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<SEC-DOCUMENT>0000825324-10-000019.txt : 20101103
<SEC-HEADER>0000825324-10-000019.hdr.sgml : 20101103
<ACCEPTANCE-DATETIME>20101103150832
ACCESSION NUMBER:		0000825324-10-000019
CONFORMED SUBMISSION TYPE:	8-K
PUBLIC DOCUMENT COUNT:		4
CONFORMED PERIOD OF REPORT:	20101103
ITEM INFORMATION:		Entry into a Material Definitive Agreement
ITEM INFORMATION:		Unregistered Sales of Equity Securities
ITEM INFORMATION:		Changes in Control of Registrant
ITEM INFORMATION:		Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers: Compensatory Arrangements of Certain Officers
ITEM INFORMATION:		Other Events
ITEM INFORMATION:		Financial Statements and Exhibits
FILED AS OF DATE:		20101103
DATE AS OF CHANGE:		20101103

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:		8-K
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	000-18590
		FILM NUMBER:		101161174

	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>8-K
<SEQUENCE>1
<FILENAME>form8k11.htm
<TEXT>
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  <p class=MsoTitle><b>&nbsp;</b></p>
  <p class=MsoTitle><b>&nbsp;</b></p>
  <p class=MsoTitle><b>UNITED STATES</b></p>
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  <p class=MsoNormal align=center style='text-align:center'><b>SECURITIES AND EXCHANGE COMMISSION</b></p>
  </td>
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  <p class=MsoNormal align=center style='text-align:center'>Washington, D.C. 20549</p>
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  <p class=MsoNormal align=center style='text-align:center'><b>FORM 8-K</b></p>
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  <p class=MsoNormal align=center style='text-align:center'><b>&nbsp;</b></p>
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  <td width=638 valign=top style='width:6.65in;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=center style='text-align:center'><b>CURRENT REPORT</b></p>
  </td>
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  <p class=MsoNormal><b>&nbsp;</b></p>
  </td>
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  <td width=638 valign=top style='width:6.65in;padding:0in 5.4pt 0in 5.4pt'>
  <h3>Pursuant to Section 13 or 15(d) of the
  Securities Exchange Act of 1934</h3>
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  <td width=638 valign=top style='width:6.65in;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=center style='text-align:center'>Date of Report (Date of earliest event reported)</p>
  </td>
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  <p class=MsoNormal align=center style='text-align:center'>October 29, 2010</p>
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  </td>
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  <td width=638 valign=top style='width:6.65in;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=center style='text-align:center'><b>Good Times Restaurants Inc.</b></p>
  </td>
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  <td width=638 valign=top style='width:6.65in;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=center style='text-align:center'>(Exact name of registrant as specified in its
  charter)</p>
  </td>
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  <td width=247 valign=top style='width:185.4pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=center style='text-align:center'>Nevada</p>
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  <td width=156 valign=top style='width:117.0pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=center style='text-align:center'>000-18590</p>
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  <p class=MsoNormal align=center style='text-align:center'>84-1133368</p>
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  <p class=MsoNormal align=center style='text-align:center'>(State or other jurisdiction</p>
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  <p class=MsoNormal align=center style='text-align:center'>(Commission</p>
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  <p class=MsoNormal align=center style='text-align:center'>(IRS Employer</p>
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  <p class=MsoNormal align=center style='text-align:center'>of incorporation)</p>
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  <td width=156 valign=top style='width:117.0pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=center style='text-align:center'>File Number)</p>
  </td>
  <td width=234 valign=top style='width:175.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=center style='text-align:center'>Identification No.)</p>
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  <p class=MsoNormal align=center style='text-align:center'>601 Corporate Circle, Golden, Colorado 80401</p>
  </td>
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  <td width=638 valign=top style='width:6.65in;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=center style='text-align:center'>(Address of principal executive offices)&nbsp;&nbsp; (Zip
  Code)</p>
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  <p class=MsoNormal align=center style='text-align:center'>Registrant's telephone number, including area code:
  (303) 384-1400</p>
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  <p class=MsoNormal align=center style='text-align:center'>Not applicable</p>
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  <p class=MsoNormal align=center style='text-align:center'>(Former name or former address, if changed since
  last report.)</p>
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  </td>
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  <td width=638 valign=top style='width:6.65in;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>Check the appropriate box
  below if the Form 8-K filing is intended to simultaneously satisfy the filing
  obligation of the registrant under any of the following provisions (see
  General Instruction A.2.):</p>

  <p class=MsoNormal>[_] Written communications
  pursuant to Rule 425 under the Securities Act (17 CFR 230.425)</p>

  <p class=MsoNormal>[_] Soliciting material
  pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)</p>

  <p class=MsoNormal>[_] Pre-commencement
  communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
  240.14d-2(b))</p>

  <p class=MsoNormal>[_] Pre-commencement
  communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
  240.13e-4(c))</p>
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<p class=MsoFooter style='line-height:10.0pt'>12135250 </p>

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<p class=MsoNormal><b>Item 1.01&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Entry
into a Material Definitive Agreement.</b></p>

<p class=MsoNormal style='text-autospace:none'><b>&nbsp;</b></p>

<p class=MsoNormal style='text-indent:.5in;text-autospace:none'><u>Strategic Investment</u></p>

<p class=MsoNormal style='text-autospace:none'><b>&nbsp;</b></p>

<p class=MsoNormal style='text-autospace:none'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; On October 29, 2010, Good Times Restaurants Inc.
(the &quot;Company&quot;) entered into a Securities Purchase Agreement (the &quot;Purchase
Agreement&quot;) with Small Island Investments Limited, a Bermuda corporation (the
&quot;Investor&quot;), under which the Company has agreed to sell, and the Investor has
agreed to purchase, 4,200,000 shares (the &quot;Shares&quot;) of the Company's common
stock, par value $0.001 per share (the &quot;Common Stock&quot;), at a purchase price of
$0.50 per share, or an aggregate purchase price of $2,100,000.&nbsp; As described
below, the closing of the investment transaction (the &quot;Investment Transaction&quot;)
under the Purchase Agreement (the &quot;Closing&quot;) is subject to the receipt of
stockholder approval of the Investment Transaction and a reverse split of the
Common Stock to take effect after the Closing.&nbsp; The Company expects the Closing
to occur by November 30, 2010.&nbsp; Upon the Closing, the Investor will become the
beneficial owner of approximately 51.4 percent of the outstanding Common Stock
of the Company.</p>



<p class=MsoNormal style='text-autospace:none'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&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.</p>



<p class=MsoNormal style='text-autospace:none'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; The Shares have not been registered under the
Securities Act of 1933, as amended (the &quot;Securities Act&quot;), and may not be
offered or sold in the United States in the absence of an effective
registration statement or exemption from the registration requirements of the
Securities Act.&nbsp; Effective on the Closing, the Company will enter into a
Registration Rights Agreement (the &quot;Registration Rights Agreement&quot;) with the
Investor, pursuant to which the Company will grant to the Investor certain
registration rights with respect to the Shares after the Closing.</p>



<p class=MsoNormal style='text-autospace:none'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; A copy of the Company's November 3, 2010 press
release announcing the Investment Transaction is filed herewith as Exhibit 99.1
to this Current Report on Form 8-K.&nbsp; 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 are filed as exhibits to this Current
Report on Form 8-K.</p>



<p class=MsoNormal style='text-autospace:none'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>Securities Purchase Agreement</u></p>



<p class=MsoNormal style='text-autospace:none'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; As described above, 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, at a purchase price of $0.50 per share.&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 style='text-autospace:none'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 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 style='text-autospace:none'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 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 style='text-autospace:none'>&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>

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<p class=MsoNormal style='text-autospace:none'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (ii) 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 style='text-autospace:none'>&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 style='text-autospace:none'>&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 related matters, including a
reverse split of the Company's Common Stock to be effected after the Closing;</p>



<p class=MsoNormal style='text-autospace:none'>&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 of Directors 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 style='text-autospace:none'>&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.</p>



<p class=MsoNormal style='text-autospace:none'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 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>



<p class=MsoNormal style='text-indent:.5in;text-autospace:none'>The Purchase Agreement provides that
after the Closing, for so long as the Investor holds at least 50 percent of the
Company's outstanding Common Stock, (i) the Company's Board of Directors shall
consist of no more than seven members, and (ii) the Investor with have the right
to designate four members of the 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.&nbsp; </p>



<p class=MsoNormal style='text-indent:.5in;text-autospace:none'>The Purchase Agreement may be terminated
at any time prior to the Closing only as follows:</p>



<p class=MsoNormal style='margin-left:.75in;text-indent:-.25in;text-autospace:
none'>&#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:.75in;text-indent:-.25in;text-autospace:
none'>&#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:.75in;text-indent:-.25in;text-autospace:
none'>&#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:.75in;text-indent:-.25in;text-autospace:
none'>&#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, 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>



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<p class=MsoNormal style='margin-left:.75in;text-indent:-.25in;text-autospace:
none'>&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
by the Company, if
the Company has received an alternative proposal which the Board of Directors
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 case the Company has agreed to pay to the Investor a termination fee of
$150,000.</p>



<p class=MsoNormal style='text-autospace:none'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; A copy the Purchase Agreement dated October 29, 2010
is attached as Exhibit 10.1 to this Current Report on Form 8-K.</p>



<p class=MsoNormal style='text-autospace:none'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>Registration Rights Agreement</u></p>



<p class=MsoNormal style='text-autospace:none'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; The disclosure required by Item 1.01 in connection
with the Registration Rights Agreement is included in Item 3.02 below and is
hereby incorporated herein by reference.</p>



<p class=MsoNormal><b>Item 3.02&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Unregistered
Sales of Equity Securities.</b></p>



<p class=MsoNormal style='text-autospace:none'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>Private Placement of Securities</u></p>



<p class=MsoNormal style='text-autospace:none'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; As set forth above, pursuant to the Purchase
Agreement, the Company has agreed to issue and sell to the Investor at the
Closing 4,200,000 Shares of its Common Stock.&nbsp; The Investor has represented
that it is an accredited investor, as such term is defined Rule 501 of
Regulation D promulgated under the Securities Act.&nbsp; The Shares have not been
registered under the Securities Act or applicable 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 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 Investment Transaction.</p>



