SECURITIES GRANT AGREEMENT
Exhibit 10.5
Execution Copy
THIS SECURITIES GRANT AGREEMENT (this “Agreement”) is made as of November 14, 2011 (the
“Grant Date”), by and among Crumbs Bake Shop, Inc. (formerly known as 00xx Xxxxxx General
Acquisition Corp.), a Delaware corporation (the “Company”), Crumbs Holdings, LLC, a
Delaware limited liability company (“Crumbs”, and together with the Company, the
“Companies”) and Xxxxxx X. Xxxxxx (the “Executive”). The Company, Crumbs and the
Executive are sometimes referred to herein individually as a “Party” and collectively as
the “Parties”. Capitalized terms shall have the meaning ascribed to them in Section
7.
WHEREAS, the Company, Crumbs and the Executive desire to enter into an agreement pursuant to which
the Executive will acquire, and the Company and Crumbs, as applicable, will issue, (A) 799,000 New
Crumbs Class B Exchangeable Units of Crumbs (the “Class B Exchangeable Units”) with such
terms and conditions as set forth in the Third Amended and Restated Limited Liability Company
Agreement of Crumbs, dated as of May 5, 2011, by and among the members of Crumbs (the “LLC
Agreement”), and 79,900 shares of Series A Voting Preferred Stock of the Company, par value
$0.0001 per share (the “Series A Preferred Stock”) (such Class B Exchangeable Units and
shares of Series A Preferred Stock, the “Granted Securities”) and (B) up to 901,000 Class B
Exchangeable Units and up to 90,100 shares of Series A Preferred Stock, subject to the achievement
of certain performance targets as more fully described herein (the “Contingent Securities”,
and together with the Granted Securities, the “Executive Securities”); and
WHEREAS, in connection with the issuance of Executive Securities hereunder, Xxxxx Holdings, Inc.
and EHL Holdings LLC (the “Forfeiting Holders”) are entering into an Acknowledgement of
Forfeiture of Securities, dated as of the date hereof, pursuant to which the Forfeiting Holders are
forfeiting a number of Class B Exchangeable Units and shares of Series A Preferred Stock that were
issued to the Forfeiting Holders (and, with respect to Contingent Consideration, that the
Forfeiting Holders have the right to receive in the event that certain performance targets are
achieved) pursuant to that certain Business Combination Agreement equal to the number of Executive
Securities to be issued hereunder, which forfeited securities shall be cancelled by the Company and
Crumbs, as the case may be;
NOW THEREFORE, in consideration of the mutual promises, covenants, representations and warranties
contained herein, and for other good and valuable consideration the receipt and sufficiency of
which is hereby acknowledged, the Parties hereby agree as follows:
1. Issuance of Granted Securities.
(a) Reasonably promptly following the execution of this Agreement, (i) Crumbs will issue to
the Executive 799,000 Class B Exchangeable Units of Crumbs and (ii) the Company will issue to the
Executive 79,900 shares of Series A Preferred Stock. Contemporaneously herewith, the Executive
shall deliver to Crumbs an executed accession agreement to the LLC Agreement indicating the
Executive’s ownership of such Class B Exchangeable Units (the “LLC Agreement Joinder”).
(b) Within thirty (30) days after the Grant Date, the Executive may elect to make an effective
election with the Internal Revenue Service under Section 83(b) of the Code and the regulations
promulgated thereunder, in the form of Exhibit A hereto. Executive hereby agrees to
provide a copy of such form of election to each of the Company and Crumbs.
