SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
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Date of Report (Date of earliest event reported) May 12, 1997
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QPQ CORPORATION
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(Exact name of registrant as specified in its charter)
Florida 1-12350 65-0423147
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(State or other jurisdiction (Commission File (IRS Employer
or incorporation) Number) Identification No.)
7777 Glades Road, Suite 213, Boca Raton, Florida 33434
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(Address of principal executive offices, including zip code)
Registrant's telephone number, including area code (561) 470-6005
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(Former name or former address, if changed since last report)
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ITEM 5. OTHER EVENTS.
On May 23, 1997, the Registrant entered into an Undertaking and Loan Agreement
(the "Loan Agreement") with International Fast Food Corporation, a Florida
corporation ("IFFC") and Pizza King Polska Sp, z.o.o., a Polish limited
liability company ("PKP"), whereby IFFC granted to the Registrant a loan in the
amount of $500,000, plus interest at the rate of 9% per annum (the "Loan"). By
the terms of the Loan Agreement, the Loan shall be repaid by Registrant (in U.S.
Dollars) in full no later than 3 months from the date of the Loan Agreement. The
Registrant has the right to prepay the principal amount without penalty. In
order to secure IFFC's rights under the Loan Agreement, Registrant has agreed to
transfer to IFFC 41,258 shares of Common Stock of PKP (the "PKP Shares")
currently owned by Registrant pursuant to an Agreement on Transfer of Shares as
Collateral dated May 23, 1997 (the "Transfer Agreement"). Under the Transfer
Agreement, IFFC agrees to transfer the PKP Shares back to the Registrant upon
full repayment of the Loan. In the event that the Registrant defaults under the
Loan Agreement, IFFC shall be released from its obligation to transfer the PKP
Shares back to Registrant and shall have the right to apply the PKP Shares
against the sums due under the Loan Agreement or any agreement entered into
pursuant to the Loan Agreement. The Loan Agreement and the Transfer Agreement
are governed by the laws of Poland.
The foregoing summary of the Loan Agreement and the Transfer Agreement is
qualified in its entirety by the copy of the Loan Agreement and Transfer
Agreement attached hereto as exhibits.
On May 12, 1997, Mitchell Rubinson resigned as President and Chief Executive
Officer of the Company. On May 21, 1997, Mr. Rubinson resigned as Chairman of
the Board of Directors of the Company.
The Registrant, through its direct or indirect subsidiaries, continues to search
for, investigate and attempt to secure and develop business opportunities on its
own behalf and for its subsidiaries. However, there can be no assurance that the
Registrant will be successful in its search for new business opportunities.
The Registrant has entered into a settlement with all holders of its 8.0%
Convertible Debentures (the "Debentures"), whereby the holders of the Debentures
have agreed to accept three (3) shares of the Registrant's Common Stock in
exchange for each $1 of debentures held by each Debenture holder. Under the
terms of the Debentures, each holder was to have received on March 31, 1998, the
principal amount of the Debenture, plus interest at the rate of 8% per annum due
and payable quarterly in arrears. Additionally, by the terms of the Debentures,
the holders were also entitled to convert the Debentures into shares of Common
Stock at a conversion price per share equal to the lower of (a) 75% of the
average closing bid price on the Common Stock for five business days immediately
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preceding the conversion date or (b) 75% of the average of the closing bid price
of the Common Stock for the business day immediately preceding the date of the
individual Subscription Agreement.
On May 27, 1997, the Registrant received a letter from Nasdaq concerning the
continued listing of the Registrant's shares of Common Stock on The Nasdaq
SmallCap Market (the "Letter"). The Letter indicated that the Registrant's
shares of Common Stock have failed to maintain a closing bid price greater than
or equal to $1.00. Nasdaq also stated that to be eligible for continued listing,
all securities, except warrants and rights, must maintain a minimum bid price of
$1.00 or, as an alternative if the bid price is less than $1.00, maintain
capital surplus of $2,000,000 and a market value of the public float of
$1,000,000. The Registrant has also failed to meet the alternative. The Letter
also stated that the Registrant will be provided 90 calendar days in which to
regain compliance with the minimum bid price or the alternative requirement. In
the event the Registrant is unable to demonstrate compliance with the minimum
$1.00 bid price or the alternative requirement on or before the end of the 90
day period, it must submit, by that date, its proposal(s) for achieving
compliance. The Registrant is currently reviewing its business plan and
considering alternatives in order to meet its Nasdaq listing requirements. There
can be no assurance that the Registrant will be successful in regaining
compliance with Nasdaq's continued listing requirements.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
Exhibits
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(a) Undertaking and Loan Agreement, dated May 23, 1997, by and
among the Registrant, International Fast Food Corporation and
Pizza King Polska Sp, z.o.o.
