Document:

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                                                                   Exhibit 10.23

                          MASTER DISTRIBUTION AGREEMENT

THIS MASTER DISTRIBUTION AGREEMENT (the "AGREEMENT") is made as of the __ day of
December 1999 by and between U.S. Foodservice, Inc., d/b/a U.S. Foodservice(TM),
a Delaware corporation with its principal place of business located at 9755
Patuxent Woods Drive, Columbia, MD 21046, on its own behalf and on behalf of its
subsidiaries ("USF"), Nathan's Famous Systems, Inc. ("NFSI"), Nathan's Famous
Operating Corp. ("NFOC"), NF Roasters Corp. ("NFR"), and Miami Subs Corp.
("MSC"). As used in this Agreement, the term "CUSTOMER" is meant to refer to
NFSI, NFOC, NFR, and MSC, individually, together, and in any combination. The
Customer maintains its principal offices at 1400 Old Country Road, Westbury, NY
11590.

                                    RECITALS:

         A. WHEREAS, Customer owns and operates, and grants franchises to third
parties to own and operate, restaurants under the marks "Kenny Rogers Roasters",
"Miami Subs", and "Nathan's Famous";

         B. WHEREAS, USF operates a food distribution business;

         C. WHEREAS, USF wishes to be designated as a "Master Distributor" to
perform a substantial portion of the purchasing, warehousing, and distribution
functions for food and related non-food products for Customer's "Kenny Rogers
Roasters", "Miami Subs", and "Nathan's Famous" restaurant systems (the
"SYSTEMS"), and in turn, Customer wishes to so designate USF, all on the terms
and conditions set forth in this Agreement.

         NOW, THEREFORE, in consideration of the agreements and promises herein
contained, and other good and valuable consideration, the sufficiency and
receipt of which are hereby acknowledged, the parties agree as follows:

                                   AGREEMENT:

1)       THE APPOINTMENT.

         a)       Customer hereby appoints USF as its Master Distributor in the
                  United States, and USF hereby accepts such appointment. In
                  connection therewith, Customer agrees to purchase from USF,
                  and USF agrees to purchase, warehouse, sell and distribute to
                  Customer and to the Systems certain products in accordance
                  with the terms and conditions contained herein.

         b)       Customer agrees to designate to its franchisees that USF is
                  Customer's principal Master Distributor for food and related
                  non-food products (the "PRODUCT(S)") at "Kenny Rogers
                  Roasters", "Miami Subs", and "Nathan's Famous" restaurants
                  (collectively, the "RESTAURANTS"). As used in this Agreement
                  the term "FRANCHISEE(S)" refers to a franchisee or licensee
                  operating one or more Restaurants pursuant to a franchise
                  agreement or license agreement from NFSI, MSC, and/or NFR.
                  Also, as used in this Agreement, the term "COMPANY-OWNED
                  UNIT(S)" refers to a Restaurant owned and operated by the
                  Customer.

         c)       An initial list of the Restaurants to be serviced by USF are
                  outlined on ATTACHMENT A. USF agrees to render service under
                  the Master Distributor Program outlined in Attachment A to any

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                  Restaurant in the U.S., so long as the operator of that
                  Restaurant (whether the Customer or a Franchisee) meets the
                  requirements (e.g., payment on time and in accordance with
                  credit standards) set out in this Agreement.

         d)       USF understands and agrees that:

                  i)   Franchisees are permitted to buy Products from USF or
                       another source that has been approved by the Customer;

                  ii)  The prices and other terms set out under this Agreement
                       shall be offered to Franchisees, who shall be able to
                       purchase Products under the terms of the program outlined
                       in this Agreement or who may purchase the same Products
                       from USF or on terms and conditions more favorable to the
                       Franchisee (provided that Franchisee and USF mutually
                       agree);

                  iii) Purchases made by Franchisees for Restaurants shall count
                       toward the volume levels established under this Agreement
                       (notwithstanding Section 1.d.ii above);

                  iv)  The Customer does not guarantee that it will operate any
                       particular number of Company-Owned Units;

                  v)   The Customer makes no representations, is not responsible
                       for, does not guarantee, and shall not be in any manner
                       whatsoever responsible for its Franchisees' decision to
                       purchase (or not purchase) Products in any quantity;

                  vi)  Even though there are references to volumes in this
                       Agreement and the attachments, there have been no
                       representations or guarantees made regarding the sales
                       volume to be anticipated; and

                  vii) Except as specifically provided in Section 5.d below, the
                       Customer does not guarantee, and shall not be responsible
                       for, its Franchisees' financial obligations to USF or any
                       other party.

2.   PRODUCTS.

          a)   Product Categories. USF shall sell to Franchisees and Customer's
               Company-Owned Units (together, the "OPERATOR(S)") those Products
               ordered by the Operators and that are within the categories of
               products listed in Section 4 below, and such additional
               categories of products as USF and the Customer may agree to in
               writing (collectively, "SPECIFIED PRODUCTS"). With respect to the
               categories of products to be distributed to Operators, USF offers
               a wide variety of Private and Signature Brand Products that offer
               quality and value. A list of these items can be found on
               ATTACHMENT B.

          b)   Specified Products. USF will maintain an appropriate inventory of
               all Specified Products under the following conditions:

                  i)  Customer purchases from USF a minimum of five (5) cases
                      per week per item, per warehouse or twelve (12) turns per
                      year, per Distribution Center. (This requirement shall not
                      apply to parmesan cheese, feta cheese, chicken philly,
                      logo'ed sub bags, placemats, and deli paper.)

                  ii) A minimum of thirty (30) days written notice is required
                      for new products to be brought into USF inventory for
                      distribution. Every effort will be made to expedite
                      special request with a shorter turnaround notice.

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                  iii) Customer will notify USF at least fourteen (14) days in
                       advance of special promotions that may cause unusual or
                       excessive demand on inventory.

                  iv)  If USF does not presently transact business with a
                       supplier/packer designated by Customer, a complete
                       Continuing Guaranty and Indemnity Agreement from that
                       supplier/packer is required before any product is brought
                       into inventory. This process may take up to sixty (60)
                       days. The current insurance requirement under the
                       Continuing Guaranty and Indemnity Agreement of $2,000,000
                       is intended to protect Customer and USF from costs
                       associated with product defect and other third party acts
                       or omissions.

                  v)   USF will purchase Specified Products only from Customer
                       and/or manufacturers approved by the Customer ("APPROVED
                       SUPPLIERS"), and the arrangements between Approved
                       Suppliers and Customer will be honored by USF. If
                       Customer has contracts with a given manufacturer for
                       products not stocked by USF, Customer will give
                       consideration (in Customer's sole and absolute
                       determination, taking into account such matters as
                       customer preference and previous association of any
                       particular product with the Restaurants in the respective
                       System(s)) to similar products stocked by USF (but
                       Customer shall have no obligation to buy such products),
                       provided that the stocking manufacturer will equalize the
                       pricing (moreover, nothing in this Agreement shall
                       require Customer to violate the terms of any agreement
                       Customer has with a manufacturer).

          c.   Proprietary or Special Order Products. At Customer's direction,
               USF will maintain an appropriate inventory of proprietary or
               special order products ("SPECIFIED PRODUCTS") under the following
               circumstances:

                  i)   USF may obtain Specified Products only from the Customer
                       and/or Approved Suppliers, as directed by Customer.
                       Customer will be responsible for the disposition of items
                       showing no movement for thirty-five (35) days ("DEAD
                       INVENTORY"), if USF has sent Customer adequate prior
                       written notice that there is Dead Inventory. If such Dead
                       Inventory is not distributed within ten (10) days
                       thereafter, and the Dead Inventory is in good condition,
                       USF will be reimbursed for any loss on the cost of said
                       product that is returned to vendors or disposed of in any
                       manner other than distribution through normal channels.
                       If said product is distributed through normal channels,
                       the normal mark-up will apply. Customer will be
                       responsible for re-stocking charges or freight cost
                       incurred.

                  ii)  In the event this Agreement is terminated, Customer will
                       remain liable for proprietary or special order products
                       purchased at its direction. In such instance, Customer
                       will coordinate the transfer of such products to the new
                       distributor, or make full payment to USF for such
                       products, within thirty (30) days after the last delivery
                       to Customer.

                  iii) During each year of the Term during which this Agreement
                       is effective, USF agrees to purchase from NFSI an annual
                       minimum of Four Hundred Fifty Thousand Pounds (450,000)
                       pounds of Nathan's brand hot dogs ("BRANDED FRANKS") for
                       resale pursuant to NFSI's "Branded Product Program" (the
                       "PURCHASING COMMITMENT"). Purchases of Branded Franks by
                       Bradlee's department store shall not count toward USF's
                       Purchasing Commitment. USF and NFSI agree that each of
                       the following terms shall apply to the Purchasing
                       Commitment and USF's sale of hot dogs to Branded Product
                       Program:

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                  (1) If USF purchases more than the Purchasing Commitment in
                      any one year, the excess of the amount purchased over the
                      Purchasing Commitment shall be credited towards the
                      subsequent year's Purchasing Commitment.

                  (2) If this Agreement is terminated by USF prior to the
                      Expiration Date other than due to Breach (as defined
                      below) by NFSI (and assuming that the Purchasing
                      Commitment as applied towards the Term of the Agreement
                      has not otherwise been satisfied), USF shall, within
                      thirty (30) days following the termination date, pay to
                      NFSI an amount equal to the following: sixty-five cents
                      ($0.65) times the difference between the amount of Branded
                      Franks actually purchased during the year in which
                      termination occurs and the Purchasing Commitment for such
                      year.

                  (3) If this Agreement is terminated by USF prior to the
                      Expiration Date for Breach by NFSI, or if this Agreement
                      is terminated by NFSI for any reason, USF shall have no
                      further obligation with respect to the Purchasing
                      Commitment. USF will notify NFSI, in writing, of the last
                      shipment date.

                  (4) USF agrees to complete its Purchasing Commitment for the
                      first year of the Term of this Agreement no later than
                      March 24, 2000. Thereafter, the Purchasing Commitment will
                      be met in full-year increments (from one anniversary of
                      this Agreement to the next anniversary) over the course of
                      the remaining years of the Term of this Agreement. On or
                      before March 24, 2000, USF shall either: (a) completed its
                      Purchasing Commitment for the first full year of this
                      Agreement; or (b) paid NFSI the Differential Payment
                      (calculated as below) in addition to the purchases of
                      Branded Franks, if any, completed before March 24, 2000. A
                      sale will be only considered completed for the purpose of
                      this Section 2(c)(iii)(4) if the payment is made to NFSI
                      on or before May 1, 2000. The term "DIFFERENTIAL PAYMENT"
                      is intended to mean:

                                        Purchasing Commitment for 2000
                                    -   Purchases of Branded Franks
                                        Completed by March 24, 2000
                                        ____________________________
                                        Subtotal

                                    X   (sixty-five cents) $0.65
                                        ____________________________
                                    =   Differential Payment

                      Following either satisfaction of the Purchasing Commitment
                      for the first year of the Term or payment of the
                      Differential Payment by USF to NFSI, USF shall have no
                      further obligation with respect to the Purchasing
                      Commitment for the first year of the Term of this
                      Agreement

                  (5) At the end of the first Year of this Agreement, the
                      parties shall reconcile the amount of Branded Franks for
                      which purchases were completed during the first Year
                      compared to the Purchasing Commitment. If USF completed
                      its Purchasing Commitment during the first Year of the
                      Agreement, then NFSI shall refund any Differential Payment
                      USF may have paid.

                  (6) All offers and sales of hot dogs by USF shall be conducted
                      pursuant to the terms of the "Branded Product Program
                      Agreement" and BPP Distribution Agreement set forth as
                      Attachments [B(1) and B(2)] to this Agreement.

          d.   Customer will be required to complete the New Product/Special
               Order Notification and Agreement attached hereto as Attachment C
               for all proprietary or special order products.

