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): April 23, 2008
NATHAN'S
FAMOUS, INC.
(Exact
Name of Registrant as Specified in its Charter)
Delaware
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1-3189
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11-3166443
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(State
of Incorporation)
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(Commission
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(I.R.S.
Employer
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File
Number)
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Identification
No.)
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1400
Old Country Road, Westbury, New York
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11590
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(Address
of Principal Executive Offices)
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(Zip
Code)
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Registrant's
telephone number including area code
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(516)
338-8500
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N/A
(Former
name or former address, if changed since last report.)
Check
the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions (see
General
Instruction A.2. below):
o |
Written
communications pursuant to Rule 425 under the Securities Act (17
CFR
230.425)
|
o |
Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
|
o |
Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17
CFR
240.14d-2(b))
|
o |
Pre-commencement
communications pursuant to Rule 13e-14(c) under the Exchange Act
(17 CFR
240.13e-4(c))
|
Item
1.01. Entry
into a Material Definitive Agreement.
On
April
23, 2008, the Registrant entered into a Stock Purchase Agreement with Roasters
Asia Pacific (Cayman) Limited (“Purchaser”) and NF Roasters Corp. (“NFR”) (the
“Stock Purchase Agreement”) pursuant to which the Registrant sold to the
Purchaser all of the stock of NFR in exchange for $4,045,194.16 in cash. Prior
to entering into the Stock Purchase Agreement, NFR transferred to the Registrant
assets having a value of approximately $1.1 million, consisting of intercompany
receivables. In connection with the sale of NFR, NFR entered into a license
agreement with Nathan’s Famous Systems, Inc. (“NFSI”), a subsidiary of the
Registrant, pursuant to which NFR licensed to NFSI certain intellectual property
necessary for the Registrant to continue to make available “Kenny Rogers”
products at existing Nathan’s Famous and Miami Subs restaurants (the “License
Agreement”).
Prior
to
entering into the Stock Purchase Agreement, NFR was party to a Master
Development Agreement dated July 22, 1993 with the Purchaser and its affiliate,
Roasters Asia Pacific (HK) Limited (together with Purchaser, “Developer”), as
amended, including without limitation, by the Third Amendment to the Master
Development Agreement dated July 15, 1999 and by the Fourth Amendment to the
Master Development Agreement dated September 2003 (the “RAP Agreement”),
pursuant to which the Developer was entitled to develop and franchise Kenny
Rogers Roasters restaurants in Malaysia and certain other foreign territories.
In accordance with the terms of the RAP Agreement, Developer paid license fees
to NFR annually during the term of the RAP Agreement; the amount of the annual
license fee has been immaterial. As a result of the sale of NFR pursuant to
the
Stock Purchase Agreement, effective at the time of such sale, there is no
material relationship between the Registrant and any of its affiliates and
the
Purchaser, other than in respect of the Stock Purchase Agreement and the License
Agreement described above.
The
Stock
Purchase Agreement is attached as Exhibit 10.1 hereto, the License Agreement
is
attached as Exhibit 10.2 hereto and the press release announcing the transaction
is attached as Exhibit 99.1 hereto.
Item
9.01. Financial
Statements and Exhibits.
(d)
Exhibits.
|
10.1 |
Stock
Purchase Agreement entered into on April 23, 2008 by and among Roasters
Asia Pacific (Cayman) Limited, NF Roasters Corp. and the
Registrant
|
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10.2
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License
Agreement dated April 23, 2008 between Roasters Asia Pacific (Cayman)
Limited and the Registrant
|
|
99.1
|
Press
release dated April 28, 2008
|
SIGNATURE
Pursuant
to the requirements of the Securities Exchange Act of 1934, the Registrant
has
duly caused this report to be signed on its behalf by the undersigned,
thereunder duly authorized.
|
NATHAN'S
FAMOUS, INC.
|
|
|
|
|
|
By:
/s/ Ronald
DeVos
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Ronald
DeVos
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|
Vice-President
Finance
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|
and
Chief Financial Officer
|
|
(Principal
Financial and Accounting Officer)
|
Dated:
April 28, 2008
Exhibit
10.1
STOCK
PURCHASE AGREEMENT
This
STOCK PURCHASE AGREEMENT (this
“Agreement”)
is
entered into as of April 23, 2008 by and among ROASTERS
ASIA PACIFIC (CAYMAN) LIMITED,
a Cayman
Island corporation (“Purchaser”),
NF ROASTERS
CORP.,
a
Delaware corporation (the “Company”),
and
NATHAN’S
FAMOUS, INC.,
a
Delaware corporation (“Seller”).
Purchaser and Seller are referred to collectively as the “Parties”
and
each individually as a “Party.”
RECITALS
WHEREAS,
Seller
owns all of the issued and outstanding common stock of the Company;
and
WHEREAS,
Seller
wishes to sell the Company, and Purchaser wishes to purchase from Seller, all
of
the shares of common stock of the Company on the terms and conditions
hereinafter set forth.
NOW
THEREFORE, in
consideration of the mutual promises, covenants, representations, warranties,
conditions and agreements contained herein, the Parties agree as
follows:
ARTICLE
I
PURCHASE
AND SALE OF SHARES
1.1 Purchase
and Sale of Shares.
(a) Purchase
of Shares.
Subject
to the terms and conditions hereinafter set forth, on the Closing Date, Seller
agrees to sell to Purchaser, and Purchaser agrees to purchase from Seller,
all
of the issued and outstanding shares (consisting of 100 shares of common stock,
$0.01 par value) of the Company (the “Shares”),
for
an aggregate price of Four Million Dollars ($4,000,000), plus the amount
calculated in accordance with Section 1(b)(i)(y), below (the “Purchase
Price).
(b) Purchase
Price.
(i) As payment in full for the Shares, Purchaser shall, against delivery of
a certificate or certificates evidencing the Shares, deliver to Seller
a
cash
payment of (x) Three Million Seven Hundred Thousand Dollars ($3,700,000)
plus (y) Three Hundred Ninety-Six and 44/100 Dollars ($396.44) for each day
in the period commencing January 1, 2008, and ending on the Closing Date,
which aggregate amount shall be paid by wire transfer of immediately available
funds to such account as Seller has designated on Schedule 1.1(b) and
(ii) Purchaser and Seller shall jointly instruct Farrell Fritz, P.C., in
its capacity as escrow agent under the Escrow Agreement among Seller, Berjaya
Group Berhad and Farrell Fritz, P.C. dated November 26, 2007, as amended to
date, to deliver to Seller the Escrow Fund (as such term is defined therein).
1.2 Closing.
The
closing (the “Closing”)
of the
transactions contemplated herein shall be held simultaneously with the execution
and delivery of this Agreement at the offices of Farrell Fritz, P.C.,
1320 RexCorp Plaza, Uniondale, NY 11556, or such other time and/or place as
the Parties otherwise agree (the “Closing
Date”).
ARTICLE
II
REPRESENTATIONS
AND WARRANTIES OF SELLER
Seller
represents and warrants to Purchaser as follows:
2.1 Organization;
Qualification; Subsidiaries.
(a) The
Company.
The
Company 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. The Company is duly qualified or licensed
to do
business and is in good standing in every jurisdiction in which the conduct
of
its business or the ownership or lease of its properties, require it to be
so
qualified or licensed except where the failure to be so qualified or licensed
would not have a Material Adverse Effect.
(b) Subsidiaries.
Set
forth on Schedule 2.1(b)
is a
list of all Subsidiaries of the Company, including its jurisdiction of
incorporation and any jurisdictions in which such Subsidiary is qualified to
do
business. Each such Subsidiary is a corporation, duly organized, validly
existing and in good standing under the laws of its jurisdiction of formation
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. Each
Subsidiary is duly qualified or licensed to do business and is in good standing
in every jurisdiction in which the conduct of its business or the ownership
or
lease of its properties, require it to be so qualified or licensed, except
where
the failure be so qualified or licensed would not have a Material Adverse
Effect.
2.2 Authorization
of Transaction.
The
Seller has full corporate power and authority to execute and deliver this
Agreement, the other Transaction Documents and to perform its obligations
hereunder and thereunder. This Agreement and each other document, instrument
or
agreement executed and delivered by Seller in connection with the transactions
contemplated hereunder has been duly executed and delivered by Seller and
constitutes the valid and legally binding obligation of Seller, enforceable
against it in accordance with its terms and conditions, except
as
the enforceability thereof may be limited by bankruptcy, insolvency or other
laws relating to or affecting creditors’ rights.
2.3 No
Conflict or Violation.
Except
as set forth on Schedule 2.3,
neither
the execution and delivery of this Agreement and any of the other Transaction
Documents, nor the consummation of the transactions contemplated hereby and
thereby, will:
(a) result
in
a violation of or a conflict with any provision of the organizational documents
of Seller, the Company or any of its Subsidiaries;
(b) result
in
a breach of, a default under, or give any third party the right to modify,
terminate or accelerate any obligation under, any term or provision of any
Contract to which Seller, the Company or any of its Subsidiaries is a party
or
by which any of their assets are bound; or
(c) result
in
a violation by Seller, the Company or any of its Subsidiaries of, or require
any
authorization, consent, approval, exemption, notice, filing or other action
due
to or required from, or filing with, any Authority pursuant to any Regulation
or
Order except, in the case of clauses (b) and (c), where the occurrence
of such event or failure to obtain such authorization, consent, or similar
approval will not result in a Material Adverse Effect.
2.4 Consents
and Approvals.
No
consent, approval or authorization of, or declaration, filing or registration
with, any Authority is required to be made or obtained by Seller, the Company
or
any of its Subsidiaries in connection with the execution, delivery and
performance of this Agreement and the consummation of the transactions
contemplated hereby, except where the failure to obtain such consents, approvals
or authorizations, or make such declarations, filings or registrations, would
not in the aggregate impair the ability of Seller to perform its obligations
hereunder or result in a Material Adverse Effect.
2.5 Capitalization.There
are
100 Shares of the Company issued and outstanding on a fully diluted basis and
all such Shares are owned beneficially and of record by Seller. All of the
Shares are duly authorized, validly issued, fully paid and non-assessable,
and
have been issued in compliance with all applicable securities Regulations.
Neither Seller nor the Company has any Contracts containing any profit
participation features, stock appreciation rights or phantom stock options,
or
similar Contracts that allow any Person to participate in the equity or profits
of the Company. No Shares of the Company are reserved for issuance and there
are
no outstanding preemptive rights, Options, Claims, Contracts, convertible or
exchangeable securities or other commitments, contingent or otherwise, relating
to the Shares of the Company or pursuant to which the Company is or may become
obligated to issue or exchange any of its Shares. There are no Contracts between
or among the Company’s equity holder and any other Persons that are binding upon
Seller or the Company with respect to the voting, transfer, encumbrance of
any
Shares of the Company or Options or with respect to any aspect of the Company’s
governance or dividends or distributions.
2.6 Title
to Personal Property.
The
Company has no personal property except for those properties and assets listed
on Schedule 2.6,
all of
which are owned by the Company free and clear of all Encumbrances.
2.7 Real
Property.The
Company does not currently own or lease any real property.
Schedule 2.7
contains
a true and complete list of all real property with respect to which the Company
or any Subsidiary was a lessee, sublessee, licensee or other occupant or user
(the “Real Property”) since the Purchase Date. Any lease, sublease or
other occupancy agreement (including any amendments and renewal letters)
relating to the Real Property (collectively, the “Real Property Leases”)
has expired or been terminated and the Company has no obligations under the
Real
Property Leases.
2.8 Financial
Statements; No Undisclosed Liabilities.
(a) Financial
Statements.
Attached
hereto as Schedule 2.8(a)
to the
Disclosure Schedule are the following financial statements (collectively the
“Financial
Statements”):
Balance Sheets and Statements of Income, Cash Flows and Stockholders Equity
for
the Company for each of the fiscal years ended March 30, 2008
(“Most
Recent Fiscal Year End”)
and
March 25, 2007 (collectively, the “Most
Recent Financial Statements”).
The
Financial Statements are unaudited, have been prepared from the books and
records of the Company, have been prepared using GAAP applied on a consistent
basis throughout the periods covered thereby and present fairly the assets
and
liabilities of the Company as of such dates and the results of operations of
the
Company for such periods.
(b) Absence
of Undisclosed Liabilities.
To the
Knowledge of Seller, the Company has no material obligation or liability
(whether accrued, absolute, contingent, unliquidated or otherwise, whether
due
or to become due arising out of any transaction entered at or prior to the
date
hereof, or any action or inaction at or prior to the date hereof, or any state
of facts existing at or prior to the date hereof, other than:
(a) liabilities reflected on the Most Recent Financial Statements;
(b) liabilities and obligations which have arisen after the date of the
Most Recent Financial Statements in the Ordinary Course of Business which would
not result, individually or in the aggregate, in a Material Adverse Effect;
(c) obligations under Contracts described on Schedule 2.14
or under
Contracts entered into in the Ordinary Course of Business consistent with past
practice which are not required to be disclosed on such Section (but not
liabilities for any breach of any such Contract occurring on or prior to the
Closing Date); and (d) other liabilities and obligations expressly
disclosed in the Disclosure Schedule.
2.9 Subsequent
Events.
