Document:

Exhibit 10.7

Exhibit 10.7

Execution Copy

INDEMNIFICATION AGREEMENT

THIS INDEMNIFICATION AGREEMENT (the “Agreement”) is made and entered into as of
November 14, 2011, by and among Crumbs Bake Shop, Inc., a Delaware corporation (the
“Company”), Crumbs Holdings LLC, a Delaware limited liability company and subsidiary of the
Company (“Crumbs”, and together with the Company, the “Companies”), and Julian R.
Geiger (“Indemnitee”). Capitalized terms not defined elsewhere in this Agreement are used
as defined in Section 13.

WHEREAS, highly competent persons have become more reluctant to serve corporations as
directors, managers or officers or in other capacities unless they are provided with adequate
protection through insurance or adequate indemnification against inordinate risks of claims and
actions against them arising out of their service to and activities on behalf of the corporation;

WHEREAS, each of the Board of Directors of the Company (the “Board of Directors”) and
the Board of Managers of Crumbs (the “Board of Managers”) has determined that, in order to
attract and retain qualified individuals, the Companies will attempt to maintain on an ongoing
basis, at their sole expense, liability insurance to protect persons serving the Companies and
their respective subsidiaries from certain liabilities. Although the furnishing of such insurance
has been a customary and widespread practice among United States-based corporations and other
business enterprises, each of the Company and Crumbs believes that, given current market conditions
and trends, such insurance may be available to it in the future only at higher premiums and with
more exclusions. At the same time, directors, managers, officers, and other persons in service to
corporations or business enterprises are being increasingly subjected to expensive and
time-consuming litigation relating to, among other things, matters that traditionally would have
been brought only against the Companies or business enterprise itself. Each of the certificate of
incorporation of the Company (as amended, the “Charter”) and the by-laws of the Company (as
amended, the “By-Laws”) requires indemnification of the officers and directors of the
Company and the Limited Liability Company Agreement of Crumbs (as amended, the “LLC
Agreement”) requires indemnification of the officers and managers of Crumbs. Indemnitee may
also be entitled to indemnification pursuant to the General Corporation Law of the State of
Delaware (“DGCL”) and the Delaware Limited Liability Company Act (“DLLCA”). The
Charter, the By-Laws, the LLC Agreement, the DGCL and the DLLCA expressly provide that the
indemnification provisions set forth therein are not exclusive, and thereby contemplate that
contracts may be entered into between (i) the Company and members of the Board of Directors,
officers and other persons with respect to indemnification and (ii) Crumbs and members of the Board
of Managers, officers and other persons with respect to indemnification;

WHEREAS, the uncertainties relating to such insurance and to indemnification have increased
the difficulty of attracting and retaining such persons;

WHEREAS, the Board of Directors has determined that the increased difficulty in attracting and
retaining such persons is detrimental to the best interests of the Company’s stockholders and that
the Company should act to assure such persons that there will be increased certainty of such
protection in the future and the Board of Managers has determined that the increased difficulty in
attracting and retaining such persons is detrimental to the best interests of Crumbs’ members and
that Crumbs should act to assure such persons that there will be increased certainty of such
protection in the future;

 

 

 

WHEREAS, it is reasonable, prudent and necessary for each of the Company and Crumbs to
contractually to obligate itself to indemnify, and to advance Expenses on behalf of, such persons
to the fullest extent permitted by applicable law so that they will serve or continue to serve the
Company and Crumbs, as applicable, and their respective subsidiaries free from undue concern that
they will not be so indemnified;

WHEREAS, this Agreement is a supplement to and in furtherance of (i) the Charter and By-Laws
of the Company and any resolutions of the Company adopted pursuant thereto and (ii) the LLC
Agreement of Crumbs and any resolutions of Crumbs adopted pursuant thereto, and this Agreement
shall not be deemed a substitute therefor, nor to diminish or abrogate any rights of Indemnitee
thereunder; and

WHEREAS, Indemnitee does not regard the protection available under the Company’s Charter and
By-Laws, Crumbs’ LLC Agreement and insurance as adequate in the present circumstances, and may not
be willing to serve as a director or officer of the Company or a manager or officer of Crumbs and
their respective subsidiaries without adequate protection, and each of the Company and Crumbs
desires Indemnitee to serve in such capacity. Indemnitee is willing to serve, continue to serve
and to take on additional service for or on behalf of the Company, Crumbs and their respective
subsidiaries on the condition that he be so indemnified.

NOW, THEREFORE, in consideration of Indemnitee’s agreement to serve as an officer and director
of the Company and an officer and manager of Crumbs, from and after the date hereof, the parties
hereto agree as follows:

1. Indemnity of Indemnitee. Notwithstanding anything to the contrary in this
Agreement, (i) excluding any Proceeding arising from or related to an Excluded Event, each of the
Company and Crumbs hereby agrees to hold harmless and indemnify Indemnitee to the fullest extent
permitted by law, as such may be amended from time to time, and (ii) all obligations of the Company
and Crumbs pursuant to this Agreement shall be joint and several. In furtherance of the foregoing
indemnification, and without limiting the generality thereof:

(a) Proceedings Other Than Proceedings by or in the Right of the Companies.
Indemnitee shall be entitled to the rights of indemnification provided in this Section l(a)
if, by reason of his Corporate Status, Indemnitee is, or is threatened to be made, a party to or
participant in any Proceeding other than a Proceeding by or in the right of the Company or Crumbs,
as applicable. Pursuant to this Section 1(a) and other than for any Proceeding arising
from or related to an Excluded Event, Indemnitee shall be indemnified against all Expenses,
judgments, penalties, fines and amounts paid in settlement actually and reasonably incurred by him,
or on his behalf, in connection with such Proceeding or any claim, issue or matter therein, if
Indemnitee acted in good faith and in a manner Indemnitee reasonably believed to be in or not
opposed to the best interests of the Company or Crumbs, as applicable, and with respect to any
criminal Proceeding, had no reasonable cause to believe Indemnitee’s conduct was unlawful.

(b) Proceedings by or in the Right of the Companies. Other than for any Proceeding
arising from or related to an Excluded Event, Indemnitee shall be entitled to the rights of
indemnification provided in this Section 1(b) if, by reason of his Corporate Status,
Indemnitee is, or is threatened to be made, a party to or participant in any Proceeding brought by
or in the right of the Company or Crumbs, as applicable. Pursuant to this Section 1(b) and
other than for any Proceeding arising from or related to an Excluded Event, Indemnitee shall be
indemnified against all Expenses actually and reasonably incurred by Indemnitee, or on Indemnitee’s
behalf, in connection with such Proceeding if Indemnitee acted in good faith and in a manner
Indemnitee reasonably believed to be in or not opposed to the best interests of the Company or
Crumbs, as applicable; provided, however, that if
applicable law so provides, no indemnification against such Expenses shall be made in respect
of any claim, issue or matter in such Proceeding as to which Indemnitee shall have been adjudged to
be liable to the Company or Crumbs, as applicable, unless and to the extent that the Court of
Chancery of the State of Delaware shall determine that such indemnification may be made.

 

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(c) Indemnification for Expenses of a Party Who is Wholly or Partly Successful. To
the extent that Indemnitee is, by reason of his Corporate Status, a party to and is successful, on
the merits or otherwise, in any Proceeding other than for any Proceeding arising from or related to
an Excluded Event, he shall be indemnified to the maximum extent permitted by law, as such may be
amended from time to time, against all Expenses actually and reasonably incurred by him or on his
behalf in connection therewith. If Indemnitee is not wholly successful in such Proceeding but is
successful, on the merits or otherwise, as to one or more but less than all claims, issues or
matters in such Proceeding (other than those arising from or related to an Excluded Event), each of
the Company and Crumbs shall indemnify Indemnitee against all Expenses actually and reasonably
incurred by him or on his behalf in connection with each successfully resolved claim, issue or
matter. For purposes of this Section 1(c) and without limitation, the termination of any
claim, issue or matter in such a Proceeding by dismissal, with or without prejudice, shall be
deemed to be a successful result as to such claim, issue or matter (other than those arising from
or related to an Excluded Event).

2. Additional Indemnity. In addition to the indemnification provided for in
Section 1 of this Agreement, other than with respect to any Proceeding arising from or
related to an Excluded Event, each of the Company and Crumbs shall and hereby does indemnify and
hold harmless Indemnitee against all Expenses, judgments, penalties, fines and amounts paid in
settlement actually and reasonably incurred by him or on his behalf if, by reason of his Corporate
Status, he is, or is threatened to be made, a party to or participant in any Proceeding (including
a Proceeding by or in the right of the Company or Crumbs, as applicable). The only limitation that
shall exist upon the Companies’ obligations pursuant to this Agreement (other than with respect to
any Proceeding arising from or related to an Excluded Event) shall be that neither the Company nor
Crumbs shall be obligated to make any payment to Indemnitee that is finally determined (under the
procedures, and subject to the presumptions, set forth in Sections 6 and 7 hereof)
to be unlawful.

