-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, S9VtbqWKy8GQ6nGDPohxKVczfeXJ/Wc79TbEtmh+Wc11yNQLo9TlWTarpK70QKG3 SYG+aSBrBpdp8VVZnITGzA== 0000825324-10-000018.txt : 20101005 0000825324-10-000018.hdr.sgml : 20101005 20101005124637 ACCESSION NUMBER: 0000825324-10-000018 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20101005 ITEM INFORMATION: Entry into a Material Definitive Agreement FILED AS OF DATE: 20101005 DATE AS OF CHANGE: 20101005 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: 101108412 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 8-K 1 form8k1.htm _

 

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

 

CURRENT REPORT

 

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported)

October 5, 2010

Good Times Restaurants Inc.

(Exact name of registrant as specified in its charter)

Nevada

000-18590

84-1133368

(State or other jurisdiction

(Commission

(IRS Employer

of incorporation)

File Number)

Identification No.)

601 Corporate Circle, Golden, Colorado 80401

(Address of principal executive offices)   (Zip Code)

Registrant's telephone number, including area code: (303) 384-1400

Not applicable

(Former name or former address, if changed since last report.)

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.):

[_] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

[_] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

[_] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

[_] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

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Item 1.01        Entry into a Material Definitive Agreement.

 

On October 3, 2010, Good Times Restaurants Inc. (the "Company") entered into a Term Sheet with Small Island Investments Ltd ("SII") for the sale of $2 million of its common stock.  SII is based in Boston, MA and is an affiliate of a company that owns and operates three restaurant brands operating in Canada and the U.S. generating approximately $75 million in annual revenues.

The sale of stock is subject to execution of a definitive Stock Purchase Agreement, the completion of SII's due diligence and fulfillment of various contingencies.  The contingencies include, but are not limited to, entering into an agreement satisfactory to SII with Wells Fargo Bank NA to modify the loan covenants under the Company's current loan agreement, satisfaction of Nasdaq's Capital Market continued listing requirements and obtaining a third party fairness opinion and shareholder approval of the transaction. 

Upon closing of the Stock Purchase Agreement, SII will have a contractual right to designate four out of seven seats on the Company's board of directors and the Agreement will contain other rights, including anti-dilution provisions and stock registration rights.

Item 9.01        Financial Statements and Exhibits.

(d)        Exhibits.  The following exhibits are filed as part of this report:

Exhibit

Number

 

Description

10.1

Term Sheet dated October 3, 2010 between Good Times Restaurants Inc. and Small Island Investments Ltd.

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SIGNATURES

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.

                                                                        GOOD TIMES RESTAURANTS INC.

Date:  October 5, 2010                                    By:  /s/ Boyd E. Hoback

                                                                                 Boyd E. Hoback

                                                                                 President and Chief Executive Officer

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 EX-1 2 ts1.htm Small Island Investments

SMALL ISLAND INVESTMENTS LTD.

Good Times Restaurants, Inc.

Term Sheet

October 1, 2010

This Term Sheet sets out the principal terms and conditions agreed to by Small Island Investments Ltd. or its nominee (hereinafter "SII"), a Bermuda corporation, and Good Times Restaurants, Inc. (hereinafter "GTIM"), a Nevada corporation, regarding a proposed purchase of common shares of GTIM by SII.

Transaction

SII or its designated nominee and GTIM intend to timely negotiate the terms of and enter into and execute a definitive Stock Purchase Agreement and related documents (collectively, the "SPA").  It is contemplated that by October 8, 2010, SII and the Company will execute the SPA which shall provide for the sale and issuance by GTIM of Common Shares of GTIM (the "Common Shares") to SII (the "Transaction").  The Transaction shall close and fund as soon as practicable thereafter.

Transaction Terms:

SII shall purchase 4,000,000 Common Shares for an aggregate price of $2 million ($.50 per share) (the "Investment").  The Investment shall be funded in full upon Closing as defined herein below.  SII shall not be obligated to make the Investment if any failure shall have occurred with respect to the conditions to the Transaction set forth in the SPA.  To the extent a reverse stock split is completed before, at or after Closing, the Investment price will be adjusted accordingly.

