Exhibit 10.20

 

RETENTION AGREEMENT

 

This RETENTION AGREEMENT (this “Agreement”) is made as of the         day of
              , 2006 by and between REAL MEX RESTAURANTS, INC., a Delaware
corporation (the “Company”), and                                    
(“Executive”).

 

WHEREAS, Executive serves the Company in a position of substantial authority and
responsibility; and

 

WHEREAS, the Company and Executive wish to establish protections for Executive
in the event of certain cessations of his employment with the Company following
a change of control of the Company.

 

NOW THEREFORE, in consideration of these premises and intending to be legally
bound hereby, the parties agree as follows:

 

SECTION 1.                            Severance Benefits.

 

1.1.                              EXECUTIVE’S ENTITLEMENT. IF ON OR AFTER THE
EFFECTIVE DATE OF A CHANGE OF CONTROL (THE “EFFECTIVE DATE”) AND PRIOR TO THE
END OF THE 18 MONTH PERIOD BEGINNING UPON SUCH CHANGE IN CONTROL, EXECUTIVE’S
EMPLOYMENT WITH THE COMPANY CEASES DUE TO A TERMINATION BY THE COMPANY WITHOUT
CAUSE OR A RESIGNATION BY EXECUTIVE WITH GOOD REASON, EXECUTIVE WILL BE ENTITLED
TO:

 

1.1.1.                     PAYMENT OF ALL ACCRUED AND UNPAID BASE SALARY THROUGH
THE DATE OF CESSATION;

 

1.1.2.                     PAYMENT FOR ALL ACCRUED BUT UNUSED VACATION DAYS;

 

1.1.3.                     PAYMENT OF ANY ANNUAL BONUS EARNED BUT UNPAID WITH
RESPECT TO THE FISCAL YEAR OF THE COMPANY ENDING PRIOR TO THE FISCAL YEAR OF THE
COMPANY IN WHICH SUCH CESSATION OCCURRED;

 

1.1.4.                     WAIVER OF THE APPLICABLE PREMIUM OTHERWISE PAYABLE
FOR COBRA CONTINUATION COVERAGE FOR EXECUTIVE (AND, TO THE EXTENT COVERED
IMMEDIATELY PRIOR TO THE DATE OF EXECUTIVE’S CESSATION, HIS SPOUSE AND
DEPENDENTS) TO THE EXTENT SUCH PREMIUM EXCEEDS THE EMPLOYEE CONTRIBUTION
REQUIRED FOR SUCH COVERAGE (AS IN EFFECT IMMEDIATELY PRIOR TO CESSATION OF
EMPLOYMENT) FOR A PERIOD EQUAL TO THE SEVERANCE PERIOD;

 

1.1.5.                     CONTINUATION OF HIS COMPANY-PROVIDED GROUP TERM LIFE
INSURANCE AT NO COST TO EXECUTIVE (AT A LEVEL EQUAL TO THE LOWER OF $500,000, OR
TWO TIMES EXECUTIVE’S ANNUAL BASE RATE OF PAY IMMEDIATELY PRIOR TO CESSATION OF
EMPLOYMENT), OR IF GROUP COVERAGE IS NOT PERMITTED, REIMBURSEMENT OF THE
PREMIUMS THAT EXECUTIVE PAYS FOR SUBSTANTIALLY EQUIVALENT REPLACEMENT COVERAGE,
FOR A PERIOD EQUAL TO THE SEVERANCE PERIOD;

 

1.1.6.                     CONTINUATION OF HIS CAR AND CAR OPERATING ALLOWANCE
OF $       /MONTH (OR SUCH GREATER AMOUNT AS IN EFFECT IMMEDIATELY PRIOR TO
CESSATION OF EMPLOYMENT) FOR A PERIOD EQUAL TO THE SEVERANCE PERIOD; AND

 

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1.1.7.                     MONTHLY PAYMENTS FOR A PERIOD EQUAL TO THE SEVERANCE
PERIOD, EACH EQUAL TO ONE-TWELFTH OF EXECUTIVE’S ANNUAL BASE RATE OF SALARY (AS
IN EFFECT IMMEDIATELY PRIOR TO HIS CESSATION OR, IF THAT CESSATION IS DUE TO A
RESIGNATION FOR GOOD REASON DESCRIBED IN SECTION 1.2.3(II), THEN AT THE RATE IN
EFFECT IMMEDIATELY PRIOR TO SUCH REDUCTION).