<p class=MsoNormal style='text-autospace:none'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>Registration Rights Agreement</u></p>



<p class=MsoNormal style='text-autospace:none'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Effective at the Closing, the Company will enter
into the Registration Rights Agreement with the Investor, pursuant to which the
Company will grant the Investor certain registration rights with respect to 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.</p>



<p class=MsoNormal style='text-autospace:none'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Additional information regarding the Shares and the
Investment Transaction is included under Item 1.01 of this Current Report on
Form 8-K and is incorporated herein by reference.</p>



<p class=MsoNormal style='text-autospace:none'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; The form of Registration Rights Agreement is
attached as Exhibit 4.1 to this Current Report on Form 8-K and is incorporated
herein by reference.</p>



<div>

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  <p class=MsoFooter>4</p>
  </td>
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<p class=MsoNormal style='margin-left:1.0in;text-indent:-1.0in;page-break-after:
avoid;text-autospace:none'><b>Item
5.01&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Change in Control of Registrant.</b></p>



<p class=MsoNormal style='page-break-after:avoid;text-autospace:none'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; As set forth above, pursuant
to the Purchase Agreement, the Company has agreed to issue and sell to the
Investor at the Closing 4,200,000 Shares of its Common Stock.&nbsp; If the
Investment Transaction is consummated, the Investor will become the beneficial
owner of approximately 51.4 percent of the outstanding Common Stock of the Company.</p>

<p class=MsoNormal style='margin-left:1.0in;text-indent:-1.0in;text-autospace:
none'><b>&nbsp;</b></p>

<p class=MsoNormal style='margin-left:1.0in;text-indent:-1.0in;text-autospace:
none'><b>Item 5.02&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Departure
of Directors or Certain Officers; Election of Directors; Appointment of Certain
Officers; Compensatory Arrangements of Certain Officers.</b></p>



<p class=MsoNormal style='text-autospace:none'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; As described above, under the Purchase Agreement, it
is a condition to the Closing that the Company shall have received the
resignations of four of its current directors, including the current Chairman
of the Board and one member of the Audit Committee, in order that the Investor
can designate four directors to fill the resultant vacancies.&nbsp; Richard J.
Stark, Alan A. Teran, Ron Goodson and David Grissen have indicated to the
Company that they intend to resign as directors effective upon the Closing of
the Investment Transaction to fulfill the closing condition set forth in the
Purchase Agreement and not due to any disagreement with the Company on any
matter relating to the Company's operations, policies or practices.&nbsp; Eric W.
Reinhard has agreed to step down as Chairman of the Board effective upon the
Closing to fulfill the condition set forth in the Purchase Agreement but he will
continue as a director of the Company following the Closing.&nbsp; As set forth in
the Purchase Agreement, effective upon the Closing, the Board of Directors
intends to designate four persons designated by the Investor as members of the
Board to fill the vacancies resulting from the resignations of Messrs. Stark,
Teran, Goodson and Grissen.&nbsp; </p>



<p class=MsoNormal style='text-autospace:none'><b>Item 8.01&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Other Events</b></p>



<p class=MsoNormal style='text-autospace:none'>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; As set forth above, on November 3, 2010, the Company
issued a press release announcing the execution of the Purchase Agreement and
the Investment Transaction.&nbsp; A copy of the Company's press release is filed
herewith as Exhibit 99.1 to this Current Report on Form 8-K.</p>



<p class=MsoNormal style='text-align:justify'><b>Item
9.01&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Financial Statements and Exhibits.</b></p>



<p class=MsoNormal style='text-indent:.5in'>(d)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Exhibits.&nbsp;
The following exhibits are filed as part of this report:</p>



<div align=center>

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  <td width=67 valign=top style='width:50.15pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=center style='text-align:center'>Exhibit</p>
  <p class=MsoNormal align=center style='text-align:center'><u>Number</u></p>
  </td>
  <td width=461 valign=top style='width:345.85pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal><u>&nbsp;</u></p>
  <p class=MsoNormal><u>Description</u></p>
  </td>
 </tr>
 <tr>
  <td width=67 valign=top style='width:50.15pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=center style='text-align:center'>4.1</p>
  </td>
  <td width=461 valign=top style='width:345.85pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>Form of Registration Rights
  Agreement.</p>

  </td>
 </tr>
 <tr>
  <td width=67 valign=top style='width:50.15pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=center style='text-align:center'>10.1</p>
  </td>
  <td width=461 valign=top style='width:345.85pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>Securities Purchase
  Agreement between the Company and Small Island Investments Limited, dated
  October 29, 2010.</p>

  </td>
 </tr>
 <tr>
  <td width=67 valign=top style='width:50.15pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal align=center style='text-align:center'>99.1</p>
  </td>
  <td width=461 valign=top style='width:345.85pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>Company Press Release dated
  November 3, 2010.</p>
  </td>
 </tr>
 <tr>
  <td width=67 valign=top style='width:50.15pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=461 valign=top style='width:345.85pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
 </tr>
 <tr>
  <td width=67 valign=top style='width:50.15pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=461 valign=top style='width:345.85pt;padding:0in 5.4pt 0in 5.4pt'>

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

</div>



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  <p class=MsoFooter>5</p>
  </td>
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<p class=MsoFooter style='line-height:10.0pt'>12135250 </p>

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<div class=WordSection2>









<h3><b>SIGNATURES</b></h3>



<p class=MsoBodyTextIndent3>Pursuant to the
requirements of the Securities Exchange Act of 1934, the registrant has duly
caused this report to be signed on its behalf by the undersigned hereunto duly
authorized.</p>





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  </td>
  <td width=294 valign=top style='width:220.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>GOOD TIMES RESTAURANTS INC.</p>
  </td>
 </tr>
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  <td width=288 valign=top style='width:3.0in;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>Date:&nbsp; November 3, 2010</p>
  </td>
  <td width=294 valign=top style='width:220.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>By:&nbsp; <i><u>/s/ Boyd E.
  Hoback</u></i></p>
  </td>
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  <td width=288 valign=top style='width:3.0in;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=294 valign=top style='width:220.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>Boyd E. Hoback</p>
  </td>
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  <td width=288 valign=top style='width:3.0in;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=294 valign=top style='width:220.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>President and Chief
  Executive Officer</p>
  </td>
 </tr>
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<SEQUENCE>2
<FILENAME>spafile101b1.htm
<TEXT>
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<head>
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<!-- Copyright 2006 E-Services, LLC.-->
<!-- 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>



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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>





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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>



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










<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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<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>





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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'>

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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>

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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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</div>



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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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  <td width=325 valign=top style='width:244.05pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>COMPANY:</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>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>
 </tr>
 <tr>
  <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>
 <tr>
  <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 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>INVESTOR:</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>SMALL ISLAND INVESTMENTS LIMITED</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'>

  </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>By: <a name="OLE_LINK3"><i><u>/s/ David Dobbin</u></i></a></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>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>
 </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'>

  </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>By: <i><u>/s/ Penelope Dobbin</u></i></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>Name: Penelope 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: President</p>
  </td>
 </tr>
</table>



<p class=MsoNormal align=center style='text-align:center'>35</p>



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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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<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>



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

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

</div>





</div>

</body>

</html>
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-2
<SEQUENCE>3
<FILENAME>rragree41a1.htm
<TEXT>
<html>

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





</head>

<body lang=EN-US>

<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>EXHIBIT A</b></p>

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



<p class=MsoNormal>This Registration Rights Agreement (the &quot;Agreement&quot;) is made
and entered into as of this ____ day of _____________, 2010, by and between
Good Times Restaurants Inc., a Nevada corporation (the &quot;Company&quot;), and Small Island
Investments Limited, a Bermuda corporation (the &quot;Investor&quot;).</p>



<p class=MsoNormal>The parties hereby agree as follows:</p>



<p class=MsoNormal>1.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>Certain Definitions</u>.</p>

<p class=MsoNormal>As used in this Agreement, the following terms shall have
the following meanings:</p>



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



<p class=MsoNormal>&quot;Common Stock&quot; shall mean 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>&quot;Confidentiality Agreement&quot; shall have the same meaning as
provided in the Purchase Agreement.</p>



<p class=MsoNormal>&quot;Exchange Act&quot; means the Securities Exchange Act of 1934, as
amended, and the rules and regulations promulgated thereunder.</p>



<p class=MsoNormal>&quot;Person&quot; 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>&quot;Prospectus&quot; shall mean (i) the prospectus included in any
Registration Statement, as amended or supplemented by any prospectus
supplement, with respect to the terms of the offering of any portion of the
Registrable Securities covered by such Registration Statement and by all other
amendments and supplements to the prospectus, including post-effective
amendments and all material incorporated by reference in such prospectus, and
(ii) any &quot;free writing prospectus&quot; as defined in Rule 163 under the Securities
Act.</p>



<p class=MsoNormal>&quot;Purchase Agreement&quot; shall mean the Securities Purchase
Agreement dated as of October 29, 2010 by and between the Company and the
Investor, as amended from time to time.</p>





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<p class=MsoNormal>&quot;Register,&quot; &quot;registered,&quot; and &quot;registration&quot; refer to a
registration made by preparing and filing a Registration Statement or similar
document in compliance with the Securities Act (as defined below), and the
declaration or ordering of effectiveness of such Registration Statement or
document.</p>

<p class=MsoNormal>&quot;Registrable Securities&quot; shall mean (i) the Shares and (ii)
any other securities issued or issuable with respect to or in exchange for
Registrable Securities; provided, that a security shall cease to be a
Registrable Security upon (A) sale pursuant to a Registration Statement or Rule
144, or (B) such security becoming eligible for sale by the Investor without
restriction pursuant to Rule 144.</p>



<p class=MsoNormal>&quot;Registration Statement&quot; shall mean any registration
statement of the Company filed under the Securities Act that covers the resale
of any of the Registrable Securities pursuant to the provisions of this
Agreement, amendments and supplements to such Registration Statement, including
post-effective amendments, all exhibits and all material incorporated by
reference in such Registration Statement.</p>



<p class=MsoNormal>&quot;Rule 144&quot; means Rule 144 promulgated by the SEC 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 SEC having substantially
the same effect as such Rule.</p>