Except
as listed on Schedule 2.9,
since
March 30, 2008, there has not been any change in the business or financial
condition of the Company which has or is reasonably likely to result in a
Material Adverse Effect with respect to the Company. Without limiting the
generality of the foregoing and except as listed on Schedule 2.9,
since
March 30, 2008 the Company has not:
(a) sold,
leased, transferred, licensed, or assigned any material assets, tangible or
intangible, outside the Ordinary Course of Business;
(b) entered
into any Contracts (or series of related Contracts) involving expenditures
of
more than $50,000 per annum, nor modified any such existing Contracts, outside
the Ordinary Course of Business;
(c) accelerated,
terminated, made material modifications to, or canceled any material Contract
to
which the Company is a party or by which it is bound (nor has any other party
thereto done the same);
(d) imposed
any Encumbrance upon any of its assets, tangible or intangible;
(e) made
or
authorized any change in the organizational documents of the
Company;
(f) experienced
any material damage, destruction, or loss (whether or not covered by insurance)
to its property;
(g) made
or
been subject to any change in its accounting practices, procedures or
methods;
(h) discharged
or satisfied any Lien or paid any obligation or liability, other than current
liabilities paid in the Ordinary Course of Business;
(i) declared,
set aside or made any payment or distribution of cash or other property to
its
equity holder or its other Affiliates with respect to such equity holder’s
equity securities or otherwise, or purchased, redeemed or otherwise acquired
any
equity securities (including any Options to acquire its equity
securities);
(j) made
capital expenditures or commitments therefor that amount in the aggregate to
more than $50,000 (other than capital expenditures that are fully funded prior
to the Closing);
(k) except
as
otherwise contemplated by this Agreement, delayed or postponed the payment
of
any accounts payable or commissions or any other liability or obligation or
agreed or negotiated with any party to extend the payment date of any accounts
payable or commissions or any other material liability or obligation or
accelerated the collection of (or discounted) any accounts or notes receivable
outside the Ordinary Course of Business;
(l) made
any
charitable pledges exceeding in the aggregate $5,000;
(m) entered
into any synthetic lease or similar arrangement or any off-balance sheet
financing arrangement;
(n) lost
any
franchisee or received written notice from any franchisee that it intends to
(i) amend the material terms of any agreement between such franchisee and
the Company or any Subsidiary, or (ii) terminate or not renew any agreement
it may have with the Company or any Subsidiary;
(o) lost
any
supplier or received written notice from any material supplier that it intends
to (i) reduce the level of business that it does with the Company or any
Subsidiary, (ii) amend the material terms of any agreement between such
supplier and the Company or any Subsidiary, or (iii) terminate or not renew
any agreement it may have with the Company or any Subsidiary;
(p) taken
any
action or failed to take any action that has had or would reasonably have been
expected to have the effect of accelerating to the Pre-Closing Period royalties
or other revenues that would otherwise be expected to be paid or incurred after
the Closing; or
(q) committed
to do any of the foregoing (except to the extent that any such actions relate
to
the transfer of assets or liabilities to Seller as disclosed in the Disclosure
Schedules).
2.10 Legal
Compliance.
(a) To
the
Knowledge of Seller, the Company is and has been for the two years preceding
the
date hereof in material compliance with all Regulations and Orders of any
Authority applicable to it. To the Knowledge of Seller, for the two years
preceding the date hereof no written notice has been received by and no written
claims have been filed against the Company or any of its Subsidiaries alleging
a
material violation of any Regulation or Order.
(b) To
the
Knowledge of Seller, the Company holds, and is in material compliance with,
all
Permits of any Authority required for the conduct of its business and the
ownership of its properties except where the failure to so comply would not
have
a Material Adverse Effect. To the Knowledge of Seller, no written notices have
been received by the Company or any of its Subsidiaries alleging the failure
to
hold any of the foregoing. To the Knowledge of Seller, all of such Permits
will
be available for use by the Company or such Subsidiary immediately after the
Closing.
2.11 Tax
Matters.
(a) The
Affiliated Group has filed all Tax Returns that it was required to file for
each
tax-period during which the Company was a member of the group, complete in
all
material respects, and has either paid all income Taxes shown thereon as owing
or provided a reserve for such amounts on its Most Recent Financial Statement,
except where the failure to file such Tax Returns or to pay such Taxes would
not
have a Material Adverse Effect.
(b) No
federal income Tax Return that includes the Company is currently the subject
of
audit. The Seller has delivered or made available to
Purchaser correct and complete copies of all federal income Tax Returns that
include the Company, examination reports, and statements of deficiencies
assessed against, or agreed to affecting the Company since December 31,
2005. The Seller has not waived any statute of limitations in respect of federal
income Taxes or agreed to any extension of time with respect to any federal
income Tax assessment or deficiency. The Company currently recognizes no sales
and is therefore not currently required to file any sales Tax
Returns.
(c) The
Company has no liability for the income Taxes of any Person other than the
Company under Treasury Regulation Section 1.1502-6 (or similar provision of
state, local or foreign law).
(d) The
Company has not been a member of an Affiliated Group filing a consolidated
federal income tax return other than a group the common parent of which is
the
Seller.
2.12 Intellectual
Property.
(a) The
Company’s registered Intellectual Property Rights are set forth on Schedule 2.12(a).
All of
the Company’s Intellectual Property Rights are subject to the Bankruptcy Plan
and Bankruptcy Assignment and Assumption and the terms and limitations of any
agreements assumed thereunder. Except as disclosed on Schedule 2.12(a),
all
registrations of the trademarks that comprise the Company’s Intellectual
Property Rights are owned of record by the Company, have been duly maintained
and are in full force and effect. No filing or payment of any kind was or is
required to be made with respect to any of the filings for any of the Company’s
Intellectual Property Rights at any time prior to the Closing Date which has
not
been made or paid in a timely manner or will not be made or paid in a timely
manner, as applicable.
(b) Subject
to the Bankruptcy Plan, the Bankruptcy Assignment and Assumption and the terms
of any agreement assumed thereunder, to the Knowledge of Seller, (i) except
as disclosed on Schedule 2.12(b),
no
other Person has any rights to any of the Intellectual Property Rights owned
or
used by the Company that is material to the operation of the Company as it
is
presently operated in the United States except pursuant to Contracts or licenses
or as otherwise specified on Schedule 2.12(b),
(ii) no other Person is infringing, misappropriating or otherwise violating
any such material Intellectual Property Rights in the United States that the
Company owns or uses, (iii) no material Intellectual Property Rights of the
Company are subject to any outstanding Order or Claim, and (iv) neither the
Company nor any of its licensees is infringing, misappropriating or otherwise
violating any third party Intellectual Property, nor has any such Claim been
made against any of them in writing.
(c) Reasonable
precautions have been taken to protect the secrecy and value of all trade
secrets forming a material part of the Company’s Intellectual Property Rights,
including, without limitation, all material proprietary and confidential
business methods, techniques and practices, such precautions including, without
limitation, implementation and enforcement of confidentiality policies and
practices and requiring all employees and contractors having access to any
confidential and proprietary information used in the business to execute and
deliver written confidentiality agreements obligating them to maintain the
confidentiality of same.
(d) Notwithstanding
anything in this Agreement to the contrary, the Company makes no representation
or warranty regarding the rights, if any, of Mr. Kenny Rogers with respect
to the image, persona, endorsement, name and likeness of Mr. Rogers or any
intellectual property rights, rights of publicity or rights of privacy he may
have.
2.13 Franchise
Operations and Co-Branding.
(a) Domestic
Franchise Agreements. Schedule 2.13(a)
accurately identifies all Franchise Agreements (collectively “Domestic
Franchise Agreements”)
which
the Company is or has been party to which grant or purport to grant to a third
party the right to operate or to develop “Kenny Rogers Roasters” restaurants
within the United States, by location, the name of Franchisee, and the date
of
agreement. Except for the Domestic Franchise Agreement between Company and
Host
International Inc. concerning the restaurant located at the Ontario Mills Mall
in Ontario, California (the “Existing
Domestic Franchise Agreement”
and
the
“Existing
Domestic Franchised Restaurant”
(as
applicable)), all of the restaurant locations covered by the Domestic Franchise
Agreements have ceased operations and all related Domestic Franchise Agreements
have expired or been terminated.
(i) There
are
no existing defaults by the Company, and no event has occurred which, with
notice or lapse of time, or both, would constitute a default by the Company
under any such Domestic Franchisee Agreement, which default could reasonably
be
expected to have a Material Adverse Effect upon the business of the Company
when
taken as a whole.
(ii) To
the
Knowledge of Seller, the material terms of the Existing Domestic Franchise
Agreement is enforceable, except as enforcement may be limited by applicable
laws, including but not limited to franchise relationship laws and bankruptcy,
insolvency, reorganization, moratorium and other laws and case precedents
affecting franchisor-franchisee relations and/or creditors rights generally,
and
except insofar as the availability of equitable remedies may be limited by
applicable law.
(iii) To
the
Knowledge of Seller, the Franchisee of the Existing Domestic Franchised
Restaurant is in compliance with the material terms of the Existing Domestic
Franchise Agreement.
(iv) The
Company has not granted a waiver, forbearance or consent with respect to any
provision of the Existing Domestic Franchise Agreement regarding the
Franchisee’s obligation to make payments of royalty fees, it being expressly
acknowledged by Purchaser that no advertising or other marketing fund
contributions were ever required to be paid by Host International Inc. pursuant
to the Existing Domestic Franchise Agreement.
(b) International
Franchise Agreements.
Schedule
2.13(b)
accurately identifies all Franchise Agreements (collectively “International
Franchise Agreements”)
which
the Company is or has been party which grant or purports to grant to a third
party the right to operate or to develop “Kenny Rogers Roasters” restaurants
outside of the United States, by territory, the name of the Franchisee and
the
date of the Agreement.
(i) To
the
Knowledge of Seller, there are no existing defaults by the Company, and no
event
has occurred which, with notice or lapse of time, or both, would constitute
a
default by the Company under any such International Franchise Agreement, which
default could reasonably be expected to have a Material Adverse Effect upon
the
business of the Company when taken as a whole.
(ii) To
the
Knowledge of Seller, the material terms of the International Franchise
Agreements are enforceable, except as enforcement may be limited by applicable
laws, including but not limited to franchise relationship laws and bankruptcy,
insolvency, reorganization, moratorium and other laws and case precedents
affecting franchisor-franchisee relations and/or creditors rights generally,
and
except insofar as the availability of equitable remedies may be limited by
applicable law.
(iii) Notwithstanding
the foregoing, except as provided in the last clause of this Section 2.13
(b)(iii), no representations are made with respect to (A) the Master Development
Agreement dated July 22, 1993 between the Company, on the one hand, and Roasters
Asia Pacific (Cayman) Limited and Roasters Asia Pacific (HK) Limited
(individually and collectively “Developer”), as heretofore amended, including
without limitation, by the Third Amendment to the Master Development Agreement
dated July 15, 1999 and by the Fourth Amendment to the Master Development
Agreement dated September 2003 (the “Existing RAP Agreement”), as well as any
and all subfranchise and/or sublicense agreements entered into by Developer
or
its Affiliates pursuant to the Existing RAP Agreement or (B) the Master
Development Agreement between the Company and Toronto Foods International
(“TFI”) dated March 2003 (the “TFI Agreement”); provided that Seller hereby
represents and warrants to Purchaser that the TFI Agreement represents the
entire agreement of the parties with respect to the subject matter
thereof.
(iv) Except
as
provided in Sections 2.13(b)(i) and (ii) above, Company makes no warranties
or
representations concerning the International Franchise Agreements, including,
without limitation, any representation or warranty regarding the current status
of the term of any International Franchise Agreement, the current status of
any
restaurants developed pursuant to any International Franchise Agreement, and/or
whether or not any Franchisee is currently in compliance with its obligations
pursuant to any International Franchise Agreement.
(c) Co-Branding.
Schedule 2.13(c)
accurately identifies all Co-Branding Agreements (collectively, “Co-Branding
Agreements”)
which
grant or purport to grant to a third party the right to sell “Kenny Rogers
Roasters” menu items within a Nathan’s Famous or Miami Subs restaurant that are
currently in effect, by location of restaurant(s) (the “Existing
Co-Branded Locations”).
The
Co-Branding agreements will be assigned by Purchaser to Seller (or its
affiliate) pursuant to the KRR Co-Brand License Agreement described in
Section 4.4 below.
(d) Pending
Sales.
There
are no offers by the Company of Franchise Agreements and/or International
Franchise Agreement which are pending or in progress as of the date of this
Agreement and which, to the Knowledge of Seller, are likely to mature into
opportunities to sign a Franchise Agreement and/or an International Franchise
Agreement.
(e) Pending
Franchisee Claims.
There
are no arbitrations, mediations or civil actions pending between the Company
and
any of the Franchisees as of the date of this Agreement and the Company is
not
engaged in any formal written dispute with any Franchisee (or other party
claiming to be a Franchisee of the Company) or any party related thereto as
of
the date of this Agreement which could reasonably be expected to have a Material
Adverse Effect.
(f) Notices
of Breach, Default or Termination.
There
are no unresolved written assertions or claims by the Company against any
current Franchisee for any breach of any of the Domestic Franchise Agreements
that remain uncured.
2.14 Contracts.
Except
for the Contracts disclosed pursuant to Section 2.13, Schedule 2.14
lists
the following Contracts to which the Company is currently a party or is subject
to and which have not, as of the date hereof, been fully performed:
(a) any
agreement (or group of related agreements) for the purchase of inventory,
products, machinery, equipment or other personal property or real property,
or
for the furnishing or receipt of services requiring payments in excess of
$50,000 per year;
(b) any
Contract (or group of related Contracts) for the consignment or lease of
machinery, equipment or other personal property or real property to or from
any
Person requiring payments in excess of $50,000 per year;
(c) any
capitalized lease, pledge, conditional sale or title retention
agreement;
(d) any
agreement concerning a partnership, joint venture or investment or relating
to
any distributorship or franchise;
(e) any
agreement (or group of related agreements) under which it has created, incurred,
assumed, or guaranteed any Indebtedness for borrowed money or any other
obligation, or any capitalized lease obligation, or under which there is imposed
an Encumbrance on any of its assets, tangible or intangible;
(f) any
agreement concerning confidentiality or noncompetition or otherwise prohibiting
the Company from freely engaging in any business or requiring it to exclusively
sell or purchase to or from any Person;
(g) any
Contract with any of its Affiliates (including Seller), officer or director
or
any family member of an Affiliate (including Seller), officer or
director;
(h) any
agreement containing commitments of suretyship, guarantee or
indemnification;
(i) any
mortgage, indenture, note, bond or other agreement relating to Indebtedness
provided by the Company or any of its Subsidiaries;
(j) any
agreement involving an Authority;
(k) any
collective bargaining agreement;
(l) any
agreement for the employment of any individual on a full-time, part-time,
consulting or other basis providing for payments in excess of $100,000 per
year;
(m) any
agreement providing severance benefits or payments upon the sale of the Company
or any of its Subsidiaries;
(n) any
agreement under which the consequences of a default or termination could
reasonably be expected to have a Material Adverse Effect;
(o) any
advertising or marketing Contracts or similar agreements;
(p) Contracts
providing for “take
or pay”
or
similar unconditional purchase or payment obligations;
(q) Contracts
relating to the acquisition of any business (whether by merger, sale of stock,
sale of assets or otherwise) entered into since December 31,
2003;
(r) any
other
agreement (or group of related agreements) the performance of which involves
consideration in excess of $50,000 per year; or
(s) any
commitment to do any of the foregoing.