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          e.   Substitutions. If a Specified Product is out of stock or
               otherwise can not be delivered to an Operator as ordered, the
               following procedures shall be followed:

                 i. A Designated Substitute Product shall be delivered to the
                    Operator. A "DESIGNATED SUBSTITUTE PRODUCT" is a product
                    identified by Customer's designated representative as a
                    permissible substitution for a specified Product.

                ii. If there is not a Designated Substitute Product for the
                    Specified Product ordered (or the Designated Substitute
                    Product is unavailable), a product of like or greater
                    quality will be delivered. Only if a Designated Substitute
                    Product or a product of like or greater quality cannot be
                    delivered and upon prior consent from the Operator, will a
                    product of lesser quality be delivered. USF will obtain the
                    Operator's permission as to all acceptable substitutions.

               iii. In the event of any substitutions, USF shall promptly
                    contact the Operator and advise the Operator of the
                    substitutions. Any substitutions other than a Designated
                    Substitute Product shall only be made with Operator's prior
                    approval.

                iv. All substitutions will be made at the same category mark-up
                    percentage if the substitution is a result of increased
                    movement without notification fourteen (14) days prior to
                    increased movement from the Customer. Should USF fail to
                    have adequate inventories to meet the Customer's normal
                    usage requirements, substitute products will be sold at the
                    same or less cost of the approved item.

                 v. USF shall re-ship out-of-stock Specified Items and critical
                    items by sending the out-of-stock item to the unit(s)
                    affected within twenty-four (24) hours, if necessary by
                    reputable overnight delivery service (e.g., FedEx).

            f. Title and Risk of Loss. Title to all goods shall pass upon
              delivery to the Operator's receiving dock and acceptance by the
              Operator's authorized representative, subject to rejection of
              certain items by notation on the invoice. All deliveries may be
              checked in jointly by the driver of the delivery vehicle and the
              Operator's authorized representative, both of whom shall note on
              the invoice any shortages and damaged or rejected goods. The
              Operator shall have forty-eight (48) hours from the time of
              delivery to notify USF: (i) of any concealed damage or rejected
              goods; or (ii) with respect to products not jointly checked in, to
              note any shortages, damages, or rejected goods. USF shall ensure
              that all billings reflect all shortages and damaged or rejected
              goods noted on the invoice. The Operator shall make arrangements
              through USF order department for any goods to be returned to USF.
              USF shall issue a receipt to the Operator for any goods picked up
              for return to ensure that Customer receives a proper credit
              therefor. USF shall bear all risk of loss, damage, or destruction
              until title passes to the Operator.

            g. USF shall distribute Products only to Restaurants that are
              approved by the Customer and, upon the Customer's written request,
              USF agrees to immediately discontinue the distribution of Products
              to any and all parties as directed by the Customer.

3.       SERVICE ARRANGEMENTS. USF shall maintain and operate an order entry
         system (the "OES") for processing orders, deliveries, and credit
         memoranda. Procedures with respect to the "OES" are included as
         ATTACHMENT D hereto. In addition:

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         a.       USF and each Operator shall mutually agree upon a delivery
                  schedule for the Operator.

         b.       USF's OES through USF's Customer units service departments or
                  USF's direct order entry system provides complete order
                  information, including confirmation and reservation of
                  inventory as well as notification of out of stock products,
                  prior to completion of an order.

         c.       A next day or skip-day order delivery schedule will be
                  mutually determined by USF and each Operator to achieve
                  optimum service levels.

         d.       USF must deliver to each unit within one (1) hour of the
                  pre-arranged and mutually-agreed upon delivery window. USF may
                  not deliver to any unit between the hours of 11AM and 2PM
                  (local time).

4.       PRICING STRUCTURE.

         a.       Cost. The price of Products sold to the Operators shall be
                  such that USF will derive a margin on sell equal to seven and
                  one-quarter percent (7.25%). The margin on sell is to be
                  derived using USF's invoice cost. The term "invoice cost" as
                  used in this Agreement is defined as the manufacturer's
                  (supplier or packer) delivered cost or f.o.b. unit price plus
                  normal freight (as hereinafter defined) to USF's distribution
                  center, less off-invoice discounts or off-invoice allowances.
                  Invoice cost shall not be adjusted for, and Customer shall not
                  be entitled to, promotional allowances, cash discounts, prompt
                  pay discounts, growth programs or any other supplier
                  incentives; provided that Customer (and, where applicable,
                  Operators) shall have the sole right to collect such financial
                  benefits (including without limitation rebates, advertising
                  support payments, program payments) as may be provided for
                  (and as may be negotiated in the future) under arrangements
                  between Customer and any such vendors). Normal freight is
                  defined as manufacturer or common carrier published rates
                  charged to deliver similar quantities of product for similar
                  distances. It is expressly acknowledged and agreed that USF
                  may utilize its internal logistics or branch generated
                  back-haul program, provided that freight cost charged to
                  Customer does not exceed normal freight (as defined above).
                  Where manufacturers handle their own freight, actual freight
                  invoiced cost will be used.

         b.       Price Guarantees and Adjustments.

                  1.       Except as in the next sentence, pricing will be
                           guaranteed for each entire month, with prices to take
                           effect on the first calendar day of each month.
                           Exceptions to monthly pricing will include eggs,
                           dairy, fresh produce, oil and oil based products,
                           seafood, meat, poultry and other items mutually
                           deemed as commodity in nature, which will be priced
                           weekly.

                  2.       In the event extreme or volatile market conditions
                           develop, USF may request pricing consideration from
                           Customer.

                  3.       Price increases and decreases will be limited to the
                           amount of cost change and/or freight changes only.
                           Any proposed increase in price on proprietary and
                           specified products must be as negotiated and approved
                           by Customer.

5.       FINANCIAL. Credit terms for Customer corporate units are net 30. All
         payments should be received 30 days from the date of invoice.

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         Any Franchisee buying from USF under the terms of this Agreement shall
         be required to complete a credit application. Credit terms for
         Franchisees will not exceed net 30 days, subject to ongoing credit
         approval. Franchisees not qualified for credit will be shipped on a
         C.O.D. basis.

         Notwithstanding anything contained herein or in any other agreement to
         the contrary, to the extent there is any change in the creditworthiness
         or financial capabilities of the Customer or any of its franchisees, or
         to the extent the Customer or any of its franchisees experience other
         circumstances which affect their ability to meet the payment terms
         established hereunder, as determined by USF in its good faith
         discretion, USF shall have the right to change credit terms as needed.

         a.       Volume Growth Incentives and Initial Payment. In recognition
                  of the services that Customer has provided (including without
                  limitation setting up the distribution arrangement outlined
                  under this Agreement), as well as the obligations undertaken
                  under Section 5.d below, USF agrees to make the following
                  payments:

                 1.   Within thirty (30) days following each annual anniversary
                      of the date on which the first order placed under this
                      Agreement was shipped by USF to the Operator (the
                      "ANNIVERSARY DATE"), USF shall pay to Customer a volume
                      incentive equal to one percent (1.00%) of the portion of
                      the prior year's total annual sales that exceeded the
                      previous year's total annual sales (the "VOLUME
                      INCENTIVE"). The base year sales amount (i.e., the amount
                      of purchases deemed as the basis for determining any
                      Volume Incentive to be earned during Year 1 of this
                      Agreement) shall be the current volume of annual sales
                      purchased by Restaurants and distributed through USF's
                      distribution centers located in California, Pennsylvania,
                      Nevada, Indiana, Connecticut and Oregon from January 1,
                      1999 through December 31, 1999.

                 2.   In addition, within thirty (30) days after the end of
                      every month during the term of this Agreement, USF shall
                      pay Customer a secondary volume inventive in an amount
                      equal to one-quarter or one percent (0.25%) of the total
                      sales during the preceding month.

         b.       In connection with the Volume Incentive, USF agrees to pay to
                  Customer, within thirty (30) days following the initial
                  shipment of product as provided for herein, a payment equal to
                  Two Hundred Fifty Thousand Dollars ($250,000) (the "INITIAL
                  PAYMENT"), which amount represents an advance of the amount
                  anticipated to be earned as a portion of the Volume Incentive.
                  The amount of the Initial Payment shall be deducted by USF
                  from any subsequent payment of the Volume Incentive earned by
                  Customer. The Initial Payment shall be earned at the rate of
                  one percent (1%) of sales made to Restaurants and shall be
                  fully-earned at such time, if any, when the aggregate amount
                  of USF's sales to the Restaurants equals Twenty-Five Million
                  Dollars ($25,000,000). If this Agreement is terminated (other
                  than by USF without cause) before the Initial Fee has been
                  fully-earned, as described above, then Customer shall refund
                  the unearned portion of the Initial Fee to USF within thirty
                  (30) days after the effective date of termination.

         c.       USF understands that information about the Customer can be
                  obtained by reviewing the NFI financial statements that are
                  publicly-available from the U.S. Securities and Exchange
                  Commission ("SEC") and on the SEC's website at
                  http://www.sec.gov.

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         d.       Miami Subs Guarantee. In order to induce the current Miami
                  Subs Franchisees to do business with USF, USF agrees to extend
                  credit to those Franchisees operating Miami Subs restaurants
                  on the date of this Agreement ("MS FRANCHISEES") on the same
                  terms and conditions as are being offered to said Franchisees
                  by their current distributor (the "SAME CREDIT TERMS", as
                  described in ATTACHMENT D to this Agreement). The following
                  provisions shall apply to said terms:

                  (i)     MSC shall only be obligated to extend the Same Credit
                          Terms to the MS Franchisees for the first six (6)
                          weeks following the date of this Agreement.

                  (ii)    MSC will guarantee to USF the payment obligations of
                          the MS Franchisees for said MS Franchisees' purchases
                          of Products from USF during the first six (6) weeks of
                          this Agreement, excluding any interest and/or
                          penalties (the "SIX WEEK GUARANTEE").

                  (iii)   At the end of the first year of this Agreement, MSC
                          shall pay USF the amount, if any, necessary to pay the
                          balance due on all sums due from MS Franchisees for
                          Products purchased during the Six Week Guarantee.

                  (iv)    USF shall use commercially reasonable efforts to
                          diligently collect all balances due from MS
                          Franchisees to which the Six Week Guarantee applies.

                  (v)     USF shall apply payments made by MS Franchisees to the
                          oldest invoice first.

                  (vi)    USF shall provide MSC, each month, with such written
                          reports as MSC may reasonably request relating to
                          obligations that are subject to the Six Week
                          Guarantee.

6.       ACCOUNT MANAGEMENT.

         a.       Personnel.

                  (vii)   USF will assign a Corporate Account Manager to
                          coordinate the management of Customer's needs.

                  (viii)  USF will also appoint a division Chain Account Manager
                          to coordinate activities and ensure program integrity
                          at the unit level.

                  (ix)    Each participating division will assign a
                          non-commissioned telephone Customer Service
                          Representative to Customer.

                  (x)     USF's corporate headquarters in Columbia, Maryland
                          will serve as a resource for all divisions involved in
                          this program.

         b.       Program Review. The parties shall conduct a quarterly,
                  semi-annual and/or annual review (as requested by the
                  Customer) to discuss and monitor the implementation of this
                  program and evaluate ways of improving its day to day
                  operation and achieving additional operational and cost
                  efficiencies. Participants in such reviews shall include
                  Customer's designated representative and USF's National
                  Account representatives, together with other representatives
                  of both parties as mutually agreed.

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         c.       MIS Capabilities. USF agrees to generate and make available to
                  Customer certain reports concerning USF's sales of the
                  Products and purchase/sale of Branded Franks.

                  Various computer generated reports are available to Customer
                  utilizing USF's data programs and formats. Three such reports
                  are described below and may be printed on a monthly and/or
                  quarterly basis.