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



<p class=MsoNormal>&quot;Securities Act&quot; means the Securities Act of 1933, as
amended, and the rules and regulations promulgated thereunder.</p>



<p class=MsoNormal>&quot;Shares&quot; means the shares of Common Stock to be issued to
the Investor under the Purchase Agreement.</p>



<p class=MsoNormal>&quot;Trading Day&quot; means (i) if the relevant stock or security is
listed or admitted for trading on The New York Stock Exchange, Inc., the Nasdaq
Global Market, the Nasdaq Capital Market, or any other national securities
exchange, a day on which such exchange is open for business; (ii) if the
relevant stock or security is quoted on a system of automated dissemination of
quotations of securities prices, a day on which trades may be effected through
such system; or (iii) if the relevant stock or security is not listed or
admitted for trading on any national securities exchange or quoted on any
system of automated dissemination of quotation of securities prices, a day on
which the relevant stock or security is traded in a regular way in the
over-the-counter market and for which a closing bid and a closing asked price
for such stock or security are available, shall mean a day, other than a
Saturday or Sunday, on which The New York Stock Exchange, Inc. is open for
trading.</p>



<p class=MsoNormal>2.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>Demand Registration</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; <u>Registration Statement</u>.&nbsp;
Following the closing of the purchase and sale of the Shares (the &quot;Closing&quot;),
the Investor shall have the right to require the Company, within 45 days of the
Investor's written request therefor, to prepare and file with the SEC a
Registration Statement on Form S-3 (or, if Form S-3 is not then available to
the Company, on such form of registration statement as is then available to
effect a registration for resale of the Registrable Securities), covering the
resale of the Registrable Securities. Subject to any SEC comments, each
Registration Statement filed pursuant to Section 2(a) shall include the plan of
distribution attached hereto as <u>Exhibit A</u>; provided however, that the
Investor shall not be named as an &quot;underwriter&quot; without the Investor's prior written
consent.&nbsp; The Registration Statement also shall cover, to the extent allowable
under the Securities Act and the rules promulgated thereunder (including Rule
416), such indeterminate number of additional shares of Common Stock resulting
from stock splits, stock dividends, or similar transactions with respect to the
Registrable Securities to which such Registration Statement relates.&nbsp; Such
Registration Statement (and each amendment or supplement thereto, and each
request for acceleration of effectiveness thereof) shall be provided in
accordance with Section 4(c) to the Investor and/or its counsel prior to its
filing or other submission.&nbsp; Notwithstanding anything else to the contrary
contained herein, the Investor shall only have the right to require the Company
to file, and the Company shall only be obligated to file, two Registration
Statements pursuant to this Section 2.</p>



<p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>Expenses</u>.&nbsp; The Company will
pay all expenses associated with each registration, including filing and
printing fees, the Company's counsel and accounting fees and expenses, costs
associated with clearing the Registrable Securities for sale under applicable
state securities laws, listing fees, fees and expenses of counsel to the
Investor, and the Investor's reasonable expenses in connection with the
registration, but excluding discounts, commissions, fees of underwriters,
selling brokers, dealer managers, or similar securities industry professionals
with respect to the Registrable Securities being sold.</p>



<p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (c)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>Effectiveness</u>.</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; (i)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; The Company shall use
best efforts to have the Registration Statement covering the resale of the
Registrable Securities declared effective by the SEC as soon as practicable and
prior to the earlier of (x) ten Business Days after the SEC shall have informed
the Company that no review of the Registration Statement will be made or that
the SEC has no further comments on the Registration Statement or (y) the 90th
day after the Registration Statement is filed. The Company shall notify the
Investor by facsimile or e-mail as promptly as practicable, and in any event,
within 48 hours, after (A) the Registration Statement is declared effective and
(B) the filing of any related Prospectus under Rule 424(b), at which time the
Company shall also provide the Investor with a copy of such related
Prospectus.&nbsp; After the Registration Statement has been declared effective by
the SEC, the Company shall take all actions, including without limitation
updating the Registration Statement as necessary, so that the Registrable
Securities may be sold pursuant to the Registration Statement without
restriction except as provided pursuant to subparagraph (ii) below.</p>





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<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; (ii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; For not more than thirty
consecutive days or for a total of not more than sixty days in any 12 month
period, the Company may, without the approval of the Investor, delay the
disclosure of material non-public information concerning the Company and
thereby suspend its obligations under paragraphs (a) and (c) of this Section 2
(as well as the right of the Investor to use any Prospectus included in any
Registration Statement contemplated by this Section) if the disclosure of such
material non-public information is not, in the good faith opinion of the
Company, in the best interests of the Company (an &quot;Allowed Delay&quot;); provided,
that the Company shall promptly (x) notify the Investor in writing of the
existence of (but in no event, without the prior written consent of the
Investor, shall the Company disclose to the Investor any of the facts or
circumstances regarding) material non-public information giving rise to an
Allowed Delay, (y) advise the Investor in writing to cease all sales under the
Registration Statement until the end of the Allowed Delay, and (z) use
commercially reasonable efforts to terminate an Allowed Delay as promptly as
practicable.</p>



<p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (d)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Notwithstanding any other provision of
this Agreement to the contrary, the Company shall not be in breach of this
Section 2 if a Registration Statement has not been filed, the effectiveness of
a Registration Statement has been delayed, or a Prospectus has been unavailable
as a result of (i) a failure by the Investor to promptly provide on request by
the Company any information required by this Agreement or requested by the SEC
(which upon notice to the Investor, the Investor fails to cure within a
reasonable period), (ii) the provision of inaccurate or incomplete information
by the Investor (which upon notice to the Investor, the Investor fails to cure
within a reasonable period), or (iii) a statement or determination of the SEC
that any provision of the rights of the Investor under this Agreement are
contrary to the provisions of the Securities Act (of which the Company shall
provide immediate notice to the Investor).</p>



<p class=MsoNormal>3.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>Piggyback Registration</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>Notice of Registration</u>.&nbsp; If
the Company proposes to register (including for this purpose a registration
effected by the Company for shareholders other than the Investor) any shares of
its Common Stock under the Securities Act in connection with a public offering
of such shares solely for cash (other than (i) a registration relating solely
to an employee benefit plan, (ii) a registration relating solely to a transaction
under Rule 145 of the Securities Act, (iii) a registration on any form not
available for registering the Registrable Securities for sale to the public, or
(iv) a registration in which the only Common Stock being registered is Common
Stock issuable upon conversion of debt securities which are also being
registered), the Company shall promptly, and in any event at least ten days
prior to the filing of the applicable registration statement, give written
notice to the Investor of its intention to effect such registration.&nbsp; Upon the
written request of the Investor given within ten days after the mailing of such
notice by the Company, the Company shall, subject to the provisions of this
Section 3, cause to be registered under the Securities Act all of the Registrable
Securities that the Investor has requested to be registered.</p>



<p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>Underwriting</u>.&nbsp; If a
registration of which the Company gives notice pursuant to Section 3(a) is for
a registered public offering involving an underwriting, the Company shall so advise
the Investor as part of its written notice.&nbsp; In such event, the right of the
Investor to registration pursuant to this Section 3 shall be conditioned upon
the Investor's participation in such underwriting, and the inclusion of
Registrable Securities in the underwriting shall be limited to the extent
provided herein.</p>



<p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (c)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>Underwriting Agreement</u>.&nbsp; If
the Investor proposes to distribute Registrable Securities through such
underwriting pursuant to this Section 3, the Investor, together with the
Company and all other shareholders distributing their securities through such
underwriting, shall enter into an underwriting agreement in customary form with
the managing underwriter selected for such underwriting by the Company.</p>





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<p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (d)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>Limitation of Underwritten Securities</u>.&nbsp;
If the applicable registration is initiated as a primary underwritten offering
on behalf of the Company and the managing underwriter advises the Company in
writing that in its opinion the number of shares of Common Stock proposed to be
included in such registration exceeds the number of shares of Common Stock
which can be sold in such offering, and/or that the number of shares of Common
Stock proposed to be included in any such registration would adversely affect
the price per share of the Common Stock to be sold in such offering, the
Company shall include in such registration (i) first, the number of shares of
Common Stock that the Company proposes to sell; and (ii) second, the number of
Registrable Securities to be included therein by the Investor.&nbsp; Notwithstanding
the foregoing, in no event shall (x) the number of Registrable Securities in
the offering be reduced unless all other securities (other than securities to
be sold by the Company) are first entirely excluded from the offering, or (y) the
number of Registrable Securities included in the offering be reduced below 25
percent of the total number of securities included in such offering.</p>



<p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (e)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>Right to Terminate Registration</u>.&nbsp;
The Company shall have the right to terminate or withdraw any registration
initiated by it under this Section 3 prior to the effectiveness of such
registration whether or not the Investor has elected to include any Registrable
Securities in such registration and shall promptly notify the Investor of such
termination or withdrawal.</p>



<p class=MsoNormal>4.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>Company Obligations</u>.&nbsp; The Company will use
commercially reasonable efforts to effect the registration of the Registrable
Securities in accordance with the terms hereof, and pursuant thereto the
Company will, as expeditiously as practicable:</p>



<p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Use commercially reasonable efforts
to cause the Registration Statement to become effective after 4:00 p.m. Eastern
time (the date the Registration Statement is declared effective shall be
referred to as the &quot;Effective Date&quot;) and to remain continuously effective for a
period that will terminate upon the earlier of (i) the date on which all
Registrable Securities covered by such Registration Statement, as amended from
time to time, have been sold, and (ii) the date on which all Registrable
Securities covered by such Registration Statement may be sold without
restriction pursuant to Rule 144 (the &quot;Effectiveness Period&quot;) and advise the
Investor in writing when the Effectiveness Period has expired;</p>



<p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Prepare and file with the SEC such
amendments and post-effective amendments to the Registration Statement and the
Prospectus as may be necessary to keep the Registration Statement effective for
the Effectiveness Period and to comply with the provisions of the Securities
Act and the Exchange Act with respect to the distribution of all of the
Registrable Securities covered thereby;</p>



