ASSET PURCHASE AGREEMENT
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”).
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:
Purchase and Sale
Section 1.01 Purchase and Sale of Assets. Subject to the terms and conditions set forth herein, Seller shall sell, assign, transfer, convey and deliver to Buyer, and Buyer shall purchase from Seller, all of Seller’s right, title and interest in the assets set forth on Section 1.01 of the disclosure schedules (“Disclosure Schedules”) attached hereto (the “Scheduled Assets”). In addition, Buyer shall purchase from Seller all current and useful unexpired inventory (including liquor inventory, food and food supplies, beverages, condiments, paper supplies, cleaning supplies, uniforms, smallwares and other operating supplies) of Seller held for use or sale by Seller as of the Closing in connection with the operation of the Famous Dave’s® restaurants located 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 (collectively, “Restaurant Inventory”) and all cash drawer amounts remaining in the Famous Dave’s restaurants located 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 as of Closing (the “Purchased Cash,” and together with the Scheduled Assets and the Restaurant Inventory, the “Purchased Assets”). Seller is conveying the Purchased Assets to Buyer and Buyer is purchasing the Purchased Assets free and clear of any mortgage, pledge, lien, charge, security interest, claim or other encumbrance (“Encumbrance”).
Section 1.02 Assumption of Liabilities. Except for the gift card liability for the restaurants, which amount shall be as reported by Givex/SVS (the “Assumed Liability”), Buyer shall not assume any liabilities or obligations of Seller of any kind, whether known or unknown, contingent, matured or otherwise, whether currently existing or hereinafter created (“Excluded Liability”).
Section 1.03 Purchase Price. The aggregate purchase price for the Purchased Assets shall be $4,100,000.00 plus the assumption by Buyer of the Assumed Liability, plus an amount equal to the book value of the Restaurant Inventory, as reflected on Seller’s most recent unaudited financial statement as of the Closing Date. Buyer shall pay Seller for Restaurant Inventory and the Purchased Cash within 10 days of the Closing Date. Buyer shall pay Seller the other elements of the Purchase Price as of Closing. The Buyer reserves the right to withhold any amount of the Purchase Price to satisfy any amounts outstanding from the Seller to the Buyer or Buyer’s Parent, as defined below, prior to Closing. However, the Buyer cannot withhold more than $350,000.00 in amounts outstanding for unpaid royalties to Buyer’s Parent.
THIS PERSONAL GUARANTY (this “Personal Guaranty”) is made and entered into this 29th 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.
By: /s/ William Ferguson
Name: William Ferguson