10-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

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

For the fiscal year ended January 3, 2017

OR

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

Jamba, Inc.

(Exact name of registrant as specified in its charter)

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

3001 Dallas Parkway, Suite 140,

Frisco, Texas 75034,

(Address of principal executive offices)

Registrant’s telephone number, including area code: (469) 294-9600

Securities registered pursuant to Section 12(b) of the Act:

Common Stock, par value $.001 per share The NASDAQ Stock Market LLC

Securities registered pursuant to Section 12(g) of the Act:

NONE

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.    Yes  ☐No  ☒

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.  Yes  ☐ No  ☒

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

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

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.  ☐

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

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

Emerging growth company   ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.   ☐

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

The aggregate market value of the registrant’s common stock, $0.001 par value per share, held by non-affiliates as of the last day of the registrant’s second fiscal quarter ended June 28, 2016 was $76,692,507 based upon the closing sales price of registrant’s common stock on such date). For purposes of this disclosure, shares of common stock held by persons who held more than 5% of the outstanding shares of common stock and shares held by officers and directors of the registrant have been excluded in that such persons may be deemed to be affiliates. This determination of affiliate status is not necessarily a conclusive determination for other purposes.

The number of shares of common stock of Jamba, Inc. issued and outstanding as of February 2, 2018 was 18,447,023 and 15,588,206, respectively.

DOCUMENTS INCORPORATED BY REFERENCE

None

JAMBA, INC.

ANNUAL REPORT ON FORM 10-K

FISCAL YEAR ENDED JANUARY 3, 2017

Form 10-K Item No.	Name of Item	Page
PART I
Item 1.	BUSINESS	4
Item 1A.	RISK FACTORS	15
Item 1B.	UNRESOLVED STAFF COMMENTS	26
Item 2.	PROPERTIES	26
Item 3.	LEGAL PROCEEDINGS	28
Item 4.	MINE SAFETY DISCLOSURE	28
PART II
Item 5.	MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED SHAREHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES	29
Item 6.	SELECTED FINANCIAL DATA	31
Item 7.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	33
Item 7A.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	51
Item 8.	FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA	52
Item 9.	CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE	53
Item 9A.	CONTROLS AND PROCEDURES	53
Item 9B.	OTHER INFORMATION	55
PART III
Item 10.	DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE	56
Item 11.	EXECUTIVE COMPENSATION	64
Item 12.	SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED SHAREHOLDER MATTERS	87
Item 13.	CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE	90
Item 14.	PRINCIPAL ACCOUNTING FEES AND SERVICES	91
PART IV
Item 15.	EXHIBITS, FINANCIAL STATEMENT SCHEDULES	92
	SIGNATURES	98

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Special Note Regarding Forward-Looking Statements

This Annual Report on Form 10-K contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. You can identify these statements by forward-looking words such as “may,” “will,” “would,” “could,” “should,” “might,” “project,” “potential,” “forecast,” “designed,” “goal,” “approximately,” “expect,” “anticipate,” “contemplate,” “believe,” “estimate,” “intend,” “plan,” and “continue” or the negative of those words or words of similar meaning. Any statement that is not a historical fact, including any other estimates, projections, future trends and the outcome of events that have not yet occurred, is a forward-looking statement. Examples of such statements include references to accelerated growth, new store openings, Company Store comparable sales, expense management and the like. You should read statements that contain these words carefully because they:

• discuss future expectations;

• contain projections of future results of operations or financial condition; or

• state other “forward-looking” information.

We believe it is important to communicate our expectations to our shareholders. However, there may be events and circumstances in the future that we are not able to accurately predict or over which we have no control. The risk factors and cautionary language discussed in this document outline examples of risks, uncertainties and events that may cause actual results to differ materially and adversely from the expectations described in the forward-looking statements, including among other things:

• our business strategy and financial performance, including our transition to an asset-light business model and relocation of our corporate headquarters and data center;

• our revenue and customer volatility based upon weather and general economic conditions;

• the operating results of our franchisees;

• fluctuations in various food and supply costs;

• competition and other risks related to the food services business;

• our ability to retain our executive management team and key employees; and

• other factors discussed in the “Risk Factors” and “Management Discussion and Analysis of Financial Condition and Results of Operations” portion of this annual report.

You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this document.

All forward-looking statements included herein are expressly qualified in their entirety by the cautionary statements contained or referred to in this section. Except to the extent required by applicable laws and regulations, we undertake no obligation to update these forward-looking statements to reflect events or circumstances after the date of this document or to reflect the occurrence of unanticipated events.

You should be aware that the occurrence of the events described in the “Risk Factors” portion of this annual report, the documents incorporated herein and our other SEC filings could have a material adverse effect on our business, prospects, financial condition or operating results.

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PART I

ITEM 1. BUSINESS

Background of Jamba, Inc.

Jamba, Inc. through its wholly-owned subsidiary, Jamba Juice Company, is a healthful, active lifestyle brand with a robust global business driven by a portfolio of franchised and company-owned Jamba Juice ^® stores and Jamba Juice Express^TM formats. The Jamba ^® brand was created by founder Kirk Perron to inspire and simplify healthy living.  This mission is alive today in the more than 900 retail locations globally and in Jamba branded products. We are a leading restaurant retailer of “better-for-you” specialty beverage blends and food offerings which include flavorful, whole fruit and vegetable smoothies, fresh squeezed juices and juice blends, Energy (smoothie) Bowls, signature “boosts”, shots and a variety of food items including; hot oatmeal, breakfast wraps, sandwiches, Artisan Flatbreads, baked goods and snacks.

Jamba, Inc. was incorporated in Delaware on January 6, 2005 as a blank check company formed to serve as a vehicle for the acquisition of a then unidentified operating business. On July 6, 2005, Jamba, Inc. consummated its initial public offering. On March 10, 2006, Jamba, Inc. entered into an Agreement and Plan of Merger with Jamba Juice Company, which first began operations in 1990. The merger between Jamba, Inc. and Jamba Juice Company was completed on November 29, 2006. The Company’s headquarters were located in Emeryville, California and were relocated to Frisco, Texas in the fourth quarter of fiscal year 2016.

Unless the context otherwise requires, Jamba, Inc., the registrant, together with Jamba Juice Company, are referred to in this Form 10-K annual report (“Form 10-K”) as the “Company”, “Jamba Juice”, “Jamba”, “we”, “us” and “our.” Information regarding the Company’s fiscal periods is included in Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”

Fiscal Year

Our fiscal year ends each year on the Tuesday closest to December 31^st and therefore we have a 52 or 53 week fiscal year. Fiscal Year 2016 was a 53 week fiscal year, ended on January 3, 2017, with the fourth quarter comprised of 14 weeks. Fiscal Years 2015 and 2014, were 52 week fiscal years, ended on December 29, 2015 and December 30, 2014, respectively.

Narrative Description of Business

As of January 3, 2017, there were 909 Jamba Juice stores globally, consisting of 66 Company-owned and operated stores, all located in the United States (“Company Stores”), 773 franchisee-owned and operated stores (“Franchise Stores”) in the United States and 70 Franchise Stores in international locations (“International Stores”), collectively the (“Jamba System”). During 2015, we substantially completed the move from a primarily company-store to a franchise-business model by refranchising 179 locations. Currently, approximately 93% of our stores are owned and operated by franchisees.

Our Strategic Priorities

Fiscal year 2016 was a year of transition for the Jamba, Inc. business and brand. Dave Pace, Chief Executive Officer (“CEO”) joined the company in March 2016 and outlined a plan for transformation of the business. The plan focuses on five core strategies, amplifying the position Jamba holds as an iconic lifestyle brand and a best-in-class franchisor, which highlights the brand’s commitment to increase shareholder value. With the transition to an asset-light business model now complete, the organization focused on hiring a new leadership team with deep food service experience. While the majority of fiscal year 2016 we executed against the existing business plan, the newly established leadership team made large strides in building the foundation needed to drive the five core strategies into the future, beginning in fiscal 2017.

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The transition initiatives in fiscal 2016 included the move into our new offices in Frisco, Texas, reenergizing our franchise system and rebuilding the leadership and support teams that were affected by the move from Emeryville, California. As part of the transition, approximately 10% of our support center team members relocated to Frisco. The remaining 90% of our support center team are new to the organization, including many of the individuals on the senior leadership team. More specifically, Marie Perry, previously the interim CFO for Brinker International, joined Jamba in the second quarter as Chief Financial Officer (“CFO”). In March 2017, Joe Thornton joined Jamba as our Chief Operating Officer, and in November 2017, Claudia Schaefer joined Jamba as our Chief Marketing Officer. With the hire of Mr. Thornton and Ms. Schaefer, our Executive Team is fully in place.

The Company’s move to Frisco, Texas, a Dallas suburb, is designed to position the Company for sustainable, long-term growth and thus better serve Jamba’s franchise system and unlock emerging market growth potential. The relocation also served as a catalyst for cultural transformation. The team re-grounded their strategy in the roots of the brand and hired a support center team aligned with both the mission and core values of Jamba and with deep industry knowledge and experience. The new “Jamba Whirl’d Support Center” includes 25,000 square feet of office and collaboration space as well as a world-class test kitchen for product innovation and optimization.

With the transition complete in late 2016, the organization is focused on generating results and creating shareholder value through the transformation of Jamba. The five key strategies include:

• Build an Iconic Global Brand;

• Establish a Customer and Store-Centric Operating Environment;

• Drive Sales and Transactions through Innovation;

• Improve Store Profitability through Simplification; and

• Expand Our Global Footprint.

Build an Iconic Global Brand

During fiscal 2016, brand activities were predominately guided by the existing brand strategy. That strategy included ongoing efforts to build total brand value as we continue to position Jamba as a leading global health and wellness, lifestyle brand. With 93% of our stores now franchisee-owned, we have increased our focus on building the brand on a local level, leveraging multi-channel brand marketing tactics, including the expansion of consumer loyalty programs, the development of engaging local marketing promotions and high-performing social media communications. Local brand activation plays a critical role and we believe it will be a significant revenue and consumer traffic driver for our franchisees. By providing our franchisees with tools and technologies that target their guests through email, social media, radio and out-of-home advertising, we are helping them reach new and lapsed consumers in their immediate trade areas. In late 2016, the field marketing team was re-structured to provide additional support to franchise partners.  

In late fiscal 2016, the brand strategy began a pivot in an effort to differentiate Jamba from the competitive set and engage guests through a health benefit driven message. We focused on sharing the benefits of blending with our existing, lapsed and potential guests. This shift demonstrated our intent to return to a brand strategy guided by our mission of inspiring and simplifying healthy living. Ongoing, innovative product development, will allow us to meet the needs of today’s increasingly health-conscious and time-starved consumer. The innovation team hired an on-staff nutritionist that works to establish a nutritional point of view for product offerings. We will continue to focus on product innovation offerings that expand our “healthy on the go” offerings across all parts of the day.

By leveraging technology and digital services such as text messaging, email and local social media tools, we enhance and simplify the Jamba experience for today’s socially connected, time-constrained consumers. We continue to upgrade the features of our Jamba Juice mobile application (“app”), helping customers locate stores, order ahead, speed up transactions and improve the online and in-store experience. With more than 2 million members, our Jamba Insider Rewards (“JIR”) program provides incentives for our most loyal customers to make increased visits to Jamba stores. Through JIR, we distribute timely emails to our members informing them of new products and promotions. Increased segmentation efforts in late fiscal 2016 yielded stronger engagement with existing guests and the new digital marketing team outlined plans to elevate the consumer journey in the digital space.

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We are actively engaged in the most popular social media platforms, delivering engaging content and leveraging the power of influencers to actively promote Jamba to their own followers in Facebook^®, YouTube^®, Pinterest^®  and other social media platforms. These influencers post about Jamba’s nutritional benefits in an authentic voice, exponentially amplifying our own marketing communications and reaching more consumers most interested in health and wellness. We also continue to build a strong following on Facebook^®, Twitter^® and Instagram^® with postings that receive increasing favor with Jamba fans. Our YouTube channel attracts fans and increases awareness with fun and informative videos of our high-profile influencers and celebrity athletes. Late in the year, we developed a revised social media engagement strategy focused on developing authentic and sincere relationships within our social communities.  

Giving back to the community is a hallmark of the brand and service to our communities has been a consistent focus of Jamba from the Company’s beginning.  We continued that work in 2016. Our work in the community ladders up to our mission. We drive awareness of the need to encourage strong dietary and fitness habits in kids through our Team Up For a Healthy America program and through partnerships with the American Heart Association^®, National Gardening Association and the GENYOUth Foundation. Our Jamba fundraising card helps support schools in Jamba markets across the country. Additionally, our franchise partners are actively involved in their local communities, raising awareness and providing much needed funding for organizations including Meals on Wheels, Juvenile Diabetes Research Foundation, St. Jude's, National Breast Cancer Foundation and other national and local organizations focused on making our communities healthier. 

Jamba launched several marketing campaigns during the year, which are designed to drive significant traffic into our Franchise and Company Stores. We worked closely with local franchisees on numerous local promotions designed to increase trial and awareness.

Establish a Customer and Store-Centric Operating Environment

In 2016, we began to reengage and reenergize our franchise system, field and store teams. Establishing a leadership team with deep food service experience was central to this initiative and the team quickly worked to reprioritize initiatives through the lens of the franchise partners and guests.  

As the newly formed leadership team outlined key priorities in each discipline, franchise operators were asked to participate in problem solving, prioritization of initiatives and sharing of best practices. By leveraging franchise operator knowledge and spending time in stores with operating partners and guests, the team has worked to quickly reduce friction in the guest experience and build trust within the franchise system. The Franchise Advisory Council (“FAC”) is also leveraged to ensure the needs of the franchise system were prioritized effectively.

In 2016, Learning and Development systems were evaluated and investments have been made to improve field training by providing in-market support for large brand initiatives. Additionally, the field marketing team was restructured and goals were aligned with FAC approved success metrics. These changes will strengthen the franchisor/franchisee relationship and ensure support center team members are aligned with franchise partner needs.  

Finally, after a thorough evaluation of each brand extension within the Jamba system, decisions were made to eliminate any under-performing, non-retail programs. This included an exit from Ready to Drink and Energy products in early fiscal 2016 and JambaGO^® in the fourth quarter of 2016. These decisions allow the support center team to focus on the success of company and franchise retail operations.  

Drive Sales and Transactions through Innovation

Our long-term growth prospects have been largely driven by our product innovation around our core offerings of smoothies, juices and bowls. In fiscal 2016, product innovation remained a high priority, but our strategy shifted to ensure future innovation efforts extend beyond product innovation and include innovation in technology, including digital marketing and refreshed operational systems.  

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Our product innovation team transitioned fully late in the year and is working to establish a revised innovation pipeline focused on leveraging the core equity of the blender to unlock revenue through expansion of categories and parts of the day. The team, composed of food scientists, quality assurance specialists, nutritionists and food industry experts, is continually developing and testing new and improved menu items that support not only the integrity of the Jamba Juice brand, but our mission of inspiring and simplifying healthy living.

Beyond product innovation, a new IT and digital roadmap was outlined in late 2016. The roadmap outlines nine key projects that will serve to strengthen store operations, improve profitability and enhance the consumer journey in both the in-store and online environments. Digital transformation will begin in fiscal 2017 and will ensure Jamba remains a leader in category and will unlock revenue opportunities across multiple platforms.   Improvements to our app, website, customer relationship management and digital marketing channels are central to this strategy.

Improve store profitability through simplification

With the shift to an asset-light business model, we are highly focused on improving franchisee profitability and 4-wall margins. Benefits captured in fiscal 2016 primarily resulted from supply chain efficiencies and simplification of in store product execution.

In fiscal 2016, we created a task force to identify, test and implement opportunities across all expense categories. The task force includes cross functional experts, best in system franchise operators, and operations leadership. We initially identified a focused set of near term opportunities to benefit Jamba in fiscal 2017, and are building a robust pipeline of initiatives for 2017 and beyond. Implementation of the successful opportunities identified will be phased in to the system to ensure savings from each initiative are captured.

The renewed focus on a store centric operating model has created a strong franchisee/franchisor relationship that will prove beneficial to capturing the opportunities in front of us.

Expand our global footprint

As we continue on our path as an asset-light business, our focus will be on expanding our retail footprint globally through franchising. As described below, our focus is on domestic growth and on both traditional and non-traditional store formats. In addition, in fiscal 2016, we refocused our international expansion to our Asia and Middle East markets and exited our previous presence in Canada. Jamba Juice store locations at the end of fiscal 2016 were comprised of approximately 7% Company Store locations and 93% Franchise locations, globally.

Jamba Juice - Domestic

We have a portfolio of flexible store formats that can be utilized in a number of different venues. We generally categorize our stores as either traditional or non-traditional locations. A traditional location is characterized as a business premise that exists primarily as a Jamba Juice store. Traditional stores average approximately 1,000 - 1,200 square feet in size. These stores are located either in major urban centers or in suburban strip mall centers. As of January 3, 2017, there were 599 traditional Jamba Juice store locations. A non-traditional location is characterized as a Jamba Juice store located within another primary business, in conjunction with another business or at institutional settings, such as colleges and universities, entertainment venues, shopping malls, transportation centers, supermarkets and airports. A “captive” audience is a common characteristic of non-traditional locations. We believe one benefit of the development of non-traditional stores is to increase awareness of the Jamba Juice brand to complement the traditional stores in the area. As of January 3, 2017, there were 240 non-traditional Jamba Juice store locations.

We announced a franchise incentive program designed to accelerate new store openings in 2017, including our new Drive-Thru format which is intended to expand our available trade-areas by increasing accessibility to the market. We believe this program will spur additional growth of the incentivized store formats.  

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We continue to innovate in the design of traditional and non-traditional stores. Our goal is to vary the size and format of our stores to allow us to locate them in or near a variety of settings. Our flexibility in store construction enables us to develop stores in a wide range of venues, broadening the visibility of the Jamba brand and giving more customers easier, more convenient access. We believe format flexibility will help us to attract qualified franchisees and offer them the potential to earn a higher return on their investment in capital expenditures. In 2016, we continued the expansion of the refresh and remodel program for our Company Stores in order to provide a contemporary and fresh experience for our customers. We continue to refresh stores, which includes upgrading the stores’ facilities to effectively and efficiently serve our blended, whole food and premium juice platforms.

The Jamba Juice Express concept was launched in 2012. The concept is designed to target venues with a smaller footprint than our historical, non-traditional store. Jamba Juice Express units offer a limited menu of the brand’s top selling smoothies and juices as compared to our other store formats. Our Jamba Juice Express platform is an in-fill strategy for venues such as colleges and universities, grocery stores, hospitals and business cafeterias where the Jamba brand is already a known presence in the market. As of January 3, 2017, there were 47 Jamba Juice Express locations open in 21 states. Due to the nature of the business format and smaller footprint, an Express unit generates a smaller financial store contribution than other formats. To better reflect the key contributors of new store development, Express units will be excluded from store counts, beginning in the first quarter of 2017.

As of January 3, 2017, we had 839 Jamba Juice store locations in the United States, operating in 35 states and Washington, D.C., consisting of 66 Company Stores and 773 Franchise Stores. We lease the real estate for all of our Company Stores. Our market planning has shown that there is potential for a total of at least 2,700 Jamba Juice stores in the United States which would meet our current store opening criteria. During fiscal 2016, 54 new Franchise Stores opened, 30 Franchise Stores closed and we completed the refranchise of one Company Store.

Domestic Franchise Opportunity

Through our franchising program, we offer franchisees choices in store location, format and number of stores they wish to operate including traditional “stand alone” stores and non-traditional store venues such as mall, university, supermarket or transportation center locations. Furthermore, we offer franchisees the opportunity to reserve larger territories by entering into multi-unit development agreements which grant the franchisee exclusive rights to develop and operate a specified number of stores within a specified period of time and geographic area.

As of January 3, 2017, we had 27 development agreements that contain rights to develop additional Franchise Stores. The exclusive territories covered by these agreements include selected markets in the states of Arizona, California, Delaware, Florida, Georgia, Michigan, Minnesota, Missouri, Nevada, New York, North Carolina, Oregon, Pennsylvania, Tennessee, Texas, Utah, Washington and Wisconsin. In 2016, as part of our ongoing east coast expansion, we entered into development agreements which will yield 24 new locations in the greater Detroit, Michigan, Philadelphia, Pennsylvania and Midland, Texas markets.

To help maximize the growth of our non-traditional franchise development, we continue to strengthen our relationships with beverage and food concessionaires operating at venues such as colleges, universities, airports and other transportation centers, as well as other retail and entertainment venues. In addition to our own efforts, we are regularly approached by concessionaires and contract feeders whose independent research has identified us as desired for non-traditional venues where they have secured exclusive development rights from venue owners. When it fits our expansion strategies, these opportunities are incorporated into our development plans.

Our comprehensive market planning and site selection process helps guide the successful execution of our growth strategy. We have processes for identifying, analyzing and assigning undeveloped markets for Franchise Store development. Once a market is selected, we carefully screen trade areas for demand based on demographic, psychographic and Jamba Juice specific variables to assess the risk of developing a store or permitting a franchisee to do so. We review trade areas to ensure that they meet our guidelines for new store development and begin the site selection or approval process. Once a trade area is approved, we carefully screen prospective locations for visibility, traffic patterns, ease-of-use, occupancy costs and co-tenancy for potential Franchise Store locations. Our expansion strategy involves using this market planning and site selection process to leverage areas of demand within each market. We use this approach as a means to create critical mass within specific geographic areas of demand, in order to increase brand awareness and improve operating and marketing efficiencies for Franchise Stores while leveraging the costs associated with regional supervision. Distribution efficiencies can also be realized through this strategy.

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International Franchising Opportunity

Our international partners work closely with us to build the Jamba Juice brand and implement the Jamba Juice system in their local geographic markets, as well as to maximize revenue and margin growth opportunities, recognizing commercial, cultural and dietary diversity in each market. There were 70 International Stores as of January 3, 2017, with stores located in Indonesia, South Korea, the Philippines, Mexico, Taiwan and the Middle East. As of January 3, 2017, we had six master developers with commitments to open 307 stores internationally.

We anticipate that global new unit development will continue to be a contributor to achieving our stated long term objectives. At the end of fiscal 2016, we had international master development agreements with partners in Indonesia, Thailand, South Korea, the Philippines, Mexico, Taiwan, and the countries of the Gulf Cooperation Council (Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates).

We believe our brand and products have international appeal and we continue to engage in discussions with additional interested partners regarding the expansion of Jamba Juice stores into new international markets. The success of further international expansion will depend on, among other things, local acceptance of the Jamba Juice concept and menu offerings, regional supply chain infrastructure to drive profitable growth for our partners and our ability to attract qualified franchise partners. Our international developer agreements take the form of development and franchise agreements under which we typically receive an initial territory fee, store opening fees and ongoing royalty revenues based on a percentage of sales.

Early progress on our five core strategies has reenergized our company and franchise system and have provided focus for our leadership team. In fiscal 2017, we anticipate that the business will more fully realize the benefits from the work accomplished against each strategy. Work will continue against these core strategies and we expect that further benefits to the business will be realized.  

Domestic Store Operations

Franchise Store Management

We continuously partner with franchisees to ensure excellence in Franchise Store operations, principally through our Franchise Business Consultants ("FBCs"). FBCs are Company team members that work closely with franchise owners to review the financial health, strength of the team, best practices and procedures of our franchisees. We engage with our system through a Franchise Advisory Council (“FAC”), which formalizes a channel of communication through a representative group of franchisees to provide advice, counsel and input to us on all aspects impacting our business. Our franchise agreement calls for franchise partners to meet certain operational and maintenance requirements intended to align the operating processes system-wide around a common set of standards. Performance is monitored regularly by the FBCs, who in addition to ensuring operational standards, provide feedback, coaching and support, as needed.

Company Store Management

We believe operational excellence throughout the Jamba system is vital to our success. Our field and store operations teams are responsible for maximizing the performance of our Company Stores across the system. We recruit and retain leaders with broad experience in management within our industry. Our field leadership consists of two Operational Directors and District Managers to support our Company Store operations. Our strong core values have contributed to a highly tenured field team that is deeply experienced and invested in the health of the business and the brand.  

Our Store Excellence Program is designed to improve operational execution and performance by establishing comprehensive standards, which we expect all of our stores to achieve and maintain. In addition, we implemented a bonus program that offers Company Store managers rewards on achievement of sales and profit goals. These factors continue to positively impact customer satisfaction and help ensure that all stores in the Jamba System are delivering against the key drivers of customer satisfaction on a consistent basis. We believe team members are the key to our success and support the development of a culture that fosters personal interaction, mutual respect, trust, empowerment, enthusiasm and commitment.

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Maintaining a culture and a management style that embodies healthy, active lifestyles in an authentic, fun, friendly and efficient manner in Company Stores, as well as Franchise Stores, is essential as we continue to expand, and we believe that it is critical to developing our brand and ensuring our continued success.

Training

Our training programs ensure all team members in the system have the knowledge needed to deliver excellence in guest experience and connect team members to our mission.  We conduct training through a variety of programs for franchise partners, team members, support center staff and our leadership team on a regular basis. We are dedicated to providing a meaningful experience for all employees, with ample opportunity to develop leadership skills as they build a career at Jamba. All of our training programs reinforce the importance of prioritizing the guest experience and building sales through menu knowledge. Training materials and best practices are available to our franchisees to help create, preserve and support a singular culture of excellence within all of the stores that comprise our system.  Additionally, in 2016 we continued to build our online training resources through Launchpad, an online training eco-system designed to elevate engagement and deliver timely and cost effective training resources to our team and franchise partners.

Recruiting and Retention

We carefully screen potential team members to ensure that they embody our core values and fit into our culture. By maintaining this emphasis and encouraging responsibility and accountability at every level, we believe that we have created a sense of team member loyalty and an open and interactive work environment, resulting in a highly passionate workforce. Our team members are paid competitive wages and are offered opportunities for advancement. In addition to competitive wages, store managers are eligible for performance-based bonuses. In order to preserve a singular culture within the stores that comprise the Jamba System, we share best practice information, qualifications and other relevant information to assist franchisees with hiring and retention.

Advertising and Marketing

In 2016, much of our advertising and marketing efforts focused on product innovation and transformation of our systems and digital eco-system.  We reaffirmed our commitment to providing healthier food and beverage options to consumers, specifically by leveraging our historic core equity of blending. In Q4 2016, we initiated a campaign designed to start consumer conversations about the benefits of blending.

Through a variety of product centric innovations, we focused consumers’ attention on the fresh fruits and vegetables that are used to make Jamba juices, smoothies and bowls, underscoring our commitment to providing healthier food and beverage options and fulfilling our mission of inspiring and simplifying healthy living. We continued our partnership with the technology company Spendgo^® to provide consumers with an easy-to-use loyalty solution.  

Jamba marketing, promotional and public relations activities are designed to promote the Jamba brand image and differentiate it from competitors. Marketing and promotional efforts focus on providing consumers with simple, easy-to-adopt solutions for pursuing a healthy active lifestyle and we continuously endeavor to improve our social responsibility and environmental practices to achieve long-term sustainability. We believe our marketing efforts in 2016 extended our reach and relevance to consumers. By improving our use of technology, expanding our reach into various lifestyle activities, helping communities and guiding our nation’s youth to improve health and wellness, we have continued to inspire and simplify healthy living and have made progress toward our goal of being a leading health and wellness brand.

Product Supply

We are committed to providing only the finest smoothies, juices, bowls and other food products. Smoothie, juice and bowl products depend heavily upon supplies of fresh and individually quick-frozen (“IQF”) fruit and vegetables. We have an established nationwide fresh produce supply chain in order to facilitate our made-to-order freshly squeezed juice platform. The quality of each beverage depends to a large degree on the quality of the basic

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fruit and vegetable ingredients from which it is made. It is essential that the supply of fruit and vegetables is of the highest quality and is consistent throughout the year. To achieve these goals, we purchase our projected requirements for the coming year from suppliers at the height of the season. The supply and price of fresh and IQF fruit and vegetables are dependent upon the supply and demand at the time of purchase and are subject to volatility. Supply and price can be affected by multiple factors in the producing regions, including weather, natural disasters and national/regional political and economic conditions.

We buy certain produce and dairy using fixed priced or to-be-fixed priced purchase commitments to secure adequate supply of quality ingredients for our products. As a result, we have purchase obligations with certain suppliers for certain produce and dairy for various terms typically ranging from one year to three years. We depend on our relationships with our suppliers for our supply of produce, dairy and other products. While two distributors accounted for approximately 92% of the supplies delivered to our Company Stores, and also service our Franchise Stores, we believe, based on our established relationships with our suppliers, the risk of non-delivery on our purchase commitments is remote.

Our supply chain, purchasing and product organization are funded by all stores across the Jamba System. This funding contributes to the cost of system-wide procurement and management of our supplies and supports our suppliers. The program allows for cost recovery of certain products purchased by Company Stores and Franchise Stores.

Competition

The retail beverage and food industry remains highly competitive and fragmented. Stores compete based on a number of factors, including quality, price-value relationships, customer service, name recognition, employee hiring and retention and location. We compete with international, national, regional and local retailers of beverage and food products, including quick service restaurants/fast food establishments, coffee shops, juice bars, donut shops, frozen yogurt shops and grocery stores. Competition in the beverage and food market is fragmented, and increasingly so, and a major competitor with substantially greater resources than us could enter the market at any time and compete directly against Jamba Juice stores. 

We compete most directly with regional smoothie stores, most of which are franchises of other smoothie brands. The rising popularity of convenient and healthy food items resulted in increased competition from non-smoothie retailers as they increased their offerings of smoothies and other juice-related products, and as we increase our food offerings, we have placed ourselves into direct competition with other quick serve food concepts with well established businesses.

Additionally, we face increasing competition from specialty juice bars and stores, which focus on made-to-order juices, juice blends, cold-press juices and fasting/cleansing packages. Many of these brands have cold-press direct-to-consumer capabilities that multiply the geographic reaches of their stores.

We also face intense competition from both restaurants and other specialty retailers for suitable sites for new stores and qualified personnel to operate both new and existing stores. There can be no assurance that we or our franchisees will be able to continue to secure adequate sites at acceptable rent levels or that we or franchisees will be able to attract a sufficient number of qualified personnel to operate our stores.

Government Regulation and Environmental Matters

Government Regulation.  We and our franchisees are subject to extensive and varied federal, state and local government regulation, including regulations relating to public health and safety and zoning codes. We operate each of our stores in accordance with standards and procedures designed to comply with applicable codes and regulations. However, if we or our franchisees could not obtain or retain food or other licenses, it would adversely affect our operations. Although we have not experienced, and do not anticipate, any significant difficulties, delays or failures in obtaining required licenses, permits or approvals, any such problem could delay or prevent the opening of, or adversely impact the viability of, a particular store or group of stores.

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California and other states and local jurisdictions have enacted laws, rules, regulations and ordinances which may apply to the operation of a Company Store or a Franchise Store, including those which (a) establish general standards, specifications and requirements for the construction, design and maintenance of the store premises; (b) regulate matters affecting the health, safety and welfare of our customers, such as general health and sanitation requirements for restaurants; employee practices concerning the storage, handling, cooking and preparation of food; special health, food service and licensing requirements; restrictions on smoking; exposure to tobacco smoke or other carcinogens or reproductive toxicants and saccharin; availability of and requirements for public accommodations, including restrooms; (c) set standards pertaining to employee health and safety and mandatory health insurance; (d) set standards and requirements for fire safety and general emergency preparedness; (e) regulate the proper use, storage and disposal of waste, insecticides and other hazardous materials; (f) establish general requirements or restrictions on advertising containing false or misleading claims, or health and nutrient claims on menus or otherwise, such as “low calorie”, “healthy” or “organic”; (g) establish requirements concerning withholdings and employee reporting of taxes on tips; (h) regulate the amount or type of ingredients in food and beverages; and (i) regulate or ban the use of particular packaging materials.

In order to develop and construct more stores, we, or our franchisees, need to comply with applicable zoning, land use and environmental regulations. Federal and state environmental regulations have not had a material effect on our operations to date, but expansion of our menu offerings or more stringent and varied requirements of local governmental bodies with respect to zoning, land use and environmental factors could delay or even prevent construction and increase development costs for new stores. We, and our franchisees, are also required to comply with the accessibility standards mandated by the U.S. Americans with Disabilities Act, which generally prohibits discrimination in accommodation or employment based on disability. We may, in the future, have to modify stores, for example, by adding access ramps or redesigning certain architectural fixtures, to provide service to or make reasonable accommodations for disabled persons. While these expenses could be material, our current expectation is that any such action will not require us to expend substantial funds.

We are subject to the U.S. Fair Labor Standards Act, the U.S. Immigration Reform and Control Act of 1986 and various federal and state laws governing various matters including minimum wages, overtime meal and rest periods, accommodations to certain employees and other working conditions. Complying with these rules subjects us to substantial expense and can also expose us to liabilities from claims for non-compliance. In addition, we and our franchisees pay a significant number of our hourly staff at rates consistent with, but higher than, the applicable federal, state or local minimum wage. Accordingly, increases in the minimum wage would increase our labor cost. We are also subject to various laws and regulations relating to our current and any future franchise operations. See “Risk Factors -  Governmental regulation may adversely affect our ability to open new stores or otherwise adversely affect our existing and future operations and results.”

We are also subject to various federal and state laws that regulate the offer and sale of franchises and aspects of the licensor-licensee relationships. Many state franchise laws impose restrictions on the franchise agreement, including the duration and scope of non-competition provisions, the ability of a franchisor to terminate or refuse to renew and the ability of a franchisor to designate sources of supply. The Federal Trade Commission, or the FTC, and some state laws also require that the franchisor furnish to prospective franchisees a franchise disclosure document that contains prescribed information and, in some instances, require the franchisor to register the franchise offering.

Environmental Matters

We and our franchisees are subject to federal, state and local environmental laws and regulations concerning the use of, among others, polystyrene products, and several counties in which our stores are located have already banned the use of our polystyrene cups. We continued to make progress on certain eco-sustainability initiatives first launched in 2009, including phasing out the use of polystyrene cups, as well as increasing the use of recyclable products and reducing waste. At the beginning of 2016 we launched plastic cups, which are more easily recycled than the double-walled coated paper cups we introduced in 2013. Our other green initiatives include the use of more environmentally friendly packaging for our cup carriers, oatmeal cups and lids, breakfast clear cups and lids, spoons and napkins, all of which are made from recycled material. We have also reduced the amount of corrugated cardboard used for bulk shipping, reduced labeling requirements, and reduced freight, resulting in lower fuel emissions. We have established several optimization programs to reduce waste, such as participation in recycling and composting programs for our food waste, where it is feasible for us to do so.

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Trademarks and Domain Names

We own and/or have applied to register numerous trademarks and service marks in the United States and in other jurisdictions throughout the world. Some of our trademarks, including Jamba Juice ^® and the Jamba logo are of material importance to the Company. The duration of trademark registrations varies from country to country. However, trademarks are generally valid and may be renewed indefinitely as long as they are in use and/or their registrations are properly maintained. In addition, the Company has registered and maintains numerous Internet domain names, including “jamba.com” and “jambajuice.com”.

Management Information Systems

Each Company Store has computerized point-of-sale registers, which collect transaction data used to generate pertinent information, including sales transactions and product mix. Additionally, the point-of-sale system is used to authorize, batch and settle credit card data. All product prices are programmed into the point-of-sale register from the Company’s corporate office. Franchise Stores generally use the same point-of-sale registers as Company Stores, but may elect to use alternative systems provided Company approval and certain information is shared with the Company. Franchisees set their own menu prices.

Company Stores use the Company’s licensed labor management software to record employee time clock information, schedule labor and provide management reports. Company Stores and many Franchise Stores use the Company’s licensed food cost management software to improve inventory management and provide management reports.

Our continued focus on technological and procedural enhancements, in areas such as labor and inventory management, has relieved our store managers from manual administrative tasks and enables them to better focus on delivering exceptional customer service.

Seasonality

Our business is subject to day-to-day volatility based on weather and varies by season. A significant portion of the Company’s revenue is realized during the second and third quarters of the fiscal year, which include the summer months. The fourth quarter of the fiscal year, which encompasses the winter months and the holiday season, has traditionally been our lowest revenue volume quarter. Our business will likely continue to be subject to seasonal patterns for the foreseeable future, given that the largest portion of our sales continues to be from the sale of smoothies during the warmer parts of the year. Because of the seasonality of the business, results for an individual quarter are not necessarily indicative of the results, which may be achieved for the full fiscal year.

Executive Officers  

Our executive officers, their respective ages and positions and descriptions of their business experience are set forth below. There are no family relationships among any of the executive officers named below.

David A. Pace, Chief Executive Officer, age 58

Mr. Pace is one of our directors as well as our Chief Executive Officer, and, as such, his biographical information is included below under Item 10 “Directors, Executive Officers and Corporate Governance”.

Marie L. Perry, Executive Vice President, Chief Financial Officer and Chief Administrative Officer, age 52

Ms. Perry has served as the Company’s Chief Financial Officer, Executive Vice President and Chief Administrative Officer since August 2016 and served as the Company’s Executive Vice President, Finance, from May 2016 to August 2016. From 2003 to 2016, Ms. Perry held roles leading all aspects of the Brinker International finance team including having served as interim CFO during a 12-month period, and most recently, serving as Senior Vice President, Controller and Treasurer. Ms. Perry also held senior finance and accounting roles at American Airlines and KPMG.

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Claudia Schaefer, Senior Vice President and Chief Marketing Officer, age 49

Ms. Schaefer has served as the Company’s Chief Marketing Officer and Senior Vice President since November 2017. Previously, Ms. Schaefer served as Chief Marketing Officer for Cheddar’s Casual Café from January 2015 to November 2017. From 2008 to 2015, Ms. Schaefer served as Vice President of Marketing at Brinker International. From 2004 to 2008, Ms. Schaefer served as Vice President of International Restaurants for T.G.I. Friday’s.

Joe Thornton, Senior Vice President, Chief Operations Officer, age 50

Mr. Thornton has served as the Company’s Senior Vice President, Chief Operations Officer, since March 2017.  Previously, Mr. Thornton served as Vice President, U.S. License Stores, for Starbucks Coffee Companyfrom February 2016to March 2017.From 2006 to 2016, Mr. Thornton held a variety of other leadership positions at Starbucks Coffee Company. From 1992 to 2006, Mr. Thornton held operational leadership roles at Blockbuster Video.

Employees

As of January 3, 2017, we employed approximately 1,177 persons, approximately 109 of whom were at our corporate offices or part of our field, licensing, direct selling and franchise support and operations. The remainder of our team members was comprised of Company Store management and hourly store personnel. The Company also hires a significant number of seasonal team members during its peak selling seasons of the spring and summer. Our team members are not covered by a collective bargaining agreement. We consider our employee relations to be good. We place a priority on staffing our stores and support center positions with highly skilled team members who embrace our culture and we invest in training programs to ensure the quality of our store operations.

Available Information

Our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and amendments to reports filed or furnished pursuant to Sections 13(a) and 15(d) of the Securities Exchange Act of 1934, as amended, are available on our website at http://ir.jambajuice.com, free of charge as soon as reasonably practicable after we electronically file such reports with, or furnish those reports to, the Securities and Exchange Commission (the “SEC”). The SEC also maintains an Internet site that contains reports, proxy and information statements and other information that we file electronically with the SEC at https://www.sec.gov/edgar. The public may also read and copy any materials that we file with the SEC at the SEC’s Public Reference Room at U.S. Securities and Exchange Commission Office of FOIA/ PA Operations, 100 F Street, NE, Washington, DC 20549-2736. Investors may obtain information on the operation of the SEC Public Reference Room by calling the SEC at 1-800-SEC-0330. Our Corporate Governance Principles and Practices, Board of Directors committee charters (including the charters of the Audit Committee, Compensation and Executive Development Committee and Nominating and Governance Committee) and our code of ethics entitled “Code of Business Conduct and Ethics” also are available at that same location on our website. Information on our website is not incorporated into this annual report. Further, our references to the URLs for these websites are intended to be inactive textual references only. Shareholders may request free copies of these documents from:

Jamba, Inc.

c/o ICR, Inc.

685 Third Avenue, 2^nd Floor

New York, NY 10017

(646) 277-1212

investors@jambajuice.com

We included the certifications of the Chief Executive Officer and the Chief Financial Officer of Jamba, Inc. relating to the quality of our public disclosure, as required by Section 302 of the Sarbanes-Oxley Act of 2002 and related rules, in this Annual Report on Form 10-K as Exhibits 31.1 and 31.2 hereto.

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ITEM 1A. RISK FACTORS

You should carefully consider the risks described below. If any of the risks and uncertainties described below actually occurs, our business, financial condition and results of operations could be materially and adversely affected. The risk factors listed below have been identified as material, however, are not exhaustive. Other sections of this Annual Report on Form 10-K include additional factors that could adversely impact our business, financial condition and results of operations. Moreover, we operate in a very competitive and rapidly changing environment. New factors emerge from time to time and it is not possible to predict the impact of all of these factors on our business, financial condition or results of operation.

RISKS RELATED TO OUR BUSINESS

The loss of our Chief Executive Officer, or one or more of our executive management team could adversely affect our business.

On January 22, 2016, David A. Pace who has been on our Board of Directors since 2012 was appointed Chief Executive Officer of the Company. Our success depends substantially on the contributions and abilities of our executive management team as well as other key employees. We believe that these individuals understand our operational strategies and priorities and the steps necessary to drive our long-term growth and shareholder value. Competition for personnel in our industry is strong and the ability to retain key employees can be difficult. While we have entered into employment agreements with each of our executive officers, we cannot make any assurances that we can retain these individuals for the period necessary for us to achieve and sustain profitability. Our failure to retain and motivate executive management, key employees and Chief Executive Officer sufficient to maintain a competitive position within our industry, and to implement our strategic priorities, would adversely affect our results of operations.

The relocation of our corporate headquarters and data center could adversely affect our operations, operating results and financial condition, as we have experienced and may continue to experience disruptions to our business.

During 2016, we relocated our corporate headquarters from Emeryville, California to Frisco, Texas, a suburb of Dallas. In addition, we relocated our data center from Emeryville, California to Richardson, Texas, also a suburb of Dallas. We incurred expenses of approximately $7.4 million as a result of the move, associated with personnel relocation, employee attrition, retention, severance and replacement, office relocation and other costs. The relocation is intended to, among other things, reduce costs, attract and retain talent and provide a more central location for our market expansion plans. 

The relocation included our corporate operations including human resources, finance and accounting, information technology and legal teams, our data center and associated employees. The relocation resulted in significant employee turnover and the planned and unplanned loss of personnel led to business disruptions stemming from delays in filling vacant positions and a lack of personnel with institutional or procedural knowledge and experience. The relocation has also required significant management time and effort, greater than had been anticipated, which was not otherwise devoted to focusing on ongoing business operations and other initiatives and opportunities.

As previously disclosed in the our Form 12b-25 filings with respect to our Form 10-K for our fiscal year ended January 3, 2017 and Form 10-Q for our quarters ended April 4, 2017, July 4, 2017 and October 3, 2017, our financial statements have been delayed as a result of significant changes occurring in 2016, including the relocation of our corporate office in 2016. While we had implemented a transition plan to mitigate the risk relating to the relocation, the replacement and training of new personnel Company wide and transition of operating knowledge created unanticipated difficulties and delays in completing our year-end financials.

The expected benefits of the move may not be fully realized due to associated disruption to our operations and personnel. Any continued difficulties or disruptions could have an adverse effect on our business, results of operations or financial condition.

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Our revenue is subject to volatility based on weather and varies by season and our operational results may be subject to unusual weather conditions.

Seasonal factors cause our revenue to fluctuate from quarter to quarter. Because the majority of our revenue results from the sale of smoothies, our revenue is typically lower during the winter months and the holiday season, and during periods of inclement weather (because fewer people choose cold beverages) and higher during the spring, summer and fall months (for the opposite reason).  Unusual weather conditions, which may or may not result from climate change or other changes in global meteorological conditions, may add to this volatility. Unusual weather conditions may also have an adverse impact on agriculture, result in increased ingredients and raw materials costs, and adversely affect our results of operations.

We are subject to risks associated with climate change and climate change regulation.

Laws and regulations regarding climate change, energy usage and emissions controls may impact the Company directly through higher costs of goods. The potential impacts of climate change and climate change regulations are highly uncertain at this time, and the Company cannot anticipate or predict the material adverse effect on our financial condition, results of operations or cash flows as a result of climate change and climate change regulations. For instance, changes in the prevailing climate may result in a reduction in, or increased prices of available produce and packaging, which may adversely affect our revenue and operating margins.

Our financial results depend upon the operating results of our franchisees.

Following the implementation of our significant refranchising initiative, we receive a substantial portion of our revenues in the form of royalties and other franchise revenues, which are generally based on development fees, initial franchise fees and a percentage of sales at franchise-operated stores and Jamba Juice Expresses. Accordingly, our financial results to a large extent are dependent upon the operational and financial success of our franchisees. If sales trends or economic conditions worsen for our franchisees, their financial results may deteriorate and our royalty and other revenues may decline and our accounts receivable from franchisees and related allowance for doubtful accounts for our franchisees may increase.

We may not be successful in implementing our strategic priorities, which may have a material adverse impact on our business and financial results.

Our business depends upon our ability to implement our strategic priorities, which we believe necessary to support the Company’s continued growth and long-term shareholder value. There can be no assurance that we will be able to continue to successfully implement our strategic priorities or whether these strategic priorities will be successful, and a failure of either could impede our growth and negatively affect our operating results.

We have a history of net losses and may incur losses in the future.

We have incurred net losses in six of the last eight fiscal years. We may continue to incur net losses in the future, and we cannot assure you that we will ever sustain profitability. Continued losses could adversely affect our liquidity and cash reserves and could negatively affect our operating results.

Failure to establish and maintain our internal control over financial reporting may result in us not being able to accurately report our financial results which could result in the loss of investor confidence and adversely affect the market price of our common stock.

Management is responsible for establishing and maintaining adequate internal control over our financial reporting. For fiscal 2016, we disclosed a material weakness in our internal control over financial reporting related to ineffective risk assessment of the risks of material misstatement in financial reporting. This material weakness was related to significant changes in our business model, leadership, key personnel, and relocation of our corporate office.  These changes resulted in a significant increase in non-routine transactions and impacted certain routine processes needed to effectively accumulate and present consolidated financial results. This material weakness affected the design, implementation and operation of controls over the preparation, analysis and review of significant balances and disclosures and impacted its ability to close the books in a timely manner. This material weakness also contributed to misstatements related to a number of significant accounts and disclosures.

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As a result of this material weakness, our management has developed a comprehensive remediation plan designed to address the factors contributing to the material weakness noted above and improve our overall system of internal controls. Our remediation plan provides that we will improve our system of internal controls by enhancing our risk assessment process, including ongoing evaluation of all of components established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”).

We cannot, however, be certain that other material weaknesses and control deficiencies will not be discovered in the future. If additional material weaknesses or significant deficiencies in our internal controls are discovered or occur in the future, we may be unable to report our financial results accurately or on a timely basis, which could result in the loss of investor confidence and adversely affect the market price of our common stock.

A worsening of economic conditions or a decrease in consumer spending may substantially decrease our revenues and may adversely impact our ability to implement our business strategy.

To a significant extent, our success depends on discretionary consumer spending, which is influenced by general economic conditions and the availability of discretionary income. While economic conditions have been improving, there is no certainty that this trend will continue or that credit and financial markets and confidence in economic conditions will not deteriorate again. Accordingly, we may experience declines in revenue during economic turmoil or during periods of uncertainty. Any material decline in the amount of discretionary spending, leading cost-conscious consumers to be more selective in restaurants visited, could have a material adverse effect on our revenue, results of operations, business and financial condition.

The challenges of competing with the many food services businesses may result in reductions in our revenue and operating margins.

We compete with many well-established companies, food service and otherwise, on the basis of taste, quality and price of product offered, customer service, atmosphere, location and overall consumer experience. Our success depends, in part, upon the popularity of our products and our ability to develop new menu items that appeal to consumers across all four day-parts. Shifts in consumer preferences away from our products, our inability to develop new menu items that appeal to consumers across all day-parts, or changes in our menu that eliminate items popular with some consumers could harm our business. We compete with other smoothie and juice bar retailers, specialty coffee retailers, yogurt and ice cream shops, bagel shops, fast-food restaurants, delicatessens, cafés, take-out food service companies, supermarkets and convenience stores. Our competitors change with each of the four day-parts, ranging from coffee bars and bakery cafés to casual dining chains. Many of our competitors, or potential competitors, have substantially greater financial and other resources than we do, which may allow them to react to changes in the market quicker than we can. In addition, aggressive pricing by our competitors or the entrance of new competitors into our markets, could reduce our revenue and operating margins.

Fluctuations in various food and supply costs, particularly produce and dairy, could adversely affect our operating results.

Supplies and prices of the various products that we use to prepare our offerings can be affected by a variety of factors, such as weather, seasonal fluctuations, demand, politics and economics in the producing countries. These factors subject us to shortages or interruptions in product supplies, which could adversely affect our revenue and profits. In addition, the prices of fruit and dairy, which are the main products in our offerings, can be highly volatile. The quality of produce we seek tends to trade on a negotiated basis, depending on supply and demand at the time of the purchase. An increase in pricing of any produce that we use in our products could have a significant adverse effect on our profitability. In addition, higher diesel and gasoline prices may affect our supply or transportation costs and may affect our profitability. Although we attempt to mitigate the risks of volatile commodity prices and allow greater predictability in pricing by entering into fixed price, or to-be-fixed price, purchase commitments for a portion of our produce and dairy requirements, we cannot assure you that these activities will be successful or that they will not result in our paying substantially more for our produce supply than would have been required absent such activities. Declines in sales may also adversely affect our business to the extent we have long-term purchase commitments in excess of our needs.

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We are dependent upon a limited number of distributors for a significant amount of our food distribution for our Stores.

For Company Stores, we maintain food distribution contracts primarily with two regional distributors, Systems Services of America (“SSA”) and Gordon Food Services (“GFS”), which also service a majority of our Franchise Stores. SSA distributes to the Western United States, and GFS primarily distributes to the Eastern United States. Although we believe our relationship with these distributors will result in operational efficiencies and cost savings, we cannot assure you that we will be successful or that we will not have to pay substantially more for distributor services in the event GFS or SSA has operational problems. Should GFS or SSA have operational problems, our operations and our operating margins could be adversely affected.

We may face difficulties entering into new or modified arrangements with existing or new suppliers or new service providers.

If we expand our operations into new geographic areas through new Company Stores, Franchise Stores, Jamba Juice Express, or introduce new products with special manufacturing, storage or distribution requirements, we may have to seek new suppliers and service providers, or enter into new arrangements with existing ones. We may also encounter difficulties or be unable to negotiate pricing or other terms as favorable as those we currently enjoy, which could harm our business and operating results. For example, the potential growth in smaller format stores may cause the frequency of shipments to increase and the average number of cases per shipment to decrease, thereby increasing the Company’s per case shipment costs.

The Company’s success depends on the value of the Jamba Juice® brands.

The Jamba Juice^® brand promise is to inspire and simplify healthy living. We believe we must preserve and grow the value of the Jamba Juice brands in order to be successful in building our business, and particularly in building a consumer products growth platform under the Jamba brands. Brand value is based in part on consumer perceptions, and the Jamba Juice brand has been highly rated in several recent brand studies. We intend to reinforce and extend these perceptions for the Jamba brands to help support our licensing efforts. Our brand building initiatives involve increasing our product offerings, opening new Franchise Stores and Jamba Juice Express platforms, and entering into licensing arrangements to increase awareness of our brands and create and maintain brand loyalty. Our franchisees and licensees are often authorized to use our logos and provide branded beverages, food and other products directly to customers. We provide training and support to, and monitor the operations of, these business partners, but the product quality and service they deliver may be diminished by any number of factors beyond our control, including financial pressures. We believe customers expect the same quality of products and service from our franchisees and licensees as they do from us. Any shortcoming of one of our business partners, particularly an issue affecting the quality of the service experience or the safety of beverages or food, may be attributed by customers to us, thus damaging our reputation and brand value and potentially affecting our results of operations. If our brand building initiatives are unsuccessful, or if business incidents occur that erode consumer perceptions of our brand, then the value of our products may diminish and we may not be able to implement our business strategy.

We may experience higher than anticipated costs in connection with the refresh and remodel of existing Company Stores.

Updating the format and design of our Company Stores is important to maintaining a positive consumer association with the Jamba Juice brand. While we intend for such remodeling efforts to inure to the benefit of the Company, the associated costs may be higher than expected, and our revenues and expenses could be negatively impacted.

We may not be able to adequately protect our intellectual property, which could harm the value of our brand and adversely affect our business.

Our intellectual property is material to the conduct of our business. Our ability to implement our business plan successfully depends in part on our ability to build further brand recognition using our trademarks, service marks, trade dress and other proprietary intellectual property, including our name and logos and the unique ambiance of our

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stores, both domestically and overseas. We have secured the ownership and rights to our marks in the United States and have filed or obtained registrations in select classes including restaurant services in most other significant foreign jurisdictions. We undertake similar efforts to protect our brands in other relevant consumer product categories in relevant jurisdictions. If our efforts to protect our intellectual property are inadequate, or if any third party misappropriates or infringes on our intellectual property, the value of our store brand and our consumer products brands may be harmed, which could have a material adverse effect on our business. While we have not encountered material claims from prior users of intellectual property relating to restaurant services in areas where we operate or intend to conduct material operations in the near future, there can be no assurances that we will not encounter any material claims in the future. If so, this could harm our image, brands or competitive position and cause us to incur significant penalties and costs.

Our business could be adversely affected by increased labor or healthcare costs. Self-insurance plan claims could materially impact our results.

Labor is a primary component in the cost of operating our business. We compete with other employers in our markets for hourly workers and may become subject to higher labor costs as a result of such competition. We devote significant resources to recruiting and training our team members. A considerable number of the team members employed by us are paid at rates related to the federal minimum wage. In 2009, the federal minimum wage increased to $7.25 per hour. Additionally, many of our Company Store team members work in stores located in states where the minimum wage is greater than the federal minimum wage and receive compensation equal to the state’s minimum wage. The current minimum wage in California for businesses with 26 or more employees increased to $10.50 per hour effective January 1, 2017, and increases each year until reaching $15.00 per hour in 2022.

Moreover, municipalities may set minimum wages above the applicable state standards, such as in San Francisco, which raised the minimum wage to $13.00 as of July 1, 2016, and will reach $15.00 on July 1, 2018. Any further increases in the federal minimum wage or the enactment of additional state or local minimum wage increases where our employees may be located will increase our labor costs. Competition for employees in various markets could also result in higher required wage rates. Furthermore, the Company is self-insured for employee healthcare and dental benefits. The Company pays a substantial part of the healthcare benefits for team members at the general manager level and above and for those working at the Company’s corporate office. The Company has a guaranteed cost Worker’s Compensation policy effective October 1, 2016. Liabilities associated with our self-insured plans the Company retains are estimated in part, by considering historical claims experience, reserves and other actuarial assumptions. The estimated accruals for these liabilities are based on statistical analyses of historical industry data as well as the Company’s actual historical trends. If actual claims experience differs from the Company’s assumptions, historical trends, and estimates, changes in the Company’s insurance reserves could materially impact our results of operations.

The Patient Protection and Affordable Care Act enacted in 2010, as well as other healthcare reform legislation being considered by Congress and state legislatures may have a material adverse impact on our business. We continue to monitor and evaluate any impact the Patient Protection and Affordable Care Act or alternative regulations may have on our business.

We are reliant on our outsourcing partner to provide effective administrative functions.

During the latter part of 2014, we engaged a third party service provider to provide outsourced accounting, IT, human resources and contract management services. This may allow us to achieve efficiencies and cost savings, in part, through a reduction in our workforce. If our outsourcing partner fails to perform at a sufficient level to ensure our efficient operation, we may not have the resources to timely and efficiently take over those functions, and our financial performance might be adversely impacted as a result.

We are subject to all of the risks associated with leasing space subject to long-term non-cancelable leases.

We, and our franchisees, compete in the market for real estate and our, or their, inability to secure appropriate real estate or lease terms could impact our respective abilities to grow. Our leases generally have initial terms of between five and 15 years, and generally can be extended only in five-year increments if at all. We generally cannot cancel these leases. If an existing or new store is not profitable, and we decide to close it, as we have done in the

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past and may do in the future, we may nonetheless be committed to perform our obligations under the applicable lease including, among other things, paying the base rent for the balance of the lease term. Additionally, because we sublease the premises of Company Stores sold to franchisees in our refranchising program, we are still legally liable to the landlords under the prime leases, and we will need to assume obligations under the prime lease should a franchisee default on its sublease obligations. Current locations of our stores and franchised locations may become unattractive as demographic patterns change. In addition, as each of our leases expire, we may fail to negotiate renewals, either on commercially acceptable terms or at all, which could require us to close stores in desirable locations.

Our business and results may be subject to disruption from work stoppages, terrorism or natural disasters.

Our operations may be subject to disruption for a variety of reasons, including work stoppages, acts of war, terrorism, pandemics, fire, earthquake, flooding or other natural disasters. These disruptions can result in, among other things, lost sales when consumers stay home or are physically prevented from reaching our stores, property damage, lost sales when our stores are forced to close for extended periods of time and interruptions in supply when vendors suffer damages or transportation is affected. If a natural disaster were to occur near our headquarters and data center in Frisco, Texas, our corporate offices and data center may be damaged or destroyed. Such a disruption could result in the temporary or permanent loss of critical data, suspension of operations, delays in shipments of product, and disruption of business in both the affected region and nationwide, which would adversely affect our revenue and results of operations.

We are highly dependent on the financial performance of stores concentrated in certain geographic areas.

Our financial performance is highly dependent on stores located in California. Stores located in California comprise over 74% of Company Stores and generate a significant portion of our Company Store revenue. These stores also comprise approximately 46% of our total global system stores. If geographic regions in which we have a high concentration of stores experience significant economic pressures, our sales and operating results could be negatively impacted. In addition, state and local laws, government regulations, weather conditions and natural disasters affecting California and other regions where we have a high concentration of stores may have a material impact upon our operating results.

We may not realize the anticipated benefits of any acquisitions, joint ventures or strategic investments.

We expect to continue to evaluate and consider a wide array of potential strategic transactions, including acquisitions, joint ventures and strategic investments. At any given time, we may be engaged in discussions or negotiations with respect to one or more of these types of transactions. Any of these transactions could be material to our financial condition and results of operations. We may not realize the anticipated benefits of any or all of our acquisitions, joint ventures or strategic investments, or we may not realize them in the time frame expected. Future acquisitions, joint ventures or strategic investments may require us to issue additional equity securities, spend a substantial portion of our available cash, or incur debt or liabilities, amortize expenses related to intangible assets or incur write-offs of goodwill, which could adversely affect our results of operations and dilute the economic and voting rights of our shareholders.

Governmental regulation may adversely affect our ability to open new stores or otherwise adversely affect our existing and future operations and results.

We, and our franchisees, are subject to various federal, state and local regulations. Each of our stores is subject to state and local licensing and regulation by health, sanitation, food and workplace safety and other agencies. We, and our franchisees, may experience material difficulties or failures in obtaining the necessary licenses or approvals for new stores, which could delay planned store openings. In addition, stringent and varied requirements of local regulators with respect to zoning, land use and environmental factors could delay or prevent development of new stores in particular locations.

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Our operations are also subject to the U.S. Fair Labor Standards Act and National Labor Relations Act, which governs such matters as minimum wages, overtime and other working conditions, along with the U.S. Americans with Disabilities Act, family leave mandates and a variety of similar laws enacted by the states that govern these and other employment law matters. In recent years, there has been an increased legislative, regulatory, and consumer focus on nutrition and advertising practices in the food industry. Establishments operating in the quick-service and fast-casual segments have been a particular focus, and compliance with additional regulations can become costly and affect our operating results.

Our federal, state and local tax returns may, from time to time, be selected for audit by the taxing authorities, which may result in tax assessments, interest or penalties that could have a material adverse impact on our results of operations and financial position.

We are subject to federal, state and local taxes in the U.S. In making tax estimates and paying taxes, significant judgment is often required. Although we believe our tax positions and estimates are reasonable, if a taxing authority disagrees with the positions taken by the Company, we could have an additional tax liability, including interest and penalties. If material, payment of such additional amounts could have a material impact on our results of operations and financial position.

We rely heavily on information technology and a material failure of that technology could impair our ability to efficiently operate our business.

Our business operations rely heavily on information systems, including point-of-sale processing in our stores, management of our supply chain and distribution system, vendor and franchisee invoicing, and various other processes and procedures. The efficient management of our business depends significantly on the reliability and capacity of these systems, and any related failure and/or breach of security could cause delays in customer service and reduce efficiency in our operations. Significant capital investments might be required to remediate any problems.

Failure to protect the integrity and security of individually identifiable data of customers, vendors or employees could expose us to data loss, litigation and liability, and our reputation could be significantly harmed.

Our business operations require us to process and/or maintain certain personal, business and financial information about customers, vendors and employees. The use of such information by us is regulated by federal, state and foreign laws, as well as certain third party agreements. If our security and information systems are compromised or if our employees or franchisees fail to comply with the applicable laws and regulations, and this information is obtained by unauthorized persons or used inappropriately, it could adversely affect our reputation and result in litigation and settlement costs, damage awards, or penalties and fines. As privacy and information security law and regulations change, we may incur additional costs to ensure that we remain in compliance.

A failure or breach of our security systems or infrastructure as a result of cyber-attacks could disrupt our business, result in the disclosure or misuse of confidential or proprietary information, damage our reputation, increase our costs and cause losses.

Information security risks have significantly increased in recent years in part because of the proliferation of new technologies, the use of the Internet and telecommunications technologies to conduct financial transactions, and the increased sophistication and activities of organized crime, hackers, terrorists and other external parties. These threats may derive from fraud or malice on the part of our employees or third parties, or may result from human error or accidental technological failure. These threats include cyber-attacks such as computer viruses, malicious code, phishing attacks or information security breaches.

To date, we have not experienced any material impact relating to cyber-attacks or other information security breaches. Any actual attacks could lead to damage to our reputation, additional costs (such as repairing systems and investigation or compliance costs), penalties, financial losses to both us and our customers and partners and the loss of customers and business opportunities. If such attacks are not detected immediately, their effect could be compounded. As cyber-threats continue to evolve, we may be required to expend significant additional resources to

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continue to modify or enhance our protective measures or to investigate and remediate any information security vulnerabilities. Any of the risks described above could materially adversely affect our overall business and results of operations.

The new presidential administration may make substantial changes to regulatory policies that may adversely affect our business.

The new presidential administration has called for substantial change to various policies and regulations, including labor, healthcare, trade, tax and fiscal policy. We cannot predict the impact, if any, of these changes to our business. However, it is possible that these changes could adversely affect our business. It is likely that some policies adopted by the new administration will benefit us and others will negatively affect us. Until we know what changes are enacted, we will not know whether in total we benefit from, or are negatively affected by, the changes.

In December of 2017, the U.S. government enacted comprehensive tax legislation that includes significant changes to the taxation of business entities, including, among other provisions, a permanent reduction to the corporate income tax rate. Notwithstanding the reduction in the corporate income tax rate, the overall impact of this tax reform is uncertain, and our business and financial condition could be adversely affected.

RISKS RELATED TO OUR FRANCHISE BUSINESS

Termination of an arrangement with a master developer could adversely impact our revenues.

We enter into relationships with “master developers” to develop and operate restaurants in defined domestic and international geographic areas. Master developers are granted exclusive rights with respect to larger territories than our typical franchisees. The termination of an arrangement with a master developer or a lack of expansion by certain master developers could result in the delay of the development and expansion of our business in our targeted markets. Any such delay or interruption could result in lower revenues for us, particularly if we were to choose to close stores following the termination of an arrangement with a master developer.

Our growth strategy depends on increasing franchise ownership.

Our current growth strategy is to continue to pursue an asset-light business model, including selling Company Stores, and increasing the number of franchise locations as a percentage of all stores in the Jamba System. By emphasizing Franchise Store development, we receive an increasingly significant amount of our revenues in the form of royalties from our franchisees. Accordingly, the success of our business is increasingly dependent upon the operational and financial success of our franchisees. This strategy is subject to risks and uncertainties, which may be concentrated where any particular franchisee owns a significant number of franchise locations. While our franchise agreements set forth certain operational standards and guidelines, we have limited control over how our franchisees’ businesses are run, and any significant inability of our franchisees to operate successfully could adversely affect our operating results through decreased royalty payments. We may not be able to identify franchisee candidates with appropriate experience and financial resources or to negotiate mutually acceptable agreements with those that do. Our franchisee candidates may not have access to the financial or management resources that they need to open or continue operating the stores contemplated by their franchise agreements with us. In addition, franchisees may not be able to find suitable sites on which to develop new stores or negotiate acceptable lease terms for the sites, obtain the necessary permits and government approvals or meet construction schedules. If our franchisees incur too much debt or if economic or sales trends deteriorate such that they are unable to repay existing debt, it could result in financial distress or even possible insolvency or bankruptcy. Some of our franchisees experienced financial pressures during fiscal 2016, 2015 and 2014. If a significant number of our franchisees become financially distressed, this could harm our operating results through reduced or delayed royalty payments or increased rent obligations for leased properties on which we are contingently liable.

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Expansion into new geographic markets may present increased risks.

Franchise growth is planned in new geographic areas in the United States and select international markets. Our future results, and the results of new Franchise Stores, depend on various factors, including successful selection and expansion into these new geographic markets and market acceptance of the Jamba Juice experience. Those markets may have different competitive conditions, consumer tastes and discretionary spending patterns as compared to existing markets. As a result, those new stores may be less successful than stores in our existing markets. Consumers in a new market may not be familiar with the Jamba Juice brand, and we may need to build brand awareness in that market through greater investments in advertising and promotional activity than we originally planned. Franchisees may find it more difficult in new markets to hire, motivate and keep qualified employees who can project our vision, passion and culture. Stores opened in new markets may also have lower average store revenue than stores opened in existing markets, and may have higher construction, occupancy or operating costs than stores in existing markets. Furthermore, we may have difficulty in finding reliable suppliers or distributors or ones that can provide us, either initially or over time, with adequate supplies of ingredients meeting our quality standards. Revenue at stores opened in new markets may take longer to increase and reach expected revenue levels, and may never do so, thereby affecting our overall royalty income. As with the experience of other retail food concepts that have tried to expand nationally and internationally, we may find that the Jamba Juice concept has limited appeal to customers in new markets or we may experience a decline in the popularity of the Jamba Juice experience. Newly opened stores may not succeed, future markets and stores may not be successful and, even if we are successful, our average store revenue, and the royalty income generated therefrom, may not increase and may even decline.

Our efforts to expand internationally may not be successful and could impair the value of our brand.

Our current strategy includes international expansion in a number of countries around the world. Expanding into international markets will expose us to new risks and uncertainties, including product supply, import/export limitations and regulations to which we are not currently bound and may not be currently set up to handle, consumer preferences, occupancy costs, operating expenses and labor and infrastructure challenges. If stores open in international markets and such stores are unable to source inventory locally, franchisees may be required to import inventory from our U.S. distributors and any resulting import duties, tariffs, transportation or other charges may disproportionately impact such stores’ cost of goods which could harm the viability of such stores. Finally, international operations have inherent risks such as foreign currency exchange rate fluctuations, the application and effect of local laws and regulations and enforceability of intellectual property and contract rights. Additionally, effectively managing growth can be challenging, particularly as we continue to expand into new international markets where we must balance the need for flexibility and a degree of autonomy for local management against the need for consistency with our goals, philosophy and standards. Failure of our international expansion strategy could have a material adverse impact on our results of operations.

Termination or non-renewal of franchise agreements may disrupt store performance.

Each franchise agreement is subject to termination by us in the event of default by the franchisee after the applicable cure period. Upon the expiration of the initial term of a franchise agreement, the franchisee generally has an option to renew for an additional term. There is no assurance that franchisees will meet the criteria for renewal or will desire or be able to renew their franchise agreements. If not renewed, a franchise agreement and payments required thereunder will terminate. We may be unable to find a new franchisee to replace such lost revenue. Furthermore, while we will be entitled to terminate franchise agreements following a default that is not cured within the applicable cure period, if any, the disruption to the performance of the stores could materially and adversely affect our business.

Our franchisees could take actions that harm our reputation and reduce our royalty revenue.

While we have franchise agreements in place with our franchisees that provide certain operational requirements, we do not exercise control over the day-to-day operations of our Franchise Stores. Any operational or developmental shortcomings of our Franchise Stores, including their failure to comply with applicable laws, are likely to be attributed to our system-wide operations in the eyes of consumers and could adversely affect our reputation and have a direct negative impact on the royalty revenue we receive from those and other stores.

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We could face liability from our franchisees and from government agencies.

A franchisee or government agency may bring legal action against us based on the franchisor/franchisee relationship. Various state and federal laws govern our relationship with our franchisees and our potential sale of a franchise. If we fail to comply with these laws, we could be liable for damages to franchisees, fines or other penalties. Expensive litigation with our franchisees or government agencies may adversely affect both our profits and our important relations with our franchisees.

RISKS RELATED TO THE FOOD SERVICE BUSINESS

Litigation and publicity concerning food quality, health claims, and other issues can result in liabilities, increased expenses, distraction of management, and can also cause customers to avoid our products, which could adversely affect our results of operations, business and financial condition.

Food service businesses can be adversely affected by litigation and complaints from customers or government authorities resulting from food quality, health claims, allergens, illness, injury or other health concerns or operating issues stemming from one retail location or a number of retail locations. Adverse publicity about these allegations may negatively affect us, regardless of whether the allegations are true, by discouraging customers from buying our products.

Our customers occasionally file complaints or lawsuits against us alleging that we are responsible for some illness or injury they suffered at or after a visit to our stores, or that we have problems with food quality or operations. We are also subject to a variety of other claims arising in the ordinary course of our business, including false advertising claims, personal injury claims, contract claims and claims alleging violations of federal and state law regarding workplace and employment matters, discrimination and similar matters, and we could become subject to class action or other lawsuits related to these or different matters in the future. Regardless of whether any claims against us are valid, or whether we are ultimately held liable, claims may be expensive to defend and may divert time and money away from our operations and hurt our performance. A judgment significantly in excess of our insurance coverage, or for which we are not covered by insurance, could materially and adversely affect our financial condition or results of operations. Any adverse publicity resulting from these allegations may also materially and adversely affect our reputation or prospects, which in turn, could adversely affect our results.

In addition, the food services industry has been subject to a growing number of claims based on the nutritional content of food products they sell, and disclosure and advertising practices. We may also be subject to this type of proceeding in the future and, even if not, publicity about these matters (particularly directed at the quick-service and fast-casual segments of the industry) may harm our reputation or prospects and adversely affect our results.

We are also impacted by trends in litigation, including class-action allegations brought under various consumer protection laws, securities and derivative lawsuits claiming violations of state and federal securities law, and employee lawsuits, including wage and hour claims.  We may also be impacted by litigation involving our relationship with franchisees and the legal distinction between our franchisees and us for employee claims based on, among other things, wage and hour violations, discrimination, harassment, or wrongful termination, as these types of claims are increasingly asserted against franchisors on a co-employer theory by employees of franchisees.

Due to the inherent uncertainties of litigation and regulatory proceedings, we cannot accurately predict the ultimate outcome of any such proceedings.  An unfavorable outcome could have a material adverse impact on our business, financial condition and results of operations. In addition, regardless of the outcome of any litigation or regulatory proceedings, these proceedings could result in substantial costs and may require that we devote substantial resources to defend our Company and could affect the future premiums we would be required to pay on our insurance policies. Further, changes in governmental regulations could have adverse effects on our business and subject us to additional regulatory actions.

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Food safety concerns and instances of food-borne illnesses could harm our customers, result in negative publicity and cause the temporary closure of some stores and, in some cases, could adversely affect the price and availability of fruits and vegetables, any of which could harm our brand reputation, result in a decline in revenue or an increase in costs.

We consider food safety a top priority and dedicate substantial resources toward ensuring that our customers enjoy high-quality, safe and wholesome products. However, we cannot guarantee that our internal controls and training will be fully effective in preventing all food-borne illnesses. Furthermore, our reliance on third-party food suppliers and distributors increases the risk that food-borne illness incidents (such as e. coli, hepatitis A, salmonella or listeria) could occur outside of our control and at multiple locations. Instances of food-borne illnesses, whether real or perceived, and whether at our stores or those of our competitors, could harm customers and otherwise result in negative publicity about us or the products we serve, which could adversely affect revenue. If there is an incident involving our stores serving contaminated products, our customers may be harmed, our revenue may decrease and our brand name and reputation may be impaired. If our customers become ill from food-borne illnesses, we could be forced to temporarily close some stores. In addition, we may have different or additional competitors for our intended customers as a result of making any such changes and may not be able to compete successfully against those competitors. Food safety concerns and instances of food-borne illnesses and injuries caused by food contamination have in the past, and could in the future, adversely affect the price and availability of affected ingredients and cause customers to shift their preferences, particularly if we choose to pass any higher ingredient costs along to consumers. As a result, our costs may increase and our revenue may decline. A decrease in customer traffic as a result of these health concerns or negative publicity, or as a result of a change in our menu or dining experience or a temporary closure of any of our stores, could materially and adversely impact our business, financial condition and results of operations.

RISKS RELATED TO OWNERSHIP OF COMMON STOCK

Failure of the Company’s internal control over financial reporting could harm its business and financial results.

Our management is responsible for establishing and maintaining effective internal control over financial reporting. Internal control over financial reporting is a process to provide reasonable assurance regarding the reliability of financial reporting for external purposes in accordance with accounting principles generally accepted in the United States. Internal control over financial reporting includes: (i) maintaining reasonably detailed records that accurately and fairly reflect our transactions; and (ii) providing reasonable assurance that we (a) record transactions as necessary to prepare the financial statements, (b) make receipts and expenditures in accordance with management authorizations; and (c) would timely prevent or detect any unauthorized acquisition, use or disposition of our assets that could have a material effect on the financial statements. Because of its inherent limitations, internal control over financial reporting is not intended to provide absolute assurance that we would prevent or detect a misstatement of our financial statements or fraud. Any failure to maintain an effective system of internal control over financial reporting could limit our ability to report our financial results accurately and timely or to detect and prevent fraud. In addition, we are required to comply with a variety of reporting, accounting and other rules and regulations.  Compliance with existing requirements is expensive. Our accounting systems are older and require manual processing. We may need to implement additional finance and accounting systems and procedures and controls to comply with our reporting requirements. A significant financial reporting failure could cause an immediate loss of investor confidence in us and a sharp decline in the market price of our common stock.

In 2016, the Company underwent significant changes in its business model, leadership, key personnel, and relocation of its corporate office. These changes resulted in a significant increase in non-routine transactions and impacted certain routine processes needed to effectively accumulate and present consolidated financial results. The Company identified that its risk assessment process, which was intended to identify new transactions and changes to existing processes and design appropriate control activities over financial reporting, was not sufficient to prevent or detect material misstatement in a timely basis. Consequently, a material weakness in internal control over financial reporting resulted from ineffective risk assessment of material misstatement in financial reporting.

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Our anti-takeover provisions may delay or prevent a change of control of us, which may adversely affect the price of our common stock.

Certain provisions in our corporate documents and Delaware law may delay or prevent a change of control of us, which could adversely affect the price of our common stock. For example, the Company’s amended and restated certificate of incorporation and bylaws include anti-takeover provisions such as:

• limitations on the ability of shareholders to amend our charter documents, including shareholder supermajority voting requirements;

• the inability of shareholders to act by written consent or to call a special meeting absent the request of the holders of a majority of the outstanding common stock; and

• advance notice requirements for nomination for election to the board of directors and for shareholder proposals.

The Company is also afforded the protections of Section 203 of the Delaware General Corporation Law which prevents it from engaging in a business combination with a person who acquires at least 15% of its common stock for a period of three years from the date such person acquired such common stock, unless board of directors or shareholder approval is obtained.

Our stock price may fluctuate significantly.

The trading price of our common stock has been volatile and is likely to continue to be volatile. Our stock price could be subject to wide fluctuations in response to a variety of factors. The stock market has experienced significant price and volume fluctuations that have often been unrelated or disproportionate to the operating performance of particular companies. Broad market factors, including the effect of international political instability, armed conflict, natural disasters, financial markets, and general economic conditions, may have a material adverse effect on our stock price, regardless of our actual performance.

ITEM 1B. UNRESOLVED STAFF COMMENTS

None.

ITEM 2. PROPERTIES

The Company’s headquarters were located in Emeryville, California and were relocated to Frisco, Texas in the fourth quarter of fiscal year 2016. The Emeryville facility was occupied under a lease for approximately 37,000 square feet, at a cost of approximately $1.2 million per year and has a lease term that expired on January 31, 2017. The Frisco facility is occupied under a lease for approximately 25,000 square feet, at a cost of approximately $0.8 million per year and has a lease term that expires on March 31, 2027.

The Company, including our franchisees, currently operates all of its stores under leases and typically signs five to 15 year leases. The Company does not intend to purchase real estate for any of its sites in the future. The Company believes that the size and flexibility of its format provide it with a competitive advantage in securing sites. At January 3, 2017, the Company served its customers primarily through a combination of Company Stores, Franchise Stores and International Stores in 35 different States, the District of Columbia, Indonesia, Taiwan, South Korea, the Philippines, Mexico and the Middle East.

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	Store Count as of January 3, 2017
	Company Stores		Franchise & International Stores	Total
United States
Arizona		—	40	40
California	49		367	416
Colorado		—	25	25
Connecticut		—	2	2
Delaware		—	1	1
District of Columbia		—	3	3
Florida		—	30	30
Georgia		—	7	7
Hawaii		—	37	37
Idaho		—	11	11
Illinois	13		6	19
Indiana		—	1	1
Iowa		—	1	1
Kentucky		—	1	1
Louisiana		—	3	3
Maryland		—	5	5
Massachusetts		—	3	3
Michigan		—	7	7
Minnesota		—	10	10
Missouri		—	6	6
Montana		—	1	1
Nevada		—	17	17
New Jersey	1		7	8
New York	2		22	24
North Carolina		—	7	7
Ohio		—	4	4
Oklahoma		—	7	7
Oregon		—	25	25
Pennsylvania		—	9	9
Tennessee		—	4	4
Texas	1		37	38
Utah		—	23	23
Virginia		—	6	6
Washington		—	32	32
Wisconsin		—	5	5
Wyoming		—	1	1
Total in United States	66		773	839
International
Indonesia		—	4	4
Mexico		—	2	2
Middle East		—	9	9
Philippines		—	26	26
South Korea		—	25	25
Taiwan		—	4	4
Total International		—	70	70
Grand Total		66	843	909

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ITEM 3. LEGAL PROCEEDINGS

The Company is party to various legal proceedings arising in the ordinary course of its business, but it is not currently a party to any legal proceeding that management believes would have a material adverse effect on the consolidated financial position or results of operations of the Company.

ITEM 4. MINE SAFETY DISCLOSURE

Not applicable.

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PART II

ITEM 5. MARKET FOR JAMBA, INC.’S COMMON EQUITY, RELATED SHAREHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

Market Information

The shares of Jamba, Inc. common stock are currently quoted on the NASDAQ Global Market under the symbol JMBA. The closing price per share of Jamba, Inc. common stock as reported on the NASDAQ Global Market on February 2, 2018, was $7.55.

The following table sets forth, for the fiscal quarter indicated, the quarterly high and low closing sales prices of our shares of common stock as reported on the NASDAQ Global Market, as applicable, for each quarter during the last two fiscal years.

	Common Stock
	High		Low
2015 First Quarter		16.80	13.71
2015 Second Quarter		16.77	14.98
2015 Third Quarter	16.33		12.92
2015 Fourth Quarter	14.75		12.75
2016 First Quarter		13.64	11.76
2016 Second Quarter	13.52		10.08
2016 Third Quarter	11.51		10.02
2016 Fourth Quarter	10.94		9.75

We have not historically paid any cash dividends on our common stock and do not currently have plans to pay any cash dividends. As of February 2, 2018, there were 91 holders of record of our common stock.

Securities Authorized for Issuance under Equity Compensation Plans

Our equity compensation plan information required by this item is incorporated by reference to the information in Part III, Item 12 of this Annual Report on Form 10-K.

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Performance Graph

The following graph compares our cumulative total shareholder return since December 31, 2011 with the cumulative total return of (i) the NASDAQ Composite Index; (ii) the Russell 2000 Index; and (iii) Russell MicroCap Index. The graph assumes that the value of the investment in our common stock and each index (including reinvestment of dividends) was $100 on January 3, 2012. The comparisons in the graph below are based on historical data and are not intended to forecast the possible future performance of our common stock. This performance graph shall not be deemed “soliciting material” or to be “filed” with the SEC for purposes of Section 18 of the Exchange Act, or otherwise subject to the liabilities under that Section, and shall not be deemed to be incorporated by reference into any of our filings under the Securities Act or the Exchange Act.

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ITEM 6. SELECTED FINANCIAL DATA

The table below summarizes the Company’s recent financial information. The historical information was derived from the consolidated financial statements of Jamba, Inc. and subsidiary for the fiscal years ended January 3, 2017, December 29, 2015, December 30, 2014, December 31, 2013 and January 1, 2013. The data set forth below should be read in conjunction with the consolidated financial statements and notes thereto in Item 8 and with Management’s Discussion and Analysis of Financial Condition and Results of Operations in Item 7.

Statements of Operations Data

(In thousands, except share data and per share amounts)

	Fiscal Year Ended January 3, 2017  (1) (2)			Fiscal Year Ended December 29, 2015 (2)			Fiscal Year Ended December 30, 2014 (2)			Fiscal Year Ended December 31, 2013 (2)			Fiscal Year Ended January 1, 2013 (2)
Revenue:
Company stores	$	51,282		$	137,025		$	198,737		$	212,887		$	215,125
Franchise and other revenue		28,341			24,651			19,311			16,362			13,664
Total revenue		79,623			161,676			218,048			229,249			228,789
Costs and operating expenses (income):
Cost of sales		12,601			33,737			52,236			52,211			50,215
Labor		17,872			44,732			61,749			62,015			63,086
Occupancy		7,659			18,951			27,630			29,350			29,473
Store operating		9,285			25,152			33,089			34,802			33,524
Depreciation and amortization		5,749			6,569			10,084			10,974			11,062
General and administrative		37,958			36,872			37,278			37,771			40,771
Loss (gain) on disposal of assets		790			(21,609	)		(2,957	)		(3,153	)		648
Store pre-opening		1,224			1,031			763			880			604
Impairment of long-lived assets		3,410			2,523			175			728			711
Store lease termination and closure		4,160			1,669			575			148			421
Other operating, net		1,083			1,795			726			1,155			(2,339	)
Total costs and operating    expenses (income):		101,791			151,422			221,348			226,881			228,176
(Loss) income from operations		(22,168	)		10,254			(3,300	)		2,368			613
Other income (expense):
Interest income		250		137			74			9			61
Interest expense		(439	)		(220	)		(195	)		(242	)		(217	)
Total other income (expense), net		(189	)		(83	)		(121	)		(233	)		(156	)
(Loss) income before income taxes		(22,357	)		10,171			(3,421	)		2,135			457
Income tax expense		(79	)		(701	)		(168	)		(55	)		(155	)
Net (loss) income		(22,436	)		9,470			(3,589	)		2,080			302
Preferred stock dividends and    deemed dividends		—			—			—			(588	)		(2,181	)
Less: Net income attributable    to noncontrolling interest		—		52				43			—			—
Net (loss) income attributable    to Jamba, Inc.	$	(22,436	)	$	9,418		$	(3,632	)	$	1,492		$	(1,879	)
Weighted-average shares used in the    computation of (loss) earnings per    share attributable to Jamba, Inc.:
Basic		15,229,102			15,787,806			17,197,904			16,793,235			14,139,888
Diluted		15,229,102			16,228,033			17,197,904			17,222,030			14,139,888
(Loss) earnings per share attributable to    Jamba, Inc. common shareholders:
Basic	$	(1.47	)	$	0.60		$	(0.21	)	$	0.09		$	(0.13	)
Diluted	$	(1.47	)	$	0.58		$	(0.21	)	$	0.09		$	(0.13	)

(1) Fiscal year ended January 3, 2017 contains the results of operations for 53 weeks.

(2) Share and per share data have been adjusted for all periods presented to reflect a five-for-one reverse stock split effective May 31, 2013.

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Selected Balance Sheet and Operating Data

(in thousands, fiscal years ended):

	January 3, 2017			December 29, 2015			December 30, 2014			December 31, 2013			January 1, 2013
Cash and cash equivalents	$	7,133		$	19,730		$	17,750		$	32,386		$	31,486
Total assets		41,620			69,616			92,489			97,916			93,613
Total liabilities		55,397			64,625			75,744			71,074			72,101
Series B redeemable preferred stock		—			—			—			—			7,916
Total shareholders’ (deficit) equity		(13,777	)		4,991			16,745			26,842			13,596
Total liabilities and shareholders’ (deficit) equity		41,620			69,616			92,489			97,916			93,613
Selected Operating Data
Percentage change in Company Store comparable sales(1)		0.8	%		1.5	%		2.8	%		0.5	%		5.1	%
Total Company Stores		66			70			263			268			301
Total Franchise Stores - Domestic		773			748			543			535			473
Total International Stores		70			75			62			48			35
Total Stores		909			893			868			851			809

(1) Percentage change in Company Store comparable sales compares the sales of Company Stores during the current fiscal year to the sales from the same Company Stores for the prior fiscal year. A Company Store is included in this calculation after its first full fiscal year of operations. Sales from Franchise and International Stores are not included in the Company Store comparable sales.

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ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

You should read the following discussion and analysis in conjunction with Part II, Item 6 “Selected Financial Data” and our audited consolidated financial statements and the related notes thereto included in Item 8 “Financial Statements and Supplementary Data.” In addition to historical consolidated financial information, this discussion contains forward-looking statements that reflect our plans, estimates and beliefs. Actual results could differ from these expectations as a result of factors including those described under Item 1A, “Risk Factors,” “Special Note Regarding Forward-Looking Statements” and elsewhere in this Form 10-K.

JAMBA, INC. OVERVIEW

Jamba, Inc. through its wholly-owned subsidiary, Jamba Juice Company, is a healthful, active lifestyle brand with a robust global business driven by a portfolio of franchised and company-owned Jamba Juice ^® stores and Jamba Juice Express^TM formats. We are a leading restaurant retailer of “better-for-you” specialty beverage and food offerings which include flavorful, whole fruit and vegetable smoothies, fresh squeezed juices and juice blends, Energy Bowls™, signature “boosts”, shots and a variety of food items including: hot oatmeal, breakfast wraps, sandwiches, Artisan Flatbreads™, baked goods and snacks.

We operate on a 52 or 53 week fiscal year ending on the Tuesday closest to December 31^st. Our fiscal quarters are comprised of 13 weeks, with the exception of the fourth quarter of a 53 week year, which contains 14 weeks. Fiscal year 2016 contained 53 weeks and fiscal years 2015 and 2014 each contained 52 weeks.

Fiscal 2016 Financial and Business Highlights

• Franchisees opened 73 new Jamba Juice stores globally; which included 27 traditional stores, 17 non-traditional stores, 10 Jamba Juice Express in the United States and 19 new International Stores.

• At January 3, 2017, there were 909 stores globally, including 47 express format stores: 66 Company Stores, 773 Domestic Franchise Stores and 70 International Stores.

• Company Store comparable sales increased 0.8%. This is the sixth consecutive fiscal year of comparable store sales growth for Company Stores.  

• Total revenue for the year decreased $82.1 million to $79.6 million from $161.7 million for the prior year. We substantially completed our move to an asset-light model during our 2015 fiscal year and we now have 93% of our locations owned by experienced franchisees. As a result, Company Store revenue (and related expense) comparisons to the prior year reflected significant decreases on a quarterly and annual basis for fiscal 2015 and fiscal 2016.

• System-wide comparable sales (includes both Company and Franchise stores) declined 0.2% for the year compared to the prior year.  The decline results from a reduction in transaction count, partially offset by an increase in the average check amount. Franchise Store comparable sales declined 0.3%. System-wide and Franchise Store comparable store sales are non-GAAP financial measures and represent the change in year-over-year sales, for stores opened for at least one full fiscal year.

• Loss from operations was $(22.2) million and operating margin was (27.8%) for the year. General and administrative expenses (“G&A”) for the year increased  $ 1.1 million, or 2.9%, to $38.0 million or 47.7% as a percentage of total revenue, for the fiscal year 2016, compared to $36.9 million, or 22.8% as a percentage of total revenue, in the prior year. Included in the 2016 results were $7.4 million of expenses related to the relocation of our corporate headquarters, impairment charges of $3.4 million and $2.0 million due to legal proceedings.

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• During the fourth quarter, we substantially completed the relocation of our corporate headquarters from Emeryville, California to Frisco, Texas, a suburb of Dallas. The stated objectives of the move were to reduce costs, provide improved access to skilled restaurant talent and establish a more central location for our market expansion plans. This transition allows us to re-align our support team with the skills required to support an asset-light model. In fiscal year 2016, we incurred $7.4 million in expense and $2.1 million of capital expenditures, associated with personnel relocation, employee attrition, retention, severance and replacement, office relocation and other costs associated with the relocation.

• During the fourth quarter, after a detailed analysis of the performance and potential of JambaGO^®, we managed a controlled exit that was substantially completed at the end of Q1 2017. As of January 3, 2017, we accrued $0.9 million primarily related to contract termination costs. We also recognized a non-cash charge, relating to impairment of property, plant and equipment, of approximately $2.3 million related to this exit. As of January 3, 2017, assets of $0.2 million related to JambaGO^® were reclassified to assets held for sale in the consolidated balance sheets.

• In the fourth quarter we completed the refranchising of a Company Store in Emeryville, California. We also announced that we are exploring the refranchising 13 company-owned operations in the Chicago area which was subsequently completed in the second quarter of 2017. The Chicago transaction would include a development agreement to grow the market over the next several years. We recognized a non-cash charge, relating to impairment of property, plant and equipment for these Chicago stores, of approximately $0.7 million.

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RESULTS OF OPERATIONS

The discussion that follows should be read in conjunction with the consolidated financial statements and notes thereto. The following table sets forth selected operating data as a percentage of total revenue (unless otherwise noted), of certain items included in our consolidated statements of operations, for the periods indicated.

	Fiscal Year Ended (1)
	January 3, 2017			December 29, 2015			December 30, 2014
Revenue:
Company Stores		64.4	%		84.8	%		91.1	%
Franchise and other revenue		35.6	%		15.2	%		8.9	%
Total revenue		100.0	%		100.0	%		100.0	%
Costs and operating expenses (income):
Cost of sales		24.6	%		24.6	%		26.3	%
Labor		34.9	%		32.6	%		31.1	%
Occupancy		14.9	%		13.8	%		13.9	%
Store operating		18.1	%		18.4	%		16.6	%
Depreciation and amortization		7.2	%		4.1	%		4.6	%
General and administrative		47.7	%		22.8	%		17.1	%
Loss (gain) on disposal of assets		1.0	%		(13.4	)%		(1.4	)%
Store pre-opening		1.5	%		0.6	%		0.3	%
Impairment of long-lived assets		4.3	%		1.6	%		0.1	%
Store lease termination and closure		5.2	%		1.0	%		0.3	%
Other operating, net		1.4	%		1.1	%		0.3	%
Total costs and operating expenses (income):		127.8	%		93.7	%		101.5	%
(Loss) income from operations		(27.8	)%		6.3	%		(1.5	)%
Other income (expense):
Interest income		0.3	%		0.1	%		0.1	%
Interest expense		(0.6	)%		(0.1	)%		(0.1	)%
Total other expense, net		(0.2	)%		(0.1	)%		0.0	%
(Loss) income before income taxes		(28.1	)%		6.3	%		(1.5	)%
Income tax expense		(0.1	)%		(0.4	)%		(0.1	)%
Net (loss) income		(28.2	)%		5.9	%		(1.6	)%
Less: Net income attributable to noncontrolling interest		0.0	%		(0.1	)%		0.0	%
Net (loss) income attributable to Jamba, Inc.		(28.2	)%		5.8	%		(1.6	)%

(1) Cost of sales, labor, occupancy and store operating expense percentages are calculated using Company Stores revenue. All other line items are calculated using total revenue. Certain percentage amounts do not sum to total due to rounding.

Known Events, Trends or Uncertainties Impacting or Expected to Impact Comparisons of Reported or Future Results

Management reviews and discusses its operations based on both financial and non-financial metrics. Among the key financial metrics upon which management focuses is performance based on the Company’s consolidated GAAP results, including Company Store comparable sales, franchise and other revenue, and income from operations. Management also uses certain supplemental, non-GAAP financial metrics in evaluating financial results, including Franchise Store comparable sales and system-wide comparable sales.

Company Store comparable sales represents the change in year-over-year sales for all Company Stores opened for at least one full year. Franchise Store comparable sales, a non-GAAP financial measure, represents the change in year-over-year sales for all Franchise Stores opened for at least one full year, as reported by franchisees excluding International Stores. System-wide comparable store sales, a non-GAAP financial measure, represents the change in year over-year sales for all Company and Franchise Stores opened for at least one full year and is based on sales by both company-owned and domestic franchise operated stores, as reported by franchisees, which are in the store base. System-wide comparable store sales excludes International Stores, JambaGO^® units and Jamba Juice Express™.

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Company-owned stores that were sold in refranchising transactions are included in the store base for each accounting period of the fiscal quarter in which the store was sold to the extent the sale is consummated at least three days prior to the end of such accounting period, but only for the days such stores have been company-owned. Thereafter, such stores are excluded from the store base until such stores have been franchise-operated for at least one full fiscal period at which point such stores are included in the store base and compared to sales in the comparable period of the prior year. Comparable store sales exclude closed locations.

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

We underwent significant changes in our business model, leadership, key personnel, and relocation of our corporate office. These changes resulted in a significant increase in non-routine transactions and impacted certain routine processes needed to effectively accumulate and present consolidated financial results. We identified that our risk assessment process, which was intended to identify new transactions and changes to existing processes and design appropriate control activities over financial reporting, was not sufficient to prevent or detect material misstatement on a timely basis. Consequently, a material weakness in internal control over financial reporting resulted and is described in “ITEM 9A. Controls and Procedures.” Management has begun implementing a plan to assess risks of material misstatement over financial reporting, including the enhancement of internal control activities, and training of key process owners. Management, with the oversight of the Audit Committee has dedicated significant incremental resources to successfully implement and test effectiveness of the enhanced controls throughout fiscal 2017. G&A expenses are expected to be negatively impacted by costs in connection with the remediation plan in fiscal 2017.

On December 22, 2017 the U.S. government passed sweeping tax legislation with the “Tax Cuts and Jobs Act” which includes significant changes to the taxation of business entities. These legislative changes begin to take effect after December 31, 2017. These changes include, among others, (i) a permanent reduction of the corporate income tax rate to a flat 21%,  (ii) a repeal of the corporate alternative minimum tax (AMT), (iii) changes to tax depreciation for first-year property, luxury automobiles and qualified leasehold improvements, (iv) a partial limitation on the deductibility of business interest expense, (v) for losses incurred after December 21, 2017 the NOL deduction is limited to 80% of taxable income with an indefinite carry forward and (vi) a disallowance of entertainment expenses but an expansion of the types of expenses allowable as a 50% business meal expenditure.  Notwithstanding the reduction in the corporate income tax rate, the overall impact of this tax reform is uncertain, we continue to assess the impact of the recently enacted federal tax reform legislation on our business and our consolidated financial statements.

Key Financial Metrics

The following table sets forth operating data that do not otherwise appear in our consolidated financial statements for the periods indicated:

	Fiscal Year Ended
	January 3, 2017 (3)									December 29, 2015
	Company Stores(1)			Franchise Stores(1)			System-wide Stores(2)			Company Stores(1)			Franchise Stores(1)			System-wide Stores(2)
Traffic		(2.4	)%		(4.8	)%		(4.5	)%		(3.5	)%		(3.9	)%		(3.9	)%
Average check		3.2	%		4.5	%		4.3	%		5.0	%		6.6	%		6.2	%
Total comparable store sales		0.8	%		(0.3	)%		(0.2	)%		1.5	%		2.7	%		2.3	%

(1) Percentage change in comparable sales compares sales during the current fiscal year to sales from the same stores for the prior fiscal year. A store is included in this calculation after its first full fiscal year of operations. Company Store comparable sales excludes sales from Franchise and International Stores. Franchise Store comparable sales excludes sales from Company, International Stores and closed locations.

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(2) Percentage change in system-wide comparable sales compares the combined sales of Company and Franchise Stores, excluding Jamba Juice Express, during the current fiscal year to the combined sales from the same Company and Franchise Stores for the prior fiscal year. A Company or Franchise Store is included in this calculation after its first full fiscal period of operations. System-wide comparable store sales excludes International Stores, Jamba Juice Express, JambaGO^® locations and closed locations.

(3) Year ended January 3, 2017 amounts are calculated based on 52 weeks.

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

	Fiscal Year Ended
	January 3, 2017			December 29, 2015			December 30, 2014
Company Stores:
Beginning of year		70			263			268
Company Stores opened		2			—			0
Company Stores acquired    from franchisees		—			2			26
Company Stores closed		(5	)		(16	)		(13	)
Company Stores sold to    franchisees		(1	)		(179	)		(18	)
Total Company Stores		66			70			263

	Fiscal Year Ended
	January 3, 2017			December 29, 2015			December 30, 2014
Franchise Stores - Domestic:
Beginning of year		748			543			535
Franchise Stores opened		54			51			43
Franchise Stores purchased    by Company		—			(2	)		(26	)
Franchise Stores closed		(30	)		(23	)		(27	)
Franchise Stores purchased    from Company		1			179			18
Total Franchise Stores -    Domestic		773			748			543

	Fiscal Year Ended
	January 3, 2017			December 29, 2015			December 30, 2014
International Stores:
Beginning of year		75			62			48
International Stores opened		19			22			24
International Stores closed		(24	)		(9	)		(10	)
Total International Stores		70			75			62
Grand Total		909			893			868

Transition to an asset-light model

Under our accelerated refranchising initiative, announced in November 2014, we completed the sale of 179 Company Stores during the year ended December 29, 2015 as part of our transition to an asset-light business model. Additionally, in the fourth quarter of 2016, we completed the refranchising of a Company Store in Emeryville, California related to our move to Frisco, Texas. Over the long term, we believe our accelerated asset-light model initiative is a key driver to accelerate unit growth, reduce general and administrative costs and to achieve certain operational efficiencies. The transition to an asset-light model was substantially completed in fiscal 2015, however, the Company will continually assess refranchising stores to drive continued growth.

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As part of the refranchising transactions, where feasible, we entered into development agreements which will commit the buyers to build additional Franchise Stores in territories occupied by the purchased stores. In addition, the buyers of mature Company Stores are generally obligated to refresh and refurbish these stores within certain timeframes.

Due to the refranchise activity that occurred throughout fiscal 2015, Company Store revenue (and related expense) comparisons to the prior year reflect significant decreases on a quarterly and annual basis for fiscal 2016.

Revenue

Fiscal Year2016to Fiscal Year 2015

Total revenue is comprised of revenue from Company Stores, royalties and fees from Franchise Stores in the U.S. and from International Stores, income from JambaGO^® locations and license income from sales of Jamba-branded CPG products. Total revenue in fiscal 2016 decreased by $82.1 million, or 50.8%, compared to fiscal 2015. The following table summarizes revenue for the periods indicated (dollars in thousands):

	Fiscal Year Ended January 3, 2017		% of Total Revenue			Fiscal Year Ended December 29, 2015		% of Total Revenue			Fiscal Year Ended December 30, 2014		% of Total Revenue
Revenue:
Company Stores	$	51,282		64.4	%	$	137,025		84.8	%	$	198,737		91.1	%
Franchise and other revenue		28,341		35.6	%		24,651		15.2	%		19,311		8.9	%
Total revenue	$	79,623		100.0	%	$	161,676		100.0	%	$	218,048		100.0	%

Company Store revenue

Company Store revenue in fiscal 2016 decreased $85.7 million or 62.6% compared to fiscal 2015. The decrease in Company Store revenue is primarily due to the reduction of 179 Company Stores due to our refranchising strategy, partially offset by the increase in comparable store sales and the 53^rd fiscal week, as illustrated by the following table (dollars in thousands):

	Company Store Decrease in Revenue 2016 vs. 2015
Company Store comparable sales increase	$	388
Impact of 53rd operating    week		735
Reduction in Company Store revenue due to    decrease in the number of Company Stores, net		(86,866	)
Total change in Company Store revenue	$	(85,743	)

Company Store comparable sales increased $0.4 million in fiscal 2016, or 0.8%, attributable to a 3.2% increase in average check, offset by a 2.4% decrease in transaction count. The increase in average check was driven by product mix as we continue to increase the sales in bowl and higher ticket items.

Franchise and other revenue

Franchise and other revenue in fiscal 2016 increased by $3.7 million, or 15.0%, compared to fiscal 2015. The increase was primarily due to royalties received on a larger base of Franchise and International Stores, fees recognized and the 53^rd fiscal week and partially offset by Franchise Store comparable store sales decrease of 0.3%.Other revenue, which primarily includes revenue from CPG and JambaGO^®, decreased by $1.5 million or 25.6% to $4.3 million, compared to $5.8 million in fiscal 2015.

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The number of Franchise Stores and International Stores grew to 843 as of January 3, 2017 compared to 823 as of December 29, 2015.

Fiscal Year 2015 to Fiscal Year 2014

Total revenue in fiscal 2015 decreased $56.4 million, or 25.9%, compared to fiscal 2014. Total revenue is comprised of revenue from Company Stores, royalties and fees from Franchise Stores in the U.S. and from International Stores, income from JambaGO^® locations, license income from sales of Jamba-branded CPG products and direct sales of CPG products.

Company Store revenue

Company Store revenue in fiscal 2015 was $137.0 million, a decrease of $61.7 million, or 31.1%, compared to $198.7 million in fiscal 2014. The decrease in Company Store revenue is primarily due to the reduction of 179 Company Stores due to our refranchising strategy and partially offset by the increase in comparable store sales as illustrated by the following table (dollars in thousands):

	Company Store Decrease in Revenue 2015 vs. 2014
Company Store comparable sales increase	$	2,050
Reduction in Company Store revenue due to    decrease in the number of Company Stores, net		(63,762	)
Total change in Company Store revenue	$	(61,712	)

Company Store comparable sales increased $2.1 million in fiscal 2015, or 1.5%, primarily attributable to a 5.0% increase in average check offset by a 3.5% decrease in transaction count related to the significantly reduced number of promotions run in fiscal 2015 compared to fiscal 2014.

Franchise and other revenue

Franchise and other revenue in fiscal 2015 increased $5.3 million, or 27.7%, compared to fiscal 2014 primarily due to an increase in the number of Franchise and International Stores. Other revenue, which primarily includes revenue from JambaGO^® and CPG, increased by $0.3 million, or 6.9%, to $5.8 million, compared to $5.5 million in fiscal 2014.

The number of Franchise Stores and International Stores grew to 823 as of December 29, 2015 compared to 605 as of December 30, 2014.

Cost of sales

Cost of sales is comprised of produce, dairy, and other products used to make smoothies and juices and paper products. The following table summarizes cost of sales for the periods indicated (dollars in thousands):

	Fiscal Year Ended
	January 3, 2017			December 29, 2015			December 30, 2014			% Change in 2016			% Change in 2015
Cost of sales	$	12,601		$	33,737		$	52,236			(62.6	)%		(35.4	)%
Percentage of company stores revenue		24.6	%		24.6	%		26.3	%

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Cost of sales in fiscal 2016 as a percentage of Company Store revenue, was unchanged compared to fiscal 2015 primarily due to favorable commodity pricing driven by strawberries and mangos (approximately 1.0%) and menu price increases (approximately 0.4%) and partially offset by product mix shift (approximately 0.7%), increased discounts (approximately 0.4%) and change in store base (approximately 0.2%). Cost of sales for fiscal 2016 decreased $21.1 million compared to fiscal 2015, primarily due to the decrease in number of Company Stores as a result of our transition to an asset-light model.

The decrease in cost of sales in fiscal 2015 as a percentage of Company Store revenue was primarily due to the benefit from lower sales discounts (approximately 1.4%), commodities pricing and product mix shift between smoothies and juices (approximately 0.5%) and partially offset by an increase in waste (approximately 0.2%). Cost of sales for fiscal 2015 decreased compared to fiscal 2014 primarily due to the decrease in number of Company Stores as a result of our transition to an asset-light model.

Labor

Labor costs are comprised of store management salaries and bonuses, hourly team member payroll, training costs and other associated fringe benefits. The following table summarizes labor costs for the periods indicated (dollars in thousands):

	Fiscal Year Ended
	January 3, 2017			December 29, 2015			December 30, 2014			% Change in 2016			% Change in 2015
Labor	$	17,872		$	44,732		$	61,749			(60.0	)%		(27.6	)%
Percentage of company stores revenue		34.9	%		32.6	%		31.1	%

The increase in labor in fiscal 2016, as a percentage of Company Store revenue, was primarily attributable to the change in store base (approximately 1.7%), increased wage rates (approximately 0.7%), reduced labor efficiency (approximately 0.6%) due to outages in the Company’s labor scheduling system in the second and third quarters of 2016. These charges are partially offset by lower fringe benefits (approximately 0.8%) driven by worker’s comp. Labor costs for fiscal 2016 decreased $26.9 million compared to fiscal 2015 primarily due to the decrease in number of Company Stores as a result of our transition to an asset-light model.

The increase in labor in fiscal 2015 as a percentage of Company Store revenue was primarily attributable to the California minimum wage rate increase that was effective July 1, 2014 (approximately 1.2%), an increase in Health Insurance costs due to the Affordable Care Act (approximately 0.5%) and higher wages from the reacquired Chicago store portfolio which occurred in the third quarter of fiscal 2014 (approximately 1.0%) offset favorably by higher Sales leverage and increased staffing efficiencies and operational optimization (approximately 0.9%). Labor costs for fiscal 2015 decreased $17.0 million compared to fiscal 2014, primarily resulting from our transition to an asset-light model.

Occupancy

Occupancy costs include both fixed and variable portions of rent, common area maintenance charges, property taxes, licenses and property insurance for all Company Store locations. The following table summarizes occupancy costs for the periods indicated (dollars in thousands):

	Fiscal Year Ended
	January 3, 2017			December 29, 2015			December 30, 2014			% Change in 2016			% Change in 2015
Occupancy	$	7,659		$	18,951		$	27,630			(59.6	)%		(31.4	)%
Percentage of company stores revenue		14.9	%		13.8	%		13.9	%

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The increase in occupancy costs in fiscal 2016, as a percentage of Company Store revenue, was primarily due to common area maintenance (approximately 0.8%), property taxes (approximately 0.4%), rent (approximately 0.2%) and insurance (approximately 0.2%) and partially offset by sales leverage (approximately 0.4%). Occupancy costs for fiscal 2016 decreased $11.3 million, or 59.6%, compared to fiscal 2015 primarily due to the decrease in number of Company Stores as a result of our transition to an asset-light model.

In fiscal 2015 as a percentage of Company Store revenue, occupancy costs were relatively flat, 13.8% in fiscal 2015, compared to 13.9% in fiscal 2014. Occupancy costs for fiscal 2015 decreased by $8.7 million, or 31.4%, compared to fiscal 2014. The decrease in occupancy costs was primarily due to the decrease in the number of Company Stores as a result of our transition to an asset-light model.

Store operating expenses

Store operating expenses consist of various store-level costs such as utilities, marketing, repairs and maintenance, credit card fees and other store operating expenses. The following table summarizes store operating expenses for the periods indicated (dollars in thousands):

	Fiscal Year Ended
	January 3, 2017			December 29, 2015			December 30, 2014			% Change in 2016			% Change in 2015
Store operating	$	9,285		$	25,152		$	33,089			(63.1	)%		(24.0	)%
Percentage of company stores revenue		18.1	%		18.4	%		16.6	%

The decrease in store operating expense in fiscal 2016, as a percentage of Company Store revenue, is primarily due to lower store-level advertising costs (approximately 0.9%), sales leverage (0.6%), and partially offset by an increase in hardware/software expenses (approximately 0.5%) and credit card fees (approximately 0.5%).Total store operating expenses for fiscal 2016 decreased by $15.9 million, or 63.1%, compared to fiscal 2015 primarily due to the decrease in the number of Company Stores as a result of our transition to an asset-light model.

The increase in total store operating expenses in fiscal 2015 as a percentage of Company Store revenue was primarily due to an increase to advertising costs (approximately 1.1%), uniform costs related to the new-look roll-out (approximately 0.2%), repairs and maintenance costs to prepare stores for refranchising (approximately 0.1%) and utilities (approximately 0.1%). Total store operating expenses for fiscal 2015 decreased by $7.9 million, or 24.0%, compared to fiscal 2014, primarily resulting from our transition to an asset-light model, which was primarily due to the decrease in the number of Company Stores as a result of our transition to an asset-light model.

Depreciation and amortization

Depreciation and amortization expenses include the depreciation of fixed assets and the amortization of intangible assets. The following table summarizes depreciation and amortization for the periods indicated (dollars in thousands):

	Fiscal Year Ended
	January 3, 2017			December 29, 2015			December 30, 2014			% Change in 2016			% Change in 2015
Depreciation and amortization	$	5,749		$	6,569		$	10,084			(12.5	)%		(34.9	)%
Percentage of total revenue		7.2	%		4.1	%		4.6	%

The decrease in depreciation and amortization in fiscal 2016 was primarily due to the discontinuation of depreciation relating to stores refranchised in the prior year which were partially offset by an increase in depreciation relating to capitalized information technology corporate programs and a correction in the current year of an immaterial prior period adjustment which overstated depreciation expense by approximately $0.2 million for fiscal year 2016.

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The decrease in depreciation and amortization in fiscal 2015 was primarily due to reclassification from property, fixtures and equipment to assets held for sale for stores prior to their refranchising and the resulting discontinuation of depreciation on those assets. Depreciation and amortization for fiscal 2015 decreased $3.5 million, or 34.9%, compared to fiscal 2014.

