U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Date of Report: February 10, 1999
BLIMPIE INTERNATIONAL, INC.
(Exact name of issuer as specified in its charter)
New Jersey 0-21036 13-2908793
(State or Other Jurisdiction of (Commission File (IRS Employer
Incorporation or Organization) Number) Identification No.)
740 Broadway, New York, NY 10003
(Address and Zip Code of Principal Executive Offices)
(212) 673-5900
(Registrant's Telephone Number)
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Item 5. Other Events
On February 3, 1999, Registrant acquired all of the rights, titles and interests
of Anthony P. Conza and David L. Siegel, the Chairman and Chief Executive
Officer, and the Vice Chairman and Chief Operating Officer, respectively, of
Registrant, in and with respect to:
(i) all of the following trademarks (collectively referred to herein as the
"Domestic USA Trademarks") which have been registered with the United States
Patent and Trademark Principal Register:
"BLIMPIE" No. 1,256,296 registered November 1, 1983
"BLIMPIE BEST" No. 2,011,843 registered October 29, 1996
"BLIMPIE SUBS & SALADS No. 2,007,989 registered October 15, 1996
and Design"
"BLIMPIE SUBS & SALADS No. 2,120,796 registered December 16,1997
and Design"
"IT'S A BEAUTIFUL THING" No. 2,070,269 registered June 10, 1997
(ii) a certain agreement dated August 1, 1976 executed by Mr. Conza, Mr. Siegel
and Peter De Carlo regulating the use of the Domestic USA Trademarks including
all amendments thereto and
(iii) a 99-year License Agreement dated April 1977 executed by Messrs. Conza and
Siegel, as assignors, and by the Registrant, as assignee.
Accordingly, Registrant is now the owner of an undivided 60% interest in and
with respect to each of the Domestic USA Trademarks, and Metropolitan Blimpie,
Inc ("MBI") is the owner of the remaining 40% interest in such trademarks.
Neither Mr. DeCarlo, nor MBI, a corporation with which he is affiliated, is
affiliated or associated with Registrant.
Registrant is also the owner of an undivided 60% interest in and with respect to
the trademarks described above for use in the territory consisting of the world
except the continental U.S.A., pursuant to the terms of an agreement dated the
18th day of February, 1997 which it executed with Messrs. Conza and Siegel (the
"1997 Agreement"). Pursuant to the 1997 Agreement, Messrs. Conza and Siegel were
entitled to receive certain contingent compensation in annual payments
aggregating $7,500,000 (the "Contingent Compensation Annual Fees"). Subject to
the satisfaction of certain conditions, the 1997 Agreement granted to each of
Messrs. Conza and Siegel certain options entitling them, upon exercise thereof,
to receive, in lieu of such Contingent Compensation Annual Fees, certain fixed
lump sum payments aggregating $2 million payable to Mr. Conza and $1 million
payable to Mr. Siegel. Such options were exercisable by each of Messrs. Conza
and Siegel commencing in the year 2002.
In order to obtain certainty as to the ultimate amount of its Contingent
Compensation Annual Fees payment obligation under the 1997Agreement, and in
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consideration for the transfer of the above-mentioned intellectual property and
contractual rights pertaining to the Domestic USA Trademarks, Registrant has
entered into an amendment of the 1997 Agreement with Messrs. Conza and Siegel
dated as of February 3, 1999. Pursuant to such amendment, the terms of such
options were modified to permit Messrs. Conza and Siegel to exercise them on or
before February 15, 1999. Each of Messrs. Conza and Siegel exercised such
options and received the above-mentioned lump sum payments due in connection
therewith.
Item 7. Financial Statements and Exhibits
The following financial statements, pro forma financial information and exhibits
have been filed as part of this Report:
(a) Financial Statements -- none
(b) Pro forma financial information -- none
(c) Exhibits
Number Description
- ------ -----------
10.44 Amendment dated as of the 3d day of February 1999 to the Agreement
made as of the 18th day of February, 1997 by and among Anthony P.
