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SECURITIES AND EXCHANGE COMMISSION
Washington D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. )
MIAMI SUBS CORPORATION
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(Name of Issuer)
Common Stock
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(Title of Class of Securities)
593-736-10
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(CUSIP Number)
Nancy D. Lieberman, Esq.
Blau, Kramer, Wactlar & Lieberman, P.C.
100 Jericho Quadrangle
Jericho, New York 11753
(516) 822-4820
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(Name , Address and Telephone Number of Person Authorized to Receive Notice and
Communications)
November 25, 1998
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(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(b)(3) or (4), check the following box [ ].
Note: Six copies of this statement, including all exhibits, should be filed
with the Commission. See Rule 13d-1(a) for other parties to whom copies are to
be sent.
(Continued on following pages)
*The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities, and
for any subsequent amendment containing information which would alter
disclosures provided in a prior cover page.
The information required in the remainder of this cover page shall not be
deemed to be "filed" for the purpose of Section 18 of the Securities Exchange
Act of 1934 ("Act") or otherwise subject to the liabilities of that section of
the Act but shall be subject to all other provisions of the Act (however, see
the Notes).
SCHEDULE 13D
CUSIP No. 593-736-10
1 Name of Reporting Person
S.S. or I.R.S. Identification No. of Above Person
Nathan's Famous, Inc.
2 Check the Appropriate Box if a Member of a Group* (a) [ ] (b) [ ]
3 SEC Use Only:
4 Source of Funds: WC
5 Check Box if Disclosure of Legal Proceedings is Required Pursuant to Items
2(d) or 2(e) [ ]
6 Citizenship or Place of Organization: Delaware
7 Number of Shares
Sole Voting Power: 8,121,000
8 Beneficially
Shared Voting Power: -0-
9 Owned by Each Reporting
Sole Dispositive Power: 8,121,000
10 Person With
Shared Dispositive Power: -0-
11 Aggregate Amount Beneficially Owned by Each Reporting Person: 8,121,000
12 Check Box if the Aggregate Amount in Row (11) excludes Certain Shares* [ ]
13 Percent of Class Represented by Amount in Row (11): 29.9%
14 Type of Reporting Person*: CO
Item 1: Security and Issuer.
The securities to which this Schedule 13D relate are the shares of Common
Stock, par value $.01 per share ( "Shares") of Miami Subs Corporation, a
corporation organized under the laws of the State of Florida. The address of the
Issuer's principal executive office is 6300 NW 31st Avenue, Fort Lauderdale,
Florida 33309.
Item 2:
This statement is being filed by Nathan's Famous, Inc. ("Nathan's"). Nathan's,
a Delaware corporation, has its principal business and principal office located
at 1400 Old Country Road, Westbury, New York 11590. Nathan's operates and
franchises fast food units featuring its famous all-beef frankfurters, fresh
crinkle-cut french fried potatoes, and a variety of other menu offerings.
During the last five years, Nathan's has neither been convicted in a criminal
proceeding (excluding traffic violations or similar misdemeanors) nor been a
party to a civil proceeding of a judicial or administrative body of competent
jurisdiction as a result of which Nathan's was or is subject to a judgment,
decree or final order enjoining future violations of, or prohibiting or
mandating activities subject to, federal or state securities laws or finding any
violation with respect to such laws.
Item 3: Source or Amount of Funds or Other Consideration.
The funds used in connection with the purchase of the 8,121,000 shares of
common stock of the Issuer consisted of Nathan's working capital.
The common stock and warrants to purchase shares of the Common Stock, $.01 par
value per share, of Nathan's which constitute the consideration for the exchange
of Shares to be issued upon consummation of the Transaction (as defined in Item
4) shall be issued by Nathan's, if and only if, a Merger Agreement is executed
and such issuance and the merger are approved by the shareholders of Nathan's at
a meeting of shareholders to be called for such purpose.
Item 4: Purpose of the Transaction.
On November 25, 1998, Nathan's acquired 8,121,000 Shares in a private
transaction. In connection with its acquisition of the 8,121,000 Shares,
Nathan's and the Issuer entered into a letter agreement ("Letter Agreement")
which contemplates the execution and delivery by Nathan's and the Issuer of a
Merger Agreement which will provide for the merger of the Issuer with and into
Nathan's (the "Transaction") and the payment to the stockholders of the Issuer
in common stock and warrants of Nathan's (the "Transaction Consideration). The
Transaction Consideration for each share of Common Stock of the Issuer shall
consist of (a) a fraction of a share of common stock of Nathan's having a market
price of $.517 per share at closing; provided that Nathan's shall not be
required to issue more than one share of its common stock for each eight shares
of common stock of the Issuer; and (b) warrants to acquire Nathan's common stock
at an exercise price of $6.00 per share at the rate of one warrant for each four
shares of Nathan's common stock received by the Issuer's stockholders in the
Transaction. Upon completion of the Transaction, the Issuer's Shares will cease
to be traded on the Nasdaq.
It is anticipated that a member of the Issuer's board of directors will be
appointed to serve as directors of Nathan's. Each of the president, chief
financial officer and vice-president of operations of the Issuer will be offered
employment contracts by Nathan's.
Item 5: Interest in Securities of the Issuer.
Nathan's owns 8,121,000, or 29.9%, of the outstanding Shares. Nathan's has the
sole right to vote or direct the vote and dispose or direct the disposition of
the 8,121,000 Shares owned by it.
On November 25, 1998, Nathan's acquired the 8,121,000 Shares in a private
transaction for $.517 per Share, or an aggregate $4,200,000.
Item 6: Contracts, Arrangements, Understandings or Relationship with Respect to
Securities of the Issuer.
Nathan's purchase of the 8,121,000 Shares was made pursuant to the terms of a
Stock Purchase Agreement. In connection with such purchase, Nathan's and the
Issuer entered into the Letter Agreement. The Letter Agreement contemplates the
execution and delivery of a Merger Agreement between Nathan's and the Issuer
pursuant to which the Issuer will merge with and into Nathan's and the
stockholders of the Issuer will receive, for each share of Common Stock of the
Issuer: (a) a fraction of a share of common stock of Nathan's having a market
price of $.517 per share at closing; provided that Nathan's shall not be
required to issue more than one share of its common stock for each eight shares
of common stock of the Issuer; and (b) warrants to acquire Nathan's common stock
at an exercise price of $6.00 per share at the rate of one warrant for each four
shares of Nathan's common stock received by the Issuer's stockholders in the
Transaction.
Consummation of the Transaction is subject to the execution and delivery of
the Merger Agreement which will require approval of the stockholders of Nathan's
and the Issuer and contain customary closing conditions.
Exhibits (1) and (2) to this Statement on Form 13D are hereby incorporated by
reference into this Item 6.
Item 7: Exhibits
(1) Stock Purchase Agreement among Gus Boulis, Miami Subs Corporation and
Nathan's Famous, Inc. dated as of November 25, 1998
(2) Letter Agreement between Nathan's Famous, Inc. and Miami Subs
Corporation.
Signature.
After reasonable inquiry and to the best of my knowledge and belief, I certify
that the information set forth in this statement is true complete and correct.
December 3, 1998
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Date
/s/ Wayne Norbitz
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Signature
Wayne Norbitz/President and Chief Operating Officer
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Name/Title Nathan's Famous, Inc.
Attention: Intentional misstatements or omissions of fact constitute Federal
criminal violations (See 18 U.S.C. 1001).
NATHAN'S FAMOUS, INC.