2. Issuance of Contingent Securities.
(a) Issuance of Contingent Securities to Executive. In addition to the Granted
Securities to be issued pursuant to Section 1(a) above, and solely in the event that any
portion of the Contingency Consideration (as defined in the Business Combination Agreement) becomes
issuable pursuant to the Business Combination Agreement, the Executive shall be entitled to the
Contingent Securities as follows (subject to adjustment pursuant to Section 2(b)):
(i) 300,333.3 Class B Exchangeable Units and 30,033.3 shares of Series A Preferred
Stock in the event that the First Stock Target (as defined in the Business Combination
Agreement) has been achieved; and/or
(ii) 300,333.3 Class B Exchangeable Units and 30,033.3 shares of Series A Preferred
Stock in the event that the Second Stock Target (as defined in the Business Combination
Agreement) has been achieved; and/or
(iii) 300,333.3 Class B Exchangeable Units and 30,033.3 shares of Series A Preferred
Stock in the event that the Third Stock Target (as defined in the Business Combination
Agreement) has been achieved; and/or
(iv) to the extent that not all of the foregoing Stock Targets have been achieved,
450,500 Class B Exchangeable Units and 45,050 shares of Series A Voting Preferred Stock in
the event that the 2013 EBITDA Target (as defined in the Business Combination Agreement) has
been achieved; and/or
(v) to the extent that not all of the foregoing Stock Targets have been achieved,
450,500 Class B Exchangeable Units and 45,050 shares of Series A Voting Preferred Stock in
the event that the 2014 EBITDA Target (as defined in the Business Combination Agreement) has
been achieved; and/or
(vi) any remaining Contingency Securities not otherwise achieved hereunder up to the
Maximum Contingency Securities (as hereinafter defined) in the event that the 2015 EBITDA
Target (as defined in the Business Combination Agreement) has been achieved.
For the avoidance of doubt, the Parties hereby agree, except as required to satisfy any adjustments
pursuant to Section 2(f) upon an Organic Dilution Event (as defined in the Business
Combination Agreement), the Contingent Securities earned under Section 2(a)(i)-(v) shall
not exceed 901,000 Class B Exchangeable Units and 90,100 shares of Series A Preferred Stock in the
aggregate (the “Maximum Contingency Securities”). For the avoidance of doubt, the Parties
hereby further agree that any issuance of Contingent Securities pursuant to this Agreement shall be
in accordance with and subject to each of (i) the obligations of the Companies to issue the
Contingency Consideration (as defined in the Business Combination Agreement), including without
limitation, pursuant to Sections 1.4(b), 1.5, and 1.9 of the Business
Combination Agreement, and (ii) the rights of the Members (as defined in the Business Combination
Agreement, including without limitation, pursuant to Sections 1.4(b), 1.4(c),
1.4(d), 1.5, 1.9 and 1.10 of the Business Combination Agreement,
including the Members’ right to receive such Contingency Consideration, but in no event shall
anything contained in this Agreement or any of the Transaction Documents create for the benefit of
Executive any right, entitlement or privilege to receive Contingent Securities that is superior to
a Member’s right (except as waived) to receive Contingency Consideration pursuant to the terms and
condition set forth in the Business Combination Agreement; provided, that in no event shall
any Member’s waiver of, or failure to exercise, his, her or its rights under the Business
Combination or consent to an amendment, supplement or modification of the Business Combination
Agreement after the date hereof in any way affect the Executive’s right to receive the Contingent
Securities pursuant to this Agreement, unless the Executive provides his prior written consent to
such waiver, amendment, supplement or modification, as applicable.
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3. Representations and Warranties of the Executive. In connection with the issuance
of the Executive Securities hereunder, the Executive represents and warrants to the Company and
Crumbs that:
(a) Authorization of Transaction Documents. This Agreement and the other Transaction
Documents to which the Executive is a party have been duly executed and delivered by the Executive
and (assuming the due authorization, execution and delivery by the Company, Crumbs and the other
parties thereto, as the case may be), this Agreement and the other Transaction Documents to which
the Executive is a party constitute the legal, valid and binding obligations of the Executive,
enforceable against the Executive in accordance with their respective terms, subject to applicable
bankruptcy, insolvency, reorganization, moratorium and similar Laws affecting creditors’ rights and
remedies generally, and subject, as to enforceability, to general principles of equity (regardless
of whether enforcement is sought in a proceeding at Law or in equity).
(b) Conflicts; Consents of Third Parties.
(i) None of the execution and delivery by the Executive of this Agreement or the other
Transaction Documents to which the Executive is a party, the consummation of the
transactions contemplated hereby or thereby, or compliance by the Executive with any of the
provisions hereof or thereof, will conflict with, result in any violation of or default
(with or without notice or lapse of time, or both) under, give rise to a right of
termination or cancellation under, require a consent or waiver under, require the payment of
a penalty or increased liabilities or fees or the loss of a benefit under or result in the
imposition of any lien under, any provision of (i) any contract or permit to which the
Executive is a party or by which any of the properties or assets of the Executive are bound;
(ii) any Order applicable to the Executive or by which any of the properties or assets of
the Executive are bound; or (iii) any applicable Law.