Conza, David L. Siegel and Blimpie International, Inc.
Signature
In accordance with the requirements of the Exchange Act, the registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
BLIMPIE International, Inc.
Dated: February 10, 1999 By: /s/ Anthony P. Conza
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Anthony P. Conza, Chief (Principal)
Executive Officer
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Exhibit 10.44
AMENDMENT AGREEMENT
AMENDMENT AGREEMENT made as of this 3rd day of February, 1999 by and
between Anthony P. Conza located at 35 Hill 99, Woodstock, New York 12498 and
David L. Siegel located at 160 East 65th Street, New York, New York 10021
(hereinafter jointly referred to as "Conza and Siegel") and Blimpie
International, Inc. located at 740 Broadway, 12th Floor, New York, New York
10003 (hereinafter referred to as "BII").
PREAMBLE
WHEREAS, Conza and Siegel are the joint owners with Metropolitan Blimpie,
Inc. of the following trademarks (collectively referred to herein as the
"Domestic USA Trademarks") which have been registered with the United States
Patent and Trademark Office ("USPTO"), Principal Register:
"BLIMPIE" No. 1,256,296 registered November 1, 1983
"BLIMPIE BEST" No. 2,011,843 registered October 29, 1996
"BLIMPIE SUBS & SALADS No. 2,007,989 registered October 15, 1996
and Design"
"BLIMPIE SUBS & SALADS No. 2,120,796 registered December 16,1997
and Design"
"IT'S A BEAUTIFUL THING" No. 2,070,269 registered June 10, 1997; and
WHEREAS, Conza, Siegel and Metropolitan Blimpie, Inc. are parties to a
certain agreement dated August 1, 1976 regulating the use of the Domestic USA
Trademarks including all amendments thereto (said agreement of August 1, 1976
and all amendments thereto shall hereinafter be called the "Agreement"); and
WHEREAS, BII's right to use and license others to use the Domestic USA
Trademarks is exercised under a 99-year License Agreement dated April 1977
contributed and granted by Conza and Siegel to BII, (the 1977 License Agreement)
and a separate license agreement dated June 1991 of undetermined term granted by
Metropolitan Blimpie, Inc. to BII. The trademarks were originally owned by
Conza, Siegel and Peter DeCarlo ("DeCarlo"); DeCarlo assigned his rights to the
Domestic USA Trademarks to Metropolitan Blimpie, Inc.; and
WHEREAS, Conza and Siegel and Metropolitan Blimpie, Inc. have been
registering in various countries throughout the world, either individually or
through partnerships owned and controlled jointly by them, service
marks/trademarks for the name Blimpie and/or Blimpie Subs and Salads
(collectively, the "International Blimpie Trademarks"); and
WHEREAS, pursuant to a certain agreement dated the 18th day of February,
1997, and executed by BII, Conza and Siegel (the "1997 Agreement"), BII
purchased all of Conza and Siegel' respective rights, titles and interest in and
with respect the International Blimpie Trademarks for use in the territory
consisting of world except the continental U.S.A. but including all areas of
non-continental U.S.A. (the "Territory"); and
WHEREAS, Article 4 of the 1997 Agreement provided for the payment of
certain contingent compensation to each of Conza and Siegel (each such payment
being hereinafter referred to as a "Contingent Compensation Annual Fee") upon
satisfaction of certain conditions; and
WHEREAS, various provisions of Article 5 of the 1997 Agreement granted to
Conza and Siegel certain options entitling them, upon exercise thereof, to
receive, in lieu of such Contingent Compensation Annual Fees, certain fixed lump
sum payments; and
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WHEREAS, all conditions to the exercise of said options have been
satisfied, except for the date when the same may be exercised; and
WHEREAS, the amount of the Contingent Compensation Annual Fees which BII
shall have to pay to Conza and Siegel if they exercise such options shall be
substantially less than the amount thereof which must be paid if they do not
exercise such options; and
WHEREAS, Conza and Siegel are willing to provide BII with certainty as to
the ultimate amount of its Contingent Compensation Annual Fees payment
obligation if BII will permit them to exercise such options at the present time
instead of requiring them to wait until the time provided for the exercise
thereof pursuant to the terms of the 1997 Agreement which are currently in
force; and
WHEREAS, Conza and Siegel are willing to transfer their respective rights,
titles and interests in the Domestic USA Trademarks, the 1977 License Agreement
and the Agreement to BII in consideration for Blimpie's agreement to amend the
1997 Agreement to provide for immediate exercise of such options; and
WHEREAS, BII is willing to amend the 1997 Agreement in such manner for
such consideration.
