Document:

f8k061813ex10i_biologix.htm

Exhibit 10.1

 

STOCK OPTION AGREEMENT

 

BIOLOGIX HAIR INC.

 

THIS AGREEMENT is entered into as of __________________________ (the “Date of Grant”)

 

BETWEEN:

BIOLOGIX HAIR INC., a company incorporated pursuant to the laws of the State of Nevada, of 82 Avenue Road, Toronto, Ontario, Canada M5R 2H2

 

(the “Company”)

 

AND:

 

__________________, of ________________________________

 

(the “Optionee”)

 

WHEREAS:

 

A.           The Board of Directors of the Company (the “Board”) has approved and adopted the 2013 Stock Option Plan (the “Plan”), pursuant to which the Board is authorized to grant to employees and other selected persons stock options to purchase common shares of the Company (the “Common Stock”);

 

B.           The Plan provides for the granting of stock options that either (i) are intended to qualify as “Incentive Stock Options” within the meaning of Section 422 of the Internal Revenue Code of 1986, as amended (the “Code”), or (ii) do not qualify under Section 422 of the Code (“Non-Qualified Stock Options”); and

 

C.           The Board has authorized the grant to the Optionee of options to purchase a total of __________________ shares of Common Stock (the “Options”), which Options are intended to be (select one):

 

[   ]           Incentive Stock Options;

[   ]           on Non-Qualified Stock Options

 

NOW THEREFORE, the Company agrees to offer to the Optionee the option to purchase, upon the terms and conditions set forth herein and in the Plan, _____________ shares of Common Stock.  Capitalized terms not otherwise defined herein shall have the meanings ascribed thereto in the Plan.

 

  

  

  

 

1.           Exercise Price.  The exercise price of the options shall be US $__________ per share.

 

2.           Limitation on the Number of Shares.  If the Options granted hereby are Incentive Stock Options, the number of shares which may be acquired upon exercise thereof is subject to the limitations set forth in Section 5.1 of the Plan.

 

3.           Vesting Schedule.  The Options shall vest in accordance with Exhibit A.

 

4.           Options not Transferable.  The Options may not be transferred, assigned, pledged or hypothecated in any manner (whether by operation of law or otherwise) other than by will, by applicable laws of descent and distribution or, in the case of a Non-Qualified Stock Option, pursuant to a qualified domestic relations order, and shall not be subject to execution, attachment or similar process; provided, however, that if the Options represent a Non-Qualified Stock Option, such Option is transferable without payment of consideration to immediate family members of the Optionee or to trusts or partnerships established exclusively for the benefit of the Optionee and Optionee’s immediate family members.  Upon any attempt to transfer, pledge, hypothecate or otherwise dispose of any Option or of any right or privilege conferred by the Plan contrary to the provisions thereof, or upon the sale, levy or attachment or similar process upon the rights and privileges conferred by the Plan, such Option shall thereupon terminate and become null and void.

 

5.           Investment Intent.  By accepting the Options, the Optionee represents and agrees that none of the shares of Common Stock purchased upon exercise of the Options will be distributed in violation of applicable federal and state laws and regulations.  In addition, the Company may require, as a condition of exercising the Options, that the Optionee execute an undertaking, in such a form as the Company shall reasonably specify, that the Stock is being purchased only for investment and without any then-present intention to sell or distribute such shares.

 

6.           Termination of Employment and Options.  Vested Options shall terminate, to the extent not previously exercised, upon the occurrence of the first of the following events:

 

	
  

	
(a)

	
Expiration.  Five (5) years from the Date of Grant.

 

	
  

	
(b)

	
Termination for Cause.  The date of the first discovery by the Company of any reason for the termination of an Optionee’s employment or contractual relationship with the Company or any related company for cause (as determined in the sole discretion of the Plan Administrator), and, if an Optionee’s employment is suspended pending any investigation by the Company as to whether the Optionee’s employment should be terminated for cause, the Optionee’s rights under this Agreement and the Plan shall likewise be suspended during the period of any such investigation.

 

	
  

	
(c)

	
Termination Due to Death or Disability.  The expiration of one (1) year from the date of the death of the Optionee or cessation of an Optionee’s employment or contractual relationship by reason of disability (as defined in Section 5.1(g) of the Plan).  If an Optionee’s employment or contractual relationship is terminated by death, any Option held by the Optionee shall be exercisable only by the person or persons to whom such Optionee’s rights under such Option shall pass by the Optionee’s will or by the laws of descent and distribution.

 

  

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(d)

	
Termination for Any Other Reason.  The expiration of three (3) months from the date of an Optionee’s termination of employment or contractual relationship with the Company or any Related Corporation for any reason whatsoever other than termination of service as a director, cause, death or Disability (as defined in Section 5.1(g) of the Plan).