 

Notwithstanding the foregoing, no amount will be paid or benefit or right
provided under this Agreement unless Executive executes and delivers to the
Company, in a form satisfactory to the Company, a release substantially
identical to that attached hereto as Exhibit A in a manner consistent with the
requirements of the Older Workers Benefit Protection Act and all other
applicable laws (the “Release”). The severance benefits described in this
Section 1.1 will be paid (or, in the case of the benefits described in
Sections 1.1.4 – 1.1.7, will begin to be paid or provided) as soon as
administratively practicable following the date the Release becomes irrevocable.
The payments, benefits and rights described in this Section 1.1 will be offset
by severance benefits due under any employment agreement, severance plan or
similar arrangement maintained by the Company.

 

1.2.                              DEFINITIONS. FOR PURPOSES OF THIS AGREEMENT:

 

1.2.1.                     “CAUSE” MEANS, WITH RESPECT TO EXECUTIVE:
(I) CONVICTION OF, OR THE ENTRY OF A PLEA OF GUILTY OR NO CONTEST TO, A FELONY
OR ANY OTHER CONDUCT THAT CAUSES THE COMPANY OR ITS AFFILIATES PUBLIC DISGRACE
OR DISREPUTE, (II) GROSS NEGLIGENCE OR WILLFUL MISCONDUCT WITH RESPECT TO THE
COMPANY OR ANY OF ITS AFFILIATES (INCLUDING, WITHOUT LIMITATION FRAUD,
EMBEZZLEMENT, THEFT OR PROVEN DISHONESTY IN THE COURSE OF EMPLOYMENT);
(III) ALCOHOL ABUSE OR USE OF CONTROLLED DRUGS OTHER THAN IN ACCORDANCE WITH A
PHYSICIAN’S PRESCRIPTION; (IV) REFUSAL, FAILURE OR INABILITY TO SUBSTANTIALLY
PERFORM THE DUTIES OF HIS POSITION, WHICH FAILURE, REFUSAL OR INABILITY (IF
CURABLE) IS NOT CURED WITHIN TEN DAYS AFTER DELIVERY OF NOTICE THEREOF;
(V) MATERIAL BREACH OF ANY AGREEMENT WITH, POLICY OF OR DUTY OWED TO THE COMPANY
OR ANY OF ITS AFFILIATES, WHICH BREACH (IF CURABLE) IS NOT CURED WITHIN TEN DAYS
AFTER DELIVERY OF NOTICE THEREOF; OR (VI) POOR WORK PERFORMANCE. NOTWITHSTANDING
THE FOREGOING, IF EXECUTIVE AND THE COMPANY (OR ANY OF ITS AFFILIATES) HAVE
ENTERED INTO AN EMPLOYMENT, CONSULTING OR OTHER SIMILAR AGREEMENT THAT
SPECIFICALLY DEFINES “CAUSE” OR ANY SUBSTANTIALLY SIMILAR CONCEPT, “CAUSE” WILL
HAVE THE MEANING OF SUCH TERM AS DEFINED IN THAT AGREEMENT. FOR AVOIDANCE OF
DOUBT, A CESSATION OF EMPLOYMENT DUE TO (A) A MENTAL OR PHYSICAL CONDITION
ENTITLING EXECUTIVE TO BENEFITS UNDER ANY COMPANY-MAINTAINED OR PROVIDED
DISABILITY PLAN OR POLICY OR (B) DEATH, WILL NOT CONSTITUTE A TERMINATION BY THE
COMPANY “WITHOUT CAUSE.”

 

1.2.2.                     “CHANGE IN CONTROL” MEANS THE FIRST OCCURRENCE OF ANY
OF THE FOLLOWING AFTER THE EFFECTIVE DATE (WHETHER IN ONE TRANSACTION OR A
SERIES OF RELATED TRANSACTIONS): (I) THE SALE, TRANSFER, ASSIGNMENT OR OTHER
DISPOSITION (INCLUDING BY MERGER OR CONSOLIDATION, BUT EXCLUDING ANY SALES BY
STOCKHOLDERS MADE AS PART OF AN UNDERWRITTEN PUBLIC OFFERING OF COMMON STOCK) BY
STOCKHOLDERS OF THE COMPANY OF MORE THAN 50% OF THE VOTING POWER REPRESENTED BY
THE THEN OUTSTANDING CAPITAL STOCK OF THE COMPANY, (II) THE SALE OF
SUBSTANTIALLY ALL THE ASSETS OF THE COMPANY (OTHER THAN A TRANSFER OF FINANCIAL
ASSETS MADE IN THE ORDINARY COURSE OF BUSINESS FOR THE PURPOSE OF
SECURITIZATION), OR (III) THE LIQUIDATION OR DISSOLUTION OF THE COMPANY.

