Document:

Exhibit
10.25

 

FIFTEENTH
AMENDMENT TO SECOND AMENDED

AND RESTATED LEASE AGREEMENT

 

THIS
FIFTEENTH AMENDMENT TO SECOND AMENDED AND RESTATED LEASE AGREEMENT is made and entered into as of February 17,
2008 by and among (i) each of the parties identified on the signature page hereof
as a landlord, as landlord (collectively, “Landlord”), and (ii) FIVE STAR QUALITY CARE TRUST, a Maryland business trust, as
tenant (“Tenant”).

 

W I T N E S S E T H:

 

WHEREAS, pursuant to the terms of that certain
Second Amended and Restated Lease Agreement, dated as of November 19,
2004, as amended by that certain First Amendment of Lease, dated as of May 17,
2005, that certain Second Amendment to Second Amended and Restated Lease
Agreement, dated as of June 3, 2005, that certain Third Amendment to
Second Amended and Restated Lease Agreement, dated as of October 31, 2005,
that certain other Third Amendment to Second Amended and Restated Lease
Agreement, dated as of December 30, 2005, that certain Letter Agreement,
dated as of March 13, 2006, that certain Fifth Amendment to Second Amended
and Restated Lease Agreement, dated as of September 1, 2006, that certain
Sixth Amendment to Second Amended and Restated Lease Agreement, dated as of October 1,
2006, that certain Seventh Amendment to Second Amended and Restated Lease
Agreement, dated as of October 1, 2006, that certain Eighth Amendment to
Second Amended and Restated Lease, dated as of November 1, 2006, that
certain Ninth Amendment to Second Amended and Restated Lease, dated as of November 1,
2006, that certain Tenth Amendment to Second Amended and Restated Lease
Agreement, dated as of November 6, 2006 (effective as of November 5,
2006), that certain Eleventh Amendment to Second Amended and Restated Lease
Agreement, dated as of December 22, 2006, that certain Twelfth Amendment
to Second Amended and Restated Lease Agreement, dated as of January 1,
2007, that certain Thirteenth Amendment to Second Amended and Restated Lease
Agreement, dated as of January 4, 2008, and that certain Fourteenth
Amendment to Second Amended and Restated Lease Agreement, dated as of February 7,
2008 (as so amended, the “Consolidated Lease”), Landlord leases to
Tenant, and Tenant leases from Landlord, the Leased Property (this and other
capitalized terms used but not otherwise defined herein having the meanings
given such terms in the Consolidated Lease), all as more particularly described
in the Consolidated Lease; and

 

WHEREAS, on or about the date hereof, SNH CHS Properties Trust has acquired
certain real property and related 

 

 

improvements known as Centennial Park Retirement
Village and located at 501 Centennial Circle, North Platte, Nebraska, as more
particularly described on Exhibit A-106 attached hereto (the “Centennial
Property”); and

 

WHEREAS, SNH CHS Properties Trust, the other entities
comprising Landlord and Tenant wish to amend the Consolidated Lease to include
the Centennial Property;

 

NOW,
THEREFORE, in
consideration of the mutual covenants herein contained and other good and
valuable consideration, the mutual receipt and legal sufficiency of which are
hereby acknowledged, Landlord and Tenant hereby agree as follows:

 

1.             Definition of Base Year.  The definition of the term “Base Year” set
forth in Section 1.9 of the Consolidated Lease is hereby deleted in its
entirety and replaced with the following:

 

“Base
Year” shall
mean (i) with respect to the Existing Properties, the 2005 calendar year, (ii) with
respect to the Additional Properties, the 2006 calendar year, (iii) with
respect to the Hermitage/Marsh View/Somerset/Walking Horse and the Holiday
Properties, other than the Buena Vida Property, the 2007 calendar year, (iv) with
respect to the Buena Vida Property, the 2008 calendar year, and (v) with
respect to the Heritage Properties, the Meadowmere Properties and the
Centennial Property, the 2009 calendar year.

 

2.             Definition of Disbursement Rate.  The definition of the term “Disbursement Rate”
set forth in Section 1.23 of the Consolidated Lease is hereby deleted in
its entirety and replaced with the following:

 

“Disbursement
Rate”  shall mean (a) with respect to all
of the Properties other than the Hermitage/Marsh View/Somerset/Walking Horse
Properties, the Holiday Properties, the Meadowmere Properties, the Heritage
Properties and the Centennial Property, an annual rate of interest, as of the
date of determination, equal to the greater of (i) the Interest Rate, and (ii) the
per annum rate for ten (10) year U.S. Treasury Obligations as published in
The Wall Street Journal plus four hundred (400) basis points and (b) with
respect to the Hermitage Hermitage/Marsh View/Somerset/Walking Horse
Properties, the Holiday Properties, the Meadowmere Properties, the Heritage
Properties and the Centennial 

 

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Property, an
annual rate of interest, as of the date of determination, equal to the greater
of (i) the Interest Rate, and (ii) the per annum rate for ten (10) year
U.S. Treasury Obligations as published in The Wall Street Journal plus
three hundred twenty-five (325) basis points; provided, however,
that in no event shall the Disbursement Rate exceed eleven and one-half percent
(11.5%).