 

Each unvested Option granted pursuant hereto shall terminate immediately upon termination of the Optionee’s employment or contractual relationship with the Company for any reason whatsoever, including Disability unless vesting is accelerated in accordance with Section 5.1(f) of the Plan.

 

7.           Stock. In the case of any stock split, stock dividend or like change in the nature of shares of Stock covered by this Agreement, the number of shares and exercise price shall be proportionately adjusted as set forth in Section 5.1(m) of the Plan.

 

8.           Exercise of Option.  Options shall be exercisable, in full or in part, at any time after vesting, until termination; provided, however, that any Optionee who is subject to the reporting and liability provisions of Section 16 of the Securities Exchange Act of 1934 with respect to the Common Stock shall be precluded from selling or transferring any Common Stock or other security underlying an Option during the six (6) months immediately following the grant of that Option.  If less than all of the shares included in the vested portion of any Option are purchased, the remainder may be purchased at any subsequent time prior to the expiration of the Option term.  No portion of any Option for less than fifty (50) shares (as adjusted pursuant to Section 5.1(m) of the Plan) may be exercised; provided, that if the vested portion of any Option is less than fifty (50) shares, it may be exercised with respect to all shares for which it is vested.  Only whole shares may be issued pursuant to an Option, and to the extent that an Option covers less than one (1) share, it is unexercisable.

 

Each exercise of the Option shall be by means of delivery of a notice of election to exercise (which may be in the form attached hereto as Exhibit B) to the President of the Company at its principal executive office, specifying the number of shares of Common Stock to be purchased and accompanied by payment in cash by certified check or cashier’s check in the amount of the full exercise price for the Common Stock to be purchased.  In addition to payment in cash by certified check or cashier’s check, an Optionee or transferee of an Option may pay for all or any portion of the aggregate exercise price by complying with one or more of the following alternatives:

 

	
  

	
(a)

	
by delivering to the Company shares of Common Stock previously held by such person, duly endorsed for transfer to the Company, or by the Company withholding shares of Common Stock otherwise deliverable pursuant to exercise of the Option, which shares of Common Stock received or withheld shall have a fair market value at the date of exercise (as determined by the Plan Administrator) equal to the aggregate purchase price to be paid by the Optionee upon such exercise; or

 

  

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(b)

	
by complying with any other payment mechanism approved by the Plan Administrator at the time of exercise.

 

It is a condition precedent to the issuance of shares of Common Stock that the Optionee execute and/or deliver to the Company all documents and withholding taxes required in accordance with Section 5.1 of the Plan.

 

9.           Holding period for Incentive Stock Options.  In order to obtain the tax treatment provided for Incentive Stock Options by Section 422 of the Code, the shares of Common Stock received upon exercising any Incentive Stock Options received pursuant to this Agreement must be sold, if at all, after a date which is later of two (2) years from the date of this agreement is entered into or one (1) year from the date upon which the Options are exercised.  The Optionee agrees to report sales of shares prior to the above determined date to the Company within one (1) business day after such sale is concluded.  The Optionee also agrees to pay to the Company, within five (5) business days after such sale is concluded, the amount necessary for the Company to satisfy its withholding requirement required by the Code in the manner specified in Section 5.1(l) of the Plan.  Nothing in this Section 9 is intended as a representation that Common Stock may be sold without registration under state and federal securities laws or an exemption therefrom or that such registration or exemption will be available at any specified time.

 

10.           Resale restrictions may apply.  Any resale of the shares of Common Stock received upon exercising any Options will be subject to resale restrictions contained in the securities legislation applicable to the Optionee.  The Optionee acknowledges and agrees that the Optionee is solely responsible (and the Company is not in any way responsible) for compliance with applicable resale restrictions.

 

11.           Subject to 2013 Stock Option Plan.  The terms of the Options are subject to the provisions of the Plan, as the same may from time to time be amended, and any inconsistencies between this Agreement and the Plan, as the same may be from time to time amended, shall be governed by the provisions of the Plan, a copy of which has been delivered to the Optionee, and which is available for inspection at the principal offices of the Company.

 

12.           Professional Advice.  The acceptance of the Options and the sale of Common Stock issued pursuant to the exercise of Options may have consequences under federal and state tax and securities laws which may vary depending upon the individual circumstances of the Optionee.  Accordingly, the Optionee acknowledges that he or she has been advised to consult his or her personal legal and tax advisor in connection with this Agreement and his or her dealings with respect to Options.  Without limiting other matters to be considered with the assistance of the Optionee’s professional advisors, the Optionee should consider: (a) whether upon the exercise of Options, the Optionee will file an election with the Internal Revenue Service pursuant to Section 83(b) of the Code and the implications of alternative minimum tax pursuant to the Code; (b) the merits and risks of an investment in the underlying shares of Common Stock; and (c) any resale restrictions that might apply under applicable securities laws.