3. Contribution. Notwithstanding anything to the contrary in this Agreement or this
Section 3 below, no claim for contribution shall be permitted to exist with respect to any
Proceeding arising from or related to an Excluded Event, and all claims for contribution shall be
subject to Section 9 hereof:

(a) Whether or not the indemnification provided in Sections 1 and 2 hereof is
available, other than with respect to any Proceeding arising from or related to an Excluded Event
and subject to Section 9 hereof, in respect of any Proceeding in which the Company or
Crumbs, as applicable, is jointly liable with Indemnitee (or would be if joined in such action,
suit or proceeding), the Companies shall pay, in the first instance, the entire amount of any
judgment or settlement of such action, suit or proceeding without requiring Indemnitee to
contribute to such payment and each of the Company and Crumbs hereby waives and relinquishes any
right of contribution it may have against Indemnitee, in each case, to the fullest extent permitted
by DGCL and DLLCA, as applicable. Neither the Company nor Crumbs shall, without the Indemnitee’s
prior written consent, enter into any such settlement of any action, suit or proceeding (in whole
or in part) unless such settlement (i) provides for a full and final release of all claims asserted
against Indemnitee and (ii) does not impose any Expense, judgment, fine, penalty or limitation on
Indemnitee.

 

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(b) Without diminishing or impairing the obligations of the Companies set forth in the
preceding subparagraph, if, for any reason, Indemnitee shall elect or be required to pay all or
any portion of any judgment or settlement in any threatened, pending or completed action, suit
or proceeding in which the Company or Crumbs, as applicable, is jointly liable with Indemnitee (or
would be if joined in such action, suit or proceeding), the Companies shall contribute to the
amount of Expenses, judgments, fines and amounts paid in settlement actually and reasonably
incurred and paid or payable by Indemnitee in proportion to the relative benefits received by the
Company or Crumbs, as applicable, and all the respective officers, directors, managers or employees
of the Company or Crumbs, as applicable, other than Indemnitee, who are jointly liable with
Indemnitee (or would be if joined in such action, suit or proceeding), on the one hand, and
Indemnitee, on the other hand, from the transaction from which such action, suit or proceeding
arose; provided, however, that the proportion determined on the basis of relative
benefit may, to the extent necessary to conform to law, be further adjusted by reference to the
relative fault of the Company or Crumbs, as applicable, and all officers, directors, managers or
employees of the Company or Crumbs, as applicable, other than Indemnitee who are jointly liable
with Indemnitee (or would be if joined in such action, suit or proceeding), on the one hand, and
Indemnitee, on the other hand, in connection with the events that resulted in such Expenses,
judgments, fines or settlement amounts, as well as any other equitable considerations which the law
may require to be considered. The relative fault of the Company or Crumbs, as applicable, and all
officers, directors, managers or employees of the Company or Crumbs, as applicable, other than
Indemnitee, who are jointly liable with Indemnitee (or would be if joined in such action, suit or
proceeding), on the one hand, and Indemnitee, on the other hand, shall be determined by reference
to, among other things, the degree to which their actions were motivated by intent to gain personal
profit or advantage, the degree to which their liability is primary or secondary and the degree to
which their conduct is active or passive.

(c) To the fullest extent permissible under applicable law, except for any Proceeding arising
from or related to an Excluded Event and subject to Section 9 hereof, each of the Company
and Crumbs hereby agrees to fully indemnify and hold Indemnitee harmless from any claims of
contribution which may be brought by officers, directors, managers or employees of the Company or
Crumbs, as applicable, other than Indemnitee, who may be jointly liable with Indemnitee.

(d) To the fullest extent permissible under applicable law, if the indemnification provided
for in this Agreement is unavailable to Indemnitee for any reason whatsoever, each of the Company
and Crumbs, in lieu of indemnifying Indemnitee, shall contribute to the amount incurred by
Indemnitee, whether for judgments, fines, penalties, excise taxes, amounts paid or to be paid in
settlement and/or for Expenses, in connection with any claim relating to an indemnifiable event
under this Agreement, in such proportion as is deemed fair and reasonable in light of all of the
circumstances of such Proceeding in order to reflect (i) the relative benefits received by the
Company or Crumbs, as applicable, and Indemnitee as a result of the event(s) and/or transaction(s)
giving cause to such Proceeding; and/or (ii) the relative fault of the Company or Crumbs, as
applicable (and their respective directors, managers, officers, employees and agents), and
Indemnitee in connection with such event(s) and/or transaction(s).

4. Indemnification for Expenses of a Witness. To the extent that Indemnitee is, by
reason of his Corporate Status, a witness, or is made (or asked) to respond to discovery requests,
in any Proceeding to which Indemnitee is not a party, he shall be indemnified against all Expenses
actually and reasonably incurred by him or on his behalf in connection therewith.

5. Advancement of Expenses. Notwithstanding any other provision of this Agreement,
other than in connection with any Proceeding arising from or related to an Excluded Event, the
Companies shall advance all Expenses incurred by or on behalf of Indemnitee in connection with any
Proceeding by reason of Indemnitee’s Corporate Status within thirty (30) days after the receipt by
the Companies of a statement or statements from Indemnitee requesting such advance or advances from
time to time, whether prior to or after final disposition of such Proceeding. Such statement or
statements shall
reasonably evidence the Expenses incurred by Indemnitee and shall include or be preceded or
accompanied by a written undertaking by or on behalf of Indemnitee to repay any Expenses advanced
if it shall ultimately be determined that Indemnitee is not entitled to be indemnified against such
Expenses. Any advances and undertakings to repay pursuant to this Section 5 shall be
unsecured and interest free.

 

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6. Procedures and Presumptions for Determination of Entitlement to Indemnification.
It is the intent of this Agreement to secure for Indemnitee rights of indemnity that are as
favorable as may be permitted under the DGCL, DLLCA and public policy of the State of Delaware.
Accordingly, the parties agree that the following procedures and presumptions shall apply in the
event of any question as to whether Indemnitee is entitled to indemnification under this Agreement:

(a) To obtain indemnification under this Agreement, Indemnitee shall submit to the Companies a
written request, including therein or therewith such documentation and information as is reasonably
available to Indemnitee and is reasonably necessary to determine whether and to what extent
Indemnitee is entitled to indemnification. The Secretary of each of the Company and Crumbs shall,
promptly upon receipt of such a request for indemnification, advise the Board of Directors and
Board of Managers, as applicable, in writing that Indemnitee has requested indemnification.
Notwithstanding the foregoing, any failure of Indemnitee to provide such a request to the
Companies, or to provide such a request in a timely fashion, shall not relieve the Companies of any
liability that it may have to Indemnitee unless, and to the extent that, such failure actually and
materially prejudices the interests of the Company or Crumbs.

(b) Upon written request by Indemnitee for indemnification pursuant to the first sentence of
Section 6(a) hereof, a determination with respect to Indemnitee’s entitlement thereto shall
be made in the specific case by one of the following four methods, which shall be at the election
of the Board of Directors and Board of Managers, as applicable: (1) by a majority vote of the
Disinterested Directors or Disinterested Managers, as applicable, even though less than a quorum,
(2) by a majority vote of the Disinterested Directors or Disinterested Managers, as applicable,
even though less than a quorum, (3) if there are no Disinterested Directors or Disinterested
Managers, as applicable, or if the Disinterested Directors or Disinterested Managers, as
applicable, so direct, by Independent Counsel in a written opinion to the Board of Directors and
Board of Managers, as applicable, a copy of which shall be delivered to Indemnitee, or (4) if so
directed by a majority vote of the Disinterested Directors or Disinterested Managers, as
applicable, by the stockholders of the Company or members of Crumbs, as applicable;
provided, however, that if a Change in Control has occurred, the determination with
respect to Indemnitee’s entitlement to indemnification shall be made by Independent Counsel.

