Document:

ex10-1.htm

EXHIBIT 10.1

 

2001 LONG TERM INCENTIVE
AND
STOCK OPTION PLAN

Table of Contents

 

Page

 

	
1.
	
Purpose of Plan
	
2

	 	 	 
	
2.
	
Stock Subject to Plan
	
2

	 	 	 
	
3.
	
Administration of Plan
	
2

	 	 	 
	
4.
	
Eligibility
	
3

	 	 	 
	
5.
	
Price
	
4

	 	 	 
	
6.
	
Term
	
4

	 	 	 
	
7.
	
Exercise of Option or Award
	
4

	 	 	 
	
8.
	
Additional Restrictions
	
4

	 	 	 
	
9.
	
Alternative Stock Appreciation Rights
	
4

	 	 	 
	
10.
	
Ten Percent Shareholder Rule
	
5

	 	 	 
	
11.
	
Non-Transferability
	
5

	 	 	 
	
12.
	
Restricted Stock Awards
	
5

	 	 	 
	
13.
	
Performance Awards
	
6

	 	 	 
	
14.
	
Dilution or Other Adjustments
	
7

	 	 	 
	
15.
	
Amendment or Discontinuance of Plan
	
7

	 	 	 
	
16.
	
Time of Granting
	
7

	 	 	 
	
17.
	
Income Tax Withholding and Tax Bonuses
	
7

	 	 	 
	
18.
	
Effective Date and Termination of Plan
	
7

 

 

1

 

 

2001 LONG-TERM INCENTIVE
AND
STOCK OPTION PLAN

 

Purpose of Plan

This Plan shall be known as the "BAB, INC. 2001 LONG-TERM INCENTIVE AND STOCK OPTION PLAN" and is hereinafter referred to as the "Plan". The purpose of the Plan is to aid in maintaining and developing personnel capable of assuring the future success of BAB, Inc., a Delaware corporation (the "Company"), to offer such personnel additional incentives to put forth maximum efforts for the success of the business, and to afford them an opportunity to acquire a proprietary interest in the Company through stock options and other long-term incentive awards as provided herein. Options granted under this Plan may be either incentive stock options ("Incentive Stock Options") within the meaning of Section 422 of the Internal Revenue Code of 1986 (the "Code"), or options, which do not qualify as Incentive Stock Options. Awards granted under this Plan shall be stock appreciation rights ("SARs"), restricted stock or performance awards as hereinafter described.

 

Stock Subject to Plan

Subject to the provisions of Section 14 hereof, the stock to be subject to options or other awards under the Plan shall be the Company's authorized Common Stock, no par value (the "Common Shares"). Such shares may be either authorized but unissued shares, or issued shares, which have been reacquired by the Company. Subject to adjustment as provided in Section 14 hereof, the maximum number of shares on which options may be exercised or other award issued under this Plan shall be 275,000 Common Shares. If an option or award under the Plan expires, or for any reason is terminated or unexercised with respect to any shares, such shares shall again be available for options or awards thereafter granted during the term of the Plan.

 

Administration of Plan

Except as provided in Section 3(b) hereof, the Plan shall be administered by the Board of Directors of the Company or a committee thereof. The members of any such committee shall be appointed by and serve at the pleasure of the Board of Directors. If no committee is appointed by the Board, the committee shall be comprised of all of the members of the Board of Directors. (The group administering the Plan shall hereinafter be referred to as the "Committee".)

 

Notwithstanding, Section 3(a) hereof, all option grants and awards under this Plan to officers, directors and others who are subject to Section 16 under the Securities Exchange Act of 1934, as amended (the "1934 Act"), and the rules and regulations of the Securities and Exchange Commission promulgated there under (the "Section 16 Regulations"), shall be made exclusively by a committee (the "Disinterested Committee") comprised of at least two members of the Board of Directors who qualify as "disinterested" plan administrators under the Section 16 Regulations, or whose administration otherwise qualifies transactions under the Plan as exempt from Section 16(b) of the 1934 Act. All references hereinafter to the "Committee" shall mean the "Disinterested Committee" if the action to be taken in administration of the Plan must be taken by the Disinterested Committee.