 

13.           No Employment Relationship.  Whether or not any Options are to be granted under this Plan shall be exclusively within the discretion of the Plan Administrator, and nothing contained in this Plan shall be construed as giving any person any right to participate under this Plan.  The grant of an Option shall in no way constitute any form of agreement or understanding binding on the Company or any Related Company, express or implied, that the Company or any Related Company will employ or contract with an Optionee, for any length of time, nor shall it interfere in any way with the Company’s or, where applicable, a Related Company’s right to terminate Optionee’s employment at any time, which right is hereby reserved.

 

  

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14.           Entire Agreement.  This Agreement is the only agreement between the Optionee and the Company with respect to the Options, and this Agreement and the Plan supersede all prior and contemporaneous oral and written statements and representations and contain the entire agreement between the parties with respect to the Options.

 

15.           Notices.  Any notice required or permitted to be made or given hereunder shall be mailed or delivered personally to the addresses set forth below, or as changed from time to time by written notice to the other:

 

        The Company:

Biologix Hair Inc.

82 Avenue Road

Toronto, ON, Canada  M5R 2H2

Attention:  President

 

        The Optionee:

 

_____________________

 

_____________________

 

_____________________

 

_____________________

 

	
BIOLOGIX HAIR INC.

	  
	  	  	  
	
Per:

	  	  
	  	
Authorized Signatory

	  
	  	  	  
	  	  	  
	
[Insert Optionee Name]

	  

  

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EXHIBIT A

 

TERMS OF THE OPTION

 

	
Name of the Optionee:

	♦	  
	 	 	 
	
Date of Grant:

	♦	  
	 	 	 
	
Designation:

	
Non Qualified Stock Options

	  
	 	 	 
	
1.           Number of Options granted:

	
♦stock options

	  
	 	 	 
	
2.           Purchase Price:

	
$♦per share

	  
	 	 	 
	
3.           Vesting Dates:

	♦	  
	 	 	 
	
4.           Expiration Date:

	♦	  

 

  

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EXHIBIT B

 

To:

Biologix Hair Inc.

82 Avenue Road

Toronto, ON, Canada  M5R 2H2

Attention:  President

 

Notice of Election to Exercise

 

This Notice of Election to Exercise shall constitute proper notice pursuant to Section 5.1(h) of Biologix Hair Inc.’s (the “Company”) 2013 Stock Option Plan (the “Plan”) and Section 8 of that certain Stock Option Agreement (the “Agreement”) dated as of the _______ day of __________________, 20___, between the Company and the undersigned.

 

The undersigned hereby elects to exercise Optionee’s option to purchase __________________ shares of the common stock of the Company at a price of US$_______ per share, for aggregate consideration of US$__________, on the terms and conditions set forth in the Agreement and the Plan.  Such aggregate consideration, in the form specified in Section 8 of the Agreement, accompanies this notice.

 

The Optionee hereby directs the Company to issue, register and deliver the certificates representing the shares as follows:

 

	
Registration Information:

	  	
Delivery Instructions:

	
 

 

	  	  
	
Name to appear on certificates

	  	
Name

	  	  	
  

 

	
Address

	  	
Address

	  	  	
  

 

	  	  	  
	  	  	  
	  	  	
Telephone Number

 

DATED at ____________________________________, the _______ day of ________________________, 20___.

 

	  	  
	  	
(Name of Optionee – Please type or print)

	  	  
	  	  
	  	
(Signature and, if applicable, Office)

	  	  
	  	  
	  	  
	  	
(Address of Optionee)

	  	  
	  	  
	  	  
	  	
(City, State, and Zip Code of Optionee)

 

 

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Exhibit 4.2

 

	No. __________ 	
__________ WARRANTS

 

 

 

 

THIS WARRANT CERTIFICATE WILL BE VOID IF NOT EXERCISED PRIOR

 

TO 5:00 P.M. NEW YORK CITY TIME, [__________], 2018

 

 

GOOD TIMES RESTAURANTS INC.

 

 

WARRANT CERTIFICATE

 

 

THIS CERTIFIES THAT, for value received, [_______________] (“Warrantholder”) is the registered holder of [_______] Warrants (the “Warrant” or “Warrants”) to purchase fully paid and non-assessable shares of common stock, par value $0.001 per share (the “Share” or “Shares”), of GOOD TIMES RESTAURANTS INC., a Nevada corporation (the “Company”).

 

1.             Terms and Exercise of Warrants.

 

 (a)           Warrant Price.  Each Warrant shall entitle the registered holder thereof, subject to the provisions of such Warrant, to purchase from the Company one share of Common Stock at the price of [$_____] per share, subject to the adjustments provided in Section 2 hereof and in the last sentence of this Section 1(a).  The term “Warrant Price” as used in this Agreement refers to the price per share at which Common Stock may be purchased at the time the Warrants are exercised.  The Company, in its sole discretion, may by notice to registered holders lower the Warrant Price at any time prior to the Expiration Date (as defined below) for a specified period of not less than 20 business days. 
   

