CONTRIBUTION
AGREEMENT 


 


THIS
CONTRIBUTION AGREEMENT (this “Agreement”) is entered into on October 20, 2017 (the “Effective Date”),
by and between Fog Cutter Capital Group Inc., a Maryland corporation (“FCCG”), Fog Cap Development LLC, an
Oregon limited liability company (“Fog Cap”), and FAT Brands Inc., a Delaware corporation and wholly owned
subsidiary of FCCG (“FAT”).


 


WHEREAS,
FAT intends to consummate an initial public offering of its common stock on the Effective Date (the “IPO”),
pursuant to an Offering Statement on Form 1-A that was initially filed with the Securities and Exchange Commission on September
6, 2017;


 


WHEREAS,
immediately prior to the issuance and sale of its common stock to investors in the IPO, FAT was a direct, wholly-owned subsidiary
of FCCG formed for the purpose of receiving the assets from FCCG described below and conducting the IPO;


 


WHEREAS,
in connection with the consummation of the IPO, FCCG and Fog Cap desire to contribute or cause to be contributed to FAT: (a) all
of their direct and indirect ownership interests in Fatburger North America, LLC, a Delaware limited liability company (successor
to Fatburger North America, Inc.) (“Fatburger”), and Buffalo’s Franchise Concepts, LLC, a Nevada limited
liability company (successor to Buffalo’s Franchise Concepts, Inc.) (“Buffalo’s”), in consideration
for common stock of FAT and an unsecured promissory note issued by FAT with a principal balance of $30,000,000, bearing interest
at a rate of 10.0% per annum, and maturing in five years from the Effective Date (the “Promissory Note”); and
(b) all of FCCG’s direct and indirect ownership interests in Ponderosa Franchising Company, a Delaware general partnership,
Bonanza Restaurant Company, a Delaware general partnership, Ponderosa International Development, Inc., a Delaware corporation,
and Puerto Rico Ponderosa, Inc., a Delaware corporation (collectively, the “Ponderosa Companies”), acquired
from Metromedia Company and its affiliate on or about the date hereof, in consideration for the payment by FAT of $10,550,000
to Metromedia Company and its affiliate (the “PondBon Payment”); and


 


WHEREAS,
immediately prior to the transactions described above, Fatburger and Buffalo’s were wholly-owned direct or indirect subsidiaries
of FCCG and Fog Cap, and the Ponderosa Companies were wholly-owned indirect subsidiaries of FCCG following the acquisition from
Metromedia Company.


 


NOW,
THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree
as follows:


 


Section
1 Contribution. Effective immediately following the acceptance by FAT of subscriptions from investors in the IPO (or as
soon thereafter as is practicable) (the “Effective Time”):


 


(a)
FCCG and Fog Cap each hereby contribute, assign, transfer, convey and deliver to FAT (or shall cause their respective subsidiaries
to contribute, assign, transfer, convey and deliver to FAT), and FAT hereby accepts, all right, title and interest held by FCCG,
Fog Cap or any of their direct or indirect subsidiaries in and to Fatburger and Buffalo’s as of the Effective Time or at
any time thereafter (the “FatBuff Ownership Interests”), in consideration for common stock of FAT and the execution
and delivery to FCCG of the Promissory Note; and


 




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(b)
FCCG hereby contributes, assigns, transfers, conveys and delivers to FAT (or shall cause its direct or indirect subsidiaries to
contribute, assign, transfer, convey and deliver to FAT), and FAT hereby accepts, all right, title and interest held by FCCG or
any of its direct or indirect subsidiaries in and to the Ponderosa Companies as of the Effective Time or at any time thereafter
(the “PondBon Ownership Interests”), in consideration for the PondBon Payment and common stock of FAT.


 


Section
2 Deliveries. In furtherance of the transactions contemplated by Section 1, the parties agree to execute and deliver,
and they will cause their respective subsidiaries to execute and deliver, such stock powers, assignments and other instruments
of transfer, conveyance and assignment as, and to the extent, necessary or convenient to evidence the transfer, conveyance and
assignment to FAT of the FatBuff Ownership Interests and PondBon Ownership Interests, and to complete and evidence the delivery
to FCCG of the Promissory Note and PondBon Payment.


 


Section
3 Transfer of Beneficial Ownership. 