 

 

2

 

 

The Committee shall have plenary authority in its discretion, but subject to the express provisions of the Plan: (i) to determine the purchase price of the Common Stock covered by each option or award, (ii) to determine the persons to whom and the time or times at which such options and awards shall be granted and the number of shares to be subject to each, (iii) to determine the form of payment to be made upon the exercise of an SAR or in connection with performance awards, either cash, Common Shares of the Company or a combination thereof, (iv) to determine the terms of exercise of each option and award, (v) to accelerate the time at which all or any part of an option or award may be exercised, (vi) to amend or modify the terms of any option or award with the consent of the optionee, (vii) to interpret the Plan, (viii) to prescribe, amend and rescind rules and regulations relating to the Plan, (ix) to determine the terms and provisions of each option and award agreement under the Plan (which agreements need not be identical), including the designation of those options intended to be Incentive Stock Options, and (x) to make all other determinations necessary or advisable for the administration of the Plan, subject to the exclusive authority of the Board of Directors under Section 15 herein to amend or terminate the Plan. The Committee's determinations on the foregoing matters, unless otherwise disapproved by the Board of Directors of the Company, shall be final and conclusive.

 

The Committee may select one of its members as its Chairman and shall hold its meetings at such times and places as it may determine. A majority of its members shall constitute a quorum. All determinations of the Committee shall be made by not less than a majority of its members. Any decision or determination reduces to writing and signed by all of the members of the Committee shall be fully effective as if it had been made by a majority vote at a meeting duly called and held. The grant of an option or award shall be effective only if a written agreement shall have been duly executed and delivered by and on behalf of the Company following such grant. The Committee may appoint a Secretary and may make such rules and regulations for the conduct of its business, as it shall deem advisable.

 

Eligibility

Incentive Stock Options may only be granted under this Plan to any full or part-time employee (which term as used herein includes, but is not limited to, officers and directors who are also employees) of the Company and of its present and future subsidiary corporations (herein called "subsidiaries"). Full or part-time employees, non-employee members of the Board of Directors, and non-employee consultants, agents or independent contractors to the Company or one of its subsidiaries shall be eligible to receive options which do not qualify as Incentive Stock Options and awards; provided, however, that members of the Disinterested Committee shall not be eligible for any option grant or award under the Plan while serving on said Disinterested Committee. In determining the persons to whom options and awards shall be granted and the number of shares subject to each, the Committee may take into account the nature of services rendered by the respective employees or consultants, their present and potential contributions to the success of the Company and such other factors as the Committee in its discretion shall deem relevant. A person who has been granted an option or award under this Plan may be granted additional options or awards under the Plan if the Committee shall so determine; provided, however, that for Incentive Stock Options, to the extent the aggregate fair market value (determined at the time the Incentive Stock Option is granted) of the Common Shares with respect to which all Incentive Stock Options are exercisable for the first time by an employee during any calendar year (under all plans described in subsection (d) of Section 422 of the Code of his employer corporation and its parent and subsidiary corporations) exceeds $100,000, such options shall be treated as options which do not qualify as Incentive Stock Options. Nothing in the Plan or in any agreement there under shall confer on any employee any right to continue in the employ of the Company or any of its subsidiaries or affect, in any way, the right of the Company or any of its subsidiaries to terminate his or her employment at the time.

 

 

3

 

  

Price

The option price for all Incentive Stock Options granted under the Plan shall be determined by the Committee but shall not be less than 100% of the fair market value of the Common Shares at the date of grant of such option. The option price for options granted under the Plan, which does not qualify as Incentive Stock Options, and, if applicable, the price for all awards shall also be determined by the Committee and may be other than 100% of the fair market value of the Common Shares. For purposes of the preceding sentence and for all other valuation purposes under the Plan, the fair market value of the Common Shares shall be as reasonably determined by the Committee. If on the date of grant of any option or award hereunder the Common Shares are not traded on an established securities market, the Committee shall make a good faith attempt to satisfy the requirements of this Section 5 and in connection therewith shall take such action as it deems necessary or advisable.

 

Term

Each option and award and all rights and obligations there under shall expire on the date determined by the Committee and specified in the option or award agreement. The Committee shall be under no duty to provide terms of like duration for options or awards granted under the Plan, but the term of an Incentive Stock Option may not extend more than ten (10) years from the date of grant of such option and the term of options granted under the Plan which do not qualify as Incentive Stock Options may not extend more than fifteen (15) years from the date of granting of such option.

 

Exercise of Option or Award

The Committee shall have full and complete authority to determine whether an option or award will be exercisable in full at any time or from time to time during the term thereof, or to provide for the exercise thereof in such installments, upon the occurrence of such events (such as termination of employment for any reason) and at such times during the term of the option as the Committee may determine and specify in the option or award agreement.

