UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K
CURRENT REPORT
Pursuant to Section 13 OR 15(d) of the Securities Exchange Act of 1934
Date of Report (date of earliest event reported): August 25, 2005
NOBLE ROMAN'S, INC.
(Exact name of Company as specified in its charter)
Indiana 0-11104 35-1281154
(State or other jurisdiction (Commission (I.R.S. Employer
of incorporation) File Number) Identification No.)
One Virginia Avenue, Suite 800
Indianapolis, Indiana 46204
(Address of principal executive offices) (Zip Code)
(317) 634-3377
(Company's telephone number, including area code)
Not applicable
(Former name or former address if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the Company under any of the
following provisions:
[ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act
(17 CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange
Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange
Act (17 CFR 240.13e-4(c))
Item 1.01. Entry into a Material Definitive Agreement.
On August 25, 2005, Noble Roman's, Inc. (the "Company") completed a
settlement with SummitBridge National Investments, LLC and related entities. The
settlement resolved litigation between the Company and certain affiliated
parties and SummitBridge, which initially was brought by the Company in March
2004 in the Marion Superior Court Civil Division of the Indiana state courts. As
previously reported by the Company, the parties had asserted various claims
against each other after SummitBridge acquired a secured promissory note and
related stock ownership interests, more fully described below, from The
Provident Bank, Noble Roman's former bank lender, in October 2003. As of a
result of the settlement, the litigation is resolved and the parties have
executed mutual releases.
The Company acquired all of SummitBridge's debt and equity interests in the
Company, except for 2,400,000 shares of common stock, for a purchase price of
$8,300,000 resulting in a pre-tax gain for the Company of approximately
$2,800,000. These interests were acquired in October 2003 from The Provident
Bank and consisted of a senior secured promissory note in the principal amount
of $7,700,000, interest accrued on the note since February 2004, 3,214,748
shares of the Company's common stock, $4,929,275 stated amount of the Company's
no-yield preferred stock convertible into 1,643,092 shares of common stock, and
a warrant to purchase 385,000 shares of the Company's common stock with an
exercise price of $.01 per share.
To fund this settlement, the Company entered in to a loan agreement with
Wells Fargo Bank, N.A. pursuant to which the Company borrowed the principal sum
of $9,000,000. Interest on the loan is payable at a rate of 30-day LIBOR plus 4%
per annum. The Company is obligated to amortize the principal balance at the
rate of $125,000 per month over the six-year term of the loan. To secure its
obligations under the loan agreement, the Company granted the lender a security
interest in its business assets. The loan agreement also contains customary
representations, warranties and financial and non-financial covenants.
In addition, the holders of the $2,040,000 principal amount of previously
outstanding subordinated debentures issued by the Company exchanged their
debentures into shares of the Company's convertible Series B Convertible
Preferred Stock with a liquidation preference equal to the principal amount of
the debt converted. The preferred stock provides for cumulative dividends
payable at the rate of 8% per annum on the stated amount of the shares until
December 31, 2009 and 12% per annum thereafter. The preferred stock is
convertible after December 31, 2006 into the Company's common stock at a
conversion price of $2.25 per share. In addition, the Company extended the terms
of warrants to purchase common stock issued in connection with the subordinated
debentures from January 15, 2007 to January 15, 2008.
The Company agreed to use commercially reasonable efforts to assist
SummitBridge in finding one or more buyers for their retained stock over a six-
to nine-month period. SummitBridge will continue to have no voting rights with
respect to its retained shares as a result of the Indiana Control Share
Acquisition Act. However, following the six- to nine-month period, SummitBridge
will have the right to require the Company and its executive officers to use
commercially reasonable efforts to cause the Company's shareholders to vote to
restore SummitBridge's voting rights on any shares that SummitBridge then owns.
Also after the six- to nine-month period, if SummitBridge then owns more than 5%
of Noble Roman's outstanding shares, SummitBridge will have certain registration
rights.
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Copies of the press release announcing the settlement is attached to this
Form 8-K as Exhibit 99.1.
Item 1.02 Termination of a Material Definitive Agreement
As discussed in Item 1.01 of this report, the Company reacquired its
promissory note with an outstanding principal balance of $7,000,000. In
addition, the holders of the Company's previously outstanding subordinated
debentures in the aggregate principal amount of $2,040,000 exchanged such
debentures (and warrants to purchase common stock) for Series B Convertible
Preferred Stock of the Company (and new warrants for a like number of shares
with a one-year longer term). See Item 1.01 which is incorporated by reference
herein.
Item 2.03 Creation of a Direct Financial Obligation.
As discussed in Item 1.01 of this report, on August 25, 2005, the Company
entered in to a loan agreement with Wells Fargo Bank, N.A. See Item 1.01, which
is incorporated by reference herein.
Item 3.02 Unregistered Sales of Equity Securities
As discussed in Item 1.01 of this report, on August 25, 2005, the Company
issued 51,000 shares of its Series B Convertible Preferred Stock (convertible
into 906,667 shares of common stock after December 31, 2001), and warrants to
purchase 204,000 shares of its common stock in exchange for subordinated
debentures and warrants that previously were outstanding. See Item 1.01, which
is incorporated by reference herein.
Item 5.03 Amendments to Articles of Incorporation or Bylaws; Change in Fiscal
Year
(a) Effective August 23, 2005 the Company adopted an amendment to its
Articles of Incorporation to authorize a new series of preferred stock
designated as Series B Convertible Preferred Stock. The Series B Preferred Stock
is described above in Item 1.01 of this report, which is incorporated by
reference herein.
Item 9.01 Financial Statements and Exhibits.
(c) The following exhibits are filed as part of this report:
Exhibit Number Description
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3.1 Amendment to Articles of Incorporation Authorizing
Series B Convertible Preferred Stock
4.1 Form of Warrant to Purchase Common Stock
10.1 Loan Agreement by and Among the Company, Pizzaco,
Inc., N.R. Realty, Inc. and Wells Fargo Bank, N.A.
3
99.1 Press Release, dated August 25, 2005, issued by
Noble Roman's, Inc.
* * *
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Company has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Dated: August 29, 2005
NOBLE ROMAN'S, INC.
By: /s/ Paul W. Mobley
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Paul W. Mobley
Chief Executive Officer and
Chief Financial Officer
EXHIBIT INDEX
Exhibit Number Description
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3.1 Amendment to Articles of Incorporation
Authorizing Series B Convertible Preferred Stock
4.1 Form of Warrant to Purchase Common Stock
10.1 Loan Agreement by and Among the Company,
Pizzaco, Inc., N.R. Realty, Inc. and Wells
Fargo Bank, N.A.
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99.1 Press Release, dated August 25, 2005, issued by
Noble Roman's, Inc.