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EXHIBIT 10.1
EXCHANGE AGENT AGREEMENT
July __, 1999
American Stock Transfer & Trust Company
00 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
In connection with the merger (the "Merger") of Miami Acquisition Corp.
a Florida corporation ("Acquisition") and wholly-owned subsidiary of Nathan's
Famous, Inc. ("Nathan's"), with and into Miami Subs Corporation, a Florida
corporation ("Miami Subs"), pursuant to the Agreement and Plan of Merger dated
as of January 15, 1999, as amended (the "Merger Agreement"), a copy of which is
annexed hereto, at the effective time of the Merger (the "Effective Time"), each
outstanding share of common stock of Miami Subs will be converted into the right
to receive a fraction of a share of Nathan's common stock having a value of
$2.068, but no more than one share of Nathan's common stock for each two shares
of Miami Subs, except that shares held by Nathan's or in the treasury of Miami
Subs and shares with respect to which dissenters' rights are properly exercised
will not be converted, (the "Shares"). In addition, one warrant to purchase one
share of Nathan's common stock at an exercise price of $6.00 will be granted to
a Miami Subs shareholder for each four shares of Nathan's common stock the
shareholder is entitled to receive (the "Warrants"). You will be notified of the
Effective Time by no later than the first business day following the Effective
Time. Capitalized terms used herein and not defined herein shall have the
meanings ascribed to such terms in the Merger Agreement.
Miami Subs and Nathan's have delivered or will deliver to you (i) a copy
of the letter of transmittal ("Letter of Transmittal") to be sent to holders of
record of shares of Miami Subs common stock other than Dissenting Shares ("Miami
Subs Shareholders"), (ii) copies of all other documents or materials, if any, to
be forwarded to Miami Subs Shareholders, (iii) a certified copy of resolutions
adopted by the Board of Directors of each of Miami Subs and Nathan's authorizing
the Merger, the appointment of an exchange agent and execution of an exchange
agent agreement, (iv) a list showing the names and addresses of all Miami Subs
Shareholders as of the Effective Time and the number of shares of Miami Subs
common stock held by each Miami Subs Shareholder as of the Effective Time, (v) a
list of Dissenting Shares and (vi) a list of certificates (including certificate
numbers) representing shares of Miami Subs common stock that have been or are,
as such date, lost, stolen, destroyed or replaced or restricted as to transfer
(noting the text of the restrictive legends applicable thereto) or with
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respect to which a stop transfer order has been noted (such lists being herein
referred to as the "Lists").
As soon as practicable after the Effective Time, the Exchange Agent (as
defined below) will mail to each Miami Subs Shareholder (a) a notice advising
such holder of the effectiveness of the Merger and the applicable terms of the
exchange effected thereby, (b) a Letter of Transmittal with instructions, (c) a
self-addressed return envelope, (d) tax certification guidelines, and (e) any
other material deemed appropriate by Nathan's and Miami Subs.
This will confirm the appointment by Nathan's, Acquisition and Miami
Subs of American Stock Transfer & Trust Company as the exchange agent ("Exchange
Agent") as provided in the Merger Agreement and, in that capacity, the
authorization of the Exchange Agent to act as agent for the Miami Subs
Shareholders for the purpose of receiving from Nathan's the Shares and the
Warrants to be issued in exchange for shares of Miami Subs common stock and cash
to be paid in lieu of fractional Shares and transmitting the same to the Miami
Subs Shareholders upon satisfaction of the conditions set forth herein. Your
duties, liabilities and rights as Exchange Agent are as set forth herein and
will be governed, in addition, by the applicable terms and conditions of the
Merger Agreement.
In carrying out your duties as Exchange Agent, you are to act in
accordance with the following:
1. Examination of Letters of Transmittal. You are to examine Letters of
Transmittal, certificates representing shares of Miami Subs common stock and
other documents delivered or mailed to you by or for Miami Subs Shareholders to
ascertain, to the extent reasonably determined by you, whether:
(a) the Letters of Transmittal appear to be duly executed and
properly completed in accordance with the instructions set forth therein;
(b) the certificates for shares of Miami Subs common stock
appear to be properly surrendered and, if applicable, endorsed for transfer;
(c) the other documents, if any, used in the exchange appear
to be duly executed and properly completed and in the proper form; and
(d) the certificates for shares of Miami Subs common stock are
free of restrictions on transfer or stop orders, except as set forth on the
Lists.