 

The exercise of any option or award granted hereunder shall only be effective at such time that the sale of Common Shares pursuant to such exercise will not violate any state or federal securities or other laws.

An optionee or grantee electing to exercise an option or award shall give written notice to the Company of such election and of the number of shares subject to such exercise. The full purchase price of such shares shall be tendered with such notice of exercise. Payment shall be made to the Company in cash (including bank check, certified check, personal check, or money order), or, at the discretion of the Committee and as specified by the Committee, (i) by delivering certificates for the Company's Common Shares already owned by the optionee or grantee having a fair market value as of the date of grant equal to the full purchase price of the shares or (ii) a combination of cash and such shares. The fair market value of such tendered shares shall be determined as provided in Section 5 herein. Until such person has been issued the shares subject to such exercise, he or she shall possess no rights as a shareholder with respect to such shares.

 

Additional Restrictions

The Committee shall have full and complete authority to determine whether all or any part of the Common Shares of the Company acquired upon exercise of any of the options or awards granted under the Plan shall be subject to restrictions on the transferability thereof or any other restrictions affecting in any manner the optionee's or grantee's rights with respect thereto, but any such restriction shall be contained in the agreement relating to such options or awards.

 

Alternative Stock Appreciation Rights

Grant. At the time of grant of an option or award under the Plan (or at any other time), the Committee, in its discretion, may grant a Stock Appreciation Right ("SAR") evidenced by an agreement in such form as the Committee shall from time to time approve. Any such SAR may be subject to restrictions on the exercise thereof as may be set forth in the agreement representing such SAR which agreement shall comply with and be subject to the following terms and conditions and any additional terms and conditions established by the Committee that are consistent with the terms of the Plan.

 

 

4

 

 

Exercise. An SAR shall be exercised by the delivery to the Company of a written notice which shall state that the holder thereof elects to exercise his or her SAR as to the number of shares specified in the notice and which shall further state what portion, if any, of the SAR exercise amount (hereinafter defined) the holder thereof requests be paid to in cash and what portion, if any, is to be paid in Common Shares of the Company. The Committee promptly shall cause to be paid to such holder the SAR exercise amount either in cash, in Common Shares of the Company, or any combination of cash and shares as the Committee may determine. Such determination may be either in accordance with the request made by the holder of the SAR or in the sole and absolute discretion of the Committee. The SAR exercise amount is the excess of the fair market value of one share of the Company's Common Shares on the date of exercise over the per share exercise price in respect of which the SAR was granted, multiplied by the number of shares as to which the SAR is exercised. For the purposes hereof, the fair market value of the Company's shares shall be determined as provided in Section 5 herein.

 

Ten Percent Shareholder Rule

Notwithstanding any other provision in the Plan, if at the time an option is granted pursuant to the Plan the optionee owns directly or indirectly (within the meaning of Section 425(d) of the Code) Common Shares of the Company possessing more than ten percent (10%) of the total combined voting, power of all classes of stock of the Company or its parent or subsidiary corporations, if any (within the meaning, of Section 422(b)(6) of the Code), then any Incentive Stock Option to be granted to such optionee pursuant to the Plan shall satisfy the requirements of Section 422(c)(6) of the Code, and the option price shall be not less than 110% of the fair market value of the Common Shares of the Company determined as described herein, and such option by its terms shall not be exercisable after the expiration of five (5) years from the date such option is granted.

 

Non-Transferability

Except as otherwise provided in an option or award agreement, no option or award granted under the Plan shall be transferable by an optionee or grantee, otherwise than by will or the laws of descent or distribution, and during the lifetime of an optionee or grantee, the option shall be exercisable only by such optionee or grantee.

 

Restricted Stock Awards

The Committee may grant awards of Common Shares subject to forfeiture and transfer restrictions. Any restricted stock award shall be evidenced by an agreement in such form as the Committee shall from time to time approve, which agreement shall comply with and be subject to the following terms and conditions and any additional terms and conditions established by the Committee that are consistent with the terms of the Plan:

 

 

5

 

 

Grant of Restricted Stock Awards. Each restricted stock award made under the Plan shall be for such number of Common Shares as shall be determined by the Committee and set forth in the agreement containing the terms of such restricted stock award. Such agreement shall set forth a period of time during which the grantee must remain in the continuous employment of the Company in order for the forfeiture and transfer restrictions to lapse. If the Committee so determines, the restrictions may lapse during such restricted period in installments with respect to specified portions of the shares covered by the restricted stock award. The agreement may also, in the discretion of the Committee, set forth performance or other conditions that will subject the Common Shares to forfeiture and transfer restrictions. The Committee may, at its discretion, waive all or any part of the restrictions applicable to any or all outstanding restricted stock awards.

