SETTLEMENT AGREEMENT AND RELEASE
EXHIBIT
10.1
This
SETTLEMENT
AGREEMENT AND RELEASE
(this
“Agreement”) is made as of the date set forth below, by and between MIAMI
SUBS CAPITAL PARTNERS I, INC.,
a
Florida corporation with an office at 0000 XX 00xx
Xxxxxx,
Xxxx Xxxxxxxxxx, Xxxxxxx (“Miami Subs ”) and NATHAN’S
FAMOUS, INC.,
a
Delaware corporation (“Nathan’s”). Miami Subs and Nathan’s are collectively
referred to herein as the “Parties.”
WITNESSETH:
WHEREAS,
on or
about June 7, 2007, the Parties entered into a Stock Purchase Agreement (“SPA”),
pursuant to which Nathan’s sold all of the issued and outstanding shares of
stock of Miami Subs Corporation to Miami Subs for an aggregate purchase price
of
Three Million Two Hundred Fifty Thousand Dollars ($3,250,000.00), consisting
of
a cash payment of Eight Hundred Fifty Thousand Dollars ($850,000.00) and the
balance of Two Million Four Hundred Thousand Dollars ($2,400,000.00) to be
paid
pursuant to the terms of a Nonnegotiable Promissory Note (the “Note”); and
WHEREAS,
Xxxxx
Xxxxxxxx (“Xxxxxxxx”) and Xxxxxxxx Xxxxxx (“Austin”) each personally guaranteed
Miami Subs’ performance under the Note, pursuant to separate written guarantees
dated on or about June 7, 2007 (the “Xxxxxxxx Personal Guaranty” and the “Austin
Personal Guaranty”); and
WHEREAS,
a
dispute has arisen between the Parties concerning the SPA (the “Dispute”); and
WHEREAS,
due to
the significant cost, expense, and uncertainty in connection with potentially
litigating the Dispute, the Parties desire
to
resolve and settle in full all past, present or future claims that Miami Subs
had, has or may have against Nathan’s arising out of the SPA through the date of
execution of this Agreement;
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NOW,
THEREFORE,
the
Parties hereby agree to settle the Dispute upon the following terms and
conditions:
1. Delivery
of Amended Note:
Upon
the execution of this Agreement by all Parties,
Miami
Subs shall deliver to Nathan’s an Amended and Restated Promissory Note in the
form annexed hereto as Exhibit “A” (the “Amended Note”), pursuant to which the
term of the Note is extended and the monthly installment amount thereunder
reduced, as set forth in the Amended Note.
2. Delivery
of Reaffirmation of Guaranty:
Upon
the execution of this Agreement by all Parties, Xxxxxxxx and Xxxxxx shall
deliver to Nathan’s a Reaffirmation of Guaranty in the form annexed hereto as
Exhibit “B” (the “Reaffirmation of Guaranty”), pursuant to which Xxxxxxxx and
Austin personally guaranty the performance of Miami Subs under the Amended
Note,
as set forth in the Reaffirmation of Guaranty.
3. General
Release to Nathan’s:
For and
in
consideration of the good and valuable consideration identified herein, the
sufficiency of which Miami Subs hereby acknowledges, Miami Subs does hereby
forever release and discharge Nathan’s, its past, present and future
shareholders, officers, directors, representatives, agents, employees,
affiliated companies, related companies, subsidiaries, parents, predecessors,
successors, assigns (collectively, “RELEASEES”), and any other entities in which
the RELEASEES have or had any interest, from all claims, demands, causes of
action, suits, debts, dues, sums of money, accounts, reckonings, bonds, bills,
specialties, covenants, contracts, controversies, agreements, promises,
variances, trespasses, damages, judgments, extents, executions, and liabilities
of any kind whatsoever (upon any legal or equitable theory, whether contractual,
common law, statutory, federal, state, local or otherwise), that Miami Subs
and
each of its past, present and future shareholders, officers, directors,
representatives, agents, employees, affiliated companies, related companies,
subsidiaries, parents, predecessors, successors and assigns, (collectively
“RELEASORS”) ever had, now have or hereafter can, shall or may have against
RELEASEES, including any and all past, present or future claims arising
out of the SPA up to and including the date of execution of this
Agreement;
provided, however, that this Release is not intended to release the obligations
set forth in this Agreement.
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4. Miami
Subs Acknowledgment of Counsel:
Miami
Subs acknowledges
that for purposes of this settlement it has had the opportunity to be
represented by legal counsel of its own choice throughout all of the
negotiations preceding the execution of this Agreement; that it has had the
opportunity to consult with its attorneys prior to executing this Agreement;
that it has executed this Agreement only after it has had the opportunity to
consult with above-described independent legal counsel; that it has carefully
read this Agreement in its entirety; that it has had the opportunity to have
the
provisions of this Agreement explained to it by counsel and has had the
opportunity to have answered to its satisfaction any questions it has had with
regard to the meaning of any of the provisions of this Agreement; that it fully
understands the terms, conditions and significance of this Agreement, and that
it voluntarily consents to all of the terms and conditions contained in this
Agreement and is signing this Agreement voluntarily and of its own force and
will; and that it intends to abide by all the provisions of this
Agreement.