General and administrative

G&A expenses include costs associated with our corporate headquarters (in Emeryville, California and Frisco, Texas), field supervision, performance related incentives, outside and contract services, accounting and legal fees, travel and travel-related expenses, share-based compensation and other G&A expenses. Also included in G&A are costs related to the move of the support center to Frisco, Texas, settlement and other legal costs. The following table summarizes G&A expenses for the periods indicated (dollars in thousands):

	Fiscal Year Ended
	January 3, 2017			December 29, 2015			December 30, 2014			% Change in 2016			% Change in 2015
General and administrative	$	37,958		$	36,872		$	37,278			2.9	%		(1.1	)%
Percentage of total revenue		47.7	%		22.8	%		17.1	%

Total G&A expenses for fiscal 2016 increased by $1.1 million, or 2.9%, compared to fiscal 2015. The increase in total G&A expenses was primarily due to costs related to our relocation to Frisco, Texas (approximately $7.4 million) and legal settlement and liability for ongoing legal action (approximately $2.0 million) and a correction for an immaterial understatement of prior period expenses (approximately $0.5 million) which were partially offset by a decline in share-based compensation expenses (approximately $2.6 million) and lower expenses related to our organizational changes resulting from our shift to an asset-light model. The increase in G&A expenses in fiscal 2016 as a percentage of total revenue is primarily due to a fewer number of Company Stores contributing revenue as a result of our transition to an asset-light model.

Total G&A expenses for fiscal 2015 decreased $0.4 million, or 1.1%, compared to fiscal 2014. The decrease of total G&A expenses was primarily due to decrease in payroll related costs as a result of reduced general and administrative headcount (approximately $4.8 million) and travel costs (approximately $0.6 million) offset by an increase in professional fees (approximately $2.8 million), former Chief Executive Officer’s severance and bonus (approximately $0.8 million), other senior executives’ severance and bonus (approximately $0.6 million) and increased stock compensation expenses related to stock modifications (approximately $0.8 million). During fiscal year 2015 we incurred costs due to the transition and termination agreements related to our former CEO and other senior executives. We also continue to incur costs related to our full transition from a company business model to a franchise model.

Loss (gain) on disposal of assets

Loss (gain) on disposal of assets includes losses or gains from the sales of related furniture, fixtures and equipment and refranchising of Company Stores.

For the fiscal year 2016, the Company recognized a loss on disposal of assets of $0.8 million compared to a gain of $21.6 million in fiscal year 2015. In fiscal 2016, the decrease in the disposal of assets gain relates to the gain on refranchising 179 Company Stores in fiscal 2015 relating to our transition to an asset-light model as well as a correction of an understated prior period loss (approximately $0.2 million).

For the fiscal year 2015, the Company recognized gain on disposal of assets of $21.6 million compared to $3.0 million in fiscal year 2014. The increase was primarily due to the gain on refranchising 179 Company Stores relating to our transition to an asset-light model that was begun in fiscal 2014 to transition the company to an asset-light business model.

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Store pre-opening

Store pre-opening consists of costs incurred in connection with start-up and promotion of new store openings as well as rent from possession date to store opening date are expensed as incurred.

The following table summarizes store pre-opening for the periods indicated (dollars in thousands):

	Fiscal Year Ended
	January 3, 2017			December 29, 2015			December 30, 2014			% Change in 2016			% Change in 2015
Store pre-opening	$	1,224		$	1,031		$	763			18.7	%		35.1	%
Percentage of total revenue		1.5	%		0.6	%		0.3	%

For the fiscal year 2016, store pre-opening increased to $1.2 million compared to $1.0 million for the fiscal year 2015, an increase of $0.2 million primarily related to the opening of two Company Stores in 2016, juice bar remodels and opening 3 additional franchise stores in 2016 compared to 2015.

For the fiscal year 2015, store pre-opening increased to $1.0 million compared to $0.8 million for the fiscal year 2014. The increase in expense of $0.2 million was primarily due to more new store openings over the prior year.

Impairment of long-lived assets

We evaluate long-lived assets for impairment when facts and circumstances indicate that the carrying values of long-lived assets may not be recoverable.

For the fiscal year 2016, impairment of long-lived assets was $3.4 million compared to $2.5 million for the fiscal year 2015. The increase in expense of $0.9 million was primarily related to the loss recorded to reflect assets associated with JambaGO^® exit ($2.3 million) and other long-lived assets.

For the fiscal year 2015, impairment of long-lived assets was $2.5 million compared to $0.2 million for the fiscal year 2014. The increase in expense of $2.3 million was primarily due to the non-cash impairment loss relating to stores classified as assets held for sale in the third quarter of fiscal 2015, assets associated with Talbott Teas and other long-lived assets.

Store lease termination and closure

Store lease termination and closure costs consists of expenses incurred when closing a store. At the date the Company ceases use of a store under an operating lease, a liability is recorded for the net present value of any remaining lease obligations, net of estimated sublease income, if any. For the fiscal year 2016, store lease termination and closure was $4.2 million compared to $1.7 million for the fiscal year 2015. The increase in expense of $2.5 million was related to closing a newer Company Store and related fixed assets before lease expiration.

For the fiscal year 2015, store lease termination and closure was an expense of $1.7 million compared to an expense of $0.6 million for the fiscal year 2014. The increase in expense of $1.1 million was primarily due to the eight stores closed at the end of fiscal 2015 before lease expiration.

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Other operating, net

Other operating, net consists of income from breakage from our gift cards (known as jambacard®), jambacard-related fees, expenses related to our franchisees, sublease income, international expenses, gain/loss on investments, bad debt expense and CPG and JambaGO^® activities. The following table summarizes other operating, net for the periods indicated (dollars in thousands):

	Fiscal Year Ended
	January 3, 2017			December 29, 2015			December 30, 2014			% Change in 2016			% Change in 2015
Other operating, net	$	1,083		$	1,795		$	726			(39.7	)%		147.2	%
Percentage of total revenue		1.4	%		1.1	%		0.3	%

Changes in the components of other operating, net include an increase in sublease income from a higher number of subleased refranchise stores (approximately $0.5 million), a decrease in CPG and JambaGO^® direct expense (approximately $1.3 million), and a correction for an immaterial understatement of prior period expenses (approximately $0.3 million) and a decrease in franchise expenses (approximately $0.2 million). These changes were partially offset by a decrease in jambacard breakage income (approximately $1.3 million).

For the fiscal year 2015, other operating, net was an expense of $1.8 million compared to an expense of $0.7 million for the fiscal year 2014. The increase of $1.1 million was primarily due to an increase in bad debt related to the write off of barter credits for marketing services due to vendor insolvency and bad debt (approximately $1.4 million), an increase in CPG and JambaGO^® direct expense (approximately $0.4 million), and an increase in International expense (approximately $0.4 million) partially offset by a decrease in franchise expense (approximately $0.4 million) and an increase in jambacard breakage income (approximately $0.7 million).

Income tax expense/benefit

Income tax expense in fiscal 2016 was $0.1 million compared to an income tax expense of $0.7 million for fiscal 2015. The decrease in income tax expense was primarily due to the fact that the Company had a large pre-tax net loss in fiscal 2016. 

Income tax expense in fiscal 2015 was $0.7 million compared to an income tax expense of $0.2 million for fiscal 2014. The increase in income tax expense was primarily due to the fact that the Company generated taxable income in fiscal 2015. 

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

The preparation of consolidated financial statements in conformity with GAAP requires the appropriate application of certain accounting policies, many of which require us to make estimates and assumptions about future events and their impact on amounts reported in our consolidated financial statements and related notes. Since future events and their impact cannot be determined with certainty, actual results may differ from our estimates. Such differences may be material to the consolidated financial statements.

We believe our application of accounting policies, and the estimates inherently required therein, are reasonable. These accounting policies and estimates are periodically reevaluated, and adjustments are made when facts and circumstances dictate a change.

Our accounting policies are more fully described in Note 1 “Business and Summary of Significant Accounting Policies” in the “Notes to Consolidated Financial Statements,” included elsewhere in this Form 10-K. We consider the following policies to be the most critical in understanding the judgments that are involved in preparing the consolidated financial statements.

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Impairment of Long-Lived Assets

We evaluate long-lived assets for impairment when facts and circumstances indicate that the carrying values of long-lived assets may not be recoverable. The impairment evaluation is generally performed at the individual store asset group level. We first compare the carrying value of the asset to the asset’s estimated future undiscounted cash flows. If the estimated future cash flows are less than the carrying value of the asset, we measure an impairment loss based on the asset’s estimated fair value. The fair value of a store’s assets is estimated using a discounted cash flow model based on internal projections and taking into consideration the view of a market participant. The estimate of cash flows is based on, among other things, certain assumptions about expected future operating performance. Factors considered during the impairment evaluation include factors related to actual operating cash flows, the period of time since a store has been opened or remodeled, refranchising expectations and the maturity of the relevant market.

Our estimates of cash flows used to assess impairment are subject to a high degree of judgment. If our estimates of future cash flows differ from actual cash flows due to, among other things, changes in economic conditions, changes to our business model or changes in operating performance, it would result in an adjustment to results of operations.

Intangible Asset Impairment

Goodwill

We evaluate goodwill for impairment on an annual basis during our fourth fiscal quarter, or more frequently if circumstances, such as material deterioration in performance, indicate carrying values may exceed their fair values. In September 2011, the FASB issued new guidance allowing an entity the option to make a qualitative evaluation about the likelihood of goodwill impairment to determine whether it should calculate the fair value of a reporting unit. If impairment is deemed more likely than not, management would perform the currently prescribed two-step goodwill impairment test. Otherwise, the two-step goodwill impairment test is not required. First, the reporting unit’s estimated fair value is compared to its carrying value, including goodwill. If we determine that the estimated fair value of the reporting unit is less than its carrying value, we move to the second step to determine the implied fair value of the reporting unit’s goodwill. If the carrying amount of the reporting unit’s goodwill exceeds its fair value, an impairment loss is recognized. When reviewing goodwill for impairment, we assess whether goodwill should be allocated to operating levels lower than our single operating segment for which discrete financial information is available and reviewed for decision-making purposes. These lower levels are referred to as reporting units. Currently, our one operating segment was determined to be one reporting unit. Considerable judgment is applied in determining the assumptions used in the qualitative evaluation and in computing fair value. Changes in the assumptions could result in an adjustment to our results of operations.

Other Intangible Assets with Indefinite Lives

We evaluate intangible assets not subject to amortization (primarily trademarks) for impairment on an annual basis during the fourth fiscal quarter, or more frequently if events or changes in circumstances indicate that the asset might be impaired. We qualitatively assess the impairment for other intangible assets not subject to amortization to determine whether it is more likely than not that the fair value of intangible assets are less than their carrying amount. For other intangible assets not subject to amortization not assessed qualitatively, a quantitative approach is utilized. We compare the carrying value of the applicable asset to its fair value, which we estimate using a discounted cash flow analysis or by comparison with the market values of similar assets. If the carrying amount of the asset exceeds its estimated fair value, we determine the impairment loss, if any, as the excess of the carrying value of the intangible asset over its fair value. Changes in the assumptions for the discounted cash flow analysis could result in an adjustment to our results of operations.

Other Intangible Assets with Finite Lives

Intangible assets subject to amortization (primarily franchise agreements, reacquired franchise rights, favorable lease intangible assets and acquired customer relationships) are tested for recoverability whenever events or changes in circumstances indicate that their carrying amounts may not be recoverable. Actual results may differ from our estimates and could cause an adjustment to results of operations.

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jambacard ^® Revenue Recognition

We sell our jambacards to our customers in our retail stores, through our website at www.jambajuice.com and through our resellers. We have sold jambacards since November of 2002. The jambacard works as a reloadable gift card. At the time of the initial load, in an amount between $5 and $500, we record an obligation that is reflected as jambacard liability on the consolidated balance sheets. We relieve the liability and record the related revenue at the time a customer redeems any part of the amount on the card. The card does not have any expiration provisions and is not refundable, except as otherwise required by law.

We recognize income from jambacards when (i) the jambacard is redeemed by the customer or (ii) the likelihood of the jambacard being redeemed by the customer is remote (also referred to as “breakage”), and we determine that we do not have a legal obligation to remit the value of unredeemed jambacards to the relevant jurisdictions. We determine the jambacard breakage amount based upon historical redemption patterns. We review the activity and then conclude that after a certain amount of inactivity the likelihood of redemption becomes remote, and we recognize breakage at that time. Jambacard breakage income is included in other operating, net in the consolidated statements of operations. If the historical redemption pattern changes, our financial statements could be materially affected.

Income Taxes

Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis. Deferred tax assets and liabilities are measured using enacted income tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Any effect on deferred tax assets and liabilities due to a change in tax rates is recognized in income in the period that includes the enactment date. In establishing deferred income tax assets and liabilities, judgments and interpretations are made based on enacted tax laws and published tax guidance applicable to our operations.

Uncertain tax positions are recognized as the greatest amount more than 50% likely of being sustained upon audit based on the technical merits of the position. On a quarterly basis, the Company reviews and updates its inventory of tax positions as necessary to add any new uncertain tax positions taken, or to remove previously identified uncertain positions that have been effectively settled. Additionally, uncertain positions may be re-measured as warranted by changes in facts or law. Accounting for uncertain tax positions requires significant judgments, including estimating the amount, timing and likelihood of ultimate settlement. Although the Company believes that these estimates are reasonable, actual results could differ from these estimates. The Company classifies interest and penalties related to income taxes as a component of income taxes in the consolidated statements of operations.

A liability related to an unrecognized tax benefit is offset against a deferred tax asset for a net operating loss carryforward, a similar tax loss or a tax credit carryforward if such settlement is required or expected in the event the uncertain tax position is disallowed. In situations in which a net operating loss carryforward, a similar tax loss or a tax credit carryforward is not available at the reporting date under the tax law of a jurisdiction or the tax law of a jurisdiction does not require it, and the Company does not intend to use the deferred tax asset for such purpose, the unrecognized tax benefit is presented in the financial statement as a liability and is not combined with deferred tax assets.

Share-based compensation

The Company’s share-based compensation relates to stock options and restricted stock units.  We account for share-based compensation at fair value. Compensation expense is recognized for any unvested stock option awards and time-based restricted stock awards on a straight-line basis or ratably over the requisite service period, generally three or four years. The fair value of stock options granted is estimated at the date of grant using a Black-Scholes option-pricing model. Option valuation models, including Black-Scholes, require the input of subjective assumptions, including expected volatility, risk-free rate, expected term, and estimated dividend yield, and changes in the assumptions used can materially affect the grant date fair value of an award. Judgment is applied in determining the assumptions for computing the fair value of share-based compensation. For all award types, the

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Company makes assumptions for the number of awards that will ultimately not vest (“forfeitures”) in determining the share-based compensation expense for these awards. The Company uses historical data to estimate expected employee behaviors related to option exercises and forfeitures. Compensation expense is trued up for actual forfeitures if different than the estimate.

The fair value of time-based restricted stock units is determined based on our closing stock price on the date of the grant. The restricted stock units granted to employees typically vest and become unrestricted generally over a three or four year period following the date of grant. The restricted stock units granted to non-employee directors typically vest and become unrestricted one year after the date of grant. Performance-based restricted stock units (“PSUs”) typically vest upon the Company satisfying certain performance targets and are granted to employees and non-employees. The Company records compensation expense for PSUs when it is probable that the performance condition(s) included in the grant will be achieved. The compensation expense ultimately recognized, if any, related to these awards will equal the grant date fair value for the number of shares for which the performance condition has been satisfied.

In addition, we grant market-based restricted stock units to certain employees. The fair value was determined using a Monte Carlo simulation that incorporated option-pricing inputs covering the period from the grant date through the end of the performance period as of the date of grant. These restricted stock units typically vest and become unrestricted upon achievement of compound annual stock price growth rate targets of 15%, 22.5% and 30% over a three-year period.Share-based compensation expense is recognized ratably over the vesting periods for market-based restricted stock units.

Self-Insurance Reserves

We are self-insured for healthcare benefits. The estimated accruals for these liabilities are based on statistical analyses of historical industry data as well as actual historical trends. For our workers’ compensation benefits, the Company has a guaranteed cost policy. Before October 1, 2015, we were self-insured and currently have prior years with exposures from September 30, 2012 through September 30, 2015. For these prior policies, liabilities associated with the risks that we retain for workers’ compensation benefits are estimated in part, by considering historical claims experience, demographic factors, severity factors, and other actuarial assumptions. Our estimates use this actuarial data in conjunction with known industry trends and Company experience. If actual claims experience differs from our assumptions, historical trends, and estimates, changes in our insurance reserves would impact the expense recorded in our consolidated statements of operations.

LIQUIDITY AND CAPITAL RESOURCES

Cash Flows Summary

The following table summarizes our cash flows for each of the past three fiscal years ended (in thousands):

	January 3, 2017			December 29, 2015			December 30, 2014
Net cash (used in) provided by operating    activities	$	(7,044	)	$	(14,610	)	$	3,543
Net cash (used in) provided by    investing activities		(6,637	)		42,344			(9,417	)
Net cash  provided by (used in)    financing activities		1,084			(25,754	)		(8,762	)
Net (decrease) increase in cash and    cash equivalents	$	(12,597	)	$	1,980		$	(14,636	)

Liquidity

As of January 3, 2017, we had cash and cash equivalents of $7.1 million compared to $19.7 million in cash and cash equivalents as of December 29, 2015. As of January 3, 2017 and December 29, 2015, we had no short term

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or long term debt. For fiscal year 2016, the Company used $7.0 million in cash for operating activities. The negative cash flow from operating activities resulted primarily from the costs incurred as a result of the relocation of the corporate headquarters.

In fiscal 2016, we incurred approximately $7.4 million in expense and $2.1 million of capital expenditures related to the relocation of our corporate headquarters. Costs incurred in fiscal year 2016 include personnel relocation, employee attrition, retention, severance and replacement, office relocation and other costs related to our relocation of our corporate headquarters.

In fiscal year 2015, the $2.0 million increase in cash and cash equivalents compared to fiscal 2014 was primarily attributable to cash proceeds from the sale of 179 store locations related to our transition to an asset-light model offset by the repurchase of 1,948,004 shares of common stock, changes in the working capital components of the balance sheet due to the sale of 179 stores, and a greater amount of redemptions of jambacards during the year.

We expect that our cash on hand and future cash flows provided by operating activities will be sufficient to fund our working capital and general corporate needs and any non-discretionary capital expenditures for at least the next twelve months and the foreseeable future. The use of cash to fund discretionary capital expenditures will be based on the need to conserve our capital.

On February 14, 2012, the Company entered into a Credit Agreement with Wells Fargo Bank, National Association (the “Lender”), and as amended on November 1, 2012, July 22, 2013, November 4, 2013 and December 29, 2015 (as amended, the “Credit Agreement”), made available to the Company a revolving line of credit in the amount of $10.0 million. On July 22, 2016, the Credit Agreement with Wells Fargo expired.

On November 3, 2016, we entered into a credit agreement with Cadence Bank, NA (“New Credit Agreement”). The New Credit Agreement provides an aggregate principal amount of up to $10.0 million. The credit facility also allows us to request an additional $5.0 million for an aggregate principal amount of up to $15.0 million.

The New Credit Agreement makes available to the Company a revolving line of credit in the amount of up to $15.0 million which accrues interest at a per annum rate equal to the LIBOR rate plus 2.50%. Under the terms of the New Credit Agreement, we are required to maintain certain leverage and coverage ratios and are subject to limits on annual capital expenditures. The New Credit Agreement terminates November 3, 2021. The credit facility is subject to customary affirmative and negative covenants for credit facilities of this type, including limitations on the Company with respect to liens, indebtedness, investments, fundamental changes (merge, dissolve, liquidate, etc.), dispositions, restricted payments and guarantees. The credit facility is evidenced by a revolving loan, is guaranteed by the Company and is secured by substantially all of our assets including the asset of our subsidiary.

During fiscal 2016, there were no borrowings under the Credit Agreement. To acquire the credit facility, the Company incurred upfront fees, which are being amortized over the term of the Credit Agreement. As of January 3, 2017, the unamortized commitment fee for the New Credit Agreement was not material and is recorded in prepaid expenses and other current assets on the consolidated balance sheets. As of January 3, 2017, the Company was in compliance with the financial covenants to the Credit Agreement. However, the Company was, as of May 3, 2017, and currently is, in violation of certain financial reporting covenants. On December 1, 2017, the Company received a covenant waiver and consent that extends the delivery requirements to February 15, 2018, for the fiscal year January 3, 2017, first quarter ended April 4, 2017, second quarter ended July 4, 2017 and third quarter ended October 3, 2017 financial statements.  

Since the inception of the Wells Fargo line of credit and the New Credit Agreement, we did not borrow on the facilities and utilized them primarily for collateral against letters of credit, which reduce the amount available to draw. In the future, we may enter equipment leasing arrangements and incur additional indebtedness as necessary and as permitted under our credit agreement. We cannot assure, however, that such financing will be available on favorable terms or at all. The adequacy of our available funds will depend on many factors, including the macroeconomic environment, the operating performance of our Company Stores, the successful expansion of our franchise and licensing programs and the successful rollout and consumer acceptance of our new beverage and food initiatives. Given these factors, our foremost priorities for the near term continue to be preserving and generating cash sufficient to fund our liquidity needs.

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Operating Activities

Net cash used in operating activities was $7.0 million in fiscal 2016, compared to $14.6 million in fiscal 2015, reflecting a decrease in cash flows used in operating activities of $7.6 million. The change in cash used in operating activities was primarily due to the net loss of $22.4 million in fiscal 2016, versus net income of $9.5 million in fiscal 2015, adjusted for a decrease in non-cash items (approximately $33.1 million) and an increase of cash used in operating assets and liabilities (approximately $6.4 million). Cash flows relating to operating assets and liabilities increased compared to prior year primarily due to our asset-light model initiative. The Company expects that operating cash flow will be generated through a combination of Company Store profitability and franchise royalty fees and a reduced cost structure.

Net cash used in operating activities was $14.6 million in fiscal 2015, compared to net cash provided by $3.5 million in fiscal 2014, reflecting a net increase in cash flows used in operating activities of $18.2 million. The increase in cash used in operating activities was primarily due to the increase in net income (loss) ($13.1 million) adjusted for a net decrease in non-cash items (approximately $26.5 million) and a net increase of cash used in operating assets and liabilities (approximately $4.7 million). Net income (loss) after adjustments for noncash items decreased primarily due to a decrease in cash flows driven by a decline in Company Store revenue, pursuant to our transition to an asset-light model. Cash flows relating to operating assets and liabilities declined compared to prior year primarily due to our transition to an asset-light model and an increase in redemption of jambacards.

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

Investing Activities

Net cash used in investing activities was $6.6 million in fiscal 2016, compared to net cash provided by investing activities of $42.3 million in fiscal 2015. The $48.9 million change in net cash used in investing activities during fiscal 2016 was due to a decrease in proceeds from disposal of fixed assets (approximately $49.9 million) due to our transition to an asset-lightmodel that occurred in fiscal year 2015.

Net cash provided by investing activities was $42.3 million in fiscal 2015, compared to net cash used in investing activities of $9.4 million in fiscal 2014. The $51.8 million increase in net cash provided by investing activities during fiscal 2015 was primarily due to increase in proceeds from disposal of assets (approximately $44.6 million) resulting from our transition to an asset-light model and a decrease in capital expenditure payments (approximately $7.2 million).

Financing Activities

Net cash provided by financing activities was $1.1 million in fiscal 2016, compared to net cash used in financing activities of $25.8 million in fiscal year 2015. The $26.9 million change in net cash provided by financing activities was primarily due to the repurchase of the shares of our common stock (approximately $28.0 million) under the stock repurchase plan approved by our Board of Directors in 2014 that occurred during fiscal 2015, partially offset by a decrease in receipts from our stock issuance plans, including from the exercise of stock options (approximately $0.7 million).

Net cash used in financing activities was $25.8 million in fiscal 2015, compared to $8.8 million in fiscal 2014. The $17.1 million increase in net cash used in financing activities was primarily due to increase in the repurchase of the shares of the Company's common stock (approximately $16.9 million) under the stock repurchase plan approved by our Board of Directors in 2014 while the proceeds from our stock issuance plans remained relatively flat.

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Contractual Obligations

The following table summarizes contractual obligations and borrowings as of January 3, 2017, and the timing and effect that such commitments are expected to have on our liquidity and capital requirements in future periods. We expect to fund these commitments primarily with operating cash flows generated in the normal course of business (in thousands):

	Payments Due by Period
	Total		Less Than 1 Year		1 - 2 Years		3 - 4 Years		5 or More Years
Operating  lease obligations(1)	$	115,316	$	26,354	$	22,539	$	33,154	$	33,269
Purchase  obligations(2)		30,727		20,234		2,145		2,783		5,565
Total	$	146,043	$	46,588	$	24,684	$	35,937	$	38,834

(1) Our wholly owned subsidiary, Jamba Juice Company, is a party to each Company Store and certain refranchised stores’ lease obligation. The operating lease obligations represent future minimum lease payments under non-cancelable operating leases and lease termination fees as of January 3, 2017. The minimum lease payments do not include common area maintenance (“CAM”) charges, insurance, contingent rent obligations or real estate taxes, which are also required contractual obligations under our operating leases. In the majority of our operating leases, CAM charges are not fixed and can fluctuate from year to year. Total CAM charges, insurance, contingent rent obligations, license, permits and real estate taxes related to Company Stores and the corporate support center for our fiscal year ended January 3, 2017 were $2.5 million.

(2) We negotiate pricing and quality specifications for many of the products used in Company Stores and Franchise Stores. This allows for volume pricing and consistent quality of products that meet our standards. Although we negotiate and contract directly with manufacturers, co-packers or growers for our products, we purchase these products from third-party centralized distributors. These distributors source, warehouse and deliver specified products to both Company Stores and Franchise Stores. The Company has purchase obligations with certain suppliers for certain fruits and dairy for various terms typically ranging from less than one year to five years. The Company has one contract with a supplier for a 15 year term that ends in 2024.

Off-Balance Sheet Arrangements

We have no off-balance sheet arrangements.

New Accounting Standards

See the Recent Accounting Pronouncements section in Note 1 of our Notes to Consolidated Financial Statements for a summary of new accounting standards.

SEASONALITY AND QUARTERLY RESULTS

Our business is subject to day-to-day volatility based on weather and varies by season. A significant portion of our revenue is realized during the second and third quarters of the fiscal year, which include the summer months. The fourth quarter of the fiscal year, which encompasses the winter months and the holiday season, has traditionally been our lowest revenue volume quarter. Although we have expanded the number of stores offering our bowls, hot oatmeal, hot beverages, sandwiches and Artisan Flatbread selections, our business will likely continue to be subject to seasonal patterns for the foreseeable future, given that the largest portion of our sales continues to be from the sale of smoothies during the warmer parts of the year. Because of the seasonality of the business, results for an individual quarter are not necessarily indicative of the results, which may be achieved for the full fiscal year.

INFLATION

We do not believe that inflation has had a material impact on our results of operations in recent years. However, we cannot predict what effect inflation may have on our operations in the future.

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ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Interest Rates

We do not enter into market risk sensitive instruments for trading purposes. We are exposed to financial market risks due primarily to changes in interest rates in our interest bearing accounts. We do not believe a change in interest rate will materially affect our financial position or results of operations. A one percent change of the interest rate would result in an annual change in the results of operations of approximately $0.1 million.

Commodities Prices

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

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

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

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ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

	Page No.
Report of Independent Registered Public Accounting Firm	F-1
Consolidated Balance Sheets at January 3, 2017 and December 29, 2015	F-2
Consolidated Statements of Operations for the Years Ended January 3, 2017, December 29, 2015, and December 30, 2014	F-3
Consolidated Statements of Shareholders’ Equity for the Years Ended January 3, 2017, December 29, 2015, and December 30, 2014	F-4
Consolidated Statements of Cash Flows for the Years Ended January 3, 2017, December 29, 2015, and December 30, 2014	F-5
Notes to Consolidated Financial Statements	F-6

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Report of Independent Registered Public Accounting Firm 

The Board of Directors and Shareholders

Jamba, Inc.:

We have audited the accompanying consolidated balance sheets of Jamba, Inc. and subsidiary (the Company) as of January 3, 2017 and December 29, 2015, and the related consolidated statements of operations, shareholders’ equity, and cash flows for the fiscal years ended January 3, 2017, December 29, 2015 and December 30, 2014. In connection with our audits of the consolidated financial statements, we also have audited the related financial statement schedule. These consolidated financial statements and financial statement schedule are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements and financial statement schedule based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Jamba, Inc. and subsidiary as of January 3, 2017 and December 29, 2015, and the results of their operations and their cash flows for the fiscal years ended January 3, 2017, December 29, 2015 and December 30, 2014 in conformity with U.S. generally accepted accounting principles. Also in our opinion, the related financial statement schedule, when considered in relation to the basic consolidated financial statements taken as a whole, presents fairly, in all material respects, the information set forth therein.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), Jamba, Inc.’s internal control over financial reporting as of January 3, 2017, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO), and our report dated February 9, 2018 expressed an adverse opinion on the effectiveness of the Company’s internal control over financial reporting.

/s/ KPMG LLP

San Francisco, Ca

February 9, 2018

F-1

JAMBA, INC.

CONSOLIDATED BALANCE SHEETS

(In thousands, except per share data)

	January 3,2017			December 29, 2015
ASSETS
Current assets:
Cash and cash equivalents	$	7,133		$	19,730
Receivables, net of allowances of $1,808 and $618		11,778			16,932
Inventories		534			818
Prepaid and refundable taxes		243			356
Prepaid rent		1,053			1,682
Assets held for sale		206			3,144
Prepaid expenses and other current assets		2,757			4,495
Total current assets		23,704			47,157
Property, fixtures and equipment, net		12,512			15,600
Goodwill		1,183			1,184
Trademarks and other intangible assets, net		1,327			1,464
Notes receivable and other long-term assets		2,894			4,211
Total assets	$	41,620		$	69,616
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	2,749		$	3,815
Accrued compensation and benefits		3,580			3,788
Workers’ compensation and health insurance reserves		675			633
Accrued jambacard liability		24,131			29,306
Accrued expenses		7,658			9,977
Other current liabilities		7,664			8,116
Total current liabilities		46,457			55,635
Deferred rent and other long-term liabilities		8,940			8,990
Total liabilities		55,397			64,625
Commitments and contingencies (Notes 19)
Shareholders’ (deficit) equity:
Common stock, $.001 par value, 30,000,000 shares authorized;    18,268,885 and 15,410,068 shares issued and outstanding,    respectively, at January 3, 2017, and 17,938,820 and 15,080,003    shares issued and outstanding, respectively, at December 29, 2015		18			18
Additional paid-in capital		407,273			403,605
Treasury shares, at cost, 2,858,817		(40,009	)		(40,009	)
Accumulated deficit		(381,059	)		(358,623	)
Shareholders' (deficit) equity		(13,777	)		4,991
Total liabilities and shareholders’ (deficit) equity	$	41,620		$	69,616

See Notes to Consolidated Financial Statements.

F-2

JAMBA, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except par value data)

	Fiscal Year Ended
	January 3,			December 29,			December 30,
	2017			2015			2014
Revenue:
Company stores	$	51,282		$	137,025		$	198,737
Franchise and other revenue		28,341			24,651			19,311
Total revenue		79,623			161,676			218,048
Costs and operating expenses (income):
Cost of sales		12,601			33,737			52,236
Labor		17,872			44,732			61,749
Occupancy		7,659			18,951			27,630
Store operating		9,285			25,152			33,089
Depreciation and amortization		5,749			6,569			10,084
General and administrative		37,958			36,872			37,278
Loss (gain) on disposal of assets		790			(21,609	)		(2,957	)
Store pre-opening		1,224			1,031			763
Impairment of long-lived assets		3,410			2,523			175
Store lease termination and closure		4,160			1,669			575
Other operating, net		1,083			1,795			726
Total costs and operating expenses (income):		101,791			151,422			221,348
(Loss) income from operations		(22,168	)		10,254			(3,300	)
Other income (expense):
Interest income		250			137			74
Interest expense		(439	)		(220	)		(195	)
Total other income (expense), net		(189	)		(83	)		(121	)
(Loss) income before income taxes		(22,357	)		10,171			(3,421	)
Income tax expense		(79	)		(701	)		(168	)
Net (loss) income		(22,436	)		9,470			(3,589	)
Less: Net income attributable to noncontrolling    interest		—			52			43
Net (loss) income attributable to Jamba, Inc.	$	(22,436	)	$	9,418		$	(3,632	)
Weighted-average shares used in the computation of    earnings (loss) per share attributable to Jamba, Inc.:
Basic		15,229,102			15,787,806			17,197,904
Diluted		15,229,102			16,228,033			17,197,904
Earnings (loss) per share attributable to Jamba, Inc.    common shareholders:
Basic	$	(1.47	)	$	0.60		$	(0.21	)
Diluted	$	(1.47	)	$	0.58		$	(0.21	)

See Notes to Consolidated Financial Statements.

F-3

JAMBA, INC.

CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY

	Common Stock				Additional Paid in						Accumulated			Equity Attributable to			Noncontrolling			Total Shareholders’
(In thousands, except share amounts)	Shares		Amount		Capital			Treasury Stock			Deficit			Jamba, Inc.			Interest			Equity
Balance as of December 31, 2013		17,154,655	$	17	$	391,234		$	—		$	(364,409	)	$	26,842		$	—		$	26,842
Share-based compensation expense		—		—		3,069			—			—			3,069			—			3,069
Issuance of common stock pursuant    to stock plans		323,961		—		1,707			—			—			1,707			—			1,707
Gain on sale of noncontrolling    interest		—		—		662			—			—			662			88			750
Paid to noncontrolling interest		—		—		(42	)		—			—			(42	)		—			(42	)
Due to noncontrolling interest		—		—		(1	)		—			—			(1	)		—			(1	)
Treasury shares purchased, not    retired		—		—		—			(11,991	)		—			(11,991	)		—			(11,991	)
Net loss		—		—		—			—			(3,632	)		(3,632	)		43			(3,589	)
Balance as of December 30, 2014		17,478,616	$	17	$	396,629			(11,991	)		(368,041	)		16,614			131			16,745
Share-based compensation expense		—		—		5,162			—			—			5,162			—			5,162
Issuance of common stock pursuant    to stock plans		460,204		1		1,792			—			—			1,793			—			1,793
Excess tax benefit from exercise    of stock options		—		—		553			—			—			553			—			553
Realized gain on sale of    noncontrolling interest		—		—		(662	)		—			—			(662	)		(183	)		(845	)
Noncontrolling interest		—		—		131			—			—			131			—			131
Treasury shares purchased, not    retired				—		—			(28,018	)		—			(28,018	)		—			(28,018	)
Net income		—		—		—			—			9,418			9,418			52			9,470
Balance as of December 29, 2015		17,938,820	$	18	$	403,605			(40,009	)		(358,623	)		4,991			—			4,991
Share-based compensation expense		—		—		2,579			—			—			2,579			—			2,579
Issuance of common stock pursuant    to stock plans		330,065		—		1,089			—			—			1,089			—			1,089
Net income		—		—		—			—			(22,436	)		(22,436	)		—			(22,436	)
Balance as of January 3, 2017		18,268,885	$	18	$	407,273		$	(40,009	)	$	(381,059	)	$	(13,777	)	$	—		$	(13,777	)

See Notes to Consolidated Financial Statements.

F-4

JAMBA, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Dollars in thousands)

	Fiscal Year Ended
	January 3,			December 29,			December 30,
	2017			2015			2014
Cash (used in) provided by operating activities:
Net income (loss) attributable to common shareholders	$	(22,436	)	$	9,470		$	(3,589	)
Adjustments to reconcile net income (loss) to net cash (used in) provided    by operating activities:
Depreciation and amortization		5,749			6,569			10,084
Lease termination, store closure costs, impairment and gain on    disposals		8,359			(26,555	)		(2,420	)
Gain from sale of investment in joint venture		—			(662	)		—
Contingent consideration fair value measurement		(295	)		(156	)		(397	)
Jambacard breakage income		(4,096	)		(5,440	)		(4,744	)
Share-based compensation		2,579			5,162			3,069
Bad debt and trade credits		1,645			1,896			358
Deferred rent		(1,970	)		(2,035	)		(397	)
Equity loss from joint ventures		98			229			—
Changes in operating assets and liabilities:
Receivables		3,493			1,222			(2,853	)
Inventories		249			1,129			387
Prepaid and refundable taxes		113			118			9
Prepaid rent		628			(1,178	)		(197	)
Prepaid expenses and other current assets		581			1,456			(2,406	)
Other long-term assets		1,447			(1,201	)		(1,617	)
Accounts payable		(330	)		(1,274	)		(2,145	)
Accrued compensation and benefits		(208	)		(2,537	)		(58	)
Workers’ compensation and health insurance reserves		43			(678	)		265
Accrued jambacard liability		(170	)		(3,438	)		5,807
Other current liabilities		(2,951	)		1,669			3,319
Other long-term liabilities		428			1,624			1,068
Cash (used in) provided by operating activities	$	(7,044	)	$	(14,610	)	$	3,543
Cash provided by (used in) investing activities:
Capital expenditures		(6,807	)		(7,052	)		(14,280	)
Acquisitions, net of cash acquired		—			(735	)		(694	)
Proceeds from the sale of assets		170			50,131			5,557
Cash provided by (used in) investing activities	$	(6,637	)	$	42,344		$	(9,417	)
Cash (used in) provided by financing activities:
Proceeds pursuant to stock plans		1,089			1,793			1,707
Excess tax benefit from exercise of stock options		—			553			—
Proceeds from sale of noncontrolling interest		—			—			750
Payments to noncontrolling interest		—			(52	)		(42	)
Payments for treasury shares		—			(28,018	)		(11,146	)
Payments on capital lease obligations		(5	)		(30	)		(31	)
Cash (used in) provided by financing activities	$	1,084		$	(25,754	)	$	(8,762	)
Net increase (decrease) in cash and cash equivalents	$	(12,597	)	$	1,980		$	(14,636	)
Cash and cash equivalents at beginning of period		19,730			17,750			32,386
Cash and cash equivalents at end of period	$	7,133		$	19,730		$	17,750
Supplemental cash flow information:
Cash paid for interest	$	12		$	31		$	30
Income taxes paid		19			65			178
Noncash investing and financing activities:
Property, fixtures and equipment in accounts payable		312			1,171			1,192
Property, fixtures and equipment funded by a tenant allowance		1,142			—			—
Note taken for store disposal		100			2,000			—
Noncash purchase of shares of Jamba, Inc.		—			—			845

See Notes to Consolidated Financial Statements.

F-5

JAMBA, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FOR THE FISCAL YEARS ENDED JANUARY 3, 2017, DECEMBER 29, 2015 AND

DECEMBER 30, 2014

1. BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Business - Jamba, Inc. consummated its initial public offering in July 2005. On November 29, 2006, Jamba, Inc. consummated the merger with Jamba Juice Company whereby Jamba Juice Company, which first began operations in 1990, became its wholly owned subsidiary.

Jamba, Inc. together with its wholly-owned subsidiary, Jamba Juice Company (“the Company”), is a healthful, active lifestyle brand with a robust global business driven by a portfolio of franchised and company-owned Jamba Juice ^® stores and Jamba Juice Express^TM formats. The Jamba ^® brand was created by founder Kirk Perron to inspire and simplify healthy living.  This mission is alive today in the more than 900 retail locations globally and in Jamba branded products. The Company is a leading restaurant retailer of “better-for-you” specialty beverage blends and food offerings which include flavorful, whole fruit and vegetable smoothies, fresh squeezed juices and juice blends, Energy (smoothie) Bowls, signature “boosts”, shots and a variety of food items including; hot oatmeal, breakfast wraps, sandwiches, Artisan Flatbreads, baked goods and snacks. The Company’s headquarters were located in Emeryville, California and were relocated to Frisco, Texas in the fourth quarter of fiscal year 2016.

As of January 3, 2017, there were 909 Jamba Juice stores globally, consisting of 66 Company-owned and operated stores (“Company Stores”), 773 franchisee-owned and operated stores (“Franchise Stores”) in the United States, and 70 Franchise Stores in international locations (“International Stores”).

Basis of Presentation - The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiary, Jamba Juice Company. The accounts of Jamba Juice Southern California, LLC (“JJSC”), a former indirect subsidiary, are included through April 28, 2015, when the Company sold its 88% interest in JJSC to the holder of JJSC’s non-controlling interest. All significant intercompany balances and transactions have been eliminated in consolidation. The equity method of accounting is used to account for Jamba Juice Company’s investments in its joint ventures because the Company exercises significant influence over the operations and financial policies of the joint ventures. Accordingly, the carrying value of the investment is reported in other long-term assets, and the Company’s equity in the net income and losses of its joint ventures is reported in other operating, net.

Fiscal Year End - The Company’s fiscal year ends on the Tuesday closest to December 31. The Company’s most recently completed fiscal year, referred to as fiscal 2016 which started on December 30, 2015 and ended on January 3, 2017, had 53 weeks. The Company’s fiscal 2015 which started on December 31, 2014, and ended on December 29, 2015, had 52 weeks, and fiscal 2014 which started on January 1, 2014 and ended on December 30, 2014 had 52 weeks.

Effect of Correction of Prior Period Misstatements – During fiscal year 2016, the Company corrected certain errors which resulted in additional expense in fiscal 2016 of approximately $0.8 million related to prior period financial statements. These errors related to FY 2015 ($0.6 million) and FY 2014 ($0.6 million), with the remaining offsetting amounts relating to the financial statements from years prior to 2014. These adjustments primarily related to the prior fiscal year 2015 results. The Company determined that the corrections were neither quantitatively nor qualitatively material to fiscal year 2016 or to prior periods either individually or in the aggregate or to the trends of the reported results of operations.

F-6

The following table details the specific amounts of out-of-period (overstatements)/understatements for the fiscal years 2016, 2015, 2014 and fiscal years prior to 2014.

(In thousands, except share and per share amounts)	Fiscal Year Ended January 3, 2017			Fiscal Year Ended December 29, 2015			Fiscal Year Ended December 30, 2014			Prior to Fiscal Year 2014
Total revenue	$	(65	)	$	(3	)	$	33		$	35
Total costs, operating expenses and gain		(893	)		624			622			(353	)
Income before income taxes		828			(627	)		(589	)		388
Total other expense, net		—			—			—			—
Income before income taxes		828			(627	)		(589	)		388
Income tax benefit (expense)		(30	)		44			29			(10	)
Net income		798			(583	)		(560	)		378
(Loss) earnings per share attributable to    Jamba, Inc. common shareholders:
Basic	$	0.05		$	(0.04	)	$	(0.03	)
Diluted	$	0.05		$	(0.04	)	$	(0.03	)

Significant Estimates - The preparation of the consolidated financial statements and accompanying notes are in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”). Preparing consolidated financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue and expenses and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reported periods. Actual results could differ from those estimates.

Reclassifications - Certain prior year amounts have been reclassified to conform to current year presentation in the consolidated financial statements.

Concentrations of Risk - From fiscal 2012 through October 2014, the Company maintained food distribution contracts primarily with one distributor. In October 2014, the Company began working with both Gordon Food Services (“GFS”) in the Eastern United States and Systems Services of America (“SSA”) in the Western United States to distribute food sold in the majority of Company and Franchise Stores. In fiscal 2016 and fiscal 2015, two distributors accounted for approximately 92% and 98%, respectively, of the supplies delivered to Company and Franchise Stores. The Company's limited distributor relationships could have an adverse effect on the Company’s operations.

Financial instruments that potentially subject the Company to concentrations of credit risk consist primarily of cash and cash equivalents. The Company places its cash and cash equivalents with high-quality financial institutions. Balances in the Company’s cash accounts frequently exceed the Federal Deposit Insurance Corporation insurance limit. The Company has not experienced any losses related to these balances and believes the credit risk to be minimal.

Cash and Cash Equivalents - The Company considers all highly liquid instruments with maturities of three months or less when purchased to be cash equivalents. The existing letters of credit balance of $0.4 million is collateralized by restricted cash.

Receivables - Receivables primarily represent amounts due from royalty fees, advertising fees, construction allowances, amounts receivable from suppliers, distributors and CPG customers, sale of jambacards by other issuers and franchisees and rent receivable from franchisees. The allowance for doubtful accounts is the Company’s estimate of the amount of probable credit losses in the Company’s existing accounts receivable.

F-7

Inventories - Inventories are stated at the lower of cost or market. Cost is determined using the first-in, first-out method (“FIFO”). Inventories consist of food, beverages and available-for-sale promotional products. The Company reduces inventory for obsolete and slow-moving inventory and for estimated shrinkage between physical inventory counts.

Property, Fixtures and Equipment - Property, fixtures and equipment are stated at cost less accumulated depreciation. Depreciation is computed using the straight-line method over the estimated useful life. Expenditures for major additions and improvements are capitalized and minor replacements, maintenance and repairs are charged to expense as incurred. The estimated useful life for leasehold improvements is the lesser of 10 years or the term of the underlying lease. The estimated useful life for furniture, fixtures and equipment is three to 10 years. Capitalized software is recorded at cost and includes purchased, internally-developed and externally-developed software used in the Company’s operations. Amortization expense is provided using the straight-line method over the estimated useful lives of the software, which range from one to three years. In fiscal year 2016, the Company received approximately $1.1 million in tenant allowances, primarily related to the headquarters relocation to Frisco, TX.

Upon sale, the cost of assets disposed and their related accumulation depreciation are removed from the consolidated balance sheets. The Company calculates the gain or loss by comparing the carrying value of the assets to the selling price.

Intangible Assets Subject to Amortization – Intangible assets subject to amortization (primarily franchise and reacquired franchise rights, favorable lease intangible assets and acquired customer relationships) are amortized over their estimated useful lives using a method of amortization that reflects the pattern in which the economic benefits of the intangible assets are consumed or otherwise realized. The useful life for the franchise agreements is approximately 13.4 years. The useful life of reacquired franchise rights represents the remaining term of the franchise agreement. The useful life of the favorable lease portfolio intangible is based on the related lease term.

Business Combinations - The Company accounts for business combinations using the acquisition method. Under the acquisition method, the purchase price of the acquisition is allocated to the underlying tangible and intangible assets acquired based on their respective fair values. Fair values are derived from various observable and unobservable inputs and assumptions. The Company utilizes third-party valuation specialists to assist in the allocation. Initial purchase price allocations are preliminary and are subject to revision within the measurement period, not to exceed one year from the date of acquisition. The costs of the business acquisitions are expensed as incurred. These costs may include fees for accounting, legal, professional consulting and valuation specialists.

Assets Held for Sale - The Company classifies assets as held for sale and suspends depreciation and amortization when approval at the appropriate level has been provided, the assets can be immediately removed from operations, an active program has begun to locate a buyer, the assets are being actively marketed for sale at or near their current fair value, significant changes to the plan of sale are not likely and the sale is probable within one year. Upon classification as held for sale, long-lived assets are no longer depreciated, and an assessment of impairment is performed to identify and expense any excess of carrying value over fair value less costs to sell. Subsequent changes to the estimated fair value less costs to sell will impact the measurement of assets held for sale. To the extent fair value increases, any impairment previously recorded is reversed. If the carrying value of the assets held for sale exceeds the fair value less costs to sell, the Company will record a loss for the amount of the excess. The Company also reclassifies the associated prior year balances for assets reclassified to assets held for sale.

If the Company decides not to sell previously classified assets held for sale, the asset is reclassified back to their original asset group. The assets are recorded at the lower of the carrying value before being classified as held for sale adjusted for depreciation that would have been recognized during the time they were classified as held for sale or fair value at the date the Company decided not to sell. Assets held for sale as of January 3, 2017 was $0.2 million and related to JambaGO^® assets, which is recorded in assets held for sale in the consolidated balance sheets.

Impairment of Long-lived assets - Long-lived assets, such as property and equipment and intangible assets subject to amortization, are tested for impairment at least annually or when facts and circumstances indicate that the carrying values of long-lived assets may not be recoverable. Long-lived assets are grouped for recognition and measurement of impairment at the lowest level for which identifiable cash flows are largely independent of the cash flows of other assets, generally the store asset group level. The Company first compares the carrying value of the

F-8

asset to the asset’s estimated future undiscounted cash flows. If the estimated future cash flows are less than the carrying value of the asset, the Company measures an impairment loss based on the asset’s estimated fair value. The fair value of a store’s assets is estimated using a discounted cash flow model based on internal projections and taking into consideration the view of a market participant. The estimate of cash flows is based on, among other things, certain assumptions about expected future operating performance. Factors considered during the impairment evaluation include factors related to actual operating cash flows, the period of time since a store has been opened or remodeled, refranchising expectations and the maturity of the relevant market. The Company recorded impairment charges of $3.4 million, $2.5 million, and $0.2 million for fiscal years 2016, 2015 and 2014, respectively.

Impairment of Goodwill, Trademarks and Other Intangible Asset Not Subject to Amortization - Goodwill is evaluated for impairment on an annual basis during the Company’s fourth fiscal quarter, or more frequently if circumstances, such as material deterioration in performance, indicate carrying values may exceed their fair values. When reviewing goodwill for impairment, the Company assesses whether goodwill should be allocated to operating levels lower than its single operating segment for which discrete financial information is available and reviewed for decision-making purposes. These lower levels are referred to as reporting units. Currently, the Company’s one operating segment was determined to be one reporting unit.

Our annual impairment test of goodwill may be completed through a qualitative assessment. We may elect to bypass the qualitative assessment and proceed directly to a two-step quantitative impairment test, in any period. We can resume the qualitative assessment for any subsequent period. If we elect to bypass the qualitative assessment for any reporting unit, or if a qualitative assessment indicates it is more-likely-than-not that the estimated carrying value of a reporting unit exceeds its fair value, we perform a two-step quantitative goodwill impairment test. First, the reporting unit’s estimated fair value is compared to its carrying value, including goodwill. If the Company determines that the estimated fair value of the reporting unit is less than its carrying value, it moves to the second step to determine the implied fair value of the reporting unit’s goodwill. If the carrying amount of the reporting unit’s goodwill exceeds its implied fair value, an impairment loss is recognized. No goodwill impairment was recorded for fiscal years 2016, 2015 and 2014.

Intangible assets not subject to amortization (primarily trademarks) are evaluated for impairment on an annual basis during the fourth fiscal quarter, or more frequently if events or changes in circumstances indicate that the asset might be impaired. The Company qualitatively assesses the impairment for other intangible assets not subject to amortization to determine whether it is more likely than not that the fair value of intangible assets are less than their carrying amount.

For other intangible assets not subject to amortization not assessed qualitatively, a quantitative approach is utilized. The Company compares the carrying value of the applicable asset to its fair value, which the Company estimates using a discounted cash flow analysis or by comparing with the market values of similar assets. If the carrying amount of the asset exceeds its estimated fair value, the Company determines the impairment loss, if any, as the excess of the carrying value of the intangible asset over its fair value. An impairment loss is generally recognized when the carrying amount of the trademarks exceeds the fair value. For fiscal 2016, 2015 and 2014, the company had no impairments related to other intangible assets not subject to amortization.

jambacards^® - The Company, through its subsidiary, Jamba Juice Company, sells gift cards called jambacards to its customers in its retail stores, through its website and through resellers. The Company’s jambacards do not have an expiration date. An obligation is recorded at the time of either an initial load or a subsequent reload in accrued jambacard liability on the Company’s consolidated balance sheets. The Company recognizes income from jambacards when (i) the jambacard is redeemed by the customer or (ii) the likelihood of the jambacard being redeemed by the customer is remote (also referred to as “breakage”) and the Company determines that it does not have a legal obligation to remit the unredeemed jambacards to the relevant jurisdictions. The Company determines the jambacard breakage amount based upon its historical redemption patterns. Jambacard breakage income is included in other operating, net in the Consolidated Statements of Operations.

Self-Insurance Reserves -The Company is self-insured for healthcare benefits. The estimated accruals for these liabilities are based on statistical analyses of historical industry data as well as actual historical trends. For its workers’ compensation benefits, the Company has a guaranteed cost policy which renewed on October 1, 2016. Prior to September 30, 2015, the Company had a retrospective policy and was self-insured for existing and prior

F-9

years exposures through September 30, 2012. For these two policies, liabilities associated with the risks that the Company retains for workers’ compensation benefits are estimated in part, by considering historical claims experience, demographic factors, severity factors and other actuarial assumptions. The Company’s estimates use this actuarial data in conjunction with known industry trends and Company experience.

Rent Expense - Under the provisions of certain of the Company’s leases, there are rent holidays and/or escalations in payments over the base lease term, as well as renewal periods. The effects of rent holidays and escalations are reflected in rent costs on a straight-line basis over the expected lease term, which includes cancelable option periods when it is deemed to be reasonably assured that the Company will exercise such option periods due to the fact that the Company would incur an economic penalty for not doing so. The lease term commences on the date when the Company becomes legally obligated for the rent payments which generally coincides with the time when the landlord delivers the property for the Company to develop. All rent costs recognized during construction periods are classified as pre-opening expenses.

The Company has assigned certain of its store leases to franchisees as part of refranchising transactions, and in some cases for amounts less than the Company’s rent obligation. Liabilities for those rent concessions are recorded and relieved against rent expense over the remaining term of the related lease.

Construction Allowances - The Company receives construction allowances from certain landlords, which are deferred and amortized on a straight-line basis over the lease term as a reduction of rent expense. In fiscal year 2016, the Company received approximately $1.1 million in allowances, primarily related to the headquarters relocation to Frisco, TX. Construction allowances are recorded in deferred rent and other long-term liabilities.

Revenue Recognition - Revenue from Company Stores is recognized when product is sold. Revenue is presented net of any taxes collected from customers and remitted to government entities. In fiscal 2014, the Company initiated a loyalty program for its customers, which allows them to earn points based on the volume of their purchases. Under the loyalty program, a customer receives a discount on future purchases when a defined number of points have been earned. The estimated amount of points redeemable in exchange for discounts is recorded in deferred revenue and recognized when the customers redeem the points they earned. The deferred revenue for unredeemed points under the loyalty program was $0.2 million at January 3, 2017 and December 29, 2015.

Revenue from jambacards is recognized upon redemption in exchange for product. Until redemption, outstanding customer balances are recorded as a liability. See “jambacards” section above for discussion on recognition of jambacard breakage.

The Company generally executes franchise agreements for each store that establishes the terms of its arrangement with the franchisee. The franchise agreements typically require the franchisee to pay an initial, non-refundable fee and continuing fees based upon a percentage of sales. Subject to the Company’s approval and the franchisee’s payment of a renewal fee, a franchisee may generally renew the franchise agreement upon its expiration.

Franchise revenue is generated from royalties, development fees, initial franchise fees and revenue from sales at franchise-operated Jamba Juice Express and JambaGO^® units. Royalties from Franchise Stores are determined as a percentage of Franchise Store revenue and are recognized in the same period as the related Franchise Store sales occur. If collection of the franchise royalty fee is doubtful, revenue is recognized at the time of collection.

Development fees are paid to the Company as part of an agreement to open and operate a specific number of stores in a specified territory. The amount of the fee is based on the number of stores to be opened pursuant to the development agreement. The nonrefundable fees collected for these services are recognized as the franchise stores under these agreements open. The Company’s multi-unit development agreements specify the number of stores to be opened.

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The Company charges an initial franchise fee for providing operational materials, new store opening, planning and functional training courses. Initial franchise fees, if any, are due for payment at the time the franchise agreement for a particular store is executed. Franchise fees are recognized as revenue when all material services or conditions have been substantially performed or satisfied and no other material conditions or obligations related to the determination of substantial performance exist. Duties and services that are completed prior to approval include training, facilities inspection, receipt of operating license(s) and clearance from appropriate agencies. These duties and services are substantially complete prior to the approval of the opening of a store. Revenue is recognized when the store opens.

Revenue from sales at the Company’s flexible format franchise locations are recognized when the products are delivered to the operators of the Jamba Juice Express.

Other revenue primarily consists of revenue from sales of CPG products sold to retail outlets and online and royalties from licensed CPG products. Revenue from sale of CPG products is recognized when the products are delivered to the customer. License revenue from CPG products is based on a percentage of product sales and is recognized as revenue upon the sale of the product to retail outlets.

Cost of Sales - The Company includes in cost of sales, costs incurred to acquire fruit, dairy and other products used to make smoothies and juices, other food offerings and paper products sold by the Company Stores.

Store Lease Termination and Closure Costs - Costs incurred when closing a store are generally expensed as incurred. At the date the Company ceases use of a store under an operating lease, a liability is recorded for the net present value of any remaining lease obligations, net of estimated sublease income, if any.  In instances where a buyout is reasonably expected within six months of store closure, liabilities are recorded by estimating the expected buyout fee and the rent expected to be incurred until a buyout agreement is reached. Any costs recorded upon store closure, as well as any subsequent adjustments to liabilities for remaining lease obligations, as a result of lease termination or changes in estimates of sublease income are recorded in other operating, net in the Consolidated Statements of Operations. Considerable management judgment is necessary to estimate future cash flows, including cash flows from continuing use, terminal value and sublease income. Accordingly, actual results could vary from the Company’s estimates.

Advertising Fund - The Company participates with its franchisees in an advertising fund to collect and administer funds contributed for use in advertising and promotional programs, which are designed to increase sales and enhance the reputation of the Company and its franchise owners. Contributions to the advertising fund are required for Company Stores and traditional Franchise Stores and are generally based on a percent of store sales. The Company has control of the advertising fund. The fund is consolidated and all assets and liabilities of the fund are reported.

The advertising fund assets, consisting primarily of cash received from the Company and franchisees and accounts receivable from franchisees, can only be used for selected purposes and are considered restricted. The cash contributed by franchisees is recorded as a liability against which specified advertising costs are charged. The Company does not reflect franchisee contributions to the fund as revenue in its consolidated statements of operations or consolidated statements of cash flows.

Advertising fund assets as of January 3, 2017 and December 29, 2015 include $1.5 million and $2.4 million of receivables from franchisees, net of allowances, respectively, which is recorded in receivables in the consolidated balance sheets. Advertising fund liabilities as of January 3, 2017 and December 29, 2015, of $1.4 million and $1.2 million, respectively, are reported in other current liabilities and accounts payable in the Company’s consolidated balance sheets.

Advertising Costs - Advertising costs are expensed as incurred and were $2.3 million, $8.5 million and $10.0 million in fiscal years 2016, 2015 and 2014, respectively, and are included in store operating expenses. Advertising contributions received from franchisees, totaled $10.6 million, $7.5 million and $5.8 million for fiscal years 2016, 2015 and 2014, respectively, and were recorded as an offset to advertising expense.

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Store Pre-Opening Costs - Costs incurred in connection with start-up and promotion of new store openings as well as rent from possession date to store opening date are expensed as incurred.

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

Income Taxes - Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis. Deferred tax assets and liabilities are measured using enacted income tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Any effect on deferred tax assets and liabilities due to a change in tax rates is recognized in income in the period that includes the enactment date. In establishing deferred income tax assets and liabilities, judgments and interpretations are made based on enacted tax laws and published tax guidance applicable to the Company’s operations. The Company records deferred tax assets and liabilities and evaluates the need for valuation allowances to reduce deferred tax assets to amounts more likely than not of being realized. Changes in the valuation of the deferred tax assets or changes in the income tax provision may affect the Company’s annual effective income tax rate.

Uncertain tax positions are recognized as the greatest amount more than 50% likely of being sustained upon audit based on the technical merits of the position. On a quarterly basis, the Company reviews and updates its inventory of tax positions as necessary to add any new uncertain tax positions taken, or to remove previously identified uncertain positions that have been effectively settled. Additionally, uncertain positions may be re-measured as warranted by changes in facts or law. Accounting for uncertain tax positions requires significant judgments, including estimating the amount, timing and likelihood of ultimate settlement. Although the Company believes that these estimates are reasonable, actual results could differ from these estimates. The Company classifies interest and penalties related to income taxes as a component of income taxes in the consolidated statements of operations.

A liability related to an unrecognized tax benefit is offset against a deferred tax asset for a net operating loss carryforward, a similar tax loss or a tax credit carryforward if such settlement is required or expected in the event the uncertain tax position is disallowed. In situations in which a net operating loss carryforward, a similar tax loss or a tax credit carryforward is not available at the reporting date under the tax law of a jurisdiction or the tax law of a jurisdiction does not require it, and the Company does not intend to use the deferred tax asset for such purpose, the unrecognized tax benefit is presented in the financial statement as a liability and is not combined with deferred tax assets.

Earnings (Loss) Per Share -  Basic earnings (loss) per share is computed based on the weighted-average number of common shares outstanding during the period. Diluted earnings (loss) per share is computed based on the weighted-average number of common shares and potentially dilutive securities, which includes outstanding options and restricted stock awards granted under the Company’s stock option plans. For fiscal years 2016 and 2014, the Company’s basic weighted average shares outstanding were equal to its diluted weighted average shares outstanding, since the Company experienced net losses.

During fiscal years 2015 and 2014, the Company repurchased 1,948,004 and 910,813 shares of common stock, respectively, which reduced the basic weighted average shares outstanding. The Company did not repurchase shares of common stock in fiscal year 2016.  

Anti-dilutive common stock equivalents of 1.9 million, 1.9 million and 1.5 million have been excluded from diluted weighted-average shares outstanding in fiscal years 2016, 2015 and 2014, respectively.

Share-based compensation - The Company’s share-based compensation relates to stock options and restricted stock units and is accounted for at fair value. Stock options for a fixed number of shares are granted to certain employees and directors with an exercise price based on the grant date fair value of the Company’s common stock. Compensation expense is recognized for any unvested stock option awards and time-based restricted stock awards on a straight-line basis or ratably over the requisite service period, generally three or four years. For all award types,

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the Company makes assumptions for the number of awards that will ultimately not vest (“forfeitures”) in determining the share-based compensation expense for these awards. The Company uses historical data to estimate expected employee behaviors related to option exercises and forfeitures. Compensation expense is trued up for actual forfeitures if different than the estimate.

The fair value of options granted was estimated at the date of grant using a Black-Scholes option-pricing model. Option valuation models, including Black-Scholes, require the input of subjective assumptions, which can materially affect the grant date fair value of a stock option award.  The assumptions used include the risk-free interest rate, the expected term of the award, expected volatility and expected dividend yield. The risk-free interest rate is based on the zero coupon U.S. Treasury rates appropriate for the expected term of the award. For the expected term of the award, the Company utilized the median of the Company’s peer group’s expected term, after adjusting for vesting and term differences. Expected volatility is based on an average of the Company’s recent historic daily stock price observations of the Company’s common stock during the period immediately preceding the share-based award grant that is equal in length to the award’s expected term and the Company’s implied volatility based on the mean of 180-day call and put options as per the open market. Expected dividends are zero based on the history of not paying cash dividends on the Company’s common stock and its intention not to make dividend payments in the future.

The Company grants time-based restricted stock units with a fair value determined based on the closing price of the Company’s common stock on the date of grant. For employees, these restricted stock units typically vest and become unrestricted over the three-year period following the date of grant. For non-employee directors, these restricted stock units typically vest and become unrestricted one year after the date of grant.  The Company grants performance-based restricted stock units (“PSUs”), which typically vest upon the Company satisfying certain performance targets and are granted to employees and non-employees.  The Company records compensation expense for PSUs when it is probable that the performance condition(s) included in the grant will be achieved. The compensation expense ultimately recognized, if any, related to these awards will equal the grant date fair value for the number of shares for which the performance condition has been satisfied.  The fair value of the PSUs is determined based on fair value at the date of grant.

In addition, the Company grants market-based restricted stock units to certain employees. The fair value was determined using a Monte Carlo simulation that incorporated option-pricing inputs covering the period from the grant date through the end of the performance period as of the date of grant.Market-based restricted stock units typically vest and become unrestricted upon achievement of compound annual stock price growth rate targets of 15%, 22.5% and 30% over a three-year period. Share-based compensation expense is recognized ratably over the vesting periods for all market-based and time-based restricted stock units.

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

Segment Reporting - The Company has one reportable retail segment.

Recent Accounting Pronouncements

In August 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update (“ASU”) 2014-15, Presentation of Financial Statements – Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern. ASU 2014-15 requires management to evaluate, at each interim and annual reporting period, whether there are conditions or events that raise substantial doubt about the entity’s ability to continue as a going concern within one year after the date the financial statements are issued, and provide related disclosures. ASU 2014-15 is effective for the annual period ending after December 15, 2016, and for annual periods and interim periods thereafter. The adoption of this guidance did not have any impact on the Company's consolidated financial statements and related disclosures.

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The Company has not yet adopted and is currently assessing the potential impact of the following pronouncements on its Consolidated Financial Statements and related disclosure:

In May 2014, the FASB issued amended guidance on revenue from contracts with customers which amended the existing accounting standards for revenue recognition. ASU 2014-09, Revenue from Contracts with Customers, establishes principles for recognizing revenue upon the transfer of promised goods or services to customers, in an amount that reflects the expected consideration received in exchange for those goods or services. In August 2015, the FASB issued ASU 2015-14 deferring the effective date to fiscal years beginning after December 15, 2017 (including interim reporting periods within those periods). Early adoption is permitted to the original effective date of the fiscal year beginning after December 15, 2016 (including interim reporting periods within those periods). The amendment guidance may be applied retrospectively to each prior period presented with the option to apply practical expedients or retrospectively with the cumulative effect recognized as of the date of initial application. Management believes adoption of the new revenue recognition standard will impact the Company’s accounting for other fees charged to franchisees and transactions involving its advertising fund and gift card fund. Currently, the Company anticipates to adopt the new revenue standard using the modified retrospective transition approach. Management is in the process of determining the financial statement impact and currently unable to estimate the impact on the Company’s consolidated financial statements or related disclosures.

In February 2016, the FASB issued ASU 2016-02, Leases (“ASU 2016-02”), which will require lessees to recognize a lease liability and a right-of-use asset for all leases (with the exception of leases with terms less than 12 months) at the commencement date. The guidance will be effective for the Company beginning fiscal year 2019, with early adoption permitted. The new standard is required to be applied with a modified retrospective approach to each prior reporting period presented with various optional practical expedients. Management believes the adoption of ASU 2016-02 will materially impact the Company’s consolidated financial statements by significantly increasing non-current assets and non-current liabilities on the consolidated balance sheets in order to record the right of use assets and related lease liabilities for existing operating leases. Management is currently unable to estimate the impact on the consolidated financial statements.

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

In March 2016, the FASB issued ASU 2016-09, Compensation-Stock Compensation: Improvements to Employee Share-Based Payment Accounting. The updated guidance changes how companies account for certain aspects of share-based payment awards to employees, including the accounting for income taxes, forfeitures and statutory tax withholding requirements, as well as classification in the statement of cash flows. The standard also allows us to repurchase more of an employee’s vesting shares for tax withholding purposes without triggering liability accounting, clarifies that all cash payments made to tax authorities on an employee’s behalf for withheld shares should be presented as a financing activity on the cash flows statement, and provides an accounting policy election to account for forfeitures as they occur. The net result of the adoption of ASC 2016-09 on deferred taxes will be zero. The cumulative gross excess tax benefit, or APIC windfall amount is approximately $2.0 million as of January 3, 2017, or approximately $0.8 million on a tax effected basis. When ASU 2016-09 is adopted, the gross excess tax benefit will be recognized as additional deferred tax asset and will increase the net operating loss carryforward. Given the Company has a full valuation allowance against its deferred tax assets, there is no impact on deferred taxes. The guidance will be effective for the Company beginning fiscal year 2017. 

The Company has not yet adopted and does not expect the adoption of the following pronouncements to have a significant impact on its Consolidated Financial Statements and related disclosure:

In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows—Classification of Certain Cash Receipts and Cash Payments, which provides specific guidance for certain cash flow classification issues, previously not specifically addressed, including classification for debt prepayment, contingent consideration made after a business combination, insurance claim proceeds and corporate-owned life insurance policies, distributions

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received from equity method investees and certain other items. The guidance will be effective for the Company beginning fiscal year 2018, with early application permitted.

In July 2015, the FASB issued ASU 2015-11, Simplifying the Measurement of Inventory. This update applies to inventory that is measured using FIFO or average cost method and requires measurement of that inventory at the lower of cost or net realizable value. Net realizable value is defined as the estimated selling price in the ordinary course of business, less reasonably predictable costs of completion, disposal and transportation. This guidance will be effective for the Company beginning fiscal year 2017.

In January 2016, the FASB issued ASU 2016-01, Financial Instruments - Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities (“ASU 2016-01”). ASU 2016-01 addresses certain aspects of recognition, measurement, presentation, and disclosure of financial instruments. ASU 2016-01 will be effective for the Company beginning fiscal year 2018.

In January 2017, the FASB issued ASU 2017-04, Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment, which eliminates Step 2 from the goodwill impairment test.The impairment amount will be calculated at Step 1. The amendments also eliminate the requirements for any reporting unit with a zero or negative carrying amount to perform a qualitative assessment and, if it fails that qualitative test, to perform Step 2 of the goodwill impairment test. An entity still has the option to perform the qualitative assessment for a reporting unit to determine if the quantitative impairment test is necessary. This guidance will be effective for the Company’s fourth quarter annual impairment test in fiscal year 2019, with early adoption permitted.

In January 2017, the FASB issued ASU 2017-09, Compensation-Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting. The amendments provide guidance on determining which changes to the terms and conditions of share-based payment awards require an entity to apply modification accounting under Topic 718. This guidance will be effective for the Company’s fiscal year 2018, with early adoption permitted.

2. REFRANCHISING

In November 2014, the Company announced an accelerated transition to an asset-light model that included the sale of up to 114 Company Stores in the California market. During fiscal 2015, the Company refranchised 179 opened stores and one unopened store (of which 176 were previously classified as assets held for sale) for total proceeds of $53.1 million which included cash of $51.1 million and notes receivable of $2.0 million. As a result of these transactions, the Company recorded a total gain of $21.6 million on the disposal of assets during fiscal year 2015. At January 3, 2017 and December 29, 2015, notes receivable related to the refranchising was $2.0 million and are included in other long-term assets in the consolidated balance sheets.

In connection with the headquarters relocation from Emeryville, California to Frisco, Texas the Company refranchised the Emeryville store in December 2016 for total proceeds of $0.1 million, which resulted in an immaterial gain. In November 2016, the Company announced plans to refranchise of 13 Company-owned stores in the Chicago area which was subsequently completed in the second quarter of 2017.

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3. PROPERTY, FIXTURES AND EQUIPMENT

Property, fixtures and equipment consisted of the following as of (in thousands):

	January 3, 2017			December 29, 2015
Leasehold improvements	$	20,734		$	19,586
Furniture, fixtures and equipment		30,349			28,470
Construction in progress (primarily stores    under construction)		74			3,773
Total		51,157			51,829
Less accumulated depreciation and    amortization		(38,645	)		(36,229	)
Total	$	12,512		$	15,600

Depreciation expense related to property, fixtures and equipment for fiscal years 2016, 2015 and 2014 was $5.7 million, $6.5 million and $10.0 million, respectively. Assets related to JambaGo were reclassified on the consolidated balance sheets from property, fixtures and equipment to assets held for sale of $0.2 million and $3.1 million for fiscal years 2016 and 2015.

In fiscal 2016, the Company corrected certain errors including an overstatement of expenses included within depreciation expense of approximately $0.2 million related to prior period financial statements. The Company determined that the corrections were neither quantitatively or qualitatively material to those periods individually and in the aggregate or to the trend of the reported operating results.

4. GOODWILL, TRADEMARKS AND OTHER INTANGIBLE ASSETS

A summary of the changes in goodwill for fiscal 2016 and 2015 follows (in thousands):

	Amount
Balance as of December 30, 2014	$	945
Additions		232
Reclassification out of assets held for sale		7
Balance as of December 29, 2015		1,184
Refranchise		(1	)
Balance as of January 3,  2017	$	1,183

The carrying amount and accumulated amortization of trademarks and other intangible assets as of January 3, 2017 and December 29, 2015 were as follows (in thousands):

	Gross Amount		Accumulated Amortization			Net Amount
Intangible Assets
As of January 3, 2017
Favorable leases		1,850		(1,850	)		—
Trademarks		807		—			807
Franchise agreements and customer lists		677		(511	)		166
Reacquired franchise rights		599		(245	)		354
Total	$	3,933	$	(2,606	)	$	1,327

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	Gross Amount		Accumulated Amortization			Net Amount
As of December 29, 2015
Favorable leases		1,850		(1,850	)		—
Trademarks		807		—			807
Franchise agreements and customer lists		735		(496	)		239
Reacquired franchise rights		599		(181	)		418
Total	$	3,991	$	(2,527	)	$	1,464

Intangible assets, other than trademarks, are amortized over their expected useful lives, ranging from two to seven years. Amortization expense for intangible assets was $0.1 million for fiscal years 2016, 2015 and 2014. The remaining intangible assets, subject to amortization of $0.5 million will continue to be amortized over their estimated useful lives. Expected annual amortization expense for the remaining intangible assets recorded as of January 3, 2017 is as follows (in thousands):

Fiscal Year	Amortization Expense
2017	$	114
2018		112
2019		97
2020		62
2021		47
Thereafter		88

Trademarks are not subject to amortization and the Company evaluates for impairment on an annual basis during the fourth quarter or more frequently if events or changes in circumstances indicate that the asset might be impaired. There was no impairment charge for trademarks in fiscal 2016 and fiscal 2015.

5. ACQUISITIONS

2015 Acquisition

In December 2015, the Company acquired two domestic stores in California from a former franchisee. The purchase was accounted for using the acquisition method of accounting. Under the acquisition method, the purchase price is allocated to the underlying tangible and intangible assets acquired based on their respective fair values. A summary of the purchase price, the fair value of the net assets acquired and the goodwill on the purchase follows (in thousands):

Cash paid to acquire stores	$	737
Additional consideration resulting from termination of    pre-existing relationships		85
Total purchase consideration	$	822
Net assets acquired:
Current assets	$	12
Fixed assets		259
Re-acquired franchise rights		424
Unfavorable Lease		(105	)
Net assets acquired	$	590
Goodwill	$	232

There was a gain on termination of pre-existing relationships that was recorded in gain on disposal of assets on the Consolidated Statement of Operations, and resulted in an increase in the purchase price consideration and an increase in goodwill. The pro-forma effect of the acquisition on the Company’s results of operations was not significant.

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The fair value of the fixed assets acquired is classified as level 2 and is based on inputs other than quoted prices in active markets included in level 1, which are either directly or indirectly observable, to estimate replacement value. The fair value of re-acquired franchise rights is classified as level 3, and is based on significant unobservable inputs and assumptions such as management’s estimate of operating profit and assumed discount rates. Significant changes in the inputs or assumptions would increase or decrease the fair value measurements that would impact the depreciation or amortization of fixed assets and reacquired franchise rights and future impairment, if any. 

The fixed assets acquired include leasehold improvements which have an estimated useful life of the lesser of 10 years or the remaining term of the underlying lease. The estimated useful life for furniture, fixtures, and equipment acquired is three to 10 years.

2014 Acquisition

In September 2014, the Company acquired 26 domestic stores, of which three were immediately closed, in the Midwest from a former franchise partner pursuant to a Settlement and General Release Agreement. The purchase was accounted for using the acquisition method of accounting. Under the acquisition method, the purchase price is allocated to the underlying tangible and intangible assets acquired based on their respective fair values. A summary of the purchase price, the fair value of the net assets acquired and the gain on the purchase follows (in thousands):

Cash paid to acquire stores	$	725
Additional consideration resulting from termination of    pre-existing relationships		369
Total purchase consideration	$	1,094
Net assets acquired:
Current assets	$	145
Fixed assets		365
Re-acquired franchise rights		476
Other assets and liabilities		343
Net assets acquired	$	1,329
Bargain purchase gain	$	235

The bargain purchase price and resulting gain was the result of a reacquisition of stores from a franchisor due to their failure to comply with the franchise agreement. The gain is recorded in the Consolidated Statement of Operations. In addition, there was a gain on termination of pre-existing relationships that was recorded in the Consolidated Statement of Operations, and resulted in an increase in the purchase price consideration and a decrease in the bargain purchase gain. The pro-forma effect of the acquisition on the Company’s results of operations was not significant.

The fair value of the fixed assets acquired is classified as level 3 and is based on unobservable inputs including projected future operating results at the store level and assumed discount rates are applied to calculate the present value of the assets. The fair value of re-acquired franchise rights is classified as level 3, and it is based on significant unobservable inputs and assumptions such as management’s estimate of operating profit and assumed discount rates. Significant changes in the inputs or assumptions would increase or decrease the fair value measurements for future impairment of the fixed assets and reacquired franchise rights.

The fixed assets acquired include leasehold improvements which have an estimated useful life of the lesser of 10 years or the remaining term of the underlying lease. The estimated useful life for furniture, fixtures, and equipment acquired is three to 10 years.

The Company began actively marketing 26 acquired stores in February 2015, which resulted in the determination that the criteria for classification of assets held for sale were met. As a result, 22 store locations were reclassified to assets held for sale during the first quarter of 2015. As of December 29, 2015, these stores were reclassified out of assets held for sale resulting from management’s decision to retain or close certain of the stores.

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6. FAIR VALUE MEASUREMENT

Financial Assets and Liabilities

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

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

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

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

In the fiscal years 2016 and 2015, the Company recorded gains of $0.3 million and $0.2 million included in gain on contingent consideration within other operating, net, due to a change in circumstances under which remaining contingent consideration was no longer deemed probable of payment.

Non-financial Assets and Liabilities

There are no long-lived assets being carried at fair value as of January 3, 2017 and December 29, 2015. As a result of its quarterly impairment reviews, the Company recognized impairment of $0.4 million, $0.6 million and $0.2 million included in impairment of long-lived assets in the Consolidated Statements of Operations for fiscal years 2016, 2015 and 2014, respectively. The losses for fiscal years 2016 and 2014 are all due to impairment of fixed assets. The losses for fiscal 2015 are due to $0.3 million of impairment of trademarks and $0.3 million impairment of fixed assets.

7. NOTES RECEIVABLE AND OTHER LONG-TERM ASSETS

As of January 3, 2017 and December 29, 2015, other long-term assets consisted of the following (in thousands):

	January 3, 2017		December 29, 2015
Notes receivable	$	1,879	$	3,107
Deposits and other		889		582
Investment in unconsolidated subsidiaries		126		522
Total	$	2,894	$	4,211

As of January 3, 2017 and December 29, 2015, notes receivable includes notes from franchisees totaling $1.9 million and $3.1 million, respectively. The note entered into during fiscal 2015 of $2.0 million has a maturity date of February 1, 2021 and the annual interest rate is 3% per annum.

8. DEVELOPMENT AGREEMENTS

The Company has entered into multi-unit license agreements with area developers to build stores in certain geographic regions. Under typical multi-unit license agreements, the area developer generally pays one-half of the initial nonrefundable fee multiplied by each store to be built as a nonrefundable development fee upon execution of the multi-unit development agreement. This deposit is included in deferred revenue in the accompanying Consolidated Financial Statements. The agreements are generally for a term of five years. Each time a store is opened under the multi-unit license agreement, the Company credits the franchisee one-half of the initial fee as part of the development fee and the franchisee is required to pay the remaining one-half of the initial fee.

F-19

The following table summarizes data about the development agreements for Franchise and International Stores as of:

	January 3, 2017	December 29, 2015
Number of developers with Franchise    Store contractual commitments	27	32
Number of Franchise Stores for which    commitments exist	122	163
Number of developers with International    Stores contractual commitments	6	7
Number of International Stores for which    commitments exist	307	485

Deferred franchise revenue is included in other current liabilities and other long-term liabilities in the Company’s consolidated balance sheets. As of January 3, 2017 and December 29, 2015, deferred franchise revenue included $1.3 million and $1.1 million, respectively, relating to non-refundable development fees and initial fees paid by domestic franchisees whose stores have not yet opened. In addition, deferred franchise revenue as of January 3, 2017 and December 29, 2015 included $1.5 million and $1.5 million, respectively, relating to non-refundable international development fees.

9. DEFERRED RENT AND OTHER LONG-TERM LIABILITIES

Other long-term liabilities consisted of the following (in thousands):

	January 3, 2017		December 29, 2015
Deferred rent	$	2,260	$	2,961
Deferred revenue		2,950		3,720
Construction allowance		1,423		735
Other liabilities		2,307		1,574
Total deferred rent and other long-term    liabilities	$	8,940	$	8,990

10. LEASE COMMITMENTS

The Company leases its office, retail stores, and some equipment under operating leases, with terms expiring through 2027. Most store leases have an initial term of 10 years, with renewal options of up to 10 years and provide for payment of common area operating expenses and real estate taxes. When the Company refranchises Company Stores, usually the franchisees become sublessees and the Company continues to be obligated under the existing lease agreements for the remainder of the lease terms.

Rental expense, net of sublease income was $7.1 million, $15.6 million and $22.3 million in fiscal years 2016, 2015 and 2014, respectively, and was recorded in occupancy and general and administrative expenses in the accompanying Statements of Operations. The Company recognized sublease income of $20.5 million, $13.8 million and $9.2 million in fiscal years 2016, 2015 and 2014, respectively.

Contingent rent included in occupancy costs in the Statements of Operations was $0.4 million, $0.5 million and $0.5 million in fiscal years 2016, 2015 and 2014, respectively.

F-20

The aggregate future minimum noncancelable lease payments and minimum rentals to be received from sublessees as of January 3, 2017, were as follows (in thousands):

Fiscal Year Ending:	Minimum lease payments		Minimum rentals to be received
2017	$	26,354	$	20,117
2018		22,539		16,734
2019		18,569		13,505
2020		14,585		10,236
2021		10,769		7,446
Thereafter		22,500		12,583
Total	$	115,316	$	80,621

11. CREDIT AGREEMENT

On November 3, 2016, the Company entered into a credit agreement with Cadence Bank, NA (“New Credit Agreement”). The New Credit Agreement provides an aggregate principal amount of up to $10.0 million. The credit facility also allows the Company to request an additional $5.0 million for an aggregate principal amount of up to $15.0 million. The New Credit Agreement accrues interest at a per annum rate equal to the LIBOR rate plus 2.50%. The New Credit Agreement contains customary affirmative and negative covenants and has a five-year term. Under the terms of the New Credit Agreement, the Company is required to either maintain minimum cash or consolidated EBITDA levels and minimum levels of tangible net worth and a minimum fixed charge coverage ratio. The New Credit Agreement terminates November 3, 2021. This credit facility is subject to customary affirmative and negative covenants for credit facilities of this type, including limitations on the Company with respect to liens, indebtedness, guaranties, investments, distributions, mergers and acquisitions and dispositions of assets. The credit facility is evidenced by a revolving note made by the Company in favor of the Lender, is guaranteed by the Company and is secured by substantially all of its assets including the assets of its subsidiary and a pledge of stock of its subsidiary.

To acquire the credit facility, the Company incurred upfront fees, which are being amortized over the term of the Credit Agreement. As of January 3, 2017, the unamortized commitment fee amount was not material and is recorded in prepaid expenses in the consolidated balance sheets. As of January 3, 2017, the Company had no borrowings against the credit facility and was in compliance with the financial covenants to the Credit Agreement.  

On February 14, 2012, the Company entered into a Credit Agreement with Wells Fargo Bank, National Association (the “Lender”), which, as amended on November 1, 2012, July 22, 2013, November 4, 2013 and December 29, 2015 (as amended, the “Credit Agreement”), made available to the Company a revolving line of credit in the amount of $10.0 million. The outstanding balance under the amended credit facility accrued interest at a LIBOR Market Index Rate based upon the rate for one month U.S. dollar deposits, plus 2.50% per annum. On July 22, 2016, the Credit Agreement expired with no amounts drawn on the credit facility since its inception. The existing letters of credit balance of $0.4 million is collateralized by restricted cash at January 3, 2017. During the term of the Credit Agreement, the unamortized commitment fee amount was not material. This credit facility was subject to customary affirmative and negative covenants for credit facilities of this type, including limitations on the Company with respect to liens, indebtedness, guaranties, investments, distributions, mergers and acquisitions and dispositions of assets.

12. SHARE-BASED COMPENSATION

Jamba, Inc. 2013 Equity Incentive Plan (“the Plan”) authorizes the Company to provide incentive compensation in the form of stock options, restricted stock and stock units (“RSUs”), performance shares and units (“PSUs”), other stock-based and restricted stock-based awards (“RSAs”), cash-based awards and deferred compensation awards. In addition, the Company periodically authorizes grants of stock-based compensation as inducement awards to new employees. This type of award does not require shareholder approval in accordance with Rule 5635(c)(4) of the Nasdaq listing rules.

F-21

On May 17, 2016, at its 2016 Annual Meeting of Shareholders, the Company’s shareholders, upon the recommendation of the Board of Directors, approved an additional 900,000 shares of common stock to be offered or issued under the 2013 Plan. The 2013 Plan authorizes up to 3,028,847 shares.

As of January 3, 2017, under the Company’s 2013 Plan, there remained 842,120 shares available for grant. All plan equity grants were issued from the 2013 Plan and it is currently the only equity plan from which future equity awards may be granted.  Options granted under the 2013 Plan and inducement awards have an exercise price equal to the closing price of the Company’s common stock on the grant date, are generally exercisable for up to 10 years, and vest annually over a four-year period. Unvested shares are forfeited upon termination of employment, unless the award agreement provides otherwise.

Share-based compensation expense was $2.6 million, $5.2 million and $3.1 million for fiscal years 2016, 2015 and 2014, respectively, and is included in general and administrative expenses in the Consolidated Statements of Operations. For fiscal years 2016, 2015 and 2014, the total income tax benefit recognized in our Consolidated Statements of Operations in connection with all share-based compensation awards was $0, $0.6 million and $0, respectively.

Stock Options

The fair value of stock options was estimated at the date of grant using a Black-Scholes option pricing model with the following weighted-average assumptions.

	Fiscal Year Ended January 3, 2017			Fiscal Year Ended December 29, 2015			Fiscal Year Ended December 30, 2014
Weighted-average risk-free interest    rate		1.36	%		1.75	%		0.12	%
Expected life of options (years)		5.22			5.85			0.80
Expected stock volatility		40.5	%		43.7	%		60.8	%
Expected dividend yield		0	%		0	%		0	%

For fiscal 2014, the table above reflects 5,000 options that had an accelerated vesting stock modification related to terminated executives. No other options were issued in fiscal 2014.

A summary of the stock option activities for fiscal year 2016 is presented below (shares and dollars in thousands):

	Number of Options			Weighted- Average Exercise Price		Weighted- Average Contractual Term Remaining		Aggregate Intrinsic Value
Outstanding at December 29, 2015		1,530		$	12.42	5.76		$	3,960
Granted		315			13.11
Exercised		(197	)		5.50
Canceled		(448	)		16.00
Outstanding at January 3, 2017		1,200		$	12.40		5.05	$	1,213
Options vested or expected to vest at     January 3, 2017		1,112		$	12.32		4.86	$	1,213
Options exercisable at  January 3, 2017		485		$	10.74		1.65	$	1,211

F-22

The intrinsic value of stock options is defined as the difference between the current market value and the exercise price, which is equal to the market value at the time of the grant. Information regarding options outstanding and exercisable at January 3, 2017 is as follows (shares in thousands):

Range of Exercise Prices	Number Outstanding		Weighted- Average Remaining Contractual Life (Years)	Weighted- Average Exercise Price		Number Exercisable		Weighted- Average Exercise Price
$3.00 - $3.00		141	1.05	$	3.00		141	$	3.00
$5.40 - $10.87		130	4.14		9.02		89		8.33
$10.93 - $11.65		139	6.43		11.41		58		11.13
$11.98 - $11.98		10	4.37		11.98		10		11.98
$12.35 - $12.35		153	9.05		12.35		3		12.35
$13.30 - $13.71		44	7.69		13.49		15		13.44
$13.94 - $13.94		503	4.46		13.94		139		13.94
$19.50 - $45.55		68	6.87		21.89		18		28.38
$47.55 - $47.55		6	0.44		47.55		6		47.55
$50.25 - $50.25		6	0.42		50.25		6		50.25
		1,200	5.05	$	12.40		485		10.74

The weighted-average grant date fair value of options granted was $4.30 in fiscal 2016, $13.92 in fiscal 2015 and $5.64 in fiscal 2014. At January 3, 2017, stock options vested or expected to vest over the next four years totaled 1.1 million. The remaining expense to amortize is approximately $1.7 million at January 3, 2017. The weighted-average remaining recognition period is approximately two years.

Restricted Stock Awards

Restricted stock awards are granted to members of our Board of Directors as part of their compensation. Awards are fully vested and expensed when granted. The fair value of restricted stock awards is the market close price of our common stock on the date of the grant. In fiscal years 2016 and 2015, 3,514 and 1,094 restricted stock awards were issued with a weighted average grant date fair value per share of $12.80 and $13.71, respectively. There were no RSAs granted in fiscal 2014.

Time-Based Restricted Stock Units

Information regarding activities during fiscal 2016 for outstanding time-based RSUs is as follows (shares in thousands):

	Number of shares of RSUs			Weighted- Average Grant Date Fair Value (per share)
Outstanding as of December 29, 2015		190			14.09
Granted		44			11.31
Forfeited		(39	)		13.95
Vested		(127	)		13.70
Outstanding as of January 3, 2017		68		$	13.11

During fiscal years 2016, 2015 and 2014, the Company granted 44,000, 52,000 and 270,000 time-based RSUs at a weighted average grant date fair value of $11.31, $15.10 and $13.21, respectively, with a vesting period of three years. Compensation expense for time-based RSUs is recognized over the vesting period on a straight-line basis. The aggregate grant date fair value of the time-based RSUs granted during fiscal years 2016, 2015 and 2014 was $0.5 million, $0.8 million, and $3.3 million, respectively. The aggregate intrinsic value of time-based RSUs outstanding as of January 3, 2017, December 29, 2015 and December 30, 2014 was $0.7 million, $2.6 million and $4.0 million, respectively.

F-23

At January 3, 2017, unvested share-based compensation for time-based RSUs, net of forfeitures, totaled $0.5 million. This expense will be recognized over the remaining weighted-average vesting period of approximately one year.

Performance-Based Restricted Stock Units

Information regarding activities during fiscal 2016 for outstanding PSUs is as follows (shares in thousands):

	Number of shares of PSUs			Weighted- Average Grant Date Fair Value (per share)
Outstanding as of December 29, 2015		57			13.89
Granted		8			10.11
Forfeited		(46	)		13.85
Vested		(2	)		14.04
Outstanding as of January 3, 2017		17		$	12.27

During fiscal years 2016 and 2014, the Company granted 8,000 and 95,000 PSUs at a weighted average grant date fair value of $10.11 and $14.37, respectively. There were no PSUs granted during fiscal 2015. The aggregate grant date fair value of the PSUs during fiscal 2014 was $1.2 million. The aggregate intrinsic value of the PSUs outstanding as of January 3, 2017 and December 29, 2015 was expense of $0.2 million and $0.8 million, respectively. At January 3, 2017, unvested share-based compensation for PSUs, net of forfeitures, was less than $0.1 million, which will be recognized over the remaining weighted-average vesting period of approximately seven months.

Market-Based Restricted Stock Units

Information regarding activities during fiscal 2016 for outstanding market-based RSUs is as follows (shares in thousands):

	Number of market-based RSUs		Weighted- Average Grant Date Fair Value (per share)
Outstanding as of December 29, 2015		—		—
Granted		505		3.04
Forfeited		—		—
Vested		—		—
Outstanding as of January 3, 2017		505	$	3.04

In January 2016, in connection with the hiring of the Company’s new Chief Executive Officer, the Company granted equity awards which included an award of 350,000 market-based RSUs vesting upon achievement of compound annual stock price growth rate targets of 15%, 22.5% and 30% over a three-year period, which were granted in May 2016.

During fiscal 2016, the Company also granted inducement awards in connection with executive hiring which included 155,000 market-based RSUs vesting upon achievement of compound annual stock price growth rate targets of 15%, 22.5% and 30%. Compensation expense related to market-based RSUs is recognized over the requisite service period on a straight-line basis. The requisite service period is a measure of the expected time to reach the respective vesting threshold. We estimated this period by utilizing a Monte Carlo simulation, considering only those stock price-paths in which the threshold was exceeded. The estimated requisite service period for the market-based RSUs issued in fiscal 2016 ranges between approximately eighteen and twenty-four months.

F-24

The aggregate grant date fair value of the market-based RSUs granted during fiscal 2016 was $1.5 million. There were no market-based RSUs granted during fiscal 2015 or 2014.  The aggregate intrinsic value of the market-based RSUs outstanding as of January 3, 2017 was $5.2 million. At January 3, 2017, unvested share-based compensation for market-based RSUs, net of forfeitures, was $0.9 million, which will be recognized over the remaining weighted-average recognition period of approximately fourteen months.

13. STOCK REPURCHASES

On August 4, 2016, the Company announced that its Board of Directors approved the terms of a share repurchase plan (the "2016 Stock Repurchase Program"). Pursuant to the 2016 Stock Repurchase Program, the Company is authorized to repurchase up to $20.0 million of its common stock subject to available cash resources over the next two-year period.  The Company may repurchase shares on the open market, through privately negotiated transactions or otherwise, at times, in amounts and at prices considered appropriate by the Company.  The number of shares to be purchased and the timing of any purchases are subject to various factors, including the price of the Company’s common stock, the Company’s capital position, the amount of retained earnings of the Company, general market conditions and other economic factors and corporate and regulatory requirements, and may be modified, suspended or terminated at any time.

On October 29, 2014, the Company’s Board of Directors authorized the repurchase of up to $25.0 million of shares of common stock over an 18-month period (the "2014 Stock Repurchase Program"). The Company’s Board of Directors authorized an increase to the Stock Repurchase Program of $15.0 million to a total of $40.0 million in May 2015 and an additional $5.0 million to a total of $45.0 million in September 2015, which expired on May 4, 2016. Shares repurchased under the Stock Repurchase Program are considered treasury stock until retired. During fiscal 2015 and fiscal 2014, the Company repurchased approximately 2.0 million and 0.9 million shares, respectively, under the Stock Repurchase Program. The average price per share during fiscal 2015 and fiscal 2014 was $14.38 and $13.17, respectively, with an aggregate cost of $28.0 million and $12.0 million for fiscal 2015 and fiscal 2014, respectively, leaving $5.0 million available for share repurchases. Shares repurchased under the stock repurchase programs are considered treasury stock until retired.

During fiscal year 2016, the Company did not repurchase shares under the 2016 Stock Repurchase Program or the 2014 Stock Repurchase Program.

14. INCOME TAXES

The components of the income tax (expense) benefit are as follows (in thousands):

	January 3, 2017			December 29, 2015			December 30, 2014
Current:
Federal	$	—		$	(438	)	$	—
State		(14	)		(149	)		(37	)
Foreign		(65	)		(114	)		(131	)
	$	(79	)	$	(701	)	$	(168	)
Deferred:
Federal	$	—		$	—		$	—
State		—			—			—
Foreign		—			—			—
	$	—		$	—		$	—
Income tax benefit (expense)	$	(79	)	$	(701	)	$	(168	)

F-25

The difference between the effective income tax rate and the United States federal income tax rate is summarized as follows:

	January 3, 2017			December 29, 2015			December 30, 2014
Statutory federal rate		34.0	%		34.0	%		34.0	%
State income taxes less federal    benefit		(1.4	)		(9.2	)		5.9
Foreign income taxes		(0.3	)		1.1			(2.5	)
Change in valuation allowance		(24.6	)		(38.1	)		(31.5	)
Meals		(0.1	)		0.3			(1.2	)
Business Gain on Acquisition		—			—			8.5
Alternative minimum taxes		—			0.1			(1.0	)
Expired tax attribute carryforwards		(6.4	)		11.1			(17.0	)
Tax credits generated		—			(0.1	)		0.3
Other		(1.6	)		7.7			(0.3	)
		(0.4	)%		6.9	%		(4.8	)%

Deferred income taxes are provided for the temporary differences between the carrying values of the Company’s assets and liabilities for financial reporting purposes and their corresponding income tax bases. The temporary differences give rise to either a deferred tax asset or liability in the financial statements that is computed by applying current statutory tax rates to taxable and deductible temporary differences. The deferred tax assets (liabilities) consisted of the following temporary differences as of January 3, 2017 and December 29, 2015 (in thousands):

	January 3, 2017			December 29, 2015
Net operating losses	$	62,875		$	50,837
Reserves and accruals		5,073			10,754
Deferred rent		967			1,518
Tax credit attributes		1,957			1,999
Basis difference in intangibles		1,152			1,510
Share-based compensation		1,915			2,979
Basis difference in fixed assets		5,670			3,245
Basis difference in intangibles		(95	)		(289	)
Basis difference in investments		144			4
Reserves and accruals		(29	)		(64	)
Total gross deferred tax asset		79,629			72,493
Valuation allowance		(79,629	)		(72,493	)
Total net deferred tax asset	$	—		$	—

Realization of the future tax benefits is dependent on the Company’s ability to generate sufficient taxable income within the carryforward period. A valuation allowance is provided for deferred tax assets when it is “more likely than not” that some portion of the deferred tax asset will not be realized. Because of the Company’s recent history of operating losses, management believes the recognition of the deferred tax assets arising from the above-mentioned future tax benefits is currently not likely to be realized and, accordingly, has provided a valuation allowance. A valuation allowance has been recorded for the net deferred tax assets at January 3, 2017, which increases the valuation allowance by $7.1 million for the fiscal year ended January 3, 2017.

At January 3, 2017, the Company has federal and state net operating loss carryovers (“NOL”) of $148.4 million and $144.5 million, respectively, which, if not used earlier, will expire between 2017 and 2036. In addition, the Company also has tax credit carryforwards for federal and state purposes of $1.1 million and $0.9 million, respectively. Approximately $0.3 million of the federal tax credit carryforwards will start to expire in 2031 if unused before that year. Of the state tax credit carryforwards, approximately $0.7 million will start to expire in 2023 if unused before that year. The remaining federal tax credits and the state tax credits do not expire.

F-26

The Company underwent an “ownership change” as defined in section 382 of the Internal Revenue Code during the second quarter of the Company’s 2009 fiscal year, as a result of the Company’s issuance of Series B-1 Convertible Preferred Stock and Series B-2 Convertible Preferred Stock and other prior trading in the Company’s stock. The amount of NOL and tax credits from pre-change years that may be used to offset the Company’s taxable income for tax years ending after the ownership change is subject to an annual limitation, known as a section 382 limitation. The section 382 limitation may cause NOL’s to expire unutilized. The Company reduced its NOL carryovers stated above for the anticipated expirations caused by the Company’s 2009 change.  Since the section 382 ownership change in 2009, the Company has performed quarterly analyses to monitor its ownership for 382 purposes.  The Company has not had any other ownership changes for section 382 purposes since 2009.

Changes in the Company’s unrecognized tax benefits are as follows (in thousands):

	Fiscal Year Ended January 3, 2017		Fiscal Year Ended December 29, 2015
Beginning balance	$	185	$	185
Increases attributable to tax positions taken    during prior periods		—		—
Decreases resulting from lapse of applicable    statutes of limitations		—		—
Ending balance	$	185	$	185

As of January 3, 2017, the entire unrecognized tax benefits reduce the deferred tax asset for the net operating loss carryforwards. If recognized, none of the unrecognized tax benefits would impact the Company’s effective tax rate. As of January 3, 2017, it is reasonably possible that the unrecognized tax benefits will not significantly increase or decrease in the next twelve months.

The Company is subject to taxation in the United States and various state and local jurisdictions. As of January 3, 2017, the Company is not subject to any income tax examinations. Due to tax attribute carryforwards, as of January 3, 2017, the Company remains effectively subject to U.S. federal, state and local income tax examinations by tax authorities for the tax years since 2006.

15. EMPLOYEE BENEFIT PLAN

The Company maintains a voluntary defined contribution plan covering all eligible employees. Eligible employees may elect to defer and contribute a percentage of their compensation to the plan, not to exceed the dollar amount set by law. The Company matched employees’ contributions on a discretionary basis, resulting in a contribution of less than $0.1 million each for fiscal years 2016, 2015 and 2014.

16. SEVERANCE AND OTHER COMPENSATION

In connection with the relocation of the Company’s headquarters from Emeryville, California to Frisco, Texas, the Company incurred severance and bonus obligations. At January 3, 2017, $1.6 million of severance and $0.8 million of retention expenses are classified in accrued compensation and benefits and accounts payable, respectively, in the consolidated balance sheets. Additionally, the Company expects to pay bonuses of $0.9 million at the beginning of second quarter in fiscal 2017.  The remaining payments will be completed by the end of the second quarter 2018.

On October 1, 2015, the Company announced the retirement of James D. White, the former Chief Executive Officer.  In accordance with his employment agreement, severance and bonus of $0.8 million have been accrued for in fiscal 2015 and paid in full in fiscal 2016. Also during fiscal 2015, severance of $0.6 million was recorded for certain departures of two senior executives. Expenses relating to acceleration of options and awards from stock modifications related to the departure of the three executives of $0.8 million were also accounted for in fiscal 2015 and are included as part of stock compensation. These payments were completed during fiscal year 2016.

F-27

17. STORE LEASE TERMINATION AND CLOSURE COSTS

On January 3, 2017, the Company closed one underperforming Company Store in the California market, which was prior to expiration of the contractual lease term. The Company recorded exit costs of $3.6 million, including accrued exit costs of $1.3 million related to the estimated fair value of the lease termination obligation and $2.3 million of asset write-off.

During the fourth quarter of 2015, in conjunction with its transition to an asset-light model, the Company performed a review of its portfolio of Company Stores, and as a result, closed eight underperforming Company Stores in the Chicago and New York City markets on December 29, 2015, which was prior to expiration of their contractual lease terms. The Company accrued exit costs of $1.6 million, including $1.3 million related to the estimated fair value of the lease termination obligation, $0.2 million of asset write-off, and $0.1 million related to severance. At January 3, 2017, the remaining lease termination obligation was approximately $0.5 million related to one of the stores closed in 2015.

The Company estimates the fair value of the remaining lease termination obligation as of the cease-use date, using a weighted average of multiple outcomes approach which considered for each lease: future contractual lease obligations, net of projected sub-lease income (limited to amount of the rental obligation) after a period for remarketing, outcomes including buyout fees for early termination and actual terminations. Future cash flows are discounted using the Company’s credit adjusted risk free rate, which were estimated at 4.95% and 6.5% in fiscal years 2016 and 2015, respectively.  Sublease rental income and absorption period assumptions were based on data available from rental activity in the local markets. Assumptions about potential buyout payments were also based on data available from rental activity in the local markets, allowed for a period for negotiation and then a final settlement at a multiple of monthly rental and common area payments.

As of January 3, 2017, the Company’s future lease obligations totaled approximately $3.5 million, which was reduced for estimates for sublease rental income of $1.6 million. The net obligation after discounting was increased for estimated transaction fees to advisors of approximately $0.1 million. The resulting obligation at estimated fair value totaled approximately $1.8 million.

Considerable management judgment is necessary to estimate net future cash flows including cash flows from continuing use, terminal value and sublease income.  Accordingly, actual results could vary from the estimates. If these assumptions or their related estimates change in the future, the Company will be required to record additional exit costs or reduce exit costs previously recorded. Exit costs recorded for each of the periods presented include the effect of such changes in estimates; there were no subsequent changes during 2016 to the amount of the obligation.

18. OTHER OPERATING, NET

The components of other operating, net are as follows (in thousands):

	Fiscal Year Ended January 3, 2017			Fiscal Year Ended December 29, 2015			Fiscal Year Ended December 30, 2014
Jambacard breakage income	$	(4,096	)	$	(5,440	)	$	(4,744	)
Jambacard expense		902			1,155			1,299
CPG and JambaGO® direct expense		1,700			3,035			2,637
Franchise discount expense		461			706			847
Franchise other expense		676			834			1,025
Sublease income		(670	)		(192	)		(121	)
Bad debt		1,560			1,474			61
International expense		613			708			316
Gain on contingent consideration		-			(156	)		(397	)
Other (income) expense		(63	)		(329	)		(197	)
Total other operating, net	$	1,083		$	1,795		$	726

F-28

19. OTHER COMMITMENTS AND CONTINGENCIES

Litigation Related - The Company records a liability for litigation claims and contingencies when payment is probable and the amount of loss can be reasonably estimated.

In fiscal year 2016, the Company recognized $2.0 million in charges associated with ongoing and settled litigation matters based on the available information at the time. The amounts recognized related to aggregate amounts for resolution of the Company’s ordinary course litigation cases estimated at $1.0 million and a commercial vendor dispute settled for $1.0 million. The losses were included in general and administrative expenses in the accompanying Statements of Operations. The Company did not include any reserve for losses relating to ongoing and settled litigation matters in 2015 or 2014.

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

Other - The Company has purchase obligations with certain suppliers for certain fruits and dairy for various terms typically ranging from one year to five years. The Company has one contract with a supplier for a 15 year term that ends in 2024. These contracts are commitments to purchase a minimum level of fruit and other items used in the production of the Company’s products totaling $30.7 million, inclusive of purchase commitments of $1.0 million related to a dispute with a commercial vendor.

20. RELATED-PARTY TRANSACTIONS

In fiscal 2016 and fiscal 2015, the Company received $0.2 million from Country Pure Foods related to vendor supply chain management fees and approximately $0.3 million from Sodexo related to licensing fees for Jamba units operated by Sodexo. One Jamba Juice Director is on the Board of Directors of Country Pure Foods and another Jamba Juice Director is an executive with Sodexo.

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21. UNAUDITED QUARTERLY INFORMATION

The tables below provide the Company’s unaudited consolidated results of operations for each quarter in 2016 and 2015:

(In thousands, except share and per share amounts)	Thirteen Weeks Ended March 29, 2016			Thirteen Weeks Ended June 28, 2016			Thirteen Weeks Ended September 27, 2016			Fourteen Weeks Ended January 3, 2017
Revenue:
Company stores	$	11,953		$	13,874		$	14,350		$	11,105
Franchise and other revenue		6,801			7,666			7,711			6,163
Total revenue		18,754			21,540			22,061			17,268
Costs and operating expenses (income):
Cost of sales		2,962			3,321			3,437			2,881
Labor		4,158			4,668			4,644			4,402
Occupancy		2,036			1,900			1,879			1,844
Store operating		2,362			2,272			2,381			2,270
Depreciation and amortization		1,502			1,674			1,068			1,505
General and administrative		7,610			9,423			9,699			11,226
Gain on disposal of assets		109			188			204			289
Store pre-opening		324			326			210			364
Impairment of long-lived assets		—			127			229			3,054
Store lease termination and closure		120			(56	)		178			3,918
Other operating, net		271			245			104			463
Total costs, operating expenses, and    gain		21,454			24,088			24,033			32,216
Loss from operations		(2,700	)		(2,548	)		(1,972	)		(14,948	)
Other income (expense):
Interest income		71			74			50			55
Interest expense		(59	)		(59	)		(51	)		(270	)
Total other income (expense), net		12			15			(1	)		(215	)
Loss before income taxes		(2,688	)		(2,533	)		(1,973	)		(15,163	)
Income tax (expense) benefit		(132	)		54			9			(10	)
Net loss		(2,820	)		(2,479	)		(1,964	)		(15,173	)
Less: Net income attributable to    noncontrolling interest		—			—			—			—
Net loss attributable to Jamba, Inc.	$	(2,820	)	$	(2,479	)	$	(1,964	)	$	(15,173	)
Loss per share attributable to    Jamba, Inc. common shareholders:
Basic	$	(0.19	)	$	(0.16	)	$	(0.13	)	$	(0.99	)
Diluted	$	(0.19	)	$	(0.16	)	$	(0.13	)	$	(0.99	)

F-30

(In thousands, except share and per share amounts)	Thirteen Weeks Ended March 31, 2015			Thirteen Weeks Ended June 30, 2015			Thirteen Weeks Ended September 29, 2015			Thirteen Weeks Ended December 29, 2015
Revenue:
Company stores	$	47,728		$	48,360		$	28,213		$	12,724
Franchise and other revenue		4,776			5,766			7,284			6,825
Total revenue		52,504			54,126			35,497			19,549
Costs and operating expenses (income):
Cost of sales		12,407			11,474			6,626			3,230
Labor		16,088			14,876			8,843			4,925
Occupancy		6,835			6,131			3,980			2,005
Store operating		8,034			8,059			5,901			3,158
Depreciation and amortization		1,873			1,344			1,143			2,209
General and administrative		8,963			8,427			9,003			10,479
Gain on disposal of assets		(778	)		(4,480	)		(16,076	)		(275	)
Store pre-opening		22			166			287			556
Impairment of long-lived assets		0			295			1,907			321
Store lease termination and closure		22			40			207			1,400
Other operating, net		706			1,333			375			(619	)
Total costs, operating expenses, and    gain		54,172			47,665			22,196			27,389
(Loss) income from operations		(1,668	)		6,461			13,301			(7,840	)
Other income (expense):
Interest income		15			14			49			59
Interest expense		(41	)		(68	)		(53	)		(58	)
Total other expense, net		(26	)		(54	)		(4	)		1
(Loss) income before income taxes		(1,694	)		6,407			13,297			(7,839	)
Income tax benefit (expense)		(26	)		(57	)		(194	)		(424	)
Net (loss) income		(1,720	)		6,350			13,103			(8,263	)
Less: Net income attributable to    noncontrolling interest		31			21			—			—
Net (loss) income attributable to Jamba, Inc.	$	(1,751	)	$	6,329		$	13,103		$	(8,263	)
(Loss) earnings per share attributable to    Jamba, Inc. common shareholders:
Basic	$	(0.11	)	$	0.39		$	0.83		$	(0.55	)
Diluted	$	(0.11	)	$	0.38		$	0.81		$	(0.55	)

The sum of (loss) earnings per share for all four quarters may not equal the loss per share of the fiscal year due to rounding.

In connection with the store closure in late fiscal 2016 and the exit of Jamba GO^®, the Company recognized a store lease termination and closure expense and an impairment loss of $2.3 million and $3.4 million, respectively, in the fourth quarter. In fiscal 2016, Company Store revenue decreased primarily due to the net reduction in Company Stores resulting from the Company’s transition to an asset-light model. During fiscal 2015, the Company sold four stores in the first quarter, 49 stores in the second quarter, 110 stores in the third quarter and 14 (net of 2 acquired stores) in the fourth quarter. At the end of fiscal 2016, the number of Company Stores was 66 compared to 70 at the end of fiscal 2015. The number of Franchise Stores and International Stores grew to 843 as of January 3, 2017 compared to 823 as of December 29, 2015. During fiscal 2016, the Company sold one store during the fourth quarter.

In the second quarter of 2015, the Company sold its 88% interest in JJSC to the holder of JJSC’s noncontrolling interest, in connection with our transition to an asset-light model.

