Document:

Exhibit 10.17

 

THIS INDEMNIFICATION AGREEMENT (the “Agreement”) is made and entered
into as of this 13th day of October, 2004, by and among J.W. Childs
Equity Partners, L.P. (“J.W. Childs”), Real Mex Restaurants, Inc. (“Real
Mex”), and CKR Acquisition Corp. (“Buyer”).

 

WHEREAS, J.W. Childs, Real Mex, and Buyer have entered into an Asset Purchase
Agreement, dated as of the date hereof by and among J.W. Childs, Buyer, Real
Mex and the other parties thereto (as the same may be amended and modified from
time to time, the “Asset Purchase Agreement”);

 

WHEREAS, Buyer’s agreement to enter into the Asset Purchase Agreement is
conditioned upon the execution and delivery by J.W. Childs, simultaneously with
the execution and delivery of the Asset Purchase Agreement, of this Agreement;
and

 

WHEREAS, all capital terms used herein and not otherwise defined herein shall
have the meanings ascribed to such terms in the Asset Purchase Agreement;

 

NOW, THEREFORE, in consideration of the foregoing and the mutual agreements, covenants,
representations, warranties and promises set forth herein, and in order to
prescribe the terms and conditions of such purchase and sale, the parties
hereto agree as follows:

 

1.             Issuance of Real Mex Securities.  Real
Mex covenants to issue and deliver to J.W. Childs on the Closing Date the
number of stock certificates, options and warrants representing the Stock
Consideration to be issued and delivered to J.W. Childs pursuant to Section 6.4
of the Asset Purchase Agreement.  Real
Mex covenants that upon such issuance and delivery, the securities representing
the Stock Consideration shall be duly authorized, validly issued, fully paid
and non-assessable.

 

2.             Representations and Warranties.

 

(a)           Real Mex and Buyer Representations.  Real
Mex and Buyer jointly and severally represent and warrant to J.W. Childs on the
date hereof as follows:

 

(i)            Organization and Power.  Real
Mex and Buyer (i) arc duly organized and validly existing under the laws of
their respective states of incorporation, (ii) have the requisite power and
authority to own their properties and assets, and to carry on the business in
which they are now engaged, and (iii) have the requisite power and authority to
execute this Agreement and to consummate the transactions contemplated hereby and
thereby.

 

(ii)           Authority.  This Agreement constitutes the
legal, valid and binding obligation of Real Mex and Buyer, as the case may be,
enforceable against it in accordance with its terms, except as enforceability
may be limited by in any case (i) applicable bankruptcy, reorganization,
insolvency, moratorium and similar Laws affecting the enforcement of creditors’
rights generally, and (ii) general equitable principles (regardless of whether
enforceability is considered in a proceeding in equity or at Law).  The
execution, delivery and performance of this Agreement, and the

 

 

consummation by Real Mex and Buyer of the
transactions contemplated hereby do not require any filing with, notice to, or
consent, waiver or approval of, any third party, including but not limited to,
any governmental body or entity.

 

(iii)          No Breach or Conflict.  The
execution, delivery and performance of this Agreement shall not: (I) violate or
result in a breach of any term of Real Mex’s or Buyer’s Certificate of
Incorporation or Bylaws, result in a breach of, or constitute a default under,
any term in any agreement or other instrument to which Real Mex or Buyer is a
party, such default having not been previously waived by the other party to any
such agreement, or violate any Law or any order, rule or regulation applicable
to Buyer, of any court or of any regulatory body, administrative agency or
other governmental instrumentality having jurisdiction over Real Mex or Buyer.  The execution, delivery and performance of
this Agreement by Real Mex and Buyer have been duly authorized by all necessary
corporate action.

 

(iv)          Capitalization.  The
representations and warranties of Real Mex and Buyer contained in Section 6.4
of the Asset Purchase Agreement shall be true and correct as of the Closing
Date.

 

(v)           Financial Statements.  The
representations and warranties of Real Mex and Buyer contained in Section 6.5
of the Asset Purchase Agreement are true and correct.

 

(b)           J.W. Childs Representations.  J.W. Childs represents and
warrants to Real Mex and Buyer on the date hereof as follows:

 

(i)            Organization and Power.  J.W.
Childs (i) is duly organized and validly existing under the laws of Us state of
formation, (ii) has the requisite power and authority to own its properties and
assets, and to carry on its business in which it is now engaged, and (iii) has
the requisite power and authority to execute this Agreement and to consummate
the transactions contemplated hereby and thereby.

 

(ii)           Authority.  This Agreement constitutes the
legal, valid and binding obligation of J.W. Childs, enforceable against it in
accordance with its terms, except as enforceability may be limited by in any
case (i) applicable bankruptcy, reorganization, insolvency, moratorium and
similar Laws affecting the enforcement of creditors’ rights generally, and (ii)
general equitable principles (regardless of whether enforceability is
considered in a proceeding in equity or at Law).  The execution, delivery and performance of
this Agreement, and the consummation by J.W. Childs of the transactions
contemplated hereby does not require any filing with, notice to, or consent,
waiver or approval of, any third party, including but not limited to, any
governmental body or entity.