(b) Agreement on Transfer of Shares as Collateral, dated May 23,
by and among the Registrant and International Fast Food
Corporation.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
QPQ CORPORATION
By: /s/ C. Lawrence Rutstein
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C. LAWRENCE RUTSTEIN
President and Chief Executive Officer
DATED: June 19, 1997
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UNDERTAKING AND LOAN AGREEMENT
This Agreement is entered into this 23 day of May 1997, by and between:
1. International Fast Food Corporation, with its registered office in 1000
Lincoln Road, Suite 200, Miami Beach, Florida 33139 USA (hereinafter
referred to as IFFC), duly represented by: Mitchell Rubinson
and
1. QPQ Corporation with its registered office in 7777 Glades, Suite 213, Boca
Raton, Florida 33139, USA (hereinafter referred to as QPQ), duly
represented by: Larry Rutstein and,
3. Pizza King Polska Sp, z o.o, with its registered office in Warsaw at Jasna
2/4, Poland (hereinafter referred to as PKP), duly represented by: Leon
Blumenthal
Whereas QPQ is willing to obtain a loan up to the amount of USD 500.000 (in
words: five hundred thousand United States Dollars), and IFFC is willing to
grant such loan on terms and conditions described below,
Whereas PKP is willing to obtain a loan up to the amount of USD 250.000 (in
words: two hundred fifty thousand United States Dollars), and IFFC is willing to
grant such loan on terms and conditions described below, and also in separate
agreements concluded between IFFC and PKP,
Whereas QPQ owns 41.258 shares of a value of PLN 148.49 each (hereinafter
referred to as the Shares) in the PKP and agrees to transfer the Shares to IFFC
to secure its rights resulting from this Agreement or any loan agreement
concluded pursuant to this Agreement. Agreement on Transfer of Shares as
Collateral (hereinafter referred to Transfer Agreement) is attached hereto as
Exhibit 1.
Now therefore the Parties of this Agreement, hereby have agreed as follows:
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LOAN
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1. Terms and conditions of loan to be granted to QPQ
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1) IFFC agrees, on terms and conditions adopted in this Agreement to grant a
loan to the QPQ for its investment in Poland, and in accordance with QPQ
request, in the amount up to USD 500.000 (hereinafter referred the Loan)
in one installment.
2) QPQ shall give to IFFC not less than 1 business day notice of the
installment.
3) QPQ shall pay interest at the rate of 9% p.a. (hereinafter referred to as
the Rate). Interest shall be calculated on a daily basis over 360 days in
a year and shall accrue on all amounts outstanding, hereunder at the Rate.
4) The Loan and interest shall be repaid by QPQ in full not later than 3
months from the date this Agreement, has been signed. QPQ shall have the
right to prepay the principal amount, without penalty.
5) All payments shall be made without any set-off or counterclaim and shall
be made in full without any deduction or withholding whatsoever.
6) All repayments of the Loan shall be made by QPQ in USD (US dollars) to the
bank account indicated under separate notification made by IFFC to QPQ
TERMS AND CONDITIONS OF IFFC UNDERTAKING.
2. UNDERTAKING to grant loan and/or loans to PKP
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1) IFFC agrees, on terms and conditions adopted in this Agreement and also
separate loan agreements, to grant a loan and/or loans to PKP, for the
development of the network of its restaurants in Poland, or for repayment
of PKP current liabilities and in accordance with PKP's request and/or
requests, in the aggregate amount not exceeding USD 250.000 (in words: two
hundred and fifty). The amount of each drawdown shall be described in PKP
request as above.
2) PKP shall given to IFFC not less than 1 Business Days notice of the
drawdown.
3) Other terms and conditions of the above mentioned loans such as interest
rate and manner of repayment, shall be defined in separate loan agreement
and/or agreements to be concluded by and between IFFC and PKP.
4) The provisions of this Agreement executed by and between the
parties,hereto shall apply and shall be effective in respect to the
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validity and performance of any separate loan agreement concluded by and
between IFFC and PKP pursuant to this Agreement.
3. Event of Default.
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IFFC may declare the outstanding amounts to be immediately due and payable and
any undrawn portion shall cease to be available if any of the following shall
occur.
1) There is a failure to make a repayment of any principal or interest due
hereunder when the same is due, or
2) There is a failure to make a repayment of any principal or interest due
under any loan agreement concluded pursuant to this Agreement when the
same is due, or
3) any legal proceeding are started for the liquidation or bankruptcy of the
QPQ and/or PKP
4) QPQ and/or PKP shall use or any portion of any loan, granted by IFFC for
purposes other than provided for in this Agreement or any separate loan
agreement concluded pursuant to Agreement without IFFC prior approval in
writing.
4. Exclusive Rights.
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Upon happening of any Event of Default IFFC in addition to any other right IFFC
may have IFFC shall be released from its obligation to transfer the Shares back
to QPQ (which obligation results from that Transfer Agreement) and shall have
the right to apply the Shares as repayment of PKP or QPQ obligations hereunder.