GUS BOULIS
MIAMI SUBS CORPORATION
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STOCK PURCHASE AGREEMENT
TABLE OF CONTENTS Page
SALE AND PURCHASE OF SHARES. . . . . . . . . . . . . . . . . . 1
Section 1.1 Sale and Purchase of Shares. . . . . . . 1
Section 1.2 Payment for Shares . . . . . . . . . . . 1
Section 1.3 Escrow . . . . . . . . . . . . . . . . . 1
CLOSING. . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Section 2.1 Closing. . . . . . . . . . . . .. . . . 2
Section 2.2 Deliveries by Selling Shareholder. . . . 2
Section 2.3 Deliveries by Purchaser. . . . . . . . . 3
Section 2.4 Deliveries by Corporation. . . . . . . . 3
Section 2.5 Termination in Absence of Closing. . . . . .3
REPRESENTATIONS AND WARRANTIES OF SELLING SHAREHOLDER. . . . . . 4
Section 3.1 Representations Relating to Selling
Shareholder. . . . . . . . . . . . . . . 4
Section 3.2 Representations Relating to Corporation. . .4
REPRESENTATIONS AND WARRANTIES OF PURCHASER. . . . . .. . .. . . .9
Section 4.1 Authority, Approval and Enforceability . . 9
Section 4.2 No Defaults or Consents. . .. . . . . . . . 9
Section 4.3 No Proceedings . . . . . . . . . . . . . . .10
Section 4.4 Acquisition For Investment . . . . . . . . .10
Section 4.5 No Convictions . . . . . . . . . . . . . . .10
CONDITIONS TO PARTIES' OBLIGATIONS . . . . . . . . . . . . . . . .10
Section 5.1 Conditions to Obligations of the Selling
Shareholder . . . . . . . . . . . . . . 10
Section 5.2 Conditions to Obligations of Purchaser . . .10
ADDITIONAL AGREEMENTS. . . . . . . . . . . . . . . . . . . . . . 11
Section 6.1 Further Assurances and Filings . . . . . . 11
Section 6.2 Publicity. . . . . . . . . . . . . . . . . 12
Section 6.3 Indemnity. . . . . . . . . . . . . . . . . 12
Section 6.4 Non-Competition. . . . . . . . . . . . . . 13
Section 6.5 Non-Disclosure . . . . . . . . . . . . . . 13
Section 6.6 Non-Solicitation of Key Personnel. . . . . 14
Section 6.7 Tradenames . . . . . . . . . . . . . . . . 14
Section 6.8 Injunction . . . . . . . . . . . . . . . . .14
MISCELLANEOUS. . . . . . . . . . . . . . . . . . . . . . . . . . 14
Section 7.1 Notices. . . . . . . . . . . . . . . . . . .14
Section 7.2 Specific Performance . . . . . .. . . . . . 15
Section 7.3 Brokers. . . . . . . . . . . . . . . . . . .16
Section 7.4 Costs and Expenses . . . . . . . . . . . . .16
Section 7.5 Governing Law. . . . . . . . . . . . . . . .16
Section 7.6 Entire Agreement; Amendments and Waivers . .16
Section 7.7 Binding Effect and Assignment. . . . . . . .16
Section 7.8 Remedies . . . . . . . . . . . . . . . . . .17
Section 7.9 Disclosure Schedule. . . . . . . . . . . . .17
Section 7.10 Multiple Counterparts. . . . . . . . . . . .17
Section 7.11 References . . . . . . . . . . . . . . . . .17
Section 7.12 Survival . . . . . . . . . . . . . . . . . .17
Section 7.13 Attorneys' Fees. . . . . . . . . . . . . . .17
Section 7.14 Investigations; Representations and
Warranties. . . . . . . . . . . . . . . . 17
DEFINITIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Section 8.1 Affiliate. . . . . . . . . . . . . . . . . .18
Section 8.2 Collateral Agreements. . . . . . . . . . . .18
Section 8.3 Contracts. . . . . . . . . . . . . . . . . .18
Section 8.4 Damages. . . . . . . . . . . . . . . . . . .18
Section 8.5 Governmental Authorities . . . . . . . . . .18
Section 8.6 Knowledge. . . . . . . . . . . . . . . . . .18
Section 8.7 Legal Requirements . . . . . . . . . . . . .18
Section 8.8 Permits. . . . . . . . . . . . . . . . . . .18
Section 8.9 Person . . . . . . . . . . . . . . . . . . .18
Section 8.10 Properties . . . . . . . . . . . . . . . . 19
DISCLOSURE SCHEDULE
Section 3.2(a)(iii). . . . . . . . . . . . . Subsidiaries
Section 3.2(c) . . . . . . . . . . . . . . . Options and Warrants
Section 3.2(f)(ii) . . . . . . . . . . . . . Material Liabilities
Section 3.2(g)(i). . . . . . . . . . . . . . Changes in Circumstances
Section 3.2 (g)(ii). . . . . . . . . . . . . Certain Changes
Section 3.2(j) . . . . . . . . . . . . . . . Defaults
Section 3.2(k) . . . . . . . . . . . . . . . Contracts
Section 3.2(m) . . . . . . . . . . . . . . . Properties
Section 3.2(n) . . . . . . . . . . . . . . . Intellectual Property
Section 3.2(o) . . . . . . . . . . . . . . . Employee Benefit Plans
Section 3.2(p) . . . . . . . . . . . . . . . Labor Relations
EXHIBITS
Exhibit A . . . . . . . . . . . . . . . . . .Form of Selling Shareholder Release
Exhibit B . . . . . . . . . . . . . . . . . .Employment Term Sheet
Exhibit C . . . . . . . . . . . . . . . . . .Escrow Agreement
STOCK PURCHASE AGREEMENT
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THIS STOCK PURCHASE AGREEMENT (the "Agreement") is made and entered into as
of the ____ day of November, 1998, by and among (i) Nathan's Famous, Inc., a
Delaware corporation ("Purchaser"), (ii) Gus Boulis (the "Selling Shareholder"),
and (iii) Miami Subs Corporation, a Florida corporation (the "Corporation")
Recital
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The Selling Shareholder desires to sell to Purchaser 8,121,000 fully-paid
and non-assessable shares of Common Stock of the Corporation, par value $.01 per
share (the "Shares"), and Purchaser desires to purchase the Shares from the
Selling Shareholder, on the terms and conditions set forth herein.
Agreement
---------
NOW, THEREFORE, in consideration of the premises and mutual covenants set
forth in this Agreement and other good and valuable consideration, the receipt
and sufficiency of which is hereby acknowledged, the Corporation, Selling
Shareholder and the Purchaser agree as follows:
ARTICLE I
SALE AND PURCHASE OF SHARESSALE AND PURCHASE OF SHARES
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Section 1.1 Sale and Purchase of Shares. On the terms and subject to
the conditions of this Agreement, at the Closing (as hereinafter defined), the
Selling Shareholder shall sell, convey, assign, transfer and deliver, free and
clear of any and all liens and encumbrances of whatever character and any
restrictions on transfer (except applicable Federal and state securities laws,
including the rules and regulations promulgated thereunder), to Purchaser, and
Purchaser shall purchase from the Selling Shareholder the Shares.
Section 1.2 Payment for Shares. Subject to Section 1.3 hereof, as
payment for the Shares to be purchased by Purchaser hereunder, Purchaser shall
pay to the Selling Shareholder, on the date and in the manner herein provided,
the sum of $4,200,000 (the "Purchase Price").
Section 1.3 Escrow. At the Closing (as defined in Section 2.1 hereof), the
Selling Shareholder, the Purchaser and Greenberg Traurig, P.A., as escrow agent
("Greenberg Traurig"), shall enter into an escrow agreement in the form attached
hereto as Exhibit C, whereby the Seller and the Purchaser shall place
concurrently the Shares (except the Pledged Shares [as defined in Section 3.1(b)
hereof]) and the Purchase Price, respectively, in escrow with Greenberg Traurig.
The Purchaser hereby authorizes Greenberg Traurig to deliver a portion of the
Purchase Price to the institutions holding the Pledged Shares in order to obtain
the release of such Pledged Shares. Upon its receipt of the Pledged Shares from
the financial institutions, Greenberg Traurig shall release and deliver
simultaneously the Shares and the balance of the Purchase Price to the Purchaser
and Selling Shareholder, respectively, at which time the transaction shall be
deemed effective (the "Effective Time"). Notwithstanding anything to the
contrary set forth herein, this Agreement and the foregoing escrow arrangement
shall automatically terminate within seven (7) business days of the Closing if
the Purchaser has not received the Shares (including the Pledged Shares).
ARTICLE II
CLOSING
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Section 2.1 Closing. The closing of the transactions contemplated by
this Agreement (the "Closing") shall take place at the offices of Greenberg
Traurig, 1221 Brickell Avenue, Miami, Florida 33131 at 10:00 a.m. (local time)
on November ___, 1998 or, if the conditions set forth in Section 5.2 have not
been satisfied or waived on such date, such other date as may be agreed upon by
the parties. The date upon which the Closing occurs is hereinafter referred to
as the "Closing Date."
Section 2.2 Deliveries by Selling Shareholder . At or prior to the Closing,
the Selling Shareholder shall deliver to Purchaser:
(i) a certificate or certificates representing the Shares, duly endorsed in
blank for transfer, or with appropriate stock powers in blank attached, in form
and substance sufficient to convey to Purchaser good title to all such Shares,
free and clear of all liens and encumbrances;
(ii) the resignations, effective the Effective Time, of the Selling
Shareholder and Greg Karan from all officer, director and other positions with
the Corporation;
(iii) a certificate executed by the Selling Shareholder to the effect that
the conditions set forth in Section 6.2(a) hereof have been satisfied;
(iv) a release executed and delivered by the Selling Shareholder, in the
form of Exhibit "A" hereto;
(v) an instrument executed and delivered by the Selling Shareholder, in
form and substance satisfactory to Purchaser, confirming that: (a) all amounts
previously due and payable to the Selling Shareholder under any agreements,
arrangements or understandings between the Corporation or any wholly-owned
subsidiary thereof and the Selling Shareholder or any entity controlled directly
or indirectly by the Selling Shareholder have been paid in full (except for any
amounts owed under any real estate property lease between the Corporation or any
wholly owned subsidiary thereof and the Selling Shareholder or any entity
controlled directly or indirectly by Selling Shareholder) and (b) there are no
employment, compensation and indebtedness arrangements or other agreements or
understandings between the Corporation or any wholly owned subsidiary thereof
and the Selling Shareholder or any entity controlled directly or indirectly by
the Selling Shareholder, including whereby the Company is obligated to pay any
sums going forward (except for any real property lease between the Corporation
or any wholly owned subsidiary thereof and the Selling Shareholder or any entity
controlled directly or indirectly by Selling Shareholder, that Indemnification
Agreement dated October 28, 1994 between the Corporation and the Selling
Shareholder and that Letter Agreement dated December 28, 1994 between the
Corporation and Kavala, Inc.);
(vi) such other certificates and other evidence as Purchaser may reasonably
request as to the satisfaction of the conditions to Purchaser's obligations set
forth herein and as to such other matters as Purchaser may reasonably request;
and
(vii) surrender for cancellation by Selling Shareholder and the
Corporation, any outstanding options or warrants beneficially owned by Selling
Shareholder or any entity directly or indirectly controlled by Selling
Shareholder for the purchase of any capital stock of the Corporation.