 

(iii)          No Breach or Conflict.  The
execution, delivery and performance of this Agreement shall not: (i) violate or
result in a breach of any term of J.W. Childs’s Certificate of Formation (or
similar organizational document) or partnership agreement, result in a breach
of, or constitute a default under, any term in any

 

2

 

agreement or other
instrument to which J.W. Childs is a party, such default having not been
previously waived by the other party to any such agreement, or violate any Law
or any order, rule or regulation applicable to J.W. Childs, of any court or of
any regulatory body, administrative agency or other governmental
instrumentality having jurisdiction over J.W. Childs. The execution, delivery
and performance of this Agreement by J.W. Childs has been duly authorized by
all necessary partnership action.

 

(iv)          Investment Representation.  J.W.
Childs acknowledges that the Real Mex Securities have not been, and will not be
as of the Closing Date, registered under the Securities Act of 1933, as
amended, or the securities Laws of an state or other regulatory body and such
shares are being offered and sold in reliance upon federal and state
exemptions.  J.W. Childs is acquiring the
Real Mex Securities for its own account with the present intention of holding such
securities for investment purposes and not with a view to or for sale in
connection with any public distribution of such securities in violation of any
federal or state securities Laws.  J.W.
Childs is a sophisticated investor, familiar with the business of Real Mex so
that it is capable of evaluating the merits and risks of its investment in the
Real Mex Securities.

 

3.             No Survival of Representations and Warranties.  None
of the representations and warranties of the parties hereto contained in
Section 2 of this Agreement or made in any other documents or instruments
delivered pursuant to this Agreement shall survive past the Closing Date.

 

4.             Indemnification.  On
and after the Closing Date, J.W. Childs shall indemnify Buyer and Real Mex and
their Affiliates and their respective partners, members, officers, directors,
employees, agents and representatives (each, a “Buyer  Indemnified
Party”) and hold each such Buyer Indemnified Party harmless from and against
any and all Damages (as defined below) arising out of, resulting from or
relating to (A) any misrepresentation or breach of any representation,
warranty, covenant or agreement made by Sellers in the Asset Purchase Agreement
or in any schedule, statement, document or certificate furnished or required to
be furnished to Buyer pursuant thereto and (B) the Excluded Assets or the
Excluded Liabilities.  For purposes of
this Agreement, “Damages” shall mean any and all losses, liabilities,
damages (including any governmental penalty), obligations, awards, fines,
deficiencies, interest, actions, demands, claims, proceedings, judgments,
costs, expenses and fees (including attorneys’ fees, court costs and all other
reasonable expenses incurred in investigating, preparing or defending any
litigation or proceeding, commenced or threatened) resulting from, arising out
of or incident to (a) any of the foregoing indemnifiable items or (b) incident
to the enforcement of this Agreement; provided, that Damages shall not
include (i) punitive damages other than punitive damages payable to a third
party, and (ii) Damages from breaches disclosed on the certificates to be
delivered to Buyer in accordance with Sections 8.1(a), 8.l(b), and 8.1(c) of
the Asset Purchase Agreement; and provided, further, that Damages
shall be calculated net of any insurance proceeds actually received by Buyer
with respect to the occurrence that is the basis for such Damages.

 

5.             Limitations.  J.W. Childs will not be liable
for any Damages unless (i) Real Mex or Buyer asserts a written claim for such damages
prior to the end of the one-year

 

3

 

period from the Closing Date
(and J.W. Childs agrees that any claim so filed shall survive until its final
resolution), (ii) the Damages with respect to the particular act, event, fact,
occurrence or omission causing Damages exceeds $10,000, and (iii) the aggregate
of all Damages exceeds $600,000 (and then only to the extent of such excess).  The maximum liability of J.W. Childs hereunder
shall in no event exceed $6,000,000.  For
purposes of calculating the amount of Damages and for determining if any breach
of any representation or warranty in the Asset Purchase Agreement has occurred,
all references to a “Material Adverse Effect” or materiality (or other
correlative terms) in such representation or warranty shall be disregarded.  Notwithstanding anything to the contrary
contained in Section 9.1 of the Asset Purchase Agreement, for purposes of this
Agreement, the representations and warranties of the Sellers contained in the
Asset Purchase Agreement shall survive for a period of 12 months after the
Closing Date.

 

6.             Payment.  In the event that J.W. Childs
owes Damages pursuant to this Agreement, at its option J.W. Childs may pay all
or portion of such Damages in cash or by remitting Real Mex Securities to Real
Mex with a value equal to such amount of such Damages.  If J.W. Childs makes payment on or before the
one-year period from the Closing Date, the Real Mex Securities shall be deemed
to have a value equal to $1,000,000 for each 1% of the Real Mex Securities
issued to J.W. Childs at the Closing.  If
J.W. Childs makes payment after the one-year period from the Closing Date, the
Real Mex Securities shall have a value equal to the fair market value as
mutually agreed by the parties.  If the
parties can not mutually agree on the fair market value, the fair market value
shall be determined by an appraiser, investment bank or similar valuation
professional of national standing in the restaurant industry mutually agreeable
to the parties, which agreement shall not be unreasonably withheld or delayed
by either party.