(b)           Duration of Warrants.  The Warrants may be exercised only during the period (“Exercise Period”) commencing on the date of issuance and terminating at 5:00 p.m., New York City time, on the Expiration Date.  For purposes of this Agreement, the “Expiration Date” shall mean the earlier to occur of (i) [__________], 2018, or (ii) the date fixed for redemption of the Warrants as provided in Section 4 hereof.  Except with respect to the right to receive the Redemption Price (as set forth in Section 6 hereof), each Warrant not exercised on or before the Expiration Date shall become void, and all rights thereunder and all rights in respect thereof shall cease at the close of business on the Expiration Date.  The Company may extend the duration of the Warrants by delaying the Expiration Date; provided, however, that the Company shall provide notice to registered holders of the Warrants of such extension of not less than 20 days.

 

  

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(c)           Exercise of Warrants.

 

(i)          Payment.  Subject to the provisions of the Warrants, the Warrants may be exercised by the registered holder thereof by surrendering them at the Company with the subscription form as set forth herein duly executed and, except where otherwise permitted in accordance with Section 1(c)(ii), by paying in full in lawful money of the United States by certified check made payable to the Company or by wire transfer of immediately available funds to an account designated by the Company (or as otherwise agreed to by the Company), the Warrant Price for each share of Common Stock as to which the Warrants are exercised and any and all applicable taxes due in connection with the exercise of the Warrants and the issuance of the Common Stock.  

 

(ii)          Cashless Exercise.  If, and only if, at the time of exercise of the Warrants there is no effective registration statement registering, or the prospectus contained therein is not available for the issuance of the Common Stock to the Warrantholder, then, and only then, the Warrants may at the option of the Warrantholder be exercised, in whole or in part, at such time by means of a “cashless exercise” in which the Warrantholder shall be entitled to receive a number of shares of Common Stock equal to the quotient obtained by dividing [(A-B) (X)] by (A), where:

 

	
  

	
(A) =

	
the VWAP (defined below) on the trading day immediately preceding the date on which the Warrantholder elects to exercise the Warrants by means of a “cashless exercise,” as set forth in the applicable subscription form;

 

	
  

	
(B) =

	
the Warrant Price of the Warrants, as adjusted hereunder; and

 

	
  

	
(X) =

	
the number of shares of Common Stock that would be issuable upon exercise of the Warrants being exercised  in accordance with the terms hereof if such exercise were by means of a cash exercise rather than a cashless exercise.

 

“VWAP” means, for any date, the price per share of Common Stock determined by the first of the following clauses that applies:  (a) if the Common Stock is then listed or quoted on the New York Stock Exchange, the American Stock Exchange, the NASDAQ National Market, the NASDAQ Capital Market or the OTC Bulletin Board (each, a “Trading Market”), the daily volume weighted average price of the Common Stock for such date (or the nearest preceding date) on the Trading Market on which the Common Stock is then listed or quoted as reported by Bloomberg L.P. (“Bloomberg”) (based on a trading day from 9:30 a.m. (New York City time) to 4:02 p.m. (New York City time)), (b) if the Common Stock is not then listed or quoted for trading or quoted for trading on a Trading Market and if prices for the  Common Stock are then reported in the “Pink Sheets” published by Pink OTC Markets, Inc. (or a similar organization or agency succeeding to its functions of reporting prices), the most recent bid price per share of the Common Stock so reported, or (c) in all other cases, the fair market value of a share of Common Stock as determined by an independent appraiser selected in good faith by the Board of Directors of the Company, the fees and expenses of which shall be paid by the Company.

 

  

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(iii)         Issuance of Certificates.  As soon as practicable after the exercise of any Warrants and the clearance of the funds in payment of the Warrant Price, the Company shall issue to the registered holder of such Warrants a certificate or certificates representing the number of shares of Common Stock to which he, she or it is entitled, registered in such name or names as may be directed by him, her or it, and, if such Warrants shall not have been exercised or surrendered in full, a new countersigned Warrant Certificate for the number of shares as to which such Warrants shall not have been exercised or surrendered.  Subject to Section 5(d) and notwithstanding the foregoing, the Company shall not be obligated to deliver any securities pursuant to the exercise of Warrants unless (a) a registration statement under the Securities Act of 1933, as amended (the "Act") with respect to the Common Stock issuable upon exercise of the Warrants is effective and a current prospectus relating to the shares of Common Stock issuable upon exercise of the Warrants is available for delivery to the Warrant holders, or (b) the exercise of the Warrants is exempt from the registration requirements of the Act and such securities are qualified for sale or exempt from qualification under applicable securities laws of the state or other jurisdiction in which the registered holder resides. Warrants may not be exercised by, or securities issued to, any registered holder in any state in which such exercise or issuance would be unlawful. In the event a registration statement under the Act with respect to the Common Stock underlying the Warrants is not effective or a prospectus is not available, or because such exercise would be unlawful with respect to a registered holder in any state, the registered holder shall not be entitled to exercise such Warrants and such Warrants may have no value and expire worthless.  In no event will the Company be obligated to pay such registered holder any cash consideration upon exercise (except pursuant to Section 2(e)). The Company’s counsel shall deliver any legal opinions required by the transfer agent in connection with the exercise of the Warrants at no cost to the Warrantholder. 