Section 2.3 Deliveries by Purchaser. At or prior to the Closing, Purchaser
shall deliver to the Selling Shareholder, the payment required to be made at
Closing.
Section 2.4 Deliveries by Corporation . At or prior to Closing, the
Corporation shall deliver to Purchaser:
(i) a certificate from the Secretary of the Corporation certifying to and
attaching a copy of a resolution of the Board of Directors of the Corporation
approving: (a) the transactions represented by this Agreement consistent with
the Florida control-share acquisition statute, and (b) the Purchaser's
appointment of three members to the Board of Directors of the Corporation
effective as of the Effective Time (including designating such members as the
Board's nominees at the Corporation's next annual shareholders' meeting or
special meeting held in place thereof); and
(ii) evidence satisfactory to Purchaser that the "Change of Control"
Agreements with each of Donald Perlyn and Jerry Woda shall be cancelled upon the
Corporation's execution and delivery to each such person an employment agreement
embodying the terms set forth in Exhibit B attached hereto.
Section 2.5 Termination in Absence of Closing.
(a) General. Subject to the provisions of Section 2.5(b), if by the close
of business on November ___, 1998, the Closing has not occurred, then either
Purchaser or the Selling Shareholder may thereafter terminate this Agreement by
written notice to such effect to the other, without liability of or to any
parties to this Agreement, or any shareholder, director, officer, employee or
representative of such party, unless the reason for Closing having not occurred
is, if all of the conditions to such party's obligations set forth in Article VI
have been satisfied or waived in writing by the date scheduled for the Closing
pursuant to Section 2.1, the failure of such party to perform its obligations
under this Article II on such date; provided, however, that any termination
pursuant to this Section 2.5 shall not relieve any party hereto of any liability
for (i) such party's willful breach of the provisions of this Agreement, or (ii)
if all of the conditions to such party's obligations set forth in Article VI
have been satisfied or waived in writing by the date scheduled for the Closing,
the failure of such party to perform its obligations under this Article II on
such date.
(b) Selling Shareholder Breach. This Agreement and the transactions
contemplated herein may be terminated and abandoned at any time on or prior to
the Closing Date if (i) any representation or warranty made by the Selling
Shareholder herein for the benefit of Purchaser, or any certificate, schedule or
document furnished by the Selling Shareholder to Purchaser pursuant to this
Agreement, is untrue in any material respect, or (the Selling Shareholder shall
have defaulted in any material respect in the performance of any material
obligation under this Agreement; provided, however, that any termination
pursuant to this Section 2.5(b) shall not relieve the Selling Shareholder of any
Damages for breach or default as described in clauses (i) or (ii) above.
(c) Purchaser Breach. This Agreement and the transactions contemplated
herein may be terminated and abandoned at any time on or prior to the Closing
Date if (i) any representation or warranty made by the Purchaser herein for the
benefit of the Selling Shareholder, or any certificate, schedule or document
furnished by the Purchaser to the Selling Shareholder pursuant to this
Agreement, is untrue in any material respect, or (ii) the Purchaser shall have
defaulted in any material respect to the performance of any material obligation
under this Agreement; provided, however, that any termination pursuant to this
Section 2.5(c) shall not relieve the Purchaser of any Damages for breach or
default as described in clauses (i) or (ii) above.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF SELLING SHAREHOLDER
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3.1 Representations Relating to Selling Shareholder. The Selling
Shareholder represents to Purchaser as follows:
(a) Authority and Enforceability. This Agreement has been duly executed and
delivered by the Selling Shareholder. Selling Shareholder has all requisite
power and authority to execute and deliver this Agreement, to consummate the
transactions contemplated hereby, and to perform his obligations hereunder.
Assuming the due execution and delivery of this Agreement by the Corporation and
Purchaser, this Agreement constitutes the legal, valid and binding obligation of
the Selling Shareholder, enforceable in accordance with its terms, except as
such enforcement may be limited by general equitable principles or by applicable
bankruptcy, insolvency, moratorium, or similar laws and judicial decisions from
time to time in effect which affect creditors' rights generally.
(b) Ownership and Delivery of Shares. The Selling Shareholder owns,
beneficially and of record, all of the Shares free and clear (except, with
respect to 2,425,000 Shares [the "Pledged Shares"]) of any and all pledges,
security interests, liens, charges or other encumbrances of any nature
whatsoever. At the Effective Time, the Selling Shareholder will have transferred
valid title to such Shares to Purchaser, free and clear of any and all pledges,
security interests, liens, charges, agreements or commitments of any character,
subject only to restrictions arising under applicable Federal and state
securities laws and the rules and regulations promulgated thereunder
("Securities Laws").
(c) No Defaults or Consents. Except as otherwise contemplated hereby, the
execution and delivery of this Agreement by Selling Shareholder and the
performance by him of his obligations hereunder will not violate any provision
of law or any judgment, award or decree or any indenture, agreement or other
instrument to which the Selling Shareholder is a party, or by which the Selling
Shareholder or any of his properties or assets is bound or affected, or conflict
with, result in a breach of or constitute (with due notice or lapse of time or
both) a default under, any such indenture, agreement or other instrument, or
result in the creation or imposition of any lien, charge, security interest or
encumbrance of any nature whatsoever upon any of his properties or assets,
except to the extent that the violation or breach would not have a material
adverse effect on the Corporation's business, properties, condition (financial
or otherwise), results of operations or prospects (a "Material Adverse Effect")
or materially impair Selling Shareholder's ability to consummate the transaction
contemplated hereby.
(d) Reliance on Representations. Selling Shareholder has discussed with,
and relied upon the advice of Selling Shareholder's counsel with regard to, the
meaning and legal consequences of Selling Shareholder's representations and
warranties herein and the considerations involved in making an investment
decision with respect to the sale of the Shares, and Selling Shareholder
understands that the Corporation and Purchaser are relying on such
representations and warranties.
Section 3.2 Representations Relating to Corporation . Except as set forth
in the Disclosure Schedule (the "Disclosure Schedule") hereto, Selling
Shareholder hereby represents to Purchaser that he has no Knowledge of any facts
which would render any of the representations or warranties contained in this
Section 3.2 inaccurate;
(a) Corporate Existence and Qualification; Corporate Documents.
(i) The Corporation is a corporation duly organized, validly existing and
in good standing under the laws of the State of Florida and has the corporate
power to own, manage, lease and hold its Properties and to carry on its business
as such business is presently conducted.
(ii) The minute books of the Corporation contain a complete and accurate
record of all actions of the stockholders and directors (and any committees
thereof) of the Corporation.
(iii) Except as set forth in Section 3.2(a) of the Disclosure Schedule, the
Corporation does not (x) have any subsidiaries, (y) participate in any
partnership or joint venture, or (z) own any outstanding capital stock of any
other corporation.
(b) Authority, Approval and Enforceability. This Agreement has been duly
executed and delivered by the Corporation, and the Corporation has all requisite
corporate power and authority to execute and deliver this Agreement, to
consummate the transactions contemplated hereby, and to perform its obligations
hereunder. This Agreement and each Collateral Agreement to which Corporation is
a party constitutes, or upon execution and delivery will constitute, the legal,
valid and binding obligation of the Corporation, enforceable in accordance with
its respective terms, except as such enforcement may be limited by general
equitable principles or by applicable bankruptcy, insolvency, moratorium, or
similar laws and judicial decisions from time to time in effect which affect
creditors' rights generally.
(c) Capitalization and Ownership. The Corporation's authorized capital
stock consists of 50,000,000 shares of common stock, par value $.01 per share
(the "Common Stock"), and 8,000,000 shares of preferred stock, par value $.01
per share (the "Preferred Stock"). The Corporation has issued and outstanding
27,119,340 shares of Common Stock and no shares of Preferred Stock. All of the
outstanding shares of the Corporation's capital stock are duly authorized,
validly issued, fully paid and nonassessable and were not issued in violation of
(i) any preemptive or other rights of any Person to acquire securities of the
Corporation, or (ii) any applicable Securities Laws. Except as set forth in
Section 3.2(c) of the Disclosure Schedule, there are no outstanding
subscriptions, options, convertible securities, rights (preemptive or other),
warrants, calls or agreements relating to any shares of capital stock of the
Corporation.
(d) No Corporation Default or Consents. Neither the execution and delivery
of this Agreement nor the carrying out of any of the transactions contemplated
hereby will:
(i) violate or conflict with any of the terms, conditions or provisions of
the charter or bylaws of the Corporation;
(ii) violate any Legal Requirements applicable to the Corporation, the
violation of which would have a Material Adverse Effect on the Corporation;
(iii) violate, conflict with, result in a breach of, constitute a default
under (whether with or without notice or the lapse of time or both), or
accelerate or permit the acceleration of the performance required by, or give
any other party the right to terminate, any Contract or Permit applicable to the
Corporation, the violation of which would have a Material Adverse Effect;
(iv) result in the creation of any material lien, charge or other
encumbrance on the shares of capital stock or any Properties of the Corporation;
or
(v) require the Corporation to obtain or make any waiver, consent, action,
approval or authorization of, or registration, declaration, notice or filing
with, any private non-governmental third party or any Governmental Authority.
(e) No Proceedings. No suit, action or other proceeding is pending or
threatened before any Governmental Authority seeking to restrain or prohibit the
Corporation's entry into or consummation of this Agreement, or seeking damages
against the Corporation or its Properties as a result of the consummation of
this Agreement.
(f) Financial Statements.