 

7.             Third Party Claims.

 

(a)           If a Buyer Indemnified Party is seeking
indemnification pursuant to this Agreement on account of a Third Party Claim
(as defined below), Buyer shall give prompt notice to J.W. Childs of the
assertion of any claim, or the commencement of any action, suit or proceeding,
in respect of which indemnity may be sought hereunder and will give J.W. Childs
such information with respect thereto as J.W. Childs may reasonably request,
but failure to give such notice shall not relieve J. W. Childs of any liability
hereunder (except to the extent that J.W. Childs has suffered actual prejudice
thereby).  J.W. Childs shall have the
right (but not the obligation), exercisable by written notice to Buyer within
15 days of receipt of notice from Buyer of the commencement of or assertion of
any claim or action, suit or proceeding by a third party in respect of which
indemnity may be sought hereunder (a “Third Party Claim”), to assume the
defense and control the settlement of such Third Party Claim which involves
(and continues to involve) solely monetary damages; provided, however,
that (i) J.W. Childs expressly agrees in such notice that, as between J.W.
Childs and the Buyer Indemnified Party, J.W. Childs shall be solely obligated
to satisfy and discharge the Third Party Claim; (ii) the defense of such Third
Party Claim by J.W. Childs will not, in the reasonable judgment of Buyer, have
any continuing material adverse effect on the Buyer Indemnified Party’s
business or financial condition; and (iii) J.W. Childs provides Buyer with
reasonable assurances that it has the financial ability to satisfy the full
amount of any adverse

 

4

 

monetary judgment that may result (the
conditions set forth in clauses (i), (ii) and (iii) are collectively referred
to as the “Litigation Conditions”).

 

(b)           J.W. Childs or Buyer, as the case may be, shall
have the right to participate in (but not control), at its own expense, the
defense of any Third Party Claim which the other is defending as provided in
this Agreement.  J.W. Childs, if it shall
have assumed the defense of any Third Party Claim as provided in this
Agreement, shall not consent to a settlement of, or the entry of any judgment
arising from, any such Third Party Claim without the prior written consent of
Buyer (which consent shall not be unreasonably withheld or delayed).  J.W. Childs shall not, without the prior
written consent of Buyer, enter into any compromise or settlement which commits
Buyer or any Buyer Indemnified Party to take, or to forbear to take, any action
or which does not provide for a complete release by such third party of the
Buyer Indemnified Party.  Buyer shall
have the sole and exclusive right to settle any Third Party Claim, on such
terms and conditions as it deems reasonably appropriate, to the extent such
Third Party Claim involves equitable or other non-monetary relief, and shall
have the right to settle any Third Party Claim involving monetary damages with
the written consent of J.W. Childs, which consent shall not be unreasonably
withheld or delayed.

 

(c)           Whether or not Buyer chooses to defend or
prosecute any Third Party Claim, the parties hereto shall cooperate in the
defense or prosecution thereof and shall furnish such records, information and
testimony, and attend such conferences, discovery proceedings, hearings, trials
and appeals, as may be reasonably requested in connection therewith.  No right to indemnification under this
Agreement shall be limited by reason of any investigation or audit conducted
before or after the Closing by any Buyer Indemnified Party or the knowledge any
of such party of any breach of any representation, warranty, agreement or
covenant by any party to the Asset Purchase Agreement at any time, or the
decision by any Buyer Indemnified Party to complete the Closing.

 

8.             Miscellaneous.

 

(a)           Governing Law.  This
Agreement shall be construed and enforced in accordance with, and the rights of
the parties hereunder shall be governed by, the Laws of the State of New York
excluding choice-of-law principles of the law of such State that would require
the application of the laws of a jurisdiction other than such State

 

(b)           Jurisdiction; Disputes; Arbitration.  The
provisions of Section 10.11 of the Asset Purchase Agreement relating to
jurisdiction, disputes and arbitration shall apply to this Agreement and the
provisions of such Section 10.11 are hereby incorporated by reference herein.

 

(c)           Effectiveness.  This
Agreement shall become effective against any party hereto only upon
consummation of the transactions contemplated by the Asset Purchase Agreement.  In the event that the Asset Purchase
Agreement is terminated, this Agreement shall be null and void and of no
further force and effect.

 

5

 

(d)           Counterparts.  This
Agreement may be executed in one or more counterparts which in the aggregate
shall comprise one Agreement.

 

(e)           Real Mex Indemnification.  On
and after the Closing Date, Real Mex shall indemnify J.W. Childs and hold J.W.
Childs harmless from and against any and all Damages arising out of, resulting
from or relating to a breach of the covenants set forth in Section 1 hereof.

 

[signature page follows]

 

6

 

IN WHITNESS WHEREOF,
the parties hereto have executed this Agreement on the day, month and year
first above written.