In the event you ascertain that any Letter of Transmittal or other
document has been improperly completed or executed, that any of the certificates
for shares of Miami Subs common stock are not in proper form or some other
irregularity exists, you shall attempt to resolve
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promptly the irregularity and may use your best efforts to contact the
appropriate Miami Subs Shareholder by whatever means of communication you deem
most expedient to correct the irregularity and, upon consultation with Nathan's,
shall endeavor to take such other reasonable action as may be necessary to cause
such irregularity to be corrected, and the determination of any questions
referred to Nathan's or its counsel by you as to the validity, form and
eligibility, as well as the proper completion or execution of the Letters of
Transmittal and other documents, shall be final and binding, and you may rely
thereon as provided in Section 12(a) hereof. Any costs of contacting Miami Subs
Shareholders for the purposes of correcting irregularities shall be incurred for
the account of Nathan's.
2. Exchange of Shares. (a) As soon as practicable after the Effective
Time and after surrender to you of the certificates for shares of Miami Subs
common stock registered to a particular record holder or holders (and only after
surrender of all such certificates) and the return of a properly completed and
signed Letter of Transmittal relating thereto, you shall cause to be issued and
distributed to the holder(s) in whose name such certificates were registered (or
such other person as shall have been specified pursuant to the terms hereof) (i)
the whole number of Shares of Nathan's common stock issuable pursuant to the
Merger Agreement, registered in the name of such holder(s), (ii) cash to be paid
in lieu of the issuance of any fractional Shares and (iii) the whole number of
Warrants issuable pursuant to the Merger Agreement, registered in the name of
such holder(s). Prior to the Effective Time, Nathan's shall provide you the
amount of cash sufficient to make all payments of cash in lieu of fractional
Shares (the "Cash Amount").
(b) Until so surrendered, each certificate as to which a
Letter of Transmittal was received which immediately prior to the Effective Time
represented outstanding shares of Miami Subs common stock shall, at and after
the Effective Time, entitle the holder(s) thereof only to receive, upon
surrender of it and all other identically registered certificates, the
certificates representing Shares and Warrants and the Cash Amount contemplated
by paragraph (a) above.
(c) If any certificates representing Shares or Warrants are to
be issued in, or a Cash Amount is to be paid to, a name other than that in which
the certificate for shares of Miami Subs common stock is registered, it shall be
a condition of the issuance or payment thereof that the certificate so
surrendered shall be properly endorsed and otherwise in proper form for transfer
and that the person requesting such exchange shall pay to you any transfer or
other taxes required, or shall establish to your satisfaction that such tax has
been paid or is not payable.
(d) Certificates to be delivered by mail shall be forwarded by
first class mail under the Exchange Agent's blanket surety bond, which Nathan's
and Miami Subs understand protects Nathan's, Miami Subs, Acquisition and the
Exchange Agent from loss or liability arising by virtue of the non-receipt or
non-delivery of such certificates. It is understood that the market value of the
securities in any one shipment sent by first class mail under this procedure
will not be in excess of $250,000. In the event the market value shall exceed
$250,000, the envelope
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shall be mailed by registered mail and shall be insured separately for the
replacement value of its contents at the time of mailing.
3. Lost Stolen or Destroyed Certificates. In the event that any Miami
Subs Shareholder claims that any certificates representing shares of Miami Subs
common stock is lost, stolen or destroyed, the Exchange Agent shall mail to such
Miami Subs Shareholder an affidavit of loss and an indemnity bond. The Exchange
Agent shall make the distribution of certificates representing Shares and
Warrants and the Cash Amount only upon receipt of a properly completed affidavit
of loss and indemnity bond.