F-31

Gain on disposal of assets increased primarily due to the transition to an asset-light model during fiscal 2015. As a result, the Company recorded net income in the second and third quarter and for the full fiscal year of 2015 compared to a net loss in fiscal 2016.

In the Statements of Operations for the third quarter ended September 27, 2016 and fourth quarter ended January 3, 2017, the Company corrected certain out-of-period errors related to prior period financial statements. The out-of-period errors related to both the first and second quarters of 2016 as well as 2015, 2014 and earlier results. The adjustments arose from various errors in depreciation expense, share-based compensation, impairments and balance sheet accruals affecting revenues and general and administrative expenses. The Company evaluated and concluded that the corrections made for the out-of-period errors in the third and fourth quarter, and the unadjusted impact on the prior periods, were neither quantitatively or qualitatively material to those periods individually or in the aggregate. The following table details the specific amounts of out-of-period (overstatements)/understatements for the fiscal 2016 quarters.

(In thousands, except share and per share amounts)	Thirteen Weeks Ended March 29, 2016			Thirteen Weeks Ended June 28, 2016			Thirteen Weeks Ended September 27, 2016			Fourteen Weeks Ended January 3, 2017
Total revenue	$	4		$	(202	)	$	(18	)	$	151
Total costs, operating expenses and gain		(892	)		490			105			(596	)
Income before income taxes		896			(692	)		(124	)		747
Total other expense, net		—			—			—			—
Income before income taxes		896			(692	)		(124	)		747
Income tax benefit (expense)		(45	)		14			2			(1	)
Net income		851			(678	)		(122	)		746
(Loss) earnings per share attributable to    Jamba, Inc. common shareholders:
Basic	$	0.06		$	(0.04	)	$	(0.01	)	$	0.05
Diluted	$	0.06		$	(0.04	)	$	(0.01	)	$	0.05

22. SUBSEQUENT EVENTS

In the first quarter of fiscal 2017, we recorded severance of $0.6 million for the departures of two senior executives. Additionally in the fourth quarter of fiscal 2017, we recorded severance of $0.3 million for the departure of one senior executive.

Refranchising Activities

In the second quarter of fiscal 2017, the Company refranchised 13 Company-owned stores and signed a 10-unit development agreement in the Chicago area for approximately $0.2 million.  

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ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

None.

ITEM 9A. CONTROLS AND PROCEDURES

(a) Disclosure Controls and Procedures

An evaluation was conducted under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, on the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended) as of the end of the period covered by this Annual Report on Form 10-K.  Based on this evaluation, the Chief Executive Officer and the Chief Financial Officer concluded that our disclosure controls and procedures were not effective as of January 3, 2017, solely because of the material weakness in our internal control over financial reporting described below.

To address the material weakness described below, management performed additional analysis and other procedures to ensure that our consolidated financial statements were prepared in accordance with U.S. GAAP. Accordingly, management believes that the consolidated financial statements and disclosures included in this Annual Report on Form 10-K fairly present, in all material respects, in accordance with U.S. GAAP, our financial position, results of operations and cash flows for the periods presented.

(b) Management’s Annual Report On Internal Control Over Financial Reporting

We, as management of the Company, are responsible for establishing and maintaining adequate internal control over financial reporting as such term is defined in rules 13a-15(f) and 15d-15(f) of the Securities Exchange Act of 1934, as amended. Pursuant to the rules and regulations of the SEC, internal control over financial reporting is a process designed by, or under the supervision of, our principal executive and principal financial officers, or persons performing similar functions, and affected by our Board of Directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect all misstatements. Also, projections of any evaluation of the effectiveness of future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with policies or procedures may deteriorate.

We used the criteria set forth in Internal Control—Integrated Framework (2013), issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) to assess the effectiveness of internal control over financial reporting and concluded that our internal control over financial reporting was not effective as of January 3, 2107 due to a material weakness in internal control over financial reporting as described below. A material weakness is a deficiency or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of a company’s annual or interim financial statements will not be prevented or detected on a timely basis.

The effectiveness of the Company’s internal control over financial reporting as of January 3, 2017 has been audited by KPMG LLP, an independent registered public accounting firm, as stated in its report that appears in this Annual Report on Form 10-K.

Material Weakness

We underwent significant changes in our business model, leadership, key personnel, and relocation of our corporate office. These changes resulted in a significant increase in non-routine transactions and impacted certain routine processes needed to effectively accumulate and present consolidated financial results. We identified that our risk assessment process, which was intended to identify new transactions and changes to existing processes and design appropriate control activities over financial reporting, was not sufficient to prevent or detect material misstatement on a timely basis. Consequently, a material weakness in internal control over financial reporting resulted as described below.

53

Ineffective risk assessment of the risks of material misstatement in financial reporting

We did not effectively identify and evaluate how the changes in our business, leadership, key personnel and location could impact our system of internal controls as it relates to assessment of risks related to financial reporting, as well as determine a basis for how those risks should be managed. As a result of ineffective risk assessment, we did not develop policies and procedures as well as design and operate relevant control activities that would mitigate risks of material misstatement over financial reporting.

The material weakness affected the design, implementation and operation of controls over the preparation, analysis and review of significant balances and disclosures and impacted our ability to close our books in a timely manner. This material weakness contributed to misstatements related to a number of significant accounts and disclosures.

(c) Changes in Internal Control Over Financial Reporting

There were no changes in our internal control over financial reporting that occurred during the year ended January 3, 2017 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

(d) Remediation Actions

Our comprehensive remediation plan is to address the factors contributing to the material weakness noted above and improve our overall system of internal controls. This will be addressed by enhancing our risk assessment process, including ongoing evaluation of all of the COSO components.  Specifically, the activities outlined below will be implemented.

Risk Assessment

Management has begun implementing the plan to assess risks of material misstatement over financial reporting, including the enhancement of internal control activities, and training of key process owners. The plan will be accomplished by the execution of the following:

• Enhancing of company-wide Sarbanes-Oxley internal control over financial reporting including performing a comprehensive evaluation of the risk assessment, scoping and testing process.

• Redesigning existing controls as necessary, as well as developing and deploying new controls to improve the adequacy and timeliness of preventing or detecting material misstatement over financial reporting.

• Developing relevant oversight controls that will operate at a level of precision sufficient to detect errors resulting from a control failure, and strengthening our existing oversight controls, including accounting policy oversight, to ensure compliance with policies and procedures.

• Training key process owners and other relevant personnel to ensure controls are performed timely, appropriately, and supported with adequate evidence of control completion.

• Augmenting the finance and accounting function with qualified personnel commensurate with the complexity of our processes and financial reporting requirements.

We believe these activities will remediate the control deficiencies identified above and strengthen our internal controls over financial reporting. Management, with the oversight of the Audit Committee has dedicated significant incremental resources to successfully implement and test effectiveness of the enhanced controls throughout fiscal 2017.

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ITEM 9B. OTHER INFORMATION

Report of Independent Registered Public Accounting Firm

The Board of Directors and Shareholders

Jamba, Inc.:

We have audited Jamba, Inc.’s (“the Company”) internal control over financial reporting as of January 3, 2017, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”). Jamba, Inc.’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Report on Internal Control over Financial Reporting, appearing under Item 9A (b). Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audit also included performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the company’s annual or interim financial statements will not be prevented or detected on a timely basis. A material weakness related to an ineffective risk assessment of the risks of material misstatement in financial reporting, has been identified and included in management’s assessment. We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated balance sheets of Jamba, Inc. as of January 3, 2017 and December 29, 2015, and the related consolidated statements of operations, shareholders’ equity, and cash flows for the fiscal years ended January 3, 2017, December 29, 2015, and December 30, 2014. This material weakness was considered in determining the nature, timing, and extent of audit tests applied in our audit of the 2016 consolidated financial statements, and this report does not affect our report dated February 9, 2018, which expressed an unqualified opinion on those consolidated financial statements.

In our opinion, because of the effect of the aforementioned material weakness on the achievement of the objectives of the control criteria, Jamba, Inc. has not maintained effective internal control over financial reporting as of January 3, 2017, based on criteria established in Internal Control—Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO)").

/s/ KPMG LLP

San Francisco, Ca

February 9, 2018

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PART III

ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

The following table sets forth the name and age of each of our directors.

Name	Age	Director Since
David A. Pace	58	2012
Richard L. Federico	63	2006
Andrew R. Heyer	60	2009
Michael A. Depatie	60	2010
Lorna C. Donatone	60	2013
James C. Pappas	36	2015
Glenn W. Welling	47	2015

There are no family relationships among any of our directors or executive officers.

DAVID A. PACE has been a member of our Board since August 2012 and our Chief Executive Officer since January 2016. From 2014 to 2016, Mr. Pace served as President of Carrabba’s Italian Grill, and from 2010 to 2014, Mr. Pace was the Executive Vice President and Chief Resource Officer of Bloomin’ Brands where he was responsible for both the human resources and real estate and development functions of Bloomin’ Brands along with the Fleming’s and Roy’s business units. Before joining Bloomin’ Brands in 2010, Mr. Pace was a management consultant, entrepreneur and not-for-profit leader. He has extensive domestic and international experience overseeing human resources for Starbucks Coffee Company, HomeGrocer.com and PepsiCo/YUM Brands along with additional experiences in technology and sports management. Mr. Pace served as an adjunct faculty member in Southern Methodist University’s Cox Graduate School of Business and is currently Chairman of the Board of Up2US, a rapidly expanding national non-profit focused on improving the health and development of America’s young people through sports-based youth development. Mr. Pace has a Bachelor of Science in Industrial and Labor Relations from Cornell University. Mr. Pace’s position as our Chief Executive Officer and his extensive knowledge of the restaurant and food and beverage industries, including his senior leadership experience in human resources, make him particularly qualified for service on our Board.

RICHARD L. FEDERICO has been a member of our Board of Directors since November 2006 and has served as the Chairman of our Board since January 2016. Mr. Federico had previously served as a director of Jamba Juice Company from October 2004 to November 2006. Mr. Federico is currently Executive Chairman of Wok Holdco, an operator of domestic Asian-inspired restaurant brands, a position he has held since 2012. From 1996 until 2012, Mr. Federico served as a director and from 1997 to 2015, as Chief Executive Officer of P.F. Chang’s China Bistro Inc. In 2000, Mr. Federico was named Chairman of the Board of P.F. Chang’s China Bistro Inc. From 1989 to 1996, Mr. Federico served as President of the Italian Concepts division of Brinker International, Inc., where he was responsible for concept development and operations. Since 2011, Mr. Federico has served on the Board of Directors of Domino’s Pizza. Since August 2016, Mr. Federico has served on the Board of Directors and Compensation Committee of GolfTEC. Mr. Federico’s business acumen and experience in leading a successful publicly-held restaurant concept make him particularly qualified for service as Chairman of our Board, and for service on our Nominating and Corporate Governance Committee and on our Compensation and Executive Development Committee.

ANDREW R. HEYER has been a member of our Board of Directors since June 2009. Mr. Heyer has served as the Chief Executive Officer and Founder of Mistral Equity Partners, a private equity fund, since its founding in 2007. Prior to founding Mistral, Mr. Heyer served as a Founding Managing Partner of Trimaran Capital Partners, LLC, a private equity firm. Mr. Heyer was formerly a Vice Chairman of CIBC World Markets Corp., and a co-head of the CIBC Argosy Merchant Banking Funds. Prior to joining CIBC World Market Corp. in 1995, Mr. Heyer was a Managing Director at Drexel Burnham Lambert Incorporated and, previous to that, he worked at Shearson/American Express. Mr. Heyer also serves on the Board of Directors of Hain Celestial Group.  Mr. Heyer also currently serves as a Member of the Executive Committee and Board of Trustees of the University of Pennsylvania and the University of Pennsylvania Health System. Mr. Heyer was appointed as our Lead Director in March 2015, a position he held until January 2016. Mr. Heyer’s business, financial and investment experience in consumer focused product and services industries makes him particularly qualified for service on our Board and our Compensation and Executive Development Committee.

56

MICHAEL A. DEPATIE has been a member of our Board of Directors since November 2010. Mr. Depatie has served as the Managing Partner of KHP Capital Partners, a hotel real estate investment fund, since January 2015. Mr. Depatie served as Chief Executive Officer of Kimpton Hotels and Restaurants, LLC from 2006 to January 2015, and was also a member of Kimpton’s Board of Directors. Prior to being elected as Kimpton’s Chief Executive Officer, Mr. Depatie served as their President from 2005 having joined the Kimpton family of companies as Chief Executive Officer for real estate for Kimpton Group Holding, LLC in 2003. Prior to Kimpton, Mr. Depatie held senior finance and development roles in a number of rapidly growing lodging companies including Residence Inn and Summerfield Suites. Previously, Mr. Depatie was the Chief Financial Officer of Sunterra, an NYSE listed resort hotel vacation ownership company and NYSE listed La Quinta, a national chain of limited service hotels. Mr. Depatie’s extensive senior management experience and his financial expertise make him particularly qualified for service on our Board and as Chairman of our Audit Committee.

LORNA C. DONATONE has been a member of our Board of Directors since December 2013. Since September 2015, Ms. Donatone has served as Region Chair for North America and Chief Executive Officer of Geographic Regions Worldwide for Sodexo. Ms. Donatone had previously served as Chief Executive Officer Schools Worldwide and Chief Operating Officer and Education Market President at Sodexo Education since February 2010, where she oversaw operations and strategic growth for Sodexo at college and university campuses, public school districts and private schools in the U.S. Prior to that, Ms. Donatone served in various other leadership roles at Sodexo including President of School Services from September 2007 to February 2010. Ms. Donatone joined Spirit Cruises, LLC, a subsidiary of Sodexo in 1999 and served as its President from 2002 to 2006. Ms. Donatone is a member of the Sodexo Group Executive Committee and Chair of the Sodexo North America Regional Leadership Committee. She has been a board member of the National Restaurant Association since 2005 and a trustee of the National Restaurant Association Educational Foundation since 2011, where she is Past Chair of the Board. Ms. Donatone is the Past Chair of the Board of Directors of the Women’s Foodservice Forum and was elected as a member of the Board of Trustees for the Culinary Institute of America in 2008. Ms. Donatone’s extensive knowledge of the restaurant and food service industry, senior management experience and financial expertise makes her particularly qualified for service on our Board, our Audit Committee and as Chair of our Nominating and Corporate Governance Committee.

JAMES C. PAPPAS has been a member of our Board of Directors since January 2015. He serves as the Managing Member of JCP Investment Management, LLC, a position he has held since June 2009. Mr. Pappas is the sole member of JCP Investment Holdings, LLC, and was a private investor between 2007 and 2009. Previously, from June 2005 to July 2007, Mr. Pappas was with the Investment Banking/Leveraged Finance Division of Goldman Sachs Group, Inc. where he advised private equity groups and corporations on appropriate leveraged buyout, recapitalization and refinancing alternatives. Prior to that, from June 2004 to June 2005, Mr. Pappas worked with Banc of America Securities, where he focused on consumer and retail investment banking, providing advice on a wide range of transactions including mergers and acquisitions, financings, restructurings and buy-side engagements. From January 2013 to May 2014, Mr. Pappas served as the Chairman of Morgan's Foods Inc., and served as its Director from February 2012 to May 2014. He served as an Independent Director of The Pantry, Inc. from March 2014 to March 2015. He also served as a Director at Samex Mining Corp. from January 2013 to August 2013. Since June 2016, Mr. Pappas has served as a Director of Tandy Leather Factory, Inc., and since October 2016 he has served as Director of US Geothermal, Inc. Mr. Pappas’s financial and food service industry expertise, along with his senior management experience make him particularly qualified to serve on our Board, our Audit Committee and our Nominating and Corporate Governance Committee.

GLENN W. WELLING has been a member of our Board of Directors since January 2015. He served as the Chief Investment Officer and Principal of Engaged Capital, LLC since its founding in 2012. Prior to the founding of Engaged Capital, Mr. Welling was a Principal and Managing Director of Research at Relational Investors LLC, which he joined in July 2008 and was responsible for research in the consumer, healthcare, and utilities sectors. Mr. Welling served from February 2002 to May 2008 as a Managing Director of Credit Suisse Group AG, where he also served as the Head of the Investment Banking Department’s Advisory Business. Mr. Welling served as Partner and Managing Director of HOLT Value Associates L.P. from October 1999 to January 2002. Mr. Welling serves as Chairman of the Board of Directors for the University of Pennsylvania’s tennis program and as a Member of the Wharton Executive Education Board. He also serves as a member of the Board of Directors of ROVI Corporation, and Medifast, Inc. He teaches executive education courses at the Wharton School of Business at the University of Pennsylvania. Mr. Welling’s financial, industry, and senior management experience make him particularly qualified to serve on our Board and as Chairman of our Compensation and Executive Development Committee.

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Information regarding the Executive Officers of the Company is contained in Part I of this Annual Report on Form 10-K.

CORPORATE GOVERNANCE

Director Independence

The Board of Directors has determined that, except for David Pace, each of the Company director nominees standing for election has no relationship which, in the opinion of the Board of Directors, would interfere with the exercise of independent judgment in carrying out the responsibilities of a director and is an “independent director” as defined by the applicable NASDAQ rules and the rules and regulations of the Securities and Exchange Commission (the “SEC”). In determining the independence of our directors, the Board of Directors has adopted the independence standards that mirror the criteria specified by applicable law and regulations of the SEC and the NASDAQ.

Board Leadership Structure

Our Board leadership structure currently consists of an independent Chairman and a Chief Executive Officer. In January 2016, David A. Pace was appointed our Chief Executive Officer and Richard L. Federico was appointed Chairman of our Board. Prior to the appointment of Richard L. Federico as independent Chairman of the Board, we appointed an independent Lead Director and will do so in the future at any time the roles of Chief Executive Officer and Chairman are combined.

The Board believes that Mr. Federico is best situated to serve as Chairman because he is the director most familiar with the Company’s business and industry, possesses detailed and in-depth knowledge of the issues, opportunities and challenges facing the Company and is thus best positioned to develop agendas that ensure that the Board’s time and attention are focused on the most critical matters. The Company’s independent directors bring experience, oversight and expertise from outside the Company, while the Chief Executive Officer brings Company-specific experience and expertise. The Board has determined that separating the roles of Chairman and Chief Executive Officer is most appropriate based on the current business environment of the Company, among other relevant factors.

Additionally, one of the responsibilities of the Board is to work with management to develop strategic direction and hold management accountable for the execution of strategy once it is developed. The Board believes that the Chairman can provide guidance to the Chief Executive Officer, who can then make the operating decisions necessary to manage the business.

Our Board elects our President, Chief Financial Officer, Secretary and all executive officers. All executive officers serve at the discretion of our Board. Each of our officers devotes his or her full time to our affairs. 

Our directors devote time to our affairs as is necessary to discharge their duties. In addition, our Board has the authority to retain its own advisers to assist it in the discharge of its duties. There are no family relationships among any of our directors, officers or key employees.

Board’s Role in Risk Oversight

Our Board has an active role, as a whole and also at the committee level, in overseeing management of the risks we face. This role is one of informed oversight rather than direct management of risk. Our Board regularly reviews and consults with management on strategic direction, challenges and risks we face. Our Board also reviews and discusses with management quarterly financial results and forecasts. The Audit Committee of our Board oversees management of financial risks, and its charter tasks the committee to provide oversight and review of, at least annually, our risk management policies. The Compensation and Executive Development Committee of our Board is responsible for overseeing the management of risks relating to and arising from our executive compensation plans and arrangements. These committees provide regular reports to the full Board.

Management is tasked with the direct management and oversight of legal, financial, and commercial compliance matters, which includes identification and mitigation of associated areas of risk. The Chief Financial Officer and her staff provide regular reports of legal risks to our Board and committees. The Chief Financial Officer and the Controller provide regular reports to the Audit Committee concerning financial, tax and audit related risks. In addition, the Audit Committee receives periodic reports from management on our compliance programs and efforts, investment policy and practices and the results of various internal audit projects. Management and the Compensation and Executive Development Committee’s compensation consultant provide analysis of risks related to our compensation programs and practices to the Compensation and Executive Development Committee.

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Certain Relationships and Related Party Transactions

The Company has entered into indemnity agreements with certain officers and directors which provide, among other things, that Jamba will indemnify such officer or director, under the circumstances and to the extent provided for therein, for expenses, damages, judgments, fines and settlements he or she may be required to pay in actions or proceedings which he or she is or may be made a party by reason of his or her position as a director, officer or other agent of Jamba, and otherwise to the fullest extent permitted under Delaware law and our Bylaws.

Other than the foregoing, there were no relationships or related party transactions in the fiscal year ended January 3, 2017 requiring disclosure.

Procedures for Approval of Related Person Transactions

Any request for us to enter into a transaction with an executive officer, director or employee, or any of such persons’ immediate family members or affiliates, must first be presented to our Audit Committee for review, consideration and approval. In approving or rejecting the proposed agreement, our Audit Committee will review each such transaction for potential conflicts of interest or improprieties in a manner consistent with our internal Policy Statement on Related Party Transactions.

Executive Sessions

Non-management directors regularly meet in executive session without management present each time our Board of Directors holds its regularly scheduled meetings.

Committees and Board Meeting Attendance

The Board of Directors has a standing Audit Committee, a Compensation and Executive Development Committee and a Nominating and Corporate Governance Committee. Each of these committees operates under a written charter adopted by the Board of Directors. Copies of these charters can be obtained on our website by going to http://ir.jambajuice.com and following the “Corporate Governance” link. The Board of Directors holds at least four regular meetings each year, with additional meetings as required. The Board of Directors held ten meetings during Fiscal 2016, either in person or by teleconference. Each of the standing committees of the Board of Directors held the number of meetings indicated in the table below. During Fiscal 2016, each of our incumbent directors attended at least 75% of the total number of meetings of the Board of Directors and all of the committees of the Board of Directors held during the period in which such director served. Our Corporate Governance Principles and Practices provide that our directors are expected to attend the Annual Meeting of Shareholders. Except for Mr. Howe, all of the directors then serving attended the Company’s last Annual Meeting of Shareholders held on May 17, 2016.

The following table sets forth the three standing committees of the Board of Directors and the members of each committee who served during Fiscal 2016:

Name of Director	Audit	Compensation and Executive Development	Nominating and Corporate Governance
Michael A. Depatie	Chair
Richard L. Federico		Member	Member
Lesley H. Howe(1)	Former Chair
Andrew R. Heyer		Member
David A. Pace(2)		Former Member	Former Member
Lorna C. Donatone	Member		Chair
James C. Pappas	Member		Member
Glenn W. Welling		Chair
Number of Meetings:	7	5	4

(1) Mr. Howe served on our Board of Directors and as Chairman of the Audit Committee through the date of our 2016 Annual Meeting, after which he completed his term and no longer served as a director of the Company.

(2) Mr. Pace served on our Nominating and Corporate Governance Committee and our Compensation and Executive Development Committee until January 22, 2016 when he was appointed Chief Executive Officer.

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Audit Committee

The current members of the Audit Committee are Michael A. Depatie (Chair), Lorna Donatone, and James C. Pappas. Each of the members of the Audit Committee is independent for purposes of the applicable NASDAQ rules and the rules and regulations of the SEC as they apply to Audit Committee members.

With the assistance of the Company’s legal counsel, the Nominating and Corporate Governance Committee reviewed the applicable legal standards and criteria to determine “audit committee financial expert” status, as well as the answers to annual questionnaires completed by the Board members. On the basis of this review, the Nominating and Corporate Governance Committee delivered a report to the full Board. The Board made a determination that all current members of the Audit Committee are “audit committee financial experts” based upon the Nominating and Corporate Governance Committee’s report and each Board member’s review of the information made available to the committee.

The Audit Committee operates under a written charter approved by the Board of Directors, a copy of which can be obtained on our website by going to http://ir.jambajuice.com and following the “Corporate Governance” link. As more fully defined in the committee’s charter, the functions of the Audit Committee include retaining our independent registered public accounting firm, reviewing their independence, reviewing and approving the planned scope of our annual audit, reviewing and approving any fee arrangements with our independent registered public accounting firm, overseeing their audit work, reviewing and pre-approving any non-audit services that may be performed by them, reviewing the adequacy of accounting and financial controls, reviewing our critical accounting policies and reviewing and approving any related party transactions.

Additional information regarding the Audit Committee is set forth in the Report of the Audit Committee.

Compensation and Executive Development Committee

The current members of the Compensation and Executive Development Committee are Glenn W. Welling (Chair), Richard L. Federico, and Andrew R. Heyer. Each of the members of the Compensation and Executive Development Committee is independent for purposes of the applicable NASDAQ rules. The Compensation and Executive Development Committee operates under a written charter approved by the Board of Directors, a copy of which can be obtained on our website by going to http://ir.jambajuice.com and following the “Corporate Governance” link.

As more fully described in the committee’s charter, the primary function of the Compensation and Executive Development Committee is to assist the Board of Directors in managing compensation and development for directors and executives. The Compensation and Executive Development Committee’s primary duties and responsibilities are to (i) set compensation philosophy and determine executive compensation; (ii) ensure that all components of executive compensation are consistent with the Company’s compensation philosophy as in effect from time to time; (iii) evaluate and make recommendations to the Board of Directors on an annual basis concerning compensation of the members of the Board of Directors; (iv) oversee risks related to our executive compensation plans and arrangements; and (v) work with management to devise and execute on an executive development plan and succession planning and practices for the Company. The Compensation and Executive Development Committee’s charter does not provide for any delegation of these duties. In addition, the Compensation and Executive Development Committee has the authority under its charter to hire outside consultants and conduct such compensation reviews, investigations and/or surveys as the Compensation and Executive Development Committee may reasonably deem will provide such information as could reasonably and properly be required by the Compensation and Executive Development Committee in the exercise of its duties and responsibilities.

In setting compensation for our members of the Board of Directors, our executive officers provide suggestions on the administration of compensation for our directors to the Compensation and Executive Development Committee. For a description of the role our executive officers play in determining or recommending the amount or form of executive compensation, please see the section below entitled “EXECUTIVE COMPENSATION — Compensation Discussion and Analysis.”

Executive Compensation Processes

The Compensation and Executive Development Committee has implemented an annual performance review program for our executives under which annual performance goals are determined early in each calendar year for each of our executive officers. These goals may include both corporate goals and individual department specific goals that facilitate the achievement of corporate performance. Bonuses are tied to the achievement of these performance goals. For all executives, annual base salary increases and bonuses, to the extent awarded, are generally implemented during the first calendar quarter of the year.

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Risk Considerations in Executive Compensation

Our Compensation and Executive Development Committee has discussed the concept of risk as it relates to our compensation programs, including our executive compensation program, and our Compensation and Executive Development Committee does not believe that our compensation programs encourage excessive or inappropriate risk taking. As described more fully in the section below entitled “EXECUTIVE COMPENSATION — Compensation Discussion and Analysis,” we structure our pay to consist of both fixed and variable compensation. The fixed (or salary) portion of compensation is designed to provide a steady income regardless of our stock price performance so that executives do not feel pressured to focus exclusively on stock price performance to the detriment of other important business metrics. The variable (cash bonus and equity) portions of compensation are designed to reward both intermediate and long-term corporate performance and generally are tied to the achievement of company-wide and individual department-specific goals. Goals are both financial and non-financial, and while largely formula-based, there is also an appropriate level of discretion in determining incentive payouts. We believe that applying company-wide metrics encourages decision-making by our executives that is in the best long-term interest of our Company and shareholders. Further, we believe that these variable elements of compensation constitute a sufficient percentage of overall compensation to motivate our executives to produce superior short, intermediate and long-term corporate results, while the fixed element is also substantial enough that our executives are not encouraged to take unnecessary or excessive risks in doing so. Finally, there are additional risk mitigating policies in place such as insider trading prohibitions and independent Compensation and Executive Development Committee oversight.

Nominating and Corporate Governance Committee

The current members of the Nominating and Corporate Governance Committee are Lorna Donatone (Chair), Richard L. Federico and James C. Pappas. Each of the members of the Nominating and Corporate Governance Committee is independent for purposes of the applicable NASDAQ rules. The Nominating and Corporate Governance Committee operates under a written charter approved by the Board of Directors, a copy of which can be obtained on our website by going to http://ir.jambajuice.com and following the “Corporate Governance” link.

As more fully defined in the committee’s charter, the Nominating and Corporate Governance Committee considers qualified candidates for appointment and nomination for election to the Board of Directors and makes recommendations concerning such candidates, develops corporate governance principles for recommendation to the Board of Directors and oversees the regular evaluation of our directors and management.

Director Nominations — Criteria and Diversity

The Board of Directors has adopted a Director Qualifications and Nominations Policy, the purpose of which is to describe the process by which candidates for possible inclusion in the Company’s slate of director nominees are selected. The Director Qualifications and Nominations Policy is administered by the Nominating and Corporate Governance Committee. 

The Nominating and Corporate Governance Committee annually evaluates the current members of the Board of Directors whose terms are expiring and who are willing to continue in service against the criteria set forth below in determining whether to recommend these directors for election. The Nominating and Corporate Governance Committee regularly assesses the optimum size of the Board of Directors and its committees and the needs of the Board of Directors for various skills, background and business experience in determining if the Board of Directors requires additional candidates for nomination.

In fulfilling its responsibilities, the Nominating and Corporate Governance Committee considers, among other things, the following factors in reviewing possible candidates for nomination as director:

• the appropriate size of the Company’s Board of Directors and its Committees;

• the perceived needs of the Board of Directors for particular skills, background and business experience;

• the skills, background, reputation, and business experience of nominees compared to the skills, background, reputation, and business experience already possessed by other members of the Board of Directors;

• nominees’ independence from management;

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• applicable regulatory and listing requirements, including independence requirements and legal considerations, such as antitrust compliance;

• the benefits of a constructive working relationship among directors; and

• the desire to balance the considerable benefit of continuity with the periodic injection of the fresh perspective provided by new members.

The Nominating and Corporate Governance Committee does not assign specific weights to particular criteria and no particular criterion is a prerequisite for any prospective nominee.

While the Nominating and Corporate Governance Committee does not have a formal policy on diversity with regard to consideration of director nominees, the Nominating and Corporate Governance Committee considers diversity in its selection of nominees and seeks to have a Board of Directors that brings to the Company a variety of perspectives and skills derived from high quality business and professional experience. Our Board of Directors recognizes its responsibility to ensure that nominees for our Board of Directors possess appropriate qualifications and reflect a reasonable diversity of personal and professional experience, skills, backgrounds and perspectives, including those backgrounds and perspectives with respect to age, gender, culture, race and national origin. We believe that the backgrounds and qualifications of our directors, considered as a group, should provide a composite mix of experience, knowledge and abilities that will allow the Board of Directors to promote our strategic objectives and to fulfill its responsibilities to our shareholders.

Candidates for nomination as director come to the attention of the Nominating and Corporate Governance Committee from time to time through incumbent directors, management, shareholders or third parties. These candidates may be considered at meetings of the Nominating and Corporate Governance Committee at any point during the year. Such candidates are evaluated against the criteria set forth above. If the Nominating and Corporate Governance Committee believes at any time that it is desirable that the Board of Directors consider additional candidates for nomination, the Nominating and Corporate Governance Committee may poll directors and management for suggestions or conduct research to identify possible candidates and may engage, if the Nominating and Corporate Governance Committee believes it is appropriate, a third party search firm to assist in identifying qualified candidates. 

The Nominating and Corporate Governance Committee will evaluate any recommendation for director nominee proposed by a shareholder. In order to be so evaluated, any recommendation for director nominee submitted by a shareholder must be sent in writing to the Corporate Secretary, Jamba, Inc., 3001 Dallas Parkway, Suite 140, Frisco, TX 75034, 120 days prior to the anniversary of the date the proxy statement was released to shareholders in connection with the prior year’s annual meeting of shareholders, except that if no annual meeting was held in the previous year or the date of the annual meeting has been advanced by more than thirty (30) calendar days from the date contemplated at the time of the previous year’s proxy statement, notice by the shareholders to be timely must be received not later than the close of business on the tenth (10^th) calendar day following the day on which public announcement of the date of such meeting is first made, and must contain, among other requirements set forth in our Bylaws, the following information with respect to the candidate:

• the candidate’s name, age, business address and residence address;

• the candidate’s principal occupation or employment;

• the class and number of shares of capital stock of the Corporation which are beneficially owned by the candidate; and

• any other information relating to the candidate that is required to be disclosed in solicitations for proxies for election of directors pursuant to the Rules and Regulations of the Securities and Exchange Commission under Section 14 of the Securities Exchange Act of 1934, as amended.

All directors and director nominees must submit a completed form of directors’ and officers’ questionnaire as part of the nominating process. The evaluation process may also include interviews and additional background and reference checks for non-incumbent nominees, at the discretion of the Nominating and Corporate Governance Committee.

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The Nominating and Corporate Governance Committee will evaluate incumbent directors, as well as candidates for director nominee submitted by directors, management and shareholders consistently using the criteria stated in its policy and will select the nominees that in the Nominating and Corporate Governance Committee’s judgment best suit the needs of the Board of Directors at that time.

Our Bylaws permit shareholders to nominate directors for consideration at annual meetings, provided the advance notice requirements set forth in our Bylaws have been properly met.

Communications with Directors

Shareholders may communicate with any and all members of our Board of Directors by transmitting correspondence by mail or facsimile addressed to one or more directors by name (or to the Chairman, for a communication addressed to the entire Board of Directors) at the following address and fax number:

Name of the Director(s)

c/o Corporate Secretary

Jamba, Inc.

3001 Dallas Parkway, Suite 140

Frisco, TX 75034

Fax: (469) 294-9601

Communications from our shareholders to one or more directors will be collected and organized by our Corporate Secretary under procedures approved by our independent directors. The Corporate Secretary will forward all communications to the Chairman of the Board of Directors, or to the identified director(s) as soon as practicable, although communications that are abusive, in bad taste or that present safety or security concerns may be handled differently. If multiple communications are received on a similar topic, the Corporate Secretary may, in his or her discretion, forward only representative correspondence. 

The Chairman of the Board of Directors will determine whether any communication addressed to the entire Board of Directors should be properly addressed by the entire Board of Directors or a committee thereof. If a communication is sent to the Board of Directors or a committee, the Chairman of the Board, or the Chairman of that committee, as the case may be, will determine whether a response to the communication is warranted. If a response to the communication is warranted, the content and method of the response will be coordinated with our Vice President of Legal Affairs.

Code of Business Conduct and Ethics

The Company has adopted a Code of Business Conduct and Ethics that applies to all of its employees, including the Chief Executive Officer, Chief Financial Officer and Controller. The Code of Business Conduct and Ethics can be obtained on the Company’s website by going to http://ir.jambajuice.com and following the “Corporate Governance” link. The Company intends to post on its website any amendments to or waivers of the Company’s Code of Business Conduct and Ethics. The information contained on the Company’s website is not part of this document.

Corporate Governance Guidelines

Our Board has adopted Corporate Governance Principles and Practices to assist it in the exercise of its duties and responsibilities and to serve the best interests of our company and our shareholders. These principles which provide a framework for the conduct of our Board’s business provide, among other things, that:

• The principal responsibility of the directors is to oversee the exercise of corporate powers and to ensure that the Company’s business and affairs are managed to meet its stated goals and objectives;

• Certain criteria and qualifications be used for consideration of selection of Board nominees;

• New directors participate in an orientation program; and

• All Board members have access to senior management. No member of the Board shall stand for re-election after his/her 75^th birthday without a waiver from a majority of the members of the Board. At least annually, our Board and its committees will conduct a self-evaluation to determine whether they are functioning effectively. Board members shall not serve on more than four other Boards of Directors of other publicly-traded companies; provided, however that if the Board member also serves as chairman of the board of a publicly-traded company, then he or she shall not serve on more than three other Boards of Directors, or if the Board member also serves as an executive officer of a company, then he or she shall not serve on more than two other Boards of Directors.

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These principles can be obtained on our website by going to http://ir.jambajuice.com and following the “Corporate Governance” link. A printed copy of the guidelines may also be obtained by any shareholder upon request in writing to Jamba, Inc., c/o ICR, Inc., 685 Third Avenue, 2^nd Floor, New York, NY, 10017, by emailing investors@jambajuice.com, or by telephoning (646) 277-1212.

Stock Ownership Guidelines

Each member of our Board of Directors is required to acquire and maintain, individually or through their affiliates, a minimum of $180,000 of shares of the Company’s common stock during the term of his or her service on the Board, with the value measured by the greater of the aggregate purchase price paid for such shares or the current market price. New members of the Board shall have five years from the date on which their service begins in which to attain the required ownership level. Any director who falls short of the guideline will be deemed in compliance as long as such director retains all stock compensation until the required level of ownership is met. We have also adopted stock ownership guidelines for our management to further align the interests of members of senior management with the interests of our shareholders and to encourage management ownership of our common stock. Further information on these guidelines is set forth in the section below entitled “EXECUTIVE COMPENSATION — Compensation Discussion and Analysis.”

Section 16(a) Beneficial Ownership Reporting Compliance

Section 16(a) of the Securities Exchange Act of 1934, as amended, requires our executive officers and directors and persons who beneficially own more than 10% of our Common Stock to file initial reports of beneficial ownership and reports of changes in beneficial ownership with the SEC. Such persons are required by SEC regulations to furnish us with copies of all Section 16(a) forms filed by such person.

Based solely on our review of such forms furnished to us and written representations from certain reporting persons, we believe that all filing requirements applicable to our executive officers, directors and greater-than-10% shareholders were complied with for Fiscal 2016, other than Mr. Pace who had one late filing in Fiscal 2016.

ITEM 11. EXECUTIVE COMPENSATION

Summary Compensation Table

The following table sets forth information concerning the compensation earned during fiscal years 2016, 2015 and 2014 by our current Chief Executive Officer, our current Chief Financial Officer, our former President and Chief Executive Officer and our former Chief Financial Officer, each of whom served during part of fiscal 2016, and our three other most highly-compensated persons serving as executive officers at January 3, 2017 (our “Named Executive Officers”):

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2016 SUMMARY COMPENSATION TABLE

Name and Principal Position	Year	Salary ($)(1)	Bonus for Fiscal Year ($)(2)		Stock Awards (time based) ($)(3)		Stock Awards (performance based) ($)(4)		Stock Awards (market based) ($)(5)		Option Awards ($)(3)		Non-Equity Incentive Plan Compensation ($)(6)		All Other Compensation ($)(7)		Total ($)
David A. Pace(8)	2016	454,615		200,000		-		-		1,052,000		870,495		477,736	691			3,055,537
Chief Executive Officer
James D. White(9)	2016	115,203		-		-		-		-		-		-		637,229		752,432
Former Chief Executive Officer	2015	600,000		-		-		-		-		1,257,751		-		1,684		1,859,435
and President	2014	600,000		-		315,900		395,365		-		-		208,275		909		1,520,449
Marie Perry(10)	2016	198,769		50,000		68,160		-		289,000		319,500		204,000		383		1,129,812
Executive Vice President,
Chief Financial &
Administrative Officer
Karen L. Luey(11)	2016	352,000		75,000		-		-		-		-		-		150,672		577,672
Former Executive Vice President,	2015	352,000		-		-		-		-		702,969		-		657		1,055,626
Chief Financial & Administrative Officer	2014	352,000		-		140,400		175,718		-		-		77,940		657		746,715
Rachel Phillips-Luther(12)	2016	99,750		50,000		54,350		-		195,000		-		100,000		196		499,296
Sr. Vice President,
Chief Marketing  Officer
Steve Adkins	2016	305,192		75,000		-		-		-		-		-		62,548		442,740
Sr. Vice President,	2015	285,000		-		-		-		-		236,822		-		575		522,397
Chief Operations Officer	2014	285,000		-		77,220		96,644		-		-		46,697		575		506,136
Arnaud Joliff(13)	2016	296,729		75,000		-		-		-		-		-		602		372,331
Sr. Vice President,	2015	253,115		-		135,000		-		-		294,322		-		531		682,968
Chief Systems Officer

(1) Reflects salaries paid for the respective fiscal year.

(2) Reflects cash sign-on bonuses granted as part of new hire arrangements, intended to cover transition-related costs such as relocation and other expenses, cash retention bonuses accrued per the plan adopted by the Board effective November 9, 2015, to be paid upon the confirmed eligibility of each named executive officer after June 30, 2016.

(3) Represents the aggregate fair market value of stock options and restricted stock units calculated in accordance with the fair value method. The grant date fair value of options granted was estimated at the date of grant using a Black-Scholes option-pricing model. Option valuation models, including Black-Scholes, require the input of highly subjective assumptions, and changes in the assumptions used can materially affect the grant date fair value of an award. These assumptions include the risk-free rate of interest, expected dividend yield, expected volatility, and the expected term of the award. The risk-free rate of interest is based on the zero coupon U.S. Treasury rates appropriate for the expected term of the award. We apply the guidance provided by the SEC Staff Accounting Bulletin No. 110 to determine expected term. Expected dividends are zero based on our history of not paying cash dividends on the Company’s common stock. For Fiscal Years 2016, 2015, and 2014, expected volatility is based on historic daily stock price observations of the Company's common stock since its inception. There is currently no market-based mechanism or other practical application to verify the reliability and accuracy of the estimates stemming from these valuation models or assumptions. The fair value of restricted stock units is based on the Company’s closing stock price on the date of grant. See the grant date fair value table below for the assumptions used to calculate the grant date fair value of option grants reported for fiscal years 2016, 2015, and 2014 on a grant by grant basis.

(4) The fair value of the performance-based restricted stock units is based upon a Monte Carlo calculation. The value of the awards at the grant date assumes that the target level of performance conditions will be achieved in 2016 and 2017.

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(5) The fair value of the market-based restricted stock units is based upon a Monte Carlo calculation. Reflects sign-on grant of restricted stock units earned upon the achievement of TSR stock price targets that represent 15%, 22.5% and 30% annualized appreciation over a three-year period.

(6) Reflects annual incentive bonus awards earned for the respective fiscal year, including guarantees.

(7) Represents vacation and personal hours paid out at separation as well as premium payments for life insurance and long term disability.

(8) Mr. Pace’s salary is prorated for service between January 22, 2016 and January 3, 2017. Mr. Pace began his employment in 2016, and accordingly he was not a Named Executive Officer in previous years.

(9) Mr. White’s salary is prorated for service between December 30, 2015 and January 22, 2016, when he separated from the Company.

(10) Ms. Perry’s salary is prorated for service between May 16, 2016 and January 3, 2017. Ms. Perry began her employment in 2016, and was appointed Executive Vice President, Chief Financial & Administrative Officer of the Company on August 9, 2016, and accordingly she was not a Named Executive Officer in previous years.

(11) Ms. Luey transitioned out of her role as Executive Vice President, Chief Financial & Administrative Officer of the Company on August 9, 2016, and accordingly she was not a Named Executive Officer after that date.

(12) Ms. Phillips-Luther’s salary is prorated for service between August 9, 2016 and January 3, 2017. Ms. Phillips-Luther began her employment in 2016, and accordingly she was not a Named Executive Officer in previous years.

(13) Mr. Joliff became a Named Executive Officer in 2015 but was not a Named Executive Officer in previous years.

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Grant Date Fair Value Table

The following table describes the assumptions used to calculate the grant date fair value of equity grants reported for fiscal years 2016, 2015, and 2014 on a grant-by-grant basis.

Name	Grant Date	Options Granted		RSUs Granted		Exercise Price ($)	Closing Price on Grant Date ($)		Volatility (%)		Expected Life (Years)		Risk Free Interest Rate (%)		Dividend Yield (%)	Grant Date Fair Value per Share ($)
David A. Pace	3/17/2016		150,000				$	12.35	41.2		5.18		1.42		-	$	4.75
	4/12/2016		50,000				$ 19.50 (1)		41.2		5.18		1.25		-	$	3.17
	5/17/2016				150,000		$	11.33								$	4.02
	(tranche 1)
	5/17/2016				100,000		$	11.33								$	2.78
	(tranche 2)
	5/17/2016				100,000		$	11.33								$	1.71
	(tranche 3)
James D. White	3/17/2015		208,237	-		-	$	13.94		43.7		5.85		1.74	-	$	6.04
	8/7/2014	-			22,500	-	$	14.04	-		-		-		-	$	14.04
	8/7/2014	-			7,500	-	$	14.04	-		-		-		-	$	17.27
	(year 1)
	8/7/2014	-			7,500	-	$	14.04	-		-		-		-	$	17.32
	(year 2)
	8/7/2014	-			7,500	-	$	14.04	-		-		-		-	$	18.13
	(year 3)
Marie Perry	5/16/2016		75,000				$	11.65	39.1		5.18		1.29		-	$	4.26
	5/18/2016				6,000		$	11.36								$	11.36
	5/18/2016				40,000		$	11.36								$	4.33
	(tranche 1)
	5/18/2016				25,000		$	11.36								$	3.08
	(tranche 2)
	5/18/2016				20,000		$	11.36								$	1.95
	(tranche 3)
Karen L. Luey	11/12/2015		25,000	-		-	$	13.50		42.5		5.85		1.88	-	$	5.75
	3/17/2015		92,586	-		-	$	13.94		43.7		5.85		1.74	-	$	6.04
	8/7/2014	-			10,000	-	$	14.04	-		-		-		-	$	14.04
	8/7/2014	-			3,333	-	$	14.04	-		-		-		-	$	17.27
	(year 1)
	8/7/2014	-			3,333	-	$	14.04	-		-		-		-	$	17.32
	(year 2)
	8/7/2014	-			3,334	-	$	14.04	-		-		-		-	$	18.13
	(year 3)
Rachel Phillips-Luther	8/9/2016				5,000		$	10.87								$	10.87
	8/9/2016				35,000		$	10.87								$	3.69
	(tranche 1)
	8/9/2016				20,000		$	10.87								$	2.25
	(tranche 2)
	8/9/2016				15,000		$	10.87								$	1.40
	(tranche 3)
Steve Adkins	3/17/2015		39,209	-		-	$	13.94		43.7		5.85		1.74	-	$	6.04
	8/7/2014	-			5,500	-	$	14.04	-		-		-		-	$	14.04
	8/7/2014	-			1,833	-	$	14.04	-		-		-		-	$	17.27
	(year 1)
	8/7/2014	-			1,833	-	$	14.04	-		-		-		-	$	17.32
	(year 2)
	8/7/2014	-			1,834	-	$	14.04	-		-		-		-	$	18.13
	(year 3)
Arnaud Joliff	11/12/2015		10,000	-		-	$	13.50		42.5		5.85		1.88	-	$	5.75
	11/12/2015	-			10,000	-	$	13.50	-		-		-		-	$	13.50
	3/17/2015		39,209	-		-	$	13.94		43.7		5.85		1.74	-	$	6.04

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(1) Reflects the strike price for these premium priced options, rather than the closing price.

Grants of Plan-Based Awards at 2016 Fiscal Year End

The following table sets forth certain information with respect to stock and option awards and other plan-based awards granted during the fiscal year ended January 3, 2017 to our Named Executive Officers:

GRANTS OF PLAN-BASED AWARDS IN FISCAL 2016

													All other			Allother option				Grant
													stock			awards:		Exercise		date fair
		Estimated Future Payouts						Estimated Future Payouts					awards:			# of		or base		value of
		Under Non-Equity Incentive Plan Awards (1)						Under Equity Incentive Plan Awards					# of share			securities		price of		stock and
													of stock			underlying		options		option
	Grant	Threshold		Target		Maximum		Threshold	Target			Maximum	or units			options(2)		awards		awards(3)
Name	Date	$		$		$		$	$			$	#			#		$		$
David A. Pace	3/17/2016																150,000	$	12.35		712,500
	4/12/2016																50,000	$	19.50		272,000
	5/3/2016		300,000		600,000		900,000
	5/17/2016									2,925,000	(5)
	5/17/2016									2,400,000	(5)
	5/17/2016									2,850,000	(5)
James D. White(4)
Marie Perry	5/16/2016																75,000	$	11.65		319,500
	5/18/2016													6,000	(6)
	5/18/2016									780,000	(7)
	5/18/2016									600,000	(7)
	5/18/2016									570,000	(7)
	5/3/2016		102,000		204,000		306,000
Karen L. Luey	5/3/2016		114,400		228,800		343,200
Rachel Phillips-Luther	8/9/2016													5,000	(6)
	8/9/2016									682,500	(7)
	8/9/2016									480,000	(7)
	8/9/2016									427,500	(7)
	5/3/2016		71,250		142,500		213,750
Steve Adkins	5/3/2016		80,000		160,000		240,000
Arnaud Joliff	5/3/2016		80,000		160,000		240,000

(1) These columns show the threshold, target and maximum potential payout under the Management Incentive Plan for each of the Named Executive Officers. The target payouts and maximum payouts listed represent the target and maximum amounts payable based on the Fiscal 2016 target metrics described above in the Section entitled “Compensation Discussion and Analysis,” taking into account the base salaries paid to each of the Named Executive Officers as of January 3, 2017, the last day of Fiscal 2016. No payouts were made under the Management Incentive Plan for Fiscal 2016. The targets for each of our Named Executive Officers are determined by the Compensation and Executive Development Committee.

(2) Represents grants of option shares made to participants in the Company’s 2013 Equity Incentive Plan, except for 75,000 option shares granted to Ms. Perry, which were inducement grants outside the plan.  The grants are time-based and will vest in equal annual installments over three years.

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(3) This amount reflects the grant date fair value of the awards granted in Fiscal 2016. The calculation of grant date fair value is explained in Footnote 3 to the 2016 Summary Compensation Table, above. Time-based grants were valued based on grant price.

(4) Although Mr. White was a Named Executive Officer, he did not receive stock or option or other plan-based awards during Fiscal 2016.

(5) The grants are market-based grants and will vest upon the 30th consecutive trading day the closing price of JMBA common stock equals or exceeds $19.50, $24.00 and $28.50, respectively, or upon a change of control whereby JMBA's shareholders receive a per share consideration equaling or exceeding such target price, so long as the target price is achieved during the three year period beginning on the vesting commencement date, and in each case so long as the executive remains an employee of JMBA and/or its affiliates.

(6) Represents grants of restricted stock unit inducement grants made outside of the Company’s 2013 Equity Plan. The grants are time-based awards and will vest in equal annual installments over three years.

(7) Represents grants of restricted stock unit inducement grants made outside of the Company’s 2013 Equity Plan. The grants are market-based grants and will vest upon the 30th consecutive trading day the closing price of JMBA common stock equals or exceeds $19.50, $24.00 and $28.50, respectively, or upon a change of control whereby JMBA's shareholders receive a per share consideration equaling or exceeding such target price, so long as the target price is achieved during the three year period beginning on the vesting commencement date, and in each case so long as the executive remains an employee of JMBA and/or its affiliates.

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Outstanding Equity Awards at 2016 Fiscal Year End

The following table sets forth certain information with respect to the number and value of all unexercised options or unvested portions of restricted stock units previously awarded to our Named Executive Officers as of January 3, 2017:

OUTSTANDING EQUITY AWARDS AT JANUARY 3, 2017

	Option Awards(1)							Stock Awards(1)
Name	Number of Securities Underlying Unexercised Options (#) Exercisable		Number of Securities Underlying Unexercised Options (#) Unexercisable		Option Exercise Price ($)		Option Expiration Date	Number of Shares or Units of Stock That Have Not Vested (#)	Market Value of Shares or Units of Stock That Have Not Yet Vested(2) ($)		Equity Incentive Plan Awards of Unearned Shares, Units or Other Rights That Have Not Vested (#)	Equity Incentive Plan Awards; Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested(2) ($)
David A. Pace	-			150,000		12.35	3/14/2026	-	-		-	-
	-			50,000		19.50	3/14/2026	-	-		-	-
	-		-		-		-	150,000 (6)		1,543,500	-	-
	-		-		-		-	100,000 (6)		1,029,000	-	-
	-		-		-		-	100,000 (6)		1,029,000	-	-
James D. White		140,848	-			3.00	12/1/2018	-	-		-	-
		15,000	-			11.10	11/12/2020	-	-		-	-
		20,000	-			8.05	11/14/2021	-	-		-	-
		138,824	-			13.94	3/17/2025	-	-		-	-
Marie Perry	-			75,000	11.65		5/16/2026	-	-		-	-
	-		-		-		-	6,000 (7)		61,740	-	-
	-		-		-		-	40,000 (8)		411,600	-	-
	-		-		-		-	25,000 (8)		257,250	-	-
	-		-		-		-	20,000 (8)		205,800	-	-
Karen L. Luey(3)		6,000	-			47.55	6/14/2017	-	-		-	-
		2,400	-			22.40	12/7/2017	-	-		-	-
		8,000	-			11.35	6/1/2020	-	-		-	-
		8,000	-			11.10	11/12/2020	-	-		-	-
		4,000	-			11.05	8/26/2021	-	-		-	-
		8,600	-			8.05	11/14/2021	-	-		-	-
	-			92,586		13.94	3/17/2025	-	-		-	-
		6,250		18,750		13.50	11/12/2025	-	-		-	-
	-		-		-		-	3,334 (9)		34,307	-	-
	-		-		-		-	-	-		3,334 (10)		34,307
Rachel Phillips-Luther	-		-		-		-	5,000 (7)		51,450	-	-
	-		-		-		-	35,000 (8)		360,150	-	-
	-		-		-		-	20,000 (8)		205,800	-	-
	-		-		-		-	15,000 (8)		154,350	-	-
Steve Adkins(4)		2,600	-			22.40	12/7/2017	-	-		-	-
		1,000				9.70	11/6/2022	-	-		-	-
	-			39,209		13.94	3/17/2025	-	-		-	-
	-		-		-		-	1,834 (9)		18,872	-	-
	-		-		-		-	-	-		1,834 (10)		18,872
Arnaud Joliff(5)		15,000		7,500		10.79	11/7/2023	-	-		-	-
	-			39,209		13.94	3/17/2025	-	-		-	-
		2,500		7,500		13.50	11/12/2025	-	-		-	-
	-		-		-		-	6,667 (11)		68,603	-	-
	-		-		-		-	834 (9)		8,582	-	-
	-		-		-		-	-	-		834 (10)		8,582

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(1) Reflects restricted stock units, options, or stock awards granted under the 2013 Equity Plan as well as inducement grants.

(2) Market values have been estimated using a price per share of $10.29, which was the closing price of our common stock on the last trading day of fiscal 2016.

(3) Upon Ms. Luey’s separation from the Company on March 20, 2017, she received one additional year of accelerated vesting of outstanding stock options, restricted stock and restricted stock units in accordance with the Severance Plan and a Transition Services Agreement dated August 3, 2016.

(4) Upon Mr. Adkin’s separation from the Company on January 31, 2017, he received accelerated vesting of outstanding stock options, restricted stock and restricted stock units in accordance with the Severance Plan.

(5) Mr. Joliff was granted market-based RSUs in 2017 for parity with other executives.

(6) The grants are market-based grants and will vest upon the 30th consecutive trading day the closing price of JMBA common stock equals or exceeds $19.50, $24.00 and $28.50, respectively, or upon a change of control whereby JMBA's shareholders receive a per share consideration equaling or exceeding such target price, so long as the target price is achieved during the three year period beginning on the vesting commencement date, and in each case so long as the executive remains an employee of JMBA and/or its affiliates.

(7) Represents grants of restricted stock unit inducement grants made outside of the Company’s 2013 Equity Plan. The grants are time-based grants and will vest in equal annual installments over three years.

(8) Represents grants of restricted stock unit inducement grants made outside of the Company’s 2013 Equity Plan. The grants are market-based grants and will vest upon the 30th consecutive trading day the closing price of JMBA common stock equals or exceeds $19.50, $24.00 and $28.50, respectively, or upon a change of control whereby JMBA's shareholders receive a per share consideration equaling or exceeding such target price, so long as the target price is achieved during the three year period beginning on the vesting commencement date, and in each case so long as the executive remains an employee of JMBA and/or its affiliates.

(9) Vesting on these restricted stock unit awards commenced on August 7, 2014 and, assuming each individual continues providing services to the Company, will vest and become exercisable in equal installments on August 7, 2015, August 7, 2016, and August 7, 2017.

(10) Vesting on these performance-based restricted stock unit awards commenced on August 7, 2014 and, assuming that the Company achieves TSR measurement against a select restaurant peer group for each year, will vest and become exercisable in equal installments on August 7, 2015, August 7, 2016, and August 7, 2017.

(11) Vesting on these restricted stock unit awards commenced on November 12, 2015 and, assuming each individual continues providing services to the Company, will vest and become exercisable in equal installments on November 12, 2016, November 12, 2017, and November 12, 2018.

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Option Exercises and Stock Vested During Last Fiscal Year

OPTION EXERCISES AND STOCK VESTED DURING

THE FISCAL YEAR ENDED JANUARY 3, 2017

	Option Awards				Stock Awards
Name	Number of Shares Acquired on Exercise (#)		Value Realized on Exercise(1) ($)		Number of Shares Acquired on Vesting (#)		Value Realized on Vesting(2) ($)
David A. Pace	-		-		-		-
James D. White		97,176		896,765		14,500		185,600
Marie Perry	-		-		-		-
Karen L. Luey		35,888		107,836		6,667		72,470
Rachel Phillips-Luther	-		-		-		-
Steve Adkins	-		-			2,917		31,708
Arnaud Joliff	-		-			9,166		93,118

(1) Based on the difference between the market price of our common stock on the date of exercise and the exercise price of the relevant option multiplied by the number of shares for which the option was exercised.

(2) Based on the market value of the underlying shares on vesting date multiplied by the number of shares vested.

The Company does not provide any deferred compensation arrangements or pension plans. As such, the Pension Benefits Table and Nonqualified Deferred Compensation Table have been eliminated from this Annual Report on Form 10-K.

Potential Payments upon Termination or Change in Control

In 2013 we adopted the Severance Plan for the benefit of employees of the Company holding the title of Executive Vice President or Senior Vice President and for certain other key employees of the Company who may be designated by the Compensation and Executive Development Committee from time to time as eligible to participate in the Severance Plan (each a “Participant,” and collectively, the “Participants”). The Compensation and Executive Development Committee decided to adopt the Severance Plan to provide Participants with specified compensation and benefits in a uniform and consistent manner as between Executive Vice Presidents and as between Senior Vice Presidents and other Participants in the event of a termination of employment under circumstances specified therein. Each of the current Executive Vice Presidents and Senior Vice Presidents has entered into a Severance Plan participation agreement which supersedes all prior arrangements and understandings regarding the subject matter of the Severance Plan (including, but not limited to any severance provisions under any employment agreement entered into prior to the effective date of the Severance Plan and/or the date of the participation agreement), and shall be the exclusive agreement for the determination of any payments and benefits due to such employee. 

Pursuant to the Severance Plan, in the event that a Participant is terminated without cause or resigns for good reason in the absence of a change of control, such participant will be entitled to receive certain compensation and benefits from the Company, including the following:

• a severance payment equal to 125% (Executive Vice Presidents) or 100% (in the case of Senior Vice Presidents and other Participants) of such Participant’s annual base salary rate in effect as of the date of termination;

• all incentive bonuses earned by participant during the period immediately preceding the performance period in which the Participant’s employment terminates;

• the Participant’s pro rata bonus amount as of the date of termination for incentive bonuses earned during the current performance period; and

• continuation of health coverage for twelve (12) months.

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Pursuant to the Severance Plan, in the event that the Participant is terminated without cause or resigns for good reason within eighteen (18) months following a change in control (as such term is defined in the Severance Plan), such Participant will be entitled to receive certain compensation and benefits from the Company, including the following:

• a severance payment equal to 125% (Executive Vice Presidents) or 100% (in the case of Senior Vice Presidents and other Participants) of such Participant’s annual base salary rate in effect as of the date of termination;

• all incentive bonuses earned by Participant during the period immediately preceding the performance period in which the Participant’s employment terminates;

• a bonus payment equal to 100% of the Participant’s target bonus for the performance period;

• continuation of health coverage for twelve (12) months; and

• 100% accelerated vesting of all unvested equity awards granted on or after the effective date of the Severance Plan.

Other than as set forth in the Severance Plan, all payments under the Severance Plan are designed to be paid in accordance with the Company’s standard procedures, including applicable tax withholding, and are subject to compliance with Section 409A of the Code. Among other conditions, the Participant must sign and not revoke a general release of all claims against the Company as a condition to receiving any of the benefits prescribed by the Severance Plan.

On October 1, 2015, the Company announced the departure of James D. White from his position as President, Chief Executive Officer and as Chairman of the Board of Directors of the Company. Under the terms negotiated relating to the termination and transition of his employment, Mr. White agreed to remain in his current position to help oversee our operations until a successor was identified.

The terms of the compensation payable to Mr. White in connection with the termination of his employment are governed by the Executive Employment Agreement and the Transition Services Agreement. Under the terms of the agreements, Mr. White was entitled to the following in connection with the termination of his employment:

• one year of his base salary then in effect on the date of termination;

• the average annual cash bonus paid to him for the most recent three years of employment;

• continuation of health coverage for twelve months;

• two years of accelerated vesting of any other unvested stock options;

• two-thirds of the vesting under the March 17, 2015 stock option grant;

• one year of accelerated vesting of any time-based unvested restricted stock units;

• continuation of vesting of any unvested performance-based restricted stock units based on performance through the end of 2016;

On May 2, 2016, the Company announced that Ms. Karen Luey, former Executive Vice President, Chief Financial Officer and Secretary would not be relocating to Frisco, Texas, and that Marie Perry would succeed Ms. Luey as described below. In connection with the transition, Ms. Luey agreed to continue to provide certain services to the Company after her resignation as Chief Financial and Administrative Officer. The terms of the compensation payable to Ms. Luey in connection with her transition and release of claims are governed by the Severance Plan and a Transition Services Agreement dated August 3, 2016, entered into between Ms. Luey and Jamba Juice Company. The Transition Services Agreement provides that $150,000 of the amount payable under the Plan would be payable to her on an accelerated basis on December 15, 2016 for remaining with the Company on a full-time basis through December 15, 2016. Ms. Luey received additional consideration for remaining with the Company on a full-time basis through March 20, 2017 or such earlier date as determined by the Company, including payment of salary through March 20, 2017, one additional year of accelerated vesting of outstanding stock options, restricted stock and restricted stock units and the extension of health care benefits for one year, subject to certain limitations.

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On January 9, 2017, the Company and Steve Adkins, former Senior Vice President, U.S. Operations, of Jamba Juice Company, the Company’s wholly-owned subsidiary, mutually agreed that Mr. Adkins would cease to be an officer and employee of Jamba Juice, effective on January 31, 2017. Mr. Adkins and Jamba Juice entered into a Release Agreement, dated January 11, 2017, whereby in addition to the severance benefits under the Severance Plan, Mr. Adkins would be entitled to reimbursement for reasonable out-of-pocket costs incurred in connection with his relocation to California, including for any out-of-pocket costs incurred due to early termination of the lease agreement for his residence in Texas.

The following table presents our estimate of the dollar value of the payments and benefits payable to our Named Executive Officers upon the occurrence of a termination without cause or resignation for good reason under the circumstances noted above, assuming that such event occurred on January 3, 2017, the last day of Fiscal 2016. The actual amounts that would be paid to any Named Executive Officer can only be determined at the time of an actual termination of employment and would vary from those listed below.

	Cash Severance	Equity Acceleration	COBRA Premium
Current Officers:	($)	($)	($)(1)
David A. Pace	1,077,736(2)	-		14,402
Marie Perry	629,000(3)	-		15,676
Rachel Phillips-Luther	385,000(4)	-		20,042
Steve Adkins	320,000 (4)	-		14,402
Arnaud Joliff	320,000 (4)	-		20,042

(1) Assumes maximum payment of COBRA premiums for the entire severance period covered by the applicable agreement.

(2) Includes one year’s base salary and 100% of incentive bonus for Fiscal 2016.

(3) Reflects 125% of annual base salary for Executive Vice President and pro rata bonus through date of termination.

(4) Reflects 100% of annual base salary for Senior Vice President and pro rata bonus through date of termination.

The following table presents our estimate of the dollar value of the payments and benefits payable to our Named Executive Officers upon the occurrence of a termination without cause or resignation for good reason in connection with a change of control under the circumstances noted above, assuming that such event occurred on January 3, 2017, the last day of Fiscal 2016. The actual amounts that would be paid to any Named Executive Officer can only be determined at the time of an actual termination of employment and would vary from those listed below.

	Cash Severance	Equity Acceleration		COBRA Premium
Current Officers:	($)	($)(1)		($)(2)
David A. Pace	1,377,736(3)	-			14,402
Marie Perry	629,000(4)		61,740		15,676
Rachel Phillips-Luther	385,000(5)		51,450		20,042
Steve Adkins	480,000 (5)		38,334		14,402
Arnaud Joliff	480,000 (5)		85,767		20,042

(1) Calculated based on the assumption that triggering event takes place on January 3, 2017, the last trading day of Fiscal 2016. Reflects the value of accelerated vesting of outstanding equity awards based on the fair market value of $10.29 per share as of the last trading day of Fiscal 2016. Acceleration of outstanding equity awards with an exercise price above $10.29 per share is not reflected.

(2) Assumes maximum payment of COBRA premiums for the entire severance period covered by the applicable agreement.

(3) Includes eighteen (18) months of base salary and 100% of incentive bonuses for Fiscal 2016.

(4) Includes 125% of annual base salary for Executive Vice President and 100% of incentive bonuses for Fiscal 2016.

(5) Includes 100% of annual base salary for Senior Vice President and 100% of incentive bonuses for Fiscal 2016.

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Change in Control Arrangements in our Equity Compensation Plans

The Compensation and Executive Development Committee may, in its discretion, provide in the grant of any award under the 2013 Equity Plan for the acceleration of exercisability, vesting and/or settlement in connection with a change in control (as defined in the 2013 Equity Plan).

Pursuant to the terms of the 2013 Equity Plan, if a change in control occurs, the surviving, continuing, successor or purchasing entity or its parent may, without the consent of any participant in the 2013 Equity Plan, either assume or continue the Company’s rights and obligations under outstanding awards or substitute substantially equivalent awards for its stock. If so determined by the Compensation and Executive Development Committee, stock-based awards will be deemed assumed if, for each share subject to the award prior to the change in control, its holder is given the right to receive the same consideration that a shareholder would receive as a result of the change in control. In general, any awards which are not assumed, substituted for or otherwise continued in connection with a change in control or exercised or settled prior to the Change in Control will terminate effective as of the time of the change in control. Subject to the restrictions of Section 409A of the Code, the Compensation and Executive Development Committee may provide for the acceleration of vesting or settlement of any or all outstanding awards upon such terms and to such extent as it determines. The 2013 Equity Plan also authorizes the Compensation and Executive Development Committee, in its discretion and without the consent of any participant, to cancel each or any award denominated in shares of stock upon a change in control in exchange for a payment to the participant with respect each vested share (and each unvested share if so determined by the Compensation and Executive Development Committee) subject to the cancelled award of an amount equal to the excess of the consideration to be paid per share of common stock in the change in control transaction over the exercise price per share, if any, under the award. In addition, for awards granted after the 2013 Equity Plan’s amendment and restatement, in the event awards are assumed, continued, or substituted for, as provided above, then “double trigger” treatment (where awards accelerate upon a qualifying termination of employment that follows such change in control) will apply, provided that performance-based awards will be based on actual performance results and will only vest to the extent of such results.

Pursuant to the 2006 Stock Plan, holders of stock rights granted thereunder may be entitled to accelerated vesting upon the occurrence of a corporate transaction (as defined therein). Should a corporate transaction occur, the Board of Directors, or the board of directors of any entity assuming the obligations of the Company thereunder, may generally:

• make appropriate provision for the continuation of such stock rights by substituting, on an equitable basis, either the consideration payable with respect to the number of outstanding shares of Common Stock in connection with the Corporate Transaction or securities of any successor or acquiring entity;

• upon written notice to the holders, provide that all stock rights must be exercised (either (a) to the extent then exercisable or (b) at the discretion of the Board of Directors, all options or stock rights being made fully exercisable for purposes of the 2006 Stock Plan), within a specified number of days of the date of such notice, at the end of which period the options or stock rights shall be terminated; or

• terminate all options or stock rights in exchange for a cash payment equal to the excess of the fair market value, less the relevant exercise price, if any, of the shares subject to such stock rights (either (a) to the extent then exercisable or (b) at the discretion of the Board of Directors, all options or stock rights being made fully exercisable for purposes of the 2006 Stock Plan).

Pursuant to the 2001 Plan, the Board of Directors, in the event of a “Change in Control,” shall have the right, but not the obligation, to accelerate the vesting or termination of restriction, limitation or repurchase rights applicable to such stock awards. As defined in the 2001 Plan, “Change in Control” means:

• a sale of substantially all of the assets of the Company;

• a merger or consolidation in which the Company is not the surviving corporation;

• a reverse merger in which the Company is the surviving corporation but the shares of Common Stock outstanding immediately preceding the merger are converted by virtue of the merger into other property; or

• the acquisition by any person, entity or group of securities of the Company representing at least 50% of the combined voting power entitled to vote in the election of Directors.

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COMPENSATION OF MEMBERS OF OUR BOARD OF DIRECTORS

The following table sets forth information concerning the compensation earned or paid during Fiscal 2016 under our Non-Employee Director Compensation Policy by each individual who served as a non-employee director at any time during Fiscal 2016.

2016 DIRECTOR COMPENSATION

Name	Board Fees Earned or Paid in Cash(1) ($)		Stock Awards(2) ($)		Total
Lorna C. Donatone		69,375		53,178		122,553
Michael A. Depatie		72,363		53,178		125,541
Richard L. Federico		98,125		53,178		151,303
Andrew R. Heyer		62,375		53,178		115,553
Lesley H. Howe(3)		30,769		90,640		121,409
David A. Pace(4)		12,925		16,793		29,718
James C. Pappas		52,500		75,668		128,168
Glenn W. Welling		61,875		75,668		137,543

(1) Fees earned are based on membership on the Board and participation in Board or committee chairmanship positions.

(2) Represents the aggregate fair market value of stock grants and restricted stock units calculated in accordance with the fair value method. For more information on this calculation see Footnote 3 to the 2016 Summary Compensation Table above.

(3) Mr. Howe served as a member of the Board of Directors through the date of the 2016 Annual Meeting.

(4) Mr. Pace became an employee director as of March 14, 2016 and did not receive Director Compensation after that date.

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Compensation of Directors

It is the general policy of the Board of Directors that compensation for non-employee directors should be a mix of cash and equity-based compensation. Director compensation is generally reviewed annually by the Compensation and Executive Development Committee, with any changes made by the committee generally becoming effective commencing after the Annual Meeting of Shareholders. All Board members are entitled to reimbursement by the Company for reasonable travel to and from meetings of the Board, and reasonable food and lodging expenses incurred in connection therewith. The 2016 compensation for non-employee directors under our Non-Employee Director Compensation Policy consisted of the following:

	Cash Compensation(1) $		Equity Compensation $
Annual Retainer:
Board Member		60,000	60,000(2)
Chairman of the Board (additional)		40,000	40,000(3)
Audit Committee Chair (additional)		20,000	—
Compensation and Executive Development Committee    Chair (additional)		10,000	—
Nominating and Corporate Governance Committee    Chair (additional)		10,000	—

(1) Assumes service for a full year; directors who serve for less than the full year are entitled to receive a pro-rated portion of the applicable payment. Each “year”, for purposes of the Director Compensation Policy, begins on the date of our annual meeting of shareholders. Each director can elect, in lieu of one-half of their Board Member cash compensation, to take an equally valued stock grant.

(2) Each non-employee director elected at an annual meeting is entitled to receive an annual grant of equity-based compensation consisting of a number of restricted stock units under the 2013 Plan with a grant date value equal to $60,000.

(3) The Chairman of the Board is entitled to receive an annual grant of equity-based compensation consisting of a number of restricted stock units under the 2013 Plan with a grant date value equal to $40,000.

Other than as provided above, there were no other arrangements pursuant to which any director was compensated during the fiscal year ended January 3, 2017 for service as a director.

Effective as of the date of the 2017 Annual Meeting, in line with the Company’s cost-reduction efforts, the Board of Directors approved a modification of director compensation such that each of the cash and equity components of annual director compensation will be reduced by $5,000.

Compensation Committee Interlocks and Insider Participation

David Pace served on our Compensation and Executive Development Committee until January 22, 2016 when he was appointed Chief Executive Officer, at which time he ceased to be a member of the Compensation and Executive Development Committee. During Fiscal 2016, no member of the Compensation and Executive Development Committee had any relationship with the Company requiring disclosure under Item 404 of Regulation S-K. During Fiscal 2016, none of the Company’s executive officers served on the Compensation and Executive Development Committee or Board of Directors of another entity any of whose executive officers served on the Company’s Compensation and Executive Development Committee or Board of Directors.

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Compensation Discussion and Analysis

This Compensation Discussion and Analysis includes a description of the compensation provided in 2016 to our executive officers who are named in the Summary Compensation Table below.

Our named executive officers (“NEOs” or “Named Executive Officers”) for 2016 were:

Current Officers
David A. Pace	Chief Executive Officer
Marie Perry	Executive Vice President, Chief Financial Officer, Chief Administrative Officer and Secretary
Former Officers
James D. White	Former Chief Executive Officer and President
Karen L. Luey	Former Executive Vice President, Chief Financial Officer, Chief Administrative Officer and Secretary
Steve A. Adkins	Former Senior Vice President, Chief Operations Officer
Rachel Phillips-Luther	Former Senior Vice President, Chief Marketing Officer
Arnaud Joliff	Senior Vice President, Chief Systems Officer, General Manager, International

As discussed further in the Executive Summary below, Mr. White departed as Chief Executive Officer and President in January 2016, Ms. Luey transitioned to no longer serve as Executive Vice President, Chief Financial Officer, Chief Administrative Officer and Secretary in July 2016, Mr. Adkins departed as Senior Vice President, Chief Operations Officer, in January 2017, Ms. Phillips-Luther departed as Senior Vice President, Chief Marketing Officer in November 2017 and Mr. Arnaud Joliff departed as Senior Vice President, Chief Systems Officer, General Manager, International in January 2018.

Executive Summary

Our 2016 fiscal year was a considerable year of transformation for the Company. In January, the Company hired Mr. Pace, who had served on the Company’s Board of Directors since 2012, as Chief Executive Officer. The Board and new executive leadership team significantly completed the transition of the Company to an asset light franchise-based business model, which resulted in a shift from a balanced Company store and franchise store approach to a greater than 90% franchise system by the end of the fiscal year. The Company began focusing on cost reduction efforts and implementing an infrastructure more closely aligned with a franchise-based business model, and also restructured the executive leadership team.

A summary of significant business highlights is provided below:

Business Highlights

• Appointed a new independent non-executive Chairman of the Board

• Significantly completed a transformation of the business from a balanced Company store and franchise store model to an asset light franchise-based business model

• Hired new leadership to support the change in business strategy, including a new Chief Executive Officer, Chief Financial Officer, and Chief Marketing Officer

• Exited the JambaGO platform

• Relocated the business from Emeryville, California to Frisco, Texas

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The following compensation program actions were taken in 2016, which were primarily related to recruiting a new executive leadership team, as well as implementing a highly performance-based compensation program that is closely tied to the realization of the Company’s new business strategy.

Compensation Highlights

Base Salaries	•	Most executives were new, and therefore, no salary adjustments were provided.
	•	One continuing executive received a salary increase of 20.75%.
Annual Incentives	•	No bonus payouts were earned under the performance-based annual incentive plan implemented for 2016 performance, since performance targets were not achieved.
	•	Cash bonuses were granted to certain new executives for 2016 in connection with their new hire arrangements.
Long-Term Incentives	•	Initiated a new highly performance-based equity program that consists of market-based RSUs earned upon the achievement of TSR stock price targets that represent 15%, 22.5% and 30% annualized appreciation over a three-year period.
	•	Additional long-term incentives were granted in connection with new hire arrangements in the form of “regular” and premium priced options, as well as time-vested RSUs to induce executives to join the Company and make them whole for benefits forfeited at their prior employer.
	•	Shareholders approved the adoption of the amended and restated 2013 Equity Plan, which increased the number of shares available for future grants to employees.

This Compensation Discussion and Analysis details the objectives and design of our executive compensation program and should be read in light of the business transition discussed above, as a number of our programs were implemented to specifically address our new strategy and leadership changes. Still, consistent with prior years, the Company’s objectives for its executive compensation programs are to align pay with performance and shareholder interests, and to attract, motivate and retain a talented, entrepreneurial and creative team of executives who will provide leadership for the Company’s success.

Overview of Major Governance Provisions

Our executive compensation program is supported by a set of strong governance provisions and pay practices, as follows:

• Independent Committee, which is advised by an independent compensation consultant

• Stock ownership guidelines

• No hedging or pledging permitted

• Incentive compensation recoupment (or “clawback”) policy

• Annual compensation risk assessment

• Double-trigger accelerated vesting in the event of a covered termination following a change of control

• No tax reimbursements or gross-ups

• No special executive-level perquisites or benefits (including no supplemental retirement plans)

Say-on-Pay

In May 2016, we provided shareholders a “say-on-pay” advisory vote to approve our executive compensation programs. At our 2016 Annual Meeting of Shareholders, shareholders approved the compensation of our NEOs, where approximately 90% of the votes cast were in favor of our practices. The Compensation and Executive Development Committee of the Board (as used herein in this Compensation Discussion and Analysis, the “Committee”) evaluates the results of the advisory vote when determining executive compensation. The Committee

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also considers many other factors in evaluating our program, including our corporate business objectives and recommendations by our compensation consultant. Taking all of this information into account, the Committee did not make any changes to our executive compensation program and policies specifically as a result of the 2016 say-on-pay advisory vote.

While the Company has historically held an advisory say-on-pay vote every three years, the Committee determined to adopt an annual say-on-pay advisory vote, which was the frequency with which shareholders expressed the most support at the 2016 Annual Meeting.

Objectives and Components of Our Executive Compensation Program

The primary objectives of our executive compensation program are as follows:

• Deliver pay for performance;

• Drive strong business results;

• Support teamwork; and

• Attract and retain strong talent.

We believe that pursuing these objectives will help us attract and retain qualified executives who are results oriented, engaged and passionate about our brand and are able to help us execute our strategic priorities. The ability to embrace our mission and culture are also important components in driving these objectives.

Our compensation programs provide a mix of fixed compensation and short-term and long-term incentive awards tied to the achievement of specific business objectives, corporate financial goals, and individual performance. We strive to be competitive in a challenging economic environment, with the ultimate objective of improving shareholder value. In addition, we work to ensure that our compensation program is perceived as fundamentally fair to all shareholders.

2016 Compensation Program

We structured our 2016 compensation program as a combination of short and long-term incentives designed to incentivize performance and retain our key executives, including our NEOs. We utilized a combination of annual cash incentive compensation with long-term equity awards that are tied to the achievement of our new business strategy.

Program Elements

The compensation program for our executive officers consists of the following elements:

• Base Salary;

• Annual Cash Incentive Compensation;

• Long-term Equity-Based Incentive Compensation; and

• General Team Member Benefits.

Base Salary

Base salary is the fixed portion of executive pay and is set to reward an individual’s current contributions to the Company and to compensate them for their day-to-day responsibilities. The Committee determines base salary levels for executives on an annual basis. Increases in salaries are generally based on both individual performance and our merit increase budget for the year. Other factors that may influence setting of or changes in base salary levels include total Company performance, the executive’s experience, responsibilities, management abilities, job performance, current market conditions, and analysis of competitive salaries payable for similar positions at other comparable companies. Salary increases may also be awarded in connection with an individual’s promotion to a new role. Peer group compensation data is reviewed annually for the industry and the relative responsibilities and contributions of the executive officers.

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In fiscal 2016, the base salary for our current CEO, CFO and CMO were established when they were hired, and no further adjustments were made in fiscal 2016. Base salaries for these executives increased or decreased as follows:

Title	2015 Salary	2016 Salary	% Increase / Decrease
Chief Executive Officer	$600,000	$600,000	0%
Chief Financial Officer, Chief Administrative Officer & Secretary	$352,000	$340,000	(3%)
Chief Marketing Officer	$300,000	$285,000	(5%)

Annual Cash Incentive Compensation

For 2016, NEOs were eligible to receive performance-based annual cash bonuses pursuant to our Management Incentive Plan, based upon achievement of financial and strategic objectives. We believe that our annual cash incentive bonus is an important factor in motivating our management team as a whole, and individual executives in particular, to perform at their highest level toward achievement of our business objectives.

Each participant was eligible for a target award based on the participant’s base salary and position, as shown in the chart below. Actual payouts can range from 0% to 150% of target depending on actual performance relative to the goals. At Threshold performance, 50% of target is paid. At Target performance, 100% of target is paid. At Maximum performance, 150% of target is paid. Linear interpolation is used to determine payouts for performance between Threshold and Maximum, and no bonus is paid for performance below Threshold level.

Title	Target Award as a % of Base Salary During Performance Periods
Chief Executive Officer	100%
Chief Financial Officer, Chief Administrative Officer & Secretary	60%
Senior Vice President	50%

Note that in connection with the hire arrangements for the CEO, CFO and CMO, the annual bonus for 2016 was paid at 80%, 100% and 70% of target respectively. These bonuses were provided as an inducement to join the Company, and to acknowledge that these executives were not able to contribute to the goal setting process under the annual incentive plan given the timing of their hire. This arrangement is only applicable to the initial year of hire.

2016 Annual Performance

For fiscal 2016, no amounts were payable to the NEOs under the bonus plan as the targets relating to Adjusted EBITDA, store-level margin, and gross store openings were not achieved.

Financial Performance Goals	Actual Performance
Adjusted EBITDA (60% weighted) o  Threshold $11.7 million o  Target $13.0 million o  Maximum $14.7 million	Threshold not achieved
4-wall margin (California) (20% weighted) o  Threshold 14.5% o  Target 15.5% o  Maximum 18%	Threshold not achieved
Gross Store Openings (20% weighted) o  Threshold 80 o  Target 100 o  Maximum 125	Threshold not achieved
Total Earnout as % of Target	No Bonus Earned

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Long-Term Equity-Based Incentive Compensation

The Committee generally considers a range of factors in setting the size of equity grants to the NEOs, including assessments of individual performance, the potential contribution that each executive could be expected to make in the future, the NEO’s targeted total direct compensation, previous grants, and the size of awards and total compensation provided to others holding similar positions at companies included in our executive compensation peer group.

The Committee approves all equity awards to our officers at or above the vice president level.

Fiscal 2016 Equity Grants

Market-Based RSUs

Our 2016 equity compensation program consisted predominantly of market-based RSUs that are earned based upon TSR stock price targets that represent 15%, 22.5% and 30% annual appreciation over a three-year period. Therefore, vesting will only occur upon achievement of stock price targets of $19.50, $24.00, and $28.50 per share, and earned shares are subject to a minimum one year holding period once a stock price hurdle is achieved.

Note these grants are intended to cover long-term incentives until fiscal 2019, and therefore, it is anticipated, that additional long-term incentives will not be granted until then. Therefore, the shares and values for each executive should be divided by three to determine the Committee’s intended “annualized” value.

Other Awards

In addition to the awards above, certain officers were granted stock options and time-vested RSUs in connection with their new hire arrangements. These options and time-vested RSU awards were granted as a further inducement to join the Company, as well as to make the executive whole for certain benefits that were forfeited upon leaving their prior employer.

Two types of stock options were granted in 2016. The first type has an exercise price set at 100% of the fair market value on the grant date. The second has an exercise price set at a premium of $19.50 (i.e., the premium is set based on roughly 15% annual price appreciation over a three-year period). The CEO is the only executive with the premium options. All of these options vest in three equal annual installments over three years.

Time-vested RSUs were also granted in certain instances and vest in three equal annual installments over three years.

Summary of Grants

The table below shows the number of shares granted to each executive in fiscal 2016:

		Market-Based RSUs(1)		Time- Based RSUs		Stock Options
	$19.50	$24.00	$28.50		FMV	Premium
CEO	150,000	100,000	100,000	—	150,000	50,000
CFO	40,000	25,000	20,000	6,000	75,000	—
CMO	35,000	20,000	15,000	5,000	—	—

(1) The Company’s Chief Systems Officer was granted Market-Based RSUs in 2017 for parity with other executives.

Fiscal 2015 Equity Grants

In 2015, we made two-year front-loaded option grants to executives at the time.  This program was only applicable to the former executives, and the current Chief Systems Officer. It did not include the current Chief Executive Officer, Chief Financial Officer, or Chief Marketing Officer. Because it was a two-year front-load, there was no long-term incentive grant in 2016 for these executives.  The two-year front load was intended to emphasize long-term incentive compensation and to offset a reduction in annual bonus opportunity by 50% in 2015.

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Equity Grant Policy

Pursuant to our equity grant policy, all grants are generally made effective three trading days after each of our quarterly public earnings releases. This applies to all of our employees, including our executive officers. Except with respect to the premium priced options granted to our CEO as described above, the exercise price of stock options is the closing or last quoted price on the date of actual stock option grant, which we believe reflects fair market value after all public disclosures.

All grants issued after June 2013 were made under the 2013 Equity Incentive Plan or pursuant to inducement grants under Nasdaq rules, and all grants prior to June 2013 were made under our 2006 Employee, Director and Consultant Stock Plan, each of which authorize grants to employees, consultants and non-employee directors.

Interim or “off cycle” equity awards are made to newly hired team members as “initial grants”, promotional grants for those taking on significant additional responsibilities or other team members when circumstances warrant it, and are made effective on a fixed quarterly schedule.

Other General Team Member Benefits

Our executive officers are eligible to participate in all of our employee benefit plans, such as our medical, dental, vision, group life, disability, accidental death and dismemberment insurance and our 401(k) plan, in each case on the same terms as other employees, except that the executive officers did not participate in the employer match under our 401(k) plan in fiscal 2016. We do not provide tax gross-ups of any perquisites.

In addition, the CEO, CFO and CMO also received additional transition-related bonuses of $200,000, $50,000 and $50,000, respectively, which were intended to cover relocation and other expenses related to the transition of employment from their prior employer to the Company.   The transition bonuses granted to the CFO and CMO are subject to the Company’s repayment policy which requires that the employee reimburse the Company for all or part of the sign-on bonus based on the number of months worked if employment terminates within 18 months for any reason other than position elimination.

Compensation Process and Oversight

Compensation and Executive Development Committee

The Committee has responsibility for establishing, implementing and monitoring our executive compensation philosophy and programs. The Committee determines compensation for our executives, including annual base salary, non-equity incentive plan payments, equity awards and all other compensation. The Committee is composed of members who are not, and never have been, employees of the Company.

Role of Senior Management and Consultant in Compensation Decisions

While the Committee does not delegate any of its authority in setting compensation, members of senior management participate in the Committee’s executive compensation process. For example, the Committee takes into consideration recommendations of our CEO on compensation decisions for executive officers other than himself, based on performance reviews he conducts with each of the executive officers, including the NEOs. Our CEO does not participate in discussions regarding his own compensation.

In addition, the Committee retains independent compensation consultants to assist it in its review of NEO compensation. The Committee reviews the findings and recommendations of its compensation consultant to help ensure that compensation decisions are in line with the Company’s priorities, properly incentivize actions that improve Company performance, and are reasonable when compared to the market for executive talent. As will be discussed below, in fiscal 2016, the Committee engaged Frederic W. Cook & Co., Inc. (“FW Cook”) as its independent compensation consultant. As part of its services, FW Cook:

• Participates in the design of executive compensation programs to help the Committee evaluate the linkage between pay and performance;

• Reviews market data and advises the Committee on recommending the CEO’s compensation levels to the Board;

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• Reviews and advises the Committee regarding the compensation of the other executive officers and non-employee directors; and

• Assists with an annual risk assessment of our compensation programs.

FW Cook does not perform any other work on behalf of management or the Company. The Committee has assessed the independence of FW Cook and concluded that no conflict of interest exists that would prevent FW Cook from independently representing the Committee. The Committee intends to continue retaining the services of third party executive compensation specialists from time to time, as the Committee deems necessary or helpful, in connection with the establishment and development of our compensation philosophy and programs.

Competitive Compensation Data

To assist with the compensation determinations regarding our executive officers for fiscal 2016, the Committee reviewed competitive pay and other market data provided by FW Cook, which compared the various elements of executive compensation provided to our executive team, relative to compensation paid to individuals holding similar positions at companies in our executive compensation peer group (described below). FW Cook worked with our human resources department and management to access the data and review our compensation practices and philosophy.

To support our objective of maintaining an executive compensation program that is sufficiently competitive to attract and retain key executives, the Committee evaluates executive compensation information from a specific group of comparable companies, which we call our peer group. This process allows the Committee to set total compensation at levels that it believes are appropriate to retain and motivate our NEOs, and to develop a compensation program that supports our financial and strategic revitalization.

The Committee, with the assistance of FW Cook, identified our executive compensation peer group for fiscal 2016, selecting companies that are similar to us in industry, revenue, net income, number of employees and market capitalization. In determining our fiscal 2016 peer group, the Committee selected companies in the quick service restaurant and fast casual dining spaces with revenues ranging from $96 million to $865 million and market capitalization ranging from $92 million to $1.567 billion (size data were as of the time of the analysis in late-2015). The Company was positioned between the 25^th percentile and the median in both size categories.

The companies that comprised the fiscal 2016 executive compensation peer group were:

Ark Restaurants	Diversified Restaurant	Luby’s
Biglari	Famous Dave’s	Nathan Famous
BJ’s	Fiesta Restaurant Group	Noodles
Bravo Brio	Frisch’s Restaurant	Popeyes
Carrols Restaurant	Ignite Restaurant	Ruth’s Hospitality
Chuy Holdings	Kona Grill	Sonic
Denny’s	Krispy Kreme

In making its executive compensation decisions, the Committee considered the competitive data provided by FW Cook. The Committee does not target a specific percentile for pay, but uses the median percentile range as a guide for making its pay decisions with respect to all pay elements. While the Committee considers relevant market pay practices when setting executive compensation, it does not believe that it is appropriate to establish compensation levels based only on market practices. The factors that influence the amount of compensation awarded include market competition for a particular position, an individual’s experience and past performance inside or outside the Company, compensation history, role and responsibilities within the Company, past and future performance objectives, value of the position within the Company, and the Company’s financial performance.

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Other Executive-Level Programs

Severance and Change in Control Arrangements

In 2013 we adopted an Executive Retention and Severance Plan (the “Severance Plan”) for persons holding the title of Executive Vice President or Senior Vice President and for certain other key employees of the Company who may be designated by the Committee from time to time as eligible to participate in the Severance Plan (each a “Participant”). The Severance Plan superseded all prior arrangements with such Participants relating to severance. The Severance Plan and, with respect to our CEO, his employment agreement, provide for severance payments upon a termination of employment without cause or resignation for good reason, as well as upon a qualifying termination following a change in control of the Company, each as more fully described below in the section entitled “Potential Payments upon Termination or Change in Control.” The Committee believes that providing our executives with specified benefits in the event of a termination of employment by the Company without “cause” or in the event of a “constructive termination” is consistent with competitive practices, helps us retain executives and maintain leadership stability. In addition, the Committee believes that adopting uniform terms for our key employees other than our CEO, as reflected in the Severance Plan, helps to ensure that these executives are treated fairly and consistently.

The Committee believes that the occurrence, or potential occurrence, of a change in control may create uncertainty for our executives and other key employees. The “double trigger” provisions in the Severance Plan are designed to help retain our employees and maintain a stable work environment leading up to and during changes in control by providing certain economic benefits in the event their employment is actually or constructively terminated in connection with such a change.

The Severance Plan does not provide for any “single trigger” payments or benefits upon the occurrence of a change in control.  Furthermore, the Severance Plan does not provide tax gross-ups for potential excise or other taxes on any benefits that are paid.

Management Stock Ownership Guidelines

We maintain Management Stock Ownership Guidelines to further align the interests of members of management with the interests of our shareholders and to encourage ownership of our common stock. These guidelines require our senior executives to acquire and maintain a minimum number of shares of our common stock, with such minimum number based upon a multiple of such executive’s annual base salary (with share value based upon the greater of the current stock price or the price at which the shares were acquired). Stock options are not counted for purposes of calculating the number of shares held.

The minimum number of shares is based upon the executive’s position as follows:

• 3x salary for our Chief Executive Officer;

• 2x salary for our Chief Financial Officer/Chief Administrative Officer and other Executive Vice Presidents; and

• 1x salary for Senior Vice Presidents.

There is no time limitation towards achieving the minimum number of shares required. However, until such minimum number of shares is held, 50% of all equity grants (calculated on the basis of net after tax shares) are to be retained.

Recoupment Policy

In March 2016, the Company’s Board of Directors adopted an Incentive Compensation Recoupment Policy setting forth the conditions under which the Company will seek reimbursement with respect to excess incentive compensation paid or awarded to, and to recover net profits realized from the sale, vesting or exercise of shares of the Company’s common stock by, executive officers of the Company.

Restrictions on Hedging and Other Transactions in our Securities

Under our Insider Trading Policy, our officers, directors and employees are not permitted to purchase or sell our securities short or buy or sell puts, calls or other derivative instruments relating to our Common Stock. Our officers, directors and employees are also strongly discouraged from engaging in hedging or monetization transactions involving the Company’s securities or holding Company securities in a margin account or pledging Company securities as collateral for a loan, with any such arrangement requiring pre-approval from the Company’s compliance officer.

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Analysis of Risk Relating to Our Compensation Programs

Appropriately incentivizing behaviors which support the best interests of the Company and our shareholders is an essential part of the compensation-setting process. We believe that risk-taking is necessary for continued innovation and growth, but that risks should be encouraged within parameters that are appropriate for the long-term health and sustainability of the business. At the direction of the Committee, our benefits committee (comprised of members of management), evaluates the merits of its compensation programs through a comprehensive review of its compensation policies and programs to determine whether they encourage unnecessary or inappropriate risk-taking by the Company’s executives and employees below the executive level, including the following:

• Annual cash incentive awards and long-term incentive awards granted to executives that are tied primarily to corporate performance goals and strategic performance objectives. These metrics provide a balanced approach to rewarding performance of the business as a whole over various and overlapping time periods.

• The executive annual cash incentive awards include a maximum payout opportunity.

• Our executives are expected to meet stock ownership guidelines in order to align the executives’ interests with those of our shareholders.

• In 2016, our annual equity awards to executives are comprised of performance-based RSUs and stock options, to further align pay with Company performance.

• The Company’s pay philosophy provides an effective balance in the mix of cash and equity and allows for the committee’s discretion.

• There is appropriate balance in fixed versus variable pay; cash and equity; corporate, business unit, and individual goals; financial and non-financial goals; formulas and discretion, etc. Policies are in place to mitigate compensation risk, such as insider trading prohibitions and independent Committee oversight. The Committee’s oversight extends to incentive and commission plans below the executive level.

The benefits committee discussed its risk review with FW Cook and reported its findings to the Committee. Based on this review, both for our executive officers and all other employees, we concluded that the risks arising from the Company’s compensation policies and practices are not reasonably likely to have a material adverse effect on the Company.

Tax Considerations

The Committee considers the impact of Section 162(m) of the Internal Revenue Code of 1986, as amended (“Section 162(m)”), in determining the mix of elements of executive compensation. Under Section 162(m), named executive officer (other than the Chief Financial Officer) compensation over $1 million for any year is generally not deductible for United States income tax purposes. Performance-based compensation is exempt from the deduction limit, however, if certain requirements are met. We believe that the gains realized at the time of exercise of nonqualified stock options granted under the terms of our shareholder-approved stock plan are fully deductible in accordance with Section 162(m). In addition, the Committee generally structures performance-based equity grants and annual bonuses payable under our non-equity incentive plan with the intent that they qualify for deductibility in accordance with Section 162(m). Salaries and time-based vesting RSUs do not qualify as performance-based compensation for purposes of Section 162(m). The Committee intends to consider the impact of Section 162(m) on the deductibility of future executive compensation but reserves the right to provide for compensation to executive officers that may not be fully deductible when it believes that other considerations outweigh the tax deductibility of the compensation.

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COMPENSATION AND EXECUTIVE DEVELOPMENT COMMITTEE REPORT

We, the Compensation and Executive Development Committee of the Board of Directors of the Company, have reviewed and discussed the Compensation Discussion and Analysis contained in this proxy statement with management. Based on such review and discussion, we have recommended to the Board of Directors that the Compensation Discussion and Analysis be included in this Company’s Annual Report on Form 10-K for the fiscal year ended January 3, 2017 and the Company's Proxy Statement for the fiscal year ended January 3, 2017.

SUBMITTED BY THE COMPENSATION AND

EXECUTIVE DEVELOPMENT COMMITTEE

OF THE BOARD OF DIRECTORS

Glenn W. Welling, Chairman

Richard L. Federico

Andrew R. Heyer

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED SHAREHOLDER MATTERS

Security Ownership of Certain Beneficial Owners and Management

The following table sets forth, as of February 1, 2018, certain information with respect to the beneficial ownership of the Company’s Common Stock by (i) each person who is known by the Company to be the beneficial owner of more than 5% of the Company’s Common Stock, (ii) each director and director-nominee of the Company, (iii) each executive officer named in the Summary Compensation Table and (iv) all directors and executive officers of the Company as a group.

	Shares of Common Stock Beneficially Held
Name and Address of Beneficial Owner(1)	Amount(2)		Percent(3)
Engaged Capital, LLC(4)	2,834,002		18.2%
610 Newport Center Drive, Suite 250
Newport Beach, California 92660
Wellington Management Group LLP(5)	2,129,476		13.7%
280 Congress Street
Boston, MA 02210
Indus Capital Partners, LLC(6)	1,430,860		9.2%
888 Seventh Avenue, 26th Floor
New York, NY 10019
Thompson Siegel & Walmsley LLC(7)	790,851		5.1%
6806 Paragon Place, Suite 300
Richmond, VA 23230
David A. Pace(8)		105,677	*
James D. White(9)		80,666	*
Marie Perry(10)		27,000	*
Karen L. Luey(11)		49,797	*
Rachel Phillips-Luther		4,636	*
Steve A. Adkins(12)		12,516	*
Arnaud Joliff(13)		69,543	*
Richard L. Federico(14)		51,832	*
Lesley H. Howe(15)		20,000	*
Michael A. Depatie(16)		36,355	*
Lorna C. Donatone		19,710	*
Andrew R. Heyer		33,697	*
James C. Pappas(17)		420,036	2.7%
Glenn W. Welling(4)		2,846,905	18.3%
All current directors and executive officers as a group(18)		3,541,212	22.7%

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* Less than 1%

(1) Except as otherwise indicated, the persons named in this table have sole voting and investment power with respect to all shares of Common Stock shown as beneficially owned by them, subject to community property laws, where applicable, and to the information contained in the footnotes to this table. This table is based upon the most current information supplied to us by current and former officers and directors of the Company and upon information gathered by us about principal shareholders known to us based on a Schedule 13G or 13D filed with the Securities and Exchange Commission.

(2) Under the rules of the Securities and Exchange Commission, a person is deemed to be the beneficial owner of shares that can be acquired by such person within 60 days upon exercise of options or warrants or vesting of restricted stock units.

(3) Calculated on the basis of 15,588,206 shares of Common Stock outstanding as of February 1, 2018, provided that any additional shares of Common Stock that a shareholder has the right to acquire within 60 days after February 1, 2018 are deemed to be held and outstanding for the purpose of calculating that shareholder’s percentage of beneficial ownership but not the percentages of beneficial ownership of other shareholders.

(4) Based on a Form 4 filed on May 8, 2017 by Engaged Capital, LLC (“Engaged Capital”) and certain of its affiliates. Represents shares directly owned by Engaged Capital Master Feeder I, LP (“Engaged Capital Master I”) and Engaged Capital Master Feeder II, LP (“Engaged Capital Master II”) and held in an account separately managed by Engaged Capital (the “Engaged Capital Account”). Engaged Capital serves as the general partner and investment adviser of each of Engaged Capital Master I and Engaged Capital Master II and the investment adviser of the Engaged Capital Account. Engaged Capital Holdings, LLC (“Engaged Holdings”) serves as the managing member of Engaged Capital. Mr. Welling, as the Founder and Chief Investment Officer of Engaged Capital and the sole member of Engaged Holdings, may be deemed to beneficially own the shares owned directly by Engaged Capital Master I and Engaged Capital Master II and held in the Engaged Capital Account. Mr. Welling expressly disclaims beneficial ownership of such shares except to the extent of his pecuniary interest therein.

(5) Based on a Schedule 13G/A filed on February 9, 2017 by Wellington Management Group LLP. Represents (i) 1,482,713 shares over which Wellington Management Group LLP has shared voting power, and (ii) 2,129,476 over which Wellington Management Group LLP has shared dispositive power.

(6) Based on a Schedule 13D filed on August 17, 2017 by Indus Capital Partners, LLC. Represents (i) 1,430,860 shares over which Indus Capital Partners, LLC has shared voting power, (ii) 1,430,860 shares over which Indus Capital Partners, LLC has shared dispositive power.

(7) Based on a Schedule 13G/A filed on February 6, 2017 by Thompson Siegel & Walmsley, LLC. Represents (i) 707,497 shares over which Thompson Siegel & Walmsley, LLC has sole voting power, (ii) 83,354 shares over which Thompson Siegel & Walmsley, LLC has shared voting power, and (iii) 790,851 shares over which Thompson Siegel & Walmsley, LLC has sole dispositive power.

(8) Represents 39,011 shares of Common Stock held by Mr. Pace and 66,666 shares of Common Stock issuable upon the exercise of vested options held by Mr. Pace.

(9) Based on a Form 4 filed on December 8, 2015 by Mr. White.

(10) Represents 2,000 shares of Common Stock held by Ms. Perry and 25,000 shares of Common Stock issuable upon exercise of vested options held by Ms. Perry.

(11) Based on a Form 4 filed on November 18, 2015 by Ms. Luey.

(12) Represents 4,186 shares of Common Stock held by Mr. Adkins and 8,330 shares of Common Stock issuable upon exercise of vested options held by Mr. Adkins.

(13) Represents 15,904 shares of Common Stock held by Mr. Joliff and 53,639 shares of Common Stock issuable upon exercise of vested options held by Mr. Joliff.

(14) Represents 22,795 shares of Common Stock held by Mr. Federico and 29,037 shares of Common Stock issuable upon exercise of vested options held by Mr. Federico.

88

(15) Based on a Form 4 filed on May 14, 2015 by Mr. Howe.

(16) Represents 28,855 shares of Common Stock held by Mr. Depatie and 7,500 shares of Common Stock issuable upon exercise of vested options held by Mr. Depatie.

(17) Represents 407,133 shares owned directly owned by JCP Investment Partnership, LP (“JCP Partnership”) and 12,903 shares held by Mr. Pappas directly. Mr. Pappas, solely by virtue of his position as the managing member of JCP Investment Management, LLC, the investment manager of JCP Partnership, and as the sole member of JCP Investment Holdings, LLC, the general partner of JCP Investment Partners, LP, which serves as the general partner of JCP Partnership, may be deemed to beneficially own the shares owned directly by JCP Partnership. Mr. Pappas expressly disclaims beneficial ownership of such shares except to the extent of his pecuniary interest therein.

(18) Represents 3,586,441 shares of Common Stock and 322,597 shares of Common Stock issuable upon the exercise of vested options. See Notes 4, and 8 through 17, above.

89

Equity Compensation Plan Information

The Company maintains one stock-based compensation plan. On May 17, 2016, at its 2016 Annual Meeting of Shareholders, the Company’s shareholders, upon the recommendation of the Board of Directors, approved the amendment and restatement of the Jamba, Inc. 2013 Equity Incentive Plan (the “2013 Equity Plan”). The 2013 Equity Plan amended and restated the existing 2013 Equity Plan adopted in May 2013.  The 2013 Equity Plan authorizes the Company to provide incentive compensation in the form of stock options, stock appreciation rights, restricted stock and stock units, performance shares and units, other stock-based awards, cash-based awards and deferred compensation awards. The 2013 Equity Plan authorizes the issuance of up to 3,028,847 shares.  The following table sets forth information regarding outstanding options and shares reserved for future issuance under the foregoing plans as of January 3, 2017.

Plan Category	Number of shares to be issued upon exercise of outstanding options (a)		Weighted- average exercise price of outstanding options ($) (b)		Number of shares remaining available for future issuance under equity compensation plans (excluding shares reflected in column)(2) (c)
Equity compensation plans approved by shareholders		953,774		13.91		1,416,801
Equity compensation plans not approved by shareholders(1)		245,848		6.55	—
Total		1,199,622				1,416,801

(1) Represents shares outstanding under an option to purchase 300,000 shares of our Common Stock granted to Mr. White, as well as 105,000 shares of our Common Stock granted to executives outside of our equity incentive plans. The grants of these options did not require approval by our shareholders due to their qualification under the “inducement grant exception” provided by Nasdaq Listing Rule 5635(c)(4).

(2) Includes 842,120 available for future issuance under the 2013 Equity Plan.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

Certain Relationships and Related Party Transactions

The Company has entered into indemnity agreements with certain officers and directors which provide, among other things, that Jamba will indemnify such officer or director, under the circumstances and to the extent provided for therein, for expenses, damages, judgments, fines and settlements he or she may be required to pay in actions or proceedings which he or she is or may be made a party by reason of his or her position as a director, officer or other agent of Jamba, and otherwise to the fullest extent permitted under Delaware law and our Bylaws.

Other than the foregoing, there were no relationships or related party transactions in the fiscal year ended January 3, 2017 requiring disclosure.

Director Independence

The Board of Directors has determined that, except for David Pace, each of the Company director nominees standing for election has no relationship which, in the opinion of the Board of Directors, would interfere with the exercise of independent judgment in carrying out the responsibilities of a director and is an “independent director” as defined by the applicable NASDAQ rules and the rules and regulations of the Securities and Exchange Commission (the “SEC”). In determining the independence of our directors, the Board of Directors has adopted the independence standards that mirror the criteria specified by applicable law and regulations of the SEC and the NASDAQ.

90

ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES

The following table sets forth the aggregate fees billed to the Company for the fiscal year ended January 3, 2017 and fiscal year ended December 29, 2015 by its independent registered public accounting firm, KPMG LLP:

	Fiscal 2016 (53 weeks)		Fiscal 2015 (52 weeks)
Audit Fees(1)	$	5,465,829	$	1,349,755
Audit-Related Fees(2)		—		25,000
Tax Fees		—		—
All Other Fees		—		—
Total Fees	$	5,465,829	$	1,374,755

(1) Audit fees consist of fees billed for professional services rendered for the audit of the Company’s consolidated annual financial statements and review of the interim consolidated financial statements included in quarterly reports and services that are normally provided by our independent registered public accountants in connection with statutory and regulatory filings or engagements.

(2) Audit-related fees consist of fees billed for assurance and related services that are reasonably related to the performance of the audit or review of the Company’s consolidated financial statements and are not reported under “Audit Fees.”

The Audit Committee has considered whether the provisions of services described in the table above are compatible with maintaining auditor independence. Unless a type of service has received general pre-approval, it will require separate pre-approval by the Audit Committee. The Audit Committee has delegated its pre-approval authority to its Chairman, provided the Chairman reports any pre-approval decisions to the full Audit Committee at its next regularly scheduled meeting. The independent registered public accounting firm and management are required to periodically report to the Audit Committee regarding the extent of services provided by the independent registered public accounting firm in accordance with this pre-approval process. During Fiscal 2016 and Fiscal 2015, all fees paid to our independent auditors were pre-approved in accordance with this policy without exception. 

