UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K
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CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D)
OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): January 29, 2019
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FAMOUS DAVE’S OF AMERICA, INC.
(Exact name of registrant as specified in its charter)
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Minnesota |
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0-21625 |
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41-1782300 |
(State or other jurisdiction of incorporation) |
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(Commission File Number) |
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(IRS Employer Identification No.) |
(Address of principal executive offices) (Zip Code)
12701 Whitewater Drive, Suite 190, Minnetonka, MN 55343
(952) 294-1300
(Registrant’s telephone number, including area code)
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Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Indicated by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
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Item 1.01. Entry into a Material Definitive Agreement.
On January 29, 2019, Famous Dave’s Ribs. Inc. (“Ribs”), a wholly owned subsidiary of Famous Dave’s of America, Inc. (the “Company”) entered into an asset purchase agreement (the “APA”), by and between Legendary BBQ, Inc., Cornerstar BBQ, Inc., Razorback BBQ, Inc., Larkridge BBQ, Inc., Mesa Mall BBQ, Inc., and Quebec Square BBQ, Inc. to purchase the assets and operations of five Famous Dave’s restaurants located in Colorado (the “Purchased Restaurants”).
Pursuant to the APA, the contract purchase price for the Purchased Restaurants is approximately $4,100,000, exclusive of closing costs, plus an amount equal to the book value of the restaurant inventory, plus the assumption the gift card liability associated with the Purchased Restaurants.
The transaction is expected to close in February of 2019.
The foregoing description of the APA is not complete and is qualified in its entirety by the document filed as Exhibit 10.1 to this Current Report on Form 8-K and incorporated herein by reference.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits
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Exhibit No. |
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Description |
10.1 |
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Asset Purchase Agreement, dated January 29, 2019, by and among Famous Dave’s Ribs, Inc., Legendary BBQ, Inc., Cornerstar BBQ, Inc., Razorback BBQ, Inc., Larkridge BBQ, Inc., Mesa Mall BBQ, Inc., and Quebec Square BBQ, Inc. |
SIGNATURE
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.
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FAMOUS DAVE’S OF AMERICA, INC. |
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Date: February 4, 2019 |
By: |
/s/ Paul M. Malazita |
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Name: Paul M. Malazita |
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Title: Chief Financial Officer and Secretary |
Exhibit 10.1
This Asset Purchase Agreement (this “ Agreement ”), dated as of January 29, 2019, is entered into between Legendary BBQ, Inc., Cornerstar BBQ, Inc., Razorback BBQ, Inc., Larkridge BBQ Inc., Mesa Mall BBQ, Inc., and Quebec Square BBQ, Inc., jointly and severally, (the “ Seller ”) and Famous Dave’s RIBS, Inc. , a Minnesota corporation (“ Buyer ”).
RECITALS
WHEREAS , Seller wishes to sell to Buyer , and Buyer wishes to purchase from Seller , the rights of Seller to the Purchased Assets (as defined herein), subject to the terms and conditions set forth herein;
NOW , THEREFORE, in consideration of the mutual covenants and agreements hereinafter set forth and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:
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(a) Upon execution of this Agreement, the Seller shall provide the Buyer in writing, as set forth in Exhibit A to this Agreement, all obligations and liabilities of amounts due by the Buyer or shall become due between the date of this Agreement and the Closing, which shall, be paid by the Buyer directly to the 3 rd parties unless it is legally not available, which are required to carry on the business without interruption until Closing. This amount shall be deducted from the Purchase Price delivered to the Seller in Section 2. 02(b)(i). Bill Ferguson shall personally guaranty, as set forth in Exhibit B hereto, any amounts we pay pursuant to this section. |
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Section 1.06 Prorations. Rent paid by Seller, pursuant to the Leases being assigned by this Agreement, for the month in which the Closing occurs shall be prorated and Seller shall be entitled to reimbursement of that portion of the month following at Closing. |
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(i) a bill of sale in form and substance satisfactory to Buyer and duly executed by Seller , transferring the Purchased Assets to Buyer ; |