Seller
has delivered, or made available, to
Purchaser a correct and complete copy of each written agreement listed in
Schedule 2.14
(as
amended to date). With respect to each agreement listed or required to be listed
in Schedule 2.14:
(A) the agreement is, with respect to the Company, legal, valid, binding,
enforceable, and in full force and effect in all material respects;
(B) neither the Company nor, to the Knowledge of Seller, any other party
thereto is in material breach or default, and no event has occurred which with
notice or lapse of time would constitute a material breach or default by the
Company, or permit termination, modification, or acceleration under the
Contract; and (C) neither the Company nor, to the Knowledge of Seller, any
other party has repudiated any material provision of the Contract.
2.15 Accounts
Receivable and Payable.
Schedule 2.15 contains an accounts receivable and accounts payable
aging as of March 30, 2008. The accounts receivable of the Company listed in
Schedule 2.15 have been generated in the Ordinary Course of
Business, reflect valid obligations due to the Company for the payment of goods
or services provided by the business and, except as otherwise noted in
Schedule 2.15 and, to the Knowledge of Seller, subject to allowances
for doubtful accounts as reflected on the Most Recent Financial Statements
which
are determined in accordance with GAAP, are collectible in the ordinary course
of business consistent with past practice. Except as set forth on
Schedule 2.15,
all
accounts payable of the business were incurred in the Ordinary Course of
Business consistent with past custom and practice and are valid payables for
products or services purchased by the Company.
2.16 Insurance.
All insurance policies (including policies providing property, casualty,
liability, and workers’ compensation coverage and bond and surety arrangements)
with respect to which the Company is a party, a named insured, or otherwise
the
beneficiary of coverage are issued in the name of Seller. There are no pending
claims by the Company under any such policies.
2.17 Litigation.
To the Knowledge of Seller there are no (and, during the two years preceding
the
date hereof, there have not been any) Claims pending or threatened against
or
affecting the Company, any of its officers, directors, managers or employees
of
the Company with respect to the business or the Company’s proposed business
activities which (i) involve a claim for money damages in excess of
$100,000, (ii) would be reasonably expected to have a Material Adverse
Effect or (iii) question the validity of this Agreement or impair the
ability of Seller or the Company to consummate the transactions contemplated
hereby.
2.18 Books
and Records.
The stock records of the Company fairly and accurately reflect in all material
respects the record ownership of all of the outstanding Shares. The financial
records and books of account of the Company are complete and accurate in all
material respects and have been maintained in accordance with GAAP. The minute
books of the Company are complete and accurate in all material
respects.
2.19 Employment
Matters.
The Company has no employees. The Company has no independent contractors who
have provided services to the Company for a period of six consecutive months
or
longer.
2.20 Employee
BenefitsThe
Company does not sponsor, maintain, contribute or is obligated to contribute,
to
any Employee Benefit Plans.
The
Company has never maintained or contributed to or been required to contribute
to
a Multiemployer Plan nor any defined benefit plan subject to Title IV of
ERISA and Section 412 of the Code.
2.21 Environmental,
Health, and Safety Regulations.
(a) To
the
Knowledge of Seller, each of the Company and its Subsidiaries (i) has
complied, and is in compliance, with all Environmental, Health, and Safety
Regulations in all material respects (and no Claim has been filed or commenced
against the Company and its Subsidiaries alleging any such failure to comply),
(ii) has obtained and been in material compliance with all of the terms and
conditions of all material Permits which are required under the Environmental,
Health, and Safety Regulations, and (iii) has complied in all material
respects with all other limitations, restrictions, conditions, standards,
prohibitions, requirements, obligations, schedules, and timetables which are
contained in the Environmental, Health, and Safety Regulations.
(b) To
the
Knowledge of Seller neither this Agreement nor the consummation of the
transactions contemplated hereby will result in any obligations for site
investigation or cleanup, or notification to or consent of government agencies
or third parties, pursuant to any so-called “transaction-triggered”
or
“responsible
transfer”
Environmental, Health, and Safety Regulations.
(c) To
the
Knowledge of Seller none of the Company or any of its Subsidiaries has received
any notice of violation of any Environmental, Health, and Safety Regulations
from Authority or other third party and has not been named as a potentially
responsible party with respect to any release of any Hazardous
Substance.
2.22 Transaction
With Affiliates.
None of the Company’s or its shareholders, directors or officers nor any of
their respective Affiliates is involved in any business arrangement or
relationship with the Company (whether written or oral), except on arms-length
terms no less favorable to the Company than those which could be obtained with
a
third party which is not an Affiliate, and none of the Company’s shareholders,
directors or officers nor any of their respective Affiliates owns any property
or right, tangible or intangible, which is used by the Company.
2.23 FIRPTA.
Seller is not a foreign corporation for the purposes of the Code
Sections 871, 882 or 1445.
2.24 Brokers’
Fees.
Neither Seller nor the Company has any liability or obligation to pay any fees
or commissions to any broker, finder or agent with respect to the transactions
contemplated by this Agreement based on any arrangement made by or on behalf
of
the Seller or the Company.
2.25 Disclosures.
The representations and warranties of the Seller contained in this Agreement
(including any exhibit or schedule hereto) do not contain any untrue statement
of a material fact or omit to state a material fact necessary in order to make
the statements contained herein or therein, in light of the circumstances under
which they were made and taking into account the express limitations set forth
in each such representation and warranty, not misleading.
ARTICLE
III
REPRESENTATIONS
AND WARRANTIES OF PURCHASER
Purchaser
hereby represents and warrants to Seller as follows:
3.1 Organization
of Purchaser.
Purchaser is a corporation duly organized, validly existing and in good standing
under the laws of the State of Delaware, and has all requisite power and
authority to conduct its business as it is presently being conducted and to
own
and lease its properties and assets.
3.2 Authorization;
Validity.
Purchaser has all necessary power and authority to enter into this Agreement
and
the other Transaction Documents and has taken all action necessary to consummate
the transactions contemplated hereby and thereby and to perform its obligations
hereunder and thereunder. This Agreement has been duly executed and delivered
by
Purchaser and is a legal, valid and binding obligation of Purchaser enforceable
against Purchaser in accordance with its terms, except
as
the enforceability thereof may be limited by bankruptcy, insolvency or other
laws relating to or affecting creditors’ rights.
3.3 No
Conflict or Violation.
Neither the execution and delivery of this Agreement nor the other Transaction
Documents, nor the consummation of the transactions contemplated hereby and
thereby, will result in:
(a) a
violation of or a conflict with any provision of the organizational documents
of
Purchaser;
(b) a
breach
of, a default under, giving any third party the right to modify, terminate
or
accelerate any obligation under, any term or provision of any material Contract
to which Purchaser is a party or by which its assets are bound; or
(c) a
violation by Purchaser in any material respect of, or require any authorization,
consent, approval, exemption, notice, filing or other action due to or required
from, or filing with, any Authority pursuant to any Regulation or
Order.
except,
in the case of clauses (b) and (c), where the occurrence of such event
or failure to obtain such authorization, consent, or similar approval will
not
result in a Material Adverse Effect.
3.4 Consents
and Approvals.
No consent, approval or authorization of, or declaration, filing or registration
with, any Authority, or any other Person, is required to be made or obtained
by
Purchaser in connection with the execution, delivery and performance of this
Agreement and the consummation of the transactions contemplated hereby, except
where the failure to obtain such consents, approvals or authorizations, or
make
such declarations, filings or registrations, would not in the aggregate impair
the ability of Purchaser to perform its obligations hereunder or result in
a
Material Adverse Effect.
3.5 Certain
Litigation.
There is no action, proceeding or investigation pending to which Purchaser
is a
party or, to Purchaser’s knowledge, threatened, against Purchaser, which
questions the validity of this Agreement or impairs the ability of Purchaser
to
consummate the transactions contemplated hereby.
3.6 Brokers’
Fees.
The Purchaser has no liability or obligation to pay any fees or commissions
to
any broker, finder or agent with respect to the transactions contemplated by
this Agreement based on any arrangement made by or on behalf of the
Purchaser.
3.7 Disclosures.The
representations and warranties of the Purchaser contained in this Agreement
(including any exhibit or schedule hereto) do not contain any untrue statement
of a material fact or omit to state a material fact necessary in order to make
the statements contained herein or therein, in light of the circumstances under
which they were made and taking into account the express limitations set forth
in each such representation and warranty, not misleading.
ARTICLE
IV
COVENANTS
4.1 Further
Assurances.
On and after the Closing Date, Seller and Purchaser will take all appropriate
action and execute (or cause to be executed) all documents, instruments or
conveyances of any kind which may be reasonably necessary or advisable to carry
out any of the provisions hereof.
4.2 Tax
Matters.
(a) Elections,
Amendments and Refunds.
(i) Except as otherwise provided in this Agreement, the Purchaser shall not
make, revoke or change any tax elections with regard to the Company which may
impact any indemnity agreement of the Seller herein or the Company’s Taxes with
respect to tax periods (or portions thereof) ending on or prior to the Closing
Date, or the tax treatment of the transactions contemplated by this Agreement,
including, without limitation, a change in the Company’s method of accounting,
without the express written consent of the Seller. The Purchaser agrees to
indemnify and defend the Seller and hold the Seller harmless from and against
any and all Taxes (including without limitation any Taxes with respect to any
taxable period, or portion thereof, ending on or prior to the Closing Date)
that
are imposed upon the Company as a result of such election. (ii) The
Purchaser shall not, and shall not cause the Company to amend any Tax Return
for
any tax period (or portion thereof) ending on or before the Closing Date without
the express written consent of the Seller. (iii) Any Tax refunds that are
received by the Purchaser or the Company and any amounts credited against Taxes
to which the Purchaser or the Company become entitled, that relate to tax
periods, or portions thereof, ending on or before the Closing Date shall be
for
the account of the Seller, and the Purchaser shall pay over to the Seller any
such refund or the amount of any such credit within ten (10) days after
receipt or entitlement thereto. (iv) Purchaser shall not, and shall cause
Company not to, take any action with respect to Taxes, which would increase,
directly or indirectly, the amount of Taxes for which the Seller would have
an
obligation to indemnify the Purchaser pursuant to this Section 4.2, or
which would increase the Seller’s Tax liability with respect to the transactions
contemplated herein.
(b) Subject
to Section 5.2(b), Seller shall indemnify and hold Purchaser Indemnitees
harmless from and against and shall reimburse each Purchaser Indemnitee for,
any
and all federal income Taxes of Company for any taxable period (or portion
thereof) ending on or before the Closing Date (excluding any Taxes attributable
to any action taken by the Purchaser at any time after the Closing, including
without limitation, on the Closing Date) but only to the extent that the amount
of such Taxes exceeds the reserve for Taxes shown on the Company’s Most Recent
Financial Statements.
(c) Without
limiting the foregoing, neither Purchaser nor the Company shall make any
election under Section 338 of the Code with respect to the transaction
contemplated by this Agreement.
(d) To
the
extent relevant, for all taxable periods ending on or before the Closing Date,
Seller shall cause the Company to join in Seller's consolidated federal income
Tax Returns. Seller shall be responsible for all federal income Taxes of the
Company shown in such returns. The income of the Company shall be apportioned
to
the period up to and including the Closing Date, and the period after the
Closing Date by closing the books of the Company as of the end of the Closing
Date. In this regard, the parties hereto will, to the extent permitted by
applicable law, elect with the relevant taxing authorities to treat for all
purposes the Closing Date as the last day of the taxable period of
Company.
(e) In
the
case of income Taxes that are payable with respect to a Straddle Period, the
Purchaser shall cause the Company to file Tax Returns for all periods other
than
periods ending on or before the Closing Date. As described in subparagraph
(d)
immediately above, the income of the Company shall be apportioned to the period
up to and including the Closing Date, and the period after the Closing Date
by
closing the books of the Company as of the end of the Closing Date. If any
Taxes
shown as due on such Tax Returns are indemnifiable by the Seller in accordance
with Section 4.2(b) hereof, (A) such Tax Returns shall be prepared in
a manner consistent with prior practice of the Company unless otherwise required
by applicable laws; (B) the Purchaser shall provide the Seller with copies
of each such Tax Return at least 45 days prior to the due date for filing
such Tax Return; and (C) the Seller shall have the right to review and
comment on each such Tax Return for 30 days following the receipt thereof
and the Purchaser shall accept any changes reasonably requested by the
Seller.
(f) All
transfer, documentary, sales, use, stamp, registration and any other such taxes
and all conveyance fees, recording charges and other fees and charges (including
any penalties and interest) incurred in connection with the consummation of
the
transactions contemplated by this Agreement shall be the responsibility of
Purchaser and be paid when due. Purchaser will, at its own expense, file all
necessary returns and other documentation as may be required with respect to
all
such taxes, fees and charges.
(g) The
Parties hereto agree to treat any indemnity payment as an adjustment to the
Purchase Price or as a capital contribution, except as otherwise required by
Regulation.
(h) Cooperation
on Tax Matters.
