PROMISSORY NOTE (Leasehold Loan)

PROMISSORY NOTE

(Leasehold Loan)

$1,000,000.00 Denver, Colorado

March 15, 2007

FOR VALUE RECEIVED, the undersigned GOOD TIMES DRIVE THRU, INC., a Colorado corporation ("GT Drive Thru") and GOOD TIMES RESTAURANTS INC., a Nevada corporation (collectively, "Maker"), hereby jointly, severally and unconditionally promise to pay to the order of PFGI II, LLC, a Colorado limited liability company, or order ("Holder"), the principal sum of One Million Dollars ($1,000,000), together with interest accruing at the rate of the Prime Rate, as hereinafter defined, plus two percent (2%) per annum on the unpaid principal balance as set forth below. Such principal and interest shall be payable pursuant to paragraph 2 below at 0000 X. 00^xx Xxxxxx, Xxxx X-000, Xxxxxxx, Xxxxxxxx 00000, or at such other place as Holder shall designate in writing. "Prime Rate" means the base rate reported in the Money Rates column or section of The Wall Street Journal for corporate loans at large U.S. commercial banks. Any change in the Prime Rate shall take effect on the date specified in the public announcement of such change. This Promissory Note is subject to the terms and conditions of that certain Loan Agreement between Maker and Holder dated August 7, 2006 ("Loan Agreement"). Each capitalized term used but not defined herein shall have the same meaning given to such term in the Loan Agreement.

Payment and Maturity. Monthly payments of accrued interest only shall be paid by Maker commencing on April 15, 2007 and continuing thereafter on the first day of each succeeding calendar month in equal payments, as adjusted with adjustments to the Prime Rate. This Promissory Note shall mature on July 10, 2008, at which time all unpaid principal and accrued interest thereon shall be due and payable in full.

Prepayment. Maker may prepay this Promissory Note at any time without penalty or prior consent of Xxxxxx.

Security. This Promissory Note and the indebtedness created and evidenced hereby, including principal and interest, are secured by (i) four separate Leasehold Deeds of Trust, Security Agreement, Assignment of Rents and Fixture Filings dated July 7, 2006 (collectively, the "Existing Deeds of Trust") made by GT Drive Thru for the benefit of Holder, encumbering all of GT Drive Thru's leasehold interest in and to the real property described therein ("Real Property") and located in the Counties of Jefferson, Xxxxx and Xxxxxxx, State of Colorado and other collateral, as more particularly described therein; and (ii) two separate Security Agreements and Collateral Assignments of Lease dated June 28, 2006 (collectively, the "Security Agreements"), from GT Drive Thru to Holder, encumbering the tangible and intangible assets, personal property, furniture, fixtures, goods, equipment and other personal property located at the Real Property (collectively, the "Property"). In addition, Maker shall provide, for the benefit of Xxxxxx and as additional security for this Promissory Note, a deed of trust on an additional restaurant property owned by Maker (the "Additional Deed of Trust"). This Promissory Note, the Existing Deeds of Trust, any Additional Deed of Trust, the Loan Agreement and the Security Agreements are hereinafter collectively referred to as the "Loan Documents".

Application of Payments. All sums paid hereunder shall be applied first to the repayment of any sums advanced by Holder for the payment of any taxes, assessments, insurance premiums, or other charges pursuant to the Security Agreements or Deeds of Trust then to accrued and unpaid interest; and the remainder, if any, to the reduction of unpaid principal. All interest hereunder shall be calculated on the basis of a three hundred sixty-five (365) day year.

Acceleration and Default Interest. If Maker shall default in the payment of any installment of interest under this Promissory Note, or in the performance of any covenants or terms contained in the other Loan Documents, and if such default is not cured within the applicable cure period stated in any such Loan Document, the entire unpaid balance of this Promissory Note, including all principal and accrued interest, irrespective of the maturity date specified herein, shall, at the election of Holder, become immediately due and payable and each and every such delinquent payment, including the entire principal balance and accrued interest in the event of acceleration, shall bear interest thereafter at the rate of eighteen percent (18%) per annum ("Default Rate") until paid in full. The rights or remedies of Holder as provided in this Promissory Note and the other Loan Documents shall be cumulative and concurrent and may be pursued singularly, successively, or together against Maker, the Property, any other funds, property, or security held by Holder for the payment hereof, or otherwise at the sole discretion of Payee. Failure to exercise any such right to remedy shall in no event be construed as a waiver or release of such rights or remedies or the right to exercise them at a later time.

Attorneys' Fees. Xxxxx agrees to promptly reimburse Holder for all reasonable costs and expenses, including attorneys' fees and court costs, incurred to collect this Promissory Note or any installment hereunder, if not paid when due.

No Waiver. No failure on the part of Holder to exercise, and no delay in exercising any right hereunder shall operate as a waiver of such right; nor shall any single or partial exercise by Holder of any right hereunder preclude the exercise of any other right. The remedies herein provided are cumulative and not exclusive of any remedies provided by law.

Waiver. Maker hereby waives presentment, demand for payment, protest for nonpayment, notice of dishonor, diligence in collection, and all other indulgences, and expressly agree that this Promissory Note may be extended or renewed from time to time and any real or collateral security or any part thereof may be released by Holder without in any manner affecting, altering, releasing, or limiting its liability hereon.

Colorado Law. This Promissory Note is made in and shall be governed by and interpreted in accordance with the laws of the State of Colorado.

Whenever used herein, the words "Maker", and "Holder" shall be deemed to include their respective successors and assigns.

IN WITNESS WHEREOF, the undersigned has duly executed this Promissory Note the day and year first above written.

MAKER:

GOOD TIMES DRIVE THRU INC., a Colorado corporation

By: /s/ Xxxx X. Xxxxxx

Name: Xxxx X. Xxxxxx, President and CEO

By: /s/ Xxxx X. Xxxxxx

Name: Xxxx X. Xxxxxx, President and CEO

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