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EXHIBIT 10
AMENDMENT TO BALANCE BAR COMPANY TRADEMARK LICENSE AGREEMENT
Jenny Craig, Inc. ("JC") and Balance Bar Company ("BBC") hereby amend the
Balance Bar Company Trademark License Agreement dated July 30, 1999 (the
"Agreement") as follows:
1. Section 2.2 is deleted in its entirety and replaced by the following:
2.2 RIGHT OF FIRST NEGOTIATION AND RIGHT OF FIRST REFUSAL.
2.2.1 RIGHT OF FIRST NEGOTIATION. If, during the term of
this Agreement, JC desires to enter into an agreement for
the license of any of the Marks to a person or entity for
such person or entity's sale of any food or beverage
product through any distribution channel other than
through the Centres ("Product License"), it shall provide
BBC with written notice of the identity of the proposed
licensee ("Negotiation Notice"), and immediately
thereafter shall negotiate exclusively with BBC with
respect to such Product License. If such negotiations with
BBC do not result in an agreement between BBC and JC
within [ * ] ([ * ]) days after the Negotiation Notice,
then JC shall be free during the next [ * ] ([ * ]) months
to negotiate with the proposed licensee identified in its
Negotiation Notice with respect to the Product License.
Provided however, that (a) JC may negotiate only with the
specific proposed licensee identified in its Negotiation
Notice; (b) JC may enter into such Product License only if
its terms are more favorable to JC than the terms last
offered by BBC; and (c) If JC does not reach agreement
within [ * ] days with the proposed licensee, then the
provisions of this Section shall again apply to any
subsequent proposed Product License.
2.2.2 RIGHT OF FIRST REFUSAL. Notwithstanding anything to
the contrary in Section 2.2.1, JC may not enter into a
Product License with [ * ] ("Restricted Licensees")
without first providing BBC notice and a copy of the
proposed agreement ("First Refusal Notice"). Within sixty
(60) days after its receipt of the First Refusal Notice,
BBC may elect, by written notice to JC, to require JC to
enter into a Product License with BBC rather than the
Restricted Licensee on terms identical to the agreement
provided to BBC with the First Refusal Notice. If BBC does
not so elect, then JC may, within thirty (30) days
thereafter, enter into the Product License in the form
delivered with the First Refusal Notice. Provided however,
that if JC does not enter into the Product License within
such thirty-day period, the provisions of this Section
shall again apply to any subsequent proposed Product
License.
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2. Article 3 (including sections 3.1 and 3.2) is deleted in its entirety and
replaced by the following:
3. LICENSED PRODUCTS
As used in this Agreement, the term "Licensed Products"
shall mean and include only those JC-branded food and beverage
products listed on Schedule B to this Agreement (the "Licensed
Products").
3. Subsection 4.3.1 is deleted in its entirety and replaced by the following:
4.3.1 For the calendar years 2001 through 2004, the
Minimum Annual Royalty shall be:
2001 [ * ]
2002 [ * ]
2003 [ * ]
2004 [ * ]
4. Section 6.2 is deleted in its entirety and replaced by the following:
6.2 PRODUCT INTRODUCTION. BBC will use commercially
reasonable efforts to introduce the Licensed Products.
5. Section 6.4 is amended by the addition of the following sentence at the end
thereof:
JC agrees that it will sell its Snack Bars only as part of
the Jenny Craig diet programs, and not otherwise.
6. Section 6.7 is deleted in its entirety and replaced by the following:
6.7 MINIMUM LICENSED PRODUCT SUPPORT REQUIREMENTS. BBC agrees to
use its best efforts to support sales of the Licensed Products,
and during each Contract Year to spend not less than [ * ] or
[ * ] per cent ([ * ]%) of Gross Sales of Licensed Products for
such Contract Year (whichever is greater) for advertising
expenditures, trade allowances, market development funding
(including coop advertising, store promotions, price discounts,
payment terms and co-sponsored events), and marketing (including
promotions, couponing, in-store
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displays, free-standing newspaper inserts and so on) with respect
to the Licensed Products.
7. Section 6.9 is deleted in its entirety and replaced by the following:
6.9 COOPERATION AND INFORMATION SHARING. The parties agree to
cooperate in the development of strategies relating to the
introduction and marketing of Licensed Products. Subject to
Section 13, the parties will exchange their consumer and market
research information relating to Licensed Products and the
Centres on a quarterly basis. BBC will refer inquiries regarding
Jenny Craig and its programs and products to a JC contact to be
identified by JC. In addition, JC will cooperate and provide
advice in connection with weight loss matters, including a
representative to serve on the BBC advisory board.
8. Section 7.3 is deleted in its entirety and replaced by the following:
7.3. QUALITY STANDARDS. Quality Standards of Licensed Products
and Promotional Packaging Material shall be maintained at a level
at least as high as the samples approved by JC (based on normal
industry standards for quality control procedures and statistical
sampling).