91

PART IV

ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES

Documents filed as part of this Annual Report:

(a) List of Financial Statements

The following consolidated financial statements are included herein in Part II, Item 8 of this Annual Report on Form 10-K:

Report of Independent Registered Public Accounting Firm	F-1
Consolidated Balance Sheets at January 3, 2017 and December 29, 2015;	F-2
Consolidated Statements of Operations for the Years Ended January 3, 2017, December 29, 2015 and December 30, 2014;	F-3
Consolidated Statements of Shareholders’ Equity for the Years Ended January 3, 2017, December 29, 2015 and December 30, 2014;	F-4
Consolidated Statements of Cash Flows for the Years Ended January 3, 2017, December 29, 2015  and December 30, 2014;	F-5
Notes to Consolidated Financial Statements	F-6

(2) Exhibits

The following exhibits are filed as part of this Annual Report or are incorporated herein by reference:

92

EXHIBIT INDEX

Exhibit Number	Description	Form	File No.	Exhibit	Filing Date	Filed Herewith
3.1	Amended and Restated Certificate of Incorporation of the Company	8-K	001-32552	3.1	December 5, 2006
3.2	Certificate of Amendment to Amended and Restated Certificate of Incorporation of the Company	8-K	001-32552	3.2	December 5, 2006
3.3	Certificate of Amendment to Amended and Restated Certificate of Incorporation of the Company	8-K	001-32552	3.1	May 31, 2013
3.4	Certificate of Elimination of the Series A Preferred Stock	8-K	001-32552	3.1	April 3, 2015
3.5	Amended and Restated Bylaws of the Company	8-K	001-32552	3.1	August 17, 2010
4.1	Specimen Common Stock Certificate	S-1	333-122812	4.2	February 14, 2005
4.2	Registration Rights Agreement dated June 16, 2009 between Jamba, Inc., the Investors and North Point	8-K	001-32552	4.1	June 17, 2009
10.1	Form of Indemnity Agreement entered into between the Company and its directors, officers and certain other employees	8-K	001-32552	10.1	December 5, 2006
10.2	Form of Distribution Agreement by and between Jamba Juice Company and various suppliers	8-K	001-32552	10.4	December 5, 2006
10.3	Amended and Restated 1994 Stock Incentive Plan**	8-K	001-32552	10.16	December 5, 2006
10.4	2001 Equity Incentive Plan**	8-K	001-32552	10.17	December 5, 2006
10.5	Jamba, Inc. Amended and Restated 2006 Employee, Director and Consultant Stock Plan**	DEF14A	001-32552	Annex A	April 1, 2010
10.6	Form of Incentive Stock Option Plan under the 2006 Plan**	10-Q	001-32552	10.2	August 17, 2011
10.7	Form of Non-Qualified Stock Option Agreement under the 2006 Plan**	10-Q	001-32552	10.3	August 17, 2011
10.8	Form of Restricted Stock Units Agreement under the 2006 Plan**	10-Q	001-32552	10.4	August 17, 2011
10.9	Jamba, Inc. 2010 Employee Stock Purchase Plan	DEF14A	001-32552	Annex B	April 1, 2010
10.10	Non-employee Director Compensation Policy, as amended**	10-K	001-32552	10.11	March 7, 2013
10.11	Distribution Service Agreement by Systems Services of America and Jamba Juice Company dated as of December 16, 2012*	10-K	001-32552	10.12	March 7, 2013

93

Exhibit Number	Description	Form	File No.	Exhibit	Filing Date	Filed Herewith
10.12	Form of Executive Employment Agreement entered into between Jamba Juice Company and each of Karen L. Luey, Thibault de Chatellus, Steve Adkins, Greg Schwartz and Susan Shields**	8-K	001-32552	10.1	October 14, 2008
10.13	Jamba, Inc. Management Incentive Plan**	8-K	001-32552	10.1	December 21, 2010
10.14	Jamba, Inc. 2013 Equity Incentive Plan**	8-K	001-32552	10.1	May 16, 2013
10.15	Form of Notice of Grant of Stock Option under 2013 Equity Incentive Plan**	8-K	001-32552	10.2	May 16, 2013
10.16	Form of Stock Option Agreement under 2013 Equity Incentive Plan**	8-K	001-32552	10.3	May 16, 2013
10.17	Form of Notice of Grant of Restricted Stock under 2013 Equity Incentive Plan**	8-K	001-32552	10.4	May 16, 2013
10.18	Form of Restricted Stock Agreement under 2013 Equity Incentive Plan**	8-K	001-32552	10.5	May 16, 2013
10.19	Form of Notice of Grant of Restricted Stock Unit under 2013 Equity Incentive Plan**	8-K	001-32552	10.6	May 16, 2013
10.20	Form of Restricted Stock Unit Agreement under 2013 Equity Incentive Plan**	8-K	001-32552	10.7	May 16, 2013
10.21	Executive Retention and Severance Plan**	10-Q	001-32552	10.9	August 6, 2013
10.22	Nonemployee Director Restricted Stock Unit Deferral Program and Election Notice	10-Q	001-32552	10.1	August 11, 2014
10.23	Asset Purchase Agreement, dated April 1, 2015, by and between Jamba Juice Company and Vitaligent, LLC	10-Q	001-32552	10.1	August 10, 2015
10.24	Executive Transition Services Agreement, dated October 1, 2015, by and between Jamba Juice Company and James D. White**	8-K	001-32552	10.1	October 2, 2015
10.25	First Amendment to Asset Purchase Agreement, dated July 28, 2015, by and between Jamba Juice Company and Vitaligent, LLC	10-Q	001-32552	10.1	November 9, 2015
10.26	Executive Employment Agreement, dated January 22, 2016, by and between Jamba Juice Company and David A. Pace**	10-Q	001-32552	10.1	May 6, 2016

94

Exhibit Number	Description	Form	File No.	Exhibit	Filing Date	Filed Herewith
10.26	Jamba, Inc. 2013 Equity Incentive Plan (As Amended and Restated May 17, 2016)**	8-K	001-32552	10.1	May 20, 2016
10.27	Office Lease Agreement made and entered into effective as of May 3, 2016, between Hall Office Park Building 16, L.P. and Jamba Inc.	10-Q	001-32552	10.1	August 5, 2016
10.29	Employment Agreement dated May 2, 2016, by and between Jamba Juice Company and Marie Perry**	10-Q	001-32552	10.2	August 5, 2016
10.30	Form of Stock Option Agreement under 2013 Equity Incentive Plan (As Amended and Restated May 17, 2016)**	10-Q	001-32552	10.4	August 5, 2016
10.31	Form of Restricted Stock Agreement under 2013 Equity Incentive Plan  (As Amended and Restated May 17, 2016)**	10-Q	001-32552	10.5	August 5, 2016
10.32	Form of Restricted Stock Units Agreement under 2013 Equity Incentive Plan (As Amended and Restated May 17, 2016)**	10-Q	001-32552	10.6	August 5, 2016
10.33	Form of Jamba, Inc. Inducement Award Notice of Grant of Non-Statutory Stock Option (Non-Plan Award)**	10-Q	001-32552	10.7	August 5, 2016
10.34	Form of Jamba, Inc. Inducement Award Non-Statutory Stock Option Agreement (Non-Plan Award)**	10-Q	001-32552	10.8	August 5, 2016
10.35	Form of Jamba, Inc. Inducement Award Notice of Grant of Time-Based Restricted Stock Units (Non-Plan Award)**	10-Q	001-32552	10.9	August 5, 2016
10.36	Form of Jamba, Inc. Inducement Award Time-Based Restricted Stock Units Agreement (Non-Plan Award)**	10-Q	001-32552	10.10	August 5, 2016
10.37	Form of Jamba, Inc. Inducement Award Notice of Grant of Market-Based Restricted Stock Units (Non-Plan Award)**	10-Q	001-32552	10.11	August 5, 2016
10.38	Form of Jamba, Inc. Inducement Award Market-Based Restricted Stock Units Agreement (Non-Plan Award)**	10-Q	001-32552	10.12	August 5, 2016
10.39	Transition Services Agreement, dated August 3, 2016, by and between Jamba Juice Company and Karen L. Luey**	10-Q	001-32552	10.1	November 7, 2016

95

Exhibit Number	Description	Form	File No.	Exhibit	Filing Date	Filed Herewith
10.40	Employment Agreement dated June 30, 2016, by and between Jamba Juice Company and Rachel Phillips Luther**					X
10.41	Credit Agreement, dated November 3, 2016, by and among Jamba, Inc., Jamba Juice Company, Jamba Juice Advertising Fund, Inc., and Cadence Bank, NA					X
21.1	List of Subsidiaries					X
23.1	Consent of Independent Registered Public Accounting Firm-KPMG LLP					X
24	Power of Attorney, included on signature page hereto					X
31.1	Certification of Chief Executive Officer pursuant to Rule 13a-14(a) and Rule 15d-14(a) of the Securities Exchange Act of 1934, as amended					X
31.2	Certification of Chief Financial Officer pursuant to Rule 13a-14(a) and Rule 15d-14(a) of the Securities Exchange Act of 1934, as amended					X
32.1	Certification of Chief Executive Officer pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002					X
32.2	Certification of Chief Financial Officer pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002					X
101.INS	XBRL Instance Document					X
101.SCH	XBRL Taxonomy Extension Schema Document					X
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document					X
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document					X
101.LAB	XBRL Taxonomy Extension Label Linkbase Document					X
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document					X

* This exhibit (or portions thereof) has been filed separately with the Securities and Exchange Commission pursuant to an application for confidential treatment. The confidential portions of this exhibit have been omitted and are marked by an asterisk.

** Management contract, or compensatory plan or arrangement.

96

(3) Schedules to Financial Statements: Schedule II

All other financial statement schedules have been omitted because they are either inapplicable or the information required is provided in the Company’s Consolidated Financial Statements and Notes thereto or included in Part II, Item 8 of this Annual Report on Form 10-K.

97

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Frisco, State of Texas, on the 9^th day of February 2018.

JAMBA, INC.
By:	/s/ David A. Pace
	David A. Pace
	Chief Executive Officer

98

POWER OF ATTORNEY

We the undersigned officers and directors of Jamba, Inc., hereby severally constitute and appoint David A. Pace and Marie L. Perry, or either of them, his attorneys-in-fact, for such person in any and all capacities, to sign any amendments to this report and to file the same, with exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, hereby ratifying and confirming all that either of said attorneys-in-fact, or substitute or substitutes, may do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

Name	Title	Date
/s/ David A. Pace David A. Pace	Chief Executive Officer, Director (Principal Executive Officer)	February 9, 2018
/s/ Marie L. Perry Marie L. Perry	Chief Financial Officer, Chief Administrative Officer, Executive Vice President and Secretary (Principal Financial Officer and Principal Accounting Officer)	February 9, 2018
/s/ Michael A. Depatie Michael A. Depatie	Director	February 9, 2018
/s/ Lorna Donatone Lorna Donatone	Director	February 9, 2018
/s/ Richard L. Federico Richard L. Federico	Director	February 9, 2018
/s/ Andrew Heyer Andrew Heyer	Director	February 9, 2018
/s/ James C. Pappas James C. Pappas	Director	February 9, 2018
/s/ Glenn W. Welling Glenn W. Welling	Director	February 9, 2018

99

JAMBA, INC. AND SUBSIDIARIES

SCHEDULE II

VALUATION AND QUALIFYING ACCOUNTS

Years Ended January 3, 2017, December 29, 2015 and December 30, 2014

(In thousands)

Allowance for Doubtful Accounts

	Balance at the Beginning of the Period		Charged to Expenses		Charged (Credited) to Other Accounts		Deductions			Balance at the End of the Period
Year ended January 3, 2017	$	618	$	1,560	$	—	$	(370	)	$	1,808
Year ended December 29, 2015	$	280	$	741	$	—	$	(403	)	$	618
Year ended December 30, 2014	$	291	$	54	$	—	$	(65	)	$	280

100

EX-10.40

EXHIBIT 10.40

June 30, 2016

RachelPhillips-Luther

Dear Rachel:

Jamba Juice started as a fruitful idea that tookrootina small store in the beach town of SanLuis Obispo. Today,thatideahasn’tchanged:Wetakethebest naturehastoofferand makewholesomenutrition accessibletoeveryoneby makingitdeliciousandkeepingitfun.It’souruniqueblendofhealthandfunthat makes JambaJuice unlike any other brand.

OURMISSION: Tobetheleadinghealthylifestylebrandofferingconsumersgreattastinganddifferentiated products inside and outsideour stores.

OUR TIMELESSPURPOSE:To inspire andsimplifyhealthy living.

Jamba’svisionandvalueswillshedinsightintowhatwe’reallaboutandwhatwestrivetobe.Theacronym FIBER sums it up the best.

Fun HaveFUN! Enjoy what you do.  Live a healthy,energetic life.

Integrity Act withINTEGRITY! Be honest and honorable in all you do. Communicate openly and treatothers with respect.

Believe BELIEVE in yourself and Jamba! Lead with enthusiasm, passion and confidence.

ExcellenceAchieveEXCELLENCE in everything you do! Strive for only the best.

Results Delivergreat RESULTS! Our success is measured byour results.

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

Compensation: Yourgrossbasesalarywillbe$285,000peryear,payablebi-weekly($10,961.54),ineach case less applicable tax withholding, andwill start at an agreed upon date.

Benefits: Medical,vision, dental,and life &disabilityinsuranceprogramsareavailableand willbecome effectiveonthefirstofthemonthafterthirty(30)daysofemployment. Youwillbeeligibletoaccrueupto 20days(4weeks)ofvacationinyourfirst year of employmentpursuanttoourtimeoffpolicy. Thedetailsof these and other programswill be explained to you during your orientation.

Signon Bonus:Iamalsopleasedtoprovideyouwitha sign-onbonusof $50,000lessapplicabletaxeswhich will be paid to you on the first payroll cycle after your start date. Sign-on bonuses are subject to a repayment agreement which will be provided upon acceptance oftheoffer. Should your employment terminate within 18 months foranyreasonotherthanpositionelimination, youwillberequiredtoreimbursethe Company forall or part of your sign-on bonus based on the number ofmonths worked.

ManagementIncentivePlanBonus:Inadditiontoyour regularpay,youwillbeeligiblefora 50%targetbonus pursuanttoourmanagementincentiveplanadoptedannuallyeachyear. The2016bonusisguaranteedat $100,000 pursuant to the plan.Bonus will be paid in March 2017.

All Equity Grantswillbe outside the current2013 Equity Incentive Planas Inducement Grantsunder Nasdaq listing rules.

RSUGrant: Wearepleasedtoprovideyouwith 5,000RSU’s,witheachrestrictedstockunitrepresentingthe righttoreceiveoneshareofParent’scommonstock, andwhichrestrictedstockunitsshallvest annuallyover athreeyearperiod,withonethird(1/3) orthetotalnumberofsharessubjecttothisRSUvestingoneach anniversary of the initial vesting date.

RSUGrant: Wearepleasedtoprovideyouwith70,000RSU’s,witheachrestrictedstockunitrepresenting therighttoreceiveoneshareofParent’scommonstock,andwhichrestricted stockunitsshallvestupon achievementofstockpricetargetsof$19.50,$24.00and$28.50,respectively(the15%,22.5%and30%TSR RSUs,as follows:

(i) 15%TSRRSUs. 35,000restrictedstockunitsshallvestifatanytimepriortothethird anniversaryoftheinitialvestingdate(x)the closingpriceofJamba,Inc.commonstock for a thirty consecutive trading day period equals or exceeds $19.50 (as adjusted in accordanceforstocksplitsandthelike) or (y)aChangeof Control(assuchtermis definedintheapplicable RSUagreement)occurswherebyJamba,Inc.’s stockholders receive a per share consideration equaling or exceeding $19.50(as adjusted in accordanceforstocksplitsandthelike),in eachcasewhereyouremainanemployeeof Jamba Juice and /or its affiliates at such time; and

(ii) 22.5%TSRRSUs. 20,000restrictedstockunitsshallvestifatanytimepriortothe thirdanniversaryoftheinitialvestingdate(x)theclosingpriceofJamba, Inc.common stockforathirtyconsecutivetradingdayperiodequalsorexceeds$24.00(asadjusted inaccordanceforstocksplitsandthelike)or (y)aChangeofControl(assuchtermis definedintheapplicableRSUagreement)occurswherebyJamba,Inc.’sstockholders receive a per share consideration equaling or exceeding $24.00(as adjusted in accordanceforstocksplitsandthelike),in eachcasewhereyouremainanemployeeof Jamba Juice and /or its affiliates at such time; and

(iii) 30%TSRRSUs.15,000restrictedstockunitsshallvestifatanytimepriortothethird anniversaryoftheinitialvestingdate(x)the closingpriceofJamba,Inc.commonstock for a thirty consecutive trading day period equals or exceeds $28.50 (as adjusted in accordanceforstocksplitsandthelike) or (y)aChangeof Control(assuchtermis definedintheapplicable RSUagreement)occurswherebyJamba,Inc.’s stockholders receive a per share consideration equaling or exceeding $28.50(as adjusted in accordanceforstocksplitsandthelike),in eachcasewhereyouremainanemployeeof Jamba Juice and /or its affiliates at such time

TheRSUswouldbegrantedduringthefirstavailable openwindowafteryourhiredate,butvestingforthe time-basedRSUswouldbecreditedto yourdateof hire. All Equity Grantsreferencedabovearesubjectto Board approval.

Restrictedstockunits,totheextentgrantedandvesting, shallbesettledassoonaspracticablefollowingany vestingdateofsuchgrants,exceptthatwithrespecttotheperformance-basedRSUsgrantedunderclauses (i)through(iii)above,such settlementshallbenoearlierthanthe firstanniversaryoftheapplicablevesting date with respect to such RSU (ineach case, the “Settlement Date”); provided, however, that if such SettlementDatewouldbeoutsideoftheperiodunderthecompany’sinsidertradingpoliciespermitting tradesinsuchsecurities,thensuchsharesshallbesettledassoonassuchinsidertradingpolicywould permit such trades.

ClawbackPolicy. All compensationcontemplatedunderthisagreementandallcashand equity awardsunder the company’s incentive compensation plans will be subject to the company’s recoupment policy for incentive compensation.

StandardSeverance Agreement:You will be eligible to participate inour Executive Retention and Severance Planwhichwouldprovideyouwithaseverancebenefitof twelve(12)month’ssalarycontinuation(subjectto mitigation)intheeventofaqualifyingtermination(withoutcauseorresignationforgoodreason,asdefined intheplan),calculatedonyourthencurrentbase salarypayableonthe Company’sordinarypayrollschedule and subject to customary withholdings, subject to signing a release.

The relationship that exists between you andthe company is for an unspecified term and considered employmentatwill.Therelationshipcanbeterminatedbyyouorthecompany“atwill”atanytimeeither withorwithoutcauseor advancenotice.This“at will”agreementconstitutestheentireagreementbetween theemployeeandthecompanyonthesubjectoftermination,andsupersedesallprioragreementsand cannotbechangedbyfutureevents, eventhoughotherpoliciesandproceduresmaychangefromtimeto time. Noone hastheauthoritytomodifythisrelationshipexcept forthe PresidentandCEOor VP,Human Resources in writing and signed by you and the President and CEO or VP, HumanResources.

Rachel,Ilookforwardtothe manycontributionsI knowyouwillmaketothe company. Uponacceptance, pleaseacknowledgethetermsofthisletterby returningonesignedcopytoKathyWrightat kwright@jambajuice.com.

Sincerely,

/s/ David A. Pace  

Dave Pace  

ChiefExecutive Officer

/s/ RachelPhillips-Luther

RachelPhillips-Luther

Acknowledgedand Agreed

EX-10.41

EXHIBIT 10.41

EXECUTION VERSION

CREDIT AGREEMENT

Dated as of November 3, 2016 among

JAMBA JUICE COMPANY, as the Borrower,

JAMBA, INC., as Holdings,

THE SUBSIDIARIES OF HOLDINGS PARTY HERETO,

as the Guarantors,

CADENCE BANK, NATIONAL ASSOCIATION,

as Administrative Agent and L/C Issuer,

and

THE LENDERS PARTY HERETO

CHAR1\1485063v6

 

TABLE OF CONTENTS

		Page
ARTICLE I	DEFINITIONS AND ACCOUNTING TERMS
1.01	Defined Terms.	6
1.02	Other Interpretive Provisions.	30
1.03	Accounting Terms	31
1.04	Rounding	31
1.05	Times of Day.	32
1.06	Letter of Credit Amounts.	32
1.07	UCC Terms.	32
1.08	Rates.	32
ARTICLE II	COMMITMENTS AND CREDIT EXTENSIONS
2.01	Loans	32
2.02	Borrowings, Conversions and Continuations of Loans.	33
2.03	Letters of Credit.	34
2.04	Prepayments	41
2.05	Termination or Reduction of Commitments.	42
2.06	Repayment of Loans.	42
2.07	Interest and Default Rate.	42
2.08	Fees.	43
2.09	Computation of Interest and Fees.	43
2.10	Evidence of Debt.	44
2.11	Payments Generally; Administrative Agent’s Clawback	44
2.12	Sharing of Payments by Lenders.	46
2.13	Cash Collateral	47
2.14	Defaulting Lenders.	48
2.15	Increase in Commitments.	50
ARTICLE III	TAXES, YIELD PROTECTION AND ILLEGALITY
3.01	Taxes.	51
3.02	Illegality and Designated Lenders.	55
3.03	Inability to Determine Rates.	56
3.04	Increased Costs; Reserves on Eurodollar Rate Loans	57
3.05	Compensation for Losses.	58
3.06	Mitigation Obligations; Replacement of Lenders.	59
3.07	Survival.	59
ARTICLE IV	CONDITIONS PRECEDENT TO CREDIT EXTENSIONS
4.01	Conditions of Initial Credit Extension.	60
4.02	Conditions to all Credit Extensions.	62
ARTICLE V	REPRESENTATIONS AND WARRANTIES

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5.01	Existence, Qualification and Power.	63
5.02	Authorization; No Contravention.	63
5.03	Governmental Authorization; Other Consents	63
5.04	Binding Effect	63
5.05	Financial Statements; No Material Adverse Effect	63
5.06	Litigation	64
5.07	No Default	64
5.08	Ownership of Property.	64
5.09	Environmental Compliance.	65
5.10	Insurance.	65
5.11	Taxes.	65
5.12	ERISA Compliance	66
5.13	Margin Regulations; Investment Company Act	66
5.14	Disclosure.	67
5.15	Compliance with Laws.	67
5.16	Solvency	67
5.17	Casualty, Etc.	67
5.18	Sanctions Concerns and Anti-Corruption Laws	67
5.19	Subsidiaries; Loan Parties	68
5.20	Collateral Representations.	68
5.21	Intellectual Property; Licenses, Etc.	69
5.22	Labor Matters	69
ARTICLE VI	AFFIRMATIVE COVENANTS
6.01	Financial Statements.	70
6.02	Certificates; Other Information	71
6.03	Notices.	73
6.04	Payment of Obligations.	73
6.05	Preservation of Existence, Etc.	73
6.06	Maintenance of Properties.	74
6.07	Maintenance of Insurance.	74
6.08	Compliance with Laws.	74
6.09	Books and Records.	75
6.10	Inspection Rights.	75
6.11	Use of Proceeds.	75
6.12	Covenant to Guarantee Obligations.	75
6.13	Covenant to Give Security.	76
6.14	Further Assurances.	76
6.15	Compliance with Terms of Leaseholds	76
6.16	Compliance with Environmental Laws	76
6.17	Anti-Corruption Laws.	77
6.18	Treasury Management.	77
6.19	Wells Fargo Letters of Credit.	77
ARTICLE VII	NEGATIVE COVENANTS
7.01	Liens.	77
7.02	Indebtedness	78
7.03	Investments.	79
7.04	Fundamental Changes.	80

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7.05	Dispositions.	80
7.06	Restricted Payments	80
7.07	Change in Nature of Business	81
7.08	Transactions with Affiliates.	81
7.09	Burdensome Agreements.	82
7.10	Use of Proceeds.	82
7.11	Financial Covenants	82
7.12	Capital Expenditures.	82
7.13	Amendments of Organization Documents; Fiscal Year; Legal Name, State of Formation; Form of Entity and Accounting Changes.	83
7.14	Prepayments, Etc. of Subordinated Indebtedness.	83
7.15	Amendment, Etc. of Subordinated Indebtedness.	83
7.16	Sanctions.	83
7.17	Anti-Corruption Laws.	83
7.18	Limitations on Holdings.	83
ARTICLE VIII	EVENTS OF DEFAULT AND REMEDIES
8.01	Events of Default.	84
8.02	Remedies upon Event of Default.	86
8.03	Application of Funds.	87
ARTICLE IX	ADMINISTRATIVE AGENT
9.01	Appointment and Authority.	88
9.02	Rights as a Lender	88
9.03	Exculpatory Provisions.	89
9.04	Reliance by Administrative Agent.	90
9.05	Delegation of Duties.	90
9.06	Resignation of Administrative Agent.	90
9.07	Non-Reliance on Administrative Agent and Other Lenders.	92
9.08	No Other Duties, Etc	92
9.09	Administrative Agent May File Proofs of Claim; Credit Bidding.	92
9.10	Collateral and Guaranty Matters.	93
9.11	Secured Cash Management Agreements and Secured Hedge Agreements.	94
ARTICLE X	CONTINUING GUARANTY
10.01	Guaranty	94
10.02	Rights of Lenders	95
10.03	Certain Waivers.	95
10.04	Obligations Independent.	95
10.05	Subrogation.	96
10.06	Termination; Reinstatement	96
10.07	Stay of Acceleration	96
10.08	Condition of Borrower.	96
10.09	Appointment of Borrower	96
10.10	Right of Contribution.	97
10.11	Keepwell.	97

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ARTICLE XI	MISCELLANEOUS
11.01	Amendments, Etc	97
11.02	Notices; Effectiveness; Electronic Communications.	99
11.03	No Waiver; Cumulative Remedies; Enforcement	101
11.04	Expenses; Indemnity; Damage Waiver	101
11.05	Payments Set Aside.	103
11.06	Successors and Assigns.	104
11.07	Treatment of Certain Information; Confidentiality	108
11.08	Right of Setoff.	109
11.09	Interest Rate Limitation.	109
11.10	Counterparts; Integration; Effectiveness	110
11.11	Survival of Representations and Warranties.	110
11.12	Severability.	110
11.13	Replacement of Lenders.	110
11.14	Governing Law; Jurisdiction; Etc.	111
11.15	Waiver of Jury Trial	112
11.16	Subordination	113
11.17	No Advisory or Fiduciary Responsibility.	113
11.18	Electronic Execution.	113
11.19	USA PATRIOT Act Notice.	114

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SCHEDULES

Schedule 1.01(a)	Certain Addresses for Notices
Schedule 1.01(b)	Initial Commitments and Applicable Percentages
Schedule 1.01(c)	Immaterial Copyrights
Schedule 5.10	Insurance
Schedule 5.19(a)	Subsidiaries
Schedule 5.19(b)	Loan Parties
Schedule 5.20(b)	Intellectual Property
Schedule 5.20(c)	Documents, Instruments, and Tangible Chattel Paper
Schedule 5.20(d)(i)	Deposit Accounts & Securities Accounts
Schedule 5.20(d)(ii)	Electronic Chattel Paper & Letter-of-Credit Rights
Schedule 5.20(e)	Commercial Tort Claims
Schedule 5.20(f)	Pledged Equity Interests
Schedule 5.20(g)	Leased and Owned Properties
Schedule 7.01	Existing Liens
Schedule 7.02	Existing Indebtedness
Schedule 7.03	Existing Investments

EXHIBITS

Exhibit A	Form of Assignment and Assumption
Exhibit B	Form of Compliance Certificate
Exhibit C	Form of Joinder Agreement
Exhibit D	Form of Loan Notice
Exhibit E	Form of Note
Exhibit F	Form of Secured Party Designation Notice
Exhibit G	Forms of U.S. Tax Compliance Certificates
Exhibit H	Form of Notice of Loan Prepayment

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CREDIT AGREEMENT

This CREDIT AGREEMENT is entered into as of November 3, 2016, among JAMBA JUICE COMPANY, a California corporation (the “Borrower”), JAMBA, INC., a Delaware corporation (“Holdings”),  the  other  Guarantors  (defined  herein),  the  Lenders  (defined  herein),  and  CADENCE BANK, NATIONAL ASSOCIATION, as Administrative Agent and L/C Issuer.

PRELIMINARY STATEMENTS:

WHEREAS, the Loan Parties (as hereinafter defined) have requested that the Lenders and the L/C Issuer make loans and other financial accommodations to the Loan Parties in an aggregate amount of up to $10,000,000.

WHEREAS, the Lenders and the L/C Issuer have agreed to make such loans and other financial accommodations to the Loan Parties on the terms and subject to the conditions set forth herein.

NOW  THEREFORE,  in  consideration  of  the  mutual  covenants  and  agreements  herein contained, the parties hereto covenant and agree as follows:

ARTICLE I

DEFINITIONS AND ACCOUNTING TERMS

1.01Defined Terms.

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

“Acquisition” means the acquisition, whether through a single transaction or a series of related transactions, of (a) a majority of the Voting Stock or other controlling ownership interest in another Person (including the purchase of an option, warrant or convertible or similar type security to acquire such a controlling interest at the time it becomes exercisable by the holder thereof), whether by purchase of such equity or other ownership interest or upon the exercise of an option or warrant for, or conversion of securities into, such equity or other ownership interest or (b) assets of another Person which constitute all or substantially all of the assets of such Person or of a division, line of business or other business unit of such Person.

“Additional Secured Obligations” means (a) all obligations arising under Secured Cash Management Agreements and Secured Hedge Agreements and (b) all costs and expenses incurred in connection with enforcement and collection of the foregoing, including the fees, charges and disbursements  of  counsel,  in  each  case  whether  direct  or  indirect  (including  those  acquired  by assumption),  absolute  or  contingent,  due  or  to  become  due,  now  existing  or  hereafter  arising  and including interest and fees that accrue after the commencement by or against any Loan Party or any Affiliate thereof of any proceeding under any Debtor Relief Laws naming such Person as the debtor in such proceeding, regardless of whether such interest and fees are allowed claims in such proceeding; provided  that  Additional  Secured  Obligations  of  a  Guarantor  shall  exclude  any  Excluded  Swap Obligations with respect to such Guarantor.

“Administrative Agent” means Cadence Bank in its capacity as administrative agent under any of the Loan Documents, or any successor administrative agent.

“Administrative Agent’s Office” means the Administrative Agent’s address and, as appropriate,

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account as set forth on Schedule 1.01(a), or such other address or account as the Administrative Agent may from time to time notify the Borrower and the Lenders.

“Administrative Questionnaire” means an Administrative Questionnaire in a form approved by the Administrative Agent.

“Affiliate” means, with respect to a specified Person, another Person that directly, or indirectly through one or more intermediaries, Controls or is Controlled by or is under common Control with the Person specified.

“Aggregate Commitments” means the Commitments of all the Lenders.

“Agreement” means this Credit Agreement.

“Applicable Percentage” means with respect to any Lender at any time, the percentage (carried out to the ninth decimal place) of the Facility represented by such Lender’s Commitment at such time.  If the Commitments of all of the Lenders to make Loans have been terminated pursuant to Section 8.02, or if the Commitments have expired, then the Applicable Percentage of each Lender in respect of the Facility shall be determined based on the Applicable Percentage of such Lender in respect of the Facility most recently in effect, giving effect to any subsequent assignments.  The Applicable Percentage of each Lender is set forth opposite the name of such Lender on Schedule 1.01(b) or in the Assignment and Assumption or such other documentation pursuant to which such Lender becomes a party hereto, as applicable.

“Applicable Rate” means, for any day, a rate per annum equal to (a) 2.50%, in the case of Eurodollar Rate Loans and Letter of Credit Fees, and (b) 1.50%, in the case of Base Rate Loans.

“Approved Fund” means any Fund that is administered or managed by (a) a Lender, (b) an Affiliate of a Lender or (c) an entity or an Affiliate of an entity that administers or manages a Lender.

“Assignment and Assumption” means an assignment and assumption entered into by a Lender and an Eligible Assignee (with the consent of any party whose consent is required by Section 11.06(b)), and accepted by the Administrative Agent, in substantially the form of Exhibit A or any other form (including an electronic documentation form generated by use of an electronic platform) approved by the Administrative Agent.

“Attributable Indebtedness” means, on any date, (a) in respect of any Capitalized Lease of any Person, the capitalized amount thereof that would appear on a balance sheet of such Person prepared as of such date in accordance with GAAP, (b) in respect of any Synthetic Lease Obligation, the capitalized amount of the remaining lease or similar payments under the relevant lease or other applicable agreement or instrument that would appear on a balance sheet of such Person prepared as of such date in accordance with GAAP if such lease or other agreement or instrument were accounted for as a Capitalized Lease, (c) all Synthetic Debt of such Person, and (d) in respect of any Sale and Leaseback Transaction, the present value (discounted in accordance with GAAP at the debt rate implied in the applicable lease) of the obligations of the lessee for rental payments during the term of such lease.

“Audited Financial Statements” means the audited consolidated balance sheet of Holdings and its Subsidiaries for the fiscal year ended December 31, 2015 and the related consolidated statements of income or operations, shareholders’ equity and cash flows for such fiscal year of Holdings and its Subsidiaries, including the notes thereto.

“Availability Period” means in respect of the Facility, the period from and including the Closing Date to the earliest of (a) the Maturity Date, (ii) the date of termination of the Commitments pursuant to

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Section 2.05, and (iii) the date of termination of the Commitment of each Lender to make Loans pursuant to Section 8.02.

“Base Rate” means for any day a fluctuating rate of interest per annum equal to the highest of (a) the Federal Funds Rate plus 0.50%, (b) the rate of interest in effect for such day as publicly announced from time to time by Cadence Bank as its “prime rate,” and (c) the Eurodollar Rate plus 1.00%; provided that if the Base Rate shall be less than 0.25%, such rate shall be deemed to be 0.25% for purposes of this Agreement.   The “prime rate” is a rate set by Cadence Bank based upon various factors including Cadence Bank’s costs and desired return, general economic conditions and other factors, and is used as a reference point for pricing some loans, which may be priced at, above, or below such announced rate. Any change in such prime rate announced by Cadence Bank shall take effect at the opening of business on the day specified in the public announcement of such change.

“Base Rate Loan” means a Loan that bears interest based on the Base Rate.

“Borrower” has the meaning specified in the introductory paragraph hereto.

“Borrower Materials” has the meaning specified in Section 6.02.

“Borrowing” means a borrowing consisting of simultaneous Loans of the same Type and, in the case of Eurodollar Rate Loans, having the same Interest Period made by each of the Lenders pursuant to Section 2.01.

“Business Day” means any day other than a Saturday, Sunday or other day on which commercial banks  are  authorized  to  close  under  the  Laws  of,  or  are  in  fact  closed  in,  the  state  where  the Administrative Agent’s Office is located and, if such day relates to any Eurodollar Rate Loan, means any such day that is also a London Banking Day.

“Cadence Bank” means Cadence Bank, National Association and its successors.

“Capital Expenditures” means, with respect to any Person for any period, any expenditure in respect of the purchase or other acquisition of any fixed or capital asset (excluding normal replacements and maintenance which are properly charged to current operations).  For purposes of this definition, the purchase price of equipment that is purchased simultaneously with the trade-in of existing equipment or with insurance proceeds shall be included in Capital Expenditures only to the extent of the gross amount by  which  such  purchase  price  exceeds  the  credit  granted  by  the  seller  of  such  equipment  for  the equipment being traded in at such time or the amount of such insurance proceeds, as the case may be.

“Capitalized Leases” means all leases that have been or should be, in accordance with GAAP, recorded as capitalized leases.

“Cash  Collateralize”  means,  to  pledge  and  deposit  with  or  deliver  to  the  Administrative Agent,  for  the  benefit  of  one  or  more  of  the  L/C  Issuer  or  the  Lenders,  as  collateral  for  L/C Obligations or obligations of the Lenders to fund participations in respect thereof, (a) cash or deposit account balances, (b) backstop letters of credit entered into on terms, from issuers and in amounts satisfactory to the Administrative  Agent and the L/C Issuer, and/or (c) if the Administrative  Agent and the L/C Issuer shall agree, in their sole discretion, other credit support, in each case, in Dollars and pursuant to documentation  in form and substance satisfactory to the Administrative  Agent and the L/C Issuer.  “Cash Collateral” shall have a meaning correlative to the foregoing and shall include the proceeds of such cash collateral and other credit support.

“Cash Equivalents” means any of the following types of Investments, to the extent owned by

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Holdings or any of its Subsidiaries free and clear of all Liens (other than Permitted Liens):

(a)readily marketable obligations issued or directly and fully guaranteed or insured by the United States or any agency or instrumentality thereof having maturities of not more than three hundred sixty (360) days from the date of acquisition thereof; provided that the full faith and credit of the United States is pledged in support thereof;

(b)time deposits with, or insured certificates of deposit or bankers’ acceptances of, any commercial bank that (i) (A) is a Lender or (B) is organized under the laws of the United States, any state thereof or the District of Columbia or is the principal banking subsidiary of a bank holding company organized under the laws of the United States, any state thereof or the District of Columbia, and is a member of the Federal Reserve System, (ii) issues (or the parent of which issues) commercial paper rated as described in clause (c) of this definition and (iii) has combined capital and surplus of at least $1,000,000,000, in each case with maturities of not more than ninety (90) days from the date of acquisition thereof;

(c)commercial paper issued by any Person organized under the laws of any state of the United States and rated at least “Prime-1” (or the then equivalent grade) by Moody’s or at least “A-1” (or the then equivalent grade) by S&P, in each case with maturities of not more than one hundred eighty (180) days from the date of acquisition thereof; and

(d)Investments, classified in accordance with GAAP as current assets of Holdings or any of its Subsidiaries, in money market investment programs registered under the Investment Company Act of 1940, which are administered by financial institutions that have the highest rating obtainable from either Moody’s or S&P, and the portfolios of which are limited solely to Investments of the character, quality and maturity described in clauses (a), (b) and (c) of this definition.

“Cash Management Agreement” means any agreement that is not prohibited by the terms hereof to provide treasury or cash management services, including deposit accounts, overnight draft, credit cards, debit cards, p-cards (including purchasing cards and commercial cards), funds transfer, automated clearinghouse, zero balance accounts, returned check concentration, controlled disbursement, lockbox, account reconciliation and reporting and trade finance services and other cash management services.

“Cash Management Bank” means any Person in its capacity as a party to a Cash Management Agreement that, (a) at the time it enters into a Cash Management Agreement with a Loan Party or any Subsidiary, is a Lender or an Affiliate of a Lender, or (b) at the time it (or its Affiliate) becomes a Lender, is a party to a Cash Management Agreement with a Loan Party or any Subsidiary, in each case in its capacity as a party to such Cash Management Agreement (even if such Person ceases to be a Lender or such Person’s Affiliate ceased to be a Lender); provided, however, that for any of the foregoing to be included  as  a  “Secured  Cash  Management  Agreement”  on  any  date  of  determination  by  the Administrative Agent, the applicable Cash Management Bank (other than the Administrative Agent or an Affiliate of the Administrative Agent) must have delivered a Secured Party Designation Notice to the Administrative Agent prior to such date of determination.

“CERCLA” means the Comprehensive Environmental Response, Compensation and Liability Act of 1980.

“CERCLIS” means the Comprehensive Environmental Response, Compensation and Liability Information System maintained by the U.S. Environmental Protection Agency.

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“CFC” means a Person that is a controlled foreign corporation under Section 957 of the Code.

“Change in Law” means the occurrence, after the Closing Date, of any of the following:  (a) the adoption or taking effect of any law, rule, regulation or treaty, (b) any change in any law, rule, regulation or treaty or in the administration, interpretation, implementation or application thereof by any Governmental  Authority  or  (c) the  making  or  issuance  of  any  request,  rule,  guideline  or  directive (whether or not having the force of law) by any Governmental Authority; provided that notwithstanding anything herein to the contrary, (i) the Dodd-Frank Wall Street Reform and Consumer Protection Act and all requests,  rules,  guidelines  or  directives  thereunder  or issued in  connection  therewith  and  (ii) all requests, rules, guidelines or directives promulgated by the Bank for International Settlements, the Basel Committee on Banking Supervision (or any successor or similar authority) or the United States or foreign regulatory authorities, in each case pursuant to Basel III, shall in each case be deemed to be a “Change in Law”, regardless of the date enacted, adopted or issued.

“Change of Control” means an event or series of events by which:

(a)any “person” or “group” (as such terms are used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, but excluding any employee benefit plan of such person or its subsidiaries, and any person or entity acting in its capacity as trustee, agent or other fiduciary or administrator of any such plan) becomes the “beneficial owner” (as defined in Rules 13d-3 and 13d-5 under the Securities Exchange Act of 1934, except that a person or group shall be deemed to have “beneficial ownership” of all securities that such person or group has the right to acquire, whether such right is exercisable immediately or only after the passage of time (such right, an “option right”)), directly or indirectly, of thirty-five percent (35)% or more of the Equity Interests of Holdings entitled to vote for members of the board of directors or equivalent governing body of Holdings on a fully-diluted basis (and taking into account all such securities that such “person” or “group” has the right to acquire pursuant to any option right);

(b)Holdings shall cease to own and control, of record and beneficially, directly 100% of the outstanding Equity Interests of the Borrower; or

(c)during any period of twelve (12) consecutive months, a majority of the members of the board of directors or other equivalent governing body of Holdings cease to be composed of individuals (i) who were members of that board or equivalent governing body on the first day of such period, (ii) whose election or nomination to that board or equivalent governing body was approved by individuals referred to in clause (i) above constituting at the time of such election or nomination at least a majority of that board or equivalent governing body or (iii) whose election or nomination to that board or other equivalent governing body was approved by individuals referred to in clauses (i) and (ii) above constituting at the time of such election or nomination at least a majority of that board or equivalent governing body.

“Closing Date” means the date hereof.

“Code” means the Internal Revenue Code of 1986.

“Collateral” means all of the “Collateral” referred to in the Collateral Documents and all of the other property that is or is intended under the terms of the Collateral Documents to be subject to Liens in favor of the Administrative Agent for the benefit of the Secured Parties; provided that “Collateral” shall not include Excluded Property.

“Collateral Documents” means, collectively, the Security Agreement, each Joinder Agreement, each of the security agreements, pledge agreements or other similar agreements delivered to the Administrative

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Agent pursuant to Section 6.13, and each of the other agreements, instruments or documents that creates or purports to create a Lien in favor of the Administrative Agent for the benefit of the Secured Parties.

“Commitment” means, as to each Lender, its obligation to make Loans to the Borrower pursuant to Section 2.01, in an aggregate principal amount at any one time outstanding not to exceed the amount set  forth  opposite  such  Lender’s  name  on  Schedule  1.01(b)  or  in  the  Assignment  and  Assumption pursuant to which such Lender becomes a party hereto, as applicable, as such amount may be adjusted from time to time in accordance with this Agreement.  The Commitments of all of the Lenders on the Closing Date shall be $10,000,000.

“Commodity Exchange Act” means the Commodity Exchange Act (7 U.S.C. § 1 et seq.), as amended from time to time, and any successor statute.

“Compliance Certificate” means a certificate substantially in the form of Exhibit B.

“Connection Income Taxes” means Other Connection Taxes that are imposed on or measured by net income (however denominated) or that are franchise Taxes or branch profits Taxes.

“Consolidated Adjusted Indebtedness” means as of any date of determination, the sum of (a) Consolidated Funded Indebtedness plus (b) the product of Consolidated Cash Rent Expense for the four fiscal quarters of Holdings most recently ended multiplied by eight.

“Consolidated Capital Expenditures” means, for any period, for Holdings and its Subsidiaries on a consolidated basis, all Capital Expenditures but excluding expenditures to the extent made with the proceeds of any Involuntary Disposition used to purchase property that is useful in the business of the Borrower and its Subsidiaries.

“Consolidated Cash Rent Expense” means, for any period, for Holdings and its Subsidiaries on a consolidated basis, the aggregate amount of rent expense paid in cash (or required to be paid in cash) during such period with respect to leases of real property.

“Consolidated EBITDA” means, for any period, the sum of the following determined on a consolidated basis, without duplication, for Holdings and its Subsidiaries in accordance with GAAP (other than as provided in (a)(vii) below): (a) Consolidated Net Income for such period plus (b) the following to the extent deducted in calculating such Consolidated Net Income (without duplication): (i) Consolidated Interest Charges for such period, (ii) the provision for federal, state, local and foreign income taxes payable for such period, (iii) depreciation and amortization expense for such period, (iv) non-cash stock based compensation expense for such period, (v) cash expenses related to the corporate office relocation provided that the aggregate amount of such cash expenses does not to exceed (x) $10,000,000 in the fiscal year ending December 31, 2016 and (y) $2,000,000 in the fiscal year ending December 31, 2017, (vi) non-cash impairment charges for such period (but excluding any non-cash charges to the extent there is a reasonable expectation that there will be cash charges with respect to such charges in future accounting periods), and (vii) non-recurring or non-cash expenses for such period determined and disclosed in accordance with Regulation G promulgated by the SEC provided that the aggregate amount of any such cash expenses does not to exceed $1,000,000 in the fiscal year ending December 31, 2018 and any fiscal year ending thereafter, or such additional amount as approved by the Administrative Agent in its sole discretion, minus (c) the following to the extent reflected as a gain or otherwise included in calculating such Consolidated Net Income: (i) federal, state, local and foreign income tax benefit or credits for such period and (ii) non-cash gains for such period (excluding any such non-cash gains to the extent (A) there were cash gains with respect to such gains in past accounting periods or (B) there is a reasonable expectation that there will be cash gains with respect to such gains in future accounting periods).

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“Consolidated EBITDAR” means, for any period, for Holdings and its Subsidiaries on a consolidated basis, an amount equal to the sum of (a) Consolidated EBITDA for such period plus (b) Consolidated Cash Rent Expense for such period.

“Consolidated Fixed Charges” means, for any period, for Holdings and its Subsidiaries on a consolidated basis, an amount equal to the sum of (i) the cash portion of Consolidated Interest Charges for such period plus (ii) Consolidated Scheduled Funded Debt Payments for such period plus (iii) Consolidated Cash Rent Expense for such period, all as determined in accordance with GAAP.

“Consolidated Fixed Charge Coverage Ratio” means, as of any date of determination, the ratio of (a) (i) Consolidated EBITDAR for the period of four fiscal quarters of Holdings most recently ended, minus (ii) Consolidated Taxes paid in cash during such period minus (iii) Restricted Payments made in cash for such period minus (iii) Consolidated Maintenance Capital Expenditures for such period, to (b) Consolidated Fixed Charges for the period of four fiscal quarters of Holdings most recently ended.

“Consolidated Funded Indebtedness” means, as of any date of determination, for Holdings and its Subsidiaries on a consolidated basis, the sum of (a) the outstanding principal amount of all obligations, whether current or long-term, for borrowed money (including Obligations hereunder) and all obligations evidenced by bonds, debentures, notes, loan agreements or other similar instruments; (b) all purchase money Indebtedness; (c) the maximum amount available to be drawn under issued and outstanding letters of credit (including standby and commercial), bankers’ acceptances, bank guaranties, surety bonds and similar instruments; (d) all obligations in respect of the deferred purchase price of property or services (other than trade accounts payable in the ordinary course of business); (e) all Attributable Indebtedness; (f) all  obligations  to purchase, redeem,  retire,  defease  or  otherwise make  any payment  prior  to the Maturity Date in respect of any Equity Interests or any warrant, right or option to acquire such Equity Interest,  valued,  in  the  case  of  a  redeemable  preferred  interest,  at  the  greater  of  its  voluntary  or involuntary  liquidation  preference  plus  accrued  and  unpaid  dividends;  (g) without  duplication,  all Guarantees with respect to outstanding Indebtedness of the types specified in clauses (a) through (f) above of Persons other than Holdings or any Subsidiary; and (h) all Indebtedness of the types referred to in clauses (a) through (g) above of any partnership or joint venture (other than a joint venture that is itself a corporation or limited liability company) in which Holdings or a Subsidiary is a general partner or joint venturer, unless such Indebtedness is expressly made non-recourse to Holdings or such Subsidiary.

“Consolidated Growth Capital Expenditures” means, for any period, any Consolidated Capital Expenditures for such period relating to the construction or opening after the Closing Date of new Restaurants or the remodeling of any existing Restaurants.

“Consolidated Interest Charges” means, for any period, for Holdings and its Subsidiaries on a consolidated basis, the sum of (a) all interest, premium payments, debt discount, fees, charges and related expenses in connection with borrowed money (including capitalized interest) or in connection with the deferred purchase price of assets, in each case to the extent treated as interest in accordance with GAAP, (b) all interest paid or payable with respect to discontinued operations, (c) the portion of rent expense under Capitalized Leases that is treated as interest in accordance with GAAP and (d) the implied interest component of Synthetic Lease Obligations and Synthetic Debt.

“Consolidated   Leverage   Ratio”   means,   as   of   any   date   of   determination,   the   ratio   of (a) Consolidated Adjusted Indebtedness as of such date to (b) Consolidated EBITDAR for the period of four fiscal quarters of Holdings most recently ended.

“Consolidated  Maintenance  Capital  Expenditures”  means,  for  any  period,  any  Consolidated Capital Expenditures for such period that are not Consolidated Growth Capital Expenditures.

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“Consolidated Net Income” means, for any period, the net income (or loss) of Holdings and its Subsidiaries on a consolidated basis for such period; provided that Consolidated Net Income shall exclude (a) extraordinary gains and extraordinary losses for such period, (b) the net income of any Subsidiary that is not a Guarantor during such period to the extent that the declaration or payment of dividends or similar distributions by such non-Guarantor Subsidiary of such income is not permitted by operation of the terms of its Organization Documents or any agreement, instrument or Law applicable to such non-Guarantor Subsidiary during such period, except that Holdings’ equity in any net loss of any such non-Guarantor Subsidiary for such period shall be included in determining Consolidated Net Income and (c) any income (or loss) for such period of any Person if such Person is not a Subsidiary, except that Holding’s equity in the net income of any such Person for such period shall be included in Consolidated Net Income up to the aggregate amount of cash actually distributed by such Person during such period to Holdings or a Subsidiary as a dividend or other distribution (and in the case of a dividend or other distribution to a Subsidiary that is not a Guarantor, such Subsidiary is not precluded from further distributing such amount to Holdings or a Guarantor as described in clause (b) of this proviso).

“Consolidated Scheduled Funded Debt Payments” means for any period for Holdings and its Subsidiaries on a consolidated basis, the sum of all scheduled payments of principal on Consolidated Funded Indebtedness.   For purposes of this definition, “scheduled payments of principal” (a) shall be determined without giving effect to any reduction of such scheduled payments resulting from the application of any voluntary or mandatory prepayments made during the applicable period, (b) shall be deemed to include the Attributable Indebtedness and (c) shall not include any voluntary prepayments or mandatory prepayments required pursuant to Section 2.04.

“Contractual Obligation” means, as to any Person, any provision of any security issued by such Person or of any agreement, instrument or other undertaking to which such Person is a party or by which it or any of its property is bound.

“Control”  means  the  possession,  directly  or  indirectly,  of  the  power  to  direct  or  cause  the direction of the management or policies of a Person, whether through the ability to exercise voting power, by contract or otherwise.   “Controlling” and “Controlled” have meanings correlative thereto.   Without limiting the generality of the foregoing, a Person shall be deemed to be Controlled by another Person if such other Person possesses, directly or indirectly, power to vote five percent (5%) or more of the securities having ordinary voting power for the election of directors, managing general partners or the equivalent.

“Credit  Extension”  means  each  of  the  following:(a) a  Borrowing  and  (b) an  L/C  Credit Extension.

“Debtor Relief Laws” means the Bankruptcy Code of the United States, and all other liquidation, conservatorship,  bankruptcy,  assignment  for  the  benefit  of  creditors,  moratorium,  rearrangement, receivership, insolvency, reorganization, or similar debtor relief Laws of the United States or other applicable jurisdictions from time to time in effect.

“Default” means any event or condition that constitutes an Event of Default or that, with the giving of any notice, the passage of time, or both, would be an Event of Default.

“Default Rate” means (a) with respect to any Obligation for which a rate is specified, a rate per annum equal to two percent (2%) in excess of the rate otherwise applicable thereto and (b) with respect to any Obligation for which a rate is not specified or available, a rate per annum equal to the Base Rate plus the Applicable Rate for Loans that are Base Rate Loans plus two percent (2%), in each case, to the fullest extent permitted by applicable Law.

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“Defaulting Lender” means, subject to Section 2.14(b), any Lender that (a) has failed to (i) fund all or any portion of its Loans within two (2) Business Days of the date such Loans were required to be funded hereunder unless such Lender notifies the Administrative Agent and the Borrower in writing that such failure is the result of such Lender’s determination that one or more conditions precedent to funding (each of which conditions precedent, together with any applicable default, shall be specifically identified in such writing) has not been satisfied, or (ii) pay to the Administrative Agent, the L/C Issuer or any other Lender any other amount required to be paid by it hereunder (including in respect of its participation in Letters of Credit) within two (2) Business Days of the date when due, (b) has notified the Borrower, the Administrative Agent or the L/C Issuer in writing that it does not intend to comply with its funding obligations hereunder, or has made a public statement to that effect (unless such writing or public statement relates to such Lender’s obligation to fund a Loan hereunder and states that such position is based on such Lender’s determination that a condition precedent to funding (which condition precedent, together with any applicable default, shall be specifically identified in such writing or public statement) cannot  be  satisfied),  (c) has  failed,  within  three  (3)  Business  Days  after  written  request  by  the Administrative  Agent  or  the  Borrower,  to  confirm  in  writing  to  the  Administrative  Agent  and  the Borrower that it will comply with its prospective funding obligations hereunder (provided that such Lender shall cease to be a Defaulting Lender pursuant to this clause (c) upon receipt of such written confirmation by the Administrative Agent and the Borrower), or (d) has, or has a direct or indirect parent company that has, (i) become the subject of a proceeding under any Debtor Relief Law, or (ii) had appointed for it a receiver, custodian, conservator, trustee, administrator, assignee for the benefit of creditors or similar Person charged with reorganization or liquidation of its business or assets, including the Federal Deposit Insurance Corporation or any other state or federal regulatory authority acting in such a capacity; provided that a Lender shall not be a Defaulting Lender solely by virtue of the ownership or acquisition of any Equity Interest in that Lender or any direct or indirect parent company thereof by a Governmental Authority so long as such ownership interest does not result in or provide such Lender with immunity from the jurisdiction of courts within the United States or from the enforcement of judgments or writs of attachment on its assets or permit such Lender (or such Governmental Authority) to reject, repudiate, disavow or disaffirm any contracts or agreements made with such Lender.  Any determination by the Administrative Agent that a Lender is a Defaulting Lender under any one or more of clauses (a) through (d) above, and the effective date of such status, shall be conclusive and binding absent manifest error, and such Lender shall be deemed to be a Defaulting Lender (subject to Section 2.14(b)) as of the date established therefor by the Administrative Agent in a written notice of such determination, which shall be delivered by the Administrative Agent to the Borrower, the L/C Issuer and each other Lender promptly following such determination.

“Designated Jurisdiction” means any country or territory to the extent that such country or territory is the subject of any Sanction.

“Disposition” or “Dispose” means the sale, transfer, license, lease or other disposition (including any Sale and Leaseback Transaction) of any property by any Loan Party or Subsidiary (or the granting of any option or other right to do any of the foregoing), including any sale, assignment, transfer or other disposal, with or without recourse, of any notes or accounts receivable or any rights and claims associated therewith, but excluding any Involuntary Disposition.

“Dollar” and “$” mean lawful money of the United States.

“Domestic Subsidiary” means any Subsidiary that is organized under the laws of any political subdivision of the United States.

“Eligible Assignee” means any Person that meets the requirements to be an assignee under Section 11.06 (subject to such consents, if any, as may be required under Section 11.06(b)(iii)) or for purposes of an assignment permitted pursuant to Section 9.09, any acquisition vehicle formed pursuant to Section 9.09 in

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connection with any credit bid.

“Environmental Laws” means any and all federal, state, local, and foreign statutes, laws, regulations, ordinances, rules, judgments, orders, decrees, permits, concessions, grants, franchises, licenses, agreements or governmental restrictions relating to pollution and the protection of the environment or the release of any materials into the environment, including those related to hazardous substances or wastes, air emissions and discharges to waste or public systems.

“Environmental Liability” means any liability, contingent or otherwise (including any liability for damages, costs of environmental remediation, fines, penalties or indemnities), of the Borrower, any other Loan Party or any of their respective Subsidiaries directly or indirectly resulting from or based upon (a) violation  of  any  Environmental  Law,  (b) the  generation,  use,  handling,  transportation,  storage, treatment or disposal  of any Hazardous Materials, (c) exposure to any Hazardous Materials, (d) the release  or  threatened  release  of  any  Hazardous  Materials  into  the  environment  or  (e) any  contract, agreement or other consensual arrangement pursuant to which liability is assumed or imposed with respect to any of the foregoing.

“Environmental Permit” means any permit, approval, identification number, license or other authorization required under any Environmental Law.

“Equity Interests” means, with respect to any Person, all of the shares of capital stock of (or other ownership or profit interests in) such Person, all of the warrants, options or other rights for the purchase or acquisition from such Person of shares of capital stock of (or other ownership or profit interests in) such Person, all of the securities convertible into or exchangeable for shares of capital stock of (or other ownership or profit interests in) such Person or warrants, rights or options for the purchase or acquisition from such Person of such shares (or such other interests), and all of the other ownership or profit interests in such Person (including partnership, member or trust interests therein), whether voting or nonvoting, and whether or not such shares, warrants, options, rights or other interests are outstanding on any date of determination.

“ERISA” means the Employee Retirement Income Security Act of 1974.

“ERISA Affiliate” means any trade or business (whether or not incorporated) under common control with Holdings or any of its Subsidiaries within the meaning of Section 414(b) or (c) of the Code (and Sections 414(m) and (o) of the Code for purposes of provisions relating to Section 412 of the Code).

“ERISA Event” means (a) a Reportable Event with respect to a Pension Plan; (b) the withdrawal of Holdings or any ERISA Affiliate from a Pension Plan subject to Section 4063 of ERISA during a plan year in which such entity was a “substantial employer” as defined in Section 4001(a)(2) of ERISA or a cessation of operations that is treated as such a withdrawal under Section 4062(e) of ERISA; (c) a complete or partial withdrawal by Holdings or any ERISA Affiliate from a Multiemployer Plan or notification that a Multiemployer Plan is in reorganization; (d) the filing of a notice of intent to terminate, the treatment of a Pension Plan amendment as a termination under Section 4041 or 4041A of ERISA; (e) the institution by the PBGC of proceedings to terminate a Pension Plan; (f) any event or condition which constitutes grounds under Section 4042 of ERISA for the termination of, or the appointment of a trustee to administer, any Pension Plan; (g) the determination that any Pension Plan is considered an at- risk plan or a plan in endangered or critical status within the meaning of Sections 430, 431 and 432 of the Code or Sections 303, 304 and 305 of ERISA; (h) the imposition of any liability under Title IV of ERISA, other than for PBGC premiums due but not delinquent under Section 4007 of ERISA, upon  Holdings or any  ERISA  Affiliate  or  (i) a  failure  by  Holdings  or  any  ERISA  Affiliate  to  meet  all  applicable requirements under the Pension Funding Rules in respect of a Pension Plan, whether or not waived, or the failure by Holdings or

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any ERISA Affiliate to make any required contribution to a Multiemployer Plan.

“Eurodollar Rate” means:

(a)for any Interest Period with respect to a Eurodollar Rate Loan, the rate per annum equal to the London Interbank Offered Rate, or a comparable or successor rate which rate is approved by the Administrative Agent, as published on the applicable Bloomberg screen page (or such other commercially available source providing such quotations as may be designated by the Administrative Agent from time to time) (in such case, the “LIBOR Rate”) at or about 11:00 a.m., London time, two (2) Business Days prior to the commencement of such Interest Period, for Dollar deposits (for delivery on the first day of such Interest Period) with a term equivalent to such Interest Period; and

(b)for any interest calculation with respect to a Base Rate Loan on any date, the rate per annum equal to the LIBOR Rate, at or about 11:00 a.m., London time, two (2) Business Days prior to such date for Dollar deposits with a term of one (1) month commencing that day; provided that:  (i) to the extent a comparable or successor rate is approved by the Administrative Agent in connection herewith, the approved rate shall be applied in a manner consistent with market practice; provided, further that to the extent such market practice is not administratively feasible  for  the  Administrative  Agent,  such  approved  rate  shall  be  applied  in  a  manner  as otherwise reasonably determined by the Administrative Agent and (ii) if the Eurodollar Rate shall be less than 0.25%, such rate shall be deemed to be 0.25% for purposes of this Agreement.

“Eurodollar Rate Loan” means a Loan that bears interest at a rate based on clause (a) of the definition of “Eurodollar Rate.”

“Event of Default” has the meaning specified in Section 8.01.

“Excluded Property” means, with respect to any Loan Party, (a) (i) any owned real property and (ii) any leased real property, (b) (i) any immaterial copyright listed on Schedule 1.01(c) and (ii) unless requested by the Administrative Agent or the Required Lenders, any Intellectual Property for which a perfected Lien thereon is not effected either by filing of a UCC financing statement or by appropriate evidence of such Lien being filed in either the United States Copyright Office or the United States Patent and Trademark Office, (c) unless requested by the Administrative Agent or the Required Lenders, any personal property (other than personal property described in clause (b) above) for which the attachment or perfection of a Lien thereon is not governed by the UCC, (d) the Equity Interests of JJAFI, any Foreign Subsidiary or Foreign Subsidiary Holdco of any Loan Party, in each case, to the extent not required to be pledged to secure the Secured Obligations pursuant to the Collateral Documents, (e) any property which, subject to the terms of Section 7.02(c), is subject to a Lien of the type described in Section 7.01(i) pursuant to documents that prohibit such Loan Party from granting any other Liens in such property, (f) motor vehicles and other property subject to a certificate of title and (g) any assets as to which the Administrative Agent and the Borrower reasonably agree that the cost of obtaining or perfecting such a security interest is excessive in relation to the benefit to the Lenders of the security to be afforded thereby.

“Excluded Swap Obligation” means, with respect to any Guarantor, any Swap Obligation if, and to the extent that, all or a portion of the Guaranty of such Guarantor of, or the grant by such Guarantor of a Lien to secure, such Swap Obligation (or any Guarantee thereof) is or becomes illegal under the Commodity  Exchange  Act  or  any  rule,  regulation  or  order  of  the  Commodity  Futures  Trading Commission (or the application or official interpretation thereof) by virtue of such Guarantor’s failure for any reason to constitute an “eligible contract participant” as defined in the Commodity Exchange Act (determined after giving effect to Section 10.11 and any other “keepwell”, support or other agreement for the benefit of such

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Guarantor and any and all guarantees of such Guarantor’s Swap Obligations by other Loan Parties) at the time the Guaranty of such Guarantor, or grant by such Guarantor of a Lien, becomes effective with respect to such Swap Obligation.  If a Swap Obligation arises under a Master Agreement governing more than one Swap Contract, such exclusion shall apply only to the portion of such Swap Obligation that is attributable to Swap Contracts for which such Guaranty or Lien is or becomes excluded in accordance with the first sentence of this definition.

“Excluded Taxes” means any of the following Taxes imposed on or with respect to any Recipient or required to be withheld or deducted from a payment to a Recipient, (a) Taxes imposed on or measured by  net  income  (however  denominated),  franchise  Taxes,  and  branch  profits  Taxes,  in  each  case, (i) imposed as a result of such Recipient being organized under the laws of, or having its principal office or, in the case of any Lender, its Lending Office located in, the jurisdiction imposing such Tax (or any political subdivision thereof) or (ii) that are Other Connection Taxes, (b) in the case of a Lender, U.S. federal withholding Taxes imposed on amounts payable to or for the account of such Lender with respect to an applicable interest in a Loan or Commitment pursuant to a law in effect on the date on which (i) such Lender acquires such interest in the Loan or Commitment (other than pursuant to an assignment request by the Borrower under Section 11.13) or (ii) such Lender changes its Lending Office, except in each case to the extent that, pursuant to Section 3.01(a)(ii), (a)(iii) or (c), amounts with respect to such Taxes were payable either to such Lender’s assignor immediately before such Lender became a party hereto or to such Lender immediately before it changed its Lending Office, (c) Taxes attributable to such Recipient’s failure to comply with Section 3.01(e) and (d) any U.S. federal withholding Taxes imposed pursuant to FATCA.

“Facility” means, at any time, the aggregate amount of the Lenders’ Commitments at such time.

“Facility Termination Date” means the date as of which all of the following shall have occurred: (a) the Aggregate Commitments have terminated, (b) all Obligations have been paid in full and (c) all Letters of Credit have terminated or expired (other than Letters of Credit as to which other arrangements with respect thereto satisfactory to the Administrative Agent and the L/C Issuer shall have been made).

“FASB  ASC”  means  the  Accounting  Standards  Codification  of  the  Financial  Accounting

Standards Board.

“FATCA” means Sections 1471 through 1474 of the Code, as of the date of this Agreement (or any amended or successor version that is substantively comparable and not materially more onerous to comply with), any current or future regulations or official interpretations thereof and any agreements entered into pursuant to Section 1471(b)(1) of the Code.

“Federal Funds Rate” means, for any day, the rate per annum equal to the weighted average of the rates on overnight federal funds transactions with members of the Federal Reserve System, as published by the Federal Reserve Bank of New York on the Business Day next succeeding such day; provided that (a) if such day is not a Business Day, the Federal Funds Rate for such day shall be such rate on such transactions on the next preceding Business Day as so published on the next succeeding Business Day, and (b) if no such rate is so published on such next succeeding Business Day, the Federal Funds Rate for such day shall be the average rate (rounded upward, if necessary, to a whole multiple of 1/100 of 1%) charged to Cadence Bank on such day on such transactions as determined by the Administrative Agent.

“Fee Letter” means the letter agreement dated the Closing Date between Cadence Bank and the Borrower.

“Foreign Lender” means, (a) if the Borrower is a U.S. Person, a Lender that is not a U.S. Person, and (b) if the Borrower is not a U.S. Person, a Lender that is resident or organized under the laws of a

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jurisdiction other than that in which the Borrower is resident for tax purposes.  For purposes of this definition, the United States, each State thereof and the District of Columbia shall be deemed to constitute a single jurisdiction.

“Foreign Subsidiary” means any Subsidiary that is not a Domestic Subsidiary.

“Foreign Subsidiary Holdco” means any Subsidiary of the Borrower substantially all of the assets of which consist of equity interests (including, for this purpose, any instruments treated as equity for U.S. federal income tax purposes) in “controlled foreign corporations” (as defined in Section 957 of the Code) and indebtedness of such controlled foreign corporations.

“FRB” means the Board of Governors of the Federal Reserve System of the United States.

“Fronting Exposure” means, at any time there is a Defaulting Lender, with respect to the L/C Issuer, such Defaulting Lender’s Applicable Percentage of the outstanding L/C Obligations other than L/C Obligations as to which such Defaulting Lender’s participation obligation has been reallocated to other Lenders or Cash Collateralized in accordance with the terms hereof.

“Fund” means any Person (other than a natural Person) that is (or will be) engaged in making, purchasing, holding or otherwise investing in commercial loans and similar extensions of credit in the ordinary course of its activities.

“GAAP” means generally accepted accounting principles in the United States set forth from time to time in the opinions and pronouncements of the Accounting Principles Board and the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board (or agencies with similar functions of comparable stature and authority within the accounting profession) including, without limitation, the FASB ASC, that are applicable to the circumstances as of the date of determination, consistently applied and subject to Section 1.03.

“Governmental Authority” means the government of the United States or any other nation, or of any political subdivision thereof, whether state or local, and any agency, authority, instrumentality, regulatory body, court, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to government (including, without limitation, any supra-national bodies such as the European Union or the European Central Bank).

“Guarantee” means, as to any Person, (a) any obligation, contingent or otherwise, of such Person guaranteeing or having the economic effect of guaranteeing any Indebtedness of the kind described in clauses (a) through (g) of the definition thereof or other obligation payable or performable by another Person (the “primary obligor”) in any manner, whether directly or indirectly, and including any obligation of such Person, direct or indirect, (i) to purchase or pay (or advance or supply funds for the purchase or payment of) such Indebtedness or other obligation, (ii) to purchase or lease property, securities or services for the purpose of assuring the obligee in respect of such Indebtedness or other obligation of the payment or performance of such Indebtedness or other obligation, (iii) to maintain working capital, equity capital or any other financial statement condition or liquidity or level of income or cash flow of the primary obligor so as to enable the primary obligor to pay such Indebtedness or other obligation, or (iv) entered into for the purpose of assuring in any other manner the obligee in respect of such Indebtedness or other obligation of the payment or performance thereof or to protect such obligee against loss in respect thereof (in whole or in part), or (b) any Lien on any assets of such Person securing any Indebtedness of the kind described in clauses (a) through (g) of the definition thereof or other obligation of any other Person, whether or not such Indebtedness or other obligation is assumed or expressly undertaken by such Person (or any right, contingent or otherwise, of any holder of such Indebtedness to obtain any such Lien).  The amount of any Guarantee shall be deemed to be an amount equal to the stated or determinable amount of the related

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primary obligation, or portion thereof, in respect of which such Guarantee is made or, if not stated or determinable, the maximum reasonably anticipated liability in respect thereof as determined by the guaranteeing Person in good faith. The term “Guarantee” as a verb has a corresponding meaning.

“Guaranteed Obligations” has the meaning set forth in Section 10.01.

“Guarantors” means, collectively, (a) Holdings, (b) the Subsidiaries of Holdings as are or may from time to time become parties to this Agreement pursuant to Section 6.12, and (c) with respect to Additional Secured Obligations owing by any Loan Party or any of its Subsidiaries and any Swap Obligation of a Specified Loan Party (determined before giving effect to Sections 10.01 and 10.11) under the Guaranty, the Borrower.

“Guaranty” means, collectively, the Guarantee made by the Guarantors under Article X in favor of the Secured Parties, together with each other guaranty delivered pursuant to Section 6.12.

“Hazardous Materials” means all explosive or radioactive substances or wastes and all hazardous or toxic substances, wastes or other pollutants, including petroleum or petroleum distillates, natural gas, natural gas liquids, asbestos or asbestos-containing materials, polychlorinated biphenyls, radon gas, toxic mold, infectious or medical wastes and all other substances, wastes, chemicals, pollutants, contaminants or compounds of any nature in any form regulated pursuant to any Environmental Law.

“Hedge Bank” means any Person in its capacity as a party to a Swap Contract that, (a) at the time it enters into a Swap Contract required by or not prohibited under Article VI or VII, is a Lender or an Affiliate of a Lender, or (b) at the time it (or its Affiliate) becomes a Lender, is a party to a Swap Contract required by or not prohibited under Article VI or VII, in each case, in its capacity as a party to such Swap Contract (even if such Person ceases to be a Lender or such Person’s Affiliate ceased to be a Lender); provided, in the case of a Secured Hedge Agreement with a Person who is no longer a Lender (or Affiliate of a Lender), such Person shall be considered a Hedge Bank only through the stated termination date (without extension or renewal) of such Secured Hedge Agreement and provided further that for any of the foregoing to be included as a “Secured Hedge Agreement” on any date of determination by the Administrative Agent, the applicable Hedge Bank (other than the Administrative Agent or an Affiliate of the Administrative Agent) must have delivered a Secured Party Designation Notice to the Administrative Agent prior to such date of determination.

“Honor Date” has the meaning set forth in Section 2.03(c).

“Holdings” means as defined in the introductory paragraph hereto.

“Indebtedness” means, as to any Person at a particular time, without duplication, all of the following, whether or not included as indebtedness or liabilities in accordance with GAAP:

(a)all obligations of such Person for borrowed money and all obligations of such Person evidenced by bonds, debentures, notes, loan agreements or other similar instruments;

(b)the maximum amount of all direct  or contingent obligations of such Person arising under letters of credit (including standby and commercial), bankers’ acceptances, bank guaranties, surety bonds and similar instruments;

(c)net obligations of such Person under any Swap Contract;

(d)all obligations (including, without limitation, earnout obligations) of such Person to

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pay the deferred purchase price of property or services (other than trade accounts payable in the ordinary course of business and not past due for more than sixty (60) days after the date on which such trade account was created);

(e)indebtedness (excluding prepaid interest thereon) secured by a Lien on property owned or being purchased by such Person (including indebtedness arising under conditional sales or other title retention agreements), whether or not such indebtedness shall have been assumed by such Person or is limited in recourse;

(f)all  Attributable  Indebtedness  in  respect  of  Capitalized  Leases  and  Synthetic Lease Obligations of such Person and all Synthetic Debt of such Person;

(g)all obligations of such Person to purchase, redeem, retire, defease or otherwise make any payment in respect of any Equity Interest in such Person or any other Person or any warrant, right or option to acquire such Equity Interest, valued, in the case of a redeemable preferred interest, at the greater of its voluntary or involuntary liquidation preference plus accrued and unpaid dividends; and

(h)all Guarantees of such Person in respect of any of the foregoing.

For all purposes hereof, the Indebtedness of any Person shall include the Indebtedness of any partnership or joint venture (other than a joint venture that is itself a corporation or limited liability company) in which such Person is a general partner or a joint venturer, unless such Indebtedness is expressly made non-recourse to such Person.  The amount of any net obligation under any Swap Contract on any date shall be deemed to be the Swap Termination Value thereof as of such date.

“Indemnified Taxes” means (a) Taxes, other than Excluded Taxes, imposed on or with respect to any payment made by or on account of any obligation of any Loan Party under any Loan Document and (b) to the extent not otherwise described in clause (a), Other Taxes.

“Indemnitees” has the meaning specified in Section 11.04(b).

“Information” has the meaning specified in Section 11.07.

“Intellectual Property” has the meaning set forth in the Security Agreement.

“Intercompany Debt” has the meaning specified in Section 7.02.

“Interest Payment Date” means, (a) as to any Eurodollar Rate Loan, the last day of each Interest Period applicable to such Loan and the Maturity Date of the Facility under which such Loan was made; and (b) as to any Base Rate Loan, the last Business Day of each March, June, September and December and the Maturity Date of the Facility under which such Loan was made.

“Interest Period” means, as to each Eurodollar Rate Loan, the period commencing on the date such Eurodollar Rate Loan is disbursed or converted to or continued as a Eurodollar Rate Loan and ending on the date one (1), two (2) or three (3) months thereafter (in each case, subject to availability), as selected by the Borrower in its Loan Notice; provided that:

(a)any Interest Period that would otherwise end on a day that is not a Business Day shall be extended to the next succeeding Business Day unless such Business Day falls in another calendar month, in which case such Interest Period shall end on the next preceding Business Day;

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(b)any Interest Period that begins on the last Business Day of a calendar month (or on a day for which there is no numerically corresponding day in the calendar month at the end of such Interest Period) shall end on the last Business Day of the calendar month at the end of such Interest Period; and

(c)no Interest Period shall extend beyond the Maturity Date of the Facility under which such Loan was made.

“Investment” means, as to any Person, any direct or indirect acquisition or investment by such Person, whether by means of (a) the purchase or other acquisition of Equity Interests of another Person, (b) a loan, advance or capital contribution to, Guarantee or assumption of debt of, or purchase or other acquisition of any other debt or interest in, another Person (including any partnership or joint venture interest in such other Person and any arrangement pursuant to which the investor guaranties Indebtedness of such other Person), or (c) an Acquisition. For purposes of covenant compliance, the amount of any Investment  shall  be  the  amount  actually  invested,  without  adjustment  for  subsequent  increases  or decreases in the value of such Investment.

“Involuntary Disposition” means any loss of, damage to or destruction of, or any condemnation or other taking for public use of, any property of any Loan Party or any Subsidiary.

“IRS” means the United States Internal Revenue Service.

“ISP” means, with respect to any Letter of Credit, the “International Standby Practices 1998” published by the Institute of International Banking Law & Practice, Inc. (or such later version thereof as may be in effect at the time of issuance).

“Issuer Documents” means with respect to any Letter of Credit, the Letter of Credit Application, and any other document, agreement and instrument entered into by the L/C Issuer and the Borrower or in favor of the L/C Issuer and relating to such Letter of Credit.

“Joinder Agreement” means a joinder agreement substantially in the form of Exhibit C executed and delivered in accordance with the provisions of Section 6.12.

“JJAFI” means Jamba Juice Advertising Fund Inc., a Delaware corporation.

“Laws” means, collectively, all international, foreign, federal, state and local statutes, treaties, rules, guidelines, regulations, ordinances, codes and administrative or judicial precedents or authorities, including the interpretation or administration thereof by any Governmental Authority charged with the enforcement, interpretation or administration thereof, and all applicable administrative orders, directed duties, requests, licenses, authorizations and permits of, and agreements with, any Governmental Authority, in each case whether or not having the force of law.

“L/C Advance” means, with respect to each Lender, such Lender’s funding of its participation in any L/C Borrowing in accordance with its Applicable Percentage.

“L/C Borrowing” means an extension of credit resulting from a drawing under any Letter of

Credit which has not been reimbursed on the date when made or refinanced as a Borrowing.

“L/C Credit Extension” means, with respect to any Letter of Credit, the issuance thereof or extension of the expiry date thereof, or the increase of the amount thereof.

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“L/C Issuer” means Cadence Bank, in its capacity as issuer of Letters of Credit hereunder, or any successor issuer of Letters of Credit hereunder.

“L/C Obligations” means, as at any date of determination, the aggregate amount available to be drawn under all outstanding Letters of Credit plus the aggregate of all Unreimbursed Amounts (including all L/C Borrowings).  For purposes of computing the amount available to be drawn under any Letter of Credit, the amount of such Letter of Credit shall be determined in accordance with Section 1.06.  For all purposes of this Agreement, if on any date of determination a Letter of Credit has expired by its terms but any amount may still be drawn thereunder by reason of the operation of Rule 3.14 of the ISP, such Letter of Credit shall be deemed to be “outstanding” in the amount so remaining available to be drawn.

“Lender” means each of the Persons identified as a “Lender” on the signature pages hereto, each other Person that becomes a “Lender” in accordance with this Agreement and their successors and assigns.

“Lending Office” means, as to the Administrative Agent, the LC Issuer or any Lender, the office or offices of such Person described as such in such Person’s Administrative Questionnaire, or such other office or offices as such Person may from time to time notify the Borrower and the Administrative Agent; which office may include any Affiliate of such Person or any domestic or foreign branch of such Person or such Affiliate.

“Letter of Credit” means any standby letter of credit issued hereunder.

“Letter  of  Credit  Application”  means  an  application  and  agreement  for  the  issuance  or amendment of a Letter of Credit in the form from time to time in use by the L/C Issuer.

“Letter of Credit Expiration Date” means the day that is seven (7) days prior to the Maturity Date then in effect for the Facility (or, if such day is not a Business Day, the next preceding Business Day).

“Letter of Credit Fee” has the meaning specified in Section 2.03(h).

“Letter of Credit Sublimit” means an amount equal to the lesser of (a) $2,000,000 and (b) the

Facility.  The Letter of Credit Sublimit is part of, and not in addition to, the Facility.

“LIBOR Rate” has the meaning specified in the definition of Eurodollar Rate.

“Lien” means any mortgage, pledge, hypothecation, assignment, deposit arrangement, encumbrance, lien (statutory or otherwise), charge, or preference, priority or other security interest or preferential arrangement in the nature of a security interest of any kind or nature whatsoever (including any conditional sale or other title retention agreement, any easement, right of way or other encumbrance on title to real property and any financing lease having substantially the same economic effect as any of the foregoing).

“Liquidity” means the amount of unencumbered cash and unencumbered Cash Equivalents of Holdings and its Subsidiaries (exclusive of any availability under the Facility); provided, that, the Liens in favor of the Administrative Agent shall not constitute an encumbrance for the purposes of this definition.

“Loan” has the meaning specified in Section 2.01.

“Loan  Documents”  means,  collectively,  (a) this  Agreement,  (b) the  Notes,  (c) the  Guaranty, (d) the Collateral Documents, (e) each Issuer Document, (f) each Joinder Agreement, (g) the Fee Letter and

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(h) all other certificates, agreements, documents and instruments executed and delivered, in each case, by or on behalf of any Loan Party pursuant to the foregoing (but specifically excluding any Secured Hedge Agreement or any Secured Cash Management Agreement); provided,however, that for purposes of Section 11.01, “Loan Documents” shall mean this Agreement, the Guaranty and the Collateral Documents and for purposes of “Material Adverse Effect” and Section 8.01(j), “Loan Documents” shall mean the documents listed in (a) through (g) above.

“Loan Notice” means a notice of (a) a Borrowing, (b) a conversion of Loans from one Type to the other,  or  (c) a  continuation  of  Eurodollar  Rate  Loans,  pursuant  to  Section  2.02(a),  which  shall  be substantially in the form of Exhibit D or such other form as may be approved by the Administrative Agent  (including any form on an electronic platform or electronic transmission system as shall be approved by the Administrative Agent), appropriately completed and signed by a Responsible Officer of the Borrower.

“Loan Parties” means, collectively, the Borrower, Holdings and each other Guarantor.

“London Banking Day” means any day on which dealings in Dollar deposits are conducted by and between banks in the London interbank eurodollar market.

“Master Agreement” has the meaning set forth in the definition of “Swap Contract.”

“Material Adverse Effect” means (a) a material adverse change in, or a material adverse effect upon, the operations, business, properties, liabilities (actual or contingent) or financial condition of the Borrower or Holdings and its Subsidiaries, taken as a whole; (b) a material impairment of the rights and remedies of the Administrative Agent or any Lender under any Loan Document, or of the ability of any Loan Party to perform its obligations under any Loan Document to which it is a party; or (c) a material adverse effect upon the legality, validity, binding effect or enforceability against any Loan Party of any Loan Document to which it is a party.

“Maturity Date” means November 3, 2021; provided, however, that if such date is not a Business

Day, the Maturity Date shall be the next preceding Business Day.

“Minimum Collateral Amount” means, at any time, (a) with respect to Cash Collateral consisting of cash or deposit account balances provided to reduce or eliminate Fronting Exposure during any period when a Lender constitutes a Defaulting Lender, an amount equal to 105% of the Fronting Exposure of the L/C Issuer with respect to Letters of Credit issued and outstanding at such time, (b) with respect to Cash Collateral consisting of cash or deposit account balances provided in accordance with the provisions of Section 2.13(a)(i), (a)(ii) or (a)(iii), an amount equal to 105% of the Outstanding Amount of all L/C Obligations, and (c) otherwise, an amount determined by the Administrative Agent and the L/C Issuer in their sole discretion.

“Moody’s” means Moody’s Investors Service, Inc. and any successor thereto.

“Multiemployer   Plan”   means   any   employee   benefit   plan   of   the   type   described   in Section 4001(a)(3) of ERISA, to which Holdings or any ERISA Affiliate makes or is obligated to make contributions, or during the preceding five (5) plan years, has made or been obligated to make contributions.

“Multiple Employer Plan” means a Plan which has two or more contributing sponsors (including Holdings or any ERISA Affiliate) at least two of whom are not under common control, as such a plan is described in Section 4064 of ERISA.

“Non-Consenting Lender” means any Lender that does not approve any consent, waiver or amendment that (a) requires the approval of all Lenders or all affected Lenders in accordance with the terms

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of Section 11.01 and (b) has been approved by the Required Lenders.

“Non-Defaulting Lender” means, at any time, each Lender that is not a Defaulting Lender at such time.

“Note” means a promissory note made by the Borrower in favor of a Lender evidencing Loans made by such Lender, substantially in the form of Exhibit E.

“Notice of Loan Prepayment” means a notice of prepayment with respect to a Loan, which shall be substantially in the form of Exhibit H or such other form as may be approved by the Administrative Agent  (including any form on  an  electronic  platform or  electronic  transmission  system as  shall be approved by the Administrative Agent), appropriately completed and signed by a Responsible Officer of the Borrower.

“NPL” means the National Priorities List under CERCLA.

“Obligations” means (a) all advances to, and debts, liabilities, obligations, covenants and duties of, any Loan Party arising under any Loan Document or otherwise with respect to any Loan or Letter of Credit and (b) all costs and expenses incurred in connection with enforcement and collection of the foregoing, including the fees, charges and disbursements of counsel, in each case whether direct or indirect (including those acquired by assumption), absolute or contingent, due or to become due, now existing or hereafter arising and including interest and fees that accrue after the commencement by or against any Loan Party or any Affiliate thereof pursuant to any proceeding under any Debtor Relief Laws naming such Person as the debtor in such proceeding, regardless of whether such interest and fees are allowed claims in such proceeding; provided that Obligations of a Guarantor shall exclude any Excluded Swap Obligations with respect to such Guarantor.

“OFAC” means the Office of Foreign Assets Control of the United States Department of the

Treasury.

“Organization Documents” means, (a) with respect to any corporation, the certificate or articles of incorporation and the bylaws (or equivalent or comparable constitutive documents with respect to any non-U.S. jurisdiction); (b) with respect to any limited liability company, the certificate or articles of formation or organization and operating agreement or limited liability company agreement (or equivalent or comparable documents with respect to any non-U.S. jurisdiction); (c) with respect to any partnership, joint venture, trust or other form of business entity, the partnership, joint venture or other applicable agreement of formation or organization (or equivalent or comparable documents with respect to any non- U.S. jurisdiction) and (d) with respect to all entities, any agreement, instrument, filing or notice with respect thereto filed in connection with its formation or organization with the applicable Governmental Authority in the jurisdiction of its formation or organization (or equivalent or comparable documents with respect to any non-U.S. jurisdiction).

“Other Connection Taxes” means, with respect to any Recipient, Taxes imposed as a result of a present or former connection between such Recipient and the jurisdiction imposing such Tax (other than connections arising from such Recipient having executed, delivered, become a party to, performed its obligations under, received payments under, received or perfected a security interest under, engaged in any other transaction pursuant to or enforced any Loan Document, or sold or assigned an interest in any Loan or Loan Document).

“Other Taxes” means all present or future stamp, court or documentary, intangible, recording, filing  or  similar  Taxes  that  arise  from  any  payment  made  under,  from  the  execution,  delivery, performance, enforcement or registration of, from the receipt or perfection of a security interest under, or

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otherwise with respect to, any Loan Document, except any such Taxes that are Other Connection Taxes imposed with respect to an assignment (other than an assignment made pursuant to Section 3.06).

“Outstanding  Amount”  means  (a)  with  respect  to  any  Loans  on  any  date,  the  aggregate outstanding  principal  amount  thereof  after  giving  effect  to  any  borrowings  and  prepayments  or repayments of Loans, as the case may be, occurring on such date and (b) with respect to any L/C Obligations on any date, the amount of such L/C Obligations on such date after giving effect to any L/C Credit Extension occurring on such date and any other changes in the aggregate amount of the L/C Obligations  as  of  such  date,  including  as  a  result  of  any  reimbursements  by  the  Borrower  of Unreimbursed Amounts.

“Participant” has the meaning specified in Section 11.06(d).

“Participant Register” has the meaning specified in Section 11.06(d).

“PBGC” means the Pension Benefit Guaranty Corporation.

“Pension Act” means the Pension Protection Act of 2006.

“Pension Funding Rules” means the rules of the Code and ERISA regarding minimum required contributions (including any installment payment thereof) to Pension Plans and set forth in, with respect to plan years ending prior to the effective date of the Pension Act, Section 412 of the Code and Section 302 of ERISA, each as in effect prior to the Pension Act and, thereafter, Section 412, 430, 431, 432 and 436 of the Code and Sections 302, 303, 304 and 305 of ERISA.

“Pension Plan” means any employee pension benefit plan (including a Multiple Employer Plan or a Multiemployer Plan) that is maintained or is contributed to by Holdings and any ERISA Affiliate and is either covered by Title IV of ERISA or is subject to the minimum funding standards under Section 412 of the Code.

“Permitted Liens” has the meaning set forth in Section 7.01.

“Permitted Transfers” means (a) Dispositions of inventory in the ordinary course of business; (b) Dispositions of property to the Borrower or any Subsidiary; provided, that if the transferor of such property is a Loan Party then the transferee thereof must be a Loan Party; (c) Dispositions of accounts receivable in connection with the collection or compromise thereof; (d) licenses, franchises, sublicenses, leases or subleases granted to others not interfering in any material respect with the business of the Borrower and its Subsidiaries; and (e) the sale or disposition of Cash Equivalents for fair market value.

“Person” means any natural person, corporation, limited liability company, trust, joint venture, association, company, partnership, Governmental Authority or other entity.

“Plan” means any employee benefit plan within the meaning of Section 3(3) of ERISA (including a Pension Plan), maintained for employees of Holdings or any ERISA Affiliate or any such Plan to which Holdings or any ERISA Affiliate is required to contribute on behalf of any of its employees.

“Platform” has the meaning specified in Section 6.02.

“Pledged Equity” has the meaning specified in the Security Agreement.

“Pro Forma Basis”, “Pro Forma Compliance” and “Pro Forma Effect” means, in respect of a

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Specified Transaction, that such Specified Transaction and the following transactions in connection therewith (to the extent applicable) shall be deemed to have occurred as of the first day of the applicable period of measurement for the applicable covenant or requirement: (a) (i) with respect to any Specified Transaction that is a Disposition or sale, transfer or other disposition that results in a Person ceasing to be a Subsidiary, income statement and cash flow statement items (whether positive or negative) attributable to the Person or property disposed of shall be excluded and (ii) with respect to any Specified Transaction that is an Acquisition or Investment, income statement and cash flow statement items (whether positive or negative) attributable to the Person or property acquired shall be included to the extent relating to any period applicable in such calculations to the extent (A) such items are not otherwise included in such income statement items for Holdings and its Subsidiaries in accordance with GAAP or in accordance with any defined terms set forth in this Section 1.01 and (B) such items are supported by financial statements or other information reasonably satisfactory to the Administrative Agent, (b) any retirement of Indebtedness and (c) any incurrence or assumption of Indebtedness by Holdings or any Subsidiary (and if such Indebtedness has a floating or formula rate, such Indebtedness shall have an implied rate of interest for the applicable period for purposes of this definition determined by utilizing the rate which is or would be in effect with respect to such Indebtedness as at the relevant date of determination); provided, that, (x) Pro Forma Basis, Pro Forma Compliance and Pro Forma Effect in respect of any Specified Transaction shall be calculated in a reasonable and factually supportable manner and certified by a Responsible Officer of the Borrower and (y) any such calculation shall be subject to any applicable limitations set forth in the definition of Consolidated EBITDA.

“Public Lender” has the meaning specified in Section 6.02.

“Qualified ECP Guarantor” means, at any time, each Loan Party with total assets exceeding $10,000,000 or that qualifies at such time as an “eligible contract participant” under the Commodity Exchange Act and can cause another Person to qualify as an “eligible contract participant” at such time under Section 1a(18)(A)(v)(II) of the Commodity Exchange Act.

“Recipient” means the Administrative Agent, any Lender, the L/C Issuer or any other recipient of any payment to be made by or on account of any obligation of any Loan Party hereunder.

“Register” has the meaning specified in Section 11.06(c).

“Related Parties” means, with respect to any Person, such Person’s Affiliates and the partners, directors, officers, employees, agents, trustees, administrators, managers, advisors and representatives of such Person and of such Person’s Affiliates.

“Reportable Event” means any of the events set forth in Section 4043(c) of ERISA, other than events for which the thirty (30) day notice period has been waived.

“Request  for  Credit  Extension”  means  (a) with  respect  to  a  Borrowing,  conversion  or continuation of Loans, a Loan Notice and (b) with respect to an L/C Credit Extension, a Letter of Credit Application.

“Required Lenders” means, at any time, Lenders having Total Credit Exposures representing at least 50% of the Total Credit Exposures of all Lenders.  The Total Credit Exposure of any Defaulting Lender shall be disregarded in determining Required Lenders at any time.

“Resignation Effective Date” has the meaning set forth in Section 9.06.

“Responsible Officer” means the chief executive officer, president, chief financial officer, treasurer, assistant treasurer or controller of a Loan Party, solely for purposes of the delivery of incumbency

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certificates pursuant to Section 4.01, the secretary or any assistant secretary of a Loan Party and, solely for purposes of notices given pursuant to Article II, any other officer or employee of the applicable Loan Party so designated by any of the foregoing officers in a notice to the Administrative Agent or any other officer or employee of the applicable Loan Party designated in or pursuant to an agreement between the applicable Loan Party and the Administrative Agent.  Any document delivered hereunder that is signed by a Responsible Officer of a Loan Party shall be conclusively presumed to have been authorized by all necessary corporate, partnership and/or other action on the part of such Loan Party and such Responsible Officer shall be conclusively presumed to have acted on behalf of such Loan Party. To the extent requested by the Administrative Agent, each Responsible Officer will provide an incumbency certificate and to the extent requested by the Administrative Agent, appropriate authorization documentation, in form and substance satisfactory to the Administrative Agent.

“Restaurant” means any “Jamba Juice” restaurant owned or leased and operated by any Loan Party or any Subsidiary thereof.

“Restricted Payment” means (a) any dividend or other distribution, direct or indirect, on account of any shares (or equivalent) of any class of Equity Interests of Holdings or any of its Subsidiaries, now or hereafter outstanding, (b) any redemption, retirement, sinking fund or similar payment, purchase or other acquisition for value, direct or indirect, of any shares (or equivalent) of any class of Equity Interests of Holdings or any of its Subsidiaries, now or hereafter outstanding, (c) any payment made to retire, or to obtain the surrender of, any outstanding warrants, options or other rights to acquire shares of any class of Equity Interests of any Loan Party or any of its Subsidiaries, now or hereafter outstanding, and (d) any payment with respect to any earnout obligation.

“S&P” means Standard & Poor’s Financial Services LLC, a subsidiary of The McGraw-Hill Companies, Inc., and any successor thereto.

“Sale and Leaseback Transaction” means, with respect to any Loan Party or any Subsidiary, any arrangement, directly or indirectly, with any Person whereby such Loan Party or such Subsidiary shall sell or transfer any property used or useful in its business, whether now owned or hereafter acquired, and thereafter rent or lease such property or other property that it intends to use for substantially the same purpose or purposes as the property being sold or transferred.

“Sanction(s)” means any sanction administered or enforced by the United States Government (including, without limitation, OFAC), the United Nations Security Council, the European Union, Her Majesty’s Treasury (“HMT”) or other relevant sanctions authority.

“SEC” means the Securities and Exchange Commission, or any Governmental Authority succeeding to any of its principal functions.

“Secured Cash Management Agreement” means any Cash Management Agreement between any Loan Party or any of its Subsidiaries and any Cash Management Bank.

“Secured Hedge Agreement” means any interest rate, currency, foreign exchange, or commodity Swap Contract required by or not prohibited under Article VI or VII between any Loan Party or any of its Subsidiaries and any Hedge Bank.

“Secured Obligations” means all Obligations and all Additional Secured Obligations.

“Secured Parties” means, collectively, the Administrative Agent, the Lenders, the L/C Issuer, the Hedge Banks, the Cash Management Banks, the Indemnitees and each co-agent or sub-agent appointed by the Administrative Agent from time to time pursuant to Section 9.05.

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“Secured Party Designation Notice” means a notice from any Lender or an Affiliate of a Lender substantially in the form of Exhibit F.

“Securities Act” means the Securities Act of 1933, including all amendments thereto and regulations promulgated thereunder.

“Security Agreement” means the security and pledge agreement, dated as of the Closing Date, executed in favor of the Administrative Agent by each of the Loan Parties.

“Solvent” and “Solvency” mean, with respect to any Person on any date of determination, that on such date (a) the fair value of the property of such Person is greater than the total amount of liabilities, including contingent liabilities, of such Person, (b) the present fair saleable value of the assets of such Person is not less than the amount that will be required to pay the probable liability of such Person on its debts as they become absolute and matured, (c) such Person does not intend to, and does not believe that it will, incur debts or liabilities beyond such Person’s ability to pay such debts and liabilities as they mature, (d) such Person is not engaged in business or a transaction, and is not about to engage in business or a transaction, for which such Person’s property would constitute an unreasonably small capital, and (e) such Person is able to pay its debts and liabilities, contingent obligations and other commitments as they mature in the ordinary course of business.  The amount of contingent liabilities at any time shall be computed as the amount that, in the light of all the facts and circumstances existing at such time, represents the amount that can reasonably be expected to become an actual or matured liability.

“Specified Loan Party” means any Loan Party that is not then an “eligible contract participant”

under the Commodity Exchange Act (determined prior to giving effect to Section 10.11).

“Specified Transaction” means (a) any Acquisition, any Disposition of all or substantially all of the assets of a Person or of a division, line of business or other business unit of a Person, any sale, transfer or other disposition that results in a Person ceasing to be a Subsidiary, any Investment that results in a Person becoming a Subsidiary, in each case, whether by merger, consolidation or otherwise, or any incurrence or repayment of Indebtedness or (b) any other event that by the terms of the Loan Documents requires Pro Forma Compliance with a test or covenant or requires such test or covenant to be calculated on a Pro Forma Basis.

“Subsidiary”  of  a  Person  means  a  corporation,  partnership,  joint  venture,  limited  liability company or other business entity of which a majority of the shares of Voting Stock is at the time beneficially owned, or the management of which is otherwise controlled, directly, or indirectly through one or more intermediaries, or both, by such Person.  Unless otherwise specified, all references herein to a “Subsidiary” or to “Subsidiaries” shall refer to a Subsidiary or Subsidiaries of Holdings.

“Swap Contract” means (a) any and all rate swap transactions, basis swaps, credit derivative transactions, forward rate transactions, commodity swaps, commodity options, forward commodity contracts, equity or equity index swaps or options, bond or bond price or bond index swaps or options or forward bond or forward bond price or forward bond index transactions, interest rate options, forward foreign exchange transactions, cap transactions, floor transactions, collar transactions, currency swap transactions, cross-currency rate swap transactions, currency options, spot contracts, or any other similar transactions or any combination of any of the foregoing (including any options to enter into any of the foregoing), whether or not any such transaction is governed by or subject to any master agreement, and (b) any and all transactions of any kind, and the related confirmations, which are subject to the terms and conditions of, or governed by, any form of master agreement published by the International Swaps and Derivatives Association, Inc., any International Foreign Exchange Master Agreement, or any other master

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agreement (any such master agreement, together with any related schedules, a “Master Agreement”), including any such obligations or liabilities under any Master Agreement.

“Swap Obligations” means with respect to any Guarantor any obligation to pay or perform under any agreement, contract or transaction that constitutes a “swap” within the meaning of Section 1a(47) of the Commodity Exchange Act.

“Swap Termination Value” means, in respect of any one or more Swap Contracts, after taking into account the effect of any legally enforceable netting agreement relating to such Swap Contracts, (a) for any date on or after the date such Swap Contracts have been closed out and termination value(s) determined in accordance therewith, such termination value(s), and (b) for any date prior to the date referenced  in  clause  (a),  the  amount(s)  determined  as  the  mark-to-market  value(s)  for  such  Swap Contracts, as determined based upon one or more mid-market or other readily available quotations provided by any recognized dealer in such Swap Contracts (which may include a Lender or any Affiliate of a Lender).

“Synthetic Debt” means, with respect to any Person as of any date of determination thereof, all obligations of such Person in respect of transactions entered into by such Person that are intended to function primarily as a borrowing of funds (including any minority interest transactions that function primarily as a borrowing) but are not otherwise included in the definition of “Indebtedness” or as a liability on the consolidated balance sheet of such Person and its Subsidiaries in accordance with GAAP.

“Synthetic Lease Obligation” means the monetary obligation of a Person under (a) a so-called synthetic, off-balance sheet or tax retention lease, or (b) an agreement for the use or possession of property (including Sale and Leaseback Transactions), in each case, creating obligations that do not appear on the balance sheet of such Person but which, upon the application of any Debtor Relief Laws to such Person, would be characterized as the indebtedness of such Person (without regard to accounting treatment).

“Taxes” means all present or future taxes, levies, imposts, duties, deductions, withholdings (including backup withholding), assessments, fees or other charges imposed by any Governmental Authority, including any interest, additions to tax or penalties applicable thereto.

“Threshold Amount” means $500,000.

“Total Credit Exposure” means, as to any Lender at any time, the unused Commitments and Total

Outstandings of such Lender at such time.

“Total  Outstandings”  means  the  aggregate  Outstanding  Amount  of  all  Loans  and  L/C Obligations.

“Type” means, with respect to a Loan, its character as a Base Rate Loan or a Eurodollar Rate Loan.

“UCC” means the Uniform Commercial Code as in effect in the State of New York; provided that, if perfection or the effect of perfection or non-perfection or the priority of any security interest in any Collateral is governed by the Uniform Commercial Code as in effect in a jurisdiction other than the State of New York, “UCC” means the Uniform Commercial Code as in effect from time to time in such other jurisdiction for purposes of the provisions hereof relating to such perfection, effect of perfection or non- perfection or priority.

“United States” and “U.S.” mean the United States of America.

“Unreimbursed Amount” has the meaning specified in Section 2.03(c)(i).

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“U.S. Loan Party” means any Loan Party that is organized under the laws of one of the states of the United States and that is not a CFC.

“U.S.   Person”   means   any   Person   that   is   a   “United   States   Person”   as   defined   in

Section 7701(a)(30) of the Code.

“U.S. Tax Compliance Certificate” has the meaning specified in Section 3.01(e)(ii)(B)(3).

“Voting Stock” means, with respect to any Person, Equity Interests issued by such Person the holders of which are ordinarily, in the absence of contingencies, entitled to vote for the election of directors (or persons performing similar functions) of such Person, even though the right to so vote has been suspended by the happening of such contingency.

“Wells Fargo Letters of Credit” means, collectively, (i) letter of credit with a face amount of $281,308.32 issued by Wells Fargo Bank, N.A. for the benefit of PNC Equipment Finance, LLC (expires November 30, 2016), (ii) letter of credit with a face amount of $48,000.00 issued by Wells Fargo Bank, N.A. for the benefit of The Port Authority of NY and NJ (expires January 1, 2017) and (iii) letter of credit with a face amount of $110,000.00 issued by Wells Fargo Bank, N.A. for the benefit of The Travelers Indemnity Company (expires April 30, 2017).

1.02Other Interpretive Provisions.

With reference to this Agreement and each other Loan Document, unless otherwise specified herein or in such other Loan Document:

(a)The definitions of terms herein shall apply equally to the singular and plural forms of the terms defined.  Whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms.   The words “include,” “includes” and “including” shall be deemed to be followed by the phrase “without limitation.”  The word “will” shall be construed to have the same meaning and effect as the word “shall.”  Unless the context requires  otherwise,  (i) any  definition  of  or  reference  to  any  agreement,  instrument  or  other document (including the Loan Documents and any Organization Document) shall be construed as referring  to  such  agreement,  instrument  or  other  document  as  from time  to  time  amended, amended and restated, modified, extended, restated, replaced or supplemented from time to time (subject to any restrictions on such amendments, supplements or modifications set forth herein or in any other Loan Document), (ii) any reference herein to any Person shall be construed to include such Person’s successors and assigns, (iii) the words “hereto,” “herein,” “hereof” and “hereunder,” and words of similar import when used in any Loan Document, shall be construed to refer to such Loan Document in its entirety and not to any particular provision thereof, (iv) all references in a Loan Document to Articles, Sections, Preliminary Statements, Exhibits and Schedules shall be construed to refer to Articles and Sections of, and Preliminary Statements, Exhibits and Schedules to, the Loan Document in which such references appear, (v) any reference to any law shall include all statutory and regulatory rules, regulations, orders and provisions consolidating, amending, replacing or interpreting such law and any reference to any law or regulation shall, unless otherwise specified, refer to such law or regulation as amended, modified, extended, restated, replaced or supplemented from time to time, and (vi) the words “asset” and “property” shall be construed to have the same meaning and effect and to refer to any and all tangible and intangible assets and properties, including cash, securities, accounts and contract rights.

(b)In the computation of periods of time from a specified date to a later specified date,

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the word “from” means “from and including;” the words “to” and “until” each mean “to but excluding;” and the word “through” means “to and including.”

(c)Section headings herein and in the other Loan Documents are included for convenience of reference only and shall not affect the interpretation of this Agreement or any other Loan Document.

1.03Accounting Terms.

(a)Generally.   All accounting terms not specifically or completely defined herein shall be construed in conformity with, and all financial data (including financial ratios and other financial calculations) required to be submitted pursuant to this Agreement shall be prepared in conformity with, GAAP applied on a consistent basis, as in effect from time to time, applied in a manner consistent with that used in preparing the Audited Financial Statements, except as otherwise specifically prescribed herein.   Notwithstanding the foregoing, for purposes of determining compliance with any covenant (including the computation of any financial covenant) contained herein, Indebtedness of Holdings and its Subsidiaries shall be deemed to be carried at

100% of the outstanding principal amount thereof, and the effects of FASB ASC 825 and FASB ASC 470-20 on financial liabilities shall be disregarded.

(b)Changes  in  GAAP.    If  at  any  time  any  change  in  GAAP  would  affect  the computation of any financial ratio or requirement set forth in any Loan Document, and either the Borrower or the Required Lenders shall so request, the Administrative Agent, the Lenders and the Borrower shall negotiate in good faith to amend such ratio or requirement to preserve the original intent thereof in light of such change in GAAP (subject to the approval of the Required Lenders); provided that, until so amended, (i) such ratio or requirement shall continue to be computed in accordance with GAAP prior to such change therein and (ii) the Borrower shall provide to the Administrative Agent and the Lenders financial statements and other documents required under this Agreement or as reasonably requested hereunder setting forth a reconciliation between calculations of such ratio or requirement made before and after giving effect to such change in GAAP.  Without limiting the foregoing, leases shall continue to be classified and accounted for on a basis consistent with that reflected in the Audited Financial Statements for all purposes of this Agreement, notwithstanding any change in GAAP relating thereto, unless the parties hereto shall enter into a mutually acceptable amendment addressing such changes, as provided for above.

(c)Consolidation of Variable Interest Entities. All references herein to consolidated financial statements of Holdings and its Subsidiaries or to the determination of any amount for Holdings and its Subsidiaries on a consolidated basis or any similar reference shall, in each case, be  deemed  to  include  each  variable  interest  entity  that  Holdings  is  required  to  consolidate pursuant to FASB ASC 810 as if such variable interest entity were a Subsidiary as defined herein.

(d)Pro  Forma  Treatment.    Each  Specified  Transaction  shall,  for  purposes  of determining compliance with the financial covenants set forth in Section 7.11, be given Pro Forma Effect as of the first day of the relevant calculation period.

1.04Rounding.

Any financial ratios required to be maintained by Holdings pursuant to this Agreement shall be calculated by dividing the appropriate component by the other component, carrying the result to one place more than the number of places by which such ratio is expressed herein and rounding the result up or down to the nearest number (with a rounding-up if there is no nearest number).

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1.05Times of Day.

Unless otherwise specified, all references herein to times of day shall be references to Eastern time (daylight or standard, as applicable).

1.06Letter of Credit Amounts.

Unless otherwise specified herein, the amount of a Letter of Credit at any time shall be deemed to be the stated amount of such Letter of Credit in effect at such time; provided, however, that with respect to any Letter of Credit that, by its terms or the terms of any Issuer Document related thereto, provides for one or more automatic increases in the stated amount thereof, the amount of such Letter of Credit shall be deemed to be the maximum stated amount of such Letter of Credit after giving effect to all such increases, whether or not such maximum stated amount is in effect at such time.

1.07UCC Terms.

Terms defined in the UCC in effect on the Closing Date and not otherwise defined herein shall, unless the context otherwise indicates, have the meanings provided by those definitions.  Subject to the foregoing, the term “UCC” refers, as of any date of determination, to the UCC then in effect.

1.08Rates.

The   Administrative   Agent   does   not   warrant,   nor   accept   responsibility,   nor   shall   the Administrative Agent have any liability with respect to the administration, submission or any other matter related to the rates in the definition of “Eurodollar Rate” or with respect to any comparable or successor rate thereto.

ARTICLE II

COMMITMENTS AND CREDIT EXTENSIONS

2.01Loans.

Subject to the terms and conditions set forth herein, each Lender severally agrees to make revolving loans (each such loan, a “Loan”) to the Borrower, in Dollars, from time to time, on any Business  Day  during  the  Availability  Period,  in  an  aggregate  amount  not  to  exceed  at  any  time outstanding the amount of such Lender’s Commitment; provided, however, that after giving effect to any Borrowing, (i) the Total Outstandings shall not exceed the Facility and (ii) the Total Credit Exposure of any  Lender  shall  not  exceed  such  Lender’s  Commitment.     Within  the  limits  of  each  Lender’s Commitment, and subject to the other terms and conditions hereof, the Borrower may borrow Loans, prepay under Section 2.04, and reborrow under this Section 2.01.   Loans may be Base Rate Loans or Eurodollar Rate Loans, as further provided herein.

2.02Borrowings, Conversions and Continuations of Loans.

(a)Notice of Borrowing.  Each Borrowing, each conversion of Loans from one Type to the other, and each continuation of Eurodollar Rate Loans shall be made upon the Borrower’s irrevocable notice to the Administrative Agent, which may be given by: (A) telephone or (B) a Loan Notice; provided that any telephonic notice must be confirmed immediately by delivery to the Administrative Agent of a Loan Notice.  Each such Loan Notice must be received by the Administrative Agent not later than 11:00 a.m. (i) three (3) Business Days prior to the requested date of any Borrowing of, conversion to or continuation of Eurodollar Rate Loans or of any

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conversion of Eurodollar Rate Loans to Base Rate Loans, and (ii) on the requested date of any Borrowing of Base Rate Loans.  Each Borrowing of, conversion to or continuation of Eurodollar Rate Loans shall be in a principal amount of $250,000 or a whole multiple of $100,000 in excess thereof.  Each Borrowing of or conversion to Base Rate Loans shall be in a principal amount of $250,000 or a whole multiple of $100,000 in excess thereof.  Each Loan Notice and each telephonic notice shall specify (A)  whether the Borrower is requesting a Borrowing, a conversion of Loans from one Type to the other, or a continuation of Loans, as the case may be, (B) the requested date of the Borrowing, conversion or continuation, as the case may be (which shall be a Business  Day),  (C) the  principal  amount  of  Loans to  be  borrowed,  converted  or  continued, (D) the Type of Loans to be borrowed or to which existing Loans are to be converted, and (E) if applicable, the duration of the Interest Period with respect thereto.   If the Borrower fails to specify a Type of Loan in a Loan Notice requesting a Borrowing, then the applicable Loans shall be made as Base Rate Loans. If the Borrower fails to give a timely notice requesting a conversion or continuation, then the applicable Loans shall be continued as Eurodollar Rate Loans with an Interest Period of one (1) month.   Any such automatic continuation as Eurodollar Rate Loans shall be effective as of the last day of the Interest Period then in effect with respect to the applicable Eurodollar Rate Loans.   If the Borrower requests a Borrowing of, conversion to, or continuation of Eurodollar Rate Loans in any Loan Notice, but fails to specify an Interest Period, it will be deemed to have specified an Interest Period of one (1) month.

(b)Advances.  Following receipt of a Loan Notice, the Administrative Agent shall promptly notify each Lender of the amount of its Applicable Percentage of the Loans.  In the case of a Borrowing, each Lender shall make the amount of its Loan available to the Administrative Agent  in  immediately  available  funds  at  the  Administrative  Agent’s  Office  not  later  than 1:00 p.m. on the Business Day specified in the applicable Loan Notice.  Upon satisfaction of the applicable conditions set forth in Section 4.02 (and, if such Borrowing is the initial Credit Extension, Section 4.01), the Administrative Agent shall make all funds so received available to the Borrower in like funds as received by the Administrative Agent either by (i) crediting the account of the Borrower on the books of Cadence Bank with the amount of such funds or (ii) wire transfer of such funds, in each case in accordance with instructions provided to (and reasonably acceptable to) the Administrative Agent by the Borrower; provided, however, that if, on the date a Loan Notice with respect to a Borrowing is given by the Borrower, there are L/C Borrowings outstanding, then the proceeds of such Borrowing, first, shall be applied to the payment in full of any such L/C Borrowings, and second, shall be made available to the Borrower as provided above.

(c)Eurodollar Rate Loans.  Except as otherwise provided herein, a Eurodollar Rate Loan may be continued or converted only on the last day of an Interest Period for such Eurodollar Rate Loan.  During the existence of a Default, no Loans may be requested as, converted to or continued  as  Eurodollar  Rate  Loans  without  the  consent  of  the  Required  Lenders,  and  the Required Lenders may demand that any or all of the outstanding Eurodollar Rate Loans be converted immediately to Base Rate Loans.

(d)Notice of Interest Rates. The Administrative Agent shall promptly notify the Borrower and the Lenders of the interest rate applicable to any Interest Period for Eurodollar Rate Loans  upon  determination  of  such  interest  rate.    At  any  time  that  Base  Rate  Loans  are outstanding, the Administrative Agent shall notify the Borrower and the Lenders of any change in Cadence Bank’s prime rate used in determining the Base Rate promptly following the public announcement of such change.

(e)Interest Periods.  After giving effect to all Borrowings, all conversions of Loans from one Type to the other, and all continuations of Loans as the same Type, there shall not be more

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than 5 Interest Periods in effect in respect of the Facility.

2.03Letters of Credit.

(a)The Letter of Credit Commitment.