<p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (c)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Provide copies to and permit counsel
designated by the Investor, if any, in the selling securityholder questionnaire
attached hereto as <u>Exhibit B</u> (the &quot;Selling Securityholder Questionnaire&quot;)
to review the Registration Statement and all amendments and supplements thereto
no fewer than seven days prior to their filing with the SEC and not file any
document to which such counsel reasonably objects;</p>





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<p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (d)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Furnish to the Investor and its legal
counsel, if any, designated in the Selling Securityholder Questionnaire (i)
promptly after the same is prepared and publicly distributed, filed with the
SEC, or received by the Company (but not later than two Business Days after the
filing date, receipt date, or sending date, as the case may be) one copy of the
Registration Statement and any amendment thereto, each preliminary prospectus
and Prospectus and each amendment or supplement thereto, and each letter
written by or on behalf of the Company to the SEC or the staff of the SEC, and
each item of correspondence from the SEC or the staff of the SEC, in each case
relating to such Registration Statement (other than any portion of any thereof
which contains information for which the Company has sought confidential
treatment), and (ii) such number of copies of a Prospectus, including a
preliminary prospectus, and all amendments and supplements thereto and such
other documents as each Investor may reasonably request in order to facilitate
the disposition of the Registrable Securities owned by the Investor that are
covered by the related Registration Statement;</p>



<p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (e)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Use commercially reasonable efforts
to (i) prevent the issuance of any stop order or other suspension of
effectiveness and, (ii) if such order is issued, obtain the withdrawal of any
such order at the earliest possible moment;</p>



<p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (f)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Prior to any public offering of
Registrable Securities, use commercially reasonable efforts to register or
qualify or cooperate with the Investor and its legal counsel, if any,
designated in the Selling Securityholder Questionnaire in connection with the
registration or qualification of such Registrable Securities for offer and sale
under the securities or blue sky laws of such jurisdictions requested by the
Investor and do any and all other commercially reasonable acts or things
necessary or advisable to enable the distribution in such jurisdictions of the
Registrable Securities; provided, however, that the Company shall not be
required in connection therewith or as a condition thereto to (i) qualify to do
business in any jurisdiction where it would not otherwise be required to
qualify but for this Section 4(f), (ii) subject itself to general taxation in
any jurisdiction where it would not otherwise be so subject but for this
Section 4(f), or (iii) file a general consent to service of process in any such
jurisdiction;</p>



<p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (g)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Use commercially reasonable efforts
to cause all Registrable Securities to be listed on each securities exchange,
interdealer quotation system, or other market on which similar securities
issued by the Company are then listed;</p>



<p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (h)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Immediately notify the Investor, at
any time prior to the end of the Effectiveness Period, upon discovery that, or
upon the happening of any event as a result of which, the Prospectus includes
an untrue statement of a material fact or omits to state any material fact
required to be stated therein or necessary to make the statements therein not
misleading in light of the circumstances then existing, and promptly prepare, file
with the SEC, and furnish to such holder a supplement to or an amendment of
such Prospectus as may be necessary so that such Prospectus shall not include
an untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading in light of the circumstances then existing; and</p>





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<p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (i)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Otherwise use commercially
reasonable efforts to comply with all applicable rules and regulations of the
SEC under the Securities Act and the Exchange Act, including, without
limitation, Rule 172 under the Securities Act, file any final Prospectus,
including any supplement or amendment thereof, with the SEC pursuant to Rule
424 under the Securities Act prior to 9:30 a.m. Eastern time on the Trading Day
immediately following the Effective Date, promptly inform the Investors in
writing if, at any time during the Effectiveness Period, the Company does not
satisfy the conditions specified in Rule 172 and, as a result thereof, the
Investor is required to deliver a Prospectus in connection with any disposition
of Registrable Securities and take such other actions as may be reasonably
necessary to facilitate the registration of the Registrable Securities
hereunder; and make available to its security holders, as soon as reasonably
practicable, but not later than the Availability Date (as defined below), an
earnings statement covering a period of at least 12 months, beginning after the
effective date of each Registration Statement, which earnings statement shall
satisfy the provisions of Section 11(a) of the Securities Act, including Rule
158 promulgated thereunder.&nbsp; For the purpose of this subsection 4(i),
&quot;Availability Date&quot; means the 45th day following the end of the fourth fiscal
quarter that includes the effective date of such Registration Statement, except
that, if such fourth fiscal quarter is the last quarter of the Company's fiscal
year, &quot;Availability Date&quot; means the 90th day after the end of such fourth
fiscal quarter.</p>



<p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (j)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; With a view to making available to
the Investor the benefits of Rule 144 (or its successor rule) and any other
rule or regulation of the SEC that may at any time permit the Investor to sell
shares of Common Stock to the public without registration, the Company covenants
and agrees to:&nbsp; (i) make and keep public information available, as those terms
are understood and defined in Rule 144, until the earlier of (A) six months
after such date as all of the Registrable Securities may be sold without
restriction by the holders thereof pursuant to Rule 144 or any other rule of
similar effect or (B) such date as all of the Registrable Securities shall have
been resold; (ii) file with the SEC in a timely manner all reports and other
documents required of the Company under the Exchange Act; and (iii) furnish to
the Investor upon request, as long as the Investor owns any Registrable
Securities, (A) a written statement by the Company that it has complied with
the reporting requirements of the Exchange Act, (B) a copy of the Company's most
recent Annual Report on Form 10-K or Quarterly Report on Form 10-Q, and (C)
such other information as may be reasonably requested in order to avail the
Investor of any rule or regulation of the SEC that permits the selling of any
such Registrable Securities without registration.</p>



<p class=MsoNormal>5.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>Due Diligence Review; Information</u>.&nbsp; The
Company shall make available, during normal business hours, for inspection and
review by the Investor, advisors to and representatives of the Investor (who
may or may not be affiliated with the Investor and who are reasonably
acceptable to the Company), all financial and other records, all SEC Reports
(as defined in the Purchase Agreement) and other filings with the SEC, and all
other corporate documents and properties of the Company as may be reasonably
necessary for the purpose of such review, and cause the Company's officers,
directors, and employees, within a reasonable time period, to supply all such
information reasonably requested by the Investor or any such representative,
advisor, or underwriter in connection with such Registration Statement
(including, without limitation, in response to all questions and other
inquiries reasonably made or submitted by any of them), prior to and from time
to time after the filing and effectiveness of the Registration Statement for
the sole purpose of enabling the Investor and its representatives, advisors,
and underwriters and their respective accountants and attorneys to conduct
initial and ongoing due diligence with respect to the Company and the accuracy
of such Registration Statement.</p>





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<p class=MsoNormal>The Company may disclose material nonpublic information to
the Investor, or to advisors to or representatives of the Investor, subject to
the terms of the Confidentiality Agreement.&nbsp; If no such Confidentiality Agreement
is then in effect at the time, prior to disclosure of such material nonpublic
information, the Company shall identify such information as being material
nonpublic information and provide the Investor or such advisors and
representatives with the opportunity to accept or refuse to accept such
material nonpublic information for review, and in such case whereby the
Investor chooses to accept such information, the Investor shall enter into an
appropriate confidentiality agreement with the Company with respect thereto.</p>



<p class=MsoNormal>6.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>Obligations of the Investor</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 Investor shall furnish to the
Company a Selling Securityholder Questionnaire and such additional information
regarding itself, the Registrable Securities held by it, and the intended
method of disposition of the Registrable Securities held by it, as shall be
reasonably required to effect the registration of such Registrable Securities,
and shall execute such documents in connection with such registration as the
Company may reasonably request.&nbsp; At least ten Business Days prior to the first
anticipated filing date of a Registration Statement, the Company shall notify
the Investor of the information the Company requires from the Investor, to the
extent not included in the Selling Securityholder Questionnaire, if the
Investor elects to have any of the Registrable Securities included in the
Registration Statement.&nbsp; The Investor shall provide such information to the
Company at least two Business Days prior to the first anticipated filing date
of such Registration Statement if the Investor elects to have any of the
Registrable Securities included in the Registration Statement.</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, by its acceptance of
the Registrable Securities agrees to cooperate with the Company as reasonably
requested by the Company in connection with the preparation and filing of a
Registration Statement hereunder, unless the Investor has notified the Company
in writing of its election to exclude all of its Registrable Securities from
such Registration Statement.</p>



<p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (c)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; The Investor agrees that, upon
receipt of any notice from the Company of either (i) the commencement of an
Allowed Delay pursuant to Section 2(c)(ii), or (ii) the happening of an event
pursuant to Section 4(h) hereof, the Investor will immediately discontinue disposition
of Registrable Securities pursuant to the Registration Statement covering such
Registrable Securities, until the Investor is advised by the Company that such
dispositions may again be made.</p>