(ii) No consent, waiver, approval, Order, permit or authorization of, or declaration or
filing with, or notification to, any Governmental Authority is required on the part of the
Executive in connection with the execution and delivery of this Agreement or the other
Transaction Documents to which the Executive is a party or the compliance by the Executive
with any of the provisions hereof or thereof, or the consummation of the transactions
contemplated hereby or thereby.
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(c) Securities Law Matters.
(i) The Executive Securities to be received by the Executive will be acquired by the
Executive for investment only for the Executive’s own account, not as a nominee or agent,
and not with a view to the transfer, sale or distribution of any part thereof in violation
of applicable U.S. federal or state or foreign securities Laws.
(ii) The Executive understands that the offer and sale of the Executive Securities has
not been registered under the Securities Act or any applicable U.S. state or foreign
securities Laws, and that the Executive Securities are being issued in reliance on an
exemption from registration, which exemption depends upon, among other things, the
bona fide nature of the investment intent and the accuracy of the Executive’s
representations as expressed herein.
(iii) The Executive has such knowledge and experience in financial and business matters
as to be capable of evaluating the merits and risks of the Executive’s receipt of the
Executive Securities. The Executive is a sophisticated investor, has relied upon
independent investigations made by Executive and Executive’s representatives, and is making
an independent decision to receive the Executive Securities.
(iv) The Executive has had, prior to his acquisition of the Executive Securities, the
opportunity to ask questions of, and receive answers from, the Company and Crumbs concerning
the terms and conditions of the transactions contemplated hereby and the Executive’s
acquisition of the Executive Securities and to obtain additional information necessary to
verify the accuracy of any information furnished to the Executive.
(v) The Executive is an “accredited investor” as such term is defined in Rule 501 of
the Securities Act.
4. Representations and Warranties of the Company and Crumbs. In connection with the
issuance of the Executive Securities hereunder, each of the Company and Crumbs, severally and not
jointly, represents and warrants to the Executive that:
(a) Organization and Good Standing. The Company is a corporation duly incorporated,
validly existing and in good standing under the Laws of the State of Delaware and has all requisite
corporate power and authority to own, lease and operate its properties and carry on its business.
Crumbs is a limited liability company duly organized, validly existing and in good standing under
the Laws of the State of Delaware and has all requisite limited liability company power and
authority to own, lease and operate its properties and carry on its business.
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(b) Authorization of Transaction Documents. Each of the Company and Crumbs has all
requisite power and authority to execute and deliver this Agreement and the other Transaction
Documents to which the Company and/or Crumbs, as applicable, is a party, and to consummate the
transactions contemplated hereby and thereby. The execution and delivery of this Agreement and the
other Transaction Documents to which the Company and/or Crumbs, as applicable, is a party and the
consummation of the transactions contemplated hereby and thereby, have been duly authorized by all
requisite corporate or limited liability company action, as applicable, on behalf of the Company
and/or Crumbs, as the case may be. This Agreement and the other Transaction Documents to which the
Company and/or Crumbs, as applicable, is a party have been duly executed and delivered by each of
the Company and Crumbs, as applicable, and (assuming the due authorization, execution and delivery
by the Executive and the other parties thereto, as the case may be), this Agreement and the other
Transaction Documents to which the Company and/or Crumbs, as applicable, is a party constitutes the
legal, valid and binding obligations of the Company and/or Crumbs, as applicable, enforceable
against such Person in accordance with their respective terms, subject to applicable bankruptcy,
insolvency, reorganization, moratorium and similar Laws affecting creditors’ rights and remedies
generally,
and subject, as to enforceability, to general principles of equity (regardless of whether
enforcement is sought in a proceeding at Law or in equity).
(c) Conflicts; Consents of Third Parties.
