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<SEC-DOCUMENT>0000825324-10-000024.txt : 20101122
<SEC-HEADER>0000825324-10-000024.hdr.sgml : 20101122
<ACCEPTANCE-DATETIME>20101122125613
ACCESSION NUMBER:		0000825324-10-000024
CONFORMED SUBMISSION TYPE:	DEF 14A
PUBLIC DOCUMENT COUNT:		3
CONFORMED PERIOD OF REPORT:	20101122
FILED AS OF DATE:		20101122
DATE AS OF CHANGE:		20101122
EFFECTIVENESS DATE:		20101122

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			GOOD TIMES RESTAURANTS INC
		CENTRAL INDEX KEY:			0000825324
		STANDARD INDUSTRIAL CLASSIFICATION:	RETAIL-EATING PLACES [5812]
		IRS NUMBER:				841133368
		STATE OF INCORPORATION:			NV
		FISCAL YEAR END:			0930

	FILING VALUES:
		FORM TYPE:		DEF 14A
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	000-18590
		FILM NUMBER:		101207998

	BUSINESS ADDRESS:	
		STREET 1:		601 CORPORATE CIRCLE
		CITY:			GOLDEN
		STATE:			CO
		ZIP:			80401
		BUSINESS PHONE:		3033841400

	MAIL ADDRESS:	
		STREET 1:		601 CORPORATE CIRCLE
		CITY:			GOLDEN
		STATE:			CO
		ZIP:			80401

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	PARAMOUNT VENTURES INC
		DATE OF NAME CHANGE:	19900205
</SEC-HEADER>
<DOCUMENT>
<TYPE>DEF 14A
<SEQUENCE>1
<FILENAME>defproxyfile2.htm
<TEXT>
<html>

<head>
<!-- Document Prepared With E-Services, LLC HTML Software-->
<!-- Copyright 2006 E-Services, LLC.-->
<!-- All rights reserved EDGAR2.com -->



<title>UNITED STATES</title>


</head>

<body lang=EN-US link=blue vlink=purple>

<div class=WordSection1>













<p class=MsoNormal align=center style='text-align:center'>UNITED STATES</p>

<p class=MsoNormal align=center style='text-align:center'>SECURITIES AND
EXCHANGE COMMISSION</p>

<p class=MsoNormal align=center style='text-align:center'>Washington, D.C.
20549</p>

<p class=MsoNormal align=center style='text-align:center'>SCHEDULE 14A</p>

<p class=MsoNormal align=center style='text-align:center'>(Rule 14a-101)</p>

<p class=MsoNormal align=center style='text-align:center'>SCHEDULE 14A
INFORMATION</p>

<p class=MsoNormal align=center style='text-align:center'>Proxy Statement
Pursuant to Section&nbsp;14(a) of the Securities</p>

<p class=MsoNormal align=center style='text-align:center'>Exchange Act of 1934</p>



<p class=MsoNormal>Filed by the Registrant [x]</p>

<p class=MsoNormal>Filed by a Party other than the Registrant [ ]</p>

<p class=MsoNormal>Check the appropriate box:</p>

<table class=MsoNormalTable border=0 cellspacing=0 cellpadding=0
 style='border-collapse:collapse'>
 <tr style='height:12.4pt'>
  <td width=19 valign=top style='width:13.9pt;background:white;padding:0in 0in 0in 0in;
  height:12.4pt'>
  <p class=MsoNormal>[]</p>
  </td>
  <td width=7 valign=top style='width:5.4pt;background:white;padding:0in 0in 0in 0in;
  height:12.4pt'>

  </td>
  <td width=613 valign=top style='width:460.0pt;background:white;padding:0in 0in 0in 0in;
  height:12.4pt'>
  <p class=MsoNormal>Preliminary Proxy Statement</p>
  </td>
 </tr>
 <tr style='height:12.4pt'>
  <td width=19 valign=top style='width:13.9pt;background:white;padding:0in 0in 0in 0in;
  height:12.4pt'>
  <p class=MsoNormal>[ ]</p>
  </td>
  <td width=7 valign=top style='width:5.4pt;background:white;padding:0in 0in 0in 0in;
  height:12.4pt'>

  </td>
  <td width=613 valign=top style='width:460.0pt;background:white;padding:0in 0in 0in 0in;
  height:12.4pt'>
  <p class=MsoNormal>Confidential, for Use of the Commission Only (as permitted
  by Rule&nbsp;14a-6(e)(2))</p>
  </td>
 </tr>
 <tr style='height:12.4pt'>
  <td width=19 valign=top style='width:13.9pt;background:white;padding:0in 0in 0in 0in;
  height:12.4pt'>
  <p class=MsoNormal>[x]</p>
  </td>
  <td width=7 valign=top style='width:5.4pt;background:white;padding:0in 0in 0in 0in;
  height:12.4pt'>

  </td>
  <td width=613 valign=top style='width:460.0pt;background:white;padding:0in 0in 0in 0in;
  height:12.4pt'>
  <p class=MsoNormal>Definitive Proxy Statement</p>
  </td>
 </tr>
 <tr style='height:12.4pt'>
  <td width=19 valign=top style='width:13.9pt;background:white;padding:0in 0in 0in 0in;
  height:12.4pt'>
  <p class=MsoNormal>[ ]</p>
  </td>
  <td width=7 valign=top style='width:5.4pt;background:white;padding:0in 0in 0in 0in;
  height:12.4pt'>

  </td>
  <td width=613 valign=top style='width:460.0pt;background:white;padding:0in 0in 0in 0in;
  height:12.4pt'>
  <p class=MsoNormal>Definitive Additional Materials</p>
  </td>
 </tr>
 <tr style='height:12.4pt'>
  <td width=19 valign=top style='width:13.9pt;background:white;padding:0in 0in 0in 0in;
  height:12.4pt'>
  <p class=MsoNormal>[ ]</p>
  </td>
  <td width=7 valign=top style='width:5.4pt;background:white;padding:0in 0in 0in 0in;
  height:12.4pt'>

  </td>
  <td width=613 valign=top style='width:460.0pt;background:white;padding:0in 0in 0in 0in;
  height:12.4pt'>
  <p class=MsoNormal>Soliciting Material Pursuant to &sect;240.14a-12</p>
  </td>
 </tr>
</table>



<p class=MsoNormal align=center style='text-align:center'>GOOD TIMES
RESTAURANTS INC.</p>

<p class=MsoNormal align=center style='text-align:center'>(Name of Registrant
as Specified In Its Charter)</p>



<p class=MsoNormal align=center style='text-align:center'>(Name of Person(s)
Filing Proxy Statement, if other than the Registrant)</p>

<p class=MsoNormal>Payment of Filing Fee (Check the appropriate box):</p>

<table class=MsoNormalTable border=0 cellspacing=0 cellpadding=0 width=660
 style='border-collapse:collapse'>
 <tr style='height:12.4pt'>
  <td width=19 valign=top style='width:13.9pt;background:white;padding:0in 0in 0in 0in;
  height:12.4pt'>
  <p class=MsoNormal>[x]</p>
  </td>
  <td width=7 valign=top style='width:5.4pt;background:white;padding:0in 0in 0in 0in;
  height:12.4pt'>

  </td>
  <td width=634 valign=top style='width:475.7pt;background:white;padding:0in 0in 0in 0in;
  height:12.4pt'>
  <p class=MsoNormal>No fee required.</p>
  </td>
 </tr>
 <tr style='height:12.4pt'>
  <td width=19 valign=top style='width:13.9pt;background:white;padding:0in 0in 0in 0in;
  height:12.4pt'>
  <p class=MsoNormal>[ ]</p>
  </td>
  <td width=7 valign=top style='width:5.4pt;background:white;padding:0in 0in 0in 0in;
  height:12.4pt'>

  </td>
  <td width=634 valign=top style='width:475.7pt;background:white;padding:0in 0in 0in 0in;
  height:12.4pt'>
  <p class=MsoNormal>Fee computed on table below per Exchange Act
  Rules&nbsp;14a-6(i)(4) and 0-11.</p>
  </td>
 </tr>
</table>



<table class=MsoNormalTable border=0 cellspacing=0 cellpadding=0
 style='border-collapse:collapse'>
 <tr style='height:12.4pt'>
  <td width=14 valign=top style='width:.15in;background:white;padding:0in 0in 0in 0in;
  height:12.4pt'>

  </td>
  <td width=22 valign=top style='width:16.2pt;background:white;padding:0in 0in 0in 0in;
  height:12.4pt'>
  <p class=MsoNormal>(1)</p>
  </td>
  <td width=7 valign=top style='width:5.4pt;background:white;padding:0in 0in 0in 0in;
  height:12.4pt'>

  </td>
  <td width=617 valign=top style='width:462.6pt;background:white;padding:0in 0in 0in 0in;
  height:12.4pt'>
  <p class=MsoNormal>Title of each class of securities to which transaction
  applies:</p>
  </td>
 </tr>
 <tr style='height:12.4pt'>
  <td width=14 style='width:.15in;padding:0in 0in 0in 0in;height:12.4pt'>

  </td>
  <td width=22 style='width:16.2pt;padding:0in 0in 0in 0in;height:12.4pt'>

  </td>
  <td width=7 style='width:5.4pt;padding:0in 0in 0in 0in;height:12.4pt'>

  </td>
  <td width=617 style='width:462.6pt;padding:0in 0in 0in 0in;height:12.4pt'>

  </td>
 </tr>
 <tr style='height:12.4pt'>
  <td width=14 valign=top style='width:.15in;background:white;padding:0in 0in 0in 0in;
  height:12.4pt'>

  </td>
  <td width=22 valign=top style='width:16.2pt;background:white;padding:0in 0in 0in 0in;
  height:12.4pt'>

  </td>
  <td width=7 valign=top style='width:5.4pt;background:white;padding:0in 0in 0in 0in;
  height:12.4pt'>

  </td>
  <td width=617 valign=top style='width:462.6pt;background:white;padding:0in 0in 0in 0in;
  height:12.4pt'>

  </td>
 </tr>
 <tr style='height:7.45pt'>
  <td width=14 style='width:.15in;padding:0in 0in 0in 0in;height:7.45pt'>

  </td>
  <td width=22 style='width:16.2pt;padding:0in 0in 0in 0in;height:7.45pt'>

  </td>
  <td width=7 style='width:5.4pt;padding:0in 0in 0in 0in;height:7.45pt'>

  </td>
  <td width=617 style='width:462.6pt;padding:0in 0in 0in 0in;height:7.45pt'>

  </td>
 </tr>
 <tr style='height:12.4pt'>
  <td width=14 valign=top style='width:.15in;background:white;padding:0in 0in 0in 0in;
  height:12.4pt'>

  </td>
  <td width=22 valign=top style='width:16.2pt;background:white;padding:0in 0in 0in 0in;
  height:12.4pt'>
  <p class=MsoNormal>(2)</p>
  </td>
  <td width=7 valign=top style='width:5.4pt;background:white;padding:0in 0in 0in 0in;
  height:12.4pt'>

  </td>
  <td width=617 valign=top style='width:462.6pt;background:white;padding:0in 0in 0in 0in;
  height:12.4pt'>
  <p class=MsoNormal>Aggregate number of securities to which transaction applies:</p>
  </td>
 </tr>
 <tr style='height:7.45pt'>
  <td width=14 style='width:.15in;padding:0in 0in 0in 0in;height:7.45pt'>

  </td>
  <td width=22 style='width:16.2pt;padding:0in 0in 0in 0in;height:7.45pt'>

  </td>
  <td width=7 style='width:5.4pt;padding:0in 0in 0in 0in;height:7.45pt'>

  </td>
  <td width=617 style='width:462.6pt;padding:0in 0in 0in 0in;height:7.45pt'>

  </td>
 </tr>
 <tr style='height:12.4pt'>
  <td width=14 valign=top style='width:.15in;background:white;padding:0in 0in 0in 0in;
  height:12.4pt'>

  </td>
  <td width=22 valign=top style='width:16.2pt;background:white;padding:0in 0in 0in 0in;
  height:12.4pt'>

  </td>
  <td width=7 valign=top style='width:5.4pt;background:white;padding:0in 0in 0in 0in;
  height:12.4pt'>

  </td>
  <td width=617 valign=top style='width:462.6pt;background:white;padding:0in 0in 0in 0in;
  height:12.4pt'>

  </td>
 </tr>
 <tr style='height:7.45pt'>
  <td width=14 style='width:.15in;padding:0in 0in 0in 0in;height:7.45pt'>

  </td>
  <td width=22 style='width:16.2pt;padding:0in 0in 0in 0in;height:7.45pt'>

  </td>
  <td width=7 style='width:5.4pt;padding:0in 0in 0in 0in;height:7.45pt'>

  </td>
  <td width=617 style='width:462.6pt;padding:0in 0in 0in 0in;height:7.45pt'>

  </td>
 </tr>
 <tr style='height:24.75pt'>
  <td width=14 valign=top style='width:.15in;background:white;padding:0in 0in 0in 0in;
  height:24.75pt'>

  </td>
  <td width=22 valign=top style='width:16.2pt;background:white;padding:0in 0in 0in 0in;
  height:24.75pt'>
  <p class=MsoNormal>(3)</p>
  </td>
  <td width=7 valign=top style='width:5.4pt;background:white;padding:0in 0in 0in 0in;
  height:24.75pt'>

  </td>
  <td width=617 valign=top style='width:462.6pt;background:white;padding:0in 0in 0in 0in;
  height:24.75pt'>
  <p class=MsoNormal>Per unit price or other underlying value of transaction
  computed pursuant to Exchange Act Rule&nbsp;0-11 (set forth the amount on
  which the filing fee is calculated and state how it was determined):</p>
  </td>
 </tr>
 <tr style='height:12.4pt'>
  <td width=14 style='width:.15in;padding:0in 0in 0in 0in;height:12.4pt'>

  </td>
  <td width=22 style='width:16.2pt;padding:0in 0in 0in 0in;height:12.4pt'>

  </td>
  <td width=7 style='width:5.4pt;padding:0in 0in 0in 0in;height:12.4pt'>

  </td>
  <td width=617 style='width:462.6pt;padding:0in 0in 0in 0in;height:12.4pt'>

  </td>
 </tr>
 <tr style='height:12.4pt'>
  <td width=14 valign=top style='width:.15in;background:white;padding:0in 0in 0in 0in;
  height:12.4pt'>

  </td>
  <td width=22 valign=top style='width:16.2pt;background:white;padding:0in 0in 0in 0in;
  height:12.4pt'>

  </td>
  <td width=7 valign=top style='width:5.4pt;background:white;padding:0in 0in 0in 0in;
  height:12.4pt'>

  </td>
  <td width=617 valign=top style='width:462.6pt;background:white;padding:0in 0in 0in 0in;
  height:12.4pt'>

  </td>
 </tr>
 <tr style='height:7.45pt'>
  <td width=14 style='width:.15in;padding:0in 0in 0in 0in;height:7.45pt'>

  </td>
  <td width=22 style='width:16.2pt;padding:0in 0in 0in 0in;height:7.45pt'>

  </td>
  <td width=7 style='width:5.4pt;padding:0in 0in 0in 0in;height:7.45pt'>

  </td>
  <td width=617 style='width:462.6pt;padding:0in 0in 0in 0in;height:7.45pt'>

  </td>
 </tr>
 <tr style='height:12.4pt'>
  <td width=14 valign=top style='width:.15in;background:white;padding:0in 0in 0in 0in;
  height:12.4pt'>

  </td>
  <td width=22 valign=top style='width:16.2pt;background:white;padding:0in 0in 0in 0in;
  height:12.4pt'>
  <p class=MsoNormal>(4)</p>
  </td>
  <td width=7 valign=top style='width:5.4pt;background:white;padding:0in 0in 0in 0in;
  height:12.4pt'>

  </td>
  <td width=617 valign=top style='width:462.6pt;background:white;padding:0in 0in 0in 0in;
  height:12.4pt'>
  <p class=MsoNormal>Proposed maximum aggregate value of transaction:</p>
  </td>
 </tr>
 <tr style='height:12.4pt'>
  <td width=14 style='width:.15in;padding:0in 0in 0in 0in;height:12.4pt'>

  </td>
  <td width=22 style='width:16.2pt;padding:0in 0in 0in 0in;height:12.4pt'>

  </td>
  <td width=7 style='width:5.4pt;padding:0in 0in 0in 0in;height:12.4pt'>

  </td>
  <td width=617 style='width:462.6pt;padding:0in 0in 0in 0in;height:12.4pt'>

  </td>
 </tr>
 <tr style='height:12.4pt'>
  <td width=14 valign=top style='width:.15in;background:white;padding:0in 0in 0in 0in;
  height:12.4pt'>

  </td>
  <td width=22 valign=top style='width:16.2pt;background:white;padding:0in 0in 0in 0in;
  height:12.4pt'>

  </td>
  <td width=7 valign=top style='width:5.4pt;background:white;padding:0in 0in 0in 0in;
  height:12.4pt'>

  </td>
  <td width=617 valign=top style='width:462.6pt;background:white;padding:0in 0in 0in 0in;
  height:12.4pt'>

  </td>
 </tr>
 <tr style='height:7.45pt'>
  <td width=14 style='width:.15in;padding:0in 0in 0in 0in;height:7.45pt'>

  </td>
  <td width=22 style='width:16.2pt;padding:0in 0in 0in 0in;height:7.45pt'>

  </td>
  <td width=7 style='width:5.4pt;padding:0in 0in 0in 0in;height:7.45pt'>

  </td>
  <td width=617 style='width:462.6pt;padding:0in 0in 0in 0in;height:7.45pt'>

  </td>
 </tr>
 <tr style='height:12.4pt'>
  <td width=14 valign=top style='width:.15in;background:white;padding:0in 0in 0in 0in;
  height:12.4pt'>

  </td>
  <td width=22 valign=top style='width:16.2pt;background:white;padding:0in 0in 0in 0in;
  height:12.4pt'>
  <p class=MsoNormal>(5)</p>
  </td>
  <td width=7 valign=top style='width:5.4pt;background:white;padding:0in 0in 0in 0in;
  height:12.4pt'>

  </td>
  <td width=617 valign=top style='width:462.6pt;background:white;padding:0in 0in 0in 0in;
  height:12.4pt'>
  <p class=MsoNormal>Total fee paid:</p>
  </td>
 </tr>
 <tr style='height:12.4pt'>
  <td width=14 style='width:.15in;padding:0in 0in 0in 0in;height:12.4pt'>

  </td>
  <td width=22 style='width:16.2pt;padding:0in 0in 0in 0in;height:12.4pt'>

  </td>
  <td width=7 style='width:5.4pt;padding:0in 0in 0in 0in;height:12.4pt'>

  </td>
  <td width=617 style='width:462.6pt;padding:0in 0in 0in 0in;height:12.4pt'>

  </td>
 </tr>
 <tr style='height:12.4pt'>
  <td width=14 valign=top style='width:.15in;background:white;padding:0in 0in 0in 0in;
  height:12.4pt'>

  </td>
  <td width=22 valign=top style='width:16.2pt;background:white;padding:0in 0in 0in 0in;
  height:12.4pt'>

  </td>
  <td width=7 valign=top style='width:5.4pt;background:white;padding:0in 0in 0in 0in;
  height:12.4pt'>

  </td>
  <td width=617 valign=top style='width:462.6pt;background:white;padding:0in 0in 0in 0in;
  height:12.4pt'>

  </td>
 </tr>
</table>





<div class=MsoNormal align=center style='text-align:center'>

<hr size=2 width="100%" noshade style='color:navy' align=center>

</div>



<br clear=all
style='page-break-before:always'>












<table class=MsoNormalTable border=0 cellspacing=0 cellpadding=0 width=660
 style='border-collapse:collapse'>
 <tr style='height:12.4pt'>
  <td width=19 colspan=2 valign=top style='width:13.9pt;background:white;
  padding:0in 0in 0in 0in;height:12.4pt'><br clear=all style='page-break-before:
  always'>

  <p class=MsoNormal>[ ]</p>
  </td>
  <td width=7 valign=top style='width:5.4pt;background:white;padding:0in 0in 0in 0in;
  height:12.4pt'>

  </td>
  <td width=634 colspan=4 valign=top style='width:475.7pt;background:white;
  padding:0in 0in 0in 0in;height:12.4pt'>
  <p class=MsoNormal>Fee paid previously with preliminary materials:</p>
  </td>
 </tr>
 <tr style='height:7.45pt'>
  <td width=19 colspan=2 style='width:13.9pt;padding:0in 0in 0in 0in;
  height:7.45pt'>

  </td>
  <td width=7 style='width:5.4pt;padding:0in 0in 0in 0in;height:7.45pt'>

  </td>
  <td width=634 colspan=4 style='width:475.7pt;padding:0in 0in 0in 0in;
  height:7.45pt'>

  </td>
 </tr>
 <tr style='height:37.1pt'>
  <td width=19 colspan=2 valign=top style='width:13.9pt;background:white;
  padding:0in 0in 0in 0in;height:37.1pt'>
  <p class=MsoNormal>[ ]</p>
  </td>
  <td width=7 valign=top style='width:5.4pt;background:white;padding:0in 0in 0in 0in;
  height:37.1pt'>

  </td>
  <td width=634 colspan=4 valign=top style='width:475.7pt;background:white;
  padding:0in 0in 0in 0in;height:37.1pt'>
  <p class=MsoNormal>Check box if any part of the fee is offset as provided by
  Exchange Act Rule&nbsp;0-11(a)(2) and identify the filing for which the
  offsetting fee was paid previously. Identify the previous filing by
  registration statement number, or the Form or Schedule and the date of its
  filing.</p>
  </td>
 </tr>
 <tr style='height:12.4pt'>
  <td width=14 valign=top style='width:.15in;background:white;padding:0in 0in 0in 0in;
  height:12.4pt'><br
  clear=all style='page-break-before:always'>


  </td>
  <td width=22 colspan=3 valign=top style='width:16.2pt;background:white;
  padding:0in 0in 0in 0in;height:12.4pt'>
  <p class=MsoNormal>(1)</p>
  </td>
  <td width=7 valign=top style='width:5.4pt;background:white;padding:0in 0in 0in 0in;
  height:12.4pt'>

  </td>
  <td width=423 valign=top style='width:316.95pt;background:white;padding:0in 0in 0in 0in;
  height:12.4pt'>
  <p class=MsoNormal>Amount Previously Paid:</p>
  </td>
  <td style='border:none;padding:0in 0in 0in 0in' width=194><p class='MsoNormal'>&nbsp;</td>
 </tr>
 <tr style='height:7.4pt'>
  <td width=14 style='width:.15in;padding:0in 0in 0in 0in;height:7.4pt'>

  </td>
  <td width=22 colspan=3 style='width:16.2pt;padding:0in 0in 0in 0in;
  height:7.4pt'>

  </td>
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  </td>
  <td width=423 style='width:316.95pt;padding:0in 0in 0in 0in;height:7.4pt'>

  </td>
  <td style='border:none;padding:0in 0in 0in 0in' width=194><p class='MsoNormal'>&nbsp;</td>
 </tr>
 <tr style='height:12.4pt'>
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  height:12.4pt'>

  </td>
  <td width=22 colspan=3 valign=top style='width:16.2pt;background:white;
  padding:0in 0in 0in 0in;height:12.4pt'>

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  <td width=7 valign=top style='width:5.4pt;background:white;padding:0in 0in 0in 0in;
  height:12.4pt'>

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  height:12.4pt'>

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 </tr>
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  </td>
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  </td>
  <td width=423 style='width:316.95pt;padding:0in 0in 0in 0in;height:7.4pt'>

  </td>
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 <tr style='height:12.4pt'>
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  <p class=MsoNormal>(2)</p>
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  <td width=423 valign=top style='width:316.95pt;background:white;padding:0in 0in 0in 0in;
  height:12.4pt'>
  <p class=MsoNormal>Form, Schedule or Registration Statement No.:</p>
  </td>
  <td style='border:none;padding:0in 0in 0in 0in' width=194><p class='MsoNormal'>&nbsp;</td>
 </tr>
 <tr style='height:7.4pt'>
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  <td width=7 style='width:5.4pt;padding:0in 0in 0in 0in;height:7.4pt'>

  </td>
  <td width=423 style='width:316.95pt;padding:0in 0in 0in 0in;height:7.4pt'>

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 </tr>
 <tr style='height:12.4pt'>
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  height:12.4pt'>

  </td>
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  padding:0in 0in 0in 0in;height:12.4pt'>

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  <td width=7 valign=top style='width:5.4pt;background:white;padding:0in 0in 0in 0in;
  height:12.4pt'>

  </td>
  <td width=423 valign=top style='width:316.95pt;background:white;padding:0in 0in 0in 0in;
  height:12.4pt'>

  </td>
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 </tr>
 <tr style='height:7.4pt'>
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  <td width=7 style='width:5.4pt;padding:0in 0in 0in 0in;height:7.4pt'>

  </td>
  <td width=423 style='width:316.95pt;padding:0in 0in 0in 0in;height:7.4pt'>

  </td>
  <td style='border:none;padding:0in 0in 0in 0in' width=194><p class='MsoNormal'>&nbsp;</td>
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  height:12.4pt'>

  </td>
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  padding:0in 0in 0in 0in;height:12.4pt'>
  <p class=MsoNormal>(3)</p>
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  height:12.4pt'>

  </td>
  <td width=423 valign=top style='width:316.95pt;background:white;padding:0in 0in 0in 0in;
  height:12.4pt'>
  <p class=MsoNormal>Filing Party:</p>
  </td>
  <td style='border:none;padding:0in 0in 0in 0in' width=194><p class='MsoNormal'>&nbsp;</td>
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  </td>
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  padding:0in 0in 0in 0in;height:12.4pt'>

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  height:12.4pt'>

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  <td width=423 valign=top style='width:316.95pt;background:white;padding:0in 0in 0in 0in;
  height:12.4pt'>

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  <td width=423 valign=top style='width:316.95pt;background:white;padding:0in 0in 0in 0in;
  height:12.4pt'>
  <p class=MsoNormal>Date Filed:</p>
  </td>
  <td style='border:none;padding:0in 0in 0in 0in' width=194><p class='MsoNormal'>&nbsp;</td>
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  height:12.4pt'>

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  <td width=423 valign=top style='width:316.95pt;background:white;padding:0in 0in 0in 0in;
  height:12.4pt'>

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  <td style='border:none;padding:0in 0in 0in 0in' width=194><p class='MsoNormal'>&nbsp;</td>
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</table>





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<p class=MsoNormal align=center style='text-align:center'>GOOD TIMES
RESTAURANTS INC.</p>



<p class=MsoNormal align=center style='text-align:center'>601 Corporate Circle</p>

<p class=MsoNormal align=center style='text-align:center'>Golden, Colorado
80401</p>



<p class=MsoBlockText align=center style='margin-bottom:0in;margin-bottom:.0001pt;
text-align:center'>NOTICE OF SPECIAL MEETING OF STOCKHOLDERS</p>



<p class=MsoBlockText align=center style='margin-bottom:0in;margin-bottom:.0001pt;
text-align:center'>To Be Held December 13, 2010</p>



<p class=MsoNormal>To Our Stockholders:</p>



<p class=Style25>A Special Meeting of the Stockholders (the &quot;Special Meeting&quot;)
of Good Times Restaurants Inc., a Nevada corporation (the &quot;Company&quot;), will be
held at our corporate offices, which are located at 601 Corporate Circle,
Golden, Colorado 80401, on December 13, 2010, beginning at 9:00 a.m. local time.&nbsp;
The purposes of the Special Meeting are:</p>

<p class=Style25>To consider and approve a $2,100,000 equity investment in the Company
through the issuance of 4,200,000 shares of the Company's common stock to Small
Island Investments Limited, a Bermuda corporation (the &quot;Investor&quot;), referred to
herein as the &quot;Investment Transaction&quot;;</p>

<p class=Style25>To consider and approve a proposal to give the Company's Board
of Directors discretion to effect a one-for-three reverse stock split of the
Company's issued and outstanding common stock following the closing of the
Investment Transaction, referred to herein as the &quot;Reverse Split&quot;; and</p>

<p class=Style25>To transact such other business as may properly come before
the Special Meeting and any adjournments or postponements thereof.</p>

<p class=Style25>The accompanying proxy statement contains additional
information about the Special Meeting.&nbsp; Only stockholders of record at the
close of business on October 27, 2010 are entitled to notice of and to vote at
the Special Meeting or any adjournment or postponement thereof.</p>

<p class=Style25>All stockholders are cordially invited to attend the Special Meeting.&nbsp;
If you do not plan to attend the Special Meeting, please sign, date and
promptly return the enclosed proxy card in the enclosed business reply envelope
or via facsimile to the attention of Boyd E. Hoback, our President and Chief Executive
Officer, at (303) 273-0177. The delivery of a proxy will not affect your right
to vote in person if you attend the Special Meeting.</p>



<p class=MsoNormal>Sincerely,</p>



<p class=MsoNormal><i>/s/ Susan M. Knutson</i></p>



<p class=MsoNormal>Susan M. Knutson</p>

<p class=MsoNormal>Secretary and Controller</p>

<p class=MsoNormal>November 22, 2010</p>





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<p class=MsoNormal align=center style='text-align:center'><b>TABLE OF CONTENTS</b></p>



<table class=MsoNormalTable border=0 cellspacing=0 cellpadding=0 width=642
 style='width:481.5pt;margin-left:5.4pt;border-collapse:collapse'>
 <tr style='height:.2in'>
  <td width=576 style='width:6.0in;padding:0in 5.4pt 0in 5.4pt;height:.2in'>
  <p class=MsoNormal>ABOUT THE SPECIAL MEETING</p>
  </td>
  <td width=66 style='width:49.5pt;padding:0in 5.4pt 0in 5.4pt;height:.2in'>
  <p class=MsoNormal align=right style='text-align:right'>1</p>
  </td>
 </tr>
 <tr style='height:.2in'>
  <td width=576 style='width:6.0in;padding:0in 5.4pt 0in 5.4pt;height:.2in'>

  </td>
  <td width=66 style='width:49.5pt;padding:0in 5.4pt 0in 5.4pt;height:.2in'>

  </td>
 </tr>
 <tr style='height:.2in'>
  <td width=576 style='width:6.0in;padding:0in 5.4pt 0in 5.4pt;height:.2in'>
  <p class=MsoNormal>PROPOSAL #1 - INVESTMENT TRANSACTION</p>
  </td>
  <td width=66 style='width:49.5pt;padding:0in 5.4pt 0in 5.4pt;height:.2in'>
  <p class=MsoNormal align=right style='text-align:right'>3</p>
  </td>
 </tr>
 <tr style='height:.2in'>
  <td width=576 style='width:6.0in;padding:0in 5.4pt 0in 5.4pt;height:.2in'>

  </td>
  <td width=66 style='width:49.5pt;padding:0in 5.4pt 0in 5.4pt;height:.2in'>

  </td>
 </tr>
 <tr style='height:.2in'>
  <td width=576 style='width:6.0in;padding:0in 5.4pt 0in 5.4pt;height:.2in'>
  <p class=MsoNormal>PROPOSAL #2 - REVERSE STOCK SPLIT</p>
  </td>
  <td width=66 style='width:49.5pt;padding:0in 5.4pt 0in 5.4pt;height:.2in'>
  <p class=MsoNormal align=right style='text-align:right'>15</p>
  </td>
 </tr>
 <tr style='height:.2in'>
  <td width=576 style='width:6.0in;padding:0in 5.4pt 0in 5.4pt;height:.2in'>

  </td>
  <td width=66 style='width:49.5pt;padding:0in 5.4pt 0in 5.4pt;height:.2in'>

  </td>
 </tr>
 <tr style='height:.2in'>
  <td width=576 style='width:6.0in;padding:0in 5.4pt 0in 5.4pt;height:.2in'>
  <p class=MsoNormal>INTEREST OF CERTAIN PERSONS IN MATTERS TO BE ACTED UPON</p>
  </td>
  <td width=66 style='width:49.5pt;padding:0in 5.4pt 0in 5.4pt;height:.2in'>
  <p class=MsoNormal align=right style='text-align:right'>18</p>
  </td>
 </tr>
 <tr style='height:.2in'>
  <td width=576 style='width:6.0in;padding:0in 5.4pt 0in 5.4pt;height:.2in'>

  </td>
  <td width=66 style='width:49.5pt;padding:0in 5.4pt 0in 5.4pt;height:.2in'>

  </td>
 </tr>
 <tr style='height:.2in'>
  <td width=576 style='width:6.0in;padding:0in 5.4pt 0in 5.4pt;height:.2in'>
  <p class=MsoNormal>SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
  MANAGEMENT</p>
  </td>
  <td width=66 style='width:49.5pt;padding:0in 5.4pt 0in 5.4pt;height:.2in'>
  <p class=MsoNormal align=right style='text-align:right'>20</p>
  </td>
 </tr>
 <tr style='height:.2in'>
  <td width=576 style='width:6.0in;padding:0in 5.4pt 0in 5.4pt;height:.2in'>

  </td>
  <td width=66 style='width:49.5pt;padding:0in 5.4pt 0in 5.4pt;height:.2in'>

  </td>
 </tr>
 <tr style='height:.2in'>
  <td width=576 style='width:6.0in;padding:0in 5.4pt 0in 5.4pt;height:.2in'>
  <p class=MsoNormal>STOCKHOLDER NOMINATIONS AND OTHER PROPOSALS</p>
  </td>
  <td width=66 style='width:49.5pt;padding:0in 5.4pt 0in 5.4pt;height:.2in'>
  <p class=MsoNormal align=right style='text-align:right'>21</p>
  </td>
 </tr>
 <tr style='height:.2in'>
  <td width=576 style='width:6.0in;padding:0in 5.4pt 0in 5.4pt;height:.2in'>

  </td>
  <td width=66 style='width:49.5pt;padding:0in 5.4pt 0in 5.4pt;height:.2in'>

  </td>
 </tr>
 <tr style='height:.2in'>
  <td width=576 style='width:6.0in;padding:0in 5.4pt 0in 5.4pt;height:.2in'>
  <p class=MsoNormal>OTHER MATTERS</p>
  </td>
  <td width=66 style='width:49.5pt;padding:0in 5.4pt 0in 5.4pt;height:.2in'>
  <p class=MsoNormal align=right style='text-align:right'>21</p>
  </td>
 </tr>
 <tr style='height:.2in'>
  <td width=576 style='width:6.0in;padding:0in 5.4pt 0in 5.4pt;height:.2in'>

  </td>
  <td width=66 style='width:49.5pt;padding:0in 5.4pt 0in 5.4pt;height:.2in'>