4. Reports. The Exchange Agent shall furnish, until otherwise notified,
monthly, or more frequently if requested by Nathan's or Miami Subs, reports to
Nathan's showing:
(a) the number of shares of Miami Subs common stock
surrendered and number of full Shares and Warrants issued in exchange therefor
(previous, herewith and total); and
(b) cash paid as part of the Cash Amount (previous, herewith
and total).
5. IRS Filings. You shall arrange to comply with all requirements under
the tax laws of the United States, including those relating to missing tax
identification numbers, and shall file any appropriate reports with the Internal
Revenue Service ("IRS") (e.g., 1099, 1099B, etc.). You may be required to deduct
31% from the Shares, Warrants and Cash Amount payable to holders who have not
supplied their correct taxpayer identification number or required certification.
To the extent that the Cash Amount is insufficient to pay such 31% you shall
sell Shares and/or Warrants sufficient to pay such amount and remit the balance
to any affected Miami Subs Shareholder. Such funds will be turned over to the
IRS by you.
6. Restricted Certificates of Miami Subs Common Stock. As set forth
above, Miami Subs will deliver to you the Lists which will set forth, among
other things, certificates representing shares of Miami Subs common stock that
have been or are, as of the date of such Lists, restricted as to transfer
(noting the text of the restrictive legends applicable thereto). Miami Subs
understands that the Lists will also set forth a legend or legends to be placed
on certificates representing Shares and Warrants to be issued in exchange for
such certificates, if any, and you shall place such legends on such certificates
as directed in the Lists. In the event a certificate bearing a restrictive
legend that is not included in the Lists is presented, you are instructed to
delay issuance of a certificate representing Shares and Warrants with respect
thereto pending instructions from Nathan's and Miami Subs.
7. Restricted Warrant Certificates. Each of the persons listed on
Schedule A hereto may be deemed an "affiliate" of Miami Subs within the meaning
of Rule 145 under the Securities Act of 1933, as amended, and applicable rules
and regulations promulgated by the Securities and Exchange Commission.
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You are hereby authorized and instructed to place on the face of each of
the certificates representing Shares and Warrants issued to each of the
aforesaid persons in exchange for the shares of Miami Subs common stock held by
them a legend reading in its entirety as follows:
In the case of Shares:
"THE SHARES REPRESENTED BY THIS CERTIFICATE WERE ISSUED IN A TRANSACTION
TO WHICH RULE 145 UNDER THE SECURITIES ACT OF 1933, AS AMENDED, APPLIES.
THESE SHARES MAY NOT BE SOLD, ASSIGNED, PLEDGED, HYPOTHECATED, OR
OTHERWISE TRANSFERRED WITHOUT AN EFFECTIVE REGISTRATION STATEMENT FOR
SUCH SHARES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND APPLICABLE
STATE SECURITIES LAWS OR AN OPINION OF COUNSEL SATISFACTORY TO THE
ISSUER OF THESE SHARES TO THE EFFECT THAT REGISTRATION IS NOT REQUIRED
UNDER SUCH ACT AND SUCH STATE SECURITIES LAWS."
In the case of Warrants:
"THE WARRANTS REPRESENTED BY THIS CERTIFICATE WERE ISSUED IN A
TRANSACTION TO WHICH RULE 000 XXXXX XXX XXXXXX XXXXXX SECURITIES ACT OF
1933, AS AMENDED, APPLIES. THESE WARRANTS AND THE UNDERLYING SHARES MAY
NOT BE SOLD, ASSIGNED, PLEDGED, HYPOTHECATED, OR OTHERWISE TRANSFERRED
WITHOUT AN EFFECTIVE REGISTRATION STATEMENT FOR SUCH WARRANTS AND THE
UNDERLYING SHARES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND
APPLICABLE STATE SECURITIES LAWS OR AN OPINION OF COUNSEL SATISFACTORY
TO THE ISSUER OF THESE WARRANTS TO THE EFFECT THAT REGISTRATION IS NOT
REQUIRED UNDER SUCH ACT AND SUCH STATE SECURITIES LAWS."
