Document:

bella8kx103_962011.htm

Exhibit 10.3

MEMBERSHIP UNITS PURCHASE AND SALE AGREEMENT

 

THIS MEMBERSHIP UNITS PURCHASE AND SALE AGREEMENT, made and entered into as of August 31, 2011, by and among Bella Petrella’s Holdings, Inc., a Florida corporation, (“Bella Petrella’s”), Robert Vasaturo, Jr. and Melissa Vasaturo, both Florida residents (collectively, the “Selling Member”), the holder of all the outstanding Membership Units of Vasaturo Real Estate Holdings, LLC, a Florida limited liability company, (“VREH”), and VREH for the purpose of its representations, warranties and deliverables set forth herein.

 

W I T N E S S E T H :

 

WHEREAS, Bella Petrella’s is registered under the Securities Act of 1933 (“1933 Act), files reports pursuant to the Securities Exchange Act of 1934 (“1934 Act”) and its common stock traded in the public securities markets under the “ticker symbol” “BTHR”;

 

WHEREAS, Bella Petrella’s is a manufacturer (through a co-packer) and distributor of tomato based and other pasta and pizza sauces; and

 

WHEREAS, VREH owns and leases to Bobby V’s Original Westshore Pizza, LLC certain real estate on which the lessee operates one pizza restaurant in Tampa, Florida; and

 

WHEREAS, Bella Petrella’s desires to acquire VREH as a going concern by purchasing all of the outstanding Membership Units, being all of its equity securities, of VREH (“VREH Securities”) and thereafter to operate VREH as a wholly owned subsidiary; and

 

WHEREAS, the Selling Member desire to sell all of the VREH Securities that they own and for VREH to be acquired by Bella Petrella’s, as contemplated by this Agreement; and

 

NOW, THEREFORE, in consideration of the premises herein before set forth, in reliance hereon and the mutual promises and respective representations and warranties of the parties, one to another made herein, and the reliance of each party upon the other(s) based hereon and other good and valuable consideration, the receipt and sufficiency of which the parties respectively acknowledge, the parties agree, for purposes of consummating the transaction(s) contemplated herein, as follows:

 

ARTICLE I

PRELIMINARY MATTERS

 

Section 1.01.  Recitals.  The parties acknowledge the recitals herein above set forth in the preamble are correct, and are, by this reference, incorporated herein and are made a part of this Agreement.

 

Section 1.02.  Exhibits and Schedules.  Exhibits (which are documents to be executed and delivered at the Closing by the party identified therein or in the provision requiring such delivery) and Schedules (which are attachments setting forth information about a party identified therein or in the provision requiring such attachment) referred to herein and annexed hereto are, by this reference, incorporated herein and made a part of this Agreement, as if set forth fully herein.

 

  

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Section 1.03.  Use of words and phrases.  Natural persons may be identified by last name, with such additional descriptors as may be desirable.  The words “herein,” “hereby,” “hereunder,” “hereof,” “herein before,” “hereinafter” and any other equivalent words refer to this Agreement as a whole and not to any particular Article, Section or other subdivision hereof.  The words, terms and phrases defined herein and any pronoun used herein shall include the singular, plural and all genders.  The word “and” shall be construed as a coordinating conjunction unless the context clearly indicates that it should be construed as a copulative conjunction.

 

Section 1.04.  Accounting terms.  All accounting terms not otherwise defined herein shall have the meanings assigned to them under generally accepted accounting principles unless specifically referenced to regulatory accounting principles.  GAAP means generally accepted accounting principles in effect in the United States and as applicable to companies subject to the reporting requirements of the 1934 Act.

 

Section 1.05.  Calculation of time lapse or passage; Action required on holidays.  When a provision of this Agreement requires or provides for the calculation of the lapse or passage of a time period, such period shall be calculated by treating the day on which the event which starts the lapse or passage occurs as zero; provided, that this provision shall not apply to any provision which specifies a certain day for action or payment, e.g. the first day of each calendar month.  Unless otherwise provided, the term “month” shall mean a period of thirty days and the term “year” shall mean a period of 360 days, except that the terms “calendar month” and “calendar year” shall mean the actual calendar period indicated.  If any day on which action is required to be taken or payment is required to be made under this Agreement is not a Business Day (Business Day being a day on which national banks are open for business where the actor or payor is located), then such action or payment shall be taken or made on the next succeeding Business Day.

 

Section 1.06.  Use of titles, headings and captions.  The titles, headings and captions of articles, sections, paragraphs and other subdivisions contained herein are for the purpose of convenience only and are not intended to define or limit the contents of said articles, sections, paragraphs and other subdivisions.

 

ARTICLE II

TERMS OF THE TRANSACTIONS

 

Section 2.01.   Purchase and sale transaction.  In accordance with the terms of this Agreement, on the Closing Date, Bella Petrella’s shall purchase the VREH Securities and the Selling Member shall deliver to Bella Petrella’s all of VREH’s Securities, in form sufficient for the transfer thereof to Bella Petrella’s and its designation as the sole member of VREH, for and in consideration of payment to the Selling Member equal to Eight Hundred Thousand Dollars ($800,000.00), in immediately available funds (the “Purchase Price”).  Upon receipt of the Purchase Price, the Selling Member shall promptly satisfy and discharge the obligations of VREH to Pilot Bank arising out of that certain Promissory Note dated January 29, 2009 in the original principal amount of $572,000.00, secured by the real property owned by VREH.

 

Section 2.02.  Federal income tax treatment.  At or before the Closing Date, the parties shall agree on the value of each of the assets of VREH for federal income tax purposes and for GAAP purposes, if required for federal income tax purposes and for GAAP purposes.

 

  

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Section 2.03.  Transaction costs.  Each party shall pay all costs and expenses which it or he incurs in connection with this Agreement and the transactions contemplated hereby.

 

Section 2.04.  Press releases.  No party will issue a press release regarding the subject matter of this Agreement and the transactions contemplated hereby, either before or after Closing, without the prior approval thereof by the other parties and their counsel.

 

ARTICLE III

CLOSING OF THE TRANSACTION

 

Section 3.01.  Location, date and time of the Closing.  The Closing of the transaction contemplated by this Agreement shall take place no later than October 31, 2011 (the “Closing Date”), at the time and simultaneously with the satisfaction of the Notes executed by Bella Petrella’s in connection with Bella Petrella’s purchase of the equity of Philly Westshore Franchising Enterprises, Inc. and Bobby V’s Original Westshore Pizza, LLC, subject to extensions in the event that the maturity dates of such Notes are extended in accordance with their terms.  The Closing shall take place at a location agreed to by the parties.  The acts and deliveries which occur on the Closing Date for the purpose of consummating the transactions contemplated by this Agreement and the event itself is referred to herein as the “Closing”.

 

Section 3.02.                                The Selling Member deliveries at the Closing.  At the Closing, the Selling Member and VREH will deliver to Bella Petrella’s:

 

	
(a)  

	
Documents legally sufficient for the transfer of VREH’s Securities and establishing Bella Petrella’s as the sole member;

 

Section 3.03.  VREH deliveries at the Closing.  At the Closing, VREH will deliver to Bella Petrella’s:

 

	
(a)  

	
Certificate of good standing in VREH state of organization;

 

	
(b)  

	
Managing Member Certificates of VREH in the form set forth in Exhibits “A” and “B”, respectively;

 

	
(c)  

	
The original of VREH’s record book or equivalent and related documents.

 

Section 3.04.  Bella Petrella’s deliveries at the Closing.  At the Closing, Bella Petrella’s will deliver to the Selling Member:

 

	
(a)  

	
The Purchase Price; and

 

	
(b)  

	
Action by Bella Petrella’s board of directors approving the transactions contemplated by this Agreement and related agreements;

 

	
(c)  

	
Officers’ and Secretary’s Certificates of Bella Petrella’s in the form set forth in Exhibits “A” and “B”, respectively; and

 

Section 3.05.  Closing Memorandum and receipts.  As evidence that all parties deem the Closing to have been completed and the transactions contemplated by this Agreement to have been consummated, the parties jointly will execute and deliver a Closing Memorandum, in the form of Exhibit “C”, acknowledging such completion and consummation.

 

  

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Section 3.06.  Waiver of conditions.  Notwithstanding Section 10.03, any condition to the Closing which is to the benefit of any party and which is not satisfied prior to or at the Closing, excluding nevertheless any provision of this Agreement which by its terms is to be performed in the future, will be deemed to be waived by the benefited party or otherwise satisfied and waived by virtue of that party executing the Closing Memorandum, except to the extent any such unsatisfied or unperformed condition is expressly preserved by listing it in the Closing Memorandum for satisfaction or performance after the Closing.