  </td>
 </tr>
 <tr style='height:.2in'>
  <td width=576 style='width:6.0in;padding:0in 5.4pt 0in 5.4pt;height:.2in'>
  <p class=MsoNormal>WHERE YOU CAN FIND MORE INFORMATION</p>
  </td>
  <td width=66 style='width:49.5pt;padding:0in 5.4pt 0in 5.4pt;height:.2in'>
  <p class=MsoNormal align=right style='text-align:right'>21</p>
  </td>
 </tr>
 <tr style='height:.2in'>
  <td width=576 style='width:6.0in;padding:0in 5.4pt 0in 5.4pt;height:.2in'>

  </td>
  <td width=66 style='width:49.5pt;padding:0in 5.4pt 0in 5.4pt;height:.2in'>

  </td>
 </tr>
 <tr style='height:.2in'>
  <td width=576 style='width:6.0in;padding:0in 5.4pt 0in 5.4pt;height:.2in'>
  <p class=MsoNormal>APPENDIX A - SECURITIES PURCHASE AGREEMENT DATED OCTOBER
  29, 2010 BETWEEN GOOD TIMES RESTAURANTS INC. AND SMALL ISLAND INVESTMENTS
  LIMITED</p>
  </td>
  <td width=66 style='width:49.5pt;padding:0in 5.4pt 0in 5.4pt;height:.2in'>

  </td>
 </tr>
 <tr style='height:.2in'>
  <td width=576 style='width:6.0in;padding:0in 5.4pt 0in 5.4pt;height:.2in'>

  </td>
  <td width=66 style='width:49.5pt;padding:0in 5.4pt 0in 5.4pt;height:.2in'>

  </td>
 </tr>
 <tr style='height:.2in'>
  <td width=576 style='width:6.0in;padding:0in 5.4pt 0in 5.4pt;height:.2in'>
  <p class=MsoNormal>APPENDIX B - FAIRNESS OPINION OF WOODVILLE HALL CAPITAL,
  LLC DATED OCTOBER 29, 2010</p>
  </td>
  <td width=66 style='width:49.5pt;padding:0in 5.4pt 0in 5.4pt;height:.2in'>

  </td>
 </tr>
</table>





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<p class=MsoNormal align=center style='text-align:center'>GOOD TIMES
RESTAURANTS INC.</p>



<p class=MsoNormal align=center style='text-align:center'>601 Corporate Circle</p>

<p class=MsoNormal align=center style='text-align:center'>Golden, Colorado
80401</p>



<p class=MsoNormal align=center style='text-align:center'>PROXY STATEMENT FOR
SPECIAL MEETING OF STOCKHOLDERS</p>



<p class=MsoNormal align=center style='text-align:center'>To Be Held December 13,
2010</p>



<p class=MsoNormal>This Proxy Statement relates to a Special Meeting of
Stockholders (the &quot;Special Meeting&quot;) of Good Times Restaurants Inc., a Nevada
corporation (the &quot;Company&quot;).&nbsp; The Special Meeting will be held on December 13,
2010, at 9:00 a.m. local time, at our corporate offices, which are located at
601 Corporate Circle, Golden, Colorado 80401, or at such other time and place
to which the Special Meeting may be adjourned or postponed.&nbsp; The enclosed proxy
is solicited by our Board of Directors (the &quot;Board&quot;).&nbsp; The proxy materials
relating to the Special Meeting are first being mailed to stockholders entitled
to vote at the meeting on or about December 1, 2010.</p>



<p class=MsoNormal>The terms &quot;we,&quot; &quot;us,&quot; and &quot;our&quot; in this Proxy Statement
refer to the Company.</p>



<p class=MsoNormal>Important Notice Regarding the Availability of Proxy
Materials for the Special Meeting of Stockholders To Be Held on December 13,
2010:&nbsp; This Proxy Statement is also available at our website at www.goodtimesburgers.com.</p>



<p class=MsoNormal align=center style='text-align:center'><b>ABOUT THE MEETING</b></p>



<p class=MsoNormal><b>What is the purpose of the Special Meeting?</b></p>



<p class=MsoNormal>At the Special Meeting, the stockholders will act upon the
matters outlined in the accompanying Notice of Special Meeting and this Proxy
Statement, including (1) a proposal to approve a $2,100,000 equity investment
in the Company through the issuance of 4,200,000 shares of the Company's common
stock to Small Island Investments Limited, a Bermuda corporation (the
&quot;Investor&quot;), referred to herein as the &quot;Investment Transaction&quot;; and (2) a
proposal to give our Board discretion to effect a one-for-three reverse stock
split of the Company's common stock following the closing of the Investment
Transaction, referred to herein as the &quot;Reverse Split.&quot;</p>



<p class=MsoNormal><b>Who is entitled to attend and vote at the Special
Meeting?</b></p>



<p class=MsoNormal>Only stockholders of record at the close of business on the
record date of October 27, 2010, or their duly appointed proxies, are entitled
to receive notice of the Special Meeting, attend the meeting, and vote their
shares at the Special Meeting or any adjournment or postponement of the Special
Meeting.&nbsp; At the close of business on October 27, 2010, there were 3,898,559
shares of our common stock outstanding and entitled to vote.&nbsp; Each outstanding
share of our common stock is entitled to one vote.</p>



<p class=MsoNormal><b>How do I vote?</b></p>



<p class=MsoNormal>You may vote on matters to come before the Special Meeting
in two ways:&nbsp; (i) you can attend the Special Meeting and cast your vote in
person, or (ii) you can vote by completing, signing and dating the enclosed
proxy card and returning it to us in the enclosed business reply envelope or
via facsimile to Boyd E. Hoback, our President and Chief Executive Officer, at
(303) 273-0177.&nbsp; If you return the proxy card, you will authorize the
individuals named on the proxy card, referred to as proxy holders, to vote your
shares according to your instructions or, if you provide no instructions,
according to the recommendations of our Board.&nbsp; If your shares are held by a
broker in &quot;street name,&quot; you will receive a voting instruction form from your
broker or the broker's agent asking you how your shares should be voted.</p>



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<p class=MsoNormal><b>What if I vote and then change my mind?</b></p>



<p class=MsoNormal>You may revoke your proxy at any time before the vote is
taken at the Special Meeting by either (i) filing with our Corporate Secretary
a written notice of revocation, (ii) sending in another duly executed proxy
bearing a later date, or (iii) attending the meeting and casting your vote in
person.&nbsp; Your last vote will be the vote that is counted.</p>



<p class=MsoNormal><b>How can I get more information about attending the Special
Meeting and voting in person?</b></p>



<p class=MsoNormal>The Special Meeting will be held on Monday, December 13,
2010, at 9:00 a.m. local time, at our corporate offices, which are located at
601 Corporate Circle, Golden, Colorado 80401, or at such other time and place
to which the Special Meeting may be adjourned or postponed.&nbsp; For additional
details about the Special Meeting, including directions to the site of the
Special Meeting and information about how you may vote in person if you so
desire, please call or email Boyd E. Hoback, our President and Chief Executive
Officer, at (303) 384-1400 or at bhoback@gtrestaurants.com.</p>



<p class=MsoNormal><b>What are the Board's recommendations?</b></p>



<p class=MsoNormal>Unless you give other instructions on your proxy card, the
persons named on the proxy card will vote in accordance with the
recommendations of our Board, which are described in this Proxy Statement.&nbsp; Our
Board recommends a vote FOR the approval of the Investment Transaction and FOR
the approval of the Reverse Split.</p>



<p class=MsoNormal>With respect to any other matter that properly comes before
the meeting, the proxy holders will vote as recommended by our Board or, if no
recommendation is given, in their own discretion.</p>



<p class=MsoNormal><b>What constitutes a quorum?</b></p>



<p class=MsoNormal>The presence at the Special Meeting, in person or by proxy,
of the holders of a majority of the issued and outstanding shares of our common
stock on the record date will constitute a quorum at the Special Meeting,
permitting us to conduct our business at the Special Meeting.&nbsp; Proxies received
but marked as abstentions and broker non-votes (defined below) will be included
in the calculation of the number of shares considered to be present at the
meeting for purposes of determining whether a quorum is present.&nbsp; If a quorum
is not present, the Special Meeting may be adjourned until a quorum is
obtained.</p>



<p class=MsoNormal><b>What vote is required to approve each proposal?</b></p>



<p class=MsoNormal>Vote Required.&nbsp; Approval of each proposal to be considered
and voted upon at the Special Meeting will require the affirmative vote of a majority
of the votes cast by the holders of our common stock present in person or
represented by proxy at the Special Meeting (assuming we have a quorum as
described above).&nbsp; A properly executed proxy marked &quot;ABSTAIN&quot; with respect to a
proposal will not be voted for that proposal but will be counted for purposes
of whether there is a quorum at the meeting.&nbsp; Abstentions will result in the
respective proposal receiving fewer votes.</p>



<p class=MsoNormal>Effect of Broker Non-Votes.&nbsp; If your shares are held by your
broker in &quot;street name,&quot; you will receive a voting instruction form from your
broker or the broker's agent asking you how your shares should be voted.&nbsp;
Please complete the form and return it in the envelope provided by the broker
or agent.&nbsp; No postage is necessary if mailed in the United States.&nbsp; If you do
not instruct your broker how to vote, your broker may vote your shares at its
discretion or, on some matters, may not be permitted to exercise voting
discretion.&nbsp; Votes that could have been cast on the matter in question if the
brokers have received their customers' instructions, and as to which the broker
has notified us on a proxy form in accordance with industry practice or has
otherwise advised us that it lacks voting authority, are referred to as &quot;broker
non-votes.&quot;&nbsp; Thus, if you do not give your broker or nominee specific
instructions, your shares may not be voted on those matters and will not be
counted as a vote cast in determining the number of shares necessary for
approval of those matters.&nbsp; Shares represented by such broker non-votes,
however, will be counted in determining whether there is a quorum.&nbsp;
Accordingly, broker non-votes will result in the respective proposal receiving
fewer votes.</p>

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<p class=MsoNormal style='line-height:1.0pt'><a name="_Toc92016731"></a><a
name="_Toc89839943"></a><a name="_Toc89839448">&nbsp;</a></p>







<p class=MsoNormal><b>Can I dissent or exercise rights of appraisal?</b></p>



<p class=MsoNormal>Neither Nevada law nor our Articles of Incorporation or
Bylaws provide our stockholders with dissenters' or appraisal rights in
connection with the proposals to be voted on at the Special Meeting.&nbsp; If the
proposals are approved at the Special Meeting, stockholders voting against such
proposals will not be entitled to seek appraisal for their shares.</p>



<p class=MsoNormal><b>Who pays for this proxy solicitation?</b></p>



<p class=MsoNormal>The Company will bear the entire cost of solicitation,
including the preparation, assembly, printing and mailing of this Proxy
Statement, the proxy card, and any additional solicitation materials furnished
to the stockholders.&nbsp; In addition to solicitation by mail, proxies may be
solicited by our officers and regular employees by telephone or personal
interview. &nbsp;These individuals will not receive any compensation for their
services other than their regular salaries.&nbsp; Arrangements will also be made
with brokerage houses and other custodians and fiduciaries to forward
solicitation materials to the beneficial owners of the shares held on the
record date, and we may reimburse those persons for reasonable out-of-pocket
expenses incurred by them in so doing.</p>



<p class=MsoNormal align=center style='text-align:center'><a name="_Toc92016732"></a><a
name="_Toc89839944"></a><a name="_Toc89839449"><b>PROPOSAL #1 - </b></a><b>APPROVAL
OF THE INVESTMENT TRANSACTION</b></p>



<p class=MsoNormal>We are seeking stockholder approval of this Proposal #1 for
the purpose of complying with Rules 5365(a) and 5365(d) of the NASDAQ Stock
Market, which require, respectively, that the Company seek stockholder approval
of the Investment Transaction because (i) it will represent 51.4 percent of the
Company's outstanding common stock following the Investment Transaction,
resulting in a change of control of the Company, and (ii) the shares of common
stock to be issued to the Investor in the Investment Transaction will be issued
at a price less than the recently prevailing market prices of such shares.&nbsp; On
November 10, 2010, the last sale price of our common stock reported by NASDAQ
was $0.75 per share.&nbsp; The purchase price for the Shares to be issued in the
Investment Transaction is $0.50 per share, which represents a 33.3 percent
discount from the November 10, 2010 trading price.</p>



<p class=MsoNormal><b>The Parties</b></p>



<p class=MsoNormal>The Company.&nbsp; The Company was incorporated in the State of
Nevada in 1987.&nbsp; The Company's common stock is quoted on the NASDAQ Capital
Market (symbol: GTIM).&nbsp; The Company is essentially a holding company for its
wholly owned subsidiary, Good Times Drive Thru Inc. (&quot;GTDT&quot;), a Colorado
corporation, which is engaged in the business of developing, owning, operating
and franchising hamburger-oriented drive-through restaurants under the name
Good Times Burgers &amp; Frozen Custard&trade;.&nbsp; Most of our restaurants are located
in the front-range communities of Colorado but we also have franchised
restaurants in Idaho, North Dakota and Wyoming.</p>



<p class=MsoNormal>The Investor.&nbsp; The Investor is a Bermuda corporation based
in Boston, Massachusetts.&nbsp; The Investor is an affiliate of a company that owns
and operates three restaurant brands operating in Canada and the United States
generating approximately $75 million in annual revenues.&nbsp; Please see the
section entitled &quot;Investor Board Designees&quot; below.</p>



<p class=MsoNormal><b>Background and Description of the Proposed Investment
Transaction</b></p>



<p class=MsoNormal>General</p>



<p class=MsoNormal>Our Board has determined to enter into the Securities Purchase
Agreement, dated October 29, 2010 (the &quot;Purchase Agreement&quot;), with the
Investor, after consideration of the Company's capital requirements and its strategic
alternatives over the course of the last twelve months.&nbsp; In August 2009, the
Company engaged Mastodon Ventures, Inc. as its financial advisor to seek
strategic alternatives that would maximize stockholder value.&nbsp; As described below
under the heading &quot;Evaluation of Strategic Alternatives&quot;, that process included
evaluation of the Company for possible investment by various private equity
firms and strategic investors, as well as by competitors interested in the
possible purchase or conversion of the Company's assets to another restaurant
brand.</p>

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<p class=MsoNormal>The Company's sales trends have declined since the middle of
fiscal 2008 as a result of the economic recession, shift in consumer spending
and the quick service restaurant segment competitive environment.&nbsp; It was not
until June 2010 that sales trends began to flatten out, turning positive in
August, September and October of 2010.&nbsp; Those negative sales trends and the
resulting impact on the Company's cash flow from operations significantly limited
the number of interested investors in the Company.&nbsp; During fiscal 2009 and 2010
the Company significantly reduced its operating expenses and entered into two
separate bridge loan transactions to improve its working capital and remain
current on its long term debt as it evaluated strategic alternatives.</p>



<p class=MsoNormal>While the Company remains current on its long term debt
obligations, leases and current liabilities with its vendors, it has accrued
property taxes for 2009, outstanding loans and other miscellaneous accounts
payable that are due.&nbsp; In spite of the recent sales trend improvement, the
losses from operations has put a strain on the Company's ability to meet its
ongoing liabilities, and our Board has taken into account the timing of the
proposed Investment Transaction given the Company's current and increased
working capital needs in the winter months of fiscal 2011.</p>



<p class=MsoNormal>During fiscal 2010, the Company received two notices of
noncompliance from NASDAQ for the continued listing of its common stock
relating to failing to maintain a minimum bid price of $1.00 per share of its
common stock and falling below the requirement of net tangible stockholders'
equity of $2.5 million.&nbsp; The proposed Investment Transaction and approval of
the Reverse Split will enable the Company to regain compliance with both of the
requirements for continued listing on the NASDAQ Capital Market.</p>



<p class=MsoNormal>Evaluation of Strategic Alternatives</p>



<p class=MsoNormal>On August 14, 2009, our Board formed a Special Committee
comprised of directors Richard Stark, Alan Teran and Geoff Bailey to explore
and evaluate strategic alternatives aimed at enhancing stockholder value.&nbsp; At
the same time, the Company hired Mastodon Ventures, Inc. to provide strategic
advisory services and explore strategic alternatives that may further the long-term
business prospects of the Company and provide value to its stockholders.&nbsp;
Mastodon Ventures is an advisory firm based in Austin, Texas focused on mergers
and acquisitions and capital formation for emerging growth and middle-market
companies with particular expertise since 2004 on multi-unit restaurant
transactions.</p>



<p class=MsoNormal>In October 2009, Mastodon Ventures began contacting a
relatively large number of potential investors to determine their initial
interest regarding a possible purchase of Company stock.&nbsp; Mastodon and the
Company prepared various disclosure materials on the Company and its business
for the benefit of possible investors.</p>



<p class=MsoNormal>In December 2009 and in January 2010, the Company discussed
potential financing transactions with two potential investors which had
expressed initial interest.&nbsp; These discussions did not progress because of the
Company's negative cash flow trends.</p>



<p class=MsoNormal>On February 1, 2010, the Company and GTDT entered into a
loan agreement with W Capital, Inc., John T. MacDonald and Golden Bridge, LLC,
pursuant to which the lenders made loans totaling $400,000 to be used for
restaurant marketing and other working capital uses of GTDT.&nbsp; The loans bear
interest at a rate of 12% per annum through August 1, 2010 and at a rate of 14%
per annum from and after August 1, 2010 until the maturity date.&nbsp; The maturity
date for payment of all principal and interest on the loans is December 31,
2010.&nbsp; The loans are convertible into shares of our common stock at any time
prior to repayment at a conversion price of 25% less than the average price of
the common stock during the 20 days prior to conversion, but at not less than
$0.75 per share nor more than $1.08 per share.&nbsp; In addition, the Company issued
warrants to the lenders which provide that the lenders may at any time until
two years from the date of repayment or conversion of the loans purchase up to
an aggregate of 50,000 shares of our common stock at the same exercise price.&nbsp;
The loans further provided that if the loans were not repaid prior to August 1,
2010, the Company would issue warrants to the lenders for the purchase of
50,000 additional shares of the common stock upon the same terms.</p>



<p class=Style25 style='text-indent:0in'>In March 2010, the Company considered
a proposal from a private equity firm to acquire all of the stock of GTDT from
the Company for cash and the assumption of certain debt obligations.&nbsp; However,
the purchase would have excluded an existing real estate asset, which would
have been leased back to GTDT, and the Company would have retained debt
obligations for that real estate and other debt obligations.</p>

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<p class=Style25 style='text-indent:0in'>The net value of the transaction to
the Company was estimated at the time to be approximately $0.53 per
share&nbsp;net of the retained debt, and the Company&nbsp;would have continued
to have on-going expenses associated with its continued public company status.&nbsp;
In addition, as a condition to the proposed sale, the buyer required that
certain controlling stockholders of the Company contribute two-thirds of their
share of the sale proceeds into the purchaser entity.&nbsp; This condition was not
acceptable to the controlling stockholders.</p>



<p class=MsoNormal>Subsequent to March 2010, Mastodon had meetings with more
than twenty possible investors about a purchase of Company stock, including
approximately seven meetings in which Boyd Hoback, the Company's President and
Chief Executive Officer, participated.&nbsp; Mr. Hoback and Eric Reinhard, the
Chairman of our Board, also had discussions with approximately six other
possible investors which were arranged other than through Mastodon.&nbsp; As a
result of these meetings before and after March 2010, four investors submitted
proposal term sheets.&nbsp; None of the foregoing activities however resulted in a
firm offer to purchase, generally because of the Company's negative cash flow trends
affected by the adverse restaurant segment competitive environment.&nbsp; Also, the
proposed investment was considered too small by some of the potential
investors.</p>



<p class=MsoNormal>The Company and the Investor, along with Mastodon, began
discussing potential investment terms in September 2010.&nbsp; On October 3, 2010, the
Company and the Investor entered into a non-binding term sheet for the sale of shares
of its common stock for $2 million, subject to the execution of a definitive
Securities Purchase Agreement, the completion of the Investor's due diligence,
and various other contingencies.&nbsp; A copy of the term sheet was filed as Exhibit
10.1 to the Company's Current Report on Form 8-K filed on October 5, 2010.</p>



<p class=MsoNormal>On October 29, 2010, the Company entered into the Purchase
Agreement with the Investor, under which the Company has agreed to sell, and
the Investor has agreed to purchase, 4,200,000 shares of the Company's common
stock (the &quot;Shares&quot;) at a price of $0.50 per share.&nbsp; When issued at the
Closing, the Shares will represent approximately 51.4 percent of the Company's
total outstanding shares on a pro forma basis.&nbsp; As described below, the
consummation of the Investment Transaction is conditioned on obtaining the
approval of the Company's stockholders of (a) the issuance and sale of the
Shares in accordance with the requirements of the Purchase Agreement and the
rules of the NASDAQ Stock Market, and (b) the proposed Reverse Split.</p>



<p class=MsoNormal><a name="_DV_C17">The $0.50 per share price at which the
Shares will be issued pursuant to the Purchase Agreement is less than the
estimated $0.53 per share net value of the proposed transaction considered by
our Board in March 2010.&nbsp; However, the $0.50 per share price treats all of the
stockholders of the Company equally and does not put controlling stockholders
at a disadvantage.&nbsp; Moreover, the March 2010 proposed transaction, if
consummated, would have eliminated the interests of our minority stockholders
in any future growth of the Company, whereas the Investment Transaction does
not eliminate the ownership interests of our present stockholders.</a></p>



<p class=MsoNormal><a name="_DV_C1">On November 12, 2010, the Company received
an unsolicited tentative proposal from another investor to purchase the Shares
at a price of $0.60 per share, subject to the successful completion of the
investor's due diligence and other matters. Our Board determined in its good
faith judgment (after consultation with the Company's outside legal counsel and
independent financial advisor) that the terms of the offer were not superior to
the Investment Transaction from a financial point of view to the Company's
stockholders because (i) the 20% premium in price to the Investment Transaction
would only net the Company an approximate 10% premium after payment of a
breakup fee to the Investor and additional legal costs, (ii) the offer did not
meet the Company's immediate working capital needs, and (iii) the offer was
subject to uncertainty and contingences. During the other investor's conduct of
initial due diligence, the Company and the other investor mutually agreed not
to proceed with the tentative proposal.</a></p>



<p class=MsoNormal><b>Securities Act Matters</b></p>



<p class=MsoNormal>The Investor has represented to the Company that it is an accredited
investor, as such term is defined in Rule 501 of Regulation D promulgated under
the Securities Act of 1933, as amended (the &quot;Securities Act&quot;).&nbsp; The Shares have
not been registered under the Securities Act or state securities laws and may
not be offered or sold in the United States in the absence of an effective
registration statement or exemption from the applicable federal and state
registration requirements.&nbsp; The Company has relied on the exemption from the
registration requirements of the Securities Act set forth in Section 4(2)
thereof and the rules and regulations promulgated thereunder for the purposes
of the transaction.&nbsp; Effective at the Closing, the Company intends to enter
into a Registration Rights Agreement with the Investor, pursuant to which the
Company will grant the Investor certain registration rights with respect to the
Shares.</p>

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<p class=MsoNormal><b>Recommendation of the Board of Directors</b></p>



<p class=MsoNormal>After taking into account the factors described below and
other factors, our Board has unanimously approved the issuance of the Shares
and has determined that the Investment Transaction is advisable and in the best
interests of our stockholders and recommends that you vote FOR Proposal #1.</p>



<p class=MsoNormal>Described below are the material factors considered by our
Board in making its recommendation, including the fairness of the price to be
received by us, and our desire for additional capital to achieve our strategic
goals and generally to enhance stockholder value.&nbsp; See generally, &quot;Board's
Evaluation of the Fairness of the Terms of the Investment Transaction&quot; and &quot;Fairness
Opinion&quot; below.</p>



<p class=MsoNormal><b>Board's Evaluation of the Fairness of the Terms of the
Investment Transaction</b></p>



<p class=MsoNormal>In reaching its decision to approve and proceed with the Investment
Transaction, our Board carefully considered a number of factors and consulted
with the Company's senior management as well as Mastodon Ventures, Inc.</p>



<p class=MsoNormal>In view of the complexity and wide variety of information
and factors considered in connection with its evaluation of the Investment
Transaction, the Board did not find it practicable to and did not quantify or
otherwise assign relative or specific weights to the factors it considered in
reaching its determination.&nbsp; Instead, the material factors considered by the
Board were the following:</p>



<p class=MsoNormal style='margin-left:.25in;text-indent:-.25in'>&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The completion of the Investment Transaction will provide
additional capital to meet current liabilities, amend an existing loan
agreement, pay off other loans coming due at December 31, 2010, and grow our
business in the future.</p>

<p class=MsoNormal style='margin-left:.25in;text-indent:-.25in'>&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The completion of the Investment Transaction, together with the Reverse
Split described below, will allow us to regain compliance for the continued
listing of our common stock on the NASDAQ Capital Market.</p>

<p class=MsoNormal style='margin-left:.25in;text-indent:-.25in'>&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The completion of the Investment Transaction will strengthen our
overall financial position and reduce our financial risk.&nbsp; In addition, the
completion of the Investment Transaction will strengthen our investor base with
the addition of a new experienced investor which will have a significant stake
in our long-term success and will be motivated to provide support and
assistance to protect and enhance its investment.</p>

<p class=MsoNormal style='margin-left:.25in;text-indent:-.25in'>&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
While the Investment Transaction will result in a change of
control of the Company, it is anticipated that the four persons who the
Investor will designate as Board members will have experience in the restaurant
sector including mergers and acquisitions and advising comparable companies.&nbsp;
Please see the section entitled &quot;Investor Board Designees&quot; below.</p>

<p class=MsoNormal style='margin-left:.25in;text-indent:-.25in'>&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Our ability to raise funds from other sources depends on many
factors, including, among other things, the growth of our revenues, our profit
margins, leverage in our operating expenses, and the cost and availability of
other forms of third-party financing to expand our business operations.&nbsp; In the
view of the Board, many of these factors are subject to significant
uncertainty.</p>

<p class=MsoNormal style='margin-left:.25in;text-indent:-.25in'>&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The securities issued in the Investment Transaction will be
shares of our common stock rather than debt or preferred stock, which will
place the Investor at the same rank as existing stockholders and allow us to
maintain a less complicated capital structure.</p>

<p class=MsoNormal style='margin-left:.25in;text-indent:-.25in'>&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The securities issued in the Investment Transaction will dilute
the percentage ownership of each of our existing stockholders by 51.4 percent,
and the purchase price per share of common stock issued in the Investment
Transaction will be less than the recently prevailing trading market prices of
such shares.</p>

<p class=MsoNormal style='margin-left:.25in;text-indent:-.25in'>&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
We received the opinion of Woodville Hall Capital, LLC, of
Middleburg, Virginia, that the consideration to be received by us in the
Investment Transaction is fair to us from a financial point of view.&nbsp; Please
see the section entitled &quot;Fairness Opinion&quot; below.</p>



<p class=MsoNormal><b>Fairness Opinion</b></p>



<p class=MsoNormal>As disclosed above, a fairness opinion was provided by Woodville
Hall Capital, LLC, of Middleburg, Virginia. Woodville Hall delivered a written
opinion to the Board that, as of October 29, 2010, and based upon and subject
to the factors, assumptions, qualifications and limitations described in the
written opinion, the consideration to be received by the Company in the
Investment Transaction is fair from a financial point of view to the Company.</p>

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<p class=MsoNormal>Below is a summary of the fairness opinion rendered by
Woodville Hall to the Board as of October 29, 2010.&nbsp; The full text of the
fairness opinion setting forth the assumptions made, procedures followed,
matters considered and limitations of the review undertaken with it is attached
hereto as Appendix B.&nbsp; </p>



<p class=MsoNormal><b>You should read the fairness opinion in its entirety.&nbsp;
Woodville Hall provided its opinion for the information and assistance of the
Board in connection with its consideration of the Investment Transaction.&nbsp; This
opinion is not a recommendation as to how a stockholder of the Company should
vote with respect to the issuance of the Shares to the Investor in the
Investment Transaction or any other matter.</b></p>



<p class=MsoNormal>No limitations were imposed upon Woodville Hall with respect
to the investigations made or procedures followed by Woodville Hall in
rendering its opinion.&nbsp; You should understand that the fairness opinion is
based upon market conditions as they exist as of October 29, 2010 and speaks
only as to such date.&nbsp; Subsequent events could affect the fairness of the
consideration received by the Company in the Investment Transaction from a
financial point of view, including changes in industry performance or changes
in market conditions and changes to our business, financial condition and
results of operation.&nbsp; Woodville Hall has not been requested and does not
intend to update, revise or reaffirm its fairness opinion to reflect any such
changes that may occur prior to the Closing.</p>



<p class=MsoNormal>In arriving at its opinion, Woodville Hall among other
things:</p>



<p class=MsoNormal style='margin-left:.25in;text-indent:-.25in'>&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Reviewed certain reports and information filed by the Company
with the SEC;</p>

<p class=MsoNormal style='margin-left:.25in;text-indent:-.25in'>&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Reviewed the Company's management presentation, dated Spring
2010;</p>

<p class=MsoNormal style='margin-left:.25in;text-indent:-.25in'>&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Discussed the business and prospects of the Company with senior
operating and financial officers as well as directors of the Company;</p>

<p class=MsoNormal style='margin-left:.25in;text-indent:-.25in'>&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Discussed the fund raising process with Robert Hersch of
Mastodon&nbsp; Ventures, Inc., an advisor to the Company;</p>

<p class=MsoNormal style='margin-left:.25in;text-indent:-.25in'>&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Reviewed the term sheet, dated October 1, 2010, between the
Company and the Investor;</p>

<p class=MsoNormal style='margin-left:.25in;text-indent:-.25in'>&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Reviewed the Securities Purchase Agreement, dated October 29,
2010, between the Company and the Investor, and related documents;</p>

<p class=MsoNormal style='margin-left:.25in;text-indent:-.25in'>&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Reviewed management-prepared GTDT store performance financials
for the past two years;</p>

<p class=MsoNormal style='margin-left:.25in;text-indent:-.25in'>&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Reviewed draft consolidated financial results for the quarter
ending September 30, 2010 and certain public filings containing prior quarterly
results;</p>

<p class=MsoNormal style='margin-left:.25in;text-indent:-.25in'>&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Reviewed a NASDAQ de-listing extension letter dated October 6,
2010;</p>

<p class=MsoNormal style='margin-left:.25in;text-indent:-.25in'>&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Reviewed certain debt agreements;</p>

<p class=MsoNormal style='margin-left:.25in;text-indent:-.25in'>&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Reviewed the Company's stock performance for the prior three
months (price, volume, percentage of outstanding shares) vs. selected other
companies;</p>

<p class=MsoNormal style='margin-left:.25in;text-indent:-.25in'>&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Reviewed insider share holdings;</p>

<p class=MsoNormal style='margin-left:.25in;text-indent:-.25in'>&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Reviewed the fund raising process for the prior year, including
the number of parties contacted, term sheets received, and reasons that the
prior potential transactions did not proceed forward;</p>

<p class=MsoNormal style='margin-left:.25in;text-indent:-.25in'>&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Reviewed the minutes of the September 30, 2010 Board meeting
where the proposed common stock investment by the Investor was discussed;</p>

<p class=MsoNormal style='margin-left:.25in;text-indent:-.25in'>&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Reviewed signed Special Committee and Board of Directors
resolutions authorizing the Investor's investment; and</p>

<p class=MsoNormal style='margin-left:.25in;text-indent:-.25in'>&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Reviewed certain other publicly available information on the
Company.</p>



<p class=MsoNormal>Woodville Hall relied, without independent verification, on
the accuracy, completeness and fair representation of all the financial and
other information obtained by it from public sources and provided to it by the Company
and Mastodon Ventures, and its opinion is conditioned upon such accuracy,
completeness and fairness.&nbsp; In addition, Woodville Hall assumed that the
unaudited financial results provided by the Company's management represent management's
best estimates of the most probable results for the Company for the periods
presented therein.</p>



<p class=MsoNormal>Woodville Hall was retained by the Company in October 2010
to render an opinion as to the fairness of the Investment Transaction.&nbsp; Under
the terms of its engagement, Woodville Hall received a fairness opinion fee of
$25,000.</p>

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<p class=MsoNormal>Woodville Hall is a FINRA-registered broker-dealer that is
engaged in the valuation of businesses in connection with securities issuances,
mergers, acquisitions and divestitures, with particular experience with
restaurant company transactions.</p>



<p class=MsoNormal><b>Summary of the Investment Transaction Documents</b></p>



<p class=MsoNormal>Each of the material agreements relating to the Investment
Transaction is summarized below.&nbsp; The summaries below do not purport to be
complete and are qualified in their entirety by the full text of the related
agreements, copies of which have been filed as exhibits to the Company's
Current Report on Form 8-K filed with the SEC on November 5, 2010.</p>



<p class=MsoNormal>Securities Purchase Agreement</p>



<p class=MsoNormal>On October 29, 2010, the Company and the Investor entered
into the Purchase Agreement under which the Company has agreed to sell, and the
Investor has agreed to purchase, 4,200,000 shares of the Company's common stock
(the &quot;Shares&quot;) at a purchase price of $0.50 per share, or an aggregate purchase
price of $2,100,000.&nbsp; Upon the closing of the Investment Transaction (the
&quot;Closing&quot;), the Investor will become the beneficial owner of approximately 51.4
percent of the Company's outstanding common stock.&nbsp; The Purchase Agreement
contains customary representations and warranties by the Company, which are in
certain cases modified by &quot;materiality&quot; and &quot;knowledge&quot; qualifiers.</p>



<p class=MsoNormal>The Purchase Agreement was subject to the Investor's further
financial, legal and other due diligence examination of the Company, GTDT and
the Investment Transaction.&nbsp; On November 1, 2010, the Investor notified the
Company in writing of its successful completion of due diligence.</p>



<p class=MsoNormal>The Purchase Agreement provides that the obligation of the
Investor to complete the purchase of the Shares at the Closing is subject to
certain conditions (which may be waived by the Investor), including:</p>



<p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (i)&nbsp; that the Registration Rights Agreement has
been duly executed by the Company and delivered to the Investor;</p>



<p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (ii)&nbsp; that the representations and warranties of
the Company contained in the Purchase Agreement are true and correct in all
material respects (or true and correct in all respects as to representations
and warranties which are qualified by materiality) as of the Closing as though
made on and as of such date;</p>



<p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (iii) that the Company has received all
consents, waivers, authorizations, and approvals from third parties necessary
in connection with the Investment Transaction;</p>



<p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (iv)&nbsp; that the Company's stockholders have
approved and authorized the Investment Transaction and the reverse stock split
described below; </p>