 

 

	
   

  	
  CKR ACQUISITION CORP.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/

  	
   Frederick F.
  Wolfe

  	
   

  
	
   

  	
   

  	
  Name:

  	
   Frederick F.
  Wolfe

  	
   

  
	
   

  	
   

  	
  Title:

  	
   President

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  REAL MEX RESTAURANTS, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/

  	
   Frederick F.
  Wolfe

  	
   

  
	
   

  	
   

  	
  Name:

  	
   Frederick F.
  Wolfe

  	
   

  
	
   

  	
   

  	
  Title:

  	
   President

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  J.W. CHILDS EQUITY PARTNERS, L.P.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/

  	
   Jeffrey J.
  Teschke

  	
   

  
	
   

  	
   

  	
  Name:

  	
   Jeffrey J.
  Teschke

  	
   

  
	
   

  	
   

  	
  Title:

  	
  Vice-President

  	
   

  

 

7Exhibit 10.18

 

Execution Version

 

JOINDER AGREEMENT

 

JOINDER AGREEMENT (the “Agreement”) dated as of January 11,
2005, by and among Real Mex Restaurants, Inc. (“Real Mex”), J.W. Childs
Equity Partners, L.P. (“J.W. Childs L.P.”), JWC Chevys Co-Invest, LLC (“Chevys
Co-Invest” and, together with J.W. Childs L.P., “J.W. Childs”)
Bruckmann, Rosser, Sherrill & Co., L.P. (“BRS I”) and
Bruckmann, Rosser, Sherrill & Co., II. L.P. (“BRS II” and
together with BRS I, collectively “BRS”).

 

WHEREAS, Real Mex and J.W. Childs L.P. have entered
into an Asset Purchase Agreement, dated as of October 14, 2004, by and
among J.W. Childs L.P., Buyer and the other parties thereto (as the same may be
amended and modified from time to time, the “Asset Purchase Agreement”);
and

 

WHEREAS, at the Closing (as such term is defined in
the Asset Purchase Agreement), Real Mex will issue and sell to J.W. Childs, and
J.W. Childs will purchase from Real Mex, the equity securities of Real Mex set
forth on Exhibit A hereto (the “Real Mex Equity Securities”);
and

 

WHEREAS, Real Mex and certain of its security holders
are a party to an Amended and Restated Securities Holders Agreement, dated as
of June 28, 2000, by and among Real Mex, BRS and the other investors named
therein, as amended (the “Securities Holders Agreement”);

 

WHEREAS, J.W. Childs has requested that BRS, as holder
of a majority of the outstanding shares of Class A Common Stock, par value
$.001 per share of Real Mex (the “Common Stock”), enter into this
Agreement in connection with the voting agreement described herein; and

 

WHEREAS, defined terms used herein but not otherwise
defined herein shall have the meanings ascribed to such terms in the Securities
Holders Agreement.

 

NOW, THEREFORE, in consideration of the mutual covenants herein contained and for other
good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged by the parties hereto, the parties hereto, intending to be
legally bound hereby, agree as follows:

 

1.                                       Representations, Warranties and Covenants of
J.W. Childs.  J.W. Childs represents and warrants to, and
covenants and agrees with, Real Mex that:

 

(a)                                  J.W. Childs has full power and authority to
enter into this Agreement and to perform J.W. Childs’s obligations hereunder;
this Agreement has been duly authorized, executed and delivered by J.W. Childs
and constitutes the legal, valid and binding obligation of J.W. Childs
enforceable against J.W. Childs in accordance with its terms, subject to
applicable bankruptcy, insolvency, reorganization, moratorium or other laws of
general application affecting enforcement of creditors’ rights and subject to
general principles or equity that restrict the availability of equitable
remedies; and the execution, delivery and performance of this

 

 

Agreement
by J.W. Childs do not contravene or violate any laws, rules or regulations
applicable to it, or require the consent of any other Person.

 

(b)                                 The Real Mex Equity Securities being acquired
pursuant to the Asset Purchase Agreement are being acquired by J.W. Childs for
investment and not with a view to any distribution thereof that would violate
the Securities Act of 1933, as amended (the “Securities Act”), or the
applicable state securities laws of any state; and J.W. Childs will not distribute
the Real Mex Equity Securities in violation of the Securities Act or the
applicable securities laws of any state.

 

(c)                                  J.W. Childs understands that the Real Mex
Equity Securities being acquired pursuant to the Asset Purchase Agreement have
not been registered under the Securities Act or the securities laws of any
state and must be held indefinitely unless transfer thereof is subsequently
registered under the Securities Act and any applicable state securities laws or
unless an exemption from such registration becomes or is available.

 

(d)                                 J.W. Childs acquiring Real Mex Equity
Securities pursuant to the Asset Purchase Agreement confirms that (i) J.W.
Childs is familiar with the business of Real Mex, (ii) J.W. Childs has had
the opportunity to ask questions of the officers and directors of Real Mex and
to obtain (and that J.W. Childs has received to its satisfaction) such
information about the business and financial condition of Real Mex as it has
reasonably requested, and (iii) J.W. Childs has such knowledge and
experience in financial and business matters such that J.W. Childs is capable
of evaluating the merits and risks of the prospective investment in the Real Mex
Equity Securities.

 

(e)                                  J.W. Childs is an “Accredited Investor” as defined
in Rule 501(a) promulgated under the Securities Act.  J.W. Childs was not formed for the purpose of
investing solely in Real Mex Equity Securities to be purchased pursuant to the
terms of the Asset Purchase Agreement.

 

(f)                                    J.W. Childs has not employed any broker or
finder or incurred any actual or potential liability or obligation, whether
direct or indirect, for any brokerage fees, commissions or finders’ fees in connection
with the transactions contemplated by this Agreement.