(i) The Corporation's audited financial statements (including the notes and
schedules thereto) for the fiscal years ended May 31, 1996, 1997 and 1998 (the
"Audited Financial Statements") and the unaudited financial statements
(including the notes and schedules thereto) for the three month period ended
August 31, 1998 (the "Unaudited Financial Statements" and together with the
Audited Financial Statements, the "Financial Statements") present fairly the
financial condition and results of operations of the Corporation for the dates
or periods indicated thereon (except for normal year-end adjustments to the
Unaudited Financial Statements).
(ii) Except as disclosed in Section 3.2(f)(ii) in the Disclosure Statement,
the Corporation does not have any material liabilities or obligations (whether
accrued, absolute or contingent and whether or not of a nature required to be
reflected or reserved against in a balance sheet in accordance with GAAP), other
than (i) liabilities reflected on the Corporation's August 31, 1998 balance
sheet (or as disclosed in the notes and schedules thereto), (ii) executory
contract obligations, and (iii) liabilities incurred by the Corporation since
August 31, 1998 in the ordinary course of business, none of which are
individually or in the aggregate material to the Corporation.
(g) Absence of Certain Changes.
(i) of the Disclosure Schedule, since August 31, 1998, to the Knowledge of
the Selling Shareholder, there has not been any change in circumstances that had
or is reasonably likely to have a Material Adverse Effect.
(ii) Except as set forth in 3.2(g)(ii) of the Disclosure Schedule, since
August 31, 1998, the Corporation has not done any of the following:
(A) declared, set aside or paid any dividends, or made any distributions or
other payments in respect of its equity securities, or repurchased, redeemed or
otherwise acquired any such securities;
(B) created, incurred, assumed, guaranteed or otherwise become liable or
obligated with respect to any indebtedness;
(C) entered into, amended or terminated any material Contract;
(D) sold, transferred, leased, mortgaged, encumbered or otherwise disposed
of, or agreed to sell, transfer, lease, mortgage, encumber or otherwise dispose
of, any material Properties;
(E) incurred or approved, or entered into any agreement or commitment to
make, any material expenditures;
(F) committed to do any of the foregoing.
(h) Compliance with Laws. The Corporation is and has been in compliance in
all respects with any and all Legal Requirements applicable to the Corporation,
other than failures to so comply that would not have a Material Adverse Effect.
The Corporation has not received or entered into any citations, complaints,
consent orders, compliance schedules, or other similar enforcement orders or
received any written notice from any Governmental Authority or any other written
notice that would indicate that there is not currently compliance with all such
Legal Requirements.
(i) Litigation. Except as set forth in the notes to the Financial
Statements, there are no claims, actions, suits, investigations or proceedings
against the Corporation pending or threatened in any court or before or by any
Governmental Authority, or before any arbitrator, that is reasonably likely to
individually or in the aggregate result in a payment by the Corporation of over
$100,000 (whether covered by insurance or not) and there is no basis for any
such claim, action, suit, investigation or proceeding that is likely to result
in a judgment, decree or order that could reasonably be expected to have a
Material Adverse Effect.
(j) Default. Except as set forth in Section 3.2(j) of the Disclosure
Schedule, the Corporation is not in default under, and no condition exists
(whether covered by insurance or not) that with or without notice or lapse of
time or both would constitute a default under, or breach or violation of, any
Legal Requirement, Permit or Contract applicable to the Corporation, or
accelerate or permit the acceleration of the performance required under, or give
any other party the right to terminate, any Contract applicable to the
Corporation, other than defaults, breaches, violations or accelerations that
would not have, individually or in the aggregate, a Material Adverse Effect.
(k) Contracts. Except as set forth in Section 3.2(k) of the Disclosure
Schedule or as reflected in the SEC Filings (as defined in Section 3.2(l)
hereof), the Corporation is not a party to or bound by any of the following,
whether written or oral:
(i) any Contract providing for payments aggregating over $100,000 that
cannot by its terms be terminated by the Corporation with 30 days' or less
notice without penalty or whose term continues beyond one year after the date of
this Agreement;
(ii) any Contract or commitment for capital expenditures by the Corporation
in excess of $100,000;
(iii) any lease or license with respect to any material assets, real or
personal, whether as landlord, tenant, licensor or licensee, except for those
reflected in the Financial Statements or subsequently entered into in the
ordinary course of business.
(iv) any agreement, contract, indenture or other instrument relating to the
borrowing of money or the guarantee of any obligation or the deferred payment of
the purchase price of any assets;
(v) any partnership, management or profit sharing agreement;
(vi) any Contract with Selling Shareholder or any Affiliate of Selling
Shareholder;
(vii) any agreement for the sale of any assets;
(viii) any agreement that purports to limit the Corporation's freedom to
compete freely in any line of business or in any geographic area; or
(ix) any preferential purchase right, right of first refusal, or similar
agreement.
All of the material Contracts required to be listed in the Disclosure Schedule
are valid, binding and in full force and effect, and the Corporation has not
been notified or advised by any party thereto of such party's intention or
desire to terminate or modify any such Contract in any material respect, and
neither the Corporation nor any other party is in breach of any of the terms and
covenants of any such material Contract.
(l) Information in SEC Filings. None of the information included in the
Corporation's 1998 Annual Report on Form 10-K, Quarterly Report on Form 10-Q for
the quarterly period ended August 31, 1998 and Preliminary Proxy Statement for
the Corporation's 1998 annual shareholders' meeting (together, the "SEC
Filings"), filed pursuant to the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), contains any untrue statement of a material fact or omits
to state any material fact required to be stated therein or necessary in order
to make the statements therein, in light of the circumstances under which they
are made, not misleading.
(m) Good Title to Properties. Except as set forth in Section 3.2(m) of the
Disclosure Schedule and/or as reflected in the SEC Filings, the Corporation has
good and marketable title to all of its Properties (as defined in Section 8.10
hereof) free and clear of any liens or restrictions on use, except with respect
to leased Properties and except where any such lien or restriction would not
have, individually or in the aggregate, a Material Adverse Effect on the
Corporation.
(n) Intellectual Property. Except as set forth in Section 3.2(n) of the
Disclosure Schedule, the Corporation has no permits, licenses and registrations
granted to or by the Corporation (including applications therefor) for the use
of: its corporate name, any trade or service mark, copyright, patent, process,
operational manual, technique and similar property by the Corporation
(collectively, the "Proprietary Assets"). The Corporation owns all of the
Proprietary Assets necessary to operate its business. No claim has been asserted
or threatened by any Person challenging the validity of any Proprietary Asset or
the use thereof by the Corporation.
(o) Employee Benefit Plans.
(i) Except as set forth in Section 3.2(o) of the Disclosure Schedule, there
are no employee benefit plans (including previously-maintained plans) or
arrangements of any type (including, without limitation, plans described in
section 3(3) of the Employee Retirement Income Security Act of 1974, as amended,
and the regulations thereunder ["ERISA"]), under which the Corporation has or in
the future could have directly, or indirectly through a Commonly Controlled
Entity (within the meaning of section 414(b), (c) (m) and (o) of the Internal
Revenue Code of 1986, as amended, and the regulations thereunder ["Code"]), any
liability with respect to any current or former employee of the Corporation or
any Commonly Controlled Entity (collectively, the "Benefit Plans"). No such
Benefit Plan is "multiple employer plan" (within the meaning of the Code or
ERISA) or subject to Title IV of ERISA.
(ii) With respect to each Benefit Plan which is a "welfare plan" (as
defined in Section 3(1) of ERISA): (1) no such plan provides medical or death
benefits (whether or not insured) with respect to current or former employees
beyond their termination of employment (other than coverage mandated by law);
(2) there are no reserves, assets, surplus or prepaid premiums under any such
plan; and (3) the Corporation and any Commonly Controlled Entity have complied
with the requirements under Code section 4980B.
(p) Labor Relations. Except as set forth in Section 3.2(p) of the
Disclosure Schedule, the Corporation is in compliance with all federal and state
laws respecting employment and employment practices, terms and conditions of
employment, wages and hours, and is not engaged in any unfair labor or unlawful
employment practice. Except as set forth in Section 3.2(p) of the Disclosure
Schedule, there is no unlawful employment practice or discrimination charge
pending or threatened against the Corporation before any Governmental Authority.
Except as set forth in Section 3.2(p) of the Disclosure Schedule, there is no
unfair labor practice charge or complaint, grievance or arbitration against the
Corporation pending or threatened against the Corporation before any
Governmental Authority. Except as set forth in Section 3.2(p) of the Disclosure
Schedule, there is no threatened labor strike, dispute, slowdown or stoppage or
any representation question respecting the Corporation's employees. There is no
collective bargaining agreement that is binding on the Corporation.