Seller
and Purchaser shall cooperate fully, as and to the extent reasonably requested
by the other Party, in connection with the filing of Tax Returns and any audit,
litigation or other proceeding with respect to Taxes; provided, however, that
to
the extent that such audit, litigation or other proceeding relates to periods
ending on or before the Closing Date or could result in an indemnification
obligation of the Seller, then notwithstanding any other provision of this
Agreement, the Seller shall have the right to control the defense or settlement
of such audit, litigation or proceeding. Such cooperation shall include (without
limitation) signing any Tax Return, amended Tax Returns, Claims or other
documents necessary to settle any Tax controversy, the retention and (upon
the
other party’s request) the provision of records and information which are
reasonably relevant to any such Claim and making employees available on a
mutually convenient basis to provide additional information and explanation
of
any material provided hereunder. The Company and the Seller agree (A) to
retain all books and records with respect to Tax matters pertinent to Company
and the Affiliated Group relating to any taxable period beginning before the
Closing Date until the expiration of the statute of limitations (and, to the
extent notified by the Purchaser or the Seller, any extensions thereof) of the
respective taxable periods, and to abide by all record retention agreements
entered into with any Taxing Authority, and (B) to give the other party
reasonable written notice prior to transferring, destroying or discarding any
such books and records and, if the other party so requests, the Company or
the
Seller, as the case may be, shall allow the other party to take possession
of
such books and records.
(i) Tax
Sharing Agreements.
Any tax
sharing agreement between Seller and the Company shall be terminated as of
the
Closing Date and shall have no further force and effect for any taxable year
(whether the current year, a future year or a past year).
(j) The
Purchaser and the Seller further agree, upon request, to use their reasonable
efforts to obtain any certificate or other document from any governmental
authority or any other Person as may be necessary to mitigate, reduce or
eliminate any Tax that could be imposed (including, but not limited to, with
respect to the transactions contemplated hereby).
(k) Indemnification
Limitations:
(i) If the amount with respect to which any claim for indemnity is made
under this Agreement (an “Indemnity
Claim”)
gives
rise to a Tax Benefit to the party making the claim (or would give rise to
such
a benefit if the party making the claim were a taxable entity), the indemnity
payment shall be reduced by the amount of the Tax Benefit available to the
party
making the claim. To the extent such Indemnity Claim does not give rise to
a
currently realizable Tax Benefit, if the amount with respect to which any
Indemnity Claim is made gives rise to a subsequently realized Tax Benefit to
the
party that made the claim, such party shall refund to the indemnifying party
the
amount of such Tax Benefit when, as and if realized. For the purposes of this
Agreement, any subsequently realized Tax Benefit shall be treated as though
it
were a reduction in the amount of the initial Indemnity Claim, and the
liabilities of the parties shall be redetermined as though both occurred at
or
prior to the time of the indemnity payment. For purposes of this paragraph,
a
“Tax
Benefit”
means
an amount by which the Tax liability of the party (or group of corporations
including the party) is reduced (including, without limitation, by deduction,
reduction of income by virtue of increased tax basis or otherwise, entitlement
to refund, credit or otherwise) plus any related interest received from the
relevant taxing authority.
(l) Notwithstanding
any other provision to the contrary, Purchaser agrees to include on its tax
returns and to indemnify Seller for any additional Taxes owed by Seller
(including Taxes owed by Seller due to this indemnification payment) resulting
from any transactions engaged in by the Company not in the ordinary course
of
business occurring on the Closing Date after Purchaser’s purchase of the
Company’s stock. Purchaser and the Seller agree to report all transactions not
in the ordinary course of business occurring on the Closing Date after
Purchaser’s purchase of the Company’s stock on the Purchaser’s federal income
Tax return to the extent permitted by Reg.
Section 1.1502-76(b)(1)(ii)(B).
4.3 Use
of
Name.
Seller agrees that from and after the Closing they will not use the name “Kenny
Rogers Roasters” or any derivations thereof or any name deceptively similar to
such names in any business enterprise or in any commercial relationship, other
than in connection with the operation of the KRR Co-Branded Locations (as
defined herein).
4.4 Co-Branding.
Schedule 4.4 sets forth the Existing Co-Branded Locations and any
new “Nathan’s Famous” or “Miami Subs” restaurant locations under development as
of the Closing Date which are intended to contain “Kenny Rogers Roasters”
co-branded menu-line extensions and intended to commence operations within
120 days after the Closing Date (such locations set forth on
Schedule 4.4 are referred to as the “KRR Co-Branded
Locations”). Simultaneously with the execution of this Agreement, the
Parties will enter into a license agreement (the “KRR Co-Brand License
Agreement”) containing the following terms:
(a) Purchaser
will assign to Seller (or an affiliate of Seller) (the “NF Licensee”)
all of
its right, title and interest in and to the Co-Branding Agreements;
(b) Purchaser
will license back to the NF Licensee all of the Intellectual Property Rights
which are necessary for Seller to continue to operate and/or authorize the
operation of the KRR Co-Branded Locations.
(c) The
KRR
Co-Branded Locations will be operated by the NF Licensee and/or the “Nathan’s
Famous” and “Miami Subs” franchisees in substantially the same manner (i.e.,
type and extent of use of trademarks, logos, marketing materials, menu items
served, procedures used, etc.) as they are being operated as of the Closing
Date
(the “Existing
Standards”).
The
KRR Co-Branded Locations will not be permitted to make any substantial changes
to the Existing Standards without Purchaser’s prior written consent (which will
not be unreasonably withheld or delayed). However, no KRR Co-Branded Locations
shall have any obligation to comply with any changes to the Existing Standards
proposed or suggested by Purchaser;
(d) The
NF
Licensee shall be solely responsible for all franchise support owed to the
operators of the KRR Co-Branded Locations, and Purchaser shall have no liability
in connection therewith.
(e) The
rights granted back to the NF Licensee shall be perpetual; provided that nothing
shall obligate any particular KRR Co-Branded Location to continue to use the
“Kenny Rogers Roasters” intellectual property.
(f) No
franchise fees, royalties, product rebates or any other monies shall be due
from
the NF Licensee (or its operators and suppliers) to Purchaser in connection
with
the continued operation of the Existing KRR Co-Branded Locations.
4.5 Contract
Ratification.
Purchaser acknowledges that Company is a party to a beverage supply agreement
with Coca Cola USA Fountain (“Coke”) dated February 25, 2000 (the
“Coke Agreement”). Purchaser and Company (i) hereby ratify the Coke
Agreement and assume obligations thereunder in accordance with the terms of
Section 13(i) of the Coke Agreement, (ii) agree that they will pay and be
solely responsible for any sums required to be paid or re-paid to Coke pursuant
to the Coke Agreement and (iii) shall indemnify Seller, in accordance with
Section 5.3 hereof, for any liability arising as a result of Company failing
to
perform under the Coke Agreement.
4.6 Post-Closing
Checks Received by Seller; Post-Closing Payments Under the Existing Domestic
Franchise Agreement.
Seller shall promptly forward to Purchaser any checks made payable to the
Company or one of its Subsidiaries received by Seller after the Closing Date;
provided,
that
Seller shall be entitled to retain the royalty payment made by Host
International Inc. under the Existing Domestic Franchise Agreement for the
period ended April 18, 2008. With respect to the royalty payment to be made
by
Host International Inc. under the Existing Domestic Franchise Agreement for
the
period ending May 16, 2008, Purchaser and Seller hereby agree that (i) in the
event that Seller receives such payment, Seller shall pay to Purchaser,
Purchaser’s pro rata portion of such payment and (ii) in the event that
Purchaser receives such payment, Purchaser shall pay to Seller an amount equal
to Seller’s pro rata portion thereof.
4.7 Post-Closing
Rebates.
Any rebates received by the Seller after the Closing Date which are derived
from
the purchase of “Kenny Rogers Roasters” products by the Existing Domestic
Franchise Location shall be paid to Company. It is expressly understood that
Company and Purchaser shall have no right to any rebates derived from the
purchase of any “Kenny Rogers Roasters” products by restaurants in the “Nathan's
Famous” and/or “Miami Subs” restaurant systems, and that to the extent that
Company and/or Purchaser shall receive the same, Company and/or Purchaser shall
promptly pay such amounts to Seller.
4.8 Contract
Termination. The parties agree that simultaneously with the execution of
this Agreement, the Company will deliver to TFI a notice of termination of
the
TFI Agreement, in the form annexed hereto as Exhibit A (the “TFI Termination
Notice”). Purchaser hereby releases Seller from, and agrees not to assert, any
claim against Seller arising out of or relating to the TFI Agreement and
delivery of the TFI Termination Notice.
4.9 Press
Releases and Public Announcements. Neither Party shall issue any press
release or make any public announcement relating to the subject matter of this
Agreement without the prior written approval of the other Party (such approval
not to be unreasonably withheld), except to the extent that disclosure may
be
required by applicable law, rule or regulation. The Parties shall jointly
prepare any press release or other public announcement to be issued upon the
execution of this Agreement and/or at Closing.
ARTICLE
V
INDEMNIFICATION
5.1 Survival,
Representations and Warranties,
Exclusive Remedy.
The respective representations and warranties of Seller and Purchaser contained
herein or in any certificates or other documents delivered at the Closing shall
not be deemed waived or otherwise affected by any investigation made by any
Party hereto or any Party’s officers, directors, managers, stockholders,
employees or agents. The representations and warranties provided for in this
Agreement shall survive for eighteen (18) months beyond the Closing Date,
except that the representations and warranties set forth in:
Section 2.11
(Tax
Matters) shall survive for a period of six (6) years. The provisions of
this Section 5.1
shall
not limit any covenant or agreement of the Parties hereto which, by its terms,
contemplates performance after the Closing Date and any breach of such covenant
or agreement shall not be subject to the Loss Threshold or Cap (as such terms
are hereinafter defined) or be counted towards the Cap. Notwithstanding the
foregoing, any representation or warranty in respect of which indemnity may
be
sought under Sections 5.2
and 5.3
below,
and the indemnity with respect thereto, shall survive the time at which it
would
otherwise terminate pursuant to this Section 5.1
if
notice of the inaccuracy or breach thereof giving rise to such right of
indemnity shall have been given to the Party against whom such indemnity may
be
sought prior to such time (regardless of when the Losses in respect thereof
may
actually be incurred) in good faith and such extension of the survival period
shall be limited solely to the items expressly specified in such notice. The
Parties agree that the indemnification provided in this Article V shall be
the
exclusive remedy of the Parties with respect to any and all matters covered
by
this Agreement.
5.2 Indemnification
Obligations of Seller.
(a) Seller
agrees to indemnify Purchaser and its Affiliates (including the Company after
the Closing Date), stockholders, officers, directors, employees, agents,
representatives and successors and assigns (collectively, the “Purchaser
Indemnitees”)
in
respect of, and save and hold each Purchaser Indemnitee harmless against and
pay
on behalf of or reimburse each Purchaser Indemnitee as and when incurred, any
Losses which any Purchaser Indemnitee suffers, sustains or becomes subject
to as
a result of or by virtue of:
(i) any
facts
or circumstances which constitute a misrepresentation or breach by Seller of
any
representation or warranty set forth in this Agreement (including any Schedule),
or any certificate delivered by Seller pursuant to this Agreement; provided
however, that Seller is given written notice of such Loss during the applicable
survival period in Section 5.1 above;
(ii) any
and
all claims against Purchaser (and/or its affiliates) arising out of the
operation of the Existing KRR Co-Branded Units, including any third-party claims
arising under any Co-Branding Agreement, and the time limitations pertaining
to
survivorship of representations and warranties set forth in Section 5.1 shall
not apply; and
(iii) any
nonfulfillment or breach of any covenant of Seller set forth in this
Agreement.
(b) Notwithstanding
the foregoing, Seller shall not be required to indemnify Purchaser Indemnitees
in respect of any Losses any Purchaser Indemnitee suffers, sustains or becomes
subject to as a result of or by virtue of any of the occurrences referred to
in
Section 5.2(a)
or
elsewhere in this Agreement unless the aggregate amount of all such Losses
exceeds $100,000 (the “Loss
Threshold”);
provided,
however,
that in
such event, Seller shall be responsible for the full amount of all such Losses
from the first dollar of Losses suffered; provided
further that
no
Purchaser Indemnitee shall have the right to indemnification with respect to
any
claim where the Losses with respect thereto are less than $10,000 and no such
Losses shall be taken into account in determining whether or the extent to
which
the Loss Threshold has been met or exceeded; provided
further, that
in
no event shall Seller be obligated to indemnify Purchaser Indemnitees for such
Losses in excess of $600,000 (the “Cap”);
and
provided,
further, however,
that any
claims for indemnification arising under Section 5.2(a)(ii) shall not be subject
to the Loss Threshold, the Cap or be counted towards the Cap.
(c) Notwithstanding
anything to the contrary set forth in this Agreement, nothing in this Agreement
shall limit or restrict any of Purchaser Indemnitees’ right to maintain or
recover any amounts in connection with any action or claim based upon fraud
or
intentional misrepresentation.
5.3 Indemnification
Obligation of Purchaser.
(a) Purchaser
agrees to indemnify Seller and each of its Affiliates, stockholders, officers,
directors, employees, agents, representatives and successors and assigns
(collectively, the “Seller
Indemnitees”)
in
respect of, and save and hold Seller Indemnitee harmless against and pay on
behalf of or reimburse each Seller Indemnitee as and when incurred, any Losses
which Seller Indemnitee suffers, sustains or becomes subject to as a result
of
or by virtue of:
(i) any
facts
or circumstances which constitute a misrepresentation or breach by Purchaser
of
any representation or warranty set forth in this Agreement or any certificate
delivered by Purchaser pursuant to this Agreement; provided,
however,
that
Purchaser is given written notice of such Loss during the applicable survival
period specified in Section 5.1
above;
(ii) any
and
all claims against Seller (and/or its Affiliates) arising out of Purchaser’s use
of all “Kenny Rogers Roasters” intellectual property and/or the operation of any
“Kenny Rogers Roasters” established by Purchaser of its franchisees/licensees,
and the time limitations pertaining to survivorship of representations and
warranties set forth in Section 5.1 shall not apply;
(iii) any
and
all third-party claims against Seller (and/ or its Affiliates) arising out
of
the TFI Agreement or the delivery to TFI of the TFI Termination Notice, or
any
breach by the Purchaser of the provisions of Section 4.8 hereof, and the time
limitations pertaining to survivorship of representations and warranties set
forth in Section 5.1 shall not apply; and
(iv) any
nonfulfillment or breach of any covenant or agreement of Purchaser set forth
in
this Agreement.
