March 12, 1999
The Xxxxxx Company, LLLP
000 Xxxxxxxxx Xxxxxx
Xxxxxx, XX 00000
Attention: Xx. Xxxxxxx X. Xxxxxxxxxx
Chief Financial Officer and Vice President
Gentlemen:
This letter will set forth the agreement between Good Times Restaurants
Inc. ("Good times") and The Xxxxxx Company, LLLP with respect to the purchase
by The Xxxxxx Company, LLLP and persons or entities controlling, controlled by
or under common control with it, all of which are tegether hereinafter
referred to as "Xxxxxx", of shares of Good Times common stock (the "Stock").
1. On March 31, 1999, (the "First Closing") Xxxxxx shall purchase from
Good Times 100,000 shares of Stock at a purchase price of $3.00 per share for
an aggregate purchase price of $300,000. On June 30, 1999, or upon such
earlier date as Xxxxxx obtains a loan intended to be utilized in part for the
purchase of the Stock (the "Second Closing") Xxxxxx shall purchase from Good
Times 250,000 shares of Stock at a purchase price of $3.00 per share for an
aggregate purchase price of $750,000. At each Closing, Xxxxxx shall pay the
purchase price to Good Times in cash and Good Times shall issue a certificate
for the Stock to such entity or entities as designated by Xxxxxx.
Notwithstanding the foregoing, Xxxxxx shall not be required to purchase the
Stock at the Second Closing if prior thereto there has xxxx a substantial
adverse change in the business, financial condition or future prospects of
Good Times involving, for example, a disease caused by Good Times' food
products, commencement of a bankruptcy proceeding or comparable catastrophic
occurrence.
2. At the Second Closing, Good Times shall issue to Xxxxxx a warrant
entitling Xxxxxx to purchase at any time or times on or before March 31, 2004,
up to 25,000 shares of common stock of Good Times at a purchase price of $4.00
per share (the "Warrant"). Notwithstanding the foregoing, (I) the Warrant
shall terminate prior to March 31, 2004, upon any acquisition of substantially
all of the assets or capital stock of Good Times (an "Acquisition"); (ii)
Xxxxxx shall receive thirty days prior written notice of an Acquisition; and
(iii) Xxxxxx shall have the right to exercise the Warrant prior to the closing
of an Acquisition. Upon each exercise of the Warrant, Xxxxxx shall pay the
Warrant exercise price to Good Times in cash and Good Times shall issue a
certificate for the purchased common stock of Good Times to such entity or
entities as diesngnated by Xxxxxx. The Warrant shall contain reclassification
of the common stock of Good Times or as a result of a divident paid in common
stock of Good Times. The Warrant shall contain such other terms and
conditions as are customary and as are approved by Xxxxxx, with such approval
not to be unreasonably withheld.