 

Use of Proceeds:

The proceeds of the Investment shall be used by GTIM and its wholly-owned subsidiary Good Times Drive-Thru, Inc. ("DT") to refinance certain prior obligations of GTIM and DT existing at the Closing, to pay other obligations and expenses of GTIM and DT, for general working capital purposes, including capital expenditures, of DT, for costs and expenses of the Transaction, and for other purposes acceptable to and approved by SII, all subject to the terms and conditions to be set forth in the SPA.

 

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Closing and Timing:

SII and GTIM anticipate that the closing of the Transaction (the "Closing") shall occur within 45 days from the date of this Term Sheet but in no event later than November 19, 2010.

 

Price Protection and Right of Participation

 

The SPA shall provide that SII shall have customary anti-dilution, rights of participation and price protection (on a weighted average calculation) provisions related to any sale of Common Shares by GTIM after the Closing.

 

Registration Rights

 

 

 

 

Board Representation

 

The SPA shall contain customary registration rights in favor of SII with respect to the Common Shares, including demand (on Form S-3) and "piggy-back" registration rights.  The registration expenses of such registrations shall be borne by GTIM.

The Board of Directors of the Company shall not exceed seven members, and shall be elected by a majority of the GTIM shares eligible to vote, provided that at Closing SII shall designate four of the seven members of the Board of Directors.

 

Conditions to Closing:

The Investment shall be subject to certain closing conditions precedent, including but not limited to:

1.      Satisfactory completion on or before October 25, 2010 of SII 's legal, regulatory, financial, tax, accounting, business and strategic due diligence on GTIM and DT.

2.      The assets of GTIM and those of DT will not have been materially diminished and no extraordinary liabilities or obligations will have been incurred by GTIM or DT.   The sale of any restaurant shall be considered material for purposes of this condition.

3.      GTIM and DT will not have pledged any of their assets and will keep such assets free of any and all encumbrances except those existing on the date of this Term Sheet or agreed to by SII prior to the Closing.

4.      Absence of any material adverse change in the business of GTIM or DT, as it exists on the date of this Term Sheet.

5.      Completion of the SPA on terms satisfactory to SII and GTIM, including appropriate representations, warranties, covenants and conditions and such other agreements related to the Investment as SII shall reasonably require.

6.      A representation by SII of its investment intent with respect to its acquisition of the Common Shares in conformity with applicable securities laws.

7.      The implementation of a new Management Incentive Program acceptable to SII and GTIM.

8.      All requisite approvals of the Transaction required by the Company, its Board of Directors and its shareholders, including the obtaining by GTIM for its shareholders of an independent opinion on the fairness of the Transaction.

9.      All required consents from lenders, landlords and others including but not limited to Wells Fargo Bank.

10.  Confirmation that the Transaction will not impair GTIM's ability to continue its current Nasdaq listing following the Closing.

 

2


Expenses:

 

 

Exclusivity and

Termination Fee

GTIM and SII shall each bear their own legal and other expenses with respect to the Transaction.

SII shall have an exclusive right to complete the Transaction with GTIM and GTIM shall not actively solicit other equity or comparable transactions for a period of 60 days from the date of the SPA or until any earlier termination of the Transaction by SII.  In the event that GTIM accepts an offer for such a comparable transaction after the date of the execution of this Term Sheet, and provided that SII is not in breach of the SPA, the Company shall pay a fee of $150,000 to SII.

 

Governing Law:

Delaware.

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Not Binding Commitment

 

Nothing herein is intended to or shall, create any rights in favor of either party and nothing herein (other than the provisions entitled Exclusivity and Termination Fee which is intended to and shall be legally binding) shall be legally binding on the parties.  A legally binding obligation regarding the purchase will arise only upon the execution of the definitive SPA.

Small Island Investments Ltd.

By:

/s/ Penelope A. Dobbin

Name:

Penelope A. Dobbin

Title:

President

Date:

October 1, 2010

Good Times Restaurants, Inc.

By:

/s/ Boyd E. Hoback

Name:

Boyd E. Hoback

Title:

President & CEO

Date:

October 3, 2010

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