 


(a)
The transfer of the FatBuff Ownership Interests and PondBon Ownership Interests will be effective as of the Effective Time, from
and after which time FAT will be the beneficial owner of the FatBuff Ownership Interests and PondBon Ownership Interests for all
purposes. It is the parties’ intent that all of the benefits and burdens of ownership of the FatBuff Ownership Interests
and PondBon Ownership Interests shall transfer to FAT at the Effective Time. To the extent that transfer of registered ownership
of the FatBuff Ownership Interests or PondBon Ownership Interests is not perfected at the Effective Time or would be contrary
to applicable law, the parties will use their commercially reasonable efforts to provide to, or cause to be provided to, FAT,
to the extent permitted by law, the rights and benefits associated with registered ownership of the FatBuff Ownership Interests
and PondBon Ownership Interests, and take such other actions as may reasonably be requested by FAT in order to place FAT insofar
as reasonably possible, in the same position as if FAT were the registered holder of the FatBuff Ownership Interests and PondBon
Ownership Interests as of the Effective Time. Without limiting the foregoing and in connection therewith, from and after the Effective
Time, FAT will have the right to (i) receive all dividends or distributions (liquidating or otherwise) associated with the FatBuff
Ownership Interests and PondBon Ownership Interests, or direct FCCG to deliver such dividends or distributions to the party of
its selection, (ii) sell, transfer or encumber, or direct FCCG to sell, transfer or encumber the FatBuff Ownership Interests and
PondBon Ownership Interests, and receive the proceeds therefrom, including any of the rights or privileges associated with the
FatBuff Ownership Interests and PondBon Ownership Interests, and (iii) vote the FatBuff Ownership Interests and PondBon Ownership
Interests, or direct FCCG to vote the FatBuff Ownership Interests and PondBon Ownership Interests as it instructs.


 




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(b)
In connection with the arrangement set forth in Section 3(a), and without limiting the foregoing, from and after the Effective
Time, to the extent that transfer of registered ownership of the FatBuff Ownership Interests or PondBon Ownership Interests is
not perfected at the Effective Time or would be contrary to applicable law, FCCG will (i) vote the FatBuff Ownership Interests
and PondBon Ownership Interests only as directed by FAT, (ii) observe all corporate formalities and filing requirements that may
have to be met with regard to the FatBuff Ownership Interests and PondBon Ownership Interests, (iii) forward to FAT, or any other
person identified by FAT, all dividends, distributions (liquidating or otherwise), and sale proceeds made with respect to the
FAT, (iv) sell, transfer or encumber the FatBuff Ownership Interests and PondBon Ownership Interests only as directed by FAT,
(v) immediately notify FAT upon attachment or attempted seizure of, or acquisition of any interest or assertion of any rights
in, FatBuff Ownership Interests and PondBon Ownership Interests by any third party and take appropriate action to defend against
such attachment and to protect FAT’s interest in the FatBuff Ownership Interests and PondBon Ownership Interests, and (vi)
be entitled to rely on the written instructions of the directors or officers of FAT, and such instructions will be deemed to have
been duly authorized by FAT.


 


Section
4 Consents; Further Assurances; Indemnification. 


 


(a)
In addition to the actions specifically provided for elsewhere in this Agreement, each of the parties shall use commercially reasonable
efforts, prior to and after the Effective Time, to take, or cause to be taken, all actions, and to do, or cause to be done, all
things, reasonably necessary, proper or advisable under applicable laws and agreements to consummate and make effective the transactions
contemplated by this Agreement; provided, however, that neither party shall be obligated under this Section 3 to pay any
consideration, grant any concession or incur any additional liability to any third party, other than ordinary and customary fees
paid to a governmental authority.


 


(b)
Without limiting the foregoing, prior to and after the Effective Time, each party shall cooperate with the other party, without
any further consideration, but at the expense of the requesting party, (i) to execute and deliver, or use reasonable best efforts
to execute and deliver, or cause to be executed and delivered, all instruments, including any instruments of conveyance, assignment
and transfer as such party may reasonably be requested to execute and deliver by the other party, (ii) to make, or cause to be
made, all filings with, and to obtain, or cause to be obtained, all consents of any governmental authority or any other person
under any permit, license, agreement, indenture or other instrument, (iii) to obtain, or cause to be obtained, any governmental
approvals or other consents required to effect the transactions contemplated hereby, and (iv) to take, or cause to be taken, all
such other actions as such Party may reasonably be requested to take by the other party from time to time, in each case consistent
with the terms of this Agreement, in order to effectuate the provisions and purposes of this Agreement and the transfers contemplated
by this Agreement.