 

1.2.3.                     “GOOD REASON” MEANS (I) REASSIGNMENT OF EXECUTIVE TO
A POSITION WITH AUTHORITY, DUTIES OR RESPONSIBILITIES THAT ARE SUBSTANTIALLY
INFERIOR TO THOSE OF HIS EXISTING POSITION,

 

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(II) A REDUCTION IN EXECUTIVE’S ANNUAL BASE SALARY, OR (III) A RELOCATION OF
EXECUTIVE’S PRINCIPAL WORKSITE TO A LOCATION MORE THAN TWENTY (20) MILES FROM
HIS EXISTING WORKSITE OR RESIDENCE; PROVIDED, HOWEVER, THAT NONE OF THE
FOREGOING EVENTS OR CONDITIONS WILL CONSTITUTE “GOOD REASON” UNLESS: (X) 
EXECUTIVE PROVIDES THE COMPANY WITH WRITTEN OBJECTION TO THE EVENT OR CONDITION
WITHIN 90 DAYS FOLLOWING THE OCCURRENCE THEREOF, (Y) THE COMPANY DOES NOT
REVERSE OR OTHERWISE CURE THE EVENT OR CONDITION WITHIN FIFTEEN (15) DAYS OF
RECEIVING THAT WRITTEN OBJECTION, AND (Z) EXECUTIVE RESIGNS HIS EMPLOYMENT
WITHIN THIRTY (30) DAYS FOLLOWING THE EXPIRATION OF THAT CURE PERIOD; AND
PROVIDED FURTHER, THAT NOTWITHSTANDING THE FOREGOING, IF EXECUTIVE AND THE
COMPANY (OR ANY OF ITS AFFILIATES) HAVE ENTERED INTO AN EMPLOYMENT, CONSULTING
OR OTHER SIMILAR AGREEMENT THAT SPECIFICALLY DEFINES “GOOD REASON,”
“CONSTRUCTIVE DISCHARGE” OR ANY SUBSTANTIALLY SIMILAR CONCEPT, “GOOD REASON”
WILL HAVE THE MEANING OF SUCH TERM AS DEFINED IN THAT AGREEMENT.

 

1.2.4.                     “SEVERANCE PERIOD” MEANS 18 MONTHS REDUCED BY THE
NUMBER OF FULL OR PARTIAL MONTHS (IF ANY) TRANSPIRED SINCE THE OCCURRENCE OF A
CHANGE IN CONTROL.

 

SECTION 2.                            Avoidance of Golden Parachute Excise
Taxes. Notwithstanding any other provision of this Agreement, to the extent that
any payment, right and/or benefit otherwise due hereunder (when added to all
other payments, rights and benefits due to Executive from the Company and its
affiliates)(collectively, the “Payments” and each, a “Payment”) will constitute
an “excess parachute payment” under Section 280G of the Internal Revenue Code
(the “Code”) or any successor provision, that Payment will not be paid or
provided unless approved by the stockholders of the Company in a manner, and at
a time, consistent with the requirements of Section 280G(b)(5)(B) of the Code
and the regulations promulgated thereunder. The Company agrees that, if the
foregoing sentence is implicated, it will timely submit the excess Payments to
its stockholders for their approval, will recommend that its stockholders vote
in favor of those Payments and will otherwise exercise reasonable efforts to
encourage the approval of those Payments in a manner consistent with the
requirements of Section 280G(b)(5)(B) of the Code.

 

SECTION 3.                            Miscellaneous.

 

3.1.                              NO MITIGATION; NO OFFSET. FOLLOWING ANY
CESSATION OF EXECUTIVE’S EMPLOYMENT WITH THE COMPANY, EXECUTIVE WILL BE UNDER NO
OBLIGATION TO SEEK OTHER EMPLOYMENT AND THERE WILL BE NO OFFSET AGAINST AMOUNTS
DUE TO EXECUTIVE HEREUNDER ON ACCOUNT OF REMUNERATION ATTRIBUTABLE TO SUBSEQUENT
EMPLOYMENT OF EXECUTIVE BY A THIRD PARTY.

 

3.2.                              NO LIABILITY OF OFFICERS AND DIRECTORS FOR
SEVERANCE UPON INSOLVENCY. NOTWITHSTANDING ANY OTHER PROVISION OF THIS AGREEMENT
AND INTENDING TO BE BOUND BY THIS PROVISION, EXECUTIVE HEREBY (A) WAIVES ANY
RIGHT TO CLAIM PAYMENT OF AMOUNTS OWED TO HIM OR HER, NOW OR IN THE FUTURE,
PURSUANT TO THIS AGREEMENT FROM DIRECTORS OR OFFICERS OF THE COMPANY IF THE
COMPANY BECOMES INSOLVENT, AND (B) FULLY AND FOREVER RELEASES AND DISCHARGES THE
COMPANY’S OFFICERS AND DIRECTORS FROM ANY AND ALL CLAIMS, DEMANDS, LIENS,
ACTIONS, SUITS, CAUSES OF ACTION OR JUDGMENTS ARISING OUT OF ANY PRESENT OR
FUTURE CLAIM FOR SUCH AMOUNTS.