         

(iv)        Valid Issuance.  All shares of Common Stock issued upon the proper exercise or surrender of the Warrants in conformity with this Agreement shall be validly issued, fully paid and nonassessable.

 

(v)        Date of Issuance.  Each person or entity in whose name any such certificate for shares of Common Stock is issued shall, for all purposes, be deemed to have become the holder of record of such shares on the date on which the Warrants were surrendered and payment of the Warrant Price was made, irrespective of the date of delivery of such certificate, except that, if the date of such surrender and payment is a date when the stock transfer books of the Company are closed, such person shall be deemed to have become the holder of such shares at the close of business on the next succeeding date on which the stock transfer books are open.

 

 1.             Adjustments. 

 

(a)           Stock Dividends; Stock Splits.  If, after the date hereof, and subject to the provisions of Section 2(f) below, the number of outstanding shares of Common Stock is increased by a stock dividend payable in shares of Common Stock, or by a split of shares of Common Stock, or other similar event, then, on the effective date of such stock dividend, stock split or similar event, the number of shares of Common Stock issuable on exercise of the Warrants shall be increased in proportion to such increase in outstanding shares of Common Stock.

 

  

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(b)           Aggregation of Shares.  If, after the date hereof, and subject to the provisions of Section 2(f) below, the number of outstanding shares of Common Stock is decreased by a consolidation, combination, reverse stock split or reclassification of shares of Common Stock or other similar event, then, on the effective date of such consolidation, combination, reverse stock split, reclassification or similar event, the number of shares of Common Stock issuable on exercise of the Warrants shall be decreased in proportion to such decrease in outstanding shares of Common Stock.

 

(c)           Adjustments in Warrant Price.  Whenever the number of shares of Common Stock purchasable upon the exercise of the Warrants is adjusted, as provided in Sections 2(a) and 2(b), the Warrant Price shall be adjusted (to the nearest cent) by multiplying such Warrant Price, immediately prior to such adjustment, by a fraction, (i) the numerator of which shall be the number of shares of Common Stock purchasable upon the exercise of the Warrants immediately prior to such adjustment, and (ii) the denominator of which shall be the number of shares of Common Stock so purchasable immediately thereafter.

 

(d)           Extraordinary Dividends.  If the Company, at any time during the Exercise Period, shall pay a dividend in cash, securities or other assets to the holders of Common Stock (or other shares of the Company’s capital stock into which the Warrants are convertible), other than (i) as described in Sections 2(a), 2(b) or 2(e), or (ii) regular quarterly or other periodic dividends (any such non-excluded event being referred to herein as an “Extraordinary Dividend”), then the Warrant Price shall be decreased, effective immediately after the effective date of such Extraordinary Dividend, by the amount of cash and/or the fair market value (as determined by the Company’s Board of Directors, in good faith) of any securities or other assets paid on each share of Common Stock in respect of such Extraordinary Dividend in order that subsequent thereto upon exercise of the Warrants the Warrantholder may obtain the equivalent benefit of such Extraordinary Dividend.

 

(e)           Replacement of Securities upon Reorganization, Etc.  In case of any reclassification or reorganization of the outstanding shares of Common Stock (other than a change covered by Sections 2(a) or 2(b) hereof or one that solely affects the par value of such shares of Common Stock), or, in the case of any merger or consolidation of the Company with or into another corporation (other than a consolidation or merger in which the Company is the continuing corporation and that does not result in any reclassification or reorganization of the outstanding shares of Common Stock), or, in the case of any sale or conveyance to another corporation or entity of the assets or other property of the Company as an entirety or substantially as an entirety, in connection with which the Company is dissolved, the Warrants shall thereafter represent the right to purchase and receive, upon the basis and upon the terms and conditions specified in the Warrants and in lieu of the shares of Common Stock of the Company immediately theretofore purchasable and receivable upon the exercise of the rights represented thereby, the kind and amount of shares of stock or other securities or property (including cash) receivable upon such reclassification, reorganization, merger or consolidation, or upon a dissolution following any such sale or transfer, that the Warrants holder would have received if such Warrants holder had exercised his, her or its Warrants immediately prior to such event; and if any reclassification also results in a change in shares of Common Stock covered by Sections 2(a) or 2(b), then such adjustment shall be made pursuant to Sections 2(a), 2(b), 2(c) and this Section 2(e). The provisions of this Section 2 shall similarly apply to successive reclassifications, reorganizations, mergers or consolidations, sales or other transfers.