(c) In the event the determination of entitlement to indemnification is to be made by
Independent Counsel, the Independent Counsel shall be selected as provided in this Section
6(c). If a Change in Control has not occurred, the Independent Counsel shall be selected by the
Board of Directors (including a vote of a majority of the Disinterested Directors, if any) and the
Board of Managers (including a vote of a majority of the Disinterested Managers, if any), as
applicable, and the Companies shall give written notice to the Indemnitee advising him of the
identity of the Independent Counsel so selected. Indemnitee may, within 10 days after such written
notice of selection shall have been given, deliver to the Companies a written objection to such
selection; provided, however, that such objection may be asserted only on the
ground that the Independent Counsel so selected does not meet the requirements of “Independent
Counsel” as defined in Section 13 of this Agreement, and the objection shall set forth with
particularity the factual basis of such assertion. Absent a proper and timely objection, the
person so selected shall act as Independent Counsel. If a written objection is made and
substantiated, the Independent Counsel selected may not serve as Independent Counsel unless and
until such objection is withdrawn or a court has determined that such objection is without merit.
If a Change in Control has

 

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occurred, the Independent Counsel shall be selected by the Indemnitee (unless the Indemnitee
shall request that such selection be made by the Board of Directors and Board of Managers, as
applicable, in which event the preceding sentence shall apply), and approved by the Board of
Directors and Board of Managers, as applicable (which approval shall not be unreasonably withheld,
conditioned or delayed). If (i) an Independent Counsel is to make the determination of entitlement
pursuant to this Section 6, and (ii) within 20 days after submission by Indemnitee of a
written request for indemnification pursuant to Section 6(a) hereof, no Independent Counsel
shall have been selected and not objected to, either the Companies, on the one hand, or Indemnitee,
on the other hand, may petition the Court of Chancery of the State of Delaware or other court of
competent jurisdiction for resolution of any objection which shall have been made by Indemnitee to
the Companies’ selection of Independent Counsel and/or for the appointment as Independent Counsel
of a person selected by the court or by such other person as the court shall designate, and the
person with respect to whom all objections are so resolved or the person so appointed shall act as
Independent Counsel under Section 6(b) hereof. The Companies shall pay any and all
reasonable fees and expenses of Independent Counsel incurred by such Independent Counsel in
connection with acting pursuant to Section 6(b) hereof, and the Companies shall pay all
reasonable fees and expenses incident to the procedures of this Section 6(c), regardless of
the manner in which such Independent Counsel was selected or appointed.

(d) In making a determination with respect to entitlement to indemnification hereunder, the
person or persons or entity making such determination shall presume that Indemnitee is entitled to
indemnification under this Agreement. Anyone seeking to overcome this presumption shall have the
burden of proof and the burden of persuasion by clear and convincing evidence. Neither the failure
of the Companies (including by its directors or managers, as applicable, or independent legal
counsel) to have made a determination prior to the commencement of any action pursuant to this
Agreement that indemnification is proper in the circumstances because Indemnitee has met the
applicable standard of conduct, nor an actual determination by the Companies (including by its
directors or managers, as applicable, or independent legal counsel) that Indemnitee has not met
such applicable standard of conduct, shall be a defense to the action or create a presumption that
Indemnitee has not met the applicable standard of conduct.

(e) Indemnitee shall be deemed to have acted in good faith if Indemnitee’s action is based on
the records or books of account of the Enterprise, including financial statements, or on
information supplied to Indemnitee by the officers of the Enterprise in the course of their duties,
or on the advice of legal counsel for the Enterprise or on information or records given or reports
made to the Enterprise by an independent certified public accountant or by an appraiser or other
expert selected with reasonable care by the Enterprise. In addition, the knowledge and/or actions,
or failure to act, of any director, manager, officer, agent or employee of the Enterprise shall not
be imputed to Indemnitee for purposes of determining the right to indemnification under this
Agreement. Whether or not the foregoing provisions of this Section 6(e) are satisfied, it
shall in any event be presumed that Indemnitee has at all times acted in good faith and in a manner
he reasonably believed to be in or not opposed to the best interests of the Company or Crumbs, as
applicable. Anyone seeking to overcome this presumption shall have the burden of proof and the
burden of persuasion by clear and convincing evidence.

 

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(f) If the person, persons or entity empowered or selected under this Section 6 to
determine whether Indemnitee is entitled to indemnification shall not have made a determination
within sixty (60) days after receipt by the Companies of the request therefor, the requisite
determination of entitlement to indemnification shall be deemed to have been made and Indemnitee
shall be entitled to such indemnification absent (i) a misstatement by Indemnitee of a material
fact, or an omission of a material fact necessary to make Indemnitee’s statement not materially
misleading, in connection with the request for indemnification, or (ii) a prohibition of such
indemnification under applicable law; provided, however, that such 60-day period
may be extended for a reasonable time, not to exceed an additional thirty (30) days, if the person, persons or entity making such determination with respect to
entitlement to indemnification in good faith requires such additional time to obtain or evaluate
documentation and/or information relating thereto; and provided, further, that the
foregoing provisions of this Section 6(f) shall not apply if the determination of
entitlement to indemnification is to be made by the stockholders pursuant to Section 6(b)
of this Agreement and if (A) within fifteen (15) days after receipt by the Companies of the request
for such determination, the Board of Directors or Board of Managers, as applicable, or the
Disinterested Directors or Disinterested Managers, as applicable, if appropriate, resolve to submit
such determination to the stockholders for their consideration at an annual meeting thereof to be
held within seventy-five (75) days after such receipt and such determination is made thereat, or
(B) a special meeting of stockholders is called within fifteen (15) days after such receipt for the
purpose of making such determination, such meeting is held for such purpose within sixty (60) days
after having been so called and such determination is made thereat.

(g) Indemnitee shall cooperate with the person, persons or entity making such determination
with respect to Indemnitee’s entitlement to indemnification, including providing to such person,
persons or entity upon reasonable advance request any documentation or information which is not
privileged or otherwise protected from disclosure and which is reasonably available to Indemnitee
and reasonably necessary to such determination. Any Independent Counsel, member of the Board of
Directors, stockholder of the Company, member of the Board of Managers or member of Crumbs shall
act reasonably and in good faith in making a determination regarding Indemnitee’s entitlement to
indemnification under this Agreement. Any costs or Expenses (including attorneys’ fees and
disbursements) incurred by Indemnitee in so cooperating with the person, persons or entity making
such determination shall be borne by the Companies (irrespective of the determination as to
Indemnitee’s entitlement to indemnification) and each of the Company and Crumbs hereby indemnifies
and agrees to hold Indemnitee harmless therefrom.

(h) Each of the Company and Crumbs acknowledges that a settlement or other disposition short
of final judgment may be successful if it permits a party to avoid expense, delay, distraction,
disruption and uncertainty. In the event that any action, claim or proceeding to which Indemnitee
is a party is resolved in any manner other than by adverse judgment against Indemnitee (including,
without limitation, settlement of such action, claim or proceeding with or without payment of money
or other consideration) it shall be presumed that Indemnitee has been successful on the merits or
otherwise in such action, suit or proceeding. Anyone seeking to overcome this presumption shall
have the burden of proof and the burden of persuasion by clear and convincing evidence.

(i) The termination of any Proceeding or of any claim, issue or matter therein, by judgment,
order, settlement or conviction, or upon a plea of nolo contendere or its equivalent, shall not
(except as otherwise expressly provided in this Agreement) of itself adversely affect the right of
Indemnitee to indemnification or create a presumption that Indemnitee did not act in good faith and
in a manner which he reasonably believed to be in or not opposed to the best interests of the
Company or Crumbs, as applicable, or, with respect to any criminal Proceeding, that Indemnitee had
reasonable cause to believe that his conduct was unlawful.

 

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7. Remedies of Indemnitee.

(a) In the event that (i) a determination is made pursuant to Section 6 of this
Agreement that Indemnitee is not entitled to indemnification under this Agreement, (ii) advancement
of Expenses is not timely made pursuant to Section 5 of this Agreement, (iii) no
determination of entitlement to indemnification is made pursuant to Section 6(b) of this
Agreement within 90 days after receipt by the Companies of the request for indemnification, (iv)
payment of indemnification is not made pursuant to this Agreement within ten (10) days after
receipt by the Companies of a written request therefor or (v) payment of indemnification is not made within ten (10) days after a determination has been
made that Indemnitee is entitled to indemnification or such determination is deemed to have been
made pursuant to Section 6 of this Agreement, Indemnitee shall be entitled to an
adjudication in an appropriate court of the State of Delaware, or in any other court of competent
jurisdiction, of Indemnitee’s entitlement to such indemnification, contribution or advancement of
Expenses. Alternatively, Indemnitee, at his option, may seek an award in arbitration to be
conducted by a single arbitrator pursuant to the Commercial Arbitration Rules of the American
Arbitration Association. Except as set forth herein, the provisions of Delaware law (without
regard to its conflict of law rules) shall apply to any such arbitration. Neither the Company nor
Crumbs shall oppose Indemnitee’s right to seek any such adjudication or award in arbitration.
Notwithstanding anything to the contrary in this Agreement, Indemnittee shall have no rights of
indemnification or contribution with respect to any Proceeding arising from or related to an
Excluded Event.