(i) None of the execution and delivery by the Company and/or Crumbs of this Agreement
or the other Transaction Documents to which the Company and/or Crumbs, as applicable, is a
party, the consummation of the transactions contemplated hereby or thereby, or compliance by
the Company and/or Crumbs, as applicable, with any of the provisions hereof or thereof will
conflict with, result in any violation of or default (with or without notice or lapse of
time, or both) under, give rise to a right of termination or cancellation under, require a
consent or waiver under, require the payment of a penalty or increased liabilities or fees
or the loss of a benefit under or result in the imposition of any lien under, any provision
of (i) the organizational documents of the Companies; (ii) any contract or permit to which
the Companies or any of their respective Affiliates is a party or by which any of the
properties or assets of the Companies or any of their respective Affiliates are bound; (iii)
any Order applicable to the Companies or any of their respective Affiliates or by which any
of the properties or assets of the Companies or any of their respective Affiliates are
bound; or (iv) any applicable Law.
(ii) No consent, waiver, approval, Order, permit or authorization of, or declaration or
filing with, or notification to, any Governmental Authority is required on the part of the
Companies in connection with the execution and delivery of this Agreement or the other
Transaction Documents to which the Company and/or Crumbs, as applicable, is a party or the
compliance by the Company and/or Crumbs, as applicable, with any of the provisions hereof or
thereof, or the consummation of the transactions contemplated hereby or thereby.
(d) Issuance of Executive Securities.
(i) The shares of (i) Series A Preferred Stock and (ii) Class B Exchangeable Units to
be issued pursuant to this Agreement will be duly authorized, validly issued, fully paid and
non assessable, not subject to or issued in violation of any purchase option, right of first
refusal, preemptive right, subscription right or any similar right under any provision of
the DGCL or the DLLCA, the organizational documents of the Company or Crumbs or any contract
to which the Company or Crumbs is a party or by which the Company or Crumbs is bound and not
subject to preemptive rights created by statute, the organizational documents of the Company
or Crumbs or any agreement to which the Company or Crumbs is a party or is bound, other than
for the Business Combination Agreement (including any agreement entered into by the Company
or Crumbs in connection with the consummation of the transactions contemplated by the
Business Combination Agreement) or as set forth herein.
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(ii) Upon delivery of the (i) Series A Preferred Stock and (ii) Class B Exchangeable
Units pursuant to this Agreement, the Executive will have good title to such securities free
and clear of any restrictions on transfer, Encumbrances (other than
any restriction under the Securities Act, or any state “blue sky” securities Laws),
warrants, purchase rights, contracts, assignments, commitments, equities, claims and
demands, other than as set forth herein.
(iii) There are no registration rights (except as set forth in the Existing
Registration Rights Agreement), and there is no voting trust, proxy, rights plan,
anti-takeover plan or other contracts or understandings to which the Company or Crumbs is a
party or by which the Company or Crumbs is bound with respect to any of its capital stock or
equity interests, other than as set forth herein.
(e) Compliance with Laws. Neither the Company, Crumbs nor any of their respective
subsidiaries is in conflict with, or in default or violation of, nor has it received, from March 7,
2008 through the Grant Date, any written notice of any conflict with, or default or violation of,
any applicable Law by which it or any of its property or assets is bound or affected including,
without limitation, consumer protection, insurance or securities Laws.
5. Vesting of Granted Securities. The Granted Securities shall be subject to the
following terms and conditions:
(a) Fifty percent (50%) of the Class B Exchangeable Units that are Granted Securities (the
“First Class B Tranche”) and fifty percent (50%) of the shares of Series A Preferred Stock
that are Granted Securities (the “First Series A Tranche”) shall be fully vested as of the
Grant Date;
(b) Fifty percent (50%) of the Class B Exchangeable Units that are Granted Securities (the
“Second Class B Tranche”) and fifty percent (50%) of the shares of Series A Preferred Stock
that are Granted Securities (the “Second Series A Tranche”) shall vest on the one-year
anniversary of the Grant Date (the “One-Year Anniversary”) subject to the Executive
remaining employed with the Companies through the One-Year Anniversary; provided, that:
(i) upon the Executive’s termination of employment by the Company or Crumbs without
Cause (as defined in the Employment Agreement) or by the Executive for Good Reason (as
defined in the Employment Agreement) prior to the One-Year Anniversary, the Second Class B
Tranche and the Second Series A Tranche shall immediately become fully vested; and
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(ii) upon the Executive’s termination of employment with the Companies as a result of
death or Disability (as defined in the Employment Agreement) prior to the One-Year
Anniversary, a portion of the Second Class B Tranche and the Second Series A Tranche shall
immediately become vested (determined by multiplying the amount of Second Class B Tranche or
Second Series A Tranche, as applicable, by a fraction, the numerator of which is the number
of days from the Grant Date through the date of the Executive’s termination and the
denominator of which is 365).