                  *        PRODUCT USAGE
                           Ranks products ordered and shipped in descending
                           dollar sales. Provides number of cases
                           ordered/shipped, total dollar sales and average
                           delivered price of each product. Amount totals are
                           summarized.

                  *        PRODUCT USAGE BY VENDOR
                           Provides a recap of products shipped and the
                           associated vendor. Products are sequenced in
                           descending dollar sales with the number of cases
                           ordered/shipped reported.

                  *        MIS REPORTS

                           *  Product usage by Restaurant

                           *  Monthly cost report by Item

                           *  A report showing price changes as they occur

                           *  A quarterly case volume report by specific
                              vendor by product

                           *  A monthly BPP sales report by location and
                              dollars

7.       PRICE VERIFICATION. USF extends price verification privileges to the
         Customer's management. Price verification will be scheduled at a time
         that is mutually agreed upon by both parties. The following procedures
         apply to a price verification:

         a.       Customer will provide USF with at least four (4) weeks written
                  notice to include:

                  i.      All products to be verified; and

                  ii.     Time period for price verification, i.e., previous
                          month or previous week, depending on product in
                          question, not to exceed previous three (3) months.

         b.       Price verification is limited to twice annually and is limited
                  to twenty-five (25) items per verification.

         c.       Customer will keep confidential that information provided by
                  USF that is, in fact, confidential.

         d.       Credit memos for any adjustments determined by a price
                  verification process will be processed at Customer's direction
                  within one (1) week. Details of this procedure are listed in
                  ATTACHMENT E hereto.

8.       TERM AND TERMINATION.

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         a.       The "TERM" of this Agreement shall commence on the Effective
                  Date and shall continue for a period ending December 31, 2004,
                  unless sooner terminated in accordance with the provisions of
                  this Agreement.

         b.       Upon the occurrence of a Breach (as defined below) of this
                  Agreement, the non-breaching party may terminate this
                  Agreement, at its option and upon written notice of
                  termination to the breaching party, and except as provided
                  herein, may seek any and all remedies available at law or in
                  equity in connection with the Breach; provided, that the
                  breaching party shall have thirty (30) days (but only ten (10)
                  days for defaults with respect to payments) after receipt of
                  said notice of termination within which to remedy and cure the
                  default to the reasonable satisfaction of the non-breaching
                  party and, if said remedy or cure is so completed within the
                  thirty-day (or ten-day) period, termination at that time shall
                  be avoided.

         c.       A Breach of this Agreement is defined as USF's or Customer's,
                  as the case may be, failure to perform any material term,
                  covenant or agreement contained herein or in any document or
                  instrument delivered pursuant to or in connection with this
                  Agreement, which failure continues uncured for thirty (30)
                  days (but only ten (10) days for defaults with respect to
                  payments) after written notice of such failure has been
                  delivered by the non-breaching party; provided, however, that
                  if such failure has previously occurred during the preceding
                  six (6) months, the cure period shall be fifteen (15) days
                  (but only ten (10) days for defaults with respect to
                  payments).

         d.       Customer or USF may terminate this Agreement with sixty (60)
                  days written notice, without cause.

9.       CONFIDENTIALITY. USF and Customer agree that all information as to
         source, quantity, and price of goods and services shall be maintained
         in confidence and not be released to any private third party (other
         than a Franchisee, as well as each party's professional advisors) for
         any reason whatsoever other than pursuant to a validly issued subpoena
         from a court or governmental authority having jurisdiction over the
         party, pursuant to the rules, regulations or requirements of any state
         or federal agency or department or pursuant to a discovery request made
         under applicable court rules and to which the party is required to
         respond.

10.      WARRANTY AND LIMITATION OF LIABILITY. USF shall use reasonable efforts
         to obtain warranties or representations from its suppliers that the
         goods to be furnished hereunder are pure, unadulterated, and of first
         rate quality and that they shall be merchantable and fit for the
         ordinary purpose for which they are intended. EXCEPT AS SPECIFICALLY
         SET FORTH IN THIS SECTION 10, ALL WARRANTIES, GUARANTEES, AND
         REPRESENTATIONS, EITHER EXPRESSED OR IMPLIED, WHETHER ARISING UNDER ANY
         STATUTE, COMMON LAW, USAGE OF TRADE, COURSE OF DEALING OR OTHERWISE,
         INCLUDING IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A
         PARTICULAR PURPOSE, ARE HEREBY EXCLUDED. USF SHALL IN NO WAY BE LIABLE
         FOR ANY SPECIAL, INCIDENTAL, INDIRECT, CONSEQUENTIAL, EXEMPLARY OR
         RELIANCE DAMAGES, EVEN IF USF IS ADVISED OF THE POSSIBLITY OF SUCH
         DAMAGES.

11.      PRODUCT STANDARDS

         a.       Products shall be received, inspected, handled, stored,
                  retained, shipped, and delivered by USF in strict compliance
                  with all requirements of applicable local, state, and federal
                  laws. Upon its receipt of any citation issued by any
                  governmental or other regulatory authority

                                       10
<PAGE>   11

                  (or of process of citation issued by any court of law or
                  equity) which might result in an interruption in service to
                  any Restaurant, USF shall immediately provide both oral and
                  written notice thereof to the Customer and to all Restaurants
                  that may be affected thereby.

         b.       USF shall promptly submit to the Customer (or to an
                  independent laboratory, if so requested by the Customer), in
                  accordance with a testing schedule established from
                  time-to-time by the Customer, samples of any of the Products
                  handled by USF or samples of any ingredients or components
                  thereof.

         c.       The Customer (or its designated agents) shall have the right
                  (at the Customer's sole cost and expense) to inspect any
                  facilities and any delivery vehicles used by USF, at all
                  reasonable times, and with prior notice to USF (which may be
                  given in writing or by telephone, but which must be given not
                  less than three (3) hours before any such inspection). USF
                  shall fully cooperate with the Customer in connection with
                  such inspections. If the Customer invokes such right to
                  inspect, the Customer shall hold harmless and defend USF, its
                  employees, officers, directors, and agents from any and all
                  claims, losses, costs and expenses, including reasonable
                  attorneys' fees, relating to injuries sustained or damage
                  caused by the Customer, its agents, or its employees, while
                  conducting any such inspection, except to the extent caused by
                  the negligence or willful misconduct of USF.

         d.       USF agrees to defend, indemnify and hold harmless the
                  Customer, its Franchisees, and their respective past, present,
                  and future officers, directors, employees, and agents, from
                  all claims, demands, losses, damages, liabilities, costs and
                  expenses (including reasonable attorneys' fees) resulting
                  from, or alleged to have resulted from injury, illness, and/or
                  death to the extent such injury, illness, and/or death is
                  caused by the negligence and/or willful misconduct of USF,
                  unless (and then only to the extent) such injury, illness,
                  and/or death is caused by the Customer, its Approved
                  Suppliers, or Franchisees. The Customer shall advise USF in
                  the event the Customer receives notice that a claim has been
                  or may be filed with respect to a matter covered by this
                  indemnity and USF shall be given the opportunity to assume the
                  defense thereof at USF's sole expense. If USF fails to assume
                  such defense, the Customer may defend, settle, and litigate
                  the action in the manner it deems appropriate in its sole
                  discretion, and USF shall pay to the Customer all costs
                  (including reasonable attorneys' fees) incurred by the
                  Customer in effecting such defense, in addition to any sum
                  which the Customer may pay by reason of any settlement or
                  judgment against the Customer. The Customer's right to
                  indemnity hereunder shall exist notwithstanding that joint or
                  several liability may be imposed upon the Customer by statute,
                  ordinance, regulation, or judicial decision.

                                       11
<PAGE>   12

         e.       USF shall maintain, during the entire term of this Agreement
                  (and for such period thereafter as is necessary to provide the
                  coverages required hereunder for events having occurred during
                  the term of this Agreement), comprehensive liability
                  insurance, including adequate product liability coverage for
                  damage, injury, and/or death to persons and for damage and/or
                  injury to property. All such insurance policies shall contain
                  a provision that the Customer and its Franchisees be an
                  additional insured party thereunder, and that the Customer and
                  its Franchisees shall be entitled to recover under said
                  policies on any loss occasioned to the Customer, its
                  Franchisees, or their respective servants, agents, or
                  employees. USF shall promptly provide the Customer with
                  certificates of insurance evidencing such coverage and each
                  certificate shall indicate that the coverage represented
                  thereby shall not be cancelled nor modified until at least ten
                  (10) days prior written notice has been given to the Customer.

         f.       If it is deemed necessary by either the Customer or any of the
                  Approved Suppliers to recall from USF and/or from the
                  Restaurants any quantity of any of Products, either as a
                  result of failure of such Products to satisfy the proprietary
                  manufacturing specifications issued to Approved Suppliers by
                  the Customer (the "SPECIFICATIONS"), or for any other reason
                  bearing on the quality and/or safety of such Products, USF
                  shall comply diligently with all product recall procedures
                  then in effect and communicated to USF, as established from
                  time-to-time by the Customer and/or manufacturers. USF shall
                  not be required to bear the costs associated with the recall
                  of any Product unless such recall is the result of the
                  negligence of USF. In such event, USF agrees to bear all costs
                  and expenses incurred by it, and/or the Customer, and/or any
                  of the Approved Suppliers in complying with such recall
                  procedures, if (and then only to the extent) such recall is
                  the result of the negligence of USF. Recall procedures shall
                  be communicated to USF by either Customer or the relevant
                  Approved Supplier. If USF fails or refuses to comply with the
                  recall of such Products hereunder upon request by the
                  Customer, the Customer shall be authorized to take such action
                  as it deems necessary to recall such Products from the System
                  and USF shall promptly reimburse the Customer for its costs
                  and expenses (including, but not limited to, reasonable
                  attorneys' fees) incurred in such recall procedure to the
                  extent such recall is the result of the negligence of USF; any
                  such action taken by the Customer shall not relieve USF of its
                  other obligations hereunder.

         g.       USF shall not sell, offer to sell, or donate any Products that
                  are out-of-date, recalled, damaged, or otherwise unfit for
                  distribution to the System, for human or animal consumption.
                  USF shall remove all such Products from the Facilities,
                  delivery vehicles, and from Restaurants, and shall destroy the
                  same.

12.      NOTICE. Any and all notices required or permitted under this Agreement
         shall be in writing and shall be personally delivered, sent by
         registered mail, or by other means which affords the sender evidence of
         delivery, or of rejected delivery, to the respective parties at the
         addresses shown below, unless and until a different address has been
         designated by written notice to the other party. Any notice by a means
         which affords the sender evidence of delivery or rejected delivery
         shall be deemed to have been given at the date and time of receipt or
         rejected delivery. Neither party shall fail to accept delivery of a
         notice from the other party.

            TO Customer:                       TO USF:
            Nathan's Famous, Inc.              U.S. Foodservice
            1400 Old Country Road              9755 Patuxent Woods Drive
            Westbury, NY  11590                Columbia, MD  21046
            Attn:  President                   Attn:    Mr. Mark Natale

                                       12
<PAGE>   13

                                                Senior Vice President
                                                Business Development

                             With Copy to:
                                                U.S. Foodservice
                                                9755 Patuxent Woods Drive
                                                Columbia, MD  21046
                                                Attn:    David M. Abramson, Esq.
                                                Executive Vice President
                                                and General Counsel

         Copies of notices to the "copy" recipient(s) noted above shall not be
         considered when determining when notice has been given under this
         Agreement.