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(iii) copies of all consents, approvals, waivers and authorizations referred to in Section 3.02 of the Disclosure Schedules ; |
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(iv) a certificate pursuant to Treasury Regulations Section 1.1445-2 (b) that Seller is not a foreign person within the meaning of Section 1445 of the Internal Revenue Code duly executed by Seller ; |
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(vii) such other customary instruments of transfer, assumption, filings or documents, in form and substance reasonably satisfactory to Buyer , as may be required to give effect to this Agreement . |
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(i) the amount of the Purchase Price payable at Closing by wire of immediately available funds to an account designated by the Seller minus (1) any amounts which will be delivered to vendors of the Seller or to the Seller for any amounts due or necessary to carry on the business between the date of this Agreement and the Closing as set forth in 1.03(a) or; (2) any amounts the Seller owes to the Buyer except for unpaid royalties to the Buyer’s Parent, which unpaid royalties will not exceed $350,000.00; |
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(ii) if available at the time of Closing, the Assignment and Assumption of Lease duly executed by Buyer ; |
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(iii) a release of any liability or obligations under the franchise agreement entered into between Famous Dave’s of America, Inc., the (“Buyer’s Parent”), and Seller; and |
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(iv) copies of all consents and authorizations referred to in Section 4.02 of the Disclosure Schedules . |
Seller represents and warrants to Buyer that the statements contained in this ARTICLE III are true and correct as of the date hereof. For purposes of this ARTICLE III, “ Seller’s knowledge ,” “ knowledge of Seller ” and any similar phrases shall mean the actual or constructive knowledge of any member of Seller , after due inquiry.
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Section 3.05 Non-foreign Status. Seller is not a “foreign person” as that term is used in Treasury Regulations Section 1.1445-2. |
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Section 3.06 Compliance With Laws Seller has complied, and is now complying, with all applicable federal, state and local laws and regulations applicable to ownership and use of the Purchased Assets. |
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Section 3.10 General Release and Covenant Not to Sue. |
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(a) The Seller, their successors and the current and former owners, shareholders, directors, officers, employees, agents, attorneys, representatives, and insurers of said corporations, firms, associations, partnerships, and entities, and their guardians, successors, assigns, heirs, executors, and administrators hereby IRREVOCABLY AND UNCONDITIONALLY RELEASES, ACQUITS, AND FOREVER DISCHARGES Famous Dave’s of America, Inc. and the Buyer from any and all claims, complaints, grievances, liabilities, obligations, promises, agreements, damages, causes of action, rights, debts, demands, controversies, costs, losses, and expenses(including attorneys' fees and expenses) whatsoever other than any arising under this Agreement or Famous Dave’s of America, Inc. under the respective franchise agreements, under any municipal, local, state, or federal law, common or statutory, including, but in no way limited to, claims arising under the Agreement or the franchise agreements for any actions or omissions whatsoever, whether known or unknown and whether connected with the franchise agreements or which existed or may have existed prior to, or contemporaneously with, the execution of this Agreement. |
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(b) Buyer’s Parent, their successors and the current and former owners, shareholders, directors, officers, employees, agents, attorneys, representatives, and insurers of said corporations, firms, associations, partnerships, and entities, and their guardians, successors, assigns, heirs, executors, and administrators hereby IRREVOCABLY AND UNCONDITIONALLY RELEASES, ACQUITS, AND FOREVER DISCHARGES the Seller from any and all claims, complaints, grievances, liabilities, obligations, promises, agreements, damages, causes of action, rights, debts, demands, controversies, costs, losses, and expenses(including attorneys' fees and expenses) that arise under the respective franchise agreements. |
Buyer represents and warrants to Seller that the statements contained in this ARTICLE IV are true and correct as of the date hereof. For purposes of this ARTICLE IV, “ Buyer’s knowledge ,” “ knowledge of Buyer ” and any similar phrases shall mean the actual knowledge of any officer of Buyer , with no duty of inquiry.