8. Copies of Documents. You shall take such action at Nathan's expense
as may from time to time be reasonably requested by Acquisition to furnish
copies of the Letter of Transmittal to persons designated by Nathan's.
9. Receipt of Disposal. Letters of Transmittal and telegrams, telexes,
facsimile transmissions and other materials submitted to you by Miami Subs
Shareholders shall be preserved by you until delivered or otherwise disposed of
in accordance with the instructions of Nathan's and Miami Subs at or prior to
the termination hereof.
10. Maintenance of Records. You will keep and maintain complete and
accurate ledgers showing all Shares and Warrants exchanged by you and payments
made by you. You are
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authorized to cooperate with and furnish information to any organization or its
legal representatives designated from time to time by Miami Subs Shareholders in
any manner reasonably requested by any of them in connection with the Merger and
exchange pursuant thereto.
11. Delivery of Surrendered Shares of Miami Subs Common Stock. All
certificates for shares of Miami Subs Common Stock surrendered to you shall be
retained by you and following exchange thereof shall be forwarded to Nathan's or
elsewhere as directed by them.
12. Exchange Agent's Duties and Obligations. As Exchange Agent, you:
(a) will have no duties or obligations other than those
specifically set forth herein or in the Merger Agreement, or may subsequently be
agreed to in writing by you, Nathan's, Acquisition and Miami Subs;
(b) will be regarded as making no representations or
warranties and having no responsibilities regarding the validity, sufficiency,
value or genuineness of any certificates for shares of Miami Subs common stock
surrendered to you or the shares of Miami Subs common stock represented thereby;
will not be required or requested to make any representations as to the validity
or genuineness of any certificates for Shares or Warrants or right to purchase
shares of Nathan's common stock represented by the Warrants; and will not be
responsible in any manner whatsoever for the correctness of the statements made
herein or in the Merger Agreement or in any document furnished to you by
Nathan's, Acquisition and Miami Subs;
(c) will not be obligated to institute or defend any action,
suit or legal proceeding in connection with the Merger, or your duties
hereunder, or take any other action which might in your judgment involve, or
result in, expense or liability to you, unless Nathan's, Acquisition or Miami
Subs shall first furnish you an indemnity satisfactory to you;
(d) may rely on, and shall be protected in acting upon, any
certificate, instrument, opinion, representation, notice, letter, telegram or
other document delivered to you and believed by you to be genuine and to have
been signed by the proper party or parties;
(e) may rely on, and shall be protected in acting upon,
written or oral instructions given by any officer of, or any party authorized
by, Nathan's, Acquisition or Miami Subs with respect to any matter relating to
your actions as Exchange Agent;
(f) may consult with counsel satisfactory to you (including
counsel for the Nathan's or Miami Subs), and the written advice or opinion of
such counsel shall be full and complete authorization and protection in the
respect of any action taken, suffered or omitted by you hereunder in good faith
and in accordance with such advice or opinion of such counsel; and
(g) may retain an agent or agents of your choice to assist you
in performing your duties and obligations hereunder, at your cost and without
relieving you of any liability hereunder.
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13. Termination of Exchange Agent's Duties and Obligations. This
agreement shall terminate upon demand by Nathan's, at which time all
undistributed certificates representing Shares and Warrants and amounts
deposited in respect of the Cash Amount shall be delivered by the Exchange Agent
to Nathan's.