                                       13
<PAGE>   14

13       MISCELLANEOUS.

         a.       Entire Agreement. This Agreement (including Exhibits [A-D]
                  hereto) constitutes the entire agreement between the Customer
                  and USF, and supersedes any and all prior negotiations,
                  understandings, and/or agreements, oral or written, between
                  the parties hereto with respect to the subject matter hereof.
                  The parties are relying only on the words of this document in
                  deciding to enter into this Agreement. Neither this Agreement
                  nor any of its provisions may be waived, modified, or amended,
                  except by an instrument in writing signed by duly authorized
                  officer of the parties hereto. Where the consent of either
                  party is required hereunder, such consent shall not be deemed
                  given unless in written form and signed by a duly authorized
                  officer of the party whose consent is required.

         b.       The Customer's Trademarks. USF shall not use, in any manner
                  whatsoever, any of the tradenames, logos, trademarks, or
                  service marks owned by the Customer or associated with the
                  Systems, without the Customer's express prior written consent
                  as to each instance of use and the manner of such use. USF
                  acknowledges that any unauthorized use of the Customer's
                  tradenames, logos, trademarks, or service marks, or use
                  thereof in a manner inconsistent with the Customer's
                  permission, shall constitute an infringement of the Customer's
                  rights in and to said tradenames, logos, trademarks, or
                  service marks. Under no circumstances shall USF use any mark
                  or name of the Customer as a part of Distributor's trade name,
                  nor shall USF register or attempt to register any of the
                  Customer's tradenames, logos, trademarks, or service marks
                  with any government authority or as an internet domain name or
                  other electronic address or identifier.

         c.       Force Majeure. Neither party will be in default in the
                  performance of its obligations under this agreement if such
                  performance is prevented or delayed because of war,
                  hostilities, revolution, civil commotion, strike, labor
                  dispute, epidemic, shortage in supply, fire, wind, earthquake
                  or flood, use of any law, order, proclamation, regulation or
                  ordinance of any government, or of any subdivision thereof,
                  because of Acts of God or for any other cause, whether similar
                  or dissimilar to those enumerated, that is beyond the
                  reasonable control and without the fault or negligence of the
                  party whose performance is affected. If a force majeure event
                  prevents USF from supplying all of the product needs of its
                  Customer's, USF shall allocate such product as is available to
                  USF among its Customer's in such manner as USF reasonably
                  determines. No force majeure event shall excuse Customer from
                  its payment obligations contained herein.

         d.       Choice of Law. This Agreement shall be governed by and
                  construed and enforced in accordance with the laws of the
                  State of Maryland without reference to the conflicts of laws
                  principles thereof.

         e.       Attorneys' Fees. In the event this Agreement is breached, the
                  breaching party shall pay any and all reasonable attorneys'
                  fees and relevant costs incurred by the non-breaching party as
                  a result of the breach.

         f.       Assignment. The rights and responsibilities of each party
                  under this Agreement shall not be assigned, sold,
                  subcontracted, or otherwise transferred without the prior
                  written consent of the other party. In the event this
                  Agreement is assigned, the assignor shall in no event be
                  relieved of or be released from its obligations contained
                  herein.

                                       14
<PAGE>   15

         g.       No Agency. Nothing contained in this Agreement shall be
                  construed or interpreted as creating an agency, partnership,
                  co-partnership or joint venture relationship between the
                  parties. USF acknowledges that it is an independent contractor
                  and neither the Customer nor USF is or shall be construed as
                  an agent, joint venturer, franchisee, nor employee of the
                  other. USF shall have no authority to negotiate on Customer's
                  behalf, to bind or otherwise obligate the Customer in any
                  manner, nor shall USF represent to anyone that it has a right
                  to do any of these things.

         h.       Year 2000 Warranty.

                  i.       Products Warranty. USF represents and warrants to
                           Customer that all technology associated with the
                           account management, MIS systems, and otherwise used
                           by USF to support its performance under this
                           Agreement is Year 2000 Compliant. "YEAR 2000
                           COMPLIANT" means, unless otherwise stated in
                           specifications for the products that have been agreed
                           to and signed by the parties, that the technology
                           associated with the products, including, but not
                           limited to, information technology, embedded systems,
                           or any other electro-mechanical or processor-based
                           system, accurately processes, provides, and receives
                           date data from, into and between the twentieth and
                           twenty-first centuries, and the years 1999 and 2000,
                           including leap year calculations (which leap year
                           calculations must include, without limitation,
                           calculation of February 29, 2000 as a leap day).

                  ii.      Services Warranty. USF represents and warrants that
                           the provision of services under this Agreement shall
                           not be delayed, interrupted, degraded, or otherwise
                           adversely affected by the failure of any technology
                           used by USF, including, but not limited to,
                           information technology, embedded systems, or any
                           other electro-mechanical or processor-based system,
                           to accurately process, provide and receive data from,
                           into and between the twentieth and twenty-first
                           centuries, and the years 1999 and 2000, including
                           leap year calculations (which leap year calculations
                           must include, without limitation, calculation of
                           February 29, 2000 as a leap day).

         i.       The Customer and USF represent and warrant to the other that:

                  i.       It has all the necessary legal capacity, right,
                           power, and authority to enter into, execute, deliver,
                           carry out its obligations and exercise its rights,
                           and be bound by this Agreement.

                  ii.      Its execution and delivery of this Agreement and
                           performance of its obligations do not breach, and
                           will not result in a breach or violation of, any
                           agreement, lien, security interest, or understanding
                           or obligation to which said party is a party or by
                           which said party is bound.

                  iii.     The person signing this Agreement on its behalf, by
                           his/her signature below, is authorized to sign this
                           Agreement on behalf of said party, and to bind said
                           party to the terms hereof.

                                       15
<PAGE>   16

         NOW THEREFORE, the parties, intending to be legally bound, have entered
into this Agreement on the date first written above.

NATHAN'S FAMOUS OPERATING CORP.           U.S. FOODSERVICE, INC.

By: /s/ Wayne Norbitz, Pres.           By: /s/ Mark A. Natale
    ---------------------------           ----------------------------------
Name: Wayne Norbitz                    Name:  Mark A. Natale
     --------------------------        Title: Senior VP Business Development
Title: President
      -------------------------

NATHAN'S FAMOUS SYSTEMS, INC.

By: /s/ Wayne Norbitz, Pres.
   ----------------------------
Name: Wayne Norbitz
     --------------------------
Title: President
      -------------------------

NF ROASTERS CORP.

By: /s/ Richard Buckley, Pres.
   ----------------------------
Name: Richard Buckley
     --------------------------
Title: President
      -------------------------

MIAMI SUBS CORP.

By: /s/ Donald L. Perlyn
   ----------------------------
Name: Donald L. Perlyn
     --------------------------
Title: President and COO
      -------------------------

                                       16
<PAGE>   17

                                                                  ATTACHMENT "A"

                             LIST OF CUSTOMER UNITS

                                  SEE ATTACHED

                                       17
<PAGE>   18

                                                                  ATTACHMENT "B"

                            [U.S. FOODSERVICE(TM), LOGO]

                       PRIVATE & SIGNATURE BRAND PRODUCTS

                                       18
<PAGE>   19

                           U.S. FOODSERVICE(TM) BRANDS

ALLOWANCE(TM)
ALLOWANCE II(TM)

         Under the ALLOWANCE(TM) and ALLOWANCE II(TM) brands are found a sugar
         substitute (Allowance(TM)) and an artificial sweetener (Allowance
         II(TM)).

CHEF'S VARIETY(R)

         This brand offers value and a wide product selection for creating menus
         and recipes for almost any need. [CHEF'S VARIETY(R) LOGO]

HARVEST VALUE(R)

         Offering a wide product selection, HARVEST VALUE(R) is the quality
         source for fine ingredients at an extraordinary value. [HARVEST
         VALUE(R) LOGO]

MAGNIFRY(R)

         The MAGNIFRY(R) brand is associated with the marketing of a wide
         assortment of frying oils. [MAGNIFRY(R) LOGO]

MAGNIFRIES(TM)

         The MAGNIFRIES(TM) brand is associated with the marketing of prepared
         French fries.[MAGNIFRIES(TM) LOGO]

TO YOUR TASTE(R)

         The TO YOUR TASTE(R) brand encompasses a line of prepared foods
         including frozen entrees, salad dressings, soups and other prepared
         items. Each group has its distinct color combination. [TO YOUR TASTE(R)
         LOGO]

U.S.(TM) BLUE
U.S.(TM) RED

         With strict quality standards, U.S.(TM) BLUE & U.S.(TM) RED is packed
         to specifications that meet and exceed the competition. A complete
         selection of products is offered to provide the consistent quality of
         ingredients that is expected from U.S. Foodservice(TM). [U.S.
         FOODSERVICE(TM) LOGO]

U.S. FOODSERVICE CATTLEMAN'S CHOICE(TM)

         Under this label a wide selection of Prime and Choice grade beef
         products are available. [U.S. FOODSERVICE CATTLEMAN'S CHOICE(TM) LOGO]

[U.S. FOODSERVICE CATTLEMAN'S SELECTION(TM) LOGO]

                                       19
<PAGE>   20

U.S. FOODSERVICE CATTLEMAN'S SELECTION(TM)

         Very fine quality beef products are available under this brand.

                                       20
<PAGE>   21

                                SIGNATURE BRANDS
                 EXCLUSIVELY DISTRIBUTED BY U.S. FOODSERVICE(TM)

CROSS VALLEY FARMS(R)

         Under this brand are found top quality fresh produce and fresh salads
         and Grade A California frozen fruits and vegetables.
         [CROSS VALLEY FARMS LOGO]

EL PASADO AUTHENTIC MEXICAN CUISINE WITH A TOUCH OF THE PAST(TM)

         Authentic Mexican products featuring traditional food items and
         ingredients for this cuisine are marketed by El Pasado, Inc.
         [EL PASADO LOGO]

HARBOR BANKS(R)

         Under the HARBOR BANKS(R) brand are found a variety of fresh, canned
         and frozen seafood products.
         [HARBOR BANKS LOGO]

HILLTOP HEARTH(R)

         Under this brand are found a fine source of desserts and wholesome
         breads for all meals, along with a selection of bakery supplies from
         the Hilltop Hearth(R) Bakery.
         [HILLTOP HEARTH LOGO]

PATUXENT FARMS(R)

         A wide assortment of specialty meat products, including pork, lamb, and
         poultry, and dairy products can be found under the PATUXENT FARMS(R)
         brand.
         [PATUXENT FARMS LOGO]

RITUALS(R)

         A complete line of coffee and coffee products for the foodservice and
         retail industries display the RITUALS(R) brand name. This program
         includes coffee-related products, equipment, and service from the
         Rituals(R) Coffee Company.
         [RITUALS LOGO]

ROSELI(R)

         [ROSELI LOGO]

                                       21
<PAGE>   22
         The best Italian products are marketed under the ROSELI(R) brand to
         answer the specialized need for foundational ingredients in Italian
         menus from the Roseli(R) Products Corporation.

                                       22
<PAGE>   23

                                                                  ATTACHMENT "C"

                            [U.S. FOODSERVICE LOGO]

              NEW PRODUCT/SPECIAL ORDER NOTIFICATION AND AGREEMENT

_____________________________ (Customer) requests U.S. Foodservice, Inc., d/b/a
U.S. Foodservice ("USF") to stock on a regular basis the following product which
is not presently in inventory at USF's distribution center:

Product:_____________________________________Pack Size:_________________________

Mfg. ID Code:_______________________________Cost:______________________________

Minimum Shipment:___________________________Case Cube:_________________________

Case Gross Wgt.:_____________________________Net Wgt.:__________________________

Date Product Needed:______________________Sequence No.:_________________________

Initial Order:_____________________ Estimated Monthly Usage:___________________

If replacing another product, what item:_____________________Code #____________

Is this product restricted to selective units?______If so, please identify:_____

USF Division Involved:_________________Representative:_________________________

Order Guides Affected:  Hotels____ F.S.M._______ Hospital_______ Education______

Additional Instructions:

Customer will be responsible for the disposition of Dead Inventory in accordance
with the provisions of Section 2.c.i of this Agreement.