(q) Environmental Matters. The Corporation has not received any written
communication from any Person (including any Governmental Authority) stating
that it may be a potentially responsible party under any applicable state,
federal and local laws, regulations and rules, including common law, judgments,
decrees and orders relating to pollution, the preservation of the environment,
and the release of material into the environment ("Environmental Law") with
respect to any actual or alleged environmental contamination or the release of
any hazardous substances; no Governmental Authority is conducting or has
conducted any environmental remediation or environmental investigation which
could reasonably be expected to result in material liability or expense for the
Corporation under Environmental Law; the Corporation has not received any
request for information under Environmental Law from any Governmental Authority
with respect to any actual or alleged environmental contamination or the release
of any hazardous substance, except, in each case, for communications,
environmental remediation and investigations and requests for information which
would not, individually or in the aggregate, have a Material Adverse Effect; and
the Corporation has no liabilities under Environmental Law that, individually or
in the aggregate, have had or may reasonably be expected to have a Material
Adverse Effect.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF PURCHASER
-------------------------------------------
Purchaser hereby represents and warrants to the Selling Shareholder that:
Section 4.1 Authority, Approval and Enforceability. The Purchaser is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Delaware with full corporate power and authority to carry on its
business as it is now being conducted and to own, operate and lease its
properties and assets. This Agreement has been duly executed and delivered by
Purchaser. Purchaser has all requisite power and authority to execute and
deliver this Agreement and all Collateral Agreements executed and delivered or
to be executed and delivered by it in connection with the transactions provided
for hereby, to consummate the transactions contemplated hereby and by the
Collateral Agreements, and to perform its obligations hereunder and under the
Collateral Agreements. This Agreement and each Collateral Agreement to which
Purchaser is a party constitutes, or upon execution and delivery will
constitute, the legal, valid and binding obligation of Purchaser, enforceable in
accordance with its terms, except as such enforcement may be limited by general
equitable principles or by applicable bankruptcy, insolvency, moratorium, or
similar laws and judicial decisions from time to time in effect which affect
creditors' rights generally.
Section 4.2 No Defaults or Consents . Except as otherwise contemplated
hereby, the execution and delivery of this Agreement by Purchaser and the
performance by Purchaser of its obligations hereunder will not violate any
provision of law or any judgment, award or decree or any indenture, agreement or
other instrument to which Purchaser is a party, or by which Purchaser or any of
its properties or assets is bound or affected, or conflict with, result in a
breach of or constitute (with due notice or lapse of time or both) a default
under, any such indenture, agreement or other instrument, or result in the
creation or imposition of any lien, charge, security interest or encumbrance of
any nature whatsoever upon any of its properties or assets, except in each case
to the extent that the violation or breach would not materially impair
Purchaser's ability to consummate the transaction contemplated hereby.
Section 4.3 No Proceedings. To the Purchaser's knowledge, no suit, action
or other proceeding is pending or threatened before any Governmental Authority
seeking to restrain or prohibit Purchaser's entry into or consummation of this
Agreement or to restrain or prohibit the Closing, or seeking Damages against
Purchaser as a result of the consummation of this Agreement.
Section 4.4 Acquisition For Investment Purchaser is acquiring the Shares
for investment and not with a view toward distribution, within the meaning of
applicable Federal securities laws.
Section 4.5 No Convictions. There is no criminal conviction in the past of
Purchaser or any of its officers or directors which would impair or bar the
Corporation from continuing to hold or acquire alcoholic beverage or other
governmental licenses.
ARTICLE V
CONDITIONS TO PARTIES' OBLIGATIONS
----------------------------------
Section 5.1 Conditions to Obligations of the Selling Shareholder. The
obligation of the Selling Shareholder to carry out the transactions contemplated
by this Agreement are subject, at the option of the Selling Shareholder, to the
satisfaction, or waiver by the Selling Shareholder, of the following conditions:
(a) All representations and warranties of Purchaser contained in this
Agreement shall be true and correct in all material respects, and shall be
certified as such by Purchaser, at and as of the Closing as if such
representations and warranties were made at and as of the Closing, except for
changes permitted or contemplated by the terms of this Agreement, and Purchaser
shall have performed and satisfied in all material respects all covenants and
agreements required by this Agreement to be performed and satisfied, and made
all deliveries required to be made, by it at or prior to the Closing, including,
but not limited to payment by Purchaser of the Purchase Price to the Selling
Shareholder.
(b) As of the Closing Date, no suit, action or other proceeding (excluding
any such matter initiated by or on behalf of the Selling Shareholder) shall be
pending or threatened before any Governmental Authority seeking to restrain or
prohibit the Closing or seeking Damages against the Selling Shareholder as a
result of the consummation of this Agreement.
(c) The Corporation shall have received evidence, reasonably satisfactory
to it, of the consent to the transactions contemplated by this Agreement of all
Governmental Authorities whose consent or approval is required to avoid
violating in any material respect any applicable Legal Requirement.
Section 5.2 Conditions to Obligations of Purchaser. The obligations of
Purchaser to carry out the transactions contemplated by this Agreement are
subject, at the option of Purchaser, to the satisfaction, or waiver by
Purchaser, of the following conditions:
(a) All representations and warranties of the Selling Shareholder and the
Corporation contained in this Agreement shall be true and correct in all
material respects, and shall be certified as such by Selling Shareholder, at and
as of the Closing as if such representations and warranties were made at and as
of the Closing Date, except for changes permitted or contemplated by the terms
of this Agreement, and the Selling Shareholder and the Corporation shall have
performed and satisfied in all material respects all agreements and covenants
required by this Agreement to be performed and satisfied, and made all
deliveries required to be made, by them at or prior to the Closing.
(b) As of the Closing Date, no suit, action or other proceeding (excluding
any such matter initiated by or on behalf of Purchaser) shall be pending or
threatened before any court or Governmental Authority seeking to restrain or
prohibit the Closing or seeking Damages against Purchaser or the Corporation as
a result of the consummation of this Agreement.
(c) Since August 31, 1998 and up to and including the Closing there shall
not have been any Material Adverse Effect on the Corporation.
(d) Purchaser shall have received written evidence, in form and substance
satisfactory to Purchaser, of the consent to the transactions contemplated by
this Agreement of all governmental, quasi-governmental and private third parties
(including, without limitation, lessors, lenders, persons or other entities
leasing real or personal property to the Corporation) where the absence of any
such consent would result in a violation of Legal Requirements or a breach or
default under any material Contract to which the Corporation is a party.
(e) There shall not be any action taken, or any statute, rule, regulation
or order enacted, entered, enforced or deemed applicable to the transactions
contemplated hereby, by any Governmental Authority which imposes any condition
or restriction upon Purchaser, the Corporation or any of their respective
Affiliates, including, without limitation, requirements relating to the
disposition of assets, which in any such case would so materially adversely
impact the economic or business benefits of the transactions contemplated by
this Agreement as to render inadvisable the consummation of such transactions.
(f) The Board of Directors of the Corporation shall have approved this
Agreement (including Purchaser's acquisition of the Shares contemplated hereby)
consistent with the Florida control-share acquisition statute and the
Purchaser's appointment of three members to the Board of Directors of the
Corporation effective as of the Effective Time (including designating such
members as the Board's nominees at the Corporation's next annual shareholders'
meeting or special meeting held in place thereof), and the Selling Shareholder
and Greg Karan shall have tendered each of their resignations as provided in
Section 2.2(ii) hereof.
(g) Purchaser shall have received evidence in accordance with Section
2.4(ii) hereof that the "Change of Control" Agreements with each of Donald
Perlyn and Jerry Woda shall be cancelled upon the Corporation's execution and
delivery to each such person an employment agreement embodying the terms set
forth in Schedule A attached hereto.
ARTICLE VI
ADDITIONAL AGREEMENTS
---------------------
Section 6.1 Further Assurances and Filings . Subject to the terms and
conditions of this Agreement, prior to and subsequent to the Closing each party
hereto shall use its or his reasonable efforts to take or cause to be taken all
actions and do or cause to be done all things required under applicable law in
order to give effect to the transactions contemplated hereby, including, without
limitation, using its or his reasonable efforts to obtain all authorizations,
consents and approvals of any Governmental Authority or other person which are
required for or in connection with the consummation of the transactions
contemplated hereby and by the Collateral Agreements. Without limiting the
generality of the foregoing, each of the Selling Shareholder, Purchaser and the
Corporation expressly agrees to promptly make and file all applications, notices
and other documents necessary or appropriate, as reasonably determined by
Purchaser, in order to ensure that no Governmental Authority will have the right
or alleged right to revoke, cancel, non-renew, restrict or withhold any material
license, permit, certificate of authority, franchise or similar approval
required in connection with the Corporation's business as currently conducted or
proposed to be conducted (each a "License"), including those state, federal and
foreign Governmental Authorities responsible for the granting, suspension,
revocation, condition and/or renewal of alcoholic beverage licenses and permits
and franchise licenses and permits granted to or applied for by the Corporation.
Each of the parties hereto shall furnish to the others such information and
assistance as any other party may reasonably request in connection with the
preparation of any such filings or submissions and provide the others with
copies of all correspondence, filings or communications (or memoranda setting
forth the substance thereof) between such party or any of its representatives,
on the one hand, and any Governmental Authority or members of their respective
staffs, on the other hand, with respect to this Agreement and the transactions
contemplated hereby.
Section 6.2 Publicity . Except as required by applicable Legal
Requirements, neither the Selling Shareholder, the Corporation nor Purchaser
shall issue or make, or cause to be issued or made, any public release or
announcement concerning this Agreement or the transactions contemplated hereby,
without the others' prior written approval of the form and substance thereof.
Section 6.3 Indemnity (a) From and after the Closing, the Selling
Shareholder shall severally indemnify and hold harmless Purchaser and each of
its Affiliates, directors, officers and employees from and against any and all
Damages arising out of, resulting from or in any way related to a breach of any
of the representations, warranties, covenants and/or agreements made by the
Selling Shareholder in this Agreement and/or any Collateral Agreement.
Notwithstanding anything to the contrary set forth in this Agreement, the
Selling Shareholder's maximum liability to Purchaser for indemnification claims
hereunder shall not exceed the Purchase Price.