<p class=MsoNormal>7.&nbsp;&nbsp;&nbsp;&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; <u>Indemnification by the Company</u>.&nbsp;
The Company will indemnify and hold harmless 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 (or actions
in respect thereof) arise out of or are based upon: (i) any untrue statement or
omission or alleged untrue statement or omission of any material fact in any
Registration Statement, any preliminary Prospectus or final Prospectus, or any
amendment or supplement thereof required to be stated therein or necessary to
make the statements therein not misleading; (ii) any blue sky application or
other document executed by the Company specifically for that purpose or based
upon written information furnished by the Company filed in any state or other
jurisdiction in order to qualify any or all of the Registrable Securities under
the securities laws thereof (any such application, document, or information
herein called a &quot;Blue Sky Application&quot;); (iii) any violation by the Company or
its agents of any rule or regulation promulgated under the Securities Act
applicable to the Company or its agents and relating to action or inaction
required of the Company in connection with such registration; or (iv) any
failure to register or qualify the Registrable Securities included in any such
registration in any state where the Company or its agents has affirmatively
undertaken or agreed in writing that the Company will undertake such
registration or qualification on an Investor's behalf and will reimburse such
Investor and each such indemnified party for any legal or other expenses
reasonably incurred by them in connection with investigating or defending any
such loss, claim, damage, liability, or action; provided, however, that the
Company will not be liable in any such case if and to the extent that any such
loss, claim, damage, or liability arises out of or is based upon (i) the
Investor's failure to comply with the prospectus delivery requirements of the
Securities Act at any time when the Company does not meet the conditions for
use of Rule 172, has advised the Investor in writing that the Company does not
meet such conditions and that therefore the Investor is required to deliver a
Prospectus in connection with any sale or other disposition of Registrable
Securities and has provided the Investor with a current Prospectus for such
use, (ii) an untrue statement or alleged untrue statement or omission or
alleged omission so made in conformity with information furnished by the
Investor or any such controlling person in writing specifically for use in such
Registration Statement or Prospectus, or (iii) the use by the Investor of an
outdated or defective Prospectus after the Company has notified the Investor
that such Prospectus is outdated or defective and the use of a corrected or
updated Prospectus would have avoided such losses, claims, damages,
liabilities, or expenses.</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>Indemnification by the Investor</u>.&nbsp;
The Investor agrees to indemnify and hold harmless, to the fullest extent
permitted by law, the Company, its directors, officers, employees,
shareholders, and each person who controls the Company (within the meaning of
the Securities Act) against any losses, claims, damages, liabilities, and
expense (including reasonable attorneys' fees) resulting from (i) the
Investor's failure to comply with the prospectus delivery requirements of the
Securities Act at any time when the Company does not meet the conditions for
use of Rule 172, has advised the Investor in writing that the Company does not
meet such conditions and that therefore the Investor is required to deliver a
Prospectus in connection with any sale or other disposition of Registrable
Securities, and has provided the Investor with a current Prospectus for such
use, (ii) the use by the Investor of an outdated or defective Prospectus after
the Company has notified the Investor that such Prospectus is outdated or
defective and the use of a corrected or updated Prospectus would have avoided
such losses, claims, damages, liabilities, or expenses, and (iii) any untrue
statement of a material fact or any omission of a material fact required to be
stated in the Registration Statement or Prospectus or preliminary Prospectus or
amendment or supplement thereto or necessary to make the statements therein not
misleading, to the extent, but only to the extent, that such untrue statement
or omission is contained in any information furnished in writing by the
Investor to the Company specifically for inclusion in such Registration
Statement or Prospectus or amendment or supplement thereto.&nbsp; In no event shall
the liability of the Investor be greater in amount than the dollar amount of
the proceeds (net of all expense paid by the Investor in connection with any
claim relating to this Section 7 and the amount of any damages the Investor has
otherwise been required to pay by reason of such untrue statement or omission)
received by the Investor upon the sale of the Registrable Securities included
in the Registration Statement giving rise to such indemnification obligation.</p>



<p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (c)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>Conduct of Indemnification
Proceedings</u>.&nbsp; Any person entitled to indemnification hereunder shall (i)
give prompt notice to the indemnifying party of any claim with respect to which
it seeks indemnification and (ii) permit such indemnifying party to assume the
defense of such claim with counsel reasonably satisfactory to the indemnified
party; provided that any person entitled to indemnification hereunder shall
have the right to employ separate counsel and to participate in the defense of
such claim, but the fees and expenses of such counsel shall be at the expense
of such person unless (x) the indemnifying party has agreed to pay such fees or
expenses, or (y) the indemnifying party shall have failed to assume the defense
of such claim and employ counsel reasonably satisfactory to such person, or (z)
in the reasonable judgment of any such person, based upon written advice of its
counsel, a conflict of interest exists between such person and the indemnifying
party with respect to such claims (in which case, if the person notifies the
indemnifying party in writing that such person elects to employ separate
counsel at the expense of the indemnifying party, the indemnifying party shall
not have the right to assume the defense of such claim on behalf of such
person); and provided, further, that the failure of any indemnified party to
give notice as provided herein shall not relieve the indemnifying party of its
obligations hereunder, except to the extent that such failure to give notice
shall materially adversely affect the indemnifying party in the defense of any
such claim or litigation.&nbsp; It is understood that the indemnifying party shall
not, in connection with any proceeding in the same jurisdiction, be liable for
fees or expenses of more than one separate firm of attorneys at any time for
all such indemnified parties.&nbsp; No indemnifying party will, except with the
consent of the indemnified party, consent to entry of any judgment or enter
into any settlement that does not include as an unconditional term thereof the
giving by the claimant or plaintiff to such indemnified party of a release from
all liability in respect of such claim or litigation.</p>



<p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (d)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>Contribution</u>.&nbsp; If for any
reason the indemnification provided for in the preceding paragraphs (a) and (b)
is unavailable to an indemnified party or insufficient to hold it harmless,
other than as expressly specified therein, then the indemnifying party shall
contribute to the amount paid or payable by the indemnified party as a result
of such loss, claim, damage, or liability in such proportion as is appropriate
to reflect the relative fault of the indemnified party and the indemnifying
party, as well as any other relevant equitable considerations.&nbsp; No person
guilty of fraudulent misrepresentation within the meaning of Section 11(f) of the
Securities Act shall be entitled to contribution from any person not guilty of
such fraudulent misrepresentation.&nbsp; In no event shall the contribution
obligation of a holder of Registrable Securities be greater in amount than the
dollar amount of the proceeds (net of all expenses paid by such holder in
connection with any claim relating to this Section 7 and the amount of any
damages such holder has otherwise been required to pay by reason of such untrue
or alleged untrue statement or omission or alleged omission) received by it
upon the sale of the Registrable Securities giving rise to such contribution
obligation.</p>





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<p class=MsoNormal>8.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>Miscellaneous</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>Amendments and Waivers</u>.&nbsp; This
Agreement may be amended only by a writing signed by the Company and the
Investor.&nbsp; The Company may take any action herein prohibited, or omit to
perform any act herein required to be performed by it, only if the Company
shall have obtained the written consent of the Investor to such amendment,
action, or omission to act.</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; <u>Notices</u>.&nbsp; All notices and
other communications provided for or permitted hereunder shall be made as set
forth in the Purchase Agreement.</p>



<p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (c)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>Assignments and Transfers by the
Investor</u>.&nbsp; The provisions of this Agreement shall be binding upon and inure
to the benefit of the Investor and its respective successors and assigns.&nbsp; The
Investor may transfer or assign, in whole or from time to time in part, to one
or more persons its rights hereunder in connection with the transfer of
Registrable Securities by the Investor to such person, provided that the
Investor complies with all laws applicable thereto and provides written notice
of assignment to the Company promptly after such assignment is effected.</p>



<p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (d)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>Assignments and Transfers by the
Company</u>.&nbsp; This Agreement may not be assigned by the Company (whether by
operation of law or otherwise) without the prior written consent of the
Investor, provided, however, that the Company may assign its rights and
delegate its duties hereunder to any surviving or successor corporation in connection
with a merger or consolidation of the Company with another corporation, or a
sale, transfer, or other disposition of all or substantially all of the
Company's assets to another corporation, without the prior written consent of
the Investor, after notice duly given by the Company to the Investor.</p>



<p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (e)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>Benefits of the Agreement</u>.&nbsp;
The terms and conditions of this Agreement shall inure to the benefit of and be
binding upon the respective permitted successors and assigns of the parties.&nbsp;
Nothing in this Agreement, express or implied, is intended to confer upon any
party other than the parties hereto or their respective successors and assigns
any rights, remedies, obligations, or liabilities under or by reason of this
Agreement, except as expressly provided in this Agreement.</p>



<p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (f)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>Counterparts; Fax and Electronic
Signature</u>.&nbsp; This Agreement may be executed in two or more counterparts,
each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument.&nbsp; This Agreement may also be executed
via facsimile or electronic signature, which shall be deemed an original.</p>



<p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (g)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>Titles and Subtitles</u>.&nbsp; The
titles and subtitles used in this Agreement are used for convenience only and
are not to be considered in construing or interpreting this Agreement.</p>

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



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<p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (h)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <u>Severability</u>.&nbsp; Any provision
of this Agreement that is prohibited or unenforceable in any jurisdiction
shall, as to such jurisdiction, be ineffective to the extent of such
prohibition or unenforceability without invalidating the remaining provisions
hereof but shall be interpreted as if it were written so as to be enforceable
to the maximum extent permitted by applicable law, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.&nbsp; To the extent
permitted by applicable law, the parties hereby waive any provision of law
which renders any provisions hereof prohibited or unenforceable in any respect.</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>Further Assurances</u>.&nbsp; The
parties shall execute and deliver all such further instruments and documents
and take all such other actions as may reasonably be required to carry out the
transactions contemplated hereby and to evidence the fulfillment of the
agreements herein contained.</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>Entire Agreement</u>.&nbsp; This
Agreement is intended by the parties as a final expression of their agreement
and intended to be a complete and exclusive statement of the agreement and
understanding of the parties hereto in respect of the subject matter contained
herein.&nbsp; This Agreement supersedes all prior agreements and understandings
between the parties with respect to such subject matter.</p>



<p class=MsoNormal>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (k)&nbsp;&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; </p>



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

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<p class=MsoNormal>IN WITNESS WHEREOF, the parties have executed this Agreement
or caused their duly authorized officers to execute this Agreement as of the
date first above written.</p>