(b) Notwithstanding
the foregoing, Purchaser shall not be required to indemnify Seller Indemnitees
in respect of any Losses any of Seller Indemnitees suffers, sustains or becomes
subject to as a result of or by virtue of any of the occurrences referred to
in
Section 5.3(a)
above
unless the aggregate amount of all such Losses exceeds the Loss Threshold;
provided,
however,
that in
such event, Purchaser shall be responsible for the full amount of all such
Losses from the first dollar of Losses suffered; provided,
further
that
except for Losses arising from a breach by Purchaser or the Company of their
obligations pursuant to Section 4.5 of this Agreement, no Seller Indemnitee
shall have the right to indemnification with respect to any claim where the
Losses with respect thereto are less than $10,000 and no such Losses shall
be
taken into account in determining whether or the extent to which the Loss
Threshold has been met or exceeded; provided
further, that
in
no event shall Purchaser be obligated to indemnify Seller Indemnitees for such
Losses in excess of the Cap;
provided, further, however,
that any
claims for indemnification arising under Section 5.3(a)(ii) or (iii) shall
not
be subject to the Loss Threshold, the Cap or be counted towards the
Cap.
5.4 Indemnification
Procedures.
(a) Except
as
provided in subsection (e) below, any Person making a claim for indemnification
pursuant to Section 5.2
or
5.3
above
(each, an “Indemnified
Party”)
must
give the Party from whom indemnification is sought (an “Indemnifying
Party”)
written notice of such claim promptly after the Indemnified Party receives
any
written notice of any Claim against or involving the Indemnified Party by any
Person or otherwise discovers the liability, obligation or facts giving rise
to
such claim for indemnification; provided,
however,
that the
failure to notify or delay in notifying an Indemnifying Party will not relieve
the Indemnifying Party of its obligations pursuant to Section 5.2
or 5.3
above,
as applicable, except where such failure actually and materially harms the
Indemnifying Party.
(b) With
respect to the defense of any Claim against or involving an Indemnified Party
in
which any Person in question seeks only the recovery of a sum of money for
which
indemnification is provided in Section 5.2
or 5.3
above
and subject to Section 4.2(h) hereof (that shall apply with respect to claims
for Taxes), at its option an Indemnifying Party may appoint as lead counsel
of
such defense any nationally recognized and reputable legal counsel selected
by
the Indemnifying Party. The Indemnifying Party shall not be entitled to assume
control of such defense (unless otherwise agreed to in writing by the
Indemnified Party), and shall pay the fees and expenses of counsel retained
by
the Indemnified Party, if: (i) the claim does not only seek the recovery of
a sum of money; (ii) the Indemnified Party has been advised by counsel that
a reasonable likelihood exists of a conflict of interest between the
Indemnifying Party and the Indemnified Party; (iii) the claim involves
environmental matters in which case the Indemnified Party shall have sole
control and management authority over the resolution of such claim (including
hiring legal counsel and environmental consultants, conducting environmental
investigations and cleanups, negotiating with governmental agencies and third
parties and defending or settling claims and actions); provided,
however,
that the
Indemnified Party shall keep the Indemnifying Party apprised of any major
developments relating to any environmental claim; or (iv) the Indemnifying
Party has not promptly acknowledged and admitted in writing to the Indemnified
Party that all damages, losses, claims, liabilities, charges, suits, penalties,
costs and expenses relating to such Claim are Losses for which the Indemnifying
Party is solely liable pursuant hereto.
(c) If
the
Indemnifying Party is controlling the defense, the Indemnified Party will be
entitled to participate in the defense of such claim and to employ counsel
of
its choice for such purpose at its own expense (other than any fees and expenses
of such separate counsel that are incurred prior to the date the Indemnifying
Party effectively assumes control of such defense which, notwithstanding the
foregoing, shall be borne by the Indemnifying Party; provided,
however,
that the
Indemnifying Party shall pay all of the fees and expenses of such separate
counsel if: (i) the Indemnified Party has been advised by counsel that a
reasonable likelihood exists of a conflict of interest between the Indemnifying
Party and the Indemnified Party; (ii) the Indemnifying Party shall have
authorized in writing the hiring of such separate counsel by the Indemnified
Party; or (iii) the Indemnifying Party shall not have employed counsel
reasonably satisfactory to the Indemnified Party).
(d) The
Indemnifying Party must obtain the prior written consent of the Indemnified
Party (which the Indemnified Party will not unreasonably withhold) prior to
entering into any settlement of such Claim or ceasing to defend such Claim,
provided,
however,
that any
such settlement shall provide for the full and final release of all claims
against each Indemnified Party.
5.5 Payment.
Upon the determination of liability under Article
V
or
otherwise between the Parties or by final judicial proceeding, the appropriate
Party shall pay to the other, as the case may be, within ten (10) days
after such determination, the amount of any claim for indemnification made
hereunder. Any such indemnification payments shall include interest at the
Applicable Rate calculated on the basis of the actual number of days elapsed
over 360, from the date any such Loss is suffered or sustained to the date
of
payment. In the event that the Indemnified Party is not paid in full for any
such claim pursuant to the foregoing provisions promptly after the other Party’s
obligation to indemnify has been determined in accordance herewith, it shall
have the right, notwithstanding any other rights that it may have against any
other Person, to setoff the unpaid amount of any such claim against any amounts
owed by it under any instrument or agreement entered into pursuant to this
Agreement or otherwise or, if Seller is the Indemnifying Party, by setoff
against amounts owed with respect to the Shares owned by Seller. Upon the
payment in full of any claim, either by setoff or otherwise, the entity making
payment shall be subrogated to the rights of the Indemnified Party against
any
Person with respect to the subject matter of such claim.
5.6 Indemnity
Calculations.
The
amount of indemnity payable under Section 5.2
or
Section 5.3
shall be
treated by Purchaser and Seller as an adjustment to the Purchase Price, and
shall be calculated giving effect to any proceeds actually received from
insurance policies covering the Loss that is the subject of the claim for
indemnity, net of any increase in premium as a result of such
claim.
ARTICLE
VI
MISCELLANEOUS
6.1 Definitions.
Capitalized terms used in this Agreement shall have the meanings set forth
below:
“Affiliate”
means,
with respect to any Person, any other Person who directly or indirectly, through
one or more intermediaries, controls, is controlled by, or is under common
control with, such Person. The term “control” means the possession, directly or
indirectly, of the power to direct or cause the direction of the management
and
policies of a Person, whether through the ownership of voting securities, by
Contract or otherwise, and the terms “controlled” and “controlling” have
meanings correlative thereto.
“Affiliated
Group”
means
any affiliated group within the meaning of Code Section 1504 (or any
similar group defined under a similar provision of state, local or foreign
law).
“Agreement”
has
the
meaning specified in the preamble to this Agreement.
“Applicable
Rate”
means
the prime rate of interest reported from time to time in The Wall
Street Journal.
“Authority”
means
any governmental or administrative body, agency, commission, board, arbitrator
or authority, any court or judicial authority, whether international, national,
federal, state or local or any third party accreditation
organization.
“Bankruptcy
Assignment and Assumption”
shall
mean the March 31, 1999 Assignment and Assumption Agreement of “Kenny Rogers
Roasters” Franchise Agreements, Master Development Agreements, Intellectual
Property Rights and Kenny Rogers License Agreement executed by the Company
and
the debtors’ trustee pursuant to the Bankruptcy Plan.
“Bankruptcy
Plan”
shall
mean the First Amended Franchisee Plan of Reorganization, as amended, as
confirmed in the Bankruptcy Proceedings on March 3, 1999.
“Bankruptcy
Proceedings”
shall
mean Case No. 98-80707 (filed March 24, 1998) and Case
No. 98-81049 (filed May 6, 1998), which were jointly administered in
the U.S. Bankruptcy Court for the Middle District of North Carolina, Durham
Division.
“Benefit
Arrangement”
means
any employment, consulting, severance or other similar Contract, arrangement
or
policy and each plan, arrangement, program, agreement or commitment providing
for insurance coverage (including any self-insured arrangements), workers’
compensation, disability benefits, retirement benefits, life, health, disability
or accident benefits (including, without limitation, any “voluntary employees’
beneficiary association” as defined in the Code), compensation, profit-sharing,
bonuses, stock options, stock appreciation rights, stock purchases or other
forms of incentive compensation or post-retirement insurance, compensation
or
benefits which (A) is not an Employee Welfare Benefit Plan, an Employee
Pension Benefit Plan or Multiemployer Plan, (B) is maintained or
contributed to by or required to be maintained or contributed to by the Company,
or (C) covers any current or former employee of the Company.
“Cap”
has
the
meaning specified in Section 5.2(b)
of this
Agreement.
“Claim”
means
any action (at law or in equity), claim, charge, audit, lawsuit, demand, suit,
inquiry, hearing, investigation, Authority review, litigation, proceeding,
arbitration, appeals or other dispute, whether civil, criminal, administrative
or otherwise.
“Closing”
has
the
meaning specified in Section 1.2
of this
Agreement.
“Closing
Date”
has
the
meaning specified in Section 1.2
of this
Agreement.
“Co-Branding
Agreements”
has
the
meaning specified in Section 2.13(b) of this Agreement.
“Code”
means
the Internal Revenue Code of 1986, as amended from time to time.
“Company”
has
the
meaning specified in the preamble to this Agreement.
“Confidential
Information”
means
all information of a confidential or proprietary nature (whether or not
specifically labeled or identified as “confidential”), in any form or medium,
that relates to the business, products, financial condition, services or
research or development of the Company, or its suppliers, distributors,
customers, independent contractors or other business relations. Confidential
Information includes, but is not limited to, the following: (i) internal
business and financial information (including information relating to strategic
and staffing plans and practices, business, operational results, finances,
training, marketing, promotional and sales plans and practices, customer
proposals, referral sources, cost, rate and pricing structures, and accounting
and business methods); (ii) identities of, individual requirements of,
specific contractual arrangements with, and information about, the Company’s
suppliers, distributors, customers, prospective customers, independent
contractors or other business relations and their confidential information;
(iii) trade secrets, know-how, compilations of data and analyses,
techniques, systems, formulae, recipes, research, records, reports, manuals,
documentation, models, data and data bases relating thereto;
(iv) inventions, innovations, improvements, developments, methods, designs,
analyses, drawings, reports and all similar or related information (whether
or
not patentable); and (v) other Intellectual Property Rights of the
Company.
“Contract”
means
any agreement, contract, instrument, commitment, lease, guaranty, indenture,
license, or other arrangement or understanding between parties or by one party
in favor of another party, whether written or oral.
“Disclosure
Schedule”
means
the disclosure schedule delivered by Seller to Purchaser on the date hereof.
The
Disclosure Schedule will be arranged in paragraphs corresponding to the lettered
and numbered paragraphs contained in this Agreement.
“Employee
Benefit Plans”
means
all Benefit Arrangements (other than Multiemployer Plans), Employee Pension
Benefit Plans and Employee Welfare Benefit Plans.
“Employee
Pension Benefit Plan”
means
any “employee pension benefit plan” as defined in Section 3(2) of ERISA
(A) which the Company maintains or contributes to or with respect to which
the Company has any liability, or (B) which covers any current or former
employee of the Company.
“Employee
Welfare Benefit Plan”
means
any “employee welfare benefit plan” as defined in Section 3(1) of ERISA
(other than a Multiemployer Plan), (A) which the Company maintains or
contributes to or with respect to which the Company has any liability, or
(B) which covers any current or former employee of the
Company.
“Encumbrance”
means
any mortgage, pledge, Lien, encumbrance, charge, or other security interest,
other than (a) mechanic’s, materialmen’s, and similar liens, (b) liens
for Taxes not yet due and payable or for Taxes that the taxpayer is contesting
in good faith through appropriate proceedings and for which adequate reserves
have been established on the Most Recent Financial Statements, and
(c) liens arising from zoning ordinances.
“Environmental,
Health, and Safety Regulations”
means
all Regulations, Orders and all common law concerning public health and safety,
worker health and safety, and pollution or protection of the environment,
including without limitation all those relating to the presence, use,
production, generations, handling, transportation, treatment, storage, disposal,
distribution, labeling, testing, processing, discharge, release, threatened
release, control, or cleanup of any hazardous materials, substances or wastes,
chemical substances or mixtures, pesticides, pollutants, contaminants, noise
or
radiation, each as now in effect.
“ERISA”
means
the Employee Retirement Income Security Act of 1974, as amended.
“Existing
Co-Branded Locations”
has
the
meaning specified in Section 2.13(b).
“Financial
Statements”
has
the
meaning specified in Section 2.8
of this
Agreement.
“Franchisee”
means
a
franchisee, licensee or other operator of a franchised “Kenny Rogers Roasters”
location.
“Franchise
Agreements”
means
any agreement between the Company and a Franchisee for the development and/or
operation of one or more traditional “Kenny Rogers Roasters” locations,
excluding Co-Branding Agreements related to any Co-Branded
Locations.
“FTC
Rule”
has
the
meaning specified in Section 2.13
of this
Agreement.
“GAAP”
means
generally accepted accounting principles as in effect in the United States
on
the date of this Agreement, applied on a consistent basis.
“Hazardous
Substances”
means
any pollutants, contaminants, toxic substances, hazardous waste or hazardous
substances defined in or regulated by any Environmental, Health and Safety
Regulation.
“Indebtedness”
means,
with respect to the Company at any date, without duplication: (i) all
obligations for borrowed money or in respect of loans or advances, (ii) all
obligations evidenced by bonds, debentures, notes, interest rate swap agreements
or other similar instruments or debt securities, (iii) all obligations in
respect of letters of credit and bankers’ acceptances issued for the account of
the Company, (iv) all obligations arising from cash/book overdrafts or
negative cash balances, (v) all obligations arising from deferred
compensation arrangements, employee bonuses (whether accrued or not),
(vi) all obligations of the Company secured by a Lien, (vii) all
accrued but unpaid franchise, income and excise taxes, (viii) all overdue
trade payables, (ix) all capital lease obligations determined in accordance
with GAAP, (x) all notes and accounts payable to any Affiliates of Seller
or any officers or employees of such Persons, (xi) all obligations (fixed
or contingent) outside the Ordinary Course of Business, (xii) all
Guaranties of such Person in connection with any of the foregoing and
(xiii) all accrued interest, prepayment premiums or penalties related to
any of the foregoing; provided,
however,
that
Indebtedness shall not include other accrued trade payables or other accrued
expenses incurred in the Ordinary Course of Business.