5. Nathan’s
Acknowledgment of Counsel:
Nathan’s acknowledges that for purposes of this settlement it has been
represented by Xxxxxxx Xxxxx, P.C., legal counsel of its own choice, throughout
all of the negotiations preceding the execution of this Agreement; that it
has
consulted with its attorneys prior to executing this Agreement; that it executed
this Agreement only after consultation with above-described independent legal
counsel; that it has carefully read this Agreement in its entirety; that it
had
the provisions of this Agreement explained to it by counsel who answered to
its
satisfaction any questions asked with regard to the meaning of any of the
provisions of this Agreement; that it fully understand the terms, conditions
and
significance of this Agreement, and that it voluntarily consent to all of the
terms and conditions contained in this Agreement and is signing this Agreement
voluntarily and of its own force and will; and that it intends to abide by
all
the provisions of this Agreement.
6. No
Admission of Wrongdoing:
The
Parties have entered into this Agreement for the purpose of avoiding the burden,
expense and inconvenience of litigation, and the making of this Agreement is
not
intended, and shall not be construed, as an admission that any of the Parties
breached any duty or contract, including without limitation the SPA; violated
any federal, state or local law (statutory or common law), ordinance or
regulation; has any liability; or committed any wrongdoing
whatsoever.
7. Non-Disparagement:
Miami
Subs shall not make or publish any statement (in verbal, written, electronic
or
any other form), or instigate, assist or participate in the making or
publication of any statement (in verbal, written, electronic or any other form),
that would libel, slander or disparage (whether or not such disparagement
constitutes libel or slander), or expose to hatred, contempt or ridicule,
Nathan’s, its products, services, affairs, or operation, and its past
or
present shareholders, officers, directors, representatives, agents or
employees.
8. Confidentiality:
Miami
Subs shall not, except as compelled by law, publicize or disclose to any person
the facts or circumstances relating to any asserted or potential claims against
Nathan’s, including those asserted in the Dispute, and any terms of this
Agreement. This covenant of confidentiality includes, but is not limited to,
the
claims Miami Subs has or could have asserted against Nathan’s, any purported
unlawful or wrongful conduct by Nathan’s, the terms of this Agreement, and Miami
Subs’ receipt of any consideration pursuant to this Agreement. Other than as
required by law, governmental agency or taxing authority, disclosure will not
be
made to anyone other than to discuss the terms hereof with the attorneys, tax
advisors and other professionals and senior corporate officers or directors
of
Miami Subs (all of whom must agree not to make any disclosure that Miami Subs
itself could not make). Upon receipt of any inquiry regarding the Dispute,
the
parties, or any representative thereof, shall state only that it has been
resolved to the satisfaction of the Parties. Miami Subs shall be liable for
all
damages caused by it or by anyone to whom it made disclosure if a court
determines that it or such person were to violate this confidentiality covenant
or any other provision of this Agreement.
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9. No
Further Action:
Miami
Subs represents and warrants that it is the only entity that has any rights,
claims or lawsuits against Nathan’s as a result of the acts, omissions and
conduct alleged in the Dispute. Miami Subs and the RELEASORS, further represent
and warrant that they have not and will not file or cause to be filed any
lawsuit in any jurisdiction, or make any claim or demand against the RELEASEES
or any other person or entity for any and all past, present or future claims
arising out of the SPA up to and including the date of execution of this
Agreement.
10. Injuries
Known through the Date Hereof:
Miami
Subs acknowledges that the consideration received under this Agreement is
intended to and does release and discharge the RELEASEES for any and all past,
present or future claims arising under the SPA as to which Miami Subs has
knowledge up to and including the date of execution of this Agreement. Miami
Subs hereby represents and warrants to Nathan’s that, as of the date hereof, it
has no knowledge of any existing, pending or threatened matter that could give
reasonably be expected to give rise to a future claim under the SPA. For the
purposes hereof, “knowledge of Miami Subs” means the knowledge of Xxxxxxxx
Xxxxxx, Xxxxxx Xxxxxx, Xxx Xxxxx, Xxxxx Xxxxxxxx, Xxxx Xxxxxx, Xxxxxxxx Xxxxxx,
Xxx Xxxxxx, Xxxxx Xxxxxx and Xxxxxx Xxxxxx following due inquiry, including
all
reasonable inquiries of any other individuals reasonably expected to have
knowledge of any claims that may arise, develop or be discovered in the future
under the SPA.
11. Change
in Facts Affecting Settlement:
It is
understood that the facts in respect of which this Agreement is made may
hereafter turn out to be other than or different from the facts in that
connection now known by the Parties or believed by any of the Parties to be
true. Each of the Parties expressly accepts and assumes the risks of the facts
turning out to be so different. Each of the Parties agrees that the foregoing
Agreement shall be in all respects effective and not subject to termination
or
rescission by any such difference in facts.
12. Choice
of Law/Venue:
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 venue for any disputes arising under
this Agreement shall be in the United States District Court for the Southern
District of New York located in New York County, New York, or if subject matter
jurisdiction is lacking in such Court, in the Supreme Court of the State of
New
York for the County of New York.