 

3.3.                              SUCCESSORS AND ASSIGNS. THIS AGREEMENT WILL
INURE TO THE BENEFIT OF AND BE BINDING UPON THE COMPANY AND EXECUTIVE AND THEIR
RESPECTIVE SUCCESSORS, EXECUTORS, ADMINISTRATORS AND HEIRS. THE COMPANY
MAY ASSIGN THIS AGREEMENT TO ANY DIRECT OR INDIRECT

 

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SUBSIDIARY OF COMPANY, OR ANY SUCCESSOR TO ALL OR SUBSTANTIALLY ALL OF ITS
ASSETS AND BUSINESS BY MEANS OF LIQUIDATION, DISSOLUTION, MERGER, CONSOLIDATION,
TRANSFER OF ASSETS, SALE OF STOCK OR OTHERWISE. THE RIGHTS AND OBLIGATIONS OF
EXECUTIVE HEREUNDER ARE PERSONAL TO EXECUTIVE AND MAY NOT BE ASSIGNED BY HIM.

 

3.4.                              NOTICE. ANY NOTICE OR COMMUNICATION REQUIRED
OR PERMITTED UNDER THIS AGREEMENT SHALL BE MADE IN WRITING AND (A) SENT BY
OVERNIGHT COURIER, (B) MAILED BY CERTIFIED OR REGISTERED MAIL, RETURN RECEIPT
REQUESTED OR (C) SENT BY TELECOPIER, ADDRESSED AS FOLLOWS:

 

If to Executive, to the address set forth in his personnel file.

 

If to Company:

 

Real Mex Restaurants, Inc.
5660 Katella Avenue
Suite 100
Cypress, CA 90630
Attention: Chairman of the Board
Facsimile No.: (562) 346-1465

 

or to such other address as either party may from time to time specify by notice
given to the other party in the manner described above.

 

3.5.                              ENTIRE AGREEMENT; AMENDMENTS. THIS AGREEMENT
CONTAINS THE ENTIRE AGREEMENT AND UNDERSTANDING OF THE PARTIES HERETO RELATING
TO THE SUBJECT MATTER HEREOF, AND MERGES AND SUPERSEDES ALL PRIOR AND
CONTEMPORANEOUS DISCUSSIONS, AGREEMENTS AND UNDERSTANDINGS OF EVERY NATURE
RELATING TO THE SUBJECT MATTER HEREOF, EXCEPT AS OTHERWISE SPECIFICALLY PROVIDED
FOR HEREIN. THIS AGREEMENT MAY NOT BE CHANGED OR MODIFIED, EXCEPT BY AN
AGREEMENT IN WRITING SIGNED BY EACH OF THE PARTIES HERETO.

 

3.6.                              WAIVER. ANY WAIVER BY EITHER PARTY OF ANY
BREACH OF ANY TERM OR CONDITION IN THIS AGREEMENT SHALL NOT OPERATE AS A WAIVER
OF ANY OTHER BREACH OF SUCH TERM OR CONDITION OR OF ANY OTHER TERM OR CONDITION,
NOR SHALL ANY FAILURE TO ENFORCE ANY PROVISION HEREOF OPERATE AS A WAIVER OF
SUCH PROVISION OR OF ANY OTHER PROVISION HEREOF OR CONSTITUTE OR BE DEEMED A
WAIVER OR RELEASE OF ANY OTHER RIGHTS, IN LAW OR IN EQUITY.

 

3.7.                              GOVERNING LAW. THIS AGREEMENT SHALL BE
GOVERNED BY, AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF
CALIFORNIA, WITHOUT REGARD TO THE APPLICATION OF THE PRINCIPLES OF CONFLICTS OF
LAWS.

 

3.8.                              SEVERABILITY. WHENEVER POSSIBLE, EACH
PROVISION OF THIS AGREEMENT WILL BE INTERPRETED IN SUCH MANNER AS TO BE
EFFECTIVE AND VALID UNDER APPLICABLE LAW. HOWEVER, IF ANY PROVISION OF THIS
AGREEMENT IS HELD TO BE INVALID, ILLEGAL OR UNENFORCEABLE IN ANY RESPECT, SUCH
INVALIDITY, ILLEGALITY OR UNENFORCEABILITY WILL NOT AFFECT ANY OTHER PROVISION,
AND THIS AGREEMENT WILL BE REFORMED, CONSTRUED AND ENFORCED AS THOUGH THE
INVALID, ILLEGAL OR UNENFORCEABLE PROVISION HAD NEVER BEEN HEREIN CONTAINED.