 

Section 3.07.  Further assurances.  At any time and from time to time after the Closing, at the reasonable request of any party and without further consideration, any other party shall execute and deliver such other instruments and documents reasonably desirable or necessary to complete and confirm the transactions contemplated by this Agreement, at no cost to the party so requested.

 

Section 3.08.  Conditions precedent to Bella Petrella’s obligation to Close.  All obligations of Bella Petrella’s hereunder are subject, at the option of Bella Petrella’s, to the fulfillment of each of the following conditions at or prior to the Closing, and the Selling Member and VREH shall exert commercially reasonable efforts to cause each such conditions to be so fulfilled:

 

(a)  All representations and warranties of the Selling Member and VREH contained herein and in any document delivered pursuant hereto shall be true and correct in all material respects when made and shall be deemed to have been made again and given at and as of the date of the Closing of the transactions contemplated by this Agreement, and shall then be true and correct in all material respects, except for changes in the ordinary course of business after the date hereof in conformity with the representations, covenants and agreements contained herein.

 

(b)  All covenants, agreements and obligations required by the terms of this Agreement to be performed by the Selling Member and VREH at or before the Closing shall have been duly and properly performed in all material respects to Bella Petrella’s reasonable satisfaction.

 

(c)  Since the date of this Agreement there shall not have occurred any material adverse change in the business, financial condition or performance or prospects of VREH.  The term “material adverse change” shall mean any adverse change in VREH operations, results of operations, assets or prospects representing a decline or reduction or an expectable decline or reduction of ten percent or more.

 

(d)  All documents required to be delivered to Bella Petrella’s at or prior to the Closing shall have been so delivered.

 

  

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Section 3.09.  Conditions precedent to the Selling Member’s and VREH’s obligation to Close.  All obligations of the Selling Member and VREH at the Closing are subject, at the option of the Selling Member, to the fulfillment of each of the following conditions at or prior to the Closing, and Bella Petrella’s shall exert commercially reasonable efforts to cause each such condition to be so fulfilled.

 

(a)  All representations and warranties of Bella Petrella’s contained herein or in any document delivered pursuant hereto shall be true and correct in all material respects when made and shall be deemed to have been made again and given at and as of the date of the Closing of the transaction contemplated by this Agreement, and shall then be true and correct in all material respects, except for changes in the ordinary course of business after the date hereof in conformity with the representations, covenants and agreements contained herein.

 

(b)  All covenants, agreements and obligations required by the terms of this Agreement to be performed by Bella Petrella’s at or before the Closing shall have been duly and properly performed in all material respects to the Selling Member reasonable satisfaction.

 

(c)  All documents required to be delivered to the Selling Member at or prior to the Closing shall have been so delivered.

 

(d)  Since the date of this Agreement, there shall not have occurred any material adverse change in the business, financial condition or performance or prospects of Bella Petrella’s.  The term “material adverse change” shall mean any adverse change in Bella Petrella’s operations, results of operations, assets or prospects representing a decline or reduction or an expectable decline or reduction of ten percent or more.

 

(e)  The transaction contemplated by this Agreement and related agreements shall have been approved in writing by Bella Petrella’s board of directors.

 

(f)  The Selling Member shall have received a certificate of good standing for Bella Petrella’s issued by the secretary of state of Florida and of each state in which it is qualified or required to be qualified to do business as a foreign corporation.

 

(g)  The Selling Member shall have had an opportunity to ask questions of Bella Petrella’s management regarding the reports it has filed with the U.S. Securities and Exchange Commission and its prospects, financial and otherwise, and received answers satisfactory to them, subject to the confidentiality requirements of Regulation FD.

 

ARTICLE IV

REPRESENTATIONS AND WARRANTIES OF THE PARTIES

 

Section 4.01.  Representations and warranties of the Selling Member and VREH.  Each of the Selling Member and VREH represents and warrants, jointly and severally, to Bella Petrella’s, as follows:

 

(a)  VREH is a duly organized and an existing entity in good standing under the laws of its state of incorporation and has full corporate power to execute, deliver and perform this Agreement.

 

  

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(b)  VREH is qualified to do business and in good standing in each state and jurisdiction in which the nature of its activities and ownership of property require it to be qualified as a foreign corporation.

 

(c) This Agreement has been duly and validly authorized, executed and delivered by VREH and constitutes the legal, valid and binding obligation of VREH enforceable against it, in accordance with its terms, subject, as to enforceability, to bankruptcy, insolvency, reorganization and other laws of, relating to or affecting stockholders and creditors rights generally and to general equitable principles.

 

(d)  To the best knowledge of the Selling Member and VREH, the execution of this Agreement and consummation of the transactions contemplated hereby does not conflict with and will not result in any adverse consequences to or material breach of any agreement (financing or otherwise), mortgage, instrument, judgment, decree, law or governmental regulation, license, permit or authorization by VREH or in the loss, forfeiture or waiver of any rights, license, authorization or franchise owned by VREH, from which VREH benefits or which is desirable in the conduct of VREH’s business.

 

(e)  To the best knowledge of the Selling Member and VREH, except for such actions as may have been taken, no further action by or before any governmental body or authority of the United States of America or any state or subdivision thereof to which VREH is subject is required in connection with the execution and delivery of this Agreement by VREH and the consummation of the transactions contemplated hereby by the Selling Member.

 

 (f)  The information VREH has delivered to Bella Petrella’s relating to VREH was, to the best knowledge of the Selling Member and VREH, on the date reflected in each such item of information accurate in all material respects and, to the best knowledge of the Selling Member and VREH, such information at the date hereof taken as a whole provides full and fair disclosure of all material information relating to VREH and does not, to the best knowledge of the Selling Member and VREH, omit to state any material fact necessary to make the statements therein, in light of the circumstances under which they were made, not misleading.

 

(g)  VREH has conducted its business substantially consistent with prior practice for the last three years or since inception, whichever is less.

 

(h)  Neither VREH nor any employee, to the Selling Member and VREH’s best knowledge, has since inception given or agreed to give any gift or similar benefit valued at more than $25 annually to any customer, supplier, governmental employee or other person who is or may be or have been in a position to help or hinder VREH’s business, or a gift or similar benefit in any amount or value which might subject VREH to damage or penalty in civil, criminal or governmental litigation or proceedings.

 

(i)  VREH has good and marketable title to all of its properties and assets, including intangible assets, if any, which it owns or uses in its business or purports to own, including, without limitation, those reflected in its books and records and in the balance sheet, both tangible and intangible  None of the properties and assets are subject to any mortgage, pledge, lien, charge, security interest, encumbrance, restriction, lease, license, easement, liability or adverse claim of any nature whatsoever, direct or indirect, whether accrued, absolute, contingent or otherwise, except to Pilot Bank or as expressly set forth in the notes to VREH’s financial statements as securing specific liabilities or subject to specific capital leases and have arisen only in the ordinary course of business or as set forth in any certificates of title or title insurance policies provided to Bella Petrella’s by VREH.

 

  

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(j)  All of the material contracts, agreements, leases, licenses and commitments of VREH (other than those which have been fully performed), copies of all of which have been delivered to Bella Petrella’s, are, to the best knowledge of the Selling Member and VREH valid and binding, enforceable in accordance with their respective terms, in full force and effect and there is not there under with respect to any party thereto any existing default or event, which after the giving of notice or lapse of time or both, would constitute a default or result in a right to accelerate or loss of rights and none of such contracts, agreements, leases, licenses and commitments is, either when considered singly or in the aggregate with others, unduly burdensome, onerous or materially adverse to VREH’s business, properties, assets, earnings or prospects, either before or after the Closing.

 

(k)  There is no claim, legal action, suit, arbitration, governmental investigation, or other legal or administrative proceeding, nor any order, decree, judgment or judgment in progress, pending or in effect or to the Selling Member’s and VREH’s knowledge threatened, against or relating to VREH, its directors, officers or employees with respect to VREH or its business or for which VREH may have an indemnity obligation, it properties, assets or business or the transaction contemplated by this Agreement and the Selling Member and VREH do not know or have any reason to be aware of any basis for the same, including any basis for a claim of sexual harassment or racial or age discrimination.