(b) In the event that a determination shall have been made pursuant to Section 6(b) of
this Agreement that Indemnitee is not entitled to indemnification, any judicial proceeding
commenced pursuant to this Section 7 shall be conducted in all respects as a de novo trial,
or arbitration, on the merits, and Indemnitee shall not be prejudiced by reason of the adverse
determination under Section 6(b). In any judicial proceeding or arbitration commenced
pursuant to this Section 7, Indemnitee shall be presumed to be entitled to indemnification
under this Agreement and the Companies shall have the burden of proving Indemnitee is not entitled
to indemnification or advancement of Expenses, as the case may be, and the Companies may not refer
to or introduce into evidence any determination pursuant to Section 6(b) of this Agreement
adverse to Indemnitee for any purpose. If Indemnitee commences a judicial proceeding or
arbitration pursuant to this Section 7, Indemnitee shall not be required to reimburse
either the Company or Crumbs for any advances pursuant to Section 5 until a final
determination is made with respect to Indemnitee’s entitlement to indemnification (as to which all
rights of appeal have been exhausted or lapsed).

(c) If a determination shall have been made pursuant to Section 6(b) of this Agreement
that Indemnitee is entitled to indemnification, each of the Company and Crumbs shall be bound by
such determination in any judicial proceeding commenced pursuant to this Section 7, absent
(i) a misstatement by Indemnitee of a material fact, or an omission of a material fact necessary to
make Indemnitee’s misstatement not materially misleading in connection with the application for
indemnification, or (ii) a prohibition of such indemnification under applicable law.

(d) In the event that Indemnitee, pursuant to this Section 7, seeks a judicial
adjudication of his rights under, or to recover damages for breach of, this Agreement, or to
recover under any directors’ and officers’ liability insurance policies maintained by the
Companies, the Companies shall pay on his behalf, in advance, any and all expenses (of the types
described in the definition of Expenses in Section 13 of this Agreement) actually and
reasonably incurred by him in such judicial adjudication, regardless of whether Indemnitee
ultimately is determined to be entitled to such indemnification, advancement of expenses or
insurance recovery.

(e) The Companies shall be precluded from asserting in any judicial proceeding commenced
pursuant to this Section 7 that the procedures and presumptions of this Agreement are not
valid, binding and enforceable and shall stipulate in any such court that each of the Company and
Crumbs is bound by all the provisions of this Agreement. Each of the Company and Crumbs shall
indemnify Indemnitee against any and all Expenses and, if requested by Indemnitee, shall (within
ten (10) days after receipt by the Companies of a written request therefore) advance, to the extent
not prohibited by law, such Expenses to Indemnitee, which are incurred by Indemnitee in connection
with any action brought by Indemnitee for indemnification or advance of Expenses from the Company
or Crumbs, as applicable, under this Agreement or under any directors’ and officers’ liability
insurance
policies maintained by the Companies, regardless of whether Indemnitee ultimately is
determined to be entitled to such indemnification, advancement of Expenses or insurance recovery,
as the case may be.

 

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(f) Notwithstanding anything in this Agreement to the contrary, no determination as to
entitlement to indemnification under this Agreement shall be required to be made prior to the final
disposition of the Proceeding.

8. Non-Exclusivity; Survival of Rights; Insurance; Primacy of Indemnification;
Subrogation.

(a) The rights of indemnification and to receive advancement of Expenses as provided by this
Agreement shall not be deemed exclusive of any other rights to which Indemnitee may at any time be
entitled under applicable law, the Charter, the By-Laws, the LLC Agreement, any other agreement, a
vote of stockholders or members, a resolution of directors or managers, or otherwise, of the
Company or Crumbs, as applicable. No amendment, alteration or repeal of this Agreement or of any
provision hereof shall limit or restrict any right of Indemnitee under this Agreement in respect of
any action taken or omitted by such Indemnitee in his Corporate Status prior to such amendment,
alteration or repeal. To the extent that a change in the DGCL or DLLCA, whether by statute or
judicial decision, permits greater indemnification than would be afforded currently under the
Charter, By-Laws, LLC Agreement and this Agreement, it is the intent of the parties hereto that
Indemnitee shall enjoy by this Agreement the greater benefits so afforded by such change. No right
or remedy herein conferred is intended to be exclusive of any other right or remedy, and every
other right and remedy shall be cumulative and in addition to every other right and remedy given
hereunder or now or hereafter existing at law or in equity or otherwise. The assertion or
employment of any right or remedy hereunder, or otherwise, shall not prevent the concurrent
assertion or employment of any other right or remedy.

(b) The Companies shall obtain and maintain in effect during the entire period for which the
Companies are obligated to indemnify Indemnitee under this Agreement, one or more policies of
insurance with reputable insurance companies to provide the directors, managers and officers of the
Company and Crumbs with coverage for losses from wrongful acts and omissions and to ensure the
Companies’ performance of their respective indemnification obligations under this Agreement.
Indemnitee shall be covered by such policy or policies in accordance with its or their terms to the
maximum extent of the coverage available for any such officer, director or manager under such
policy or policies. In all such insurance policies, Indemnitee shall be named as an insured in
such a manner as to provide Indemnitee with the same rights and benefits as are accorded to the
most favorably insured of the Company’s or Crumb’s, as applicable, directors, managers and
officers. At the time of the receipt of a notice of a claim pursuant to the terms hereof, the
Companies shall give prompt notice of the commencement of such proceeding to the insurers in
accordance with the procedures set forth in the respective policies. The Companies shall
thereafter take all necessary or desirable action to cause such insurers to pay, on behalf of
Indemnitee, all amounts payable as a result of such proceeding in accordance with the terms of such
policies.

(c) In the event of any payment under this Agreement, the Companies shall be subrogated to the
extent of such payment to all of the rights of recovery of Indemnitee, who shall execute all papers
required and take all action necessary to secure such rights, including execution of such documents
as are necessary to enable the Companies to bring suit to enforce such rights.

(d) The Companies shall not be liable under this Agreement to make any payment of amounts
otherwise indemnifiable hereunder if and to the extent that Indemnitee has otherwise actually
received such payment under any insurance policy, contract, agreement or otherwise.

 

9

 

(e) The Companies’ obligation to indemnify or advance Expenses hereunder to Indemnitee who is
or was serving at the request of either the Company or Crumbs as a director, manager, officer,
employee or agent of any other corporation, partnership, joint venture, trust, employee benefit
plan or other Enterprise shall be reduced by any amount Indemnitee has actually received as
indemnification or advancement of Expenses from such other corporation, partnership, joint venture,
trust, employee benefit plan or other enterprise.

9. Exception to Right of Indemnification or Contribution. Notwithstanding any
provision in this Agreement, the Companies shall not be obligated under this Agreement to make any
indemnity or contribution in connection with any claim made against Indemnitee:

(a) for which payment has actually been made to or on behalf of Indemnitee under any insurance
policy or other indemnity provision, except with respect to any excess beyond the amount paid under
any insurance policy or other indemnity provision; provided, that the foregoing shall not
affect the rights of Indemnitee set forth in Section 8(c) above; or

(b) for an accounting of profits made from the purchase and sale (or sale and purchase) by
Indemnitee of securities of the Company or Crumbs, as applicable, within the meaning of Section
16(b) of the Exchange Act or similar provisions of state statutory law or common law; or

(c) for reimbursement to the Company or Crumbs, as applicable, of any bonus or other
incentive-based or equity-based compensation or of any profits realized by Indemnitee from the sale
of securities of the Company or Crumbs, as applicable, in each case as required under the Exchange
Act; or

(d) in connection with any Proceeding (or any part of any Proceeding) initiated by Indemnitee,
including any Proceeding (or any part of any Proceeding) initiated by Indemnitee against the
Company, Crumbs or their respective directors, managers, officers, employees or other indemnitees,
unless (i) the Company or Crumbs has joined in or the Board of Directors or Board of Managers
authorized the Proceeding (or any part of any Proceeding) prior to its initiation, (ii) either the
Company or Crumbs provides the indemnification, in its sole discretion, pursuant to the powers
vested in the Company or Crumbs, as applicable, under applicable law, or (iii) the Proceeding is
one to enforce Indemnitee’s rights under this Agreement; or

(e) in connection with any Proceeding arising from or related to an Excluded Event.