 

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3.9.                              SECTION HEADINGS. THE SECTION HEADINGS IN THIS
AGREEMENT ARE FOR CONVENIENCE ONLY; THEY FORM NO PART OF THIS AGREEMENT AND
SHALL NOT AFFECT ITS INTERPRETATION.

 

3.10.                        WITHHOLDING. ANY PAYMENTS DUE TO EXECUTIVE
HEREUNDER WILL BE SUBJECT TO WITHHOLDING FOR ALL TAXES OR OTHER AMOUNTS REQUIRED
TO BE WITHHELD PURSUANT TO APPLICABLE LAW.

 

3.11.                        COMPLIANCE WITH SECTION 409A. NOTWITHSTANDING ANY
OTHER PROVISION OF THIS AGREEMENT, ALL PAYMENTS TO BE MADE HEREUNDER SHALL BE
STRUCTURED, BOTH AS TO AMOUNT AND TIME OF PAYMENT, TO THE MAXIMUM EXTENT
POSSIBLE, TO COMPLY WITH SECTION 409A OF THE CODE AS INTERPRETED IN GOOD FAITH
AND IN ACCORDANCE WITH GUIDANCE ON THE APPLICATION OF SECTION 409A PUBLISHED BY
THE INTERNAL REVENUE SERVICE (“SECTION 409A”). UNLESS AND UNTIL PRECLUDED BY
FINAL GUIDANCE ISSUED UNDER SECTION 409A, THE COMPANY AND THE EXECUTIVE AGREE TO
NEGOTIATE IN GOOD FAITH TO RESTRUCTURE ANY PAYMENTS TO BE MADE UNDER THIS
AGREEMENT TO THE EXTENT REASONABLY NECESSARY TO COMPLY WITH THE REQUIREMENTS OF
SECTION 409A.

 

3.12.                        COUNTERPARTS AND FACSIMILES. THIS AGREEMENT MAY BE
EXECUTED, INCLUDING EXECUTION BY FACSIMILE SIGNATURE, IN ONE OR MORE
COUNTERPARTS, EACH OF WHICH SHALL BE DEEMED AN ORIGINAL AND ALL OF WHICH
TOGETHER WILL BE DEEMED TO BE ONE AND THE SAME INSTRUMENT.

 

3.13.                        TERMINATION. THIS AGREEMENT SHALL TERMINATE AND BE
OF NO FORCE OR EFFECT IF THE EFFECTIVE DATE HAS NOT OCCURRED WITHIN ONE YEAR
AFTER THE DATE HEREOF.

 

IN WITNESS WHEREOF, the Company has caused this Agreement to be executed by its
duly authorized officer, and Executive has executed this Agreement, in each case
as of the date first above written.

 

 

REAL MEX RESTAURANTS, INC.

 

 

 

 

 

By:

 

 

 

 

 

Name & Title:

 

 

 

 

 

 

 

EXECUTIVE

 

 

 

 

 

 

 

 

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Exhibit A

 

GENERAL RELEASE AND NON-DISPARAGEMENT AGREEMENT

 

THIS GENERAL RELEASE AND NON-DISPARAGEMENT AGREEMENT (this “Release”) is made as
of the         day of               ,                by and between
                      (“Executive”) and REAL MEX RESTAURANTS, INC. (the
“Company”).

 

WHEREAS, Executive’s employment by the Company has terminated; and

 

WHEREAS, pursuant to Section 1.1 of the Retention Agreement by and between the
Company and Executive dated as of               , 2006 (the “Retention
Agreement”), the Company has agreed to pay Executive certain amounts and to
provide Executive with certain benefits, subject to the execution of this
Release.

 

NOW THEREFORE, in consideration of these premises and the mutual promises
contained herein, and intending to be legally bound hereby, the parties agree as
follows:

 

SECTION 1.                            Consideration. Executive acknowledges
that: (i) the payments and benefits set forth in Section 1.1 of the Retention
Agreement constitute full settlement of all his rights under the Retention
Agreement, and (ii) [except as otherwise provided specifically in this Release,]
he has no entitlement under any other severance or similar arrangement
maintained by the Company, and (iii) except as otherwise provided specifically
in this Release, the Company does not and will not have any other liability or
obligation to him. Executive further acknowledges that, in the absence of his
execution of this Release, the severance benefits specified in Section 1.1 of
the Retention Agreement would not otherwise be due to him.

 

SECTION 2.                            General Release and Covenant Not to Sue.