 

(l)  To the best knowledge of Selling Member and VREH, all VREH taxes, including without limitation, income, property, special assessments, sales, use, franchise, intangibles, employees’ income withholding and social security taxes, including employer’s contribution, other than those for which a return or deposit is not yet due and have been disclosed to Bella Petrella’s, imposed by the United States or any state, municipality, subdivision, authority, which are due and payable, and all interest and penalties thereon, unless disputed in good faith in proper proceedings and reserved for or set aside, have been paid in full and all tax returns required to be filed in connection therewith have been accurately prepared and timely filed and all deposits required by law to be made by VREH with respect to employees’ withholding and social security taxes have been made.  VREH is not and has no reason to believe that it will be the subject of an audit by any taxing authority.  There is not now in force any extension of time with respect to the date when tax return was or is due to be filed, or any waiver or agreement by VREH for the extension of time for the assessment of any tax and VREH is not a “consenting corporation” within the meaning of Section 341(f)(1) of the Tax Code.

 

(m)  VREH does not have any employee benefit, pension or profit sharing plans subject to ERISA and no such plans to which VREH is obligated or required to make contributions.

 

(n)  No person other than Philly Westshore Franchising Enterprises, Inc. and Seller has guaranteed any obligation of VREH, and VREH has not guaranteed the obligation of any other person.

 

(o)  No broker, finder or other person is entitled to any compensation, fees or other payments in connection with the transactions contemplated by this Agreement.

 

  

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Section 4.02.  Bella Petrella’s representations and warranties.  Bella Petrella’s represents and warrants to the Selling Member that:

 

(a)  Bella Petrella’s is a duly incorporated and existing corporation in good standing under the laws of its state of incorporation and has full corporate power to execute and deliver this Agreement.

 

(b)  Bella Petrella’s is qualified to do business and in good standing in each state and jurisdiction in which the nature of its activities and ownership of property require it to be qualified as a foreign corporation.

 

(c)  All licenses required for the conduct of Bella Petrella’s business in intra and interstate commerce are in full force and effect; and, there is no proceeding of any nature pending or, to the best knowledge of Bella Petrella’s, threatened which if determined adversely to Bella Petrella’s would result in a revocation, cancellation of or material limitation or restriction on Bella Petrella’s and the conduct of its or any subsidiary’s business as it is presently conducted.

 

(d)  To the best knowledge of Bella Petrella’s, Bella Petrella’s is in compliance with all federal and state laws and regulations applicable to it governing the offer, sale and operations of franchises.

 

(e)  This Agreement has been duly and validly authorized, executed and delivered by Bella Petrella’s and constitutes the legal, valid and binding obligation of Bella Petrella’s, enforceable against Bella Petrella’s in accordance with its terms subject, as to enforceability, to bankruptcy, insolvency, reorganization and other laws of, relating to or affecting shareholders and creditors rights generally and to general equitable principles.

 

(f)  To the best knowledge of Bella Petrella’s, the execution of this Agreement and consummation of the transactions contemplated hereby does not conflict with and will not result in any adverse consequences to or material breach of any agreement (financing or otherwise), mortgage, instrument, judgment, decree, law or governmental regulation, license, permit or authorization by Bella Petrella’s or in the loss, forfeiture or waiver of any rights, license, authorization or franchise owned by Bella Petrella’s, from which Bella Petrella’s benefits or which is desirable in the conduct of Bella Petrella’s business.

 

(g)  Except for such actions as may have already been taken, no further action by or before any governmental body or authority of the United States of America or any state thereof is required in connection with the execution and delivery of this Agreement by Bella Petrella’s and the consummation of the transactions contemplated hereby.

 

(h)  The information Bella Petrella’s have delivered to the Selling Member was on the date reflected in each such item of information accurate in all material respects and such information at the date hereof as a whole did not contain any untrue statement of material fact or omit to state any material fact necessary to make the statements therein, in light of the circumstances under which they were made, not misleading.

 

(i)  The information and financial statements Bella Petrella’s has filed under the 1934 Act and has delivered to the Selling Member, on the date reflected in each report and element of information and financial statements, are accurate in all material respects and, to the knowledge of Bella Petrella’s, such information at the date hereof taken as a whole provides, to the best knowledge of Bella Petrella’s, full and fair disclosure of all material information relating to Bella Petrella’s and does not, to the knowledge of Bella Petrella’s omit to state any material fact necessary to make the statements therein, in light of the circumstances under which they were made, not misleading.

 

  

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(j)  No broker, finder or other person is entitled to any compensation, fees or other payments in connection with the transactions contemplated by this Agreement.

 

(k)  Bella Petrella’s has good title to all of its properties and assets, including intangible assets, if any, which it owns or uses in its business or purports to own, including, without limitation, those reflected in its books and records and in the balance sheet, both tangible and intangible  None of the properties and assets are subject to any mortgage, pledge, lien, charge, security interest, encumbrance, restriction, lease, license, easement, liability or adverse claim of any nature whatsoever, direct or indirect, whether accrued, absolute, contingent or otherwise, except as expressly set forth in the notes to Bella Petrella’s financial statements as securing specific liabilities or subject to specific capital leases and have arisen only in the ordinary course of business.

 

(l)  All of the material contracts, agreements, leases, licenses and commitments of Bella Petrella’s (other than those which have been fully performed), copies of all of which have been delivered to VREH are, to the best knowledge of Bella Petrella’s, valid and binding, enforceable in accordance with their respective terms, in full force and effect and there is not there under with respect to any party thereto any existing default or event, which after the giving of notice or lapse of time or both, would constitute a default or result in a right to accelerate or loss of rights and none of such contracts, agreements, leases, licenses and commitments is, either when considered singly or in the aggregate with others, unduly burdensome, onerous or materially adverse to Bella Petrella’s business, properties, assets, earnings or prospects, either before or after the Closing.

 

(m)  There is no claim, legal action, suit, arbitration, governmental investigation, or other legal or administrative proceeding, nor any order, decree, judgment or judgment in progress, pending or in effect or to Bella Petrella’s knowledge threatened, against or relating to Bella Petrella’s, its directors, officers or employees with respect to Bella Petrella’s or its business or for which Bella Petrella’s may have an indemnity obligation, its properties, assets or business or the transaction contemplated by this Agreement and the Bella Petrella’s does not know or have any reason to be aware of any basis for the same, including any basis for a claim of sexual harassment or racial or age discrimination.

 

(n)  To the best knowledge of Bella Petrella’s, all taxes, including without limitation, income, property, special assessments, sales, use, franchise, intangibles, employees’ income withholding and social security taxes, including employer’s contribution, other than those for which a return or deposit is not yet due and have been disclosed to VREH, imposed by the United States or any state, municipality, subdivision, authority, which are due and payable, and all interest and penalties thereon, unless disputed in good faith in proper proceedings and reserved for or set aside, have been paid in full and all tax returns required to be filed in connection therewith have been accurately prepared and timely filed and all deposits required by law to be made by Bella Petrella’s with respect to employees’ withholding and social security taxes have been made.  Bella Petrella’s is not subject of an audit by any taxing authority.  There is not now in force any extension of time with respect to the date when tax return was or is due to be filed, or any waiver or agreement by Bella Petrella’s for the extension of time for the assessment of any tax and Bella Petrella’s is not a “consenting corporation” within the meaning of Section 341(f)(1) of the Tax Code.

 

(o)  None of Bella Petrella’s employees are represented by a collective bargaining agent or subject to a collective bargaining agreement and Bella Petrella’s considers its relations with its employees as a whole to be good.

 

  

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Section 4.03.  Nature and survival of representation and warranties; Remedies.  For purposes of this Section 4.03 and Section 9.01 only, any party or other person seeking to enforce, or claiming the benefit of, any representation and warranty under this Agreement is called a Claimant, and any party or other person against whom a right is claimed is called a Defendant.  All representations and warranties of the parties shall survive the Closing; provided, however, that all representations and warranties shall terminate and expire, and be without further force and effect whatever from and after one calendar year from the Closing, and neither the Selling Member, VREH nor Bella Petrella’s shall have any liability whatsoever on account of any inaccurate representation or warranty or for any breach of warranty, unless a Claimant shall, on or prior to the expiration of such one calendar year period, serve written notice on a Defendant, with a copy to the Defendant’s counsel, setting forth in reasonable detail the breach and any direct, incidental or consequential damages (including amounts) the Claimant may have suffered as a result of such breach.

 

ARTICLE V

COVENANTS OF THE PARTIES

 

Section 5.01.  Conduct of business prior to Closing.

 

(a) From the date hereof to the Closing, VREH will conduct its business and affairs only in the ordinary course and consistent with its prior practice and shall endeavor to maintain, keep and preserve its assets and properties in good condition and repair and maintain insurance thereon in accordance with present practices, it will use its best efforts (i) to preserve its business and organization intact, (ii) to keep available to Bella Petrella’s the services of VREH’s present employees, agents and independent contractors, (iii) to preserve for the benefit of VREH and Bella Petrella’s the goodwill of suppliers, customers, distributors, landlords and others having business relations with it, and (iv) to cooperate and use reasonable efforts to obtain the consent of any landlord or other party to any lease or contract with VREH where the consent of such landlord or other party may be required by reason of the transactions contemplated hereby.