NOW, THEREFORE, it is agreed as follows:
1. Amendment of the 1977 Agreement. BII, Conza and Siegel hereby amend
Articles 5.6.1, 5.6.2 and 5.6.3 of the 1997 Agreement to read as follows:
5.6.1 On or after January 1, 1999, either or both of Conza and
Siegel or their respective heirs, successors or assigns may elect the
option to effect a cancellation of the Contingent Compensation Annual fee
payable to the electing Seller or Conza and Siegel pursuant to Article 4
hereof (the "First Cancellation Option")...
5.6.2 If Conza exercises the First Cancellation Option by execution
of this agreement, BII shall pay the sum of $2,000,000 to him as follows;
$2,000,000 on or before 2/15/99; and/or
5.6.3 If Siegel exercises the First Cancellation Option by execution
of this agreement, BII shall pay the sum of $1,000,000 to him as follows;
$1,000,000 on or before 2/15/99.
2. Capital Contribution. Conza and Siegel hereby agree to contribute all
of their respective rights, titles and interests in the Domestic USA Trademarks,
the 1977 License Agreement and the Agreement to Blimpie. All obligations in
connection with the filing, registration, processing and completion of the
transfer of the Domestic USA Trademarks and the Agreement are the obligation of
BII solely.
3. Closing Documents. The parties shall execute, acknowledge where
necessary and deliver the following documents:
3.1 Secretary's certificates of directors' resolutions of BII consenting
to the execution and delivery of this agreement and all other documents executed
in compliance therewith.
3.2 Instrument of assignment executed by Conza and Siegel, as assignors,
granting to BII, as assignee, all of the assignors' respective rights, titles,
and interests in the Domestic USA Trademarks, the 1977 License Agreement and the
Agreement and any and all rights and privileges thereto including partnership
rights with Metropolitan Blimpie, Inc. owned by them, free and clear of all
claims, liens and encumbrances except for the ownership rights of Metropolitan
Blimpie, Inc. in and with respect to the Domestic USA Trademarks.
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3.3 UCC-3 termination statements executed by Conza and Siegel evidencing
the termination and cancellation of the first and primary accounts receivable
security interest granted to them against all of BII's accounts and franchise
fees receivable to secure the payment of the obligations of the BII set forth in
1997 Agreement.
3.4 any and all other instruments and/or documents needed to effectuate
the transfer and recording of record of the assignment of each of the respective
Domestic USA Trademarks, the 1977 License Agreement and the Agreement as may be
reasonably required by BII's trademark counsel. All obligations in connection
with the filing, registration, processing and completion of the transfer of the
Domestic USA Trademarks, the 1977 License Agreement and the Agreement are the
obligation of BII solely.
3.5 Conza and Siegel and BII shall execute any and all documents
reasonably requested by the other in order to effectuate, enforce or otherwise
comply with the terms of this agreement.
4. Representations. No representations have been made except as set forth
in this agreement. Conza and Siegel represent and warrants to BII as of the
closing as follows:
4.1 To the best of Conza and Siegel' knowledge, Conza and Siegel interest
in the Domestic USA Trademarks, the 1977 License Agreement and the Agreement and
are free and clear of all debts, mortgages, security interests or other liens or
encumbrances and are accepted "as is".