 

2.1.                              EXECUTIVE HEREBY FULLY AND FOREVER RELEASES
AND DISCHARGES THE COMPANY AND ITS PARENTS, AFFILIATES AND SUBSIDIARIES,
INCLUDING ALL PREDECESSORS AND SUCCESSORS, ASSIGNS, OFFICERS, DIRECTORS,
TRUSTEES, EMPLOYEES, AGENTS AND ATTORNEYS, PAST AND PRESENT (EACH, A “RELEASED
PERSON”), FROM ANY AND ALL CLAIMS, DEMANDS, LIENS, AGREEMENTS, CONTRACTS,
COVENANTS, ACTIONS, SUITS, CAUSES OF ACTION, OBLIGATIONS, CONTROVERSIES, DEBTS,
COSTS, EXPENSES, DAMAGES, JUDGMENTS, ORDERS AND LIABILITIES, OF WHATEVER KIND OR
NATURE, DIRECT OR INDIRECT, IN LAW, EQUITY OR OTHERWISE, WHETHER KNOWN OR
UNKNOWN, ARISING AT ANY TIME, UP TO AND INCLUDING THE DATE OF THIS RELEASE. THIS
GENERAL RELEASE COVERS AND INCLUDES, AND THEREFORE RELEASES (WITHOUT LIMITATION)
ALL CLAIMS ARISING FROM OR RELATING TO THE EMPLOYEE’S EMPLOYMENT WITH THE
COMPANY, THE TERMINATION OF HIS/HER EMPLOYMENT WITH THE COMPANY, OR ANY ACT OR
OMISSION PROVIDED FOR OR AUTHORIZED BY THIS RELEASE. AMONG THE SPECIFIC CLAIMS
THAT THE EMPLOYEE IS RELEASING BY SIGNING THIS RELEASE ARE (WITHOUT LIMITATION)
THE FOLLOWING: ALL CLAIMS ARISING UNDER (I) ANY LAW PROHIBITING DISCRIMINATION
ON THE BASIS OF ANY PROTECTED CHARACTERISTIC (SUCH AS AGE, RACE, SEX, NATIONAL
ORIGIN, RELIGION, AND DISABILITY STATUS), INCLUDING (BUT NOT LIMITED TO) ALL
CLAIMS ARISING UNDER THE AGE DISCRIMINATION IN EMPLOYMENT ACT (“ADEA”), TITLE
VII OF THE CIVIL RIGHTS ACT OF 1964, THE AMERICANS WITH DISABILITIES ACT, AND
ANY SIMILAR STATE AND LOCAL LAWS, INCLUDING (BUT NOT LIMITED TO) THE CALIFORNIA
FAIR EMPLOYMENT AND HOUSING ACT; (II) ANY LAW GOVERNING THE PAYMENT OF WAGES OR
THE PROVISION OF EMPLOYEE BENEFITS, INCLUDING (BUT NOT LIMITED TO) THE EMPLOYEE
RETIREMENT INCOME SECURITY ACT, THE CALIFORNIA LABOR CODE, AND THE CALIFORNIA
WORKERS’ COMPENSATION ACT; (III) THE

 

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COMMON LAW OF ANY JURISDICTION, INCLUDING (BUT NOT LIMITED TO) ALL CLAIMS FOR
BREACH OF CONTRACT, WRONGFUL TERMINATION OR DISCHARGE, INFLICTION OF EMOTIONAL
DISTRESS, FRAUD, NEGLIGENCE, AND DEFAMATION; AND (IV) ANY OTHER LAW (OR CAUSE OF
ACTION), WHETHER FEDERAL, STATE, OR LOCAL, GOVERNING THE EMPLOYMENT
RELATIONSHIP, INCLUDING (WITHOUT LIMITATION) THE FAMILY AND MEDICAL LEAVE ACT.”

 

2.2.                              EXECUTIVE EXPRESSLY REPRESENTS THAT HE HAS NOT
FILED A LAWSUIT OR INITIATED ANY OTHER PROCEEDING AGAINST ANY RELEASED PERSON
AND THAT HE HAS NOT ASSIGNED ANY CLAIM AGAINST A RELEASED PERSON TO ANY OTHER
PERSON OR ENTITY. EXECUTIVE FURTHER PROMISES NOT TO INITIATE, JOIN, OR ACCEPT
ANY RELIEF IN A LAWSUIT OR ANY OTHER PROCEEDING AGAINST ANY RELEASED PERSON
ASSERTING ANY CLAIMS RELEASED BY THIS RELEASE.

 

2.3.                              THIS RELEASE WILL NOT PREVENT EXECUTIVE FROM
FILING A CHARGE WITH THE EQUAL EMPLOYMENT OPPORTUNITY COMMISSION OR
PARTICIPATING IN ANY INVESTIGATION CONDUCTED BY THE EQUAL EMPLOYMENT OPPORTUNITY
COMMISSION; PROVIDED, HOWEVER, THAT ANY CLAIMS BY EXECUTIVE FOR PERSONAL RELIEF
IN CONNECTION WITH SUCH A CHARGE OR INVESTIGATION (SUCH AS REINSTATEMENT OR
MONETARY DAMAGES) WOULD BE BARRED.