<p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (v)&nbsp; that the Company has received the
resignations of four of its current directors, including the current Chairman
of the Board and one member of the Audit Committee, and that the Board has
taken all action necessary to fill the resulting four vacancies with the
Investor's designees effective upon the Closing; and</p>



<p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (vi)&nbsp; that the Company has adopted a new
management incentive program, in a form satisfactory to the Investor, to apply
from and after the Closing, subject to the subsequent approval of such
management incentive program by our stockholders, if required.</p>



<p class=MsoNormal>Pursuant to the Purchase Agreement, the Company has agreed
to indemnify the Investor (and certain &quot;Investor Parties&quot; as defined in the
Purchase Agreement) for all liabilities, losses, or damages as a result of or
relating to any breach of any representations, warranties, covenants, or
agreements made by the Company in the Purchase Agreement and the Registration
Rights Agreement.</p>

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<p class=MsoNormal>The Purchase Agreement may be terminated at any time prior
to the Closing only as follows:</p>



<p class=MsoNormal style='margin-left:.25in;text-indent:-.25in'>&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
by the Investor or the Company, if the Closing has not occurred
by November 30, 2010, provided that the right to terminate shall not be
available to either party whose failure to perform its obligations under the Purchase
Agreement is the primary cause of the failure of the Closing to have occurred
by such date;</p>

<p class=MsoNormal style='margin-left:.25in;text-indent:-.25in'>&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
by the Investor or the Company, if the Company's stockholders do
not vote to approve the Investment Transaction;</p>

<p class=MsoNormal style='margin-left:.25in;text-indent:-.25in'>&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
at any time by mutual agreement of the Company and the Investor;</p>

<p class=MsoNormal style='margin-left:.25in;text-indent:-.25in'>&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
by either the Company or the Investor, if there has been a
material breach of any representation, warranty, or covenant or obligation of
the other party contained in the Purchase Agreement, which has not been cured
within 15 days after notice thereof; or</p>

<p class=MsoNormal style='margin-left:.25in;text-indent:-.25in'>&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
by the Company if the Company has received an alternative
proposal which the Board determines in its good faith judgment (after
consultation with the Company's outside legal counsel and independent financial
advisor) to be on terms superior in value from a financial point of view to the
Company's stockholders than the Investment Transaction and reasonably capable
of being completed, in which event the Company has agreed to pay to the
Investor a termination fee in the amount of $150,000.</p>



<p class=MsoNormal>The Purchase Agreement provides that after the&nbsp; Closing, for
so long as the Investor holds at least 50 percent of our outstanding common
stock, (i) our Board shall consist of no more than seven members, and (ii) the
Investor will have the right to designate four members of our Board.&nbsp; In
addition, the Purchase Agreement provides that for a period of three years
following the Closing, as long as the Investor continues to own at least 80
percent of the Shares, the Investor will have a right of first refusal to
purchase additional securities which are offered and sold by the Company for
the purpose of maintaining its percentage interest in the Company.</p>



<p class=MsoNormal>Registration Rights Agreement</p>



<p class=MsoNormal>At the Closing, the Company will execute and deliver the
Registration Rights Agreement to the Investor, pursuant to which the Company will
grant the Investor certain registration rights with respect to resale of the
Shares.&nbsp; The Company has agreed to pay all expenses associated with the
registration of the Shares, including the fees and expenses of counsel to the
Investor.&nbsp; The Company has also agreed to indemnify the Investor, and its
officers, directors, members, investors, employees and agents, successors and
assigns, and each other person, if any, who controls the Investor within the
meaning of the Securities Act, against any losses, claims, damages, or
liabilities, joint or several, to which they may become subject under the
Securities Act or otherwise, insofar as such losses, claims, damages, or
liabilities arise out of or are based upon specified violations or failures to
comply with applicable federal and state securities laws, rules and
regulations.&nbsp; A copy of the form of Registration Rights Agreement was filed as
Exhibit 4.1 to the Company's Current Report on Form 8-K filed on November 3,
2010.</p>



<p class=MsoNormal><b>Use of Proceeds</b></p>



<p class=MsoNormal>If this Proposal #1 is approved by our stockholders, and the
Closing of the Investment Transaction occurs, subject to Investor approval, the
net proceeds of the Investment Transaction after payment of related fees and
expenses will be used to pay off the interim working capital loans, reduce the
Company's current liabilities and provide working capital for fiscal 2011 and
beyond pursuant to its business strategy.&nbsp; The loans to be repaid include the
$400,000 of principal of loans described on page 4 hereof and an additional
$185,000 of principal of loans due to Golden Bridge LLC, an entity in which
certain of our directors have an interest.&nbsp; Please see the section entitled
&quot;Interest of Certain Persons in Matters to Be Acted Upon&quot; below.&nbsp; Accrued
interest of $36,647 on such loans will be converted into 73,293 shares of our common
stock following the Closing of the Investment Transaction.</p>



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<p class=MsoNormal><b>Investor Board Designees</b></p>



<p class=MsoNormal>If this Proposal #1 is approved by our stockholders, immediately
following the Closing Richard J. Stark, Alan A. Teran, Ron Goodson and David
Grissen intend to resign as directors in order to fulfill the closing condition
set forth in the Purchase Agreement.&nbsp; In addition, Eric W. Reinhard has agreed
to resign as Chairman of our Board effective upon the Closing to fulfill the
closing condition set forth in the Purchase Agreement but he will continue as a
director of the Company following the Closing.&nbsp; The foregoing director
resignations include all of the current members of the Audit Committee (Messrs.
Grissen, Teran and Stark) and all of the current members of the Compensation
Committee (Messrs. Goodson, Stark and Teran).</p>



<p class=MsoNormal>As set forth in the Purchase Agreement, effective upon the
Closing, the Board intends to appoint four individuals designated by the
Investor to the Board to fill such vacancies, each to serve until the next
annual meeting of stockholders.&nbsp; The new Board will then elect a Chairman and
appoint new members of the Audit Committee and the Compensation Committee, in
each case in accordance with applicable NASDAQ Listing Rules regarding director
independence and committee membership.&nbsp; The new Board will also designate a new
Audit Committee financial expert under the rules promulgated by the SEC.</p>



<p class=MsoNormal>The Investor has advised us it intends to designate the
following individuals as its director designees:</p>



<p class=MsoNormal>Keith A. Radford, age 41, currently serves as Chief
Financial Officer of Terra Nova Pub Group Ltd., Elephant &amp; Castle Group
Inc. and Massachusetts Pub Group LLC (2009-Present).&nbsp; Previously Mr. Radford
served as a Director and Vice President of subsidiaries within AKER Solutions,
a leading global provider of engineering and construction services, technology
products and integrated solutions (2002-2008).&nbsp; In addition he has over eight
years of experience in public practice providing auditing, taxation and
business consulting services.&nbsp; Mr. Radford holds a Bachelor of Commerce degree
from Memorial University of Newfoundland and Labrador and is a Chartered Accountant.</p>



<p class=MsoNormal>John F. Morgan, age 50, currently serves as President, Chief
Executive Officer and a Director of Elephant &amp; Castle Group Inc. and Terra
Nova Pub Group Ltd. (2009-Present).&nbsp; He is President, Chief Executive Officer
and a Manager of Massachusetts Pub Group LLC (2008-Present).&nbsp; Previously Mr.
Morgan had been the President of Morgan Capital Limited, St. John's,
Newfoundland, an independent financial services firm providing taxation and
merger and acquisition support services to North American and international
clients (1994-2009).</p>



<p class=MsoNormal>Mr. Morgan holds a Bachelor of Commerce degree from Memorial
University of Newfoundland and Labrador with a participation in the In Depth
Taxation Program and Chartered Business Valuator Program.&nbsp; He is a Chartered
Accountant.</p>



<p class=MsoNormal>Gary J. Heller, age 43, currently serves as Secretary and a
Director of Elephant &amp; Castle Group Inc. (2007-Present), Secretary and a
Manager of Massachusetts Pub Group LLC (2008-Present), and Executive Vice
President of Terra Nova Pub Group Ltd. (2009-Present).&nbsp; Prior to entering the
restaurant industry in 2007, Mr. Heller spent 16 years as an investment banker,
including serving as a Managing Director of FTI Capital Advisors, LLC (2002-2006)
and a Director of Andersen Corporate Finance LLC.&nbsp; Mr. Heller holds a BA in
Economics from the University of Pennsylvania and an MBA in Finance from New
York University.</p>



<p class=MsoNormal>David L. Dobbin, age 49, currently serves as Chairman of the
Board of Small Island Investments Ltd. (2010-Present).&nbsp; He also serves as
Chairman of the Boards of Terra Nova Pub Group Ltd., its subsidiaries and
affiliates (2007-Present) and Welaptega Marine Ltd. (2008-Present), a leading
supplier of offshore mooring inspection systems, companies controlled by Mr. Dobbin
through Repechage Investments Limited, an investment company formed under the
laws of Canada that holds investments in the transportation, service, real
estate and hospitality sectors (2001-Present).&nbsp; Previously, Mr. Dobbin served in
several capacities with CHC Helicopter Corporation, the world's leading
offshore helicopter services provider, and led Canadian Ocean Resource
Associates Inc., a consulting firm specializing in best practice reviews,
institutional support and public/private partnerships.&nbsp; Mr. Dobbin holds a
Bachelor of Commerce from Memorial University of Newfoundland.</p>

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<p class=MsoNormal>In addition to the Investor's director designees above, the
following current directors of the Company will remain on our Board:</p>



<p class=MsoNormal><i>Geoffrey R. Bailey</i>, age 58, has served on our Board
since 1996 and is a member of the Special Committee.&nbsp; He is also a director of
The Erie County Investment Co., which owns 99% of The Bailey Company.&nbsp; The
principal business of The Bailey Company is owning and operating 58 Arby's
restaurants as a franchisee, and The Bailey Company has also been a franchisee
and joint venture partner of the Company since 1987.&nbsp; Mr. Bailey joined The
Erie County Investment Co. in 1979.&nbsp; Mr. Bailey is a graduate of the University
of Denver with a Bachelor's Degree in Business Administration.</p>



<p class=MsoNormal><i>Boyd E. Hoback</i>, age 54, has served on our Board since
1992 and is President and Chief Executive Officer of the Company, a position he
has held since December 1992, and he has been in the restaurant business since
the age of 16.&nbsp; Mr. Hoback has been a vital part of the development of the
Company into a 52-restaurant chain and has been involved in developing all
areas of the Company.&nbsp; Mr. Hoback is an honors graduate of the University of
Colorado in finance.</p>



<p class=MsoNormal><i>Eric W. Reinhard</i>, age 51, has served on our Board
since 2005.&nbsp; He is currently the Chairman of the Board, but will resign from
this position upon the Closing of the Investment Transaction, as discussed
above.&nbsp; Mr. Reinhard also serves as President of the Pepsi Cola Bottler's
Association, a beverage association management and consulting association and a
position he has held since 2006.&nbsp; Prior to June 2004, he was the General
Manager for the Pepsi Bottling Group's Great West Business Unit.&nbsp; While in this
role, Mr. Reinhard was also a member of the Pepsi Bottling Group's Chairman's
Operating Council, a member of the Food Service Strategic Planning Committee,
and a member of The Dr. Pepper Bottler Marketing Committee.&nbsp; Mr. Reinhard
joined Pepsi Cola in 1984 after four years with The Procter &amp; Gamble
Distributing Company.&nbsp; Since 1984 he has held several field and headquarters
positions including Vice President/General Manager Pepsi-Lipton Tea partnership
(JV), General Manager Mid-Atlantic Business Unit, Area Vice President Retail
Channels, Vice President On-Premise Operations, and Area Vice President of
Franchise Operations.&nbsp; Mr. Reinhard holds a B.A. from Michigan State University
and has completed the Executive Business Program at the University of Michigan.</p>



<p class=MsoNormal>There are no family relationships among the continuing
directors or the Investor's director designees.&nbsp; The Board has previously
determined that of the current directors Geoffrey R. Bailey, Ron Goodson, David
Grissen, Richard J. Stark and Alan A. Teran are independent directors under the
NASDAQ listing standards.&nbsp; Of the independent directors, Messrs. Goodson,
Grissen, Stark and Teran intend to resign as directors immediately following
the Closing of the Investment Transaction in order to fulfill the closing
condition set forth in the Purchase Agreement, while Mr. Bailey will continue
on our Board after the Closing.&nbsp; The new Board will make determinations
regarding the independence of the Investor's director designees after they are
appointed to the Board after the Closing.</p>



<p class=MsoNormal>Mr. Bailey was originally elected to our Board pursuant to
contractual board representation rights granted to The Bailey Company in
connection with its investment in shares of our Series A Convertible Preferred
Stock in 1996 and has continued to serve on our Board pursuant to contractual
board representation rights granted to The Bailey Company and its affiliates in
connection with our Series B Convertible Preferred Stock financing in February
2005.&nbsp; Mr. Reinhard has also served on our Board pursuant to contractual board
representation rights granted to other investors in our Series B Convertible
Preferred Stock financing.&nbsp; As a condition to the Closing of the Investment
Transaction, The Bailey Company and Mr. Reinhard (together with their
respective affiliates) will be required to waive the contractual board
representation rights granted in connection with the Series B Convertible
Preferred Stock financing.&nbsp; In lieu thereof, The Bailey Company and Mr.
Reinhard (together with their respective affiliates) will each have the right
to designate one director, provided that they each continue to own (in each
case, together with their respective affiliates) at least 600,000 shares of our
common stock (adjusted for any stock splits, reverse splits or similar capital
stock transactions).&nbsp; Pursuant to the Purchase Agreement, the Investor has
agreed to vote its shares in any election of directors in favor of the persons
designated by The Bailey Company and its affiliates and by Mr. Reinhard and his
affiliates.</p>



<p class=MsoNormal><i>Director Nominee Selection Process</i>.&nbsp; Our Board as a
whole acts as the nominating committee for the selection of nominees for
election as directors.&nbsp; We do not have a separate standing nominating committee
since we require that our director nominees be approved as nominees by a
majority of our independent directors.&nbsp; The Board will consider suggestions by
stockholders for possible future nominees for election as directors at the next
annual meeting when the suggestion is delivered in writing to our corporate
secretary by August 15 of the year immediately preceding the annual meeting.</p>

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<p class=MsoNormal>The Board selects each nominee, subject to contractual
nominee designation and election rights held by certain stockholders, as
discussed above, based on the nominee's skills, achievements and experience,
with the objective that the Board as a whole should have broad and relevant
experience in high policymaking levels in business and a commitment to
representing the long-term interests of the stockholders.&nbsp; The Board believes
that each nominee should have experience in positions of responsibility and
leadership, an understanding of our business environment and a reputation for
integrity.</p>



<p class=MsoNormal>The Board evaluates each potential nominee individually and
in the context of the Board as a whole.&nbsp; The objective is to recommend a group
that will effectively contribute to our long-term success and represent
stockholder interests.&nbsp; In determining whether to recommend a director for
re-election, the Board also considers the director's past attendance at
meetings and participation in and contributions to the activities of the Board.</p>



<p class=MsoNormal>When seeking candidates for director, the Board solicits
suggestions from incumbent directors, management, stockholders or others.&nbsp; The
Board does not have a charter for the nominating process.</p>



<p class=MsoNormal>The Company does not have a formal policy with regard to the
consideration of diversity in identifying director nominees, but the Board
strives to nominate directors with a variety of complementary skills so that,
as a group, the Board will possess the appropriate talent, skills, and expertise
to oversee the Company's business.</p>



<p class=MsoNormal><i>Shareholder Communications</i>. The Board welcomes
questions or comments about us and our operations.&nbsp; Those interested may
contact the Board as a whole or any one or more specified individual directors
by sending a letter to the intended recipients' attention in care of Good Times
Restaurants Inc., Corporate Secretary, 601 Corporate Circle, Golden, CO 80401.&nbsp;
All such communications other than commercial advertisements will be forwarded
to the appropriate director or directors for review.</p>



<p class=MsoNormal><i>Leadership Structure</i>.&nbsp; The Board does not have a
policy regarding the separation of the roles of Chief Executive Officer and
Chairman of the Board as the Board believes it is in the best interests of the
Company to make that determination based on the position and direction of the
Company and the membership of the Board.&nbsp; The Board has determined that
separating these roles is in the best interests of the Company's stockholders
at this time.&nbsp; This structure ensures a greater role for the independent
directors in the oversight of the Company and active participation of the
independent directors in setting agendas and establishing Board priorities and
procedures.&nbsp; Further, this structure permits the Chief Executive Officer to
focus on the management of the Company's day-to-day operations.</p>



<p class=MsoNormal><i>Risk Oversight</i>.&nbsp; Material risks are identified and
prioritized by the Company's management and reported to the Board for
oversight.&nbsp; The Board regularly reviews information regarding the Company's credit,
liquidity and operations, as well as the risks associated with each.&nbsp; In
addition, the Board continually works, with the input of the Company's
executive officers, to assess and analyze the most likely areas of future risk
for the Company.</p>



<p class=MsoNormal><i>Audit Committee</i>.&nbsp; As discussed above, the Audit
Committee currently consists of Messrs. Grissen, Teran and Stark, all of whom
intend to resign as directors immediately following the Closing of the
Investment Transaction in order to fulfill the closing condition set forth in
the Purchase Agreement.&nbsp; Following the Closing, the new Board will appoint new
members of the Audit Committee, all of whom will be independent directors under
the applicable NASDAQ listing standards.&nbsp; In addition, following the Closing,
the new Board will designate an Audit Committee financial expert in accordance
with the applicable SEC rules to replace Mr. Stark who currently serves in that
capacity.</p>



<p class=MsoNormal>The function of the Audit Committee relates to oversight of
the auditors, the auditing, accounting and financial reporting processes and
the review of the Company's financial reports and information.&nbsp; In addition,
the functions of this Committee have included, among other things, recommending
to the Board the engagement or discharge of independent auditors, discussing
with the auditors their review of the Company's quarterly results and the
results of their audit and reviewing the Company's internal accounting
controls.&nbsp; The Audit Committee operates pursuant to a written Charter adopted
by the Board. &nbsp;A current copy of the Audit Committee Charter is available on
our website at www.goodtimesburgers.com.&nbsp; The Audit Committee held five
meetings during fiscal 2010.</p>

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<p class=MsoNormal style='line-height:1.0pt'><a name="_Toc92016738"></a><a
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<p class=MsoNormal><i>Compensation Committee</i>.&nbsp; As discussed above, the
Compensation Committee currently consists of Messrs. Goodson, Stark and Teran,
all of whom intend to resign as directors immediately following the Closing of
the Investment Transaction in order to fulfill the closing condition set forth
in the Purchase Agreement.&nbsp; Following the Closing, the new Board will appoint
new members of the Compensation Committee, all of whom will be independent
directors under the applicable NASDAQ listing standards.&nbsp; The function of this
Committee is to consider and determine all matters relating to the compensation
of the President and CEO and other executive officers, including matters
relating to the employment agreements.&nbsp; The Compensation Committee held one
meeting during fiscal 2010.</p>



<p class=MsoNormal>The Compensation Committee does not have a Charter. The
responsibility of the Compensation Committee is to review and approve the
compensation and other terms of employment of our Chief Executive Officer and
our other executive officers.&nbsp; Among its other duties, the Compensation
Committee oversees all significant aspects of the Company's compensation plans
and benefit programs.&nbsp; The Compensation Committee annually reviews and approves
corporate goals and objectives for the Chief Executive Officer's compensation
and evaluates the Chief Executive Officer's performance in light of those goals
and objectives.&nbsp; The Compensation Committee also recommends to the Board the
compensation and benefits for members of the Board.&nbsp; The Compensation Committee
has also been appointed by the Board to administer our 2008 Omnibus Equity
Incentive Compensation Plan, which is the successor equity compensation plan to
the Company's 2001 Stock Option Plan.&nbsp; The Compensation Committee does not
delegate any of its authority to other persons.</p>



<p class=MsoNormal>In carrying out its duties, the Compensation Committee
participates in the design and implementation and ultimately reviews and
approves specific compensation programs.&nbsp; The Compensation Committee reviews
and determines the base salaries for our executive officers, and also approves
awards to our executive officers under the Company's equity compensation plans.</p>



<p class=MsoNormal>In determining the amount and form of compensation for
executive officers other than the Chief Executive Officer, the Compensation
Committee obtains input from the Chief Executive Officer regarding the duties,
responsibilities and performance of the other executive officers and the
results of performance reviews.&nbsp; The Chief Executive Officer also recommends to
the Compensation Committee the base salary levels for all executive officers
and the award levels for all executive officers under the Company's equity
compensation programs.&nbsp; No executive officer attends any executive session of
the Compensation Committee or is present during final deliberations or
determinations of such officer's compensation.&nbsp; The Chief Executive Officer
also provides input with respect to the amount and form of compensation for the
members of the Board of Directors.</p>



<p class=MsoNormal>The Compensation Committee has the authority to directly
engage, at the Company's expense, any compensation consultants or other advisers
as it deems necessary to carry out its responsibilities in determining the
amount and form of executive and director compensation.&nbsp; For fiscal 2010, the
Compensation Committee did not use the services of a compensation consultant or
other adviser.&nbsp; However, the Compensation Committee has reviewed surveys,
reports and other market data against which it has measured the competitiveness
of the Company's compensation programs.&nbsp; In determining the amount and form of
executive and director compensation, the Compensation Committee has reviewed
and discussed historical salary information as well as salaries for similar
positions at comparable companies.</p>

<p class=MsoNormal><i>&nbsp;</i></p>

<p class=MsoNormal><i>Special Committee</i>.&nbsp; On August 14, 2009, our Board
formed a Special Committee comprised of directors Richard Stark, Alan Teran and
Geoff Bailey to explore and evaluate strategic alternatives aimed at enhancing
stockholder value.&nbsp; The activities of the Special Activities are discussed in
the section entitled &quot;Evaluation of Strategic Alternatives&quot; above.</p>



<p class=MsoNormal><i>Board Meeting Attendance</i>.&nbsp; There were seven Board
meetings held during the fiscal year ended September 30, 2010.&nbsp; None of our
continuing directors attended fewer than 75% of the Board meetings and
applicable committee meetings.&nbsp; Each of the continuing directors attended the
annual meeting of stockholders for the fiscal year ended September 30, 2009,
which was held September 30, 2010.</p>



<p class=MsoNormal><i>Director Compensation</i>.&nbsp; Each non-employee director
receives $500 for each Board meeting attended.&nbsp; Members of the Compensation and
Audit Committees generally each receive $100 per meeting attended.&nbsp; However,
where both Compensation and Audit Committee meetings are held at the same place
on the same day, only $100 is paid to directors attending both committee
meetings.&nbsp; Additionally, non-employee directors may receive non-statutory stock
options from the Company under the terms of our 2008 Omnibus Equity Incentive
Compensation Plan.</p>

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<p class=MsoNormal><b>Effect of the Investment Transaction on Existing
Stockholders</b></p>



<p class=MsoNormal>Pursuant to the Purchase Agreement, the Investor will
purchase the Shares, which will represent approximately 51.4 percent of the
outstanding shares of our common stock immediately upon the Closing.</p>



<p class=MsoNormal>Possible Effect on Market Price of our Common Stock.&nbsp; If
stockholders of the Company approve the Investment Transaction, the Shares will
be sold to the Investor at a discount to the recently prevailing trading market
prices of our common stock.&nbsp; We are unable to predict the potential effects of
the Investment Transaction on the trading activity and market price of our common
stock.&nbsp; We are also unable to predict the effects of the trading activity and
market price of our common stock if the Investment Transaction does not close.&nbsp;
Pursuant to the Registration Rights Agreement, at the Closing we will grant the
Investor and its permitted transferees registration rights for the resale of
the Shares.&nbsp; These registration rights would facilitate the resale of the
Shares into the public market, and any resale of the Shares would increase the
number of shares of our common stock available for public trading.&nbsp; Sales by
the Investor or its permitted transferees of a substantial number of shares of
our common stock in the public market, or the perception that such sales might
occur, could have a material adverse effect on the price of our common stock.</p>



<p class=MsoNormal>The Investor will be a Controlling Stockholder.&nbsp; The
Company's present executive officers, directors and five percent or greater
stockholders beneficially own approximately 58 percent of our outstanding
common stock and are therefore in a position, acting together, to influence and
possibly control most matters submitted for approval by our stockholders.&nbsp; Immediately
upon the Closing of the Investment Transaction, the Investor will beneficially
own approximately 51.4 percent of our outstanding common stock and therefore
such control will continue in the hands of the Investor.</p>



<p class=MsoNormal>The Investor will have the Right to Designate a Majority of
our Board.&nbsp; Pursuant to the Purchase Agreement, the after the Closing and for
so long as the Investor holds at least 50 percent of our outstanding common
stock, (i) our Board shall consist of not more than seven members, and (ii) the
Investor will have the right to designate four members of our Board.&nbsp; See the
section entitled &quot;Investor Board Designees&quot; above.</p>



<p class=MsoNormal>Dilution.&nbsp; If approved, the issuance of common stock in the
Investment Transaction will result in dilution by 51.4 percent to each
stockholder by reducing such stockholder's percentage ownership of the total
outstanding shares.&nbsp; If stockholders of the Company approve the proposed
issuance of the Shares to the Investor, the Shares will represent approximately
51.4 percent of our common stock immediately following the Closing.&nbsp; In
addition, the Purchase Agreement provides that for a period of three years
following the Closing, as long as the Investor continues to own at least 80
percent of the Shares issued to the Investor, the Investor will have a right of
first refusal to purchase additional equity securities which are offered and
sold by the Company for the purpose of maintaining its percentage ownership interest
in the Company.&nbsp; The foregoing purchase right applies to (i) shares of our
common stock, (ii) any debt or equity security of the Company convertible into
or exchangeable for shares of common stock, with or without consideration being
paid, (iii) any option, warrant or other right to purchase shares of common
stock or securities convertible into or exchangeable for shares of common stock
or any other security so convertible, or (iv) any debt securities having voting
rights equivalent to those of our common stock.&nbsp; However, the Investor will
have no purchase right respect to securities issued and sold by the Company in
an underwritten public offering under a then-effective registration statement
under the Securities Act (except as provided in the Registration Rights
Agreement), or any common stock issued by the Company as consideration in
connection with an acquisition, merger or strategic partnership transaction of
the Company or GTDT that has been approved by our Board after the Closing.</p>



<p class=MsoNormal><b>Vote Required for Approval</b></p>



<p class=MsoNormal>Approval of Proposal #1 - the shareholder resolution
authorizing the Investment Transaction - will require the affirmative vote of a
majority of the votes cast by the holders of our common stock present in person
or represented by proxy at the special meeting and entitled to vote on the
matter.</p>

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<p class=MsoNormal><b>THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT
STOCKHOLDERS VOTE &quot;FOR&quot; PROPOSAL #1.</b></p>



<p class=MsoNormal align=center style='text-align:center'><b>PROPOSAL #2 -
APPROVAL OF REVERSE STOCK SPLIT</b></p>



<p class=MsoNormal>The Board adopted a resolution on October 28, 2010 seeking
stockholder approval to grant the Board discretionary authority to effect a
reverse split with respect to the issued and outstanding shares of the
Company's common stock.&nbsp; If this Proposal #2, as more fully described below, is
approved by the Company's stockholders, the Board may subsequently effect, in
its sole discretion, the reverse stock split based upon a one-for-three
exchange ratio.&nbsp; If approved, the Board's discretion to effect the reverse
stock split would last until December 31, 2010, when such discretion would
terminate if not exercised by the Board.</p>



<p class=MsoNormal>Under the Purchase Agreement, stockholder approval of this Proposal
#2 is a condition to the Closing of the Investment Transaction.</p>



<p class=MsoNormal><b>Reasons for Effecting a Reverse Stock Split</b></p>



<p class=MsoNormal>The Board believes that a reverse stock split is desirable
for the following reasons:</p>



<p class=MsoNormal style='margin-left:.25in;text-indent:-.25in'>&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Regain Compliance with NASDAQ Listing Rules.&nbsp; As we have
previously disclosed, on July 19, 2010, the Company received a deficiency
notice from NASDAQ that the Company had failed to maintain a minimum bid price
of $1.00 per share for a period of 30 consecutive business days.&nbsp; The Company
has a grace period of 180 calendar days, or until January 18, 2011, in which to
regain compliance with this NASDAQ listing rule.&nbsp; To regain compliance, the bid
price of our common stock must close at $1.00 per share or more for a minimum
of ten consecutive business days anytime before January 18, 2011.&nbsp; The Board
has concluded that, absent a significant market-driven increase in our stock
price, the best way for the Company to increase the closing bid price of our
common stock to the level satisfactory for meeting the continued listing
requirements of NASDAQ is to effect the reverse stock split.</p>

<p class=MsoNormal style='margin-left:.25in;text-indent:-.25in'>&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Increased Share Price.&nbsp; A reverse stock split may increase the
trading price of shares of the Company's common stock, potentially making them
more attractive investments generally and to institutional investors in
particular.</p>

<p class=MsoNormal style='margin-left:.25in;text-indent:-.25in'>&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Reduced Number of Shares Issued and Outstanding.&nbsp; The Company has
3,898,559 shares of its common stock issued and outstanding and will issue an
additional 4,200,000 shares of common stock to the Investor at the Closing and
an additional 73,293 shares of common stock upon the conversion of accrued
interest on the loans discussed on page 4 hereof.&nbsp; Thus, following the
Investment Transaction, the Company will have an aggregate of 8,171,852 shares
of common stock outstanding, not including those shares of common stock
reserved for issuance under the Company's Omnibus Equity Plan or upon exercise
of outstanding warrants of the Company. &nbsp;The Board believes that reducing the
number of issued and outstanding shares of common stock following the
Investment Transaction to 2,723,951 (and increasing the proportion of the
shares of common stock authorized but unissued) may be beneficial to the
Company and its stockholders.</p>

<p class=MsoNormal style='margin-left:.25in;text-indent:-.25in'>&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Such a reduction might also help to facilitate future business
combinations or other transactions in the event that such opportunities arise.</p>

<p class=MsoNormal style='margin-left:.25in;text-indent:-.25in'>&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Reduced Stockholder Transaction Costs.&nbsp; Because investors
typically pay commissions based on the number of shares traded when they buy or
sell shares of our common stock, such investors may pay lower commissions for
trading a given dollar amount of the Company's common stock if the reverse
stock split occurs.</p>



<p class=MsoNormal><b>Potential Risks Associated with a Reverse Stock Split</b></p>



<p class=MsoNormal>The following is a non-exhaustive list of potential risks
associated with effecting a reverse stock split:</p>



<p class=MsoNormal>No Guarantee of Increased Share Price. There are no
assurances that the trading price of shares of the Company's common stock will
increase upon the effectiveness of any reverse stock split approved by the
Board. The future performance of our common stock will be based on the Company's
performance and other factors that are unrelated to the number of issued and
outstanding shares of our common stock. If the trading price of shares of our
common stock does not increase by an amount that is commensurate with the
reduction in our shares issued and outstanding as a result of the reverse stock
split, the total market capitalization of the Company will decrease.</p>

<p class=MsoFooter align=center style='text-align:center'>15</p>



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<p class=MsoNormal>Reduced Liquidity is Possible. The liquidity of our common
stock could be adversely affected by the reduced number of shares that would be
issued and outstanding if the reverse stock split is approved.</p>



<p class=MsoNormal><b>Effect of a Reverse Stock Split</b></p>



<p class=MsoNormal>The principal effect of the reverse stock split would be to
reduce the number of issued and outstanding shares of the Company's common
stock from 8,171,852 shares (after the Closing of the Investment Transaction)
to 2,723,951 shares, based on a one-for-three exchange ratio. As such, each
stockholder holding three shares of the Company's common stock (par value $0.001
per share) immediately prior to the reverse stock split taking effect will
become a holder of one share of our common stock (par value $0.001 per share)
after the reverse stock split is consummated.</p>



<p class=MsoNormal>The reverse stock split itself will not change the
proportionate equity interests of our stockholders, nor will the respective
voting rights or other rights of stockholders be altered in any way by the
reverse stock split, other than as a result of the treatment of fractional
shares as described below.&nbsp; The common stock issued pursuant to the reverse
stock split will remain fully paid and non-assessable. The number of authorized
shares of the Company's common stock will not change by virtue of adopting this
Proposal #2.&nbsp; Therefore, after taking into account the issuance of the Shares
to the Investor in the Investment Transaction, approximately 41,828,148 shares
of the Company's common stock of the 50,000,000 currently authorized would
remain available for issuance (inclusive of 857,184 shares which are reserved
for issuance pursuant to our Omnibus Equity Plan or upon exercise of
outstanding warrants).&nbsp; If this Proposal #2 is approved, there will be
approximately 47,276,049 shares of common stock available for issuance
(including 285,728 reserved shares under our Omnibus Equity Plan and our
outstanding warrants).</p>



<p class=MsoNormal>The shares of authorized and unissued common stock following
the Reverse Split will be available for issuance in connection with such
corporate transactions and purposes as may, from time to time, be considered
advisable by our Board.&nbsp; Except as discussed herein, however, we have no
arrangements, agreements, understandings or plans at the current time for the
issuance or use of the additional shares of common stock that will be available
following the Reverse Split.&nbsp; Having such shares available for issuance in the
future will allow the shares to be issued as determined by our Board without
further stockholder action, unless the circumstances require that we seek
stockholder approval under the rules of the NASDAQ Stock Market.</p>



<p class=MsoNormal>In addition, the issuance of additional shares of common
stock for such corporate transactions and purposes could have a dilutive effect
on earnings per share and the book or market value of our outstanding common
stock, depending on the circumstances, and would likely dilute a stockholder's
percentage voting power in the company. Our Board intends to take these factors
into account before authorizing any new issuance of shares.</p>



<p class=MsoNormal><b>Potential Anti-Takeover Effects</b></p>



<p class=MsoNormal>If the Reverse Split is approved, the increased proportion
of authorized but unissued shares of the Company's common stock to the issued
and outstanding shares thereof could, under certain circumstances, have an
anti-takeover effect. For example, such a change could permit future issuances
of our common stock that would dilute the stock ownership of a person seeking
to effect a change in composition of our Board or contemplating a tender offer
or other transaction for the combination of the Company with another entity.</p>



<p class=MsoNormal>The Board is not, however, proposing the Reverse Split in
response to any effort of which it is aware to accumulate shares of the
Company's common stock or to obtain control of the Company. Rather, the Board
is proposing the Reverse Split for the reasons outlined above.</p>