From and after the Closing, Purchaser shall indemnify and hold harmless the
Selling Shareholder and his heirs and personal representative from and against
any and all Damages arising out of, resulting from or in any way related to a
breach of any of the representations, warranties, covenants, and/or agreements
made by Purchaser in this Agreement and/or any Collateral Agreement.
(b) Promptly after the assertion by any third party of any claim, demand or
notice (a "Third Party Claim") against any Person or Persons entitled to
indemnification under this Section 6.3(b) (the "Indemnified Parties") that
result or may result in the incurrence by such Indemnified Parties of any
Damages for which such Indemnified Parties would be entitled to indemnification
pursuant to this Agreement, such Indemnified Parties shall promptly notify the
parties from whom such indemnification could be sought (the "Indemnifying
Parties") of such Third Party Claim. Thereupon, the Indemnifying Party shall
have the right, upon written notice (the "Defense Notice") to the Indemnified
Parties within thirty days after receipt by the Indemnifying Parties o of notice
of the Third Party Claim (or sooner if such claim so requires), to conduct, at
their own expense, the defense against the Third Party Claim in their own names
or, if necessary, in the names of the Indemnified Parties. The Defense Notice
shall specify the counsel the Indemnifying Parties shall appoint to defend such
Third Party Claim (the "Defense Counsel") and the Indemnified Parties shall have
the right to approve the Defense Counsel, which approval shall not be
unreasonably withheld or delayed. In the event the Indemnified Parties and the
Indemnifying Parties cannot agree on such counsel within ten days after the
Defense Notice is give, then the Indemnifying Parties shall propose an alternate
Defense Counsel, which shall be subject again to the Indemnified Parties'
approval which approval shall not be unreasonably withheld or delayed. Any
Indemnified Party shall have the right to employ separate counsel in any such
Third Party claim and/or to participate in the defense thereof, but the fees and
expenses of such counsel shall not be included as part of any Damages incurred
by the Indemnified Party unless (A) the Indemnified Parties shall have failed to
give the Defense Notice within the prescribed period, (B) such Indemnified Party
shall have received an opinion of counsel, reasonably acceptable to the
Indemnifying Parties, to the effect to the interests of the Indemnified Party
and the Indemnifying Parties with respect to the Third Party Claim are
sufficiently adverse to prohibit the representation by the same counsel of both
parties under applicable ethical rules, or (C) the employment f such counsel at
the expanse of the Indemnifying Parties has been specifically authorized by the
Indemnifying Parties. The party or parties conducting the defense of any Third
Party Claim shall keep the other parties apprised of all significant
developments and shall not enter into any settlement, compromise or consent to
judgment with respect to such Third Party Claim unless the Company and the
Selling Shareholder consent, such consent not to be unreasonably withheld.
(c) The representations, warranties, covenants and agreements set forth in
this Agreement, and the indemnities of the Selling Shareholder and Purchaser set
forth in this Section 6 in connection with the transactions contemplated hereby
shall survive the Closing, except as expressly provided in Section 6.3(d) or
otherwise in this Agreement.
(d) All representations and warranties of the parties contained in this
Agreement shall expire, terminate and be of no force and effect (or provide the
basis for any claim) and no party shall have any obligation to indemnify any
other party hereunder for any breach of a representation or warranty unless
written notice of any indemnifiable claim resulting from such breach is received
prior to the first anniversary of the Closing Date.
Section 6.4 Non-Competition . For a period commencing on the Closing Date
and terminating on the third anniversary thereof (the "Restriction Period"), the
Selling Shareholder shall not, directly or indirectly, engage in or have any
interest in any sole proprietorship, partnership, corporation, limited liability
company, business or any other Person, whether as an employee, officer,
director, partner, agent, shareholder, consultant or otherwise, that directly or
indirectly is engaged in any fast food restaurant business that serves (a) gyro
sandwiches or submarine sandwiches as a major product or (b) otherwise competes,
directly or indirectly, with the Corporation's franchised or company owned
restaurant business in the fast food industry throughout the United States, and
South America; provided, however, that nothing herein shall be deemed to prevent
Selling Shareholder from owning, solely as an investment, less than one percent
of the outstanding shares of any class of securities that is listed or admitted
for trading on any United States national securities exchange, so long as
Selling Shareholder is not a member of any "control group" (within the meaning
of the rules and regulations of the SEC) of the issuer of such securities.
Selling Shareholder agrees that the covenant provided for in this Section 7.4 is
reasonable and necessary in terms of time, activity and territory to protect
Purchaser's interest as buyer of the Shares, which includes its interests in
protecting the Corporation's valuable confidential business information,
substantial relationships with customers, and customer goodwill. To the extent
that the covenant provided for in this Section 7.4 may later be deemed by a
court to be too broad to be enforced with respect to its duration or with
respect to any particular activity or geographic area, the court making such
determination shall have the power to reduce the duration or scope of the
provision, and to add or delete specific words or phrases to or from the
provision. The provision as modified shall then be enforced.
6.5 Non-Disclosure . Prior to, during and after the Restriction Period, the
Selling Shareholder shall not disclose, divulge, furnish or make accessible to
anyone (other than Purchaser or the Corporation or any of their Affiliates or
representatives) any Confidential Information (as hereinafter defined), or in
any way use any Confidential Information in the conduct of any business that is
competitive with the business of the Corporation; provided, however, that
nothing in this Section will prohibit the disclosure of any Confidential
Information which is required to be disclosed by Selling Shareholder or its
representatives in connection with any court action or any proceeding before any
Governmental Authority if Selling Shareholder shall give notice to Purchaser of
the intention to disclose such Confidential Information so that Purchaser may
contest the need for disclosure, and Selling Shareholder shall cooperate (and
will cause its representatives to cooperate) with Purchaser in connection with
any such proceeding. For purposes hereof, the term "Confidential Information"
means information of any kind concerning the Corporation, its business,
financial condition, results of operations, prospects, customers, marketing and
other business strategies, sources of leads, methods of obtaining new business,
expansion plans, employees and/or dealings with Government Authorities;
provided, however, that Confidential Information shall not include information
that is or becomes generally available to the public other than as a result of a
disclosure by Selling Shareholder or his Affiliates or any of his or their
employees, agents, accountants, legal counsel or other representatives or
advisers.
Section 6.6 Non-Solicitation of Key Personnel . In order to induce Purchase
to enter into this Agreement, during the Restriction Period, Selling Shareholder
shall not, directly or indirectly, for him or for any other Person, attempt to
employ or enter into any contractual arrangement with any employee of the
Corporation with the rank of manager or higher until one year after such
person's employment with the Corporation has ended. Selling Shareholder agrees
that neither it nor any of its Affiliates will take any action to discourage any
such employees from continuing employment with the Corporation.
Section 6.7 Tradenames . In order to induce Purchaser to enter into this
Agreement, at no time during or subsequent to the Restriction Period shall
Selling Shareholder or any of his respective Affiliates (x) engage in any
business that utilizes or attempts to utilize the "Miami Subs" or "Miami Subs
Grill" tradename or any derivative thereof which includes the words "Miami Subs"
or "Miami" , or (y) directly or indirectly represent and/or otherwise convey the
impression that the Selling Shareholder is affiliated or involved with the
Corporation as a director, officer or controlling shareholder.
Section 6.8 Injunction . It is recognized and hereby acknowledged by the
parties hereto that a breach or violation by Selling Shareholder of any or all
of the covenants and agreements contained in Section 6.4, 6.5, 6.6 and/or 6.7
hereof may cause irreparable harm and damage to the Corporation in a monetary
amount which may be virtually impossible to ascertain. As a result, Selling
Shareholder recognizes and hereby acknowledges that the Purchaser and the
Corporation shall be entitled to an injunction from any court of competent
jurisdiction enjoining and restraining any beach or violation of any or all of
the covenants and agreements contained in such Sections 6.4 through 6.7 by
Selling Shareholder and that such right to injunction shall be cumulative and in
addition to whatever other rights or remedies the Purchaser and the Corporation
may possess hereunder, at law or in equity. Nothing contained in this Section
6.8 shall be construed to prevent the Purchaser and the Corporation from seeking
and recovering from Selling Shareholder damages sustained by it as a result of
any breach or violation by him of any of the covenants or agreements contained
herein.
ARTICLE VII
MISCELLANEOUS
-------------
Section 7.1 Notices.
(a) Addresses. Any notices, requests, demands and other communications
required or permitted to be given hereunder must be in writing and, except as
otherwise specified in writing, will be deemed to have been duly given when
personally delivered, telexed or facsimile transmitted, or three days after
deposit in the United States mail, by certified mail, postage prepaid, return
receipt requested, as follows. The addresses of the Corporation, the Selling
Shareholder and Purchaser, which shall be considered to be their last known
addresses unless subsequently changed in accordance with the provisions of this
Agreement, are as follows:
To the Corporation: Miami Subs Corporation
6300 Northwest 31st Avenue
Fort Lauderdale, Florida 33309
Attention: Donald Perlyn, President
Copy to: Greenberg Traurig, P.A.
1221 Brickell Avenue
Miami, Florida 33131
Attention: Harold E. Berritt, Esq.
Facsimile: 305-579-0717
To Selling Shareholder: Gus Boulis
647 East Dania Beach Boulevard
Dania Beach, Florida 33004
Copy to: Chris A. Economou, Esq.
150 North Federal Highway
Suite 210
Fort Lauderdale, Florida 33301
Facsimile: 954-522-4659
To Purchaser: Nathan's Famous, Inc.
1400 Old Country Road
Westbury, New York 11590
Copy to: Blau, Kramer, Wactlar & Lieberman, P.A.