                                      _____________________________
                                      By:
                                      Its:

                                       23
<PAGE>   24
                                                                  ATTACHMENT "E"

                            [U.S. FOODSERVICE LOGO]

                              OPERATING PROCEDURES

                            FOODSERVICE DISTRIBUTION
                                     PROGRAM
                                       FOR

                              NATHAN'S FAMOUS, INC.
                               NF OPERATING CORP.
                                NF ROASTERS CORP.
                                MIAMI SUBS CORP.

                                       24
<PAGE>   25

                    ORDERING, DELIVERY, RECEIVING PROCEDURES

                               ORDERING PROCEDURES

   1. To facilitate ordering, a pre-printed, standardized order/inventory
      control form will be provided for those products/categories so defined and
      distributed at the beginning of each month. All weekly price changes will
      be mailed, faxed or electronically sent to your units.

   2. Your USF Customer Service Representative will initiate the order process
      with each unit by calling your unit at a predetermined order day and hour.
      Please have your orders ready to allow for proper processing.

   3. It assists USF in the scheduling of our vehicles when you order a
      "delivery to delivery" consistent number of cases, as business permits.

   4. The following ordering procedures should be used when placing your orders.

         a.       Confirm the date of the current order form and control number.
                  Your order guide control number is very important.

         b.       Order by line item number.

         c.       State quantity desired.

         d.       The Customer Service Representative will verify your order by:

                           -        Recapping the order back by giving line
                                    number, product and quantity; or

                           -        Giving only total lines and cases.

         e.       Substitutions will be offered when there are out of stocks.

         f.       Verify the expected delivery dates for the order.

   5. ORDER DAY (S)                ORDER TIME (S)              DELIVERY DAY (S)

      _____________               _______________

      _____________               _______________

      _____________               _______________

                                       25
<PAGE>   26

                    ORDERING, DELIVERY, RECEIVING PROCEDURES

                               ORDERING PROCEDURES
                                   (CONTINUED)

   6. Order dates that fall on a holiday will be scheduled by prior arrangements
      with Customer and USF. Notification of holiday delivery schedules will be
      given prior to the holiday.

   7. The Branch Account Manager is responsible for coordinating issues or
      changes to order schedules.

                               DELIVERY PROCEDURE

   1. Your delivery will be made by USF in accordance with a pre-arranged
      delivery schedule by Customer and USF.

   2. At the time of delivery, either the Unit Manager, the assistant Manager or
      a designated person should receive the shipment and sign for the product.

   3. Delivery dates that fall in a holiday week will be rescheduled by prior
      arrangements with USF at least two weeks in advance.

   4. The Branch Account Manager is responsible to coordinate issues or changes
      to delivery schedules.

                              RECEIVING PROCEDURES

   1. You will receive a completely priced extended original and two (2)
      duplicate copies of your invoice with your order, which should be checked
      by an authorized person upon receipt.

   2. All copies of the invoice must be signed. The driver will keep one (1)
      duplicate copy and you are to retain the original and one (1) duplicate
      for your records.

   3. Freezer and refrigerated products should be stored immediately upon
      receipt.

   4. Make sure that all cases are counted before you sign the invoice. Once you
      have signed for a specific quantity of cases and the driver has left the
      premises, the shipment is your responsibility. You will not be given
      credit for any shortages once the invoice has been signed and the driver
      has gone.

                                       26
<PAGE>   27

                    ORDERING, DELIVERY, RECEIVING PROCEDURES

                              RECEIVING PROCEDURES
                                   (CONTINUED)

   5. Please assist in providing a clear path for the truck to gain entrance to
      the designated loading area.

   6. Due to insurance requirements and your own safety, Customer employees are
      not permitted on the USF truck.

                              UNLOADING PROCEDURES

   1. The driver will unload and place all orders in designated areas.

   2. The driver is not responsible for placing cases on storage shelves.

                                PAYMENTS-CREDITS

                            SHORTAGES/VISIBLE DAMAGE

   1. At the time of delivery, should any product ordered be shorted or damaged,
      the driver will issue an instant credit by notation on the original
      invoice of shortages, damaged or returned goods.

   2.

                                CONCEALED DAMAGE

If you should discover damaged merchandise after the driver leaves, you should
notify your USF Customer Service Representative when placing your next order.
Damaged or defective merchandise should not be disposed of as we may need to
inspect.

Please indicate the following:

                  1.       Invoice number under which the product was delivered.
                  2.       Product code number.
                  3.       Quantity of item.
                  4.       Price of product delivered.
                  5.       Description of product.

<PAGE>   28
                    ORDERING, DELIVERY, RECEIVING PROCEDURES

                             PICK-UPS AND/OR RETURNS

   1. Pick-ups and/or returns may occasionally be necessary. In order for credit
      to be issued, product must be in the original shipping carton and in
      reasonable condition, unless there is concealed damage. In the event that
      a pick-up and/or returns are in order, advise the Customer Service
      Representative at the time the next order is placed. Be prepared to
      provide the following information:

         a. Reason for the return. (Concealed damage to the product, etc.)

         b. Invoice number for the delivered product.

         c. Product code number, quantity, price and description.

                       OUT-OF-STOCKS/SHORTS/SUBSTITUTIONS

Contact the Customer Service Representative so the corrective steps can be taken

All credit memos will be processed at direction within one (1) week.

            WE THANK YOU FOR THE OPPORTUNITY TO PROVIDE YOU WITH THE TYPE OF
            SERVICE YOU HAVE COME TO KNOW AND EXPECT.

<PAGE>   29
                            [U.S. FOODSERVICE LOGO]

                   USF'S GENERAL CREDIT POLICY AND PROCEDURES

         THIS IS NOT TO BE ATTACHED TO THE AGREEMENT - DIVISIONS MAY ADD THE
      APPROPRIATE DEFINITION FOR CREDIT TERMS (SECTION 5) TO BE APPLIED TO A
      GIVEN
                                    CUSTOMER

<PAGE>   30
                                 Terms of Sale:

The herein established Terms of Sale for Customer will be followed as applied to
all transactions with Customer. All requests for terms which are different from
stated terms must be made through USF's Corporate Credit Manager.

After completing a thorough credit evaluation, the division Credit Manager is
authorized to determine the Terms of Sale on an account-by-account basis.

C.O.D. - Cash  Code (01)
The Customer must pay the driver with cash, certified check or money order when
the order is delivered.

C.O.D. - Check Code (02)
The Customer must pay the driver with cash or by check when the order is
delivered.

C.O.D. - Customer Request Code (03)
The Customer may charge one order. Payment for the order must be received when
the salesman takes the next order or when the driver makes his next delivery,
providing that takes place within 5 working days.

Weekly Code (07)
All merchandise purchased in one week is due and payable on Monday of the
following week.

Semi-Weekly Code (05)
Payment for Customer purchases from the 1st to the 15th of the month will be
received by the 20th of the month. Payment for Customer purchases from the 16th
to the end of the month will be received by the 5th of the following month.

Bi-Weekly Code (06)
Payment for Customer purchases for the first two weeks will be received by the
end of the third week. Thereafter, bi-weekly payments will be received for the
corresponding prior two weeks purchases.

Monthly Code (04)
All invoices for the month are due and payable by the 10th of the following
month.

Weekly, Net 21 Code (21)
Payment for Customer purchases of the first week are to be received by the end
of the third week. Payment for purchases of the second week will be received by
the end of the fourth week. Thereafter, weekly payments will be based on the
established pattern.

Weekly, Net 31 Code (30)
Payment for Customer purchases of the first week are to be received by the end
of the fourth week. Payment for purchases of the second week will be received by
the end of the fifth week. Thereafter, weekly payments will be based on the
established pattern.

Net 14 Days  Code (50)
The payment for an invoice is due 13 days after the invoice date.
<PAGE>   31

Net 21 Days Code (51)
The payment for an invoice is due 20 days after the invoice date.

Net 28 Days Code (52)
The payment for an invoice is due 27 days after the invoice date.

Net 30 Days Code (53)
The payment for an invoice is due 29 days after the invoice date.

Defined terms:

SYSTEMS shall mean the "Kenny Rogers Roasters", "Miami Subs", and "Nathan's
Famous" franchise and company-owned system of restaurants.

RESTAURANT shall mean a "Kenny Rogers Roasters", "Miami Subs", or "Nathan's
Famous" franchised or licensed restaurant.

FRANCHISEE shall mean a licensee or franchisee that operates a Restaurant under
the applicable System.<PAGE>   1

                                                                 EXHIBIT 10.24

                              EMPLOYMENT AGREEMENT

THIS EMPLOYMENT AGREEMENT (this "Agreement"), made and entered into as of
January 1, 2000 (the "Effective Date"), by and between Nathan's Famous, Inc., a
Delaware corporation, with its principal office located at 1400 Old Country
Road, Westbury, New York 11590 (together with its successors and assigns
permitted under this Agreement, "Nathan's") and Howard M. Lorber, who resides at
8061 Fisher Island, Miami, Florida 33109 ("Lorber"), amends and restates in its
entirety the original agreement made and entered into as of November 8, 1993
between Nathan's and Lorber, as subsequently amended through the date hereof
(the "Prior Agreement").

                                   WITNESSETH:

      WHEREAS, Nathans' has determined that it is in the best interests of
Nathan's and its stockholders to continue to employ Lorber and to set forth in
this Agreement the obligations and duties of both Nathan's and Lorber; and

      WHEREAS, Nathan's wishes to assure itself of the services of Lorber for
the period hereinafter provided, and Lorber is willing to be employed by
Nathan's for said period, upon the terms and conditions provided in this
Agreement;

      NOW, THEREFORE, in consideration of the premises and mutual covenants
contained herein and for other good and valuable consideration, the receipt of
which is mutually acknowledged, Nathan's and Lorber (individually a "Party" and
together the "Parties") agree as follows:

1.    DEFINITIONS.

     (a)    "BENEFICIARY" shall mean the person or persons named by Lorber
pursuant to Section 19 below or, in the event that no such person is named who
survives Lorber, his estate.

<PAGE>   2

     (b)    "BOARD" shall mean the Board of Directors of Nathan's.

     (c)    "CAUSE" shall mean:

          (i)  Lorber's conviction of a felony involving an act or acts of
dishonesty on his part and resulting or intended to result directly or
indirectly in gain or personal enrichment at the expense of Nathan's;

         (ii)  willful and continued failure of Lorber to perform his
obligations under this Agreement, resulting in demonstrable material economic
harm to Nathan's; or

        (iii)  a material breach by Lorber of the provisions of Sections 16 or
17 below to the demonstrable and material detriment of Nathan's.

        Notwithstanding the foregoing, in no event shall Lorber's failure to
perform the duties associated with his position caused by his mental or physical
disability constitute Cause for his termination.

        For purposes of this Section 1(c), no act or failure to act on the part
of Lorber shall be considered "willful" unless it is done, or omitted to be
done, by him in bad faith or without reasonable belief that his action or
omission was in the best interests of Nathan's. Any act or failure to act based
upon authority given pursuant to a resolution adopted by the Board or based upon
the advice of counsel for Nathan's shall be conclusively presumed to be done, or
omitted to be done, by Lorber in good faith and in the best interests of
Nathan's.