“Indemnified
Party”
has
the
meaning specified in Section 5.4
of this
Agreement.
“Indemnifying
Party”
has
the
meaning specified in Section 5.4(a)
of this
Agreement.
“Intellectual
Property”
means
all (i) patents, patent applications, patent disclosures, registrations and
applications for registrations, (ii) trademarks, service marks, trade
dress, logos, trade names and domain names, including common law rights, the
goodwill associated therewith and registrations and applications for
registration thereof, (iii) works of authorship, copyrights and
registrations and applications for registration thereof, (iv) copies and
tangible embodiments thereof, (v) confidential and proprietary information,
including trade secrets and know-how, (vi) technology, processes,
algorithms, computer software programs and applications (in both source code
and
object code form), (vii) moral rights and similar rights of attribution and
integrity, and (viii) rights to sue and recover any damages, profits and
other remedies for any past, present or future infringement, misappropriation
or
other violation of any of the foregoing.
“Intellectual
Property Rights”
means
any Intellectual Property obtained by the Company pursuant to and under the
Bankruptcy Plan and the Bankruptcy Assignment, subject to the limitations of
such plan and assignment and only to the extent such rights actually vested
in
the Company under such plan and assignment. The definition of Intellectual
Property Rights also includes any trademark registrations and applications
of
the Company which are disclosed on Schedule 2.12(a) and were obtained after
the date the Bankruptcy Plan was confirmed and excludes any trademark
registrations and applications of Seller which lapsed or were withdrawn or
abandoned after the date the Bankruptcy Plan was confirmed.
“Knowledge
of Seller”
means
(i) the actual knowledge of any of Eric Gatoff, Wayne Norbitz, Donald
Perlyn and Ron DeVos and (ii) that knowledge which could have been acquired
by any of Eric Gatoff, Wayne Norbitz, Donald Perlyn and Ron DeVos after making
a
reasonable and diligent inquiry concerning the subject matter at issue as a
prudent businessperson would have made or exercised in the management of his
business affairs in light of all the circumstances applicable thereto and,
when
reference is made to actual knowledge, the actual knowledge of the persons
listed in clause (i) without such inquiry.
“Leased
Property”
has
the
meaning specified in Section 2.7
of this
Agreement.
“Lien”
means
any claim, lien, pledge, option, charge, security interest, mortgage,
right-of-way, easement, covenant, Encumbrance or other right of any third
party.
“Loss
Threshold”
has
the
meaning specified in Section 5.2(b)
of this
Agreement.
“Losses”
means
any Claims, liabilities, losses, damages (including consequential damages),
fees, deficiencies, assessments, judgments, obligations, demands, commitments,
actions, imposed tax, penalties, fines, remediations and other costs or expenses
(any one such item being called a “Loss”
and
all
such items collectively called “Losses”),
including all interest, penalties, reasonable attorneys’ fees and other expenses
arising from, or in connection with, any Loss by a Party seeking
indemnification.
“Material
Adverse Effect”
means
any circumstance, change in, or effect on a Party that is, or could reasonably
be expected in the foreseeable future to be, materially adverse to the Party’s
business, assets, liabilities, financial condition, earnings or results of
operation, prospects, customer or supplier relations, employee relations, cash
flow or net worth or its ability to consummate the transactions contemplated
by
this Agreement; provided, that the foregoing excludes the effects of changes
that are generally applicable to (i) the industries and markets in which
the Party operates, (ii) the United States or world economy or securities
markets or (iii) result from the outbreak of war, other hostilities or
terrorist activities.
“Most
Recent Financial Statements”
has
the
meaning specified in Section 2.8.
“Most
Recent Fiscal Year End”
has
the
meaning specified in Section 2.8
of this
Agreement.
“Multiemployer
Plan”
means
any “multiemployer plan,” as defined in Section 4001(a)(3) of
ERISA.
“Option”
means
any subscription, option, warrant, right, security, Contract, commitment, or
stock appreciation, phantom stock option, or arrangement by which the Company
is
bound to issue any additional shares of its capital stock or rights pursuant
to
which any Person has a right to acquire shares of the Company’s or a
Subsidiary’s capital stock (as the case may be).
“Order”
means
any decree, order, judgment, writ, injunction (temporary or permanent), rule,
ruling, legal restraint, award, formal or informal directive or notice,
prohibition or consent of or by or from an Authority.
“Ordinary
Course of Business”
means
the ordinary course of normal day-to-day business consistent with past custom
and practice (including with respect to quantity quality and frequency), other
than any “like-kind” exchanges whereby an franchisee/operator pays less
royalties to Company than it is otherwise obligated to pay to
Company.
“Parties”
has
the
meaning specified in the preamble to this Agreement.
“Permits”
means
all permits, licenses, registrations, agreements, certificates, approvals,
accreditation, orders, and other consents and authorizations from any Authority
or other Person (including without limitation those relating to the occupancy
or
use of Real Property) issued to or held by the Company and necessary or required
for the Company to be in compliance with all Regulations and Orders as of the
date hereof.
“Person”
means
an individual, partnership, corporation, limited liability company, joint stock
company, unincorporated organization or association, trust, firm, joint venture,
association, government, body or other organization, whether or not a legal
entity, or Authority.
“Pre-Closing
Period”
means
any taxable period ending on or before the Closing Date.
“Purchase
Date”
shall
mean April 1, 1999.
“Purchase
Price”
has
the
meaning specified in Section 1.1(a)
of this
Agreement.
“Purchaser”
has
the
meaning specified in the preamble to this Agreement.
“Purchaser
Indemnitees”
has
the
meaning specified in Section 5.2(a)
of this
Agreement.
“Real
Property”
has
the
meaning specified in Section 2.7
of this
Agreement.
“Real
Property Leases”
has
the
meaning specified in Section 2.7
of this
Agreement.
“Regulation”
means
any applicable rule, law, code, statute, regulation, ordinance or other binding
action of or by an Authority.
“Securities
Act”
means
the United States Securities Act of 1933, as amended.
“Seller”
has
the
meaning specified in the preamble to this Agreement.
“Seller
Indemnitees”
has
the
meaning specified in Section 5.3(a)
of this
Agreement.
“Shares”
has
the
meaning specified in Section 1.1(a).
“Straddle
Period”
means
a
taxable period that commences before the Closing Date and ends after the Closing
Date.
“Subsidiary”
means,
with respect to any Person, any corporation, partnership, limited liability
company, association or other business entity of which: (i) if a
corporation, a majority of the total voting power of shares of stock entitled
(irrespective of whether, at the time, stock of any other class or classes
of
such corporation shall have or might have voting power by reason of the
happening of any contingency) to vote in the election of directors, managers
or
trustees thereof is at the time owned or controlled, directly or indirectly,
by
that Person or one or more of the other Subsidiaries of that Person or a
combination thereof; or (ii) if a partnership, limited liability company,
association or other business entity, either (A) a majority of the
partnership or other similar ownership interest thereof is at the time owned
or
controlled, directly or indirectly, by that Person or one or more Subsidiaries
of that Person or a combination thereof, or (B) such Person is a general
partner, managing member or managing director of such partnership, limited
liability company, association or other entity.
“Tax”
means
(i) any federal, state, local, or foreign income, gross receipts, license,
payroll, employment, excise, severance, stamp, occupation, premium, windfall
profits, environmental (including taxes under Section 59A of the Code),
custom duties, capital stock, franchise, profits, withholding, social security
(or similar), unemployment, disability, real property, personal property, sales,
use, transfer, registration, value added, alternative or add-on minimum,
estimated, or other tax of any kind whatsoever, including any interest, penalty,
or addition thereto, whether disputed or not, and any amounts payable pursuant
to the determination or settlement of an audit; (ii) liability of the
Company for the payment of any amounts of the type described in clause (i)
above arising as a result of being (or ceasing to be) a member of any Affiliated
Group (or being included (or required to be included) in any Tax Return relating
thereto); and (iii) liability of the Company for the payment of any amounts
of the type described in clause (i) above as a result of any express or
implied obligation to indemnify or otherwise assume or succeed to the liability
of any other Person.
“Tax
Return”
means
any return, declaration, report, claim for refund, or information return or
statement relating to Taxes, including any schedule or attachment thereto,
and
including any amendment thereof.
“Taxing
Authority”
means
the Internal Revenue Service and any other Federal, state, local or foreign
Authority which has the right to impose Taxes on the Company.
“Transaction
Documents”
means
this Agreement, and the Corporate Headquarters Lease.
6.2 Construction.
As used in this Agreement, (i) each term defined in this Agreement has the
meaning assigned to it, (ii) each accounting term not otherwise defined in
this Agreement has the meaning assigned to it in accordance with U.S. Treasury
Regulations, (iii) as the context may require, words in the singular
include the plural and words in the plural include the singular, (iv) as
the context may require, words in the masculine or neuter gender include the
masculine, feminine and neuter genders, (v) except as the context may
require, all references to Schedules or Exhibits refer to the Disclosure
Schedules or Exhibits delivered herewith or attached hereto (each of which
is
deemed to be a part of this Agreement), (vi) all references to Sections or
Articles refer to Sections or Articles of this Agreement, (vii) all
references to “$” or “dollars” refer to U.S. dollars, (viii) all references
to “including” shall mean “including without limitation”, (ix) any amount to be
paid in “$” or “dollars” shall be paid in U.S. dollars, and (x) the terms
“herein”, “hereunder”, “hereby”, “hereto” and terms of similar import refer to
this Agreement in its entirety, and not to any particular Article, Section,
paragraph or subparagraph. No provision of this Agreement will be construed
in
favor of, or against, any of the Parties hereto by reason of the extent to
which
such Party or its counsel participated in its drafting or by reason of the
extent to which this Agreement or any provision hereof is inconsistent with
any
prior draft hereof or thereof.
6.3 Assignment.
Neither this Agreement nor any of the rights or obligations hereunder may be
assigned by Seller without the prior written consent of Purchaser, or by
Purchaser without the prior written consent of Seller. Such consent shall not
be
unreasonably withheld, conditioned or delayed. Notwithstanding the foregoing,
Purchaser may assign its rights and obligations hereunder, in whole or in part,
to any of its Affiliates; provided,
however,
that in
connection with such assignment Purchaser shall agree to guarantee such
assignee’s obligations under the Transaction Documents; provided
further, however,
that
such assignment shall be subject to Seller’s approval of Purchaser’s financial
condition, such approval not to be unreasonably withheld. In addition, Purchaser
may assign any or all of its rights pursuant to this Agreement, including its
rights to indemnification, to a lender as collateral security. Subject to the
foregoing, this Agreement shall be binding upon and inure to the benefit of
the
Parties hereto and their successors and permitted assigns. This Agreement shall
be for the sole benefit of the Parties hereto and their respective permitted
assigns and is not intended, nor shall be construed, to give any Person, other
than the Parties hereto and their respective successors and assigns any legal
or
equitable right, remedy or claim hereunder.
6.4 Notices.
Any notice, request, demand, waiver, consent, approval or other communication
which is required or permitted hereunder shall be in writing. All such notices
shall be delivered: personally; by telecopier receipt confirmed; by certified
mail, return receipt requested; or by reputable overnight courier (costs
prepaid). All such notices are to be given or made to the Parties at the
following addresses (or to such other address as any Party may designate by
a
notice given in accordance with the provisions of this Section):
If
to
Purchaser (or the Company after the Closing):
Roasters
Asia Pacific (Cayman) Limited
c/o
Berjaya Corporation Berhad
Lot
1.35
C&D, 1st
floor
Podium
Block, Plaza Berjaya
No.
12
Jalan lmbi, 55100 Kuala Lumpur
West
Malaysia
Facsimile
No. 603-2143-4085
Copy
to
(which shall not constitute notice):
Abelman
Frayne & Schwab
666
Third
Avenue
New
York,
NY 10017-5621
Attn:
Mel
Ortner, Esq.
If
to
Seller (or Company prior to the Closing):
Nathan’s
Famous, Inc.
1400
Old
Country Road
Westbury,
New York 11501
Attn: Eric
Gatoff, Chief Executive Officer
Facsimile
No.: (516) 338-7220
Copy
to
(which shall not constitute notice):
Farrell
Fritz, P.C.
1320
RexCorp Plaza
Uniondale,
New York 11556
Attn: Nancy
D.
Lieberman, Esq.
Facsimile
No.: 516-336-2778
Any
of
the above addresses may be changed at any time by notice given as provided
above; provided,
however,
that any
such notice of change of address will be effective only upon receipt. All
notices, requests or instructions given in accordance herewith will be deemed
given (a) on the date of delivery, if hand delivered, (b) on the date
of receipt, if sent by facsimile or other electronic means (including PDF
format), (c) three business days after the date of mailing, if mailed by
registered or certified mail, return receipt requested, and (d) one
business day after the date of sending, if sent by Federal Express or other
recognized overnight courier.
6.5 Choice
of Law.
This Agreement shall be governed by, and construed in accordance with, the
internal laws of the State of New York, without reference to the choice of
law or conflicts of law principles thereof.
6.6 Entire
Agreement; Amendments and Waivers.
This Agreement, together with all exhibits and schedules hereto, constitute
the
entire agreement among the Parties pertaining to the subject matter hereof
and
supersedes all prior agreements, understandings, negotiations and discussions,
whether oral or written, of the Parties, including that certain Letter
Agreement, dated September 6, 2007 by and between Nathan’s Famous, Inc. and
Berjaya Group Berhad. This Agreement may not be amended or modified except
by an
instrument in writing signed on behalf of all of the Parties. No waiver of
any
of the provisions of this Agreement shall be deemed or shall constitute a waiver
of any other provision hereof (whether or not similar), nor shall such waiver
constitute a continuing waiver unless otherwise expressly provided.
6.7 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. This Agreement may be executed and delivered by facsimile
or
other electronic means (including PDF format) with the same force and effect
as
if the same were a fully executed and delivered manual counterpart.