 

Delivery of Common Shares and Restrictions. At the time of a restricted stock award, a certificate representing the number of Common Shares awarded there under shall be registered in the name of the grantee. Such certificate shall be held by the Company or any custodian appointed by the Company for the account of the grantee subject to the terms and conditions of the Plan, and shall bear such a legend setting forth the restrictions imposed thereon as the Committee, in its discretion, may determine. The grantee shall have all rights of a shareholder with respect to the Common Shares, including the right to receive dividends and the right to vote such shares, subject to the following restrictions: (i) the grantee shall not be entitled to delivery of the stock certificate until the expiration of the restricted period and the fulfillment of any other restrictive conditions set forth in the restricted stock agreement with respect to such Common Shares; (ii) none of the Common Shares may be sold, assigned, transferred, pledged, hypothecated or otherwise encumbered or disposed of during such restricted period or until after the fulfillment of any such other restrictive conditions; and (iii) except as otherwise determined by the Committee, all of the Common Shares shall be forfeited and all rights of the grantee to such Common Shares shall terminate, without further obligation on the part of the Company, unless the grantee remains in the continuous employment of the Company for the entire restricted period in relation to which such Common Shares were granted and unless any other restrictive conditions relating to the restricted stock award are met. Any Common Shares, any other securities of the Company and any other property (except for cash dividends) distributed with respect to the Common Shares subject to restricted stock awards shall be subject to the same restrictions, terms and conditions as such restricted Common Shares.

 

Termination of Restrictions. At the end of the restricted period and provided that any other restrictive conditions of the restricted stock award are met, or at such earlier time as otherwise determined by the Committee, all restrictions set forth in the agreement relating, to the restricted stock award or in the Plan shall lapse as to the restricted Common Shares subject thereto, and a stock certificate for the appropriate number of Common Shares, free of the restrictions and the restricted stock legend, shall be delivered to the grantee or his beneficiary or estate, as the case may be.

 

Performance Awards

The Committee is further authorized to grant Performance awards. Subject to the terms of this Plan and any applicable award agreement, a Performance award granted under the Plan (i) may be denominated or payable in cash, Common Shares of the Company (including, without limitation. restricted stock), other securities, other awards, or other property and (ii) shall confer on the holder thereof rights valued as determined by the Committee, in its discretion, and payable to, or exercisable by, the holder of the Performance awards, in whole or in part, upon the achievement of such performance goals during such performance periods as the Committee, in its discretion, shall establish. Subject to the terms of this Plan and any applicable award agreement, the performance goals to be achieved during any performance period, the length of any performance period, the amount of any Performance award granted, and the amount of any payment or transfer to be made by the Company under any Performance award shall be determined by the Committee.

 

 

6

 

 

Dilution or Other Adjustments

If there shall be any change in the Common Shares through merger, consolidation, reorganization, recapitalization, dividend in the form of stock (of whatever amount), stock split or other change in the corporate structure, appropriate adjustments in the Plan and outstanding options and awards shall be made by the Committee. In the event of any such changes, adjustments shall include, where appropriate, changes in the aggregate number of shares subject to the Plan, the number of shares and the price per share subject to outstanding options and awards and the amount payable upon exercise of outstanding awards, in order to prevent dilution or enlargement of option or award rights.

 

Amendment or Discontinuance of Plan

The Board of Directors may amend or discontinue at any time. Subject to the provisions of Section 14 no amendment of the Plan, however, shall without shareholder approval: (i) increase the maximum number of shares under the Plan as provided in Section 2 herein, (ii) decrease the minimum price provided in Section 5 herein, (iii) extend the maximum term under Section 6, or (iv) modify the eligibility requirements for participation in the Plan. The Board of Directors shall not alter or impair any option or award theretofore granted under the Plan without the consent of the holder of the option or award.