(c) The Second Class B Tranche and the Second Series A Tranche shall immediately become fully
vested upon a “Change of Control” (as defined in the Employment Agreement) prior to the One-Year
Anniversary.
6. Lock-Up.
(a) Lock-up Period. The Executive hereby agrees that, without the prior written
consent of the Company and Crumbs, he: (i) will not, directly or indirectly, offer, sell, agree to
offer or sell, solicit offers to purchase, grant any call option or purchase any put option with
respect to, assign, transfer, pledge, borrow or otherwise dispose of, any Executive Securities
issued pursuant to this Agreement, including, without limitation, any Class B Exchangeable Units or
Series A Preferred Stock received pursuant to this Agreement or Common Stock issuable upon the
exchange thereof (such shares or securities, collectively, the “Lock-up Shares”); (ii) will
not establish or increase any “put equivalent position” or liquidate or decrease any “call
equivalent position” (in each case within the meaning of Section 16 of the Securities Exchange Act
of 1934, as amended, and the rules and regulations promulgated thereunder) with respect to any
Lock-up Shares, or otherwise enter into any swap, derivative or other transaction or arrangement
that transfers to another, in whole or in part, any economic consequence of ownership of any
Lock-up Shares, whether or not such transaction is to be settled by delivery of Lock-up Shares,
other securities, cash or other consideration; or (iii) will not engage in any short selling of any
Lock-up Shares, in each case, for a period commencing on the Grant Date and ending on the earlier
to occur of (i) the first (1st) anniversary of the Grant Date and (ii) the Executive’s termination
of employment by the Company and/or Crumbs without Cause (as defined in the Employment Agreement)
or by the Executive for Good Reason (as defined in the Employment Agreement) (the “Lock-up
Period”). Notwithstanding anything in this Section 6(a) to the contrary, the Executive
may exercise any rights under the Executive Registration Rights Agreement; provided,
however, that no sale of Lock-up Shares by the Executive shall be permitted during the
Lock-up Period. Nothing in this Agreement shall prevent the Executive from making any exchange
permitted by the Exchange and Support Agreement.
(b) Transfer Agent Instructions. The Executive hereby authorizes the Company and/or
Crumbs during the Lock-up Period to cause any transfer agent for the Lock-up Shares to decline to
transfer, and to note stop transfer restrictions on the stock register and other records relating
to, Lock-up Shares for which the Executive is the record holder and, in the case of Lock-up Shares
for which the Executive is the beneficial but not the record holder, agrees during the Lock-Up
Period to cause the record holder to cause the relevant transfer agent to decline to transfer, and
to note stop transfer restrictions on the stock register and other records relating to, such
Lock-up Shares, if such transfer would constitute a violation or breach of this Agreement.
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(c) Permitted Transfer. Notwithstanding the foregoing, the Executive may sell or
otherwise transfer Lock-up Shares (i) to immediate family members (including spouses, significant
others, lineal descendants, brothers and sisters), (ii) a family trust, foundation or partnership
established for the exclusive benefit of the Executive, (iii) a charitable foundation controlled by
the Executive or any of his immediate family members or (iv) by will or intestacy to any immediate
family or to a trust, the beneficiaries of which are exclusively the Executive, a member or members
of his immediate family or a charitable foundation controlled by any such persons;
provided, in each such case that the transferee thereof agrees to be bound by the
restrictions set forth herein.
7. Glossary.
(a) Defined Terms. For purpose of this Agreement, the following capitalized terms
have the following meanings:
(i) “Business Combination Agreement” means that certain Business Combination
Agreement, dated as of January 9, 2011, as amended on each of February 18, 2011, March 17,
2011 and April 7, 2011, by and among the Company, 00xx Xxxxxx Merger Sub LLC, a Delaware
limited liability company, Crumbs, the members of Crumbs set forth on the signature pages
thereto, and the representatives of Crumbs and the Members.
(ii) “Employment Agreement” means that certain Employment Agreement, dated as
of the date hereof, by and among the Company, Crumbs and the Executive, as amended or
supplemented from time to time.