 

2.4.                              EXECUTIVE ACKNOWLEDGES THAT HE IS FAMILIAR
WITH AND EXPRESSLY WAIVES ALL RIGHTS AFFORDED BY SECTION 1542 OF THE CIVIL CODE
OF THE STATE OF CALIFORNIA (“SECTION 1542”). SECTION 1542 READS SUBSTANTIALLY AS
FOLLOWS:

 

A general release does not extend to claims which the creditor does not know or
suspect to exist in his favor at the time of executing the release, which if
known by him must have materially affected his settlement with the debtor.

 

NOTWITHSTANDING THE PROVISIONS OF SECTION 1542, AND FOR THE PURPOSE OF
IMPLEMENTING A FULL AND COMPLETE RELEASE, EXECUTIVE UNDERSTANDS AND AGREES THAT
THIS RELEASE IS INTENDED TO INCLUDE ALL CLAIMS DESCRIBED ABOVE THAT HE MAY HAVE,
EVEN IF NOT NOW KNOWN OR SUSPECTED, AND THAT THIS RELEASE EXTINGUISHES ALL SUCH
CLAIMS.

 

2.5.                              THE FORGOING WILL NOT BE DEEMED TO RELEASE THE
COMPANY FROM (A)  CLAIMS SOLELY TO ENFORCE SECTION 1.1 OF THE RETENTION
AGREEMENT, (B) CLAIMS FOR INDEMNIFICATION UNDER THE COMPANY’S BY-LAWS, [OR]
(C) CLAIMS SOLELY TO ENFORCE THE TERMS OF ANY EQUITY INCENTIVE AWARD AGREEMENT
BETWEEN EXECUTIVE AND THE COMPANY[, OR (D) CLAIMS FOR AMOUNTS DUE UNDER
SECTION 2.4(D) OF THAT CERTAIN EXECUTIVE EMPLOYMENT AGREEMENT BETWEEN EXECUTIVE
AND THE COMPANY DATED AUGUST 2, 2004].(1)

 

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(1) For Fred Wolfe only.

 

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SECTION 3.                            Non-Disparagement. Executive will not
disparage any Released Person or otherwise take any action which could
reasonably be expected to adversely affect the personal or professional
reputation of any Released Person. Similarly, the Company (meaning, solely for
this purpose, the Company’s directors, executive officers and other individuals
authorized to make official communications on Company’s behalf) will not
disparage Executive or otherwise take any action which could reasonably be
expected to adversely affect Executive’s personal or professional reputation.

 

SECTION 4.                            Cooperation. Executive further agrees
that, subject to reimbursement of his reasonable expenses, he will cooperate
fully with the Company and its counsel with respect to any matter (including
litigation, investigations, or governmental proceedings) which relates to
matters with which he was involved during his employment with Company. Executive
will render such cooperation in a timely manner on reasonable notice from the
Company.

 

SECTION 5.                            Rescission Right. Executive expressly
acknowledges and recites that (a) he has read and understands this Release in
its entirety, (b) he has entered into this Release knowingly and voluntarily,
without any duress or coercion; (c) he has been advised orally and is hereby
advised in writing to consult with an attorney with respect to this Release
before signing it; (d) he was provided 21 calendar days after receipt of the
Release to consider its terms before signing it; and (e) he is provided seven
calendar days from the date of signing to terminate and revoke this Release, in
which case this Release shall be unenforceable, null and void. Executive
may revoke this Release during those seven days by providing written notice of
revocation to the Company at the address specified in Section 3.4 of the
Retention Agreement.

 

SECTION 6.                            Challenge. If Executive violates or
challenges the enforceability of any provision of this Release, no further
payments, rights or benefits under Section 1.1 of the Retention Agreement will
be due to Executive. While this Release will serve to release any ADEA claims
referenced above in Section 2, this Section 6 will not apply to any claims
challenging the validity of this Agreement under the ADEA.

 

SECTION 7.                            Miscellaneous.

 

7.1.                              NO ADMISSION OF LIABILITY. THIS RELEASE IS NOT
TO BE CONSTRUED AS AN ADMISSION OF ANY VIOLATION OF ANY FEDERAL, STATE OR LOCAL
STATUTE, ORDINANCE OR REGULATION OR OF ANY DUTY OWED BY THE COMPANY TO
EXECUTIVE. THERE HAVE BEEN NO SUCH VIOLATIONS AND THE COMPANY SPECIFICALLY
DENIES ANY SUCH VIOLATIONS.

