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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
Date of Report (date of earliest event reported): June 28, 1996
GROUND ROUND RESTAURANTS, INC.
(Exact name of registrant as specified in its charter)
New York 1-6192 13-5637682
(State or other (Commission File Number) (I.R.S. Employer
jurisdiction of Identification Number)
incorporation)
35 Braintree Hill Office Park, Braintree, Massachusetts 02184-9078
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code: (617) 380-3100
This Current Report on Form 8-K consists of 6 pages.
Exhibits begin on page 5.
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Item 2. Disposition of Assets:
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On June 28, 1996 the Registrant agreed to sell up to 16 restaurant
units to Lone Star Steakhouse & Saloon, Inc. ("Purchaser") for up to
$16 million in cash. The purchase price was negotiated in an arms
length transaction by the parties. Closing of the sale of the
restaurants is subject to the satisfaction of certain conditions,
including (i) the issuance or regulatory approval of the assignment
of liquor licenses to Purchaser; (ii) obtaining the consent of
lessors to the assignment of leases where such consent is
required;(iii) the right of Purchaser to renegotiate leases with the
lessors with respect to seven restaurants; (iv) conveyance by
Registrant of good title to each restaurant (in each case subject to
waiver by the Purchaser).
The closing of the transaction shall occur on or before the later of
August 12, 1996 or five business days after the issuance or
regulatory approval of the assignment to Purchaser of the liquor
licenses, but in no event later than November 30, 1996. In the event
not all of the liquor licenses or regulatory approvals of the
assignments is obtained prior to the scheduled closing date, the
parties shall close with respect to a minimum of eleven restaurants
for which such licenses or approvals have been obtained, with the
closing on the balance within five business days after all closing
conditions as to such remaining restaurants have been satisfied.
Any restaurant as to which the closing conditions cannot be timely
satisfied may be rejected by the Purchaser; in which event the
purchase price shall be reduced by a specified amount agreed by the
parties; provided, however, in no event shall Purchaser purchase less
than eleven restaurants.
Purchaser intends to utilize the proceeds to reduce bank debt and for
general corporate purposes.
Item 5. Other Events:
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On June 28, 1996, the Registrant and its lenders amended the
Registrant's Credit Facility so as to (i) defer certain principal
payments totalling approximately $2.9 million, which were due on June
30, 1996, until July 31, 1996; (ii) defer until July 31, 1996 the
payment of a restructuring fee that was due on June 30, 1996; and
(iii) permit the Registrant to retain a percentage of the proceeds of
sale of restaurants, subject to the Registrant and its lenders
reaching final agreement on a definitive term sheet restructuring its
Credit Facility
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prior to July 31, 1996. In addition, such amendment waived
Registrant's compliance with certain financial covenants through the
Registrant's third fiscal quarter ending June 30, 1996.
Item 7. Financial Statements and Exhibits:
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(a) Financial Statement of businesses acquired.
None.
(b) PRO FORMA financial information.
None.
(c) Exhibits:
1. Press Release dated June 28, 1996.
2. Press Release dated July 1, 1996.
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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.
GROUND ROUND RESTAURANTS, INC.
Date: July 11, 1996 By /s/ Michael R. Jorgensen
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Michael R. Jorgensen
Senior Vice President and
Chief Financial Officer