10. Non-Disclosure of Payments. Except as expressly required by the securities laws of
the United States of America, neither party shall disclose any payments under this Agreement unless
prior approval of the other party is obtained. If any payment information must be disclosed, the
Companies shall afford the Indemnitee an opportunity to review all such disclosures and, if
requested, to explain in such statement any mitigating circumstances regarding the events to be
reported.

11. Duration of Agreement. All agreements and obligations of the Company and Crumbs
contained herein shall continue upon the later of (a) six (6) years after the date that Indemnitee
shall have ceased to serve as a director, manager or officer of the Company or Crumbs or a
director, manager, officer, trustee, partner, managing member, fiduciary, employee or agent of any
other corporation, partnership, joint venture, trust, employee benefit plan or other Enterprise
which Indemnitee served at the request of the Company or Crumbs; or (b) one (1) year after the
final termination of any Proceeding (including any rights of appeal thereto) in respect of which
Indemnitee is granted rights of
indemnification or advancement of Expenses hereunder and of any Proceeding commenced by
Indemnitee pursuant to Section 7 of this Agreement relating thereto (including any rights
of appeal of any Section 7 Proceeding. This Agreement shall be binding upon and inure to
the benefit of and be enforceable by the parties hereto and their respective successors (including
any direct or indirect successor by purchase, merger, consolidation or otherwise to all or
substantially all of the business or assets of the Company or Crumbs), assigns, spouses, heirs,
executors and personal and legal representatives.

 

10

 

12. Security. To the extent requested by Indemnitee and approved by the Board of
Directors (including a vote of a majority of the Disinterested Directors, if any) and the Board of
Managers (including a vote of a majority of the Disinterested Managers, if any), as applicable, the
Company and/or Crumbs may at any time and from time to time provide security to Indemnitee for the
obligations of the Company and/or Crumbs, as applicable, hereunder through an irrevocable bank line
of credit, funded trust or other collateral. Any such security, once provided to Indemnitee, may
not be revoked or released without the prior written consent of Indemnitee.

13. Definitions. For purposes of this Agreement:

(a) “Change in Control” shall be deemed to occur upon the earliest to occur after the
date of this Agreement of any of the following events:

(i) Acquisition of Stock by Third Party. Any Person, other
than a trustee or other fiduciary holding securities under an
employee benefit plan of the Company or a corporation owned directly
or indirectly by the stockholders of the Company in substantially
the same proportions as their ownership of stock of the Company, is
or becomes the Beneficial Owner, directly or indirectly, of
securities of the Company representing fifty (50%) or more of the
combined voting power of the Company’s then outstanding securities;

(ii) Change in Board of Directors. Any individuals, who, as
of the date of this Agreement, constitute the Board of Directors
(the “Incumbent Board”) cease for any reason to constitute
at least a majority of such Board of Directors; provided,
that any individual who becomes a director of the Company subsequent
to the date hereof as a designee of the holders of the Company’s
Series A Voting Preferred Stock or whose election or nomination for
election by the Company’s stockholders was approved by the vote of
at least a majority of the directors then in office shall be deemed
a member of the Incumbent Board.;

(iii) Corporate Transactions. The effective date of a merger
or consolidation of the Company with any other entity, other than a
merger or consolidation which would result in the voting securities
of the Company outstanding immediately prior to such merger or
consolidation continuing to represent (either by remaining
outstanding or by being converted into voting securities of the
surviving entity) more than 51% of the combined voting power of the
voting securities of the surviving entity outstanding immediately
after such merger or consolidation and with the power to elect at
least a majority of the board of directors or other governing body
of such surviving entity; and

 

11

 

(iv) Liquidation. The approval by the stockholders of the
Company of a complete liquidation of the Company or an agreement or
series of agreements for the sale or disposition by the Company of
all or substantially all of the Company’s assets, or, if such
approval is not required, the decision by the Board of Directors to
proceed with such a liquidation, sale, or disposition in one
transaction or a series of related transactions.

(b) “Beneficial Owner” shall have the meaning given to such term in Rule 13d-3 under
the Exchange Act; provided, however, that Beneficial Owner shall exclude any Person
otherwise becoming a Beneficial Owner by reason of the stockholders of the Company approving a
merger of the Company with another entity.

(c) “Corporate Status” describes the status of a person who is or was a director,
manager, officer, employee, agent or fiduciary of the Company or Crumbs, any direct or indirect
subsidiary of the Company or Crumbs, or of any other corporation, partnership, joint venture,
trust, employee benefit plan or other enterprise that such person is or was serving at the request
of the Company or Crumbs.

(d) “Disinterested Director” means a director of the Company who is not and was not a
party to the Proceeding in respect of which indemnification is sought by Indemnitee.

(e) “Disinterested Manager” means a member of the Board of Managers of Crumbs who is
not and was not a party to the Proceeding in respect of which indemnification is sought by
Indemnitee.

(f) “Employment Agreement” means that certain employment agreement dated as of
November 14, 2011, by and among Company, Crumbs and Indemnittee, as amended from time to time.

(g) “Enterprise” shall mean the Company, Crumbs and any other corporation,
partnership, joint venture, trust, employee benefit plan or other enterprise that Indemnitee is or
was serving at the request of the Company or Crumbs as a director, manager, officer, employee,
agent or fiduciary.

(h) “Exchange Act” shall mean the Securities Exchange Act of 1934, as amended.

(i) “Excluded Event” shall mean (i) willful misconduct of the Indemnittee in the
performance of his duties pursuant to his Employment Agreement or (ii) the Indemnitee’s conviction
of a fraud, felony or crime of moral turpitude, in each case, with respect to matters related to
the Indemnitee’s employment with the Company and/or Crumbs that give rise to the termination of
Indemnitee’s employment with the Company and Crumbs for “Cause” in accordance with the terms of the
Employment Agreement.

(j) “Expenses” shall include all reasonable attorneys’ fees, retainers, court costs,
transcript costs, fees of experts, witness fees, travel expenses, duplicating costs, printing and
binding costs, telephone charges, postage, delivery service fees and all other disbursements or
expenses of the types customarily incurred in connection with prosecuting, defending, preparing to
prosecute or defend, investigating, participating, or being or preparing to be a witness in a
Proceeding, or responding to, or objecting to, a request to provide discovery in any Proceeding.
Expenses also shall include
Expenses incurred in connection with any appeal resulting from any Proceeding and any federal,
state, local or foreign taxes imposed on Indemnitee as a result of the actual or deemed receipt of
any payments under this Agreement, including without limitation the premium, security for, and
other costs relating to any cost bond, supersede as bond, or other appeal bond or its equivalent.
Expenses, however, shall not include amounts paid in settlement by Indemnitee or the amount of
judgments or fines against Indemnitee.

 

12

 

(k) “Independent Counsel” means a law firm, or a member of a law firm, that is
experienced in matters of corporation law and neither presently is, nor in the past five years has
been, retained to represent: (i) any of the Company, Crumbs or Indemnitee in any matter material
to either such party (other than with respect to matters concerning Indemnitee under this
Agreement, or of other indemnitees under similar indemnification agreements), or (ii) any other
party to the Proceeding giving rise to a claim for indemnification hereunder. Notwithstanding the
foregoing, the term “Independent Counsel” shall not include any person who, under the applicable
standards of professional conduct then prevailing, would have a conflict of interest in
representing any of the Company, Crumbs or Indemnitee in an action to determine Indemnitee’s rights
under this Agreement. Each of the Company and Crumbs agrees to pay the reasonable fees of the
Independent Counsel referred to above and to fully indemnify such counsel against any and all
Expenses, claims, liabilities and damages arising out of or relating to this Agreement or its
engagement pursuant hereto.

(l) “Person” shall have the meaning as set forth in Sections 13(d) and 14(d) of the
Exchange Act; provided, however, that Person shall exclude (i) the Company and
Crumbs, (ii) any trustee or other fiduciary holding securities under an employee benefit plan of
the Company or Crumbs, as applicable, and (iii) any corporation owned, directly or indirectly, by
the stockholders of the Company in substantially the same proportions as their ownership of stock
of the Company.