 

  

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(f)            Notices of Changes in Warrants.  Upon every adjustment of the Warrant Price or the number of shares issuable upon exercise of the Warrants, the Company shall give written notice thereof to each registered holder, which notice shall state the Warrant Price resulting from such adjustment and the increase or decrease, if any, in the number of shares purchasable at such price upon the exercise of the Warrants, setting forth in reasonable detail the method of calculation and the facts upon which such calculation is based. Upon the occurrence of any event specified in Sections 2(a), 2(b), 2(d) or 2(e) the Company shall give written notice to each Warrants holder, at the last address set forth for such holder in the Warrants register, of the record date or the effective date of the event. Failure to give such notice, or any defect therein, shall not affect the legality or validity of such event.

 

(g)           Form of Warrant.  The form of Warrant need not be changed because of any adjustment pursuant to this Section 2, and Warrants issued after such adjustment may state the same Warrant Price and the same number of shares as is stated in the Warrants initially issued pursuant to this Agreement. However, the Company may, at any time, in its sole discretion, make any change in the form of Warrants that the Company may deem appropriate and that does not affect the rights of holders thereof, and any Warrants thereafter issued or countersigned, whether in exchange or substitution for outstanding Warrants or otherwise, may be in the form as so changed.

 

(h)           Notice of Certain Transactions.  In the event that the Company shall propose to (i) offer the holders of its Common Stock rights to subscribe for or to purchase any securities convertible into shares of Common Stock or shares of stock of any class or any other securities, rights or options, (ii) issue any rights, options or warrants entitling the holders of Common Stock to subscribe for shares of Common Stock or (iii) make a tender offer, redemption offer or exchange offer with respect to the Common Stock, the Company shall send to the Warrant holders a notice of such proposed action or offer. Such notice shall be mailed to the registered holders at their addresses as they appear in the Warrants register, which shall specify the record date for the purposes of such dividend, distribution or rights, or the date such issuance or event is to take place and the date of participation therein by the holders of Common Stock, if any such date is to be fixed, and shall briefly indicate the effect of such action on the Common Stock and on the number and kind of any other shares of stock and on other property, if any, and the number of shares of Common Stock and other property, if any, issuable upon exercise of the Warrants and the Warrant Price after giving effect to any adjustment pursuant to this Section 2 which would be required as a result of such action. Such notice shall be given as promptly as practicable after the Company has determined to take any such action and (x) in the case of any action covered by clause (i) or (ii) above, at least 10 days prior to the record date for determining the holders of the Common Stock for purposes of such action or (y) in the case of any other such action, at least 20 days prior to the date of the taking of such proposed action or the date of participation therein by the holders of Common Stock, whichever shall be the earlier.

 

(i)            Other Events.  If any event occurs as to which the foregoing provisions of this Section 2 are not strictly applicable or, if strictly applicable, would not, in the good faith judgment of the Company’s Board of Directors, fairly and adequately protect the purchase rights of the registered holders of the Warrants in accordance with the essential intent and principles of such provisions, then the Company shall make such adjustments in the application of such provisions, in accordance with such essential intent and principles, as shall be reasonably necessary, in the good faith opinion of the Company, to protect such purchase rights as aforesaid.

 

  

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3.             Transfer and Exchange of Warrants.

 

(a)           Registration of Transfer.  The Company shall register the transfer, from time to time, of any outstanding Warrants into the Warrant register, upon surrender of such Warrants for transfer, properly endorsed with signatures properly guaranteed and accompanied by appropriate instructions for transfer. Upon any such transfer, new Warrants representing an equal aggregate number of Warrants shall be issued and the old Warrants shall be cancelled by the Company.

 

(b)           Procedure for Surrender of Warrants.  Warrants may be surrendered to the Company, together with a written request for exchange or transfer, and, thereupon, the Company shall issue in exchange therefor one or more new Warrants as requested by the registered holder of the Warrants so surrendered, representing an equal aggregate number of Warrants; provided, however, that, in the event the Warrants surrendered for transfer bear a restrictive legend, the Company shall not cancel such Warrants and issue new Warrants in exchange therefor until the Company has received an opinion of counsel for the Company stating that such transfer may be made and indicating whether the new Warrants must also bear a restrictive legend.

 

(c)           Service Charges.  No service charge shall be made for any exchange or registration of transfer of Warrants.

 

4.             Redemption.

 

 (a)           Redemption.  Subject to the penultimate and final sentences of this Section 4(a), not less than all of the outstanding Warrants may be redeemed, at the option of the Company, at any time after they become exercisable and there is an effective registration statement covering the shares of Common Stock issuable upon exercise of the Warrants current and available and prior to their expiration, upon the notice referred to in Section 4(b), in whole but not in part, at the price of $0.01 per Warrant (“Redemption Price”), provided that the closing sales price of a share of Common Stock has been equal to or greater than 150% of the Warrant Price (as adjusted pursuant to Section 2(c) hereof) for any 20 trading days within a 30 consecutive trading day period ending on the third business day prior to the date on which notice of redemption is given.  Notwithstanding anything to the contrary contained herein, the Company shall not call the Warrants for redemption unless there is an effective registration statement under the Act relating to the shares of Common Stock issuable upon exercise of the Warrants current and available throughout the “30-day redemption period” and a prospectus is available. 