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(a) Following the Closing , each of the parties hereto shall execute and deliver such additional documents, instruments, conveyances and assurances and take such further actions as may be reasonably required to carry out the provisions hereof and give effect to the transactions contemplated by this Agreement and the documents to be delivered hereunder . |
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(b) On the date on which Buyer receives a liquor license for the sale of intoxicating beverages at each of the premises known at 15725 East Briarwood Circle, Aurora, CO 88016, 8330 Razorback Drive, Colorado Springs, CO 80920, 16539 N. Washington Street, Thornton, CO 80020, 7557 E. 36th Ave., Denver, CO 80238, and 2440 Hwy 6 & 50, Grand Junction, CO 81505, which is anticipated to be February 19, 2019, Seller shall deliver to Buyer a Bill of Sale for all inventory of Liquor Inventory located at or intended to be used at such premises, and as of the date of conveyance, the Liquor Inventory shall be considered Purchased Assets hereunder. |
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Section 5.05 Non-Compete with Buyer. As consideration for entering into this Agreement, Seller and Bill Ferguson personally, shall agree to enter into a restrictive covenants in a form acceptable to Buyer, agreeing not to: (i) compete with Famous Dave’s© Restaurant for a period of three years after the closing within five miles of any current Famous Dave’s© Restaurant, on their own account or as an employee, principal, agent, independent contractor, consultant, affiliate, licensee, partner officer, director or owner of any other person, firm, Entity, partnership or corporation, own, operate, lease, franchise, conduct, engage in, be connected with, have any interest in or assist any person or entity engaged in any full or quick service Barbecue-Style Restaurant which is located within five miles of the Sellers, within five miles of any other Famous Dave's© Restaurant, or within any exclusive area granted by Famous Dave's or any affiliate of Famous Dave's pursuant to a Development Agreement or other territorial agreement following the closing by not opening a restaurant that resembles a barbeque themed restaurant with offerings that include, but not limited to, smoked pork ribs, smoked brisket, corn muffins and barbeque beans, and (ii) hire or solicit any employee of the Business or encourage any such employee to leave such employment for a period of one year following the closing. |
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Section 5.06 Mutual Non -Disparagement . Subject to applicable law, each of the parties covenants and agrees that neither it nor any of its respective agents, subsidiaries, affiliates, successors, assigns, officers, key employees or directors, will in any way publicly disparage, call into disrepute, defame, slander or otherwise criticize the other parties or such other parties' subsidiaries, affiliates, successors, assigns, officers (including any current officer of a party or a parties' subsidiaries who no longer serves in such capacity following the execution of this Agreement), directors (including any current director of a party or a parties' subsidiaries who no longer serves in such capacity following the execution of this Agreement), employees, shareholders, agents, attorneys or representatives, or any of their products or services, in any manner that would damage the business or reputation of such other parties, their products or services or their subsidiaries, affiliates, successors, assigns, officers (or former officers), directors (or former directors), employees, shareholders, agents, attorneys or representatives. |
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(a) any inaccuracy in or breach of any of the representations or warranties of Seller contained in this Agreement or any document to be delivered hereunder ; |
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(b) any breach or non-fulfillment of any covenant, agreement or obligation to be performed by Seller pursuant to this Agreement or any document to be delivered hereunder ; or |
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(a) any inaccuracy in or breach of any of the representations or warranties of Buyer contained in this Agreement or any document to be delivered hereunder ; |
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(b) any breach or non-fulfillment of any covenant, agreement or obligation to be performed by Buyer pursuant to this Agreement or any document to be delivered hereunder ; |
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(c) the Assumed Liability; or |
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(d) ownership or use of the Purchased Assets by the Buyer arising after the Closing. |
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Section 7.01 Expenses . All costs and expenses incurred in connection with this Agreement and the transactions contemplated hereby shall be paid by the party incurring such costs and expenses. |
If to Seller: |
Legendary BBQ, Inc. Cornerstar BBQ, Inc. Razorback BBQ, Inc. Larkridge BBQ, Inc. Mesa Mall BBQ, Inc. Quebec Square BBQ, Inc. Attn: Bill Ferguson
45 Inverness Drive East
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If to Buyer: |
FAMOUS DAVE’S RIBS, INC. 12701 Whitewater Drive, Suite 190 Minnetonka, MN 55343 Facsimile: (952) 294-1301 Attention: Corporate Counsel |
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Section 7.03 Headings . The headings in this Agreement are for reference only and shall not affect the interpretation of this Agreement . |
respect of any failure, breach or default not expressly identified by such written waiver, whether of a similar or different character, and whether occurring before or after that waiver. No failure to exercise, or delay in exercising, any right, remedy, power or privilege arising from this Agreement shall operate or be construed as a waiver thereof; nor shall any single or partial exercise of any right, remedy, power or privilege hereunder preclude any other or further exercise thereof or the exercise of any other right, remedy, power or privilege . |
[signature page follows]
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed as of the date first written above by their respective officers thereunto duly authorized.