<p class=MsoNormal><b>Mechanics of Reverse Stock Split</b></p>



<p class=MsoNormal>If this Proposal #2 is approved by stockholders and the
Board effects a reverse stock split as discussed above, stockholders will be
entitled to exchange their stock certificates after the reverse stock split
takes place. Stockholders may exchange their stock certificates by contacting
our transfer agent, Computershare Trust Company. Otherwise, stock certificates
representing pre-reverse stock split shares of our common stock will be
exchanged for certificates evidencing post-reverse stock split shares at the
first time they are presented to the transfer agent for transfer.</p>

<p class=MsoFooter align=center style='text-align:center'>16</p>



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<p class=MsoNormal><b>Impact on Omnibus Equity Plan, Options, Warrants and
Convertible Securities</b></p>



<p class=MsoNormal>If the reverse stock split is approved, the number of shares
of our common stock that may be issued upon the exercise of conversion rights
held by holders of securities convertible into our common stock will be reduced
proportionately based upon the one-for-three exchange ratio. Proportionate
adjustments will also be made to the per-share exercise price and the number of
shares of our common stock issuable upon the exercise of all outstanding
options and warrants entitling the holders to purchase shares of our common
stock. Finally, the number of shares reserved for issuance under the Company's
Omnibus Equity Plan will be reduced proportionately based on the one-for-three
exchange ratio.</p>



<p class=MsoNormal><b>Fractional Shares</b></p>



<p class=MsoNormal>The Company will not issue fractional shares in connection
with the reverse stock split if it is effected by the Board. Instead, any
fractional share that results from the reverse stock split will be rounded to
the next whole share.</p>



<p class=MsoNormal><b>Accounting Matters</b></p>



<p class=MsoNormal>Because the reverse stock split will not change the par
value of shares of the Company's common stock, our stated capital attributable
to common stock on our balance sheet will be reduced to approximately 33
percent of its present amount. Additional paid-in capital will increase by the
dollar amount by which stated capital decreases.</p>



<p class=MsoNormal><b>Certain Federal Income Tax Consequences of a Reverse
Stock Split</b></p>



<p class=MsoNormal>IN ACCORDANCE WITH 31 C.F.R. &sect; 10.35(B) (5), THE DISCUSSION
OF THE TAX ASPECTS PROVIDED HEREIN HAS NOT BEEN PREPARED, AND MAY NOT BE RELIED
UPON BY ANY PERSON, FOR PROTECTION AGAINST ANY FEDERAL TAX PENALTY.&nbsp; THE TAX
DISCUSSION HEREIN IS WRITTEN TO SUPPORT PROPOSAL #2 AND EACH STOCKHOLDER SHOULD
SEEK ADVICE BASED ON SUCH STOCKHOLDER'S PARTICULAR CIRCUMSTANCES FROM AN
INDEPENDENT TAX ADVISOR.</p>



<p class=MsoNormal>The following is a summary of certain United States federal
income tax consequences of the reverse stock split generally applicable to
beneficial holders of shares of our common stock. This summary addresses only
such stockholders who hold their pre-reverse stock split shares as capital
assets and will hold the post-reverse stock split shares as capital assets.
This discussion does not address all United States federal income tax
considerations that may be relevant to particular stockholders in light of
their individual circumstances or to stockholders that are subject to special
rules, such as financial institutions, tax-exempt organizations, insurance
companies, dealers in securities, and foreign stockholders. The following
summary is based upon the provisions of the Internal Revenue Code of 1986, as
amended, applicable Treasury Regulations thereunder, judicial decisions and current
administrative rulings, as of the date hereof, all of which are subject to
change, possibly on a retroactive basis. Tax consequences under state, local,
foreign and other laws are not addressed in this summary. Each stockholder
should consult its tax advisor as to the particular facts and circumstances
which may be unique to such stockholder and also as to any estate, gift, state,
local or foreign tax considerations arising out of the reverse stock split. We
have not and will not seek a ruling from the Internal Revenue Service or an
opinion of counsel regarding the United States federal income tax consequences
of the proposed reverse stock split.&nbsp; Therefore, the income tax consequences
discussed below are not binding on the Internal Revenue Service and there can
be no assurance that such income tax consequences, if challenged, would be
sustained.</p>



<p class=MsoNormal>Subject to the above stated, the United States federal
income tax consequences of the proposed reverse stock split may be summarized
as follows:</p>



<p class=MsoNormal style='margin-left:.25in;text-indent:-.25in'>&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The reverse stock split would qualify as a tax-free
recapitalization under the Internal Revenue Code.&nbsp; Accordingly, a stockholder
will not recognize any gain or loss for United States federal income tax
purposes as a result of the receipt of the post-reverse stock split common
stock pursuant to the reverse stock split.</p>

<p class=MsoNormal style='margin-left:.25in;text-indent:-.25in'>&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The shares of post-reverse stock split common stock in the hands
of a stockholder will have an aggregate basis for computing gain or loss on a
subsequent disposition equal to the aggregate basis of the shares of
pre-reverse stock split common stock held by the stockholder immediately prior
to the reverse stock split.</p>

<p class=MsoNormal style='margin-left:.25in;text-indent:-.25in'>&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
A stockholder's holding period for the post-reverse stock split
common stock will include the holding period of the pre-reverse stock split common
stock exchanged.</p>

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<p class=MsoNormal><b>No Appraisal Rights</b></p>



<p class=MsoNormal>Neither Nevada law nor our Articles of Incorporation or
Bylaws provide our stockholders with dissenters' or appraisal rights in
connection with the proposal described above. If the proposal to give our Board
discretion to effect a reverse stock split with respect to issued and
outstanding shares of the Company's common stock is approved at the Special
Meeting, stockholders voting against such proposals will not be entitled to
seek appraisal for their shares.</p>



<p class=MsoNormal><b>Vote Required for Approval</b></p>



<p class=MsoNormal>Approval of Proposal #2 - the shareholder resolution
authorizing the Reverse Stock Split - will require the affirmative vote of a
majority of the votes cast by the holders of our common stock present in person
or represented by proxy at the special meeting and entitled to vote on the
matter.</p>



<p class=MsoNormal><b>THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT
STOCKHOLDERS VOTE &quot;FOR&quot; PROPOSAL #2.&nbsp; IF THE STOCKHOLDERS DO NOT APPROVE THE
REVERSE SPLIT, THE INVESTMENT TRANSACTION WILL NOT OCCUR.</b></p>



<p class=MsoNormal>INTEREST OF CERTAIN PERSONS IN MATTERS TO BE ACTED UPON</p>



<p class=MsoNormal><a name="_DV_C21">In</a><a name="_DV_M243"></a> April <a
name="_DV_M244"></a>2009, the Company<a name="_DV_C23"> and its wholly-owned
subsidiary GTDT</a><a name="_DV_M245"></a> entered into a loan agreement with
Golden Bridge, LLC (&quot;Golden Bridge&quot;), pursuant to which Golden Bridge
made a loan of $185,000 to <a name="_DV_C25">be used for restaurant marketing
and other working capital needs of GTDT.&nbsp; The Golden Bridge loan is evidenced
by a promissory note dated April 20, 2009 made by the Company and its
wholly-owned subsidiary GTDT, as co-makers, which bears interest at a rate of
10% per annum on the unpaid principal balance and provides for monthly interest
payments with all unpaid principal due on July 10, 2010.&nbsp; As discussed below,
the note has been extended to December 31, 2010.&nbsp; In connection with the loan,
the Company issued to Golden Bridge a three-year warrant dated April 20, 2009
(the &quot;Golden Bridge Warrant&quot;) which provides that Golden Bridge may
at any time from April 20, 2009 until April 20, 2012 purchase up to 92,500
shares of the Company's common stock at an exercise price of $1.15 per share.</a></p>



<p class=MsoNormal><a name="_DV_M246"></a>Eric W. Reinhard, Ron Goodson, David
Grissen, Richard J. Stark and Alan A. Teran, who are all members of our Board
and stockholders of the Company, are the sole members of Golden Bridge.&nbsp; Mr.
Reinhard is the sole manager of Golden Bridge.&nbsp; The <a name="_DV_C27">Company's
obtaining of the loan from Golden Bridge and related transactions were duly
approved in advance by the Company's Board by the affirmative vote of members
thereof who did not have an interest in the transaction.&nbsp; Total interest and
commitment fees paid under this agreement were approximately $12,000 for fiscal
year ended September 30, 2009 and approximately $18,500 for the fiscal year
ended September 30, 2010.&nbsp; The amount due to related parties under this
agreement that is included in notes payable was $185,000 at September 30, 2010.</a></p>

<p class=MsoNormal><b>&nbsp;</b></p>

<p class=MsoNormal>The fair value of the Golden Bridge Warrant was determined
to be $42,000 with the following assumptions: 1) risk free interest rate of
1.27%, 2) an expected life of 3 years, and 3) an expected dividend yield of zero.
The fair value of $42,000 was charged to the note discount and credited to
Additional Paid in Capital. The note discount is being amortized over fourteen
months and charged to interest expense.</p>



<p class=MsoNormal><a name="_DV_C28">As discussed above, the Golden Bridge loan
was initially</a><a name="_DV_M247"></a> due and payable in full on July 10, <a
name="_DV_C30">2010.&nbsp; However,</a><a name="_DV_M248"></a> we have a letter
agreement with Golden Bridge to continue with interest only payments until we
complete a larger recapitalization event or until December 31, 2010.&nbsp;
Accordingly, $185,000 of the net proceeds from the sale and issuance of the
Shares to the Investor in the Investment Transaction will be used to repay the
Golden Bridge loan.&nbsp; As the members of Golden Bridge, Messrs. Reinhard,
Goodson, Grissen, Stark and Teran therefore have an indirect interest in the
Investment Transaction.</p>

<p class=MsoNormal><a name="_DV_M249"></a>&nbsp;</p>

<p class=MsoNormal>The Purchase Agreement requires that The Bailey Company and
Eric W. Reinhard enter into an agreement to vote in favor of the Investment
Transaction with respect to an aggregate of 2,079,192 shares of our common
stock owned by them, which represents approximately 53.3 percent of our
outstanding common stock.</p>



<p class=MsoFooter align=center style='text-align:center'>18</p>



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<p class=MsoNormal align=center style='text-align:center'><b>SECURITY OWNERSHIP
OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT</b></p>



<p class=MsoNormal>The following table shows the beneficial ownership of shares
of the Company's common stock as of November 1, 2010 by each person known by the
Company to be the beneficial owner of more than five percent of the shares of the
Company's common stock, each director and each named executive officer, and all
directors and executive officers as a group.&nbsp; The address for the principal
stockholders and the directors and officers is 601 Corporate Circle, Golden, CO
80401.</p>



<table class=MsoNormalTable border=0 cellspacing=0 cellpadding=0
 style='margin-left:5.4pt;border-collapse:collapse'>
 <tr style='height:1.0pt'>
  <td width=378 valign=top style='width:283.5pt;padding:0in 5.4pt 0in 5.4pt;
  height:1.0pt'>
  <p class=MsoNormal>Holder</p>
  </td>
  <td width=180 valign=top style='width:135.0pt;padding:0in 5.4pt 0in 5.4pt;
  height:1.0pt'>
  <p class=MsoNormal>Number of shares</p>
  </td>
  <td width=90 valign=top style='width:67.5pt;padding:0in 5.4pt 0in 5.4pt;
  height:1.0pt'>
  <p class=MsoNormal>Percent of</p>
  </td>
 </tr>
 <tr style='height:1.0pt'>
  <td width=378 valign=top style='width:283.5pt;padding:0in 5.4pt 0in 5.4pt;
  height:1.0pt'><br
  clear=all style='page-break-before:always'>

  <p class=MsoNormal>Principal stockholders</p>
  </td>
  <td width=180 valign=top style='width:135.0pt;padding:0in 5.4pt 0in 5.4pt;
  height:1.0pt'>
  <p class=MsoNormal>beneficially owned</p>
  </td>
  <td width=90 valign=top style='width:67.5pt;padding:0in 5.4pt 0in 5.4pt;
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  <p class=MsoNormal>class**</p>
  </td>
 </tr>
 <tr style='height:1.0pt'>
  <td width=378 valign=top style='width:283.5pt;padding:0in 5.4pt 0in 5.4pt;
  height:1.0pt'>

  </td>
  <td width=180 style='width:135.0pt;padding:0in 5.4pt 0in 5.4pt;height:1.0pt'>

  </td>
  <td width=90 style='width:67.5pt;padding:0in 5.4pt 0in 5.4pt;height:1.0pt'>

  </td>
 </tr>
 <tr style='height:.2in'>
  <td width=378 style='width:283.5pt;padding:0in 5.4pt 0in 5.4pt;height:.2in'>
  <p class=MsoNormal>The Bailey Company, LLLP</p>
  </td>
  <td width=180 style='width:135.0pt;padding:0in 5.4pt 0in 5.4pt;height:.2in'>
  <p class=MsoNormal>821,512<sup>1</sup></p>
  </td>
  <td width=90 style='width:67.5pt;padding:0in 5.4pt 0in 5.4pt;height:.2in'>
  <p class=MsoNormal>21.07%</p>
  </td>
 </tr>
 <tr style='height:.2in'>
  <td width=378 style='width:283.5pt;padding:0in 5.4pt 0in 5.4pt;height:.2in'>
  <p class=MsoNormal>The Erie County Investment Co.</p>
  </td>
  <td width=180 style='width:135.0pt;padding:0in 5.4pt 0in 5.4pt;height:.2in'>
  <p class=MsoNormal>1,016,192<sup>1</sup></p>
  </td>
  <td width=90 style='width:67.5pt;padding:0in 5.4pt 0in 5.4pt;height:.2in'>
  <p class=MsoNormal>26.07%</p>
  </td>
 </tr>
 <tr style='height:.2in'>
  <td width=378 style='width:283.5pt;padding:0in 5.4pt 0in 5.4pt;height:.2in'>
  <p class=MsoNormal>Commonwealth Equity Services LLP</p>
  </td>
  <td width=180 style='width:135.0pt;padding:0in 5.4pt 0in 5.4pt;height:.2in'>
  <p class=MsoNormal>312,913<sup>2</sup></p>
  </td>
  <td width=90 style='width:67.5pt;padding:0in 5.4pt 0in 5.4pt;height:.2in'>
  <p class=MsoNormal>8.03%</p>
  </td>
 </tr>
 <tr style='height:.2in'>
  <td width=378 style='width:283.5pt;padding:0in 5.4pt 0in 5.4pt;height:.2in'>
  <p class=MsoNormal>Paul T. Bailey</p>
  </td>
  <td width=180 style='width:135.0pt;padding:0in 5.4pt 0in 5.4pt;height:.2in'>
  <p class=MsoNormal>1,074,192<sup>3</sup></p>
  </td>
  <td width=90 style='width:67.5pt;padding:0in 5.4pt 0in 5.4pt;height:.2in'>
  <p class=MsoNormal>27.55%</p>
  </td>
 </tr>
 <tr style='height:.2in'>
  <td width=378 valign=top style='width:283.5pt;padding:0in 5.4pt 0in 5.4pt;
  height:.2in'>
  <p class=MsoNormal>Directors and Officers</p>
  </td>
  <td width=180 style='width:135.0pt;padding:0in 5.4pt 0in 5.4pt;height:.2in'>

  </td>
  <td width=90 style='width:67.5pt;padding:0in 5.4pt 0in 5.4pt;height:.2in'>

  </td>
 </tr>
 <tr style='height:.2in'>
  <td width=378 style='width:283.5pt;padding:0in 5.4pt 0in 5.4pt;height:.2in'>
  <p class=MsoNormal>Geoffrey R. Bailey, Director</p>
  </td>
  <td width=180 style='width:135.0pt;padding:0in 5.4pt 0in 5.4pt;height:.2in'>
  <p class=MsoNormal>23,300<sup>4</sup></p>
  </td>
  <td width=90 style='width:67.5pt;padding:0in 5.4pt 0in 5.4pt;height:.2in'>
  <p class=MsoNormal>*</p>
  </td>
 </tr>
 <tr style='height:.2in'>
  <td width=378 style='width:283.5pt;padding:0in 5.4pt 0in 5.4pt;height:.2in'>
  <p class=MsoNormal>Ron Goodson, Director</p>
  </td>
  <td width=180 style='width:135.0pt;padding:0in 5.4pt 0in 5.4pt;height:.2in'>
  <p class=MsoNormal>214,497<sup>5</sup></p>
  </td>
  <td width=90 style='width:67.5pt;padding:0in 5.4pt 0in 5.4pt;height:.2in'>
  <p class=MsoNormal>5.48%</p>
  </td>
 </tr>
 <tr style='height:.2in'>
  <td width=378 style='width:283.5pt;padding:0in 5.4pt 0in 5.4pt;height:.2in'>
  <p class=MsoNormal>David Grissen, Director</p>
  </td>
  <td width=180 style='width:135.0pt;padding:0in 5.4pt 0in 5.4pt;height:.2in'>
  <p class=MsoNormal>231,999<sup>6</sup></p>
  </td>
  <td width=90 style='width:67.5pt;padding:0in 5.4pt 0in 5.4pt;height:.2in'>
  <p class=MsoNormal>5.90%</p>
  </td>
 </tr>
 <tr style='height:.2in'>
  <td width=378 valign=top style='width:283.5pt;padding:0in 5.4pt 0in 5.4pt;
  height:.2in'>
  <p class=MsoNormal>Boyd E. Hoback, Director, President and Chief Executive
  Officer</p>
  </td>
  <td width=180 style='width:135.0pt;padding:0in 5.4pt 0in 5.4pt;height:.2in'>
  <p class=MsoNormal>134,542<sup>7</sup></p>
  </td>
  <td width=90 style='width:67.5pt;padding:0in 5.4pt 0in 5.4pt;height:.2in'>
  <p class=MsoNormal>3.33%</p>
  </td>
 </tr>
 <tr style='height:.2in'>
  <td width=378 style='width:283.5pt;padding:0in 5.4pt 0in 5.4pt;height:.2in'>
  <p class=MsoNormal>Scott G. LeFever, Vice President, Operations</p>
  </td>
  <td width=180 style='width:135.0pt;padding:0in 5.4pt 0in 5.4pt;height:.2in'>
  <p class=MsoNormal>18,790<sup>8</sup></p>
  </td>
  <td width=90 style='width:67.5pt;padding:0in 5.4pt 0in 5.4pt;height:.2in'>
  <p class=MsoNormal>*</p>
  </td>
 </tr>
 <tr style='height:.2in'>
  <td width=378 style='width:283.5pt;padding:0in 5.4pt 0in 5.4pt;height:.2in'>
  <p class=MsoNormal>Richard J. Stark, Director</p>
  </td>
  <td width=180 style='width:135.0pt;padding:0in 5.4pt 0in 5.4pt;height:.2in'>
  <p class=MsoNormal>62,103<sup>9</sup></p>
  </td>
  <td width=90 style='width:67.5pt;padding:0in 5.4pt 0in 5.4pt;height:.2in'>
  <p class=MsoNormal>1.58%</p>
  </td>
 </tr>
 <tr style='height:.2in'>
  <td width=378 style='width:283.5pt;padding:0in 5.4pt 0in 5.4pt;height:.2in'>
  <p class=MsoNormal>Alan A. Teran, Director</p>
  </td>
  <td width=180 style='width:135.0pt;padding:0in 5.4pt 0in 5.4pt;height:.2in'>
  <p class=MsoNormal>&nbsp;113,206<sup>10</sup></p>
  </td>
  <td width=90 style='width:67.5pt;padding:0in 5.4pt 0in 5.4pt;height:.2in'>
  <p class=MsoNormal>2.88%</p>
  </td>
 </tr>
 <tr style='height:.2in'>
  <td width=378 style='width:283.5pt;padding:0in 5.4pt 0in 5.4pt;height:.2in'>
  <p class=MsoNormal>Eric W. Reinhard, Chairman</p>
  </td>
  <td width=180 style='width:135.0pt;padding:0in 5.4pt 0in 5.4pt;height:.2in'>
  <p class=MsoNormal>314,000<sup>11</sup></p>
  </td>
  <td width=90 style='width:67.5pt;padding:0in 5.4pt 0in 5.4pt;height:.2in'>
  <p class=MsoNormal>7.94%</p>
  </td>
 </tr>
 <tr style='height:.2in'>
  <td width=378 valign=top style='width:283.5pt;padding:0in 5.4pt 0in 5.4pt;
  height:.2in'>
  <p class=MsoNormal>All directors and executive officers as a group</p>
  <p class=MsoNormal>(9 persons including all those named above)</p>
  </td>
  <td width=180 style='width:135.0pt;padding:0in 5.4pt 0in 5.4pt;height:.2in'>
  <p class=MsoNormal>1,129,181<sup>12</sup></p>
  </td>
  <td width=90 style='width:67.5pt;padding:0in 5.4pt 0in 5.4pt;height:.2in'>
  <p class=MsoNormal>26.38%</p>
  </td>
 </tr>
</table>

<p class=MsoNormal style='margin-left:.25in;text-indent:-.25in'><sup>&nbsp;</sup></p>

<table class=MsoNormalTable border=0 cellspacing=0 cellpadding=0 width=672
 style='margin-left:9.9pt;border-collapse:collapse'>
 <tr>
  <td width=30 valign=top style='width:22.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal><sup>1</sup></p>
  </td>
  <td width=642 valign=top style='width:481.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>The Bailey Company is 99%
  owned by The Erie County Investment Co., which should be deemed the
  beneficial owner of Good Times Restaurants common stock held by The Bailey
  Company.&nbsp; The Erie County Investment Co. also owns 194,680 shares of Good
  Times Restaurants common stock in its own name.&nbsp; Geoffrey R. Bailey is a
  director and executive officer of The Erie County Investment Co.&nbsp; Geoffrey R.
  Bailey disclaims beneficial ownership of the shares of Good Times Restaurants
  common stock held by The Bailey Company and The Erie County Investment Co.&nbsp;
  See footnote 3 below.</p>
  </td>
 </tr>
 <tr>
  <td width=30 valign=top style='width:22.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal><sup>2</sup></p>
  </td>
  <td width=642 valign=top style='width:481.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>The information as to
  Commonwealth Equity Services LLP (&quot;Commonwealth&quot;) and entities
  controlled directly or indirectly by Commonwealth is derived in part from
  Schedule&nbsp;13G, as filed with the Securities and Exchange Commission on
  December 23, 2005 and most recently amended on February 11, 2009, and
  information furnished to Good Times separately by Commonwealth.</p>
  </td>
 </tr>
 <tr>
  <td width=30 valign=top style='width:22.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal><sup>3</sup></p>
  </td>
  <td width=642 valign=top style='width:481.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>Includes 821,512 shares
  beneficially owned by The Bailey Company and 194,680 shares held of record by
  The Erie County Investment Co.&nbsp; Paul T. Bailey is the principal owner of The
  Erie County Investment Co. and may be deemed the beneficial owner of shares
  held by The Erie County Investment Co. and The Bailey Company.&nbsp; Paul T.
  Bailey disclaims beneficial ownership of the shares held by The Erie County
  Investment Co. and The Bailey Company.&nbsp; Paul T. Bailey is the father of
  Geoffrey R. Bailey.</p>
  </td>
 </tr>
 <tr>
  <td width=30 valign=top style='width:22.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal><sup>4</sup></p>
  </td>
  <td width=642 valign=top style='width:481.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>Includes 14,000 shares
  underlying presently exercisable stock options.</p>
  </td>
 </tr>
 <tr>
  <td width=30 valign=top style='width:22.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal><sup>5</sup></p>
  </td>
  <td width=642 valign=top style='width:481.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>Includes 12,000 shares
  underlying presently exercisable stock options and 2,497 warrants to purchase
  stock.</p>
  </td>
 </tr>
 <tr>
  <td width=30 valign=top style='width:22.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal><sup>6</sup></p>
  </td>
  <td width=642 valign=top style='width:481.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>Includes 12,000 shares
  underlying presently exercisable stock options and 19,999 warrants to
  purchase stock.</p>
  </td>
 </tr>
 <tr>
  <td width=30 valign=top style='width:22.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal><sup>7</sup></p>
  </td>
  <td width=642 valign=top style='width:481.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>Includes 89,550 shares
  underlying presently exercisable stock options</p>
  </td>
 </tr>
 <tr>
  <td width=30 valign=top style='width:22.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal><sup>8</sup></p>
  </td>
  <td width=642 valign=top style='width:481.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>Includes 18,790 shares
  underlying presently exercisable stock options</p>
  </td>
 </tr>
 <tr>
  <td width=30 valign=top style='width:22.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal><sup>9</sup></p>
  </td>
  <td width=642 valign=top style='width:481.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>Includes 14,000 shares
  underlying presently exercisable stock options and 15,003 warrants to
  purchase stock.</p>
  </td>
 </tr>
 <tr>
  <td width=30 valign=top style='width:22.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal><sup>10</sup></p>
  </td>
  <td width=642 valign=top style='width:481.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>Includes 14,000 shares
  underlying presently exercisable stock options and 17,501 warrants to
  purchase stock</p>
  </td>
 </tr>
 <tr>
  <td width=30 valign=top style='width:22.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal><sup>11</sup></p>
  </td>
  <td width=642 valign=top style='width:481.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>Includes 16,500 shares
  underlying presently exercisable stock options and 37,500 warrants to
  purchase stock</p>
  </td>
 </tr>
 <tr>
  <td width=30 valign=top style='width:22.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal><sup>12</sup></p>
  </td>
  <td width=642 valign=top style='width:481.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>Does not include shares held
  beneficially by The Bailey Company and The Erie County Investment Co.&nbsp; If
  those shares were included, the number of shares beneficially held by all
  directors and executive officers as a group would be 2,145,373 and the
  percentage of class would be 50.13%.</p>
  </td>
 </tr>
 <tr>
  <td width=30 valign=top style='width:22.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=642 valign=top style='width:481.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
 </tr>
 <tr>
  <td width=30 valign=top style='width:22.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>*</p>
  </td>
  <td width=642 valign=top style='width:481.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>Less than one percent.</p>
  </td>
 </tr>
 <tr>
  <td width=30 valign=top style='width:22.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=642 valign=top style='width:481.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
 </tr>
 <tr>
  <td width=30 valign=top style='width:22.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>**</p>
  </td>
  <td width=642 valign=top style='width:481.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>Under SEC rules, beneficial
  ownership includes shares over which the individual or entity has voting or
  investment power and any shares which the individual or entity has the right
  to acquire within sixty days.</p>
  </td>
 </tr>
</table>

<p class=MsoFooter align=center style='text-align:center'>19</p>



<div class=MsoNormal align=center style='text-align:center'>

<hr size=2 width="100%" noshade style='color:navy' align=center>

</div>



<br clear=all
style='page-break-before:always'>










<p class=MsoNormal><i>Executive Officers</i>.&nbsp; The executive officers of the
Company are as follows:</p>



<table class=MsoNormalTable border=0 cellspacing=0 cellpadding=0 width=624
 style='margin-left:5.4pt;border-collapse:collapse'>
 <tr style='height:17.1pt'>
  <td width=138 valign=top style='width:103.5pt;padding:0in 5.4pt 0in 5.4pt;
  height:17.1pt'>
  <p class=MsoNormal><u>Name</u></p>
  </td>
  <td width=66 valign=top style='width:49.5pt;padding:0in 5.4pt 0in 5.4pt;
  height:17.1pt'>
  <p class=MsoNormal><u>Age</u></p>
  </td>
  <td width=198 valign=top style='width:148.5pt;padding:0in 5.4pt 0in 5.4pt;
  height:17.1pt'>
  <p class=MsoNormal><u>Position</u></p>
  </td>
  <td width=222 valign=top style='width:166.5pt;padding:0in 5.4pt 0in 5.4pt;
  height:17.1pt'>
  <p class=MsoNormal><u>Date Began With Company</u></p>
  </td>
 </tr>
 <tr>
  <td width=138 valign=top style='width:103.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>Boyd E. Hoback</p>
  </td>
  <td width=66 valign=top style='width:49.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>54</p>
  </td>
  <td width=198 valign=top style='width:148.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>President &amp; CEO</p>
  </td>
  <td width=222 valign=top style='width:166.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>September 1987</p>
  </td>
 </tr>
 <tr>
  <td width=138 valign=top style='width:103.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>Susan M. Knutson</p>
  </td>
  <td width=66 valign=top style='width:49.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>51</p>
  </td>
  <td width=198 valign=top style='width:148.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>Controller</p>
  </td>
  <td width=222 valign=top style='width:166.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>September 1987</p>
  </td>
 </tr>
 <tr style='height:11.85pt'>
  <td width=138 valign=top style='width:103.5pt;padding:0in 5.4pt 0in 5.4pt;
  height:11.85pt'>
  <p class=MsoNormal>Scott G. LeFever</p>
  </td>
  <td width=66 valign=top style='width:49.5pt;padding:0in 5.4pt 0in 5.4pt;
  height:11.85pt'>
  <p class=MsoNormal>51</p>
  </td>
  <td width=198 valign=top style='width:148.5pt;padding:0in 5.4pt 0in 5.4pt;
  height:11.85pt'>
  <p class=MsoNormal>VP of Operations</p>
  </td>
  <td width=222 valign=top style='width:166.5pt;padding:0in 5.4pt 0in 5.4pt;
  height:11.85pt'>
  <p class=MsoNormal>September 1987</p>
  </td>
 </tr>
</table>



<p class=MsoNormal><i>Boyd E. Hoback.</i>&nbsp; See the description of Mr. Hoback's
business experience under the heading &quot;Investor Board Designees&quot; above.</p>



<p class=MsoNormal><i>Susan M. Knutson </i>has been Controller since 1993 with
direct responsibility for overseeing the accounting department, maintaining
cash controls, producing budgets, financials and quarterly and annual reports
required to be filed with the Securities and Exchange Commission, acting as the
principal financial officer of the Company, and preparing all information for
the annual audit.</p>



<p class=MsoNormal><i>Scott G. LeFever</i> has been Vice President of
Operations since August 1995, and has been involved in all phases of operations
with direct responsibility for restaurant service performance, personnel and
cost controls.</p>



<p class=MsoNormal>Executive officers do not have fixed terms and serve at the
discretion of our Board.&nbsp; There are no family relationships among the executive
officers, the continuing directors or the Investor's director designees.</p>



<p class=MsoNormal><i>Executive Compensation</i>.&nbsp; The information called for
by Item 8 of Schedule 14A of Regulation 14A is hereby incorporated by reference
to the Company's Annual Report on Form 10-K for the fiscal year ended September
30, 2010 to be filed on EDGAR on or about December 29, 2010.</p>



<p class=MsoNormal><i>Employment Agreements</i>.&nbsp; Mr. Hoback entered into an
employment agreement with the Company in October 2001 and the terms of the
agreement were revised effective October 2007 for compliance with Section 409A
of the Internal Revenue Code.&nbsp; The revised agreement provides for his
employment as President and Chief Executive Officer for two years from the date
of the agreement at a minimum salary of $190,000 per year, terminable by the
Company only for cause.&nbsp; The agreement provides for payment of one year's
salary and benefits in the event that change of ownership control results in a
termination of his employment or termination other than for cause.&nbsp; This
agreement renews automatically annually for a new two-year term unless
specifically not renewed by our Board.&nbsp; Mr. Hoback's compensation, including
salary, expense allowance, bonus and any equity award, is reviewed annually by
the Compensation Committee.&nbsp; Mr. Hoback's bonus is based on the Company's
achieving certain Earnings Before Interest, Taxes, Depreciation and
Amortization (&quot;EBITDA&quot;) targets for each year.</p>



<p class=MsoNormal>As a condition to the Closing of the Investment Transaction,
Mr. Hoback will be required to waive certain rights under the employment
agreement which would otherwise accrue to him as a result of the change in
ownership control of the Company which will occur as a result of the Investment
Transaction, including his right to terminate his employment within one year of
the change in control and trigger the severance payment described above and his
right to accelerate the vesting of stock options upon the change in control.</p>



<p class=MsoNormal><i>Other Employment Arrangements</i>.&nbsp; Mr. LeFever is
employed as an &quot;employee at will&quot; and does not have a written employment
agreement.&nbsp; His compensation, including salary, expense allowance, bonus and
any equity awards, is reviewed and approved by the Compensation Committee
annually.&nbsp; He participates in a bonus program that is based on both the
Company's level of EBITDA for the year and achieving certain operating metrics
and sales targets.</p>



<p class=MsoNormal><i>Section 16(a) beneficial ownership reporting compliance</i>.&nbsp;
Under Section 16(a) of the Securities Exchange Act of 1934, directors,
executive officers, and persons who own more than ten percent of the Company's
common stock must disclose their initial beneficial ownership of the common
stock and any changes in that ownership in reports which must be filed with the
SEC and the Company.&nbsp; The SEC has designated specific deadlines for these
reports and the Company must identify in this Proxy Statement those persons who
did not file these reports when due.</p>

<p class=MsoFooter align=center style='text-align:center'>20</p>



<div class=MsoNormal align=center style='text-align:center'>

<hr size=2 width="100%" noshade style='color:navy' align=center>

</div>



<br clear=all
style='page-break-before:always'>










<p class=MsoNormal>Based solely on a review of the reports filed with the
Company and written representations received from reporting persons, the
Company believes that, as of November 1, 2010, all Section 16(a) filing
requirements for its officers, directors, and more than ten percent
stockholders were complied with on a timely basis.&nbsp; Moreover, pursuant to the
Purchase Agreement, the Investor has agreed to comply with all Section 16(a)
filing requirements on a timely basis.</p>



<p class=MsoNormal align=center style='text-align:center'><b>STOCKHOLDER
NOMINATIONS AND OTHER PROPOSALS</b></p>



<p class=MsoNormal>Any stockholder proposal for the Company's annual meeting of
stockholders in 2011 must be received by the Company for the proposal to be
included in the Company's proxy statement and form of proxy for that meeting.&nbsp;
If notice of a proposal for which a stockholder will conduct his or her own
proxy solicitation is not received by the Company by August 15, 2011, such
proposal will be considered untimely pursuant to Rules 14a-4 and 14a-5(e) of
the Securities Exchange Act of 1934, and the person named in proxies solicited
by our Board may use his or her discretionary authority when the matter is
raised at the meeting, without including any discussion of the matter in the
proxy statement.</p>



<p class=MsoNormal align=center style='text-align:center'><b>OTHER MATTERS</b></p>



<p class=MsoNormal>As of the date of this Proxy Statement, our Board does not
intend to present at the Special Meeting any matters other than those described
herein and does not presently know of any matters that will be presented by
other parties.&nbsp; If any other matter is properly brought before the meeting for
action by stockholders, proxies in the enclosed form returned to us will be
voted in accordance with the recommendation of our Board or, in the absence of
such recommendation, in accordance with the judgment of the proxy holder.</p>



<p class=MsoNormal align=center style='text-align:center'><b>WHERE YOU CAN FIND
MORE INFORMATION</b></p>