<table class=MsoNormalTable border=0 cellspacing=0 cellpadding=0
 style='margin-left:5.4pt;border-collapse:collapse'>
 <tr>
  <td width=150 valign=top style='width:112.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=474 valign=top style='width:355.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>COMPANY:</p>
  </td>
 </tr>
 <tr>
  <td width=150 valign=top style='width:112.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=474 valign=top style='width:355.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>GOOD TIMES RESTAURANTS INC.</p>
  </td>
 </tr>
 <tr>
  <td width=150 valign=top style='width:112.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal><u>&nbsp;</u></p>
  </td>
  <td width=474 valign=top style='width:355.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal><u>&nbsp;</u></p>
  </td>
 </tr>
 <tr>
  <td width=150 valign=top style='width:112.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=474 valign=top style='width:355.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>By:__________________________________ </p>
  </td>
 </tr>
 <tr>
  <td width=150 valign=top style='width:112.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=474 valign=top style='width:355.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>Name: Boyd E. Hoback</p>
  </td>
 </tr>
 <tr>
  <td width=150 valign=top style='width:112.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=474 valign=top style='width:355.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>Title: President &amp; CEO</p>
  </td>
 </tr>
 <tr>
  <td width=150 valign=top style='width:112.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=474 valign=top style='width:355.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
 </tr>
 <tr>
  <td width=150 valign=top style='width:112.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=474 valign=top style='width:355.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>INVESTOR:</p>
  </td>
 </tr>
 <tr>
  <td width=150 valign=top style='width:112.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=474 valign=top style='width:355.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>SMALL ISLAND INVESTMENTS LIMITED</p>
  </td>
 </tr>
 <tr>
  <td width=150 valign=top style='width:112.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=474 valign=top style='width:355.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
 </tr>
 <tr>
  <td width=150 valign=top style='width:112.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=474 valign=top style='width:355.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>By:<u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </u></p>
  </td>
 </tr>
 <tr>
  <td width=150 valign=top style='width:112.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=474 valign=top style='width:355.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>Name:<u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </u></p>
  </td>
 </tr>
 <tr>
  <td width=150 valign=top style='width:112.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=474 valign=top style='width:355.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>Title:<u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </u></p>
  </td>
 </tr>
 <tr>
  <td width=150 valign=top style='width:112.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=474 valign=top style='width:355.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
 </tr>
 <tr>
  <td width=150 valign=top style='width:112.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=474 valign=top style='width:355.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>By:<u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </u></p>
  </td>
 </tr>
 <tr>
  <td width=150 valign=top style='width:112.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=474 valign=top style='width:355.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>Name:<u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </u></p>
  </td>
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 <tr>
  <td width=150 valign=top style='width:112.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=474 valign=top style='width:355.5pt;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>Title:<u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </u></p>
  </td>
 </tr>
 <tr>
  <td width=150 valign=top style='width:112.5pt;padding:0in 5.4pt 0in 5.4pt'>

  </td>
  <td width=474 valign=top style='width:355.5pt;padding:0in 5.4pt 0in 5.4pt'>

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







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<p class=MsoNormal align=right style='text-align:right'><u>Exhibit A</u></p>

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

<p class=MsoNormal align=center style='text-align:center'><b>Plan of
Distribution</b></p>



<p class=MsoNormal>The selling shareholders, which as used herein includes
donees, pledgees, transferees, or other successors-in-interest selling shares
of common stock or interests in shares of common stock received after the date
of this prospectus from a selling shareholder as a gift, pledge, partnership
distribution, or other transfer, may, from time to time, sell, transfer, or
otherwise dispose of any or all of their shares of common stock or interests in
shares of common stock on any stock exchange, market, or trading facility on
which the shares are traded or in private transactions.&nbsp; These dispositions may
be at fixed prices, at prevailing market prices at the time of sale, at prices
related to the prevailing market price, at varying prices determined at the
time of sale, or at negotiated prices.</p>



<p class=MsoNormal>The selling shareholders may use any one or more of the
following methods when disposing of shares or interests therein:</p>



<p class=MsoListParagraphCxSpFirst style='text-indent:-.25in'>&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
ordinary brokerage transactions and transactions in which the
broker-dealer solicits purchasers;</p>

<p class=MsoListParagraphCxSpMiddle style='text-indent:-.25in'>&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
block trades in which the broker-dealer will attempt to sell the
shares as agent, but may position and resell a portion of the block as
principal to facilitate the transaction;</p>

<p class=MsoListParagraphCxSpMiddle style='text-indent:-.25in'>&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
purchases by a broker-dealer as principal and resale by the
broker-dealer for its account;</p>

<p class=MsoListParagraphCxSpMiddle style='text-indent:-.25in'>&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
an exchange distribution in accordance with the rules of the
applicable exchange;</p>

<p class=MsoListParagraphCxSpMiddle style='text-indent:-.25in'>&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
privately negotiated transactions;</p>

<p class=MsoListParagraphCxSpMiddle style='text-indent:-.25in'>&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
short sales effected after the date the registration statement of
which this Prospectus is a part is declared effective by the SEC;</p>

<p class=MsoListParagraphCxSpMiddle style='text-indent:-.25in'>&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
through the writing or settlement of options or other hedging
transactions, whether through an options exchange or otherwise;</p>

<p class=MsoListParagraphCxSpMiddle style='text-indent:-.25in'>&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
broker-dealers may agree with the selling shareholders to sell a
specified number of such shares at a stipulated price per share; </p>

<p class=MsoListParagraphCxSpMiddle style='text-indent:-.25in'>&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
a combination of any such methods of sale; and</p>

<p class=MsoListParagraphCxSpLast style='text-indent:-.25in'>&#149;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
any other method permitted by applicable law.</p>



<p class=MsoNormal>The selling shareholders may, from time to time, pledge or
grant a security interest in some or all of the shares of common stock owned by
them and, if they default in the performance of their secured obligations, the
pledgees or secured parties may offer and sell the shares of common stock, from
time to time, under this prospectus, or under an amendment to this prospectus
under Rule 424(b)(3) or other applicable provision of the Securities Act
amending the list of selling shareholders to include the pledgee, transferee,
or other successor in interest as a selling shareholder under this prospectus.&nbsp;
The selling shareholders also may transfer the shares of common stock in other
circumstances, in which case the transferees, pledges, or other successors in
interest will be the selling beneficial owners for purposes of this prospectus.</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>In connection with the sale of our common stock or interests
therein, the selling shareholders may enter into hedging transactions with
broker-dealers or other financial institutions, which may in turn engage in
short sales of the common stock in the course of hedging the positions they
assume.&nbsp; The selling shareholders may also sell shares of our common stock
short and deliver these securities to close out their short positions, or loan
or pledge the common stock to broker-dealers that in turn may sell these
securities.&nbsp; The selling shareholders may also enter into option or other
transactions with broker-dealers or other financial institutions or the creation
of one or more derivative securities which require the delivery to such
broker-dealer or other financial institution of shares offered by this
prospectus, which shares such broker-dealer or other financial institution may
resell pursuant to this prospectus (as supplemented or amended to reflect such
transaction).</p>



<p class=MsoNormal>The aggregate proceeds to the selling shareholders from the
sale of the common stock offered by them will be the purchase price of the
common stock less discounts or commissions, if any.&nbsp; Each of the selling
shareholders reserves the right to accept and, together with their agents from
time to time, to reject, in whole or in part, any proposed purchase of common
stock to be made directly or through agents.&nbsp; We will not receive any of the proceeds
from this offering. </p>



<p class=MsoNormal>The selling shareholders also may resell all or a portion of
the shares in open market transactions in reliance upon Rule 144 under the
Securities Act, provided that they meet the criteria and conform to the
requirements of that rule.</p>



<p class=MsoNormal>Any underwriters, broker-dealers, or agents that participate
in the sale of the common stock or interests therein may be &quot;underwriters&quot;
within the meaning of Section 2(11) of the Securities Act.&nbsp; Any discounts,
commissions, concessions, or profit they earn on any resale of the shares may
be underwriting discounts and commissions under the Securities Act.</p>



<p class=MsoNormal>To the extent required, the shares of our common stock to be
sold, the names of the selling shareholders, the respective purchase prices and
public offering prices, the names of any agent, dealer, or underwriter, and any
applicable commissions or discounts with respect to a particular offer will be
set forth in an accompanying prospectus supplement or, if appropriate, a
post-effective amendment to the registration statement that includes this
prospectus.</p>

<p class=MsoNormal>In order to comply with the securities laws of some states,
if applicable, the common stock may be sold in these jurisdictions only through
registered or licensed brokers or dealers.&nbsp; In addition, in some states the
common stock may not be sold unless it has been registered or qualified for
sale or an exemption from registration or qualification requirements is
available and is complied with.</p>



<p class=MsoNormal>We have advised the selling shareholders that the anti-manipulation
rules of Regulation M under the Exchange Act may apply to sales of shares in
the market and to the activities of the selling shareholders and their
affiliates.&nbsp; In addition, to the extent applicable we will make copies of this
prospectus (as it may be supplemented or amended from time to time) available
to the selling shareholders for the purpose of satisfying the prospectus
delivery requirements of the Securities Act.&nbsp; The selling shareholders may
indemnify any broker-dealer that participates in transactions involving the
sale of the shares against certain liabilities, including liabilities arising
under the Securities Act.</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>We have agreed to indemnify the selling shareholders against
liabilities, including liabilities under the Securities Act and state
securities laws, relating to the registration of the shares offered by this
prospectus.</p>



<p class=MsoNormal>We have agreed with the selling shareholders to keep the
registration statement of which this prospectus constitutes a part effective
until the earlier of (1) such time as all of the shares covered by this
prospectus have been disposed of pursuant to and in accordance with the
registration statement or (2) the date on which the shares may be sold without
restriction pursuant to Rule 144 of the Securities Act.</p>







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

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

</div>



</div>

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<div class=WordSection4>









<p class=MsoNormal align=right style='text-align:right'><u>Exhibit B</u></p>



<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>Selling
Securityholder Questionnaire</b></p>



<p class=MsoNormal>The undersigned beneficial owner (the &quot;Selling
Securityholder&quot;) of common stock (&quot;Common Stock&quot;) of Good Times Restaurants
Inc. (the &quot;Company&quot;) understands that the Company has filed or intends to file
with the Securities and Exchange Commission (&quot;SEC&quot;) one or more Registration
Statements for the registration and resale of the Registrable Securities, in
accordance with the terms of the Registration Rights Agreement, dated as of
___________, 2010 (the &quot;Registration Rights Agreement&quot;), among the Company and
the Investor named therein.&nbsp; A copy of the Registration Rights Agreement is
available from the Company upon request at the address set forth below.&nbsp; All
capitalized terms used and not otherwise defined herein shall have the meanings
ascribed thereto in the Registration Rights Agreement.</p>

<p class=MsoNormal>The undersigned hereby provides the following information to
the Company and represents and warrants that such information is accurate:</p>

<p class=MsoNormal>QUESTIONNAIRE</p>

<p class=MsoNormal>Name.</p>

<p class=MsoNormal>Full legal name of Selling Securityholder:</p>

<table class=MsoNormalTable border=0 cellspacing=0 cellpadding=0 width=536
 style='width:402.0pt;margin-left:77.4pt;border-collapse:collapse'>
 <tr>
  <td width=536 valign=top style='width:402.0pt;border:none;border-bottom:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt'>