(m) “Proceeding” includes any threatened, pending or completed action, suit,
arbitration, alternate dispute resolution mechanism, investigation, inquiry, administrative hearing
or any other actual, threatened or completed proceeding, whether brought by or in the right of the
Company or Crumbs, as applicable, or otherwise and whether civil, criminal, administrative or
investigative, in which Indemnitee was, is or will be involved as a party or otherwise, by reason
of the fact that Indemnitee is or was a director, manager or officer of the Company or Crumbs, as
applicable, by reason of any action taken by him or of any inaction on his part while acting as a
director, manager or officer of the Company or Crumbs, as applicable, or by reason of the fact that
he is or was serving at the request of the Company or Crumbs as a director, manager, officer,
employee, agent or fiduciary of another corporation, partnership, joint venture, trust or other
Enterprise; in each case whether or not he is acting or serving in any such capacity at the time
any liability or Expense is incurred for which indemnification can be provided under this
Agreement; including one pending on or before the date of this Agreement, but excluding one
initiated by an Indemnitee pursuant to Section 7 of this Agreement to enforce his rights
under this Agreement.

14. Severability. If any provision or provisions of this Agreement shall be held to
be invalid, illegal or unenforceable for any reason whatsoever: (a) the validity, legality, and
enforceability of the remaining provisions of this Agreement (including, without limitation, each
portion of any Section, paragraph or sentence of this Agreement containing any such provision held
to be invalid, illegal or unenforceable, that is not itself invalid, illegal or unenforceable)
shall not in any way be affected or impaired thereby and shall remain enforceable to the fullest
extent permitted by law; (b) such provision or provisions shall be deemed reformed to the fullest
extent necessary to conform to applicable law and to give the maximum effect to the intent of the
parties hereto; and (c) to the fullest extent possible, the provisions of this Agreement
(including, without limitation, each portion of any Section, paragraph or sentence of this
Agreement containing any such provision held to be invalid, illegal or unenforceable, that
is not itself invalid, illegal or unenforceable) shall be construed so as to give effect to
the intent manifested thereby. Without limiting the generality of the foregoing, this Agreement is
intended to confer upon Indemnitee indemnification rights to the fullest extent permitted by
applicable laws.

 

13

 

15. Enforcement and Binding Effect.

(a) Each of the Company and Crumbs expressly confirms and agrees that it has entered into this
Agreement and assumed the obligations imposed on it hereby in order to induce Indemnitee to serve
as a director or manager, as applicable, and officer of the Company and Crumbs, respectively, and
each of the Company and Crumbs acknowledges that Indemnitee is relying upon this Agreement in
serving as a director or manager, as applicable, and officer of the Company and Crumbs,
respectively.

(b) Without limiting any of the rights of Indemnitee under the Charter, the By-Laws or the LLC
Agreement, as they may be amended from time to time, this Agreement constitutes the entire
agreement between the parties hereto with respect to the subject matter hereof and supersedes all
prior agreements and understandings, oral, written and implied, between the parties hereto with
respect to the subject matter hereof.

(c) The indemnification and advancement of Expenses provided by, or granted pursuant to this
Agreement shall be binding upon and be enforceable by the parties hereto and their respective
successors and assigns (including any direct or indirect successor by purchase, merger,
consolidation or otherwise to all or substantially all of the business or assets of the Company or
Crumbs), shall continue as to an Indemnitee who has ceased to be a director, manager, officer,
employee or agent of any of the Company, Crumbs or of any other Enterprise at the request of the
Company or Crumbs, and shall inure to the benefit of Indemnitee and his or her spouse, assigns,
heirs, devisees, executors and administrators and other legal representatives.

(d) Each of the Company and Crumbs shall require and cause any successor (whether direct or
indirect by purchase, merger, consolidation or otherwise) to all, substantially all or a
substantial part, of the business and/or assets of the Company or Crumbs, as applicable, to
expressly to assume and agree to perform this Agreement in the same manner and to the same extent
that the Company and Crumbs, as applicable, would be required to perform if no such succession had
taken place.

(e) The Companies and Indemnitee agree herein that a monetary remedy for breach of this
Agreement, at some later date, may be inadequate, impracticable and difficult of proof, and further
agree that such breach may cause Indemnitee irreparable harm. Accordingly, the parties hereto agree
that Indemnitee may enforce this Agreement by seeking injunctive relief and/or specific performance
hereof, without any necessity of showing actual damage or irreparable harm and that by seeking
injunctive relief and/or specific performance, Indemnitee shall not he precluded from seeking or
obtaining any other relief to which he may be entitled. The Companies and Indemnitee further agree
that Indemnitee shall be entitled to such specific performance and injunctive relief, including
temporary restraining orders, preliminary injunctions and permanent injunctions, without the
necessity of posting bonds or other undertaking in connection therewith. Each of the Company and
Crumbs acknowledges that in the absence of a waiver, a bond or undertaking may be required of
Indemnitee by the Court, and each of the Company and Crumbs hereby waives any such requirement of
such a bond or undertaking.

16. Modification and Waiver. No supplement, modification, termination or amendment of
this Agreement shall be binding unless executed in writing by both of the parties hereto. No
waiver of any of the provisions of this Agreement shall be deemed or shall constitute a waiver of
any
other provisions hereof (whether or not similar) nor shall such waiver constitute a continuing
waiver.

 

14

 

17. Notice By Indemnitee. Indemnitee agrees promptly to notify the Companies in
writing upon being served with or otherwise receiving any summons, citation, subpoena, complaint,
indictment, information or other document relating to any Proceeding or matter which may be subject
to indemnification covered hereunder. The failure to so notify the Companies shall not relieve the
Companies of any obligation which it may have to Indemnitee under this Agreement or otherwise.

18. Notices. All notices and other communications given or made pursuant to this
Agreement shall be in writing and shall be deemed effectively given: (a) upon personal delivery to
the party to be notified, (b) when sent by confirmed electronic mail if sent during normal business
hours of the recipient, and if not so confirmed, then on the next business day, (c) five (5) days
after having been sent by registered or certified mail, return receipt requested, postage prepaid,
or (d) one (1) day after deposit with a nationally recognized overnight courier, specifying next
day delivery, with written verification of receipt. All communications shall be sent:

(a) To Indemnitee at the address set forth below Indemnitee signature hereto.

(b) To the Company or Crumbs at:

Crumbs Bake Shop, Inc.

c/o Crumbs Holdings LLC

110 West 40th Street

New York, New York 10018

Attention: Chairman of the Board

or to such other address as may have been furnished to Indemnitee by the Companies or to the
Companies by Indemnitee, as the case may be.

19. Counterparts. This Agreement may be executed in two or more counterparts, each of
which shall be deemed an original, but all of which together shall constitute one and the same
Agreement. This Agreement may also be executed and delivered by facsimile signature and in two or
more counterparts, each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument.

20. Headings. The headings of the paragraphs of this Agreement are inserted for
convenience only and shall not be deemed to constitute part of this Agreement or to affect the
construction thereof.

 

15

 

21. Usage of Pronouns. Use of the masculine pronoun shall be deemed to include usage
of the feminine pronoun where appropriate.

22. Governing Law and Consent to Jurisdiction. This Agreement and the legal relations
among the parties shall be governed by, and construed and enforced in accordance with, the laws of
the State of Delaware, without regard to its conflict of laws rules. Each of the Company, Crumbs
and Indemnitee hereby irrevocably and unconditionally (i) agree that any action or proceeding
arising out of or in connection with this Agreement shall be brought only in the Chancery Court of
the State of Delaware (the “Delaware Court”), and not in any other state or federal court
in the United States of
America or any court in any other country, (ii) generally and unconditionally consent to
submit to the exclusive jurisdiction of the Delaware Court for purposes of any action or proceeding
arising out of or in connection with this Agreement, (iii) waive any objection to the laying of
venue of any such action or proceeding in the Delaware Court, and (iv) waive, and agree not to
plead or to make, any claim that any such action or proceeding brought in the Delaware Court has
been brought in an improper or inconvenient forum. The foregoing consent to jurisdiction shall not
constitute general consent to service of process in the state for any purpose except as provided
above, and shall not be deemed to confer rights on any person other than the parties to this
Agreement.

[SIGNATURE PAGE TO FOLLOW]

 

16

 

IN WITNESS WHEREOF, the parties hereto have executed this Agreement on and as of the day and
year first above written.