100 Jericho Quadrangle, Suite 225
Jericho, New York 11753
Attention: David H. Lieberman, Esq.
Facsimile: 516-822-4824
Any party may change its address for the purposes of this Agreement by giving
notice of such change of address to the other parties in the manner herein
provided for giving notice.
(b) Form of Notice. Any notice or communication hereunder must be in
writing, and may be personally delivered or given by registered or certified
mail, return receipt requested, and if given by registered or certified mail,
shall be deemed to have been given and received forty-eight hours after deposit
in the United States mail of a registered or certified letter, return receipt
requested, containing such notice, properly addressed, with postage prepaid; and
if given otherwise than by registered or certified mail, it shall be deemed to
have been given when received by the party to whom it is addressed at the time
received.
(c) Failure to Notify of Changed Address. It shall be the responsibility of
each of the parties to this Agreement to notify all other parties of their
respective addresses and any changes thereof, and any objections to the
performance of any act required hereunder based upon a failure to receive a
notice mailed in conformity with the provisions of this Agreement shall be
meritless.
Section 7.2 Specific Performance . The right to own the Corporation's
capital stock is hereby declared by the parties hereto to be a unique right, the
loss of which is not susceptible to monetary quantification. Consequently, the
parties hereto agree that an action by Purchaser for specific performance of the
purchase and sale obligations created by this Agreement is a proper remedy for
the breach of its provisions should Purchaser elect to pursue such remedy rather
than terminate this Agreement as provided in Section 2.5.
Section 7.3 Brokers . Regardless of whether the Closing shall occur, (i)
the Selling Shareholder shall indemnify and hold harmless Purchaser and the
Corporation from and against any and all liability for any brokers' or finders'
fees arising with respect to brokers or finders retained or engaged by the
Selling Shareholder in respect of the transactions contemplated by this
Agreement, and (ii) Purchaser shall indemnify and hold harmless the Selling
Shareholder and the Corporation from and against any and all liability for any
brokers' or finders' fees arising with respect to brokers or finders retained or
engaged by Purchaser in respect of the transactions contemplated by this
Agreement.
Section 7.4 Costs and Expenses . Each of the parties to this Agreement
shall bear his or its own expenses incurred in connection with the negotiation,
preparation, execution and closing of this Agreement and the transactions
contemplated hereby.
Section 7.5 Governing Law. The provisions of this agreement and the
documents delivered pursuant hereto shall be governed by and construed in
accordance with the laws of the State of Florida (excluding any conflict of law
rule or principle that would refer to the laws of another jurisdiction). Each
party hereto irrevocably submits to the jurisdiction of the Circuit Court of the
State of Florida, Broward County, Florida, in any action or proceeding arising
out of or relating to this Agreement or any of the Collateral Agreements, and
each party hereby irrevocably agrees that all claims in respect of any such
action or proceeding must be brought and/or defended in such court; provided,
however, that matters which are under the exclusive jurisdiction of the Federal
courts shall be brought in the Federal District Court for the Southern District
of Florida. Each party hereto consents to service of process by any means
authorized by the applicable law of the forum in any action brought under or
arising out of this Agreement or any of the Collateral Agreements, and each
party irrevocably waives, to the fullest extent each may effectively do so, the
defense of an inconvenient forum to the maintenance of such action or proceeding
in any such court.
Section 7.6 Entire Agreement; Amendments and Waivers. This Agreement,
together with all Collateral Agreements and Disclosure Schedules, constitutes
the entire agreement between and among the parties hereto pertaining to the
subject matter hereof and supersedes all prior agreements, understandings,
negotiations and discussions, whether oral or written, of the parties, and there
are no warranties, representations or other agreements between the parties in
connection with the subject matter hereof except as set forth specifically
herein or contemplated hereby. No supplement, modification or waiver of this
Agreement shall be binding unless executed in writing by the party to be bound
thereby. No waiver of any of the provisions of this Agreement shall be deemed or
shall constitute a waiver of any other provision hereof (regardless of whether
similar), nor shall any such waiver constitute a continuing waiver unless
otherwise expressly provided.
Section 7.7 Binding Effect and Assignment. This Agreement shall be binding
upon and inure to the benefit of the parties hereto and their respective
permitted successors and assigns; but neither this Agreement nor any of the
rights, benefits or obligations hereunder shall be assigned, by operation of law
or otherwise, by any party hereto (except by the Selling Shareholder, by
operation of law, to his heirs and personal representative) without the prior
written consent of each other party. Nothing in this Agreement, express or
implied, is intended to confer upon any person or entity other than the parties
hereto and their respective permitted successors and assigns, any rights,
benefits or obligations hereunder.
Section 7.8 Remedies. The rights and remedies provided by this Agreement
are cumulative, and the use of any one right or remedy by any party hereto shall
not preclude or constitute a waiver of its right to use any or all other
remedies. Such rights and remedies are given in addition to any other rights and
remedies a party may have by law, statute, or otherwise.
Section 7.9 Disclosure Schedule. The Disclosure Schedule referred to herein
is attached hereto and incorporated herein by this reference. Disclosure of a
specific item in the Disclosure Schedule shall be deemed restricted only to the
Section of this Agreement to which such disclosure specifically relates except
where (i) there is an explicit cross-reference to another Section, and (ii) the
recipient party could reasonably be expected to ascertain the scope of the
modification to a representation intended by such cross-reference.
Section 7.10 Multiple Counterparts. This Agreement may be executed in one
or more counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.
Section 7.11 References. Whenever required by the context, the singular
number shall include the plural and pronouns and any variations thereof shall be
deemed to refer to the masculine, feminine, neuter, singular or plural, as the
identification of a Person may require. References to monetary amounts, specific
named statutes and generally accepted accounting principles are intended to be
and shall be construed as references to United States dollars, statutes of the
United States of the stated name and United States generally accepted accounting
principles, respectively, unless the context otherwise requires.
Section 7.12 Survival. Any and all representations and warranties set forth
in this Agreement, shall not be deemed to be merged into or waived by the
execution and delivery of the instruments executed at the Closing, but shall
expressly survive Closing for a period of eighteen (18) months and shall be
binding upon the party or parties obligated thereby in accordance with the terms
of this Agreement, subject to any limitations expressly set forth in this
Agreement.
Section 7.13 Attorneys Fees. In the event any suit or other legal
proceeding is brought for the enforcement of any of the provisions of this
Agreement, the parties hereto agree that the prevailing party or parties shall
be entitled to recover from the other party or parties upon final judgment on
the merits reasonable attorneys' fees (and sales taxes thereon, if any),
including reasonable attorneys' fees for any appeal, and costs incurred in
bringing such suit or proceeding.
Section 7.14 Investigations; Representations and Warranties. The respective
representations and warranties of Purchaser and Selling Shareholder contained
herein or in any certificate, or other document delivered by any party at the
closing shall not be deemed waived, vitiated or otherwise affected in any manner
or in any respect by any due diligence investigation made or not made by a party
hereto or by any actual or constructive knowledge a party may have had or should
have had on or before the Closing that a representation or warranty made or
given by the other party herein or any Schedule annexed hereto was wholly or
party untrue, misleading or incomplete. Also, the rights and remedies of any
party based upon, arising out of or otherwise in respect of any inaccuracy in or
breach of any representation, warranty, covenant or agreement contained in this
Agreement shall in no way be limited by the fact that the act, omission,
occurrence or other state of facts upon which any claim of any such inaccuracy
or breach is based may also be the subject matter of any other representation,
warranty, covenant or agreement contained in this Agreement ( or in any other
agreement between the parties) as to which there is no inaccuracy or breach.
ARTICLE VIII
DEFINITIONS
-----------
Capitalized terms used in this Agreement are used as defined in this
Article X or elsewhere in this Agreement.
Section 8.1 Affiliate. The term "Affiliate" shall mean, with respect to any
Person, any other Person controlling, controlled by or under common control with
such Person. The term "control" as used in the preceding sentence means, with
respect to a corporation, the right to exercise, directly or indirectly, more
than 50% of the voting rights attributable to the shares of the controlled
corporation and, with respect to any Person other than a corporation, the
possession, directly or indirectly, of the power to direct or cause the
direction of the management or policies of such Person.
Section 8.2 Collateral Agreements. The term "Collateral Agreements" shall
mean any or all of the exhibits to this Agreement and any and all other
agreements, instruments or documents required or expressly provided under this
Agreement to be executed and delivered in connection with the transactions
contemplated by this Agreement.
Section 8.3 Contracts. The term "Contracts", when described as being those
of or applicable to any Person, shall mean any and all contracts, agreements,
franchises, understandings, arrangements, leases, licenses, registrations,
authorizations, easements, servitudes, rights of way, mortgages, bonds, notes,
guaranties, liens, indebtedness, approvals or other instruments or undertakings
to which such Person is a party or to which or by which such Person or the
property of such Person is subject or bound, excluding any Permits.
Section 8.4 Damages. The term "Damages" shall mean any and all actual (but
not consequential) damages, liabilities, obligations, penalties, fines,
judgments, claims, deficiencies, losses, reasonable costs and expenses and
assessments (including without limitation income and other taxes, interest,
penalties and attorneys' and accountants' fees and disbursements).
Section 8.5 Governmental Authorities. The term "Governmental Authorities"
shall mean any nation or country (including but not limited to the United
States) and any commonwealth, territory or possession thereof and any political
subdivision of any of the foregoing, including but not limited to the SEC and
other courts, departments, commissions, boards, bureaus, agencies, ministries or
other instrumentalities.