14. Indemnification of Exchange Agent. Nathan's, Acquisition and Miami
Subs hereby jointly and severally covenant and agree to reimburse, indemnify and
hold you harmless from and against any and all claims, actions, judgments,
damages, losses, liabilities, costs, transfer or other taxes, and expenses
(including, without limitation, reasonable attorneys' fees and expenses)
incurred or suffered by you, or to which you may become subject and not
resulting from any negligence, bad faith or willful misconduct on your part,
arising out of or incident to this Agreement or the administration of your
duties hereunder, or arising out of or incident to your compliance with the
instructions set forth herein or with any instructions delivered to you pursuant
hereto, or as a result of defending yourself against any claim or liability
resulting from your actions as Exchange Agent, including any claim against you
by any tendering Miami Subs Shareholder, which covenant and agreement shall
survive the termination hereof. You hereby represent that you will notify
Nathan's, Acquisition and Miami Subs by letter, or facsimile confirmed by
letter, of any receipt by you of a written assertion of a claim against you, or
any action commenced against you, within five (5) business days after your
receipt of written notice of such assertion or your having been served with the
summons or other first legal process giving information as to the nature and
basis of any such assertion. However, your failure to so notify Nathan's,
Acquisition and Miami Subs shall not operate in any manner whatsoever to relieve
them from any liability which they may have on account of this Section 14 if no
prejudice occurs. At their election, Nathan's and Miami Subs may assume the
conduct of your defense in any such action or claim at their sole cost and
expense. In the event that Nathan's and Miami Subs elect to assume the defense
of any such action or claim and confirm to you in writing that the indemnity
provided for in this Section 14 applies to such action or claim, they shall not
be liable for the fees and expenses of any counsel thereafter retained by you.
15. Compensation and Expenses. For services rendered as Exchange Agent
hereunder, your fees are approved as set forth in the schedule attached to this
agreement.
16. Modification. Except as otherwise provided in Section 12(a) hereof,
(i) the instructions contained herein may be modified or supplemented only by
authorized representatives of each of Nathan's, Acquisition and Miami Subs, and
(ii) any inconsistency between this agreement and the Merger Agreement shall be
resolved in favor of the Merger Agreement.
17. Notices. Except as otherwise provided herein, no notice,
instruction or other communication by one party shall be binding upon the other
party unless hand delivered or sent by certified mail, return receipt requested,
nationally recognized overnight courier service or by facsimile transmission
electronically confirmed. Notice to you shall be sent or delivered to your
above-noted address or such other addresses as you shall hereafter designate in
writing in
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accordance herewith. Notice to Nathan's, Acquisition and Miami Subs shall be
sent or delivered to:
If to Nathan's or Acquisition:
0000 Xxx Xxxxxxx Xxxx
Xxxxxxxx, Xxx Xxxx 00000
Attention: Xxxxx Xxxxxxx, President
with a copy to:
Blau, Kramer, Wactlar & Xxxxxxxxx, P.C.
000 Xxxxxxx Xxxxxxxxxx
Xxxxxxx, XX 00000
Attention: Xxxxx X. Xxxxxxxxx, Esq.
If to Miami Subs:
0000 X.X. 00xx Xxxxxx
Xxxx Xxxxxxxxxx, Xxxxxxx 00000
Attention: Xxxxxx Xxxxxx, President
with a copy to:
Xxxxxxxxx Traurig. P.A.
0000 Xxxxxxxx Xxxxxx
Xxxxx, XX 00000
Attention: Xxxxxx X. Xxxxxxx, Esq.
18. Counterparts. This agreement may be executed in several
counterparts, each of which shall be an original and all of which shall
constitute but one and the same agreement.
19. Governing Law; Binding Upon Successors and Assigns. This agreement
shall be construed and enforced in accordance with the laws of the State of New
York, without regard to the principles thereof respecting conflicts of laws, and
shall inure to the benefit of, and the
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obligations created hereby shall be binding upon, the successors and assigns of
the parties hereto.
Executed this __ th day of July, 1999.
NATHAN'S FAMOUS, INC.
By: _________________________________
Name:
Title:
MIAMI ACQUISITION CORP.
By: _________________________________
Name:
Title:
MIAMI SUBS CORPORATION
By: _________________________________
Name:
Title:
Agreed To and Accepted:
AMERICAN STOCK TRANSFER AND TRUST COMPANY
By: _________________________________
Name:
Title:
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Schedule A
Xxxxxx Xxxxxx
Xxxxx Xxxx
Xxxxx Xxxxx
Xxxxx X. Xxxxxxxx
Xxxxx Xxxxx
Xxxxxx Xxxxxxx
Fees
$7,500
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