 

Time of Granting

Nothing contained in the Plan or in any resolution adopted or to be adopted by the Board of Directors or by the shareholders of the Company, and no action taken by the Committee or the Board of Directors (other than the execution and delivery of an option or award agreement), shall constitute the granting of an option or award hereunder.

 

Income Tax Withholding and Tax Bonuses

In order to comply with all applicable federal or state income tax laws or regulations, the Company may take such action as it deems appropriate to ensure that all applicable federal or state payroll, withholding, income or other taxes, which are the sole and absolute responsibility of an optionee or grantee under the Plan, are withheld or collected from such optionee or grantee. In order to assist an optionee or grantee in paying all federal and state taxes to be withheld or collected upon exercise of an option or award which does not qualify as an Incentive Stock Option hereunder, the Committee, in its absolute discretion and subject to such additional terms and conditions as it may adopt, shall permit the optionee or grantee to satisfy such tax obligation by (i) electing to have the Company withhold a portion of the shares otherwise to be delivered upon exercise of such option or award with a fair market value, determined in accordance with Section 5 herein, equal to such taxes or (ii) delivering to the Company Common Shares other than the shares issuable upon exercise of such option or award with a fair market value, determined in accordance with Section 5, equal to such taxes.

 

The Committee shall have the authority, at the time of grant of an option under the Plan or at any time thereafter, to approve tax bonuses to designated optionee or grantees to be paid upon their exercise of options or awards granted hereunder. The Committee shall determine the amount of any such payment. The Committee shall have full authority in its absolute discretion to determine the amount of any such tax bonus and the terms and conditions affecting the vesting and payment thereafter.

 

Effective Date and Termination of Plan

The Board of Directors approved the Plan by unanimous action in writing, effective March 19, 2001 and by the shareholders of the Company by unanimous action in writing, effective May 25, 2001.

 

Unless the Plan shall have been discontinued as provided in Section 14 hereof, the Plan shall terminate May 25, 2011. No option or award may be granted after such termination, but termination of the Plan shall not, without the consent of the optionee or grantee, alter or impair any rights or obligations under any option or award theretofore granted.

 

 

7ex10-2.htm

Exhibit 10.2

 

THIS STOCK REDEMPTION AGREEMENT (the "Agreement") is made as of the 30th day of June, 2002, by and between BAB, Inc., a Delaware company ("Company"), and Bruno Guazzoni, an individual ("Guazzoni").

 

WHEREAS, Guazzoni owns 345,010 shares of common stock of the Company; and

 

WHEREAS, Guazzoni wishes to sell shares and Company wishes to purchase Guazzoni's shares of the Company.

 

THE COMPANY AND GUAZZONI HEREBY AGREE AS FOLLOWS:

 

1. Purchase and Sale; Purchase Price and Closing. The Company agrees to purchase and Guazzoni agrees to sell 345,010 shares of common stock of the Company (the "Shares") free and clear of any liens and encumbrances, for the aggregate purchase price in the amount equal to Five Hundred Twenty-Five Thousand and 00/100 Dollars ($525,000.00), payable in fifteen annual equal installments of Thirty-Five Thousand and 00/100 Dollars ($35,000.00), commencing on the first day of October, 2002, and the anniversary date thereafter until paid in full.

 

In lieu of its obligation to pay the amounts due under this Agreement, the Company may deliver to Guazzoni an annuity in the amount of the payments issued by a bank, financial institution or insurance company having its senior long term debt rated at least A by Moody's or equivalent rating service.

 

2.     Closing. The closing for redemption and the purchase and sale of the Shares (the

"Closing") shall be held at the offices of Wolin & Rosen, Ltd., 55 West Monroe Street, Suite

3600, Chicago, Illinois 60603, on July 1, 2002, at such time as the parties agree, or as the parties may otherwise agree.

 

 

3. Representations and Warranties of Guazzoni. Guazzoni hereby represents and warrants to the Company as follows:

 

(a) Access to Information. Guazzoni or Guazzoni's professional advisor has been granted the opportunity to ask questions of and receive answers from representatives of the Company, its officers, directors, employees and agents concerning the terms and conditions of the Company, and its business and prospects, and to obtain any additional information which Guazzoni or Guazzoni's professional advisor deems necessary to verify the accuracy and completeness of the information received.

 

(b) Reliance on Own Advisors. Guazzoni has relied completely on the advice of, or has consulted with, Guazzoni's own personal tax, investment, legal or other advisors and has not relied on the Company or any of its affiliates, officers, directors, attorneys, accountants or any affiliates of any thereof. The foregoing, however, does not limit or modify Guazzoni's right to rely upon representations and warranties of the Company in Section 5 of this Agreement.