(i)Subject to the terms and conditions set forth herein, (A) the L/C Issuer agrees, in reliance upon the agreements of the Lenders set forth in this Section, (1) from time to time on any Business Day during the period from the Closing Date until the Letter of Credit Expiration Date, to issue Letters of Credit in Dollars for the account of the Borrower, and to amend Letters of Credit previously issued by it, in accordance with Section  2.03(b),  and  (2) to  honor  drawings  under  the  Letters  of  Credit;  and (B) the Lenders severally agree to participate in Letters of Credit issued for the account of the Borrower and any drawings thereunder; provided that after giving effect to any L/C Credit Extension with respect to any Letter of Credit, (x) the Total Outstandings shall not exceed the Facility, (y) the Total Credit Exposure of any Lender shall not exceed such Lender’s Commitment, and (z) the Outstanding Amount of the L/C Obligations shall not exceed the Letter of Credit Sublimit.  Each request by the Borrower for the issuance or amendment of a Letter of Credit shall be deemed to be a representation by the Borrower that the L/C Credit Extension so requested complies with the conditions set forth in the proviso to the preceding sentence.  Within the foregoing limits, and subject to the terms and conditions hereof, the Borrower’s ability to obtain Letters of Credit shall be fully revolving, and accordingly the Borrower may, during the foregoing period, obtain Letters of Credit to replace Letters of Credit that have expired or that have been drawn upon and reimbursed.

(ii)The L/C Issuer shall not issue any Letter of Credit if:

(A)the expiry date of the requested Letter of Credit would occur more than twelve (12) months after the date of issuance, unless the Required Lenders have approved such expiry date; or

(B)the expiry date of the requested Letter of Credit would occur after the Letter of Credit Expiration Date, unless all the Lenders have approved such expiry date.

(iii)The L/C Issuer shall not be under any obligation to issue any Letter of Credit if:

(A)any order, judgment or decree of any Governmental Authority or arbitrator shall by its terms purport to enjoin or restrain the L/C Issuer from issuing the Letter of Credit, or any Law applicable to the L/C Issuer or any request or directive (whether or not having the force of law) from any Governmental Authority with jurisdiction over the L/C Issuer shall prohibit, or request that the L/C Issuer refrain from, the issuance of letters of credit generally or the Letter of Credit in particular or shall impose upon the L/C Issuer with respect to the Letter of Credit any restriction, reserve or capital requirement (for which the L/C Issuer is not otherwise compensated hereunder) not in effect on the Closing Date, or shall impose upon the L/C Issuer any unreimbursed loss, cost or expense which was not applicable on the Closing Date and which the L/C Issuer in good faith deems material to it;

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(B)the issuance of the Letter of Credit would violate one or more policies of the L/C Issuer applicable to letters of credit generally;

(C)except as otherwise agreed by the Administrative Agent and the

L/C Issuer, the Letter of Credit is in an initial stated amount less than $100,000;

(D)the Letter of Credit is to be denominated in a currency other than

Dollars; or

(E)any Lender is at that time a Defaulting Lender, unless the L/C Issuer has entered into arrangements, including the delivery of Cash Collateral, satisfactory to the L/C Issuer (in its sole discretion) with the Borrower or such Lender to eliminate the L/C Issuer’s actual or potential Fronting Exposure (after giving effect to Section 2.14(a)(iv)) with respect to the Defaulting Lender arising from either the Letter of Credit then proposed to be issued or that Letter of Credit and all other L/C Obligations as to which the L/C Issuer has actual or potential Fronting Exposure, as it may elect in its sole discretion.

(iv)The L/C Issuer shall not amend any Letter of Credit if the L/C Issuer would not be permitted at such time to issue the Letter of Credit in its amended form under the terms hereof.

(v)The L/C Issuer shall be under no obligation to amend any Letter of Credit if (A) the L/C Issuer would have no obligation at such time to issue such Letter of Credit in its amended form under the terms hereof, or (B) the beneficiary of such Letter of Credit does not accept the proposed amendment to the Letter of Credit.

(vi)The L/C Issuer shall act on behalf of the Lenders with respect to any Letters of Credit issued by it and the documents associated therewith, and the L/C Issuer shall have all of the benefits and immunities (A) provided to the Administrative Agent in Article IX with respect to any acts taken or omissions suffered by the L/C Issuer in connection with Letters of Credit issued by it or proposed to be issued by it and Issuer Documents pertaining to such Letters of Credit as fully as if the term “Administrative Agent” as used in Article IX included the L/C Issuer with respect to such acts or omissions, and (B) as additionally provided herein with respect to the L/C Issuer.

(b)Procedures for Issuance and Amendment of Letters of Credit.

(i)Each Letter of Credit shall be issued or amended, as the case may be, upon the request of the Borrower delivered to the L/C Issuer (with a copy to the Administrative Agent) in the form of a Letter of Credit Application, appropriately completed and signed by a Responsible Officer of the Borrower. Such Letter of Credit Application may be sent by fax transmission, by United States mail, by overnight courier, by electronic transmission using the system provided by the L/C Issuer, by personal delivery or by any other means acceptable to the L/C Issuer. Such Letter of Credit Application must be received by the L/C Issuer and the Administrative Agent not later than 11:00 a.m. at least two (2) Business Days (or such later date and time as the Administrative Agent and the L/C Issuer may agree in a particular instance in their sole discretion) prior to the proposed issuance date or date of amendment, as the case may be. In the case of a request for an initial issuance of a Letter of Credit, such Letter of Credit Application shall specify in form and detail satisfactory to the

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L/C Issuer:   (A) the proposed issuance date of the requested Letter of Credit (which shall be a Business Day); (B) the amount thereof; (C) the expiry date thereof; (D) the name and address of the beneficiary thereof; (E) the documents to be presented by such beneficiary in case of any drawing thereunder; (F) the full text of any certificate to be presented by such beneficiary in case of any drawing thereunder; (G) the purpose and nature of the requested Letter of Credit; and (H) such other matters as the L/C Issuer may require.  In the case of a request for an amendment of any outstanding Letter of Credit, such Letter of Credit Application shall specify in form and detail satisfactory to the L/C Issuer (1) the Letter of Credit to be amended; (2) the proposed date of amendment thereof (which shall be a Business Day); (3) the nature of the proposed amendment; and (4) such other matters as the L/C Issuer may require.   Additionally, the Borrower shall furnish to the L/C Issuer and the Administrative Agent such other documents and information pertaining to such requested Letter of Credit issuance or amendment, including any Issuer Documents, as the L/C Issuer or the Administrative Agent may require.

(ii)Promptly after receipt of any Letter of Credit Application, the L/C Issuer will confirm with the Administrative Agent (by telephone or in writing) that the Administrative Agent has received a copy of such Letter of Credit Application from the Borrower and, if not, the L/C Issuer will provide the Administrative Agent with a copy thereof.   Unless the L/C Issuer has received written notice from any Lender, the Administrative Agent or any Loan Party, at least one (1) Business Day prior to the requested date of issuance or amendment of the applicable Letter of Credit, that one or more applicable conditions contained in Article IV shall not then be satisfied, then, subject to the terms and conditions hereof, the L/C Issuer shall, on the requested date, issue a Letter of Credit for the account of the Borrower or enter into the applicable amendment, as the case may be, in each case in accordance with the L/C Issuer’s usual and customary business practices.   Immediately upon the issuance of each Letter of Credit, each Lender shall be deemed to, and hereby irrevocably and unconditionally agrees to, purchase from the L/C Issuer a risk participation in such Letter of Credit in an amount equal to the product of such Lender’s Applicable Percentage times the amount of such Letter of Credit.

(iii)Promptly after its delivery of any Letter of Credit or any amendment to a Letter of Credit to an advising bank with respect thereto or to the beneficiary thereof, the L/C Issuer will also deliver to the Borrower and the Administrative Agent a true and complete copy of such Letter of Credit or amendment.

(c)Drawings and Reimbursements; Funding of Participations.

(i)Upon receipt from the beneficiary of any Letter of Credit of any notice of a drawing under such Letter of Credit, the L/C Issuer shall notify the Borrower and the Administrative Agent thereof.  Not later than 11:00 a.m. on the date of any payment by the L/C Issuer under a Letter of Credit (each such date, an “Honor Date”), the Borrower shall reimburse the L/C Issuer through the Administrative Agent  in an amount equal to the amount of such drawing.  If the Borrower fails to so reimburse the L/C Issuer by such time, the Administrative Agent shall promptly notify each Lender of the Honor Date, the amount of the unreimbursed drawing (the “Unreimbursed Amount”), and the amount of such Lender’s Applicable Percentage thereof.  In such event, the Borrower shall be deemed to have requested a Borrowing of Base Rate Loans to be disbursed on the Honor Date in an amount equal to the Unreimbursed Amount, without regard to the minimum and multiples specified in Section 2.02 for the principal amount of Base Rate Loans, but subject to the amount of the unutilized portion of the Commitments and the conditions set forth in Section

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4.02 (other than the delivery of a Loan Notice).  Any notice given by the L/C Issuer or the Administrative Agent pursuant to this Section 2.03(c)(i) may be given by telephone if immediately confirmed in writing; provided that the lack of such an immediate confirmation shall not affect the conclusiveness or binding effect of such notice.

(ii)Each Lender shall upon any notice pursuant to Section 2.03(c)(i) make funds available (and the Administrative Agent may apply Cash Collateral provided for this purpose) for the account of the L/C Issuer, at the Administrative Agent’s Office in an amount equal to its Applicable Percentage of the Unreimbursed Amount not later than

1:00 p.m. on the Business Day specified in such notice by the Administrative Agent, whereupon, subject to the provisions of Section 2.03(c)(iii), each Lender that so makes funds available shall be deemed to have made a Base Rate Loan to the Borrower in such amount.  The Administrative Agent shall remit the funds so received to the L/C Issuer.

(iii)With respect to any Unreimbursed Amount that is not fully refinanced by a Borrowing of Base Rate Loans because the conditions set forth in Section 4.02 cannot be satisfied or for any other reason, the Borrower shall be deemed to have incurred from the L/C Issuer an L/C Borrowing in the amount of the Unreimbursed Amount that is not so refinanced, which L/C Borrowing shall be due and payable on demand (together with interest) and shall bear interest at the Default Rate.  In such event, each Lender’s payment to  the  Administrative  Agent  for  the  account  of  the  L/C  Issuer  pursuant  to  Section

2.03(c)(ii) shall be deemed payment in respect of its participation in such L/C Borrowing and shall constitute an L/C Advance from such Lender in satisfaction of its participation obligation under this Section.

(iv)Until  each  Lender  funds  its  Loan  or  L/C  Advance  pursuant  to  this Section 2.03(c) to reimburse the L/C Issuer for any amount drawn under any Letter of Credit, interest in respect of such Lender’s Applicable Percentage of such amount shall be solely for the account of the L/C Issuer.

(v)Each Lender’s obligation to make Loans or L/C Advances to reimburse the  L/C  Issuer for amounts  drawn under  Letters of Credit, as contemplated by this Section 2.03(c), shall be absolute and unconditional and shall not be affected by any circumstance, including (A) any setoff, counterclaim, recoupment, defense or other right which such Lender may have against the L/C Issuer, the Borrower, any Subsidiary or any other Person for any reason whatsoever; (B) the occurrence or continuance of a Default; or (C) any other occurrence, event or condition, whether or not similar to any of the foregoing; provided, however, that each Lender’s obligation to make Loans pursuant to this Section 2.03(c) is subject to the conditions set forth in Section 4.02 (other than delivery by the Borrower of a Loan Notice).  No such making of an L/C Advance shall relieve or otherwise impair the obligation of the Borrower to reimburse the L/C Issuer for the amount of any payment made by the L/C Issuer under any Letter of Credit, together with interest as provided herein.

(vi)If any Lender fails to make available to the Administrative Agent for the account of the L/C Issuer any amount required to be paid by such Lender pursuant to the foregoing provisions of this Section 2.03(c) by the time specified in Section 2.03(c)(ii), then, without limiting the other provisions of this Agreement, the L/C Issuer shall be entitled to recover from such Lender (acting through the Administrative Agent), on demand, such amount with interest thereon for the period from the date such payment is required to the date on which such payment is immediately available to the L/C Issuer at a rate per annum equal to the greater of the Federal Funds Rate and a rate determined by the L/C

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Issuer in accordance with banking industry rules on interbank compensation, plus any administrative, processing or similar fees customarily charged by the L/C Issuer in connection with the foregoing.  If such Lender pays such amount (with interest and fees as aforesaid), the amount so paid shall constitute such Lender’s Loan included in the relevant Borrowing or L/C Advance in respect of the relevant L/C Borrowing, as the case may be.   A certificate of the L/C Issuer submitted to any Lender (through the Administrative Agent) with respect to any amounts owing under this Section 2.03(c)(vi) shall be conclusive absent manifest error.

(d)Repayment of Participations.

(i)At any time after the L/C Issuer has made a payment under any Letter of Credit and has received from any Lender such Lender’s L/C Advance in respect of such payment in accordance with Section 2.03(c), if the Administrative Agent receives for the account of the L/C Issuer any payment in respect of the related Unreimbursed Amount or interest thereon (whether directly from the Borrower or otherwise, including proceeds of Cash Collateral applied thereto by the Administrative Agent), the Administrative Agent will distribute to such Lender its Applicable Percentage thereof in the same funds as those received by the Administrative Agent.

(ii)If any payment received by the Administrative Agent for the account of the L/C Issuer pursuant to Section 2.03(c)(i) is required to be returned under any of the circumstances described in Section 11.05 (including pursuant to any settlement entered into by the L/C Issuer in its discretion), each Lender shall pay to the Administrative Agent for the account of the L/C Issuer its Applicable Percentage thereof on demand of the Administrative Agent, plus interest thereon from the date of such demand to the date such amount is returned by such Lender, at a rate per annum equal to the Federal Funds Rate from time to time in effect.  The obligations of the Lenders under this clause shall survive the payment in full of the Obligations and the termination of this Agreement.

(e)Obligations Absolute.   The obligation of the Borrower to reimburse the L/C Issuer for each drawing under each Letter of Credit and to repay each L/C Borrowing shall be absolute, unconditional and irrevocable, and shall be paid strictly in accordance with the terms of this Agreement under all circumstances, including the following:

(i)any  lack  of  validity  or  enforceability  of  such  Letter  of  Credit,  this Agreement, or any other Loan Document;

(ii)the existence of any claim, counterclaim, setoff, defense or other right that the Borrower or any Subsidiary may have at any time against any beneficiary or any transferee of such Letter of Credit (or any Person for whom any such beneficiary or any such transferee may be acting), the L/C Issuer or any other Person, whether in connection with this Agreement or by such Letter of Credit, the transactions contemplated hereby or any agreement or instrument relating thereto, or any unrelated transaction;

(iii)any draft, demand, endorsement, certificate or other document presented under or in connection with such Letter of Credit proving to be forged, fraudulent, invalid or insufficient in any respect or any statement therein being untrue or inaccurate in any respect; or any loss or delay in the transmission or otherwise of any document required in order to make a drawing under such Letter of Credit;

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(iv)waiver by the L/C Issuer of any requirement that exists for the L/C Issuer’s protection and not the protection of the Borrower or any waiver by the L/C Issuer which does not in fact materially prejudice the Borrower;

(v)honor of a demand for payment presented electronically even if such Letter of Credit requires that demand be in the form of a draft;

(vi)any  payment  made  by  the  L/C  Issuer  in  respect  of  an  otherwise complying item presented after the date specified as the expiration date of, or the date by which documents must be received under, such Letter of Credit if presentation after such date is authorized by the UCC or the ISP, as applicable;

(vii)any payment by the L/C Issuer under such Letter of Credit against presentation of a draft or certificate that does not strictly comply with the terms of such Letter of Credit; or any payment made by the L/C Issuer under such Letter of Credit to any Person purporting to be a trustee in bankruptcy, debtor-in-possession, assignee for the benefit of creditors, liquidator, receiver or other representative of or successor to any beneficiary or any transferee of such Letter of Credit, including any arising in connection with any proceeding under any Debtor Relief Law; or

(viii)any other circumstance or happening whatsoever, whether or not similar to any of the foregoing, including any other circumstance that might otherwise constitute a defense available to, or a discharge of, the Borrower or any of its Subsidiaries.

The Borrower shall promptly examine a copy of each Letter of Credit and each amendment thereto that is delivered to it and, in the event of any claim of noncompliance with the Borrower’s instructions or other irregularity, the Borrower will immediately notify the L/C Issuer.   The Borrower shall be conclusively deemed to have waived any such claim against the L/C Issuer and its correspondents unless such notice is given as aforesaid.

(f)Role of L/C Issuer.   Each Lender and the Borrower agree that, in paying any drawing under a Letter of Credit, the L/C Issuer shall not have any responsibility to obtain any document (other than any sight or time draft, certificates and documents expressly required by the Letter of Credit) or to ascertain or inquire as to the validity or accuracy of any such document or the authority of the Person executing or delivering any such document.  None of the L/C Issuer, the Administrative Agent, any of their respective Related Parties nor any correspondent, participant or assignee of the L/C Issuer shall be liable to any Lender for (i) any action taken or omitted in connection herewith at the request or with the approval of the Required Lenders; (ii) any action taken or omitted in the absence of gross negligence or willful misconduct; or (iii) the due execution, effectiveness, validity or enforceability of any document or instrument related to any Letter of Credit or Issuer Document.  The Borrower hereby assumes all risks of the acts or omissions of any beneficiary or transferee with respect to its use of any Letter of Credit; provided, however, that this assumption is not intended to, and shall not, preclude the Borrower’s pursuing such rights and remedies as it may have against the beneficiary or transferee at law or under any other agreement.  None of the L/C Issuer, the Administrative Agent, any of their respective Related Parties nor any correspondent, participant or assignee of the L/C Issuer shall be liable or responsible for any of the matters described in Section 2.03(e); provided, however, that anything in such clauses to the contrary notwithstanding, the Borrower may have a claim against the L/C Issuer, and the L/C Issuer may be liable to the Borrower, to the extent, but only to the extent, of any direct, as opposed to consequential or exemplary, damages suffered by the Borrower which the Borrower proves, as determined by a final nonappealable judgment of a court of competent jurisdiction, were caused by

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the L/C Issuer’s willful misconduct or gross negligence or the L/C Issuer’s willful failure to pay under any Letter of Credit after the presentation to it by the beneficiary of a sight or time draft and certificate(s) strictly complying with the terms and conditions of a Letter of Credit.  In furtherance and not in limitation of the foregoing, the L/C Issuer may accept documents that appear on their face to be in order, without responsibility for further investigation, regardless of any notice or information to the contrary, and the L/C Issuer shall not be responsible for the validity or sufficiency of any instrument transferring, endorsing or assigning or purporting to transfer, endorse or assign a Letter of Credit or the rights or benefits thereunder or proceeds thereof, in whole or in part, which may prove to be invalid or ineffective for any reason.  The L/C Issuer may send a Letter of Credit or conduct any communication to or from the beneficiary via the Society for Worldwide Interbank Financial Telecommunication (“SWIFT”)  message  or  overnight  courier,  or  any  other  commercially  reasonable  means  of communicating with a beneficiary.

(g)Applicability of ISP; Limitation of Liability.  Unless otherwise expressly agreed by the L/C Issuer and the Borrower when a Letter of Credit is issued, the rules of the ISP shall apply to each Letter of Credit.  Notwithstanding the foregoing, the L/C Issuer shall not be responsible to the Borrower for, and the L/C Issuer’s rights and remedies against the Borrower shall not be impaired by, any action or inaction of the L/C Issuer required or permitted under any law, order, or practice that is required or permitted to be applied to any Letter of Credit or this Agreement, including the Law or any order of a jurisdiction where the L/C Issuer or the beneficiary is located, the practice stated in the ISP, or in the decisions, opinions, practice statements, or official commentary of the ICC Banking Commission, the Bankers Association for Finance and Trade - International Financial Services Association (BAFT-IFSA), or the Institute of International Banking Law & Practice, whether or not any Letter of Credit chooses such law or practice.

(h)Letter of Credit Fees.  The Borrower shall pay to the Administrative Agent for the account of each Lender in accordance, subject to Section 2.14, with its Applicable Percentage a Letter of Credit fee (the “Letter of Credit Fee”) for each Letter of Credit equal to the Applicable Rate for Loans that are Eurodollar Rate Loans times the daily amount available to be drawn under such Letter of Credit.  Letter of Credit Fees shall be (1) due and payable on the first Business Day following each fiscal quarter end, commencing with the first such date to occur after the issuance of such Letter of Credit, on the Letter of Credit Expiration Date and thereafter on demand and (2) computed on a quarterly basis in arrears.  If there is any change in the Applicable Rate during any quarter, the daily amount available to be drawn under each Letter of Credit shall be computed and multiplied by the Applicable Rate separately for each period during such quarter that such Applicable Rate was in effect.

(i)Documentary and Processing Charges Payable to L/C Issuer.  For purposes of computing the daily amount available to be drawn under any Letter of Credit, the amount of such Letter of Credit shall be determined in accordance with Section 1.06.  The Borrower shall pay directly to the L/C Issuer for its own account the customary issuance, presentation, amendment and other processing fees, and other standard costs and charges, of the L/C Issuer relating to letters of credit as from time to time in effect.   Such customary fees and standard costs and charges are due and payable on demand and are nonrefundable.

(j)Conflict with Issuer Documents.  In the event of any conflict between the terms hereof and the terms of any Issuer Document, the terms hereof shall control.

2.04Prepayments.

(a)Optional.  The Borrower may, upon notice to the Administrative Agent pursuant to

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delivery to the Administrative Agent of a Notice of Loan Prepayment, at any time or from time to time voluntarily prepay Loans in whole or in part without premium or penalty subject to Section 3.05; provided that, unless otherwise agreed by the Administrative Agent, (A) such notice must be received by the Administrative Agent not later than 11:00 a.m. (1) three (3) Business Days prior to any date of prepayment of Eurodollar Rate Loans and (2) on the date of prepayment of Base Rate Loans; (B) any prepayment of Eurodollar Rate Loans shall be in a principal amount of $250,000 or a whole multiple of $100,000 in excess thereof; and (C) any prepayment of Base Rate Loans shall be in a principal amount of $250,000 or a whole multiple of $100,000 in excess thereof or, in each case, if less, the entire principal amount thereof then outstanding.  Each such notice shall specify the date and amount of such prepayment and the Type(s) of Loans to be prepaid and, if Eurodollar Rate Loans are to be prepaid, the Interest Period(s) of such Loans.  The Administrative Agent will promptly notify each Lender of its receipt of each such notice, and of the amount of such Lender’s ratable portion of such prepayment (based on such Lender’s Applicable  Percentage  in  respect  of  the  relevant  Facility).    If  such  notice  is  given  by  the Borrower, the Borrower shall make such prepayment and the payment amount specified in such notice shall be due and payable on the date specified therein.  Any prepayment of principal shall be accompanied by all accrued interest on the amount prepaid, together with any additional amounts required pursuant to Section 3.05.

(b)Mandatory.

(i)If for any reason the Total Outstandings at any time exceed the Facility at  such  time,  the  Borrower  shall  immediately  prepay  Loans  and  L/C  Borrowings (together with all accrued but unpaid interest thereon) and/or Cash Collateralize the L/C Obligations in an aggregate amount equal to such excess; provided, however, that the Borrower shall not be required to Cash Collateralize the L/C Obligations pursuant to this Section 2.04(b) unless, after the prepayment of the Loans, the Total Outstandings exceed the Facility at such time.

(ii)Except  as  otherwise  provided  in  Section  2.14,  prepayments  of  the Facility made pursuant to this Section 2.04(b), first, shall be applied ratably to the L/C Borrowings, second, shall be applied to the outstanding Loans, and, third, shall be used to Cash Collateralize the remaining L/C Obligations.  Upon the drawing of any Letter of Credit that has been Cash Collateralized, the funds held as Cash Collateral shall be applied (without any further action by or notice to or from the Borrower or any other Loan Party or any Defaulting Lender that has provided Cash Collateral) to reimburse the L/C Issuer or the Lenders, as applicable.

Prepayments pursuant to this Section 2.04(b) shall be applied first to Base Rate Loans and then to Eurodollar  Rate  Loans  in  direct  order  of  Interest  Period  maturities.    All  prepayments  under  this Section 2.04(b) shall be subject to Section 3.05, but otherwise without premium or penalty, and shall be accompanied by interest on the principal amount prepaid through the date of prepayment.

2.05Termination or Reduction of Commitments.

(a)Optional.     The  Borrower  may,  upon  notice  to  the  Administrative  Agent, terminate the Facility or the Letter of Credit Sublimit or from time to time permanently reduce the Facility or the Letter of Credit Sublimit; provided that (i) any such notice shall be received by the Administrative Agent not later than 11:00 a.m. five (5) Business Days prior to the date of termination or reduction, (ii) any such partial reduction shall be in an aggregate amount of $1,000,000 or any whole multiple of $500,000 in excess thereof and (iii) the Borrower shall not terminate  or  reduce  (A)  the  Facility  if,  after  giving  effect  thereto  and  to  any  concurrent

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prepayments hereunder, the Outstanding Amount of all Loans would exceed the Facility or (B) the Letter of Credit Sublimit if, after giving effect thereto, the Outstanding Amount of L/C Obligations not fully Cash Collateralized would exceed the Letter of Credit Sublimit.

(b)Mandatory.      If   after   giving   effect   to   any   reduction   or   termination   of Commitments under this Section 2.05, the Letter of Credit Sublimit exceeds the Facility at such time, the Letter of Credit Sublimit shall be automatically reduced by the amount of such excess.

(c)Application of Commitment Reductions; Payment of Fees.  The Administrative Agent will promptly notify the Lenders of any termination or reduction of the Commitments or the Letter of Credit Sublimit under this Section 2.05. Upon any reduction of the Commitments, the Commitment of each Lender shall be reduced by such Lender’s Applicable Percentage of such reduction amount.  All fees in respect of the Facility accrued until the effective date of any termination of the Facility shall be paid on the effective date of such termination.

2.06Repayment of Loans.

The Borrower shall repay to the Lenders on the Maturity Date the aggregate principal amount of all Loans outstanding on such date.

2.07Interest and Default Rate.

(a)Interest.   Subject to the provisions of Section 2.07(b), (i) each Eurodollar Rate Loan shall bear interest on the outstanding principal amount thereof for each Interest Period from the applicable borrowing date at a rate per annum equal to the Eurodollar Rate for such Interest Period  plus  the  Applicable  Rate  and  (ii) each  Base  Rate  Loan  shall  bear  interest  on  the outstanding principal amount thereof from the applicable borrowing date at a rate per annum equal to the Base Rate plus the Applicable Rate.

(b)Default Rate.

(i)If any amount of principal of any Loan is not paid when due (without regard to any applicable grace periods), whether at stated maturity, by acceleration or otherwise, such amount shall thereafter bear interest at a fluctuating interest rate per annum at all times equal to the Default Rate to the fullest extent permitted by applicable Laws.

(ii)If  any  amount  (other  than  principal  of  any  Loan)  payable  by  the Borrower under any Loan Document is not paid when due (without regard to any applicable grace periods), whether at stated maturity, by acceleration or otherwise, then upon the request of the Required Lenders such amount shall thereafter bear interest at a fluctuating interest rate per annum at all times equal to the Default Rate to the fullest extent permitted by applicable Laws.

(iii)Upon the request of the Required Lenders, while any Event of Default exists (including a payment default), all outstanding Obligations (including Letter of Credit Fees) shall accrue at a fluctuating interest rate per annum at all times equal to the Default Rate to the fullest extent permitted by applicable Laws.

(iv)Accrued and unpaid interest on past due amounts (including interest on past due interest) shall be due and payable upon demand.

(c)Interest Payments.  Interest on each Loan shall be due and payable in arrears on

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each Interest Payment Date applicable thereto and at such other times as may be specified herein. Interest hereunder shall be due and payable in accordance with the terms hereof before and after judgment, and before and after the commencement of any proceeding under any Debtor Relief Law.

2.08Fees.

(a)Commitment Fee.  The Borrower shall pay to the Administrative Agent, for the account of each Lender in accordance with its Applicable Percentage, a commitment fee in Dollars equal to 0.25% per annum times the actual daily amount by which the Facility exceeds the sum of (i) Outstanding Amount of the Loans and (ii) the Outstanding Amount of L/C Obligations, subject to adjustment as provided in Section 2.14.  The commitment fee shall accrue at all times during the Availability Period, including at any time during which one or more of the conditions in Article IV is not met, and shall be due and payable quarterly in arrears on the last Business Day of each March, June, September and December, commencing with the first such date to occur after the Closing Date, and on the last day of the Availability Period.   The commitment fee shall be calculated quarterly in arrears.

(b)Other Fees.   The Borrower shall pay to the Administrative Agent for its own account fees in the amounts and at the times specified in the Fee Letter.  Such fees shall be fully earned when paid and shall not be refundable for any reason whatsoever.

2.09Computation of Interest and Fees.

All computations of interest for Base Rate Loans (including Base Rate Loans determined by reference to the Eurodollar Rate) shall be made on the basis of a year of 365 or 366 days, as the case may be, and actual days elapsed.  All other computations of fees and interest shall be made on the basis of a 360-day year and actual days elapsed (which results in more fees or interest, as applicable, being paid than if computed on the basis of a 365 day year).  Interest shall accrue on each Loan for the day on which the Loan is made, and shall not accrue on a Loan, or any portion thereof, for the day on which the Loan or such portion is paid, provided that any Loan that is repaid on the same day on which it is made shall,subject to Section 2.11(a), bear interest for one (1) day.  Each determination by the Administrative Agent of an interest rate or fee hereunder shall be conclusive and binding for all purposes, absent manifest error.

2.10Evidence of Debt.

(a)The Credit Extensions made by each Lender shall be evidenced by one or more accounts or records maintained by such Lender and by the Administrative Agent in the ordinary course of business. The accounts or records maintained by the Administrative Agent and each Lender shall be conclusive absent manifest error of the amount of the Credit Extensions made by the Lenders to the Borrower and the interest and payments thereon.  Any failure to so record or any error in doing so shall not, however, limit or otherwise affect the obligation of the Borrower hereunder to pay any amount owing with respect to the Obligations.  In the event of any conflict between the accounts and records maintained by any Lender and the accounts and records of the Administrative Agent in respect of such matters, the accounts and records of the Administrative Agent shall control in the absence of manifest error.   Upon the request of any Lender made through the Administrative Agent, the Borrower shall execute and deliver to such Lender (through the Administrative Agent) a Note, which shall evidence such Lender’s Loans in addition to such accounts or records.  Each Lender may attach schedules to its Note and endorse thereon the date, Type (if applicable), amount and maturity of its Loans and payments with respect thereto.

(b)In addition to the accounts and records referred to in Section 2.10(a), each Lender

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and the Administrative Agent shall maintain in accordance with its usual practice accounts or records evidencing the purchases and sales by such Lender of participations in Letters of Credit.  In the event of any conflict between the accounts and records maintained by the Administrative Agent and the accounts and records of any Lender in respect of such matters, the accounts and records of the Administrative Agent shall control in the absence of manifest error.

2.11Payments Generally; Administrative Agent’s Clawback.

(a)General.  All payments to be made by the Borrower shall be made free and clear of and without condition or deduction for any counterclaim, defense, recoupment or setoff. Except as otherwise expressly provided herein, all payments by the Borrower hereunder shall be made to the Administrative Agent, for the account of the respective Lenders to which such payment is owed, at the Administrative Agent’s Office in Dollars and in immediately available funds not later than 2:00 p.m. on the date specified herein.  The Administrative Agent will promptly distribute to each Lender its Applicable Percentage in respect of the relevant Facility (or other applicable share as provided herein) of such payment in like funds as received by wire transfer to such Lender’s Lending Office.  All payments received by the Administrative Agent after 2:00 p.m. shall be deemed received on the next succeeding Business Day and any applicable interest or fee shall continue to accrue.  Except as otherwise specifically provided for in this Agreement, if any payment to be made by the Borrower shall come due on a day other than a Business Day, payment shall be made on the next following Business Day, and such extension of time shall be reflected in computing interest or fees, as the case may be.   The Administrative Agent shall, and the Borrower hereby authorizes the Administrative Agent to, debit a deposit account of the Borrower or any of its Subsidiaries held with the Administrative Agent or any of its Affiliates and designated for such purpose by the Borrower or such Subsidiary in order to cause timely payment to be made to the Administrative Agent of all principal, interest and fees due hereunder or under any other Loan Document (subject to sufficient funds being available in its accounts for that purpose).

(b)(i)Funding by Lenders; Presumption by Administrative Agent.  Unless the Administrative Agent shall have received notice from a Lender prior to the proposed date of any Borrowing of Eurodollar Rate Loans (or, in the case of any Borrowing of Base Rate Loans, prior to 12:00 noon on the date of such Borrowing) that such Lender will not make available to the Administrative Agent such Lender’s share of such Borrowing, the Administrative Agent may assume that such Lender has made such share available on such date in accordance with Section 2.02 (or, in the case of a Borrowing of Base Rate Loans, that such Lender has made such share available in accordance with and at the time required by Section 2.02) and may, in reliance upon such assumption, make available to the Borrower a corresponding amount.  In such event, if a Lender has not in fact made its share of the applicable Borrowing available to the Administrative Agent, then the applicable Lender and the Borrower severally agree to pay to the Administrative Agent forthwith on demand such corresponding amount in immediately available funds with interest thereon, for each day from and including the date such amount is made available to the Borrower to but excluding the date of payment to the Administrative Agent, at (A) in the case of a payment to be made by such Lender, the greater of the Federal Funds Rate and a rate determined by the Administrative Agent in accordance with banking industry rules on interbank compensation, plus any administrative, processing or similar fees customarily charged by the Administrative Agent in connection with the foregoing, and (B) in the case of a payment to be made by the Borrower, the interest rate applicable to Base Rate Loans.  If the Borrower and such Lender shall pay such interest to the Administrative Agent for the same or an overlapping period, the Administrative Agent shall promptly remit to the Borrower the amount of such interest paid by the Borrower for such period.   If such Lender pays its share of the applicable Borrowing to the Administrative Agent, then the amount so paid shall constitute such Lender’s Loan included in such Borrowing.  Any payment by

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the Borrower shall be without prejudice to any claim the Borrower may have against a Lender that shall have failed to make such payment to the Administrative Agent.

(ii)Payments by Borrower; Presumptions by Administrative Agent.  Unless the Administrative Agent shall have received notice from the Borrower prior to the date on which any payment is due to the Administrative Agent for the account of the Lenders or the L/C Issuer hereunder that the Borrower will not make such payment, the Administrative Agent may assume that the Borrower has made such payment on such date in accordance herewith and may, in reliance upon such assumption, distribute to the Lenders or the L/C Issuer, as the case may be, the amount due.  In such event, if the Borrower has not in fact made such payment, then each of the Lenders or the L/C Issuer, as the case may be, severally agrees to repay to the Administrative Agent forthwith on demand the amount so distributed to such Lender or the L/C Issuer, in immediately available funds with interest thereon, for each day from and including the date such amount is distributed to it to but excluding the date of payment to the Administrative Agent, at the greater of the Federal Funds Rate and a rate determined by the Administrative Agent in accordance with banking industry rules on interbank compensation.

A notice of the Administrative Agent to any Lender or the Borrower with respect to any amount owing under this subsection (b) shall be conclusive, absent manifest error.

(c)Failure to Satisfy Conditions Precedent.  If any Lender makes available to the Administrative Agent funds for any Loan to be made by such Lender as provided in the foregoing provisions of this Article II, and such funds are not made available to the Borrower by the Administrative Agent because the conditions to the applicable Credit Extension set forth in Article IV are not satisfied or waived in accordance with the terms hereof, the Administrative Agent shall return such funds (in like funds as received from such Lender) to such Lender, without interest.

(d)Obligations of Lenders Several.   The obligations of the Lenders hereunder to make Loans, to fund participations in Letters of Credit and to make payments pursuant to Section 11.04(c) are several and not joint.  The failure of any Lender to make any Loan, fund any such participation or to make any payment under Section 11.04(c) on any date required hereunder shall not relieve any other Lender of its corresponding obligation to do so on such date, and no Lender shall be responsible for the failure of any other Lender to so make its Loan, to purchase its participation or to make its payment under Section 11.04(c).

(e)Funding Source.   Nothing herein shall be deemed to obligate any Lender to obtain the funds for any Loan in any particular place or manner or to constitute a representation by any Lender that it has obtained or will obtain the funds for any Loan in any particular place or manner.

(f)Pro Rata Treatment.   Except to the extent otherwise provided herein:   (i) each Borrowing shall be made from the Lenders, each payment of fees under Section 2.03 and Section 2.08 shall be made for account of the Lenders or the L/C Issuer, as applicable, and each termination or reduction of the amount of the Commitments shall be applied to the respective Commitments   of  the   Lenders,   pro   rata  according  to   the   amounts   of  their  respective Commitments; (ii) each Borrowing shall be allocated pro rata among the Lenders according to the amounts of their respective Commitments (in the case of the making of Loans) or their respective Loans that are to be included in such Borrowing (in the case of conversions and continuations of Loans); (iii) each payment or prepayment of principal of Loans by the Borrower shall be made for account of the Lenders pro rata in accordance with the respective unpaid principal amounts of the Loans held by them; and (iv) each payment of interest on Loans by the Borrower shall be made for account of the Lenders pro rata in accordance with the amounts of interest on such Loans then due and payable to

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the Lenders.

2.12Sharing of Payments by Lenders.

If  any  Lender  shall,  by  exercising  any  right  of  setoff  or  counterclaim or  otherwise,  obtain payment in respect of (a) Obligations in respect of any of the Facilities due and payable to such Lender hereunder and under the other Loan Documents at such time in excess of its ratable share (according to the proportion of (i) the amount of such Obligations due and payable to such Lender at such time to (ii) the aggregate amount of the Obligations in respect of the Facilities due and payable to all Lenders hereunder and under the other Loan Documents at such time) of payments on account of the Obligations in respect of the Facilities due and payable to all Lenders hereunder and under the other Loan Documents at such time obtained by all the Lenders at such time or (b) Obligations in respect of any of the Facilities owing (but not due and payable) to such Lender hereunder and under the other Loan Documents at such time in excess of its ratable share (according to the proportion of (i) the amount of such Obligations owing  (but  not  due  and  payable)  to  such  Lender  at  such  time  to  (ii) the  aggregate  amount  of  the Obligations in respect of the Facilities owing (but not due and payable) to all Lenders hereunder and under the other Loan Documents at such time) of payments on account of the Obligations in respect of the Facilities owing (but not due and payable) to all Lenders hereunder and under the other Loan Documents at such time obtained by all of the Lenders at such time, then, in each case under clauses (a) and (b) above, the Lender receiving such greater proportion shall (A) notify the Administrative Agent of such fact, and (B) purchase (for cash at face value) participations in the Loans and subparticipations in L/C Obligations of the other Lenders, or make such other adjustments as shall be equitable, so that the benefit of all such payments shall be shared by the Lenders ratably in accordance with the aggregate amount of Obligations in respect of the Facilities then due and payable to the Lenders or owing (but not due and payable) to the Lenders, as the case may be, provided that:

(1)if  any  such  participations  or  subparticipations  are  purchased  and  all  or  any portion of the payment giving rise thereto is recovered, such participations or subparticipations shall be rescinded and the purchase price restored to the extent of such recovery, without interest; and

(2)the provisions of this Section shall not be construed to apply to (x) any payment made by or on behalf of the Borrower pursuant to and in accordance with the express terms of this Agreement (including the application of funds arising from the existence of a Defaulting Lender), (y) the application of Cash Collateral provided for in Section 2.13 or (z) any payment obtained by a Lender as consideration for the assignment of or sale of a participation in any of its Loans or subparticipations in L/C Obligations to any assignee or participant, other than an assignment to any Loan Party or any Affiliate thereof (as to which the provisions of this Section shall apply).

Each Loan Party consents to the foregoing and agrees, to the extent it may effectively do so under applicable Law, that any Lender acquiring a participation pursuant to the foregoing arrangements may exercise against such Loan Party rights of setoff and counterclaim with respect to such participation as fully as if such Lender were a direct creditor of such Loan Party in the amount of such participation.

2.13Cash Collateral.

(a)Certain Credit Support Events.   If (i) the L/C Issuer has honored any full or partial drawing request under any Letter of Credit and such drawing has resulted in an L/C Borrowing, (ii) as of the Letter of Credit Expiration Date, any L/C Obligation for any reason remains outstanding, (iii) the Borrower shall be required to provide Cash Collateral pursuant to Section  2.04  or  8.02(c),  or  (iv) there  shall  exist  a  Defaulting  Lender,  the  Borrower  shall immediately (in the case of clause (iii) above) or within one (1) Business Day (in all other cases) following any request by the Administrative Agent or the L/C Issuer, provide Cash Collateral in an amount not less than the

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applicable Minimum Collateral Amount (determined in the case of Cash Collateral provided pursuant to clause (iv) above, after giving effect to Section 2.14(a)(iv) and any Cash Collateral provided by the Defaulting Lender).

(b)Grant of Security Interest.  The Borrower, and to the extent provided by any Defaulting Lender, such Defaulting Lender, hereby grants to (and subjects to the control of) the Administrative  Agent,  for  the  benefit  of  the  Administrative  Agent,  the  L/C  Issuer  and  the Lenders, and agrees to maintain, a first priority security interest in all such cash, deposit accounts and all balances therein, and all other property so provided as collateral pursuant hereto, and in all proceeds of the foregoing, all as security for the obligations to which such Cash Collateral may be applied pursuant to Section 2.13(c).  If at any time the Administrative Agent determines that Cash Collateral is subject to any right or claim of any Person other than the Administrative Agent or the L/C Issuer as herein provided, or that the total amount of such Cash Collateral is less than the Minimum Collateral Amount, the Borrower will, promptly upon demand by the Administrative Agent, pay or provide to the Administrative Agent additional Cash Collateral in an amount sufficient to eliminate such deficiency. All Cash Collateral (other than credit support not constituting funds subject to deposit) shall be maintained in one or more blocked, non-interest bearing deposit accounts at Cadence Bank.   The Borrower shall pay on demand therefor from time to time all customary account opening, activity and other administrative fees and charges in connection with the maintenance and disbursement of Cash Collateral.

(c)Application.     Notwithstanding  anything  to  the  contrary  contained  in  this Agreement, Cash Collateral provided under any of this Section 2.13 or Sections 2.03, 2.04, 2.14 or 8.02 in respect of Letters of Credit shall be held and applied to the satisfaction of the specific L/C Obligations, obligations to fund participations therein (including, as to Cash Collateral provided by a Lender that is a Defaulting Lender, any interest accrued on such obligation) and other obligations for which the Cash Collateral was so provided, prior to any other application of such property as may be provided for herein.

(d)Release.  Cash Collateral (or the appropriate portion thereof) provided to reduce Fronting Exposure or to secure other obligations shall be released promptly following (i) the elimination of the applicable Fronting Exposure or other obligations giving rise thereto (including by the termination of Defaulting Lender status of the applicable Lender (or, as appropriate, its assignee  following  compliance  with  Section 11.06(b)(vi)))  or  (ii) the  determination  by  the Administrative Agent and the L/C Issuer that there exists excess Cash Collateral; provided, however, (A) any such release shall be without prejudice to, and any disbursement or other transfer of Cash Collateral shall be and remain subject to, any other Lien conferred under the Loan Documents and the other applicable provisions of the Loan Documents, and (B) the Person providing Cash Collateral and the L/C Issuer may agree that Cash Collateral shall not be released but instead held to support future anticipated Fronting Exposure or other obligations.

2.14Defaulting Lenders.

(a)Adjustments.     Notwithstanding  anything  to  the  contrary  contained  in  this Agreement, if any Lender becomes a Defaulting Lender, then, until such time as that Lender is no longer a Defaulting Lender, to the extent permitted by applicable Law:

(i)Waivers and Amendments.  Such Defaulting Lender’s right to approve or disapprove any amendment, waiver or consent with respect to this Agreement shall be restricted as set forth in the definition of “Required Lenders” and Section 11.01.

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(ii)Defaulting Lender Waterfall.  Any payment of principal, interest, fees or other amounts received by the Administrative Agent for the account of such Defaulting Lender (whether voluntary or mandatory, at maturity, pursuant to Article VIII or otherwise) or received by the Administrative Agent from a Defaulting Lender pursuant to Section 11.08 shall be applied at such time or times as may be determined by the Administrative Agent as follows:  first, to the payment of any amounts owing by such Defaulting Lender to the Administrative Agent hereunder; second, to the payment on a pro rata basis of any amounts owing by such Defaulting Lender to the L/C Issuer hereunder; third, to Cash Collateralize the L/C Issuer’s Fronting Exposure with respect to such Defaulting Lender in accordance with Section 2.13; fourth, as the Borrower may request (so long as no Default or Event of Default exists), to the funding of any Loan in respect of which such Defaulting Lender has failed to fund its portion thereof as required by this Agreement, as determined by the Administrative Agent; fifth, if so determined by the Administrative Agent and the Borrower, to be held in a deposit account and released pro rata in order to (A) satisfy such Defaulting Lender’s potential future funding obligations with respect to Loans under this Agreement and (B) Cash Collateralize the L/C  Issuer’s  future  Fronting  Exposure  with  respect  to  such  Defaulting  Lender  with respect to future Letters of Credit issued under this Agreement, in accordance with Section 2.13; sixth, to the payment of any amounts owing to the Lenders or the L/C Issuer as a result of any judgment of a court of competent jurisdiction obtained by any Lender or the L/C Issuer against such Defaulting Lender as a result of such Defaulting Lender’s breach of its obligations under this Agreement; seventh, so long as no Default or Event of Default exists, to the payment of any amounts owing to the Borrower as a result of any judgment of a court of competent jurisdiction obtained by the Borrower against such Defaulting Lender as a result of such Defaulting Lender’s breach of its obligations under this Agreement; and eighth, to such Defaulting Lender or as otherwise as may be required under the Loan Documents in connection with any Lien conferred thereunder or directed by a court of competent jurisdiction; provided that if (1) such payment is a payment of the principal amount of any Loans or L/C Borrowings in respect of which such Defaulting Lender has not fully funded its appropriate share, and (2) such Loans  were  made  or  the  related  Letters  of  Credit  were  issued  at  a  time  when  the conditions set forth in Section 4.02 were satisfied or waived, such payment shall be applied solely to pay the Loans of, and L/C Obligations owed to, all Non-Defaulting Lenders on a pro rata basis prior to being applied to the payment of any Loans of, or L/C Obligations owed to, such Defaulting Lender until such time as all Loans and funded and unfunded participations in L/C Obligations are held by the Lenders pro rata in accordance with the Commitments hereunder without giving effect to Section 2.14(a)(v).   Any payments, prepayments or other amounts paid or payable to a Defaulting Lender that are applied (or held) to pay amounts owed by a Defaulting Lender or to post Cash Collateral pursuant to this Section 2.14(a)(ii) shall be deemed paid to and redirected by such Defaulting Lender, and each Lender irrevocably consents hereto.

(iii)Certain Fees.

(A)No Defaulting Lender shall be entitled to receive any fee payable under Section 2.08(a) for any period during which that Lender is a Defaulting Lender (and the Borrower shall not be required to pay any such fee that otherwise would have been required to have been paid to that Defaulting Lender).

(B)Each Defaulting Lender shall be entitled to receive Letter of Credit Fees for any period during which that Lender is a Defaulting Lender only to the extent  allocable to its  Applicable Percentage  of the stated  amount of Letters of

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Credit for which it has provided Cash Collateral pursuant to Section2.13.

(C)With respect to any Letter of Credit Fee not required to be paid to any Defaulting Lender pursuant to clause (B) above, the Borrower shall (1) pay  to  each  Non-Defaulting  Lender  that  portion  of  any  such  fee  otherwise payable to such Defaulting Lender with respect to such Defaulting Lender’s participation in L/C Obligations that has been reallocated to such Non-Defaulting Lender pursuant to clause (iv) below, (2) pay to the L/C Issuer the amount of any such fee otherwise payable to such Defaulting Lender to the extent allocable to such L/C Issuer’s Fronting Exposure to such Defaulting Lender, and (3) not be required to pay the remaining amount of any such fee.

(iv)Reallocation of Applicable Percentages to Reduce Fronting Exposure. All or any part of such Defaulting Lender’s participation in L/C Obligations shall be reallocated among the Non-Defaulting Lenders in accordance with their respective Applicable Percentages (calculated without regard to such Defaulting Lender’s Commitment) but only to the extent that such reallocation does not cause the Total Credit Exposure of any Non-Defaulting Lender to exceed such Non-Defaulting Lender’s Commitment.  No reallocation hereunder shall constitute a waiver or release of any claim of any party hereunder against a Defaulting Lender arising from that Lender having become a Defaulting Lender, including any claim of a Non-Defaulting Lender as a result of such Non-Defaulting Lender’s increased exposure following such reallocation.

(v)Cash Collateral.   If the reallocation described in clause (a)(iv) above cannot, or can only partially, be effected, the Borrower shall, without prejudice to any right or remedy available to it hereunder or under applicable Law, Cash Collateralize the L/C Issuer’s Fronting Exposure in accordance with the procedures set forth in Section 2.13.

(b)Defaulting Lender Cure.  If the Borrower, the Administrative Agent and the L/C Issuer agree in writing that a Lender is no longer a Defaulting Lender, the Administrative Agent will so notify the parties hereto, whereupon as of the effective date specified in such notice and subject to any conditions set forth therein (which may include arrangements with respect to any Cash Collateral), that Lender will, to the extent applicable, purchase at par that portion of outstanding Loans of the other Lenders or take such other actions as the Administrative Agent may determine to be necessary to cause the Loans and funded and unfunded participations in Letters of Credit to be held on a pro rata basis by the Lenders in accordance with their Applicable Percentages (without giving effect to Section 2.14(a)(iv)), whereupon such Lender will cease to be a Defaulting Lender; provided that no adjustments will be made retroactively with respect to fees accrued or payments made by or on behalf of the Borrower while that Lender was a Defaulting Lender; and provided, further, that except to the extent otherwise expressly agreed by the affected parties, no change hereunder from Defaulting Lender to Lender will constitute a waiver or release of any claim of any party hereunder arising from that Lender’s having been a Defaulting Lender.

2.15Increase in Commitments.

(a)The Borrower may, on a one time basis, upon prior written notice by the Borrower to the Administrative Agent increase the Commitments (but not the Letter of Credit Sublimit) with additional Commitments from any existing Lender or new Commitments from any other Person selected by the Borrower and acceptable to the Administrative Agent and the L/C Issuer; provided that:

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(i)such increase shall be in an amount not exceeding $5,000,000;

(ii)no Default or Event of Default shall exist and be continuing at the time of such increase;

(iii)no existing Lender shall be under any obligation to increase its Commitment and any such decision whether to increase its Commitment shall be in such Lender’s sole and absolute discretion;

(iv)(A)  any  new  Lender  shall  join  this  Agreement  by  executing  such  joinder documents required by the Administrative Agent and/or (B) any existing Lender electing to increase its Commitment shall have executed a commitment agreement satisfactory to the Administrative Agent;

(v)as a condition precedent to such increase, the Borrower shall deliver to the Administrative Agent a certificate of each Loan Party dated as of the date of such increase (in sufficient copies for each Lender) signed by a Responsible Officer of such Loan Party (A) certifying and attaching the resolutions adopted by such Loan Party approving or consenting to such increase, and (B) in the case of the Borrower, certifying that, before and after giving effect to such increase, (x) the representations and warranties contained in Article V and the other Loan Documents are true and correct in all material respects (and in all respects if any such representation or warranty is already qualified by materiality or reference to Material Adverse Effect) on and as of the date of such increase, except to the extent that such representations and warranties specifically refer to an earlier date, in which case they are true and correct in all material respects (and in all respects if any such representation or warranty is already qualified by materiality or reference to Material Adverse Effect) as of such earlier date, and except that for purposes of this Section 2.15, the representations and warranties contained in subsections (a) and (b) of Section 5.05 shall be deemed to refer to the most recent statements furnished pursuant to clauses (a) and (b), respectively, of Section 6.01, and (y) no Default or Event of Default exists; and

(b)Schedule 1.01(b) shall be deemed revised to include any increase in the Commitments pursuant to this Section 2.15 and to include thereon any Person that becomes a Lender pursuant to this Section 2.15.

(c)The Borrower shall prepay any Loans owing by it and outstanding on the date of any such increase (and pay any additional amounts required pursuant to Section 3.05) to the extent necessary to  keep  the  outstanding  Loans  ratable  with  any  revised  Commitments  arising  from  any  nonratable increase in the Commitments under this Section.

ARTICLE III

TAXES, YIELD PROTECTION AND ILLEGALITY

3.01Taxes.

(a)Payments  Free  of  Taxes;  Obligation  to  Withhold;  Payments  on  Account  of Taxes.

(i)Any and all payments by or on account of any obligation of any Loan Party under any Loan Document shall be made without deduction or withholding for any Taxes,

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except as required by applicable Laws.  If any applicable Laws (as determined in the good faith discretion of the Administrative Agent) require the deduction or withholding of any Tax from any such payment by the Administrative Agent or a Loan Party, then the Administrative Agent or such Loan Party shall be entitled to make such deduction or withholding, upon the basis of the information and documentation to be delivered pursuant to subsection (e) below.

(ii)If any Loan Party or the Administrative Agent shall be required by the Code to withhold or deduct any Taxes, including both United States federal backup withholding  and  withholding  taxes,  from  any  payment,  then  (A) the  Administrative Agent shall withhold or make such deductions as are determined by the Administrative Agent to be required based upon the information and documentation it has received pursuant to subsection (e) below, (B) the Administrative Agent shall timely pay the full amount withheld or deducted to the relevant Governmental Authority in accordance with the Code, and (C) to the extent that the withholding or deduction is made on account of Indemnified Taxes, the sum payable by the applicable Loan Party shall be increased as necessary so that after any required withholding or the making of all required deductions (including deductions applicable to additional sums payable under this Section 3.01) the applicable Recipient receives an amount equal to the sum it would have received had no such withholding or deduction been made.

(iii)If any Loan Party or the Administrative Agent shall be required by any applicable Laws other than the Code to withhold or deduct any Taxes from any payment, then (A) such Loan Party or the Administrative Agent, as required by such Laws, shall withhold or make such deductions as are determined by it to be required based upon the information and documentation it has received pursuant to subsection (e) below, (B) such Loan Party or the Administrative Agent, to the extent required by such Laws, shall timely pay the full amount withheld or deducted to the relevant Governmental Authority in accordance with such Laws, and (C) to the extent that the withholding or deduction is made on account of Indemnified Taxes, the sum payable by the applicable Loan Party shall be increased as necessary so that after any required withholding or the making of all required deductions (including deductions applicable to additional sums payable under this Section 3.01) the applicable Recipient receives an amount equal to the sum it would have received had no such withholding or deduction been made.

(b)Payment of Other Taxes by the Loan Parties.  Without limiting the provisions of subsection (a) above, the Loan Parties shall timely pay to the relevant Governmental Authority in accordance with applicable law, or at the option of the Administrative Agent timely reimburse it for the payment of, any Other Taxes.

(c)Tax Indemnifications.

(i)Each of the Loan Parties shall, and does hereby, jointly and severally indemnify each Recipient, and shall make payment in respect thereof within ten (10) days after demand therefor, for the full amount of any Indemnified Taxes (including Indemnified Taxes imposed or asserted on or attributable to amounts payable under this Section 3.01) payable or paid by such Recipient or required to be withheld or deducted from a payment to such Recipient, and any penalties, interest and reasonable expenses arising therefrom or with respect thereto, whether or not such Indemnified Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority.  A certificate as to the amount of such payment or liability delivered to the Borrower by a Lender or the L/C Issuer (with a

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copy to the Administrative Agent), or by the Administrative Agent on its own behalf or on behalf of a Lender or the L/C Issuer, shall be conclusive absent manifest error.  Each of the Loan Parties shall also, and does hereby, jointly and severally indemnify the Administrative Agent, and shall make payment in respect thereof within ten (10) days after demand therefor, for any amount which a Lender or the L/C Issuer for any reason fails to pay indefeasibly to the Administrative Agent as required pursuant to Section 3.01(c)(ii) below.

(ii)Each  Lender  and  the  L/C  Issuer  shall,  and  does  hereby,  severally indemnify and shall make payment in respect thereof within ten (10) days after demand therefor, (A) the Administrative Agent against any Indemnified Taxes attributable to such Lender or the L/C Issuer (but only to the extent that any Loan Party has not already indemnified the Administrative Agent for such Indemnified Taxes and without limiting the obligation of the Loan Parties to do so), (B) the Administrative Agent and the Loan Parties, as applicable, against any Taxes attributable to such Lender’s failure to comply with  the  provisions  of  Section 11.06(d)  relating  to  the  maintenance  of  a  Participant Register and (C) the Administrative Agent and the Loan Parties, as applicable, against any Excluded Taxes attributable to such Lender or the L/C Issuer, in each case, that are payable or paid by the Administrative Agent or a Loan Party in connection with any Loan Document,  and  any  reasonable  expenses  arising  therefrom  or  with  respect  thereto, whether or not such Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority.  A certificate as to the amount of such payment or liability delivered to any Lender by the Administrative Agent shall be conclusive absent manifest error.  Each Lender and the L/C Issuer hereby authorizes the Administrative Agent to set off and apply any and all amounts at any time owing to such Lender or the L/C Issuer, as the case may be, under this Agreement or any other Loan Document against any amount due to the Administrative Agent under this clause (ii).

(d)Evidence of Payments.  As soon as practicable after any payment of Taxes by any Loan Party to a Governmental Authority, as provided in this Section 3.01, the Borrower shall deliver to the Administrative Agent the original or a certified copy of a receipt issued by such Governmental Authority evidencing such payment, a copy of any return reporting such payment or other evidence of such payment reasonably satisfactory to the Administrative Agent.

(e)Status of Lenders; Tax Documentation.

(i)Any  Lender  that  is  entitled  to  an  exemption  from  or  reduction  of withholding Tax with respect to payments made under any Loan Document shall deliver to the Borrower and the Administrative Agent, at the time or times reasonably requested by the Borrower or the Administrative Agent, such properly completed and executed documentation reasonably requested by the Borrower or the Administrative Agent as will permit  such  payments  to  be  made  without  withholding  or  at  a  reduced  rate  of withholding.  In addition, any Lender, if reasonably requested by the Borrower or the Administrative Agent, shall deliver such other documentation prescribed by applicable Law or reasonably requested by the Borrower or the Administrative Agent as will enable the Borrower or the Administrative Agent to determine whether or not such Lender is subject to backup withholding or information reporting requirements.  Notwithstanding anything to the contrary in the preceding two sentences, the completion, execution and submission of such documentation (other than such documentation set forth in Section 3.01(e)(ii)(A),  (ii)(B)  and  (ii)(D)  below)  shall  not  be  required  if  in  the  Lender’s reasonable  judgment  such  completion,  execution  or  submission  would  subject  such Lender to any material unreimbursed cost or expense or would materially prejudice the legal or

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commercial position of such Lender.

(ii)Without limiting the generality of the foregoing, in the event that the Borrower is a U.S. Person,

(A)any Lender that is a U.S. Person shall deliver to the Borrower and the Administrative Agent on or prior to the date on which such Lender becomes a Lender under this Agreement (and from time to time thereafter upon the reasonable request of the Borrower or the Administrative Agent), executed copies of IRS Form W-9 certifying that such Lender is exempt from U.S. federal backup withholding tax;

(B)any Foreign Lender shall, to the extent it is legally entitled to do so, deliver to the Borrower and the Administrative Agent (in such number of copies as shall be requested by the recipient) on or prior to the date on which such Foreign Lender becomes a Lender under this Agreement (and from time to time thereafter upon the reasonable request of the Borrower or the Administrative Agent), whichever of the following is applicable:

(1)in the case of a Foreign Lender claiming the benefits of an income tax treaty to which the United States is a party (x) with respect to payments of interest under any Loan Document, executed copies of IRS Form W-8BEN-E (or W-8BEN, as applicable) establishing an exemption from, or reduction of, U.S. federal withholding Tax pursuant to the “interest” article of such tax treaty and (y) with respect to any other applicable payments under any Loan Document, IRS Form W-8BEN-E (or W-8BEN, as applicable)  establishing an exemption from, or reduction of, U.S. federal withholding Tax pursuant to the “business profits” or “other income” article of such tax treaty;

(2)executed originals of IRS Form W-8ECI;

(3)in the case of a Foreign Lender claiming the benefits of the exemption for portfolio interest under Section 881(c) of the Code, (x) a certificate substantially in the form of Exhibit G-1 to the effect that such Foreign Lender is not a “bank” within the meaning of Section 881(c)(3)(A) of the Code, a “10 percent shareholder” of the Borrower within the meaning of Section 881(c)(3)(B) of the Code, or a “controlled foreign corporation” described in Section 881(c)(3)(C) of the Code (a “U.S. Tax Compliance Certificate”) and (y) executed copies of IRS Form W-8BEN-E (or W-8BEN, as applicable); or

(4)to  the  extent  a  Foreign  Lender  is  not  the  beneficial owner, executed copies of IRS Form W-8IMY, accompanied by IRS Form W-8ECI, IRS Form W-8BEN-E (or W-8BEN, as applicable), a U.S. Tax Compliance Certificate substantially in the form of Exhibit G-2 or Exhibit G-3, IRS Form W-9, and/or other certification documents from each beneficial owner, as applicable; provided that if the Foreign Lender is a partnership and one or more direct or indirect partners of such Foreign Lender are claiming the portfolio interest exemption, such Foreign Lender may provide a U.S. Tax Compliance Certificate substantially in the form of

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Exhibit G-4 on behalf of each such direct and indirect partner;

(C)any Foreign Lender shall, to the extent it is legally entitled to do so, deliver to the Borrower and the Administrative Agent (in such number of copies as shall be requested by the recipient) on or prior to the date on which such Foreign Lender becomes a Lender under this Agreement (and from time to time thereafter upon the reasonable request of the Borrower or the Administrative Agent), executed copies (or originals, as required) of any other form prescribed by applicable Law as a basis for claiming exemption from or a reduction in U.S. federal withholding Tax, duly completed, together with such supplementary documentation as may be prescribed by applicable Law to permit the Borrower or the Administrative Agent to determine the withholding or deduction required to be made; and

(D)if a payment made to a Lender under any Loan Document would be subject to U.S. federal withholding Tax imposed by FATCA if such Lender were to fail to comply with the applicable reporting requirements of FATCA (including  those  contained  in  Section  1471(b)  or 1472(b)  of  the  Code,  as applicable), such Lender shall deliver to the Borrower and the Administrative Agent at the time or times prescribed by law and at such time or times reasonably requested by the Borrower or the Administrative Agent such documentation prescribed    by    applicable    Law    (including    as    prescribed    by    Section 1471(b)(3)(C)(i)  of  the  Code)  and  such  additional documentation  reasonably requested by the Borrower or the Administrative Agent as may be necessary for the Borrower and the Administrative Agent to comply with their obligations under  FATCA  and  to  determine  that  such  Lender  has  complied  with  such Lender’s obligations under FATCA or to determine the amount to deduct and withhold from such payment.  Solely for purposes of this clause (D), “FATCA” shall include any amendments made to FATCA after the date of this Agreement.

(iii)Each  Lender  agrees  that  if  any  form  or  certification  it  previously delivered pursuant to this Section 3.01 expires or becomes obsolete or inaccurate in any respect, it shall update such form or certification or promptly notify the Borrower and the Administrative Agent in writing of its legal inability to do so.

(f)Treatment of Certain Refunds.  Unless required by applicable Laws, at no time shall the Administrative Agent have any obligation to file for or otherwise pursue on behalf of a Lender or the L/C Issuer, or have any obligation to pay to any Lender or the L/C Issuer, any refund of Taxes withheld or deducted from funds paid for the account of such Lender or the L/C Issuer, as the case may be.  If any Recipient determines, in its sole discretion exercised in good faith, that it has received a refund of any Taxes as to which it has been indemnified by any Loan Party or with respect to which any Loan Party has paid additional amounts pursuant to this Section 3.01, it shall pay to such Loan Party an amount equal to such refund (but only to the extent of indemnity payments made, or additional amounts paid, by such Loan Party under this Section 3.01 with respect to the Taxes giving rise to such refund), net of all out-of-pocket expenses (including Taxes) incurred by such Recipient, as the case may be, and without interest (other than any interest paid by the relevant Governmental Authority with respect to such refund), provided that each Loan Party, upon the request of the Recipient, agrees to repay the amount paid over to such Loan Party (plus any penalties, interest or other charges imposed by the relevant Governmental Authority) to the Recipient in the event the Recipient is required to repay such refund to such Governmental Authority.   Notwithstanding anything to the contrary in this subsection, in no event will the applicable Recipient be required to pay any amount to such Loan Party pursuant to this subsection

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the payment of which would place the Recipient in a less favorable net after-Tax position than such Recipient would have been in if the Tax subject to indemnification and giving rise to such refund had not been deducted, withheld or otherwise imposed and the indemnification payments or additional amounts with respect to such Tax had never been paid.   This subsection shall not be construed to require any Recipient to make available its tax returns (or any other information relating to its taxes that it deems confidential) to any Loan Party or any other Person.

(g)Survival.   Each party’s obligations under this Section 3.01 shall survive the resignation or replacement of the Administrative Agent or any assignment of rights by, or the replacement of, a Lender or the L/C Issuer, the termination of the Commitments and the repayment, satisfaction or discharge of all other Obligations.

3.02Illegality and Designated Lenders.

If any Lender determines that any Law has made it unlawful, or that any Governmental Authority has asserted that it is unlawful, for any Lender or its Lending Office to perform any of its obligations hereunder or to make, maintain or fund or charge interest with respect to any Credit Extension or to determine or charge interest rates based upon the Eurodollar Rate, or any Governmental Authority has imposed material restrictions on the authority of such Lender to purchase or sell, or to take deposits of, Dollars in the London interbank market, then, on notice thereof by such Lender to the Borrower through the Administrative Agent, (a) any obligation of such Lender to issue, make, maintain, fund or charge interest with respect to any such Credit Extension or continue Eurodollar Rate Loans or to convert Base Rate Loans to Eurodollar Rate Loans shall be suspended, and (b) if such notice asserts the illegality of such Lender making or maintaining Base Rate Loans the interest rate on which is determined by reference to the Eurodollar Rate component of the Base Rate, the interest rate on which Base Rate Loans of such Lender shall, if necessary to avoid such illegality, be determined by the Administrative Agent without reference to the Eurodollar Rate component of the Base Rate, in each case until such Lender notifies the Administrative Agent and the Borrower that the circumstances giving rise to such determination no longer exist.  Upon receipt of such notice, (i) the Borrower shall, upon demand from such Lender (with a copy to the Administrative Agent), prepay or, if applicable, convert all Eurodollar Rate Loans of such Lender to Base Rate Loans (the interest rate on which Base Rate Loans of such Lender shall, if necessary to avoid such illegality, be determined by the Administrative Agent without reference to the Eurodollar Rate component of the Base Rate), either on the last day of the Interest Period therefor, if such Lender may lawfully continue to maintain such Eurodollar Rate Loans to such day, or immediately, if such Lender may not lawfully continue to maintain such Eurodollar Rate Loans and (ii) if such notice asserts the illegality of such Lender determining or charging interest rates based upon the Eurodollar Rate, the Administrative Agent shall during the period of such suspension compute the Base Rate applicable to such Lender without reference to the Eurodollar Rate component thereof until the Administrative Agent is advised in writing by such Lender that it is no longer illegal for such Lender to determine or charge interest rates based upon the Eurodollar Rate.  Upon any such prepayment or conversion, the Borrower shall also pay accrued interest on the amount so prepaid or converted.

3.03Inability to Determine Rates.

(a)If in connection with any request for a Eurodollar Rate Loan or a conversion to or continuation thereof, (i) the Administrative Agent determines that (A)  Dollar deposits are not being offered to banks in the London interbank eurodollar market for the applicable amount and Interest Period of such Eurodollar Rate Loan, or (B) adequate and reasonable means do not exist for determining the Eurodollar Rate for any requested Interest Period with respect to a proposed Eurodollar Rate Loan or in connection with an existing or proposed Base Rate Loan (in each case with respect to clause (i), “Impacted Loans”), or (ii) the Administrative Agent or the Required

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Lenders determine that for any reason the Eurodollar Rate for any requested Interest Period with respect to a proposed Eurodollar Rate Loan does not adequately and fairly reflect the cost to such Lenders of funding such Loan, the Administrative Agent will promptly so notify the Borrower and each Lender.  Thereafter, (x) the obligation of the Lenders to make or maintain Eurodollar Rate Loans shall be suspended (to the extent of the affected Eurodollar Rate Loans or Interest Periods), and (y) in the event of a determination described in the preceding sentence with respect to the Eurodollar Rate component of the Base Rate, the utilization of the Eurodollar Rate component in determining the Base Rate shall be suspended, in each case until the Administrative Agent (upon the instruction of the Required Lenders) revokes such notice.  Upon receipt of such notice, the Borrower may revoke any pending request for a Borrowing of, conversion to or continuation of Eurodollar Rate Loans (to the extent of the affected Eurodollar Rate Loans or Interest Periods) or, failing that, will be deemed to have converted such request into a request for a Borrowing of Base Rate Loans in the amount specified therein.

(b)Notwithstanding the foregoing, if the Administrative Agent has made the determination described in clause (a)(i) of this Section, the Administrative Agent in consultation with the Borrower and the Required Lenders may establish an alternative interest rate for the Impacted Loans, in which case, such alternative rate of interest shall apply with respect to the Impacted Loans until (1) the Administrative Agent revokes the notice delivered with respect to the Impacted Loans under clause (a)(i) of this Section, (2) the Administrative Agent or the Required Lenders notify the Administrative Agent and the Borrower that such alternative interest rate does not adequately and fairly reflect the cost to the Lenders of funding the Impacted Loans, or (3) any Lender determines that any Law has made it unlawful, or that any Governmental Authority has asserted that it is unlawful, for such Lender or its applicable Lending Office to make, maintain or fund Loans whose interest is determined by reference to such alternative rate of interest or to determine or charge interest rates based upon such rate or any Governmental Authority has imposed material restrictions on the authority of such Lender to do any of the foregoing and provides the Administrative Agent and the Borrower written notice thereof.

3.04Increased Costs; Reserves on Eurodollar Rate Loans.

(a)Increased Costs Generally.  If any Change in Law shall:

(i)impose,  modify  or  deem  applicable  any  reserve,  special  deposit, compulsory loan, insurance charge or similar requirement against assets of, deposits with or for the account of, or credit extended or participated in by, any Lender (except any reserve requirement contemplated by Section 3.04(e)) or the L/C Issuer;

(ii)subject any Recipient to any Taxes (other than (A) Indemnified Taxes, (B) Taxes described in clauses (b) through (d) of the definition of Excluded Taxes and (C) Connection Income Taxes) on its loans, loan principal, letters of credit, commitments, or  other  obligations,  or  its  deposits,  reserves,  other  liabilities  or  capital  attributable thereto; or

(iii)impose on any Lender or the L/C Issuer or the London interbank market any other condition, cost or expense affecting this Agreement or Eurodollar Rate Loans made by such Lender or any Letter of Credit or participation therein;

and the result of any of the foregoing shall be to increase the cost to such Lender of making, converting to, continuing or maintaining any Loan (or of maintaining its obligation to make any such Loan), or to increase the cost to such Lender or the L/C Issuer of

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participating in, issuing or maintaining any Letter of Credit (or of maintaining its obligation to participate in or to issue any Letter of Credit), or to reduce the amount of any sum received or receivable by such Lender or the L/C Issuer hereunder (whether of principal, interest or any other amount) then, upon request of such Lender or the L/C Issuer, the Borrower will pay to such Lender or the L/C Issuer, as the case may be, such additional amount or amounts as will compensate such Lender or the L/C Issuer, as the case may be, for such additional costs incurred or reduction suffered.

(b)Capital Requirements.   If any Lender or the L/C Issuer determines that any Change in Law affecting such Lender or the L/C Issuer or any Lending Office of such Lender or such Lender’s or the L/C Issuer’s holding company, if any, regarding capital or liquidity requirements has or would have the effect of reducing the rate of return on such Lender’s or the L/C Issuer’s capital or on the capital of such Lender’s or the L/C Issuer’s holding company, if any, as a consequence of this Agreement, the Commitments of such Lender or the Loans made by, or participations in Letters of Credit held by, such Lender, or the Letters of Credit issued by the L/C Issuer, to a level below that which such Lender or the L/C Issuer or such Lender’s or the L/C Issuer’s holding company could have achieved but for such Change in Law (taking into consideration such Lender’s or the L/C Issuer’s policies and the policies of such Lender’s or the L/C Issuer’s holding company with respect to capital adequacy), then from time to time the Borrower will pay to such Lender or the L/C Issuer, as the case may be, such additional amount or amounts as will compensate such Lender or the L/C Issuer or such Lender’s or the L/C Issuer’s holding company for any such reduction suffered.

(c)Certificates for Reimbursement.   A certificate of a Lender or the L/C Issuer setting forth the amount or amounts necessary to compensate such Lender or the L/C Issuer or its holding company, as the case may be, as specified in subsection (a) or (b) of this Section and delivered to the Borrower shall be conclusive absent manifest error.  The Borrower shall pay such Lender or the L/C Issuer, as the case may be, the amount shown as due on any such certificate within ten (10) days after receipt thereof; provided, that, a Lender or the L/C Issuer shall not be entitled to any compensation pursuant to subsection (a) or (b) of this Section to the extent such Lender or L/C Issuer, as the case may be, is not generally imposing such charges or requesting such compensation from other similarly situated borrowers under similar circumstances.

(d)Reserves on Eurodollar Rate Loans.  The Borrower shall pay to each Lender, (i) as long as such Lender shall be required to maintain reserves with respect to liabilities or assets consisting of or including eurocurrency funds or deposits (currently known as “Eurocurrency liabilities”), additional interest on the unpaid principal amount of each Eurodollar Rate Loan equal to the actual costs of such reserves allocated to such Loan by such Lender (as determined by such Lender in good faith, which determination shall be conclusive), and (ii) as long as such Lender shall be required to comply with any reserve ratio requirement or analogous requirement of any central banking or financial regulatory authority imposed in respect of the maintenance of the Commitments or the funding of the Loans, such additional costs (expressed as a percentage per annum and rounded upwards, if necessary, to the nearest five decimal places) equal to the actual costs allocated to such Commitment or Loan by such Lender (as determined by such Lender in good faith, which determination shall be conclusive), which in each case shall be due and payable on each date on which interest is payable on such Loan, provided the Borrower shall have received at least ten (10) days’ prior notice (with a copy to the Administrative Agent) of such additional interest or costs from such Lender.  If a Lender fails to give notice ten (10) days prior to the relevant Interest Payment Date, such additional interest shall be due and payable ten (10) days from receipt of such notice.

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(e)Delay in Requests.  Failure or delay on the part of any Lender or the L/C Issuer to demand compensation pursuant to the foregoing provisions of this Section 3.04 shall not constitute a waiver of such Lender’s or the L/C Issuer’s right to demand such compensation, provided that the Borrower shall not be required to compensate a Lender or the L/C Issuer pursuant to the foregoing provisions of this Section for any increased costs incurred or reductions suffered more than six (6) months prior to the date that such Lender or the L/C Issuer notifies the Borrower of the Change in Law giving rise to such increased costs or reductions and of such Lender’s or the L/C Issuer’s intention to claim compensation therefor (except that, if the Change in Law giving rise to such increased costs or reductions is retroactive, then the six (6) month period referred to above shall be extended to include the period of retroactive effect thereof).

3.05Compensation for Losses.

Upon demand of any Lender (with a copy to the Administrative Agent) from time to time, the Borrower shall promptly compensate such Lender for and hold such Lender harmless from any loss, cost or expense incurred by it as a result of:

(a)any continuation, conversion, payment or prepayment of any Loan other than a Base Rate Loan on a day other than the last day of the Interest Period for such Loan (whether voluntary, mandatory, automatic, by reason of acceleration, or otherwise);

(b)any failure by the Borrower (for a reason other than the failure of such Lender to make a Loan) to prepay, borrow, continue or convert any Loan other than a Base Rate Loan on the date or in the amount notified by the Borrower; or

(c)any assignment of a Eurodollar Rate Loan on a day other than the last day of the Interest Period therefor as a result of a request by the Borrower pursuant to Section 11.13;

including any loss of anticipated profits and any loss or expense arising from the liquidation or reemployment of funds obtained by it to maintain such Loan or from fees payable to terminate the deposits  from  which  such  funds  were  obtained.     The  Borrower  shall  also  pay  any  customary administrative fees charged by such Lender in connection with the foregoing.

For purposes of calculating amounts payable by the Borrower to the Lenders under this Section 3.05, each Lender shall be deemed to have funded each Eurodollar Rate Loan made by it at the Eurodollar Rate for such Loan by a matching deposit or other borrowing in the London interbank eurodollar market for a comparable amount and for a comparable period, whether or not such Eurodollar Rate Loan was in fact so funded.

3.06Mitigation Obligations; Replacement of Lenders.

(a)Designation of a Different Lending Office.  If any Lender requests compensation under Section 3.04, or requires the Borrower to pay any Indemnified Taxes or additional amounts to any Lender or any Governmental Authority for the account of any Lender or the L/C Issuer pursuant to Section 3.01, or if any Lender or the L/C Issuer gives a notice pursuant to Section 3.02, then at the request of the Borrower, such Lender or the L/C Issuer shall, as applicable, use reasonable efforts to designate a different Lending Office for funding or booking its Loans hereunder or to assign its rights and obligations hereunder to another of its offices, branches or affiliates, if, in the judgment of such Lender or the L/C Issuer, such designation or assignment (i) would eliminate or reduce amounts payable pursuant to Section 3.01 or 3.04, as the case may be, in the future, or

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eliminate the need for the notice pursuant to Section 3.02, as applicable, and (ii) in each case, would not subject such Lender or the L/C Issuer, as the case maybe, to any unreimbursed cost or expense and would not otherwise be disadvantageous to such Lender or the L/C Issuer, as the case may be.  The Borrower hereby agrees to pay all reasonable costs and expenses incurred by any Lender or the L/C Issuer in connection with any such designation or assignment.

(b)Replacement of Lenders.   If any Lender requests compensation under Section 3.04, or if the Borrower is required to pay any Indemnified Taxes or additional amounts to any Lender or any Governmental Authority for the account of any Lender pursuant to Section 3.01 and, in each case, such Lender has declined or is unable to designate a different lending office in accordance with Section 3.06(a), the Borrower may replace such Lender in accordance with Section 11.13.

3.07Survival.

All of the Loan Parties’ obligations under this Article III shall survive termination of the Aggregate Commitments, repayment of all other Obligations hereunder, resignation of the Administrative Agent and the Facility Termination Date.

ARTICLE IV

CONDITIONS PRECEDENT TO CREDIT EXTENSIONS

4.01Conditions of Initial Credit Extension.

The obligation of the L/C Issuer and each Lender to make its initial Credit Extensions hereunder is subject to satisfaction of the following conditions precedent:

(a)Execution of Credit Agreement; Loan Documents.   The Administrative Agent shall have received (i) counterparts of this Agreement, executed by a Responsible Officer of each Loan Party and a duly authorized officer of each Lender, (ii) for the account of each Lender requesting a Note, a Note executed by a Responsible Officer of the Borrower, (iii) counterparts of the Security Agreement and each other Collateral Document, executed by a Responsible Officer of the applicable Loan Parties and a duly authorized officer of each other Person party thereto, as applicable and (iv) counterparts of any other Loan Document, executed by a Responsible Officer of the applicable Loan Party and a duly authorized officer of each other Person party thereto.

(b)Officer’s Certificate.  The Administrative Agent shall have received an officer’s certificate dated the Closing Date, executed by a Responsible Officer of each Loan Party, certifying as to the Organization Documents of each Loan Party (which, to the extent filed with a Governmental Authority, shall be certified as of a recent date by such Governmental Authority), the resolutions of the governing body of each Loan Party, the good standing, existence or its equivalent of each Loan Party and of the incumbency (including specimen signatures) of the Responsible Officers of each Loan Party.

(c)Legal Opinions of Counsel.   The Administrative Agent shall have received an opinion or opinions of counsel for the Loan Parties, dated the Closing Date and addressed to the Administrative Agent and the Lenders, in form and substance acceptable to the Administrative Agent.

(d)Financial Statements.   The Administrative Agent and the Lenders shall have received copies of the financial statements referred to in Section 5.05.

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(e)Personal Property Collateral.  The Administrative Agent shall have received, in form and substance satisfactory to the Administrative Agent:

(i)(A) searches  of  UCC  filings  in  the  jurisdiction  of  incorporation  or formation, as applicable, of each Loan Party and each jurisdiction where any Collateral is located or where a filing would need to be made in order to perfect the Administrative Agent’s security interest in the Collateral, copies of the financing statements on file in such jurisdictions and evidence that no Liens exist other than Permitted Liens and (B) tax lien, judgment and bankruptcy searches;

(ii)searches of ownership of Intellectual Property in the appropriate governmental offices and such patent/trademark/copyright filings as requested by the Administrative Agent in order to perfect the Administrative Agent’s security interest in the Intellectual Property;

(iii)completed UCC financing statements for each appropriate jurisdiction as is necessary, in the Administrative Agent’s sole discretion, to perfect the Administrative Agent’s security interest in the Collateral; and

(iv)to  the  extent  required  to  be  delivered,  filed,  registered  or  recorded pursuant to the terms and conditions of the Collateral Documents, all instruments, documents and chattel paper in the possession of any of the Loan Parties, together with allonges or assignments as may be necessary or appropriate to create and perfect the Administrative Agent’s and the Lenders’ security interest in the Collateral.

(f)Liability,  Casualty,  Property,  Terrorism  and  Business  Interruption  Insurance. The Administrative Agent shall have received copies of insurance policies, declaration pages, certificates, and endorsements of insurance or insurance binders evidencing liability, casualty, property, terrorism and business interruption insurance meeting the requirements set forth herein or in the Collateral Documents.

(g)Financial Condition and Solvency Certificate.   The Administrative Agent shall have received a certificate signed by the chief financial officer of Holdings (or such other Responsible Officer of Holdings as is acceptable to the Administrative Agent) as of the Closing Date, certifying that, after giving effect to the initial Credit Extension under the Loan Documents and the other transactions contemplated hereby to occur on the Closing Date, (i) the Borrower is Solvent individually and Holdings and its Subsidiaries are Solvent on a consolidated basis and (ii) the conditions  specified in  Sections 4.01(i)  and (j) and Sections 4.02(a) and (b)  have  been satisfied as of the Closing Date.

(h)Loan Notice.  The Administrative Agent shall have received a Loan Notice with respect to the Loans to be made on the Closing Date.

(i)No Material Adverse Effect.  There shall not have occurred since December 31, 2015 any event or condition that has had or would reasonably be expected to have, either individually or in the aggregate, a Material Adverse Effect.

(j)No Litigation.  There shall not exist any action, suit, investigation or proceeding pending or, to the knowledge of the Loan Parties, threatened in any court or before an arbitrator or Governmental Authority that would reasonably be expected to have a Material Adverse Effect.

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(k)Existing Indebtedness of the Loan Parties.  All of the existing Indebtedness for borrowed money of Holdings and its Subsidiaries (other than Indebtedness permitted to exist pursuant to Section 7.02) shall be repaid in full and all security interests related thereto shall be terminated on or prior to the Closing Date.

(l)Fees  and  Expenses.    The  Administrative  Agent  and  the  Lenders  shall  have received all fees and expenses, if any, owing pursuant to Section 2.08.

(m)Attorney Costs.  Unless waived by the Administrative Agent, the Borrower shall have paid all reasonable fees, charges and disbursements of counsel to the Administrative Agent to the extent invoiced prior to or on the Closing Date, plus such additional amounts of such fees, charges and disbursements as shall constitute its reasonable estimate of such fees, charges and disbursements incurred or to be incurred by it through the closing proceedings (provided that such estimate shall not thereafter preclude a final settling of accounts between the Borrower and the Administrative Agent).

(n)Other  Documents.All  other  documents  provided  for  herein  or  which  the Administrative Agent or any other Lender may reasonably request or require.

(o)Additional Information.   Such additional information and materials which the Administrative Agent and/or any Lender shall reasonably request or require.

Without limiting the generality of the provisions of the last paragraph of Section 9.03, for purposes of determining compliance with the conditions specified in this Section, each Lender that has signed this Agreement shall be deemed to have consented to, approved or accepted or to be satisfied with, each document or other matter required thereunder to be consented to or approved by or acceptable or satisfactory to a Lender unless the Administrative Agent shall have received notice from such Lender prior to the proposed Closing Date specifying its objection thereto.

4.02Conditions to all Credit Extensions.

The obligation of each Lender and the L/C Issuer to honor any Request for Credit Extension (other than a Loan Notice requesting only a conversion of Loans to the other Type, or a continuation of Eurodollar Rate Loans) is subject to the following conditions precedent:

(a)Representations  and  Warranties.  The  representations  and  warranties  of  the Borrower and each other Loan Party contained in Article V or any other Loan Document, or which are contained in any document furnished at any time under or in connection herewith or therewith, shall (i) with respect to representations and warranties that contain a materiality qualification, be true and correct on and as of the date of such Credit Extension, and (ii) with respect to representations and warranties that do not contain a materiality qualification, be true and correct in all material respects on and as of the date of such Credit Extension, and except that for purposes of this Section 4.02, the representations and warranties contained in Sections 5.05(a) and (b) shall be deemed to refer to the most recent statements furnished pursuant to Sections 6.01(a) and (b), respectively.

(b)Default.  No  Default  shall  exist,  or  would  result  from  such  proposed  Credit Extension or from the application of the proceeds thereof.

(c)Request for Credit Extension. The Administrative Agent shall have received a Request for Credit Extension in accordance with the requirements hereof.

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(d)Consolidated Leverage Ratio.  The Borrower shall certify to the Administrative Agent and provide calculations in form and substance acceptable to the Administrative Agent demonstrating that the Consolidated Leverage Ratio (calculated on a Pro Forma Basis after giving effect to such Credit Extension) is at least 0.25 less than the maximum Consolidated Leverage Ratio permitted under Section 7.11(a) then in effect.

Each Request for Credit Extension (other than a Loan Notice requesting only a conversion of Loans to the other Type or a continuation of Eurodollar Rate Loans) submitted by the Borrower shall be deemed to be a representation and warranty that the conditions specified in Sections 4.02(a) and (b) have been satisfied on and as of the date of the applicable Credit Extension.

ARTICLE V

REPRESENTATIONS AND WARRANTIES

Each Loan Party represents and warrants to the Administrative Agent and the Lenders, as of the

date made or deemed made, that:

5.01Existence, Qualification and Power.

Each Loan Party and each of its Subsidiaries (a) is duly organized or formed, validly existing and, as applicable, in good standing under the Laws of the jurisdiction of its incorporation or organization, (b) has all requisite power and authority and all requisite governmental licenses, authorizations, consents and approvals to (i) own or lease its assets and carry on its business and (ii) execute, deliver and perform its obligations under the Loan Documents to which it is a party, and (c) is duly qualified and is licensed and, as applicable, in good standing under the Laws of each jurisdiction where its ownership, lease or operation of properties or the conduct of its business requires such qualification or license; except in each case referred to in clause (b)(i) or (c), to the extent that failure to do so could not reasonably be expected to have a Material Adverse Effect. The copy of the Organization Documents of each Loan Party provided to the Administrative Agent pursuant to the terms of this Agreement is a true and correct copy of each such document, each of which is valid and in full force and effect.

5.02Authorization; No Contravention.

The execution, delivery and performance by each Loan Party of each Loan Document to which such Person is or is to be a party have been duly authorized by all necessary corporate or other organizational  action,  and  do  not  and  will  not  (a) contravene  the  terms  of  any  of  such  Person’s Organization Documents; (b) conflict with or result in any breach or contravention of, or the creation of any Lien under, or require any payment to be made under (i) any Contractual Obligation to which such Person is a party or affecting such Person or the properties of such Person or any of its Subsidiaries or (ii) any order, injunction, writ or decree of any Governmental Authority or any arbitral award to which such Person or its property is subject; or (c) violate any Law.

5.03Governmental Authorization; Other Consents.

No approval, consent, exemption, authorization, or other action by, or notice to, or filing with, any Governmental Authority or any other Person is necessary or required in connection with (a) the execution, delivery or performance by, or enforcement against, any Loan Party of this Agreement or any other Loan Document, (b) the grant by any Loan Party of the Liens granted by it pursuant to the Collateral Documents,  (c) the  perfection  or  maintenance  of  the  Liens  created  under the Collateral  Documents (including the first priority nature thereof) or (d) the exercise by the Administrative Agent or any Lender of its rights under

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the Loan Documents or the remedies in respect of the Collateral pursuant to the Collateral Documents, other than (i) authorizations, approvals, actions, notices and filings which have been duly obtained and (ii) filings to perfect or maintain the Liens created by the Collateral Documents.

5.04Binding Effect.

This Agreement has been, and each other Loan Document, when delivered hereunder, will have been, duly executed and delivered by each Loan Party that is party thereto.  This Agreement constitutes, and each other Loan Document when so delivered will constitute, a legal, valid and binding obligation of such Loan Party, enforceable against each Loan Party that is party thereto in accordance with its terms, subject  to  applicable  bankruptcy,  insolvency,  reorganization,  moratorium  or  other  laws  affecting creditors’ rights generally and subject to general principles of equity.

5.05Financial Statements; No Material Adverse Effect.

(a)Audited  Financial  Statements.     The  Audited  Financial  Statements  (i) were prepared in accordance with GAAP consistently applied throughout the periods covered thereby, except as otherwise expressly noted therein; (ii) fairly present the financial condition of Holdings and its Subsidiaries as of the dates thereof and their results of operations, cash flows and changes in shareholder’s equity for the periods covered thereby in accordance with GAAP consistently applied throughout the periods covered thereby, except as otherwise expressly noted therein; and (iii) show all material indebtedness and other liabilities, direct or contingent, of Holdings and its Subsidiaries as of the dates thereof, including liabilities for taxes, material commitments and Indebtedness.

(b)Quarterly Financial Statements.  The unaudited consolidated balance sheet of Holdings and its Subsidiaries dated June 30, 2016, and the related consolidated statements of income or operations, shareholders’ equity and cash flows for the fiscal quarter ended on that date (i) were prepared in accordance with GAAP consistently applied throughout the period covered thereby, except as otherwise expressly noted therein, and (ii) fairly present the financial condition of Holdings and its Subsidiaries as of the date thereof and their results of operations, cash flows and changes in shareholders’ equity for the period covered thereby, subject, in the case of clauses (i) and (ii), to the absence of footnotes and to normal year-end audit adjustments.

(c)Material Adverse Effect.  Since December 31, 2015, there has been no event or circumstance, either individually or in the aggregate, that has had or could reasonably be expected to have a Material Adverse Effect.

(d)Forecasted Financials.  The consolidated forecasted balance sheets, statements of income and cash flows of Holdings and its Subsidiaries delivered pursuant to Section 4.01 or Section 6.01 were prepared in good faith on the basis of the assumptions stated therein, which assumptions were fair in light of the conditions existing at the time of delivery of such forecasts, and represented, at the time of preparation, the Borrower’s best estimate of its future financial condition and performance.

5.06Litigation.

There are no actions, suits, proceedings, claims or disputes pending or, to the knowledge of the Loan Parties after due and diligent investigation, threatened or contemplated, at law, in equity, in arbitration or before any Governmental Authority, by or against any Loan Party or any Subsidiary or against any of their properties or revenues that (a) purport to affect or pertain to this Agreement or any other Loan Document or any of the transactions contemplated hereby, or (b) either individually or in the aggregate

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could reasonably be expected to have a Material Adverse Effect.

5.07No Default.

Neither any Loan Party nor any Subsidiary thereof is in default under or with respect to, or a party to, any Contractual Obligation that could, either individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.  No Default has occurred and is continuing or would result from the consummation of the transactions contemplated by this Agreement or any other Loan Document.

5.08Ownership of Property.

Each Loan Party and each of its Subsidiaries has good record and marketable title in fee simple to, or valid leasehold interests in, all real property necessary or used in the ordinary conduct of its business, except for such defects in title as could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.

5.09Environmental Compliance.

(a)The Loan Parties and their respective Subsidiaries conduct in the ordinary course of business a review of the effect of existing Environmental Laws and claims alleging potential liability or responsibility for violation of any Environmental Law on their respective businesses, operations and properties, and as a result thereof the Loan Parties have reasonably concluded that such Environmental Laws and claims could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.

(b)None of the properties currently or formerly owned or operated by any Loan Party or any of its Subsidiaries is listed or proposed for listing on the NPL or on the CERCLIS or any analogous foreign, state or local list or is adjacent to any such property; there are no and never have been any underground or above-ground storage tanks or any surface impoundments, septic tanks, pits, sumps or lagoons in which Hazardous Materials are being or have been treated, stored or disposed on any property currently owned or operated by any Loan Party or any of its Subsidiaries or, to the best of the knowledge of the Loan Parties, on any property formerly owned or operated by any Loan Party or any of its Subsidiaries; there is no asbestos or asbestos-containing material on any property currently owned or operated by any Loan Party or any of its Subsidiaries; and Hazardous Materials have not been released, discharged or disposed of on any property currently or formerly owned or operated by any Loan Party or any of its Subsidiaries.

(c)Neither any Loan Party nor any of its Subsidiaries is undertaking, and no Loan Party or Subsidiary has completed, either individually or together with other potentially responsible parties, any investigation or assessment or remedial or response action relating to any actual or threatened release, discharge or disposal of Hazardous Materials at any site, location or operation, either voluntarily or pursuant to the order of any Governmental Authority or the requirements of any Environmental Law; and all Hazardous Materials generated, used, treated, handled or stored at, or transported to or from, any property currently or formerly owned or operated by any Loan Party or any of its Subsidiaries have been disposed of in a manner not reasonably expected to result in material liability to any Loan Party or any of its Subsidiaries.

5.10Insurance.

The properties of Holdings and its Subsidiaries are insured with financially sound and reputable insurance companies not Affiliates of any Loan Party, in such amounts, with such deductibles and covering

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such risks as are customarily carried by companies engaged in similar businesses and owning similar properties in localities where the applicable Loan Party or the applicable Subsidiary operates.  The general liability, casualty, property, terrorism and business interruption insurance coverage of the Loan Parties as in effect on the Closing Date is outlined as to carrier, policy number, expiration date, type, amount and deductibles on Schedule 5.10 and such insurance coverage complies with the requirements set forth in this Agreement and the other Loan Documents.

5.11Taxes.

Each Loan Party and its Subsidiaries have filed all federal and state income tax returns and other material tax returns and reports required to be filed, and have paid all federal and state income taxes and other material taxes, assessments, fees and other governmental charges levied or imposed upon them or their properties, income or assets otherwise due and payable, except those which are being contested in good faith by appropriate proceedings diligently conducted and for which adequate reserves have been provided in accordance with GAAP.  There is no proposed tax assessment against any Loan Party or any Subsidiary that would, if made, have a Material Adverse Effect, nor is there any tax sharing agreement applicable to Holdings or any Subsidiary.

5.12ERISA Compliance.

(a)Each Plan is in compliance in all material respects with the applicable provisions of ERISA, the Code and other federal or state laws.  Each Pension Plan that is intended to be a qualified plan under Section 401(a) of the Code has received a favorable determination letter or is subject to a favorable opinion letter from the IRS to the effect that the form of such Plan is qualified under Section 401(a) of the Code and the trust related thereto has been determined by the IRS to be exempt from federal income tax under Section 501(a) of the Code, or an application for such a letter is currently being processed by the IRS.   To the best knowledge of the Loan Parties, nothing has occurred that would prevent or cause the loss of such tax-qualified status.

(b)There are no pending or, to the best knowledge of the Loan Parties, threatened claims, actions or lawsuits, or action by any Governmental Authority, with respect to any Plan that  could  reasonably  be  expected  to  have  a  Material  Adverse  Effect.    There  has  been  no prohibited transaction or violation of the fiduciary responsibility rules with respect to any Plan that has resulted or could reasonably be expected to result in a Material Adverse Effect.

(c)(i) No ERISA Event has occurred, and no Loan Party nor any ERISA Affiliate is aware of any fact, event or circumstance that could reasonably be expected to constitute or result in an ERISA Event with respect to any Pension Plan or Multiemployer Plan; (ii) as of the most recent valuation date for any Pension Plan, the funding target attainment percentage (as defined in Section 430(d)(2) of the Code) is 60% or higher and no Loan Party nor any ERISA Affiliate knows of any facts or circumstances that could reasonably be expected to cause the funding target attainment percentage for any such plan to drop below 60% as of the most recent valuation date; (iii) no Loan Party nor any ERISA Affiliate has incurred any liability to the PBGC other than for the payment of premiums, and there are no premium payments which have become due that are unpaid; (iv) neither Holdings nor any ERISA Affiliate has engaged in a transaction that could be subject  to  Section 4069  or  Section  4212(c)  of  ERISA;  and  (v) no  Pension  Plan  has  been terminated by the plan administrator thereof nor by the PBGC, and no event or circumstance has occurred or exists that could reasonably be expected to cause the PBGC to institute proceedings under Title IV of ERISA to terminate any Pension Plan.

5.13Margin Regulations; Investment Company Act.

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(a)Margin  Regulations.    The  Borrower  is  not  engaged  and  will  not  engage, principally or as one of its important activities, in the business of purchasing or carrying margin stock (within the meaning of Regulation U issued by the FRB), or extending credit for the purpose of purchasing or carrying margin stock.   Following the application of the proceeds of each Borrowing or drawing under each Letter of Credit, not more than twenty-five percent (25%) of the value of the assets (either of the Borrower only or of Holdings and its Subsidiaries on a consolidated basis) subject to the provisions of Section 7.01 or Section 7.05 or subject to any restriction contained in any agreement or instrument between the Borrower and any Lender or any Affiliate of any Lender relating to Indebtedness and within the scope of Section 8.01(e) will be margin stock.

(b)Investment Company Act.  None of the Borrower, any Person Controlling the Borrower, Holdings or any Subsidiary is or is required to be registered as an “investment company” under the Investment Company Act of 1940.

5.14Disclosure.

The Borrower has disclosed to the Administrative Agent and the Lenders all agreements, instruments and corporate or other restrictions to which it or any of its Subsidiaries or any other Loan Party is subject, and all other matters known to it, that, individually or in the aggregate, could reasonably be expected to result in a Material Adverse Effect.  No report, financial statement, certificate or other information furnished (whether in writing or orally) by or on behalf of any Loan Party to the Administrative Agent or any Lender in connection with the transactions contemplated hereby and the negotiation of this Agreement or delivered hereunder or under any other Loan Document (in each case as modified or supplemented by other information so furnished) contains any material misstatement of fact or omits to state any material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided that, with respect to projected financial information, each Loan Party represents only that such information was prepared in good faith based upon assumptions believed to be reasonable at the time.

5.15Compliance with Laws.

Each Loan Party and each Subsidiary thereof is in compliance with the requirements of all Laws and all orders, writs, injunctions and decrees applicable to it or to its properties, except in such instances in which (a) such requirement of Law or order, writ, injunction or decree is being contested in good faith by appropriate proceedings diligently conducted or (b) the failure to comply therewith, either individually or in the aggregate, could not reasonably be expected to have a Material Adverse Effect.

5.16Solvency.

The  Borrower  is  Solvent  individually,  and  Holdings  and  its  Subsidiaries  are  Solvent  on  a consolidated basis.

5.17Casualty, Etc.

Neither the businesses nor the properties of any Loan Party or any of its Subsidiaries are affected by any fire, explosion, accident, strike, lockout or other labor dispute, drought, storm, hail, earthquake, embargo, act of God or of the public enemy or other casualty (whether or not covered by insurance) that, either individually or in the aggregate, could reasonably be expected to have a Material Adverse Effect.

5.18Sanctions Concerns and Anti-Corruption Laws.

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(a)Sanctions Concerns. No Loan Party, nor any Subsidiary, nor, to the knowledge of the Loan Parties and their Subsidiaries, any director, officer, employee, agent, affiliate or representative thereof, is an individual or entity   that is, or is owned or controlled by any individual or entity that is (i) currently the subject or target of any Sanctions, (ii) included on OFAC’s List of Specially Designated Nationals, HMT’s Consolidated List of Financial Sanctions Targets and the Investment Ban List, or any similar list enforced by any other relevant sanctions authority or (iii) located, organized or resident in a Designated Jurisdiction.

(b)Anti-Corruption Laws.  The Loan Parties and their Subsidiaries have conducted their business in compliance with the United States Foreign Corrupt Practices Act of 1977, the UK Bribery Act 2010 and other similar anti-corruption legislation in other jurisdictions, and have instituted and maintained policies and procedures designed to promote and achieve compliance with such laws.

5.19Subsidiaries; Loan Parties.

(a)Subsidiaries.  Set forth on Schedule 5.19(a) is the following information which is true and complete in all respects as of the Closing Date:  (i) a complete and accurate list of all Subsidiaries of the Loan Parties as of the Closing Date, (ii) the number of shares of each class of Equity Interests in each Subsidiary outstanding, (iii) the number and percentage of outstanding shares of each class of Equity Interests owned by the Loan Parties and their Subsidiaries and (iv) the class or nature of such Equity Interests (i.e. voting, non-voting, preferred, etc.).   The outstanding Equity Interests in all Subsidiaries are validly issued, fully paid and non-assessable and are owned free and clear of all Liens.  There are no outstanding subscriptions, options, warrants, calls, rights or other agreements or commitments (other than stock options granted to employees or directors and directors’ qualifying shares) of any nature relating to the Equity Interests of any Loan Party or any Subsidiary thereof, except as contemplated in connection with the Loan Documents.

(b)Loan Parties.  Set forth on Schedule 5.19(b) is a complete and accurate list of all Loan Parties as of the Closing Date, showing as of the Closing Date (as to each Loan Party) (i) the exact legal name, (ii) any former legal names of such Loan Party in the five (5) years prior to  the  Closing Date,  (iii) the jurisdiction  of its  incorporation  or  organization,  as  applicable, (iv) the type of organization, (v) the address of its chief executive office, (vi) its U.S. federal taxpayer identification number, and (vii) the organization identification number.

5.20Collateral Representations.

(a)Collateral Documents.  The provisions of the Collateral Documents are effective to create in favor of the Administrative Agent for the benefit of the Secured Parties a legal, valid and enforceable first priority Lien (subject to Permitted Liens) on all right, title and interest of the respective Loan Parties in the Collateral described therein.  Except for filings completed on or prior to the Closing Date, or taking possession of any possessory Collateral on or prior to the Closing  Date,  as  applicable,  in  each  case  as  contemplated  hereby  and  by  the  Collateral Documents, no filing or other action will be necessary to perfect or protect such Liens.

(b)Intellectual Property.  Set forth on Schedule 5.20(b), as of the Closing Date, is a list of all registered or issued Intellectual Property (including all applications for registration and issuance) owned by each of the Loan Parties or that each of the Loan Parties has the right to (including the name/title, current owner, registration or application number, and registration or application  date  and  such  other  information  as  reasonably  requested  by  the  Administrative Agent).

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(c)Documents,   Instrument,   and   Tangible   Chattel   Paper.       Set   forth   on Schedule 5.20(c), as of the Closing Date, is a description of all Collateral constituting Documents, Instruments, and Tangible Chattel Paper of the Loan Parties (including the Loan Party owning such Document, Instrument and Tangible Chattel Paper and such other information as reasonably requested by the Administrative Agent).

(d)Deposit   Accounts,   Electronic   Chattel   Paper,   Letter-of-Credit   Rights,   and Securities Accounts.

(i)Set forth on Schedule 5.20(d)(i), as of the Closing Date, is a description of all Deposit Accounts and Securities Accounts of the Loan Parties, including the name of (A) the applicable Loan Party, (B) in the case of a Deposit Account, the depository institution and average amount held in such Deposit Account and whether such account is a zero balance account or a payroll account, and (C) in the case of a Securities Account, the Securities Intermediary or issuer and the average aggregate market value held in such Securities Account, as applicable.

(ii)Set forth on Schedule 5.20(d)(ii), as of the Closing Date, is a description of all Electronic Chattel Paper (as defined in the UCC) and Letter-of-Credit Rights (as defined in the UCC) of the Loan Parties, including the name of (A) the applicable Loan Party, (B) in the case of Electronic Chattel Paper (as defined in the UCC), the account debtor and (C) in the case of Letter-of-Credit Rights (as defined in the UCC), the issuer or nominated person, as applicable.

(e)Commercial Tort Claims.  Set forth on Schedule 5.20(e), as of the Closing Date, is a description of all commercial tort claims of the Loan Parties the amount of which exceeds $250,000 for any such commercial tort claim (detailing such commercial tort claim in such detail as reasonably requested by the Administrative Agent).

(f)Pledged Equity Interests.  Set forth on Schedule 5.20(f), as of the Closing Date, is a list of (i) all Pledged Equity and (ii) all other Equity Interests required to be pledged to the Administrative Agent pursuant to the Security Agreement (in each case, detailing the Grantor (as defined in the Security Agreement), the Person whose Equity Interests are pledged, the number of shares of each class of Equity Interests, the certificate number and percentage ownership of outstanding shares of each class of Equity Interests and the class or nature of such Equity Interests (i.e. voting, non-voting, preferred, etc.).

(g)Properties.  Set forth on Schedule 5.20(g), as of the Closing Date, is a list of all real property owned or leased by any Loan Party (including (i) the name of the Loan Party owning (or leasing) such property, (ii) the property address, (iii) the city, county, state and zip code which such property is located and (iv) an indication if such location is leased or owned, and if leased, the name of the landlord).

5.21Intellectual Property; Licenses, Etc.

Each  Loan  Party  and  each  of  its  Subsidiaries  own,  or  possess  the  right  to  use,  all  of  the trademarks, service marks, trade names, copyrights, patents, patent rights, franchises, licenses and other intellectual property rights that are reasonably necessary for the operation of their respective businesses, without conflict with the rights of any other Person.  To the best knowledge of the Borrower, no slogan or other advertising device, product, process, method, substance, part or other material now employed, or now

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contemplated to be employed, by any Loan Party or any of its Subsidiaries infringes upon any rights held by any other Person.  No claim or litigation regarding any of the foregoing is pending or, to the best knowledge of the Borrower, threatened, which, either individually or in the aggregate, could reasonably be expected to have a Material Adverse Effect.

5.22Labor Matters.

There are no collective bargaining agreements or Multiemployer Plans covering the employees of Holdings or any of its Subsidiaries as of the Closing Date and neither Holdings nor any Subsidiary has suffered any strikes, walkouts, work stoppages or other material labor difficulty within the last five (5) years preceding the Closing Date.

ARTICLE VI

AFFIRMATIVE COVENANTS

Each of the Loan Parties hereby covenants and agrees that on the Closing Date and thereafter until the Facility Termination Date, such Loan Party shall, and shall cause each of its Subsidiaries to:

6.01Financial Statements.

Deliver to the Administrative Agent and each Lender, in form and detail satisfactory to the Administrative Agent and the Required Lenders:

(a)Audited Financial Statements.  As soon as available, but in any event within one hundred twenty (120) days after the end of each fiscal year of Holdings (commencing with the fiscal year ending December 31, 2016), a consolidated balance sheet of Holdings and its Subsidiaries as at the end of such fiscal year, and the related consolidated statements of income or operations, changes in shareholders’ equity and cash flows for such fiscal year, setting forth in each case in comparative form the figures for the previous fiscal year, all in reasonable detail and prepared in accordance with GAAP, such consolidated statements to be audited and accompanied by a report and opinion of an independent certified public accountant of nationally recognized standing reasonably acceptable to the Administrative Agent, which report and opinion shall be prepared in accordance with generally accepted auditing standards and shall not be subject to any “going concern” or like qualification or exception or any qualification or exception as to the scope of such audit.

(b)Quarterly Financial Statements.   As soon as available, but in any event within forty-five (45) days after the end of each fiscal quarter of each fiscal year of Holdings (including the last fiscal quarter of each fiscal year of Holdings), a consolidated balance sheet of Holdings and its Subsidiaries as at the end of such fiscal quarter, and the related consolidated statements of income or operations, changes in shareholders’ equity and cash flows for such fiscal quarter and for the portion of Holdings’ fiscal year then ended, setting forth in each case in comparative form the figures for the corresponding fiscal quarter of the previous fiscal year and the corresponding portion of the previous fiscal year, all in reasonable detail and prepared in accordance with GAAP, certified by the chief executive officer, chief financial officer, treasurer or controller who is a Responsible Officer of Holdings as fairly presenting the financial condition, results of operations, shareholders’ equity and cash flows of Holdings and its Subsidiaries, subject only to normal year-end audit adjustments and the absence of footnotes.

(c)Store-Level Summary.  As soon as available, but in any event within forty-five (45) days after the end of each fiscal year of Holdings (commencing with the fiscal year ending

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December 31, 2016), a store level summary with respect to each Restaurant, in form and detail reasonably satisfactory to the Administrative Agent, certified by a Responsible Officer of the Borrower as fairly presenting the profits and/or losses of each Restaurant.

(d)Business Plan and Budget.  As soon as available, but in any event within forty- five (45) days after the end of each fiscal year of Holdings, an annual business plan and budget of Holdings  and  its  Subsidiaries  on  a  consolidated  basis,  including  forecasts  prepared  by management of Holdings, in form satisfactory to the Administrative Agent, of consolidated balance sheets and statements of income or operations and cash flows of Holdings and its Subsidiaries on a quarterly basis for the immediately following fiscal year.

As to any information contained in materials furnished pursuant to Section 6.02(e), the Borrower shall not be separately required to furnish such information under Section 6.01(a) or (b) above, but the foregoing shall not be in derogation of the obligation of the Borrower to furnish the information and materials described in Sections 6.01(a) and (b) above at the times specified therein.

6.02Certificates; Other Information.

Deliver to the Administrative Agent and each Lender, in form and detail satisfactory to the

Administrative Agent:

(a)Reserved.

(b)Compliance  Certificate.     Concurrently  with  the  delivery  of  the  financial statements referred to in Sections 6.01(a) and (b) (commencing with the delivery of the financial statements for the fiscal quarter ending September 30, 2016), a duly completed Compliance Certificate signed by the chief executive officer, chief financial officer, treasurer or controller which is a Responsible Officer of Holdings.   Unless the Administrative Agent or a Lender requests  executed  originals,  delivery  of  the  Compliance  Certificate  may  be  by  electronic communication including fax or email and shall be deemed to be an original and authentic counterpart thereof for all purposes.

