Exhibit 10.2
GOOD TIMES RESTAURANTS INC.
AMENDMENT AND AGREEMENT REGARDING
SERIES A CONVERTIBLE PREFERRED STOCK
This Amendment and Agreement Series A Convertible Preferred Stock
("Amendment") is dated this 3rd day of December, 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 - 1,000,000* $0.56875
April 30, 1999
May 1, 1999 and 1,000,000* the greater of (i) the
thereafter 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.
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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
-------------------------------------
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
-------------------------------------
Xxxxx X. Xxxxxx, President
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