(iii) “Exchange and Support Agreement” means that certain Exchange and Support
Agreement, dated as of May 5, 2011, by and among the Company, Crumbs and the Persons set
forth on the signature pages thereof and their Permitted Transferees (as defined therein).
(iv) “Exchange Agreement Joinder” means that certain Accession Agreement to the
Exchange and Support Agreement, dated as of the date hereof, by and among the Company,
Crumbs and the Executive.
(v) “Executive Registration Rights Agreement” means that certain Registration
Rights Agreement, dated as of the date hereof, by and among the Company and the Executive.
(vi) “Existing Registration Rights Agreement” means that certain Registration
Rights Agreement, dated as of May 5, 2011, by and among the Company, the Member Holders, the
Underwriter Holders, the Sponsor and the Expense Holders (each as defined therein).
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(vii) “Tax Receivable Agreement” means that certain Tax Receivables Agreement,
dated as May 5, 2011, by and among the Company, Crumbs and each of the other parties thereto
identified as “Members” therein.
(viii) “Tax Receivable Agreement Joinder” means that certain Joinder Agreement
to the Tax Receivable Agreement, dated as of the date hereof, by and among the Company,
Crumbs and the Executive.
(ix) “Transaction Documents” means the Employment Agreement, this Agreement,
the Executive Registration Rights Agreement, the Tax Receivable Agreement Joinder, the
Exchange Agreement Joinder and the LLC Agreement Joinder.
(b) Other Capitalized Terms. Capitalized terms used and not otherwise defined herein
are defined in the Business Combination Agreement and shall have the meanings given to such terms
in the Business Combination Agreement.
8. Miscellaneous.
(a) Fair Market Value. With respect to the Executive Securities, each of the Parties
agrees that the aggregate fair market value for one Class B Exchangeable Unit and 0.1 shares of
Series A Preferred Stock shall equal the closing or last reported price on NASDAQ of a share of
Common Stock for the date of grant (as reported by Bloomberg L.P. or a similar organization or
agency succeeding to its functions of reporting prices).
(b) Notices. Any notices or communication given by any Party hereto to the other
Party shall be given in accordance with section 8 (“Notices”) of the Employment Agreement.
(c) Entire Agreement. This Agreement and the other Transaction Documents contains the
entire understanding of the Parties in respect of its subject matter and supersedes all prior oral
and written agreements and understandings between the Parties with respect to such subject matter.
(d) Amendment; Waiver. This Agreement may not be amended, supplemented, canceled or
discharged, except by written instrument executed by the Executive and the Companies. No failure to
exercise, and no delay in exercising, any right, power or privilege hereunder shall operate as a
waiver thereof. No waiver of any preceding breach of this Agreement shall operate as a waiver of a
succeeding breach of this Agreement.
(e) Binding Effect; Assignment. The rights and obligations of the Companies under
this Agreement shall bind and inure to the benefit of any successor or successors of the Companies
by reorganization, merger or consolidation, or any assignee of all or substantially all of the
business and properties of the Companies. The rights or obligations of the Executive under this
Agreement shall bind and inure to the benefit of the Executive, his heirs, personal representatives
and assigns.
(f) Headings. The headings contained in this Agreement are for reference purposes
only and shall not affect the meaning or interpretation of this Agreement.
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(g) Governing Law; Interpretation. This Agreement shall be governed and construed in
accordance with the Laws of the State of New York, without regard to conflicts of laws doctrines.
Any action, suit, proceeding, claim, dispute or controversy concerning this Agreement or the
subject matter thereof shall be brought in the courts of the State of New York, in New York County,
or in the federal courts of the United States within the State and County of New York, to the
exclusive jurisdiction of which courts the Parties hereto hereby agree. Any service of process in
any such action, suit, proceeding, claim, dispute or controversy shall be by delivering the same or
by mailing the same (by registered or certified mail, return receipt requested) to the relevant
addresses set forth in section 9 of the Employment Agreement or to such other addresses as may have
been designated in writing.
(h) Further Assurances. The Companies and the Executive each agree, at any time and
from time to time, to execute, acknowledge, deliver and perform, and/or cause to be executed,
acknowledged, delivered and performed, all such further acts, deeds, assignments, transfers,
conveyances, powers of attorney and/or assurances as may be necessary, and/or proper to carry out
the provisions and/or intent of this Agreement.