 

(b)  From the date hereof to the Closing, VREH shall not outside the ordinary course of business (i) dispose of any material assets, (ii) engage in any extraordinary transactions without Bella Petrella’s prior approval, including but not limited to, directly or indirectly, soliciting, entertaining, encouraging inquiries or proposals or entering into negotiation or agreement with any third party for sale of assets by VREH, sale of its equity securities or merger, consolidation or combination with any company, (iii) grant any salary or compensation increase to any employee, or (iv) make any commitment for capital expenditures, other than as disclosed to Bella Petrella’s and approved by it.

 

Section 5.02.  Notice of changes in information.  From the date hereof to the Closing, each party shall give the other parties prompt written notice of any change in any of the information contained in their respective representations and warranties made in Article IV, or elsewhere in this Agreement, or the exhibits and schedules referred to herein or any written statements made or given in connection herewith which occurs prior to the Closing.

 

Section 5.03.  Notice of extraordinary changes.  From the date hereof to the Closing, VREH shall advise Bella Petrella’s with respect to any of the following events outside of ordinary course of business and which are materially adverse:  (i) the entering into and cancellation or breach of contracts, agreements, licenses, commitments or other understandings or arrangements to which VREH is a party, (ii) any changes in purchasing, pricing or selling policy, or, any changes in its sales, business or employee relations in general, and (iii) the filing or commencement of any litigation or governmental or agency proceedings against VREH.

 

Section 5.04.  Action to preserve VREH’s business and assets.   From the date hereof to the Closing, notwithstanding anything contained in this Agreement to the contrary, VREH will not take or fail to take any action that in VREH’s reasonable business judgment, is likely to give rise to a substantial penalty or a claim for damages by any third party against VREH, or is likely to result in losses, or is otherwise likely to prejudice in any material respect or unduly interfere with the conduct of its business and operations in the ordinary course consistent with prior practice, or is likely to result in a breach by VREH of any of its representations, warranties or covenants contained in this Agreement (unless any such breach is first waived in writing by Bella Petrella’s).

 

Section 5.05.  Cooperation by the parties.  From the date hereof to the Closing, each party hereto shall cooperate and shall take such further action as may be reasonably requested by any other party in order to carry out the provisions and purposes of this Agreement.

 

  

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ARTICLE VI

FEDERAL INCOME TAX MATTERS

 

Section 6.01.  Federal income tax treatment.  Each party shall be responsible for obtaining his, her or its own tax advice with respect to and understanding the federal income tax consequences of the transactions and the federal income tax consequences thereof contemplated by this Agreement and waives any reliance with respect thereto on any other party.

 

ARTICLE VII

TERMINATION

Section 7.01.   Right of Parties to Terminate.  This Agreement may be terminated:

	
(a)  

	
 by the mutual written consent of Bella Petrella’s and Selling Member;

(b) by either Bella Petrella’s or Selling Member by written notice to the other party if the Closing shall not have occurred on or prior to October 31, 2011, unless extended as set forth in Section 3.01 hereof ;

(c) by either Bella Petrella’s or Selling Member by written notice to the other party in the event any court of competent jurisdiction in the United States or other federal, state or local government body shall have issued a final order, decree or ruling or taken any other action, no longer subject to appeal, prohibiting the transactions contemplated hereby;

(d) by Selling Member by written notice to Bella Petrella’s in the event that an Event of Default has occurred under that certain Pledge Agreement dated of event date herewith between Robert Vasaturo, Jr. and Bella Petrella’s, which by this reference is made an integral part hereof; or

(e)  as otherwise expressly authorized in this Agreement.

Section 7.02   Effect of Termination.  In the event that this Agreement is terminated, this Agreement shall be null and void and of no further force or effect whatsoever and none of the parties shall have any further rights or obligations hereunder, or, in lieu of termination, Selling Member shall have the right to pursue an action for specific performance of this Agreement or other related equitable remedies.

 

  

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ARTICLE VIII

NOTICES

 

Section 8.01.  Procedure for giving notices.  Any and all notices or other communications required or permitted to be given under any of the provisions of this Agreement shall be in writing and shall be deemed to have been duly given when personally delivered (excluding telephone facsimile and including receipted express courier and overnight delivery service) or mailed by first class certified U.S. mail, return receipt requested showing name of recipient, addressed to the proper party.

 

Section 8.02.  Addresses for notices. For purposes of sending notices under this Agreement, the addresses of the parties are as follows:

 

	
As to VREH and Mr./Mrs. Vasaturo:

	
Robert Vasaturo, Jr.

	
(prior to Closing)

	  
	  	
4802 West Bay Court Avenue

	  	
Tampa, FL 33681

	
 

Copy to:

 

 

 

	
 

Craig A. Wagner, Esq.

Wagner, Johnston & Rosenthal, P.C.

5855 Sandy Springs Circle

Suite 300

Atlanta, Georgia 30328

 

  

12

  

 

 

	
As to Mr./Mrs. Vasaturo:

	
Mr. Robert Vasaturo, Jr.

	
(after Closing)

	
P.O. Box 13137

	  	
Tampa, FL 33681

	
 

Copy to:

 

	
 

Craig A. Wagner, Esq.

Wagner, Johnston & Rosenthal, P.C.

5855 Sandy Springs Circle

Suite 300

Atlanta, Georgia 30328

 

	
As to Bella Petrella’s

	
John V. Whitman, Jr., Chief Executive Officer

	
and VREH (after

	
Bella Petrella’s Holdings, Inc.

	
       Closing):

	
109 South Edison Avenue

	  	
Tampa, FL 33606

	  	  
	
Copy to:

	
Jackson L. Morris, Esq.

	  	
3116 West North A Street

	  	
Tampa, Florida 33609-1544

Section 8.03.  Change of address.  A party may change its address for notices by sending a notice of such change to all other parties by the means provided in Section 8.01.

 

  

13

  

 

ARTICLE IX

LEGAL AND OTHER COSTS

 

Section 9.01.  Party entitled to recover.  In the event that any party (the “Defaulting Party”) defaults in his or its obligation under this Agreement and, as a result thereof, the other party (the “Non-Defaulting Party”) seeks to legally enforce his or its rights hereunder against the Defaulting Party (whether in an action at law, in equity or in arbitration), then, in addition to all damages and other remedies to which the Non-Defaulting Party is entitled by reason of such default, the Defaulting Party shall promptly pay to the Non-Defaulting Party an amount equal to all costs and expenses (including reasonable attorneys’ fees and expert witness fees) paid or incurred by the Non-Defaulting Party in connection with such enforcement.

 

Section 9.02.  Interest.  In the event the Non-Defaulting Party is entitled to receive an amount of money by reason of the Defaulting Party’s default hereunder, then, in addition to such amount of money, the Defaulting Party shall promptly pay to the Non-Defaulting Party a sum equal to interest on such amount of money accruing at the rate of 1.5% per month during the period between the date such payment should have been made hereunder and the date of the actual payments thereof.

ARTICLE X

MISCELLANEOUS

 

Section 10.01.  Effective date.  The effective date of this Agreement shall for all purposes be the date set forth in first paragraph hereof notwithstanding a later actual date of execution by any individual party.

 

Section 10.02.  Entire agreement.  This writing constitutes the entire agreement of the parties with respect to the subject matter hereof, superseding all prior agreements, understandings, representations and warranties with respect to the subject matter hereof.

 

Section 10.03.  Waivers.  No waiver of any provision, requirement, obligation, condition, breach or default hereunder, or consent to any departure from the provisions hereof, shall be considered valid unless in writing and signed by the party giving such waiver, and no such waiver shall be deemed a waiver of any subsequent breach or default of the same or similar nature.

 

Section 10.04.  Amendments.  This Agreement may not be modified, amended or terminated except by a written agreement specifically referring to this Agreement signed by all of the parties hereto and amendment, modification or alteration of, addition to or termination of this Agreement or any provision of this Agreement shall not be effective unless it is made in writing and signed by the parties.

 

  

14

  

 

Section 10.05.  Construction.  This Agreement has been negotiated by the parties, section by section, and no provision hereof shall be construed more strictly against one party than against the other party by reason of such party having drafted such provision.  The order in which the provisions of this Agreement appear are solely for convenience of organization; and later appearing provisions shall not be construed to control earlier appearing provisions.