<p class=MsoNormal>The Company is subject to the informational requirements of
the Securities Exchange Act of 1934, as amended (the &quot;Exchange Act&quot;).&nbsp; The
Company files reports, proxy statements and other information with the Securities
and Exchange Commission (&quot;SEC&quot;).&nbsp; The public may read and copy any materials
that we file with the SEC at the SEC's Public Reference Room at 100 F Street,
N.E., Washington D.C. 20549.&nbsp; The public may obtain information on the
operation of the Public Reference Room by calling 1-800-SEC-0330.&nbsp; The
statements and forms we file with the SEC have been filed electronically and
are available for viewing or copy on the SEC maintained Internet site that
contains reports, proxy and information statements, and other information
regarding issuers that file electronically with the SEC.&nbsp; The Internet address
for this site can be found at: www.sec.gov. </p>



<p class=MsoNormal>A copy of our Annual Report on Form 10-K for the fiscal year
ended September 30, 2009 can be found at the SEC's Internet site.&nbsp; The Annual
Report is not incorporated into this Proxy Statement and is not to be
considered a part of these proxy soliciting materials or subject to Regulations
14A or 14C or to the liabilities of Section 18 of the Exchange Act.&nbsp; We will
provide upon written request, without charge to each stockholder of record as
of the record date, a copy of our Annual Report on Form 10-K for the fiscal
year ended September 30, 2009, as filed with the SEC.&nbsp; Any exhibits listed in
the Form 10-K report also will be furnished upon request at the actual expense
incurred by us in furnishing such exhibits.&nbsp; Any such requests should be
directed to our Corporate Secretary at our principal executive offices at 601
Corporate Circle, Golden, Colorado 80401.</p>



<p class=MsoNormal><b>STOCKHOLDERS ARE URGED TO IMMEDIATELY MARK, DATE, SIGN
AND RETURN THE ENCLOSED PROXY IN THE ENCLOSED BUSINESS REPLY ENVELOPE OR VIA
FACSIMILE TO THE ATTENTION OF BOYD E. HOBACK, OUR PRESIDENT AND CHIEF EXECUTIVE
OFFICER, AT (303) 273-0177.&nbsp; YOUR VOTE IS IMPORTANT.</b></p>

<p class=MsoNormal><b>&nbsp;</b></p>

<p class=MsoNormal><b>BY ORDER OF THE BOARD OF DIRECTORS</b></p>

<p class=MsoNormal><i>&nbsp;</i></p>

<p class=MsoNormal><i>/s/ Boyd E. Hoback</i></p>

<p class=MsoNormal>Boyd E. Hoback</p>

<p class=MsoNormal>President and Chief Executive Officer</p>



<p class=MsoNormal>November 22, 2010</p>



<p class=MsoFooter align=center style='text-align:center'>21</p>



<div class=MsoNormal align=center style='text-align:center'>

<hr size=2 width="100%" noshade style='color:navy' align=center>

</div>



</div>

<br clear=all
style='page-break-before:always'>


<div class=WordSection5>









<p class=MsoNormal align=center style='text-align:center'><b>GOOD TIMES
RESTAURANTS INC.</b></p>

<p class=MsoNormal align=center style='text-align:center'><b>&nbsp;</b></p>

<p class=MsoNormal align=center style='text-align:center'><b>REVOCABLE PROXY</b></p>



<p class=MsoNormal><b>THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF
DIRECTORS OF GOOD TIMES RESTAURANTS INC. IN CONNECTION WITH THE SPECIAL MEETING
OF STOCKHOLDERS TO BE HELD ON DECEMBER 13, 2010</b>.</p>



<p class=MsoNormal>The undersigned hereby revokes all previous proxies,
acknowledges receipt of the Notice of the Special Meeting of Stockholders to be
held on December 13, 2010 and the Proxy Statement, and appoints Boyd E. Hoback
and Susan M. Knutson (or either of them), the proxy of the undersigned, each
with full power of substitution, to vote all shares of common stock of Good
Times Restaurants Inc., a Nevada corporation (the &quot;Company&quot;), that the
undersigned is entitled to vote, either on his or her own behalf or on behalf
of any entity or entities, at the Special Meeting of Stockholders of the
Company to be held on December 13, 2010, beginning at 9:00 a.m. local time, at
the Company's corporate offices, which are located at 601 Corporate Circle,
Golden, Colorado 80401, and at any adjournment or postponement thereof, with
the same force and effect as the undersigned might or could do if personally
present thereat.&nbsp; The shares represented by this proxy shall be voted in the
matter set forth herein.</p>



<p class=MsoNormal><a name="_Toc89840040"></a><a name="_Toc89839545"><b>PROPOSAL
#1 - APPROVAL OF INVESTMENT TRANSACTION</b>:&nbsp; </a>To approve a $2,100,000
equity investment in the Company through the issuance of 4,200,000 shares of
the Company's common stock to Small Island Investments Limited, a Bermuda
corporation, referred to herein as the &quot;Investment Transaction&quot;.</p>



<table class=MsoNormalTable border=0 cellspacing=0 cellpadding=0
 style='margin-left:70.65pt;border-collapse:collapse'>
 <tr>
  <td width=72 valign=top style='width:.75in;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>For</p>
  </td>
  <td width=48 valign=top style='width:.5in;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>[&nbsp;&nbsp; ]</p>
  </td>
  <td width=72 valign=top style='width:.75in;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>Against</p>
  </td>
  <td width=48 valign=top style='width:.5in;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>[&nbsp;&nbsp; ]</p>
  </td>
  <td width=72 valign=top style='width:.75in;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>Abstain</p>
  </td>
  <td width=48 valign=top style='width:.5in;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>[&nbsp;&nbsp; ]</p>
  </td>
 </tr>
</table>



<p class=MsoNormal><b>PROPOSAL #2 - APPROVAL OF REVERSE STOCK SPLIT</b>:&nbsp; To
approve a proposal to give the Board of Directors discretion to effect a one-for-three
reverse stock split of the Company's common stock following the closing of the
Investment Transaction, referred to herein as the &quot;Reverse Split&quot;.</p>



<table class=MsoNormalTable border=0 cellspacing=0 cellpadding=0
 style='margin-left:70.65pt;border-collapse:collapse'>
 <tr>
  <td width=72 valign=top style='width:.75in;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>For</p>
  </td>
  <td width=48 valign=top style='width:.5in;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>[&nbsp;&nbsp; ]</p>
  </td>
  <td width=72 valign=top style='width:.75in;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>Against</p>
  </td>
  <td width=48 valign=top style='width:.5in;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>[&nbsp;&nbsp; ]</p>
  </td>
  <td width=72 valign=top style='width:.75in;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>Abstain</p>
  </td>
  <td width=48 valign=top style='width:.5in;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>[&nbsp;&nbsp; ]</p>
  </td>
 </tr>
</table>



<p class=MsoNormal>This proxy when properly executed will be voted in the
manner directed by the undersigned.</p>



<p class=MsoNormal><b>If this proxy is properly executed but no voting
directions are given, this proxy will be voted &quot;For&quot; the approval of each of
Proposals #1 and #2 set forth above.</b></p>



<p class=MsoNormal>This proxy also confers discretionary authority to the
proxies to vote on any other matters that may properly be presented at the
meeting.&nbsp; As of the date of the accompanying Proxy Statement, the Company did
not know of any other matters to be presented at the meeting.&nbsp; If any other
matters are properly presented at the meeting, this proxy will be voted in
accordance with the recommendations of the Company's Board of Directors.</p>



<p class=MsoNormal>Please sign exactly as your name appears below.&nbsp; When joint
tenants hold shares, both should sign.&nbsp; When signing as attorney, executor,
administrator, trustee or guardian, please give full title as such.&nbsp; If a
corporation, please sign in full corporate name by the president or other
authorized officer.&nbsp; If a partnership or limited liability company, please sign
in such name by an authorized person.</p>



<p class=MsoNormal>Please complete, date and sign this proxy card and return it
promptly in the accompanying envelope.</p>



<table class=MsoNormalTable border=0 cellspacing=0 cellpadding=0
 style='border-collapse:collapse'>
 <tr>
  <td width=337 valign=top style='width:252.9pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>Shares Owned: ____________________</p>
  </td>
  <td width=30 valign=top style='width:22.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=288 valign=top style='width:3.0in;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>Dated: ____________________</p>
  </td>
 </tr>
 <tr>
  <td width=337 valign=top style='width:252.9pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>_________________________________</p>
  </td>
  <td width=30 valign=top style='width:22.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=288 valign=top style='width:3.0in;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>__________________________</p>
  </td>
 </tr>
 <tr>
  <td width=337 valign=top style='width:252.9pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>Signature of Shareholder </p>
  </td>
  <td width=30 valign=top style='width:22.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=288 valign=top style='width:3.0in;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>Signature (if held jointly)</p>
  </td>
 </tr>
</table>



<p class=MsoFooter>(Sign exactly as name appears on stock certificate)</p>



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<DOCUMENT>
<TYPE>EX-1
<SEQUENCE>2
<FILENAME>spafile101b1.htm
<TEXT>
<html>

<head>
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<!-- All rights reserved EDGAR2.com -->



<title>_</title>


</head>

<body lang=EN-US link=blue vlink=purple>

<div class=WordSection1>

<p class=MsoNormal align=center style='text-align:center'><b>&nbsp;</b></p>

<p class=MsoNormal align=center style='text-align:center'><b>&nbsp;</b></p>









<p class=MsoNormal align=center style='text-align:center'><b>SECURITIES
PURCHASE AGREEMENT</b></p>

<p class=MsoNormal align=center style='text-align:center'><b>&nbsp;</b></p>

<p class=MsoNormal>This Securities Purchase Agreement (this <b>&quot;Agreement&quot;</b>)
is dated as of October 29, 2010, between Good Times Restaurants Inc., a Nevada
corporation (the <b>&quot;Company&quot;</b>), and Small Island Investments Limited, a Bermuda
corporation (the <b>&quot;Investor&quot;</b>).</p>



<p class=MsoNormal>WHEREAS, subject to the terms and conditions set forth in
this Agreement and pursuant to Section 4(2) of the Securities Act (as defined
below), the Company desires to issue and sell to the Investor, and the Investor
desires to purchase from the Company certain securities of the Company, as more
fully described in this Agreement.</p>



<p class=MsoNormal>NOW, THEREFORE, IN CONSIDERATION of the mutual covenants
contained in this Agreement, and for other good and valuable consideration the
receipt and adequacy of which are hereby acknowledged, the Company and the
Investor agree as follows:</p>



<p class=MsoNormal align=center style='text-align:center'><b>ARTICLE 1.</b></p>

<p class=MsoNormal align=center style='text-align:center'><b>DEFINITIONS</b></p>



<p class=MsoNormal>1.1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>Definitions</u>.&nbsp; In addition to the terms
defined elsewhere in this Agreement, for all purposes of this Agreement, the
following terms shall have the meanings indicated in this Section 1.1:</p>



<p class=MsoNormal><b>&quot;Action&quot;</b> means any action, suit, inquiry, notice of
violation, proceeding (including any partial proceeding such as a deposition),
or investigation pending or threatened in writing against or affecting the
Company, the Subsidiary, or any of their respective properties before or by any
court, arbitrator, governmental or administrative agency, regulatory authority
(federal, state, county, or local), stock market, stock exchange, or trading
facility.</p>



<p class=MsoNormal><b>&quot;Affiliate&quot;</b> means any Person that, directly or
indirectly through one or more intermediaries, controls or is controlled by, or
is under common control with, a Person, as such terms are used in and construed
under Rule 144.</p>



<p class=MsoNormal><b>&quot;Board&quot;</b> means the Board of Directors of the Company.</p>



<p class=MsoNormal><b>&quot;Business Day&quot;</b> means any day except Saturday, Sunday,
and any day which is a federal legal holiday.</p>



<p class=MsoNormal align=center style='text-align:center'>1</p>



<p class=MsoNormal><b>&nbsp;&quot;Closing&quot;</b> means the closing of the purchase and sale
of the Shares pursuant to Article 2.</p>



<p class=MsoNormal><b>&quot;Closing Date&quot;</b> means the first Business Day on which
all of the conditions set forth in Sections 5.1 and 5.2 hereof are satisfied,
or such other date as the parties may agree.</p>



<p class=MsoNormal><b>&quot;Commission&quot;</b> means the U.S. Securities and Exchange
Commission.</p>





<div class=MsoNormal align=center style='text-align:center'>

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</div>



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<p class=MsoNormal><b>&quot;Common Stock&quot;</b> means the common stock of the Company,
par value $0.001 per share, and any securities into which such common stock may
hereafter be reclassified.</p>

<p class=MsoNormal><b>&quot;Company Deliverables&quot;</b> has the meaning set forth in
Section 2.3(a).</p>



<p class=MsoNormal><b>&quot;Disclosure Materials&quot;</b> has the meaning set forth in
Section 3.1(h).</p>

<p class=MsoNormal><b>&nbsp;</b></p>

<p class=MsoNormal><b>&quot;Equity Securities&quot;</b> means any (i) Common Stock, (ii)
any debt or equity security of the Company convertible into or exchangeable for
shares of Common Stock, with or without consideration being paid, (iii) any
option, warrant or other right to purchase shares of Common Stock or securities
convertible into or exchangeable for shares of Common Stock or any other
security so convertible, or (iv) any debt securities having voting rights,
which shall be included in any calculation of beneficial ownership pursuant to
Rule 13d-3 promulgated under the Exchange Act as the equivalent of shares of
Common Stock having the same voting power.</p>



<p class=MsoNormal><b>&quot;Exchange Act&quot;</b> means the Securities Exchange Act of
1934, as amended.</p>



<p class=MsoNormal><b>&quot;GAAP&quot;</b> means U.S. generally accepted accounting
principles.</p>



<p class=MsoNormal><b>&quot;Investment Amount&quot;</b> means the aggregate purchase
price for the Shares purchased by the Investor.</p>



<p class=MsoNormal><b>&quot;Investor Deliverables&quot;</b> has the meaning set forth in
Section 2.3(b).</p>



<p class=MsoNormal><b>&quot;Lien&quot;</b> means any lien, charge, encumbrance, security
interest, right of first refusal, or other restriction of any kind.</p>



<p class=MsoNormal><a name="OLE_LINK2"><b>&quot;Material Adverse Effect&quot;</b> means
any of (i) a material and adverse effect on the legality, validity, or
enforceability of any Transaction Document, (ii) a material and adverse effect
on the results of operations, assets, liabilities, property, business, or
condition (financial or otherwise) of the Company and the Subsidiary, taken as
a whole, or (iii) a material and adverse </a></p>



<p class=MsoNormal align=center style='text-align:center'>2</p>



<p class=MsoNormal>impairment to the Company's ability to perform on a timely
basis its obligations under any Transaction Document.</p>



<p class=MsoNormal><b>&quot;Person&quot;</b> means an individual or corporation,
partnership, trust, incorporated or unincorporated association, joint venture,
limited liability company, joint stock company, government (or an agency or
subdivision thereof), or other entity of any kind.</p>



<p class=MsoNormal><b>&quot;Proceeding&quot;</b> means an action, claim, suit,
investigation, or proceeding (including, without limitation, an investigation
or partial proceeding, such as a deposition), whether commenced or threatened.</p>



<p class=MsoNormal><b>&quot;Registration Rights Agreement&quot;</b> means the
Registration Rights Agreement, dated as of the Closing Date, between the
Company and the Investor, in the form of <u>Exhibit A</u> hereto.</p>



<div class=MsoNormal align=center style='text-align:center'>

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<p class=MsoNormal><b>&quot;Registration Statement&quot;</b> means a registration
statement meeting the requirements set forth in the Registration Rights
Agreement and covering the resale by the Investor of the Shares.</p>



<p class=MsoNormal><b>&quot;Rule 144&quot;</b> means Rule 144 promulgated by the
Commission pursuant to the Securities Act, as such rule may be amended from
time to time, or any similar rule or regulation hereafter adopted by the
Commission having substantially the same effect as such Rule.</p>



<p class=MsoNormal><b>&quot;SEC Reports&quot;</b> has the meaning set forth in Section
3.1(h).</p>



<p class=MsoNormal><b>&quot;Securities Act&quot;</b> means the Securities Act of 1933, as
amended.</p>



<p class=MsoNormal><b>&quot;Shares&quot;</b> means the shares of Common Stock to be
purchased by the Investor pursuant to this Agreement.</p>



<p class=MsoNormal><b>&quot;Subsidiary&quot;</b> means Good Times Drive Thru Inc., a
Colorado corporation, a wholly-owned subsidiary of the Company.</p>

<p class=MsoNormal><b>&nbsp;</b></p>

<p class=MsoNormal><b>&quot;Trading Market&quot;</b> means whichever of the New York
Stock Exchange, the American Stock Exchange, the NASDAQ National Market, the
NASDAQ Capital Market, or the OTC Bulletin Board on which the Common Stock is
listed or quoted for trading on the date in question.</p>



<p class=MsoNormal align=center style='text-align:center'>3</p>



<p class=MsoNormal><b>&quot;Transaction Documents&quot;</b> means this Agreement, the Registration
Rights Agreement, and any other documents or agreements executed in connection
with the transactions contemplated hereunder.</p>



<p class=MsoNormal align=center style='text-align:center'><b>ARTICLE 2.</b></p>

<p class=MsoNormal align=center style='text-align:center'><b>PURCHASE AND SALE</b></p>



<p class=MsoNormal>2.1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>Purchase and Sale of Shares</u>.&nbsp; Subject to
the terms and conditions set forth in this Agreement, at the Closing the
Company shall issue and sell to the Investor and the Investor shall purchase
from the Company 4,200,000 Shares for an Investment Amount of $2,100,000.</p>



<p class=MsoNormal>2.2&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>Closing</u>.&nbsp; The Closing shall take place remotely
by the exchange of documents and signatures at 10:00 a.m. (Mountain time) on
the Closing Date or at such other location or time as the parties may agree.</p>



<p class=MsoNormal>2.3&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>Closing Deliveries</u>.</p>

<p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; At the Closing, the Company shall
deliver or cause to be delivered to the Investor (i) &nbsp;a certificate evidencing the
Shares, registered in the name of the Investor, and (ii) the duly executed
signature page of the Registration Rights Agreement for the Company (together, the
<b>&quot;Company Deliverables</b>&quot;).</p>





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<p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; At the Closing, the Investor shall
deliver or cause to be delivered to the Company (i) the Investment Amount, in
immediately available funds, by wire transfer to an account designated in
writing by the Company for such purpose, and (ii) the duly executed signature
page of the Registration Rights Agreement for the Investor (together, the <b>&quot;Investor
Deliverables&quot;</b>).</p>



<p class=MsoNormal align=center style='text-align:center'><b>ARTICLE 3.</b></p>

<p class=MsoNormal align=center style='text-align:center'><b>REPRESENTATIONS
AND WARRANTIES</b></p>

<p class=MsoNormal><b>&nbsp;</b></p>

<p class=MsoNormal>3.1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>Representations and Warranties of the Company</u>.&nbsp;
The Company hereby makes the following representations and warranties to the
Investor, except as set forth on the schedule of exceptions attached as Exhibit
B hereto and made a part hereof by this reference (the &quot;Schedule of
Exceptions&quot;):</p>



<p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>Subsidiaries</u>.&nbsp; The Company has
no direct or indirect subsidiaries other than the Subsidiary.&nbsp; The Company
owns, directly or indirectly, all of the capital stock of the Subsidiary free
and clear of any and all Liens, and all the issued and outstanding shares of
capital stock of the Subsidiary are validly issued and are fully paid,
non-assessable, and free of preemptive and similar rights.</p>



<p class=MsoNormal align=center style='text-align:center'>4</p>



<p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>Organization and Qualification</u>.&nbsp;
The Company and the Subsidiary are each duly incorporated or otherwise
organized, validly existing, and in good standing under the laws of the
jurisdiction of its incorporation, with the requisite power and authority to
own and use its properties and assets and to carry on its business as currently
conducted.&nbsp; Neither the Company nor the Subsidiary is in violation of any of
the provisions of its respective articles of incorporation, bylaws, or other
organizational or charter documents, except where the violation would not,
individually or in the aggregate, have or reasonably be expected to result in a
Material Adverse Effect.&nbsp; The Company and the Subsidiary are duly qualified to
conduct their respective businesses, and each is in good standing as a foreign
corporation in each jurisdiction in which the nature of the business conducted
or property owned by it makes such qualification necessary, except where the
failure to be so qualified or in good standing, as the case may be, could not,
individually or in the aggregate, have or reasonably be expected to result in a
Material Adverse Effect.</p>





<div class=MsoNormal align=center style='text-align:center'>

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<p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (c)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>Authorization; Enforcement</u>.&nbsp;
The Company has the requisite corporate power and authority to enter into and
to consummate the transactions contemplated by each of the Transaction Documents
and otherwise to carry out its obligations thereunder.&nbsp; Upon the approval of
the transactions contemplated by the Transaction Documents by the Company's shareholders,
(i) the execution and delivery of each of the Transaction Documents by the
Company and the consummation by it of the transactions contemplated thereby
shall have been duly authorized by all necessary action on the part of the
Company and no further action shall be required by the Company in connection
therewith, and (ii) each Transaction Document, when delivered in accordance
with the terms hereof, will constitute the valid and binding obligation of the
Company enforceable against the Company in accordance with its terms, except as
such enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium, liquidation, or similar laws relating to, or
affecting generally the enforcement of, creditors' rights and remedies or by
other equitable principles of general application.</p>



<p class=MsoNormal align=center style='text-align:center'>5</p>



<p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (d)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>No Conflicts</u>.&nbsp; Upon the approval
of the transactions contemplated by the Transaction Documents by the Company's shareholders,
the execution, delivery, and performance of the Transaction Documents by the
Company and the consummation by the Company of the transactions contemplated
thereby do not and will not (i) conflict with or violate any provision of the
Company's or the Subsidiary's articles of incorporation, bylaws, or other
organizational or charter documents (including revisions to such organizational
or charter documents made in conjunction with and to effect the provisions of
this Agreement, if applicable, as disclosed in the Schedule of Exceptions), or
(ii) conflict with, or constitute a default (or an event that with notice or
lapse of time or both would become a default) under, or give to others any
rights of termination, amendment, acceleration, or cancellation (with or
without notice, lapse of time, or both) of, any agreement or other instrument
or other understanding to which the Company or the Subsidiary is a party or by
which any property or asset of the Company or the Subsidiary is bound or
affected, or (iii) result in a violation of any law, rule, regulation, order,
judgment, injunction, decree, or other restriction of any court or governmental
authority to which the Company or the Subsidiary is subject (including federal
and state securities laws and regulations), or by which any property or asset
of the Company or the Subsidiary is bound or affected; except in the case of
each of clauses (ii) and (iii), such as could not, individually or in the
aggregate, have or reasonably be expected to result in a Material Adverse
Effect.</p>



<p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (e)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>Filings, Consents, and Approvals</u>.&nbsp;
The Company is not required to obtain any consent, waiver, authorization, or
order of, give any notice to, or make any filing or registration with, any
court or other federal, state, provincial, local, or other United States or
foreign governmental authority in connection with the execution, delivery, and
performance by the Company of the Transaction Documents, other than (i) the
filing with the Commission of preliminary and definitive proxy materials under
the Commission's proxy rules related to approval by the Company's shareholders
of the transactions contemplated by the Transaction Documents; (ii) the filing
with the Commission of one or more Registration Statements in accordance with
the requirements of the Registration Rights Agreement; (iii) the filings
required, if any, in accordance with Section 4.4; (iv) filings required by
federal or state securities laws, including Form D pursuant to Regulation D of
the Securities Act; and (v) those that have been made or obtained prior to the
date of this Agreement.</p>



<p class=MsoNormal align=center style='text-align:center'>6</p>



<p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (f)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>Issuance of the Shares</u>.&nbsp; Upon
the approval of the transactions contemplated by the Transaction Documents by
the Company's shareholders, the Shares will have been duly authorized and, when
issued and paid for in accordance with the Transaction Documents, will be duly
and validly issued, fully paid, and nonassessable, free and clear of all
Liens.&nbsp; The Company has reserved from its duly authorized capital stock the
shares of Common Stock issuable pursuant to this Agreement in order to issue
the Shares.</p>



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<p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (g)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>Capitalization</u>.&nbsp; The number of
shares and type of all authorized, issued, and outstanding capital stock of the
Company, and all shares of Common Stock reserved for issuance under the
Company's various option and incentive plans, is specified in the Schedule of
Exceptions, which information is accurate as of the date of this Agreement.&nbsp;
Except as specified in the Schedule of Exceptions, no securities of the Company
are entitled to preemptive or similar rights, and no Person has any right of
first refusal, preemptive right, right of participation, or any similar right
to participate in the transactions contemplated by the Transaction Documents.&nbsp;
Except as specified in the Schedule of Exceptions, there are no outstanding
options, warrants, scrip rights to subscribe to, calls, or commitments of any
character whatsoever relating to, or securities, rights, or obligations
convertible into or exchangeable for, or giving any Person any right to
subscribe for or acquire, any shares of Common Stock, or contracts,
commitments, understandings, or arrangements by which the Company or the
Subsidiary is or may become bound to issue additional shares of Common Stock,
or securities or rights convertible or exchangeable into shares of Common
Stock.&nbsp; The issue and sale of the Shares will not, immediately or with the
passage of time, obligate the Company to issue shares of Common Stock or other
securities to any Person (other than the Investor) and will not result in a
right of any holder of Company securities to adjust the exercise, conversion,
exchange, or reset price under such securities.&nbsp; Except as specified in the
Schedule of Exceptions, no outstanding agreements, plans or provisions of the
Company's articles of incorporation, bylaws or other such documents will affect
the <b>&quot;Shares Purchase Position&quot;</b> of the Investor (defined as such percentage
holding of Company Common Stock as the Investor would have if the Shares
purchase pursuant to Section 2.1 were given effect as of the date of this
Agreement) as set forth on the Closing Capitalization Table attached hereto as <u>Exhibit
C</u>.</p>



<p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (h)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>SEC Reports; Financial Statements</u>.&nbsp;
The Company has filed all reports required to be filed by it under the
Securities Act and the Exchange Act, including pursuant to</p>



<p class=MsoNormal align=center style='text-align:center'>7</p>





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<p class=MsoNormal>Section 13(a) or 15(d) thereof, since October 1, 2007 (the
foregoing materials being collectively referred to herein as the <b>&quot;SEC
Reports&quot;</b> and, together with the Schedule of Exceptions, the <b>&quot;Disclosure
Materials&quot;</b>) on a timely basis or has timely filed a valid extension of such
time of filing and has filed any such SEC Reports prior to the expiration of
any such extension.&nbsp; As of their respective dates, the SEC Reports complied in
all material respects with the requirements of the Securities Act and the
Exchange Act and the rules and regulations of the Commission promulgated
thereunder, and none of the SEC Reports, when filed, contained any untrue
statement of a material fact or omitted to state a material fact required to be
stated therein or necessary in order to make the statements therein, in light
of the circumstances under which they were made, not misleading.&nbsp; The financial
statements of the Company included in the SEC Reports comply in all material
respects with applicable accounting requirements and the rules and regulations
of the Commission with respect thereto as in effect at the time of filing.&nbsp; Such
financial statements have been prepared in accordance with GAAP applied on a
consistent basis during the periods involved, except as may be otherwise
specified in such financial statements or the notes thereto, and fairly present
in all material respects the financial position of the Company and the
Subsidiary as of and for the dates thereof and the results of operations and
cash flows for the periods then ended, subject, in the case of unaudited
statements, to normal, immaterial, year-end audit adjustments.</p>



<p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (i)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>Press Releases</u>.&nbsp; To the
Company's best knowledge, the press releases disseminated by the Company since October
1, 2007 taken as a whole do not contain any untrue statement of a material fact
or omit to state a material fact required to be stated therein or necessary in
order to make the statements therein, in light of the circumstances under which
they were made and when made, not misleading.</p>

<p class=MsoNormal><u>&nbsp;</u></p>

<p class=MsoNormal><a name="OLE_LINK1">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (j)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>Material
Changes</u>.&nbsp; Since the date of the Company's most recently filed Form 10-Q,
except as specifically disclosed in the Schedule of Exceptions, (i) there has
been no event, occurrence, or development that has had or that could reasonably
be expected to result in a Material Adverse Effect, (ii) the Company has not
incurred any liabilities (contingent or otherwise) other than (A) trade
payables, accrued expenses, and other liabilities incurred in the ordinary
course of business consistent with past practice and (B) liabilities not
required to be reflected in the Company's financial statements pursuant to GAAP
or required to be disclosed in filings made with the Commission, (iii) the
Company has not altered its method of accounting or the identity of its
auditors, (iv) the Company has not declared or made any dividend or
distribution of cash or other property to its shareholders or purchased,
redeemed, or made any agreements to purchase or redeem any shares of its
capital stock, and (v) except as disclosed in the Schedule of Exceptions, the
Company has not issued any equity securities to any officer, director, or
Affiliate, except pursuant to existing Company stock option plans. The Company
does not have pending before the Commission any request for confidential
treatment of information.</a></p>



<p class=MsoNormal align=center style='text-align:center'>8</p>



<p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (k)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>Litigation</u>.&nbsp; There is no
Action which (i) adversely affects or challenges the legality, validity, or
enforceability of any of the Transaction Documents or the Shares, or (ii)
except as specifically disclosed in the Schedule of Exceptions, could, if there
were an unfavorable decision, individually or in the aggregate, have or
reasonably be expected to result in a Material Adverse Effect.&nbsp; Neither the
Company nor the Subsidiary, nor any director or officer thereof (in his or her
capacity as such), is or has been the subject of any Action involving a claim
of violation of or liability under any federal, state, or local laws.&nbsp; There
has not been, and to the knowledge of the Company, there is not pending any
investigation by the Commission involving the Company or any current or former
director or officer of the Company (in his or her capacity as such).&nbsp; The
Commission has not issued any stop order or other order suspending the
effectiveness of any registration statement filed by the Company or the
Subsidiary under the Exchange Act or the Securities Act.</p>





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<p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (l)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>Compliance</u>.&nbsp; Neither the
Company nor the Subsidiary (i) is in default under or in violation of (and no
event has occurred that has not been waived that, with notice or lapse of time
or both, would result in a default by the Company or the Subsidiary under), nor
has the Company or the Subsidiary received written notice of a claim that it is
in default under or that it is in violation of, any agreement or instrument to
which it is a party or by which it or any of its properties is bound (except
where such default or violation has been waived), (ii) is in violation of any
order of any United States court, arbitrator, or governmental body, or (iii) is
or has been in violation of any statute, rule, or regulation of any United
States governmental authority, including without limitation all federal, state,
and local laws relating to taxes, environmental protection, occupational health
and safety, product quality and safety, and employment and labor matters,
except in each case as could not, individually or in the aggregate, have or
reasonably be expected to result in a Material Adverse Effect. The Company is
in compliance with all effective</p>

<p class=MsoNormal>&nbsp;requirements of the Sarbanes-Oxley Act of 2002, as amended,
and the rules and regulations thereunder, that are applicable to it, except
where such noncompliance could not have or reasonably be expected to result in
a Material Adverse Effect. </p>



<p class=MsoNormal align=center style='text-align:center'>9</p>



<p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (m)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>Regulatory Permits</u>.&nbsp; The
Company and the Subsidiary possess all certificates, authorizations, and
permits issued by the appropriate federal, state, or local regulatory authorities
necessary to conduct their respective businesses as described in the SEC
Reports, except where the failure to possess such permits could not,
individually or in the aggregate, have or reasonably be expected to result in a
Material Adverse Effect, and neither the Company nor the Subsidiary has
received any written or other notice of proceedings relating to the revocation
or modification of any such permits.</p>



<p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (n)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>Title to Assets</u>.&nbsp; Except as
set forth in the Schedule of Exceptions, the Company and the Subsidiary have
good and marketable title in fee simple to all real property owned by them that
is material to their respective businesses and good and marketable title to all
personal property owned by them that is material to their respective businesses,
in each case free and clear of all Liens, except for Liens as do not materially
affect the value of such property and do not materially interfere with the use
made and proposed to be made of such property by the Company and the Subsidiary.
Any real property and facilities held under lease by the Company and the
Subsidiary are held by them under valid, subsisting, and enforceable leases of
which the Company and the Subsidiary are in compliance, except as could not,
individually or in the aggregate, have or reasonably be expected to result in a
Material Adverse Effect.</p>



<p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (o)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>Insurance</u>.&nbsp; The Company and
the Subsidiary are insured by insurers of recognized financial responsibility
against such losses and risks and in such amounts as are prudent and customary
in the businesses in which the Company and the Subsidiary are engaged.&nbsp; The
Company has no reason to believe that it will not be able to renew its and the
Subsidiary's existing insurance coverage as and when such coverage expires or
to obtain similar coverage from similar insurers as may be necessary to
continue its business on terms consistent with market for the Company's and the
Subsidiary's respective lines of business.</p>



<p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (p)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>Environmental Matters</u>.&nbsp; The
Company and the Subsidiary are in compliance with all applicable federal,
state, and local laws, regulations, rules, ordinances, and orders which impose
requirements relating to environmental protection, hazardous substances, or</p>

<p class=MsoNormal>public or employee health and safety (collectively, &quot;<b>Environmental
Laws</b>&quot;), except as could not, individually or in the aggregate, have or
reasonably be expected to result in a Material Adverse Effect.</p>





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<p class=MsoNormal align=center style='text-align:center'>10</p>



<p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (q)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>Transactions With Affiliates and
Employees</u>.&nbsp; Except as set forth in the Schedule of Exceptions, none of the
officers or directors of the Company or the Subsidiary and, to the knowledge of
the Company, none of the employees of the Company or the Subsidiary is
presently a party to any transaction with the Company or the Subsidiary (other
than for services as employees, officers, and directors), including any
contract, agreement, or other arrangement providing for the furnishing of
services to or by, providing for rental of real or personal property to or
from, or otherwise requiring payments to or from any officer, director, or such
employee or, to the knowledge of the Company, any entity in which any officer,
director, or any such employee has a substantial interest or is an officer, director,
trustee, or partner.</p>