     (d)    "CHANGE IN CONTROL" shall mean the occurrence of any of the
following events:

          (I)  the acquisition by any individual, entity or group (within the
meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934
as amended (the "Exchange Act") (a "Person") of beneficial ownership (within the
meaning of Rule 13d-3 promulgated under the Exchange Act) of voting

<PAGE>   3

securities of Nathan's when such acquisition causes such Person to own 15
percent or more of the combined voting power of the then outstanding voting
securities of Nathan's entitled to vote generally in the election of directors
(the "Outstanding Nathan's Voting Securities"); provided, however, that for
purposes of this subsection (I), the following acquisitions shall not be deemed
to result in a Change in Control: (A) any acquisition directly from Nathan's,
(B) any acquisition by Nathan's, (C) any acquisition by any employee benefit
plan (or related trust) sponsored or maintained by Nathan's or any corporation
controlled by Nathan's or (D) any acquisition pursuant to a transaction that
complies with clauses (A), (B) and (C) of subsection (iii) below; and provided,
further, that if any Person's beneficial ownership of the Outstanding Nathan's
Voting Securities reaches or exceeds 15 percent as a result of a transaction
described in clause (A) or (B) above, and such Person subsequently acquires
beneficial ownership of additional voting securities of Nathan's, such
subsequent acquisition shall be treated as an acquisition that causes such
Person to own 15 percent or more of the Outstanding Nathan's Voting Securities;
or

         (ii) individuals who, as of the Effective Date, constitute the Board
(the "Incumbent Board") cease for any reason to constitute at least a majority
of the Board; provided, however, that any individual becoming a director
subsequent to the Effective Date whose election, or nomination for election by
Nathan's stockholders, was approved by a vote of at least a majority of the
directors then comprising the Incumbent Board shall be considered as though such
individual were a member of the Incumbent Board, but excluding for this purpose
any such individual whose initial assumption of office occurs as a result of an
actual or threatened election contest with respect to the election or removal of
directors or other actual or threatened solicitation of proxies or consents by
or on behalf of a Person other than the Board; or

        (iii) consummation of a reorganization, merger or consolidation or sale
or other disposition of all or substantially all of the assets of Nathan's or
the acquisition of assets of another entity ("Business Combination"); excluding,
however, such a Business Combination pursuant to which (A) all or substantially
all of the individuals and entities who were the beneficial owners of the
Outstanding Nathan's Voting Securities immediately prior to such Business
Combination beneficially own, directly or indirectly, more than 60 percent of,
respectively, the then outstanding shares of common stock or the combined voting
power of the then outstanding voting securities entitled to vote generally in
the election of directors, as the case may be, of the corporation resulting from
such Business Combination (including, without limitation, a corporation that as
a result of such transaction owns Nathan's or all or substantially all of
Nathan's assets either directly or through one or more subsidiaries) in
substantially the same proportions as their ownership, immediately prior to such
Business Combination of the Outstanding Nathan's Voting Securities, (B) no
Person (excluding any employee benefit plan (or related trust) of Nathan's or
such corporation resulting from such Business Combination) beneficially owns,
directly or indirectly, 15 percent or more of, respectively, the then
outstanding shares of common stock of the corporation resulting from such
Business Combination or the combined voting power of the then outstanding voting
securities of such corporation except to the extent that such ownership existed
prior to the Business Combination and (C) at least a majority of the members of
the board of directors of the corporation resulting from such Business
Combination were members of the Incumbent Board at the time of the execution of
the initial agreement, or of the action of the Board, providing for such
Business Combination; or

<PAGE>   4

         (iv) approval by the stockholders of Nathan's of a complete
liquidation or dissolution of the Company.

     (e) "CODE" shall mean the Internal Revenue Code of 1986, as amended from
time to time.

     (f) "COMMITTEE" shall mean the Compensation Committee of the Board.

     (g) "CONSOLIDATED PRETAX EARNINGS" of the Company shall mean, with respect
to any fiscal year, the net consolidated income, if any, of Nathan's for such
fiscal year as set forth in the audited, consolidated financial statements of
Nathan's and its subsidiaries included in its Annual Report to Stockholders,
increased by the sum of the following: (w) the provision for income taxes in
respect of such fiscal year as shown on such financial statements; and (x) all
amounts paid or accrued during such fiscal year as incentive compensation to
Lorber under this Agreement.

     (h) "CONSULTING FEE" shall mean the compensation paid to Lorber pursuant
to Section 13.

     (i)  "CONSULTING PERIOD" shall mean the period specified in Section 13
during which Lorber serves as a consultant to Nathan's.

     (j) "DISABILITY" shall mean the illness or other mental or physical
disability of Lorber, as determined by a physician acceptable to Nathan's and
Lorber, resulting in his failure during the Employment Term, (I) to perform
substantially his applicable material duties under this Agreement for a period
of nine consecutive months and (ii) to return to the performance of his duties
within 30 days after receiving written notice of termination.

     (k) "EMPLOYMENT TERM" shall mean the period specified in Section 2(b)
below.

<PAGE>   5

     (l) "FISCAL YEAR" shall mean the 12-month period ending on the last Sunday
in March, or such other 12-month period as may constitute Nathan's fiscal year
at any time hereafter.

     (m) "GOOD REASON" shall mean, at any time during the Employment Term,
without Lorber's prior written consent or his acquiescence:

          (I)  diminution, reduction or other adverse change in the bonus or
incentive compensation opportunities available to Lorber (with respect to the
level of bonus or incentive compensation opportunities, the applicable
performance criteria and otherwise the manner in which bonuses and incentive
compensation are determined) in the aggregate from those available as of the
Effective Date in accordance with Section 4(a) below;

         (ii)  Nathan's failure to pay Lorber any amounts otherwise vested and
due him hereunder or under any plan or policy of Nathan's;

        (iii)  diminution of Lorber's titles, position, authorities or
responsibilities, including not serving on the Board;

        (iv)   assignment to Lorber of duties incompatible with his position of
Chief Executive Officer;

          (v) imposition of a requirement that Lorber report other than
directly to the full Board;

         (vi)  a material breach of the Agreement by Nathan's that is not cured
within 10 business days after written notification by Lorber of such breach; or

        (vii)  relocation of Nathan's corporate headquarters to a location more
than 35 miles from the location first above described, other than to its office
at 6300 N.W. 31st Avenue, Fort Lauderdale, Florida, or more than 35 miles from
such Florida office.

<PAGE>   6

     (n) "RETIREMENT" shall mean termination of Lorber's employment, other than
due to death, with eligibility to receive a benefit under the terms of Nathan's
Supplemental Executive Retirement Plan as then in effect.

     (o) "SALARY" shall mean the annual Salary provided for in Section 3 below,
as adjusted from time to time.

     (p) "SUBSIDIARY" shall mean any corporation of which Nathan's owns,
directly or indirectly, more than 50 percent of its voting stock.

2.          Employment Term, Positions And Duties.

     (a) Employment of Lorber. Nathan's hereby continues to employ Lorber, and
Lorber hereby accepts continued employment with Nathan's, in the positions and
with the duties and responsibilities set forth below and upon such other terms
and conditions as are hereinafter stated. Lorber shall render services to
Nathan's principally at Nathan's's corporate headquarters, but he shall do such
traveling on behalf of Nathan's as shall be reasonably required in the course of
the performance of his duties hereunder.

     (b) Employment Term. The Employment Term shall terminate on December 31,
2004.

3.          TITLES AND DUTIES.

     (a) Until the date of termination of his employment hereunder,
Lorber shall be employed as Chief Executive Officer, reporting to the full
Board. In his capacity as Chief Executive Officer, Lorber shall have the
customary powers, responsibilities and authorities of chief executive officers
of corporations of the size, type and nature of Nathan's including, without
limitation, authority, in conjunction with the Board as appropriate, to hire and
terminate other employees of Nathan's.

<PAGE>   7

     (b) During the Employment Term, Nathan's shall uses its best efforts to
secure the election of Lorber to the Board and to the chairmanship thereof.
During the Employment Term, if the Board forms an executive or similar
committee, Lorber shall serve thereon.

4.    TIME AND EFFORT.

     (a) Lorber agrees to devote his best efforts and abilities, and such of
his business time and attention as he determines is reasonably necessary, to the
affairs of Nathan's in order to carry out his duties and responsibilities under
this Agreement. The Parties hereby acknowledge that Lorber is President and
Chief Operating Officer of New Valley Corporation and Chairman and Chief
Executive Officer of Hallman & Lorber and that during the Employment Term he
will be devoting time and attention to those and other business activities.

     (b) Notwithstanding the foregoing, nothing shall preclude Lorber from (A)
serving on the boards of a reasonable number of trade associations, charitable
organizations and/or businesses not in competition with Nathan's, (B) engaging
in charitable activities and community affairs and (C) managing his personal
investments and affairs; provided, however, that, such activities do not
materially interfere with the proper performance of his duties and
responsibilities specified in Section 3(a) above.

5.    SALARY.

             Lorber shall receive from Nathan's a Salary, at the rate of $1.00
per annum.

6.    BONUSES.

     (a) Annual Bonus. Commencing with Fiscal Year 2000, and for each
succeeding Fiscal Year during the Employment Term, Lorber shall be eligible to
receive an annual bonus equal to 5 percent of Nathan's Consolidated Pretax
Earnings for such Fiscal Year; provided, that such bonus shall in no event be
less than $250,000. Any such bonus payable with respect to a portion of a Fiscal
Year shall be prorated accordingly.

     (b) Special Bonus. Lorber shall be eligible to receive additional bonuses
during the Employment

<PAGE>   8

Term. The Committee shall determine, in its discretion, the occasion for
payment, and the amount, of any such bonus.

7.    LONG-TERM INCENTIVE.

      During the Employment Term, Lorber shall be eligible for an award under
any long-term incentive compensation plan established by Nathan's for the
benefit of Lorber or, in the absence thereof, under any such plan established
for the benefit of members of the senior management of Nathan's.

8.    EQUITY OPPORTUNITY.

     (a) Simultaneously with the execution and delivery of this Agreement,
Nathan's shall issue to Lorber 25,000 shares of Nathan's Common Stock, par value
$.01 per share. Lorber's rights to such shares will vest immediately.

     (b) During the Employment Term and any Consulting Period, Lorber shall be
eligible to receive grants of options to purchase shares of Nathans' stock and
awards of shares of Nathans' stock, either or both as determined by the
Committee, under and in accordance with the terms of applicable plans of
Nathan's and related option and award agreements. It is the intention of
Nathan's to grant stock options to Lorber during the Employment Term. Also, to
the extent permitted by any such plan, Lorber shall be eligible during any
Consulting Period to receive grants of options and awards of shares of Nathan's
stock in the same manner.

9.    EXPENSE REIMBURSEMENT; CERTAIN OTHER COSTS.

      During the Employment Term and any Consulting Period, Lorber shall be
entitled to prompt reimbursement by Nathan's for all reasonable out-of-pocket
expenses incurred by him in performing services under this Agreement, upon his
submission of such accounts and records as may be reasonably required by
Nathan's. In addition, Lorber shall be entitled to payment by Nathan's of all
reasonable costs and expenses, including attorneys' and consultants' fees and
disbursements, incurred by him in connection with adoption of this Agreement and
any related compensatory arrangements that Nathan's adopts solely for his
benefit.

10.   PERQUISITES.

<PAGE>   9

       During the Employment Term and any Consulting Period, Nathan's shall
provide Lorber with the use of an automobile and payment of related expenses on
the same terms as are in effect on the Effective Date or, if more favorable to
Lorber, as are made available generally to other executive officers of Nathan's
at any time thereafter.

11.   EMPLOYEE BENEFIT PLANS.

     (a) General. During the Employment Term and any Consulting Period, Lorber
shall be entitled to participate in all employee benefit plans and programs that
are made available to Nathan's senior executives or to its employees generally,
as such plans or programs may be in effect from time to time, including, without
limitation, pension and other retirement plans, profit-sharing plans, savings
and similar plans, group life insurance, accidental death and dismemberment
insurance, travel accident insurance, hospitalization insurance, surgical
insurance, major and excess major medical insurance, dental insurance,
short-term and long-term disability insurance, sick leave, holidays, vacation
(not less than four weeks in any calendar year) and any other employee benefit
plans or programs that may be sponsored by Nathan's from time to time, including
plans that supplement the above-listed types of plans, whether funded or
unfunded.

     (b) Disability Benefit. In consideration of the benefit payable to Lorber
in the event of termination of his employment due to Disability, as provided in
Section 12(e) below, Nathan's shall not be obligated to provide Lorber with
long-term disability insurance. Notwithstanding the foregoing, if Nathan's does
provide Lorber with such insurance, he shall be the owner of any individual
policies obtained and shall pay the premiums thereon.