6.8 Invalidity.
In the event that any one or more of the provisions contained in this Agreement
or in any other instrument referred to herein, shall, for any reason, be held
to
be invalid, illegal or unenforceable in any respect, such invalidity, illegality
or unenforceability shall not affect any other provision of this Agreement
or
any other such instrument.
6.9 Headings.
The headings of the Articles and Sections herein are inserted for convenience
of
reference only and are not intended to be a part of or to affect the meaning
or
interpretation of this Agreement.
6.10 Expenses.
Except as otherwise provided herein, each Party will each be liable for their
respective costs and expenses incurred in connection with the negotiation,
preparation, execution and performance of this Agreement and the consummation
of
the transactions contemplated hereby (including fees, costs and expenses of
legal counsel, investment advisors, brokers and other representatives and
consultants).
6.11 Confidentiality
Agreement.
Neither Party will utilize or disclose any Confidential Information of the
other
Party and each Party will continue to abide by the Confidentiality Agreement
between the Parties dated October 19, 2006 and the terms of Section 7 of the
Letter of Intent between the Parties dated September 6, 2007.
6.12 WAIVER
OF JURY TRIAL.
EACH OF THE PARTIES HERETO KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVES
ANY
RIGHTS IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED HEREON,
OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH, THIS AGREEMENT OR ANY SCHEDULE
OR EXHIBIT HERETO, OR ANY COURSE OF CONDUCT, COURSE OF DEALING OR STATEMENTS
(WHETHER VERBAL OR WRITTEN) RELATING TO THE FOREGOING. THIS PROVISION IS A
MATERIAL INDUCEMENT FOR THE PARTIES HERETO TO ENTER INTO THIS
AGREEMENT.
6.13 Consent
To Jurisdiction; Service Of Process.
Seller and Purchaser hereby irrevocably submit to the jurisdiction of the state
or Federal courts located in Nassau County, New York in connection with any
suit, action or other proceeding arising out of or relating to this agreement
and the transactions contemplated hereby (including any claim for injunctive
relief), and hereby agree not to assert, by way of motion, as a defense, or
otherwise in any such suit, action or proceeding that the suit, action or
proceeding is brought in an inconvenient forum, that the venue of the suit,
action or proceeding is improper or that this agreement or the subject matter
hereof may not be enforced by such courts.
6.14 Attorneys’
Fees.
If any Party hereto brings an action against another Party hereto to enforce
its
rights under this Agreement, the prevailing Party shall be entitled to recover
its reasonable costs and expenses, including reasonable attorneys’ fees and
costs and including, but not limited to, expert witness fees and expenses,
incurred in connection with such action and any appeal thereof.
6.15 Incorporation
of Exhibits and Schedules.
The exhibits and schedules identified in this Agreement are incorporated herein
by reference and made a part hereof. Any exception to representations or
warranties disclosed on one Disclosure Schedule shall constitute disclosure
for
the purposes of all other applicable representations or warranties made in
this
Agreement and any related Disclosure Schedule; provided such application is
readily apparent on its face.
6.16 No
Third-Party Beneficiaries.
Nothing herein expressed or implied is intended or shall be construed to confer
upon or give to any Person other than the Parties hereto and their respective
permitted successors and assigns, any rights or remedies under or by reason
of
this Agreement, such third parties specifically including employees and
creditors of the Company.
6.17 Business
Days.
Whenever the last day for the exercise of any privilege or the discharge of
any
duty hereunder shall fall upon any day which is not a business day, the Party
having such privilege or duty may exercise such privilege or discharge such
duty
on the next succeeding business day.
6.18 Legal
Representation.
Each Party has varying rights and interests under this Agreement and has been
advised by, or has had the opportunity to obtain the advice of, its own
independent legal counsel in connection the preparation and execution of this
agreement.
* * * * *
IN
WITNESS WHEREOF,
the
Parties have executed and delivered this Agreement as of the date first written
above.
|
NATHAN’S
FAMOUS, INC.
|
|
|
|
|
By:
|
/s/Eric
Gatoff
|
|
Name:
|
ERIC
GATOFF
|
|
Title:
|
CEO
|
|
|
|
|
|
|
|
NF
ROASTERS CORPORATION
|
|
|
|
|
By:
|
/s/Wayne
Norbitz
|
|
Name:
|
WAYNE
NORBITZ
|
|
Title:
|
PRESIDENT
|
|
|
|
|
|
|
|
ROASTERS
ASIA PACIFIC (CAYMAN) LIMITED
|
|
|
|
|
|
|
|
By:
|
/s/Francis
Lee Kok Chuan
|
|
Name:
|
FRANCIS
LEE KOK CHUAN
|
|
Title:
|
DIRECTOR
|
|
|
|
Exhibit
A
VIA
OVERNIGHT MAIL
April
__,
2008
Toronto
Foods International
Sheikh
Zayed Road
Al
Attar
Tower, 1st
Floor,
Suite 106
Dubai,
United Arab Emirates
Attn:
Pooneh Babaki
|
Re: |
Kenny
Rogers Roasters Master Development Agreement for
the
|
United
Arab Emirates, Bahrain, Jordan, Oman, Qatar and Yemen
Gentlepersons:
Reference
is made to the Master Development Agreement between NF Roasters Corporation
(“we”, “us” and the like) and Toronto Foods International (“TFI”) dated March
2003 concerning the development, operation and franchising by TFI of “Kenny
Rogers Roasters” restaurants in the United Arab Emirates, Bahrain, Jordan, Oman,
Qatar and Yemen (the “Master Franchise Agreement”).
In
the
normal course of reviewing our files, it has come to our attention that, despite
TFI’s cessation of business activities under the Master Franchise Agreement, the
Master Franchise Agreement has never been formally terminated.
Accordingly,
so that we may close our files, this letter shall serve as formal notice of
TFI’s default under Section 15.2.1 of the Master Franchise Agreement, as well as
our election to terminate the Master Franchise Agreement effective upon your
receipt hereof.
This
letter is written without prejudice, waiver or limitation of any of our rights
or remedies, at law or in equity, all of which are hereby expressly
reserved.
Sincerely,
NF
Roasters Corporation
By:________________________
Authorized
Signatory
Exhibit
10.2
NF
Roasters Corp.
c/o
Berjaya Corporation Berhad
Lot
1.35
C&D, 1st
Floor
Podium
Block, Plaza Berjaya
No.
12
Jalan Imbi, 55100 Kuala Lumpur
West
Malaysia
As
of
April 23, 2008
Nathan’s
Famous Systems, Inc.
1400
Old
Country Road, Suite 400
Westbury,
New York 11590
Re:
KRR
Co-Brand License Agreement
Gentlemen:
Reference
is made to the Stock Purchase Agreement dated April 23, 2008 by and among
Nathan’s Famous, Inc. (“Seller”), Roasters Asia Pacific (Cayman) Limited
(“Purchaser”) and NF Roasters Corp. (“Company”) (the “Stock Purchase
Agreement”). Except as otherwise expressly provided, all capitalized terms used
herein shall have the meanings ascribed to them in the Stock Purchase
Agreement.
In
accordance with Section 4.4 of the Stock Purchase Agreement, the Parties have
agreed that, simultaneously with the execution of the Stock Purchase Agreement,
Purchaser on the one hand and Seller or an affiliate of Seller on the other
hand
shall enter into a separate agreement (the “KRR Co-Brand License Agreement”) to
appoint NFSI (as defined below) as Company’s agent to enforce the terms and
conditions of the Sub-License Agreement (as defined below), including the
quality control requirements specified thereunder, and to appoint NFSI as a
licensee with the right to grant sub-licenses in respect of the Intellectual
Property Rights. The Parties acknowledge and agree that the Seller would not
execute, deliver and perform the Stock Purchase Agreement without the
simultaneous execution and delivery of this Agreement.
When
executed by Company and Nathan’s Famous Systems, Inc. (“NFSI”), an affiliate of
Seller, the following terms shall constitute the KRR Co-Brand License Agreement
(as described in Section 4.4 of the Stock Purchase Agreement). Consequently,
the
Company and NFSI hereby agree as follows:
1.
|
Company
hereby irrevocably assigns to NFSI, for so long as the license granted
hereunder shall remain in effect, all of Company’s right, title and
interest in and to the Sub-License Agreements to which the Company
is a
party; excluding however, any right, title and interest of the Company
as
set forth in Sections 4, 6 and 10(d)
thereof.
|
2.
|
Company
hereby grants a license to NFSI all of the Intellectual Property
Rights
which are necessary for NFSI to operate and/or authorize the operation
of
the KRR Co-Branded Locations pursuant to the terms set forth herein.
The
Company agrees to maintain and enforce all Intellectual Property
Rights
licensed to NFSI pursuant to this Agreement, and to keep all such
rights
in full force and effect, as Company deems necessary in Company’s sole and
absolute discretion in order to permit the operation of the KRR Co-Branded
Locations as presently operated.
|
3.
|
NFSI
shall be permitted to use or sublicense the use of the Intellectual
Property Rights in connection with the operation and/or authorization
of
the operation only of the KRR Co-Branded Locations as listed on Exhibit
A
hereto pursuant to the terms and conditions of the license agreements
between NFSI and the operators of such co-branded locations (“Sub-License
Agreements”) and for no other purpose.
|
4.
|
NFSI
is hereby appointed as Company’s agent with respect to all Sub-License
Agreements and NFSI agrees to enforce all of the terms and conditions
of
the Sub-License Agreements, including but not limited to the maintenance
of quality control; provided that in the event of any difference
between
the provisions of Section 2 of the Sub-License Agreements and the
Existing
Standards, the maintenance of quality control shall de deemed to
require
that the sub-licensees maintain the Existing Standards. In this regard,
NFSI will conduct periodic inspections of each location to ensure
that the
Existing Standards are being met and will send reports to Company
after
such inspections are conducted.
|
5.
|
NFSI
agrees that the KRR Co-Branded Locations will be operated by NFSI
and/or
the “Nathan’s Famous” and “Miami Subs” franchisees in compliance with the
Existing Standards, and that the KRR Co-Branded Locations will not
be
permitted to make any changes to the Existing Standards without Company’s
prior written consent (which will not be unreasonably withheld or
delayed). However, no KRR Co-Branded Locations shall have any obligation
to comply with any changes to the Existing Standards proposed or
suggested
by Company.
|
6.
|
As
between NFSI and Company, NFSI shall be solely responsible for all
franchise support owed to the operators of the KRR Co-Branded Locations,
and Company shall have no liability in connection
therewith.
|
7.
|
The
rights granted to NFSI hereunder shall continue for the term of the
Sub-License Agreements; provided that nothing shall obligate any
particular KRR Co-Branded Location to continue to use the Intellectual
Property Rights. If any such location ceases to use the Intellectual
Property Rights, the Sub-License Agreement for such location shall
be
deemed immediately terminated and NFSI shall ensure that the sub-licensee
shall terminate its use of the Intellectual Property Rights.
|
8.
|
No
franchise fees, royalties, product rebates or any other monies shall
be
due from NFSI (or its operators and suppliers) to Company in connection
with the continued operation of the Existing KRR Co-Branded
Locations.
|
9.
|
The
Company, its affiliates, successors and assigns shall have the right
to
use or license the Intellectual Property Rights at any location throughout
the world (“Company Location”) irrespective of whether any such Company
Location competes with an Existing KRR Co-Branded Location.
|
10.
|
This
Agreement shall be governed by, and construed in accordance with,
the
internal laws of the State of New York, without reference to the
choice of law or conflicts of law principles thereof. The parties
hereto
irrevocably submit to the jurisdiction of the state or Federal courts
located in Nassau County, New York in connection with any suit,
action or other proceeding arising out of or relating to this agreement
and the transactions contemplated hereby (including any claim for
injunctive relief), and hereby agree not to assert, by way of motion,
as a
defense, or otherwise in any such suit, action or proceeding that
the
suit, action or proceeding is brought in an inconvenient forum, that
the
venue of the suit, action or proceeding is improper or that this
agreement
or the subject matter hereof may not be enforced by such
courts.
|
11.
|
For
the purpose of facilitating the execution of this Agreement and for
other
purposes, this Agreement may be executed simultaneously in any number
of
counterparts, each of which counterparts shall be deemed to be an
original, and all of which counterparts shall constitute but one
and the
same instrument. Delivery of an executed counterpart of a signature
page
to this Agreement by facsimile shall be effective as delivery of
a
manually executed counterpart of this Agreement.
|
|
|
|
|
Sincerely,
NF
Roasters Corp.
|
|
|
|
|
By: |
/s/Derek
Chee Seng Chin |
|
Name:
DEREK
CHEE SENG CHIN |
|
Title:
DIRECTOR |
|
|
|
|
Roasters Asia Pacific (Cayman)
Limited |
|
|
|
|
By: |
/s/Francis
Lee Kok Chuan |
|
Name:
FRANCIS
LEE KOK CHUAN |
|
Title:
DIRECTOR |
Accepted
and agree to:
Nathan’s
Famous Systems, Inc.
By: /s/Wayne
Norbitz
Name: WAYNE
NORBITZ
Title: PRESIDENT
& COO
Nathan’s
Famous, Inc.