<p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (r)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>Internal Accounting Controls</u>.&nbsp;
The Company and the Subsidiary maintain a system of internal accounting
controls sufficient to provide reasonable assurance that (i) transactions are
executed in accordance with management's general or specific authorizations,
(ii) transactions are recorded as necessary to permit preparation of financial
statements in conformity with GAAP and to maintain asset accountability, (iii)
access to assets is permitted only in accordance with management's general or
specific authorization, and (iv) the recorded accountability for assets is compared
with the existing assets at reasonable intervals and appropriate action is
taken with respect to any differences.&nbsp; The Company has established disclosure
controls and procedures (as defined in Exchange Act Rules 13a-15(e) and
15d-15(e)) for the Company and designed such disclosure controls and procedures
to ensure that material information relating to the Company, including the
Subsidiary, is made known to the certifying officers by others within those
entities, particularly during the period in which the Company's Form 10-K or
10-Q, as the case may be, is being prepared.&nbsp; The Company's certifying officers
have evaluated the effectiveness of the Company's controls and procedures in
accordance with Item 307 of Regulation S-K under the Exchange Act for the
Company's most recently ended fiscal quarter or fiscal year-end (such date, the
<b>&quot;Evaluation Date&quot;</b>).&nbsp; The Company presented in its most recently filed
Form 10-Q the conclusions of the certifying officers about the effectiveness of
the disclosure controls and procedures based on their evaluations as of the
Evaluation Date.&nbsp; Since the Evaluation Date, there have been no significant
changes in the</p>

<p class=MsoNormal>Company's internal controls (as such term is defined in Item
308(c) of Regulation S-K under the Exchange Act) or, to the Company's
knowledge, in other factors that could significantly affect the Company's
internal controls.</p>



<p class=MsoNormal align=center style='text-align:center'>11</p>





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<p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (s)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>Certain Fees</u>.&nbsp; Except with
respect to the fees to be paid to Mastodon Ventures, Inc., Woodville Hall
Capital, LLC, and such other fees to be paid with respect to the transactions
contemplated by this Agreement at or after the Closing (the <b>&quot;Closing Fees&quot;</b>)
as set forth in the Schedule of Exceptions, no brokerage or finder's fees or
commissions are or will be payable by the Company to any broker, financial
advisor or consultant, finder, placement agent, investment banker, bank, or
other Person with respect to the transactions contemplated by this Agreement.&nbsp;
The Investor shall have no obligation with respect to any fees or with respect to
any claims (other than such fees or commissions owed by the Investor pursuant
to written agreements executed by the Investor which fees or commissions shall
be the sole responsibility of the Investor) made by or on behalf of other
Persons for fees of a type contemplated in this Section that may be due in
connection with the transactions contemplated by this Agreement.</p>



<p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (t)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>Certain Registration Matters</u>.
Assuming the accuracy of the Investor's representations and warranties set
forth in Section 3.2 and pursuant to Section 4.6(b), no registration under the
Securities Act is required for the offer and sale of the Shares by the Company
to the Investor under the Transaction Documents.&nbsp; Except as set forth in the Schedule
of Exceptions, the Company has not granted or agreed to grant to any Person
other than the Investor any rights (including &quot;piggy&#8209;back&quot; registration
rights) to have any securities of the Company registered with the Commission or
any other governmental authority that have not been satisfied.</p>



<p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (u)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>Listing and Maintenance
Requirements</u>.&nbsp; Except as specified in the Schedule of Exceptions, the
Company has not, in the two years preceding the date hereof, received notice
from any Trading Market to the effect that the Company is not in compliance
with the listing or maintenance requirements thereof.&nbsp; The issuance and sale of
the Shares under the Transaction Documents does not contravene the rules and
regulations of the Trading Market on which the Common Stock is currently listed
or quoted.</p>



<p class=MsoNormal align=center style='text-align:center'>12</p>



<p class=MsoNormal>The Investor acknowledges and agrees that the Company has
not made and does not make any representations or warranties with respect to
the transactions contemplated hereby other than those specifically set forth in
this Section 3.1 and the Schedule of Exceptions.</p>



<p class=MsoNormal>3.2&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>Representations and Warranties of the Investor</u>.&nbsp;
The Investor hereby represents and warrants to the Company as follows:</p>



<p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>Organization; Authority</u>.&nbsp; The
Investor is a corporation duly organized, validly existing, and in good
standing under the laws of Bermuda with the requisite corporate power and
authority to enter into and to consummate the transactions contemplated by the
applicable Transaction Documents and otherwise to carry out its obligations
thereunder. The execution, delivery, and performance by the Investor of the
transactions contemplated by this Agreement have been duly authorized by all
necessary corporate action on the part of the Investor.&nbsp; Each of the
Transaction Documents has been (or upon delivery will have been) duly executed
by the Investor, and when delivered by the Investor in accordance with the
terms hereof and thereof, will constitute the valid and legally binding
obligation of the Investor, enforceable against it in accordance with its
terms, except as such enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium, liquidation, or similar laws relating
to, or affecting generally the enforcement of, creditors' rights and remedies
or by other equitable principles of general application.</p>





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<p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>Investment Intent</u>.&nbsp; The
Investor is acquiring the Shares as principal for its own account for
investment purposes only and not with a view to or for distributing or
reselling such Shares or any part thereof, without prejudice, however, to the
Investor's right at all times to sell or otherwise dispose of all or any part
of such Shares in compliance with applicable federal and state securities laws
and pursuant to the Registration Rights Agreement.&nbsp; Subject to the immediately
preceding sentence, nothing contained herein shall be deemed a representation
or warranty by the Investor to hold the Shares for any period of time.&nbsp; The
Investor does not have any agreement or understanding, directly or indirectly,
with any Person to distribute any of the Shares.</p>



<p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (c)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>Investor Status</u>.&nbsp; At the time
the Investor was offered the Shares, it was, and at the date hereof it is, (i)
knowledgeable, sophisticated, and experienced in making, and qualified to make,
decisions with respect to investments in securities representing an investment</p>

<p class=MsoNormal><i>&nbsp;decision similar to that involved in the purchase</i> of
the Shares, including investments in securities issued by the Company and
comparable entities, and (ii) an &quot;accredited investor&quot; as defined in Rule
501(a) under the Securities Act.&nbsp; The Investor shall provide reasonable and
customary information to the Company to confirm its accredited investor
status.&nbsp; The Investor is not a registered broker-dealer under Section 15 of the
Exchange Act.</p>



<p class=MsoNormal align=center style='text-align:center'>13</p>



<p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (d)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>Certain Trading Activities</u>.&nbsp;
The Investor has not directly or indirectly, nor has any Person acting on
behalf of or pursuant to any understanding with the Investor, engaged in any
transactions in the securities of the Company since the time that the Investor
was first contacted regarding an investment in the Company.&nbsp; The Investor
covenants that neither it nor any Person acting on its behalf or pursuant to
any understanding with it will engage in any transactions in the securities of
the Company prior to the time that the transactions contemplated by the Transaction
Documents are publicly disclosed.</p>



<p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (e)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>Reliance on Investor
Representations</u>.&nbsp; The Investor understands that (i) the Shares are being
offered and sold to it in reliance upon specific exemptions from the
registration requirements of the Securities Act and the rules and regulations
promulgated thereunder, and any applicable state or foreign securities laws;
(ii) the Company is relying upon the truth and accuracy of, and the Investor's
compliance with, the representations, warranties, agreements, acknowledgements,
and understandings of the Investor set forth herein in order to determine the
availability of such exemptions and the eligibility of the Investor to acquire
the Shares; and under such laws and rules and regulations the Shares may be
resold without registration under the Securities Act only in certain limited
circumstances.</p>



<p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (f)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>Risks of Investment</u>.&nbsp; The
Investor understands that its investment in the Shares involves a significant
degree of risk, and the Investor has full cognizance of and understands all of
the risk factors related to the Investor's purchase of the Shares, including,
but not limited to, those set forth in the SEC Reports.&nbsp; The Investor
understands that no representation is being made as to the future value of the Shares.&nbsp;
The Investor has the knowledge and experience in financial and business matters
as to be capable of evaluating the merits and risks of an investment in the Shares
and has the ability to bear the economic risks of an investment in the Shares.</p>



<p class=MsoNormal align=center style='text-align:center'>14</p>





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<p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (g)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>No Approvals</u>.&nbsp; The Investor
understands that no United States federal or state agency or any other
government or governmental agency has passed upon or made any recommendation or
endorsement of the Shares.</p>



<p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (h)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>Location of Offices</u>.&nbsp; The
Investor's principal executive offices are in the jurisdiction set forth in
Section 7.3 hereof.</p>



<p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (i)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>Independent Investment Decision</u>.&nbsp;
The Investor has independently evaluated the merits of its decision to purchase
Shares pursuant to the Transaction Documents, and has relied on its own
industry, business and/or legal advisors in making such decision.</p>



<p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (j)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>No Voting Agreements</u>.&nbsp; The
Investor has not entered into any agreement or arrangement regarding the voting
or disposition of the Shares.</p>



<p class=MsoNormal>The Company acknowledges and agrees that the Investor has
not made and does not make any representations or warranties with respect to
the transactions contemplated hereby other than those specifically set forth in
this Section 3.2.</p>



<p class=MsoNormal align=center style='text-align:center'><b>ARTICLE 4</b></p>

<p class=MsoNormal align=center style='text-align:center'><b>OTHER AGREEMENTS
OF THE PARTIES</b></p>



<p class=MsoNormal>4.1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>Restrictive Legends on Certificates.</u></p>



<p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Shares may only be disposed of in
compliance with federal, state, and foreign securities laws or pursuant to the Registration
Rights Agreement.&nbsp; In connection with any transfer of the Shares other than
pursuant to an effective registration statement, to the Company, or to an
Affiliate of the Investor, the Company may require the transferor thereof to
provide to the Company an opinion of counsel selected by the transferor, the
form and substance of which opinion shall be reasonably satisfactory to the
Company, to the effect that such transfer does not require registration of such
transferred Shares under the Securities Act or any other applicable securities
law.</p>



<p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Certificates evidencing the Shares
will contain the following legend, until such time as it is not required under
Section 4.1(c):</p>



<p class=MsoNormal style='margin-left:1.0in'>THESE SECURITIES HAVE NOT BEEN
REGISTERED WITH THE U.S. SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES
COMMISSION OF ANY U.S. STATE</p>



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<p class=MsoNormal style='margin-left:1.0in'>&nbsp;OR FOREIGN JURISIDICTION IN
RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933,
AS AMENDED (THE <b>&quot;SECURITIES ACT&quot;</b>), AND, ACCORDINGLY, MAY NOT BE OFFERED
OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION
NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN
ACCORDANCE WITH APPLICABLE STATE AND PROVINCIAL SECURITIES LAWS AS EVIDENCED BY
A LEGAL OPINION OF COUNSEL TO SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE
REASONABLY ACCEPTABLE TO THE COMPANY.</p>



<p class=MsoNormal align=center style='text-align:center'>15</p>



<p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (c)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Certificates evidencing Shares shall
not contain any legend (including the legend set forth in Section 4.1(b)): (i)
with respect to a sale or transfer of such Shares pursuant to an effective registration
statement (including the Registration Statement), or (ii) with respect to a
sale or transfer of such Shares pursuant to Rule 144.&nbsp; The Company agrees that
following the effective date of the initial Registration Statement filed with
the Commission pursuant to the Registration Rights Agreement or at such time as
such legend is no longer required under this Section 4.1(c), it will, no later
than seven Business Days following the delivery by the Investor to the Company
or the Company's transfer agent of a certificate representing Shares issued
with a restrictive legend, together with the written request of the Investor
accompanied by the written representation letter in customary form, deliver or
cause to be delivered to the Investor a certificate representing such Shares
that is free from all restrictive and other legends.</p>



<p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (d)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; The Investor agrees that the removal
of the restrictive legend from certificates representing Shares as set forth in
this Section 4.1 is predicated upon the Company's reliance that the Investor
will sell any such Shares pursuant to either the registration requirements of
the Securities Act, including any applicable prospectus delivery requirements,
or an exemption therefrom.</p>



<p class=MsoNormal align=center style='text-align:center'>16</p>



<p class=MsoNormal>4.2.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>Furnishing of Information.</u></p>



<p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; The Company covenants to timely file
(or obtain extensions in respect thereof and file within the applicable grace
period) all reports required to be filed by the Company after the date hereof
pursuant to the Securities Act and the Exchange Act.&nbsp; The Company further
covenants that it will take such further action as any holder of Shares may
reasonably request, all to the extent required from time to time to enable such
Person to sell the Shares without registration under the Securities Act within
the limitation of the exemptions provided by Rule 144.</p>

<p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; The Investor covenants to timely file
all reports required to be filed by the Investor after the date hereof pursuant
to the Exchange Act, including Sections 13(d) and 16(a) thereof. </p>



<p class=MsoNormal>4.3.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>Indemnification</u>.</p>





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<p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; In addition to the indemnity provided
in the Registration Rights Agreement, the Company will indemnify and hold the
Investor and its directors, officers, managers, shareholders, investors,
members, partners, employees, and agents (each, an <b>&quot;Investor Party&quot;</b>)
harmless from any and all losses, liabilities, obligations, claims,
contingencies, damages, costs, and expenses, including all judgments, amounts
paid in settlements, court costs, and reasonable attorneys' fees and costs of
investigation (collectively, <b>&quot;Losses&quot;</b>), that any such Investor Party may
suffer or incur as a result of or relating to any misrepresentation, breach, or
inaccuracy of any representation, warranty, covenant, or agreement made by the
Company in any Transaction Document.</p>



<p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; In addition to the indemnity provided
in the Registration Rights Agreement, the Investor will indemnify and hold the
Company and its directors, officers, managers, shareholders, investors,
members, partners, employees, and agents (each, a <b>&quot;Company Party&quot;</b>) harmless
from any and all Losses that any such Company Party may suffer or incur as a
result of or relating to any misrepresentation, breach, or inaccuracy of any
representation, warranty, covenant, or agreement made by the Investor in any
Transaction Document.</p>



<p class=MsoNormal align=center style='text-align:center'>17</p>



<p class=MsoNormal>4.4.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>Listing of Shares.</u>&nbsp; The Company agrees, (i)
it will utilize its best efforts to continue the listing and trading of its
Common Stock on its current Trading Market on the date of this Agreement and
will comply in all material respects with the Company's reporting, filing, and
other obligations under the bylaws or rules of such Trading Market, (ii) it
will make such required notice or other filing with respect to the transactions
contemplated by this Agreement and the Shares with its current Trading Market
and obtain any approvals, and (iii) if the Company applies to have the Common
Stock traded on any Trading Market other than that of the date of this
Agreement, it will include in such application the Shares, and will take such
other action as is necessary or desirable to cause the Shares to be listed on
such other Trading Market as promptly as possible.</p>



<p class=MsoNormal>4.5.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>Conduct of Business Prior to Closing</u>.&nbsp; From
the date hereof until the Closing, except as otherwise provided in this
Agreement or consented to in writing by the Investor (which consent shall not
be unreasonably withheld or delayed), the Company and the Subsidiary shall
conduct their respective businesses in the ordinary course consistent with past
practice, and, at the Closing, the Company shall deliver to the Investor a
Certificate of Good Standing for each of the Company and the Subsidiary.&nbsp; For
the purposes of this provision, the closing of any location or any sale of
assets, except as disclosed in the Schedule of Exceptions, shall not be
considered to be operation of business in the ordinary course and is subject to
notice to and consent by the Investor.</p>



<p class=MsoNormal>4.6.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>Investor Further Due Diligence</u>.</p>





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<p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; For a period beginning on the date of
this Agreement and ending at 4:30 p.m. (Mountain time) on November 1, 2010 (the
<b>&quot;Due Diligence Period&quot;</b>), the Company and the Subsidiary will, and will
cause their respective officers, directors, managers, employees, or agents to,
(i) afford the Investor and its representatives full and free access to the
Company's and the Subsidiary's personnel, properties, contracts, books and
records, and other existing documents and data (the <b>&quot;Due Diligence
Materials&quot;</b>), (ii) furnish the Investor and its advisors with copies of all
such Due Diligence Materials, and (iii) furnish the Investor and its advisors
with additional financial, operating, and other data and information as the
Investor may reasonably request.&nbsp; Any investigation by the Investor during the
Due Diligence Period shall be conducted in such manner as not to interfere
unreasonably with the conduct of the business of the Company and the
Subsidiary.&nbsp; All information furnished to the Investor and its advisors during
the Due Diligence Period shall be treated as confidential information pursuant
to the existing confidentiality agreement between the Company and the Investor
(the <b>&quot;Confidentiality Agreement&quot;</b>), subject to any amendment thereto
required in order that such Confidentiality Agreement provides that the
Investor agrees to maintain any material nonpublic information in confidence in
compliance with Regulation FD under the Securities Act.</p>



<p class=MsoNormal align=center style='text-align:center'>18</p>



<p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; At or prior to the end of the Due
Diligence Period, the Investor shall provide written notice to the Company (the
<b>&quot;Due Diligence Completion Notice&quot;</b>) specifying that the Investor has
completed its financial, legal and other due diligence examination of the
Company and that either (i) the Investor is satisfied with such examination and
the Agreement remains in full force and effect, or (ii) the Investor is not
satisfied with such examination and is electing to terminate this Agreement
pursuant to the provisions of Section 6.1(f).&nbsp; Termination by the Investor pursuant
to clause (ii) of the foregoing sentence may be for any reason. Notwithstanding
the foregoing, at the election and in the discretion of the Investor, and subject
to the approval of the Company (which approval the Company may elect for any
reason to withhold in its discretion), such termination may be deferred
accompanied by a request for further diligence information and/or additional time
to review such diligence information prior to the Investor's determination
under clause (i) or (ii) above.&nbsp; If the Investor provides notice of the
satisfactory completion of its due diligence (the <b>&quot;Satisfactory Completion
of Due Diligence&quot;</b>) pursuant to clause (i) of this Section 4.6(b), the
Investor shall provide a representation and warranty to the Company that the
Investor has been afforded (x) the opportunity to ask such questions as it has
deemed necessary and to receive answers from representatives of the Company
concerning the terms and conditions of the offering of the Shares and the
merits and risks of investing in the Shares, (y) access to information about
the Company and the Subsidiary and their respective financial condition,
results of operation, business, properties, management, and prospects
sufficient to enable it to evaluate its investment, and (z) the opportunity to
obtain such additional information that the Company possesses or can acquire
without unreasonable effort or expense that is necessary to make an informed
investment decision with respect to the investment.</p>



<p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (c)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Immediately upon receipt of the Due
Diligence Completion Notice, the Company shall provide notice for and schedule
a special meeting of shareholders (<b>&quot;Special Meeting&quot;</b>) to</p>



<p class=MsoNormal align=center style='text-align:center'>19</p>





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<p class=MsoNormal>be held as soon as possible after the execution of this
Agreement for the purposes of effecting the transactions and other actions
contemplated by this Agreement.&nbsp; During the Due Diligence Period, the Company
shall prepare proxy materials for the Special Meeting and shall provide copies thereof
to the Investor for review and approval prior to filing.&nbsp; The Company shall
immediately notify the Investor if preliminary proxy materials are required to
be filed with respect to the Special Meeting or other such delay in obtaining
shareholder approval occurs.&nbsp; During the Due Diligence Period, the Company
shall prepare any NASDAQ filings with respect to the transactions contemplated
by this Agreement and the Shares and shall provide copies thereof to the Investor
for review and approval prior to filing during such period.&nbsp; If no such filings
are required during this period, and in any event, the Company shall provide
the Investor with an update (or updates, as applicable) as to the status of any
NASDAQ filings and/or approvals.</p>



<p class=MsoNormal>4.7.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>No Solicitation of Other Bids.</u></p>



<p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; For a period of sixty days after the
date of this Agreement, or, if earlier, until the Closing or the termination of
this Agreement, and provided that the Investor has not failed to notify the Company
of the satisfactory completion of its due diligence in accordance with Section
4.6(b) or otherwise terminated this Agreement, the Company shall not, and shall
not authorize or permit any of its officers, directors, employees, or agents,
or any investment banker, financial advisor, attorney, accountant, or other
advisor or representative retained by it, to, directly or indirectly, solicit,
initiate, or encourage (including by way of furnishing non-public information),
or take any other action to facilitate, any inquiries or the making of any
proposal or offer that constitutes, or may reasonably be expected to lead to,
an Acquisition Proposal, or (ii) participate in any discussions or negotiations
regarding an Acquisition Proposal.&nbsp; For purposes of this Section 4.7(a), <b>&quot;Acquisition
Proposal&quot;</b> shall mean any inquiry, proposal, or offer from any Person (other
than the Investor or any of its Affiliates) concerning (i) a merger,
consolidation, liquidation, recapitalization, share exchange, or other business
combination transaction involving the Company, (ii) the acquisition of a
significant number of shares of Common Stock or other Equity Securities of the
Company, or (iii) the purchase, lease, exchange, or other acquisition of any
significant portion of the Company's or the Subsidiary's properties or assets.</p>



<p class=MsoNormal align=center style='text-align:center'>20</p>





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<p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Notwithstanding Section 4.7(a), if at
any time prior to the approval of the Transaction Documents by the Company's shareholders,
the Board determines in good faith, based on the advice of outside legal
counsel, that failure to do so would be reasonably likely to constitute a
breach of its fiduciary duties to the Company's shareholders under applicable
law, the Company, in response to a bona fide Acquisition Proposal that (i) was
unsolicited or that did not otherwise result from a breach of this Section 4.7,
and (ii) is reasonably likely to lead to a Superior Proposal, may (x) furnish
non-public information with respect to the Company to the Person who made such
Acquisition Proposal pursuant to a customary confidentiality agreement
(provided that the Company also furnishes such nonpublic information to the
Investor, to the extent that such nonpublic information has not been previously
furnished by the Company to the Investor), and (y) participate in discussions
and negotiations regarding such Acquisition Proposal.&nbsp; For purposes of this
Section 4.7(b), <b>&quot;Superior Proposal&quot;</b> shall mean a bona fide unsolicited
written Acquisition Proposal which the Board determines in its good faith
judgment (after consultation with the Company's outside legal counsel and
independent financial advisor) to be (A) on terms superior in value from a
financial point of view to the Company's shareholders than the transactions
contemplated by the Transaction Documents, taking into account all the terms
and conditions of such proposal and the Transaction Documents (including any
offer by the Investor to amend the terms of the transactions contemplated by
the Transaction Documents) and (B) reasonably capable of being completed, taking
into account all financial, regulatory, legal, and other aspects of such
proposal.</p>



<p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (c)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; The Company shall promptly (but in
any event within 24 hours) advise the Investor in writing of any Acquisition
Proposal or any inquiry regarding the making of an Acquisition Proposal,
including any request for information, the material terms and conditions of
such request, Acquisition Proposal, or inquiry, and the identity of the Person
making such request, Acquisition Proposal, or inquiry.&nbsp; The Company will, to the
extent reasonably practicable, keep the Investor fully informed of the status
and details (including amendments or proposed amendments) of any such request,
Acquisition Proposal, or inquiry.</p>



<p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (d)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; If the Company has received a Superior
Proposal and, after providing the Investor with a ten-day period in which to
match the Superior Proposal with equivalent value from a financial point of
view to the Company's shareholders, the Board has determined in good faith,
based upon the advice of outside legal counsel, that it is necessary for the
Board to terminate this</p>

<p class=MsoNormal>Agreement in order to comply with its fiduciary duties under
applicable law and has notified the Investor in writing of such determination, the
Company may terminate this Agreement upon payment of the termination fee
required by Section 6.2.</p>



<p class=MsoNormal align=center style='text-align:center'>21</p>



<p class=MsoNormal>4.8.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>Use of Proceeds</u>.&nbsp; Subject to Investor
approval, the Company shall use the net proceeds from the sale of the Shares
hereunder to refinance prior obligations of the Company and the Subsidiary
existing on the Closing Date, to pay other obligations and expenses of the
Company and the Subsidiary, for general working capital purposes, including
capital expenditures, of the Subsidiary, for costs and expenses resulting from
the Transaction Documents, and for other purposes acceptable to and approved by
the Investor.&nbsp; Such use of proceeds shall include payments by the Company to W
Capital Inc., John W. McDonald, and Golden Bridge LLC (collectively, the <b>&quot;Bridge
Lenders&quot;</b>) in the aggregate principal amount of $585,000 payable to such
Bridge Lenders.&nbsp; The aggregate amount of interest owed to W Capital Inc. and
John W. McDonald shall be converted into shares of Common Stock at a conversion
ratio of $0.50 of the amount owed for each share of Common Stock.</p>





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<p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 4.9.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>Board Composition</u>.&nbsp; So long as
the Investor holds at least fifty percent of the Company's then-outstanding
capital stock, (i) the Board shall not consist of more than seven directors,
and (ii) the Investor shall have a right to designate four members of the
Company's Board (the <b>&quot;Investor Designees&quot;</b>), and the Company agrees to
include the Investor Designees on its recommended slate of directors
recommended for approval at each annual meeting of the Company's shareholders.&nbsp;
The Investor shall vote its shares in any election of directors in favor of (x)
its four designees, (y) one Person designated by The Bailey Company (the <b>&quot;Bailey
Designee&quot;</b>), and (z) one Person designated by Eric W. Reinhard (the <b>&quot;Reinhard
Designee&quot;</b>); provided, however, that if The Bailey Company or Eric W.
Reinhard (in each case, together with its or his Affiliates) ceases to own at
least 600,000 shares of the Company's Common Stock (adjusted for any stock
splits, reverse splits or similar capital stock transactions), then in lieu of
the Bailey Designee or the Reinhard Designee, as the case may be, the Investor
agrees to vote its shares in any election of directors in favor of a Person,
other than an Investor Designee, who receives the majority of votes of holders
of Common Stock other than the Investor.&nbsp; The Investor agrees that The Bailey
Company and Eric W. Reinhard constitute third party beneficiaries of the
foregoing provision.&nbsp; The Bailey Company and Eric W. Reinhard shall have
entered into a customary voting agreement whereby they agree to vote their
shares in favor of the Investor Designees, as well as in favor of the
transactions contemplated by this Agreement and submitted for shareholder
approval.</p>



<p class=MsoNormal align=center style='text-align:center'>22</p>



<p class=MsoNormal>4.10.&nbsp;&nbsp;&nbsp; <u>Purchase Rights</u>.&nbsp; For a period of three
years following the Closing and provided the Investor continues to hold at
least eighty percent of the Shares, the Company hereby grants to the Investor
rights to purchase securities of the Company for the purpose of maintaining up
to its percentage ownership interest in the Company, as set forth in the
provisions below.</p>



<p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>Subsequent Offerings</u>.&nbsp; The
Investor shall have a right of first refusal (the <b>&quot;Purchase Right&quot;</b>) to
purchase up to its <b>&quot;Pro Rata Share&quot;</b> of all Equity Securities which may
be issued and sold by the Company other than those excluded pursuant to Section
4.10(c) below.&nbsp; The Investor's Pro Rata Share shall be calculated as of the
time immediately prior to the issuance of such Equity Securities by the Company
as the ratio of (i) the number of shares of Common Stock beneficially owned by
the Investor at such time to (ii) the total number of shares of Common Stock of
the Company outstanding on a fully diluted basis at such time</p>



<p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>Exercise of Rights</u>.</p>



<p class=MsoNormal>(i)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; If the Company proposes to issue any
Equity Securities, it shall first give the Investor written notice (the <b>&quot;Company's
Issuance Notice&quot;</b>) of its intention, describing the Equity Securities, the
price and the other terms and conditions upon which the Company proposes to
issue such Equity Securities.&nbsp; The Investor shall have ten Business Days after
the giving of the Company's Issuance Notice to agree to purchase up to its Pro Rata
Share of the Equity Securities, for the price and upon the other terms and
conditions specified in the notice, by giving written notice to the Company
(the <b>&quot;Investor's Purchase Notice&quot;</b>) and stating therein the quantity of
such Equity Securities to be purchased.&nbsp; If the Investor exercises its Purchase
Right hereunder, the Company and the Investor shall then effect the sale and
purchase of the Equity Securities at the closing of the issuance of Equity
Securities described in the Company's Issuance Notice.&nbsp; On the date of such
closing, the Company shall deliver to the Investor the certificates
representing the Equity Securities to be purchased by the Investor, each certificate
to be properly endorsed for transfer, and at such time, the Investor shall pay
the purchase price for the Equity Securities.</p>



<p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (ii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>Issuance of Equity
Securities to Other Persons</u>.&nbsp; If the Investor fails to exercise in full its
Purchase Right, the Company shall have sixty days thereafter to sell the Equity
Securities in respect of which the Investor's Purchase Right was not exercised,
at a price and upon general terms and conditions no more favorable to the
purchasers thereof than specified in the Company's Issuance Notice.&nbsp; If the
Company has not sold such Equity Securities within such sixty days, the Company
shall not thereafter issue or sell any Equity Securities, without first again
complying with this Section 4.10.</p>



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<p class=MsoNormal align=center style='text-align:center'>23</p>



<p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (iii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>Exercise of Options
and Warrants</u>.&nbsp; Notwithstanding the foregoing, the Investor's Purchase Right
with respect to Common Stock issued by the Company upon the exercise of
incentive stock options or warrants outstanding on the date of this Agreement
or subsequently issued pursuant to the Company's existing equity incentive plan
shall be governed exclusively by Section 4.10(d).</p>



<p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (c)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>Excluded Securities</u>.&nbsp; The
Purchase Rights established by this Section 4.10 shall have no application to
any of the following Equity Securities: </p>

<p class=MsoNormal>Subject to the applicable provisions of the Registration
Rights Agreement, Equity Securities issued and sold by the Company in an
underwritten public offering thereof under a then-effective registration
statement under the 1933 Act; or</p>

<p class=MsoNormal>Any Common Stock issued as consideration in connection with
or relating to any acquisitions, mergers or strategic partnership transactions
of the Company or the Subsidiary (other than transactions entered into
primarily for equity financing purposes) that have been approved by the Board
after the Closing Date.</p>

<p class=MsoNormal><u>Exercise of Options and Warrants</u>.&nbsp; Upon the exercise
of any incentive stock options or warrants outstanding on the date of this
Agreement or subsequently issued pursuant to the Company's existing stock
incentive plan, the Company shall provide the Investor with notice of such
exercise and the Investor shall have a period of ten Business Days after such
notice to purchase shares at the same price as applicable in such exercise in
an amount necessary to maintain its Pro Rata Share of the Company's Common
Stock.</p>



<p class=MsoNormal>4.11.&nbsp;&nbsp;&nbsp; <u>Adjustments.</u></p>

<p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>Stock Dividends, Combinations, or&nbsp;
Splits</u>.&nbsp; If, prior to the Closing, the outstanding shares of Common Stock
are subdivided, by stock split, or otherwise, into a greater number of shares
of Common Stock, or if the Company shall declare or pay any dividend on the
Common Stock payable in shares of Common Stock, then the number of Shares
issuable to the Investor at the Closing shall be proportionately increased, and
the purchase price per share shall be proportionately decreased, upon the
occurrence of such event.&nbsp; If, prior to the Closing, the outstanding shares of
Common Stock are combined or consolidated, by reclassification, reverse stock
split, or otherwise, into a lesser number of shares of Common Stock, then the
number of Shares issuable to the Investor at the Closing shall be
proportionately decreased, and the purchase price per Share shall be
proportionately increased, upon the occurrence of such event.</p>



<p class=MsoNormal align=center style='text-align:center'>24</p>



<p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>Reorganization or Reclassification</u>.&nbsp;
If, prior to the Closing, the Common Stock is changed into the same or a
different number of shares of any other class or series of stock, whether by
capital reorganization, reclassification or otherwise, then the Investor shall
have the right to purchase and receive at the Closing, in lieu of the Shares, a
number of shares of such other class or series of stock equivalent to the
number of shares of such class or series that the Investor would have received
had the Shares been issued to the Investor immediately prior to such reclassification,
capital reorganization or change.</p>



<div class=MsoNormal align=center style='text-align:center'>

<hr size=2 width="100%" noshade style='color:navy' align=center>

</div>



<br
clear=all style='page-break-before:always'>












<p class=MsoNormal>4.12.&nbsp;&nbsp;&nbsp; <u>Best Efforts.</u>&nbsp; Each party shall use its
commercially reasonable best efforts to take, or cause to be taken, all actions
and to do, or cause to be done, and to assist and cooperate with the other
parties in doing, all things necessary, proper or advisable to consummate the
transactions contemplated by the Transaction Documents as soon as practicable
after the date hereof.</p>



<p class=MsoNormal align=center style='text-align:center'><b>ARTICLE 5.</b></p>

<p class=MsoNormal align=center style='text-align:center'><b>CONDITIONS
PRECEDENT TO CLOSING</b></p>



<p class=MsoNormal>5.1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>Conditions Precedent to the Obligations of the
Investor to Purchase Shares</u>.&nbsp; The obligation of the Investor to acquire Shares
at the Closing is subject to the satisfaction or waiver by the Investor, at or
before the Closing, of each of the following conditions:</p>



<p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>Representations and Warranties</u>.&nbsp;
The representations and warranties of the Company contained herein shall be
true and correct in all material respects (or true and correct in all respects
as to representations and warranties which are qualified by materiality) as of
the date when made and as of the Closing as though made on and as of such date;</p>



<p class=MsoNormal align=center style='text-align:center'>25</p>



<p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>Performance</u>.&nbsp; The Company
shall have performed, satisfied, and complied in all material respects with all
covenants, agreements, and conditions required by the Transaction Documents to
be performed, satisfied, or complied with by it at or prior to the Closing;</p>



<p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (c)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>Consents</u>.&nbsp; The Company shall
have received all consents, waivers, authorizations, and approvals from third
parties necessary in connection with the transactions contemplated by the
Transaction Documents, including, but not limited to, (i) consents from certain
Bridge Lenders with respect to the conversion of accrued interest into Common
Stock in accordance with Section 4.8, (ii) a waiver from Boyd E. Hoback of any
acceleration of his outstanding stock options and of his right to sell all or
any portion of his shares to the Company upon a change of control at the
Closing, and (iii) any consents or waivers with respect to any outstanding agreements
regarding board composition rights or rights to Common Stock (by conversion
rights, option rights, warrants or otherwise) that are in conflict with any
provision of this Agreement or consents with respect to outstanding debt
facilities (as referenced in this Agreement or in Sections 3.1(d), 3.1(l) or
other such section of the Schedule of Exceptions), and no such consent, waiver,
authorization, or approval shall have been revoked;</p>



<p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (d)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>No Injunction</u>.&nbsp; No statute,
rule, regulation, executive order, decree, ruling, or injunction shall have
been enacted, entered, promulgated, or endorsed by any court or governmental
authority of competent jurisdiction that prohibits the consummation of any of
the transactions contemplated by the Transaction Documents;</p>



<p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (e)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>No Adverse Changes</u>.&nbsp; Since the
date of execution of this Agreement, no event or series of events shall have
occurred that constitute or reasonably could have or result in a Material
Adverse Effect;</p>