13. Section
Headings:
Section
headings are used herein for convenience of reference only and do not affect
the
meaning of any provision of this Agreement.
14. Severability:
If at
any time after the date of the execution of this Agreement, any provision of
this Agreement shall be held to be illegal, void or unenforceable by a court
of
competent jurisdiction, such provision shall be of no force and effect;
provided, however, that the illegality or unenforceability of such provision
shall have no effect upon, and shall not impair the enforceability of, any
other
provision of this Agreement.
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15. Entire
Agreement:
This
Agreement (which incorporates as covenants the representations and clauses
in
the introductory “Whereas” clauses) constitutes the entire agreement and
understanding between the Parties relating to the Dispute and the settlement
thereof, and
it
supersedes any and all prior representations, understandings and agreements,
whether written or verbal, except that the Parties’ obligations set forth in
Article 4 of the SPA shall survive the execution of this Agreement and shall
remain in full force and effect.
16. Changes
to Agreement:
This
Agreement may not be changed, amended, modified or terminated except by a
written instrument signed by each of the Parties.
17. Additional
Obligations:
Each of
the Parties agree to execute all such further documents, and to take all
such further action, as may be deemed necessary or advisable in order to
effectuate the intent and purpose of the foregoing Agreement.
18. Signatures:
This
Agreement may be executed in counterparts and/or by facsimile transmission,
each
of which when executed shall be deemed to be an original and all of which
together shall constitute a single instrument binding upon the Parties;
provided, however, that original signed documents shall also be provided. All
fully executed copies shall be considered duplicate originals, equally
admissible in evidence.
THE
TERMS OF THIS AGREEMENT, INCLUDING THE WAIVER AND GENERAL RELEASE, ARE THE
PRODUCT OF MUTUAL NEGOTIATION AND COMPROMISE BETWEEN THE PARTIES. THE PARTIES
HAVE READ AND FULLY CONSIDERED THIS AGREEMENT AND MUTUALLY DESIRE TO ENTER
INTO
THIS AGREEMENT.
EACH
PARTY HAS BEEN AFFORDED A REASONABLE TIME TO CONSIDER ITS RIGHTS AND OBLIGATIONS
UNDER THIS AGREEMENT AND TO CONSULT WITH AN ATTORNEY.
HAVING
ELECTED TO EXECUTE THIS AGREEMENT AFTER CONSULTING WITH LEGAL COUNSEL, TO
FULFILL THE PROMISES SET FORTH HEREIN, AND TO RECEIVE THEREBY THE CONSIDERATION
SET FORTH IN PARAGRAPHS “1” AND “2” HEREOF, MIAMI SUBS FREELY AND KNOWINGLY, AND
AFTER DUE CONSIDERATION, ENTERS INTO THIS AGREEMENT INTENDING TO WAIVE, SETTLE
AND RELEASE ALL CLAIMS IT HAS OR MIGHT HAVE AGAINST NATHAN’S.
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WHEREFORE,
the
Parties hereto have caused this Settlement Agreement and Release to be signed
on
the dates indicated below with the Agreement becoming effective upon the last
dated signature of the Parties.
MIAMI SUBS CAPITAL PARTNERS I, INC. | ||
|
|
|
By:/s/ Xxxx Xxxxxx | ||
Name: Xxxx Xxxxxx |
||
Title: President |
On
the
28th
day of
October 2008, before me, the undersigned, personally appeared Xxxx Xxxxxx,
the
President
of Miami
Subs Capital Partners I, Inc., personally known to me or proved to me on the
basis of satisfactory evidence to be the individual whose name is subscribed
to
the within instrument and acknowledged to me that he executed the same in his
capacity as the President
of Miami
Subs Capital Partners I, Inc., and that by his signature on the instrument,
the
individual, or the person upon his behalf of which the individual acted,
executed the instrument.
/s/ Xxxxxx Xxxxxx | ||
Notary Public |
(Signature
Page 1 of 2)
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WHEREFORE,
the
Parties hereto have caused this Settlement Agreement and Release to be signed
on
the dates indicated below with the Agreement becoming effective upon the last
dated signature of the Parties.
NATHAN’S FAMOUS, INC. | ||
|
|
|
By: /s/ Xxxx Xxxxxx | ||
Name: Xxxx Xxxxxx |
||
Title: CEO |
STATE OF NEW YORK | ) | |
) | ss.: | |
COUNTY
OF NASSAU
|
) |
On
the
31st
day of
October 2008, before me, the undersigned, personally appeared Xxxx
Xxxxxx,
the
CEO
of
Nathan’s Famous, Inc., personally known to me or proved to me on the basis of
satisfactory evidence to be the individual whose name is subscribed to the
within instrument and acknowledged to me that he executed the same in his
capacity as the CEO
of
Nathan’s Famous, Inc., and that by his signature on the instrument, the
individual, or the person upon his behalf of which the individual acted,
executed the instrument.
/s/ Xxxx Xxxxxx | ||
Notary Public |
(Signature
Page 2 of 2)
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