Nathan's Famous, Inc. Miami Subs Corporation Announce Definitive Merger Agreement.

WESTBURY, N.Y.--(BUSINESS WIRE)--Feb. 1, 1999--Nathan's Famous, Inc. (NASDAQ:NATH) and Miami Subs Corporation (NASDAQ:SUSCD) reported today that they have entered into a definitive merger agreement pursuant to which Nathan's will acquire the issued and outstanding shares of common stock of Miami Subs in exchange for common stock of Nathan's having a market price of $2.068 per share at closing but no more than one share of Nathan's common stock for each two shares of common stock of Miami Subs.

Shareholders of Miami Subs will also receive warrants to purchase Nathan's common stock which have an exercise price of $6.00 per share at the rate of one warrant for each four shares of Nathan's common stock received by Miami Subs shareholders. The merger is subject to certain conditions, including completion of due diligence, receipt of fairness opinions and approval by a majority of the stockholders of Nathan's and Miami Subs. In November 1998, Nathan's acquired, in a private transaction, approximately 30% of the outstanding common stock of Miami Subs.

Wayne Norbitz, the President of Nathan's stated: "We are enthusiastic about our potential acquisition of Miami Subs, which we believe represents a significant step towards realizing Nathan's growth strategy. The combined entity would double the revenue base of Nathan's and is expected to be accretive to earnings. We shall seek to exploit opportunities to market and develop each company's concept separately, as well as in concert, through co-branding opportunities. We will also seek to make margin improvements, leverage and enhance management and effectuate cost efficiencies."

"Nathan's is a natural partner for us," said Donald L. Perlyn, President of Miami Subs Grill. "It is not only a situation where we will enhance our product line, but one where we will enhance our financial strength, and development potential as well. It was clearly time to seek a strategic alliance for our Company, and I am certain we are making the right move by joining forces with Nathan's."

The Nathan's Famous retail system is currently comprised of 26 Company-owned units, 168 franchised or licensed units, and over 500 Branded Product points of distribution, located in twenty-nine states, the District of Columbia and two foreign countries, featuring Nathan's world famous all-beef hot dogs.

Miami Subs Corporation currently operates and franchises 194 restaurants located in 16 states, Puerto Rico, Peru, the Dominican Republic and Ecuador.

Except for historical information contained in this news release, the matters discussed are forward looking statements that involve risks and uncertainties. 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; capacity; the regulatory and trade environment; and the risk factors reported from time to time in Nathan's and Miami Subs' SEC reports.