(i) Severability. The Companies and the Executive each acknowledge that the terms of
this Agreement are fair and reasonable at the date signed by them. However, in light of the
possibility of a change of conditions or of differing interpretations by a court of what is fair
and reasonable, the Companies and the Executive stipulate as follows: if any one or more of the
terms, provisions, covenants and restrictions of this Agreement shall be determined by a court of
competent jurisdiction to be invalid, void or unenforceable, the remainder of the terms,
provisions, covenants and restrictions of this Agreement shall remain in full force and effect and
shall in no way be affected, impaired or invalidated; further, if any one or more of the provisions
contained in this Agreement shall for any reason be determined by a court of competent jurisdiction
to be excessively broad as to duration, geographical scope, activity or subject, it shall be
construed, by limiting or reducing it, so as to be enforceable to the extent compatible with then
applicable Law.
(j) Counterparts. This Agreement may be executed in one or more counterparts, each of
which shall be deemed an original, and all of which taken together shall constitute a single
agreement.
[Remainder of Page Intentionally Left Blank]
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IN WITNESS WHEREOF, the Parties have executed this Securities Grant Agreement on the date
first written above.
| CRUMBS BAKE SHOP, INC. | ||||||
| By: | /s/ Xxxx X. Ireland
|
|||||
| Title: CFO | ||||||
| CRUMBS HOLDINGS LLC | ||||||
| By: | /s/ Xxxx X. Ireland
|
|||||
| Title: CFO | ||||||
| EXECUTIVE: | ||||||
| /s/ Xxxxxx X. Xxxxxx | ||||||
| Xxxxxx X. Xxxxxx | ||||||
[SIGNATURE PAGE TO SECURITIES GRANT AGREEMENT]
Exhibit A
November ___, 2011
PROTECTIVE ELECTION TO INCLUDE SECURITIES
IN GROSS INCOME PURSUANT TO
SECTION 83(b) OF THE INTERNAL REVENUE CODE
IN GROSS INCOME PURSUANT TO
SECTION 83(b) OF THE INTERNAL REVENUE CODE
On November [_____], 2011 (the “Grant Date”), the undersigned acquired 799,000 shares of
Series A Voting Preferred Stock, par value $0.0001 per share (the “Series A Preferred
Stock”), of Crumbs Bake Shop, Inc., a Delaware corporation (the “Company”), and 79,900
New Crumbs Class B Exchangeable Units (the “Class B Exchangeable Units”, and together with
the Series A Preferred Stock, the “Acquired Securities”) of Crumbs Holdings, LLC, a
Delaware limited liability company (“Crumbs”), subject to certain vesting requirements and
forfeiture provisions.
Pursuant to §83(b) of the Internal Revenue Code (the “Code”) and Treasury Regulation
§1.83-2 promulgated thereunder, the undersigned hereby makes an election, with respect to the
Acquired Securities, to report as taxable income for the calendar year 2011 the excess (if any) of
the value of the Acquired Securities on the Grant Date, over the purchase price thereof.
The following information is supplied in accordance with Treasury Regulation § 1.83-2(e):
1. The name, address and social security number of the undersigned:
Xxxxxx X. Xxxxxx
0000 Xxxxxxxxxx Xxx
Xxxxxxxxxx, Xxxxxxx 00000
SSN: _____
0000 Xxxxxxxxxx Xxx
Xxxxxxxxxx, Xxxxxxx 00000
SSN: _____
2. A description of the property with respect to which the election is being made: 39,950 shares of
Series A Preferred Stock and 399,500 Class B Exchangeable Units.
3. The date on which the Acquired Securities were transferred: November [_____], 2011. The taxable
year for which such election is made: 2011.
4. The restrictions to which the property is subject: Service-based vesting.
5. The fair market value on the Grant Date of the property with respect to which the election is
being made, determined without regard to any lapse restrictions: $[_____].
6. The amount paid or to be paid for such property: $0.00.
* * * * *
A-1
A copy of this election is being furnished to the Company and Crumbs pursuant to Treasury
Regulation § 1.83-2(e)(7). A copy of this election will be submitted with the 2011 federal income
tax return of the undersigned pursuant to Treasury Regulation § 1.83-2(c).
Dated: November [__], 2011
A-2