By: /s/Eric
Gatoff
Name: ERIC
GATOFF
Title: CEO
Exhibit
A
KRR
Co-Branded Locations
Host
Concept
|
Location
|
Nathan’s
Famous
|
Lacey
Mall, 244 N. Main Street, Lanoka Harbor, NJ
|
Nathan’s
Famous
|
Menlo
Park Mall, Edison, NJ
|
Nathan’s
Famous
|
Mall
of America, Bloomington, MN
|
Nathan’s
Famous
|
705
8th
Avenue, New York, NY
|
Nathan’s
Famous
|
1670
Deer Park Ave., Deer Park, NY
|
Nathan’s
Famous
|
Smith
Haven Mall, Middle Country Road, Lake Grove, NY
|
Nathan’s
Famous
|
South
Shore Mall, 1701 Sunrise Highway, Bay Shore, NY
|
Nathan’s
Famous
|
Hudson
Mall, 701 Route 440, Jersey City, NY
|
Nathan’s
Famous
|
1A
Main Street, East Hartford, CT
|
Nathan’s
Famous
|
121
S. Palm Canyon Drive, Palm Springs, CA
|
Nathan’s
Famous
|
90-30
Sutphin Blvd., Jamaica, NY
|
Nathan’s
Famous
|
Seton
Hall University, S. Orange Ave., S. Orange, NJ
|
Nathan’s
Famous
|
3380
Hillside Ave., New Hyde Park, NY
|
Nathan’s
Famous
|
1291
Broadway, Brooklyn, NY
|
Nathan’s
Famous
|
1625
Boardwalk, Atlantic City, NJ
|
Nathan’s
Famous
|
Queens
Center, 90-15 Queens Blvd., Elmhurst, NY
|
Nathan’s
Famous
|
Moorestown
Mall, 400 Route 38, Moorestown, NJ
|
Nathan’s
Famous
|
Willowbrook
Mall, 1400 Willowbrook Mall, Wayne, NJ
|
Nathan’s
Famous
|
Freehold
Raceway Mall, 3710 Route 9, Freehold, NJ
|
Nathan’s
Famous
|
Palms
Casino Resort, 4321 W. Flamingo Rd., Las Vegas, NV
|
Nathan’s
Famous
|
Manhattan
Mall, 1275 Broadway, New York, NY
|
Nathan’s
Famous
|
Sunrise
Mall, 1 Sunrise Hwy, Massapequa, NY
|
Nathan’s
Famous
|
545
William Floyd Parkway, Shirley, NY
|
Nathan’s
Famous
|
Pembroke
Lakes Mall, 11401 Pines Blvd., Pembroke Pines, FL
|
Nathan’s
Famous
|
Orlando
Int’l Airport, Landside, Orlando, FL
|
Nathan’s
Famous
|
Plattekill
Travel Plaza, Interstate 87, Wallkill, NY
|
Nathan’s
Famous
|
Fort
Drum Travel Plaza, Florida Tpke., Okeechobee, FL
|
Nathan’s
Famous
|
MacArthur
Center Mall, 300 Monticello Ave., Norfolk, VA
|
Nathan’s
Famous
|
Concord
Mills Mall, 8111 Concord Mills Blvd., Charlotte, NC
|
Nathan’s
Famous
|
Leesburg
Mall, Leesburg, VA
|
Nathan’s
Famous
|
Orlando
Int’l Airport, Delta Terminal, Orlando, FL
|
Nathan’s
Famous
|
White
Plains Galleria Mall, White Plains, NY
|
Nathan’s
Famous
|
Paramus
Park Mall, Paramus, NJ
|
Nathan’s
Famous
|
Ocean
County Mall, Toms River, NJ
|
Nathan’s
Famous
|
Westchester
Mall, 125 Westchester Ave., White Plains, NY
|
Nathan’s
Famous
|
Palisades
Center, 36-21 Palisades Center Drive, Nyack, New York
|
Nathan’s
Famous
|
Kings
Plaza Mall, 5424 Kings Plaza, Brooklyn, NY
|
Nathan’s
Famous
|
238-19
Linden Blvd., Elmont, NY
|
Nathan’s
Famous
|
Westfield
North County, 272 E. Via Rancho Pkwy., Escondido, CA
|
Nathan’s
Famous
|
Philadelphia
Outlet Center, 18 Lightcap Rd., Pottstown, PA
|
Nathan’s
Famous
|
Jackson
Outlet Center, Jackson, NJ
|
Nathan’s
Famous
|
Penn
State Univ., HUB-Robeson Center, University Park, PA
|
Nathan’s
Famous
|
Mall
at Steamtown, 300 Lackawanna Ave, Scranton, PA
|
Nathan’s
Famous
|
Lenox
Square Mall, 3393 Peachtree Road, Atlanta, GA
|
Nathan’s
Famous
|
Trumbull
Mall, Trumbull, CT
|
Nathan’s
Famous
|
Cortland
Town Center, 3139 E. Main Street, Mohegan Lake, NY
|
Nathan’s
Famous
|
1530
Old Country Road, Westbury, NY
|
Nathan’s
Famous
|
Hartsfield
Atlanta Int’l Airport, Concourse B, Gate 27, Atlanta,
GA
|
Nathan’s
Famous
|
Hartsfield
Atlanta Int’l Airport, Concourse D, Gate 21, Atlanta,
GA
|
Nathan’s
Famous
|
Hartsfield
Atlanta Int’l Airport, Concourse T, Gate 6/7, Atlanta,
GA
|
Nathan’s
Famous
|
Newport
Center Mall, Jersey City, NJ
|
Nathan’s
Famous
|
569
Myrtle Avenue, Brooklyn, NY
|
Nathan’s
Famous
|
251
East 14th
Street, New York, NY
|
Nathan’s
Famous
|
Jersey
Gardens Mall, Elizabeth, NJ
|
Nathan’s
Famous
|
Brunswick
Square Mall, 755 Route 18, East Brunswick, NJ
|
Nathan’s
Famous
|
Monmouth
Mall, Route 36 and 35, Eaton Town, NJ
|
Nathan’s
Famous
|
Nanuet
Mall, 75 West Route 59, Nanuet, NY
|
Nathan’s
Famous
|
Sawgrass
Mall, 12801 W. Sunrise Blvd., Sunrise, FL
|
Nathan’s
Famous
|
Victoria
Gardens Mall, 12434 N. Main Street, Rancho Cucamonga,
CA
|
Nathan’s
Famous
|
Coastland
Center Mall, Naples, FL
|
Nathan’s
Famous
|
Coconut
Point Mall, 2311 Fashion Drive, Estero, FL
|
Nathan’s
Famous
|
166
North 2nd
Street, Camden, NJ
|
Nathan’s
Famous
|
3600
Grand Avenue, Coconut Grove, NJ
|
Nathan’s
Famous
|
Staten
Island Ferry, Whitehall Ferry Building, New York, NY
|
Nathan’s
Famous
|
Tanger
Deer Park Outlets, Deer Park, NY
|
Nathan’s
Famous
|
105
West Montauk Highway, Hampton Bays, NY
|
Nathan’s
Famous
|
Meadowlands
Xanadu, East Rutherford, NJ
|
Nathan’s
Famous
|
Miami
Int’l Airport, Concourse C, Miami, FL
|
Nathan’s
Famous
|
1310
Surf Avenue, Coney Island, NY
|
Nathan’s
Famous
|
650
86th
Street, Brooklyn, NY
|
Nathan’s
Famous
|
2290
Central Park Avenue, Yonkers, NY
|
Nathan’s
Famous
|
3131
Long Beach Road, Oceanside, NY
|
Nathan’s
Famous
|
229
Broadhollow Road, Farmingdale, NY
|
Nathan’s
Famous
|
Aeropuerto
Internacional De LaRomana, Casa De Campo, Santo Domingo, Dominican
Republic
|
Nathan’s
Famous
|
Cibao
Bowling, Autopista Duarte KM 3 ½, Entrada el Embrujo 111, Santiago,
Dominican Republic
|
Nathan’s
Famous
|
Aeropuerto
Internacional de Punta Cana, Punta Cana, Dominican Rep.
|
Nathan’s
Famous
|
Aeropuerto
Internacional de Santiago, Santiago, Dominican Rep.
|
Nathan’s
Famous
|
Colony
Center Mall, Albany, New York
|
Nathan’s
Famous
|
Miami
Int’l Airport, Concourse H, Miami, FL
|
Nathan’s
Famous
|
Greensboro
Piedmont Airport, Greensboro, NC
|
Nathan’s
Famous
|
JFK
Int’l Airport, New Jet Blue Terminal, Queens, NY
|
Nathan’s
Famous
|
Valdosta
State University, Valdosta, GA
|
Nathan’s
Famous
|
Melbourne
Square Mall, Melbourne, FL
|
Nathan’s
Famous
|
Christiana
Mall, Newark, DE
|
Nathan’s
Famous
|
Raleigh-Durham
Airport, Raleigh, NC
|
Nathan’s
Famous
|
Tinton
Falls Outlet Center, Tinton Falls, NJ
|
Nathan’s
Famous
|
NJ
Expo Center, Edison, NJ
|
Nathan’s
Famous
|
Trump
Plaza, Atlantic City, NJ
|
Nathan’s
Famous
|
New
York New York Casino, Las Vegas, NV
|
Nathan’s
Famous
|
Mariner’s
Crossing, Spring Hill, FL
|
Miami
Subs
|
7301
Overseas Highway, Marathon, FL (MS#4)
|
Miami
Subs
|
1920
S. Federal Highway, Boynton Beach, FL (MS#9)
|
Miami
Subs
|
19000
NW 2nd
Avenue, North Miami, FL (MS#14)
|
Miami
Subs
|
661
W. Sunrise Blvd, Ft. Lauderdale, FL (MS#16)
|
Miami
Subs
|
750
West Sample Road, Pompano Beach, FL (MS#17)
|
Miami
Subs
|
1198
South State Road 7, North Lauderdale, FL (MS#19)
|
Miami
Subs
|
4513
Lakeworth Road, Green Acres City, FL (MS#20)
|
Miami
Subs
|
116
W. Hallandale Beach Blvd., Hallandale, FL (MS#21)
|
Miami
Subs
|
317
W. Atlantic Blvd., Pompano Beach, FL (MS#22)
|
Miami
Subs
|
4999
S. State Road 7, Davie, FL (MS#23)
|
Miami
Subs
|
5875
N.W. 36th
Street, Miami, FL (MS#24)
|
Miami
Subs
|
1851
Broadway, Riviera Beach, FL (MS#27)
|
Miami
Subs
|
1955
S. State Road 7, Hollywood, FL (MS#28)
|
Miami
Subs
|
5001
N. University Drive, Lauderhill, FL (MS#30)
|
Miami
Subs
|
1600
W. 49th
Street, Hialeah, FL (MS#33)
|
Miami
Subs
|
600
N.W. 167th
Street, Miami, FL (MS#40)
|
Miami
Subs
|
2484
N. State Road 7, Lauderdale, Lakes, FL (MS#42)
|
Miami
Subs
|
3712
W. Columbus Drive, Tampa, FL (MS#44)
|
Miami
Subs
|
2600
Okeechobee Blvd., West Palm Beach, FL (MS#48)
|
Miami
Subs
|
7781
Pines Blvd., Pembroke Pines, FL (MS#50)
|
Miami
Subs
|
888
S. Military Trail, West Palm Beach, FL (MS#52)
|
Miami
Subs
|
952
North Lake Blvd., Lake Park, FL (MS#60)
|
Miami
Subs
|
2035
Highway 434, Longwood, FL (MS#61)
|
Miami
Subs
|
210
SW 40th
Avenue, Plantation, FL (MS#76)
|
Miami
Subs
|
2501
SW 87th
Avenue, Miami, FL (MS#90)
|
Miami
Subs
|
12605
Biscayne Blvd., Miami, FL (MS#104)
|
Miami
Subs
|
7140
Collins Avenue, Miami Beach, FL (MS#105)
|
Miami
Subs
|
1099
NW 42nd
Ave., Miami, FL (MS#125)
|
Miami
Subs
|
1101
Washington Avenue, Miami Beach, FL (MS#133)
|
Miami
Subs
|
1505
S. Federal Highway, Dania, FL (MS#137)
|
Miami
Subs
|
1420
University Drive, Coral Springs, FL (MS#164)
|
Miami
Subs
|
4742
North Congress Avenue, Boynton Beach, FL (MS#172)
|
Miami
Subs
|
641
Route 18 South, East Brunswick, NJ (MS#208)
|
Miami
Subs
|
Ft.
Lauderdale Airport, Ft. Lauderdale, FL (MS#212)
|
Miami
Subs
|
Brandsmart/4320
NW 167th
Street, North Miami, FL (MS#216)
|
Miami
Subs
|
6694
NW 186th
Street, Hialeah, FL (MS#248)
|
Miami
Subs
|
819
Lake Worth Ave., Lake Worth, FL 33460
(MS#257)
|
Exhibit
99.1
FOR:
|
NATHAN'S
FAMOUS, INC.
|
|
|
COMPANY
|
Ronald
G. DeVos, Vice President - Finance and CFO
|
CONTACT:
|
(516)
338-8500 ext. 229
|
FOR
IMMEDIATE RELEASE
NATHAN'S
FAMOUS, INC.
REPORTS
SALE OF NF ROASTERS CORP.
WESTBURY,
N.Y., April 28, 2008 - Nathan’s Famous, Inc. (Nasdaq Symbol: NATH), announced
today the sale of its subsidiary, NF Roasters Corp. to Roasters Asia Pacific
(Cayman) Limited, its Master Developer of franchised Kenny Rogers Roasters
restaurants in Malaysia and certain other foreign territories. The purchase
price was approximately $4,000,000 in cash plus certain accruals.
In
connection with the sale, NF Roasters Corp. entered into a license agreement
with a subsidiary of Nathan’s, pursuant to which NF Roasters Corp. licensed to
the Nathan’s subsidiary certain intellectual property necessary for Nathan’s to
continue to make available “Kenny Rogers” products at existing Nathan’s Famous
and Miami Subs restaurants.
About
Nathan’s Famous
Nathan’s
products are distributed in 50 states, and four foreign countries through its
restaurant system, Branded Product Program and retail licensing activities.
Following the sale of NF Roasters Corp., Nathan’s restaurant system consisted of
223 franchised or licensed units and six company-owned units (including one
seasonal unit). For additional information about Nathan’s please visit our
website at www.nathansfamous.com
Except
for historical information contained in this news release, the matters discussed
are forward looking statements that involve risks and uncertainties. Words
such
as “anticipate”, “believe”, “estimate”, “expect”, “intend”, and similar
expressions identify forward-looking statements, which are based on the current
belief of the Company’s management, as well as assumptions made by and
information currently available to the Company’s management. Among the factors
that could cause actual results to differ materially are the following: the
effect of business and economic conditions; the impact of competitive products
and pricing; the ability to obtain an adequate supply of beef and other food
products at competitive prices; capacity; the regulatory and trade environment;
and the risk factors reported from time to time in the Company’s SEC reports.
The Company does not undertake any obligation to update such forward-looking
statements.