	 	 	 	 	 	 	 
	 	 	CRUMBS BAKE SHOP, INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ John D. Ireland
 

Name: John D. Ireland
	 	 
	 

	 	 	 	Title: CFO	 	 
	 
	 	 	 	 	 	 
	 	 	CRUMBS HOLDINGS LLC	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ John D. Ireland
 

Name: John D. Ireland
	 	 
	 

	 	 	 	Title: CFO	 	 

[Signature Page to Indemnification Agreement]

 

 

 

	 	 	 	 	 
	 

	 	INDEMNITEE	 	 
	 
	 	 	 	 
	 

	 	/s/ Julian R. Geiger
 

Julian R. Geiger
	 	 
	 
	 	 	 	 
	 

	 	Address:	 	 
	 
	 	 	 	 
	 

	 	Julian R. Geiger

7 Chowning Drive

Malvern, Pennsylvania 19355	 	 
	 
	 	 	 	 
	 

	 	With copies to:	 	 
	 
	 	 	 	 
	 

	 	Julian R. Geiger

2330 Stotesbury Way

Wellington, Florida 33414	 	 
	 
	 	 	 	 
	 

	 	and	 	 
	 
	 	 	 	 
	 

	 	Julian R. Geiger

40 Central Park South, Apartment 16A

New York, New York 10019	 	 
	 
	 	 	 	 
	 

	 	and	 	 
	 
	 	 	 	 
	 

	 	Weil, Gotshal & Manges LLP

767 Fifth Avenue

New York, New York 10153

Attention: Michael Aiello, Esq.	 	 

[Signature Page to Indemnification Agreement]ex41.htm

Exhibit 4.1

 

 

THIS DEBENTURE AND THE COMMON SHARES ISSUABLE UPON CONVERSION OF THIS DEBENTURE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAWS.  THIS NOTE AND THE COMMON SHARES ISSUABLE UPON CONVERSION OF THIS NOTE MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT AS TO THIS DEBENTURE UNDER SAID ACT AND ANY APPLICABLE STATE SECURITIES LAWS OR AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO VANITY EVENTS HOLDING INC. THAT SUCH REGISTRATION IS NOT REQUIRED.

 

CONVERTIBLE DEBENTURE

 

FOR VALUE RECEIVED, VANITY EVENTS HOLDING, Inc., a Delaware corporation (the “Borrower”), promises to pay to Greystone Capital Partners LLC (the “Holder”) or its registered assigns or successors in interest, the sum of Fifty Thousand Dollars ($50,000), together with any accrued and unpaid interest hereon, on November 10, 2012 (the “Maturity Date”) if not sooner paid.

 

Capitalized terms used herein without definition shall have the meanings ascribed to such terms in that certain Securities Purchase Agreement dated as of November 10, 2011, between Borrower and the Holder (as amended, modified or supplemented from time to time, the “Purchase Agreement”).

 

The following terms shall apply to this Debenture:

 

ARTICLE I

 

INTEREST & AMORTIZATION

 

1.1. Contract Rate.  Subject to Sections 3.10 and 5.7 hereof, interest payable on this Debenture shall accrue at a rate per annum equal to ten percent (10%).

 

1.2. Payments.  Payment of the aggregate principal amount outstanding under this Debenture (the “Principal Amount”), together with all accrued interest thereon shall be made on the Maturity Date.

 

1.3 Prepayment Option.  The Company may prepay in cash all or any portion of the outstanding principal amount of this Note, without penalty, upon thirty (30) days prior written notice to the Holder. The Holder shall have the right to convert any outstanding principal in accordance with Article I hereof during such thirty day notice period.

 

ARTICLE II

 

CONVERSION REPAYMENT

 

2.1. Optional Conversion.  Subject to the terms of this Article II, the Holder shall have the right, but not the obligation, at any time until the Maturity Date, or thereafter during an Event of Default and to convert all or any portion of the outstanding Principal Amount and/or accrued interest and fees due and payable into fully paid and nonassessable shares of the Common Stock at the Conversion Price. The shares of Common Stock to be issued upon such conversion are herein referred to as the “Conversion Shares.”  The “Conversion Price” shall mean $0.001 per share.

 

  

1

  

 

2.2. Conversion Limitation.  Notwithstanding anything contained herein to the contrary, the Holder shall not be entitled to convert pursuant to the terms of this Debenture an amount that would be convertible into that number of Conversion Shares which would exceed the difference between the number of shares of Common Stock beneficially owned by such Holder and 4.99% of the outstanding shares of Common Stock of Borrower.  For the purposes of the immediately preceding sentence, beneficial ownership shall be determined in accordance with Section 13(d) of the Exchange Act and Regulation 13d-3 thereunder.

 

2.3. Mechanics of Holder’s Conversion.  Subject to Section 2.2, this Debenture will be converted by the Holder in part from time to time after the Issue Date, by submitting to the Borrower a Notice of Conversion (by facsimile or other reasonable means of communication dispatched on the Conversion Date prior to 6:00 p.m., New York, New York time).  On each Conversion Date (as hereinafter defined) and in accordance with its Notice of Conversion, the Holder shall make the appropriate reduction to the Principal Amount, accrued interest and fees as entered in its records and shall provide written notice thereof to the Borrower on the Conversion Date.  Each date on which a Notice of Conversion is delivered or telecopied to Borrower in accordance with the provisions hereof shall be deemed a Conversion Date (the “Conversion Date”).  A form of Notice of Conversion to be employed by the Holder is annexed hereto as Exhibit A.  Pursuant to the terms of the Notice of Conversion, Borrower will issue instructions to the transfer agent accompanied by an opinion of counsel to Borrower of the Notice of Conversion and shall cause the transfer agent to transmit the certificates representing the Conversion Shares to the Holder by physical delivery or crediting the account of the Holder’s designated broker with the Depository Trust Corporation (“DTC”) through its Deposit Withdrawal Agent Commission (“DWAC”) system within five (5) business days after receipt by Borrower of the Notice of Conversion (the “Delivery Date”). In the case of the exercise of the conversion rights set forth herein the conversion privilege shall be deemed to have been exercised and the Conversion Shares issuable upon such conversion shall be deemed to have been issued upon the date of receipt by Borrower of the Notice of Conversion. The Holder shall be treated for all purposes as the record holder of such Common Stock, unless the Holder provides Borrower written instructions to the contrary.

 

2.4. Late Payments.  The Borrower understands that a delay in the delivery of the shares of Common Stock in the form required pursuant to this Article beyond the Delivery Date could result in economic loss to the Holder.  As compensation to the Holder for such loss, the Borrower agrees to pay late payments to the Holder for late issuance of such shares in the form required pursuant to this Article II upon conversion of the Debenture, in the amount equal to $500 per business day after the Delivery Date.  The Borrower shall pay any payments incurred under this Section in immediately available funds upon demand.

 

2.5. Conversion Mechanics.

 

(a) The number of shares of Common Stock to be issued upon each conversion of this Debenture shall be determined by dividing that portion of the Principal Amount and interest and fees to be converted, if any, by the then applicable Conversion Price.

 

(b) Intentionally Omitted.

 

2.6. Authorized Shares. The Borrower represents that upon issuance, such shares will be duly and validly issued, fully paid and non-assessable.  The Borrower agrees that its issuance of this Debenture shall constitute full authority to its officers and agents who are charged with the duty of executing stock certificates to execute and issue the necessary certificates for shares of Common Stock in accordance with the terms and conditions of this Debenture.

 

2.7. Issuance of New Debenture.  Upon any partial conversion of this Debenture, a new Debenture containing the same date and provisions of this Debenture shall, at the request of the Holder, be issued by the Borrower to the Holder for the principal balance of this Debenture and interest which shall not have been converted or paid. Subject to the provisions of Article III, the Borrower will pay no costs, fees or any other consideration to the Holder for the production and issuance of a new Debenture.

 

2.8           Fractional Shares.  No fractional shares shall be issued upon the conversion of this Note.  As to any fraction of a share which Holder would otherwise be entitled to upon such conversion, the Company shall round up to the next whole share.

 

  

2

  

 

ARTICLE III

 

EVENTS OF DEFAULT

 

The occurrence of any of the following events set forth in Sections 3.1 through 3.9, inclusive, shall be an “Event of Default”:

 

3.1. Failure to Pay Principal, Interest or Other Fees.  Borrower fails to pay principal, interest or other fees hereon and such failure shall continue for a period of five (5) days following the date upon which any such payment was due.

 

3.2. Breach of Covenant.  Borrower breaches any covenant or other term or condition of this Debenture in any material respect and such breach, if subject to cure, continues for a period of five (5) days after the occurrence thereof.

 

3.3. Breach of Representations and Warranties.  Any representation or warranty of Borrower made herein or the Purchase Agreement shall be false or misleading in any material respect.