  </td>
 </tr>
 <tr>
  <td width=536 valign=top style='width:402.0pt;border:none;padding:0in 5.4pt 0in 5.4pt'>

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



<p class=MsoNormal>Full legal name of registered Holder (if not the same as (a)
above) through which Registrable Securities listed in Item 3 below are held:</p>

<table class=MsoNormalTable border=0 cellspacing=0 cellpadding=0 width=534
 style='width:400.5pt;margin-left:77.4pt;border-collapse:collapse'>
 <tr>
  <td width=534 valign=top style='width:400.5pt;border:none;border-bottom:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt'>

  </td>
 </tr>
 <tr>
  <td width=534 valign=top style='width:400.5pt;border:none;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>`</p>
  </td>
 </tr>
</table>



<p class=MsoNormal>Full legal name of Natural Control Person (which means a
natural person who directly or indirectly alone or with others has power to
vote or dispose of the securities covered by the questionnaire):</p>

<table class=MsoNormalTable border=0 cellspacing=0 cellpadding=0 width=534
 style='width:400.5pt;margin-left:77.4pt;border-collapse:collapse'>
 <tr>
  <td width=534 valign=top style='width:400.5pt;border:none;border-bottom:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt'>

  </td>
 </tr>
 <tr>
  <td width=534 valign=top style='width:400.5pt;border:none;padding:0in 5.4pt 0in 5.4pt'>

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

<p class=MsoNormal>State of organization or domicile of Selling Securityholder:</p>

<table class=MsoNormalTable border=0 cellspacing=0 cellpadding=0 width=536
 style='width:402.0pt;margin-left:77.4pt;border-collapse:collapse'>
 <tr>
  <td width=536 valign=top style='width:402.0pt;border:none;border-bottom:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt'>

  </td>
 </tr>
 <tr>
  <td width=536 valign=top style='width:402.0pt;border:none;padding:0in 5.4pt 0in 5.4pt'>

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



<p class=MsoNormal>Address for Notices to Selling Securityholder:</p>

<table class=MsoNormalTable border=0 cellspacing=0 cellpadding=0 width=624
 style='width:6.5in;margin-left:5.4pt;border-collapse:collapse'>
 <tr>
  <td width=624 valign=top style='width:6.5in;border:none;border-bottom:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt'>

  </td>
 </tr>
 <tr>
  <td width=624 valign=top style='width:6.5in;border:none;border-bottom:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt'>

  </td>
 </tr>
 <tr>
  <td width=624 valign=top style='width:6.5in;border:none;border-bottom:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt'>

  </td>
 </tr>
 <tr>
  <td width=624 valign=top style='width:6.5in;border:none;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>Telephone:</p>
  </td>
 </tr>
 <tr>
  <td width=624 valign=top style='width:6.5in;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>Fax:</p>
  </td>
 </tr>
 <tr>
  <td width=624 valign=top style='width:6.5in;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>Contact Person:</p>
  </td>
 </tr>
 <tr>
  <td width=624 valign=top style='width:6.5in;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>Email:</p>
  </td>
 </tr>
</table>

<p class=MsoNormal>Note:&nbsp;&nbsp; By providing an email address, the undersigned
hereby consents to receipt of notices by email.</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>Any such notice shall also be sent to the following address
(which shall not constitute notice):</p>

<table class=MsoNormalTable border=0 cellspacing=0 cellpadding=0 width=624
 style='width:6.5in;margin-left:5.4pt;border-collapse:collapse'>
 <tr>
  <td width=624 valign=top style='width:6.5in;border:none;border-bottom:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt'>

  </td>
 </tr>
 <tr>
  <td width=624 valign=top style='width:6.5in;border:none;border-bottom:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt'>

  </td>
 </tr>
 <tr>
  <td width=624 valign=top style='width:6.5in;border:none;border-bottom:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt'>

  </td>
 </tr>
 <tr>
  <td width=624 valign=top style='width:6.5in;border:none;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>Telephone:</p>
  </td>
 </tr>
 <tr>
  <td width=624 valign=top style='width:6.5in;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>Fax:</p>
  </td>
 </tr>
 <tr>
  <td width=624 valign=top style='width:6.5in;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>Contact Person:</p>
  </td>
 </tr>
 <tr>
  <td width=624 valign=top style='width:6.5in;padding:0in 5.4pt 0in 5.4pt'>
  <p class=MsoNormal>Email:</p>
  </td>
 </tr>
</table>



<p class=MsoNormal>Beneficial Ownership of Registrable Securities:</p>

<p class=MsoNormal>Type and principal amount of Registrable Securities
beneficially owned:</p>

<table class=MsoNormalTable border=0 cellspacing=0 cellpadding=0 width=528
 style='width:5.5in;margin-left:77.4pt;border-collapse:collapse'>
 <tr>
  <td width=528 valign=top style='width:5.5in;border:none;border-bottom:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt'>

  </td>
 </tr>
 <tr>
  <td width=528 valign=top style='width:5.5in;border:none;border-bottom:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt'>

  </td>
 </tr>
 <tr>
  <td width=528 valign=top style='width:5.5in;border:none;border-bottom:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt'>

  </td>
 </tr>
 <tr>
  <td width=528 valign=top style='width:5.5in;border:none;padding:0in 5.4pt 0in 5.4pt'>

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

<p class=MsoNormal>If applicable, provide the information required by Items 1
and 2 for each beneficial owner.</p>

<table class=MsoNormalTable border=0 cellspacing=0 cellpadding=0 width=528
 style='width:5.5in;margin-left:77.4pt;border-collapse:collapse'>
 <tr>
  <td width=528 valign=top style='width:5.5in;border:none;border-bottom:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt'>

  </td>
 </tr>
 <tr>
  <td width=528 valign=top style='width:5.5in;border:none;border-bottom:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt'>

  </td>
 </tr>
 <tr>
  <td width=528 valign=top style='width:5.5in;border:none;border-bottom:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt'>

  </td>
 </tr>
 <tr>
  <td width=528 valign=top style='width:5.5in;border:none;border-bottom:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt'>

  </td>
 </tr>
 <tr>
  <td width=528 valign=top style='width:5.5in;border:none;padding:0in 5.4pt 0in 5.4pt'>

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

<p class=MsoNormal>Broker-Dealer Status:</p>

<p class=MsoNormal>Are you a broker-dealer?</p>

<p class=MsoNormal>Yes&nbsp; &#61608; &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; No&nbsp; &#61608;</p>

<p class=MsoNormal>Note:&nbsp;&nbsp; If yes, the Commission's staff has indicated that
you should be identified as an underwriter in any Registration Statement filed
pursuant to the Registration Rights Agreement.</p>

<p class=MsoNormal>Are you an affiliate of a broker-dealer?</p>

<p class=MsoNormal>Yes&nbsp; &#61608; &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; No&nbsp; &#61608;</p>

<p class=MsoNormal>If you are an affiliate of a broker-dealer, do you certify
that you bought the Registrable Securities in the ordinary course of business,
and at the time of the purchase of the Registrable Securities to be resold, you
had no agreements or understandings, directly or indirectly, with any person to
distribute the Registrable Securities?</p>

<p class=MsoNormal>Yes&nbsp; &#61608; &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; No&nbsp; &#61608;</p>

<p class=MsoNormal>Note:&nbsp;&nbsp; If no, the Commission's staff has indicated that you
should be identified as an underwriter in any Registration Statement filed
pursuant to the Registration Rights Agreement.</p>

<p class=MsoNormal>If you checked &quot;Yes&quot; to either of the questions in Item 4(a)
or Item 4(b) above, please state (a) the name of any such broker-dealer, (b)
the nature of your affiliation or association with such broker-dealer, (c)
information as to such broker-dealer's participation in any capacity in the
offering or the original placement of the Securities, (d) the number of shares
of equity securities or face value of debt securities of the Company owned by
you, (e) the date such securities were acquired and (f) the price paid for such
securities.</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'>












<table class=MsoNormalTable border=0 cellspacing=0 cellpadding=0 width=528
 style='width:5.5in;margin-left:77.4pt;border-collapse:collapse'>
 <tr>
  <td width=528 valign=top style='width:5.5in;border:none;border-bottom:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt'>

  </td>
 </tr>
 <tr>
  <td width=528 valign=top style='width:5.5in;border:none;border-bottom:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt'>

  </td>
 </tr>
 <tr>
  <td width=528 valign=top style='width:5.5in;border:none;border-bottom:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt'>

  </td>
 </tr>
 <tr>
  <td width=528 valign=top style='width:5.5in;border:none;border-bottom:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt'>

  </td>
 </tr>
 <tr>
  <td width=528 valign=top style='width:5.5in;border:none;padding:0in 5.4pt 0in 5.4pt'>

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

<p class=MsoNormal>Beneficial Ownership of Other Securities of the Company
Owned by the Selling Securityholder.</p>

<p class=MsoNormal><i>Except as set forth below in this Item 5, the undersigned
is not the beneficial or registered owner of any securities of the Company
other than the Registrable Securities listed above in Item 3.</i></p>

<p class=MsoNormal>Type and amount of other securities beneficially owned by the
Selling Securityholder:</p>

<table class=MsoNormalTable border=0 cellspacing=0 cellpadding=0 width=528
 style='width:5.5in;margin-left:77.4pt;border-collapse:collapse'>
 <tr>
  <td width=528 valign=top style='width:5.5in;border:none;border-bottom:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt'>

  </td>
 </tr>
 <tr>
  <td width=528 valign=top style='width:5.5in;border:none;border-bottom:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt'>

  </td>
 </tr>
 <tr>
  <td width=528 valign=top style='width:5.5in;border:none;padding:0in 5.4pt 0in 5.4pt'>

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



<p class=MsoNormal>Relationships with the Company:</p>

<p class=MsoNormal><i>Except as set forth below, neither the undersigned nor
any of its affiliates, officers, directors or principal equity holders (owners
of 5% of more of the equity securities of the undersigned) has held any
position or office or has had any other material relationship with the Company
(or its predecessors or affiliates) during the past three years.</i></p>