(c)Changes  in  Entity  Structure.    Within  ten  (10)  days  prior  to  any  merger, consolidation, dissolution or other change in entity structure of any Loan Party or any of its Subsidiaries permitted pursuant to the terms hereof, provide notice of such change in entity structure to the Administrative Agent, along with such other information as reasonably requested by the Administrative Agent.  Provide notice to the Administrative Agent, not less than ten (10) days prior (or such extended period of time as agreed to by the Administrative Agent) of any change in any Loan Party’s legal name, state of organization, or organizational existence.

(d)Audit  Reports;  Management  Letters;  Recommendations.    Promptly  after  any request by the Administrative Agent or any Lender, copies of any detailed audit reports, management letters or recommendations submitted to the board of directors (or the audit committee of the board of directors) of any Loan Party by independent accountants in connection with the accounts or books of any Loan Party or any of its Subsidiaries, or any audit of any of them.

(e)Annual Reports; Etc.   Promptly after the same are available, copies of each annual report, proxy or financial statement or other report or communication sent to the stockholders of Holdings, and copies of all annual, regular, periodic and special reports and registration statements which Holdings may file or be required to file with the SEC under Section 13 or 15(d) of the Securities Exchange Act of 1934, or with any national securities exchange, and in any case not

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otherwise required to be delivered to the Administrative Agent pursuant hereto.

(f)Debt Securities Statements and Reports.  Promptly after the furnishing thereof, copies of any statement or report furnished to any holder of debt securities of any Loan Party or of any of its Subsidiaries pursuant to the terms of any indenture, loan or credit or similar agreement and not otherwise required to be furnished to the Lenders pursuant to Section 6.01 or any other clause of this Section.

(g)SEC Notices.   Promptly, and in any event within five (5) Business Days after receipt thereof by any Loan Party or any Subsidiary thereof, copies of each notice or other correspondence received from the SEC (or comparable agency in any applicable non-U.S. jurisdiction) concerning any investigation or possible investigation or other inquiry by such agency regarding financial or other operational results of any Loan Party or any Subsidiary thereof.

(h)Notices.  Not later than five (5) Business Days after receipt thereof by any Loan Party or any Subsidiary thereof, copies of all notices, requests and other documents (including amendments, waivers and other modifications) so received under or pursuant to any instrument, indenture, loan or credit or similar agreement, in each case with respect to any Indebtedness in excess of the Threshold Amount, and, from time to time upon request by the Administrative Agent, such information and reports regarding such instruments, indentures and loan and credit and similar agreements, in each case with respect to any Indebtedness in excess of the Threshold Amount, as the Administrative Agent may reasonably request.

(i)Environmental Notice.  Promptly after the assertion or occurrence thereof, notice of any action or proceeding against or of any noncompliance by any Loan Party or any of its Subsidiaries with any Environmental Law or Environmental Permit that could reasonably be expected to have a Material Adverse Effect.

(j)Additional Information.  Promptly, such additional information regarding the business, financial, legal or corporate affairs of any Loan Party or any Subsidiary thereof, or compliance with the terms of the Loan Documents, as the Administrative Agent or any Lender may from time to time reasonably request.

Documents required to be delivered pursuant to Section 6.01(a) or (b) or Section 6.02(e) (to the extent any such documents are included in materials otherwise filed with the SEC) may be delivered electronically and if so delivered, shall be deemed to have been delivered on the date (a) on which the Borrower posts such documents, or provides a link thereto on the Borrower’s website on the Internet at the website address listed on Schedule 1.01(a); or (b) on which such documents are posted on the Borrower’s behalf on an Internet or intranet website, if any, to which each Lender and the Administrative Agent   have   access   (whether  a   commercial,  third-party  website   or   whether   sponsored   by  the Administrative Agent); provided that the Borrower shall notify the Administrative Agent (by fax transmission or e-mail transmission) of the posting of any such documents.  The Administrative Agent shall have no obligation to request the delivery of or to maintain paper copies of the documents referred to above, and in any event shall have no responsibility to monitor compliance by the Borrower with any such request by a Lender for delivery, and each Lender shall be solely responsible for requesting delivery to it or maintaining its copies of such documents.

The Borrower hereby acknowledges that (A) the Administrative Agent and/or an Affiliate thereof may, but shall not be obligated to, make available to the Lenders materials and/or information provided by or on behalf of the Borrower hereunder (collectively, “Borrower Materials”) by posting the Borrower Materials on IntraLinks, Syndtrak, ClearPar or a substantially similar electronic transmission system (the

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“Platform”) and (B) certain of the Lenders (each, a “Public Lender”) may have personnel who do not wish to receive material non-public information with respect to the Borrower or its Affiliates, or the respective securities of any of the foregoing, and who may be engaged in investment and other market- related activities with respect to such Persons’ securities.  The Borrower hereby agrees that it will use commercially reasonable efforts to identify that portion of the Borrower Materials that may be distributed to the Public Lenders and that (1) all such Borrower Materials shall be clearly and conspicuously marked “PUBLIC” which, at a minimum, shall mean that the word “PUBLIC” shall appear prominently on the first page thereof; (2) by marking Borrower Materials “PUBLIC,” the Borrower shall be deemed to have authorized the Administrative Agent, any Affiliate thereof and the Lenders to treat such Borrower Materials as not containing any material non-public information (although it may be sensitive and proprietary) with respect to the Borrower or its securities for purposes of United States federal and state securities laws (provided,however, that to the extent such Borrower Materials constitute Information, they shall be treated as set forth in Section 11.07); (3) all Borrower Materials marked “PUBLIC” are permitted to be made available through a portion of the Platform designated “Public Side Information;” and  (4) the  Administrative  Agent  and  any  Affiliate  thereof  shall  be  entitled  to  treat  any  Borrower Materials that are not marked “PUBLIC” as being suitable only for posting on a portion of the Platform not designated “Public Side Information.”

6.03 Notices.

Promptly, but in any event within two (2) Business Days, notify the Administrative Agent and each Lender:

(a)of the occurrence of any Event of Default;

(b)of any matter that has resulted or could reasonably be expected to result in a Material Adverse Effect, including (i) a breach or non-performance of, or any event of default under, a material Contractual Obligation of Holdings or any Subsidiary; (ii) any material dispute, litigation, investigation, proceeding or suspension between Holdings or any Subsidiary and any Governmental Authority; or (iii) the commencement of, or any material development in, any material litigation or proceeding affecting Holdings or any Subsidiary, including pursuant to any applicable Environmental Laws;

(c)of the occurrence of any ERISA Event;

(d)of the occurrence of any material default under any lease of real property of any Loan Party related to a Restaurant or receipt by any Loan Party of notice of a material default from any landlord with respect thereto that remains uncured for thirty (30) days; and

(e)of any material change in accounting policies or financial reporting practices by any Loan Party or any Subsidiary thereof.

Each notice pursuant to this Section 6.03 shall be accompanied by a statement of a Responsible Officer of the Borrower setting forth details of the occurrence referred to therein and to the extent applicable, stating what action the Borrower has taken and proposes to take with respect thereto.  Each notice  pursuant  to  Section  6.03(a)  shall  describe  with  particularity  any  and  all  provisions  of  this Agreement and any other Loan Document that have been breached.

6.04Payment of Obligations.

Pay and discharge as the same shall become due and payable, all its obligations and liabilities, including (a) all tax liabilities, assessments and governmental charges or levies upon it or its properties or assets, unless the same are being contested in good faith by appropriate proceedings diligently conducted

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and adequate reserves in accordance with GAAP are being maintained by Holdings or such Subsidiary; (b) all lawful claims  which,  if  unpaid,  would by law become  a  Lien upon its  property; and (c) all Indebtedness, as and when due and payable, but subject to any subordination provisions contained in any instrument or agreement evidencing such Indebtedness.

6.05Preservation of Existence, Etc.

(a)Preserve, renew and maintain in full force and effect its legal existence and good standing under the Laws of the jurisdiction of its organization except in a transaction permitted by Section 7.04 or 7.05;

(b)take all reasonable action to maintain all rights, privileges, permits, licenses and franchises necessary or desirable in the normal conduct of its business, except to the extent that failure to do so could not reasonably be expected to have a Material Adverse Effect; and

(c)preserve  or  renew  all  of its  registered  patents, trademarks,  trade  names  and service marks, the non-preservation of which could reasonably be expected to have a Material Adverse Effect.

6.06Maintenance of Properties.

(a)Maintain,  preserve  and  protect  all  of  its  material  properties  and  equipment necessary in the operation of its business in good working order and condition, ordinary wear and tear excepted;

(b)make all necessary repairs thereto and renewals and replacements thereof except where the failure to do so could not reasonably be expected to have a Material Adverse Effect; and

(c)use the standard of care typical in the industry in the operation and maintenance of its facilities.

6.07Maintenance of Insurance.

(a)Maintenance  of  Insurance.    Maintain  with  financially  sound  and  reputable insurance companies not Affiliates of any Loan Party, insurance with respect to its properties and business against loss or damage of the kinds customarily insured against by Persons engaged in the same or similar business, of such types and in such amounts as are customarily carried under similar circumstances by such other Persons or as otherwise required by the Administrative Agent, but excluding terrorism insurance.

(b)Evidence of Insurance.  Cause the Administrative Agent to be named as lenders’ loss payable, as its interest may appear, and/or additional insured with respect of any such insurance providing liability coverage or coverage in respect of any Collateral, and cause, unless otherwise agreed to by the Administrative Agent, each provider of any such insurance to agree, by endorsement upon the policy or policies issued by it or by independent instruments furnished to the Administrative Agent that it will give the Administrative Agent thirty (30) days prior written notice before any such policy or policies shall be altered or cancelled (or ten (10) days prior notice in the case of cancellation due to the nonpayment of premiums).   Annually, upon expiration of current insurance coverage, the Loan Parties shall provide, or cause to be provided, to the Administrative Agent, such evidence of insurance as required by the Administrative Agent, including, but not limited to: (i) certified copies of such insurance policies, (ii) evidence of such insurance policies

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(including, without limitation and as applicable, ACORD Form 28 certificates (or similar form of insurance certificate), and ACORD Form 25 certificates (or similar form of insurance certificate)), (iii) declaration pages for each insurance policy and (iv) lender’s loss payable endorsement if the Administrative Agent for the benefit of the Secured Parties is not on the declarations page for such policy.

6.08Compliance with Laws.

Comply  with  the  requirements  of  all  Laws  and  all  orders,  writs,  injunctions  and  decrees applicable to it or to its business or property, except in such instances in which (a) such requirement of Law or order, writ, injunction or decree is being contested in good faith by appropriate proceedings diligently conducted; or (b) the failure to comply therewith could not reasonably be expected to have a Material Adverse Effect.

6.09Books and Records.

(a)Maintain proper books of record and account, in which full, true and correct entries in conformity with GAAP consistently applied shall be made of all financial transactions and matters involving the assets and business of such Loan Party or such Subsidiary, as the case may be; and

(b)maintain  such  books  of  record  and  account  in  material  conformity  with  all applicable requirements of any Governmental Authority having regulatory jurisdiction over such Loan Party or such Subsidiary, as the case may be.

6.10Inspection Rights.

Permit representatives and independent contractors of the Administrative Agent and each Lender to visit and inspect any of its properties, to examine its corporate, financial and operating records, and make copies thereof or abstracts therefrom, and to discuss its affairs, finances and accounts with its directors, officers, and independent public accountants, all at the expense of the Borrower and at such reasonable  times  during  normal  business  hours  and  as  often  as  may  be  reasonably  desired,  upon reasonable advance notice to the Borrower; provided, however, that when an Event of Default exists the Administrative  Agent  or  any  Lender  (or  any  of  their  respective  representatives  or  independent contractors) may do any of the foregoing at the expense of the Borrower at any time during normal business hours and without advance notice.

6.11Use of Proceeds.

Use the proceeds of the Credit Extensions to pay transaction fees and expenses related to this Agreement, develop new Restaurants, finance working capital and for other general corporate purposes, in each case, not in contravention of any Law or of any Loan Document.

6.12Covenant to Guarantee Obligations.

The Loan Parties will cause each of their Subsidiaries whether newly formed, after acquired or otherwise existing to promptly (and in any event within thirty (30) days after such Subsidiary is formed or acquired (or such longer period of time as agreed to by the Administrative Agent in its sole discretion)) become a Guarantor hereunder by way of execution of a Joinder Agreement or such other joinder documents as the Administrative Agent shall deem appropriate for such purpose; provided, however, no Foreign Subsidiary (to the extent such Guaranty would result in a material adverse tax consequence for the

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Borrower) or Foreign Subsidiary Holdco shall be required to become a Guarantor.  In connection therewith, the Loan Parties shall give notice to the Administrative Agent not less than ten (10) days prior to creating a Subsidiary (or such shorter period of time as agreed to by the Administrative Agent in its sole discretion), or acquiring the Equity Interests of any other Person.  In connection with the foregoing, the Loan Parties shall deliver to the Administrative Agent, with respect to each new Guarantor to the extent applicable, substantially the same documentation required pursuant to Sections 4.01(b), (c), (e) and (f) and 6.13 and such other documents or agreements as the Administrative Agent may reasonably request.

6.13Covenant to Give Security.

Except with respect to Excluded Property:

(a)Equity Interests and Personal Property.  Each Loan Party will cause the Pledged Equity and all of its tangible and intangible personal property now owned or hereafter acquired by it to be subject at all times to a first priority, perfected Lien (subject to Permitted Liens and other exceptions permitted by the Loan Documents) in favor of the Administrative Agent for the benefit of the Secured Parties to secure the Secured Obligations pursuant to the terms and conditions of the Collateral Documents.  Each Loan Party shall provide opinions of counsel and any filings and deliveries reasonably necessary in connection therewith to perfect the security interests therein, all in form and substance reasonably satisfactory to the Administrative Agent.

(b)Further Assurances.   At any time upon request of the Administrative Agent, promptly execute and deliver any and all further instruments and documents and take all such other action as the Administrative Agent may deem necessary or desirable to maintain in favor of the Administrative Agent, for the benefit of the Secured Parties, Liens and insurance rights on the Collateral that are duly perfected in accordance with the requirements of, or the obligations of the Loan Parties under, the Loan Documents and all applicable Laws.

6.14Further Assurances.

Promptly upon request by the Administrative Agent, or any Lender through the Administrative Agent, (a) correct any material defect or error that may be discovered in any Loan Document or in the execution, acknowledgment, filing or recordation thereof, and (b) do, execute, acknowledge, deliver, record, re-record, file, re-file, register and re-register any and all such further acts, deeds, certificates, assurances and other instruments as the Administrative Agent, or any Lender through the Administrative Agent, may reasonably require from time to time in order to (i) carry out more effectively the purposes of the Loan Documents, (ii) to the fullest extent permitted by applicable Law, subject any Loan Party’s or any of its Subsidiaries’ properties, assets, rights or interests to the Liens now or hereafter intended to be covered by any of the Collateral Documents, (iii) perfect and maintain the validity, effectiveness and priority of any of the Collateral Documents and any of the Liens intended to be created thereunder and (iv) assure,  convey,  grant,  assign,  transfer,  preserve,  protect  and  confirm  more  effectively  unto  the Secured Parties the rights granted or now or hereafter intended to be granted to the Secured Parties under any Loan Document or under any other instrument executed in connection with any Loan Document to which any Loan Party or any of its Subsidiaries is or is to be a party, and cause each of its Subsidiaries to do so.

6.15Compliance with Terms of Leaseholds.

Make all payments and otherwise perform all obligations in respect of all leases of real property to which Holdings or any of its Subsidiaries is a party, keep such leases in full force and effect and not allow such leases to lapse or be terminated or any rights to renew such leases to be forfeited or cancelled (other than in the ordinary course of business), notify the Administrative Agent of any default by any party with

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respect to such leases related to Restaurants and cooperate with the Administrative Agent in all respects to cure any such default, and cause each of its Subsidiaries to do so, except, (i) with respect to any lease subject to a sublease and (ii) in any case, where the failure to do so, either individually or in the aggregate, could not reasonably be expected to have a Material Adverse Effect.

6.16Compliance with Environmental Laws.

Comply, and cause all lessees and other Persons operating or occupying its properties to comply, in all material respects, with all applicable Environmental Laws and Environmental Permits; obtain and renew all Environmental Permits necessary for its operations and properties; and conduct any investigation, study, sampling and testing, and undertake any cleanup, removal, remedial or other action necessary to remove and clean up all Hazardous Materials from any of its properties, in accordance with the requirements of all Environmental Laws; provided, however, that neither Holdings nor any of its Subsidiaries shall be required to undertake any such cleanup, removal, remedial or other action to the extent that its obligation to do so is being contested in good faith and by proper proceedings and appropriate reserves are being maintained with respect to such circumstances in accordance with GAAP.

6.17Anti-Corruption Laws.

Conduct its business in compliance with the United States Foreign Corrupt Practices Act of 1977, the UK Bribery Act 2010 and other similar anti-corruption legislation in other jurisdictions and maintain policies and procedures designed to promote and achieve compliance with such laws.

6.18Treasury Management.

From and after March 31, 2017, maintain Cadence Bank as the primary treasury services provider for the Loan Parties and their Subsidiaries (which shall require, at a minimum, that the Loan Parties and their Subsidiaries maintain their primary operating deposit accounts with Cadence Bank).  The Borrower shall  promptly  notify  the  Administrative  Agent  of  any  opening  or  closing of  a  deposit  account  or securities account by any Loan Party or Subsidiary following the Closing Date.

6.19Wells Fargo Letters of Credit.

The Loan Parties shall terminate or replace each of the Wells Fargo Letters of Credit with Letters of Credit issued by the L/C Issuer and have any liens in favor of Wells Fargo Bank, N.A. related thereto released in a manner satisfactory to the Administrative Agent (including, without limitation, any cash collateral accounts maintained to secure such Wells Fargo Letters of Credit) by, with respect to each Wells Fargo Letter of Credit, the earlier of (i) the applicable expiry date of each such Wells Fargo Letter of Credit (without taking into account any extensions thereof) and (ii) March 31, 2017.

ARTICLE VII

NEGATIVE COVENANTS

Each of the Loan Parties hereby covenants and agrees that on the Closing Date and thereafter

until the Facility Termination Date, no Loan Party shall, nor shall it permit any Subsidiary to, directly or indirectly:

7.01Liens.

Create, incur, assume or suffer to exist any Lien upon any of its property, assets or revenues,

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whether now owned or hereafter acquired, except for the following (the “Permitted Liens”):

(a)Liens pursuant to any Loan Document;

(b)Liens existing on the Closing Date and listed on Schedule 7.01;

(c)Liens for Taxes not yet due or which are being contested in good faith and by appropriate proceedings diligently conducted, if adequate reserves with respect thereto are maintained on the books of the applicable Person in accordance with GAAP;

(d)Statutory Liens such as landlords’, carriers’, warehousemen’s, mechanics’, materialmen’s, repairmen’s or other like Liens arising in the ordinary course of business which are not overdue for a period of more than thirty (30) days or which are being contested in good faith and by appropriate proceedings diligently conducted, if adequate reserves with respect thereto are maintained on the books of the applicable Person; provided that a reserve or other appropriate provision shall have been made therefor;

(e)pledges  or  deposits  in  the  ordinary  course  of  business  in  connection  with workers’ compensation, unemployment insurance and other social security legislation, other than any Lien imposed by ERISA;

(f)deposits to secure the performance of bids, trade contracts and leases (other than Indebtedness), statutory obligations, surety and appeal bonds, performance bonds and other obligations of a like nature incurred in the ordinary course of business;

(g)easements, rights-of-way, restrictions and other similar encumbrances affecting real property which, in the aggregate, are not substantial in amount, and which do not in any case materially detract from the value of the property subject thereto or materially interfere with the ordinary conduct of the business of the applicable Person;

(h)Liens securing judgments for the payment of money (or appeal or other surety bonds relating to such judgments) not constituting an Event of Default under Section 8.01(h);

(i)Liens  securing  Indebtedness  permitted  under  Section 7.02(c);  provided  that (i) such Liens do not at any time encumber any property other than the property financed by such Indebtedness and (ii) the Indebtedness secured thereby does not exceed the cost of the property being acquired on the date of acquisition;

(j)bankers’  Liens,  rights  of  setoff  and  other  similar  Liens  existing  solely  with respect to cash and Cash Equivalents on deposit in one or more accounts maintained by Holdings or any of its Subsidiaries with any financial institution, in each case in the ordinary course of business in favor of the bank or banks with which such accounts are maintained, securing solely the customary amounts owing to such bank with respect to cash management and operating account arrangements; provided, that in no case shall any such Liens secure (either directly or indirectly) the repayment of any Indebtedness;

(k)any interest or title of a lessor, licensor or sublessor under any lease, license or sublease entered into by any Loan Party or any Subsidiary thereof in the ordinary course of business and covering only the assets so leased, licensed or subleased;

(l)Liens of a collection bank arising under Section 4-210 of the UCC on items in the

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course of collection; and

(m)any  zoning,  building  or  similar  laws  or  rights  reserved  to  or  vested  in  any Governmental Authority.

7.02Indebtedness.

Create, incur, assume or suffer to exist any Indebtedness, except:

(a)Indebtedness under the Loan Documents;

(b)Indebtedness outstanding on the date hereof and listed on Schedule 7.02 and extensions and replacements (but not any increase in the aggregate principal amount thereof);

(c)Indebtedness in respect of Capitalized Leases and purchase money obligations for fixed or capital assets within the limitations set forth in Section 7.01(i); provided, however, that the aggregate amount of all such Indebtedness at any one time outstanding shall not exceed $500,000;

(d)Unsecured  Indebtedness  of  a  Loan  Party  to  another  Loan  Party,  which Indebtedness  shall  (i) to  the  extent  required  by  the  Administrative  Agent,  be  evidenced  by promissory  notes  which  shall  be  pledged  to  the  Administrative  Agent  as  Collateral  for  the Secured Obligations in accordance with the terms of the Security Agreement, (ii) be on terms (including subordination terms) acceptable to the Administrative Agent and (iii) be otherwise permitted under the provisions of Section 7.03 (“Intercompany Debt”);

(e)Guarantees  of  the  Borrower  or  any  Guarantor  in  respect  of  Indebtedness otherwise permitted hereunder of the Borrower or any other Guarantor; and

(f)obligations  (contingent  or  otherwise)  existing  or  arising  under  any  Swap Contract, provided that (i) such obligations are (or were) entered into by such Person in the ordinary  course  of  business  for  the  purpose  of  directly  mitigating  risks  associated  with fluctuations in interest rates or foreign exchange rates and (ii) such Swap Contract does not contain any provision exonerating the non-defaulting party from its obligation to make payments on outstanding transactions to the defaulting party.

7.03Investments.

Make or hold any Investments, except:

(a)Investments held by Holdings and its Subsidiaries in the form of cash or Cash Equivalents;

(b)(i) Investments by Holdings and its Subsidiaries in their respective Subsidiaries outstanding on the Closing Date, (ii) additional Investments by Holdings and its Subsidiaries in Loan Parties, and (iii) additional Investments by Subsidiaries of Holdings that are not Loan Parties in other Subsidiaries that are not Loan Parties;

(c)Investments  consisting  of  extensions  of  credit  in  the  nature  of  accounts receivable or notes receivable arising from the grant of trade credit in the ordinary course of business, and Investments received in satisfaction or partial satisfaction thereof from financially troubled account debtors to the extent reasonably necessary in order to prevent or limit loss;

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(d)Guarantees permitted by Section 7.02;

(e)Investments existing on the date hereof (other than those referred to in Section 7.03(b)(i)) and set forth on Schedule 7.03; and

(f)Investments  (including  debt  obligations)  received  in  connection  with  the bankruptcy or reorganization of suppliers and customers and in settlement of delinquent obligations of, and other disputes with, customers and suppliers arising in the ordinary course of business.

7.04Fundamental Changes.

Merge, dissolve, liquidate, consolidate with or into another Person, or Dispose of (whether in one transaction or in a series of transactions) all or substantially all of its assets (whether now owned or hereafter acquired) to or in favor of any Person, except that, so long as no Default exists or would result therefrom:

(a)any Subsidiary may merge with (i) the Borrower; provided that the Borrower shall be the continuing or surviving Person, or (ii) any one or more other Subsidiaries, provided that when any Loan Party is merging with another Subsidiary, such Loan Party shall be the continuing or surviving Person;

(b)any  Loan  Party  may  Dispose  of  all  or  substantially  all  of  its  assets  (upon voluntary liquidation or otherwise) to the Borrower or to another Loan Party; and

(c)any Subsidiary that is not a Loan Party may dispose of all or substantially all its assets (including any Disposition that is in the nature of a liquidation) to (i) another Subsidiary that is not a Loan Party or (ii) to a Loan Party.

7.05Dispositions.

Make any Disposition or enter into any agreement to make any Disposition, except:

(a)Permitted Transfers;

(b)Dispositions of obsolete or worn out property, whether now owned or hereafter acquired, in the ordinary course of business;

(c)Dispositions of equipment or real property to the extent that (i) such property is exchanged  for  credit  against  the  purchase  price  of  similar  replacement  property  or  (ii) the proceeds of such Disposition are reasonably promptly applied to the purchase price of such replacement property;

(d)the Borrower may sell Restaurants to a franchisee, so long as no Event of Default has occurred and is continuing;

(e)Dispositions permitted by Section 7.04; and

(f)other  Dispositions  so  long  as  (i)  at  least  75%  of  the  consideration  paid  in connection therewith shall be cash or Cash Equivalents paid contemporaneously with consummation of the transaction and shall be in an amount not less than the fair market value of the property disposed of, (ii) such transaction does not involve the sale or other disposition of a

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minority Equity Interests in any Subsidiary, (iii) such transaction does not involve a sale or other disposition of receivables other than receivables owned by or attributable to other property concurrently being disposed of in a transaction otherwise permitted under this Section, and (iv) the aggregate net book value of all of the assets sold or otherwise disposed of by the Loan Parties and their Subsidiaries in all such transactions in any fiscal year of Holdings shall not exceed $500,000.

7.06Restricted Payments.

Declare  or  make,  directly  or  indirectly,  any  Restricted  Payment,  or  incur  any  obligation (contingent or otherwise) to  do so,  except that,  so long as  no Default  shall have  occurred  and be continuing at the time of any action described below or would result therefrom:

(a)each Subsidiary may make Restricted Payments to any Person that owns Equity Interests in such Subsidiary, ratably according to their respective holdings of the type of Equity Interest in respect of which such Restricted Payment is being made;

(b)Holdings and each Subsidiary may declare and make dividend payments or other distributions payable solely in common Equity Interests of such Person;

(c)the Borrower may make dividends or distributions to Holdings to pay the general corporate and overhead expenses of Holdings to the extent such expenses are attributable to the ownership or operation of the Borrower or its Subsidiaries and including amounts sufficient to pay out-of-pocket expenses, board activities, accounting, tax preparation and other expenses in the nature of overhead, in each case in the ordinary course of business; and

(d)the Borrower may make additional Restricted Payments to Holdings to allow

Holdings to make additional Restricted Payments as follows:

(i)if the Consolidated Leverage Ratio is not at least .25x less than the maximum Consolidated Leverage Ratio permitted under Section 7.11(a) then in effect at the time any such Restricted Payment is made and after giving pro forma effect thereto, the Loan Parties may make Restricted Payments not otherwise permitted pursuant to this Section 7.06 in an aggregate amount (together with any Consolidated Growth Capital Expenditures made pursuant to Section 7.12(a)) not to exceed $5,000,000 in any fiscal year; and

(ii)if  the  Consolidated  Leverage  Ratio  is  at  least  .25x  less  than  the maximum Consolidated Leverage Ratio permitted under Section 7.11(a) then in effect at the time any such Restricted Payment is made and after giving pro forma effect thereto, the Loan Parties may make unlimited Restricted Payments;

provided, in each case, (x) after giving effect to the making of such Restricted Payment, there shall be no less than $5,000,000 of Liquidity and (y) no Default or Event of Default shall have occurred and be continuing or would result therefrom.

7.07Change in Nature of Business.

Engage in any material line of business substantially different from those lines of business conducted by Holdings and its Subsidiaries on the date hereof or any business substantially related or incidental thereto (provided that the foregoing shall not permit any line of business that is unrelated to the “Jamba Juice” restaurant concept).

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7.08Transactions with Affiliates.

Enter into or permit to exist any transaction or series of transactions with any officer, director or Affiliate of such Person other than (a) advances of working capital to any Loan Party, (b) transfers of cash and assets to any Loan Party (other than Holdings), (c) intercompany transactions expressly permitted by this Agreement, (d) normal and reasonable compensation and reimbursement of expenses of officers and directors and (e) except as otherwise specifically limited in this Agreement, other transactions which are entered into in the ordinary course of such Person’s business on fair and reasonable terms and conditions substantially as favorable to such Person as would be obtainable by it in a comparable arm’s length transaction with a Person other than an officer, director or Affiliate.

7.09Burdensome Agreements.

Enter into, or permit to exist, any Contractual Obligation (except for this Agreement and the other

Loan Documents) that (a) encumbers or restricts the ability of any such Person to (i) to act as a Loan Party; (ii) make Restricted Payments to any Loan Party, (iii) pay any Indebtedness or other obligation owed to any Loan Party, (iv) make loans or advances to any Loan Party, or (v) create any Lien upon any of their properties or assets, whether now owned or hereafter acquired, except, in the case of clause (a)(v) only,  for any document or instrument governing Indebtedness incurred pursuant to Section 7.02(c); provided that any such restriction contained therein relates only to the asset or assets constructed or acquired in connection therewith, or (b) requires the grant of any Lien on property for any obligation if a Lien on such property is given as security for the Secured Obligations.

7.10Use of Proceeds.

Use  the  proceeds  of  any  Credit  Extension,  whether  directly  or  indirectly,  and  whether immediately, incidentally or ultimately, to purchase or carry margin stock (within the meaning of Regulation U of the FRB) or to extend credit to others for the purpose of purchasing or carrying margin stock or to refund indebtedness originally incurred for such purpose.

7.11Financial Covenants.

(a)Consolidated Leverage Ratio.  Permit the Consolidated Leverage Ratio as of the end of any fiscal quarter of Holdings to be greater than 3.75 to 1.00.

(b)Consolidated  Fixed  Charge  Coverage  Ratio.Permit  the  Consolidated  Fixed Charge Coverage Ratio as of the end of any fiscal quarter of Holdings to be less than 1.50 to 1.00.

7.12Capital Expenditures.

Make any Consolidated Growth Capital Expenditures except that, so long as no Default shall have occurred and be continuing or would result therefrom, the Loan Parties may make Consolidated Growth Capital Expenditures as follows:

(a)if the Consolidated Leverage Ratio is not at least .25x less than the maximum Consolidated Leverage Ratio permitted under Section 7.11(a) then in effect at the time any such Consolidated Growth Capital Expenditure is made after giving pro forma effect thereto, the Loan Parties may make Consolidated Growth Capital Expenditures in an aggregate amount (together with any Restricted Payments made pursuant to Section 7.06(d)(i)) not to exceed $5,000,000 in any fiscal year; and

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(b)if the Consolidated Leverage Ratio is at least .25x less than the maximum Consolidated Leverage Ratio permitted under Section 7.11(a) then in effect at the time any such Consolidated Growth Capital Expenditure is made and after giving pro forma effect thereto, the Loan Parties may make unlimited Consolidated Growth Capital Expenditures;

provided, in each case, (x) after giving effect to the making of such Consolidated Growth Capital Expenditures, there shall be no less than $5,000,000 of Liquidity and (y) no Default or Event of Default shall have occurred and be continuing or would result therefrom.

7.13Amendments of Organization Documents; Fiscal Year; Legal Name, State of Formation; Form of Entity and Accounting Changes.

(a)Amend any of its Organization Documents in a material manner adverse to the

Lenders’ interests without the prior written consent of the Administrative Agent;

(b)change its fiscal year;

(c)without providing ten (10) days prior written notice to the Administrative Agent (or such extended period of time as agreed to by the Administrative Agent), change its name, state of formation, form of organization or principal place of business; or

(d)make any material change in accounting policies or reporting practices, except as required by GAAP.

7.14Prepayments, Etc. of Subordinated Indebtedness.

Prepay, redeem, purchase, defease or otherwise satisfy any Indebtedness that is subordinated to the Obligations (“Subordinated Indebtedness”) or obligate itself to do so prior to the scheduled maturity thereof in any manner (including by the exercise of any right of setoff), or make any payment in violation of  any  subordination,  standstill  or  collateral  sharing  terms  of  or  governing  any  Subordinated Indebtedness.

7.15Amendment, Etc. of Subordinated Indebtedness.

Amend, modify or change in any manner any term or condition of any Subordinated Indebtedness if such amendment or modification would add or change any terms in a manner adverse to any Loan Party or any Subsidiary, or shorten the final maturity or average life to maturity or require any payment to be made sooner than originally scheduled or increase the interest rate applicable thereto.

7.16Sanctions.

Directly or indirectly, use any Credit Extension or the proceeds of any Credit Extension, or lend, contribute or otherwise make available such Credit Extension or the proceeds of any Credit Extension to any Person, to fund any activities of or business with any Person, or in any Designated Jurisdiction, that, at the time of such funding, is the subject of Sanctions, or in any other manner that will result in a violation by any Person (including any Person participating in the transaction, whether as Lender, Administrative Agent, LC Issuer or otherwise) of Sanctions.

7.17Anti-Corruption Laws.

Directly or indirectly, use any Credit Extension or the proceeds of any Credit Extension for any

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purpose which would breach the United States Foreign Corrupt Practices Act of 1977, the UK Bribery Act 2010 and other similar anti-corruption legislation in other jurisdictions.

7.18Limitations on Holdings.

Holdings shall not (a) own any assets, other than (i) all of the outstanding Equity Interests in the Borrower and (ii) assets incidental to the foregoing and (b) engage in any material business activity other than (i) the making of capital contributions with respect to the Equity Interests in the Borrower, (ii) maintaining its corporate existence, (iii) the execution and delivery of the Loan Documents to which it is a party and the performance of its obligations thereunder, (iv) receiving Restricted Payments permitted by Section 7.06, (v) issuing, selling or redeeming (as permitted by Section 7.06) its own Equity Interests and activities incidental thereto, (vi) holding directors’ and members’ meetings, preparing corporate and similar records and other activities required to maintain its separate existence or other legal structure, (vii) preparing reports to, and preparing and making notices to and filings with, Governmental Authorities and to its holders of Equity Interests, and (viii) activities incidental to the foregoing.

ARTICLE VIII

EVENTS OF DEFAULT AND REMEDIES

8.01Events of Default.

Any of the following shall constitute an Event of Default:

(a)Non-Payment.  The Borrower or any other Loan Party fails to pay (i) when and as required to be paid herein, any amount of principal of any Loan or any L/C Obligation or deposit funds as Cash Collateral in respect of L/C Obligations, or (ii) within three (3) days after the same becomes due, any interest on any Loan or L/C Obligation, or any fee due hereunder, or (iii) within five (5) days after the same becomes due, any other amount payable hereunder or under any other Loan Document; or

(b)Specific Covenants.   Any Loan Party fails to perform or observe any term, covenant or agreement contained in any of 6.03(a), 6.05(a), 6.08, 6.10, 6.11, 6.12, 6.13, Article VII or Article X; or

(c)Other Defaults.  Any Loan Party fails to perform or observe (i) any covenant or agreement contained in Sections 6.01, 6.02, or 6.03(b)-(e) on its part to be performed or observed and  such failure continues  for five (5) days and (ii) any other covenant  or agreement  (not specified  in  Section  8.01(a)  or  (b)  or  in  Section  8.01(c)(i)  above)  contained  in  any  Loan Document on its part to be performed or observed and such failure continues for thirty (30) days; or

(d)Representations and Warranties.  Any representation, warranty, certification or statement of fact made or deemed made by or on behalf of the Borrower or any other Loan Party herein, in any other Loan Document, or in any document delivered in connection herewith or therewith shall be incorrect or misleading in any material respect when made or deemed made; or

(e)Cross-Default.  (i) Any Loan Party or any Subsidiary thereof (A) fails to make any payment when due (whether by scheduled maturity, required prepayment, acceleration, demand, or otherwise) in respect of any Indebtedness or Guarantee (other than Indebtedness hereunder and Indebtedness under Swap Contracts) having an aggregate principal amount (including undrawn committed or available amounts and including amounts owing to all creditors under any combined

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or syndicated credit arrangement) of more than the Threshold Amount, or (B) fails  to  observe  or  perform  any  other  agreement  or  condition  relating  to  any  such Indebtedness or Guarantee or contained in any instrument or agreement evidencing, securing or relating thereto, or any other event occurs, the effect of which default or other event is to cause, or to permit the holder or holders of such Indebtedness or the beneficiary or beneficiaries of such Guarantee  (or  a  trustee  or  agent  on  behalf  of  such  holder  or  holders  or  beneficiary  or beneficiaries) to cause, with the giving of notice if required, such Indebtedness to be demanded or to become due or to be repurchased, prepaid, defeased or redeemed (automatically or otherwise), or an offer to repurchase, prepay, defease or redeem such Indebtedness to be made, prior to its stated maturity, or such Guarantee to become payable or cash collateral in respect thereof to be demanded; or (ii) there occurs under any Swap Contract an Early Termination Date (as defined in such Swap Contract) resulting from (A) any event of default under such Swap Contract as to which a Loan Party or any Subsidiary thereof is the Defaulting Party (as defined in such Swap Contract) or (B) any Termination Event (as so defined) under such Swap Contract as to which a Loan Party or any Subsidiary thereof is an Affected Party (as so defined) and, in either event, the Swap Termination Value owed by such Loan Party or such Subsidiary as a result thereof is greater than the Threshold Amount and remains unpaid beyond any grace period set forth in such Swap Contract; or

(f)Insolvency  Proceedings,  Etc.     Any  Loan  Party  or  any  Subsidiary  thereof institutes or consents to the institution of any proceeding under any Debtor Relief Law, or makes an assignment for the benefit of creditors; or applies for or consents to the appointment of any receiver, trustee, custodian, conservator, liquidator, rehabilitator or similar officer for it or for all or any material part of its property; or any receiver, trustee, custodian, conservator, liquidator, rehabilitator or similar officer is appointed without the application or consent of such Person and the appointment continues undischarged or unstayed for sixty (60) calendar days; or any proceeding under any Debtor Relief Law relating to any such Person or to all or any material part of its property is instituted without the consent of such Person and continues undismissed or unstayed for sixty (60) calendar days, or an order for relief is entered in any such proceeding; or

(g)Inability to Pay Debts; Attachment.  (i) Any Loan Party or any Subsidiary thereof becomes unable or admits in writing its inability or fails generally to pay its debts as they become due, or (ii) any writ or warrant of attachment or execution or similar process is issued or levied against all or any material part of the property of any such Person and is not released, vacated or fully bonded within sixty (60) days after its issue or levy; or

(h)Judgments.  There is entered against any Loan Party or any Subsidiary thereof (i) one or more final judgments or orders for the payment of money in an aggregate amount (as to all such judgments and orders) exceeding the Threshold Amount (to the extent not covered by independent third-party insurance as to which the insurer is rated at least “A” by A.M. Best Company, has been notified of the potential claim and does not dispute coverage), or (ii) any one or more non-monetary final judgments that have, or could reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect and, in either case, such judgment remains  undischarged,  unvacated,  unbonded  or  unstayed  for  a  period  of  forty-five  (45) consecutive days; or

(i)ERISA.     (i) An  ERISA  Event  occurs  with  respect  to  a  Pension  Plan  or Multiemployer Plan which has resulted or could reasonably be expected to result in liability of any Loan Party under Title IV of ERISA to the Pension Plan, Multiemployer Plan or the PBGC in an aggregate amount in excess of the Threshold Amount, or (ii) Holdings or any ERISA Affiliate fails  to  pay  when  due,  after  the  expiration  of  any applicable  grace  period,  any  installment payment with respect to its withdrawal liability under Section 4201 of ERISA under a

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Multiemployer Plan in an aggregate amount in excess of the Threshold Amount; or

(j)Invalidity of Loan Documents.  Any material provision of any Loan Document, at any time after its execution and delivery and for any reason other than as expressly permitted hereunder  or  thereunder  or  satisfaction  in  full  of  all  Obligations  arising  under  the  Loan Documents, ceases to be in full force and effect; or any Loan Party or any Affiliate of a Loan Party contests in any manner the validity or enforceability of any provision of any Loan Document; or any Loan Party denies that it has any or further liability or obligation under any provision of any Loan Document, or purports to revoke, terminate or rescind any provision of any Loan Document; or

(k)Collateral Documents.  Any Collateral Document after delivery thereof pursuant to the terms of the Loan Documents shall for any reason cease to create a valid and perfected first priority Lien (subject to Permitted Liens and other exceptions set forth therein) on the Collateral purported to be covered thereby, or any Loan Party shall assert the invalidity of such Liens; or

(l)Change of Control. There occurs any Change of Control.

Without limiting the provisions of Article IX, if a Default shall have occurred under the Loan Documents, then such Default will continue to exist until it either is cured (to the extent specifically permitted) in accordance with the Loan Documents or is otherwise expressly waived by Administrative Agent (with the approval of requisite Lenders (in their sole discretion) as determined in accordance with Section 11.01); and once an Event of Default occurs under the Loan Documents, then such Event of Default  will  continue  to  exist  until  it  is  expressly  waived  by  the  requisite  Lenders  or  by  the Administrative Agent with the approval of the requisite Lenders, as required hereunder in Section 11.01.

8.02Remedies upon Event of Default.

If any Event of Default occurs and is continuing, the Administrative Agent shall, at the request of, or may, with the consent of, the Required Lenders, take any or all of the following actions:

(a)declare the Commitment of each Lender to make Loans and any obligation of the L/C Issuer to make L/C Credit Extensions to be terminated, whereupon such commitments and obligation shall be terminated;

(b)declare the unpaid principal amount of all outstanding Loans, all interest accrued and unpaid thereon, and all other amounts owing or payable hereunder or under any other Loan Document to be immediately due and payable, without presentment, demand, protest or other notice of any kind, all of which are hereby expressly waived by the Borrower;

(c)require that the Borrower Cash Collateralize the L/C Obligations (in an amount equal to the Minimum Collateral Amount with respect thereto); and

(d)exercise on behalf of itself, the Lenders and the LC Issuer all rights and remedies available to it, the Lenders and the LC Issuer under the Loan Documents or applicable Law or equity;

provided, however, that upon the occurrence of an actual or deemed entry of an order for relief with respect to the Borrower under the Bankruptcy Code of the United States, the obligation of each Lender to make Loans and any obligation of the L/C Issuer to make L/C Credit Extensions shall automatically terminate, the unpaid principal amount of all outstanding Loans and all interest and other amounts as aforesaid shall automatically become due and payable, and the obligation of the Borrower to Cash Collateralize the L/C Obligations as aforesaid shall automatically become

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effective, in each case without further act of the Administrative Agent or any Lender.

8.03Application of Funds.

After the exercise of remedies provided for in Section 8.02 (or after the Loans have automatically become immediately due and payable and the L/C Obligations have automatically been required to be Cash Collateralized as set forth in the proviso to Section 8.02) or if at any time insufficient funds are received by and available to the Administrative Agent to pay fully all Secured Obligations then due hereunder, any amounts received on account of the Secured Obligations shall, subject to the provisions of Sections 2.13 and 2.14, be applied by the Administrative Agent in the following order:

First, to payment of that portion of the Secured Obligations constituting fees, indemnities, expenses and other amounts (including fees, charges and disbursements of counsel to the Administrative Agent and amounts payable under Article III) payable to the Administrative Agent in its capacity as such;

Second, to payment of that portion of the Secured Obligations constituting fees, indemnities and other amounts (other than principal, interest and Letter of Credit Fees) payable to the Lenders and the L/C Issuer (including fees, charges and disbursements of counsel to the respective Lenders and the L/C Issuer) arising under the Loan Documents and amounts payable under Article III, ratably among them in proportion to the respective amounts described in this clause Second payable to them;

Third, to payment of that portion of the Secured Obligations constituting accrued and unpaid  Letter  of  Credit  Fees,  interest  on  the  Loans,  L/C  Borrowings  and  other  Secured Obligations arising under the Loan Documents, ratably among the Lenders and the L/C Issuer in proportion to the respective amounts described in this clause Third payable to them;

Fourth,  to  payment  of  that  portion  of  the  Secured  Obligations  constituting  unpaid principal of the Loans, L/C Borrowings and Secured Obligations then owing under Secured Hedge Agreements and Secured Cash Management Agreements and to the to the Administrative Agent for the account of the L/C Issuer, to Cash Collateralize that portion of L/C Obligations comprised of the aggregate undrawn amount of Letters of Credit to the extent not otherwise Cash Collateralized by the Borrower pursuant to Sections 2.03 and 2.13, in each case ratably among the Administrative Agent, the Lenders, the L/C Issuer, the Hedge Banks and the Cash Management Banks in proportion to the respective amounts described in this clause Fourth held by them; and

Last, the balance, if any, after all of the Secured Obligations have been indefeasibly paid in full, to the Borrower or as otherwise required by Law.

Subject to Sections 2.03(c) and 2.13, amounts used to Cash Collateralize the aggregate undrawn amount of Letters of Credit pursuant to clause Fourth above shall be applied to satisfy drawings under such Letters of Credit as they occur.  If any amount remains on deposit as Cash Collateral after all Letters of Credit have either been fully drawn or expired, such remaining amount shall be applied to the other Secured Obligations, if any, in the order set forth above.  Excluded Swap Obligations with respect to any Guarantor shall not be paid with amounts received from such Guarantor or its assets, but appropriate adjustments shall be made with respect to payments from other Loan Parties to preserve the allocation to Secured Obligations otherwise set forth above in this Section.

Notwithstanding   the   foregoing,   Secured   Obligations   arising   under   Secured   Cash   Management Agreements and Secured Hedge Agreements shall be excluded from the application described above if the Administrative Agent has not received a Secured Party Designation Notice, together with such

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supporting documentation as the Administrative Agent may request, from the applicable Cash Management Bank or Hedge Bank, as the case may be.  Each Cash Management Bank or Hedge Bank not a party to this Agreement that has given the notice contemplated by the preceding sentence shall, by such notice, be deemed to have acknowledged and accepted the appointment of the Administrative Agent pursuant to the terms of Article IX for itself and its Affiliates as if a “Lender” party hereto.

ARTICLE IX

ADMINISTRATIVE AGENT

9.01Appointment and Authority.

(a)Appointment.    Each  of  the  Lenders  and  the  L/C  Issuer  hereby  irrevocably appoints, designates and authorizes Cadence Bank to act on its behalf as the Administrative Agent hereunder and under the other Loan Documents and authorizes the Administrative Agent to take such actions on its behalf and to exercise such powers as are delegated to the Administrative Agent by the terms hereof or thereof, together with such actions and powers as are reasonably incidental thereto.  The provisions of this Article are solely for the benefit of the Administrative Agent, the Lenders and the L/C Issuer, and neither the Borrower nor any other Loan  Party  shall  have  rights  as  a  third  party  beneficiary  of  any  of  such  provisions.    It  is understood and agreed that the use of the term “agent” herein or in any other Loan Documents (or any other similar term) with reference to the Administrative Agent is not intended to connote any fiduciary or other implied (or express) obligations arising under agency doctrine of any applicable Law. Instead such term is used as a matter of market custom, and is intended to create or reflect only an administrative relationship between contracting parties.

(b)Collateral  Agent.  The  Administrative  Agent  shall  also  act  as  the  “collateral agent” under the Loan Documents, and each of the Lenders (including in its capacities as a potential Hedge Bank and a potential Cash Management Bank) and the L/C Issuer hereby irrevocably appoints and authorizes the Administrative Agent to act as the agent of such Lender and  the  L/C  Issuer  for  purposes  of  acquiring,  holding  and  enforcing  any  and  all  Liens  on Collateral granted by any of the Loan Parties to secure any of the Secured Obligations, together with such powers and discretion as are reasonably incidental thereto.  In this connection, the Administrative Agent, as “collateral agent” (and any co-agents, sub-agents and attorneys-in-fact appointed by the Administrative Agent pursuant to Section 9.05 for purposes of holding or enforcing any Lien on the Collateral (or any portion thereof) granted under the Collateral Documents, or for exercising any rights and remedies thereunder at the direction of the Administrative Agent), shall be entitled to the benefits of all provisions of this Article IX and Article XI (including Section 11.04(c), as though such co-agents, sub-agents and attorneys-in-fact were the “collateral agent” under the Loan Documents) as if set forth in full herein with respect thereto.

9.02Rights as a Lender.

The Person serving as the Administrative Agent hereunder shall have the same rights and powers in its capacity as a Lender as any other Lender and may exercise the same as though it were not the Administrative Agent and the term “Lender” or “Lenders” shall, unless otherwise expressly indicated or unless the context otherwise requires, include the Person serving as the Administrative Agent hereunder in its individual capacity.  Such Person and its Affiliates may accept deposits from, lend money to, own securities of, act as the financial advisor or in any other advisory capacity for and generally engage in any kind of banking, trust, financial, advisory, underwriting or other business with any Loan Party or any Subsidiary or other Affiliate thereof as if such Person were not the Administrative Agent hereunder and

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without any duty to account therefor to the Lenders or to provide notice to or consent of the Lenders with respect thereto.

9.03Exculpatory Provisions.

(a)The Administrative Agent shall not have any duties or obligations except those expressly set forth herein and in the other Loan Documents, and its duties hereunder shall be administrative in nature.  Without limiting the generality of the foregoing, the Administrative Agent and its Related Parties:

(i)shall not be subject to any fiduciary or other implied duties, regardless of whether a Default has occurred and is continuing;

(ii)shall not have any duty to take any discretionary action or exercise any discretionary powers, except discretionary rights and powers expressly contemplated hereby or by the other Loan Documents that the Administrative Agent is required to exercise as directed in writing by the Required Lenders (or such other number or percentage of the Lenders as shall be expressly provided for herein or in the other Loan Documents), provided that the Administrative Agent shall not be required to take any action that, in its opinion or the opinion of its counsel, may expose the Administrative Agent to liability or that is contrary to any Loan Document or applicable Law, including for the avoidance of doubt any action that may be in violation of the automatic stay under any Debtor Relief Law or that may effect a forfeiture, modification or termination of property of a Defaulting Lender in violation of any Debtor Relief Law; and

(iii)shall not, except as expressly set forth herein and in the other Loan Documents, have any duty or responsibility to disclose, and shall not be liable for the failure to disclose, any information relating to any Loan Party or any of its Affiliates that is communicated to or obtained by the Person serving as the Administrative Agent or any of its Affiliates in any capacity.

(b)Neither the Administrative Agent nor any of its Related Parties shall be liable for any action taken or not taken by the Administrative Agent under or in connection with this Agreement or any other Loan Document or the transactions contemplated hereby or thereby (i) with the consent or at the request of the Required Lenders (or such other number or percentage of the Lenders as shall be necessary, or as the Administrative Agent shall believe in good faith shall be necessary, under the circumstances as provided in Sections 11.01 and 8.02) or (ii) in the absence of its own gross negligence or willful misconduct as determined by a court of competent jurisdiction by final and nonappealable judgment.  The Administrative Agent shall be deemed not to have knowledge of any Default unless and until notice describing such Default is given in writing to the Administrative Agent by the Borrower, a Lender or the L/C Issuer.

(c)Neither the Administrative Agent nor any of its Related Parties have any duty or obligation to any Lender or participant or any other Person to ascertain or inquire into (i) any statement, warranty or representation made in or in connection with this Agreement or any other Loan Document, (ii) the contents of any certificate, report or other document delivered hereunder or thereunder or in connection herewith or therewith, (iii) the performance or observance of any of the covenants, agreements or other terms or conditions set forth herein or therein or the occurrence of any Default, (iv) the validity, enforceability, effectiveness or genuineness of this Agreement, any other Loan Document or any other agreement, instrument or document, or the creation, perfection or priority of any Lien purported to be created by the Collateral Documents, (v) the value or the

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sufficiency of any Collateral, or (vi) the satisfaction of any condition set forth in Article IV or elsewhere herein, other than to confirm receipt of items expressly required to be delivered to the Administrative Agent.

9.04Reliance by Administrative Agent.

The Administrative Agent shall be entitled to rely upon, and shall be fully protected in relying and shall not incur any liability for relying upon, any notice, request, certificate, communication, consent, statement, instrument, document or other writing (including any electronic message, Internet or intranet website posting or other distribution) believed by it to be genuine and to have been signed, sent or otherwise  authenticated  by  the  proper  Person.    The  Administrative  Agent  also  may  rely  upon  any statement made to it orally or by telephone and believed by it to have been made by the proper Person, and shall be fully protected in relying and shall not incur any liability for relying thereon.  In determining compliance with any condition hereunder to the making of a Loan, or the issuance, extension, renewal or increase of a Letter of Credit, that by its terms must be fulfilled to the satisfaction of a Lender or the L/C Issuer, the Administrative Agent may presume that such condition is satisfactory to such Lender or the L/C Issuer unless the Administrative Agent shall have received notice to the contrary from such Lender or the L/C Issuer prior to the making of such Loan or the issuance of such Letter of Credit.   The Administrative Agent may consult with legal counsel (who may be counsel for the Loan Parties), independent accountants and other experts selected by it, and shall not be liable for any action taken or not taken by it in accordance with the advice of any such counsel, accountants or experts.  For purposes of determining compliance with the conditions specified in Section 4.01, each Lender that has signed this Agreement shall be deemed to have consented to, approved or accepted or to be satisfied with, each document or other matter required thereunder to be consented to or approved by or acceptable or satisfactory to a Lender unless the Administrative Agent shall have received notice from such Lender prior to the proposed Closing Date specifying its objections.

9.05Delegation of Duties.

The Administrative Agent may perform any and all of its duties and exercise its rights and powers hereunder or under any other Loan Document by or through any one or more sub-agents appointed by the Administrative Agent.  The Administrative Agent and any such sub-agent may perform any and all of its duties and exercise its rights and powers by or through their respective Related Parties.  The exculpatory provisions  of  this  Article  shall  apply  to  any  such  sub-agent  and  to  the  Related  Parties  of  the Administrative Agent and any such sub-agent, and shall apply to their respective activities in connection with the syndication of the Facility as well as activities as Administrative Agent. The Administrative Agent shall not be responsible for the negligence or misconduct of any sub-agents except to the extent that a court of competent jurisdiction determines in a final and nonappealable judgment that the Administrative Agent acted with gross negligence or willful misconduct in the selection of such sub- agents.

9.06Resignation of Administrative Agent.

(a)Notice.  The Administrative Agent may at any time give notice of its resignation to the Lenders, the L/C Issuer and the Borrower.  Upon receipt of any such notice of resignation, the Required Lenders shall have the right, in consultation with the Borrower, to appoint a successor, which shall be a bank with an office in the United States, or an Affiliate of any such bank with an office in the United States.  If no such successor shall have been so appointed by the Required Lenders and shall have accepted such appointment within thirty (30) days after the retiring Administrative Agent gives notice of its resignation (or such earlier day as shall be agreed by the Required Lenders) (the “Resignation Effective Date”), then the retiring Administrative Agent may (but shall not be obligated to) on behalf of the Lenders and the L/C Issuer, appoint a successor

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Administrative Agent meeting the qualifications set forth above; provided that in no event shall any successor Administrative Agent be a Defaulting Lender.   Whether or not a successor has been appointed, such resignation shall become effective in accordance with such notice on the Resignation Effective Date.

(b)Effect of Resignation.   With effect from the Resignation Effective Date (i) the retiring Administrative Agent shall be discharged from its duties and obligations hereunder and under the other Loan Documents (except that in the case of any collateral security held by the Administrative Agent on behalf of the Lenders or the L/C Issuer under any of the Loan Documents, the retiring Administrative Agent shall continue to hold such collateral security until such time as a successor Administrative Agent is appointed) and (ii) except for any indemnity payments  or  other  amounts  then  owed  to  the  retiring  Administrative  Agent, all  payments, communications and determinations provided to be made by, to or through the Administrative Agent shall instead be made by or to each Lender and the L/C Issuer directly, until such time, if any, as the Required Lenders appoint a successor Administrative Agent as provided for above. Upon the acceptance of a successor’s appointment as Administrative Agent hereunder, such successor shall succeed to and become vested with all of the rights, powers, privileges and duties of the retiring Administrative Agent (other than as provided in Section 3.01(g) and other than any rights to indemnity payments or other amounts owed to the retiring Administrative Agent as of the Resignation Effective Date), and the retiring Administrative Agent shall be discharged from all of its duties and obligations hereunder or under the other Loan Documents (if not already discharged therefrom as provided above in this Section).  The fees payable by the Borrower to a successor Administrative Agent shall be the same as those payable to its predecessor unless otherwise agreed between the Borrower and such successor.  After the retiring Administrative Agent’s resignation hereunder and under the other Loan Documents, the provisions of this Article and Section 11.04 shall continue in effect for the benefit of such retiring Administrative Agent, its sub-agents and their respective Related Parties in respect of any actions taken or omitted to be taken by any of them (i) while the retiring Administrative Agent was acting as Administrative Agent and (ii) after such resignation or removal for as long as any of them continues to act in any capacity hereunder or under the other Loan Documents, including, without limitation, (A) acting as collateral agent or otherwise holding any collateral security on behalf of any of the Secured Parties and (B) in respect of any actions taken in connection with transferring the agency to any successor Administrative Agent.

(c)L/C Issuer.  Any resignation by Cadence Bank as Administrative Agent pursuant to this Section shall also constitute its resignation as L/C Issuer.  If Cadence Bank resigns as an L/C Issuer, it shall retain all the rights, powers, privileges and duties of the L/C Issuer hereunder with respect to all Letters of Credit outstanding as of the effective date of its resignation as L/C Issuer and all L/C Obligations with respect thereto, including the right to require the Lenders to make  Base  Rate  Loans  or  fund  risk  participations  in  Unreimbursed  Amounts  pursuant  to Section 2.03(c).   Upon the appointment by the Borrower of a successor L/C Issuer hereunder (which successor shall in all cases be a Lender other than a Defaulting Lender), (i) such successor shall succeed to and become vested with all of the rights, powers, privileges and duties of the retiring L/C Issuer, (ii) the retiring L/C Issuer shall be discharged from all of their respective duties and obligations hereunder or under the other Loan Documents, and (iii) the successor L/C Issuer shall issue letters of credit in substitution for the Letters of Credit, if any, outstanding at the time of such succession or make other arrangements satisfactory to Cadence Bank to effectively assume the obligations of Cadence Bank with respect to such Letters of Credit.

9.07Non-Reliance on Administrative Agent and Other Lenders.

Each Lender and the L/C Issuer acknowledges that it has, independently and without reliance upon

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the Administrative Agent or any other Lender or any of their Related Parties and based on such documents and information as it has deemed appropriate, made its own credit analysis and decision to enter into this Agreement.  Each Lender and the L/C Issuer also acknowledges that it will, independently and without reliance upon the Administrative Agent or any other Lender or any of their Related Parties and based on such documents and information as it shall from time to time deem appropriate, continue to make its own decisions in taking or not taking action under or based upon this Agreement, any other Loan Document or any related agreement or any document furnished hereunder or thereunder.

9.08No Other Duties, Etc.

Anything herein to the contrary notwithstanding, none of the titles listed on the cover page hereof shall  have  any  powers,  duties  or  responsibilities  under  this  Agreement  or  any  of  the  other  Loan Documents, except in its capacity, as applicable, as the Administrative Agent, a Lender or the L/C Issuer hereunder.

9.09Administrative Agent May File Proofs of Claim; Credit Bidding.

In case of the pendency of any proceeding under any Debtor Relief Law or any other judicial proceeding relative to any Loan Party, the Administrative Agent (irrespective of whether the principal of any Loan or L/C Obligation shall then be due and payable as herein expressed or by declaration or otherwise and irrespective of whether the Administrative Agent shall have made any demand on the Borrower) shall be entitled and empowered, by intervention in such proceeding or otherwise:

(a)to file and prove a claim for the whole amount of the principal and interest owing and unpaid in respect of the Loans, L/C Obligations and all other Secured Obligations that are owing and unpaid and to file such other documents as may be necessary or advisable in order to have the claims of the Lenders, the L/C Issuer and the Administrative Agent (including any claim for the reasonable compensation, expenses, disbursements and advances of the Lenders, the L/C Issuer and the Administrative Agent and their respective agents and counsel and all other amounts due  the  Lenders,  the  L/C  Issuer  and  the  Administrative  Agent  under  Sections  2.03,  2.08 and 11.04) allowed in such judicial proceeding; and

(b)to collect and receive any monies or other property payable or deliverable on any such claims and to distribute the same; and any custodian, receiver, assignee, trustee, liquidator, sequestrator or other similar official in any such judicial proceeding is hereby authorized by each Lender and the L/C Issuer to make such payments to the Administrative Agent and, in the event that the Administrative Agent shall consent to the making of such payments directly to the Lenders and the L/C Issuer, to pay to the Administrative Agent any amount due for the reasonable compensation, expenses, disbursements and advances of the Administrative Agent and its agents and counsel, and any other amounts due the Administrative Agent under Sections 2.08 and 11.04.

Nothing contained herein shall be deemed to authorize the Administrative Agent to authorize or consent to or accept or adopt on behalf of any Lender or the L/C Issuer any plan of reorganization, arrangement, adjustment or composition affecting the Secured Obligations or the rights of any Lender or the L/C Issuer to authorize the Administrative Agent to vote in respect of the claim of any Lender or the L/C Issuer or in any such proceeding.

The Secured Parties hereby irrevocably authorize the Administrative Agent, at the direction of the Required Lenders, to credit bid all or any portion of the Secured Obligations (including accepting some or all of the Collateral in satisfaction of some or all of the Secured Obligations pursuant to a deed in lieu of foreclosure or otherwise) and in such manner purchase (either directly or through one or more acquisition

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vehicles) all or any portion of the Collateral (a) at any sale thereof conducted under the provisions of the Bankruptcy Code of the United States, including under Sections 363, 1123 or 1129 of the Bankruptcy Code of the United States, or any similar Laws in any other jurisdictions to which a Loan Party is subject, (b) at any other sale or foreclosure or acceptance of collateral in lieu of debt conducted by (or with the consent or at the direction of) the Administrative Agent (whether by judicial action or otherwise) in accordance with any applicable Law.  In connection with any such credit bid and purchase, the Secured Obligations owed to the Secured Parties shall be entitled to be, and shall be, credit bid on a ratable basis (with Secured Obligations with respect to contingent or unliquidated claims receiving contingent interests in the acquired assets on a ratable basis that would vest upon the liquidation of such claims in an amount proportional to the liquidated portion of the contingent claim amount used in allocating the contingent interests) in the asset or assets so purchased (or in the Equity Interests or debt instruments of the acquisition vehicle or vehicles that are used to consummate such purchase).  In connection with any such bid (i) the Administrative Agent shall be authorized to form one or more acquisition vehicles to make a bid, (ii) to adopt documents providing for the governance of the acquisition vehicle or vehicles (provided that  any  actions  by  the  Administrative  Agent  with  respect  to  such  acquisition  vehicle  or  vehicles, including any disposition of the assets or Equity Interests thereof shall be governed, directly or indirectly, by the vote of the Required Lenders, irrespective of the termination of this Agreement and without giving effect to the limitations on actions by the Required Lenders contained in clauses (a) through (j) of Section11.01 of this Agreement, (iii) the Administrative Agent shall be authorized to assign the relevant Secured Obligations to any such acquisition vehicle pro rata by the Lenders, as a result of which each of the Lenders  shall  be  deemed  to  have  received  a  pro  rata  portion  of  any  Equity  Interests  and/or  debt instruments  issued  by  such  an  acquisition  vehicle  on  account  of  the  assignment  of  the  Secured Obligations to be credit bid, all without the need for any Secured Party or acquisition vehicle to take any further action, and (iv) to the extent that Secured Obligations that are assigned to an acquisition vehicle are not used to acquire Collateral for any reason (as a result of another bid being higher or better, because the amount of Secured Obligations assigned to the acquisition vehicle exceeds the amount of debt credit bid by the acquisition vehicle or otherwise), such Secured Obligations shall automatically be reassigned to the Lenders pro rata and the Equity Interests and/or debt instruments issued by any acquisition vehicle on  account  of  the  Secured  Obligations  that  had  been  assigned  to  the  acquisition  vehicle  shall automatically be cancelled, without the need for any Secured Party or any acquisition vehicle to take any further action.

9.10 Collateral and Guaranty Matters.

Each of the Lenders (including in its capacities as a potential Cash Management Bank and a potential Hedge Bank) and the L/C Issuer irrevocably authorize the Administrative Agent, at its option and in its discretion,

(a)to release any Lien on any property granted to or held by the Administrative Agent under any Loan Document (i) upon the Facility Termination Date, (ii) that is sold or otherwise disposed of or to be sold or otherwise disposed of as part of or in connection with any sale or other disposition permitted hereunder or under any other Loan Document, or (iii) if approved, authorized or ratified in writing by the Required Lenders in accordance with Section 11.01;

(b)to subordinate any Lien on any property granted to or held by the Administrative Agent under any Loan Document to the holder of any Lien on such property that is permitted by Section 7.01(i); and

(c)to release any Guarantor from its obligations under the Guaranty if such Person ceases to be a Subsidiary as a result of a transaction permitted under the Loan Documents.

Upon request by the Administrative Agent at any time, the Required Lenders will confirm in writing

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the Administrative Agent’s authority to release or subordinate its interest in particular types or items of property, or to release any Guarantor from its obligations under the Guaranty pursuant to this Section 9.10.  In each case as specified in this Section 9.10, the Administrative Agent will, at the Borrower’s expense, execute and deliver to the applicable Loan Party such documents as such Loan Party may reasonably request to evidence the release of such item of Collateral from the assignment and security interest granted under the Collateral Documents or to subordinate its interest in such item, or to release such Guarantor from its obligations under the Guaranty, in each case in accordance with the terms of the Loan Documents and this Section 9.10.

The Administrative Agent shall not be responsible for or have a duty to ascertain or inquire into any representation or warranty regarding the existence, value or collectability of the Collateral, the existence, priority or perfection of the Administrative Agent’s Lien thereon, or any certificate prepared by any Loan Party in connection therewith, nor shall the Administrative Agent be responsible or liable to the Lenders for any failure to monitor or maintain any portion of the Collateral.

9.11Secured Cash Management Agreements and Secured Hedge Agreements.

Except as otherwise expressly set forth herein, no Cash Management Bank or Hedge Bank that obtains the benefit of the provisions of Section 8.03, the Guaranty or any Collateral by virtue of the provisions hereof or any Collateral Document shall have any right to notice of any action or to consent to, direct or object to any action hereunder or under any other Loan Document or otherwise in respect of the Collateral (including the release or impairment of any Collateral) (or to notice of or to consent to any amendment, waiver or modification of the provisions hereof or of the Guaranty or any Collateral Document) other than in its capacity as a Lender and, in such case, only to the extent expressly provided in the Loan Documents.  Notwithstanding any other provision of this Article IX to the contrary, the Administrative  Agent  shall  not  be  required  to  verify  the  payment  of,  or  that  other  satisfactory arrangements have been made with respect to, Secured Obligations arising under Secured Cash Management Agreements and Secured Hedge Agreements except to the extent expressly provided herein and unless the Administrative Agent has received a Secured Party Designation Notice of such Secured Obligations, together with such supporting documentation as the Administrative Agent may request, from the applicable Cash Management Bank or Hedge Bank, as the case may be.  The Administrative Agent shall not be required to verify the payment of, or that other satisfactory arrangements have been made with respect to, Secured Obligations arising under Secured Cash Management Agreements and Secured Hedge Agreements in the case of a Facility Termination Date.

ARTICLE X

CONTINUING GUARANTY

10.01Guaranty.

Each Guarantor hereby absolutely and unconditionally, jointly and severally guarantees, as primary  obligor  and  as  a  guaranty  of  payment  and  performance  and  not  merely  as  a  guaranty  of collection, prompt payment when due, whether at stated maturity, by required prepayment, upon acceleration, demand or otherwise, and at all times thereafter, of any and all Secured Obligations (for each Guarantor, subject to the proviso in this sentence, its “Guaranteed Obligations”); provided that (a) the Guaranteed Obligations of a Guarantor shall exclude any Excluded Swap Obligations with respect to such Guarantor and (b) the liability of each Guarantor individually with respect to this Guaranty shall be limited to an aggregate amount equal to the largest amount that would not render its obligations hereunder subject to avoidance under Section 548 of the Bankruptcy Code of the United States or any comparable provisions of any applicable state law.   The Administrative Agent’s books and records showing the amount of the Obligations shall be admissible in evidence in any action or proceeding, and shall be binding upon each Guarantor, and conclusive for the

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purpose of establishing the amount of the Secured Obligations.  This Guaranty shall not be affected by the genuineness, validity, regularity or enforceability of the Secured Obligations or any instrument or agreement evidencing any Secured Obligations, or by the existence, validity, enforceability, perfection, non-perfection or extent of any collateral therefor, or by any fact or circumstance relating to the Secured Obligations which might otherwise constitute a defense to the obligations  of  the  Guarantors,  or  any  of  them,  under  this  Guaranty,  and  each  Guarantor  hereby irrevocably waives any defenses it may now have or hereafter acquire in any way relating to any or all of the foregoing.

10.02Rights of Lenders.

Each Guarantor consents and agrees that the Secured Parties may, at any time and from time to time, without notice or demand, and without affecting the enforceability or continuing effectiveness hereof:  (a) amend, extend, renew, compromise, discharge, accelerate or otherwise change the time for payment or the terms of the Secured Obligations or any part thereof; (b) take, hold, exchange, enforce, waive, release, fail to perfect, sell, or otherwise dispose of any security for the payment of this Guaranty or any Secured Obligations; (c) apply such security and direct the order or manner of sale thereof as the Administrative  Agent,  the  L/C  Issuer  and  the  Lenders  in  their  sole  discretion  may  determine;  and (d) release  or  substitute  one  or  more  of  any  endorsers  or  other  guarantors  of  any  of  the  Secured Obligations. Without limiting the generality of the foregoing, each Guarantor consents to the taking of, or failure to take, any action which might in any manner or to any extent vary the risks of such Guarantor under this Guaranty or which, but for this provision, might operate as a discharge of such Guarantor.

10.03Certain Waivers.

Each Guarantor waives (a) any defense arising by reason of any disability or other defense of the Borrower or any other guarantor, or the cessation from any cause whatsoever (including any act or omission of any Secured Party) of the liability of the Borrower or any other Loan Party; (b) any defense based on any claim that such Guarantor’s obligations exceed or are more burdensome than those of the Borrower or any other Loan Party; (c) the benefit of any statute of limitations affecting any Guarantor’s liability hereunder; (d) any right to proceed against the Borrower or any other Loan Party, proceed against or exhaust any security for the Secured Obligations, or pursue any other remedy in the power of any Secured Party whatsoever; (e) any benefit of and any right to participate in any security now or hereafter held by any Secured Party; and (f) to the fullest extent permitted by law, any and all other defenses or benefits that may be derived from or afforded by applicable Law limiting the liability of or exonerating guarantors or sureties.   Each Guarantor expressly waives all setoffs and counterclaims and all presentments, demands for payment or performance, notices of nonpayment or nonperformance, protests, notices of protest, notices of dishonor and all other notices or demands of any kind or nature whatsoever with respect to the Secured Obligations, and all notices of acceptance of this Guaranty or of the existence, creation or incurrence of new or additional Secured Obligations.

10.04Obligations Independent.

The obligations of each Guarantor hereunder are those of primary obligor, and not merely as surety, and are independent of the Secured Obligations and the obligations of any other guarantor, and a separate action may be brought against each Guarantor to enforce this Guaranty whether or not the Borrower or any other person or entity is joined as a party.

10.05Subrogation.

No Guarantor shall exercise any right of subrogation, contribution, indemnity, reimbursement or similar rights with respect to any payments it makes under this Guaranty until all of the Secured Obligations

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and any amounts payable under this Guaranty have been indefeasibly paid and performed in full and the Commitments and the Facility are terminated.   If any amounts are paid to a Guarantor in violation of the foregoing limitation, then such amounts shall be held in trust for the benefit of the Secured Parties and shall forthwith be paid to the Secured Parties to reduce the amount of the Secured Obligations, whether matured or unmatured.

10.06Termination; Reinstatement.

This  Guaranty  is  a  continuing  and  irrevocable  guaranty  of  all  Secured  Obligations  now  or hereafter existing and shall remain in full force and effect until the Facility Termination Date. Notwithstanding the foregoing, this Guaranty shall continue in full force and effect or be revived, as the case may be, if any payment by or on behalf of the Borrower or a Guarantor is made, or any of the Secured Parties exercises its right of setoff, in respect of the Secured Obligations and such payment or the proceeds of such setoff or any part thereof is subsequently invalidated, declared to be fraudulent or preferential, set aside or required (including pursuant to any settlement entered into by any of the Secured Parties in their discretion) to be repaid to a trustee, receiver or any other party, in connection with any proceeding under any Debtor Relief Laws or otherwise, all as if such payment had not been made or such setoff had not occurred and whether or not the Secured Parties are in possession of or have released this Guaranty and regardless of any prior revocation, rescission, termination or reduction.  The obligations of each Guarantor under this paragraph shall survive termination of this Guaranty.

10.07Stay of Acceleration.

If acceleration of the time for payment of any of the Secured Obligations is stayed, in connection with any case commenced by or against a Guarantor or the Borrower under any Debtor Relief Laws, or otherwise, all such amounts shall nonetheless be payable by each Guarantor, jointly and severally, immediately upon demand by the Secured Parties.

10.08Condition of Borrower.

Each Guarantor acknowledges and agrees that it has the sole responsibility for, and has adequate means of, obtaining from the Borrower and any other guarantor such information concerning the financial condition, business and operations of the Borrower and any such other guarantor as such Guarantor requires, and that none of the Secured Parties has any duty, and such Guarantor is not relying on the Secured Parties at any time, to disclose to it any information relating to the business, operations or financial condition of the Borrower or any other guarantor (each Guarantor waiving any duty on the part of the Secured Parties to disclose such information and any defense relating to the failure to provide the same).

10.09Appointment of Borrower.

Each of the Loan Parties hereby appoints the Borrower to act as its agent for all purposes of this Agreement, the other Loan Documents and all other documents and electronic platforms entered into in connection herewith and agrees that (a) the Borrower may execute such documents and provide such authorizations on behalf of such Loan Parties as the Borrower deems appropriate in its sole discretion and each Loan Party shall be obligated by all of the terms of any such document and/or authorization executed on its behalf, (b) any notice or communication delivered by the Administrative Agent, the L/C Issuer or a Lender to the Borrower shall be deemed delivered to each Loan Party and (c) the Administrative Agent, the L/C Issuer or the Lenders may accept, and be permitted to rely on, any document, authorization, instrument or agreement executed by the Borrower on behalf of each of the Loan Parties.

10.10Right of Contribution.

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The Guarantors agree among themselves that, in connection with payments made hereunder, each Guarantor shall have contribution rights against the other Guarantors as permitted under applicable Law.

10.11Keepwell.

Each Loan Party that is a Qualified ECP Guarantor at the time the Guaranty or the grant of a Lien under the Loan Documents, in each case, by any Specified Loan Party becomes effective with respect to any Swap Obligation, hereby jointly and severally, absolutely, unconditionally and irrevocably undertakes to provide such funds or other support to each Specified Loan Party with respect to such Swap Obligation as may be needed by such Specified Loan Party from time to time to honor all of its obligations under the Loan Documents in respect of such Swap Obligation (but, in each case, only up to the maximum amount of  such  liability  that  can  be  hereby  incurred  without  rendering  such  Qualified  ECP  Guarantor’s obligations and undertakings under this Article X voidable under applicable law relating to fraudulent conveyance or fraudulent transfer, and not for any greater amount).  The obligations and undertakings of each Qualified ECP Guarantor under this Section shall remain in full force and effect until the Secured Obligations have been indefeasibly paid and performed in full.  Each Loan Party intends this Section to constitute, and this Section shall be deemed to constitute, a guarantee of the obligations of, and a “keepwell, support, or other agreement” for the benefit of, each Specified Loan Party for all purposes of the Commodity Exchange Act.

ARTICLE XI

MISCELLANEOUS

11.01Amendments, Etc.

No amendment or waiver of any provision of this Agreement or any other Loan Document, and no consent to any departure by the Borrower or any other Loan Party therefrom, shall be effective unless in writing signed by the Required Lenders (or by the Administrative Agent with the consent of the Required Lenders) and the Borrower or the applicable Loan Party, as the case may be, and acknowledged by the Administrative Agent, and each such waiver or consent shall be effective only in the specific instance and for the specific purpose for which given; provided, however, that no such amendment, waiver or consent shall:

(a)extend or increase the Commitment of any Lender (or reinstate any Commitment terminated pursuant to Section 8.02) without the written consent of such Lender (it being understood and agreed that a waiver of any condition precedent in Section 4.02 or of any Default or a mandatory reduction in Commitments is not considered an extension or increase in Commitments of any Lender);

(b)postpone any date fixed by this Agreement or any other Loan Document for any payment (excluding mandatory prepayments) of principal, interest, fees or other amounts due to the Lenders (or any of them) hereunder or under such other Loan Document without the written consent of each Lender entitled to such payment;

(c)reduce the principal of, or the rate of interest specified herein on, any Loan or L/C Borrowing, or (subject to clause (ii) of the second proviso to this Section 11.01) any fees or other amounts payable hereunder or under any other Loan Document, without the written consent of each Lender entitled to such amount; provided, however, that only the consent of the Required Lenders  shall  be  necessary to  (i)  amend  the  definition  of  “Default  Rate”  or  to  waive  any obligation of the Borrower to pay interest or Letter of Credit Fees at the Default Rate or (ii) to amend any financial covenant hereunder (or any defined term used therein) even if the effect of such

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amendment would be to reduce the rate of interest on any Loan or L/C Borrowing or to reduce any fee payable hereunder;

(d)change (i) Section 8.03 or Section 2.12 in a manner that would alter the pro rata sharing of payments required thereby without the written consent of each Lender or (ii) Section

2.11(f) in a manner that would alter the pro rata application required thereby without the written

consent of each Lender directly affected thereby;

(e)change  any  provision  of  this  Section  11.01  or  the  definition  of  “Required Lenders” or any other provision of any Loan Document specifying the number or percentage of Lenders required to amend, waive or otherwise modify any rights hereunder or thereunder or make any determination or grant any consent hereunder, without the written consent of each Lender;

(f)release all or substantially all of the Collateral in any transaction or series of related transactions, without the written consent of each Lender;

(g)release all or substantially all of the Guarantors, without the written consent of each Lender, except to the extent the release of any Subsidiary from the Guaranty is permitted pursuant to Section 9.10 (in which case such release may be made by the Administrative Agent acting alone); or

(h)release the Borrower or permit the Borrower to assign or transfer any of its rights or obligations under this Agreement or the other Loan Documents without the consent of each Lender;

and provided, further, that (i) no amendment, waiver or consent shall, unless in writing and signed by the L/C Issuer in addition to the Lenders required above, affect the rights or duties of the L/C Issuer under this Agreement or any Issuer Document relating to any Letter of Credit issued or to be issued by it; (ii) no amendment, waiver or consent shall, unless in writing and signed by the Administrative Agent in addition to  the  Lenders  required  above,  affect  the  rights  or  duties  of  the  Administrative  Agent  under  this Agreement or any other Loan Document; and (iii) any fee letters executed in connection with the Facility may be amended, or rights or privileges thereunder waived, in a writing executed only by the parties thereto.  Notwithstanding anything to the contrary herein, (A) no Defaulting Lender shall have any right to approve or disapprove any amendment, waiver or consent hereunder (and any amendment, waiver or consent which by its terms requires the consent of all Lenders or each affected Lender may be effected with  the  consent  of  the  applicable  Lenders  other  than  Defaulting  Lenders),  except  that  (1) the Commitment of any Defaulting Lender may not be increased or extended without the consent of such Lender and (2) any waiver, amendment or modification requiring the consent of all Lenders or each affected Lender that by its terms affects any Defaulting Lender disproportionately adversely relative to other affected Lenders shall require the consent of such Defaulting Lender; (B) each Lender is entitled to vote as such Lender sees fit on any bankruptcy reorganization plan that affects the Loans, and each Lender acknowledges that the provisions of Section 1126(c) of the Bankruptcy Code of the United States supersedes  the  unanimous  consent  provisions  set  forth  herein  and  (C) the  Required  Lenders  shall determine whether or not to allow a Loan Party to use cash collateral in the context of a bankruptcy or insolvency proceeding and such determination shall be binding on all of the Lenders.

Notwithstanding anything to the contrary herein the Administrative Agent may, with the prior written consent of the Borrower only, amend, modify or supplement this Agreement or any of the other Loan Documents to cure any ambiguity, omission, mistake, defect or inconsistency.

If any Lender does not consent to a proposed amendment, waiver, consent or release with respect to any Loan Document that requires the consent of each Lender and that has been approved by the Required

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Lenders, the Borrower may replace such Non-Consenting Lender in accordance with Section 11.13; provided that such amendment, waiver, consent or release can be effected as a result of the assignment contemplated by such Section (together with all other such assignments required by the Borrower to be made pursuant to this paragraph).

11.02Notices; Effectiveness; Electronic Communications.

(a)Notices Generally.   Except in the case of notices and other communications expressly permitted to be given by telephone (and except as provided in subsection (b) below), all notices and other communications provided for herein shall be in writing and shall be delivered by hand or overnight courier service, mailed by certified or registered mail or sent by fax transmission  or  e-mail  transmission  as  follows,  and  all  notices  and  other  communications expressly permitted hereunder to be given by telephone shall be made to the applicable telephone number, as follows:

(i)if to the Borrower or any other Loan Party, the Administrative Agent or the L/C Issuer, to the address, fax number, e-mail address or telephone number specified for such Person on Schedule 1.01(a); and

(ii)if to any other Lender, to the address, fax number, e-mail address or telephone   number   specified   in   its   Administrative   Questionnaire   (including,   as appropriate, notices delivered solely to the Person designated by a Lender on its Administrative Questionnaire then in effect for the delivery of notices that may contain material non-public information relating to the Borrower).

Notices and other communications sent by hand or overnight courier service, or mailed by certified or registered mail, shall be deemed to have been given when received; notices and other communications sent by fax transmission shall be deemed to have been given when sent (except that, if not given during normal business hours for the recipient, shall be deemed to have been given at the opening of business on the next Business Day for the recipient).  Notices and other communications delivered through electronic communications to the extent provided in subsection (b) below shall be effective as provided in such subsection (b).

(b)Electronic Communications.    Notices and other communications to the Administrative Agent, the L/C Issuer and the Lenders hereunder may be delivered or furnished by electronic communication (including e-mail, FPML messaging and Internet or intranet websites) pursuant to procedures approved by the Administrative Agent; provided that the foregoing shall not apply to notices to any Lender or the L/C Issuer pursuant to Article II if such Lender or the L/C Issuer, as applicable, has notified the Administrative Agent that it is incapable of receiving notices under such Article by electronic communication.   The Administrative Agent, the L/C Issuer or the Borrower may each, in its discretion, agree to accept notices and other communications to it hereunder by electronic communications pursuant to procedures approved by it, provided that approval of such procedures may be limited to particular notices or communications.

Unless the Administrative Agent otherwise prescribes, (i) notices and other communications sent to an e-mail address shall be deemed received upon the sender’s receipt of an acknowledgment from the intended recipient (such as by the “return receipt requested” function, as available, return e-mail or other written acknowledgement) and (ii) notices and other communications  posted  to  an  Internet  or  intranet  website  shall  be  deemed  received  by  the intended recipient upon the sender’s receipt of an acknowledgement from the intended recipient (such as by the “return receipt requested” function, as available, return e-mail address or other written acknowledgement) indicating that such notice or communication is available and identifying the website address

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therefor; provided that for both clauses (i) and (ii), if such notice or other communication is not sent during the normal business hours of the recipient, such notice, email or communication shall be deemed to have been sent at the opening of business on the next Business Day for the recipient.

(c)The Platform.   THE PLATFORM IS PROVIDED “AS IS” AND “AS AVAILABLE.”  THE AGENT PARTIES (AS DEFINED BELOW) DO NOT WARRANT THE ACCURACY OR COMPLETENESS OF THE BORROWER MATERIALS OR THE ADEQUACY OF THE PLATFORM, AND EXPRESSLY DISCLAIM LIABILITY FOR ERRORS IN OR OMISSIONS FROM THE BORROWER MATERIALS.   NO WARRANTY OF ANY KIND, EXPRESS, IMPLIED OR STATUTORY, INCLUDING ANY WARRANTY OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, NON- INFRINGEMENT OF THIRD PARTY RIGHTS OR FREEDOM FROM VIRUSES OR OTHER CODE DEFECTS, IS MADE BY ANY AGENT PARTY IN CONNECTION WITH THE BORROWER MATERIALS OR THE PLATFORM.  In no event shall the Administrative Agent or any of its Related Parties (collectively, the “Agent Parties”) have any liability to the Borrower, any Lender, the L/C Issuer or any other Person for losses, claims, damages, liabilities or expenses of any kind (whether in tort, contract or otherwise) arising out of the Borrower’s, any Loan Party’s or the Administrative Agent’s transmission of Borrower Materials or notices through the Platform, any other electronic platform or electronic messaging service, or through the Internet.

(d)Change of Address, Etc.  Each of the Borrower, the Administrative Agent and the L/C Issuer may change its address, fax number or telephone number or e-mail address for notices and other communications hereunder by notice to the other parties hereto.   Each other Lender may change its address, fax number or telephone number or e-mail address for notices and other communications hereunder by notice to the Borrower, the Administrative Agent and the L/C Issuer.  In addition, each Lender agrees to notify the Administrative Agent from time to time to ensure  that  the  Administrative  Agent  has  on  record  (i) an  effective  address,  contact  name, telephone number, fax number and e-mail address to which notices and other communications may be sent and (ii) accurate wire instructions for such Lender.  Furthermore, each Public Lender agrees to cause at least one (1) individual at or on behalf of such Public Lender to at all times have selected the “Private Side Information” or similar designation on the content declaration screen of the Platform in order to enable such Public Lender or its delegate, in accordance with such Public Lender’s compliance procedures and applicable Law, including United States federal and state securities Laws, to make reference to Borrower Materials that are not made available through the “Public Side Information” portion of the Platform and that may contain material non-public information with respect to the Borrower or its securities for purposes of United States federal or state securities laws.

(e)Reliance by Administrative Agent, L/C Issuer and Lenders.  The Administrative Agent,  the  L/C  Issuer  and  the  Lenders  shall  be  entitled  to  rely  and  act  upon  any  notices (including, without limitation, telephonic or electronic notices, Loan Notices, Letter of Credit Applications and Notices of Loan Prepayment) purportedly given by or on behalf of any Loan Party even if (i) such notices were not made in a manner specified herein, were incomplete or were not preceded or followed by any other form of notice specified herein, or (ii) the terms thereof, as understood by the recipient, varied from any confirmation thereof.  The Loan Parties shall indemnify the Administrative Agent, the L/C Issuer, each Lender and the Related Parties of each of them from all losses, costs, expenses and liabilities resulting from the reliance by such Person on each notice purportedly given by or on behalf of a Loan Party.  All telephonic notices to and other telephonic communications with the Administrative Agent may be recorded by the Administrative Agent, and each of the parties hereto hereby consents to such recording.

11.03No Waiver; Cumulative Remedies; Enforcement.

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No failure by any Lender, the L/C Issuer or the Administrative Agent to exercise, and no delay by any such Person in exercising, any right, remedy, power or privilege hereunder or under any other Loan Document shall operate as a waiver thereof; nor shall any single or partial exercise of any right, remedy, power or privilege hereunder or under any other Loan Document preclude any other or further exercise thereof or the exercise of any other right, remedy, power or privilege.  The rights, remedies, powers and privileges herein provided, and provided under each other Loan Document, are cumulative and not exclusive of any rights, remedies, powers and privileges provided by law.

Notwithstanding anything to the contrary contained herein or in any other Loan Document, the authority to enforce rights and remedies hereunder and under the other Loan Documents against the Loan Parties or any of them shall be vested exclusively in, and all actions and proceedings at law in connection with such enforcement shall be instituted and maintained exclusively by, the Administrative Agent in accordance with Section 8.02 for the benefit of all the Lenders and the L/C Issuer; provided, however, that the foregoing shall not prohibit (a) the Administrative Agent from exercising on its own behalf the rights and remedies that inure to its benefit (solely in its capacity as Administrative Agent) hereunder and under the other Loan Documents, (b) the L/C Issuer from exercising the rights and remedies that inure to its benefit (solely in its capacity as L/C Issuer) hereunder and under the other Loan Documents, (c) any Lender from exercising setoff rights in accordance with Section 11.08 (subject to the terms of Section

2.11), or (d) any Lender from filing proofs of claim or appearing and filing pleadings on its own behalf during the pendency of a proceeding relative to any Loan Party under any Debtor Relief Law; and

provided, further, that if at any time there is no Person acting as Administrative Agent hereunder and under the other Loan Documents, then (i) the Required Lenders shall have the rights otherwise ascribed to the Administrative Agent pursuant to Section 8.02 and (ii) in addition to the matters set forth in clauses (b), (c) and (d) of the preceding proviso and subject to Section 2.12, any Lender may, with the consent of the Required Lenders, enforce any rights and remedies available to it and as authorized by the Required Lenders.

11.04Expenses; Indemnity; Damage Waiver.

(a)Costs and Expenses.  The Loan Parties shall pay (i) all reasonable out-of-pocket expenses incurred by the Administrative Agent and its Affiliates (including the reasonable fees, charges and disbursements of counsel for the Administrative Agent), in connection with the syndication of the credit facility provided for herein, the preparation, negotiation, execution, delivery  and  administration  of  this  Agreement  and  the  other  Loan  Documents  or  any amendments, modifications or waivers of the provisions hereof or thereof (whether or not the transactions contemplated hereby or thereby shall be consummated), (ii) all reasonable out-of- pocket expenses incurred by the L/C Issuer in connection with the issuance, amendment, renewal or extension of any Letter of Credit or any demand for payment thereunder and (iii) all reasonable out-of-pocket expenses incurred by the Administrative Agent, the L/C Issuer or any Lender (including the fees, charges and disbursements of any counsel for the Administrative Agent, the L/C Issuer or any Lender; provided prior to an Event of Default the Loan Parties shall only be obligated to pay for one counsel for the Administrative Agent, the L/C Issuer and all Lenders combined), in connection with the enforcement or protection of its rights (A) in connection with this Agreement and the other Loan Documents, including its rights under this Section, or (B) in connection with Loans made or Letters of Credit issued hereunder, including all such out-of- pocket expenses incurred during any workout, restructuring or negotiations in respect of such Loans or Letters of Credit.

(b)Indemnification by the Loan Parties.   The Loan Parties shall indemnify the Administrative Agent (and any sub-agent thereof), the L/C Issuer and each Lender, and each Related Party of any of the foregoing Persons (each such Person being called an “Indemnitee”) against, and hold each Indemnitee harmless from, any and all losses, claims, damages, liabilities and

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related expenses (including the reasonable out-of-pocket fees, charges and disbursements of any counsel for any Indemnitee; provided prior to an Event of Default the Loan Parties shall only be obligated to pay for one counsel for all Indemnitees combined (unless representation by a single counsel would be inappropriate due to the existence of an actual conflict of interest, in which case the Borrower shall be required to reimburse the reasonable and documented legal fees and out-of-pocket expenses of one separate counsel for all affected Indemnitees, as reasonably determined to be necessary in good faith in light of such actual conflict of interest)), incurred by any Indemnitee or asserted against any Indemnitee by any Person (including the Borrower or any other Loan Party) arising out of, in connection with, or as a result of (i) the execution or delivery of this Agreement, any other Loan Document or any agreement or instrument contemplated hereby or thereby, the performance by the parties hereto of their respective obligations hereunder or thereunder or the consummation of the transactions contemplated hereby or thereby, or, in the case of the Administrative Agent (and any sub-agent thereof) and its Related Parties only, the administration of this Agreement and the other Loan Documents (including in respect of any matters addressed in Section 3.01), (ii) any Loan or Letter of Credit or the use or proposed use of the proceeds therefrom (including any refusal by the L/C Issuer to honor a demand for payment under a Letter of Credit if the documents presented in connection with such demand do not strictly comply with the terms of such Letter of Credit), (iii) any actual or alleged presence or release of Hazardous Materials on or from any property owned or operated by a Loan Party or any of its Subsidiaries, or any Environmental Liability related in any way to a Loan Party or any of its Subsidiaries, or (iv) any actual or prospective claim, litigation, investigation or proceeding relating to any of the foregoing, whether based on contract, tort or any other theory, whether brought by a third party or by the Borrower or any other Loan Party or any of the Borrower’s or such Loan Party’s directors, shareholders or creditors, and regardless of whether any Indemnitee is a party thereto; provided that such indemnity shall not, as to any Indemnitee, be available to the extent that such losses, claims, damages, liabilities or related expenses (A) are determined by a court of competent jurisdiction by final and nonappealable judgment to have resulted from the gross negligence or willful misconduct of such Indemnitee or (B) arise from claims of any Indemnitee solely against one or more other Indemnitees that do not involve or have not resulted from an act or omission by any Credit Party or any Subsidiary thereof (other than any action or proceeding involving the Administrative Agent or the L/C Issuer, in each case in its capacity as such, in which case such indemnity shall apply with respect to the Administrative Agent and/or the L/C Issuer, as applicable, to the extent otherwise available).  Without limiting the provisions of Section 3.01(c), this Section 11.04(b) shall not apply with respect to Taxes other than any Taxes that represent losses, claims, damages, etc. arising from any non-Tax claim.

(c)Reimbursement by Lenders.  To the extent that the Loan Parties for any reason fail to indefeasibly pay any amount required under subsection (a) or (b) of this Section to be paid by it to the Administrative Agent (or any sub-agent thereof), the L/C Issuer or any of their Related Parties, each Lender severally agrees to pay to the Administrative Agent (or any such sub-agent), the L/C Issuer or such Related Party, as the case may be, such Lender’s pro rata share (determined as of the time that the applicable unreimbursed expense or indemnity payment is sought based on each Lender’s share of the Total Credit Exposure at such time) of such unpaid amount (including any such unpaid amount in respect of a claim asserted by such Lender), such payment to be made severally among them based on such Lender’s Applicable Percentage (determined as of the time that the applicable unreimbursed expense or indemnity payment is sought), provided, further that, the unreimbursed expense or indemnified loss, claim, damage, liability or related expense, as the case may be, was incurred by or asserted against the Administrative Agent (or any such sub-agent) or the L/C Issuer in its capacity as such, or against any Related Party of any of the foregoing acting for the Administrative Agent (or any such sub- agent) or the L/C Issuer in connection with such capacity.  The obligations of the Lenders under this subsection (c) are subject to the provisions of Section

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2.11(d).

(d)Waiver  of  Consequential  Damages,  Etc.    To  the  fullest  extent  permitted  by applicable  Law,  no  Loan  Party  shall  assert,  and  each  Loan  Party  hereby  waives,  and acknowledges that no other Person shall have, any claim against any Indemnitee, on any theory of liability, for special, indirect, consequential or punitive damages (as opposed to direct or actual damages) arising out of, in connection with, or as a result of, this Agreement, any other Loan Document or any agreement or instrument contemplated hereby, the transactions contemplated hereby or thereby, any Loan or Letter of Credit or the use of the proceeds thereof.  No Indemnitee referred to in subsection (b) above shall be liable for any damages arising from the use by unintended recipients of any information or other materials distributed to such unintended recipients by such Indemnitee through telecommunications, electronic or other information transmission systems in connection with this Agreement or the other Loan Documents or the transactions contemplated hereby or thereby.

(e)Payments.  All amounts due under this Section shall be payable not later than ten

(10) Business Days after demand therefor.

(f)Survival.  The agreements in this Section and the indemnity provisions of Section

11.02(e) shall survive the resignation of the Administrative Agent and the L/C Issuer, the replacement of any Lender, the termination of the Aggregate Commitments and the repayment, satisfaction or discharge of all the other Obligations.

11.05Payments Set Aside.

To the extent that any payment by or on behalf of the Borrower is made to the Administrative Agent, the L/C Issuer or any Lender, or the Administrative Agent, the L/C Issuer or any Lender exercises its right of setoff, and such payment or the proceeds of such setoff or any part thereof is subsequently invalidated, declared to be fraudulent or preferential, set aside or required (including pursuant to any settlement entered into by the Administrative Agent, the L/C Issuer or such Lender in its discretion) to be repaid to a trustee, receiver or any other party, in connection with any proceeding under any Debtor Relief Law or otherwise, then (a) to the extent of such recovery, the obligation or part thereof originally intended to be satisfied shall be revived and continued in full force and effect as if such payment had not been made or such setoff had not occurred, and (b) each Lender and the L/C Issuer severally agrees to pay to the Administrative Agent upon demand its applicable share (without duplication) of any amount so recovered from or repaid by the Administrative Agent, plus interest thereon from the date of such demand to the date such payment is made at a rate per annum equal to the Federal Funds Rate from time to time in effect.  The obligations of the Lenders and the L/C Issuer under clause (b) of the preceding sentence shall survive the payment in full of the Obligations and the termination of this Agreement.

11.06Successors and Assigns.

(a)Successors and Assigns Generally.   The provisions of this Agreement and the other Loan Documents shall be binding upon and inure to the benefit of the parties hereto and thereto and their respective successors and assigns permitted hereby, except neither the Borrower nor  any other Loan  Party may assign  or  otherwise transfer any of  its rights or  obligations hereunder or under any other Loan Document without the prior written consent of the Administrative Agent and each Lender and no Lender may assign or otherwise transfer any of its rights or obligations hereunder except (i) to an assignee in accordance with the provisions of subsection (b) of this Section, (ii) by way of participation in accordance with the provisions of subsection (d) of this Section, or (iii) by way of pledge or assignment of a security interest subject to the restrictions of subsection (e) of this

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Section   (and any other attempted assignment or transfer by any party hereto shall be null and void).  Nothing in this Agreement, expressed or implied, shall be construed to confer upon any Person (other than the parties hereto, their respective successors and assigns permitted hereby, Participants to the extent provided in subsection (d) of this Section and, to the extent expressly contemplated hereby, the Related Parties of  each  of  the  Administrative  Agent,  the L/C  Issuer  and  the  Lenders) any legal  or equitable right, remedy or claim under or by reason of this Agreement.

(b)Assignments by Lenders.  Any Lender may at any time assign to one or more assignees all or a portion of its rights and obligations under this Agreement and the other Loan Documents  (including  all  or  a  portion  of  its  Commitment(s)  and  the  Loans  (including  for purposes of this subsection (b), participations in L/C Obligations) at the time owing to it); provided that any such assignment shall be subject to the following conditions:

(i)Minimum Amounts.

(A)in the case of an assignment of the entire remaining amount of the assigning Lender’s Commitment and/or the Loans at the time owing to it or contemporaneous  assignments  to  related  Approved  Funds  (determined  after giving effect to such Assignments) that equal at least the amount specified in paragraph  (b)(i)(B)  of  this  Section  in  the  aggregate  or  in  the  case  of  an assignment to a Lender, an Affiliate of a Lender or an Approved Fund, no minimum amount need be assigned; and

(B)in any case not described in subsection (b)(i)(A) of this Section, the aggregate amount of the Commitment (which for this purpose includes Loans outstanding thereunder) or, if the Commitment is not then in effect, the principal outstanding balance of the Loans of the assigning Lender subject to each such assignment, determined as of the date the Assignment and Assumption with respect to such assignment is delivered to the Administrative Agent or, if “Trade Date” is specified in the Assignment and Assumption, as of the Trade Date, shall not be less than $1,000,000, unless each of the Administrative Agent and, so long as no Event of Default has occurred and is continuing, the Borrower otherwise consents (each such consent not to be unreasonably withheld or delayed); provided,  that  this  Section  11.06(b)(i)(B)  shall  not  apply  to  assignments permitted pursuant to Section 9.09.

(ii)Proportionate Amounts.  Each partial assignment shall be made as an assignment of a proportionate part of all the assigning Lender’s rights and obligations under this Agreement and the other Loan Documents with respect to the Loans and/or the Commitment assigned.

(iii)Required Consents.   No consent shall be required for any assignment except to the extent required by subsection (b)(i)(B) of this Section and, in addition:

(A)the   consent   of   the   Borrower   (such   consent   not   to   be unreasonably  withheld  or  delayed)  shall  be  required  unless  (1) an  Event  of Default has occurred and is continuing at the time of such assignment or (2) such assignment is to a Lender, an Affiliate of a Lender or an Approved Fund;

(B)the consent of the Administrative Agent (such consent not to be

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unreasonably withheld or delayed) shall be required for assignments if such assignment is to a Person that is not a Lender with a Commitment, an Affiliate of such Lender or an Approved Fund with respect to such Lender; and

(C)the  consent  of  the  L/C  Issuer  shall  be  required  for  any assignment in respect of the Facility.

(iv)Assignment  and  Assumption.    The  parties  to  each  assignment  shall execute and deliver to the Administrative Agent an Assignment and Assumption, together with a processing and recordation fee in the amount of $3,500; provided, however, that the Administrative Agent may, in its sole discretion, elect to waive such processing and recordation fee in the case of any assignment; provided, further, that such processing and recordation fee shall not apply to any assignment permitted pursuant to Section 9.09.  The assignee, if it is not a Lender, shall deliver to the Administrative Agent an Administrative Questionnaire.

(v)No Assignment to Certain Persons.  No such assignment shall be made (A) to the Borrower, Holdings or any of Holdings’ Affiliates or Subsidiaries, (B) to any Defaulting Lender or any of its Subsidiaries, or any Person who, upon becoming a Lender hereunder, would constitute any of the foregoing Persons described in this clause (B), or (C) to a natural Person (or a holding company, investment vehicle or trust for, or owned and operated for the primary benefit of a natural person).

(vi)Certain Additional Payments.   In connection with any assignment of rights and obligations of any Defaulting Lender hereunder, no such assignment shall be effective unless and until, in addition to the other conditions thereto set forth herein, the parties to the assignment shall make such additional payments to the Administrative Agent in an aggregate amount sufficient, upon distribution thereof as appropriate (which may  be  outright  payment,  purchases  by  the  assignee  of  participations  or subparticipations, or other compensating actions, including funding, with the consent of the Borrower and the Administrative Agent, the applicable pro rata share of Loans previously requested but not funded by the Defaulting Lender, to each of which the applicable assignee and assignor hereby irrevocably consent), to (A) pay and satisfy in full all payment liabilities then owed by such Defaulting Lender to the Administrative Agent,  the  L/C  Issuer  or  any  Lender  hereunder  (and  interest  accrued  thereon)  and (B) acquire (and fund as appropriate) its full pro rata share of all Loans and participations in Letters of Credit in accordance with its Applicable Percentage.  Notwithstanding the foregoing, in the event that any assignment of rights and obligations of any Defaulting Lender hereunder shall become effective under applicable Law without compliance with the provisions of this paragraph, then the assignee of such interest shall be deemed to be a Defaulting Lender for all purposes of this Agreement until such compliance occurs.

Subject to acceptance and recording thereof by the Administrative Agent pursuant to subsection (c) of this Section, from and after the effective date specified in each Assignment and Assumption, the assignee thereunder  shall  be  a  party  to  this  Agreement  and,  to  the  extent  of  the  interest  assigned  by  such Assignment and Assumption, have the rights and obligations of a Lender under this Agreement, and the assigning Lender thereunder shall, to the extent of the interest assigned by such Assignment and Assumption, be released from its obligations under this Agreement (and, in the case of an Assignment and Assumption covering all of the assigning Lender’s rights and obligations under this Agreement, such Lender shall cease to be a party hereto but shall continue to be entitled to the benefits of Sections 3.01, 3.04, 3.05 and 11.04 with respect to facts and circumstances occurring prior to the effective date of such assignment); provided, that except to the extent otherwise expressly agreed by the affected parties, no assignment by a

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Defaulting Lender will constitute a waiver or release of any claim of any party hereunder arising from that Lender’s having been a Defaulting Lender.  Upon request, the Borrower (at its expense) shall execute and deliver a Note to the assignee Lender.  Any assignment or transfer by a Lender of rights or obligations under this Agreement that does not comply with this subsection shall be treated for purposes of this Agreement as a sale by such Lender of a participation in such rights and obligations in accordance with subsection (d) of this Section.

(c)Register.   The Administrative Agent, acting solely for this purpose as a non- fiduciary agent of the Borrower (and such agency being solely for tax purposes), shall maintain at the Administrative Agent’s Office a copy of each Assignment and Assumption delivered to it (or the equivalent thereof in electronic form) and a register for the recordation of the names and addresses of the Lenders, and the Commitments of, and principal amounts (and stated interest) of the Loans and L/C Obligations owing to, each Lender pursuant to the terms hereof from time to time (the “Register”).  The entries in the Register shall be conclusive, absent manifest error, and the Borrower, the Administrative Agent and the Lenders shall treat each Person whose name is recorded in the Register pursuant to the terms hereof as a Lender hereunder for all purposes of this Agreement.  The Register shall be available for inspection by the Borrower and any Lender, at any reasonable time and from time to time upon reasonable prior notice.

(d)Participations.  Any Lender may at any time, without the consent of, or notice to, the Borrower or the Administrative Agent, sell participations to any Person (other than a natural Person, or a holding company, investment vehicle or trust for, or owned and operated for the primary  benefit  of  a  natural  Person,  a  Defaulting  Lender  or  the  Borrower  or  any  of  the Borrower’s Affiliates or Subsidiaries) (each, a “Participant”) in all or a portion of such Lender’s rights and/or obligations under this Agreement (including all or a portion of its Commitment and/or the Loans (including such Lender’s participations in L/C Obligations) owing to it); provided  that  (i) such  Lender’s  obligations  under  this  Agreement  shall  remain  unchanged, (ii) such Lender shall remain solely responsible to the other parties hereto for the performance of such obligations and (iii) the Borrower, the Administrative Agent, the L/C Issuer and the Lenders shall continue to deal solely and directly with such Lender in connection with such Lender’s rights and obligations under this Agreement.  For the avoidance of doubt, each Lender shall be responsible for the indemnity under Section 11.04(c) without regard to the existence of any participations.

Any agreement or instrument pursuant to which a Lender sells such a participation shall provide that such Lender shall retain the sole right to enforce this Agreement and to approve any amendment, modification or waiver of any provision of this Agreement; provided that such agreement or instrument may provide that such Lender will not, without the consent of the Participant, agree to any amendment, waiver or other modification described in the first proviso to Section 11.01 that affects such Participant.  The Borrower agrees that each Participant shall be entitled to the benefits of Sections 3.01, 3.04 and 3.05 (subject to the requirements and limitations therein, including the requirements under Section 3.01(e) (it being understood that the documentation required under Section 3.01(e) shall be delivered to the Lender who sells the participation))  to  the  same  extent  as  if  it  were  a  Lender  and  had  acquired  its  interest  by assignment pursuant to paragraph (b) of this Section; provided that such Participant (A) agrees to be subject to the provisions of Sections 3.06 and 11.13 as if it were an assignee under paragraph (b) of this Section and (B) shall not be entitled to receive any greater payment under Sections 3.01 or 3.04, with respect to any participation, than the Lender from whom it acquired the applicable participation would have been entitled to receive, except to the extent such entitlement to receive a greater payment results from a Change in Law that occurs after the Participant acquired  the  applicable  participation.    Each  Lender  that  sells  a  participation  agrees,  at  the Borrower’s request and expense, to use reasonable efforts to cooperate with the Borrower to effectuate the provisions of

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Section 3.06 with respect to any Participant. To the extent permitted by law, each Participant also shall be entitled to the benefits of Section 11.08 as though it were a Lender; provided that such Participant agrees to be subject to Section 2.12 as though it were a Lender.  Each Lender that sells a participation shall, acting solely for this purpose as a non- fiduciary agent of the Borrower, maintain a register on which it enters the name and address of each Participant and the principal amounts (and stated interest) of each Participant’s interest in the Loans or other obligations under the Loan Documents (the “Participant Register”); provided that no Lender shall have any obligation to disclose all or any portion of the Participant Register (including the identity of any Participant or any information relating to a Participant’s interest in any commitments, loans, letters of credit or its other obligations under any Loan Document) to any Person except to the extent that such disclosure is necessary to establish that such commitment, loan, letter of credit or other obligation is in registered form under Section 5f.103-1(c) of the United States Treasury Regulations.  The entries in the Participant Register shall be conclusive absent manifest error, and such Lender shall treat each Person whose name is recorded in the Participant Register as the owner of such participation for all purposes of this Agreement notwithstanding any notice to the contrary.  For the avoidance of doubt, the Administrative Agent (in its capacity as Administrative Agent) shall have no responsibility for maintaining a Participant Register.

(e)Certain Pledges.  Any Lender may at any time pledge or assign a security interest in all or any portion of its rights under this Agreement (including under its Note or Notes, if any) to secure obligations of such Lender, including any pledge or assignment to secure obligations to a Federal Reserve Bank; provided that no such pledge or assignment shall release such Lender from any of its obligations hereunder or substitute any such pledgee or assignee for such Lender as a party hereto.

(f)Resignation as L/C Issuer after Assignment.   Notwithstanding anything to the contrary contained herein, if at any time Cadence Bank assigns all of its Commitments and Loans pursuant  to  subsection (b)  above,  Cadence  Bank  may, upon  thirty  (30)  days’  notice  to  the Borrower and the Lenders, resign as L/C Issuer.   In the event of any such resignation as L/C Issuer, the Borrower shall be entitled to appoint from among the Lenders a successor L/C Issuer hereunder; provided, however, that no failure by the Borrower to appoint any such successor shall affect the resignation of Cadence Bank as L/C Issuer.  If Cadence Bank resigns as L/C Issuer, it shall retain all the rights, powers, privileges and duties of the L/C Issuer hereunder with respect to all Letters of Credit outstanding as of the effective date of its resignation as L/C Issuer and all L/C Obligations with respect thereto (including the right to require the Lenders to make Base Rate Loans or fund risk participations in Unreimbursed Amounts pursuant to Section 2.03(c)). Upon the appointment of a successor L/C Issuer, (A) such successor shall succeed to and become vested with all of the rights, powers, privileges and duties of the retiring L/C Issuer and (B) the successor L/C Issuer shall issue letters of credit in substitution for the Letters of Credit, if any, outstanding at the time of such succession or make other arrangements satisfactory to Cadence Bank to effectively assume the obligations of Cadence Bank with respect to such Letters of Credit.