 

Section 10.06.  Invalidity.  It is the intent of the parties that each provision of this Agreement shall be interpreted in such a manner as to be effective and valid under applicable law.  If any provision hereof shall be prohibited, invalid, illegal or unenforceable, in any respect, under applicable law, such provision shall be ineffective to the extent of such prohibition, invalidity or non enforceability only, without invalidating the remainder of such provision or the remaining provisions of this Agreement; and, there shall be substituted in place of such prohibited, invalid, illegal or unenforceable provision a provision which nearly as practicable carries out the intent of the parties with respect thereto and which is not prohibited and is valid, legal and enforceable.

 

Section 10.07.  Multiple counterparts.  This Agreement may be executed in one or more counterparts, each of which shall be an original and, taken together, shall be deemed one and the same instrument.

 

Section 10.08.  Assignment, parties and binding effect.  This Agreement, and the duties and obligations of any party shall not be assigned without the prior written consent of the other party(ies).  This Agreement shall benefit solely the named parties and no other person shall claim, directly or indirectly, benefit hereunder, express or implied, as a third-party beneficiary, or otherwise.  Wherever in this Agreement a party is named or referred to, the successors (including heirs and personal representative of individual parties) and permitted assigns of such party shall be deemed to be included, and all agreements, promises, covenants and stipulations in this Agreement shall be binding upon and inure to the benefit of their respective successors and permitted assigns.

 

Section 10.09.  Survival of representations and warranties.  The representations and warranties made herein shall survive the execution and delivery of this Agreement and full performance hereunder of the obligations of the representing and warranting party, subject to the provisions of Section 4.03.

 

Section 10.10.  Jurisdiction and venue.  Any action or proceeding for enforcement of this Agreement and the instruments and documents executed and delivered in connection herewith which is determined by a court of competent jurisdiction not, as a matter of law, which seeks injunctive relief shall be brought and enforced in the courts of the State of Florida in and for Hillsborough County, Florida, and the parties irrevocably submit to the jurisdiction of each such court in respect of any such action or proceeding.

 

Section 10.11.  Applicable law.  This Agreement and all amendments thereof shall be governed by and construed in accordance with the law of the State of Florida applicable to contracts made and to be performed therein (not including the choice of law rules thereof).

 

[Testimonium on following page.]

 

 

  

15

  

 

IN WITNESS WHEREOF, the parties hereto have caused this agreement to be signed by their respective officers thereunto duly authorized and their respective corporate seals to be hereunto affixed, the day and year first above written.

 

	 	 	Bella Petrella’s Holdings, Inc.	 
	[Corporate Seal]	 	 	 	 
	
Attest:

	 	
By: 

	/s/ John V. Whitman, Jr.	 
	/s/ Jackson L. Morris 	 	 	John V. Whitman, Jr., Chief Executive Officer	 
	Jackson L. Morris, Secretary	 	 	 	 
	 	 	Vasaturo Real Estate Holdings, LLC	 
	 	 	 	 	 
	 	 	By: 	 /s/ Robert Vasaturo, Jr.	 
	 	 	 	Robert Vasaturo, Jr., Managing Member	 
	 	 	 	 	 
	 	 	 	/s/ Melissa Vasaturo 	 
	Witness:	 	 	Melissa Vasaturo, Managing Member	 
	 	 	 	 	 
	 	 	 	 /s/ Robert Vasaturo, Jr.	 
	 	 	 	Robert Vasaturo, Jr.	 
	 	 	 	 	 
	 	 	 	 /s/ Melissa Vasaturo	 
	 	 	 	Melissa Vasaturo	 
	 	 	 

 

 

  

16bella8kx104_962011.htm

 

 

Exhibit 10.4

 

Escrow Agreement

 

 

THIS ESCROW AGREEMENT (hereinafter referred to as the “Escrow Agreement”), is executed and delivered to be effective the 31st day of August, 2011, by and among BELLA PETRELLA’S HOLDINGS, INC., a Florida corporation (hereinafter referred to as “BP”); ROBERT VASATURO, JR., a Florida resident (hereinafter referred to as “VASATURO”); BOBBY V’S PIZZA, INC., a Florida corporation, (hereinafter referred to as “BOBBY V’S PIZZA”); BOUT TIME MARKETING, LLC, a Florida limited liability company (hereinafter referred to as “Bout Time”); JOHN V. WHITMAN, JR., a Florida resident (hereinafter referred to as “Whitman”); and WJ TITLE & ESCROW COMPANY, a Georgia corporation (hereinafter referred to as “Escrow Agent”).

 

WITNESSETH:

 

WHEREAS, pursuant to a certain Stock Purchase and Sales Agreement between Vasaturo and BP of even date herewith (hereinafter referred to as the “Philly Westshore Purchase Agreement”), BP has acquired all of the outstanding common stock of Philly Westshore Franchising Enterprises, Inc., a Florida corporation (hereinafter referred to as “Philly Westshore”); and

 

WHEREAS, in conjunction with the Philly Westshore Purchase Agreement, BP has made and delivered to Vasaturo a Secured Promissory Note dated of even date in the principal amount of Two Million Five Hundred Eighty-One Thousand Three Hundred Seventy-One and 93/100 Dollars ($2,581,371.93) which by this reference is made an integral part hereof (hereinafter referred to as “Philly Westshore Note”); and

 

WHEREAS, as collateral for the obligations of BP under the Philly Westshore Note, BP has pledged 100,000 Shares of common stock of Philly Westshore represented by Certificate No. 2 (hereinafter referred to as the “Philly Westshore Shares”) in favor of Vasaturo and executed and delivered to Vasaturo a Pledge Agreement in connection therewith, which by this reference is made an integral part hereof (hereinafter referred to as the “Philly Westshore Pledge Agreement”); and

 

WHEREAS, Vasaturo has deposited with Escrow Agent, and Escrow Agent, as the agent of Vasaturo, has agreed to hold and possess the Philly Westshore Shares, in escrow, so as to perfect Vasaturo’s security interest in the Philly Westshore Shares, together with an irrevocable Stock Power executed by BP in blank by which Vasaturo, upon an Event of Default under the Pledge Agreement, may transfer the Philly Westshore Shares in conjunction with the exercise of his remedies under the Philly Westshore Pledge Agreement (hereinafter referred to as the “Philly Westshore Power”); and

 

  

 

  

 

WHEREAS, pursuant to a certain Membership Interest Purchase and Sale Agreement of even date herewith made and entered into by and between Bobby V’s Pizza, Bout Time and BP, which by this reference is made an integral part hereof (hereinafter referred to as the “Bobby V’s Purchase Agreement”), BP has acquired from Bobby V’s Pizza and Bout Time all of the Membership Units in Bobby V’s Original Westshore Pizza, LLC, a Florida limited liability company; and

 

WHEREAS, in conjunction with the Bobby V’s Purchase Agreement, BP has made and delivered to Bobby V’s Pizza a Secured Promissory Note of even date herewith in the principal amount of Five Hundred Fifty-Three Thousand One Hundred Fifty-One and 10/100 Dollars ($553,151.10) which by this reference is made an integral part hereof (hereinafter referred to as the “Bobby V Note”); and

 

WHEREAS, as collateral for the obligations of BP under the Bobby V Note, BP has pledged 1,000 Membership Units that it acquired from Bobby V’s Pizza represented by Certificate No. 3 (hereinafter referred to as the “Bobby V Units”) in favor of Bobby V’s Pizza and executed and delivered to Bobby V’s Pizza a Pledge Agreement, which by this reference is made an integral part hereof (hereinafter referred to as the “Bobby V Pledge Agreement”); and

 

WHEREAS, Bobby V’s Pizza has deposited with Escrow Agent and Escrow Agent, as the agent of Bobby V’s Pizza, has agreed to hold and possess the Bobby V Units, in escrow, so as to perfect Bobby V’s Pizza security interest in the Bobby V Units, together with an Irrevocable Pledged Membership Units Power executed in blank by BP by which Bobby V’s Pizza, upon an Event of Default by BP, may transfer the Bobby V Units in conjunction with the exercise of its remedies under the Bobby V Pledge Agreement (hereinafter referred to as the “Bobby V Power”); and

 

WHEREAS, in conjunction with the Bobby V’s Purchase Agreement, BP has made and delivered to Bout Time a Secured Promissory Note of even date in the principal amount of Five Hundred Fifty-Three Thousand One Hundred Fifty-One and 10/100 Dollars ($553,151.10), which by this reference is made an integral part hereof (hereinafter referred to as the “Bout Time Note”); and

 