<p class=MsoNormal>State any exceptions here:</p>

<table class=MsoNormalTable border=0 cellspacing=0 cellpadding=0 width=576
 style='width:6.0in;margin-left:41.4pt;border-collapse:collapse'>
 <tr>
  <td width=576 valign=top style='width:6.0in;border:none;border-bottom:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt'>

  </td>
 </tr>
 <tr>
  <td width=576 valign=top style='width:6.0in;border:none;border-bottom:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt'>

  </td>
 </tr>
 <tr>
  <td width=576 valign=top style='width:6.0in;border:none;padding:0in 5.4pt 0in 5.4pt'>

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

<p class=MsoNormal>Plan of Distribution:</p>

<p class=MsoNormal><i>Except as set forth below, the undersigned intends to
distribute the Registrable Securities listed above in Item 3 only as set forth
in Exhibit B to the Registration Rights Agreement (if at all):</i></p>

<table class=MsoNormalTable border=0 cellspacing=0 cellpadding=0 width=576
 style='width:6.0in;margin-left:41.4pt;border-collapse:collapse'>
 <tr>
  <td width=576 valign=top style='width:6.0in;border:none;border-bottom:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt'>

  </td>
 </tr>
 <tr>
  <td width=576 valign=top style='width:6.0in;border:none;border-bottom:solid windowtext 1.0pt;
  padding:0in 5.4pt 0in 5.4pt'>

  </td>
 </tr>
 <tr>
  <td width=576 valign=top style='width:6.0in;border:none;padding:0in 5.4pt 0in 5.4pt'>

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

<p class=MsoNormal>The undersigned agrees to promptly notify the Company of any
inaccuracies or changes in the information provided herein that may occur
subsequent to the date hereof and prior to the effective date of any applicable
Registration Statement filed pursuant to the Registration Rights Agreement.</p>



<p class=MsoNormal>By signing below, the undersigned consents to the disclosure
of the information contained herein in its answers to Items 1 through 7 and the
inclusion of such information in each Registration Statement filed pursuant to
the Registration Rights Agreement and each related prospectus.&nbsp; The undersigned
understands that such information will be relied upon by the Company in
connection with the preparation or amendment of any such Registration Statement
and the related prospectus.</p>



<p class=MsoNormal>By signing below, the undersigned acknowledges that it
understands its obligation to comply, and agrees that it will comply, with the
provisions of the Exchange Act and the rules and regulations thereunder,
particularly Regulation M.&nbsp; The undersigned also acknowledges that it
understands that the answers to this Questionnaire are furnished for use in
connection with Registration Statements filed pursuant to the Registration
Rights Agreement and any amendments or supplements thereto filed with the
Commission pursuant to the Securities Act.</p>

<p class=MsoNormal>I confirm that, to the best of my knowledge and belief, the
foregoing statements (including without limitation the answers to this
Questionnaire) are correct.</p>



<p class=MsoNormal>[Signature Page Follows.]</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>IN WITNESS WHEREOF the undersigned, by authority duly given,
has caused this Questionnaire to be executed and delivered either in person or
by its duly authorized agent.</p>



<p class=MsoNormal>Dated: <u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Beneficial
Owner:____________________________ </p>



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

<p class=MsoNormal>Name:________________________ </p>

<p class=MsoNormal>Title:_________________________ </p>



<p class=MsoNormal>PLEASE FAX A COPY OF THE COMPLETED AND EXECUTED
QUESTIONNAIRE, AND RETURN THE ORIGINAL BY OVERNIGHT MAIL, TO:</p>



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

<p class=MsoNormal>601 Corporate Circle</p>

<p class=MsoNormal>Golden, CO 80401</p>

<p class=MsoNormal>Fax No.:&nbsp; (303) 384-1400</p>

<p class=MsoNormal>Attn:&nbsp; Boyd E. Hoback, President &amp; CEO</p>



<p class=MsoNormal>with a copy to:</p>



<p class=MsoNormal>Snell &amp; Wilmer L.L.P.</p>

<p class=MsoNormal>1200 Seventeenth Street, Suite 1900</p>

<p class=MsoNormal>Denver, CO 80202</p>

<p class=MsoNormal>Fax No.:&nbsp; (303) 634-2020</p>

<p class=MsoFooter>Attn:&nbsp; Roger C. Cohen, Esq.</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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<DOCUMENT>
<TYPE>EX-3
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  <p class=MsoNormal><b><u>&nbsp;</u></b></p>
  <p class=MsoNormal><b><u>&nbsp;</u></b></p>
  <p class=MsoNormal><b><u>FOR IMMEDIATE RELEASE</u></b></p>
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  <p class=MsoNormal align=right style='text-align:right'><b>News</b></p>
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  <p class=MsoNormal style='text-align:justify'><b>November 3, 2010</b></p>
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  <p class=MsoNormal align=right style='text-align:right'><b>Nasdaq Capital
  Market- GTIM</b></p>
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<p class=MsoNormal align=center style='text-align:center'><b>Good Times Restaurants
Inc. Reports Entering into Stock Purchase Agreement</b></p>

<p class=MsoNormal align=center style='text-align:center'><b>for the Sale of $2.1
Million of its Common Stock, Continued Positive Sales Trends</b></p>

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

<p class=MsoNormal style='text-align:justify;text-autospace:none'>(GOLDEN, CO) &nbsp;Good
Times Restaurants Inc. (GTIM) today announced that it has entered into a Stock
Purchase Agreement with Small Island Investments Ltd. (&quot;SII&quot;) for the sale of 4,200,000
shares of its common stock for an aggregate purchase price of $2.1 million.&nbsp; SII
is a Bermuda corporation based in Boston, Massachusetts.&nbsp; SII 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 revenues.</p>



<p class=MsoNormal style='text-align:justify;text-autospace:none'>The closing
of the investment transaction under the Purchase Agreement is subject to the
receipt of stockholder approval of the transaction and of a reverse split of
the common stock to take effect after the closing.&nbsp; On November 1, 2010, SII
notified the Company in writing of its successful completion of due diligence
and the Company expects the closing to occur by November 30, 2010.&nbsp; Upon the
closing, SII will become the beneficial owner of approximately 51.4 percent of
the outstanding common stock of the Company. &nbsp;&nbsp;The Company's financial advisor
was Mastodon Ventures who arranged the transaction with SII.&nbsp; A fairness
opinion for the transaction was provided to the Board of Directors by Woodville
Hall Capital, LLC, of Middleburg, Virginia</p>



<p class=MsoNormal style='text-align:justify;text-autospace:none'>President
&amp; CEO, Boyd Hoback said, &quot;This capital infusion along with improved
operating results provides stability for the Company, resources for longer term
growth of Good Times, allows us to regain compliance for our continued Nasdaq
Capital Market listing and creates the opportunity to partner with an investment
group with deep experience in owning restaurants.&quot;</p>



<p class=MsoNormal style='text-align:justify'>The Company also reported that
its same store sales increased 20.3% in October compared to the prior year,
following September's 7.5% increase.&nbsp; Commenting on the sales increases, Hoback
said &quot;We estimate that approximately 10% of the sales increase in October is
due to much better weather this year and the other 10% is due to some general
improvement in the macroeconomic environment and continued resonance of our
internal product and service initiatives for our customers.&nbsp; Since June of 2010
we have seen gradually improving sales trends as we introduced a new lower
priced Craver Combo category, two fry alternatives with Fresh Cut Fries and our
heritage Wild Fry, Fresh Hand Spun Custard Shakes and other items that are
truly unique to Good Times, such as our limited time offer of Sweet Potato
Waffle Fries that are available in October through December of this year.&quot;&nbsp; </p>



<p class=MsoNormal style='text-align:justify'>Regarding future expectations,
Hoback added &quot;We are seeing growth in both transactions and our average check
without the benefit of much broadcast media, based on effective store level
communications of unique product offerings and a tight focus on quality
enhancements across our menu.&nbsp; While the commodity environment remains
challenging and is pressuring our cost of sales margin, we expect that
approximately 40% to 45% of incremental sales growth will flow to our cash flow
from operations, significantly improving our financial performance compared to
the first half of fiscal 2010, which was the bottoming of our sales trends.&nbsp; We
have lived through the influx of several fast casual &quot;better burger&quot;
competitors and are seeing our customers returning for our fresh, premium
burger lineup, fresh cut fries, fresh frozen custard, fresh squeezed lemonades
and fresh Craver Combos.&quot;</p>





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<p class=MsoNormal style='text-align:justify'>Good Times is a regional chain of
quick service restaurants located primarily in Colorado providing a menu of
high quality all natural hamburgers, 100% breast of chicken sandwiches, fresh
frozen custard, fresh squeezed lemonades and other unique offerings.&nbsp; Good
Times currently operates and franchises 49 restaurants.</p>



<p class=MsoNormal style='text-align:justify'>This press release contains
forward looking statements within the meaning of federal securities laws.&nbsp; The
words &quot;intend,&quot; &quot;may,&quot; &quot;believe,&quot; &quot;will,&quot; &quot;should,&quot; &quot;anticipate,&quot; &quot;expect,&quot;
&quot;seek&quot; and similar expressions are intended to identify forward looking
statements.&nbsp; These statements involve known and unknown risks, which may cause
Good Times' actual results to differ materially from results expressed or implied
by the forward looking statements.&nbsp; These risks include such factors as the
uncertain nature of current restaurant development plans and the ability to
implement those plans<b>,</b> delays in developing and opening new restaurants
because of weather, local permitting or other reasons, increased competition,
cost increases or shortages in raw food products, and other matters discussed
under the &quot;Risk Factors&quot; section of Good Times' Annual Report on Form 10-K for
the fiscal year ended September 30, 2009 filed with the SEC.&nbsp; Although Good
Times may from time to time voluntarily update its forward looking statements,
it disclaims any commitment to do so except as required by securities laws.</p>



<p class=MsoNormal style='text-align:justify'><b>INVESTOR RELATIONS CONTACTS:</b></p>

<p class=MsoNormal style='text-align:justify'>Good Times Restaurants Inc.</p>

<p class=MsoNormal style='text-align:justify'>Boyd E. Hoback, President and CEO,
303/384-1411</p>

<p class=MsoFooter>Christi Pennington, Executive Assistant, 303/384-1440</p>

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