 

2.                                       Representations, Warranties and Covenants of
BRS.  BRS represents and warrants to J.W. Childs
that:

 

(a)                                  BRS has full power and authority to enter
into this Agreement and to perform BRS’s obligations hereunder; this Agreement
has been duly authorized, executed and delivered by BRS and constitutes the
legal, valid and binding obligation of BRS enforceable against BRS in
accordance with its terms; and the execution, delivery and performance of this
Agreement by BRS do not contravene or violate any laws, rules or
regulations applicable to it, or require the consent of any other Person.

 

3.                                       Legend.  The certificates representing
the Real Mex Equity Securities shall bear the following legend in addition to
any other legend required under applicable law:

 

2

 

“THESE
SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE “SECURITIES ACT”), OR THE SECURITIES LAWS OF ANY STATE AND MAY NOT
BE TRANSFERRED WITHOUT REGISTRATION UNDER THE SECURITIES ACT OR STATE
SECURITIES LAWS OR AN OPINION OF COUNSEL, SATISFACTORY TO REAL MEX RESTAURANTS,
INC., THAT SUCH REGISTRATION IS NOT REQUIRED.

 

THE
SECURITIES REPRESENTED BY THIS CERTIFICATE ARE ALSO SUBJECT TO THE TERMS AND
CONDITIONS OF AN AMENDED AND RESTATED SECURITIES HOLDERS AGREEMENT, BY AND
AMONG REAL MEX RESTAURANTS, INC. AND THE HOLDERS SPECIFIED THEREIN, A COPY OF
WHICH AGREEMENT IS ON FILE AT THE PRINCIPAL OFFICE OF REAL MEX RESTAURANTS, INC.  THE SALE, TRANSFER OR OTHER DISPOSITION OF
THE SECURITIES IS SUBJECT TO THE TERMS OF SUCH AGREEMENT AND THE SECURITIES ARE
TRANSFERABLE ONLY UPON PROOF OF COMPLIANCE THEREWITH.”

 

4.                                       Securities Holders Agreement.  Each
of Real Mex, BRS and J.W. Childs hereby agrees that J.W. Childs shall (i) join
in, be bound by and receive all the benefits of Sections 3.2, 3.3 and 4.8 of
the Securities Holders Agreement as an “Investor” thereunder (including any
defined terms used therein but not otherwise defined which shall have the meanings
set forth in the Securities Holders Agreement) and (ii) that all
securities of Real Mex from time to time owned by J.W. Childs (including,
without limitation, the Real Mex Equity Securities purchased pursuant to the
Asset Purchase Agreement) shall be treated as “Securities” thereunder.

 

5.                                       Transfer Restrictions.  J.W.
Childs hereby acknowledges and agrees that the transfer restrictions provisions
set forth on Exhibit B hereto shall apply to J.W. Childs and the
Real Mex Equity Securities.

 

6.                                       Preemptive Rights.  Each
of Real Mex and J.W. Childs hereby acknowledges and agrees that the preemptive
rights provisions set forth on Exhibit C hereto shall apply to J.W.
Childs and the Real Mex Equity Securities.

 

7.                                       Voting Agreement.  BRS
agrees that it shall take, at any time and from time to time, all action
necessary (including voting the Common Stock owned by it, calling special
meetings of stockholders and execute and delivering written consents) to ensure
that one (1) director entitled to be designated by BRS pursuant to Section 4.2(c)(ii) of
the Securities Holders Agreement shall be a director designated by J.W. Childs
(the “J.W. Childs Director”).  J.W.
Childs may request that any J.W. Childs Director be removed (with or without
cause) by written notice to BRS, and, in any such event, BRS shall promptly
consent in writing or vote or cause to be voted all shares of Common Stock now
or hereafter owned or controlled by it for the removal of such person as a
director. In the event a J.W. Childs Director ceases to be a director, such
person shall also cease to be a member of any committee of the Board of
Directors of Real

 

3

 

Mex.  In the event that a vacancy is created on
Real Mex’s Board of Directors at any time by the death, disability, retirement,
resignation or removal (with or without cause) of a J.W. Childs Director, or if
otherwise there shall exist or occur any vacancy on Real Mex’s Board of
Directors in a directorship of BRS subject to designation by J.W. Childs
pursuant to this Section 7, such vacancy shall not be filled by the
remaining members of Real Mex’s Board of Directors but BRS hereby agrees
promptly to consent in writing or vote or cause to be voted all shares of
Common Stock now or hereafter owned or controlled by it to elect that
individual designated to fill such vacancy and serve as a director, as shall be
designated by J.W. Childs.

 

8.                                       Termination of Certain Rights.  Notwithstanding
anything to the contrary set forth in the Securities Holders Agreement or this
Agreement, (a) Sections 3.2, 3.3 and 4.8 of the Securities Holders
Agreement and Sections 4(ii), 5, 6 and 7 hereof shall cease to apply to J.W. Childs
upon the earlier to occur of (i) an Initial Public Offering, (ii) an
Approved Sale and (iii) with respect to Section 4.8 of the Securities
Holders Agreement and Sections 6 and 7 hereof only, the time at which J.W. Childs
owns less than (x) 85% of the Real Mex Equity Securities acquired by it
pursuant to the Asset Purchase Agreement (treating, for purposes of this Section 8,
each share of Series A, Series B and Series C Preferred Stock of
Real Mex held by J.W Childs as a share of common stock) or (y) 7.5% of the
value of the then outstanding Real Mex equity capitalization, as reasonably
determined in good faith by the Real Mex Board of Directors.