 


(c)
FCCG shall defend, indemnify and hold harmless FAT and its subsidiaries and their respective successors, and each of their respective
directors and officers, employees, consultants and agents (each, an “Indemnified Party”) against, and agree
to hold each Indemnified Party harmless from, any and all actions, suits, proceedings, hearings, investigations, charges, complaints,
claims, demands, injunctions, judgments, orders, decrees, rulings, actual damages, dues, penalties, fines, costs, amounts paid
in settlement, liabilities, liens, actual losses, expenses, and fees, including court costs and reasonable attorneys’ fees
and expenses, but excluding lost profits, diminution in value, punitive, exemplary, special, indirect or consequential damages
(except those payable to third parties), incurred or suffered by any such Indemnified Party to the extent resulting or arising
from, or attributable to, any direct or indirect liability, indebtedness, obligation, cost, expense, claim, loss, damage, deficiency,
guaranty or endorsement of or by any person, absolute or contingent, asserted or unasserted, accrued or unaccrued, due or to become
due, liquidated or unliquidated, existing with respect to Fatburger, Buffalo’s or the FatBuff Ownership Interests as of
the Effective Date.


 




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Section
5 Miscellaneous. 


 


(a)
Counterparts. This Agreement may be executed in one or more counterparts, all of which shall be considered one and the
same agreement. Each party acknowledges that it and the other party may execute this Agreement by manual, stamp or mechanical
signature, and that delivery of an executed counterpart of a signature page to this Agreement (whether executed by manual, stamp
or mechanical signature) by facsimile or by email in portable document format (PDF) shall be effective as delivery of such executed
counterpart of this Agreement.


 


(b)
Governing Law. This Agreement (and any claims or disputes arising out of or related hereto or thereto or to the transactions
contemplated hereby or thereby or to the inducement of any party to enter herein or therein, whether for breach of contract, tortious
conduct or otherwise and whether predicated on common law, statute or otherwise) shall be governed by and construed and interpreted
in accordance with the laws of the State of California, irrespective of the choice of laws principles of the State of California,
including all matters of validity, construction, effect, enforceability, performance and remedies.


 


(c)
Severability. In the event that any one or more of the terms or provisions of this Agreement or the application thereof
to any person or circumstance is determined by a court of competent jurisdiction to be invalid, illegal or unenforceable in any
respect, such invalidity, illegality or unenforceability shall not affect any other term or provision of this Agreement, or the
application of such term or provision to persons or circumstances or in jurisdictions other than those as to which it has been
determined to be invalid, illegal or unenforceable, and the parties shall use their commercially reasonable efforts to substitute
one or more valid, legal and enforceable terms or provisions into this Agreement which, insofar as practicable, implement the
purposes and intent of the parties. Any term or provision of this Agreement held invalid or unenforceable only in part, degree
or within certain jurisdictions shall remain in full force and effect to the extent not held invalid or unenforceable to the extent
consistent with the intent of the parties as reflected by this Agreement. To the extent permitted by applicable law, each party
waives any term or provision of law which renders any term or provision of this Agreement to be invalid, illegal or unenforceable
in any respect.


 


(d)
Assigns. This Agreement shall inure to the benefit of the successors and assigns of the parties.


 


(e)
Entire Agreement; Amendment. This Agreement constitutes and contains the entire agreement of the parties with regard to
the subject matter hereof, and supersede any and all prior negotiations, correspondence, understandings, and agreements between
the parties respecting the subject matter hereof. This Agreement may not be amended without the written consent of each of the
parties hereto.


 


(f)
Headings. The headings appearing in this Agreement have been inserted for identification and reference purposes and shall
not by themselves determine the construction or interpretation of this Agreement.


 


[Signature
page follows]


 




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IN
WITNESS WHEREOF, each of the parties has caused this Contribution Agreement to be executed on its behalf by its duly authorized
representative effective as of the date first written above.


 


	 	FOG
    CUTTER CAPITAL GROUP INC.
	 	 	 
	 	By:
    	/s/
    Andrew Wiederhorn
	 	Name:	Andrew
    Wiederhorn
	 	Title:	Chief
    Executive Officer 


 


	 	FAT
    BRANDS INC.
	 	 	 
	 	By:
    	/s/
    Ron Roe
		Name:	Ron
    Roe
	 	Title:	Chief
    Financial Officer


 


	 	FOG
    CAP DEVELOPMENT LLC
	 	 	 
	 	By:
    	/s/
    Andrew Wiederhorn
	 	Name:
    	 
	 	Title:	 


 


[Signature
Page to Contribution Agreement] 


 




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