WHEREAS, as collateral for the obligations of BP under the Bout Time Note, BP has pledged 1,000 Membership Units that it acquired from Bout Time represented by Certificate No. 4 (hereinafter referred to as the “Bout Time Units”) in favor of Bout Time and executed and delivered to Bout Time a Pledge Agreement, which by this reference is made an integral part hereof (hereinafter referred to as the “Bout Time Pledge Agreement”); and

 

  

Page 2

  

 

WHEREAS, Bout Time has deposited with Escrow Agent and Escrow Agent, as the agent of Bout Time, has agreed to hold and possess the Bout Time Units, in escrow, so as to perfect Bout Time’s security interest in the Bout Time Units, together with an Irrevocable Pledged Membership Units Power executed by BP in blank by which Bout Time [Bobby V’s Pizza?], upon an Event of Default by BP, may transfer the Bout Time Units in conjunction with the exercise of its remedies under the Bout Time Pledge Agreement (hereinafter referred to as the “Bout Time Power”); and

 

WHEREAS, Whitman, directly or indirectly the majority owner of BP, has deposited in escrow One Million Seven Hundred Ninety-six Thousand Nine Hundred Fifty (1,796,950) shares of common stock of BP (hereinafter referred to as the “Whitman Shares”), together with a Stock Power executed by Whitman in favor of BP (hereinafter referred to as the “Whitman Power”), subject to the terms and conditions hereinafter set forth; and

 

WHEREAS, BP has deposited with the Escrow Agent a Stock Power executed by BP in favor of Vasaturo with respect to the Philly Westshore Shares (hereinafter referred to as the “Vasaturo Power”), subject to the terms and conditions hereinafter set forth; and

 

WHEREAS, BP has deposited with the Escrow Agent a Membership Units Power executed by BP in favor of Bobby V’s Pizza, with respect to the Bobby V Units (hereinafter referred to as the “Bobby V’s Pizza Power”), subject to the terms and conditions hereinafter set forth; and

 

WHEREAS, BP has deposited with Escrow Agent a certain Membership Units Power executed by BP in favor of Bout Time, with respect to the Bout Time Units (hereinafter referred to as the “Bout Time Marketing Power”), subject to the terms and conditions hereinafter set forth; and

 

WHEREAS, the parties hereto desire that the Escrow Agent hold the Philly Westshore Shares, with Bobby V Units, the Bout Time Units, the Whitman Shares and all of the Powers in accordance with the terms of this Escrow Agreement and further desire that Escrow Agent dispose of all such instruments as provided hereunder and Escrow Agent is willing to do so on the terms and conditions hereinafter set forth.

 

NOW, THEREFORE, FOR AND IN CONSIDERATION OF the mutual promises contained herein, and for other good and valuable consideration, the receipt, sufficiency and adequacy of which are hereby acknowledged, the parties hereto, each intending to be legally bound, do hereby agree as follows:

 

1.           Whereas Clauses Incorporated.  The parties acknowledge that the Whereas clauses hereinabove set forth are correct and are, by this reference, incorporated herein and are made a part of this Escrow Agreement.

 

 

2.           Appointment of Escrow Agent.  The Escrow Agent is hereby constituted and appointed as escrow agent, and hereby accepts its appointment and agrees to act as escrow agent pursuant to this Escrow Agreement.

 

3.           Escrowed Instruments.  The parties shall deliver to and deposit with the Escrow Agent each of the following (hereinafter collectively referred to as the “Instruments”):

 

(a)           The Philly Westshore Shares;

 

(b)           The Philly Westshore Power;

 

(c)           The Certificate evidencing the Bobby V Units;

 

(d)           The Bobby V Power;

 

(e)           The Certificate evidencing the Bout Time Units;

 

(f)           The Bout Time Power;

 

(g)           The Whitman Shares;

 

(h)           The Whitman Power;

 

(i)           The Vasaturo Power;

 

(j)           The Bobby V’s Pizza Power; and

 

(k)           The Bout Time Marketing Power.

 

  

Page 3

  

4.           Distribution of Instruments to Vasaturo and Bobby V’s Pizza After an Event of Default.

 

(a)            In the event there shall have occurred an Event of Default under Paragraph 6(a) of the Philly Westshore Pledge Agreement or Paragraph 6(a) of the Bobby V Pledge Agreement, Vasaturo shall deliver to BP, Whitman and the Escrow Agent a written notice stating that such an Event of Default has occurred.  Vasaturo, in the written notice to the Escrow Agent, BP and Whitman, shall have the right to also notify BP, Whitman and the Escrow Agent that Vasaturo desires to accept the Philly Westshore Shares in full satisfaction of the Philly Westshore Note and that Bobby V’s Pizza desires to accept the Bobby V Units in full satisfaction of the Bobby V Note.  In the event that BP fails to deliver to the Escrow Agent, within five (5) days of receipt of the request therefor from Vasaturo, a fully executed consent to the acceptance of the Philly Westshore Shares, in full satisfaction of the Philly Westshore Note substantially in the same form as that attached hereto as Exhibit “A” and by this reference made an integral part hereof (hereinafter referred to as the “Philly Consent to Acceptance”) and a fully executed consent to the acceptance of the Bobby V Units, in full satisfaction of the Bobby V Note substantially in the same form as that attached hereto as Exhibit “B” and by this reference made an integral part hereof (hereinafter referred to as the “Bobby V’s Consent to Acceptance”), then BP, Whitman, Vasaturo and Bobby V’s Pizza hereby authorize, empower and direct Escrow Agent to promptly distribute to Vasaturo and Bobby V’s Pizza the following Instruments:

 

(i)  the Philly Westshore Shares to Vasaturo;

 

(ii) the Philly Westshore Power to Vasaturo;

 

(iii)  the Certificate evidencing the Bobby V Units to Bobby V’s Pizza;

 

(iv) the Bobby V Power to Bobby V’s Pizza;

 

(v) the Vasaturo Power to Vasaturo; and

 

(vi)  the Bobby V Pizza Power to Bobby V’s Pizza;

 

and, simultaneously, Escrow Agent shall distribute the following Instruments to BP:

 

(vii)           the Whitman Shares; and

 

(viii)           the Whitman Power.

 

                      (b)           In the event that BP timely delivers the fully executed Philly Consent to Acceptance and the Bobby V’s Consent to Acceptance to the Escrow Agent, then BP, Whitman, Vasaturo and Bobby V’s Pizza hereby authorize, empower and direct the Escrow Agent to promptly distribute the following Instruments to Vasaturo and Bobby V’s Pizza:

 

  

Page 4

  

 

(i)  the Philly Westshore Shares to Vasaturo;

 

(ii) the Philly Westshore Power to Vasaturo;

 

(iii)  the Certificate evidencing the Bobby V Units to Bobby V’s Pizza;

 

(iv) the Bobby V Power to Bobby V’s Pizza;

 

(v) the Vasaturo Power to Vasaturo; and

 

(vi)  the Bobby V Pizza Power to Bobby V’s Pizza;

 

	
  

	
and, simultaneously, Escrow Agent shall deliver the following Instruments to Whitman:

 

(vii)           the Whitman Shares; and

 

(viii)           the Whitman Power.

 

5.           Distribution of Instruments to Bout Time After an Event of Default.

 

(a)           In the event there shall have occurred an Event of Default under Paragraph 6(a) of the Bout Time Pledge Agreement, Vasaturo shall deliver to BP, Whitman and the Escrow Agent a written notice stating that such an Event of Default has occurred.  Vasaturo, in the written notice to the Escrow Agent, BP and Whitman, shall have the right to also notify Escrow Agent, BP and Whitman that Bout Time desires to accept the Bout Time Units in full satisfaction of the Bout Time Note.  In the event that BP fails to deliver to the Escrow Agent, within five (5) days of request therefor from Vasaturo, a consent to the acceptance of the Bout Time Units, in full satisfaction of the Bout Time Note substantially in the same form as that attached hereto as Exhibit “C” and by this reference made an integral part hereof (hereinafter referred to as the “Bout Time Consent to Acceptance”), then BP, Whitman and Bout Time hereby authorize, empower and direct Escrow Agent to promptly distribute to Bout Time the following Instruments:

 

(i)           the Certificate evidencing the Bout Time Units;

 

(ii)           the Bout Time Power; and

 

(iii)           the Bout Time Marketing Power.

 

  

Page 5

  

 

(b)           In the event that BP timely delivers the fully executed Bout Time Consent to Acceptance to the Escrow Agent, then BP, Whitman and Bout Time hereby authorize, empower and direct the Escrow Agent to promptly distribute the following instruments to Bout Time:

 

(i)           the Certificate evidencing the Bout Time Units;

 

(ii)           the Bout Time Power; and

 

(iii)           the Bout Time Marketing Power.