 

9.                                       Further Assurances.  Each
of the parties hereto covenants and agrees upon the request of the other, to
do, execute, acknowledge and deliver or cause to be done, executed, acknowledged
and delivered all such further acts, deeds, documents, powers of attorney and assurances
as may be reasonably necessary or desirable to give full effect to this
Agreement.

 

10.                                 Successors and Assigns.  This
Agreement shall inure to the benefit of and be binding upon the parties hereto
and their respective successors and permitted assigns; provided, however,
that J.W. Childs shall not transfer any of its rights or obligations under this
Agreement without the prior written consent of Real Mex (except in connection
with a permitted transfer under Section 5 of this Agreement); and provided,
further, however, that in no event shall J.W. Childs be entitled
to transfer its right to designate the J.W. Childs Director without the prior
written consent of Real Mex and BRS.

 

11.                                 Governing Law.  This
agreement shall be construed and interpreted according to the laws of the State
of Delaware without regard to its principles of conflict of laws.

 

12.                                 Counterparts.  This
Agreement may be executed in any number of counterparts, each of which shall be
deemed an original, but all of which together shall constitute one agreement.

 

[signature page follows]

 

4

 

 

IN
WITNESS WHEREOF, this Agreement has been executed by the
parties hereto as of the day and year first above written.

 

	
   

  	
  REAL MEX RESTAURANTS, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
      /s/ Frederick
  F. Wolfe

  	
   

  
	
   

  	
   

  	
  Name:  Frederick
  F. Wolfe

  
	
   

  	
   

  	
  Title:    President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  J.W. CHILDS EQUITY PARTNERS,
  L.P.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
     /s/ Jeffrey
  J. Teschke

  	
   

  
	
   

  	
   

  	
  Name: Jeffrey J.
  Teschke

  
	
   

  	
   

  	
  Title:   Vice-President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  BRUCKMANN, ROSSER, SHERRILL &
  CO.,

  
	
   

  	
  L.P.

  
	
   

  	
   

  
	
   

  	
  By: BRS
  Partners, Limited Partnership, the general

  partner

  
	
   

  	
   

  
	
   

  	
  By: BRSE Associates, Inc.,
  its general partner

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
     /s/ Harold
  O. Rosser

  	
   

  
	
   

  	
   

  	
  Name: Harold O.
  Rosser

  
	
   

  	
   

  	
  Title:   Principal

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  BRUCKMANN, ROSSER, SHERRILL &
  CO., II 

  
	
   

  	
  L.P.

  
	
   

  	
   

  
	
   

  	
  By:  BRSE, L.L.C., the general partner

  
	
   

  	
   

  
	
   

  	
  By:

  	
     /s/ Harold
  O. Rosser

  	
   

  
	
   

  	
   

  	
  Name: Harold O.
  Rosser

  
	
   

  	
   

  	
  Title:   Principal

  
							

 

 

	
   

  	
  JWC CHEVYS CO-INVEST, LLC

  
	
   

  	
   

  
	
   

  	
  By:

  	
  J. W. Childs
  Associates, L.P., Its Manager

  
	
   

  	
   

  
	
   

  	
  By:

  	
  J.W. Childs Associates, Inc.,
  Its General

  
	
   

  	
   

  	
  Partner

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Jeffrey
  Teschke

  	
   

  
	
   

  	
   

  	
  Name: Jeffrey Teschke

  
	
   

  	
   

  	
  Title: Vice President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  J. W. CHILDS EQUITY PARTNERS,
  L.P.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By: J.W. Childs
  Advisors, L.P., its General Partner

  
	
   

  	
   

  
	
   

  	
  By: J.W. Childs
  Associates, L.P., its General

  Partner

  
	
   

  	
   

  
	
   

  	
  By: J.W. Childs
  Associates, Inc., its General

  Partner

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Jeffrey
  Teschke

  	
   

  
	
   

  	
   

  	
  Name: Jeffrey Teschke

  
	
   

  	
   

  	
  Title: Vice President

  
						

 

 

Exhibit A

 

Real Mex Equity Securities

 

(see attached)

 

A-1

 

Exhibit A

 

Real Mex
Equity Securities

 

J. W.
Childs Equity Partners, L.P.

 

	
  Shares
  of

  Class A

  Common Stock

  	
   

  	
  Shares of 

  Series A

  Preferred Stock

  	
   

  	
  Shares of

  Series B

  Preferred Stock

  	
   

  	
  Shares of

  Series C

  Preferred Stock

  	
   

  	
  Options to Purchase

  	
   

  
	
  Class A Common Stock

  
	
  Number of Options

  	
   

  	
  Strike Price

  Per Share

  	
   

  	
  Expiration

  Date

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  38,523.090

  	
   

  	
  1,922.105

  	
   

  	
  1,297.683

  	
   

  	
  1,812.415

  	
   