12.   TERMINATION OF EMPLOYMENT.

     (a) Termination by Mutual Agreement.  The Parties may terminate this
Agreement by mutual agreement at any time. If they do so, Lorber's entitlements
shall be as the Parties mutually agree.

     (b) General. Notwithstanding anything to the contrary herein, in the
event of termination of Lorber's employment under this Agreement, he or his
Beneficiary, as the case may be, shall be entitled to receive (in addition to
payments and benefits under, and except as specifically provided in, subsections
(C) through (h) below, as applicable):

<PAGE>   10

         (I)  his Salary through the date of termination;

         (ii) any unused vacation from prior years;

        (iii) any annual bonus for the current Fiscal Year,
prorated to the date of termination;

         (iv) any annual or special bonus previously awarded but not yet paid
to him;

          (v) any deferred compensation under any incentive compensation plan
of Nathan's or any deferred compensation agreement then in effect; and

         (vi) any other compensation or benefits, including without limitation
long-term incentive compensation described in Section 7 above, benefits under
equity grants and awards described in Section 8 above and employee benefits
under plans described in Section 11 above, that have vested through the date of
termination or to which he may then be entitled in accordance with the
applicable terms and conditions of each grant, award or plan.

     (C) Termination due to Retirement. In the event that Lorber's
employment terminates due to Retirement, he shall be entitled to the
compensation and benefits specified in Section 12(b).

     (d) Termination due to Death. In the event that Lorber's employment
terminates due to his death, his Beneficiary shall be entitled, in addition to
the compensation and benefits specified in Section 12(b), to his Salary and
annual bonuses payable for the remainder of the Employment Term. For the
purposes hereof, such annual bonus shall be equal to the average of the annual
bonuses awarded to him during the three Fiscal Years preceding the Fiscal Year
of termination.

     (e) Termination due to Disability. In the event of Disability,
Nathan's or Lorber may terminate Lorber's employment. If Lorber's employment
terminates due to Disability, he shall be entitled, in

<PAGE>   11

addition to the compensation and benefits specified in Section 12(b), to his
Salary and annual bonuses payable for the remainder of the Employment Term,
offset by any long-term disability insurance benefit that Nathan's has provided
for him and for which it has paid the applicable group or individual insurance
premiums. For the purposes hereof, such annual bonus shall be equal to the
average of the annual bonuses awarded to him during the three Fiscal Years
preceding the Fiscal Year of termination.

     (f) Termination by Nathan's for Cause. Nathan's may terminate Lorber's
employment hereunder for Cause only upon written notice to Lorber not less than
30 days prior to any intended termination, which notice shall specify the
grounds for such termination in reasonable detail. Cause shall in no event be
deemed to exist except upon a finding reflected in a resolution approved by a
majority (excluding Lorber) of the members of the Board (whose findings shall
not be binding upon or entitled to any deference by any court, arbitrator or
other decision-maker ruling on this Agreement) at a meeting of which Lorber
shall have been given proper notice and at which Lorber (and his counsel) shall
have a reasonable opportunity to present his case.

      In the event that Lorber's employment is terminated for Cause, he  shall
be entitled only to the compensation and benefits specified in Sections
12(b)(I), (ii) and (iv) .

     (g) Termination Without Cause or by Lorber for Good Reason.

          (I) Termination without Cause shall mean termination of Lorber's
employment by Nathan's and shall exclude termination (A) due to Retirement,
death, Disability or Cause or (B) by mutual agreement of Lorber and Nathan's.
Nathan's shall provide Lorber 15 days prior written notice of termination by it
without Cause, and Lorber shall provide Nathan's 15 days prior written notice of
his termination for Good Reason.

         (ii) In the event of termination by Nathan's of Lorber's employment
without Cause or of termination by Lorber of his employment for Good Reason, he
shall be entitled, in addition to the compensation and benefits specified in
Section 12(b), to:

             (A) his Salary, payable for the remainder of the Employment Term
at the rate in effect immediately before such termination;

             (B) annual bonuses for the remainder of the Employment Term
(including a

<PAGE>   12

prorated bonus for any partial Fiscal Year) equal to the average of the annual
bonuses awarded to him during the three Fiscal Years preceding the Fiscal Year
of termination, such bonuses to be paid at the same time annual bonuses are
regularly paid by Nathan's to Lorber;

             (C) continued participation in all employee benefit plans or
programs available to Nathan's employees generally in which Lorber was
participating on the date of termination of his employment until the end of the
Employment Term; provided; however, that (x) if Lorber is precluded from
continuing his participation in any employee benefit plan or program as provided
in this clause (E), he shall be entitled to the after-tax economic equivalent of
the benefits under the plan or program in which he is unable to participate
until the end of the Employment Term, and (y) the economic equivalent of any
benefit foregone shall be deemed to be the lowest cost that Lorber would incur
in obtaining such benefit on an individual basis;

             (D) the perquisites provided to Lorber pursuant to Section 10
hereof until the end of the Employment Term;

             (E) other benefits in accordance with applicable plans
and programs of the Company until the end of the Employment Term.

              Prior written consent by Lorber to any of the events described in
Section 1(k) above shall be deemed a waiver by him of his right to terminate for
Good Reason under this Section 12(g) solely by reason of the events set forth in
such waiver.

     (h) Change in Control. In the event of any termination of Lorber's
employment within a one-year period following a Change in Control for any reason
other than Cause, Retirement, death or Disability, Lorber shall be entitled, in
addition to the compensation and benefits specified in Section 12(b) to:

          (I) a lump sum cash payment equal to the greater of:

<PAGE>   13

             (A) his Salary and annual bonuses for the remainder of the
Employment Term (including a prorated bonus for any partial fiscal year), which
bonus shall be equal to the average of the annual bonuses awarded to him during
the three Fiscal Years preceding the Fiscal Year of termination; or

             (B) 2.99 times his Salary and annual bonus for the Fiscal Year
immediately preceding the Fiscal Year of termination;

         (ii) continued participation in all employee benefit plans or programs
available to Nathan's employees generally in which Lorber was participating on
the date of termination of his employment until the end of the Employment Term;
provided; however, that (x) if Lorber is precluded from continuing his
participation in any employee benefit plan or program as provided in this clause
(E), he shall be entitled to the after-tax economic equivalent of the benefits
under the plan or program in which he is unable to participate until the end of
the Employment Term, and (y) the economic equivalent of any benefit foregone
shall be deemed to be the lowest cost that Lorber would incur in obtaining such
benefit on an individual basis;

        (iii) the perquisites provided to Lorber pursuant to Section 10 hereof
until the end of the Employment Term;

         (Iv) a lump sum cash payment equal to the difference between the
exercise price of any exercisable options having an exercise price of less than
the then current market price of Nathan's common stock and such then current
market price; and

          (v) other benefits in accordance with applicable plans and programs
of the Company for the remainder of the Employment Term.

13.   CONSULTING PERIOD.

     (a) General. Effective upon the end of the Employment Term (but only
if the Employment Term ends by reason of its expiration or, if earlier, upon
termination of Lorber's employment (I) by

<PAGE>   14

mutual agreement, (ii) by Retirement or (iii) due to a Change in Control),
Lorber shall become a consultant to Nathan's, in recognition of the continued
value to Nathan's of his extensive knowledge and expertise. Unless earlier
terminated, as provided in Section 13(e), the Consulting Period shall continue
for three years.

     (b) Duties and Extent of Services.

         (I)  During the Consulting Period, Lorber shall consult with Nathan's
and its senior executive officers regarding its business and operations. Such
consulting services shall not require more than 50 days in any calendar year,
nor more than one day in any week, it being understood and agreed that during
the Consulting Period Lorber shall have the right, consistent with the
prohibitions of Sections 16 and 17 below, to engage in full-time or part-time
employment with any business enterprise that is not a competitor of Nathan's.

         (ii) Lorber's service as a consultant shall only be required at such
times and such places as shall not result in unreasonable inconvenience to him,
recognizing his other business commitments that he may have to accord priority
over the performance of services for Nathan's. In order to minimize interference
with Lorber's other commitments, his consulting services may be rendered by
personal consultation at his residence or office wherever maintained, or by
correspondence through mail, telephone, fax or other similar mode of
communication at times, including weekends and evenings, most convenient to him.

        (iii) During the Consulting Period, Lorber shall not be obligated to
serve as a member of the Board or to occupy any office on behalf of Nathan's or
any of its Subsidiaries.

     (C) Compensation. During the Consulting Period, Lorber shall receive
from Nathan's each year as a Consulting Fee an amount equivalent to two-thirds
of the average of the annual bonuses awarded to him during the three Fiscal
Years preceding the Fiscal Year of termination.

     (d) Disability. In the event of Disability during the Consulting Period,
Nathan's or Lorber may terminate Lorber's consulting services. If Lorber's
consulting services are terminated due to Disability, he shall be entitled to
compensation, in accordance with Section 13(c), for the remainder of the
Consulting Period.

<PAGE>   15

     (e) Termination. The Consulting Period shall terminate after three years
or, if earlier, upon Lorber's death or upon his failure to perform consulting
services as provided in Section 13(b), pursuant to 30 days' written notice by
Nathan's to Lorber of the grounds constituting such failure and reasonable
opportunity afforded Lorber to cure the alleged failure. Upon any such
termination, payment of consulting fees and benefits shall cease.

     (f) Other. During the Consulting Period, Lorber shall be entitled to
expense reimbursement, perquisites and benefits pursuant to the terms of
Sections 9, 10 and 11, respectively.

14.   NO DUTY TO MITIGATE; NO OFFSET.

      Lorber shall not be required to mitigate damages or the amount of any
payment provided for under this Agreement by seeking other employment or
otherwise, nor will any payment hereunder be subject to offset in the event
Lorber does receive compensation for services from any other source.

15.   PARACHUTES.

     (a) Application. If all, or any portion, of the payments provided under
this Agreement, and/or any other payments and benefits that Lorber receives or
is entitled to receive from Nathan's or a Subsidiary, whether or not under an
existing plan, arrangement or other agreement, constitutes an "excess parachute
payment" within the meaning of Section 280G(b) of the Code (each such parachute
payment, a "Parachute Payment") and will result in the imposition on Lorber of
an excise tax under Section 4999 of the Code, then, in addition to any other
benefits to which Lorber is entitled under this Agreement, Nathan's shall pay
him an amount in cash equal to the sum of the excise taxes payable by him by
reason of receiving Parachute Payments, plus the amount necessary to put him in
the same after-tax position (taking into account any and all applicable federal,
state and local excise, income or other taxes at the highest possible applicable
rates on such Parachute Payments (including without limitation any payments
under this Section 15) as if no excise taxes had been imposed with respect to
Parachute Payments (the "Excise Tax Gross-up").

     (b) Computation. The amount of any payment under this Section 15 shall be
computed by a certified public accounting firm of national reputation selected
by Nathan's and acceptable to Lorber. If Nathan's or Lorber disputes the
computation rendered by such accounting firm, Nathan's shall select an
alternative certified public accounting firm of national reputation to perform
the applicable computation. If the two accounting firms cannot agree upon the
computations, Lorber and Nathan's shall jointly appoint a third certified public
accounting firm of national reputation within 10 calendar days after the two

<PAGE>   16

conflicting computations have been rendered. Such third accounting firm shall be
asked to determine within 30 calendar days the computation of the Excise Tax
Gross-up to be paid to Lorber, and payments shall be made accordingly.

     (C) Payment. In any event, Nathan's shall pay to Lorber or pay on his
behalf the Excise Tax Gross-up as computed by the accounting firm initially
selected by Nathan's by the time any taxes payable by him as a result of the
Parachute Payments become due, with Lorber agreeing to return the excess amount
of such payment over the final computation rendered from the process described
in Section 15(b). Lorber and Nathan's shall provide the accounting firms with
all information that any of them reasonably deems necessary in order to compute
the Excise Tax Gross-up. The cost and expenses of all the accounting firms
retained to perform the computations described above shall be borne by Nathan's.