9. Article 17 is deleted in its entirety and replaced by the following:
17. ASSIGNMENT.
The rights and duties granted in this Agreement are
personal to JC and BBC and neither party may assign any of its
rights or delegate any of its duties under this Agreement without
prior written consent of the other party, which consent will not
be unreasonably withheld, provided that such assignee assumes in
writing and agrees to pay, perform and discharge all of the
assigning party's obligations hereunder. The parties agree that
it shall be reasonable for BBC to withhold its consent to any
such assignment by JC to any of the following competitors of BBC:
[ * ]; and for JC to withhold its consent to any such assignment
by BBC to any of the following competitors of JC: [ * ]. The
foregoing notwithstanding, either party may assign its rights
hereunder to any of its subsidiaries or affiliates without the
consent of the other party (it being understood and agreed that
no such assignment pursuant to this proviso shall relieve the
assigning party of any of its obligations hereunder). In
addition, either party may assign its rights and duties hereunder
without the consent of the other party to any person or entity
that acquires all or
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substantially all of the business of the assigning party whether
by asset sale, stock sale or merger or similar means, provided
that such person or entity assumes in writing and agrees to pay,
perform and discharge all of the assigning party's obligations
hereunder. Changes in the securities ownership of a party hereto
shall not be deemed to be an assignment of this Agreement. Any
attempted assignment or delegation in violation of this provision
shall be void. This Agreement shall inure to the benefit of the
permitted successors and assigns hereunder.
10. A new Article 19 is added, as follows:
19. DISPUTE RESOLUTION
19.1 DISPUTE RESOLUTION. The parties hereto will attempt to
settle any claim or controversy arising out of or relating to
this Agreement through consultation and negotiation in good faith
and a spirit of mutual cooperation. However, at any time before
or during such negotiations, or following any unsuccessful
negotiations, either party may by written notice to the other
demand that the dispute be submitted to mediation. When such a
demand is made, the parties shall within ten (10) days jointly
make arrangements for the mediation of the dispute within the
State of California with the CPR Institute for Dispute Resolution
(CPR), whose Model Procedure for Mediation of Business Disputes
in effect on the date of the written demand for mediation shall
govern the mediation in all respects, except as modified by
agreement of the parties. If the dispute has not been resolved
within sixty (60) days of any written demand for mediation, or
within a longer time period to which the parties may agree, the
dispute shall be submitted to binding arbitration. Such binding
arbitration shall be conducted within the State of California, in
accordance with the then current CPR Rules for Non-Administered
Arbitration of Business Disputes by a single arbitrator selected
by mutual agreement of the parties within twenty (20) days after
the date of submission of the dispute to binding arbitration, or
in the absence of such agreement, such selection to be made by
CPR in accordance with the procedures outlined in Section 6 of
the CPR Rules. The arbitration shall be governed by the United
States Arbitration Act, 9 U.S.C. Sections 1-16 (as may be
amended), and judgment upon the award rendered by the arbitrator
may be entered by any court having jurisdiction thereof.
Nothing in this Agreement will prevent either party from
resorting to judicial proceedings for the limited purpose of
seeking a preliminary injunction or to avoid the barring of the
claim under the applicable statute of limitations. In addition,
resort by either party to negotiation, mediation or arbitration
pursuant to this Agreement shall not be construed under the
doctrine of laches, waiver or estoppel to affect adversely the
rights of either party to pursue any such judicial relief;
provided, however, that irrespective of the filing of any such
request for judicial relief the party shall continue to
participate in the dispute resolution proceedings required by
this paragraph. Any negotiation or mediation which
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takes place pursuant to this Agreement shall be confidential and
shall be treated as a compromise and settlement negotiation for
purposes of the Federal Rules of Evidence and State rules of
evidence.
11. Schedule B is deleted in its entirety and replaced by the following:
SCHEDULE B
LICENSED PRODUCTS
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PRODUCT
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Nutrition Bar
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Ready to drink beverage
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Powdered drink mix
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Nutritional cookie
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Nutritional cracker
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Condiments, such as mayonnaise,
not sold in Jenny Craig Centres
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**Notwithstanding the foregoing, BBC shall not introduce (i) the
Licensed Products in Canada, (ii) condiments, such as mayonnaise, not
sold in Jenny Craig Centres, or (iii) nutritional crackers, until JC has
notified BBC that JC's franchisees have consented to the distribution
and sale of such products in the franchised territories. JC will use
commercially reasonable efforts to obtain consent by its franchisees to
the distribution and sale of such products in the franchise territories.
12. All other terms and conditions of the Agreement shall remain in full force
and effect.
JENNY CRAIG, INC. BALANCE BAR COMPANY
By: /s/ SID CRAIG By: /s/ JERI FINARD
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Sid Craig Jeri Finard
Chairman and Chief Executive EVP/GM BALANCE BAR
Officer ----------------------------
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