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Legendary BBQ, Inc. |
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Cornerstar BBQ, Inc. |
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Razorback BBQ, Inc. |
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Larkridge BBQ, Inc. |
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Mesa Mall BBQ, Inc. |
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Quebec Square BBQ, Inc. |
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By: /s/ William Ferguson |
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Name: William Ferguson |
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Title: President |
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FAMOUS DAVE’S RIB, INC. |
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By: /s/ Jeffery Crivello |
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Name: Jeffery Crivello |
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Title: Chief Executive Officer |
ACKNOWLEDGED BY: |
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FAMOUS DAVE’S OF AMERICA, INC. |
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By: /s/ Jeffery Crivello |
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Name: Jeffery Crivello |
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Title: Chief Executive Officer |
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Exhibit A
Amounts owed to keep the business uninterrupted between the date of this Agreement and Closing
THIS PERSONAL GUARANTY (this “Personal Guaranty”) is made and entered into this 29 th day of January, 2019, by and between Famous Dave’s Ribs, Inc., a Minnesota corporation (“Secured Party”), and each one of the undersigned personal guarantors (the “Personal Guarantor”).
WHEREAS, the Personal Guarantor have acknowledged and agreed that their entities which they own, __________________________, (the “Sellers”) owe Secured Party an amount equal to at least $____________________ to the order of Secured Party evidencing such amounts due (“Obligations”) as set forth in Exhibit A of the Asset Purchase Agreement dated _____________________ (as amended, supplemented or otherwise modified from time to time, the “Agreement”); and
WHEREAS, this Personal Guaranty is given by the Personal Guarantor in favor of the Secured Party to secure the payment and performance of all the Obligations, as defined in the Agreement;
NOW, THEREFORE, in consideration of the mutual covenants, terms and conditions set forth herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows:
WHEREAS, it is the desire of the undersigned Personal Guarantor to personally guaranty the obligations of and to be individually bound by the terms and conditions of the Agreement.
NOW, THEREFORE, in consideration of the execution of the Agreement by Secured Party, and for other good and valuable consideration, the undersigned, for themselves, their heirs, successors, and assigns, hereby become surety and guaranty for the payment of all amounts and the performance of the covenants, terms and conditions of the Agreement.
Obligations under Agreement . The undersigned, hereby agrees to be personally bound by each and every condition and term contained in the Agreement and agree that this Personal Guaranty should be construed as though the undersigned and each of them executed an agreement containing the identical terms and conditions of the Agreement. The Personal Guarantor acknowledge having received a copy of the Agreement which is incorporated herein by reference.
Non-Compliance by Seller . If Seller fails to comply with any other terms and conditions of the Agreement, then each one of the undersigned, their heirs, successors and assigns, do hereby, individually, jointly and severally, promise and agree to comply with the terms and conditions of the Agreement for and on behalf of the Seller.
Obligations of Seller . If the Seller is at any time in default on any obligation to pay monies to Secured Party or any Affiliate of Secured Party, then the undersigned, their heirs, successors and assigns, do hereby, promise and agree to pay all such monies due and payable by Seller to Secured Party or any upon default by Seller.
Liability . Upon demand by Secured Party, the Personal Guarantor will immediately make each payment required of Seller under the Agreement.
Binding Agreement . The Personal Guarantor warrants and represents that they have the capacity to execute this Personal Guaranty and that they will be bound by all of the terms and conditions of this Personal Guaranty. The provisions, covenants and conditions of this Personal Guaranty will inure to the benefit of the successors and assigns of Secured Party.
Jurisdiction and Venue . Except as precluded by applicable law, all arbitration, litigation, actions or proceedings pertaining to this Personal Guaranty will be brought and venued in accordance with the terms of the Agreement and the Personal Guarantor agrees to the dispute resolution provisions, including jurisdiction and venue, contained in the Agreement.
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By: /s/ William Ferguson |
Name: William Ferguson |