 

(b)           Date Fixed for, and Notice of, Redemption.  In the event the Company shall elect to redeem all of the Warrants, the Company shall fix a date for the redemption. Notice of redemption shall be mailed by first class mail, postage prepaid, by the Company not less than 30 days prior to the date fixed for redemption to the registered holders of the Warrants to be redeemed at their last addresses as they shall appear on the Warrant Register. Any notice mailed in the manner herein provided shall be conclusively presumed to have been duly given, whether or not the registered holder received such notice.

 

  

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(c)            Exercise After Notice of Redemption.  The Warrants may be exercised in accordance with Section 1 of this Agreement at any time after notice of redemption shall have been given by the Company pursuant to Section 4(b) hereof and prior to the time and date fixed for redemption. On and after the redemption date, the registered holders of the Warrants shall have no further rights except to receive, upon surrender of the Warrants, the Redemption Price.

 

5.             Other Provisions Relating to Rights of Holders of Warrants.

 

(a)           No Rights as Stockholder.  The Warrants do not entitle the registered holder thereof to any of the rights of a stockholder of the Company, including, without limitation, the right to receive dividends or other distributions, to exercise any preemptive rights, or to vote, consent or receive notice as stockholders in respect of the meetings of stockholders or the election of directors of the Company or any other matter.

 

(b)           Lost, Stolen, Mutilated or Destroyed Warrant Certificates.  If any Warrant Certificate is lost, stolen, mutilated or destroyed, the Company may, on such terms as to indemnity or otherwise as it may in its discretion impose (which terms shall, in the case of a mutilated Warrant Certificate, include the surrender thereof), issue a new Warrant Certificate of like denomination, tenor and date as the Warrant Certificate so lost, stolen, mutilated or destroyed. Any such new Warrant Certificate shall constitute a substitute contractual obligation of the Company, whether or not the allegedly lost, stolen, mutilated or destroyed Warrant Certificate shall be at any time enforceable by anyone.

 

(c)           Reservation of Common Stock.  The Company shall at all times reserve and keep available a number of its authorized but unissued shares of Common Stock that will be sufficient to permit the exercise in full of all outstanding Warrants issued pursuant to this Agreement.

 

(d)           Registration of Common Stock.  The Company agrees that prior to the commencement of the Exercise Period, it shall use its best efforts to prepare and file with the Securities and Exchange Commission a post-effective amendment to the registration statement, or a new registration statement, for the registration under the Act of the Common Stock issuable upon exercise of the Warrants, and it shall take such action as is necessary to qualify for sale, in those states in which the Warrants were initially offered by the Company, the Common Stock issuable upon exercise of the Warrants. In either case, the Company will use its best efforts to cause the same to become effective on or prior to the commencement of the Exercise Period and to maintain the effectiveness of such registration statement and ensure that a prospectus is available for delivery to the Warrant holders until the expiration of the Warrants in accordance with the provisions of this Agreement.  Except as provided in Section 1(c)(ii) of this Warrant Certificate, the Warrants shall not be exercisable and the Company shall not be obligated to issue Common Stock unless, at the time a holder seeks to exercise Warrants, a prospectus related to the Common Stock issuable upon exercise of the Warrants is current and the Common Stock has been registered or qualified under the laws of the state of residence of the holder of the Warrants or unless the issuance of the Common Stock is deemed to be exempt from such requirements.  In addition, the Company agrees to use its best efforts to register such securities under the blue sky laws of the states of residence of exercising Warrant holders, if permitted by the blue sky laws of such jurisdictions, in the event that an exemption is not available.

 

  

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(e)           Notices.  Any notice, statement or demand authorized by this Certificate to be given or made by the Company or by the holder of the Warrants to or on the Company shall be delivered by hand or sent by registered or certified mail or overnight courier service, addressed (until another address is provided in writing by the Company) as follows:

 

Good Times Restaurants Inc.

 

601 Corporate Circle

 

Golden, CO 80401

 

Attn:  President and CEO

 

 

Any notice, sent pursuant to this Certificate shall be effective, if delivered by hand, upon receipt thereof by the party to whom it is addressed, if sent by overnight courier, on the next business day of the delivery to the courier, and if sent by registered or certified mail on the third day after registration or certification thereof.