 

3.4. Stop Trade.  An SEC stop trade order or Principal Market trading suspension of the Common Stock shall be in effect for five (5) consecutive days or five (5) days during a period of 10 consecutive days, excluding in all cases a suspension of all trading on a Principal Market, provided that Borrower shall not have been able to cure such trading suspension within 30 days of the notice thereof or list the Common Stock on another Principal Market within 60 days of such notice.  The “Principal Market” for the Common Stock shall include the OTC Bulletin Board, NASDAQ Capital Market, NASDAQ Global Market, NYSE Amex, or New York Stock Exchange (whichever of the foregoing is at the time the principal trading exchange or market for the Common Stock), or any securities exchange or other securities market on which the Common Stock is then being listed or traded.

 

3.5. Receiver or Trustee.  The Borrower or any of its Subsidiaries shall make an assignment for the benefit of creditors, or apply for or consent to the appointment of a receiver or trustee for it or for a substantial part of its property or business; or such a receiver or trustee shall otherwise be appointed.

 

3.6. Judgments.  Any money judgment, writ or similar final process shall be entered or filed against the Borrower or any of its Subsidiaries or any of their respective property or other assets for more than $100,000 in the aggregate for Borrower, and shall remain unvacated, unbonded or unstayed for a period of thirty (30) days.

 

3.7. Bankruptcy.  Bankruptcy, insolvency, reorganization or liquidation proceedings or other proceedings or relief under any bankruptcy law or any law for the relief of debtors shall be instituted by or against the Borrower or any of its Subsidiaries.

 

3.8. Default Under Other Agreements.  The occurrence of an Event of Default under and as defined herein or any event of default (or similar term) under any other agreement evidencing indebtedness of at least $100,000.

 

3.9. Failure to Deliver Common Stock or Replacement Debenture.  Except in the event Borrower does not have a sufficient number of shares of Common Stock authorized but unissued upon a conversion hereunder, Borrower’s failure to timely deliver Common Stock to the Holder pursuant to and in the form required by this Debenture and the Purchase Agreement, if such failure to timely deliver Common Stock shall not be cured within five (5) days.  If Borrower is required to issue a replacement Debenture to Holder and Borrower shall fail to deliver such replacement Debenture within seven (7) Business Days.

 

  

3

  

 

DEFAULT RELATED PROVISIONS

 

3.10. Default Interest Rate.  Following the occurrence and during the continuance of an Event of Default, interest on this Debenture shall automatically be instated at a rate of 18% per annum, effective as of the date of Issuance of this Debenture, which interest shall be payable in cash or Common Stock, at the option of the Borrower.

 

3.11. Conversion Privileges.  The conversion privileges set forth in Article II shall remain in full force and effect immediately from the date hereof and until this Debenture is paid in full.

 

3.12. Cumulative Remedies.  The remedies under this Debenture shall be cumulative.

 

ARTICLE IV

 

DEFAULT PAYMENTS

 

4.1. Default Payment.  If an Event of Default occurs and is continuing beyond any applicable grace period, the Holder, at its option, may elect, in addition to all rights and remedies of Holder under the Purchase Agreement and all obligations of the Borrower under the Purchase Agreement to require the Borrower to make a Default Payment (“Default Payment”).  The Default Payment shall be 105% of the outstanding principal amount of the Debenture, plus accrued but unpaid interest, all other fees then remaining unpaid, and all other amounts payable hereunder. The Default Payment shall be applied first to any fees due and payable to Holder pursuant to the Debentures or the Ancillary Agreements, then to accrued and unpaid interest due on the Debentures and then to outstanding principal balance of the Debentures.

 

4.2. Default Payment Date.  The Default Payment shall be due and payable immediately on the date that the Holder has exercised its rights pursuant to Section 4.1 (“Default Payment Date”).

 

ARTICLE V

 

MISCELLANEOUS

 

5.1. Failure or Indulgence Not Waiver.  No failure or delay on the part of the Holder hereof in the exercise of any power, right or privilege hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such power, right or privilege preclude other or further exercise thereof or of any other right, power or privilege.  All rights and remedies existing hereunder are cumulative to, and not exclusive of, any rights or remedies otherwise available.

 

5.2. Notices.  Any notice herein required or permitted to be given shall be in writing and provided in accordance with the terms of the Purchase Agreement.

 

5.3. Amendment Provision.  Any term of this Note may be amended only with the written consent of the Holder and the Borrower.  . The term “Debenture” and all reference thereto, as used throughout this instrument, shall mean this instrument as originally executed, or if later amended or supplemented, then as so amended or supplemented, and any successor instrument as it may be amended or supplemented.

 

5.4. Assignability.  This Debenture shall be binding upon the Borrower and its successors and assigns, and shall inure to the benefit of the Holder and its successors and assigns, and may not be assigned by the Holder without the prior written consent of the Borrower, which consent may not be unreasonably withheld.

 

  

4

  

 

5.5. Cost of Collection.  If default is made in the payment of this Debenture, each Borrower shall jointly and severally pay the Holder hereof reasonable costs of collection, including reasonable attorneys’ fees.

 

5.6. Governing Law; Consent to Jurisdiction; Waiver of Jury Trial.  This Debenture shall be governed by, and construed in accordance with, the internal laws of the State of New York, without regard to principles of conflicts of law.  HOLDER AND BORROWER WAIVE ANY RIGHT TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS DEBENTURE OR ANY TRANSACTION CONTEMPLATED HEREIN, INCLUDING CLAIMS BASED ON CONTRACT, TORT, BREACH OF DUTY AND ALL OTHER COMMON LAW OR STATUTORY BASES. Each party hereby submits to the exclusive jurisdiction of the state and federal courts located in the County of New York, State of New York.  If the jury waiver set forth in this Section is not enforceable, then any dispute, controversy or claim arising out of or relating to this Debenture or any of the transactions contemplated herein will be finally settled by binding arbitration in New York, New York in accordance with the then current Commercial Arbitration Rules of the American Arbitration Association by one arbitrator appointed in accordance with said rules.  The arbitrator shall apply New York law to the resolution of any dispute, without reference to rules of conflicts of law or rules of statutory arbitration.  Judgment on the award rendered by the arbitrator may be entered in any court having jurisdiction thereof.  Notwithstanding the foregoing, the parties may apply to any court of competent jurisdiction for preliminary or interim equitable relief, or to compel arbitration in accordance with this paragraph.  The expenses of the arbitration, including the arbitrator’s fees and expert witness fees, incurred by the parties to the arbitration, may be awarded to the prevailing party, in the discretion of the arbitrator, or may be apportioned between the parties in any manner deemed appropriate by the arbitrator.  Unless and until the arbitrator decides that one party is to pay for all (or a share) of such expenses, both parties shall share equally in the payment of the arbitrator’s fees as and when billed by the arbitrator.

 

5.7. Maximum Payments.  Nothing contained herein shall be deemed to establish or require the payment of a rate of interest or other charges in excess of the maximum permitted by applicable law.  In the event that the rate of interest required to be paid or other charges hereunder exceed the maximum permitted by such law, any payments in excess of such maximum shall be credited against amounts owed by Borrowers to the Holder and thus refunded to the Borrowers

 

5.8. Construction.  Each party acknowledges that its legal counsel participated in the preparation of this Debenture and, therefore, stipulates that the rule of construction that ambiguities are to be resolved against the drafting party shall not be applied in the interpretation of this Debenture to favor any party against the other.

 

[signature page follows]

 

  

5

  

 

 

IN WITNESS WHEREOF, Borrower has caused this Convertible Debenture to be signed in its name effective as of this 10th day of November, 2011.

 

	 	VANITY EVENTS HOLDING INC.	 
	 	 	 	 
	
 

	
By: 

	/s/ Lloyd Lapidus	 
	 	 	Name: Lloyd Lapidus	 
	 	 	Title:Interim Chief Executive Officer	 
	 	 	 	 

 

 

  

6

  

 

EXHIBIT A

 

NOTICE OF CONVERSION

 

(To be executed by the Holder in order to convert all or part of the Debenture into Common Stock)

 

GREYSTONE CAPTIAL PARTNERS LLC

 

[ADDRESS]

 

 

The undersigned hereby converts $_________ of the principal due on November 10, 2012 under the Convertible Debenture issued by VANITY EVENTS HOLDING, Inc. (“Borrower”) dated as of November 10, 2011 by delivery of shares of Common Stock of Borrower on and subject to the conditions set forth in Article II of such Debenture.

 

 

	1.	Date of Conversion	 	 
	 	 	 	 
	2.	Shares To Be Delivered:	 	 

 

 

	 	GREYSTONE CAPITAL PARTNERS LLC	 
	 	 	 	 
	
 

	
By: 

	 	 
	 	 	 	 
	 	Name:	 	 
	 	 	 	 
	 	Title:	 	 
	 	 	 	 

 

 

 

7

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