<div class=MsoNormal align=center style='text-align:center'>

<hr size=2 width="100%" noshade style='color:navy' align=center>

</div>



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<p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (f)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>No Suspensions of Trading in
Common Stock; Listing</u>.&nbsp; Trading in the Common Stock shall not have been
suspended by the Commission or any Trading Market (except for any suspensions
of trading of not more than one Business Day solely to permit dissemination of
material information regarding the Company) at any time since the date of
execution of this Agreement, the Common Stock shall have been at all times
since such date listed for trading on a Trading Market, and the Company shall
have obtained all approvals necessary for continued listing of its Common Stock
on a Trading Market</p>



<p class=MsoNormal align=center style='text-align:center'>26</p>



<p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (g)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>Shareholder Approval</u>.&nbsp; The
Company's shareholders shall have authorized and approved (i) the issuance and
sale of the Shares in accordance with the terms and provisions of this
Agreement, (ii) a reverse split of the Company's Common Stock to take effect following
the Closing intended to be sufficient to allow the Company to comply with NASDAQ
trading price listing requirements, if applicable, and (iii) any other matter
required to be submitted for shareholder approval in order to give full effect
to any provision of this Agreement or the transactions contemplated herein
(including, but not limited to, for example, any shareholder approval of the
Investor's Board designates pursuant to Section 5.1(h) required under state or federal
law);</p>



<p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (h)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>Board Composition</u>.&nbsp; With
respect to the composition of the Board, the Company shall have (i) received
the resignations of four of its current directors, including the current
Chairman of the Board and one member of the Audit Committee, (ii) taken all
necessary corporate action to fill the four vacancies created by such
resignations, effective as of the Closing Date, with the four persons
designated by the Investor who are approved by the Company, which approval
shall not be unreasonably withheld, and (iii) provided appropriate notice of
and scheduled a meeting of the Board to be held immediately following the
Closing;</p>



<p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (i)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>Management Incentive Program</u>.&nbsp;
The Company shall have adopted the new a management incentive program, in a
form satisfactory to the Investor, to apply from and after the Closing;</p>



<p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (j)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>Satisfactory Completion of Due
Diligence</u>.&nbsp; The Investor shall have notified the Company of its
Satisfactory Completion of Due Diligence pursuant to Section 4.6(b); and</p>



<p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (k)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>Company Deliverables</u>.&nbsp; The
Company shall have delivered the Company Deliverables in accordance with
Section 2.3(a).</p>



<p class=MsoNormal>5.2&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>Conditions Precedent to the Obligations of the
Company to Sell Shares</u>.&nbsp; The obligation of the Company to sell Shares at
the Closing is subject to the satisfaction or waiver by the Company, at or
before the Closing, of each of the following conditions:</p>



<p class=MsoNormal align=center style='text-align:center'>27</p>





<div class=MsoNormal align=center style='text-align:center'>

<hr size=2 width="100%" noshade style='color:navy' align=center>

</div>



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clear=all style='page-break-before:always'>










<p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>Representations and Warranties</u>.&nbsp;
The representations and warranties of the Investor contained herein shall be
true and correct in all material respects as of the date when made and as of
the Closing Date as though made on and as of such date;</p>



<p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>Performance</u>.&nbsp; The Investor
shall have performed, satisfied, and complied in all material respects with all
covenants, agreements, and conditions required by the Transaction Documents to
be performed, satisfied, or complied with by the Investor at or prior to the
Closing;</p>



<p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (c)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>Consents</u>.&nbsp; The Company shall
have received all consents, waivers, authorizations, and approvals from third
parties necessary in connection with the transactions contemplated by the
Transaction Documents, including, but not limited to, (i) consents from certain
Bridge Lenders with respect to the conversion of accrued interest into Common
Stock in accordance with Section 4.8, (ii) a waiver from Boyd E. Hoback of any
acceleration of his outstanding stock options and of his right to sell all or
any portion of his shares to the Company upon a change of control at the
Closing, and (iii) any consents or waivers with respect to any outstanding
agreements regarding board composition rights or rights to Common Stock (by
conversion rights, option rights, warrants or otherwise) that are in conflict
with any provision of this Agreement or consents with respect to outstanding
debt facilities (as referenced in this Agreement or in Sections 3.1(d), 3.1(l)
or other such section of the Schedule of Exceptions), and no such consent,
waiver, authorization, or approval shall have been revoked;</p>



<p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (d)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>No Injunction</u>.&nbsp; No statute,
rule, regulation, executive order, decree, ruling, or injunction shall have
been enacted, entered, promulgated, or endorsed by any court or governmental
authority of competent jurisdiction that prohibits the consummation of any of
the transactions contemplated by the Transaction Documents;</p>



<p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (e)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>Fairness Opinion</u>.&nbsp; The Company
shall have received an opinion from its financial advisor that as of the date
of this Agreement, the consideration to be received by the Company as a result
of the consummation of the transactions contemplated by the Transaction
Documents is fair to the Company from a financial point of view;</p>



<p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (f)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>Shareholder Approval</u>.&nbsp; The
Company's shareholders shall have authorized and approved (i) the issuance and
sale of the Shares in accordance with the terms and provisions of this
Agreement, (ii) a reverse split of the Company's Common Stock to take effect
following the Closing intended to be sufficient to allow the Company to comply
with NASDAQ trading price listing requirements, if applicable, and (iii) any
other matter required to be submitted for shareholder approval in order to give
full effect to any provision of this Agreement or the transactions contemplated
herein (including, but not limited to, for example, any shareholder approval of
the Investor's Board designates pursuant to Section 5.1(h) required under state
or federal law); and</p>



<p class=MsoNormal align=center style='text-align:center'>28</p>



<p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (g)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>Investor Deliverables</u>.&nbsp; The
Investor shall have delivered its Investor Deliverables in accordance with
Section 2.3(b).</p>





<div class=MsoNormal align=center style='text-align:center'>

<hr size=2 width="100%" noshade style='color:navy' align=center>

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<p class=MsoNormal align=center style='text-align:center'><b>ARTICLE 6.</b></p>

<p class=MsoNormal align=center style='text-align:center'><b>TERMINATION PRIOR
TO CLOSING</b></p>



<p class=MsoNormal>6.1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>Termination</u>.&nbsp; This Agreement may be
terminated and the transactions contemplated hereunder abandoned at any time prior
to the Closing only as follows:</p>



<p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; by the Investor or the Company, upon
written notice to the other, if the Closing shall not have taken place and all
conditions thereto have not been satisfied by 6:30 p.m., Mountain Time, on November
30, 2010, or such later date as may be required solely in order to seek the
approval of the Company's shareholders; provided, that the right to terminate
this Agreement pursuant to this Section 6.1(a) shall not be available to any
party whose failure to perform any of its obligations under this Agreement is
the primary cause of the failure of the Closing to have occurred by such date
and time; or</p>

<p class=MsoNormal><u>&nbsp;</u></p>

<p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; by the Investor or the Company if the
Company's shareholders do not vote to approve the issuance and sale of the Shares
at a shareholder meeting duly called and held for such purposes or any
adjournment or postponement thereof; or </p>

<p class=MsoNormal><u>&nbsp;</u></p>

<p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (c)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; at any time by mutual agreement of
the Company and the Investor; or</p>

<p class=MsoNormal><u>&nbsp;</u></p>

<p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (d)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; by the Investor, if there has been a
material breach of any representation or warranty, or covenant or obligation,
of the Company contained herein and the same has not been cured within 15 days
after notice thereof; or</p>

<p class=MsoNormal><u>&nbsp;</u></p>

<p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (e)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; by the Company, if there has been a
material breach of any representation, warranty, or covenant of the Investor
contained herein and the same has not been cured within 15 days after notice
thereof; or</p>



<p class=MsoNormal align=center style='text-align:center'>29</p>

<p class=MsoNormal><u>&nbsp;</u></p>

<p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (f)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; by the Investor, by giving written
notice to the Company pursuant to Section 4.6(b); or</p>

<p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (g)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; by the Company, if the Investor fails
to provide the Due Diligence Completion Notice required by Section 4.6(b); or</p>

<p class=MsoNormal><u>&nbsp;</u></p>

<p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (h)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; by the Company in accordance with
Section 4.7(d).</p>

<p class=MsoNormal><u>&nbsp;</u></p>

<p class=MsoNormal>6.2&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>Effect of Termination; Termination Fee.</u></p>



<p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Except as set forth in Sections
6.2(b), any termination pursuant to this Section 6 shall be without liability
on the part of any party, unless such termination is the result of a material
breach of this Agreement by a party to this Agreement in which case such
breaching party shall remain liable for such breach notwithstanding any
termination of this Agreement.</p>

<p class=MsoNormal>In the event this Agreement is terminated by the Company
pursuant to Section 6.1(h), the Company shall pay to the Investor, by wire
transfer of immediately available funds, a termination fee in the amount of $150,000.
</p>



<div class=MsoNormal align=center style='text-align:center'>

<hr size=2 width="100%" noshade style='color:navy' align=center>

</div>



<br
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<p class=MsoNormal>6.2&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>Extension; Waiver.</u>&nbsp; At any time prior to
the Closing, the Investor or the Company may (a) extend the time for the
performance of any of the obligations of the other party hereto, (b) waive any
inaccuracies in the representations and warranties made to such party contained
herein or in any document delivered pursuant hereto, and (c) waive compliance
with any of the agreements or conditions for the benefit of such party
contained herein.&nbsp; Any agreement on the part of a party hereto to any such
extension or waiver shall be valid only if set forth in an instrument in
writing signed on behalf of such party.</p>



<p class=MsoNormal align=center style='text-align:center'><b>ARTICLE 7.</b></p>

<p class=MsoNormal align=center style='text-align:center'><b>MISCELLANEOUS</b></p>



<p class=MsoNormal>7.1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>Fees and Expenses</u>.&nbsp; Each party shall pay
the expenses incurred by such party incident to the negotiation, preparation,
execution, delivery, and performance of the Transaction Documents.&nbsp; The Company
shall pay all stamp and other taxes and duties levied in connection with the
sale of the Shares.</p>



<p class=MsoNormal>7.2&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>Entire Agreement.</u>&nbsp; The Transaction
Documents, together with the Exhibits and Schedules thereto, contain the entire
understanding of the parties with respect to the subject matter hereof and
thereof and supersede all prior agreements, understandings, discussions, and
representations, oral or written, with respect to such matters, which the
parties acknowledge have been merged into such documents, exhibits, and
schedules.</p>



<p class=MsoNormal align=center style='text-align:center'>30</p>



<p class=MsoNormal>7.3&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>Notices.</u>&nbsp; Any and all notices or other
communications or deliveries required or permitted to be provided hereunder
shall be in writing and shall be deemed given and effective on the earliest of
(a) the date of transmission, if such notice or communication is delivered via
facsimile on a Business Day, (b) the Business Day following the date of
mailing, if sent by U.S. nationally recognized overnight courier service, or
(c) upon actual receipt by the party to whom such notice is required to be
given.&nbsp; The address for such notices and communications shall be as follows:</p>



<table class=MsoNormalTable border=0 cellspacing=0 cellpadding=0
 style='margin-left:27.9pt;border-collapse:collapse'>
 <tr>
  <td width=156 valign=top style='width:117.0pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>If to the Company:</p>
  </td>
  <td width=330 valign=top style='width:247.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>Good Times Restaurants Inc.</p>
  </td>
 </tr>
 <tr>
  <td width=156 valign=top style='width:117.0pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=330 valign=top style='width:247.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>601 Corporate Circle</p>
  </td>
 </tr>
 <tr>
  <td width=156 valign=top style='width:117.0pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=330 valign=top style='width:247.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>Golden, CO 80401</p>
  </td>
 </tr>
 <tr>
  <td width=156 valign=top style='width:117.0pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=330 valign=top style='width:247.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>Facsimile: (303) 384-1400</p>
  </td>
 </tr>
 <tr>
  <td width=156 valign=top style='width:117.0pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=330 valign=top style='width:247.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>Attention:&nbsp; Boyd E. Hoback, President &amp; CEO</p>
  </td>
 </tr>
 <tr>
  <td width=156 valign=top style='width:117.0pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=330 valign=top style='width:247.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
 </tr>
 <tr>
  <td width=156 valign=top style='width:117.0pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>If to the Investor:</p>
  </td>
  <td width=330 valign=top style='width:247.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>Small Island Investments Limited</p>
  </td>
 </tr>
 <tr>
  <td width=156 valign=top style='width:117.0pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=330 valign=top style='width:247.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>50 Congress Street, Suite 900</p>
  </td>
 </tr>
 <tr>
  <td width=156 valign=top style='width:117.0pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=330 valign=top style='width:247.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>Boston, MA 02109</p>
  </td>
 </tr>
 <tr>
  <td width=156 valign=top style='width:117.0pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=330 valign=top style='width:247.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>Facsimile: (617) 720-2102</p>
  </td>
 </tr>
 <tr>
  <td width=156 valign=top style='width:117.0pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=330 valign=top style='width:247.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>Attention: Gary Heller</p>
  </td>
 </tr>
</table>



<p class=MsoNormal>or such other address as may be designated in writing
hereafter, in the same manner, by such Person.</p>



<div class=MsoNormal align=center style='text-align:center'>

<hr size=2 width="100%" noshade style='color:navy' align=center>

</div>



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<p class=MsoNormal>7.4&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>Amendments; Waivers; No Additional
Consideration.</u>&nbsp; Except as provided in Section 6.3 above, no provision of
this Agreement may be waived or amended except in a written instrument signed
by the Company and the Investor.&nbsp; No waiver of any default with respect to any
provision, condition, or requirement of this Agreement shall be deemed to be a
continuing waiver in the future or a waiver of any subsequent default or a
waiver of any other provision, condition, or requirement hereof, nor shall any
delay or omission of either party to exercise any right hereunder in any manner
impair the exercise of any such right.</p>



<p class=MsoNormal>7.5&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>Construction.</u>&nbsp; The headings herein are for
convenience only, do not constitute a part of this Agreement, and shall not be
deemed to limit or affect any of the provisions hereof.&nbsp; The language used in
this Agreement will be deemed to be the language chosen by the parties and
their counsel to express their mutual intent, and no rules of strict
construction will be applied against any party.&nbsp; This Agreement shall be
construed as if drafted jointly by the parties, and no presumption or burden of
proof shall arise favoring or disfavoring any party by virtue of the authorship
of any provisions of this Agreement or any of the Transaction Documents.</p>



<p class=MsoNormal>7.6&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>Successors and Assigns.</u>&nbsp; The rights and
obligations of the parties hereto shall inure to the benefit of and shall be
binding upon the authorized successors and permitted assigns of each party.&nbsp; No
party may assign its rights or obligations under this Agreement or designate
another person (i) to perform all or part of its obligations under this
Agreement or (ii) to have all or part of its rights and benefits under this
Agreement, in each case without the prior written consent of the other party,
provided, however, that the Investor may assign its rights and delegate its
duties hereunder in whole or in part to an Affiliate without the prior written
consent of the Company; provided, that no such assignment shall affect the
obligations of the Investor hereunder.&nbsp; In the event of any assignment in
accordance with the terms of this Agreement, the assignee shall specifically
assume and be bound by the provisions of this Agreement by executing and
agreeing to an assumption agreement reasonably acceptable to the other party.</p>



<p class=MsoNormal>7.7&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>No Third-Party Beneficiaries.</u>&nbsp; This
Agreement is intended for the benefit of the parties hereto and their
respective successors and permitted assigns and is not for the benefit of, nor
may any provision hereof be enforced by, any other Person, except as otherwise
set forth in Section 4.4.</p>



<p class=MsoNormal>7.8&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>Governing Law.</u>&nbsp; All questions concerning
the construction, validity, enforcement, and interpretation of this Agreement
shall be governed by and construed and enforced in accordance with the internal
laws of the State of Nevada, without regard to the principles of conflicts of
law thereof.&nbsp; If any party shall commence a Proceeding to enforce any provision
of a Transaction Document, then the prevailing party in such Proceeding shall
be reimbursed by the other party to the Proceeding for its reasonable
attorneys' fees and other costs and expenses incurred with the investigation,
preparation, and prosecution of such Proceeding.</p>



<p class=MsoNormal align=center style='text-align:center'>32</p>





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<p class=MsoNormal>7.9&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>Survival</u>.&nbsp; The representations, warranties,
agreements, and covenants contained herein shall survive the Closing and the
delivery of the Shares for a period of 12 months thereafter, after which time
they shall expire and be of no further force or effect.</p>



<p class=MsoNormal>7.10&nbsp;&nbsp;&nbsp;&nbsp; <u>Execution</u>.&nbsp; This Agreement may be executed
in counterparts, all of which when taken together shall be considered one and
the same agreement, and shall become effective when counterparts have been
signed by each party and delivered to the other party, it being understood that
both parties need not sign the same counterpart.&nbsp; In the event that any
signature is delivered by facsimile or electronic transmission, such signature
shall create a valid and binding obligation of the party executing (or on whose
behalf such signature is executed) with the same force and effect as if such
facsimile or electronic signature page were an original thereof.</p>



<p class=MsoNormal>7.11&nbsp;&nbsp;&nbsp;&nbsp; <u>Severability.</u>&nbsp; If any provision of this
Agreement is held to be invalid or unenforceable in any respect, the validity
and enforceability of the remaining terms and provisions of this Agreement
shall not in any way be affected or impaired thereby and the parties will
attempt to agree upon a valid and enforceable provision that is a reasonable
substitute therefor, and upon so agreeing, shall incorporate such substitute
provision in this Agreement.</p>



<p class=MsoNormal>7.12&nbsp;&nbsp;&nbsp;&nbsp; <u>Replacement of Shares</u>.&nbsp; If any certificate
or instrument evidencing any Shares is mutilated, lost, stolen, or destroyed,
the Company shall issue or cause to be issued in exchange and substitution for
and upon cancellation thereof, or in lieu of and substitution therefor, a new
certificate or instrument, but only upon receipt of evidence reasonably
satisfactory to the Company of such loss, theft, or destruction and customary
and reasonable indemnity, if requested.&nbsp; The applicants for a new certificate
or instrument under such circumstances shall also pay any reasonable
third-party costs associated with the issuance of such replacement Shares.&nbsp; If
a replacement certificate or instrument evidencing any Shares is requested due
to a mutilation thereof, the Company may require delivery of such mutilated
certificate or instrument as a condition precedent to any issuance of a
replacement.</p>



<p class=MsoNormal align=center style='text-align:center'>33</p>



<p class=MsoNormal>7.13&nbsp;&nbsp;&nbsp;&nbsp; <u>Remedies</u>.&nbsp; In addition to being entitled to
exercise all rights provided herein or granted by law, including recovery of
damages, each of the Investor and the Company will be entitled to specific
performance under the Transaction Documents.&nbsp; The parties agree that monetary
damages may not be adequate compensation for any loss incurred by reason of any
breach of obligations described in the foregoing sentence and hereby agree to
waive in any action for specific performance of any such obligation the defense
that a remedy at law would be adequate.</p>



<p class=MsoNormal align=center style='text-align:center'>34</p>















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<p class=MsoNormal>IN WITNESS WHEREOF, the parties hereto have caused this
Securities Purchase Agreement to be duly executed by their respective authorized
signatories as of the date first indicated above.</p>



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  <p class=MsoNormal>COMPANY:</p>
  </td>
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  </td>
  <td width=325 valign=top style='width:244.05pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>GOOD TIMES RESTAURANTS INC.</p>
  </td>
 </tr>
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  <td width=313 valign=top style='width:234.75pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal><u>&nbsp;</u></p>
  </td>
  <td width=325 valign=top style='width:244.05pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal><u>&nbsp;</u></p>
  </td>
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  <td width=313 valign=top style='width:234.75pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal><b>&nbsp;</b></p>
  </td>
  <td width=325 valign=top style='width:244.05pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>By: <i><u>/s/ Boyd E. Hoback</u></i></p>
  </td>
 </tr>
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  <td width=313 valign=top style='width:234.75pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal><b>&nbsp;</b></p>
  </td>
  <td width=325 valign=top style='width:244.05pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>Name: Boyd E. Hoback</p>
  <p class=MsoNormal>Title: President and CEO</p>
  </td>
 </tr>
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  <td width=313 valign=top style='width:234.75pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal><b>&nbsp;</b></p>
  </td>
  <td width=325 valign=top style='width:244.05pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal><b>&nbsp;</b></p>
  </td>
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  </td>
  <td width=325 valign=top style='width:244.05pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>INVESTOR:</p>
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  </td>
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  <p class=MsoNormal>SMALL ISLAND INVESTMENTS LIMITED</p>
  </td>
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  </td>
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  </td>
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  </td>
  <td width=325 valign=top style='width:244.05pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>By: <a name="OLE_LINK3"><i><u>/s/ David Dobbin</u></i></a></p>
  </td>
 </tr>
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  <td width=313 valign=top style='width:234.75pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=325 valign=top style='width:244.05pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>Name: David Dobbin</p>
  </td>
 </tr>
 <tr>
  <td width=313 valign=top style='width:234.75pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=325 valign=top style='width:244.05pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>Title: Chairman</p>
  </td>
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  <td width=313 valign=top style='width:234.75pt;padding:0in 5.4pt 0in 5.4pt'>

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  <td width=325 valign=top style='width:244.05pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
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  </td>
  <td width=325 valign=top style='width:244.05pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>By: <i><u>/s/ Penelope Dobbin</u></i></p>
  </td>
 </tr>
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  <td width=313 valign=top style='width:234.75pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=325 valign=top style='width:244.05pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>Name: Penelope Dobbin</p>
  </td>
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  <td width=313 valign=top style='width:234.75pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=325 valign=top style='width:244.05pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>Title: President</p>
  </td>
 </tr>
</table>



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<p class=MsoNormal align=center style='text-align:center'><b>EXHIBIT A</b></p>

<p class=MsoNormal align=center style='text-align:center'><b>Attached as
Exhibit 4.1</b></p>



<p class=MsoNormal align=center style='text-align:center'>A-1</p>



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<p class=MsoNormal align=center style='text-align:center'><b>EXHIBIT B</b></p>

<p class=MsoNormal align=center style='text-align:center'><b>SCHEDULE OF
EXCEPTIONS</b></p>



<p class=MsoNormal>Pursuant to the Securities Purchase Agreement, dated as of
October 29, 2010 (the <b>&quot;Purchase Agreement&quot;</b>), by and between Good Times
Restaurant Inc., a Nevada corporation (the <b>&quot;Company&quot;</b>), and Small Island
Investments Limited, a Bermuda corporation (the <b>&quot;Investor&quot;</b>), this
Schedule of Exceptions is being delivered by the Company to the Investor.&nbsp; All
defined terms herein have the same meanings assigned to them in the Purchase
Agreement, unless otherwise defined.</p>



<p class=MsoNormal>The representations and warranties of the Company set forth
in Section 3.1 of the Purchase Agreement are made and given subject to the
disclosures in this Schedule of Exceptions.&nbsp; The section numbers in this
Schedule of Exceptions correspond to the section numbers of the Purchase
Agreement requiring such disclosure.&nbsp; Any information disclosed herein under
any section number in Section 3.1 of the Purchase Agreement shall be deemed to
be disclosed and incorporated into any other section number under Section 3.1
of the Purchase Agreement where the applicability of such disclosure to such
other section number is reasonably apparent to the Investor based on the face
of such disclosure.</p>

<p class=MsoNormal><u>Section 3.1(d)</u>:&nbsp; The Company has change of control
provisions in its loan agreements with Wells Fargo Bank, N.A. and PFGI II LLC
under which the consummation of this transaction would constitute an event of
default if prior consent is not obtained. The loan agreements (the &quot;<b>Bridge
Loans</b>&quot;) with Golden Bridge LLC (<b>&quot;Golden Bridge&quot;</b>), W Capital, Inc. (<b>&quot;W
Capital&quot;</b>) and John T. MacDonald (<b>&quot;MacDonald&quot;</b>) also have change of
control provisions requiring prior consent if such Bridge Loans are not paid in
full as a part of the use of proceeds from this transaction.</p>



<p class=MsoNormal><u>Section 3.1(e)</u>:&nbsp; As discussed in Section 3.1(d) of
this Schedule of Exceptions, the Company intends to obtain consents from
certain lenders prior to the Closing.&nbsp; In addition, the Company intends to
obtain waivers from its Series B investors of their participation rights with
respect to this transaction and of their contractual board designation rights.</p>



<p class=MsoNormal><u>Section 3.1(g)</u>:&nbsp; Immediately prior to the Closing,
the authorized capital stock of the Company consists of (i) 50,000,000 shares
of Common Stock, par value $0.001 per share, of which 3,898,559 shares are
issued and outstanding, fully paid and non-assessable, and (ii) 5,000,000
shares of Preferred Stock, par value $0.01 per share, none of which are issued
and outstanding.&nbsp; As of immediately prior to the Closing, the Company has
reserved an aggregate of 552,072 shares of its Common Stock for issuance under
the Company's Omnibus Equity Plan (the <b>&quot;Plan&quot;</b>), of which options to
purchase 386,486 shares of Common Stock have been issued and the remaining
165,586 shares remain available under the Plan.&nbsp; In addition, the Company has
reserved an aggregate of 305,112 shares of its Common Stock for issuance upon
the exercise of outstanding warrants.</p>



<p class=MsoNormal>The Plan contains a change of control provision pursuant to
which, immediately upon the Closing, any and all stock options which have been
granted under the Plan shall be accelerated to become immediately exercisable
in full. &nbsp;No awards other than stock options have been granted under the Plan.</p>



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<p class=MsoNormal>In addition, the Company's Employment Agreement with Boyd
Hoback, its President and CEO, contains a change of control provision pursuant
to which, immediately prior to the Closing, all stock options granted to Mr.
Hoback shall be accelerated and shall become exercisable.&nbsp; In addition, if Mr.
Hoback's employment with the Company is terminated following a change of
control, he shall have a right exercisable within 15 business days after the
effective date of such termination to sell to the Company any or all of the
stock owned by him, including any shares acquired by exercise of accelerated
stock options or otherwise.&nbsp; If this right is exercised, the purchase price for
the shares shall be equal to the average daily market price of the Company's
stock on NASDAQ or any other applicable public trading market over the thirty
trading days immediately preceding the public announcement of termination of
Mr. Hoback's employment, and the purchase price shall be payable to Mr. Hoback
in cash within five business days after he provides the company with written
notification of his exercise of this right.&nbsp; The Company intends to obtain a
waiver from Mr. Hoback of any acceleration of his stock options and of his
right to sell his shares to the Company upon a change of control at the
Closing.</p>



<p class=MsoNormal>Attached hereto is a summary of the Company's outstanding
options and warrants.&nbsp; In addition, in connection with the Bridge Loans, the
Convertible Promissory Note held by W Capital and McDonald is convertible into
shares of Common Stock at any time prior to repayment at a conversion price of
25% less than the average price of the Common Stock during the 20 days prior to
the conversion date, provided however that the conversion price shall not be
below $0.75 per share nor above $1.08 per share.&nbsp; As set forth in Section 4.8
of the Agreement, the aggregate principal amount of the Bridge Loans will be
repaid out of the net proceeds from the sale of the Shares.&nbsp; The Company intends
to obtain consents from W Capital and McDonald to the conversion of the accrued
interest on their Bridge Loans into shares of Common Stock at a conversion
price of $0.50 per share.</p>



<p class=MsoNormal>The Company has granted Participation Rights to the holders
of the shares of Common Stock issued upon conversion of the Series B
Convertible Preferred Stock.&nbsp; The Series B investors will waive their right to
participation in connection with this transaction.</p>



<p class=MsoNormal><u>Section 3.1(j)</u>:&nbsp; None.</p>



<p class=MsoNormal><u>Section 3.1(k)</u>:&nbsp; None.</p>



<p class=MsoNormal><u>Section 3.1(l)</u>:&nbsp; As reported on the form 8-K filed on
January 23, 2009, the Company is in default of certain technical loan covenants
on our note payable to Wells Fargo Bank, N.A. (the &quot;<b>Bank</b>&quot;). On February
9, 2009 we received a Reservation of Rights letter from the Bank formally
notifying us of the default of the Earnings Before Interest Taxes and
Depreciation (&quot;<b>EBITDA</b>&quot;) Coverage Ratio of not less than 1.5 to 1.0 and
the Tangible Net Worth of not less than $5,000,000 as set forth in the Credit
Agreement for the period ending December 31, 2008. The letter serves as notice
that in light of the foregoing events of default, the Bank is reserving all of
its rights and remedies under the Credit Agreement and related agreements.</p>





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<p class=MsoNormal>The Bank is not accelerating the loan at this time and is
continuing to accept regularly scheduled payments of principal and interest
under the loan; however the acceptance of payments under the loan does not
constitute a modification of the Credit Agreement or a waiver of any of the
covenants or of the Bank's rights or remedies under the Credit Agreement,
including the right to accelerate the loan in the future after the giving of
notice.</p>



<p class=MsoNormal><u>Section 3.1(n)</u>:&nbsp; The Company has received a notice of
default under two of its leases due to the non-payment of real property taxes.&nbsp;
The Company is in negotiation with the landlord for the sublease of one of the
restaurants or termination of its lease in connection with the sale of the
restaurant.&nbsp; The Company is negotiation with the other landlord for the payment
of property taxes over time.&nbsp; The Company is and will remain liable for the
unpaid property taxes.</p>



<p class=MsoNormal>The Company has accrued 2009 real property taxes in the
aggregate amount of $196,740 related to ten of its properties.</p>



<p class=MsoNormal><u>Section 3.1(q)</u>: In February 2005, the Company issued
1,240,000 shares of Series B Convertible Preferred Stock, including 180,000
shares to The Erie County Investment Co., a substantial holder of the Company's
Common Stock and member of The Bailey Group.&nbsp; In June 2006, the Company
exercised its mandatory conversion rights under the terms of the Series B
Preferred Stock to convert all of those shares into a total of 1,240,000 shares
of Common Stock.&nbsp; Under the agreements for the Series B Preferred Stock
financing, The Bailey Group currently has the right to elect three directors,
provided that two directors meet the Nasdaq independence standards.&nbsp;
Furthermore, the other investors in the Series B Preferred Stock financing
currently have the right to elect three directors.&nbsp; The number of director positions
subject to these provisions will decrease proportionally to the extent that the
original investors sell or otherwise transfer the Common Stock into which the
Series B shares have been converted.&nbsp; An additional provision of the Series B
Preferred Stock financing restricts, for as long as the original investors hold
at least two-thirds of the Common Stock into which the Series B shares have
been converted, they have participation rights on any subsequent equity
financings and our ability to increase the size of the Board of Directors above
seven directors unless we the Company first receives approval from the holders
of at least three-fourths of all outstanding shares of Common Stock.&nbsp; Geoffrey
R. Bailey, Richard J. Stark and Alan A. Teran are the current directors
designated by The Bailey Group, and Ron Goodson, David Grissen and Eric W.
Reinhard are the current directors designated by the other investors.&nbsp; Geoffrey
R. Bailey is a director of The Erie County Investment Co., which owns 99% of
The Bailey Company.&nbsp; The Bailey Company and The Erie County Investment Co. are
principal stockholders of us.&nbsp; Geoffrey R. Bailey's father, Paul T. Bailey, is
the principal owner of The Erie County Investment Co.</p>



<p class=MsoNormal>The Company's corporate headquarters are located in a building
owned by The Bailey Company and in which The Bailey Company also has its
corporate headquarters.&nbsp; The Company currently leases its executive office
space of approximately 3,693 square feet from The Bailey Company for
approximately $55,000 per year. &nbsp;The lease expired September 30, 2009 and the
Company continues to lease the space on a month to month basis.</p>





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<p class=MsoNormal>The Bailey Company is also the owner of one franchised Good
Times Drive Thru restaurant which is located in Loveland, Colorado and was the
owner of one franchised restaurant in Thornton, Colorado which was closed in
October 2009. The Bailey Company has entered into two franchise and management
agreements with the Company.&nbsp; Franchise royalties and management fees paid
under those agreements totaled approximately $78,000 and $94,000 for the fiscal
years ending September 30, 2009 and 2008, respectively.</p>



<p class=MsoNormal>In April 2009 the Company and the Subsidiary entered into a
loan agreement with Golden Bridge pursuant to which Golden Bridge made a loan
of $185,000 to the Subsidiary to be used for restaurant marketing and other
working capital needs.&nbsp; The Golden Bridge loan is evidenced by a promissory
note dated April 20, 2009 made by the Company and the Subsidiary, as co-makers,
which bears interest at a rate of 10% per annum on the unpaid principal balance
and provides for monthly interest payments with all unpaid principal due on
July 20, 2010.&nbsp; The note has been extended to December 31, 2010.&nbsp; In connection
with the loan, the Company issued to Golden Bridge a three-year warrant dated
April 20, 2009 which provides that Golden Bridge may at any time from April 20,
2009 until April 20, 2012 purchase up to 92,500 shares of the Company's common
stock at an exercise price of $1.15 per share.</p>



<p class=MsoNormal>Eric Reinhard, Ron Goodson, David Grissen, Richard Stark,
and Alan Teran, who are all members of the Board and stockholders of the
Company, are the sole members of Golden Bridge.&nbsp; Eric Reinhard is the sole
manager of Golden Bridge.&nbsp; The Company's obtaining of the loan from Golden Bridge
and related transactions were duly approved in advance by the Board by the
affirmative vote of members thereof who did not have an interest in the
transaction.&nbsp;&nbsp; Total interest and commitment fees paid under this agreement
were approximately $12,000 for fiscal 2009. The amount due to related parties
under this agreement that is included in notes payable was $185,000 at
September 30, 2009.&nbsp; The fair value of the Warrant issued was determined to be
$42,000 with the following assumptions: 1) risk free interest rate of 1.27%, 2)
an expected life of 3 years, and 3) an expected dividend yield of zero. The
fair value of $42,000 was charged to the note discount and credited to
Additional Paid in Capital. The note discount is being amortized over fourteen
months and charged to interest expense.</p>



<p class=MsoNormal>On February 1, 2010, the Company and the Subsidiary entered
into a loan agreement with Golden Bridge, W Capital and McDonald, pursuant to
which the lenders made loans totaling $400,000, to be used for restaurant
marketing and other working capital uses of the Subsidiary.&nbsp; These loans are
evidenced by a convertible secured promissory note dated February 1, 2010 made
by the Company and the Subsidiary, as co-makers, which bears interest on the
unpaid principal balance at a rate of 12% per annum through August 1, 2010 and
at rate of 14% per annum from August 1, 2010 through December 31, 2010.&nbsp; All
interest accrues through December 31, 2010.&nbsp; The note is convertible into
shares of Common Stock at any time prior to prepayment at a conversion price of
25% less than the average price of the Common Stock during the 20 days prior to
the conversion date, provided however that the conversion price shall not be
below $0.75 per share nor above $1.08 per share.</p>



