Exhibit 10.44
AMENDMENT AGREEMENT
AMENDMENT AGREEMENT made as of this 3rd day of February, 1999 by and
between Xxxxxxx X. Xxxxx located at 00 Xxxx 00, Xxxxxxxxx, Xxx Xxxx 00000 and
Xxxxx X. Xxxxxx located at 000 Xxxx 00xx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000
(hereinafter jointly referred to as "Xxxxx and Xxxxxx") and Blimpie
International, Inc. located at 000 Xxxxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx
00000 (hereinafter referred to as "BII").
PREAMBLE
WHEREAS, Xxxxx and Xxxxxx 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, Xxxxx, Xxxxxx 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 Xxxxx and Xxxxxx 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
Xxxxx, Xxxxxx and Xxxxx XxXxxxx ("XxXxxxx"); XxXxxxx assigned his rights to the
Domestic USA Trademarks to Metropolitan Blimpie, Inc.; and
WHEREAS, Xxxxx and Xxxxxx 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, Xxxxx and Xxxxxx (the "1997 Agreement"), BII
purchased all of Xxxxx and Xxxxxx' 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 Xxxxx and Xxxxxx (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
Xxxxx and Xxxxxx 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 Xxxxx and Xxxxxx 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, Xxxxx and Xxxxxx 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, Xxxxx and Xxxxxx 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, Xxxxx and Xxxxxx 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 Xxxxx and
Xxxxxx 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 Xxxxx and Xxxxxx pursuant to Article 4
hereof (the "First Cancellation Option")...
5.6.2 If Xxxxx 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 Xxxxxx 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. Xxxxx and Xxxxxx 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 Xxxxx and Xxxxxx, 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 Xxxxx and Xxxxxx 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 Xxxxx and Xxxxxx 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. Xxxxx and Xxxxxx represent and warrants to BII as of the
closing as follows:
4.1 To the best of Xxxxx and Xxxxxx' knowledge, Xxxxx and Xxxxxx 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, Xxxxx and Xxxxxx
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 Xxxxx and Xxxxxx, nor have Xxxxx and Xxxxxx made an
assignment for the benefit of creditors. There is no litigation or
administrative proceedings of any nature pending against Xxxxx and Xxxxxx which
would affect Xxxxx and Xxxxxx partial ownership of the Domestic USA Trademarks.
There are no judgments entered against Xxxxx and Xxxxxx which affect Xxxxx and
Xxxxxx 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, Xxxxx and Xxxxxx 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 Xxxxx and Xxxxxx:
Xxxxxxx X. Xxxxx
000 Xxxxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
AND
Xxxxxxx X. Xxxxx
00 Xxxx 00
Xxxxxxxxx, XX 00000
AND
Xxxxx X. Xxxxxx, Esq.
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000 Xxxxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
AND
Xxxxx X. Xxxxxx, Esq.
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
AND
Xxxxx X. Xxxxxx and Francinelee Hand
0000 Xxxxx Xxxx 00xx Xxxxx
Xxxx Xxxxx, Xxxxxxx 00000
If to BII:
Blimpie International, Inc.
000 Xxxxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Notices shall be deemed given seven business days after receipt when sent in
accordance with the foregoing.
6. Election of Option. Xxxxx and Xxxxxx 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
Xxxxx and Xxxxxx 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 Xxxxxx Xxxxxx, Esq. of Hall
Xxxxxxx Xxxx Xxxxxxxx & Xxxx LLP. Xxxxxx has negotiated and drafted this
agreement on behalf of Xxxxx and Xxxxxx, however, Xxxxx has been represented by
independent counsel selected by Xxxxx who has reviewed this agreement and
approved same on his behalf.
9. Loan Repayment. BII has loaned Xxxxx the sum of $90,000 and Xxxxxx
$60,000 secured by pledges of BII outstanding and issued corporate stock issued
to them respectively. Xxxxx and Xxxxxx agree that upon payment of the
consideration set forth in Article 2 herein, Xxxxx and Xxxxxx shall each pay in
full said loans including all accrued interest. Upon full payment by Xxxxx and
Xxxxxx 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, Xxxxxxx X. Xxxxxxx Esq., is authorized to release the
pledged shares to Xxxxx and Xxxxxx respectively
IN WITNESS WHEREOF, the parties have executed this agreement as of the
date first above written.
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Xxxxxxx X. Xxxxx
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Xxxxx X. Xxxxxx
Blimpie International, Inc.
By:
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Xxxxxxx X. Xxxxxxx, Exec. V.P.
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