4.2 Except for the Agreement and 1977 License Agreement, Conza and Siegel
have made no prior agreement with any third party to license or sell to them the
Domestic USA Trademarks. BII agrees to comply with the provisions of the
Agreement.
4.3 No petition in bankruptcy or other insolvency proceeding has been
filed by or against Conza and Siegel, nor have Conza and Siegel made an
assignment for the benefit of creditors. There is no litigation or
administrative proceedings of any nature pending against Conza and Siegel which
would affect Conza and Siegel partial ownership of the Domestic USA Trademarks.
There are no judgments entered against Conza and Siegel which affect Conza and
Siegel ownership of the Domestic USA Trademarks.
4.4. There are no currently effective determinations of the USPTO, the
trademark administrator of this state, or any court, nor is there any pending
interference, opposition, or cancellation proceeding, nor any pending material
litigation involving the trademarks that are relevant to their use in this state
or in any other state pertaining to the Domestic USA Trademarks, the 1977
License Agreement and the Agreement.
4.5 If any representation hereunder is not correct, Conza and Siegel shall
have the opportunity to cure such misrepresentation within a reasonable time
after notice thereof.
5. Notices. Any notice or other communication hereunder shall be in
writing sent by certified mail, postage prepaid, return receipt requested or by
one day carrier such as Federal Express or Airborne, addressed to the parties as
follows:
If to Conza and Siegel:
Anthony P. Conza
740 Broadway, 12th Floor
New York, New York 10003
AND
Anthony P. Conza
35 Hill 99
Woodstock, NY 12498
AND
David L. Siegel, Esq.
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740 Broadway, 12th Floor
New York, New York 10003
AND
David L. Siegel, Esq.
160 East 65th Street
New York, New York 10021
AND
David L. Siegel and Francinelee Hand
6229 North West 21st Court
Boca Raton, Florida 33496
If to BII:
Blimpie International, Inc.
740 Broadway, 12th Floor
New York, New York 10003
Notices shall be deemed given seven business days after receipt when sent in
accordance with the foregoing.
6. Election of Option. Conza and Siegel hereby elect to exercise the First
Cancellation Option as of the date hereof.
7. Miscellaneous Provisions. This agreement may not be changed or modified
nor may any provision hereof be waived, except by a written instrument signed by
Conza and Siegel and BII or their assignees.
7.1 This agreement shall be construed in accordance with the laws of the
State of New York.
7.2 This agreement shall bind and benefit the heirs, executors,
administrators, successors and assigns of the parties hereto.
7.3 This entire agreement shall survive closing.
8. Attorneys. BII has been represented by Steven Dreyer, Esq. of Hall
Dickler Kent Friedman & Wood LLP. Siegel has negotiated and drafted this
agreement on behalf of Conza and Siegel, however, Conza has been represented by
independent counsel selected by Conza who has reviewed this agreement and
approved same on his behalf.
9. Loan Repayment. BII has loaned Conza the sum of $90,000 and Siegel
$60,000 secured by pledges of BII outstanding and issued corporate stock issued
to them respectively. Conza and Siegel agree that upon payment of the
consideration set forth in Article 2 herein, Conza and Siegel shall each pay in
full said loans including all accrued interest. Upon full payment by Conza and
Siegel all pledge agreements, escrow agreements and other collateral security
provided by them are hereby cancelled and made null and void. The escrowee of
the pledged shares, Charles G. Leaness Esq., is authorized to release the
pledged shares to Conza and Siegel respectively
IN WITNESS WHEREOF, the parties have executed this agreement as of the
date first above written.
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Anthony P. Conza
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David L. Siegel
Blimpie International, Inc.
By:
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Charles G. Leaness, Exec. V.P.
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