 

(f)           Applicable Law.  The validity, interpretation, and performance of this Certificate and of the Warrants shall be governed in all respects by the laws of the State of Nevada, without giving effect to any conflict of laws principles. The Company hereby agrees that any action, proceeding or claim against it arising out of or relating in any way to this Certificate and to the Warrants shall be brought and enforced in the courts of the State of Nevada or the United States District Court for the District of Nevada, and irrevocably submits to such jurisdiction, which jurisdiction shall be exclusive. The Company hereby waives any objection to such exclusive jurisdiction and that such courts represent an inconvenient forum. Any such process or summons to be served upon the Company may be served by transmitting a copy thereof by registered or certified mail, return receipt requested, postage prepaid, addressed to it at the address set forth in Section 5(e) hereof. Such mailing shall be deemed personal service and shall be legal and binding upon the Company in any action, proceeding or claim. 

  

GOOD TIMES RESTAURANTS INC.

 

 

 

	By:	 	 
	 	 	 
	 	
Boyd E. Hoback, President & CEO

	 

 

                                                                

 

 

	By:	 	 
	 	 	 
	 	
Susan M. Knutson, Secretary

	 

 

  

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GOOD TIMES RESTAURANTS INC.

 

SUBSCRIPTION FORM

 

(To Be Executed by the Warrantholder in Order to Exercise Warrants)

 

 

 

The undersigned Warrantholder hereby irrevocably elects to exercise __________ Warrants represented by this Warrant Certificate, and to purchase the shares of Common Stock issuable upon the exercise of such Warrants.  Payment shall take the form of (check applicable box):

 

o in lawful money of the United States by certified check made payable to the Company or by wire transfer of immediately available funds to an account designated by the Company; or

 

 

o if permitted by the terms of the Warrant Certificate, the cancellation of such number of shares of Common Stock as is necessary, in accordance with the formula set forth in Section 1(c)(ii), to exercise the Warrants with respect to the maximum number of shares of Common Stock purchasable pursuant to the cashless exercise procedure set forth in Section 1(c)(ii).

 

 

The undersigned Warrantholder requests that certificates for such shares shall be issued in the name of:

 

	Name:   	 	 
	 	 	 
	Address:   	 	 
	 	 	 
	 	 	 
	 	 	 
	Tax Identification Number:   	 	 

 

 

and be delivered to:

 

 

 

	Name:   	 	 
	 	 	 
	Address:   	 	 
	 	 	 
	 	 	 

 

 

and, if the number of Warrants shall not be all the Warrants evidenced by this Warrant Certificate, that a new Warrant Certificate for the balance of such Warrants be registered in the name of, and delivered to, the Warrantholder at the address stated below.

 

 

	Dated: 	 	 	 	 	Signature: 	 	 
	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 
	 	 	 	 	 	Address

 

  

9

  

 

	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 
	 	 	 	 	 	  Tax Identification Number

 

Signature Guaranteed:

 

 

 

	 	 

 

 

THE SIGNATURE TO THIS WARRANT EXERCISE FORM MUST CORRESPOND TO THE NAME WRITTEN UPON THE FACE OF THIS WARRANT CERTIFICATE IN EVERY PARTICULAR, WITHOUT ALTERATION OR ENLARGEMENT OR ANY CHANGE WHATSOEVER, AND MUST BE GUARANTEED BY A COMMERCIAL BANK OR TRUST COMPANY OR A MEMBER FIRM OF THE AMERICAN STOCK EXCHANGE, NEW YORK STOCK EXCHANGE, PACIFIC STOCK EXCHANGE OR CHICAGO STOCK EXCHANGE.

 

  

10

  

 

GOOD TIMES RESTAURANTS INC.

 

ASSIGNMENT

 

(To Be Executed by the Warrantholder in Order to Assign Warrants)

 

 

 

For Value Received, ____________________ hereby sells, assigns and transfers unto:

 

 

	Name:   	 	 
	 	 	 
	Address:   	 	 
	 	 	 
	 	 	 
	 	 	 
	Tax Identification Number:   	 	 

 

_________ of the Warrants represented by this Warrant Certificate, and hereby irrevocably constitutes and appoints ____________________ Attorney to transfer this Warrant Certificate on the books of the Company, with full substitution in the premises.

 

 

                                                             

 

	Dated: 	 	 	 	 	Signature: 	 	 

 

 

 

 

Signature Guaranteed:

 

 

 

 

	 	 

 

 

THE SIGNATURE TO THIS ASSIGNMENT MUST CORRESPOND TO THE NAME WRITTEN UPON THE FACE OF THIS WARRANT CERTIFICATE IN EVERY PARTICULAR, WITHOUT ALTERATION OR ENLARGEMENT OR ANY CHANGE WHATSOEVER, AND MUST BE GUARANTEED BY A COMMERCIAL BANK OR TRUST COMPANY OR A MEMBER FIRM OF THE AMERICAN STOCK EXCHANGE, NEW YORK STOCK EXCHANGE, PACIFIC STOCK EXCHANGE OR CHICAGO STOCK EXCHANGE.

 

 

 

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