11.07Treatment of Certain Information; Confidentiality.

(a)Treatment of Certain Information.   Each of the Administrative Agent, the L/C Issuer and the Lenders agrees to maintain the confidentiality of the Information (as defined below), except that Information may be disclosed (i) to its Affiliates and to its Related Parties (it being understood that the Persons to whom such disclosure is made will be informed of the confidential nature of such Information and instructed to keep such Information confidential), (ii) to the extent required or requested by any regulatory authority purporting to have jurisdiction over such Person or its Related Parties (including any self-regulatory authority, such as the National Association of

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Insurance Commissioners), (iii) to the extent required by applicable Laws or regulations or by any subpoena or similar legal process, (iv) to any other party hereto, (v) in connection with the exercise of any remedies hereunder or under any other Loan Document or any action or proceeding relating to this Agreement or any other Loan Document or the enforcement of rights hereunder or thereunder, (vi) subject to an agreement containing provisions substantially the same as those of this Section, to (A) any assignee of or Participant in, or any prospective assignee of or Participant in, any of its rights and obligations under this Agreement or any Eligible Assignee invited to be a Lender pursuant to Section 11.01 or (B) any actual or prospective party (or its Related Parties) to any swap, derivative or other transaction under which payments are to be made by reference to the Borrower and its obligations, this Agreement or payments hereunder, (vii) on a confidential basis to (A) any rating agency in connection with rating Holdings or its Subsidiaries or the credit facility provided hereunder or (B) the provider of any Platform or other electronic delivery service used by the Administrative Agent and/or the L/C Issuer to deliver Borrower Materials or notices to the Lenders or (C) the CUSIP Service Bureau or any similar agency in connection with the issuance and monitoring of CUSIP numbers or other market identifiers with respect to the credit facility provided hereunder, or (viii) with the consent of the Borrower or to the extent such Information (1) becomes publicly available other than as a result of a breach of this Section or (2) becomes available to the Administrative Agent, the L/C Issuer, any Lender or any of their respective Affiliates on a nonconfidential basis from a source other than the Borrower.  For purposes of this Section, “Information” means all information received from Holdings or any Subsidiary relating to Holdings or any Subsidiary or any of their respective businesses, other than any such information that is available to the Administrative Agent, the L/C Issuer or any Lender on a nonconfidential basis prior to disclosure by Holdings or any Subsidiary.  Any Person required to maintain the confidentiality of Information as provided in this Section shall be considered to have complied with its obligation to do so if such Person has exercised the same degree of care to maintain the confidentiality of such Information as such Person would accord to its own confidential information.  In addition, the Administrative Agent and  the  Lenders  may  disclose  the  existence  of  this  Agreement  and  information  about  this Agreement to market data collectors, similar service providers to the lending industry and service providers to the Agents and the Lenders in connection with the administration of this Agreement, the other Loan Documents and the Commitments.

(b)Non-Public Information.  Each of the Administrative Agent, the L/C Issuer and the Lenders acknowledges that (i) the Information may include material non-public information concerning a Loan Party or a Subsidiary, as the case may be, (ii) it has developed compliance procedures regarding the use of material non-public information and (iii) it will handle such material non-public information in accordance with applicable Law, including United States federal and state securities Laws.

(c)Press Releases.  The Loan Parties and their Affiliates agree that they will not in the future issue any press releases or other public disclosure using the name of the Administrative Agent or any Lender or their respective Affiliates or referring to this Agreement or any of the Loan Documents without the prior written consent of the Administrative Agent, unless (and only to the extent that) the Loan Parties or such Affiliate is required to do so under Law and then, in any event the Loan Parties or such Affiliate will consult with such Person before issuing such press release or other public disclosure.

(d)Customary Advertising Material.  The Loan Parties consent to the publication by the Administrative Agent or any Lender of customary advertising material relating to the transactions contemplated hereby using the name, product photographs, logo or trademark of the Loan Parties.

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11.08Right of Setoff.

If an Event of Default shall have occurred and be continuing, each Lender, the L/C Issuer and each of their respective Affiliates is hereby authorized at any time and from time to time, after obtaining the prior written consent of the Administrative Agent, to the fullest extent permitted by applicable Law, to set off and apply any and all deposits (general or special, time or demand, provisional or final, in whatever currency) at any time held and other obligations (in whatever currency) at any time owing by such Lender, the L/C Issuer or any such Affiliate to or for the credit or the account of the Borrower or any other Loan Party against any and all of the obligations of the Borrower or such Loan Party now or hereafter existing under this Agreement or any other Loan Document to such Lender or the L/C Issuer or their respective Affiliates, irrespective of whether or not such Lender, the L/C Issuer or Affiliate shall have made any demand under this Agreement or any other Loan Document and although such obligations of the Borrower or such Loan Party may be contingent or unmatured, secured or unsecured, or are owed to a branch, office or Affiliate of such Lender or the L/C Issuer different from the branch, office or Affiliate holding such deposit or obligated on such indebtedness; provided that in the event that any Defaulting Lender shall exercise any such right of setoff, (a) all amounts so set off shall be paid over immediately to the Administrative Agent for further application in accordance with the provisions of Section 2.14 and, pending such payment, shall be segregated by such Defaulting Lender from its other funds and deemed held in trust for the benefit of the Administrative Agent, the L/C Issuer and the Lenders, and (b) the Defaulting Lender shall provide promptly to the Administrative Agent a statement describing in reasonable detail the Secured Obligations owing to such Defaulting Lender as to which it exercised such right of setoff.  The rights of each Lender, the L/C Issuer and their respective Affiliates under this Section are in addition to other rights and remedies (including other rights of setoff) that such Lender, the L/C Issuer or their respective Affiliates may have.  Each Lender and the L/C Issuer agrees to notify  the  Borrower  and  the  Administrative  Agent  promptly  after  any  such  setoff  and  application, provided that the failure to give such notice shall not affect the validity of such setoff and application.

11.09Interest Rate Limitation.

Notwithstanding anything to the contrary contained in any Loan Document, the interest paid or agreed to be paid under the Loan Documents shall not exceed the maximum rate of non-usurious interest permitted by applicable Law (the “Maximum Rate”).  If the Administrative Agent or any Lender shall receive interest in an amount that exceeds the Maximum Rate, the excess interest shall be applied to the principal of the Loans or, if it exceeds such unpaid principal, refunded to the Borrower.  In determining whether the interest contracted for, charged, or received by the Administrative Agent or a Lender exceeds the Maximum Rate, such Person may, to the extent permitted by applicable Law, (a) characterize any payment that is not principal as an expense, fee, or premium rather than interest, (b) exclude voluntary prepayments and the effects thereof, and (c) amortize, prorate, allocate, and spread in equal or unequal parts the total amount of interest throughout the contemplated term of the Obligations hereunder.

11.10Counterparts; Integration; Effectiveness.

This Agreement and each of the other Loan Documents may be executed in counterparts (and by different parties hereto in different counterparts), each of which shall constitute an original, but all of which when taken together shall constitute a single contract. This Agreement, the other Loan Documents, and any separate letter agreements with respect to fees payable to the Administrative Agent or the L/C Issuer, constitute the entire contract among the parties relating to the subject matter hereof and supersede any and all previous agreements and understandings, oral or written, relating to the subject matter hereof. Except as provided in Section 4.01, this Agreement shall become effective when it shall have been executed  by  the  Administrative  Agent  and  when  the  Administrative  Agent  shall  have  received counterparts hereof that, when taken together, bear the signatures of each of the other parties hereto. Delivery of an executed

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counterpart of a signature page of this Agreement or any other Loan Document, or any certificate delivered thereunder, by fax transmission or e-mail transmission (e.g. “pdf” or “tif”) shall be effective as delivery of a manually executed counterpart of this Agreement or such other Loan Document or certificate.  Without limiting the foregoing, to the extent a manually executed counterpart is not specifically required to be delivered under the terms of any Loan Document, upon the request of any party,  such  fax  transmission  or  e-mail  transmission  shall  be  promptly  followed  by  such  manually executed counterpart.

11.11Survival of Representations and Warranties.

All representations and warranties made hereunder and in any other Loan Document or other document delivered pursuant hereto or thereto or in connection herewith or therewith shall survive the execution and delivery hereof and thereof.   Such representations and warranties have been or will be relied upon by the Administrative Agent and each Lender, regardless of any investigation made by the Administrative Agent or any Lender or on their behalf and notwithstanding that the Administrative Agent or any Lender may have had notice or knowledge of any Default at the time of any Credit Extension, and shall continue in full force and effect as long as any Loan or any other Obligation hereunder shall remain unpaid or unsatisfied or any Letter of Credit shall remain outstanding.

11.12Severability.

If any provision of this Agreement or the other Loan Documents is held to be illegal, invalid or unenforceable, (a) the legality, validity and enforceability of the remaining provisions of this Agreement and the other Loan Documents shall not be affected or impaired thereby and (b) the parties shall endeavor in good faith negotiations to replace the illegal, invalid or unenforceable provisions with valid provisions the economic effect of which comes as close as possible to that of the illegal, invalid or unenforceable provisions.    The  invalidity of  a  provision  in  a  particular jurisdiction  shall  not  invalidate  or  render unenforceable such provision in any other jurisdiction.  Without limiting the foregoing provisions of this Section, if and to the extent that the enforceability of any provisions in this Agreement relating to Defaulting Lenders shall be limited by Debtor Relief Laws, as determined in good faith by the Administrative Agent or the L/C Issuer, as applicable, then such provisions shall be deemed to be in effect only to the extent not so limited.

11.13Replacement of Lenders.

If the Borrower is entitled to replace a Lender pursuant to the provisions of Section 3.06, or if any Lender is a Defaulting Lender or a Non-Consenting Lender or if any other circumstance exists hereunder that gives the Borrower the right to replace a Lender as a party hereto, then the Borrower may, at its sole expense and effort, upon notice to such Lender and the Administrative Agent, require such Lender to assign and delegate, without recourse (in accordance with and subject to the restrictions contained in, and consents required by, Section 11.06), all of its interests, rights (other than its existing rights to payments pursuant  to  Sections 3.01  and  3.04)  and  obligations  under  this  Agreement  and  the  related  Loan Documents to an Eligible Assignee that shall assume such obligations (which assignee may be another Lender, if a Lender accepts such assignment), provided that:

(a)the Borrower shall have paid to the Administrative Agent the assignment fee (if any) specified in Section 11.06(b);

(b)such Lender shall have received payment of an amount equal to 100% of the outstanding principal of its Loans and L/C Advances, accrued interest thereon, accrued fees and all other amounts payable to it hereunder and under the other Loan Documents (including any amounts under Section 3.05) from the assignee (to the extent of such outstanding principal and accrued

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interest and fees) or the Borrower (in the case of all other amounts);

(c)in the case of any such assignment resulting from a claim for compensation under Section 3.04 or payments required to be made pursuant to Section 3.01, such assignment will result in a reduction in such compensation or payments thereafter;

(d)such assignment does not conflict with applicable Laws; and

(e)in the case of an assignment resulting from a Lender becoming a Non-Consenting Lender, the applicable assignee shall have consented to the applicable amendment, waiver or consent.

A Lender shall not be required to make any such assignment or delegation if, prior thereto, as a result of a waiver by such Lender or otherwise, the circumstances entitling the Borrower to require such assignment and delegation cease to apply.

11.14Governing Law; Jurisdiction; Etc.

(a)GOVERNING LAW.   THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS (EXCEPT, AS TO ANY OTHER LOAN DOCUMENT, AS EXPRESSLY SET FORTH THEREIN) AND ANY CLAIMS, CONTROVERSY, DISPUTE OR CAUSE OF ACTION  (WHETHER  IN  CONTRACT  OR  TORT  OR  OTHERWISE)  BASED  UPON, ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT (EXCEPT, AS TO ANY OTHER LOAN DOCUMENT, AS EXPRESSLY SET FORTH   THEREIN)   AND   THE   TRANSACTIONS   CONTEMPLATED   HEREBY   AND THEREBY SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.

(b)SUBMISSION TO JURISDICTION.  THE BORROWER AND EACH OTHER LOAN  PARTY  IRREVOCABLY  AND  UNCONDITIONALLY  AGREES  THAT  IT  WILL NOT COMMENCE ANY ACTION, LITIGATION OR PROCEEDING OF ANY KIND OR DESCRIPTION,  WHETHER  IN  LAW  OR  EQUITY,  WHETHER  IN  CONTRACT  OR  IN TORT OR OTHERWISE, AGAINST THE ADMINISTRATIVE AGENT, ANY LENDER, THE L/C ISSUER OR ANY RELATED PARTY OF THE FOREGOING IN ANY WAY RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS RELATING HERETO OR THERETO, IN ANY FORUM OTHER THAN THE COURTS OF THE STATE OF NEW YORK SITTING IN NEW YORK COUNTY AND OF THE UNITED STATES DISTRICT COURT OF THE SOUTHERN DISTRICT OF NEW YORK, AND ANY APPELLATE COURT FROM ANY THEREOF, AND EACH OF THE PARTIES HERETO IRREVOCABLY  AND  UNCONDITIONALLY  SUBMITS  TO  THE  JURISDICTION  OF SUCH  COURTS    AND  AGREES  THAT  ALL  CLAIMS  IN  RESPECT  OF  ANY  SUCH ACTION,  LITIGATION  OR  PROCEEDING  MAY  BE  HEARD  AND  DETERMINED  IN SUCH NEW YORK STATE COURT OR, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, IN SUCH FEDERAL COURT.  EACH OF THE PARTIES HERETO AGREES THAT A FINAL JUDGMENT IN ANY SUCH ACTION, LITIGATION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS  BY  SUIT  ON  THE  JUDGMENT  OR  IN  ANY  OTHER  MANNER PROVIDED BY LAW.  NOTHING IN THIS AGREEMENT OR IN ANY OTHER LOAN DOCUMENT SHALL AFFECT ANY RIGHT THAT THE ADMINISTRATIVE AGENT, THE L/C ISSUER OR ANY LENDER MAY OTHERWISE HAVE TO BRING ANY ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT

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AGAINST THE BORROWER OR ANY OTHER LOAN PARTY OR ITS PROPERTIES IN THE COURTS OF ANY JURISDICTION.

(c)WAIVER  OF  VENUE.    THE  BORROWER  AND  EACH  OTHER  LOAN PARTY IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY OBJECTION THAT IT MAY NOW OR   HEREAFTER   HAVE   TO   THE   LAYING   OF   VENUE   OF   ANY   ACTION   OR PROCEEDING  ARISING  OUT  OF  OR  RELATING  TO  THIS  AGREEMENT  OR  ANY OTHER LOAN DOCUMENT IN ANY COURT REFERRED TO IN PARAGRAPH (B) OF THIS SECTION.  THE BORROWER AND EACH OTHER LOAN PARTY IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, THE DEFENSE OF AN INCONVENIENT FORUM TO THE MAINTENANCE OF SUCH ACTION OR PROCEEDING IN ANY SUCH COURT.

(d)SERVICE OF PROCESS.    EACH PARTY HERETO IRREVOCABLY CONSENTS TO SERVICE OF PROCESS IN THE MANNER PROVIDED FOR NOTICES IN SECTION 11.02.  NOTHING IN THIS AGREEMENT WILL AFFECT THE RIGHT OF ANY PARTY HERETO TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY APPLICABLE LAW.

11.15Waiver of Jury Trial.

EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER  THEORY).    EACH  PARTY  HERETO  (a) CERTIFIES  THAT  NO  REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PERSON HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PERSON WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (b) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.

11.16Subordination.

Each Loan Party (a “Subordinating Loan Party”) hereby subordinates the payment of all obligations and indebtedness of any other Loan Party owing to it, whether now existing or hereafter arising, including but not limited to any obligation of any such other Loan Party to the Subordinating Loan Party as subrogee of the Secured Parties or resulting from such Subordinating Loan Party’s performance under the Guaranty, to the indefeasible payment in full in cash of all Obligations.   If the Secured Parties so request, any such obligation or indebtedness of any such other Loan Party to the Subordinating Loan Party shall be enforced and performance received by the Subordinating Loan Party as trustee for the Secured Parties and the proceeds thereof shall be paid over to the Secured Parties on account of the Secured Obligations, but without reducing or affecting in any manner the liability of the Subordinating Loan Party under this Agreement.   Without limitation of the foregoing, so long as no Default has occurred and is continuing, the Loan Parties may make and receive payments with respect to Intercompany Debt; provided, that in the event that any Loan Party receives any payment of any Intercompany Debt at a time when such  payment is prohibited by this Section, such payment shall be held by such Loan Party in trust for the benefit of, and shall be paid forthwith over and delivered, upon written request, to the Administrative Agent.

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11.17No Advisory or Fiduciary Responsibility.

In connection with all aspects of each transaction contemplated hereby (including in connection with any amendment, waiver or other modification hereof or of any other Loan Document), the Borrower and each other Loan Party acknowledges and agrees, and acknowledges its Affiliates’ understanding, that: (a) (i) the arranging and other services regarding this Agreement provided by the Administrative Agent and  any  Affiliate  thereof  and  the  Lenders  are  arm’s-length  commercial  transactions  between  the Borrower, each other Loan Party and their respective Affiliates, on the one hand, and the Administrative Agent and, as applicable, its Affiliates and the Lenders and their Affiliates (collectively, solely for purposes of this Section, the “Lenders”), on the other hand, (ii) each of the Borrower and the other Loan Parties has consulted its own legal, accounting, regulatory and tax advisors to the extent it has deemed appropriate, and (iii) the Borrower and each other Loan Party is capable of evaluating, and understands and accepts, the terms, risks and conditions of the transactions contemplated hereby and by the other Loan Documents; (b) (i) the Administrative Agent and its Affiliates and each Lender each is and has been acting solely as a principal and, except as expressly agreed in writing by the relevant parties, has not been, is not, and will not be acting as an advisor, agent or fiduciary, for Borrower, any other Loan Party or any of their respective Affiliates, or any other Person and (ii) neither the Administrative Agent, any of its Affiliates nor any Lender has any obligation to the Borrower, any other Loan Party or any of their respective Affiliates with respect to the transactions contemplated hereby except those obligations expressly set forth herein and in the other Loan Documents; and (c) the Administrative Agent and its Affiliates and the Lenders may be engaged in a broad range of transactions that involve interests that differ from those of the Borrower, the other Loan Parties and their respective Affiliates, and neither the Administrative Agent, any of its Affiliates nor any Lender has any obligation to disclose any of such interests to the Borrower, any other Loan Party or any of their respective Affiliates.  To the fullest extent permitted by law, each of the Borrower and each other Loan Party hereby waives and releases any claims that it may have against the Administrative Agent, any of its Affiliates or any Lender with respect to any breach or alleged breach of agency or fiduciary duty in connection with any aspect of any transactions contemplated hereby.

11.18Electronic Execution.

The words “delivery,” “execute,” “execution,” “signed,” “signature,” and words of like import in any Loan Document or any other document executed in connection herewith shall be deemed to include electronic signatures, the electronic matching of assignment terms and contract formations on electronic platforms approved by the Administrative Agent, or the keeping of records in electronic form, each of which shall be of the same legal effect, validity or enforceability as a manually executed signature, physical delivery thereof or the use of a paper-based recordkeeping system, as the case may be, to the extent and as provided for in any applicable Law, including the Federal Electronic Signatures in Global and National Commerce Act, the New York State Electronic Signatures and Records Act, or any other similar state laws based on the Uniform Electronic Transactions Act; provided that notwithstanding anything contained herein to the contrary, the Administrative Agent is under no obligation to agree to accept electronic signatures in any form or in any format unless expressly agreed to by the Administrative Agent pursuant to procedures approved by it; provided further without limiting the foregoing, upon the request  of  the  Administrative  Agent,  any  electronic  signature  shall  be  promptly  followed  by  such manually executed counterpart.

11.19USA PATRIOT Act Notice.

Each Lender that is subject to the Act (as hereinafter defined) and the Administrative Agent (for itself and not on behalf of any Lender) hereby notifies the Borrower and the other Loan Parties that pursuant to the requirements of the USA PATRIOT Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001)) (the “Act”), it is required to obtain, verify and record information that identifies each Loan Party,

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which information includes the name and address of each Loan Party and other information that will allow such Lender or the Administrative Agent, as applicable, to identify each Loan Party in accordance with the Act.  The Borrower and the Loan Parties agree to, promptly following a request by the Administrative Agent or any Lender, provide all such other documentation and information that the Administrative Agent or such Lender requests in order to comply with its ongoing obligations under applicable “know your customer” and anti-money laundering rules and regulations, including the Act.

[signature pages follow]

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as of the date first above written.

BORROWER:	JAMBA JUICE COMPANY
	By:	/s/ Marie Perry
	Name:	Marie Perry
	Title:	EVP, CFO, CAO and Secretary
HOLDINGS:	JAMBA, INC.
	By:	/s/ Marie Perry
	Name:	Marie Perry
	Title:	Treasurer and CFO
GUARANTORS:		JAMBA JUICE ADVERTISING FUND INC.
	By:	/s/ Marie Perry
	Name:	Marie Perry
	Title:	Treasurer and CFO
ADMINISTRATIVE AGENT:	CADENCE BANK, NATIONAL ASSOCIATION,
	as Administrative Agent
	By:	/s/ Charles M. Joye III
	Name:	Charles M. Joye III
	Title:	Senior Vice President
LENDERS:	CADENCE BANK, NATIONAL ASSOCIATION,
	as a Lender and L/C Issuer
	By:	/s/ Charles M. Joye III
	Name:	Charles M. Joye III
	Title:	Senior Vice President

EX-21.1

EXHIBIT 21.1

LIST OF SUBSIDIARY

Name of Company	Jurisdiction of Incorporation
Jamba Juice Company	California

EX-23.1

EXHIBIT 23.1

Consent of Independent Registered Public Accounting Firm

The Board of Directors

Jamba, Inc.:

We consent to the incorporation by reference in the registration statements (Nos. 333-160597 and 333-139645) on Form S-3 and the registration statements (Nos. 333-212938, 333-211440, 333-189147, 333-167449, 333-139128, 333-167449 and 333-158093) on Form S-8 of Jamba, Inc. of our reports dated February 9, 2018, with respect to the consolidated balance sheets of Jamba, Inc. as of January 3, 2017 and December 29, 2015, and the related consolidated statements of operations, stockholders’ equity, and cash flows for the fiscal years ended January 3, 2017, December 29, 2015 and December 30, 2014 and the related financial statement schedule, and the effectiveness of internal control over financial reporting as of January 3, 2017, which reports appear in the January 3, 2017 annual report on Form 10‑K of Jamba, Inc.  

Our report dated February 9, 2018, on the effectiveness of internal control over financial reporting as of January 3, 2017, expresses our opinion that Jamba, Inc. did not maintain effective internal control over financial reporting as of January 3, 2017 because of the effect of a material weakness on the achievement of the objectives of the control criteria and contains an explanatory paragraph that states that a material weakness has been identified and included in management’s assessment related to ineffective risk assessment of the risks of material misstatement in financial reporting

.

/s/ KPMG LLP

San Francisco, Ca

February 9, 2018

EX-31.1

EXHIBIT 31.1

CERTIFICATIONS

I, David A. Pace, certify that:

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

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

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

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

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

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

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

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

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

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

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

/s/ David A. Pace

Chief Executive Officer

(Principal Executive Officer)

Date: February 9, 2018

EX-31.2

EXHIBIT 31.2

CERTIFICATIONS

I, Marie L. Perry, certify that:

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

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

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

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

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

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

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

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

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

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

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

/s/ Marie L. Perry

Chief Financial Officer, Chief Administrative Officer,

Executive Vice President and Secretary

(Principal Financial Officer)

Date: February 9, 2018

EX-32.1

EXHIBIT 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Annual Report of Jamba, Inc. (the “Company”) on Form 10-K for the year ended January 3, 2017, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, David A. Pace, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (“Section 906”), that:

(1) The Report fully complies with the requirements of section 13(a) of the Securities Exchange Act of 1934 (15 U.S.C. 78m); and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ David A. Pace

Chief Executive Officer

Date: February 9, 2018

A signed original of this written statement required by Section 906, or other document authenticating, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement required by Section 906, has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

EX-32.2

EXHIBIT 32.2

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Annual Report of Jamba, Inc. (the “Company”) on Form 10-K for the year ended January 3, 2017 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Marie L. Perry, Executive Vice President, Chief Financial Officer, Chief Administrative Officer and Secretary of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (“Section 906”), that:

(1) The Report fully complies with the requirements of section 13(a) of the Securities Exchange Act of 1934 (15 U.S.C. 78m); and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ Marie L. Perry

Chief Financial Officer, Chief Administrative Officer,

Executive Vice President and Secretary

Date: February 9, 2018

A signed original of this written statement required by Section 906, or other document authenticating, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement required by Section 906, has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.   

XML

Document and Entity Information - USD ($)	12 Months Ended
	Jan. 03, 2017	Feb. 02, 2018	Jun. 28, 2016
Document And Entity Information [Abstract]
Document Type	10-K
Amendment Flag	false
Document Period End Date	Jan. 03, 2017
Document Fiscal Year Focus	2016
Document Fiscal Period Focus	FY
Trading Symbol	JMBA
Entity Common Stock, Shares Outstanding		15,588,206
Entity Registrant Name	JAMBA, INC.
Entity Central Index Key	0001316898
Current Fiscal Year End Date	--01-03
Entity Well-known Seasoned Issuer	No
Entity Voluntary Filers	No
Entity Current Reporting Status	No
Entity Filer Category	Accelerated Filer
Entity Public Float			$ 76,692,507

XML

CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Jan. 03, 2017	Dec. 29, 2015
Current assets:
Cash and cash equivalents	$ 7,133	$ 19,730
Receivables, net of allowances of $1,808 and $618	11,778	16,932
Inventories	534	818
Prepaid and refundable taxes	243	356
Prepaid rent	1,053	1,682
Assets held for sale	206	3,144
Prepaid expenses and other current assets	2,757	4,495
Total current assets	23,704	47,157
Property, fixtures and equipment, net	12,512	15,600
Goodwill	1,183	1,184
Trademarks and other intangible assets, net	1,327	1,464
Notes receivable and other long-term assets	2,894	4,211
Total assets	41,620	69,616
Current liabilities:
Accounts payable	2,749	3,815
Accrued compensation and benefits	3,580	3,788
Workers’ compensation and health insurance reserves	675	633
Accrued jambacard liability	24,131	29,306
Accrued expenses	7,658	9,977
Other current liabilities	7,664	8,116
Total current liabilities	46,457	55,635
Deferred rent and other long-term liabilities	8,940	8,990
Total liabilities	55,397	64,625
Commitments and contingencies (Notes 19)
Shareholders’ (deficit) equity:
Common stock, $.001 par value, 30,000,000 shares authorized; 18,268,885 and 15,410,068 shares issued and outstanding, respectively, at January 3, 2017, and 17,938,820 and 15,080,003 shares issued and outstanding, respectively, at December 29, 2015	18	18
Additional paid-in capital	407,273	403,605
Treasury shares, at cost, 2,858,817	(40,009)	(40,009)
Accumulated deficit	(381,059)	(358,623)
Shareholders' (deficit) equity	(13,777)	4,991
Total liabilities and shareholders’ (deficit) equity	$ 41,620	$ 69,616

XML

CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands	Jan. 03, 2017	Dec. 29, 2015
Statement Of Financial Position [Abstract]
Receivables, allowances (in dollars)	$ 1,808	$ 618
Common stock, par value (in dollars per share)	$ 0.001	$ 0.001
Common stock, shares authorized	30,000,000	30,000,000
Common stock, shares issued	18,268,885	17,938,820
Common stock, shares outstanding	15,410,068	15,080,003
Treasury Stock, Shares	2,858,817	2,858,817

XML

CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands	3 Months Ended								12 Months Ended
	Jan. 03, 2017	Sep. 27, 2016	Jun. 28, 2016	Mar. 29, 2016	Dec. 29, 2015	Sep. 29, 2015	Jun. 30, 2015	Mar. 31, 2015	Jan. 03, 2017	Dec. 29, 2015	Dec. 30, 2014
Revenue:
Company stores	$ 11,105	$ 14,350	$ 13,874	$ 11,953	$ 12,724	$ 28,213	$ 48,360	$ 47,728	$ 51,282	$ 137,025	$ 198,737
Franchise and other revenue	6,163	7,711	7,666	6,801	6,825	7,284	5,766	4,776	28,341	24,651	19,311
Total revenue	17,268	22,061	21,540	18,754	19,549	35,497	54,126	52,504	79,623	161,676	218,048
Costs and operating expenses (income):
Cost of sales	2,881	3,437	3,321	2,962	3,230	6,626	11,474	12,407	12,601	33,737	52,236
Labor	4,402	4,644	4,668	4,158	4,925	8,843	14,876	16,088	17,872	44,732	61,749
Occupancy	1,844	1,879	1,900	2,036	2,005	3,980	6,131	6,835	7,659	18,951	27,630
Store operating	2,270	2,381	2,272	2,362	3,158	5,901	8,059	8,034	9,285	25,152	33,089
Depreciation and amortization	1,505	1,068	1,674	1,502	2,209	1,143	1,344	1,873	5,749	6,569	10,084
General and administrative	11,226	9,699	9,423	7,610	10,479	9,003	8,427	8,963	37,958	36,872	37,278
Loss (gain) on disposal of assets	289	204	188	109	(275)	(16,076)	(4,480)	(778)	790	(21,609)	(2,957)
Store pre-opening	364	210	326	324	556	287	166	22	1,224	1,031	763
Impairment of long-lived assets	3,054	229	127		321	1,907	295	0	3,410	2,523	175
Store lease termination and closure	3,918	178	(56)	120	1,400	207	40	22	4,160	1,669	575
Other operating, net	463	104	245	271	(619)	375	1,333	706	1,083	1,795	726
Total costs and operating expenses (income):	32,216	24,033	24,088	21,454	27,389	22,196	47,665	54,172	101,791	151,422	221,348
(Loss) income from operations	(14,948)	(1,972)	(2,548)	(2,700)	(7,840)	13,301	6,461	(1,668)	(22,168)	10,254	(3,300)
Other income (expense):
Interest income	55	50	74	71	59	49	14	15	250	137	74
Interest expense	(270)	(51)	(59)	(59)	(58)	(53)	(68)	(41)	(439)	(220)	(195)
Total other income (expense), net	(215)	(1)	15	12	1	(4)	(54)	(26)	(189)	(83)	(121)
(Loss) income before income taxes	(15,163)	(1,973)	(2,533)	(2,688)	(7,839)	13,297	6,407	(1,694)	(22,357)	10,171	(3,421)
Income tax expense	(10)	9	54	(132)	(424)	(194)	(57)	(26)	(79)	(701)	(168)
Net (loss) income	(15,173)	(1,964)	(2,479)	(2,820)	(8,263)	13,103	6,350	(1,720)	(22,436)	9,470	(3,589)
Less: Net income attributable to noncontrolling interest							21	31		52	43
Net (loss) income attributable to Jamba, Inc.	$ (15,173)	$ (1,964)	$ (2,479)	$ (2,820)	$ (8,263)	$ 13,103	$ 6,329	$ (1,751)	$ (22,436)	$ 9,418	$ (3,632)
Weighted-average shares used in the computation of earnings (loss) per share attributable to Jamba, Inc.:
Basic									15,229,102	15,787,806	17,197,904
Diluted									15,229,102	16,228,033	17,197,904
Earnings (loss) per share attributable to Jamba, Inc. common shareholders:
Basic	$ (0.99)	$ (0.13)	$ (0.16)	$ (0.19)	$ (0.55)	$ 0.83	$ 0.39	$ (0.11)	$ (1.47)	$ 0.60	$ (0.21)
Diluted	$ (0.99)	$ (0.13)	$ (0.16)	$ (0.19)	$ (0.55)	$ 0.81	$ 0.38	$ (0.11)	$ (1.47)	$ 0.58	$ (0.21)

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CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY - USD ($) $ in Thousands	Total	Common Stock [Member]	Additional Paid in Capital [Member]	Treasury Stock [Member]	Accumulated Deficit [Member]	Equity Attributable to Jamba, Inc. [Member]	Noncontrolling Interest [Member]
Balance at Dec. 31, 2013	$ 26,842	$ 17	$ 391,234	$ 0	$ (364,409)	$ 26,842	$ 0
Balance (in shares) at Dec. 31, 2013		17,154,655
Share-based compensation expense	3,069	$ 0	3,069	0	0	3,069	0
Issuance of common stock pursuant to stock plans	1,707	$ 0	1,707	0	0	1,707	0
Issuance of common stock pursuant to stock plans (in shares)		323,961
Realized gain on sale of noncontrolling interest	750	$ 0	662	0	0	662	88
Paid to noncontrolling interest	(42)	0	(42)	0	0	(42)	0
Due to noncontrolling interest	(1)	0	(1)	0	0	(1)	0
Treasury shares purchased, not retired	(11,991)	0	0	(11,991)	0	(11,991)	0
Net income (loss)	(3,589)	0	0	0	(3,632)	(3,632)	43
Balance at Dec. 30, 2014	16,745	$ 17	396,629	(11,991)	(368,041)	16,614	131
Balance (in shares) at Dec. 30, 2014		17,478,616
Share-based compensation expense	5,162	$ 0	5,162	0	0	5,162	0
Issuance of common stock pursuant to stock plans	1,793	$ 1	1,792	0	0	1,793	0
Issuance of common stock pursuant to stock plans (in shares)		460,204
Excess tax benefit from exercise of stock options	553	$ 0	553	0	0	553	0
Realized gain on sale of noncontrolling interest	(845)	0	(662)	0	0	(662)	(183)
Noncontrolling interest	131	0	131	0	0	131	0
Treasury shares purchased, not retired	(28,018)	0	0	(28,018)	0	(28,018)	0
Net income (loss)	9,470	0	0	0	9,418	9,418	52
Balance at Dec. 29, 2015	$ 4,991	$ 18	403,605	(40,009)	(358,623)	4,991	0
Balance (in shares) at Dec. 29, 2015	17,938,820	17,938,820
Share-based compensation expense	$ 2,579	$ 0	2,579	0	0	2,579	0
Issuance of common stock pursuant to stock plans	1,089		1,089	0	0	1,089	0
Issuance of common stock pursuant to stock plans (in shares)		330,065
Excess tax benefit from exercise of stock options	2,000
Net income (loss)	(22,436)	$ 0	0	0	(22,436)	(22,436)
Balance at Jan. 03, 2017	$ (13,777)	$ 18	$ 407,273	$ (40,009)	$ (381,059)	$ (13,777)	$ 0
Balance (in shares) at Jan. 03, 2017	18,268,885	18,268,885

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CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	12 Months Ended
	Jan. 03, 2017	Dec. 29, 2015	Dec. 30, 2014
Cash (used in) provided by operating activities:
Net income (loss) attributable to common shareholders	$ (22,436)	$ 9,470	$ (3,589)
Adjustments to reconcile net income (loss) to net cash (used in) provided by operating activities:
Depreciation and amortization	5,749	6,569	10,084
Lease termination, store closure costs, impairment and gain on disposals	8,359	(26,555)	(2,420)
Gain from sale of investment in joint venture		(662)	0
Contingent consideration fair value measurement	(295)	(156)	(397)
Jambacard breakage income	(4,096)	(5,440)	(4,744)
Share-based compensation	2,579	5,162	3,069
Bad debt and trade credits	1,645	1,896	358
Deferred rent	(1,970)	(2,035)	(397)
Equity loss from joint ventures	98	229	0
Changes in operating assets and liabilities:
Receivables	3,493	1,222	(2,853)
Inventories	249	1,129	387
Prepaid and refundable taxes	113	118	9
Prepaid rent	628	(1,178)	(197)
Prepaid expenses and other current assets	581	1,456	(2,406)
Other long-term assets	1,447	(1,201)	(1,617)
Accounts payable	(330)	(1,274)	(2,145)
Accrued compensation and benefits	(208)	(2,537)	(58)
Workers’ compensation and health insurance reserves	43	(678)	265
Accrued jambacard liability	(170)	(3,438)	5,807
Other current liabilities	(2,951)	1,669	3,319
Other long-term liabilities	428	1,624	1,068
Cash (used in) provided by operating activities	(7,044)	(14,610)	3,543
Cash provided by (used in) investing activities:
Capital expenditures	(6,807)	(7,052)	(14,280)
Acquisitions, net of cash acquired		(735)	(694)
Proceeds from the sale of assets	170	50,131	5,557
Cash provided by (used in) investing activities	(6,637)	42,344	(9,417)
Cash (used in) provided by financing activities:
Proceeds pursuant to stock plans	1,089	1,793	1,707
Excess tax benefit from exercise of stock options		553	0
Proceeds from sale of noncontrolling interest		0	750
Payments to noncontrolling interest		(52)	(42)
Payments for treasury shares		(28,018)	(11,146)
Payments on capital lease obligations	(5)	(30)	(31)
Cash (used in) provided by financing activities	1,084	(25,754)	(8,762)
Net increase (decrease) in cash and cash equivalents	(12,597)	1,980	(14,636)
Cash and cash equivalents at beginning of period	19,730	17,750	32,386
Cash and cash equivalents at end of period	7,133	19,730	17,750
Supplemental cash flow information:
Cash paid for interest	12	31	30
Income taxes paid	19	65	178
Noncash investing and financing activities:
Property, fixtures and equipment in accounts payable	312	1,171	1,192
Property, fixtures and equipment funded by a tenant allowance	1,142
Note taken for store disposal	100	2,000	0
Noncash purchase of shares of Jamba, Inc.	$ 0	$ 0	$ 845

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Business and Summary of Significant Accounting Policies

12 Months Ended

Jan. 03, 2017

Accounting Policies [Abstract]

Basis of Presentation and Significant Accounting Policies

1. BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Business - Jamba, Inc. consummated its initial public offering in July 2005. On November 29, 2006, Jamba, Inc. consummated the merger with Jamba Juice Company whereby Jamba Juice Company, which first began operations in 1990, became its wholly owned subsidiary.

Jamba, Inc. together with its wholly-owned subsidiary, Jamba Juice Company (“the Company”), is a healthful, active lifestyle brand with a robust global business driven by a portfolio of franchised and company-owned Jamba Juice ^® stores and Jamba Juice Express^TM formats. The Jamba ^® brand was created by founder Kirk Perron to inspire and simplify healthy living.  This mission is alive today in the more than 900 retail locations globally and in Jamba branded products. The Company is a leading restaurant retailer of “better-for-you” specialty beverage blends and food offerings which include flavorful, whole fruit and vegetable smoothies, fresh squeezed juices and juice blends, Energy (smoothie) Bowls, signature “boosts”, shots and a variety of food items including; hot oatmeal, breakfast wraps, sandwiches, Artisan Flatbreads, baked goods and snacks. The Company’s headquarters were located in Emeryville, California and were relocated to Frisco, Texas in the fourth quarter of fiscal year 2016.

As of January 3, 2017, there were 909 Jamba Juice stores globally, consisting of 66 Company-owned and operated stores (“Company Stores”), 773 franchisee-owned and operated stores (“Franchise Stores”) in the United States, and 70 Franchise Stores in international locations (“International Stores”).

Basis of Presentation - The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiary, Jamba Juice Company. The accounts of Jamba Juice Southern California, LLC (“JJSC”), a former indirect subsidiary, are included through April 28, 2015, when the Company sold its 88% interest in JJSC to the holder of JJSC’s non-controlling interest. All significant intercompany balances and transactions have been eliminated in consolidation. The equity method of accounting is used to account for Jamba Juice Company’s investments in its joint ventures because the Company exercises significant influence over the operations and financial policies of the joint ventures. Accordingly, the carrying value of the investment is reported in other long-term assets, and the Company’s equity in the net income and losses of its joint ventures is reported in other operating, net.

Fiscal Year End - The Company’s fiscal year ends on the Tuesday closest to December 31. The Company’s most recently completed fiscal year, referred to as fiscal 2016 which started on December 30, 2015 and ended on January 3, 2017, had 53 weeks. The Company’s fiscal 2015 which started on December 31, 2014, and ended on December 29, 2015, had 52 weeks, and fiscal 2014 which started on January 1, 2014 and ended on December 30, 2014 had 52 weeks.

Effect of Correction of Prior Period Misstatements – During fiscal year 2016, the Company corrected certain errors which resulted in additional expense in fiscal 2016 of approximately $0.8 million related to prior period financial statements. These errors related to FY 2015 ($0.6 million) and FY 2014 ($0.6 million), with the remaining offsetting amounts relating to the financial statements from years prior to 2014. These adjustments primarily related to the prior fiscal year 2015 results. The Company determined that the corrections were neither quantitatively nor qualitatively material to fiscal year 2016 or to prior periods either individually or in the aggregate or to the trends of the reported results of operations.

The following table details the specific amounts of out-of-period (overstatements)/understatements for the fiscal years 2016, 2015, 2014 and fiscal years prior to 2014.

(In thousands, except share and per share amounts)	Fiscal Year Ended January 3, 2017			Fiscal Year Ended December 29, 2015			Fiscal Year Ended December 30, 2014			Prior to Fiscal Year 2014
Total revenue	$	(65	)	$	(3	)	$	33		$	35
Total costs, operating expenses and gain		(893	)		624			622			(353	)
Income before income taxes		828			(627	)		(589	)		388
Total other expense, net		—			—			—			—
Income before income taxes		828			(627	)		(589	)		388
Income tax benefit (expense)		(30	)		44			29			(10	)
Net income		798			(583	)		(560	)		378
(Loss) earnings per share attributable to    Jamba, Inc. common shareholders:
Basic	$	0.05		$	(0.04	)	$	(0.03	)
Diluted	$	0.05		$	(0.04	)	$	(0.03	)

Significant Estimates - The preparation of the consolidated financial statements and accompanying notes are in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”). Preparing consolidated financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue and expenses and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reported periods. Actual results could differ from those estimates.

Reclassifications - Certain prior year amounts have been reclassified to conform to current year presentation in the consolidated financial statements.

Concentrations of Risk - From fiscal 2012 through October 2014, the Company maintained food distribution contracts primarily with one distributor. In October 2014, the Company began working with both Gordon Food Services (“GFS”) in the Eastern United States and Systems Services of America (“SSA”) in the Western United States to distribute food sold in the majority of Company and Franchise Stores. In fiscal 2016 and fiscal 2015, two distributors accounted for approximately 92% and 98%, respectively, of the supplies delivered to Company and Franchise Stores. The Company's limited distributor relationships could have an adverse effect on the Company’s operations.

Financial instruments that potentially subject the Company to concentrations of credit risk consist primarily of cash and cash equivalents. The Company places its cash and cash equivalents with high-quality financial institutions. Balances in the Company’s cash accounts frequently exceed the Federal Deposit Insurance Corporation insurance limit. The Company has not experienced any losses related to these balances and believes the credit risk to be minimal.

Cash and Cash Equivalents - The Company considers all highly liquid instruments with maturities of three months or less when purchased to be cash equivalents. The existing letters of credit balance of $0.4 million is collateralized by restricted cash.

Receivables - Receivables primarily represent amounts due from royalty fees, advertising fees, construction allowances, amounts receivable from suppliers, distributors and CPG customers, sale of jambacards by other issuers and franchisees and rent receivable from franchisees. The allowance for doubtful accounts is the Company’s estimate of the amount of probable credit losses in the Company’s existing accounts receivable.

Inventories - Inventories are stated at the lower of cost or market. Cost is determined using the first-in, first-out method (“FIFO”). Inventories consist of food, beverages and available-for-sale promotional products. The Company reduces inventory for obsolete and slow-moving inventory and for estimated shrinkage between physical inventory counts.

Property, Fixtures and Equipment - Property, fixtures and equipment are stated at cost less accumulated depreciation. Depreciation is computed using the straight-line method over the estimated useful life. Expenditures for major additions and improvements are capitalized and minor replacements, maintenance and repairs are charged to expense as incurred. The estimated useful life for leasehold improvements is the lesser of 10 years or the term of the underlying lease. The estimated useful life for furniture, fixtures and equipment is three to 10 years. Capitalized software is recorded at cost and includes purchased, internally-developed and externally-developed software used in the Company’s operations. Amortization expense is provided using the straight-line method over the estimated useful lives of the software, which range from one to three years. In fiscal year 2016, the Company received approximately $1.1 million in tenant allowances, primarily related to the headquarters relocation to Frisco, TX.

Upon sale, the cost of assets disposed and their related accumulation depreciation are removed from the consolidated balance sheets. The Company calculates the gain or loss by comparing the carrying value of the assets to the selling price.

Intangible Assets Subject to Amortization – Intangible assets subject to amortization (primarily franchise and reacquired franchise rights, favorable lease intangible assets and acquired customer relationships) are amortized over their estimated useful lives using a method of amortization that reflects the pattern in which the economic benefits of the intangible assets are consumed or otherwise realized. The useful life for the franchise agreements is approximately 13.4 years. The useful life of reacquired franchise rights represents the remaining term of the franchise agreement. The useful life of the favorable lease portfolio intangible is based on the related lease term.

Business Combinations - The Company accounts for business combinations using the acquisition method. Under the acquisition method, the purchase price of the acquisition is allocated to the underlying tangible and intangible assets acquired based on their respective fair values. Fair values are derived from various observable and unobservable inputs and assumptions. The Company utilizes third-party valuation specialists to assist in the allocation. Initial purchase price allocations are preliminary and are subject to revision within the measurement period, not to exceed one year from the date of acquisition. The costs of the business acquisitions are expensed as incurred. These costs may include fees for accounting, legal, professional consulting and valuation specialists.

Assets Held for Sale - The Company classifies assets as held for sale and suspends depreciation and amortization when approval at the appropriate level has been provided, the assets can be immediately removed from operations, an active program has begun to locate a buyer, the assets are being actively marketed for sale at or near their current fair value, significant changes to the plan of sale are not likely and the sale is probable within one year. Upon classification as held for sale, long-lived assets are no longer depreciated, and an assessment of impairment is performed to identify and expense any excess of carrying value over fair value less costs to sell. Subsequent changes to the estimated fair value less costs to sell will impact the measurement of assets held for sale. To the extent fair value increases, any impairment previously recorded is reversed. If the carrying value of the assets held for sale exceeds the fair value less costs to sell, the Company will record a loss for the amount of the excess. The Company also reclassifies the associated prior year balances for assets reclassified to assets held for sale.

If the Company decides not to sell previously classified assets held for sale, the asset is reclassified back to their original asset group. The assets are recorded at the lower of the carrying value before being classified as held for sale adjusted for depreciation that would have been recognized during the time they were classified as held for sale or fair value at the date the Company decided not to sell. Assets held for sale as of January 3, 2017 was $0.2 million and related to JambaGO^® assets, which is recorded in assets held for sale in the consolidated balance sheets.

Impairment of Long-lived assets - Long-lived assets, such as property and equipment and intangible assets subject to amortization, are tested for impairment at least annually or when facts and circumstances indicate that the carrying values of long-lived assets may not be recoverable. Long-lived assets are grouped for recognition and measurement of impairment at the lowest level for which identifiable cash flows are largely independent of the cash flows of other assets, generally the store asset group level. The Company first compares the carrying value of the asset to the asset’s estimated future undiscounted cash flows. If the estimated future cash flows are less than the carrying value of the asset, the Company measures an impairment loss based on the asset’s estimated fair value. The fair value of a store’s assets is estimated using a discounted cash flow model based on internal projections and taking into consideration the view of a market participant. The estimate of cash flows is based on, among other things, certain assumptions about expected future operating performance. Factors considered during the impairment evaluation include factors related to actual operating cash flows, the period of time since a store has been opened or remodeled, refranchising expectations and the maturity of the relevant market. The Company recorded impairment charges of $3.4 million, $2.5 million, and $0.2 million for fiscal years 2016, 2015 and 2014, respectively.

Impairment of Goodwill, Trademarks and Other Intangible Asset Not Subject to Amortization - Goodwill is evaluated for impairment on an annual basis during the Company’s fourth fiscal quarter, or more frequently if circumstances, such as material deterioration in performance, indicate carrying values may exceed their fair values. When reviewing goodwill for impairment, the Company assesses whether goodwill should be allocated to operating levels lower than its single operating segment for which discrete financial information is available and reviewed for decision-making purposes. These lower levels are referred to as reporting units. Currently, the Company’s one operating segment was determined to be one reporting unit.

Our annual impairment test of goodwill may be completed through a qualitative assessment. We may elect to bypass the qualitative assessment and proceed directly to a two-step quantitative impairment test, in any period. We can resume the qualitative assessment for any subsequent period. If we elect to bypass the qualitative assessment for any reporting unit, or if a qualitative assessment indicates it is more-likely-than-not that the estimated carrying value of a reporting unit exceeds its fair value, we perform a two-step quantitative goodwill impairment test. First, the reporting unit’s estimated fair value is compared to its carrying value, including goodwill. If the Company determines that the estimated fair value of the reporting unit is less than its carrying value, it moves to the second step to determine the implied fair value of the reporting unit’s goodwill. If the carrying amount of the reporting unit’s goodwill exceeds its implied fair value, an impairment loss is recognized. No goodwill impairment was recorded for fiscal years 2016, 2015 and 2014.

Intangible assets not subject to amortization (primarily trademarks) are evaluated for impairment on an annual basis during the fourth fiscal quarter, or more frequently if events or changes in circumstances indicate that the asset might be impaired. The Company qualitatively assesses the impairment for other intangible assets not subject to amortization to determine whether it is more likely than not that the fair value of intangible assets are less than their carrying amount.

For other intangible assets not subject to amortization not assessed qualitatively, a quantitative approach is utilized. The Company compares the carrying value of the applicable asset to its fair value, which the Company estimates using a discounted cash flow analysis or by comparing with the market values of similar assets. If the carrying amount of the asset exceeds its estimated fair value, the Company determines the impairment loss, if any, as the excess of the carrying value of the intangible asset over its fair value. An impairment loss is generally recognized when the carrying amount of the trademarks exceeds the fair value. For fiscal 2016, 2015 and 2014, the company had no impairments related to other intangible assets not subject to amortization.

jambacards^® - The Company, through its subsidiary, Jamba Juice Company, sells gift cards called jambacards to its customers in its retail stores, through its website and through resellers. The Company’s jambacards do not have an expiration date. An obligation is recorded at the time of either an initial load or a subsequent reload in accrued jambacard liability on the Company’s consolidated balance sheets. The Company recognizes income from jambacards when (i) the jambacard is redeemed by the customer or (ii) the likelihood of the jambacard being redeemed by the customer is remote (also referred to as “breakage”) and the Company determines that it does not have a legal obligation to remit the unredeemed jambacards to the relevant jurisdictions. The Company determines the jambacard breakage amount based upon its historical redemption patterns. Jambacard breakage income is included in other operating, net in the Consolidated Statements of Operations.

Self-Insurance Reserves -The Company is self-insured for healthcare benefits. The estimated accruals for these liabilities are based on statistical analyses of historical industry data as well as actual historical trends. For its workers’ compensation benefits, the Company has a guaranteed cost policy which renewed on October 1, 2016. Prior to September 30, 2015, the Company had a retrospective policy and was self-insured for existing and prior years exposures through September 30, 2012. For these two policies, liabilities associated with the risks that the Company retains for workers’ compensation benefits are estimated in part, by considering historical claims experience, demographic factors, severity factors and other actuarial assumptions. The Company’s estimates use this actuarial data in conjunction with known industry trends and Company experience.

Rent Expense - Under the provisions of certain of the Company’s leases, there are rent holidays and/or escalations in payments over the base lease term, as well as renewal periods. The effects of rent holidays and escalations are reflected in rent costs on a straight-line basis over the expected lease term, which includes cancelable option periods when it is deemed to be reasonably assured that the Company will exercise such option periods due to the fact that the Company would incur an economic penalty for not doing so. The lease term commences on the date when the Company becomes legally obligated for the rent payments which generally coincides with the time when the landlord delivers the property for the Company to develop. All rent costs recognized during construction periods are classified as pre-opening expenses.

The Company has assigned certain of its store leases to franchisees as part of refranchising transactions, and in some cases for amounts less than the Company’s rent obligation. Liabilities for those rent concessions are recorded and relieved against rent expense over the remaining term of the related lease.

Construction Allowances - The Company receives construction allowances from certain landlords, which are deferred and amortized on a straight-line basis over the lease term as a reduction of rent expense. In fiscal year 2016, the Company received approximately $1.1 million in allowances, primarily related to the headquarters relocation to Frisco, TX. Construction allowances are recorded in deferred rent and other long-term liabilities.

Revenue Recognition - Revenue from Company Stores is recognized when product is sold. Revenue is presented net of any taxes collected from customers and remitted to government entities. In fiscal 2014, the Company initiated a loyalty program for its customers, which allows them to earn points based on the volume of their purchases. Under the loyalty program, a customer receives a discount on future purchases when a defined number of points have been earned. The estimated amount of points redeemable in exchange for discounts is recorded in deferred revenue and recognized when the customers redeem the points they earned. The deferred revenue for unredeemed points under the loyalty program was $0.2 million at January 3, 2017 and December 29, 2015.

Revenue from jambacards is recognized upon redemption in exchange for product. Until redemption, outstanding customer balances are recorded as a liability. See “jambacards” section above for discussion on recognition of jambacard breakage.

The Company generally executes franchise agreements for each store that establishes the terms of its arrangement with the franchisee. The franchise agreements typically require the franchisee to pay an initial, non-refundable fee and continuing fees based upon a percentage of sales. Subject to the Company’s approval and the franchisee’s payment of a renewal fee, a franchisee may generally renew the franchise agreement upon its expiration.

Franchise revenue is generated from royalties, development fees, initial franchise fees and revenue from sales at franchise-operated Jamba Juice Express and JambaGO^® units. Royalties from Franchise Stores are determined as a percentage of Franchise Store revenue and are recognized in the same period as the related Franchise Store sales occur. If collection of the franchise royalty fee is doubtful, revenue is recognized at the time of collection.

Development fees are paid to the Company as part of an agreement to open and operate a specific number of stores in a specified territory. The amount of the fee is based on the number of stores to be opened pursuant to the development agreement. The nonrefundable fees collected for these services are recognized as the franchise stores under these agreements open. The Company’s multi-unit development agreements specify the number of stores to be opened.

The Company charges an initial franchise fee for providing operational materials, new store opening, planning and functional training courses. Initial franchise fees, if any, are due for payment at the time the franchise agreement for a particular store is executed. Franchise fees are recognized as revenue when all material services or conditions have been substantially performed or satisfied and no other material conditions or obligations related to the determination of substantial performance exist. Duties and services that are completed prior to approval include training, facilities inspection, receipt of operating license(s) and clearance from appropriate agencies. These duties and services are substantially complete prior to the approval of the opening of a store. Revenue is recognized when the store opens.

Revenue from sales at the Company’s flexible format franchise locations are recognized when the products are delivered to the operators of the Jamba Juice Express.

Other revenue primarily consists of revenue from sales of CPG products sold to retail outlets and online and royalties from licensed CPG products. Revenue from sale of CPG products is recognized when the products are delivered to the customer. License revenue from CPG products is based on a percentage of product sales and is recognized as revenue upon the sale of the product to retail outlets.

Cost of Sales - The Company includes in cost of sales, costs incurred to acquire fruit, dairy and other products used to make smoothies and juices, other food offerings and paper products sold by the Company Stores.

Store Lease Termination and Closure Costs - Costs incurred when closing a store are generally expensed as incurred. At the date the Company ceases use of a store under an operating lease, a liability is recorded for the net present value of any remaining lease obligations, net of estimated sublease income, if any.  In instances where a buyout is reasonably expected within six months of store closure, liabilities are recorded by estimating the expected buyout fee and the rent expected to be incurred until a buyout agreement is reached. Any costs recorded upon store closure, as well as any subsequent adjustments to liabilities for remaining lease obligations, as a result of lease termination or changes in estimates of sublease income are recorded in other operating, net in the Consolidated Statements of Operations. Considerable management judgment is necessary to estimate future cash flows, including cash flows from continuing use, terminal value and sublease income. Accordingly, actual results could vary from the Company’s estimates.

Advertising Fund - The Company participates with its franchisees in an advertising fund to collect and administer funds contributed for use in advertising and promotional programs, which are designed to increase sales and enhance the reputation of the Company and its franchise owners. Contributions to the advertising fund are required for Company Stores and traditional Franchise Stores and are generally based on a percent of store sales. The Company has control of the advertising fund. The fund is consolidated and all assets and liabilities of the fund are reported.

The advertising fund assets, consisting primarily of cash received from the Company and franchisees and accounts receivable from franchisees, can only be used for selected purposes and are considered restricted. The cash contributed by franchisees is recorded as a liability against which specified advertising costs are charged. The Company does not reflect franchisee contributions to the fund as revenue in its consolidated statements of operations or consolidated statements of cash flows.

Advertising fund assets as of January 3, 2017 and December 29, 2015 include $1.5 million and $2.4 million of receivables from franchisees, net of allowances, respectively, which is recorded in receivables in the consolidated balance sheets. Advertising fund liabilities as of January 3, 2017 and December 29, 2015, of $1.4 million and $1.2 million, respectively, are reported in other current liabilities and accounts payable in the Company’s consolidated balance sheets.

Advertising Costs - Advertising costs are expensed as incurred and were $2.3 million, $8.5 million and $10.0 million in fiscal years 2016, 2015 and 2014, respectively, and are included in store operating expenses. Advertising contributions received from franchisees, totaled $10.6 million, $7.5 million and $5.8 million for fiscal years 2016, 2015 and 2014, respectively, and were recorded as an offset to advertising expense.

Store Pre-Opening Costs - Costs incurred in connection with start-up and promotion of new store openings as well as rent from possession date to store opening date are expensed as incurred.

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

Income Taxes - Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis. Deferred tax assets and liabilities are measured using enacted income tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Any effect on deferred tax assets and liabilities due to a change in tax rates is recognized in income in the period that includes the enactment date. In establishing deferred income tax assets and liabilities, judgments and interpretations are made based on enacted tax laws and published tax guidance applicable to the Company’s operations. The Company records deferred tax assets and liabilities and evaluates the need for valuation allowances to reduce deferred tax assets to amounts more likely than not of being realized. Changes in the valuation of the deferred tax assets or changes in the income tax provision may affect the Company’s annual effective income tax rate.

Uncertain tax positions are recognized as the greatest amount more than 50% likely of being sustained upon audit based on the technical merits of the position. On a quarterly basis, the Company reviews and updates its inventory of tax positions as necessary to add any new uncertain tax positions taken, or to remove previously identified uncertain positions that have been effectively settled. Additionally, uncertain positions may be re-measured as warranted by changes in facts or law. Accounting for uncertain tax positions requires significant judgments, including estimating the amount, timing and likelihood of ultimate settlement. Although the Company believes that these estimates are reasonable, actual results could differ from these estimates. The Company classifies interest and penalties related to income taxes as a component of income taxes in the consolidated statements of operations.

A liability related to an unrecognized tax benefit is offset against a deferred tax asset for a net operating loss carryforward, a similar tax loss or a tax credit carryforward if such settlement is required or expected in the event the uncertain tax position is disallowed. In situations in which a net operating loss carryforward, a similar tax loss or a tax credit carryforward is not available at the reporting date under the tax law of a jurisdiction or the tax law of a jurisdiction does not require it, and the Company does not intend to use the deferred tax asset for such purpose, the unrecognized tax benefit is presented in the financial statement as a liability and is not combined with deferred tax assets.

Earnings (Loss) Per Share -  Basic earnings (loss) per share is computed based on the weighted-average number of common shares outstanding during the period. Diluted earnings (loss) per share is computed based on the weighted-average number of common shares and potentially dilutive securities, which includes outstanding options and restricted stock awards granted under the Company’s stock option plans. For fiscal years 2016 and 2014, the Company’s basic weighted average shares outstanding were equal to its diluted weighted average shares outstanding, since the Company experienced net losses.

During fiscal years 2015 and 2014, the Company repurchased 1,948,004 and 910,813 shares of common stock, respectively, which reduced the basic weighted average shares outstanding. The Company did not repurchase shares of common stock in fiscal year 2016.  

Anti-dilutive common stock equivalents of 1.9 million, 1.9 million and 1.5 million have been excluded from diluted weighted-average shares outstanding in fiscal years 2016, 2015 and 2014, respectively.

Share-based compensation - The Company’s share-based compensation relates to stock options and restricted stock units and is accounted for at fair value. Stock options for a fixed number of shares are granted to certain employees and directors with an exercise price based on the grant date fair value of the Company’s common stock. Compensation expense is recognized for any unvested stock option awards and time-based restricted stock awards on a straight-line basis or ratably over the requisite service period, generally three or four years. For all award types, the Company makes assumptions for the number of awards that will ultimately not vest (“forfeitures”) in determining the share-based compensation expense for these awards. The Company uses historical data to estimate expected employee behaviors related to option exercises and forfeitures. Compensation expense is trued up for actual forfeitures if different than the estimate.

The fair value of options granted was estimated at the date of grant using a Black-Scholes option-pricing model. Option valuation models, including Black-Scholes, require the input of subjective assumptions, which can materially affect the grant date fair value of a stock option award.  The assumptions used include the risk-free interest rate, the expected term of the award, expected volatility and expected dividend yield. The risk-free interest rate is based on the zero coupon U.S. Treasury rates appropriate for the expected term of the award. For the expected term of the award, the Company utilized the median of the Company’s peer group’s expected term, after adjusting for vesting and term differences. Expected volatility is based on an average of the Company’s recent historic daily stock price observations of the Company’s common stock during the period immediately preceding the share-based award grant that is equal in length to the award’s expected term and the Company’s implied volatility based on the mean of 180-day call and put options as per the open market. Expected dividends are zero based on the history of not paying cash dividends on the Company’s common stock and its intention not to make dividend payments in the future.

The Company grants time-based restricted stock units with a fair value determined based on the closing price of the Company’s common stock on the date of grant. For employees, these restricted stock units typically vest and become unrestricted over the three-year period following the date of grant. For non-employee directors, these restricted stock units typically vest and become unrestricted one year after the date of grant.  The Company grants performance-based restricted stock units (“PSUs”), which typically vest upon the Company satisfying certain performance targets and are granted to employees and non-employees.  The Company records compensation expense for PSUs when it is probable that the performance condition(s) included in the grant will be achieved. The compensation expense ultimately recognized, if any, related to these awards will equal the grant date fair value for the number of shares for which the performance condition has been satisfied.  The fair value of the PSUs is determined based on fair value at the date of grant.

In addition, the Company grants market-based restricted stock units to certain employees. The fair value was determined using a Monte Carlo simulation that incorporated option-pricing inputs covering the period from the grant date through the end of the performance period as of the date of grant.Market-based restricted stock units typically vest and become unrestricted upon achievement of compound annual stock price growth rate targets of 15%, 22.5% and 30% over a three-year period. Share-based compensation expense is recognized ratably over the vesting periods for all market-based and time-based restricted stock units.

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

Segment Reporting - The Company has one reportable retail segment.

Recent Accounting Pronouncements

In August 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update (“ASU”) 2014-15, Presentation of Financial Statements – Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern. ASU 2014-15 requires management to evaluate, at each interim and annual reporting period, whether there are conditions or events that raise substantial doubt about the entity’s ability to continue as a going concern within one year after the date the financial statements are issued, and provide related disclosures. ASU 2014-15 is effective for the annual period ending after December 15, 2016, and for annual periods and interim periods thereafter. The adoption of this guidance did not have any impact on the Company's consolidated financial statements and related disclosures.

The Company has not yet adopted and is currently assessing the potential impact of the following pronouncements on its Consolidated Financial Statements and related disclosure:

In May 2014, the FASB issued amended guidance on revenue from contracts with customers which amended the existing accounting standards for revenue recognition. ASU 2014-09, Revenue from Contracts with Customers, establishes principles for recognizing revenue upon the transfer of promised goods or services to customers, in an amount that reflects the expected consideration received in exchange for those goods or services. In August 2015, the FASB issued ASU 2015-14 deferring the effective date to fiscal years beginning after December 15, 2017 (including interim reporting periods within those periods). Early adoption is permitted to the original effective date of the fiscal year beginning after December 15, 2016 (including interim reporting periods within those periods). The amendment guidance may be applied retrospectively to each prior period presented with the option to apply practical expedients or retrospectively with the cumulative effect recognized as of the date of initial application. Management believes adoption of the new revenue recognition standard will impact the Company’s accounting for other fees charged to franchisees and transactions involving its advertising fund and gift card fund. Currently, the Company anticipates to adopt the new revenue standard using the modified retrospective transition approach. Management is in the process of determining the financial statement impact and currently unable to estimate the impact on the Company’s consolidated financial statements or related disclosures.

In February 2016, the FASB issued ASU 2016-02, Leases (“ASU 2016-02”), which will require lessees to recognize a lease liability and a right-of-use asset for all leases (with the exception of leases with terms less than 12 months) at the commencement date. The guidance will be effective for the Company beginning fiscal year 2019, with early adoption permitted. The new standard is required to be applied with a modified retrospective approach to each prior reporting period presented with various optional practical expedients. Management believes the adoption of ASU 2016-02 will materially impact the Company’s consolidated financial statements by significantly increasing non-current assets and non-current liabilities on the consolidated balance sheets in order to record the right of use assets and related lease liabilities for existing operating leases. Management is currently unable to estimate the impact on the consolidated financial statements.

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

In March 2016, the FASB issued ASU 2016-09, Compensation-Stock Compensation: Improvements to Employee Share-Based Payment Accounting. The updated guidance changes how companies account for certain aspects of share-based payment awards to employees, including the accounting for income taxes, forfeitures and statutory tax withholding requirements, as well as classification in the statement of cash flows. The standard also allows us to repurchase more of an employee’s vesting shares for tax withholding purposes without triggering liability accounting, clarifies that all cash payments made to tax authorities on an employee’s behalf for withheld shares should be presented as a financing activity on the cash flows statement, and provides an accounting policy election to account for forfeitures as they occur. The net result of the adoption of ASC 2016-09 on deferred taxes will be zero. The cumulative gross excess tax benefit, or APIC windfall amount is approximately $2.0 million as of January 3, 2017, or approximately $0.8 million on a tax effected basis. When ASU 2016-09 is adopted, the gross excess tax benefit will be recognized as additional deferred tax asset and will increase the net operating loss carryforward. Given the Company has a full valuation allowance against its deferred tax assets, there is no impact on deferred taxes. The guidance will be effective for the Company beginning fiscal year 2017. 

The Company has not yet adopted and does not expect the adoption of the following pronouncements to have a significant impact on its Consolidated Financial Statements and related disclosure:

In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows—Classification of Certain Cash Receipts and Cash Payments, which provides specific guidance for certain cash flow classification issues, previously not specifically addressed, including classification for debt prepayment, contingent consideration made after a business combination, insurance claim proceeds and corporate-owned life insurance policies, distributions received from equity method investees and certain other items. The guidance will be effective for the Company beginning fiscal year 2018, with early application permitted.

In July 2015, the FASB issued ASU 2015-11, Simplifying the Measurement of Inventory. This update applies to inventory that is measured using FIFO or average cost method and requires measurement of that inventory at the lower of cost or net realizable value. Net realizable value is defined as the estimated selling price in the ordinary course of business, less reasonably predictable costs of completion, disposal and transportation. This guidance will be effective for the Company beginning fiscal year 2017.

In January 2016, the FASB issued ASU 2016-01, Financial Instruments - Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities (“ASU 2016-01”). ASU 2016-01 addresses certain aspects of recognition, measurement, presentation, and disclosure of financial instruments. ASU 2016-01 will be effective for the Company beginning fiscal year 2018.

In January 2017, the FASB issued ASU 2017-04, Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment, which eliminates Step 2 from the goodwill impairment test.The impairment amount will be calculated at Step 1. The amendments also eliminate the requirements for any reporting unit with a zero or negative carrying amount to perform a qualitative assessment and, if it fails that qualitative test, to perform Step 2 of the goodwill impairment test. An entity still has the option to perform the qualitative assessment for a reporting unit to determine if the quantitative impairment test is necessary. This guidance will be effective for the Company’s fourth quarter annual impairment test in fiscal year 2019, with early adoption permitted.

In January 2017, the FASB issued ASU 2017-09, Compensation-Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting. The amendments provide guidance on determining which changes to the terms and conditions of share-based payment awards require an entity to apply modification accounting under Topic 718. This guidance will be effective for the Company’s fiscal year 2018, with early adoption permitted.

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Refranchising

12 Months Ended

Jan. 03, 2017

Refranchising [Abstract]

Refranchising

2. REFRANCHISING

In November 2014, the Company announced an accelerated transition to an asset-light model that included the sale of up to 114 Company Stores in the California market. During fiscal 2015, the Company refranchised 179 opened stores and one unopened store (of which 176 were previously classified as assets held for sale) for total proceeds of $53.1 million which included cash of $51.1 million and notes receivable of $2.0 million. As a result of these transactions, the Company recorded a total gain of $21.6 million on the disposal of assets during fiscal year 2015. At January 3, 2017 and December 29, 2015, notes receivable related to the refranchising was $2.0 million and are included in other long-term assets in the consolidated balance sheets.

In connection with the headquarters relocation from Emeryville, California to Frisco, Texas the Company refranchised the Emeryville store in December 2016 for total proceeds of $0.1 million, which resulted in an immaterial gain. In November 2016, the Company announced plans to refranchise of 13 Company-owned stores in the Chicago area which was subsequently completed in the second quarter of 2017.

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Property, Fixtures, and Equipment

12 Months Ended

Jan. 03, 2017

Property Plant And Equipment [Abstract]

Property, Fixtures, and Equipment

3. PROPERTY, FIXTURES AND EQUIPMENT

Property, fixtures and equipment consisted of the following as of (in thousands):

	January 3, 2017			December 29, 2015
Leasehold improvements	$	20,734		$	19,586
Furniture, fixtures and equipment		30,349			28,470
Construction in progress (primarily stores    under construction)		74			3,773
Total		51,157			51,829
Less accumulated depreciation and    amortization		(38,645	)		(36,229	)
Total	$	12,512		$	15,600

Depreciation expense related to property, fixtures and equipment for fiscal years 2016, 2015 and 2014 was $5.7 million, $6.5 million and $10.0 million, respectively. Assets related to JambaGo were reclassified on the consolidated balance sheets from property, fixtures and equipment to assets held for sale of $0.2 million and $3.1 million for fiscal years 2016 and 2015.

In fiscal 2016, the Company corrected certain errors including an overstatement of expenses included within depreciation expense of approximately $0.2 million related to prior period financial statements. The Company determined that the corrections were neither quantitatively or qualitatively material to those periods individually and in the aggregate or to the trend of the reported operating results.

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Goodwill, Trademarks and Other Intangible Assets

12 Months Ended

Jan. 03, 2017

Goodwill And Intangible Assets Disclosure [Abstract]

Goodwill, Trademarks and Other Intangible Assets

4. GOODWILL, TRADEMARKS AND OTHER INTANGIBLE ASSETS

A summary of the changes in goodwill for fiscal 2016 and 2015 follows (in thousands):

	Amount
Balance as of December 30, 2014	$	945
Additions		232
Reclassification out of assets held for sale		7
Balance as of December 29, 2015		1,184
Refranchise		(1	)
Balance as of January 3,  2017	$	1,183

The carrying amount and accumulated amortization of trademarks and other intangible assets as of January 3, 2017 and December 29, 2015 were as follows (in thousands):

	Gross Amount		Accumulated Amortization			Net Amount
Intangible Assets
As of January 3, 2017
Favorable leases		1,850		(1,850	)		—
Trademarks		807		—			807
Franchise agreements and customer lists		677		(511	)		166
Reacquired franchise rights		599		(245	)		354
Total	$	3,933	$	(2,606	)	$	1,327

	Gross Amount		Accumulated Amortization			Net Amount
As of December 29, 2015
Favorable leases		1,850		(1,850	)		—
Trademarks		807		—			807
Franchise agreements and customer lists		735		(496	)		239
Reacquired franchise rights		599		(181	)		418
Total	$	3,991	$	(2,527	)	$	1,464

Intangible assets, other than trademarks, are amortized over their expected useful lives, ranging from two to seven years. Amortization expense for intangible assets was $0.1 million for fiscal years 2016, 2015 and 2014. The remaining intangible assets, subject to amortization of $0.5 million will continue to be amortized over their estimated useful lives. Expected annual amortization expense for the remaining intangible assets recorded as of January 3, 2017 is as follows (in thousands):

Fiscal Year	Amortization Expense
2017	$	114
2018		112
2019		97
2020		62
2021		47
Thereafter		88

Trademarks are not subject to amortization and the Company evaluates for impairment on an annual basis during the fourth quarter or more frequently if events or changes in circumstances indicate that the asset might be impaired. There was no impairment charge for trademarks in fiscal 2016 and fiscal 2015.

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Acquisitions

12 Months Ended

Jan. 03, 2017

Business Combinations [Abstract]

Acquisitions

5. ACQUISITIONS

2015 Acquisition

In December 2015, the Company acquired two domestic stores in California from a former franchisee. The purchase was accounted for using the acquisition method of accounting. Under the acquisition method, the purchase price is allocated to the underlying tangible and intangible assets acquired based on their respective fair values. A summary of the purchase price, the fair value of the net assets acquired and the goodwill on the purchase follows (in thousands):

Cash paid to acquire stores	$	737
Additional consideration resulting from termination of    pre-existing relationships		85
Total purchase consideration	$	822
Net assets acquired:
Current assets	$	12
Fixed assets		259
Re-acquired franchise rights		424
Unfavorable Lease		(105	)
Net assets acquired	$	590
Goodwill	$	232

There was a gain on termination of pre-existing relationships that was recorded in gain on disposal of assets on the Consolidated Statement of Operations, and resulted in an increase in the purchase price consideration and an increase in goodwill. The pro-forma effect of the acquisition on the Company’s results of operations was not significant.

The fair value of the fixed assets acquired is classified as level 2 and is based on inputs other than quoted prices in active markets included in level 1, which are either directly or indirectly observable, to estimate replacement value. The fair value of re-acquired franchise rights is classified as level 3, and is based on significant unobservable inputs and assumptions such as management’s estimate of operating profit and assumed discount rates. Significant changes in the inputs or assumptions would increase or decrease the fair value measurements that would impact the depreciation or amortization of fixed assets and reacquired franchise rights and future impairment, if any. 

The fixed assets acquired include leasehold improvements which have an estimated useful life of the lesser of 10 years or the remaining term of the underlying lease. The estimated useful life for furniture, fixtures, and equipment acquired is three to 10 years.

2014 Acquisition

In September 2014, the Company acquired 26 domestic stores, of which three were immediately closed, in the Midwest from a former franchise partner pursuant to a Settlement and General Release Agreement. The purchase was accounted for using the acquisition method of accounting. Under the acquisition method, the purchase price is allocated to the underlying tangible and intangible assets acquired based on their respective fair values. A summary of the purchase price, the fair value of the net assets acquired and the gain on the purchase follows (in thousands):

Cash paid to acquire stores	$	725
Additional consideration resulting from termination of    pre-existing relationships		369
Total purchase consideration	$	1,094
Net assets acquired:
Current assets	$	145
Fixed assets		365
Re-acquired franchise rights		476
Other assets and liabilities		343
Net assets acquired	$	1,329
Bargain purchase gain	$	235

The bargain purchase price and resulting gain was the result of a reacquisition of stores from a franchisor due to their failure to comply with the franchise agreement. The gain is recorded in the Consolidated Statement of Operations. In addition, there was a gain on termination of pre-existing relationships that was recorded in the Consolidated Statement of Operations, and resulted in an increase in the purchase price consideration and a decrease in the bargain purchase gain. The pro-forma effect of the acquisition on the Company’s results of operations was not significant.

The fair value of the fixed assets acquired is classified as level 3 and is based on unobservable inputs including projected future operating results at the store level and assumed discount rates are applied to calculate the present value of the assets. The fair value of re-acquired franchise rights is classified as level 3, and it is based on significant unobservable inputs and assumptions such as management’s estimate of operating profit and assumed discount rates. Significant changes in the inputs or assumptions would increase or decrease the fair value measurements for future impairment of the fixed assets and reacquired franchise rights.

The fixed assets acquired include leasehold improvements which have an estimated useful life of the lesser of 10 years or the remaining term of the underlying lease. The estimated useful life for furniture, fixtures, and equipment acquired is three to 10 years.

The Company began actively marketing 26 acquired stores in February 2015, which resulted in the determination that the criteria for classification of assets held for sale were met. As a result, 22 store locations were reclassified to assets held for sale during the first quarter of 2015. As of December 29, 2015, these stores were reclassified out of assets held for sale resulting from management’s decision to retain or close certain of the stores.

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Fair Value Measurement

12 Months Ended

Jan. 03, 2017

Fair Value Disclosures [Abstract]

Fair Value Measurement

6. FAIR VALUE MEASUREMENT

Financial Assets and Liabilities

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

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

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

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

In the fiscal years 2016 and 2015, the Company recorded gains of $0.3 million and $0.2 million included in gain on contingent consideration within other operating, net, due to a change in circumstances under which remaining contingent consideration was no longer deemed probable of payment.

Non-financial Assets and Liabilities

There are no long-lived assets being carried at fair value as of January 3, 2017 and December 29, 2015. As a result of its quarterly impairment reviews, the Company recognized impairment of $0.4 million, $0.6 million and $0.2 million included in impairment of long-lived assets in the Consolidated Statements of Operations for fiscal years 2016, 2015 and 2014, respectively. The losses for fiscal years 2016 and 2014 are all due to impairment of fixed assets. The losses for fiscal 2015 are due to $0.3 million of impairment of trademarks and $0.3 million impairment of fixed assets.

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Notes Receivable and Other Long-term Assets

12 Months Ended

Jan. 03, 2017

Receivables [Abstract]

Notes Receivable and Other Long-term Assets

7. NOTES RECEIVABLE AND OTHER LONG-TERM ASSETS

As of January 3, 2017 and December 29, 2015, other long-term assets consisted of the following (in thousands):

	January 3, 2017		December 29, 2015
Notes receivable	$	1,879	$	3,107
Deposits and other		889		582
Investment in unconsolidated subsidiaries		126		522
Total	$	2,894	$	4,211

As of January 3, 2017 and December 29, 2015, notes receivable includes notes from franchisees totaling $1.9 million and $3.1 million, respectively. The note entered into during fiscal 2015 of $2.0 million has a maturity date of February 1, 2021 and the annual interest rate is 3% per annum.

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Development Agreements

12 Months Ended

Jan. 03, 2017

Development Agreements [Abstract]

Development Agreements

8. DEVELOPMENT AGREEMENTS

The Company has entered into multi-unit license agreements with area developers to build stores in certain geographic regions. Under typical multi-unit license agreements, the area developer generally pays one-half of the initial nonrefundable fee multiplied by each store to be built as a nonrefundable development fee upon execution of the multi-unit development agreement. This deposit is included in deferred revenue in the accompanying Consolidated Financial Statements. The agreements are generally for a term of five years. Each time a store is opened under the multi-unit license agreement, the Company credits the franchisee one-half of the initial fee as part of the development fee and the franchisee is required to pay the remaining one-half of the initial fee.

The following table summarizes data about the development agreements for Franchise and International Stores as of:

	January 3, 2017	December 29, 2015
Number of developers with Franchise    Store contractual commitments	27	32
Number of Franchise Stores for which    commitments exist	122	163
Number of developers with International    Stores contractual commitments	6	7
Number of International Stores for which    commitments exist	307	485

Deferred franchise revenue is included in other current liabilities and other long-term liabilities in the Company’s consolidated balance sheets. As of January 3, 2017 and December 29, 2015, deferred franchise revenue included $1.3 million and $1.1 million, respectively, relating to non-refundable development fees and initial fees paid by domestic franchisees whose stores have not yet opened. In addition, deferred franchise revenue as of January 3, 2017 and December 29, 2015 included $1.5 million and $1.5 million, respectively, relating to non-refundable international development fees.

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Deferred Rent and Other Long-Term Liabilities

12 Months Ended

Jan. 03, 2017

Other Liabilities Disclosure [Abstract]

Deferred Rent and Other Long-Term Liabilities

9. DEFERRED RENT AND OTHER LONG-TERM LIABILITIES

Other long-term liabilities consisted of the following (in thousands):

	January 3, 2017		December 29, 2015
Deferred rent	$	2,260	$	2,961
Deferred revenue		2,950		3,720
Construction allowance		1,423		735
Other liabilities		2,307		1,574
Total deferred rent and other long-term    liabilities	$	8,940	$	8,990

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Lease Commitments

12 Months Ended

Jan. 03, 2017

Leases [Abstract]

Lease Commitments

10. LEASE COMMITMENTS

The Company leases its office, retail stores, and some equipment under operating leases, with terms expiring through 2027. Most store leases have an initial term of 10 years, with renewal options of up to 10 years and provide for payment of common area operating expenses and real estate taxes. When the Company refranchises Company Stores, usually the franchisees become sublessees and the Company continues to be obligated under the existing lease agreements for the remainder of the lease terms.

Rental expense, net of sublease income was $7.1 million, $15.6 million and $22.3 million in fiscal years 2016, 2015 and 2014, respectively, and was recorded in occupancy and general and administrative expenses in the accompanying Statements of Operations. The Company recognized sublease income of $20.5 million, $13.8 million and $9.2 million in fiscal years 2016, 2015 and 2014, respectively.

Contingent rent included in occupancy costs in the Statements of Operations was $0.4 million, $0.5 million and $0.5 million in fiscal years 2016, 2015 and 2014, respectively.

The aggregate future minimum noncancelable lease payments and minimum rentals to be received from sublessees as of January 3, 2017, were as follows (in thousands):

Fiscal Year Ending:	Minimum lease payments		Minimum rentals to be received
2017	$	26,354	$	20,117
2018		22,539		16,734
2019		18,569		13,505
2020		14,585		10,236
2021		10,769		7,446
Thereafter		22,500		12,583
Total	$	115,316	$	80,621

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Credit Agreement

12 Months Ended

Jan. 03, 2017

Debt Disclosure [Abstract]

Credit Agreement

11. CREDIT AGREEMENT

On November 3, 2016, the Company entered into a credit agreement with Cadence Bank, NA (“New Credit Agreement”). The New Credit Agreement provides an aggregate principal amount of up to $10.0 million. The credit facility also allows the Company to request an additional $5.0 million for an aggregate principal amount of up to $15.0 million. The New Credit Agreement accrues interest at a per annum rate equal to the LIBOR rate plus 2.50%. The New Credit Agreement contains customary affirmative and negative covenants and has a five-year term. Under the terms of the New Credit Agreement, the Company is required to either maintain minimum cash or consolidated EBITDA levels and minimum levels of tangible net worth and a minimum fixed charge coverage ratio. The New Credit Agreement terminates November 3, 2021. This credit facility is subject to customary affirmative and negative covenants for credit facilities of this type, including limitations on the Company with respect to liens, indebtedness, guaranties, investments, distributions, mergers and acquisitions and dispositions of assets. The credit facility is evidenced by a revolving note made by the Company in favor of the Lender, is guaranteed by the Company and is secured by substantially all of its assets including the assets of its subsidiary and a pledge of stock of its subsidiary.

To acquire the credit facility, the Company incurred upfront fees, which are being amortized over the term of the Credit Agreement. As of January 3, 2017, the unamortized commitment fee amount was not material and is recorded in prepaid expenses in the consolidated balance sheets. As of January 3, 2017, the Company had no borrowings against the credit facility and was in compliance with the financial covenants to the Credit Agreement.  

On February 14, 2012, the Company entered into a Credit Agreement with Wells Fargo Bank, National Association (the “Lender”), which, as amended on November 1, 2012, July 22, 2013, November 4, 2013 and December 29, 2015 (as amended, the “Credit Agreement”), made available to the Company a revolving line of credit in the amount of $10.0 million. The outstanding balance under the amended credit facility accrued interest at a LIBOR Market Index Rate based upon the rate for one month U.S. dollar deposits, plus 2.50% per annum. On July 22, 2016, the Credit Agreement expired with no amounts drawn on the credit facility since its inception. The existing letters of credit balance of $0.4 million is collateralized by restricted cash at January 3, 2017. During the term of the Credit Agreement, the unamortized commitment fee amount was not material. This credit facility was subject to customary affirmative and negative covenants for credit facilities of this type, including limitations on the Company with respect to liens, indebtedness, guaranties, investments, distributions, mergers and acquisitions and dispositions of assets.

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Share-Based Compensation

12 Months Ended

Jan. 03, 2017

Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]

Share-Based Compensation

12. SHARE-BASED COMPENSATION

Jamba, Inc. 2013 Equity Incentive Plan (“the Plan”) authorizes the Company to provide incentive compensation in the form of stock options, restricted stock and stock units (“RSUs”), performance shares and units (“PSUs”), other stock-based and restricted stock-based awards (“RSAs”), cash-based awards and deferred compensation awards. In addition, the Company periodically authorizes grants of stock-based compensation as inducement awards to new employees. This type of award does not require shareholder approval in accordance with Rule 5635(c)(4) of the Nasdaq listing rules.

On May 17, 2016, at its 2016 Annual Meeting of Shareholders, the Company’s shareholders, upon the recommendation of the Board of Directors, approved an additional 900,000 shares of common stock to be offered or issued under the 2013 Plan. The 2013 Plan authorizes up to 3,028,847 shares.

As of January 3, 2017, under the Company’s 2013 Plan, there remained 842,120 shares available for grant. All plan equity grants were issued from the 2013 Plan and it is currently the only equity plan from which future equity awards may be granted.  Options granted under the 2013 Plan and inducement awards have an exercise price equal to the closing price of the Company’s common stock on the grant date, are generally exercisable for up to 10 years, and vest annually over a four-year period. Unvested shares are forfeited upon termination of employment, unless the award agreement provides otherwise.

Share-based compensation expense was $2.6 million, $5.2 million and $3.1 million for fiscal years 2016, 2015 and 2014, respectively, and is included in general and administrative expenses in the Consolidated Statements of Operations. For fiscal years 2016, 2015 and 2014, the total income tax benefit recognized in our Consolidated Statements of Operations in connection with all share-based compensation awards was $0, $0.6 million and $0, respectively.

Stock Options

The fair value of stock options was estimated at the date of grant using a Black-Scholes option pricing model with the following weighted-average assumptions.

	Fiscal Year Ended January 3, 2017			Fiscal Year Ended December 29, 2015			Fiscal Year Ended December 30, 2014
Weighted-average risk-free interest    rate		1.36	%		1.75	%		0.12	%
Expected life of options (years)		5.22			5.85			0.80
Expected stock volatility		40.5	%		43.7	%		60.8	%
Expected dividend yield		0	%		0	%		0	%

For fiscal 2014, the table above reflects 5,000 options that had an accelerated vesting stock modification related to terminated executives. No other options were issued in fiscal 2014.

A summary of the stock option activities for fiscal year 2016 is presented below (shares and dollars in thousands):

	Number of Options			Weighted- Average Exercise Price		Weighted- Average Contractual Term Remaining		Aggregate Intrinsic Value
Outstanding at December 29, 2015		1,530		$	12.42	5.76		$	3,960
Granted		315			13.11
Exercised		(197	)		5.50
Canceled		(448	)		16.00
Outstanding at January 3, 2017		1,200		$	12.40		5.05	$	1,213
Options vested or expected to vest at     January 3, 2017		1,112		$	12.32		4.86	$	1,213
Options exercisable at  January 3, 2017		485		$	10.74		1.65	$	1,211

The intrinsic value of stock options is defined as the difference between the current market value and the exercise price, which is equal to the market value at the time of the grant. Information regarding options outstanding and exercisable at January 3, 2017 is as follows (shares in thousands):

Range of Exercise Prices	Number Outstanding		Weighted- Average Remaining Contractual Life (Years)	Weighted- Average Exercise Price		Number Exercisable		Weighted- Average Exercise Price
$3.00 - $3.00		141	1.05	$	3.00		141	$	3.00
$5.40 - $10.87		130	4.14		9.02		89		8.33
$10.93 - $11.65		139	6.43		11.41		58		11.13
$11.98 - $11.98		10	4.37		11.98		10		11.98
$12.35 - $12.35		153	9.05		12.35		3		12.35
$13.30 - $13.71		44	7.69		13.49		15		13.44
$13.94 - $13.94		503	4.46		13.94		139		13.94
$19.50 - $45.55		68	6.87		21.89		18		28.38
$47.55 - $47.55		6	0.44		47.55		6		47.55
$50.25 - $50.25		6	0.42		50.25		6		50.25
		1,200	5.05	$	12.40		485		10.74

The weighted-average grant date fair value of options granted was $4.30 in fiscal 2016, $13.92 in fiscal 2015 and $5.64 in fiscal 2014. At January 3, 2017, stock options vested or expected to vest over the next four years totaled 1.1 million. The remaining expense to amortize is approximately $1.7 million at January 3, 2017. The weighted-average remaining recognition period is approximately two years.

Restricted Stock Awards

Restricted stock awards are granted to members of our Board of Directors as part of their compensation. Awards are fully vested and expensed when granted. The fair value of restricted stock awards is the market close price of our common stock on the date of the grant. In fiscal years 2016 and 2015, 3,514 and 1,094 restricted stock awards were issued with a weighted average grant date fair value per share of $12.80 and $13.71, respectively. There were no RSAs granted in fiscal 2014.

Time-Based Restricted Stock Units

Information regarding activities during fiscal 2016 for outstanding time-based RSUs is as follows (shares in thousands):

	Number of shares of RSUs			Weighted- Average Grant Date Fair Value (per share)
Outstanding as of December 29, 2015		190			14.09
Granted		44			11.31
Forfeited		(39	)		13.95
Vested		(127	)		13.70
Outstanding as of January 3, 2017		68		$	13.11

During fiscal years 2016, 2015 and 2014, the Company granted 44,000, 52,000 and 270,000 time-based RSUs at a weighted average grant date fair value of $11.31, $15.10 and $13.21, respectively, with a vesting period of three years. Compensation expense for time-based RSUs is recognized over the vesting period on a straight-line basis. The aggregate grant date fair value of the time-based RSUs granted during fiscal years 2016, 2015 and 2014 was $0.5 million, $0.8 million, and $3.3 million, respectively. The aggregate intrinsic value of time-based RSUs outstanding as of January 3, 2017, December 29, 2015 and December 30, 2014 was $0.7 million, $2.6 million and $4.0 million, respectively.

At January 3, 2017, unvested share-based compensation for time-based RSUs, net of forfeitures, totaled $0.5 million. This expense will be recognized over the remaining weighted-average vesting period of approximately one year.

Performance-Based Restricted Stock Units

Information regarding activities during fiscal 2016 for outstanding PSUs is as follows (shares in thousands):

	Number of shares of PSUs			Weighted- Average Grant Date Fair Value (per share)
Outstanding as of December 29, 2015		57			13.89
Granted		8			10.11
Forfeited		(46	)		13.85
Vested		(2	)		14.04
Outstanding as of January 3, 2017		17		$	12.27

During fiscal years 2016 and 2014, the Company granted 8,000 and 95,000 PSUs at a weighted average grant date fair value of $10.11 and $14.37, respectively. There were no PSUs granted during fiscal 2015. The aggregate grant date fair value of the PSUs during fiscal 2014 was $1.2 million. The aggregate intrinsic value of the PSUs outstanding as of January 3, 2017 and December 29, 2015 was expense of $0.2 million and $0.8 million, respectively. At January 3, 2017, unvested share-based compensation for PSUs, net of forfeitures, was less than $0.1 million, which will be recognized over the remaining weighted-average vesting period of approximately seven months.

Market-Based Restricted Stock Units

Information regarding activities during fiscal 2016 for outstanding market-based RSUs is as follows (shares in thousands):

	Number of market-based RSUs		Weighted- Average Grant Date Fair Value (per share)
Outstanding as of December 29, 2015		—		—
Granted		505		3.04
Forfeited		—		—
Vested		—		—
Outstanding as of January 3, 2017		505	$	3.04

In January 2016, in connection with the hiring of the Company’s new Chief Executive Officer, the Company granted equity awards which included an award of 350,000 market-based RSUs vesting upon achievement of compound annual stock price growth rate targets of 15%, 22.5% and 30% over a three-year period, which were granted in May 2016.

During fiscal 2016, the Company also granted inducement awards in connection with executive hiring which included 155,000 market-based RSUs vesting upon achievement of compound annual stock price growth rate targets of 15%, 22.5% and 30%. Compensation expense related to market-based RSUs is recognized over the requisite service period on a straight-line basis. The requisite service period is a measure of the expected time to reach the respective vesting threshold. We estimated this period by utilizing a Monte Carlo simulation, considering only those stock price-paths in which the threshold was exceeded. The estimated requisite service period for the market-based RSUs issued in fiscal 2016 ranges between approximately eighteen and twenty-four months.

The aggregate grant date fair value of the market-based RSUs granted during fiscal 2016 was $1.5 million. There were no market-based RSUs granted during fiscal 2015 or 2014.  The aggregate intrinsic value of the market-based RSUs outstanding as of January 3, 2017 was $5.2 million. At January 3, 2017, unvested share-based compensation for market-based RSUs, net of forfeitures, was $0.9 million, which will be recognized over the remaining weighted-average recognition period of approximately fourteen months.

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Stock Repurchases

12 Months Ended

Jan. 03, 2017

Equity [Abstract]

Stock Repurchases

13. STOCK REPURCHASES

On August 4, 2016, the Company announced that its Board of Directors approved the terms of a share repurchase plan (the "2016 Stock Repurchase Program"). Pursuant to the 2016 Stock Repurchase Program, the Company is authorized to repurchase up to $20.0 million of its common stock subject to available cash resources over the next two-year period.  The Company may repurchase shares on the open market, through privately negotiated transactions or otherwise, at times, in amounts and at prices considered appropriate by the Company.  The number of shares to be purchased and the timing of any purchases are subject to various factors, including the price of the Company’s common stock, the Company’s capital position, the amount of retained earnings of the Company, general market conditions and other economic factors and corporate and regulatory requirements, and may be modified, suspended or terminated at any time.

On October 29, 2014, the Company’s Board of Directors authorized the repurchase of up to $25.0 million of shares of common stock over an 18-month period (the "2014 Stock Repurchase Program"). The Company’s Board of Directors authorized an increase to the Stock Repurchase Program of $15.0 million to a total of $40.0 million in May 2015 and an additional $5.0 million to a total of $45.0 million in September 2015, which expired on May 4, 2016. Shares repurchased under the Stock Repurchase Program are considered treasury stock until retired. During fiscal 2015 and fiscal 2014, the Company repurchased approximately 2.0 million and 0.9 million shares, respectively, under the Stock Repurchase Program. The average price per share during fiscal 2015 and fiscal 2014 was $14.38 and $13.17, respectively, with an aggregate cost of $28.0 million and $12.0 million for fiscal 2015 and fiscal 2014, respectively, leaving $5.0 million available for share repurchases. Shares repurchased under the stock repurchase programs are considered treasury stock until retired.

During fiscal year 2016, the Company did not repurchase shares under the 2016 Stock Repurchase Program or the 2014 Stock Repurchase Program.

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Income Taxes

12 Months Ended

Jan. 03, 2017

Income Tax Disclosure [Abstract]

Income Taxes

14. INCOME TAXES

The components of the income tax (expense) benefit are as follows (in thousands):

	January 3, 2017			December 29, 2015			December 30, 2014
Current:
Federal	$	—		$	(438	)	$	—
State		(14	)		(149	)		(37	)
Foreign		(65	)		(114	)		(131	)
	$	(79	)	$	(701	)	$	(168	)
Deferred:
Federal	$	—		$	—		$	—
State		—			—			—
Foreign		—			—			—
	$	—		$	—		$	—
Income tax benefit (expense)	$	(79	)	$	(701	)	$	(168	)

The difference between the effective income tax rate and the United States federal income tax rate is summarized as follows:

	January 3, 2017			December 29, 2015			December 30, 2014
Statutory federal rate		34.0	%		34.0	%		34.0	%
State income taxes less federal    benefit		(1.4	)		(9.2	)		5.9
Foreign income taxes		(0.3	)		1.1			(2.5	)
Change in valuation allowance		(24.6	)		(38.1	)		(31.5	)
Meals		(0.1	)		0.3			(1.2	)
Business Gain on Acquisition		—			—			8.5
Alternative minimum taxes		—			0.1			(1.0	)
Expired tax attribute carryforwards		(6.4	)		11.1			(17.0	)
Tax credits generated		—			(0.1	)		0.3
Other		(1.6	)		7.7			(0.3	)
		(0.4	)%		6.9	%		(4.8	)%

Deferred income taxes are provided for the temporary differences between the carrying values of the Company’s assets and liabilities for financial reporting purposes and their corresponding income tax bases. The temporary differences give rise to either a deferred tax asset or liability in the financial statements that is computed by applying current statutory tax rates to taxable and deductible temporary differences. The deferred tax assets (liabilities) consisted of the following temporary differences as of January 3, 2017 and December 29, 2015 (in thousands):

	January 3, 2017			December 29, 2015
Net operating losses	$	62,875		$	50,837
Reserves and accruals		5,073			10,754
Deferred rent		967			1,518
Tax credit attributes		1,957			1,999
Basis difference in intangibles		1,152			1,510
Share-based compensation		1,915			2,979
Basis difference in fixed assets		5,670			3,245
Basis difference in intangibles		(95	)		(289	)
Basis difference in investments		144			4
Reserves and accruals		(29	)		(64	)
Total gross deferred tax asset		79,629			72,493
Valuation allowance		(79,629	)		(72,493	)
Total net deferred tax asset	$	—		$	—

Realization of the future tax benefits is dependent on the Company’s ability to generate sufficient taxable income within the carryforward period. A valuation allowance is provided for deferred tax assets when it is “more likely than not” that some portion of the deferred tax asset will not be realized. Because of the Company’s recent history of operating losses, management believes the recognition of the deferred tax assets arising from the above-mentioned future tax benefits is currently not likely to be realized and, accordingly, has provided a valuation allowance. A valuation allowance has been recorded for the net deferred tax assets at January 3, 2017, which increases the valuation allowance by $7.1 million for the fiscal year ended January 3, 2017.

At January 3, 2017, the Company has federal and state net operating loss carryovers (“NOL”) of $148.4 million and $144.5 million, respectively, which, if not used earlier, will expire between 2017 and 2036. In addition, the Company also has tax credit carryforwards for federal and state purposes of $1.1 million and $0.9 million, respectively. Approximately $0.3 million of the federal tax credit carryforwards will start to expire in 2031 if unused before that year. Of the state tax credit carryforwards, approximately $0.7 million will start to expire in 2023 if unused before that year. The remaining federal tax credits and the state tax credits do not expire.

The Company underwent an “ownership change” as defined in section 382 of the Internal Revenue Code during the second quarter of the Company’s 2009 fiscal year, as a result of the Company’s issuance of Series B-1 Convertible Preferred Stock and Series B-2 Convertible Preferred Stock and other prior trading in the Company’s stock. The amount of NOL and tax credits from pre-change years that may be used to offset the Company’s taxable income for tax years ending after the ownership change is subject to an annual limitation, known as a section 382 limitation. The section 382 limitation may cause NOL’s to expire unutilized. The Company reduced its NOL carryovers stated above for the anticipated expirations caused by the Company’s 2009 change.  Since the section 382 ownership change in 2009, the Company has performed quarterly analyses to monitor its ownership for 382 purposes.  The Company has not had any other ownership changes for section 382 purposes since 2009.

Changes in the Company’s unrecognized tax benefits are as follows (in thousands):

	Fiscal Year Ended January 3, 2017		Fiscal Year Ended December 29, 2015
Beginning balance	$	185	$	185
Increases attributable to tax positions taken    during prior periods		—		—
Decreases resulting from lapse of applicable    statutes of limitations		—		—
Ending balance	$	185	$	185

As of January 3, 2017, the entire unrecognized tax benefits reduce the deferred tax asset for the net operating loss carryforwards. If recognized, none of the unrecognized tax benefits would impact the Company’s effective tax rate. As of January 3, 2017, it is reasonably possible that the unrecognized tax benefits will not significantly increase or decrease in the next twelve months.

The Company is subject to taxation in the United States and various state and local jurisdictions. As of January 3, 2017, the Company is not subject to any income tax examinations. Due to tax attribute carryforwards, as of January 3, 2017, the Company remains effectively subject to U.S. federal, state and local income tax examinations by tax authorities for the tax years since 2006.

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Employee Benefit Plan

12 Months Ended

Jan. 03, 2017

Compensation And Retirement Disclosure [Abstract]

Employee Benefit Plan

15. EMPLOYEE BENEFIT PLAN

The Company maintains a voluntary defined contribution plan covering all eligible employees. Eligible employees may elect to defer and contribute a percentage of their compensation to the plan, not to exceed the dollar amount set by law. The Company matched employees’ contributions on a discretionary basis, resulting in a contribution of less than $0.1 million each for fiscal years 2016, 2015 and 2014.

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Severance and Other Compensation

12 Months Ended

Jan. 03, 2017

Severance Disclosure [Abstract]

Severance and Other Compensation

16. SEVERANCE AND OTHER COMPENSATION

In connection with the relocation of the Company’s headquarters from Emeryville, California to Frisco, Texas, the Company incurred severance and bonus obligations. At January 3, 2017, $1.6 million of severance and $0.8 million of retention expenses are classified in accrued compensation and benefits and accounts payable, respectively, in the consolidated balance sheets. Additionally, the Company expects to pay bonuses of $0.9 million at the beginning of second quarter in fiscal 2017.  The remaining payments will be completed by the end of the second quarter 2018.

On October 1, 2015, the Company announced the retirement of James D. White, the former Chief Executive Officer.  In accordance with his employment agreement, severance and bonus of $0.8 million have been accrued for in fiscal 2015 and paid in full in fiscal 2016. Also during fiscal 2015, severance of $0.6 million was recorded for certain departures of two senior executives. Expenses relating to acceleration of options and awards from stock modifications related to the departure of the three executives of $0.8 million were also accounted for in fiscal 2015 and are included as part of stock compensation. These payments were completed during fiscal year 2016.

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Store Lease Termination and Closure Costs

12 Months Ended

Jan. 03, 2017

Leases [Abstract]

Store Lease Termination and Closure Costs

17. STORE LEASE TERMINATION AND CLOSURE COSTS

On January 3, 2017, the Company closed one underperforming Company Store in the California market, which was prior to expiration of the contractual lease term. The Company recorded exit costs of $3.6 million, including accrued exit costs of $1.3 million related to the estimated fair value of the lease termination obligation and $2.3 million of asset write-off.

During the fourth quarter of 2015, in conjunction with its transition to an asset-light model, the Company performed a review of its portfolio of Company Stores, and as a result, closed eight underperforming Company Stores in the Chicago and New York City markets on December 29, 2015, which was prior to expiration of their contractual lease terms. The Company accrued exit costs of $1.6 million, including $1.3 million related to the estimated fair value of the lease termination obligation, $0.2 million of asset write-off, and $0.1 million related to severance. At January 3, 2017, the remaining lease termination obligation was approximately $0.5 million related to one of the stores closed in 2015.

The Company estimates the fair value of the remaining lease termination obligation as of the cease-use date, using a weighted average of multiple outcomes approach which considered for each lease: future contractual lease obligations, net of projected sub-lease income (limited to amount of the rental obligation) after a period for remarketing, outcomes including buyout fees for early termination and actual terminations. Future cash flows are discounted using the Company’s credit adjusted risk free rate, which were estimated at 4.95% and 6.5% in fiscal years 2016 and 2015, respectively.  Sublease rental income and absorption period assumptions were based on data available from rental activity in the local markets. Assumptions about potential buyout payments were also based on data available from rental activity in the local markets, allowed for a period for negotiation and then a final settlement at a multiple of monthly rental and common area payments.

As of January 3, 2017, the Company’s future lease obligations totaled approximately $3.5 million, which was reduced for estimates for sublease rental income of $1.6 million. The net obligation after discounting was increased for estimated transaction fees to advisors of approximately $0.1 million. The resulting obligation at estimated fair value totaled approximately $1.8 million.

Considerable management judgment is necessary to estimate net future cash flows including cash flows from continuing use, terminal value and sublease income.  Accordingly, actual results could vary from the estimates. If these assumptions or their related estimates change in the future, the Company will be required to record additional exit costs or reduce exit costs previously recorded. Exit costs recorded for each of the periods presented include the effect of such changes in estimates; there were no subsequent changes during 2016 to the amount of the obligation.

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Other Operating, Net

12 Months Ended

Jan. 03, 2017

Other Operating Net [Abstract]

Other Operating, Net

18. OTHER OPERATING, NET

The components of other operating, net are as follows (in thousands):

	Fiscal Year Ended January 3, 2017			Fiscal Year Ended December 29, 2015			Fiscal Year Ended December 30, 2014
Jambacard breakage income	$	(4,096	)	$	(5,440	)	$	(4,744	)
Jambacard expense		902			1,155			1,299
CPG and JambaGO® direct expense		1,700			3,035			2,637
Franchise discount expense		461			706			847
Franchise other expense		676			834			1,025
Sublease income		(670	)		(192	)		(121	)
Bad debt		1,560			1,474			61
International expense		613			708			316
Gain on contingent consideration		-			(156	)		(397	)
Other (income) expense		(63	)		(329	)		(197	)
Total other operating, net	$	1,083		$	1,795		$	726

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Other Commitments and Contingencies

12 Months Ended

Jan. 03, 2017

Commitments And Contingencies Disclosure [Abstract]

Other Commitments and Contingencies

19. OTHER COMMITMENTS AND CONTINGENCIES

Litigation Related - The Company records a liability for litigation claims and contingencies when payment is probable and the amount of loss can be reasonably estimated.

In fiscal year 2016, the Company recognized $2.0 million in charges associated with ongoing and settled litigation matters based on the available information at the time. The amounts recognized related to aggregate amounts for resolution of the Company’s ordinary course litigation cases estimated at $1.0 million and a commercial vendor dispute settled for $1.0 million. The losses were included in general and administrative expenses in the accompanying Statements of Operations. The Company did not include any reserve for losses relating to ongoing and settled litigation matters in 2015 or 2014.

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

Other - The Company has purchase obligations with certain suppliers for certain fruits and dairy for various terms typically ranging from one year to five years. The Company has one contract with a supplier for a 15 year term that ends in 2024. These contracts are commitments to purchase a minimum level of fruit and other items used in the production of the Company’s products totaling $30.7 million, inclusive of purchase commitments of $1.0 million related to a dispute with a commercial vendor.

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Related-Party Transactions

12 Months Ended

Jan. 03, 2017

Related Party Transactions [Abstract]

Related-Party Transactions

20. RELATED-PARTY TRANSACTIONS

In fiscal 2016 and fiscal 2015, the Company received $0.2 million from Country Pure Foods related to vendor supply chain management fees and approximately $0.3 million from Sodexo related to licensing fees for Jamba units operated by Sodexo. One Jamba Juice Director is on the Board of Directors of Country Pure Foods and another Jamba Juice Director is an executive with Sodexo.

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Unaudited Quarterly Information

12 Months Ended

Jan. 03, 2017

Quarterly Financial Information Disclosure [Abstract]

Unaudited Quarterly Information

21. UNAUDITED QUARTERLY INFORMATION

The tables below provide the Company’s unaudited consolidated results of operations for each quarter in 2016 and 2015:

(In thousands, except share and per share amounts)	Thirteen Weeks Ended March 29, 2016			Thirteen Weeks Ended June 28, 2016			Thirteen Weeks Ended September 27, 2016			Fourteen Weeks Ended January 3, 2017
Revenue:
Company stores	$	11,953		$	13,874		$	14,350		$	11,105
Franchise and other revenue		6,801			7,666			7,711			6,163
Total revenue		18,754			21,540			22,061			17,268
Costs and operating expenses (income):
Cost of sales		2,962			3,321			3,437			2,881
Labor		4,158			4,668			4,644			4,402
Occupancy		2,036			1,900			1,879			1,844
Store operating		2,362			2,272			2,381			2,270
Depreciation and amortization		1,502			1,674			1,068			1,505
General and administrative		7,610			9,423			9,699			11,226
Gain on disposal of assets		109			188			204			289
Store pre-opening		324			326			210			364
Impairment of long-lived assets		—			127			229			3,054
Store lease termination and closure		120			(56	)		178			3,918
Other operating, net		271			245			104			463
Total costs, operating expenses, and    gain		21,454			24,088			24,033			32,216
Loss from operations		(2,700	)		(2,548	)		(1,972	)		(14,948	)
Other income (expense):
Interest income		71			74			50			55
Interest expense		(59	)		(59	)		(51	)		(270	)
Total other income (expense), net		12			15			(1	)		(215	)
Loss before income taxes		(2,688	)		(2,533	)		(1,973	)		(15,163	)
Income tax (expense) benefit		(132	)		54			9			(10	)
Net loss		(2,820	)		(2,479	)		(1,964	)		(15,173	)
Less: Net income attributable to    noncontrolling interest		—			—			—			—
Net loss attributable to Jamba, Inc.	$	(2,820	)	$	(2,479	)	$	(1,964	)	$	(15,173	)
Loss per share attributable to    Jamba, Inc. common shareholders:
Basic	$	(0.19	)	$	(0.16	)	$	(0.13	)	$	(0.99	)
Diluted	$	(0.19	)	$	(0.16	)	$	(0.13	)	$	(0.99	)

(In thousands, except share and per share amounts)	Thirteen Weeks Ended March 31, 2015			Thirteen Weeks Ended June 30, 2015			Thirteen Weeks Ended September 29, 2015			Thirteen Weeks Ended December 29, 2015
Revenue:
Company stores	$	47,728		$	48,360		$	28,213		$	12,724
Franchise and other revenue		4,776			5,766			7,284			6,825
Total revenue		52,504			54,126			35,497			19,549
Costs and operating expenses (income):
Cost of sales		12,407			11,474			6,626			3,230
Labor		16,088			14,876			8,843			4,925
Occupancy		6,835			6,131			3,980			2,005
Store operating		8,034			8,059			5,901			3,158
Depreciation and amortization		1,873			1,344			1,143			2,209
General and administrative		8,963			8,427			9,003			10,479
Gain on disposal of assets		(778	)		(4,480	)		(16,076	)		(275	)
Store pre-opening		22			166			287			556
Impairment of long-lived assets		0			295			1,907			321
Store lease termination and closure		22			40			207			1,400
Other operating, net		706			1,333			375			(619	)
Total costs, operating expenses, and    gain		54,172			47,665			22,196			27,389
(Loss) income from operations		(1,668	)		6,461			13,301			(7,840	)
Other income (expense):
Interest income		15			14			49			59
Interest expense		(41	)		(68	)		(53	)		(58	)
Total other expense, net		(26	)		(54	)		(4	)		1
(Loss) income before income taxes		(1,694	)		6,407			13,297			(7,839	)
Income tax benefit (expense)		(26	)		(57	)		(194	)		(424	)
Net (loss) income		(1,720	)		6,350			13,103			(8,263	)
Less: Net income attributable to    noncontrolling interest		31			21			—			—
Net (loss) income attributable to Jamba, Inc.	$	(1,751	)	$	6,329		$	13,103		$	(8,263	)
(Loss) earnings per share attributable to    Jamba, Inc. common shareholders:
Basic	$	(0.11	)	$	0.39		$	0.83		$	(0.55	)
Diluted	$	(0.11	)	$	0.38		$	0.81		$	(0.55	)

The sum of (loss) earnings per share for all four quarters may not equal the loss per share of the fiscal year due to rounding.