      In the event that the Internal Revenue Service ("IRS") or the accounting
firm computing the Excise Tax Gross-up finally determines that the amount of
excise taxes thereon initially paid was insufficient to discharge Lorber's
excise tax liability, Nathan's shall make additional payments to him as may be
necessary to reimburse him for discharging the full liability.

      Lorber shall apply to the IRS for a refund of any excise taxes paid and
remit to Nathan's the amount of any such refund that he receives. Nathan's shall
reimburse Lorber for his expenses in seeking a refund of excise taxes and for
any interest and penalties imposed on excise taxes that he is required to pay.

16.   CONFIDENTIAL INFORMATION.

     (a) General.

         (I)  Lorber understands and hereby acknowledges that as a result of his
employment with Nathan's he will necessarily become informed of and have access
to certain valuable and confidential information of Nathan's and any of its
Subsidiaries, joint ventures and affiliates, including, without limitation,
inventions, trade secrets, technical information, computer software and
programs, know-how and plans ("Confidential Information"), and that any such
Confidential Information, even though it may be developed or otherwise acquired
by Lorber, is the exclusive property of Nathan's to be held by him in

<PAGE>   17

 trust solely for Nathan's benefit.

         (ii) Accordingly, Lorber hereby agrees that, during the Employment
Term and subsequent thereto, he shall not, and shall not cause others to, use,
reveal, report, publish, transfer or otherwise disclose to any person,
corporation or other entity any Confidential Information without prior written
consent of the Board, except to (A) responsible officers and employees of
Nathan's or (B) responsible persons who are in a contractual or fiduciary
relationship with Nathan's or who need such information for purposes in the
interest of Nathan's. Notwithstanding the foregoing, the prohibitions of this
clause (ii) shall not apply to any Confidential Information that becomes of
general public knowledge other than from Lorber or is required to be divulged by
court order or administrative process.

     (b) Return of Documents. Upon termination of his employment with Nathan's
for any reason Lorber shall promptly deliver to Nathan's all plans, drawings,
manuals, letters, notes, notebooks, reports, computer programs and copies
thereof and all other materials, including without limitation those of a secret
or confidential nature, relating to Nathan's business that are then in his
possession or control.

     (C) Remedies and Sanctions.  In the event that Lorber is found to be in
violation of Section 16(a) or (b) above, Nathan's shall be entitled to relief
as provided in Section 18 below.

17.   NONCOMPETITION/NONSOLICITATION.

     (a) Prohibitions. During the Employment Term and, if applicable, the
Consulting Period, Lorber shall not, without prior written authorization of the
Board, directly or indirectly, through any other individual or entity:

        (I)   become on officer or employee of, or render any service to, any
direct competitor of Nathan's;

        (ii)  solicit or induce any customer of Nathan's to cease purchasing
goods or services from Nathan's or to become a customer of any competitor of
Nathan's; or

        (iii) solicit or induce any employee of Nathan's to become employed by
any competitor

<PAGE>   18

of Nathan's.

     (b) Remedies and Sanctions.  In the event that Lorber is found to be in
violation of Section 17(a) above, Nathan's shall be entitled to relief as
provided in Section 18 below.

     (C) Exceptions.  Notwithstanding anything to the contrary in Section 17(a)
above, its provisions shall not:

        (I) apply if Nathan's terminates Lorber's employment without Cause or
Lorber terminates his employment for Good Reason, each as provided in Section
12(g) above; or

        (ii) be construed as preventing Lorber from investing his assets in any
business that is not a direct competitor of Nathan's.

18.   REMEDIES/SANCTIONS.

       Lorber acknowledges that the services he is to render under this
Agreement are of a unique and special nature, the loss of which cannot
reasonably or adequately be compensated for in monetary damages, and that
irreparable injury and damage may result to Nathan's in the event of any breach
of this Agreement or default by Lorber. Because of the unique nature of the
Confidential Information and the importance of the prohibitions against
competition and solicitation, Lorber further acknowledges and agrees that
Nathan's will suffer irreparable harm if he fails to comply with his obligations
under Section 16(a) or (b) above or Section 17(a) above and that monetary
damages would be inadequate to compensate Nathan's for any such breach.
Accordingly, Lorber agrees that, in addition to any other remedies available to
either Party at law, in equity or otherwise, Nathan's will be entitled to seek
injunctive relief or specific performance to enforce the terms, or prevent or
remedy the violation, of any provisions of this Agreement.

19. BENEFICIARIES/REFERENCES.

<PAGE>   19

      Lorber shall be entitled to select (and change, to the extent permitted
under any applicable law) a beneficiary or beneficiaries to receive any
compensation or benefit payable under this Agreement following his death by
giving Nathan's written notice thereof; provided, however, that absent any then
effective contrary notice, his beneficiary shall be the [Lorber Family Trust].
In the event of Lorber's death, or of a judicial determination of his
incompetence, reference in this Agreement to Lorber shall be deemed to refer, as
appropriate, to his beneficiary, estate or other legal representative.

20.   WITHHOLDING TAXES.

      All payments to Lorber or his Beneficiary under this Agreement shall be
subject to withholding on account of federal, state and local taxes as required
by law.

21.   INDEMNIFICATION AND LIABILITY INSURANCE.

      Nothing herein is intended to limit Nathan's indemnification of Lorber,
and Nathan's shall indemnify him to the fullest extent permitted by applicable
law consistent with Nathan's Certificate of Incorporation and By-Laws as in
effect on the Effective Date, with respect to any action or failure to act on
his part while he is an officer, director or employee of Nathan's or any
Subsidiary. Nathan's shall cause Lorber to be covered at all times by directors'
and officers' liability insurance on terms no less favorable than the directors'
and officers' liability insurance maintained by Nathan's as in effect on the
Effective Date in terms of coverage and amounts. Nathan's shall continue to
indemnify Lorber as provided above and maintain such liability insurance
coverage for him after the Employment Term for any claims that may be made
against him with respect to his service as a director or officer of Nathan's or
a consultant to Nathan's.

22.   EFFECT OF AGREEMENT ON OTHER BENEFITS.

      The existence of this Agreement shall not prohibit or restrict Lorber's
entitlement to participate fully in compensation, employee benefit and other
plans of Nathan's in which senior executives are eligible to participate.

<PAGE>   20

23.   ASSIGNABILITY; BINDING NATURE.

      This Agreement shall be binding upon and inure to the benefit of the
Parties and their respective successors, heirs (in the case of Lorber) and
assigns. No rights or obligations of Nathan's under this Agreement may be
assigned or transferred by Nathan's except pursuant to (a) a merger or
consolidation in which Nathan's is not the continuing entity or (b) sale or
liquidation of all or substantially all of the assets of Nathan's, provided that
the surviving entity or assignee or transferee is the successor to all or
substantially all of the assets of Nathan's and such surviving entity or
assignee or transferee assumes the liabilities, obligations and duties of
Nathan's under this Agreement, either contractually or as a matter of law.

      Nathan's further agrees that, in the event of a sale of assets or
liquidation as described in the preceding sentence, it shall use its best
efforts to have such assignee or transferee expressly agree to assume the
liabilities, obligations and duties of Nathan's hereunder; provided, however,
that notwithstanding such assumption, Nathan's shall remain liable and
responsible for fulfillment of the terms and conditions of this Agreement; and
provided, further, that in no event shall such assignment and assumption of this
Agreement adversely affect Lorber's rights upon a Change in Control, as provided
in Section 12(h) above. No rights or obligations of Lorber under this Agreement
may be assigned or transferred by him.

24.   REPRESENTATIONS.

      The Parties respectively represent and warrant that each is fully
authorized and empowered to enter into this Agreement and that the performance
of its or his obligations, as the case may be, under this Agreement will not
violate any agreement between such Party and any other person, firm or
organization. Nathan's represents and warrants that this Agreement has been duly
authorized by all necessary corporate action and is valid, binding and
enforceable in accordance with its terms.

25.   ENTIRE AGREEMENT.

      Except to the extent otherwise provided herein, this Agreement contains
the entire understanding and agreement between the Parties concerning the
subject matter hereof and supersedes any prior agreements, whether written or
oral, between the Parties concerning the subject matter hereof, including
without limitation the Prior Agreement. Payments and benefits provided under
this Agreement are in lieu of any payments or other benefits under any severance
program or policy of Nathan's to which Lorber would otherwise be entitled.

<PAGE>   21

26.   AMENDMENT OR WAIVER.

      No provision in this Agreement may be amended unless such amendment is
agreed to in writing and signed by both Lorber and an authorized officer of
Nathan's. No waiver by either Party of any breach by the other Party of any
condition or provision contained in this Agreement to be performed by such other
Party shall be deemed a waiver of a similar or dissimilar condition or provision
at the same or any prior or subsequent time. Any waiver must be in writing and
signed by the Party to be charged with the waiver. No delay by either Party in
exercising any right, power or privilege hereunder shall operate as a waiver
thereof.

27.   Severability.

      In the event that any provision or portion of this Agreement shall
be determined to be invalid or unenforceable for any reason, in whole or in
part, the remaining provisions of this Agreement shall be unaffected thereby and
shall remain in full force and effect to the fullest extent permitted by law.

28.   SURVIVAL.

      The respective rights and obligations of the Parties under this
Agreement shall survive any termination of Lorber's employment with Nathan's.

29.   GOVERNING LAW/JURISDICTION.

      This Agreement shall be governed by and construed and interpreted in
accordance with the laws of New York, without reference to principles of
conflict of laws.

30.  COSTS OF DISPUTES.

       Nathan's shall pay, at least monthly, all costs and expenses, including
reasonable attorneys' fees

<PAGE>   22

and disbursements, of Lorber in connection with any proceeding, whether or not
instituted by Nathan's or Lorber, relating to any provision of this Agreement,
including but not limited to the interpretation, enforcement or reasonableness
thereof; provided, however, that, if Lorber institutes the proceeding and the
judge or other decision-maker presiding over the proceeding affirmatively finds
that his claims were frivolous or were made in bad faith, he shall pay his own
costs and expenses and, if applicable, return any amounts theretofore paid to
him or on his behalf under this Section 30. Pending the outcome of any
proceeding, Nathan's shall pay Lorber all amounts due to him without regard to
the dispute; provided, however, that if Nathan's shall be the prevailing party
in such a proceeding, Lorber shall promptly repay all amounts that he received
during pendency of the proceeding.

31.   NOTICES.

       Any notice given to either Party shall be in writing and shall be deemed
to have been given when delivered either personally, by fax, by overnight
delivery service (such as Federal Express) or sent by certified or registered
mail postage prepaid, return receipt requested, duly addressed to the Party
concerned at the address indicated below or to such changed address as the Party
may subsequently give notice of.

If to Nathan's or the Board:

        Nathan's Incorporated

        1400 Old Country Road

        Westbury, NY 11590

        Attention: Wayne Norbitz

        FAX: (516) 338-7220

<PAGE>   23

If to Lorber:

        Howard M. Lorber

        8061 Fisher Island

        Miami, Florida  33109

32.   HEADINGS.

      The headings of the sections contained in this Agreement are for
convenience only and shall not be deemed to control or affect the meaning or
construction of any provision of this Agreement.

33.   COUNTERPARTS.

      This Agreement may be executed in counterparts, each of which when so
executed and delivered shall be an original, but all such counterparts together
shall constitute one and the same instrument.

      IN WITNESS WHEREOF THE PARTIES, hereto have executed this Agreement as of
the day and year first written above.

                         NATHAN'S FAMOUS, INC.

                         By: /s/ Wayne Norbitz, President
                           -------------------------------
                             /s/ Howard M. Lorber
                           -------------------------------
                                 Howard M. Lorber

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