  	
  635.283

  	
   

  	
  10.00

  	
   

  	
  03/12/2009

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  1,208.478

  	
   

  	
  92.00

  	
   

  	
  10/03/2010

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  222.210

  	
   

  	
  92.00

  	
   

  	
  05/15/2011

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  1,180.037

  	
   

  	
  5.00

  	
   

  	
  09/23/2012

  	
   

  

 

JWC
Chevys Co-Invest, LLC

 

	
  Shares
  of

  Class A

  Common Stock

  	
   

  	
  Shares of 

  Series A

  Preferred Stock

  	
   

  	
  Shares of

  Series B

  Preferred Stock

  	
   

  	
  Shares of

  Series C

  Preferred Stock

  	
   

  	
  Options to Purchase 

  	
   

  
	
  Class A Common Stock

  
	
  Number of Options

  	
   

  	
  Strike Price

  Per Share

  	
   

  	
  Expiration

  Date

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2,837.325

  	
   

  	
  141.568

  	
   

  	
  95.578

  	
   

  	
  133.489

  	
   

  	
  46.790

  	
   

  	
  10.00

  	
   

  	
  03/12/2009

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  89.008

  	
   

  	
  92.00

  	
   

  	
  10/03/2010

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  16.366

  	
   

  	
  92.00

  	
   

  	
  05/15/2011

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  86.913

  	
   

  	
  5.00

  	
   

  	
  09/23/2012

  	
   

  

 

A-2

 

Exhibits B

 

Transfers of Securities

 

1.                                       Except as provided in Section 3.3 of the
Securities Holders Agreement and the provisions set forth below in this Exhibit B,
J.W. Childs is prohibited from Transferring any of its Securities except in the
following circumstances:  (i) to
Permitted Transferees (as hereinafter defined), (ii) to another Investor, (iii) pursuant
to an Approved Sale (as defined in Section 3.2 of the Securities Holders
Agreement) and in accordance with Section 3.2 of the Securities Holders
Agreement, (iv) a Transfer of Common Stock by any of the BRS Entities or the
FSI Entities as to which Tag-Along Rights (as defined in Section 33 of the
Securities Holders Agreement) apply and (v) pursuant to an effective
registration statement under the Securities Act of 1933, as amended (the “Securities
Act”); provided, however, that, in the case of any such
Transfer, except in the case of an Approved Sale or sale pursuant to an
effective registration statement, each such transferee shall take such
Securities subject to and be fully bound by the terms of this Agreement
applicable to it with the same effect as if it were a party hereto; and provided,
further, that no Transfer shall be effected except in compliance with
the registration requirements of the Securities Act (and applicable state
securities laws) or pursuant to an available exemption therefrom.

 

2.                                       No Transfer shall, in any event, be made by
J.W. Childs unless in connection with such Transfer, the applicable transferee
has complied with the terms and provisions of this Agreement. Neither J.W. Childs
nor transferee may effect any Transfer of Securities, whether to a Permitted
Transferee or otherwise, unless the transferee executes an agreement pursuant
to which such transferee agrees to be bound by the terms and provisions of this
Agreement applicable to the transferor (except in the case of an Approved Sale,
a sale pursuant to an effective registration statement under the Securities Act
or as otherwise specifically provided herein). 
In addition, neither J.W. Childs nor transferee may effect any Transfer
of Securities, whether to a Permitted Transferee or otherwise, if Real Mex
reasonably determines that the proposed Transfer would adversely affect Real Mex’s
or any of its subsidiaries’ alcoholic beverage licenses or permits.  Any purported Transfer in violation of this covenant
shall be null and void and of no force and effect and the purported transferee
shall have no rights or privileges in or with respect to Real Mex.  As used herein, “Transfer” means the making
of any sale, exchange, assignment, hypothecation, gift, security interest,
pledge or other encumbrance, or any contract therefor, any voting trust or
other agreement or arrangement with respect to the transfer of voting rights
(including any proxy or similar arrangement (whether or not revocable)) or any
other beneficial interest in any of the Securities, the creation of any other claim
thereto or any other transfer or disposition whatsoever, whether voluntary or
involuntary, affecting the right, title, interest or possession in or to such
Securities.

 

3.                                       Prior to any proposed Transfer of any
Securities, J.W. Childs shall give written notice to Real Mex describing the
manner and circumstances of the proposed Transfer accompanied by a written
opinion of legal counsel, addressed to Real Mex and the transfer agent, if
other than Real Mex, and reasonably satisfactory in form and substance to each
addressee, to the effect that the proposed Transfer of the Securities may be
effected without registration under the Securities Act and applicable state
securities laws.  Each certificate
evidencing the Securities transferred shall bear the legend set forth in Section 3
of the Joinder Agreement to which this

 

B-1

 

Exhibit B is attached, except that such certificate
shall not bear the first paragraph of such legend if the opinion of counsel
referred to above is to the further effect that the first paragraph of such
legend is not required in order to establish compliance with any provision of
the Securities Act or applicable state securities laws.