<p class=MsoNormal>In connection with these loans, the Company issued to Golden
Bridge, W Capital and McDonald two-year warrants dated February 1, 2010 which
provide that the lenders may purchase up to an aggregate of 50,000 shares of
Common Stock at an exercise price equal to the conversion price under the
note.&nbsp; The warrants expire two years from the date of repayment or conversion
of the loan.</p>





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<p class=MsoNormal>On April 1, 2010, the Company, the Subsidiary and the
lenders amended the loan agreement to replace Golden Bridge as a lender with an
additional loan from W Capital and McDonald on the same terms and conditions
that applied to Golden Bridge.&nbsp; The Company repaid the principal amount which
was owed to Golden Bridge. The warrant which had previously been issued to
Golden Bridge was cancelled in its entirety.</p>



<p class=MsoNormal><u>Section 3.1(s)</u>:&nbsp; The Company's Closing Fees include
(i) $150,000 payable to Mastodon Ventures, Inc., inclusive of all accrued
expenses, in connection with strategic advisory services, and (ii) $25,000
payable to Woodville Hall Capital, LLC in connection with the preparation and
deliver of a fairness opinion to the Company.</p>



<p class=MsoNormal><u>Section 3.1(t)</u>: The Company has granted registration
rights to W Capital and McDonald in connection with the shares of Common Stock
issuable upon conversion of their convertible promissory note and upon exercise
of their warrants.</p>



<p class=MsoNormal><u>Section 3.1(u)</u>:&nbsp; The Company has received notices of
non-compliance from Nasdaq for non-compliance with its continued listing
requirements for the Nasdaq Capital Markets for a) not maintaining a $1 minimum
bid price on its common stock and b) falling below the $2.5 million minimum
stockholders' equity requirement.&nbsp; The Company has until January 2011 to regain
compliance with the $1 minimum bid price and is filing a Compliance Plan with
Nasdaq on October 4, 2010 to meet the $2.5 million minimum stockholders' equity
requirement after giving effect to the transaction contemplated herein.</p>



<p class=MsoNormal><u>Section 4.5</u>:&nbsp; The Good Times Drive Thru location at
Federal and Asbury (Store #130) has been closed and is under negotiation for
lease termination.&nbsp; The Company took a write down of the assets associated with
the closure of the restaurant of $36,247 and accrued a lease liability of
$34,802 in June 2010.&nbsp; The site is under final negotiations for the termination
of the lease in connection with the sale of the property underlying the lease
to Jack in the Box.&nbsp;&nbsp; If the sale is delayed or if Jack in the Box terminates
the purchase contract, the Company will remain liable on the lease from August
1, 2010 through January 31, 2011.</p>



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<div class=WordSection2>









<p class=MsoNormal>Capitalization Summary as of 9/30/2010</p>

<p class=MsoNormal>Good Times Restaurants Inc.</p>

<p class=MsoNormal>Total Common Shares Outstanding as of 9/30/2010&nbsp; 3,898,559</p>

<p class=MsoNormal><b>Summary of outstanding Warrants</b>:</p>

<table class=MsoNormalTable border=0 cellspacing=0 cellpadding=0 width=895
 style='width:671.4pt;border-collapse:collapse'>
 <tr>
  <td width=241 valign=top style='width:180.9pt;border:solid windowtext 1.0pt;
  border-right:none;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal><b>Entity</b></p>
  </td>
  <td width=156 valign=top style='width:117.0pt;border-top:solid windowtext 1.0pt;
  border-left:none;border-bottom:solid windowtext 1.0pt;border-right:none;
  padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal><b>Total Warrant Shares</b></p>
  </td>
  <td width=78 valign=top style='width:58.5pt;border-top:solid windowtext 1.0pt;
  border-left:none;border-bottom:solid windowtext 1.0pt;border-right:none;
  padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal><b>Expiration</b></p>
  </td>
  <td width=108 valign=top style='width:81.0pt;border-top:solid windowtext 1.0pt;
  border-left:none;border-bottom:solid windowtext 1.0pt;border-right:none;
  padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal><b>Exercise Price</b></p>
  </td>
  <td width=312 valign=top style='width:3.25in;border:solid windowtext 1.0pt;
  border-left:none;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal><b>Notes</b></p>
  </td>
 </tr>
 <tr>
  <td width=241 valign=top style='width:180.9pt;border:none;border-left:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>Golden Bridge, LLC</p>
  <p class=MsoNormal>W. Capital &amp; John T.
  McDonald-2/1/10</p>
  </td>
  <td width=156 valign=top style='width:117.0pt;border:none;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>92,500</p>
  <p class=MsoNormal>50,000</p>
  </td>
  <td width=78 valign=top style='width:58.5pt;border:none;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>04/20/12</p>
  <p class=MsoNormal>12/31/12</p>
  </td>
  <td width=108 valign=top style='width:81.0pt;border:none;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>$1.15</p>
  <p class=MsoNormal>Not below $.75</p>
  <p class=MsoNormal>Nor above $1.08</p>
  </td>
  <td width=312 valign=top style='width:3.25in;border:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt'>

  <p class=MsoNormal>25% less than the average
  price of the Company's common stock during the 20 days prior to the exercise
  date, provided however that the exercise price shall not be below $.75 per share
  nor above $1.08 per share</p>
  </td>
 </tr>
 <tr>
  <td width=241 valign=top style='width:180.9pt;border:none;border-left:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=156 valign=top style='width:117.0pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=78 valign=top style='width:58.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=108 valign=top style='width:81.0pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=312 valign=top style='width:3.25in;border:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt'>

  </td>
 </tr>
 <tr>
  <td width=241 valign=top style='width:180.9pt;border:none;border-left:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>W. Capital &amp; John T.
  McDonald-8/1/10</p>
  </td>
  <td width=156 valign=top style='width:117.0pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>50,000</p>
  </td>
  <td width=78 valign=top style='width:58.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>12/31/12</p>
  </td>
  <td width=108 valign=top style='width:81.0pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>Not below $.75</p>
  <p class=MsoNormal>Nor above $1.08</p>
  </td>
  <td width=312 valign=top style='width:3.25in;border:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>25% less than the average
  price of the Company's common stock during the 20 days prior to the exercise
  date, provided however that the exercise price shall not be below $.75 per
  share nor above $1.08 per share</p>
  </td>
 </tr>
 <tr>
  <td width=241 valign=top style='width:180.9pt;border:none;border-left:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=156 valign=top style='width:117.0pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=78 valign=top style='width:58.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=108 valign=top style='width:81.0pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=312 valign=top style='width:3.25in;border:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt'>

  </td>
 </tr>
 <tr>
  <td width=241 valign=top style='width:180.9pt;border:none;border-left:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>PFGI II, LLC</p>
  </td>
  <td width=156 valign=top style='width:117.0pt;border:none;border-bottom:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>112,612</p>
  </td>
  <td width=78 valign=top style='width:58.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>01/02/13</p>
  </td>
  <td width=108 valign=top style='width:81.0pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>$1.11</p>
  </td>
  <td width=312 valign=top style='width:3.25in;border:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt'>

  </td>
 </tr>
 <tr>
  <td width=241 valign=top style='width:180.9pt;border-top:none;border-left:
  solid windowtext 1.0pt;border-bottom:solid windowtext 1.0pt;border-right:
  none;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>Total outstanding warrants</p>
  </td>
  <td width=156 valign=top style='width:117.0pt;border:none;border-bottom:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>305,112</p>
  </td>
  <td width=78 valign=top style='width:58.5pt;border:none;border-bottom:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=108 valign=top style='width:81.0pt;border:none;border-bottom:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=312 valign=top style='width:3.25in;border-top:none;border-left:
  none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt'>

  </td>
 </tr>
</table>

<p class=MsoNormal><b>&nbsp;</b></p>

<p class=MsoNormal><b>Summary of outstanding Stock Options:</b></p>

<table class=MsoNormalTable border=0 cellspacing=0 cellpadding=0 width=895
 style='width:671.4pt;border-collapse:collapse'>
 <tr>
  <td width=199 style='width:149.4pt;border:solid windowtext 1.0pt;border-right:
  none;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>Grant Date &amp; Type</p>
  </td>
  <td width=126 style='width:94.5pt;border-top:solid windowtext 1.0pt;
  border-left:none;border-bottom:solid windowtext 1.0pt;border-right:none;
  padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>Total Outstanding Options</p>
  </td>
  <td width=120 style='width:90.25pt;border-top:solid windowtext 1.0pt;
  border-left:none;border-bottom:solid windowtext 1.0pt;border-right:none;
  padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>Boyd Hoback's Options</p>
  </td>
  <td width=204 style='width:152.75pt;border-top:solid windowtext 1.0pt;
  border-left:none;border-bottom:solid windowtext 1.0pt;border-right:none;
  padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>Expiration</p>
  </td>
  <td width=246 style='width:184.5pt;border:solid windowtext 1.0pt;border-left:
  none;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>Exercise Price</p>
  </td>
 </tr>
 <tr>
  <td width=199 valign=top style='width:149.4pt;border:none;border-left:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>10/1/2000 ISO - Expired</p>
  </td>
  <td width=126 valign=top style='width:94.5pt;border:none;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>0</p>
  </td>
  <td width=120 valign=top style='width:90.25pt;border:none;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>0</p>
  </td>
  <td width=204 valign=top style='width:152.75pt;border:none;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>10/01/10</p>
  </td>
  <td width=246 valign=top style='width:184.5pt;border:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>$1.38</p>
  </td>
 </tr>
 <tr>
  <td width=199 valign=top style='width:149.4pt;border:none;border-left:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>10/1/2001 ISO</p>
  </td>
  <td width=126 valign=top style='width:94.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>57,400</p>
  </td>
  <td width=120 valign=top style='width:90.25pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>50,000</p>
  </td>
  <td width=204 valign=top style='width:152.75pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>10/01/11</p>
  </td>
  <td width=246 valign=top style='width:184.5pt;border:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>$1.75</p>
  </td>
 </tr>
 <tr>
  <td width=199 valign=top style='width:149.4pt;border:none;border-left:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>10/1/2002 ISO</p>
  </td>
  <td width=126 valign=top style='width:94.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>11,770</p>
  </td>
  <td width=120 valign=top style='width:90.25pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>3,750</p>
  </td>
  <td width=204 valign=top style='width:152.75pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>10/01/12</p>
  </td>
  <td width=246 valign=top style='width:184.5pt;border:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>$2.70</p>
  </td>
 </tr>
 <tr>
  <td width=199 valign=top style='width:149.4pt;border:none;border-left:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>10/1/2003 ISO</p>
  </td>
  <td width=126 valign=top style='width:94.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>19,550</p>
  </td>
  <td width=120 valign=top style='width:90.25pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>3,900</p>
  </td>
  <td width=204 valign=top style='width:152.75pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>10/01/13</p>
  </td>
  <td width=246 valign=top style='width:184.5pt;border:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>$3.60</p>
  </td>
 </tr>
 <tr>
  <td width=199 valign=top style='width:149.4pt;border:none;border-left:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>10/1/2003 NQSO</p>
  </td>
  <td width=126 valign=top style='width:94.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>6,000</p>
  </td>
  <td width=120 valign=top style='width:90.25pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=204 valign=top style='width:152.75pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>10/01/13</p>
  </td>
  <td width=246 valign=top style='width:184.5pt;border:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>$3.60</p>
  </td>
 </tr>
 <tr>
  <td width=199 valign=top style='width:149.4pt;border:none;border-left:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>10/1/2004 ISO</p>
  </td>
  <td width=126 valign=top style='width:94.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>33,560</p>
  </td>
  <td width=120 valign=top style='width:90.25pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>12,000</p>
  </td>
  <td width=204 valign=top style='width:152.75pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>10/01/14</p>
  </td>
  <td width=246 valign=top style='width:184.5pt;border:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>$3.11</p>
  </td>
 </tr>
 <tr>
  <td width=199 valign=top style='width:149.4pt;border:none;border-left:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>10/1/2004 NQSO</p>
  </td>
  <td width=126 valign=top style='width:94.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>6,000</p>
  </td>
  <td width=120 valign=top style='width:90.25pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=204 valign=top style='width:152.75pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>10/01/14</p>
  </td>
  <td width=246 valign=top style='width:184.5pt;border:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>$3.11</p>
  </td>
 </tr>
 <tr>
  <td width=199 valign=top style='width:149.4pt;border:none;border-left:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>2/11/2005 NQSO</p>
  </td>
  <td width=126 valign=top style='width:94.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>4,000</p>
  </td>
  <td width=120 valign=top style='width:90.25pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=204 valign=top style='width:152.75pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>02/11/15</p>
  </td>
  <td width=246 valign=top style='width:184.5pt;border:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>$3.33</p>
  </td>
 </tr>
 <tr>
  <td width=199 valign=top style='width:149.4pt;border:none;border-left:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>10/1/2005 ISO</p>
  </td>
  <td width=126 valign=top style='width:94.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>39,750</p>
  </td>
  <td width=120 valign=top style='width:90.25pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>8,500</p>
  </td>
  <td width=204 valign=top style='width:152.75pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>10/01/15</p>
  </td>
  <td width=246 valign=top style='width:184.5pt;border:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>$5.68</p>
  </td>
 </tr>
 <tr>
  <td width=199 valign=top style='width:149.4pt;border:none;border-left:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>10/1/2005 NQSO</p>
  </td>
  <td width=126 valign=top style='width:94.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>10,000</p>
  </td>
  <td width=120 valign=top style='width:90.25pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=204 valign=top style='width:152.75pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>10/01/15</p>
  </td>
  <td width=246 valign=top style='width:184.5pt;border:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>$5.68</p>
  </td>
 </tr>
 <tr>
  <td width=199 valign=top style='width:149.4pt;border:none;border-left:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>11/17/2006 ISO</p>
  </td>
  <td width=126 valign=top style='width:94.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>46,650</p>
  </td>
  <td width=120 valign=top style='width:90.25pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>19,000</p>
  </td>
  <td width=204 valign=top style='width:152.75pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>11/17/16</p>
  </td>
  <td width=246 valign=top style='width:184.5pt;border:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>$6.38</p>
  </td>
 </tr>
 <tr>
  <td width=199 valign=top style='width:149.4pt;border:none;border-left:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>11/17/2006 NQSO</p>
  </td>
  <td width=126 valign=top style='width:94.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>12,000</p>
  </td>
  <td width=120 valign=top style='width:90.25pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=204 valign=top style='width:152.75pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>11/17/16</p>
  </td>
  <td width=246 valign=top style='width:184.5pt;border:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>$6.38</p>
  </td>
 </tr>
 <tr>
  <td width=199 valign=top style='width:149.4pt;border:none;border-left:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>10/5/2007 ISO</p>
  </td>
  <td width=126 valign=top style='width:94.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>4,800</p>
  </td>
  <td width=120 valign=top style='width:90.25pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=204 valign=top style='width:152.75pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>10/05/17</p>
  </td>
  <td width=246 valign=top style='width:184.5pt;border:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>$5.75</p>
  </td>
 </tr>
 <tr>
  <td width=199 valign=top style='width:149.4pt;border:none;border-left:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>10/2/2007 NQSO</p>
  </td>
  <td width=126 valign=top style='width:94.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>12,000</p>
  </td>
  <td width=120 valign=top style='width:90.25pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=204 valign=top style='width:152.75pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>10/05/17</p>
  </td>
  <td width=246 valign=top style='width:184.5pt;border:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>$5.75</p>
  </td>
 </tr>
 <tr>
  <td width=199 valign=top style='width:149.4pt;border:none;border-left:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>11/14/2008 ISO</p>
  </td>
  <td width=126 valign=top style='width:94.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>68,400</p>
  </td>
  <td width=120 valign=top style='width:90.25pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>28,503</p>
  </td>
  <td width=204 valign=top style='width:152.75pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>11/14/18</p>
  </td>
  <td width=246 valign=top style='width:184.5pt;border:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>$1.47</p>
  </td>
 </tr>
 <tr>
  <td width=199 valign=top style='width:149.4pt;border:none;border-left:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>11/14/2008 NQSO</p>
  </td>
  <td width=126 valign=top style='width:94.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>12,000</p>
  </td>
  <td width=120 valign=top style='width:90.25pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=204 valign=top style='width:152.75pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>11/14/18</p>
  </td>
  <td width=246 valign=top style='width:184.5pt;border:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>$1.47</p>
  </td>
 </tr>
 <tr>
  <td width=199 valign=top style='width:149.4pt;border:none;border-left:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>11/6/2009 ISO</p>
  </td>
  <td width=126 valign=top style='width:94.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>30,606</p>
  </td>
  <td width=120 valign=top style='width:90.25pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>13,652</p>
  </td>
  <td width=204 valign=top style='width:152.75pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>11/06/19</p>
  </td>
  <td width=246 valign=top style='width:184.5pt;border:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>$1.15</p>
  </td>
 </tr>
 <tr>
  <td width=199 valign=top style='width:149.4pt;border:none;border-left:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>11/6/2009 NQSO</p>
  </td>
  <td width=126 valign=top style='width:94.5pt;border:none;border-bottom:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>12,000</p>
  </td>
  <td width=120 valign=top style='width:90.25pt;border:none;border-bottom:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=204 valign=top style='width:152.75pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>11/06/19</p>
  </td>
  <td width=246 valign=top style='width:184.5pt;border:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>$1.15</p>
  </td>
 </tr>
 <tr>
  <td width=199 valign=top style='width:149.4pt;border:none;border-left:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Total
  outstanding options</p>
  </td>
  <td width=126 valign=top style='width:94.5pt;border:none;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>386,486</p>
  </td>
  <td width=120 valign=top style='width:90.25pt;border:none;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>139,305</p>
  </td>
  <td width=204 valign=top style='width:152.75pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=246 valign=top style='width:184.5pt;border:none;border-right:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt'>

  </td>
 </tr>
 <tr>
  <td width=895 colspan=5 valign=top style='width:671.4pt;border:solid windowtext 1.0pt;
  border-top:none;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>Note: There are a total of
  fifteen current employees in the plan, no former employees hold any options.</p>
  </td>
 </tr>
</table>





<div class=MsoNormal align=center style='text-align:center'>

<hr size=2 width="100%" noshade style='color:navy' align=center>

</div>



</div>

<br
clear=all style='page-break-before:always'>


<div class=WordSection3>









<p class=MsoNormal align=center style='text-align:center'><b>EXHIBIT C</b></p>

<p class=MsoNormal align=center style='text-align:center'><b>CLOSING
CAPITALIZATION TABLE</b></p>

<p class=MsoNormal><b>&nbsp;</b></p>

<table class=MsoNormalTable border=0 cellspacing=0 cellpadding=0 width=625
 style='border-collapse:collapse'>
 <tr>
  <td width=319 valign=top style='width:239.4pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>Small Island Investment</p>
  </td>
  <td width=19 valign=top style='width:14.25pt;padding:0in .7pt 0in .7pt'>
  <p class=MsoNormal>&nbsp;$</p>
  </td>
  <td width=67 valign=top style='width:50.55pt;padding:0in .7pt 0in .7pt'>
  <p class=MsoNormal>2,100,000&nbsp;</p>
  </td>
  <td width=220 valign=top style='width:164.7pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
 </tr>
 <tr>
  <td width=319 valign=top style='width:239.4pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>Price/Share ($)</p>
  </td>
  <td width=19 valign=top style='width:14.25pt;padding:0in .7pt 0in .7pt'>
  <p class=MsoNormal>&nbsp;$</p>
  </td>
  <td width=67 valign=top style='width:50.55pt;padding:0in .7pt 0in .7pt'>
  <p class=MsoNormal><u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 0.50&nbsp;</u></p>
  </td>
  <td width=220 valign=top style='width:164.7pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
 </tr>
 <tr>
  <td width=319 valign=top style='width:239.4pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>Common Shares Issued</p>
  </td>
  <td width=86 colspan=2 valign=top style='width:.9in;padding:0in .7pt 0in .7pt'>
  <p class=MsoNormal>4,200,000&nbsp;</p>
  </td>
  <td width=220 valign=top style='width:164.7pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
 </tr>
 <tr>
  <td width=319 valign=top style='width:239.4pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=86 colspan=2 valign=top style='width:.9in;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=220 valign=top style='width:164.7pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
 </tr>
 <tr>
  <td width=319 valign=top style='width:239.4pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>Bridge Loans:</p>
  </td>
  <td width=86 colspan=2 valign=top style='width:.9in;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=220 valign=top style='width:164.7pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
 </tr>
 <tr>
  <td width=319 valign=top style='width:239.4pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=19 valign=top style='width:14.25pt;padding:0in .7pt 0in .7pt'>
  <p class=MsoNormal>&nbsp;$</p>
  </td>
  <td width=67 valign=top style='width:50.55pt;padding:0in .7pt 0in .7pt'>
  <p class=MsoNormal>300,000&nbsp;</p>
  </td>
  <td width=220 valign=top style='width:164.7pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>w/J-Mac</p>
  </td>
 </tr>
 <tr>
  <td width=319 valign=top style='width:239.4pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=19 valign=top style='width:14.25pt;padding:0in .7pt 0in .7pt'>
  <p class=MsoNormal>&nbsp;$</p>
  </td>
  <td width=67 valign=top style='width:50.55pt;padding:0in .7pt 0in .7pt'>
  <p class=MsoNormal>100,000&nbsp;</p>
  </td>
  <td width=220 valign=top style='width:164.7pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>w/J-Mac</p>
  </td>
 </tr>
 <tr>
  <td width=319 valign=top style='width:239.4pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=19 valign=top style='width:14.25pt;padding:0in .7pt 0in .7pt'>
  <p class=MsoNormal>&nbsp;$</p>
  </td>
  <td width=67 valign=top style='width:50.55pt;padding:0in .7pt 0in .7pt'>
  <p class=MsoNormal><u>&nbsp; 185,000&nbsp;</u></p>
  </td>
  <td width=220 valign=top style='width:164.7pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>Golden Bridge</p>
  </td>
 </tr>
 <tr>
  <td width=319 valign=top style='width:239.4pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>Total Bridge Lender Debt</p>
  </td>
  <td width=19 valign=top style='width:14.25pt;padding:0in .7pt 0in .7pt'>
  <p class=MsoNormal>&nbsp;$</p>
  </td>
  <td width=67 valign=top style='width:50.55pt;padding:0in .7pt 0in .7pt'>
  <p class=MsoNormal>585,000&nbsp;</p>
  </td>
  <td width=220 valign=top style='width:164.7pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
 </tr>
 <tr>
  <td width=319 valign=top style='width:239.4pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>Less: Paydown</p>
  </td>
  <td width=86 colspan=2 valign=top style='width:.9in;padding:0in .7pt 0in .7pt'>
  <p class=MsoNormal><u>($585,000)</u></p>
  </td>
  <td width=220 valign=top style='width:164.7pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
 </tr>
 <tr>
  <td width=319 valign=top style='width:239.4pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>Outstanding balance to be converted to equity</p>
  </td>
  <td width=19 valign=top style='width:14.25pt;padding:0in .7pt 0in .7pt'>
  <p class=MsoNormal>&nbsp;$</p>
  </td>
  <td width=67 valign=top style='width:50.55pt;padding:0in .7pt 0in .7pt'>
  <p class=MsoNormal>-&nbsp;</p>
  </td>
  <td width=220 valign=top style='width:164.7pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
 </tr>
 <tr>
  <td width=319 valign=top style='width:239.4pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>Conversion Price</p>
  </td>
  <td width=19 valign=top style='width:14.25pt;padding:0in .7pt 0in .7pt'>
  <p class=MsoNormal>&nbsp;$</p>
  </td>
  <td width=67 valign=top style='width:50.55pt;padding:0in .7pt 0in .7pt'>
  <p class=MsoNormal><u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 0.50&nbsp;</u></p>
  </td>
  <td width=220 valign=top style='width:164.7pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
 </tr>
 <tr>
  <td width=319 valign=top style='width:239.4pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>Common Shares Issued</p>
  </td>
  <td width=86 colspan=2 valign=top style='width:.9in;padding:0in .7pt 0in .7pt'>
  <p class=MsoNormal>0&nbsp;</p>
  </td>
  <td width=220 valign=top style='width:164.7pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
 </tr>
 <tr>
  <td width=319 valign=top style='width:239.4pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=86 colspan=2 valign=top style='width:.9in;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=220 valign=top style='width:164.7pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
 </tr>
 <tr>
  <td width=319 valign=top style='width:239.4pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>Accrued Interest to be converted to equity</p>
  </td>
  <td width=19 valign=top style='width:14.25pt;padding:0in .7pt 0in .7pt'>
  <p class=MsoNormal>&nbsp;$</p>
  </td>
  <td width=67 valign=top style='width:50.55pt;padding:0in .7pt 0in .7pt'>
  <p class=MsoNormal>36,647&nbsp;</p>
  </td>
  <td width=220 valign=top style='width:164.7pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>As of November 23, 2010</p>
  </td>
 </tr>
 <tr>
  <td width=319 valign=top style='width:239.4pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>Conversion Price</p>
  </td>
  <td width=19 valign=top style='width:14.25pt;padding:0in .7pt 0in .7pt'>
  <p class=MsoNormal>&nbsp;$</p>
  </td>
  <td width=67 valign=top style='width:50.55pt;padding:0in .7pt 0in .7pt'>
  <p class=MsoNormal><u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 0.50&nbsp;</u></p>
  </td>
  <td width=220 valign=top style='width:164.7pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
 </tr>
 <tr>
  <td width=319 valign=top style='width:239.4pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>Common Shares Issued</p>
  </td>
  <td width=86 colspan=2 valign=top style='width:.9in;padding:0in .7pt 0in .7pt'>
  <p class=MsoNormal>73,293&nbsp;</p>
  </td>
  <td width=220 valign=top style='width:164.7pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
 </tr>
</table>





<table class=MsoNormalTable border=0 cellspacing=0 cellpadding=0
 style='border-collapse:collapse'>
 <tr>
  <td width=205 valign=top style='width:153.9pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal><u>Capitalization</u></p>
  </td>
  <td width=90 valign=top style='width:67.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal><u>Current</u></p>
  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=78 valign=top style='width:58.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal><u>&nbsp;</u></p>
  </td>
  <td width=96 valign=top style='width:1.0in;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal><u>At Closing</u></p>
  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=90 valign=top style='width:67.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
 </tr>
 <tr>
  <td width=205 valign=top style='width:153.9pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=90 valign=top style='width:67.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=78 valign=top style='width:58.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=96 valign=top style='width:1.0in;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=90 valign=top style='width:67.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
 </tr>
 <tr>
  <td width=205 valign=top style='width:153.9pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>Small Island</p>
  </td>
  <td width=90 valign=top style='width:67.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>-</p>
  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=78 valign=top style='width:58.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>0.00%</p>
  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=96 valign=top style='width:1.0in;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>4,200,000</p>
  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=90 valign=top style='width:67.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>51.40%</p>
  </td>
 </tr>
 <tr>
  <td width=205 valign=top style='width:153.9pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>Bailey/Reinhard</p>
  </td>
  <td width=90 valign=top style='width:67.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>2,079,192</p>
  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=78 valign=top style='width:58.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>53.33%</p>
  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=96 valign=top style='width:1.0in;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>2,079,192</p>
  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=90 valign=top style='width:67.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>25.44%</p>
  </td>
 </tr>
 <tr>
  <td width=205 valign=top style='width:153.9pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>Other SH'rs</p>
  </td>
  <td width=90 valign=top style='width:67.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>1,819,367</p>
  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=78 valign=top style='width:58.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>46.67%</p>
  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=96 valign=top style='width:1.0in;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>1,819,367</p>
  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=90 valign=top style='width:67.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>22.26%</p>
  </td>
 </tr>
 <tr>
  <td width=205 valign=top style='width:153.9pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>Converted Interest w/J-Mac</p>
  </td>
  <td width=90 valign=top style='width:67.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal><u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; -</u></p>
  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=78 valign=top style='width:58.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal><u>&nbsp;&nbsp;&nbsp; 0.00%</u></p>
  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=96 valign=top style='width:1.0in;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal><u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 73,293</u></p>
  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=90 valign=top style='width:67.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal><u>&nbsp;&nbsp;&nbsp; 0.90%</u></p>
  </td>
 </tr>
 <tr>
  <td width=205 valign=top style='width:153.9pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=90 valign=top style='width:67.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>3,898,559</p>
  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=78 valign=top style='width:58.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>100.00%</p>
  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=96 valign=top style='width:1.0in;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>8,171,852</p>
  </td>
  <td width=18 valign=top style='width:13.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=90 valign=top style='width:67.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>100.00%</p>
  </td>
 </tr>
</table>



<p class=MsoNormal align=center style='text-align:center'>C-1</p>



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<p class=MsoNormal align=center style='margin-left:4.0in;text-align:center;
text-indent:.5in'>October 29<sup>th</sup>, 2010</p>





<p class=MsoNormal>Board of Directors</p>

<p class=MsoNormal>Good Times Restaurants, Inc.</p>

<p class=MsoNormal>601 Corporate Circle</p>

<p class=MsoNormal>Golden, CO&nbsp; 80401</p>



<p class=MsoNormal>Gentlemen: </p>



<p class=MsoNormal style='text-indent:.5in;line-height:200%'>Good Times
Restaurants, Inc. (the &quot;Company&quot;) proposes to issue 4.2 million of its common
shares to Small Island Investments, Ltd. (&quot;Investor&quot;) for a total consideration
of $2.1 million (the &quot;Proposed Purchase Price&quot;).&nbsp; The proposal, in
its present form, is set forth in a Securities Purchase Agreement dated October
29<sup>th</sup>, 2010.&nbsp; You have requested our opinion as to whether the
Proposed Purchase Price is fair, from a financial point of view, to the
Company. </p>

<p class=MsoNormal style='text-indent:.5in;line-height:200%'>Woodville Hall is
engaged in the valuation of businesses in connection with securities issuances,
mergers, acquisitions and divestitures.</p>

<p class=MsoNormal style='text-indent:.5in;line-height:200%'>In connection with
your request, we have:</p>

<p class=MsoNormal style='line-height:200%'>1.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Reviewed certain reports
and information filed by the Company with the Securities and </p>

<p class=MsoNormal style='text-indent:.5in;line-height:200%'>Exchange
Commission;</p>

<p class=MsoNormal style='margin-left:.5in;text-indent:-.5in;line-height:200%'>2.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Reviewed
the Company's Management Presentation, dated Spring, 2010;</p>

<p class=MsoNormal style='margin-left:.5in;text-indent:-.5in;line-height:200%'>3.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Discussed
the business and prospects of the Company with senior operating and financial
officers as well as directors of the Company; </p>

<p class=MsoNormal style='margin-left:.5in;text-indent:-.5in;line-height:200%'>4.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Discussed
the offering process with the Robert Hersch of Mastodon Ventures, Inc., an
advisor to the Company;</p>

<p class=MsoNormal style='margin-left:.5in;text-indent:-.5in;line-height:200%'>5.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Reviewed
the term sheet, dated October 1<sup>st</sup>, 2010 between the Company and
Investor; </p>

<p class=MsoNormal style='margin-left:.5in;text-indent:-.5in;line-height:200%'>6.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Reviewed
the Securities Purchase Agreement (and related agreements) dated October 29<sup>th</sup>,
2010 between the Company and Investor;</p>



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<p class=MsoNormal style='margin-left:.5in;text-indent:-.5in;line-height:200%'>7.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Reviewed
management prepared company store performance financials for the past two
years;</p>

<p class=MsoNormal style='margin-left:.5in;text-indent:-.5in;line-height:200%'>8.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Reviewed
draft consolidated financial results for the quarter ending September 30<sup>th</sup>,
2010 and certain public filings containing prior quarterly results;</p>

<p class=MsoNormal style='line-height:200%'>9.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Reviewed a NASDAQ
de-listing extension letter dated October 6, 2010;</p>

<p class=MsoNormal style='line-height:200%'>10.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Reviewed certain debt
agreements;</p>

<p class=MsoNormal style='margin-left:.5in;text-indent:-.5in;line-height:200%'>11.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Reviewed
the Company's stock performance for the prior three months (price, volume,
percentage of outstanding shares) vs. selected other companies;</p>

<p class=MsoNormal style='line-height:200%'>12.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Reviewed insider share
holdings;</p>

<p class=MsoNormal style='margin-left:.5in;text-indent:-.5in;line-height:200%'>13.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Reviewed
the investment banking process for the prior year, including the number of parties
contacted, term sheets and letters of intent received, and reasons that the
prior potential transactions did not close;</p>

<p class=MsoNormal style='margin-left:.5in;text-indent:-.5in;line-height:200%'>14.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Reviewed
minutes of the September 30, 2010 Board meeting where the proposed common stock
investment by the Investor was discussed;</p>

<p class=MsoNormal style='margin-left:.5in;text-indent:-.5in;line-height:200%'>15.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Reviewed
signed Special Committee and Board of Directors resolutions authorizing the
Investor's investment; and</p>

<p class=MsoNormal style='line-height:200%'>16.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Reviewed certain other
publicly available information on the Company.</p>





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<p class=MsoNormal style='text-indent:.5in;line-height:200%'>We have relied
with your approval, and without independent verification, on the accuracy,
completeness, and fair representation of all the financial and other
information obtained by us from public sources and provided to us by the
Company and Mastodon Ventures, Inc., and this opinion is conditioned upon such
accuracy, completeness and fairness. We have assumed that the unaudited
financial results provided to us by the Company's management represent its best
estimates of the most probable results for the Company for the periods
presented therein.&nbsp; </p>

<p class=MsoNormal style='text-indent:.5in;line-height:200%'>Finally, we note
that our opinion is necessarily based upon market conditions as they exist and
can be evaluated as of the date of this letter.</p>

<p class=MsoNormal style='text-indent:.5in;line-height:200%'>Based upon and
subject to the foregoing, we advise you that, in our opinion and from a
financial point of view, the Proposed Purchase Price is fair to the Company.&nbsp;
We have not examined any other aspect of the proposed transaction and express
no opinion on any other aspect of the proposed transaction.</p>

<p class=MsoNormal style='text-indent:.5in;line-height:200%'>This opinion is
for your use only and may not be used or relied upon by or published for or
communicated to any third party for any purpose without our prior written
consent.</p>

<p class=MsoNormal style='text-align:justify'>Very truly yours,</p>



<p class=MsoNormal style='text-align:justify'><i><u>/s/ Jonathan F. Catherwood</u></i></p>

<p class=MsoFooter>Woodville Hall Capital, LLC</p>

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