If IFFC elects to do so (retain the ownership of shares) the parties shall be
free from any obligations or claims against each other in particular PKP and/or
QPQ shall be free from obligations resulting from this Agreement and/or
agreements entered into pursuant to this Agreement.
5. Exclusive Agreement.
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This Agreement supersedes all prior agreements and understandings,either verbal
or written, in the matters relating to the Loan or any loans granted upon this
Agreement.
6. Governing Law.
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This Agreement is subject to the law of the Republic of Poland.
7. Counterparts
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This Agreement has been signed in three counterparts, one copy for each Party
and all of which constitute one and the same document.
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9. Controversies
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Any claims disputes or controversies which shall arise in connection with this
Agreement or any other agreement concluded pursuant to this Agreement, which may
not be settled amicably shall be settled before Arbitration Court by Polish
Chamber of Commerce (Krajowa Izba Gospodarcza) in Warsaw in accordance with the
rules of this Court. The language of arbitration shall be English.
In the name of IFFC: /s/ Mitchell Rubinson
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In the name of QPQ: /s/ C. Lawrence Rutstein
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In the name of PKP: /s/ Leon Blumenthal
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IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed by its
duly authorized representatives on the day and year first above written.
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Agreement on Transfer the Shares as Collateral
(przewlaszczenie na zabezpieczenie)
This Agreement is entered into this 23 day of May, 1997, by and between:
1. QPQ Corporation, with its registered office in 7777 Glades Road, Suite
213, Boca Raton, Florida 33139, USA (hereinafter referred to as QPQ), duly
represented by Larry Rutstein
and
2. International Fast Food Corporation, with its registered office in 1000
Lincoln Road, Suite 200, Miami Beach, Florida 33139, USA (hereinafter referred
to as IFFC), duly represented by Mitchell Rubinson.
Recitals:
1. QPQ, IFFC and Pizza King Polska Sp. z o.o. have entered into Undertaking
and Loan Agreement of May 23, 1997 (hereinafter referred to as the Loan
Agreement).
2. QPQ owns shares in the company Pizza King Polska Sp. z o.o. and is willing
to transfer them to IFFC to secure its rights resulting from the Loan Agreement.
Now it is hereby agreed as follows:
ss.1. QPQ represents and declares that:
1) It owns 41,258 shares of a value of PLN 148.49 each (hereinafter referred
to as the Shares), in the company Pizza King Polska Sp. z o.o., a limited
liability company having its registered office in Warsaw, Poland, entered into
commercial register kept by the District Court for the city of Warsaw under No.
RHB 34669 (hereinafter referred to as the Company).
2) The Company is duly organized and validly existing, with full corporate
power and authority to conduct its business.
3) There are no governmental or corporate permits or consents needed for the
transfer of Shares by QPQ.
4) One Share entitles its holder to one vote at the shareholders' meetings.
5) The Shares are fully paid and clear of any claims and encumbrances.
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ss.2. IFFC represents and warrants:
1) It is acting solely for itself and for no other person, firm, partnership,
corporation or entity in executing this Agreement.
2) It is not prevented by any law or by any provisions of any contract,
indenture, or other instrument from acquiring the Shares as contemplated by this
Agreement.
ss.3.1. QPQ hereby transfers to IFFC and IFFC hereby acquires 41,258 Shares of a
total value of PLN 6,126,400.42, with 41,258 votes, to secure its rights
resulting from the Loan Agreement.
ss.3.2. The transfer of ownership of the Shares back to QPQ shall occur upon
full repayment of all loans with interest and shall be made pursuant to separate
transfer agreement. In case of Event of Default (as defined in the Loan
Agreement) IFFC shall automatically be released from the obligation to transfer
the Shares back to QPQ and shall have the right to apply the Shares against the
sums due under the Loan Agreement (or any loan agreement entered pursuant to the
Loan Agreement) in the way described in the Loan Agreement.
ss.4. Acquisition of the Shares shall be notified by the parties to this
Agreement to the Management Board of the Company in order for the Management
Board to comply with the obligation arising out of Article 188ss.1 and 3 of the
Polish Commercial Code.
ss.5. This Agreement is subject to the laws of Poland. If any disputes between
the parties arise out of, or in relation to, this Agreement, the parties shall
always use their best efforts to reach an amicable settlement. Any disputes
which cannot be resolved amicably by the parties shall be submitted for
settlement to the Arbitration Court in the Polish Chamber of Commerce (Sad
Arbitrazowy przy Krojowez lzbie Gospodarczej) in Warsaw, in accordance with the
rules of the said Court.
ss.6. IFFC declares and assures that it shall keep confidential any information
obtained from QPQ or the Company, concerning the Company, its properties,
operations and business.
ss.7. This Agreement has been executed, as of the date first above written, in 2
copies, and each demand to be an original.
QPQ Corporation International Fast Food Corporation
/s/ C. Lawrence Rutstein /s/ Mitchell Rubinson
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Larry Rutstein Mitchell Rubinson
Title: Title:
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