 

 

 

 

 

(c) Capability to Evaluate. Guazzoni has such knowledge and experience in financial and business matters so as to enable Guazzoni to utilize the information made

 

available to him in connection with this Agreement in order to evaluate the merits and risks of selling shares of common stock of the Company, which are substantial.

 

(d) Due Diligence. Guazzoni, in making Guazzoni's investment decision to sell the Company common stock hereunder, represents that Guazzoni has received and had an opportunity to review the Company's books and records, including financial statements and such other information as deemed necessary. Guazzoni has had full access to all the information he considers necessary or appropriate to make an informed decision to sell.

 

(e) Investment Experience; Fend for Self.    Guazzoni has substantial experience in investing in securities and has made investments in securities other than those of the Company. Guazzoni acknowledges that Guazzoni is able to fend for Guazzoni's self in the transactions contemplated by this Agreement.

 

(f) Company Financial Status. Guazzoni acknowledges that the Company expects to report a profit for the second quarter recently ended and expects to remain profitable for the remaining quarters of the fiscal year 2002.

 

(g) Title to Shares. Guazzoni owns beneficially and of record the Shares and has good and valid title to the Shares, free and clear of any and all liens and that 345,010 shares is the total amount of shares of common stock beneficially and of record owned by Guazzoni in the Company. After the redemption, Guazzoni will not own or beneficially own any shares of common stock in the Company. Upon delivery to Company of the stock certificates representing the Company's Shares and payment therefore, the Company shall acquire good and valid title to such Shares, free and clear of all liens.

 

4.      Representations and Warranties of the Company. The Company hereby represents and warrants to Guazzoni that:

 

(a) Organization, Good Standing, and Qualification.    The Company is a corporation duly organized, validly existing, and in good standing under the laws of the State of Delaware and has all requisite power and authority to carry on its business as now conducted and as proposed to be conducted. The Company is not the subject of any pending, threatened or, to its knowledge, contemplated investigation or administrative or legal proceeding by the Internal Revenue Service, the taxing authorities of any state or local jurisdiction, or the Securities and Exchange Commission ("SEC"), or any state securities commission, or any other governmental entity, which have not been disclosed to Guazzoni. 

 

 

 

 

 

(b) Corporate Condition. The financial and statistical information of the Company and data are, in all material respects, accurately presented and prepared on a basis consistent with such financial statements and the books and records of the Company. Without limiting the foregoing, there are no material liabilities, contingent or actual, that are not disclosed (other than liabilities incurred by the Company in the ordinary course of its business, consistent with its past practice). The Company has paid all material taxes which are due, except for taxes which it reasonably disputes and which have been disclosed to Guazzoni. There is no material claim, litigation, or administrative proceeding pending, or, to the best of the Company's knowledge, threatened against the Company. This agreement does not contain any untrue statement of a material fact and does not omit to state any material fact required to be stated therein or herein necessary to make the statements contained therein or herein not misleading in the light of the circumstances under which they were made.

 

(c) Authorization. All action on the part of the Company by its officers and board of directors, necessary for the authorization, execution and delivery of this Agreement, the performance of all obligations of the Company hereunder has been taken, and this Agreement, constitutes the valid and legally binding obligations of the Company, enforceable in accordance with its terms, except insofar as the enforceability may be limited by applicable bankruptcy, insolvency, reorganization, or other similar laws affecting creditors' rights generally or by principles governing the availability of equitable remedies. The Company has obtained all consents and approvals required for it to execute, deliver and perform its obligations under this Agreement.

 

(d) Compliance with Other Instruments. The Company is not in violation or default of any provisions of its Articles of Incorporation or by-laws each as it may be amended and in effect on and as of the date of the Agreement or of any provision of any instrument or contract to which it is a party or by which it is bound or, to its knowledge, of any provision of any federal or state judgment, writ, decree, order, statute, rule or governmental regulation applicable to the Company, which would have a material adverse effect on the Company's business or prospects. There exists no condition that, with notice, the passage of time or otherwise, would constitute a default under any such instrument or contract, except where such a default would not have a material adverse effect. The execution, delivery and performance of this Agreement and the consummation of the transactions contemplated hereby will not result in any such violation or be in conflict with or constitute, with or without the passage of time and giving of notice, either a default under any such provision, instrument or contract or an event which results in the creation of any lien, charge or encumbrance upon any assets of the Company.