In connection with the store closure in late fiscal 2016 and the exit of Jamba GO^®, the Company recognized a store lease termination and closure expense and an impairment loss of $2.3 million and $3.4 million, respectively, in the fourth quarter. In fiscal 2016, Company Store revenue decreased primarily due to the net reduction in Company Stores resulting from the Company’s transition to an asset-light model. During fiscal 2015, the Company sold four stores in the first quarter, 49 stores in the second quarter, 110 stores in the third quarter and 14 (net of 2 acquired stores) in the fourth quarter. At the end of fiscal 2016, the number of Company Stores was 66 compared to 70 at the end of fiscal 2015. The number of Franchise Stores and International Stores grew to 843 as of January 3, 2017 compared to 823 as of December 29, 2015. During fiscal 2016, the Company sold one store during the fourth quarter.

In the second quarter of 2015, the Company sold its 88% interest in JJSC to the holder of JJSC’s noncontrolling interest, in connection with our transition to an asset-light model.

Gain on disposal of assets increased primarily due to the transition to an asset-light model during fiscal 2015. As a result, the Company recorded net income in the second and third quarter and for the full fiscal year of 2015 compared to a net loss in fiscal 2016.

In the Statements of Operations for the third quarter ended September 27, 2016 and fourth quarter ended January 3, 2017, the Company corrected certain out-of-period errors related to prior period financial statements. The out-of-period errors related to both the first and second quarters of 2016 as well as 2015, 2014 and earlier results. The adjustments arose from various errors in depreciation expense, share-based compensation, impairments and balance sheet accruals affecting revenues and general and administrative expenses. The Company evaluated and concluded that the corrections made for the out-of-period errors in the third and fourth quarter, and the unadjusted impact on the prior periods, were neither quantitatively or qualitatively material to those periods individually or in the aggregate. The following table details the specific amounts of out-of-period (overstatements)/understatements for the fiscal 2016 quarters.

(In thousands, except share and per share amounts)	Thirteen Weeks Ended March 29, 2016			Thirteen Weeks Ended June 28, 2016			Thirteen Weeks Ended September 27, 2016			Fourteen Weeks Ended January 3, 2017
Total revenue	$	4		$	(202	)	$	(18	)	$	151
Total costs, operating expenses and gain		(892	)		490			105			(596	)
Income before income taxes		896			(692	)		(124	)		747
Total other expense, net		—			—			—			—
Income before income taxes		896			(692	)		(124	)		747
Income tax benefit (expense)		(45	)		14			2			(1	)
Net income		851			(678	)		(122	)		746
(Loss) earnings per share attributable to    Jamba, Inc. common shareholders:
Basic	$	0.06		$	(0.04	)	$	(0.01	)	$	0.05
Diluted	$	0.06		$	(0.04	)	$	(0.01	)	$	0.05

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Subsequent Events

12 Months Ended

Jan. 03, 2017

Subsequent Events [Abstract]

Subsequent Events

22. SUBSEQUENT EVENTS

In the first quarter of fiscal 2017, we recorded severance of $0.6 million for the departures of two senior executives. Additionally in the fourth quarter of fiscal 2017, we recorded severance of $0.3 million for the departure of one senior executive.

Refranchising Activities

In the second quarter of fiscal 2017, the Company refranchised 13 Company-owned stores and signed a 10-unit development agreement in the Chicago area for approximately $0.2 million.  

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Schedule II - Valuation and Qualifying Accounts

12 Months Ended

Jan. 03, 2017

Valuation And Qualifying Accounts [Abstract]

Schedule of Valuation and Qualifying Accounts

SCHEDULE II

VALUATION AND QUALIFYING ACCOUNTS

Years Ended January 3, 2017, December 29, 2015 and December 30, 2014

(In thousands)

Allowance for Doubtful Accounts

	Balance at the Beginning of the Period		Charged to Expenses		Charged (Credited) to Other Accounts		Deductions			Balance at the End of the Period
Year ended January 3, 2017	$	618	$	1,560	$	—	$	(370	)	$	1,808
Year ended December 29, 2015	$	280	$	741	$	—	$	(403	)	$	618
Year ended December 30, 2014	$	291	$	54	$	—	$	(65	)	$	280

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Business and Summary of Significant Accounting Policies (Policies)

12 Months Ended

Jan. 03, 2017

Accounting Policies [Abstract]

Business

Business - Jamba, Inc. consummated its initial public offering in July 2005. On November 29, 2006, Jamba, Inc. consummated the merger with Jamba Juice Company whereby Jamba Juice Company, which first began operations in 1990, became its wholly owned subsidiary.

Jamba, Inc. together with its wholly-owned subsidiary, Jamba Juice Company (“the Company”), is a healthful, active lifestyle brand with a robust global business driven by a portfolio of franchised and company-owned Jamba Juice ^® stores and Jamba Juice Express^TM formats. The Jamba ^® brand was created by founder Kirk Perron to inspire and simplify healthy living.  This mission is alive today in the more than 900 retail locations globally and in Jamba branded products. The Company is a leading restaurant retailer of “better-for-you” specialty beverage blends and food offerings which include flavorful, whole fruit and vegetable smoothies, fresh squeezed juices and juice blends, Energy (smoothie) Bowls, signature “boosts”, shots and a variety of food items including; hot oatmeal, breakfast wraps, sandwiches, Artisan Flatbreads, baked goods and snacks. The Company’s headquarters were located in Emeryville, California and were relocated to Frisco, Texas in the fourth quarter of fiscal year 2016.

As of January 3, 2017, there were 909 Jamba Juice stores globally, consisting of 66 Company-owned and operated stores (“Company Stores”), 773 franchisee-owned and operated stores (“Franchise Stores”) in the United States, and 70 Franchise Stores in international locations (“International Stores”).

Basis of Presentation

Basis of Presentation - The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiary, Jamba Juice Company. The accounts of Jamba Juice Southern California, LLC (“JJSC”), a former indirect subsidiary, are included through April 28, 2015, when the Company sold its 88% interest in JJSC to the holder of JJSC’s non-controlling interest. All significant intercompany balances and transactions have been eliminated in consolidation. The equity method of accounting is used to account for Jamba Juice Company’s investments in its joint ventures because the Company exercises significant influence over the operations and financial policies of the joint ventures. Accordingly, the carrying value of the investment is reported in other long-term assets, and the Company’s equity in the net income and losses of its joint ventures is reported in other operating, net.

Fiscal Year End

Fiscal Year End - The Company’s fiscal year ends on the Tuesday closest to December 31. The Company’s most recently completed fiscal year, referred to as fiscal 2016 which started on December 30, 2015 and ended on January 3, 2017, had 53 weeks. The Company’s fiscal 2015 which started on December 31, 2014, and ended on December 29, 2015, had 52 weeks, and fiscal 2014 which started on January 1, 2014 and ended on December 30, 2014 had 52 weeks.

Effect of Correction of Prior Period Misstatements

Effect of Correction of Prior Period Misstatements – During fiscal year 2016, the Company corrected certain errors which resulted in additional expense in fiscal 2016 of approximately $0.8 million related to prior period financial statements. These errors related to FY 2015 ($0.6 million) and FY 2014 ($0.6 million), with the remaining offsetting amounts relating to the financial statements from years prior to 2014. These adjustments primarily related to the prior fiscal year 2015 results. The Company determined that the corrections were neither quantitatively nor qualitatively material to fiscal year 2016 or to prior periods either individually or in the aggregate or to the trends of the reported results of operations.

The following table details the specific amounts of out-of-period (overstatements)/understatements for the fiscal years 2016, 2015, 2014 and fiscal years prior to 2014.

(In thousands, except share and per share amounts)	Fiscal Year Ended January 3, 2017			Fiscal Year Ended December 29, 2015			Fiscal Year Ended December 30, 2014			Prior to Fiscal Year 2014
Total revenue	$	(65	)	$	(3	)	$	33		$	35
Total costs, operating expenses and gain		(893	)		624			622			(353	)
Income before income taxes		828			(627	)		(589	)		388
Total other expense, net		—			—			—			—
Income before income taxes		828			(627	)		(589	)		388
Income tax benefit (expense)		(30	)		44			29			(10	)
Net income		798			(583	)		(560	)		378
(Loss) earnings per share attributable to    Jamba, Inc. common shareholders:
Basic	$	0.05		$	(0.04	)	$	(0.03	)
Diluted	$	0.05		$	(0.04	)	$	(0.03	)

Significant Estimates

Significant Estimates - The preparation of the consolidated financial statements and accompanying notes are in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”). Preparing consolidated financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue and expenses and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reported periods. Actual results could differ from those estimates.

Reclassifications

Reclassifications - Certain prior year amounts have been reclassified to conform to current year presentation in the consolidated financial statements.

Concentrations of Risk

Concentrations of Risk - From fiscal 2012 through October 2014, the Company maintained food distribution contracts primarily with one distributor. In October 2014, the Company began working with both Gordon Food Services (“GFS”) in the Eastern United States and Systems Services of America (“SSA”) in the Western United States to distribute food sold in the majority of Company and Franchise Stores. In fiscal 2016 and fiscal 2015, two distributors accounted for approximately 92% and 98%, respectively, of the supplies delivered to Company and Franchise Stores. The Company's limited distributor relationships could have an adverse effect on the Company’s operations.

Financial instruments that potentially subject the Company to concentrations of credit risk consist primarily of cash and cash equivalents. The Company places its cash and cash equivalents with high-quality financial institutions. Balances in the Company’s cash accounts frequently exceed the Federal Deposit Insurance Corporation insurance limit. The Company has not experienced any losses related to these balances and believes the credit risk to be minimal.

Cash and Cash Equivalents

Cash and Cash Equivalents - The Company considers all highly liquid instruments with maturities of three months or less when purchased to be cash equivalents. The existing letters of credit balance of $0.4 million is collateralized by restricted cash.

Receivables

Receivables - Receivables primarily represent amounts due from royalty fees, advertising fees, construction allowances, amounts receivable from suppliers, distributors and CPG customers, sale of jambacards by other issuers and franchisees and rent receivable from franchisees. The allowance for doubtful accounts is the Company’s estimate of the amount of probable credit losses in the Company’s existing accounts receivable.

Inventories

Inventories - Inventories are stated at the lower of cost or market. Cost is determined using the first-in, first-out method (“FIFO”). Inventories consist of food, beverages and available-for-sale promotional products. The Company reduces inventory for obsolete and slow-moving inventory and for estimated shrinkage between physical inventory counts.

Property, Fixtures and Equipment

Property, Fixtures and Equipment - Property, fixtures and equipment are stated at cost less accumulated depreciation. Depreciation is computed using the straight-line method over the estimated useful life. Expenditures for major additions and improvements are capitalized and minor replacements, maintenance and repairs are charged to expense as incurred. The estimated useful life for leasehold improvements is the lesser of 10 years or the term of the underlying lease. The estimated useful life for furniture, fixtures and equipment is three to 10 years. Capitalized software is recorded at cost and includes purchased, internally-developed and externally-developed software used in the Company’s operations. Amortization expense is provided using the straight-line method over the estimated useful lives of the software, which range from one to three years. In fiscal year 2016, the Company received approximately $1.1 million in tenant allowances, primarily related to the headquarters relocation to Frisco, TX.

Upon sale, the cost of assets disposed and their related accumulation depreciation are removed from the consolidated balance sheets. The Company calculates the gain or loss by comparing the carrying value of the assets to the selling price.

Intangible Assets Subject to Amortization

Intangible Assets Subject to Amortization – Intangible assets subject to amortization (primarily franchise and reacquired franchise rights, favorable lease intangible assets and acquired customer relationships) are amortized over their estimated useful lives using a method of amortization that reflects the pattern in which the economic benefits of the intangible assets are consumed or otherwise realized. The useful life for the franchise agreements is approximately 13.4 years. The useful life of reacquired franchise rights represents the remaining term of the franchise agreement. The useful life of the favorable lease portfolio intangible is based on the related lease term.

Business Combinations

Business Combinations - The Company accounts for business combinations using the acquisition method. Under the acquisition method, the purchase price of the acquisition is allocated to the underlying tangible and intangible assets acquired based on their respective fair values. Fair values are derived from various observable and unobservable inputs and assumptions. The Company utilizes third-party valuation specialists to assist in the allocation. Initial purchase price allocations are preliminary and are subject to revision within the measurement period, not to exceed one year from the date of acquisition. The costs of the business acquisitions are expensed as incurred. These costs may include fees for accounting, legal, professional consulting and valuation specialists.

Assets Held for Sale

Assets Held for Sale - The Company classifies assets as held for sale and suspends depreciation and amortization when approval at the appropriate level has been provided, the assets can be immediately removed from operations, an active program has begun to locate a buyer, the assets are being actively marketed for sale at or near their current fair value, significant changes to the plan of sale are not likely and the sale is probable within one year. Upon classification as held for sale, long-lived assets are no longer depreciated, and an assessment of impairment is performed to identify and expense any excess of carrying value over fair value less costs to sell. Subsequent changes to the estimated fair value less costs to sell will impact the measurement of assets held for sale. To the extent fair value increases, any impairment previously recorded is reversed. If the carrying value of the assets held for sale exceeds the fair value less costs to sell, the Company will record a loss for the amount of the excess. The Company also reclassifies the associated prior year balances for assets reclassified to assets held for sale.

If the Company decides not to sell previously classified assets held for sale, the asset is reclassified back to their original asset group. The assets are recorded at the lower of the carrying value before being classified as held for sale adjusted for depreciation that would have been recognized during the time they were classified as held for sale or fair value at the date the Company decided not to sell. Assets held for sale as of January 3, 2017 was $0.2 million and related to JambaGO^® assets, which is recorded in assets held for sale in the consolidated balance sheets.

Impairment of Long-lived assets

Impairment of Long-lived assets - Long-lived assets, such as property and equipment and intangible assets subject to amortization, are tested for impairment at least annually or when facts and circumstances indicate that the carrying values of long-lived assets may not be recoverable. Long-lived assets are grouped for recognition and measurement of impairment at the lowest level for which identifiable cash flows are largely independent of the cash flows of other assets, generally the store asset group level. The Company first compares the carrying value of the asset to the asset’s estimated future undiscounted cash flows. If the estimated future cash flows are less than the carrying value of the asset, the Company measures an impairment loss based on the asset’s estimated fair value. The fair value of a store’s assets is estimated using a discounted cash flow model based on internal projections and taking into consideration the view of a market participant. The estimate of cash flows is based on, among other things, certain assumptions about expected future operating performance. Factors considered during the impairment evaluation include factors related to actual operating cash flows, the period of time since a store has been opened or remodeled, refranchising expectations and the maturity of the relevant market. The Company recorded impairment charges of $3.4 million, $2.5 million, and $0.2 million for fiscal years 2016, 2015 and 2014, respectively.

Impairment of Goodwill, Trademarks and Other Intangible Asset Not Subject to Amortization

Impairment of Goodwill, Trademarks and Other Intangible Asset Not Subject to Amortization - Goodwill is evaluated for impairment on an annual basis during the Company’s fourth fiscal quarter, or more frequently if circumstances, such as material deterioration in performance, indicate carrying values may exceed their fair values. When reviewing goodwill for impairment, the Company assesses whether goodwill should be allocated to operating levels lower than its single operating segment for which discrete financial information is available and reviewed for decision-making purposes. These lower levels are referred to as reporting units. Currently, the Company’s one operating segment was determined to be one reporting unit.

Our annual impairment test of goodwill may be completed through a qualitative assessment. We may elect to bypass the qualitative assessment and proceed directly to a two-step quantitative impairment test, in any period. We can resume the qualitative assessment for any subsequent period. If we elect to bypass the qualitative assessment for any reporting unit, or if a qualitative assessment indicates it is more-likely-than-not that the estimated carrying value of a reporting unit exceeds its fair value, we perform a two-step quantitative goodwill impairment test. First, the reporting unit’s estimated fair value is compared to its carrying value, including goodwill. If the Company determines that the estimated fair value of the reporting unit is less than its carrying value, it moves to the second step to determine the implied fair value of the reporting unit’s goodwill. If the carrying amount of the reporting unit’s goodwill exceeds its implied fair value, an impairment loss is recognized. No goodwill impairment was recorded for fiscal years 2016, 2015 and 2014.

Intangible assets not subject to amortization (primarily trademarks) are evaluated for impairment on an annual basis during the fourth fiscal quarter, or more frequently if events or changes in circumstances indicate that the asset might be impaired. The Company qualitatively assesses the impairment for other intangible assets not subject to amortization to determine whether it is more likely than not that the fair value of intangible assets are less than their carrying amount.

For other intangible assets not subject to amortization not assessed qualitatively, a quantitative approach is utilized. The Company compares the carrying value of the applicable asset to its fair value, which the Company estimates using a discounted cash flow analysis or by comparing with the market values of similar assets. If the carrying amount of the asset exceeds its estimated fair value, the Company determines the impairment loss, if any, as the excess of the carrying value of the intangible asset over its fair value. An impairment loss is generally recognized when the carrying amount of the trademarks exceeds the fair value. For fiscal 2016, 2015 and 2014, the company had no impairments related to other intangible assets not subject to amortization.

Jambacards

jambacards^® - The Company, through its subsidiary, Jamba Juice Company, sells gift cards called jambacards to its customers in its retail stores, through its website and through resellers. The Company’s jambacards do not have an expiration date. An obligation is recorded at the time of either an initial load or a subsequent reload in accrued jambacard liability on the Company’s consolidated balance sheets. The Company recognizes income from jambacards when (i) the jambacard is redeemed by the customer or (ii) the likelihood of the jambacard being redeemed by the customer is remote (also referred to as “breakage”) and the Company determines that it does not have a legal obligation to remit the unredeemed jambacards to the relevant jurisdictions. The Company determines the jambacard breakage amount based upon its historical redemption patterns. Jambacard breakage income is included in other operating, net in the Consolidated Statements of Operations.

Self-Insurance Reserves

Self-Insurance Reserves -The Company is self-insured for healthcare benefits. The estimated accruals for these liabilities are based on statistical analyses of historical industry data as well as actual historical trends. For its workers’ compensation benefits, the Company has a guaranteed cost policy which renewed on October 1, 2016. Prior to September 30, 2015, the Company had a retrospective policy and was self-insured for existing and prior years exposures through September 30, 2012. For these two policies, liabilities associated with the risks that the Company retains for workers’ compensation benefits are estimated in part, by considering historical claims experience, demographic factors, severity factors and other actuarial assumptions. The Company’s estimates use this actuarial data in conjunction with known industry trends and Company experience.

Rent Expense

Rent Expense - Under the provisions of certain of the Company’s leases, there are rent holidays and/or escalations in payments over the base lease term, as well as renewal periods. The effects of rent holidays and escalations are reflected in rent costs on a straight-line basis over the expected lease term, which includes cancelable option periods when it is deemed to be reasonably assured that the Company will exercise such option periods due to the fact that the Company would incur an economic penalty for not doing so. The lease term commences on the date when the Company becomes legally obligated for the rent payments which generally coincides with the time when the landlord delivers the property for the Company to develop. All rent costs recognized during construction periods are classified as pre-opening expenses.

The Company has assigned certain of its store leases to franchisees as part of refranchising transactions, and in some cases for amounts less than the Company’s rent obligation. Liabilities for those rent concessions are recorded and relieved against rent expense over the remaining term of the related lease.

Construction Allowances

Construction Allowances - The Company receives construction allowances from certain landlords, which are deferred and amortized on a straight-line basis over the lease term as a reduction of rent expense. In fiscal year 2016, the Company received approximately $1.1 million in allowances, primarily related to the headquarters relocation to Frisco, TX. Construction allowances are recorded in deferred rent and other long-term liabilities.

Revenue Recognition

Revenue Recognition - Revenue from Company Stores is recognized when product is sold. Revenue is presented net of any taxes collected from customers and remitted to government entities. In fiscal 2014, the Company initiated a loyalty program for its customers, which allows them to earn points based on the volume of their purchases. Under the loyalty program, a customer receives a discount on future purchases when a defined number of points have been earned. The estimated amount of points redeemable in exchange for discounts is recorded in deferred revenue and recognized when the customers redeem the points they earned. The deferred revenue for unredeemed points under the loyalty program was $0.2 million at January 3, 2017 and December 29, 2015.

Revenue from jambacards is recognized upon redemption in exchange for product. Until redemption, outstanding customer balances are recorded as a liability. See “jambacards” section above for discussion on recognition of jambacard breakage.

The Company generally executes franchise agreements for each store that establishes the terms of its arrangement with the franchisee. The franchise agreements typically require the franchisee to pay an initial, non-refundable fee and continuing fees based upon a percentage of sales. Subject to the Company’s approval and the franchisee’s payment of a renewal fee, a franchisee may generally renew the franchise agreement upon its expiration.

Franchise revenue is generated from royalties, development fees, initial franchise fees and revenue from sales at franchise-operated Jamba Juice Express and JambaGO^® units. Royalties from Franchise Stores are determined as a percentage of Franchise Store revenue and are recognized in the same period as the related Franchise Store sales occur. If collection of the franchise royalty fee is doubtful, revenue is recognized at the time of collection.

Development fees are paid to the Company as part of an agreement to open and operate a specific number of stores in a specified territory. The amount of the fee is based on the number of stores to be opened pursuant to the development agreement. The nonrefundable fees collected for these services are recognized as the franchise stores under these agreements open. The Company’s multi-unit development agreements specify the number of stores to be opened.

The Company charges an initial franchise fee for providing operational materials, new store opening, planning and functional training courses. Initial franchise fees, if any, are due for payment at the time the franchise agreement for a particular store is executed. Franchise fees are recognized as revenue when all material services or conditions have been substantially performed or satisfied and no other material conditions or obligations related to the determination of substantial performance exist. Duties and services that are completed prior to approval include training, facilities inspection, receipt of operating license(s) and clearance from appropriate agencies. These duties and services are substantially complete prior to the approval of the opening of a store. Revenue is recognized when the store opens.

Revenue from sales at the Company’s flexible format franchise locations are recognized when the products are delivered to the operators of the Jamba Juice Express.

Other revenue primarily consists of revenue from sales of CPG products sold to retail outlets and online and royalties from licensed CPG products. Revenue from sale of CPG products is recognized when the products are delivered to the customer. License revenue from CPG products is based on a percentage of product sales and is recognized as revenue upon the sale of the product to retail outlets.

Cost of Sales

Cost of Sales - The Company includes in cost of sales, costs incurred to acquire fruit, dairy and other products used to make smoothies and juices, other food offerings and paper products sold by the Company Stores.

Store Lease Termination and Closure Costs

Store Lease Termination and Closure Costs - Costs incurred when closing a store are generally expensed as incurred. At the date the Company ceases use of a store under an operating lease, a liability is recorded for the net present value of any remaining lease obligations, net of estimated sublease income, if any.  In instances where a buyout is reasonably expected within six months of store closure, liabilities are recorded by estimating the expected buyout fee and the rent expected to be incurred until a buyout agreement is reached. Any costs recorded upon store closure, as well as any subsequent adjustments to liabilities for remaining lease obligations, as a result of lease termination or changes in estimates of sublease income are recorded in other operating, net in the Consolidated Statements of Operations. Considerable management judgment is necessary to estimate future cash flows, including cash flows from continuing use, terminal value and sublease income. Accordingly, actual results could vary from the Company’s estimates.

Advertising Fund

Advertising Fund - The Company participates with its franchisees in an advertising fund to collect and administer funds contributed for use in advertising and promotional programs, which are designed to increase sales and enhance the reputation of the Company and its franchise owners. Contributions to the advertising fund are required for Company Stores and traditional Franchise Stores and are generally based on a percent of store sales. The Company has control of the advertising fund. The fund is consolidated and all assets and liabilities of the fund are reported.

The advertising fund assets, consisting primarily of cash received from the Company and franchisees and accounts receivable from franchisees, can only be used for selected purposes and are considered restricted. The cash contributed by franchisees is recorded as a liability against which specified advertising costs are charged. The Company does not reflect franchisee contributions to the fund as revenue in its consolidated statements of operations or consolidated statements of cash flows.

Advertising fund assets as of January 3, 2017 and December 29, 2015 include $1.5 million and $2.4 million of receivables from franchisees, net of allowances, respectively, which is recorded in receivables in the consolidated balance sheets. Advertising fund liabilities as of January 3, 2017 and December 29, 2015, of $1.4 million and $1.2 million, respectively, are reported in other current liabilities and accounts payable in the Company’s consolidated balance sheets.

Advertising Costs

Advertising Costs - Advertising costs are expensed as incurred and were $2.3 million, $8.5 million and $10.0 million in fiscal years 2016, 2015 and 2014, respectively, and are included in store operating expenses. Advertising contributions received from franchisees, totaled $10.6 million, $7.5 million and $5.8 million for fiscal years 2016, 2015 and 2014, respectively, and were recorded as an offset to advertising expense.

Store Pre-opening Costs

Store Pre-Opening Costs - Costs incurred in connection with start-up and promotion of new store openings as well as rent from possession date to store opening date are expensed as incurred.

Comprehensive Income

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

Income Taxes

Income Taxes - Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis. Deferred tax assets and liabilities are measured using enacted income tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Any effect on deferred tax assets and liabilities due to a change in tax rates is recognized in income in the period that includes the enactment date. In establishing deferred income tax assets and liabilities, judgments and interpretations are made based on enacted tax laws and published tax guidance applicable to the Company’s operations. The Company records deferred tax assets and liabilities and evaluates the need for valuation allowances to reduce deferred tax assets to amounts more likely than not of being realized. Changes in the valuation of the deferred tax assets or changes in the income tax provision may affect the Company’s annual effective income tax rate.

Uncertain tax positions are recognized as the greatest amount more than 50% likely of being sustained upon audit based on the technical merits of the position. On a quarterly basis, the Company reviews and updates its inventory of tax positions as necessary to add any new uncertain tax positions taken, or to remove previously identified uncertain positions that have been effectively settled. Additionally, uncertain positions may be re-measured as warranted by changes in facts or law. Accounting for uncertain tax positions requires significant judgments, including estimating the amount, timing and likelihood of ultimate settlement. Although the Company believes that these estimates are reasonable, actual results could differ from these estimates. The Company classifies interest and penalties related to income taxes as a component of income taxes in the consolidated statements of operations.

A liability related to an unrecognized tax benefit is offset against a deferred tax asset for a net operating loss carryforward, a similar tax loss or a tax credit carryforward if such settlement is required or expected in the event the uncertain tax position is disallowed. In situations in which a net operating loss carryforward, a similar tax loss or a tax credit carryforward is not available at the reporting date under the tax law of a jurisdiction or the tax law of a jurisdiction does not require it, and the Company does not intend to use the deferred tax asset for such purpose, the unrecognized tax benefit is presented in the financial statement as a liability and is not combined with deferred tax assets.

Earnings (Loss) Per Share

Earnings (Loss) Per Share -  Basic earnings (loss) per share is computed based on the weighted-average number of common shares outstanding during the period. Diluted earnings (loss) per share is computed based on the weighted-average number of common shares and potentially dilutive securities, which includes outstanding options and restricted stock awards granted under the Company’s stock option plans. For fiscal years 2016 and 2014, the Company’s basic weighted average shares outstanding were equal to its diluted weighted average shares outstanding, since the Company experienced net losses.

During fiscal years 2015 and 2014, the Company repurchased 1,948,004 and 910,813 shares of common stock, respectively, which reduced the basic weighted average shares outstanding. The Company did not repurchase shares of common stock in fiscal year 2016.  

Anti-dilutive common stock equivalents of 1.9 million, 1.9 million and 1.5 million have been excluded from diluted weighted-average shares outstanding in fiscal years 2016, 2015 and 2014, respectively.

Share-based compensation

Share-based compensation - The Company’s share-based compensation relates to stock options and restricted stock units and is accounted for at fair value. Stock options for a fixed number of shares are granted to certain employees and directors with an exercise price based on the grant date fair value of the Company’s common stock. Compensation expense is recognized for any unvested stock option awards and time-based restricted stock awards on a straight-line basis or ratably over the requisite service period, generally three or four years. For all award types, the Company makes assumptions for the number of awards that will ultimately not vest (“forfeitures”) in determining the share-based compensation expense for these awards. The Company uses historical data to estimate expected employee behaviors related to option exercises and forfeitures. Compensation expense is trued up for actual forfeitures if different than the estimate.

The fair value of options granted was estimated at the date of grant using a Black-Scholes option-pricing model. Option valuation models, including Black-Scholes, require the input of subjective assumptions, which can materially affect the grant date fair value of a stock option award.  The assumptions used include the risk-free interest rate, the expected term of the award, expected volatility and expected dividend yield. The risk-free interest rate is based on the zero coupon U.S. Treasury rates appropriate for the expected term of the award. For the expected term of the award, the Company utilized the median of the Company’s peer group’s expected term, after adjusting for vesting and term differences. Expected volatility is based on an average of the Company’s recent historic daily stock price observations of the Company’s common stock during the period immediately preceding the share-based award grant that is equal in length to the award’s expected term and the Company’s implied volatility based on the mean of 180-day call and put options as per the open market. Expected dividends are zero based on the history of not paying cash dividends on the Company’s common stock and its intention not to make dividend payments in the future.

The Company grants time-based restricted stock units with a fair value determined based on the closing price of the Company’s common stock on the date of grant. For employees, these restricted stock units typically vest and become unrestricted over the three-year period following the date of grant. For non-employee directors, these restricted stock units typically vest and become unrestricted one year after the date of grant.  The Company grants performance-based restricted stock units (“PSUs”), which typically vest upon the Company satisfying certain performance targets and are granted to employees and non-employees.  The Company records compensation expense for PSUs when it is probable that the performance condition(s) included in the grant will be achieved. The compensation expense ultimately recognized, if any, related to these awards will equal the grant date fair value for the number of shares for which the performance condition has been satisfied.  The fair value of the PSUs is determined based on fair value at the date of grant.

In addition, the Company grants market-based restricted stock units to certain employees. The fair value was determined using a Monte Carlo simulation that incorporated option-pricing inputs covering the period from the grant date through the end of the performance period as of the date of grant.Market-based restricted stock units typically vest and become unrestricted upon achievement of compound annual stock price growth rate targets of 15%, 22.5% and 30% over a three-year period. Share-based compensation expense is recognized ratably over the vesting periods for all market-based and time-based restricted stock units.

Fair Value of Financial Instruments

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

Segment Reporting

Segment Reporting - The Company has one reportable retail segment.

Recent Accounting Pronouncements

Recent Accounting Pronouncements

In August 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update (“ASU”) 2014-15, Presentation of Financial Statements – Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern. ASU 2014-15 requires management to evaluate, at each interim and annual reporting period, whether there are conditions or events that raise substantial doubt about the entity’s ability to continue as a going concern within one year after the date the financial statements are issued, and provide related disclosures. ASU 2014-15 is effective for the annual period ending after December 15, 2016, and for annual periods and interim periods thereafter. The adoption of this guidance did not have any impact on the Company's consolidated financial statements and related disclosures.

The Company has not yet adopted and is currently assessing the potential impact of the following pronouncements on its Consolidated Financial Statements and related disclosure:

In May 2014, the FASB issued amended guidance on revenue from contracts with customers which amended the existing accounting standards for revenue recognition. ASU 2014-09, Revenue from Contracts with Customers, establishes principles for recognizing revenue upon the transfer of promised goods or services to customers, in an amount that reflects the expected consideration received in exchange for those goods or services. In August 2015, the FASB issued ASU 2015-14 deferring the effective date to fiscal years beginning after December 15, 2017 (including interim reporting periods within those periods). Early adoption is permitted to the original effective date of the fiscal year beginning after December 15, 2016 (including interim reporting periods within those periods). The amendment guidance may be applied retrospectively to each prior period presented with the option to apply practical expedients or retrospectively with the cumulative effect recognized as of the date of initial application. Management believes adoption of the new revenue recognition standard will impact the Company’s accounting for other fees charged to franchisees and transactions involving its advertising fund and gift card fund. Currently, the Company anticipates to adopt the new revenue standard using the modified retrospective transition approach. Management is in the process of determining the financial statement impact and currently unable to estimate the impact on the Company’s consolidated financial statements or related disclosures.

In February 2016, the FASB issued ASU 2016-02, Leases (“ASU 2016-02”), which will require lessees to recognize a lease liability and a right-of-use asset for all leases (with the exception of leases with terms less than 12 months) at the commencement date. The guidance will be effective for the Company beginning fiscal year 2019, with early adoption permitted. The new standard is required to be applied with a modified retrospective approach to each prior reporting period presented with various optional practical expedients. Management believes the adoption of ASU 2016-02 will materially impact the Company’s consolidated financial statements by significantly increasing non-current assets and non-current liabilities on the consolidated balance sheets in order to record the right of use assets and related lease liabilities for existing operating leases. Management is currently unable to estimate the impact on the consolidated financial statements.

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

In March 2016, the FASB issued ASU 2016-09, Compensation-Stock Compensation: Improvements to Employee Share-Based Payment Accounting. The updated guidance changes how companies account for certain aspects of share-based payment awards to employees, including the accounting for income taxes, forfeitures and statutory tax withholding requirements, as well as classification in the statement of cash flows. The standard also allows us to repurchase more of an employee’s vesting shares for tax withholding purposes without triggering liability accounting, clarifies that all cash payments made to tax authorities on an employee’s behalf for withheld shares should be presented as a financing activity on the cash flows statement, and provides an accounting policy election to account for forfeitures as they occur. The net result of the adoption of ASC 2016-09 on deferred taxes will be zero. The cumulative gross excess tax benefit, or APIC windfall amount is approximately $2.0 million as of January 3, 2017, or approximately $0.8 million on a tax effected basis. When ASU 2016-09 is adopted, the gross excess tax benefit will be recognized as additional deferred tax asset and will increase the net operating loss carryforward. Given the Company has a full valuation allowance against its deferred tax assets, there is no impact on deferred taxes. The guidance will be effective for the Company beginning fiscal year 2017. 

The Company has not yet adopted and does not expect the adoption of the following pronouncements to have a significant impact on its Consolidated Financial Statements and related disclosure:

In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows—Classification of Certain Cash Receipts and Cash Payments, which provides specific guidance for certain cash flow classification issues, previously not specifically addressed, including classification for debt prepayment, contingent consideration made after a business combination, insurance claim proceeds and corporate-owned life insurance policies, distributions received from equity method investees and certain other items. The guidance will be effective for the Company beginning fiscal year 2018, with early application permitted.

In July 2015, the FASB issued ASU 2015-11, Simplifying the Measurement of Inventory. This update applies to inventory that is measured using FIFO or average cost method and requires measurement of that inventory at the lower of cost or net realizable value. Net realizable value is defined as the estimated selling price in the ordinary course of business, less reasonably predictable costs of completion, disposal and transportation. This guidance will be effective for the Company beginning fiscal year 2017.

In January 2016, the FASB issued ASU 2016-01, Financial Instruments - Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities (“ASU 2016-01”). ASU 2016-01 addresses certain aspects of recognition, measurement, presentation, and disclosure of financial instruments. ASU 2016-01 will be effective for the Company beginning fiscal year 2018.

In January 2017, the FASB issued ASU 2017-04, Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment, which eliminates Step 2 from the goodwill impairment test.The impairment amount will be calculated at Step 1. The amendments also eliminate the requirements for any reporting unit with a zero or negative carrying amount to perform a qualitative assessment and, if it fails that qualitative test, to perform Step 2 of the goodwill impairment test. An entity still has the option to perform the qualitative assessment for a reporting unit to determine if the quantitative impairment test is necessary. This guidance will be effective for the Company’s fourth quarter annual impairment test in fiscal year 2019, with early adoption permitted.

In January 2017, the FASB issued ASU 2017-09, Compensation-Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting. The amendments provide guidance on determining which changes to the terms and conditions of share-based payment awards require an entity to apply modification accounting under Topic 718. This guidance will be effective for the Company’s fiscal year 2018, with early adoption permitted.

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Business and Summary of Significant Accounting Policies (Tables)

12 Months Ended

Jan. 03, 2017

Accounting Policies [Abstract]

Specific Amounts of Out-of-Period (Overstatements)/Understatements

The following table details the specific amounts of out-of-period (overstatements)/understatements for the fiscal years 2016, 2015, 2014 and fiscal years prior to 2014.

(In thousands, except share and per share amounts)	Fiscal Year Ended January 3, 2017			Fiscal Year Ended December 29, 2015			Fiscal Year Ended December 30, 2014			Prior to Fiscal Year 2014
Total revenue	$	(65	)	$	(3	)	$	33		$	35
Total costs, operating expenses and gain		(893	)		624			622			(353	)
Income before income taxes		828			(627	)		(589	)		388
Total other expense, net		—			—			—			—
Income before income taxes		828			(627	)		(589	)		388
Income tax benefit (expense)		(30	)		44			29			(10	)
Net income		798			(583	)		(560	)		378
(Loss) earnings per share attributable to    Jamba, Inc. common shareholders:
Basic	$	0.05		$	(0.04	)	$	(0.03	)
Diluted	$	0.05		$	(0.04	)	$	(0.03	)

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Property, Fixtures, and Equipment (Tables)

12 Months Ended

Jan. 03, 2017

Property Fixtures And Equipment [Abstract]

Schedule of Property, Fixtures, and Equipment

Property, fixtures and equipment consisted of the following as of (in thousands):

	January 3, 2017			December 29, 2015
Leasehold improvements	$	20,734		$	19,586
Furniture, fixtures and equipment		30,349			28,470
Construction in progress (primarily stores    under construction)		74			3,773
Total		51,157			51,829
Less accumulated depreciation and    amortization		(38,645	)		(36,229	)
Total	$	12,512		$	15,600

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Goodwill, Trademarks and Other Intangible Assets (Tables)

12 Months Ended

Jan. 03, 2017

Goodwill And Intangible Assets Disclosure [Abstract]

Summary of Changes in Goodwill

A summary of the changes in goodwill for fiscal 2016 and 2015 follows (in thousands):

	Amount
Balance as of December 30, 2014	$	945
Additions		232
Reclassification out of assets held for sale		7
Balance as of December 29, 2015		1,184
Refranchise		(1	)
Balance as of January 3,  2017	$	1,183

Schedule of Carrying Amount and Accumulated Amortization of Trademarks and Other Intangible Assets

The carrying amount and accumulated amortization of trademarks and other intangible assets as of January 3, 2017 and December 29, 2015 were as follows (in thousands):

	Gross Amount		Accumulated Amortization			Net Amount
Intangible Assets
As of January 3, 2017
Favorable leases		1,850		(1,850	)		—
Trademarks		807		—			807
Franchise agreements and customer lists		677		(511	)		166
Reacquired franchise rights		599		(245	)		354
Total	$	3,933	$	(2,606	)	$	1,327

	Gross Amount		Accumulated Amortization			Net Amount
As of December 29, 2015
Favorable leases		1,850		(1,850	)		—
Trademarks		807		—			807
Franchise agreements and customer lists		735		(496	)		239
Reacquired franchise rights		599		(181	)		418
Total	$	3,991	$	(2,527	)	$	1,464

Schedule of Expected Annual Amortization Expense for Remaining Intangible Assets

Expected annual amortization expense for the remaining intangible assets recorded as of January 3, 2017 is as follows (in thousands):

Fiscal Year	Amortization Expense
2017	$	114
2018		112
2019		97
2020		62
2021		47
Thereafter		88

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Acquisitions (Tables)

12 Months Ended

Jan. 03, 2017

Business Combination And Assets Held For Sale [Abstract]

Summary of the Purchase Price, the Fair Value of the Net Assets Acquired and the Goodwill on the Purchase

A summary of the purchase price, the fair value of the net assets acquired and the goodwill on the purchase follows (in thousands):

Cash paid to acquire stores	$	737
Additional consideration resulting from termination of    pre-existing relationships		85
Total purchase consideration	$	822
Net assets acquired:
Current assets	$	12
Fixed assets		259
Re-acquired franchise rights		424
Unfavorable Lease		(105	)
Net assets acquired	$	590
Goodwill	$	232

A summary of the purchase price, the fair value of the net assets acquired and the gain on the purchase follows (in thousands):

Cash paid to acquire stores	$	725
Additional consideration resulting from termination of    pre-existing relationships		369
Total purchase consideration	$	1,094
Net assets acquired:
Current assets	$	145
Fixed assets		365
Re-acquired franchise rights		476
Other assets and liabilities		343
Net assets acquired	$	1,329
Bargain purchase gain	$	235

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Notes Receivable and Other Long-term Assets (Tables)

12 Months Ended

Jan. 03, 2017

Receivables [Abstract]

Schedule of Accounts, Notes, Loans and Financing Receivable

As of January 3, 2017 and December 29, 2015, other long-term assets consisted of the following (in thousands):

	January 3, 2017		December 29, 2015
Notes receivable	$	1,879	$	3,107
Deposits and other		889		582
Investment in unconsolidated subsidiaries		126		522
Total	$	2,894	$	4,211

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Development Agreements (Tables)

12 Months Ended

Jan. 03, 2017

Development Agreement [Abstract]

Number of Franchise and International Stores

The following table summarizes data about the development agreements for Franchise and International Stores as of:

	January 3, 2017	December 29, 2015
Number of developers with Franchise    Store contractual commitments	27	32
Number of Franchise Stores for which    commitments exist	122	163
Number of developers with International    Stores contractual commitments	6	7
Number of International Stores for which    commitments exist	307	485

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Deferred Rent and Other Long-Term Liabilities (Tables)

12 Months Ended

Jan. 03, 2017

Other Liabilities Disclosure [Abstract]

Schedule of Other Long-term Liabilities

Other long-term liabilities consisted of the following (in thousands):

	January 3, 2017		December 29, 2015
Deferred rent	$	2,260	$	2,961
Deferred revenue		2,950		3,720
Construction allowance		1,423		735
Other liabilities		2,307		1,574
Total deferred rent and other long-term    liabilities	$	8,940	$	8,990

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Lease Commitments (Tables)

12 Months Ended

Jan. 03, 2017

Leases [Abstract]

Schedule of Future Minimum Noncancelable Lease Payments and Minimum Rentals to Be Received from Sublessees

The aggregate future minimum noncancelable lease payments and minimum rentals to be received from sublessees as of January 3, 2017, were as follows (in thousands):

Fiscal Year Ending:	Minimum lease payments		Minimum rentals to be received
2017	$	26,354	$	20,117
2018		22,539		16,734
2019		18,569		13,505
2020		14,585		10,236
2021		10,769		7,446
Thereafter		22,500		12,583
Total	$	115,316	$	80,621

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Share-Based Compensation (Tables)

12 Months Ended

Jan. 03, 2017

Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]

Schedule of Fair Value of Stock Options Estimated at Date of Grant Using Black-Scholes Option Pricing Model with Weighted-Average Assumptions

The fair value of stock options was estimated at the date of grant using a Black-Scholes option pricing model with the following weighted-average assumptions.

	Fiscal Year Ended January 3, 2017			Fiscal Year Ended December 29, 2015			Fiscal Year Ended December 30, 2014
Weighted-average risk-free interest    rate		1.36	%		1.75	%		0.12	%
Expected life of options (years)		5.22			5.85			0.80
Expected stock volatility		40.5	%		43.7	%		60.8	%
Expected dividend yield		0	%		0	%		0	%

Summary of Stock Option Activities

A summary of the stock option activities for fiscal year 2016 is presented below (shares and dollars in thousands):

	Number of Options			Weighted- Average Exercise Price		Weighted- Average Contractual Term Remaining		Aggregate Intrinsic Value
Outstanding at December 29, 2015		1,530		$	12.42	5.76		$	3,960
Granted		315			13.11
Exercised		(197	)		5.50
Canceled		(448	)		16.00
Outstanding at January 3, 2017		1,200		$	12.40		5.05	$	1,213
Options vested or expected to vest at     January 3, 2017		1,112		$	12.32		4.86	$	1,213
Options exercisable at  January 3, 2017		485		$	10.74		1.65	$	1,211

Summary of Options Outstanding and Exercisable

The intrinsic value of stock options is defined as the difference between the current market value and the exercise price, which is equal to the market value at the time of the grant. Information regarding options outstanding and exercisable at January 3, 2017 is as follows (shares in thousands):

Range of Exercise Prices	Number Outstanding		Weighted- Average Remaining Contractual Life (Years)	Weighted- Average Exercise Price		Number Exercisable		Weighted- Average Exercise Price
$3.00 - $3.00		141	1.05	$	3.00		141	$	3.00
$5.40 - $10.87		130	4.14		9.02		89		8.33
$10.93 - $11.65		139	6.43		11.41		58		11.13
$11.98 - $11.98		10	4.37		11.98		10		11.98
$12.35 - $12.35		153	9.05		12.35		3		12.35
$13.30 - $13.71		44	7.69		13.49		15		13.44
$13.94 - $13.94		503	4.46		13.94		139		13.94
$19.50 - $45.55		68	6.87		21.89		18		28.38
$47.55 - $47.55		6	0.44		47.55		6		47.55
$50.25 - $50.25		6	0.42		50.25		6		50.25
		1,200	5.05	$	12.40		485		10.74

Summary of Outstanding Time-Based Restricted Stock Units

Information regarding activities during fiscal 2016 for outstanding time-based RSUs is as follows (shares in thousands):

	Number of shares of RSUs			Weighted- Average Grant Date Fair Value (per share)
Outstanding as of December 29, 2015		190			14.09
Granted		44			11.31
Forfeited		(39	)		13.95
Vested		(127	)		13.70
Outstanding as of January 3, 2017		68		$	13.11

Summary of Outstanding Performance Stock Units

Information regarding activities during fiscal 2016 for outstanding PSUs is as follows (shares in thousands):

	Number of shares of PSUs			Weighted- Average Grant Date Fair Value (per share)
Outstanding as of December 29, 2015		57			13.89
Granted		8			10.11
Forfeited		(46	)		13.85
Vested		(2	)		14.04
Outstanding as of January 3, 2017		17		$	12.27

Summary of Outstanding Market-Based Restricted Stock Units

Information regarding activities during fiscal 2016 for outstanding market-based RSUs is as follows (shares in thousands):

	Number of market-based RSUs		Weighted- Average Grant Date Fair Value (per share)
Outstanding as of December 29, 2015		—		—
Granted		505		3.04
Forfeited		—		—
Vested		—		—
Outstanding as of January 3, 2017		505	$	3.04

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Income Taxes (Tables)

12 Months Ended

Jan. 03, 2017

Income Tax Disclosure [Abstract]

Schedule of Components of Income Tax (Expense) Benefit

The components of the income tax (expense) benefit are as follows (in thousands):

	January 3, 2017			December 29, 2015			December 30, 2014
Current:
Federal	$	—		$	(438	)	$	—
State		(14	)		(149	)		(37	)
Foreign		(65	)		(114	)		(131	)
	$	(79	)	$	(701	)	$	(168	)
Deferred:
Federal	$	—		$	—		$	—
State		—			—			—
Foreign		—			—			—
	$	—		$	—		$	—
Income tax benefit (expense)	$	(79	)	$	(701	)	$	(168	)

Summary of Difference Between Effective Income Tax Rate and The United States Federal Income Tax Rate

The difference between the effective income tax rate and the United States federal income tax rate is summarized as follows:

	January 3, 2017			December 29, 2015			December 30, 2014
Statutory federal rate		34.0	%		34.0	%		34.0	%
State income taxes less federal    benefit		(1.4	)		(9.2	)		5.9
Foreign income taxes		(0.3	)		1.1			(2.5	)
Change in valuation allowance		(24.6	)		(38.1	)		(31.5	)
Meals		(0.1	)		0.3			(1.2	)
Business Gain on Acquisition		—			—			8.5
Alternative minimum taxes		—			0.1			(1.0	)
Expired tax attribute carryforwards		(6.4	)		11.1			(17.0	)
Tax credits generated		—			(0.1	)		0.3
Other		(1.6	)		7.7			(0.3	)
		(0.4	)%		6.9	%		(4.8	)%

Schedule of Deferred Tax Assets (Liabilities) of Temporary Differences

The deferred tax assets (liabilities) consisted of the following temporary differences as of January 3, 2017 and December 29, 2015 (in thousands):

	January 3, 2017			December 29, 2015
Net operating losses	$	62,875		$	50,837
Reserves and accruals		5,073			10,754
Deferred rent		967			1,518
Tax credit attributes		1,957			1,999
Basis difference in intangibles		1,152			1,510
Share-based compensation		1,915			2,979
Basis difference in fixed assets		5,670			3,245
Basis difference in intangibles		(95	)		(289	)
Basis difference in investments		144			4
Reserves and accruals		(29	)		(64	)
Total gross deferred tax asset		79,629			72,493
Valuation allowance		(79,629	)		(72,493	)
Total net deferred tax asset	$	—		$	—

Schedule of Changes in Unrecognized Tax Benefits

Changes in the Company’s unrecognized tax benefits are as follows (in thousands):

	Fiscal Year Ended January 3, 2017		Fiscal Year Ended December 29, 2015
Beginning balance	$	185	$	185
Increases attributable to tax positions taken    during prior periods		—		—
Decreases resulting from lapse of applicable    statutes of limitations		—		—
Ending balance	$	185	$	185

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Other Operating, Net (Tables)

12 Months Ended

Jan. 03, 2017

Other Operating Net [Abstract]

Schedule of Components of Other Operating, Net

The components of other operating, net are as follows (in thousands):

	Fiscal Year Ended January 3, 2017			Fiscal Year Ended December 29, 2015			Fiscal Year Ended December 30, 2014
Jambacard breakage income	$	(4,096	)	$	(5,440	)	$	(4,744	)
Jambacard expense		902			1,155			1,299
CPG and JambaGO® direct expense		1,700			3,035			2,637
Franchise discount expense		461			706			847
Franchise other expense		676			834			1,025
Sublease income		(670	)		(192	)		(121	)
Bad debt		1,560			1,474			61
International expense		613			708			316
Gain on contingent consideration		-			(156	)		(397	)
Other (income) expense		(63	)		(329	)		(197	)
Total other operating, net	$	1,083		$	1,795		$	726

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Unaudited Quarterly Information (Tables)

12 Months Ended

Jan. 03, 2017

Quarterly Financial Information Disclosure [Abstract]

Schedule of Unaudited Consolidated Results of Operations

The tables below provide the Company’s unaudited consolidated results of operations for each quarter in 2016 and 2015:

(In thousands, except share and per share amounts)	Thirteen Weeks Ended March 29, 2016			Thirteen Weeks Ended June 28, 2016			Thirteen Weeks Ended September 27, 2016			Fourteen Weeks Ended January 3, 2017
Revenue:
Company stores	$	11,953		$	13,874		$	14,350		$	11,105
Franchise and other revenue		6,801			7,666			7,711			6,163
Total revenue		18,754			21,540			22,061			17,268
Costs and operating expenses (income):
Cost of sales		2,962			3,321			3,437			2,881
Labor		4,158			4,668			4,644			4,402
Occupancy		2,036			1,900			1,879			1,844
Store operating		2,362			2,272			2,381			2,270
Depreciation and amortization		1,502			1,674			1,068			1,505
General and administrative		7,610			9,423			9,699			11,226
Gain on disposal of assets		109			188			204			289
Store pre-opening		324			326			210			364
Impairment of long-lived assets		—			127			229			3,054
Store lease termination and closure		120			(56	)		178			3,918
Other operating, net		271			245			104			463
Total costs, operating expenses, and    gain		21,454			24,088			24,033			32,216
Loss from operations		(2,700	)		(2,548	)		(1,972	)		(14,948	)
Other income (expense):
Interest income		71			74			50			55
Interest expense		(59	)		(59	)		(51	)		(270	)
Total other income (expense), net		12			15			(1	)		(215	)
Loss before income taxes		(2,688	)		(2,533	)		(1,973	)		(15,163	)
Income tax (expense) benefit		(132	)		54			9			(10	)
Net loss		(2,820	)		(2,479	)		(1,964	)		(15,173	)
Less: Net income attributable to    noncontrolling interest		—			—			—			—
Net loss attributable to Jamba, Inc.	$	(2,820	)	$	(2,479	)	$	(1,964	)	$	(15,173	)
Loss per share attributable to    Jamba, Inc. common shareholders:
Basic	$	(0.19	)	$	(0.16	)	$	(0.13	)	$	(0.99	)
Diluted	$	(0.19	)	$	(0.16	)	$	(0.13	)	$	(0.99	)

(In thousands, except share and per share amounts)	Thirteen Weeks Ended March 31, 2015			Thirteen Weeks Ended June 30, 2015			Thirteen Weeks Ended September 29, 2015			Thirteen Weeks Ended December 29, 2015
Revenue:
Company stores	$	47,728		$	48,360		$	28,213		$	12,724
Franchise and other revenue		4,776			5,766			7,284			6,825
Total revenue		52,504			54,126			35,497			19,549
Costs and operating expenses (income):
Cost of sales		12,407			11,474			6,626			3,230
Labor		16,088			14,876			8,843			4,925
Occupancy		6,835			6,131			3,980			2,005
Store operating		8,034			8,059			5,901			3,158
Depreciation and amortization		1,873			1,344			1,143			2,209
General and administrative		8,963			8,427			9,003			10,479
Gain on disposal of assets		(778	)		(4,480	)		(16,076	)		(275	)
Store pre-opening		22			166			287			556
Impairment of long-lived assets		0			295			1,907			321
Store lease termination and closure		22			40			207			1,400
Other operating, net		706			1,333			375			(619	)
Total costs, operating expenses, and    gain		54,172			47,665			22,196			27,389
(Loss) income from operations		(1,668	)		6,461			13,301			(7,840	)
Other income (expense):
Interest income		15			14			49			59
Interest expense		(41	)		(68	)		(53	)		(58	)
Total other expense, net		(26	)		(54	)		(4	)		1
(Loss) income before income taxes		(1,694	)		6,407			13,297			(7,839	)
Income tax benefit (expense)		(26	)		(57	)		(194	)		(424	)
Net (loss) income		(1,720	)		6,350			13,103			(8,263	)
Less: Net income attributable to    noncontrolling interest		31			21			—			—
Net (loss) income attributable to Jamba, Inc.	$	(1,751	)	$	6,329		$	13,103		$	(8,263	)
(Loss) earnings per share attributable to    Jamba, Inc. common shareholders:
Basic	$	(0.11	)	$	0.39		$	0.83		$	(0.55	)
Diluted	$	(0.11	)	$	0.38		$	0.81		$	(0.55	)

Schedule of Details Specific Amounts of Out-of-period (Overstatements)/Understatements

The following table details the specific amounts of out-of-period (overstatements)/understatements for the fiscal 2016 quarters.

(In thousands, except share and per share amounts)	Thirteen Weeks Ended March 29, 2016			Thirteen Weeks Ended June 28, 2016			Thirteen Weeks Ended September 27, 2016			Fourteen Weeks Ended January 3, 2017
Total revenue	$	4		$	(202	)	$	(18	)	$	151
Total costs, operating expenses and gain		(892	)		490			105			(596	)
Income before income taxes		896			(692	)		(124	)		747
Total other expense, net		—			—			—			—
Income before income taxes		896			(692	)		(124	)		747
Income tax benefit (expense)		(45	)		14			2			(1	)
Net income		851			(678	)		(122	)		746
(Loss) earnings per share attributable to    Jamba, Inc. common shareholders:
Basic	$	0.06		$	(0.04	)	$	(0.01	)	$	0.05
Diluted	$	0.06		$	(0.04	)	$	(0.01	)	$	0.05

XML

Business and Summary of Significant Accounting Policies - Additional Information (Details)	12 Months Ended
	Jan. 03, 2017 USD ($) Location Segment Store shares	Dec. 29, 2015 USD ($) Store shares	Dec. 30, 2014 USD ($) shares	Mar. 07, 2017 USD ($)	Apr. 28, 2015
Number of stores | Store	66	70
Expense related to error correction	$ 800,000	$ (600,000)	$ (600,000)
Letters of credit outstanding, amount	400,000
Asset impairment charges, total	$ 3,400	2,500	200
Number of operating segment | Segment	1
Goodwill impairment	$ 0	0	0
Intangible assets not subject to amortization	0	0	0
Deferred revenue	200,000	200,000
Accounts receivable, net	1,500,000	2,400,000
Accounts payable	1,400,000	1,200,000
Advertising expense	2,300,000	8,500,000	10,000,000
Cooperative advertising amount	$ 10,600,000	$ 7,500,000	$ 5,800,000
Weighted average number of shares, common stock subject to repurchase or cancellation | shares		1,948,004	910,813
Antidilutive securities excluded from computation of earnings per share, amount | shares	1,900,000	1,900,000	1,500,000
Net result on adoption of accounting policy on deferred taxes	$ 0
Cumulative gross excess tax benefit	2,000,000	$ 553,000
Additional deferred tax assets	$ 800,000
Share-based Compensation Award, Tranche One [Member]
Share-based compensation arrangement by share-based payment award, upon achievement of annual stock price growth rate targets, percentage	15.00%
Share-based Compensation Award, Tranche Two [Member]
Share-based compensation arrangement by share-based payment award, upon achievement of annual stock price growth rate targets, percentage	22.50%
Share-based Compensation Award, Tranche Three [Member]
Share-based compensation arrangement by share-based payment award, upon achievement of annual stock price growth rate targets, percentage	30.00%
Frisco, TX [Member]
Tenant allowance received	$ 1,100,000
Leasehold Improvements [Member]
Property, plant and equipment, estimated useful lives	lesser of 10 years or the remaining term of the underlying lease
Furniture and Fixtures [Member]
Assets held for sale				$ 200,000
Systems Services Of America [Member] | Sales Revenue, Net [Member]
Concentration risk, supplier	92	98
Jamba Juice Southern California, LLC [Member]
Noncontrolling interest, ownership percentage by parent					88.00%
Jamba Juice stores [Member]
Number of stores	909
Company Stores [Member]
Number of stores	66
Franchise Stores [Member]
Number of stores	773
Franchise agreement useful life	13 years 4 months 24 days
International Stores [Member]
Number of stores	70
Minimum [Member]
Number of retail locations | Location	900
Uncertain tax positions measurement percentage	50.00%
Minimum [Member] | Unvested Stock Option Awards and Time Based Restricted Stock Awards [Member]
Share-based compensation arrangement by share-based payment award, estimated requisite service period	3 years
Minimum [Member] | Leasehold Improvements [Member]
Property, Plant and Equipment, Useful Life	10 years	10 years	10 years
Minimum [Member] | Furniture and Fixtures [Member]
Property, Plant and Equipment, Useful Life	10 years	3 years	3 years
Minimum [Member] | Software [Member]
Property, Plant and Equipment, Useful Life	1 year
Maximum | Unvested Stock Option Awards and Time Based Restricted Stock Awards [Member]
Share-based compensation arrangement by share-based payment award, estimated requisite service period	4 years
Maximum | Furniture and Fixtures [Member]
Property, Plant and Equipment, Useful Life	3 years	10 years	10 years
Maximum | Software [Member]
Property, Plant and Equipment, Useful Life	3 years

XML

Business and Summary of Significant Accounting Policies - Specific Amounts of Out-of-Period (Overstatements)/Understatements (Details) - USD ($) $ in Thousands	3 Months Ended								12 Months Ended
	Jan. 03, 2017	Sep. 27, 2016	Jun. 28, 2016	Mar. 29, 2016	Dec. 29, 2015	Sep. 29, 2015	Jun. 30, 2015	Mar. 31, 2015	Jan. 03, 2017	Dec. 29, 2015	Dec. 30, 2014	Jan. 01, 2013
Total revenue	$ 17,268	$ 22,061	$ 21,540	$ 18,754	$ 19,549	$ 35,497	$ 54,126	$ 52,504	$ 79,623	$ 161,676	$ 218,048
Total costs, operating expenses and gain	32,216	24,033	24,088	21,454	27,389	22,196	47,665	54,172	101,791	151,422	221,348
(Loss) income from operations	(14,948)	(1,972)	(2,548)	(2,700)	(7,840)	13,301	6,461	(1,668)	(22,168)	10,254	(3,300)
Total other expense, net	(215)	(1)	15	12	1	(4)	(54)	(26)	(189)	(83)	(121)
(Loss) income before income taxes	(15,163)	(1,973)	(2,533)	(2,688)	(7,839)	13,297	6,407	(1,694)	(22,357)	10,171	(3,421)
Income tax expense	(10)	9	54	(132)	(424)	(194)	(57)	(26)	(79)	(701)	(168)
Net (loss) income attributable to Jamba, Inc.	(15,173)	(1,964)	(2,479)	(2,820)	$ (8,263)	$ 13,103	$ 6,329	$ (1,751)	$ (22,436)	$ 9,418	$ (3,632)
Earnings (loss) per share attributable to Jamba, Inc. common shareholders:
Basic									15,229,102	15,787,806	17,197,904
Diluted									15,229,102	16,228,033	17,197,904
Immaterial Prior Period Adjustment [Member]
Total revenue	151	(18)	(202)	4					$ (65)	$ (3)	$ 33	$ 35
Total costs, operating expenses and gain	(596)	105	490	(892)					(893)	624	622	(353)
(Loss) income from operations	747	(124)	(692)	896					828	(627)	(589)	388
(Loss) income before income taxes	747	(124)	(692)	896					828	(627)	(589)	388
Income tax expense	$ (1)	$ 2	$ 14	$ (45)					(30)	44	29	(10)
Net (loss) income attributable to Jamba, Inc.									$ 798	$ (583)	$ (560)	$ 378
Earnings (loss) per share attributable to Jamba, Inc. common shareholders:
Basic									0.05	(0.04)	(0.03)
Diluted									0.05	(0.04)	(0.03)

XML

Refranchising - Additional Information (Details) $ in Thousands	1 Months Ended	3 Months Ended								12 Months Ended
	Dec. 31, 2016 USD ($)	Jan. 03, 2017 USD ($) Store	Sep. 27, 2016 USD ($)	Jun. 28, 2016 USD ($)	Mar. 29, 2016 USD ($)	Dec. 29, 2015 USD ($) Store	Sep. 29, 2015 USD ($)	Jun. 30, 2015 USD ($)	Mar. 31, 2015 USD ($)	Jan. 03, 2017 USD ($) Store	Dec. 29, 2015 USD ($) Store	Dec. 30, 2014 USD ($)	Jun. 27, 2017 Store	Nov. 30, 2014 Store
Number of stores | Store		66				70				66	70
Proceeds from the sale of assets										$ 170	$ 50,131	$ 5,557
Gain (loss) on disposition of assets, total		$ (289)	$ (204)	$ (188)	$ (109)	$ 275	$ 16,076	$ 4,480	$ 778	(790)	21,609	$ 2,957
Notes receivable, related parties, noncurrent		$ 2,000				$ 2,000				$ 2,000	$ 2,000
Assets Held-for-sale [Member] | Franchised Units [Member]
Number of stores | Store						176					176
Refranchise [Member]
Number of stores | Store						179					179			114
Number of unopened store | Store						1					1
Proceeds from the sale of stores											$ 53,100
Gain (loss) on disposition of assets, total											$ 21,600
Refranchise [Member] | Headquarters Relocation [Member]
Proceeds from the sale of assets	$ 100
Refranchise [Member] | Subsequent Event [Member]
Number of stores | Store													13

XML

Property, Fixtures, and Equipment - Schedule of Property, Fixtures, and Equipment (Details) - USD ($) $ in Thousands	Jan. 03, 2017	Dec. 29, 2015
Property, Plant and Equipment [Line Items]
Total	$ 51,157	$ 51,829
Less accumulated depreciation and amortization	(38,645)	(36,229)
Total	12,512	15,600
Leasehold Improvements [Member]
Property, Plant and Equipment [Line Items]
Total	20,734	19,586
Furniture, Fixtures and Equipment [Member]
Property, Plant and Equipment [Line Items]
Total	30,349	28,470
Construction in Progress [Member]
Property, Plant and Equipment [Line Items]
Total	$ 74	$ 3,773

XML

Property, Fixtures, and Equipment - Additional Information (Details) - USD ($) $ in Thousands	12 Months Ended
	Jan. 03, 2017	Dec. 29, 2015	Dec. 30, 2014
Property, Plant and Equipment [Line Items]
Assets held for sale	$ 206	$ 3,144
Immaterial Prior Period Adjustment [Member]
Property, Plant and Equipment [Line Items]
Depreciation expense	(200)
Furniture and Fixtures [Member]
Property, Plant and Equipment [Line Items]
Depreciation expense	5,700	6,500	$ 10,000
Assets held for sale	$ 200	$ 3,100

XML

Goodwill, Trademarks and Other Intangible Assets - Summary of Changes in Goodwill (Details) - USD ($) $ in Thousands	12 Months Ended
	Jan. 03, 2017	Dec. 29, 2015
Goodwill And Intangible Assets Disclosure [Abstract]
Balance	$ 1,184	$ 945
Additions		232
Reclassification out of assets held for sale		7
Refranchise	(1)
Balance	$ 1,183	$ 1,184

XML

Goodwill, Trademarks and Other Intangible Assets - Schedule of Carrying Amount and Accumulated Amortization of Trademarks and Other Intangible Assets (Details) - USD ($) $ in Thousands	Jan. 03, 2017	Dec. 29, 2015
Amortized Intangible Assets Gross Amount	$ 3,933	$ 3,991
Amortized Intangible Assets Accumulated Amortization	(2,606)	(2,527)
Amortized Intangible Assets Net Amount	1,327	1,464
Trademarks [Member]
Amortized Intangible Assets Gross Amount	807	807
Amortized Intangible Assets Accumulated Amortization	0	0
Amortized Intangible Assets Net Amount	807	807
Favorable Leases [Member]
Amortized Intangible Assets Gross Amount	1,850	1,850
Amortized Intangible Assets Accumulated Amortization	(1,850)	(1,850)
Amortized Intangible Assets Net Amount	0	0
Franchise Agreements and Customer Lists [Member]
Amortized Intangible Assets Gross Amount	677	735
Amortized Intangible Assets Accumulated Amortization	(511)	(496)
Amortized Intangible Assets Net Amount	166	239
Franchise Rights [Member]
Amortized Intangible Assets Gross Amount	599	599
Amortized Intangible Assets Accumulated Amortization	(245)	(181)
Amortized Intangible Assets Net Amount	$ 354	$ 418

XML

Goodwill, Trademarks and Other Intangible Assets - Additional Information (Details) - USD ($) $ in Millions	12 Months Ended
	Jan. 03, 2017	Dec. 29, 2015	Dec. 30, 2014
Goodwill And Intangible Assets Disclosure [Abstract]
Amortization of intangible assets	$ 0.1	$ 0.1	$ 0.1
Finite lived intangible assets subject to amortization	$ 0.5

XML

Goodwill, Trademarks and Other Intangible Assets - Schedule of Expected Annual Amortization Expense for Remaining Intangible Assets (Details) $ in Thousands	Jan. 03, 2017 USD ($)
Goodwill And Intangible Assets Disclosure [Abstract]
2017	$ 114
2018	112
2019	97
2020	62
2021	47
Thereafter	$ 88

XML

Acquisitions - Additional Information (Details) - Store	12 Months Ended
	Jan. 03, 2017	Dec. 29, 2015	Dec. 30, 2014	Mar. 31, 2015	Sep. 30, 2014
Number of stores	66	70
Assets - Held for sale [Member]
Number of stores				22
Leasehold Improvements [Member]
Property, plant and equipment, estimated useful lives	lesser of 10 years or the remaining term of the underlying lease
Leasehold Improvements [Member] | Minimum [Member]
Property, Plant and Equipment, Useful Life	10 years	10 years	10 years
Furniture and Fixtures [Member] | Minimum [Member]
Property, Plant and Equipment, Useful Life	10 years	3 years	3 years
Furniture and Fixtures [Member] | Maximum
Property, Plant and Equipment, Useful Life	3 years	10 years	10 years
Domestic [Member]
Number of stores		2			26
Number of stores closed					3

XML

Acquisitions - Summary of the Purchase Price, the Fair Value of the Net Assets Acquired and the Goodwill on the Purchase (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 29, 2015	Dec. 30, 2014
Business Combination And Assets Held For Sale [Abstract]
Cash paid to acquire stores	$ 737	$ 725
Additional consideration resulting from termination of pre-existing relationships	85	369
Total purchase consideration	822	1,094
Net assets acquired:
Current assets	12	145
Fixed assets	259	365
Re-acquired franchise rights	424	476
Other assets and liabilities		343
Unfavorable Lease	(105)
Net assets acquired	590	1,329
Goodwill	$ 232	$ 235

XML

Fair Value Measurement - Additional Information (Details) - USD ($)	12 Months Ended
	Jan. 03, 2017	Dec. 29, 2015	Dec. 30, 2014
Business acquisitions, contingent consideration, at fair value, gain or loss	$ 300,000	$ 200,000
Long-lived assets carried at fair value	0	0
Tangible asset impairment charges, total		300,000
Trademarks [Member]
Impairment of intangible assets, indefinite-lived (excluding goodwill)		300,000
Fair Value, Measurements, Nonrecurring [Member]
Impairment of intangible assets (excluding goodwill), total	$ 400,000	$ 600,000	$ 200,000

XML

Notes Receivable and Other Long-term Assets - Schedule of Accounts Notes Loans and Financing Receivable (Details) - USD ($) $ in Thousands	Jan. 03, 2017	Dec. 29, 2015
Accounts Notes And Loans Receivable [Line Items]
Long-term investments and receivables, net, Total	$ 2,894	$ 4,211
Investment in unconsolidated subsidiaries [Member]
Accounts Notes And Loans Receivable [Line Items]
Long-term investments and receivables, net, Total	126	522
Deposits and other [Member]
Accounts Notes And Loans Receivable [Line Items]
Long-term investments and receivables, net, Total	889	582
Notes receivable [Member]
Accounts Notes And Loans Receivable [Line Items]
Long-term investments and receivables, net, Total	$ 1,879	$ 3,107

XML

Notes Receivable and Other Long-term Assets - Additional Information (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 29, 2015	Jan. 03, 2017
Notes, loans and financing receivable, net, noncurrent, Total	$ 2.0
Notes receivable maturity date	Feb. 01, 2021
Loans receivable fixed rate of interest	3.00%
Notes from Franchisees [Member]
Notes, loans and financing receivable, net, noncurrent, Total	$ 3.1	$ 1.9

XML

Development Agreements - Additional Information (Details) - USD ($) $ in Millions	12 Months Ended
	Jan. 03, 2017	Dec. 29, 2015
Indefinite Lived Intangible Assets By Major Class [Line Items]
Deferred franchise revenue	$ 1.3	$ 1.1
International Development Fees [Member]
Indefinite Lived Intangible Assets By Major Class [Line Items]
Deferred franchise revenue	$ 1.5	$ 1.5
License Agreement Terms [Member]
Indefinite Lived Intangible Assets By Major Class [Line Items]
Commitments from franchise agreements	five years

XML

Development Agreements - Number of Franchise and International Stores (Details)	Jan. 03, 2017 Store Developer	Dec. 29, 2015 Store Developer
Indefinite Lived Intangible Assets By Major Class [Line Items]
Number of stores	66	70
Franchise Store Contractual Commitments [Member]
Indefinite Lived Intangible Assets By Major Class [Line Items]
Number of developers | Developer	27	32
Franchise Stores Commitments Exist [Member]
Indefinite Lived Intangible Assets By Major Class [Line Items]
Number of stores	122	163
International Stores Contractual Commitments [Member]
Indefinite Lived Intangible Assets By Major Class [Line Items]
Number of developers | Developer	6	7
International Stores Commitments Exist [Member]
Indefinite Lived Intangible Assets By Major Class [Line Items]
Number of stores	307	485

XML

Deferred Rent and Other Long-Term Liabilities - Schedule of Other Long-term Liabilities (Details) - USD ($) $ in Thousands	Jan. 03, 2017	Dec. 29, 2015
Other Liabilities Disclosure [Abstract]
Deferred rent	$ 2,260	$ 2,961
Deferred revenue	2,950	3,720
Construction allowance	1,423	735
Other liabilities	2,307	1,574
Total deferred rent and other long-term liabilities	$ 8,940	$ 8,990

XML

Lease Commitments - Additional Information (Details) - USD ($) $ in Millions	12 Months Ended
	Jan. 03, 2017	Dec. 29, 2015	Dec. 30, 2014
Leases [Abstract]
Description of lessee leasing arrangements, operating leases	The Company leases its office, retail stores, and some equipment under operating leases, with terms expiring through 2027. Most store leases have an initial term of 10 years, with renewal options of up to 10 years and provide for payment of common area operating expenses and real estate taxes.
Operating leases, rent expense, net, total	$ 7.1	$ 15.6	$ 22.3
Operating leases, income statement, sublease revenue	20.5	13.8	9.2
Operating leases, rent expense, contingent rentals	$ 0.4	$ 0.5	$ 0.5

XML

Lease Commitments - Schedule of Future Minimum Noncancelable Lease Payments and Minimum Rentals to Be Received from Sublessees (Details) $ in Thousands	Jan. 03, 2017 USD ($)
Leases [Abstract]
Minimum lease payments for 2017	$ 26,354
Minimum lease payments for 2018	22,539
Minimum lease payments for 2019	18,569
Minimum lease payments for 2020	14,585
Minimum lease payments for 2021	10,769
Minimum lease payments Thereafter	22,500
Minimum lease payments Total	115,316
Minimum rentals to be received for 2017	20,117
Minimum rentals to be received for 2018	16,734
Minimum rentals to be received for 2019	13,505
Minimum rentals to be received for 2020	10,236
Minimum rentals to be received for 2021	7,446
Minimum rentals to be received Thereafter	12,583
Minimum rentals to be received Total	$ 80,621

XML

Credit Agreement - Additional Information (Details) - USD ($)		12 Months Ended
	Nov. 03, 2016	Jan. 03, 2017
Credit Agreement [Line Items]
Letters of credit outstanding, amount		$ 400,000
Cadence Bank NA [Member]
Credit Agreement [Line Items]
Line of credit facility, maximum borrowing capacity	$ 10,000,000	$ 15,000,000
Line of credit facility, additional borrowing capacity	$ 5,000,000
Debt instrument, description of variable rate basis		accrues interest at a per annum rate equal to the LIBOR rate plus 2.50%
Debt instrument, term	5 years
Credit facility outstanding amount		$ 0
Line of Credit [Member]
Credit Agreement [Line Items]
Line of credit facility, maximum borrowing capacity		$ 10,000,000
Line of credit facility, interest rate description		LIBOR Market Index Rate based upon the rate for one month U.S. dollar deposits, plus 2.50% per annum
Letters of credit outstanding, amount		$ 400,000
Line of Credit [Member] | Cadence Bank NA [Member]
Credit Agreement [Line Items]
Debt instrument, maturity date		Nov. 03, 2021
LIBOR [Member] | Cadence Bank NA [Member]
Credit Agreement [Line Items]
Debt instrument, basis spread on variable rate	2.50%
LIBOR Market Index Rate [Member] | Line of Credit [Member]
Credit Agreement [Line Items]
Debt instrument, basis spread on variable rate		2.50%

XML

Share-Based Compensation - Additional Information (Details) - USD ($)	1 Months Ended	12 Months Ended
	May 17, 2016	Jan. 03, 2017	Dec. 29, 2015	Dec. 30, 2014
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Employee service share-based compensation, tax benefit from compensation expense		$ 0	$ 600,000	$ 0
Share-based compensation arrangement by share-based payment award, accelerated vesting, number				5,000
Share-based compensation arrangement by share-based payment award, options, grants in period, weighted average grant date fair value		$ 4.30	$ 13.92	$ 5.64
Share-based compensation arrangement by share-based payment award, options, vested and expected to vest, outstanding, weighted average remaining contractual term		4 years 10 months 10 days
Remaining expense to amortize		$ 1,700,000
Share-based compensation arrangement by share-based payment award, options, vested and expected to vest, outstanding, weighted average remaining recognition period		2 years
Chief Executive Officer [Member] | Share-based Compensation Award, Tranche One [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based compensation arrangement by share-based payment award, purchase price of common stock, percent		15.00%
Chief Executive Officer [Member] | Share-based Compensation Award, Tranche Two [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based compensation arrangement by share-based payment award, purchase price of common stock, percent		22.50%
Chief Executive Officer [Member] | Share-based Compensation Award, Tranche Three [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based compensation arrangement by share-based payment award, purchase price of common stock, percent		30.00%
Restricted Stock Awards [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares, granted		3,514	1,094	0
Weighted-Average Grant Date Fair Value, granted		$ 12.80	$ 13.71
Time-Based Restricted Stock Units [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share based compensation arrangement by share based payment award option and restricted stock, remaining weighted average vesting period		1 year
Share-based compensation arrangement by share-based payment award, options, grants in period, weighted average grant date fair value		$ 11.31	$ 15.10	$ 13.21
Number of shares, granted		44,000	52,000	270,000
Weighted-Average Grant Date Fair Value, granted		$ 11.31
Vesting period		3 years
Share-based compensation arrangement by share-based payment award equity instruments other than options grants in period grant date fair value		$ 500,000	$ 800,000	$ 3,300,000
Share-based compensation arrangement by share-based payment award, equity instruments other than options, aggregate intrinsic value, outstanding		700,000	$ 2,600,000	$ 4,000,000
Unvested share-based compensation		$ 500,000
Number shares vested		127,000
Performance-Based Restricted Stock Units [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share based compensation arrangement by share based payment award option and restricted stock, remaining weighted average vesting period		7 months
Number of shares, granted		8,000	0	95,000
Weighted-Average Grant Date Fair Value, granted		$ 10.11		$ 14.37
Share-based compensation arrangement by share-based payment award equity instruments other than options grants in period grant date fair value				$ 1,200,000
Share-based compensation arrangement by share-based payment award, equity instruments other than options, aggregate intrinsic value, outstanding		$ 200,000	$ 800,000
Number shares vested		2,000
Performance-Based Restricted Stock Units [Member] | Maximum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Unvested share-based compensation		$ 100,000
Market-Based Restricted Stock Units [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share based compensation arrangement by share based payment award option and restricted stock, remaining weighted average vesting period		14 months
Number of shares, granted		505,000
Weighted-Average Grant Date Fair Value, granted		$ 3.04
Share-based compensation arrangement by share-based payment award, equity instruments other than options, aggregate intrinsic value, outstanding		$ 5,200,000
Unvested share-based compensation		$ 900,000
Number shares vested		0
Share based compensation arrangement by share based payment award options grants in period grant date fair value		$ 1,500,000	0	0
Market-Based Restricted Stock Units [Member] | Chief Executive Officer [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares, granted	350,000
Vesting period		3 years
Employee Stock Option [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based compensation arrangement by share-based payment award, options, vested and expected to vest, outstanding, number		1,100,000
Share-based compensation arrangement by share-based payment award, options, vested and expected to vest, outstanding, weighted average remaining contractual term		4 years
General and Administrative Expense [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Allocated share-based compensation expense		$ 2,600,000	$ 5,200,000	$ 3,100,000
Equity Incentive Plan 2013 [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based compensation arrangement by share-based payment award, number of additional shares authorized	900,000
Share-based compensation arrangement by share-based payment award, number of shares authorized		3,028,847
Share-based compensation arrangement by share-based payment award, number of shares available for grant		842,120
Equity Incentive Plan 2013 and Inducement Awards [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based compensation arrangement by share-based payment award, expiration period		10 years
Share based compensation arrangement by share based payment award option and restricted stock, remaining weighted average vesting period		4 years
Inducement Awards [Member] | Share-based Compensation Award, Tranche One [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based compensation arrangement by share-based payment award, purchase price of common stock, percent		15.00%
Inducement Awards [Member] | Share-based Compensation Award, Tranche Two [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based compensation arrangement by share-based payment award, purchase price of common stock, percent		22.50%
Inducement Awards [Member] | Share-based Compensation Award, Tranche Three [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based compensation arrangement by share-based payment award, purchase price of common stock, percent		30.00%
Inducement Awards [Member] | Market-Based Restricted Stock Units [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number shares vested		155,000
Inducement Awards [Member] | Market-Based Restricted Stock Units [Member] | Maximum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based compensation arrangement by share-based payment award, estimated requisite service period		24 months
Inducement Awards [Member] | Market-Based Restricted Stock Units [Member] | Minimum [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based compensation arrangement by share-based payment award, estimated requisite service period		18 months

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Share-Based Compensation - Schedule of Fair Value of Stock Options Estimated at Date of Grant Using Black-Scholes Option Pricing Model with Weighted-Average Assumptions (Details)	12 Months Ended
	Jan. 03, 2017	Dec. 29, 2015	Dec. 30, 2014
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]
Weighted-average risk-free interest rate	1.36%	1.75%	0.12%
Expected life of options (years)	5 years 2 months 19 days	5 years 10 months 6 days	9 months 18 days
Expected stock volatility	40.50%	43.70%	60.80%
Expected dividend yield	0.00%	0.00%	0.00%

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Share-Based Compensation - Summary of Stock Option Activities (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	12 Months Ended
	Jan. 03, 2017	Dec. 29, 2015
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]
Number of Options outstanding, beginning balance	1,530
Number of Options, granted	315
Number of Options, exercised	(197)
Number of Options, canceled	(448)
Number of Options outstanding, ending balance	1,200	1,530
Number of Options, vested or expected to vest - January 3, 2017	1,112
Number of Options, exercisable - January 3, 2017	485
Weighted-Average Exercise Price outstanding, beginning balance (in dollars per share)	$ 12.42
Weighted-Average Exercise Price, granted (in dollars per share)	13.11
Weighted-Average Exercise Price, exercised (in dollars per share)	5.50
Weighted-Average Exercise Price, canceled (in dollars per share)	16.00
Weighted-Average Exercise Price outstanding, ending balance (in dollars per share)	12.40	$ 12.42
Weighted-Average Exercise Price, vested or expected to vest - January 3, 2017 (in dollars per share)	12.32
Weighted-Average Exercise Price, exercisable - January 3, 2017 (in dollars per share)	$ 10.74
Weighted-Average Contractual Term Remaining (years)	5 years 18 days	5 years 9 months 3 days
Weighted-Average Contractual Term Remaining vested or expected to vest - January 3, 2017	4 years 10 months 10 days
Weighted-Average Contractual Term Remaining exercisable - January 3, 2017	1 year 7 months 24 days
Aggregate Intrinsic Value, outstanding	$ 1,213	$ 3,960
Aggregate Intrinsic Value, vested or expected to vest - January 3, 2017	1,213
Aggregate Intrinsic Value, exercisable at January 3, 2017	$ 1,211

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Share-Based Compensation - Summary of Options Outstanding and Exercisable (Details) - $ / shares shares in Thousands	12 Months Ended
	Jan. 03, 2017	Dec. 29, 2015
Number Outstanding	1,200	1,530
Weighted-Average Remaining Contractual Life	5 years 18 days	5 years 9 months 3 days
Weighted-Average Exercise Price outstanding	$ 12.40	$ 12.42
Number Exercisable	485
Weighted-Average Exercise Price exercisable	$ 10.74
Range of Exercise Prices $3.00 - $3.00
Range of Exercise Prices, minimum	3.00
Range of Exercise Prices, maximum	$ 3.00
Number Outstanding	141
Weighted-Average Remaining Contractual Life	1 year 18 days
Weighted-Average Exercise Price outstanding	$ 3.00
Number Exercisable	141
Weighted-Average Exercise Price exercisable	$ 3.00
Range of Exercise Prices $5.40 - $10.87
Range of Exercise Prices, minimum	5.40
Range of Exercise Prices, maximum	$ 10.87
Number Outstanding	130
Weighted-Average Remaining Contractual Life	4 years 1 month 20 days
Weighted-Average Exercise Price outstanding	$ 9.02
Number Exercisable	89
Weighted-Average Exercise Price exercisable	$ 8.33
Range of Exercise Prices $10.93 $11.65
Range of Exercise Prices, minimum	10.93
Range of Exercise Prices, maximum	$ 11.65
Number Outstanding	139
Weighted-Average Remaining Contractual Life	6 years 5 months 5 days
Weighted-Average Exercise Price outstanding	$ 11.41
Number Exercisable	58
Weighted-Average Exercise Price exercisable	$ 11.13
Range of Exercise Prices $11.98 - $11.98
Range of Exercise Prices, minimum	11.98
Range of Exercise Prices, maximum	$ 11.98
Number Outstanding	10
Weighted-Average Remaining Contractual Life	4 years 4 months 13 days
Weighted-Average Exercise Price outstanding	$ 11.98
Number Exercisable	10
Weighted-Average Exercise Price exercisable	$ 11.98
Range of Exercise Prices $12.35 - $12.35
Range of Exercise Prices, minimum	12.35
Range of Exercise Prices, maximum	$ 12.35
Number Outstanding	153
Weighted-Average Remaining Contractual Life	9 years 18 days
Weighted-Average Exercise Price outstanding	$ 12.35
Number Exercisable	3
Weighted-Average Exercise Price exercisable	$ 12.35
Range of Exercise Prices $13.30 - $13.71
Range of Exercise Prices, minimum	13.30
Range of Exercise Prices, maximum	$ 13.71
Number Outstanding	44
Weighted-Average Remaining Contractual Life	7 years 8 months 9 days
Weighted-Average Exercise Price outstanding	$ 13.49
Number Exercisable	15
Weighted-Average Exercise Price exercisable	$ 13.44
Range of Exercise Prices $13.94 - $13.94
Range of Exercise Prices, minimum	13.94
Range of Exercise Prices, maximum	$ 13.94
Number Outstanding	503
Weighted-Average Remaining Contractual Life	4 years 5 months 16 days
Weighted-Average Exercise Price outstanding	$ 13.94
Number Exercisable	139
Weighted-Average Exercise Price exercisable	$ 13.94
Range of Exercise Prices $19.50 - $45.55
Range of Exercise Prices, minimum	19.50
Range of Exercise Prices, maximum	$ 45.55
Number Outstanding	68
Weighted-Average Remaining Contractual Life	6 years 10 months 14 days
Weighted-Average Exercise Price outstanding	$ 21.89
Number Exercisable	18
Weighted-Average Exercise Price exercisable	$ 28.38
Range of Exercise Prices $47.55 - $47.55
Range of Exercise Prices, minimum	47.55
Range of Exercise Prices, maximum	$ 47.55
Number Outstanding	6
Weighted-Average Remaining Contractual Life	5 months 9 days
Weighted-Average Exercise Price outstanding	$ 47.55
Number Exercisable	6
Weighted-Average Exercise Price exercisable	$ 47.55
Range of Exercise Prices $50.25 - $50.25
Range of Exercise Prices, minimum	50.25
Range of Exercise Prices, maximum	$ 50.25
Number Outstanding	6
Weighted-Average Remaining Contractual Life	5 months 1 day
Weighted-Average Exercise Price outstanding	$ 50.25
Number Exercisable	6
Weighted-Average Exercise Price exercisable	$ 50.25

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Share-Based Compensation - Summary of Outstanding Time-Based Restricted Stock Units (Details) - Time-Based Restricted Stock Units [Member] - $ / shares	12 Months Ended
	Jan. 03, 2017	Dec. 29, 2015	Dec. 30, 2014
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares, outstanding	190,000
Number of shares, granted	44,000	52,000	270,000
Number of shares, forfeited	(39,000)
Number of shares, vested	(127,000)
Number of shares, outstanding	68,000	190,000
Weighted-Average Grant Date Fair Value, outstanding	$ 14.09
Weighted-Average Grant Date Fair Value, granted	11.31
Weighted-Average Grant Date Fair Value, forfeited	13.95
Weighted-Average Grant Date Fair Value, vested	13.70
Weighted- Average Grant Date Fair Value, outstanding	$ 13.11	$ 14.09

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Share-Based Compensation - Summary of Outstanding Performance-Based Restricted Stock Units (Details) - Performance-Based Restricted Stock Units [Member] - $ / shares	12 Months Ended
	Jan. 03, 2017	Dec. 29, 2015	Dec. 30, 2014
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares, outstanding	57,000
Number of shares, granted	8,000	0	95,000
Number of shares, forfeited	(46,000)
Number of shares, vested	(2,000)
Number of shares, outstanding	17,000	57,000
Weighted-Average Grant Date Fair Value, outstanding	$ 13.89
Weighted-Average Grant Date Fair Value, granted	10.11		$ 14.37
Weighted-Average Grant Date Fair Value, forfeited	13.85
Weighted-Average Grant Date Fair Value, vested	14.04
Weighted- Average Grant Date Fair Value, outstanding	$ 12.27	$ 13.89

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Share-Based Compensation - Summary of Outstanding Market-Based Restricted Stock Units (Details) - Market-Based Restricted Stock Units [Member] shares in Thousands	12 Months Ended
	Jan. 03, 2017 $ / shares shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares, outstanding | shares	0
Number of shares, granted | shares	505
Number of shares, forfeited | shares	0
Number of shares, vested | shares	0
Number of shares, outstanding | shares	505
Weighted-Average Grant Date Fair Value, outstanding | $ / shares	$ 0
Weighted-Average Grant Date Fair Value, granted | $ / shares	3.04
Weighted-Average Grant Date Fair Value, forfeited | $ / shares	0
Weighted-Average Grant Date Fair Value, vested | $ / shares	0
Weighted- Average Grant Date Fair Value, outstanding | $ / shares	$ 3.04

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Stock Repurchases - Additional Information (Details) - USD ($) $ / shares in Units, shares in Millions			1 Months Ended		12 Months Ended
	Aug. 04, 2016	Oct. 29, 2014	Sep. 29, 2015	May 31, 2015	Dec. 29, 2015	Dec. 30, 2014	Jan. 03, 2017	Sep. 30, 2015
Equity [Abstract]
Stock repurchase program, authorized amount	$ 20,000,000	$ 25,000,000		$ 40,000,000				$ 45,000,000
Stock repurchase program authorized period	2 years	18 months
Increase stock repurchase program authorized amount			$ 5,000,000	$ 15,000,000
Treasury stock, shares, retired					2.0	0.9
Treasury stock acquired, average cost per share					$ 14.38	$ 13.17
Treasury stock, retired, cost method, amount					$ 28,000,000	$ 12,000,000
Stock repurchase program, remaining authorized repurchase amount							$ 5,000,000

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Income Taxes - Schedule of Components of Income Tax (Expense) Benefit (Details) - USD ($) $ in Thousands	3 Months Ended								12 Months Ended
	Jan. 03, 2017	Sep. 27, 2016	Jun. 28, 2016	Mar. 29, 2016	Dec. 29, 2015	Sep. 29, 2015	Jun. 30, 2015	Mar. 31, 2015	Jan. 03, 2017	Dec. 29, 2015	Dec. 30, 2014
Current:
Federal									$ 0	$ (438)	$ 0
State									(14)	(149)	(37)
Foreign									(65)	(114)	(131)
Current income tax (expense) benefit									(79)	(701)	(168)
Deferred:
Federal									0	0	0
State									0	0	0
Foreign									0	0	0
Deferred income tax (expense) benefit									0	0	0
Income tax benefit (expense)	$ (10)	$ 9	$ 54	$ (132)	$ (424)	$ (194)	$ (57)	$ (26)	$ (79)	$ (701)	$ (168)

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Income Taxes - Summary of Difference Between Effective Income Tax Rate and The United States Federal Income Tax Rate (Details)	12 Months Ended
	Jan. 03, 2017	Dec. 29, 2015	Dec. 30, 2014
Income Tax Disclosure [Abstract]
Statutory federal rate	34.00%	34.00%	34.00%
State income taxes less federal benefit	(1.40%)	(9.20%)	5.90%
Foreign income taxes	(0.30%)	1.10%	(2.50%)
Change in valuation allowance	(24.60%)	(38.10%)	(31.50%)
Meals	(0.10%)	0.30%	(1.20%)
Business Gain on Acquisition	0.00%	0.00%	8.50%
Alternative minimum taxes	0.00%	0.10%	(1.00%)
Expired tax attribute carryforwards	(6.40%)	11.10%	(17.00%)
Tax credits generated	(0.00%)	(0.10%)	0.30%
Other	(1.60%)	7.70%	(0.30%)
Effective income tax rate reconciliation, percent	(0.40%)	6.90%	(4.80%)

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Income Taxes - Schedule of Deferred Tax Assets (Liabilities) of Temporary Differences (Details) - USD ($) $ in Thousands	Jan. 03, 2017	Dec. 29, 2015
Income Tax Disclosure [Abstract]
Net operating losses	$ 62,875	$ 50,837
Reserves and accruals	5,073	10,754
Deferred rent	967	1,518
Tax credit attributes	1,957	1,999
Basis difference in intangibles	1,152	1,510
Share-based compensation	1,915	2,979
Basis difference in fixed assets	5,670	3,245
Basis difference in intangibles	(95)	(289)
Basis difference in investments	144	4
Reserves and accruals	(29)	(64)
Total gross deferred tax asset	79,629	72,493
Valuation allowance	(79,629)	(72,493)
Total net deferred tax asset	$ 0	$ 0

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Income Taxes - Additional Information (Details) - USD ($) $ in Thousands	12 Months Ended
	Jan. 03, 2017	Dec. 29, 2015
Income Tax [Line Items]
Valuation allowance, deferred tax asset, increase (decrease), amount	$ 7,100
Deferred tax assets, tax credit carryforwards, total	$ 1,957	$ 1,999
Earliest Tax Year [Member]
Income Tax [Line Items]
Operating loss carry forward expiration year	2017
Latest Tax Year [Member]
Income Tax [Line Items]
Operating loss carry forward expiration year	2036
Domestic Tax Authority [Member]
Income Tax [Line Items]
Operating loss carryforwards	$ 148,400
Deferred tax assets, tax credit carryforwards, total	1,100
Tax credit carryforwards expire amount	$ 300
Operating loss carryforwards, limitations on use	Approximately $0.3 million of the federal tax credit carryforwards will start to expire in 2031 if unused before that year
State and Local Jurisdiction [Member]
Income Tax [Line Items]
Operating loss carryforwards	$ 144,500
Deferred tax assets, tax credit carryforwards, total	900
Tax credit carryforwards expire amount	$ 700
Operating loss carryforwards, limitations on use	Of the state tax credit carryforwards, approximately $0.7 million will start to expire in 2023 if unused before that year

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Income Taxes - Schedule of Changes in Unrecognized Tax Benefits (Details) - USD ($) $ in Thousands	12 Months Ended
	Jan. 03, 2017	Dec. 29, 2015
Income Tax Disclosure [Abstract]
Beginning balance	$ 185	$ 185
Increases attributable to tax positions taken during prior periods	0	0
Decreases resulting from lapse of applicable statutes of limitations	0	0
Ending balance	$ 185	$ 185

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Employee Benefit Plan - Additional Information (Details) - USD ($) $ in Millions	12 Months Ended
	Jan. 03, 2017	Dec. 29, 2015	Dec. 30, 2014
Maximum
Compensation And Employee Benefit Plans [Line Items]
Discretionary contributions for 401K	$ 0.1	$ 0.1	$ 0.1

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Severance and Other Compensation - Additional Information (Details) - USD ($) $ in Thousands	3 Months Ended	12 Months Ended
	Jan. 02, 2018	Jan. 03, 2017	Dec. 29, 2015	Apr. 04, 2017
Restructuring Cost and Reserve [Line Items]
Retention expenses classified in accounts payable		$ 3,580	$ 3,788
Severance costs			800
Headquarters Relocation [Member]
Restructuring Cost and Reserve [Line Items]
Severance costs classified in accrued compensation and benefits		1,600
Retention expenses classified in accounts payable		800
Headquarters Relocation [Member] | Scenario, Forecast [Member]
Restructuring Cost and Reserve [Line Items]
Bonuses payable				$ 900
Employee Severance [Member] | Chief Executive Officer [Member]
Restructuring Cost and Reserve [Line Items]
Severance costs			800
Payment of severance costs		$ 800
Employee Severance [Member] | Other Senior Executives [Member]
Restructuring Cost and Reserve [Line Items]
Severance costs			$ 600
Employee Severance [Member] | Scenario, Forecast [Member] | Other Senior Executives [Member]
Restructuring Cost and Reserve [Line Items]
Severance costs	$ 300

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Store Lease Termination and Closure Costs - Additional Information (Details) $ in Thousands	3 Months Ended	12 Months Ended
	Dec. 29, 2015 USD ($) Store	Jan. 03, 2017 USD ($) Store	Dec. 29, 2015 USD ($) Store
Operating Leased Assets [Line Items]
Severance costs			$ 800
Operating leases, future minimum payments due, total		$ 115,316
Contract Termination [Member]
Operating Leased Assets [Line Items]
Number of stores closed | Store	8	1	8
Business exit costs	$ 1,600	$ 3,600
Fair value adjustments lease termination obligations	1,300	1,300
Assets write off	200	2,300
Severance costs	$ 100
Remaining lease termination obligation		$ 500
Fair value assumptions, risk free interest rate		4.95%	6.50%
Operating leases, future minimum payments due, total		$ 3,500
Operating leases, rent expense, sublease rentals		1,600
Transaction fee to advisors		100
Operating lease obligations estimated fair value		$ 1,800

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Other Operating, Net - Schedule of Components of Other Operating, Net (Details) - USD ($) $ in Thousands	3 Months Ended								12 Months Ended
	Jan. 03, 2017	Sep. 27, 2016	Jun. 28, 2016	Mar. 29, 2016	Dec. 29, 2015	Sep. 29, 2015	Jun. 30, 2015	Mar. 31, 2015	Jan. 03, 2017	Dec. 29, 2015	Dec. 30, 2014
Other Operating Net [Abstract]
Jambacard breakage income									$ (4,096)	$ (5,440)	$ (4,744)
Jambacard expense									902	1,155	1,299
CPG and JambaGO® direct expense									1,700	3,035	2,637
Franchise discount expense									461	706	847
Franchise other expense									676	834	1,025
Sublease income									(670)	(192)	(121)
Bad debt									1,560	1,474	61
International expense									613	708	316
Contingent consideration fair value measurement									(295)	(156)	(397)
Other (income) expense									(63)	(329)	(197)
Total other operating, net	$ 463	$ 104	$ 245	$ 271	$ (619)	$ 375	$ 1,333	$ 706	$ 1,083	$ 1,795	$ 726

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Other Commitments and Contingencies - Additional Information (Details) - USD ($)	12 Months Ended
	Jan. 03, 2017	Dec. 29, 2015	Dec. 30, 2014
Loss Contingencies [Line Items]
Charges associated with ongoing and settled litigation matters	$ 2,000,000	$ 0	$ 0
Litigation cases estimated, amounts	1,000,000
Purchase commitment, remaining minimum amount committed	$ 30,700,000
Purchase commitment, description	The Company has purchase obligations with certain suppliers for certain fruits and dairy for various terms typically ranging from one year to five years. The Company has one contract with a supplier for a 15 year term that ends in 2024
Commercial Vendor Dispute [Member]
Loss Contingencies [Line Items]
Charges associated with ongoing and settled litigation matters	$ 1,000,000
Purchase commitment, remaining minimum amount committed	$ 1,000,000

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Related-Party Transactions - Additional Information (Details) - USD ($) $ in Millions	12 Months Ended
	Jan. 03, 2017	Dec. 29, 2015
Country Pure Foods [Member]
Related Party Transaction [Line Items]
Management fees revenue, total	$ 0.2	$ 0.2
Sodexo [Member]
Related Party Transaction [Line Items]
Licenses revenue	$ 0.3	$ 0.3

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Unaudited Quarterly Information - Schedule of Unaudited Consolidated Results of Operations (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended								12 Months Ended
	Jan. 03, 2017	Sep. 27, 2016	Jun. 28, 2016	Mar. 29, 2016	Dec. 29, 2015	Sep. 29, 2015	Jun. 30, 2015	Mar. 31, 2015	Jan. 03, 2017	Dec. 29, 2015	Dec. 30, 2014
Revenue:
Company stores	$ 11,105	$ 14,350	$ 13,874	$ 11,953	$ 12,724	$ 28,213	$ 48,360	$ 47,728	$ 51,282	$ 137,025	$ 198,737
Franchise and other revenue	6,163	7,711	7,666	6,801	6,825	7,284	5,766	4,776	28,341	24,651	19,311
Total revenue	17,268	22,061	21,540	18,754	19,549	35,497	54,126	52,504	79,623	161,676	218,048
Costs and operating expenses (income):
Cost of sales	2,881	3,437	3,321	2,962	3,230	6,626	11,474	12,407	12,601	33,737	52,236
Labor	4,402	4,644	4,668	4,158	4,925	8,843	14,876	16,088	17,872	44,732	61,749
Occupancy	1,844	1,879	1,900	2,036	2,005	3,980	6,131	6,835	7,659	18,951	27,630
Store operating	2,270	2,381	2,272	2,362	3,158	5,901	8,059	8,034	9,285	25,152	33,089
Depreciation and amortization	1,505	1,068	1,674	1,502	2,209	1,143	1,344	1,873	5,749	6,569	10,084
General and administrative	11,226	9,699	9,423	7,610	10,479	9,003	8,427	8,963	37,958	36,872	37,278
Loss (gain) on disposal of assets	289	204	188	109	(275)	(16,076)	(4,480)	(778)	790	(21,609)	(2,957)
Store pre-opening	364	210	326	324	556	287	166	22	1,224	1,031	763
Impairment of long-lived assets	3,054	229	127		321	1,907	295	0	3,410	2,523	175
Store lease termination and closure	3,918	178	(56)	120	1,400	207	40	22	4,160	1,669	575
Other operating, net	463	104	245	271	(619)	375	1,333	706	1,083	1,795	726
Total costs and operating expenses (income):	32,216	24,033	24,088	21,454	27,389	22,196	47,665	54,172	101,791	151,422	221,348
(Loss) income from operations	(14,948)	(1,972)	(2,548)	(2,700)	(7,840)	13,301	6,461	(1,668)	(22,168)	10,254	(3,300)
Other income (expense):
Interest income	55	50	74	71	59	49	14	15	250	137	74
Interest expense	(270)	(51)	(59)	(59)	(58)	(53)	(68)	(41)	(439)	(220)	(195)
Total other income (expense), net	(215)	(1)	15	12	1	(4)	(54)	(26)	(189)	(83)	(121)
(Loss) income before income taxes	(15,163)	(1,973)	(2,533)	(2,688)	(7,839)	13,297	6,407	(1,694)	(22,357)	10,171	(3,421)
Income tax (expense) benefit	(10)	9	54	(132)	(424)	(194)	(57)	(26)	(79)	(701)	(168)
Net (loss) income	(15,173)	(1,964)	(2,479)	(2,820)	(8,263)	13,103	6,350	(1,720)	(22,436)	9,470	(3,589)
Less: Net income attributable to noncontrolling interest							21	31		52	43
Net (loss) income attributable to Jamba, Inc.	$ (15,173)	$ (1,964)	$ (2,479)	$ (2,820)	$ (8,263)	$ 13,103	$ 6,329	$ (1,751)	$ (22,436)	$ 9,418	$ (3,632)
(Loss) earnings per share attributable to Jamba, Inc. common shareholders:
Basic	$ (0.99)	$ (0.13)	$ (0.16)	$ (0.19)	$ (0.55)	$ 0.83	$ 0.39	$ (0.11)	$ (1.47)	$ 0.60	$ (0.21)
Diluted	$ (0.99)	$ (0.13)	$ (0.16)	$ (0.19)	$ (0.55)	$ 0.81	$ 0.38	$ (0.11)	$ (1.47)	$ 0.58	$ (0.21)

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Unaudited Quarterly Information - Additional Information (Details) $ in Thousands	3 Months Ended								12 Months Ended
	Jan. 03, 2017 USD ($) Store	Sep. 27, 2016 USD ($)	Jun. 28, 2016 USD ($)	Mar. 29, 2016 USD ($)	Dec. 29, 2015 USD ($) Store	Sep. 29, 2015 USD ($) Store	Jun. 30, 2015 USD ($) Store	Mar. 31, 2015 USD ($) Store	Jan. 03, 2017 USD ($) Store	Dec. 29, 2015 USD ($) Store	Dec. 30, 2014 USD ($)	Apr. 28, 2015
Unaudited Quarterly Financial Information [Line Items]
Store lease termination and closure expense | $	$ 3,918	$ 178	$ (56)	$ 120	$ 1,400	$ 207	$ 40	$ 22	$ 4,160	$ 1,669	$ 575
Impairment loss | $	$ 3,054	$ 229	$ 127		$ 321	$ 1,907	$ 295	$ 0	$ 3,410	$ 2,523	$ 175
Number of stores sold | Store	1				14	110	49	4
Number of stores acquired | Store					2
Number of stores | Store	66				70				66	70
Jamba Juice Southern California, LLC [Member]
Unaudited Quarterly Financial Information [Line Items]
Noncontrolling interest, ownership percentage by parent												88.00%
Jamba GO [Member]
Unaudited Quarterly Financial Information [Line Items]
Store lease termination and closure expense | $	$ 2,300
Impairment loss | $	$ 3,400
Franchise and International [Member]
Unaudited Quarterly Financial Information [Line Items]
Number of stores | Store	843				823				843	823

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Unaudited Quarterly Information - Schedule of Details Specific Amounts of Out-of-period (Overstatements)/Understatements (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended								12 Months Ended
	Jan. 03, 2017	Sep. 27, 2016	Jun. 28, 2016	Mar. 29, 2016	Dec. 29, 2015	Sep. 29, 2015	Jun. 30, 2015	Mar. 31, 2015	Jan. 03, 2017	Dec. 29, 2015	Dec. 30, 2014	Jan. 01, 2013
Quantifying Misstatement In Current Year Financial Statements [Line Items]
Total revenue	$ 17,268	$ 22,061	$ 21,540	$ 18,754	$ 19,549	$ 35,497	$ 54,126	$ 52,504	$ 79,623	$ 161,676	$ 218,048
Total costs, operating expenses and gain	32,216	24,033	24,088	21,454	27,389	22,196	47,665	54,172	101,791	151,422	221,348
(Loss) income from operations	(14,948)	(1,972)	(2,548)	(2,700)	(7,840)	13,301	6,461	(1,668)	(22,168)	10,254	(3,300)
Total other expense, net	(215)	(1)	15	12	1	(4)	(54)	(26)	(189)	(83)	(121)
(Loss) income before income taxes	(15,163)	(1,973)	(2,533)	(2,688)	(7,839)	13,297	6,407	(1,694)	(22,357)	10,171	(3,421)
Income tax (expense) benefit	(10)	9	54	(132)	(424)	(194)	(57)	(26)	(79)	(701)	(168)
Net (loss) income	$ (15,173)	$ (1,964)	$ (2,479)	$ (2,820)	$ (8,263)	$ 13,103	$ 6,350	$ (1,720)	$ (22,436)	$ 9,470	$ (3,589)
Earnings (loss) per share attributable to Jamba, Inc. common shareholders:
Basic	$ (0.99)	$ (0.13)	$ (0.16)	$ (0.19)	$ (0.55)	$ 0.83	$ 0.39	$ (0.11)	$ (1.47)	$ 0.60	$ (0.21)
Diluted	$ (0.99)	$ (0.13)	$ (0.16)	$ (0.19)	$ (0.55)	$ 0.81	$ 0.38	$ (0.11)	$ (1.47)	$ 0.58	$ (0.21)
Immaterial Prior Period Adjustment [Member]
Quantifying Misstatement In Current Year Financial Statements [Line Items]
Total revenue	$ 151	$ (18)	$ (202)	$ 4					$ (65)	$ (3)	$ 33	$ 35
Total costs, operating expenses and gain	(596)	105	490	(892)					(893)	624	622	(353)
(Loss) income from operations	747	(124)	(692)	896					828	(627)	(589)	388
(Loss) income before income taxes	747	(124)	(692)	896					828	(627)	(589)	388
Income tax (expense) benefit	(1)	2	14	(45)					$ (30)	$ 44	$ 29	$ (10)
Net (loss) income	$ 746	$ (122)	$ (678)	$ 851
Earnings (loss) per share attributable to Jamba, Inc. common shareholders:
Basic	$ 0.05	$ (0.01)	$ (0.04)	$ 0.06
Diluted	$ 0.05	$ (0.01)	$ (0.04)	$ 0.06

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Subsequent Events - Additional Information (Details) $ in Millions	3 Months Ended			12 Months Ended
	Jan. 02, 2018 USD ($)	Jun. 27, 2017 USD ($) Store	Apr. 04, 2017 USD ($)	Dec. 29, 2015 USD ($) Store	Jan. 03, 2017 Store	Nov. 30, 2014 Store
Subsequent Event [Line Items]
Severance costs				$ 0.8
Number of stores | Store				70	66
Refranchise [Member]
Subsequent Event [Line Items]
Number of stores | Store				179		114
Subsequent Event [Member] | Chicago [Member]
Subsequent Event [Line Items]
Number of units developed | Store		10
Unit development cost		$ 0.2
Subsequent Event [Member] | Refranchise [Member]
Subsequent Event [Line Items]
Number of stores | Store		13
Employee Severance [Member] | Other Senior Executives [Member]
Subsequent Event [Line Items]
Severance costs				$ 0.6
Employee Severance [Member] | Other Senior Executives [Member] | Subsequent Event [Member]
Subsequent Event [Line Items]
Severance costs			$ 0.6
Employee Severance [Member] | Scenario, Forecast [Member] | Other Senior Executives [Member]
Subsequent Event [Line Items]
Severance costs	$ 0.3

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Schedule II - Valuation and Qualifying Accounts (Details) - Allowance for Doubtful Accounts - USD ($) $ in Thousands	12 Months Ended
	Jan. 03, 2017	Dec. 29, 2015	Dec. 30, 2014
Valuation And Qualifying Accounts Disclosure [Line Items]
Balance at the Beginning of the Period	$ 618	$ 280	$ 291
Charged to Expenses	1,560	741	54
Deductions	(370)	(403)	(65)
Balance at the End of the Period	$ 1,808	$ 618	$ 280