Section 8.6 Knowledge. The term "Knowledge" shall mean actual knowledge of
Selling Shareholder with respect to the matter in question, after due inquiry.
Section 8.7 Legal Requirements. The term "Legal Requirements", when
described as being applicable to any Person, shall mean any and all laws
(statutory, judicial or otherwise), ordinances, regulations, judgments, orders,
directives, injunctions, writs, decrees or awards of, and any Contracts with,
any Governmental Authority, in each case as and to the extent applicable to such
person or such person's business, operations or Properties.
Section 8.8 Permits. The term "Permits" shall mean any and all permits,
legal status, orders or Contracts under any Legal Requirement or otherwise
granted by any Governmental Authority.
Section 8.9 Person . The term "Person" shall mean any individual or any
corporation, partnership, limited liability company, association or other
entity.
Section 8.10 Properties. The term "Properties" shall mean any and all
properties and assets (real, personal or mixed, tangible or intangible) owned or
used by the Corporation.
[Signature Page Follows]
IN WITNESS WHEREOF, the parties to this Agreement have hereunto set their
names as of the date first above written.
MIAMI SUBS CORPORATION
By: /s/ Donald L. Perlyn
---------------------------------------------
Name: Donald L. Perlyn
Title: President & Chief Operating Officer
/s/ Gus Boulis
---------------------------------------------
Gus Boulis, Individually
NATHAN'S FAMOUS, INC.
By: /s/ Howard M. Lorber
---------------------------------------------
Name: Howard M. Lorber
Title:
Exhibit 2
NATHAN'S FAMOUS, INC.
November 25, 1998
Miami Subs Corporation
6300 Northwest 31st Avenue
Fort Lauderdale, Florida 33309
Attention: Mr. Donald Perlyn, President
Gentlemen:
Nathan's Famous, Inc., a Delaware corporation (the "Purchaser"), hereby
submits this letter with regard to its proposal to acquire all of the remaining
issued and outstanding shares of Common Stock (including the assumption of
options and warrants relating thereto) of Miami Subs Corporation, a Florida
corporation ("Miami Subs"), by merging with Miami Subs and being the surviving
corporation subsequent to such merger, subject to the terms herein, such
purchase being referred to herein as the "Transaction."
1. The parties will enter into a Merger Agreement which will provide for
payment to the stockholders of Miami Subs in common stock and warrants of the
Purchaser (the "Transaction Consideration), which securities shall be registered
pursuant to a registration statement on Form S-4. The Transaction Consideration
for each share of Common Stock of Miami Subs shall consist of (a) common stock
of Purchaser having a market price of $.517 per share at closing provided that
Purchaser shall not be required to issue more than one share of its common stock
for each eight shares of common stock of Miami Subs; and (b) warrants to acquire
Purchaser's Common Stock at an exercise price of $6.00 per share at the rate of
one warrant for each four shares of Purchaser's common stock received by Miami
Subs stockholders in the Transaction. The Transaction Consideration will be
appropriately adjusted to reflect any stock split (including a reverse stock
split), dividend, reclassification, recapitalization or similar transaction
effectuated by either the Purchaser or Miami Subs prior to the closing of the
Transaction. The Transaction will be subject to shareholder approval by
Purchaser's stockholders and Miami Subs stockholders at special meetings of
stockholders in accordance with applicable state and Federal laws and Purchaser
and Miami Subs receipt of fairness opinions indicating that the Transaction
Consideration is fair, from a financial point of view, to Purchaser's
stockholders or Miami Subs stockholders, as the case may be.
2. Consummation of the Transaction is contingent upon the Purchaser and Miami
Subs completing, and being satisfied with the results of, a due diligence review
of Miami Subs. and the Purchaser, as the case may be. The purpose of such review
is to provide the Purchaser and Miami Subs, as the case may be, with information
with regard to the operations and prospects of Miami Subs and the Purchaser, as
the case may be, to ensure that the acquisition is appropriate as proposed. To
assist the Purchaser and Miami Subs, as the case may be, in conducting this
review, Miami Subs and the Purchaser, as the case may be, will provide, or cause
to be provided, all information with respect to itself as the Purchaser and
Miami Subs, as the case may be, may reasonably request, including any interim
audited financial information.
3. In addition to Miami Subs shareholder approval and receipt of the fairness
opinion referenced in item (1), consummation of the Transaction is subject to,
among other things, (a) the execution of mutually acceptable definitive
documentation which contains such representations, warranties, covenants and
other terms as are customary, (b) approval of the Transaction by the Board of
Directors of the Purchaser and Miami Subs, (c) consent to the Transaction and
the granting of any necessary waivers by any necessary third parties, (d) the
absence of any pending or threatened litigation or other contingent liabilities
or obligations which could prevent the closing of the Transaction or materially
adversely affect the business of Miami Subs (the "Business"), (e) compliance by
the Purchaser and Miami Subs with the requirements of applicable Florida
anti-takeover and related statutes.
4. Whether or not the Transaction is completed, each party will bear its own
expenses (including, without limitation, any broker's or finder's fees and any
attorney's and accountant's fees) incurred in connection with this letter and
the Transaction.
5. Miami Subs agrees that during the period from the date hereof through the
closing of the Transaction (a) the Business will be operated only in the
ordinary course, (b) Miami Subs will not dispose of any of its assets used in
connection with its business other than in the ordinary course of business, and
(c) Miami Subs will not make any distribution or any other payment, in cash or
in securities, to its shareholders, officers, directors or its or their
affiliates, other than salary paid in the ordinary course of business consistent
with past practice. Additionally, Miami Subs represents and warrants that the
Business has been operated in the ordinary course of business since August 31,
1998.
6. Miami Subs represents that it has filed all forms, reports and documents
required to be filed by it with the Securities and Exchange Commission ("SEC")
since filing its Report on Form 10-Q for the quarter ended August 31, 1998 and
has made available to Purchaser such forms, reports and documents in the form
filed with the SEC. All such required forms, reports and documents (including
those which Miami Subs may file subsequent to the date hereof) are designated as
the "SEC Reports." As of their respective dates, the SEC Reports (i) were
prepared in accordance with the requirements of the Securities Act or the
Exchange Act, as the case may be, and the rules and regulations of the SEC
thereunder applicable to the SEC Reports, and (ii) did not at the time they were
filed (or amended or superseded) contain any untrue statement of a material fact
or omit to state a material fact required to be stated therein or necessary in
order to make the statements therein, in light of the circumstances under which
they were made, not misleading.
7. Miami Subs agrees to use its best efforts to retain for the benefit of
Miami Subs all employees of Miami Subs determined by the Purchaser to be
necessary to Miami Subs' operations. Purchaser agrees to enter into employment
agreements with each of Donald Perlyn, Jerry Woda and Frank Baron on the terms
and conditions set forth on Exhibit "A" attached hereto.
8. From the date hereof until the earlier of (a) 60 days from the date of
this letter, or (b) the date on which the parties have terminated discussions
regarding the Transaction, Miami Subs shall not, and Miami Subs shall use
reasonably commercial efforts to cause Miami Subs to cause its officers,
directors, employees and other agents not to, directly or indirectly, take any
action to (i) solicit, initiate or encourage any offer or proposal or indication
of interest in a merger, consolidation or other business combination involving
any capital stock in, or a substantial portion of the assets of Miami Subs,
other than in connection with the transactions contemplated by the Transaction,
or (ii) participate in any discussions or negotiations regarding, furnish any
information with respect to, assist or participate in, or facilitate in any
other manner any effort or attempt by any Person to do or seek any of the
foregoing. Miami Subs shall notify the Purchaser immediately if any person makes
any proposal, offer, inquiry, or contract with respect to any of the foregoing.
9. Without the consent of Miami Subs (in the case of Purchaser) or the
consent of Purchaser (in the case of Miami Subs), none of the parties shall
issue any press release or make any public announcement with regard to the
Transaction; provided, however, nothing herein shall be deemed to prohibit any
party hereto from making any disclosure which its counsel deems necessary or
advisable in order to fulfill such party's disclosure obligations imposed by law
or the rules of any national securities exchange or automated quotation system,
so long as the disclosing party uses all commercially reasonable efforts to
consult with the other parties prior to such disclosure.
10. Each of the Purchaser and Miami Subs agrees that it will keep
confidential (except for such disclosure to attorneys and other representatives
as may be appropriate in furtherance of this transaction and except for
disclosure as may be required by applicable law) all confidential information
obtained by it from the other party or parties in connection with the
Transaction. Confidential information does not include any information that was
available by a party on a non-confidential basis prior to its receipt of such
information or thereafter became publicly available not as a result of a breach
of this Agreement. Information shall be deemed "publicly available" if it
becomes a matter of public knowledge or is contained in materials available to
the public or is obtained from any source other than Purchaser or Miami Subs (or
their respective directors, officers, employees, agents, representatives or
advisors), as the case may be.
11. This letter shall be governed by and construed and enforced in accordance
with the laws of the State of New York, without regard to conflicts of law
principles thereof.
If the above properly meets with your approval with respect to the proposed
Transaction, please sign where indicated below.
NATHAN'S FAMOUS, INC.
By: /s/ Howard M. Lorber
----------------------------------
Howard M. Lorber
Accepted and Agreed as of the date first above written:
MIAMI SUBS CORPORATION
By: /s/ Donald L. Perlyn
-----------------------------
Donald L. Perlyn
President & Chief Operating Officer