GOOD TIMES RESTAURANTS INC.
AMENDMENT AND AGREEMENT REGARDING
SERIES A CONVERTIBLE PREFERRED STOCK
This Amendment and Agreement Regarding Series A Convertible
Preferred Stock ("Amendment") is dated this 3rd day of
November, 1997, effective as of October 31, 1997, by and between
Good Times Restaurants Inc. (the "Company") and The Xxxxxx Company
("Xxxxxx").
RECITALS
X. Xxxxxx currently owns all of the outstanding shares of
the Company's Series A Convertible Preferred Stock consisting of
1,000,000 shares (the "Preferred Shares"), which shares were
purchased by Xxxxxx pursuant to the terms and conditions of the
Series A Convertible Preferred Stock Purchase Agreement dated May
31, 1996, as amended by the First Amendment to Series A Convertible
Preferred Stock Purchase Agreement dated effective as of May 31,
1996 (the "Agreement"). All capitalized and undefined terms herein
shall have the same meaning as in the Agreement.
B. Pursuant to the Agreement, the Preferred Shares are
convertible into common stock of the Company at various conversion
prices depending upon the number of Preferred Shares being
converted and the date of conversion.
C. The Company desires to obtain financing of at least
$2,000,000 on acceptable terms prior to April 30, 1998
("Financing"), the proceeds of which shall be used by the Company
for the development of additional restaurants and for advertising
and other Company expenses.
D. The Company and Xxxxxx desire to modify and amend the
conversion rights of the Preferred Shares in consideration of
Xxxxxx'x agreement to consider in its sole and absolute discretion
assisting the Company to obtain its Financing as set forth herein.
AGREEMENT
NOW, THEREFORE, for good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the
Company and Xxxxxx agree as follows:
1. Xxxxxx hereby agrees to review all information provided
to it by the Company in connection with any Financing and it shall
consider in its sole and absolute discretion assisting the Company
with such Financing upon terms and conditions to be mutually
agreeable between the Company and Xxxxxx. Notwithstanding the
foregoing, Xxxxxx shall have no obligation to assist the Company
with any Financing whatsoever.
2. In consideration of Xxxxxx'x agreement in paragraph 1
above, the conversion periods and the conversion prices with
respect to the Preferred Shares as set forth in the Agreement are
hereby amended as follows:
Maximum Number of
Conversion Period Preferred Shares Conversion Price
October 1, 1997 - 1,000,000 $0.46875
April 30, 1998
May 1, 1998 -
April 30, 1999 1,000,000* $0.56875
May 1, 1999 and
thereafter 1,000,000* the greater of (i)
the Dividend Conversion
Rate at the time of such
conversion, and (ii)
$0.46875
* To the extent not previously converted.
3. If Xxxxxx does not assist the Company in obtaining its
Financing, and if Xxxxxx converts some or all of the Preferred
Shares on or before April 30, 1998 at the $0.46875 conversion
price as set forth above, then any dividend shall not be paid or
accrue (or to the extent already paid shall be refunded) from and
after October 1, 1997 with respect to the first 500,000 Preferred
Shares (or any portion thereof) converted and from and after
January 1, 1998 with respect to the next 250,000 Preferred Shares
(or any portion thereof) converted beyond the first 500,000.
Except under the foregoing circumstances, dividends shall
continue to accrue and be payable with respect to all unconverted
Preferred Shares.
4. The Company and Xxxxxx understand and agree that it is
impossible to determine to what extent, if any, and under what
circumstances Xxxxxx may assist the Company in obtaining
acceptable Financing. Depending upon the terms and risks
involved in connection with any proposed assistance with a
Financing by Xxxxxx, Xxxxxx may require additional consideration
from the Company, including without limitation additional
amendments to the conversion rights with respect to the Preferred
Shares. The Company is not however obligated to accept any
assistance from Xxxxxx nor is it obligated to provide Xxxxxx with
any additional consideration in connection with any Xxxxxx
assisted Financing.
5. Except as expressly set forth in this Amendment, all
other rights, powers, preferences, qualifications and
restrictions with respect to the Preferred Shares shall remain in
full force and effect.
6. This Amendment has been approved by the vote of the
Board of Directors of the Company without participation of the
two Company directors appointed by Xxxxxx.
7. This Amendment may be executed in counterparts and
delivered by facsimile transmission.
IN WITNESS WHEREOF, the parties hereto have duly executed
this Amendment effective as of October 31, 1997.
GOOD TIMES RESTAURANT INC.,
a Nevada corporation
By: /s/ Xxxx X. Xxxxxx, President
Xxxx X. Xxxxxx, President
THE XXXXXX COMPANY,
a Colorado limited partnership
By: The Erie County Investment Co.,
Its General Partner
By: /s/ Xxxxx X. Xxxxxx, President
Xxxxx X. Xxxxxx, President