 

6.           Distribution of Instruments upon repayment of the Philly Westshore Note, the Bobby V Note and the Bout Time Note.  In the event that the Philly Westshore Note, the Bobby V Note and the Bout Time Note are each satisfied in full in a timely manner in accordance with the terms of each of said Notes, then upon written notice thereof to the Escrow Agent, signed jointly by Vasaturo, Bobby V’s Pizza and Bout Time, Escrow Agent shall promptly distribute to BP each of the following Instruments:

 

(a)           The Philly Westshore Shares;

 

(b)           The Philly Westshore Power;

 

(c)           The Certificate evidencing the Bobby V Units;

 

(d)           The Bobby V Power;

 

(e)           The Certificate evidencing the Bout Time Units;

 

(f)           The Bout Time Power;

 

(g)           The Vasaturo Power;

 

(h)           The Bobby V’s Pizza Power; and

 

(i)           The Bout Time Marketing Power;

 

and shall simultaneously distribute to Whitman:

 

(j)           the Whitman Shares; and

 

(k)           the Whitman Power.

 

  

Page 6

  

 

7.           Consideration to Whitman and BP.

 

(a)           Whitman hereby represents and warrants that he, directly or indirectly, owns approximately fifty six and seven tenths percent (56.7%) of the issued and outstanding shares of BP and that because of such ownership, it is in his best interest that the transactions contemplated under the Philly Westshore Purchase Agreement and the Bobby V’s Purchase Agreement be consummated.  Whitman acknowledges and agrees that but for his depositing the Whitman Shares in escrow, and Whitman’s agreement that the Whitman Shares shall be conveyed to BP in the event that the fully executed Philly Consent to Acceptance, the Bobby V’s Consent to Acceptance and the Bout Time Consent to Acceptance shall not have been timely executed and delivered by BP to the Escrow Agent in accordance with the terms of Sections 4(a) and 5(a) hereof, Vasaturo, Bobby V’s Pizza and Bout Time would not enter into the Philly Westshore Purchase Agreement and the Bobby V’s Purchase Agreement.  Whitman further represents and warrants that Vasaturo, Bobby V’s Pizza and Bout Time’s entering into the Philly Westshore Purchase Agreement and the Bobby V’s Purchase Agreement constitute sufficient and adequate consideration to Whitman for the conveyance of the Whitman Shares to BP should BP fail to fully execute and timely deliver to the Escrow Agent the Philly Consent to Acceptance, the Bobby V’s Consent to Acceptance and the Bout Time Consent to Acceptance.  Whitman hereby agrees that he shall not assert, in any judicial or other procedure whatsoever, that he did not receive full and adequate consideration for the conveyance of the Whitman Shares to BP in the event that such conveyance should occur.  Whitman does further expressly acknowledge and agree that Vasaturo, Bobby V’s Pizza and Bout Time are expressly relying upon the acknowledgements, representations and warranties of Whitman in this Section 7(a) and, absent such acknowledgements, representations and warranties by Whitman, Vasaturo, Bobby V’s Pizza and Bout Time would not consummate the transactions under the Philly Westshore Purchase Agreement or the Bobby V’s Purchase Agreement.

 

(b)           BP does hereby expressly agree that in the event that the fully executed Philly Consent to Acceptance, the Bobby V’s Consent to Acceptance and the Bout Time Consent to Acceptance shall not be timely delivered to the Escrow Agent pursuant to the provisions of Section 4(a) and 5(a) hereof, BP shall transfer, convey and assign the Philly Westshore Shares and the Bobby V Units to Vasaturo and Bobby V’s Pizza, respectively, and the Bout Time Units to Bout Time, through the escrow mechanisms set forth in this Escrow Agreement, free and clear of any and all liens and encumbrances of any kind or nature whatsoever, for and in consideration of the transfer of the Whitman Shares to BP.  BP does hereby acknowledge and agree that the Whitman Shares shall constitute full and adequate consideration for the conveyance of the Philly Westshore Shares and the Bobby V Units to Vasaturo and Bobby V’s Pizza, respectively, and the Bout Time Units to Bout Time.  BP hereby agrees that it shall not assert, in any judicial or other procedure whatsoever, that it did not receive full and adequate consideration for the conveyance of the Philly Westshore and the Bobby V Units to Vasaturo and Bobby V’s Pizza, respectively, and the Bout Time Units to Bout Time in the event that such conveyance should occur.  BP does further expressly acknowledge and agree that Vasaturo, Bobby V’s Pizza and Bout Time are expressly relying upon the acknowledgements and agreements of BP in this Section 7(b) and, absent such acknowledgements and agreements by BP, Vasaturo, Bobby V’s Pizza and Bout Time would not consummate the transactions under the Philly Westshore Purchase Agreement or the Bobby V’s Purchase Agreement.

 

  

Page 7

  

 

8.           Termination.  This Escrow Agreement shall terminate upon delivery of the Instruments in accordance herewith.

 

9.           Delivery of Instruments.  BP, Vasaturo, Bobby V’s Pizza, Whitman and Bout Time shall be entitled to delivery of the Instruments solely in accordance with the terms hereof.  Except as may otherwise be lawfully determined, no creditor of any party hereto will have any rights in or to the Instruments so long as they remain subject to the terms of this Escrow Agreement.

 

10.           Duties of the Escrow Agent; Fees.  Any attorneys’ fees and expenses incurred by the Escrow Agent in connection with a dispute between BP, Vasaturo, Bobby V’s Pizza, Bout Time and Whitman shall be borne equally by BP, Vasaturo and Whitman.  Acceptance by the Escrow Agent of its duties under this Escrow Agreement is subject to the following terms and conditions, which the parties to this Escrow Agreement hereby agree will govern and control the rights, duties and immunities of the Escrow Agent:

 

(a)             the duties and obligations of the Escrow Agent shall be determined solely by the provisions of this Escrow Agreement and the Escrow Agent shall be responsible only for the performance of such duties and obligations as are specifically set out in this Escrow Agreement;

 

(b)             the Escrow Agent shall not be a party to, or bound by, any agreement between any party hereto other than this Escrow Agreement whether or not a copy and/or original of such agreement is provided to the Escrow Agent; and the Escrow Agent shall have no duty to know or inquire as to the performance or nonperformance of any provision of any such agreement between the parties hereto;

 

(c)             the Escrow Agent shall be fully protected in acting on and relying upon any written advice, certificate, notice, direction, instruction, request, or other paper or document which is received by the Escrow Agent and may assume that any person purporting to give such advice, certificate, notice, direction, instruction, request or other paper or document has been duly authorized to do so.  The Escrow Agent assumes no responsibility for the accuracy of the recitals thereof;

 

(d)             the Escrow Agent shall not be liable for any mistake in fact or law or otherwise, absent willful misconduct, bad faith or gross neglect;

 

(e)             the Escrow Agent may seek the advice of legal counsel in the event of any dispute or question as to the construction of any of the provisions of this Escrow Agreement or its duties hereunder, and it shall incur no liability and will be fully protected by the parties hereto in respect of any action taken, omitted or suffered by it in accordance with the opinion of such counsel;

 

  

Page 8

  

 

(f)             the parties hereto each agree to jointly and severally indemnify and hold harmless the Escrow Agent and any of its shareholders, employees or agents from and against any and all claims, losses, liabilities, taxes, obligations, damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind or nature whatsoever that may be imposed on, incurred by or asserted against it in its capacity as the Escrow Agent or in any way relating to or arising out of this Escrow Agreement, absent willful misconduct or gross neglect of the Escrow Agent; and

 

(g)             the Escrow Agent shall not be responsible to the other parties hereto for the due execution, genuineness, validity, enforceability or effectiveness of this Escrow Agreement.

 

11.           Resignation of Escrow Agent.  The Escrow Agent and any successor escrow agent, as the case may be, may resign its duties and be discharged from all further duties and obligations hereunder at any time upon giving thirty (30) days' written notice to the parties hereto.  BP and Vasaturo shall thereupon jointly designate a successor escrow agent hereunder within said 30 day period, to whom the Escrow Agent shall deliver the Instruments.  In the absence of such a joint designation of a successor escrow agent, the Escrow Agent shall, without further liability or responsibility, retain the Instruments as custodian thereof until otherwise directed by BP and Vasaturo jointly.