 

(e) No Proceedings. There are no legal or governmental proceedings pending or, to the knowledge of the Company, threatened to which the Company is a party or to which any of their respective property is subject that could reasonably be expected to result, singly or in the aggregate, in a material adverse effect.

 

 

 

 

 

5.      Miscellaneous.

 

5.1 Indemnification. Each party ("Indemnifying Party") to this Agreement agrees to indemnify, defend and hold harmless the other party ("Indemnified Party") to the fullest extent permitted by law from and against any and all losses, claims, or written threats thereof (including, without limitation, any claim by a third party), damages, expenses (including reasonable fees, disbursements and other charges of counsel incurred by the Indemnified Party in any action between the Indemnifying Party and the Indemnified Party or between the Indemnified Party and any third party or otherwise) (collectively, "Losses") resulting from or arising out of any breach of any representation or warranty, covenant or agreement by the Indemnifying Party in this Agreement.

 

                    5.2 Severability. In the event that any provision of this agreement becomes or is declared by a court of competent jurisdiction to be illegal, unenforceable or void, this Agreement shall continue in full force and effect without said provision; provided that no such severability shall be effective if it materially changes the economic benefit of this Agreement to any party. 

 

5.3 Successors and Assigns. The terms and conditions of this Agreement shall inure to the benefit of and be binding upon the respective successors and assigns of the parties. Nothing in this Agreement, express or implied, is intended to confer upon any party other than the parties hereto or their respective successors and assigns any rights, remedies, obligations, or liabilities under or by reason of this Agreement, except as expressly provided in this Agreement.

 

5.4 Governing Law. This Agreement shall be governed by and construed under the laws of the State of Illinois without regard to its conflict of laws rules or principles.

 

5.5 Execution in Counterparts Permitted. This Agreement may be executed in any number of counterparts, each of which shall be enforceable against the parties actually executing such counterparts, and all of which together shall constitute one (1) instrument.

 

5.6 Titles and Subtitles; Gender. The titles and subtitles used in this Agreement are used for convenience only and are not to be considered in construing or interpreting this Agreement. The use in this Agreement of a masculine, feminine or neither pronoun shall be deemed to include a reference to the others.

 

 

 

 

 

5.7 Written Notices, Etc. Any notice, demand or request required or permitted to be given by the Company or Guazzoni pursuant to the terms of this Agreement sh3ll be in writing and shall be deemed given when delivered personally, or by facsimile (with a hard copy to follow by two (2) day courier), addressed to the parties at the addresses and/or facsimile telephone number of the parties or such other address as a party may request by notifying the other in writing as follows:

 

	
If to Guazzoni:
	
Bruno Guazzoni

	  	
135 East 57th Street

	  	
15th Floor 

	  	
New York, NY 10022

	  	
Facsimile No.: 212/343-2121

	  	  
	
If to Company:
	
BAB, Inc.

	  	
8501 W. Higgins Road Suite 320

	  	
Chicago, IL 60631

	  	
Facsimile No.: 773/380-6183

	  	
Attention: Michael Murtaugh

	  	  
	
with a copy to:
	
Wolin & Rosen, Ltd.

	  	
55 West Monroe Street Suite 3600

	  	
Chicago, IL 60603

	  	
Facsimile No.: 312/424-0660

	  	
Attention: Charles J Mack

 

 

 

 

 

5.8 Expenses. Each of the Company and Guazzoni shall pay all costs and expenses that it respectively incurs, with respect to the negotiation, execution, delivery and performance of this Agreement.

 

5.9 Entire Agreement; Written Amendments Required. This Agreement, including the Exhibits and Schedules attached hereto and the other documents delivered pursuant hereto constitute the full and entire understanding and agreement between the parties with regard to the subjects hereof and thereof, and no party shall be liable or bound to any other party in any manner by any warranties, representations or covenants except as specifically set forth herein or therein. Except as expressly as provided herein, neither this Agreement nor any term hereof may be amended, waived, discharged or terminated other than by a written instrument signed by the party against whom enforcement of any such amendment, waiver, discharge or termination is sought.

 

5.10 Further Assurances. Each party shall do all such acts, and shall execute and deliver to the other all such certificates, instruments, assignments and other documents and shall do and perform or cause to be done all matters and such other things necessary or expedient to be done as either party may reasonable request from time to time in order to give full effect to this Agreement.