 

4.                                       As used herein, “Permitted Transferee”
shall mean (i) J.W. Childs Associates, Inc. (“Childs Inc.”) or
any officer, employee or consultant of Childs Inc., (ii) any corporation
or partnership (or other entity for collective investment, such as a fund)
which is (and continues to be) controlled by, controlling or under common
control with Childs Inc., and (iii) subsequent to September 30, 2008,
the partners of J.W. Childs in so far as they may receive Securities in
connection with the liquidation of J.W. Childs, provided, however,
that such Transfers do not result in Real Mex becoming subject to the reporting
requirements of the Securities Exchange Act of 1934, as amended.

 

5.                                       As used herein, “controlling” (including,
with its correlative meanings, “controlled by” and “under common control with”)
means possession, directly or indirectly, of power to direct or cause the
direction of management or policies (whether through ownership of securities,
partnership or other ownership interests, by contract or otherwise).

 

6.                                       Defined terms used herein but not otherwise
defined herein shall have the meanings ascribed to them in the Joinder
Agreement to which this Exhibit B is attached.

 

B-2

 

Exhibit C

 

Preemptive Rights

 

1.                                       Except as provided in paragraph 3 below, Real
Mex shall not issue, sell or transfer any equity securities to BRS, Jefferies
Capital Partners or their respective Affiliates (as such term is defined in Section 2.1(d) of
the Securities Holders Agreement), unless Real Mex provides J.W. Childs written
notice (a “Preemptive Rights Notice”) at least 15 days prior to the proposed
issuance date specifying the prices at which such equity securities are
proposed to be issued and sold and all other material terms of the issuance.  J.W. Childs shall have the right to purchase,
during the period set forth in paragraph 2 below, at the prices and on the
terms specified in the Preemptive Rights Notice, up to the number of shares (or
amount) of such equity securities (“J.W. Childs Maintenance Securities”)
equal to J.W. Childs’ Percentage Ownership (as defined below) as it existed
immediately prior to such issuance (“Preemptive Rights”). “Percentage
Ownership” means, with respect to J.W. Childs at any time, (i) the number
of shares of Common Stock, on a fully diluted basis, that J.W. Childs
beneficially owns (and (without duplication) has the right to acquire), divided
by (ii) the total number of shares of Common Stock outstanding at such
time on a fully diluted basis; provided, however, that no Options
(as such term is defined in the Securities Holders Agreement) or any other
stock options, restricted stock or similar awards granted pursuant to any stock
option or other incentive compensation plan approved by the Real Mex Board of
Directors shall be taken into account for purposes of clause (i) and (ii) above
in determining J.W. Childs’ Percentage Ownership.

 

2.                                       J.W. Childs may exercise its right to
purchase J.W. Childs Maintenance Securities by delivering written notice of
acceptance of any offer made in a Preemptive Rights Notice within 10 days after
receipt of the Preemptive Rights Notice. 
A delivery of such a written notice of acceptance, which shall specify
the number of shares (or amount) of J.W. Childs Maintenance Securities that J.W.
Childs desires to purchase, shall constitute a binding agreement of J.W. Childs
to purchase such J.W. Childs Maintenance Securities specified in such written acceptance
notice, at the prices and on substantially the same terms and conditions as set
forth in the Preemptive Rights Notice.  Real
Mex shall have 90 days from the date it sends the Preemptive Rights Notice to
consummate the proposed issuance of J.W. Childs Maintenance Securities.  On the date of such consummation, Real Mex
shall issue certificates representing such J.W. Childs Maintenance Securities
to be purchased by J.W. Childs, registered in the name of J.W. Childs and in
the denomination as specified by J.W. Childs in the acceptance notice, against
payment by J.W. Childs of the purchase price for such J.W. Childs Maintenance Securities.  If Real Mex proposed to issue equity
securities subject to Preemptive Rights after such 90-day period, it shall
again comply with the foregoing procedures.

 

3.                                       Notwithstanding the foregoing, J.W. Childs
shall not be entitled to purchase J.W. Childs Maintenance Securities (and no
Preemptive Rights Notice shall be required) in connection with (i) the
issuance of equity securities described in Section 3.4(c) of the
Securities Holders Agreement, (ii) the issuance of any Maintenance
Securities (as such term is defined in the Securities Holders Agreement)
pursuant to Section 3.4 of the Securities Holders Agreement and (iii) the
issuance of any Real Mex equity securities in connection with the acquisition
of another corporation or other entity (whether by merger, recapitalization,
purchase of all or substantially all of the assets or otherwise), and
regardless of whether or not Real Mex is

 

C-1

 

the
surviving entity.  In addition,
notwithstanding the foregoing, J.W. Childs shall not be entitled to purchase J.W.
Childs Maintenance Securities (and no Preemptive Rights Notice shall be
required) in connection with any proposed issuance, sale or transfer of equity
securities by Real Mex if Real Mex shall notify J.W. Childs in writing that it
shall issue to J.W. Childs the same number (or amount) of J.W. Childs
Maintenance Securities which it would otherwise be required to issue to J.W. Childs
at the same price and on the same conditions as would be required to be set
forth in a Preemptive Rights Notice, within 30 days after the issuance, sale or
transfer of any such equity securities.

 

4.                                       Defined terms used herein but not otherwise
defined herein shall have the meanings ascribed to them in the Joinder
Agreement to which this Exhibit C is attached.

 

C-2

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