 

12.           Legal Counsel.  The Parties acknowledge and agree that the law firm of Wagner, Johnston & Rosenthal, P.C. has drafted this Escrow Agreement in its capacity as counsel for Vasaturo, Bobby V’s Pizza and Bout Time.  BP and Whitman consent to this drafting and to the Escrow Agent, an affiliate of the law firm of Wagner, Johnston & Rosenthal, P.C. serving as Escrow Agent hereunder and continuing to serve as legal counsel to Vasaturo, Bobby V. and Bout Time.  BP and Whitman acknowledge that they have not relied upon Wagner, Johnston & Rosenthal, P.C. for individual legal advice and counsel regarding this Escrow Agreement and the transactions reflected herein.

 

13.           Notices.  All notices, communications and deliveries under this Escrow Agreement shall be made in writing signed by the party making the same, and shall be deemed received (a) on the date delivered if delivered in person (or by a recognized overnight courier with all costs paid), or (b) when received, or when refused or returned because of failure to claim, if mailed certified mail, return receipt  requested (with postage prepaid).  Such notice shall not be effective unless copies are provided contemporaneously as specified below.  The time of giving notice to those to whom copies are to be given shall not control the date notice is given or received but the manner of delivery shall be the same.  The addresses and requirements for copies are as follows:

 

  

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If to Vasaturo or Bobby V’s Pizza:

	 	  
	  	Robert Vasaturo, Jr.
	  	
4802 West Baycourt Avenue

	  	
Tampa, Florida 33681

	  	  
	  	  
	
with a copy given in the aforesaid manner to:

	  
	  	  
	  	
Craig Wagner, Esq.

	  	
Wagner, Johnston & Rosenthal, P.C.

	  	
5855 Sandy Springs Circle, Suite 300

	  	
Atlanta, Georgia 30328

	  	  
	 	
 

  

Page 10

  

If to Bout Time:

 

	 	 
	  	

Bout Time Marketing, LLC

P.O. Box 67037

	  	
St. Petersburg, Florida 33736

	  	
Attn; Lawrence Martin, Manager

	  	  
	
with a copy given in the aforesaid manner to:

	  
	  	  
	  	
Wagner, Johnston & Rosenthal, P.C.

	  	
5855 Sandy Springs Circle, Suite 300

	  	
Atlanta, Georgia  30328

	  	
Attention: Craig A. Wagner, Esq.

	  	  
	If to Escrow Agent:	 
	 	 
	 	
WJ Title & Escrow Company

	  	
5855 Sandy Springs Circle, Suite 300

	  	
Atlanta, Georgia  30328

	  	
Attention: Craig A. Wagner, Esq.

	  	  
	 	
 

  

Page 11

  

	 	 
	If to BP:	 
	 	 
	 	Bella Petrella’s Holdings, Inc.
	  	
109 South Edison Avenue

	  	
Tampa, Florida 33606

	  	
Attn: John V. Whitman, Jr., Chief Executive Officer

	  	  
	
with a copy given in the aforesaid manner to:

	  
	  	  
	  	
Jackson L. Morris, Esq.

	  	
3116 West North A Street

	  	
Tampa, Florida 33609-1544

	  	  
	 If to Whitman:	 
	 	 
	
 

	
John V. Whitman, Jr.

	 	109 South Edison Avenue
	 	Tampa, Florida 33606
	 	 

  

Page 12

  

	  	
 

	  	  
	
with a copy given in the aforesaid manner to:

	  
	  	  
	  	
Jackson L. Morris, Esq.

	  	
3116 West North A Street

	  	
Tampa, Florida 33609-1544

 

or to such representative or to such other address as the parities hereto may furnish to the other parties in writing.  If notice is given pursuant to this Section 13 of a permitted successor or assign of a party to this Escrow Agreement, then notice shall be given as set forth above to such successor or assign of such party.

14.           Miscellaneous.

 

(a)             Binding Effect; No Assignment.  This Escrow Agreement shall be binding upon and shall inure to the benefit of the parties hereto, their heirs, administrators, executors, successors and permitted assigns.  Except as set forth in Section 11 hereof, no party hereto shall have any right to assign or delegate any of their rights, duties or obligations under this Escrow Agreement without the prior written consent of all other parties hereto and any attempt to do so shall be null and void and of no force or effect whatsoever.

 

(b)             Entire Agreement.  This Escrow Agreement (together with the other agreements and documents referred to herein) constitutes the entire understanding of the parties relating to the subject matter hereof and supersedes all prior and contemporaneous

 

  

Page 13

  

agreements and understandings, whether oral or written, relating to the subject matter hereof.  No amendment or modification of the terms of this Escrow Agreement shall be binding or effective upon the parties hereto unless in writing and signed by all of the parties hereto.

 

(c)             No Waiver.  Failure of any party to this Escrow Agreement to require performance by another of any provision expressed herein shall in no way affect that party's right to thereafter enforce such provision; nor shall the waiver by any party of any breach of any provision expressed herein be taken or held to be a waiver of any succeeding or other breach of such provision or as a waiver of the provision itself or of any other provision.

 

(d)             Time of the Essence.  Time is of the essence of this Escrow Agreement.

 

(e)             Specific Performance.  The parties agree that any breach of this Escrow Agreement by any party or the heirs, personal representatives, successors or assigns of any party will result in irreparable and continuing harm to the other party, the magnitude of which harm will be difficult or impossible to ascertain, and which harm cannot be adequately remedied by monetary damages, and that, if in the event of such a breach, any party should institute any action or proceeding to enforce the provisions hereof, such party shall be entitled to injunctive relief and/or specific performance as well as such other and further relief as shall be proper.

 

(f)             Jurisdiction; Venue.  The parties irrevocably and unconditionally:  (a) agree that any suit, action or legal proceeding arising out of or relating to this Escrow Agreement (other than any action to enforce any judgment or arbitration award hereunder) shall be brought only in the courts of record of the State of Georgia in Fulton County or the United States District Court in the Northern District of Georgia in Atlanta, Georgia; (b) consent to the exclusive jurisdiction of said courts in any such suit, action or proceeding; and (c) waive any objection which any may have to the venue of any such suit, action or proceeding in any of such courts under any statute or law of any jurisdiction.

 

(g)             No Third Party Beneficiary.  This Escrow Agreement is for the benefit of only the parties hereto and no person, firm or entity that is not a party to this Escrow Agreement shall have any rights or claims under or by virtue of this Escrow Agreement.

 

(h)             Severability.  Should any court of competent jurisdiction declare any provision or covenant of this Escrow Agreement invalid or unenforceable for any reason, the remaining terms and conditions of this Escrow Agreement shall remain in full force and effect as if this Escrow Agreement had been executed initially without the invalid provision, as each term and condition is based on viable and independent consideration.

 

(i)             Additional Acts and Documents.  Each party hereto agrees to do such things, take all such actions, and make, execute and deliver such other documents and instruments, as shall be reasonably requested to carry out the provisions, intent and purpose of this Escrow Agreement, in each case, at the sole expense of the party or parties so requested.

 

  

Page 14

  

(j)             Headings.  The headings or captions used in this Escrow Agreement are inserted for convenience or reference purposes only and shall neither constitute a part hereof nor affect the interpretation of any provision of this Escrow Agreement.

 

(k)             Governing Law.  This Escrow Agreement shall be governed by and construed in accordance with the laws of the State of Georgia in all respects.

 

(l)           Counterparts.  This Escrow Agreement may be executed in any number of counterparts, each of which so executed shall be deemed to be an original, and such counterparts together shall constitute but one and the same contract, which shall sufficiently be evidenced by any such original counterpart.  Signatures on this Escrow Agreement transmitted via facsimile or by electronic mail (email) shall be treated as an original for all purposes hereunder.

 

  

Page 15

  

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as of the date first above written.

 

BP:

BELLA PETRELLA’S HOLDINGS, INC.

By: /s/ John V. Whitman, Jr.,

John V. Whitman, Jr.,

Its: Chief Executive Officer

VASATURO:

/s/ ROBERT VASATURO, JR. (Seal)

ROBERT VASATURO, JR.

BOBBY V’S PIZZA:

BOBBY V’S PIZZA, INC.

By: /s/ Robert Vasaturo, Jr.

Robert Vasaturo, Jr.

Its: President

BOUT TIME:

BOUT TIME MARKETING, LLC

By: /s/ Lawrence Martin

Lawrence Martin

Its: Manager

WHITMAN:

/s/ JOHN V. WHITMAN, JR. (Seal)

JOHN V. WHITMAN, JR.

[Signatures continued on following page]

  

Page 16

  

ESCROW AGENT:

WJ TITLE & ESCROW COMPANY

By: /s/ Craig A. Wagner

Craig A. Wagner, President

  

Page 17

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