 

 

 

 

 

Interest Rate Stipulation

 

BAB, Inc., a Delaware Corporation. ("BAB") and Bruno Guazzoni ("Guazzoni") hereby enter into the following Interest Rate Stipulation ("Stipulation").

 

Whereas, BAB and Guazzoni have entered into a Stock Redemption Agreement dated June 30, 2002 whereby BAB acquired 345,010 shares of BAB, Inc. Stock formerly owned by Guazzoni; and

 

Whereas, due to the fact that the payment arrangements for the stock require a stipulation from the parties as to the interest rate applicable to the payments which are to be made; 

 

It is hereby stipulated that the interest rate applicable to the purchase of the Stock under the Stock Purchase Agreement shall be 4.75% and the amortization schedule for the Stock Redemption Agreement shall be as set forth on Exhibit A to this stipulation.

 

Agreed to:

 

	
 
	

 

 

 

 

  

BAB Inc.

 

Note Payable Schedule for Bruno Guazzoni

9/1/02 through 10/01/16

 

	 	
annual
	  	 
	 	
interest rate 
	
4.75%
	 
	 	  	  	 
	 	
$35,000 
	
15 payments
	 
	 	
$525,000 
	
Total
	 

 

	 	 	 	 	
Interest

Paid
	 	 	
Principal

Paid
	 	 	

Balance
	 	 	
shares purchased
	 	 	
price per share
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	385,531.17	 	 	 	345,010	 	 	 	1.1174	 
	 	 	
 
	 	 	0.00	 	 	 	0.00	 	 	 	385,531.17	 	 	 	 	 	 	 	 	 
	
1
	 	
10/1/02
	 	 	1,526.06	 	 	 	33,473.94	 	 	 	352,057.23	 	 	 	 	 	 	 	 	 
	
2
	 	
10/1/03
	 	 	16,722.72	 	 	 	18,277.28	 	 	 	333,779.95	 	 	 	 	 	 	 	 	 
	
3
	 	
10/1/04
	 	 	15,854.55	 	 	 	19,145.45	 	 	 	314,634.50	 	 	 	 	 	 	 	 	 
	
4
	 	
10/1/05
	 	 	14,945.14	 	 	 	20,054.86	 	 	 	294,579.64	 	 	 	 	 	 	 	 	 
	
5
	 	
10/1/06
	 	 	13,992.53	 	 	 	21,007.47	 	 	 	273,572.17	 	 	 	 	 	 	 	 	 
	
6
	 	
10/1/07
	 	 	12,994.68	 	 	 	22,005.32	 	 	 	251,566.85	 	 	 	 	 	 	 	 	 
	
7
	 	
10/1/08
	 	 	11,949.43	 	 	 	23,050.57	 	 	 	228,516.27	 	 	 	 	 	 	 	 	 
	
8
	 	
10/1/09
	 	 	10,854.52	 	 	 	24,145.48	 	 	 	204,370.79	 	 	 	 	 	 	 	 	 
	
9
	 	
10/1/10
	 	 	9,707.61	 	 	 	25,292.39	 	 	 	179,078.41	 	 	 	 	 	 	 	 	 
	
10
	 	
10/1/11
	 	 	8,506.22	 	 	 	26,493.78	 	 	 	152,584.63	 	 	 	 	 	 	 	 	 
	
11
	 	
10/1/12
	 	 	7,247.77	 	 	 	27,752.23	 	 	 	124,832.40	 	 	 	 	 	 	 	 	 
	
12
	 	
10/1/13
	 	 	5,929.54	 	 	 	29,070.46	 	 	 	95,761.94	 	 	 	 	 	 	 	 	 
	
13
	 	
10/1/14
	 	 	4,548.69	 	 	 	30,451.31	 	 	 	65,310.63	 	 	 	 	 	 	 	 	 
	
14
	 	
10/1/15
	 	 	3,102.26	 	 	 	31,897.74	 	 	 	33,412.89	 	 	 	 	 	 	 	 	 
	
15
	 	
10/1/16
	 	 	1,587.11	 	 	 	33,412.89	 	 	 	(0.00	)	 	 	 	 	 	 	 	 
	 	 	Total	 	 	139,469	 	 	 	385,531	 	 	 	525,000

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00248-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00248-of-00352.parquet"}]]