 

7.2.                              NO REINSTATEMENT. EXECUTIVE AGREES THAT HE
WILL NOT APPLY FOR REINSTATEMENT WITH THE COMPANY OR SEEK IN ANY WAY TO BE
REINSTATED, RE-EMPLOYED OR HIRED BY THE COMPANY IN THE FUTURE. EXECUTIVE
(I) AGREES THAT, IF HE DOES SEEK SUCH REINSTATEMENT, THEN THE DENIAL OF SUCH
SHALL BE CONSIDERED LEGITIMATE, PROPER, AND NON-DISCRIMINATORY FOR ALL PURPOSES,
AS WELL AS AN EXERCISE OF THE COMPANY’S RIGHTS UNDER THIS SECTION; AND
(II) RELEASES THE COMPANY AND THE OTHER RELEASED PERSONS FROM ALL CLAIMS ARISING
FROM EXERCISE OF THEIR RIGHTS UNDER THIS SECTION 7.2 (INCLUDING THE CLAIMS
REFERENCED ABOVE IN SECTION 2).

 

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7.3.                              SUCCESSORS AND ASSIGNS. THIS RELEASE SHALL
INURE TO THE BENEFIT OF AND BE BINDING UPON THE COMPANY AND EXECUTIVE AND THEIR
RESPECTIVE SUCCESSORS, EXECUTORS, ADMINISTRATORS AND HEIRS. EXECUTIVE MAY NOT
MAKE ANY ASSIGNMENT OF THIS RELEASE OR ANY INTEREST HEREIN, BY OPERATION OF LAW
OR OTHERWISE. THE COMPANY MAY ASSIGN THIS RELEASE TO ANY SUCCESSOR TO ALL OR
SUBSTANTIALLY ALL OF ITS ASSETS AND BUSINESS BY MEANS OF LIQUIDATION,
DISSOLUTION, TRANSFER OF ASSETS, OR OTHERWISE.

 

7.4.                              SEVERABILITY. WHENEVER POSSIBLE, EACH
PROVISION OF THIS RELEASE WILL BE INTERPRETED IN SUCH MANNER AS TO BE EFFECTIVE
AND VALID UNDER APPLICABLE LAW. HOWEVER, IF ANY PROVISION OF THIS RELEASE IS
HELD TO BE INVALID, ILLEGAL OR UNENFORCEABLE IN ANY RESPECT, SUCH INVALIDITY,
ILLEGALITY OR UNENFORCEABILITY WILL NOT AFFECT ANY OTHER PROVISION, AND THIS
RELEASE WILL BE REFORMED, CONSTRUED AND ENFORCED AS THOUGH THE INVALID, ILLEGAL
OR UNENFORCEABLE PROVISION HAD NEVER BEEN HEREIN CONTAINED.

 

7.5.                              ENTIRE AGREEMENT; AMENDMENTS. EXCEPT AS
OTHERWISE PROVIDED HEREIN, THIS RELEASE CONTAINS THE ENTIRE AGREEMENT AND
UNDERSTANDING OF THE PARTIES HERETO RELATING TO THE SUBJECT MATTER HEREOF, AND
MERGES AND SUPERSEDES ALL PRIOR AND CONTEMPORANEOUS DISCUSSIONS, AGREEMENTS AND
UNDERSTANDINGS OF EVERY NATURE RELATING TO THE SUBJECT MATTER HEREOF, EXCEPT AS
OTHERWISE SPECIFICALLY PROVIDED FOR HEREIN. THIS RELEASE MAY NOT BE CHANGED OR
MODIFIED, EXCEPT BY AN AGREEMENT IN WRITING SIGNED BY EACH OF THE PARTIES
HERETO.

 

7.6.                              GOVERNING LAW. THIS RELEASE SHALL BE GOVERNED
BY, AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF CALIFORNIA WITHOUT
REGARD TO THE APPLICATION OF THE PRINCIPLES OF CONFLICTS OF LAWS.

 

7.7.                              COUNTERPARTS AND FACSIMILES. THIS RELEASE
MAY BE EXECUTED, INCLUDING EXECUTION BY FACSIMILE SIGNATURE, IN ONE OR MORE
COUNTERPARTS, EACH OF WHICH SHALL BE DEEMED AN ORIGINAL, AND ALL OF WHICH
TOGETHER SHALL BE DEEMED TO BE ONE AND THE SAME INSTRUMENT.

 

IN WITNESS WHEREOF, the Company has caused this Release to be executed by its
duly authorized officer, and Executive has executed this Release, in each case
as of the date first above written.

 

 

 

REAL MEX RESTAURANTS, INC.

 

 

 

 

 

By:

 

 

 

 

 

Name & Title:

 

 

 

 

 

 

 

EXECUTIVE

 

 

 

 

 

 

 

 

A-4

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