 

3.             Definition of Interest Rate.  The definition of the term “Interest Rate”
set forth in Section 1.54 of the Consolidated Lease is hereby deleted in
its entirety and replaced with the following:

 

“Interest
Rate” shall
mean, (i) with respect to the Existing Properties, ten percent (10%) per
annum, (ii) with respect to the Additional Properties, nine percent (9%)
per annum, (iii) with respect to the Hermitage/Marsh View/Somerset/Walking
Horse Properties and the Holiday Properties, eight and one quarter percent
(8.25%) per annum, and (iv) with respect to the Meadowmere Properties, the
Heritage Properties and the Centennial Property, eight percent (8%) per annum.

 

4.             Definition of Minimum Rent.  The definition for the term “Minimum Rent”
set forth in Section 1.69 of the Consolidated Lease is hereby deleted in
its entirety and replaced with the following:

 

“Minimum
Rent”  shall mean the sum of
$49,101,900.00 per annum.

 

5.             Definition of Centennial
Property.  The following new
definition for the term “Centennial Property” is hereby added to the
Consolidated Lease as a new section 1.106:

 

“Centennial
Property” shall
mean the Property located on the Land described on Exhibit A-106
attached hereto.

 

6.             Leased Property.  Section 2.1 of the Consolidated Lease is
hereby amended by deleting subsection (a) in its entirety and replacing it
with the following:

 

(a)           those certain tracts, pieces and
parcels of land as more particularly described in Exhibits A-1 through A-106
attached hereto and made a part hereof (the “Land”).

 

3

 

8.             Exhibit A.  Exhibit A to the Consolidated Lease is
hereby amended by adding Exhibit A-106 attached hereto following Exhibit A-105
to the Consolidated Lease.

 

9.             Ratification.  As amended hereby, the Consolidated Lease is
hereby ratified and confirmed.

 

[SIGNATURE PAGE FOLLOWS]

 

4

 

IN
WITNESS WHEREOF,
Landlord and Tenant have caused this Fifteenth Amendment to Second Amended and
Restated Lease Agreement to be duly executed, as a sealed instrument, as of the
date first set forth above.

 

	
   

  	
  LANDLORD:

  
	
   

  	
   

  
	
   

  	
  ELLICOTT CITY LAND I LLC,
  ELLICOTT CITY LAND II LLC, HRES2 PROPERTIES TRUST, SNH CHS PROPERTIES TRUST,
  SPTIHS PROPERTIES TRUST, SPT-MICHIGAN TRUST,  SPTMNR PROPERTIES TRUST,
  SNH/LTA PROPERTIES TRUST, and SNH/LTA PROPERTIES GA LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ David J. Hegarty

  
	
   

  	
   

  	
  David J. Hegarty

  
	
   

  	
   

  	
  President, Chief
  Operating 

  
	
   

  	
   

  	
  Officer and Secretary

  
	
   

  	
   

  	
  of each of the
  foregoing 

  
	
   

  	
   

  	
  entities

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  TENANT:

  
	
   

  	
   

  
	
   

  	
  FIVE STAR QUALITY CARE TRUST

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Travis K. Smith

  
	
   

  	
   

  	
  Travis K. Smith

  
	
   

  	
   

  	
  Vice President

  

 

5Exhibit 10.1

 

AMENDED
AND RESTATED EXECUTIVE EMPLOYMENT AGREEMENT

 

This AMENDED AND RESTATED EXECUTIVE
EMPLOYMENT AGREEMENT (the “Agreement”), by and between Real Mex
Restaurants, Inc., a Delaware corporation (the “Company”), and
Frederick Wolfe (the “Executive”). 
Capitalized terms used herein but not otherwise defined have the meaning
set forth in Section 1.1 hereof.

 

WHEREAS, the Company and the Executive previously entered into an
Executive Employment Agreement effective as of August 21, 2006 (the “Prior
Employment Agreement”); and

 

WHEREAS, the Company and the Executive now wish to amend and restate
the Prior Employment Agreement to conform to the requirements of Section 409A
(“Section 409A”) of the Internal Revenue Code of 1986, as amended
(the “Code”).

 

NOW, THEREFORE, in consideration of the mutual undertakings contained
herein and other good and valuable consideration, the receipt and sufficiency
of which is hereby acknowledged, the parties hereto agree as follows:

 

ARTICLE I

Definitions

 

1.1           Definitions. 
As used herein, the following terms shall have the following meanings.

 

“Affiliate” shall mean, as to any Person, any other Person which
directly or indirectly controls, or is under common control with, or is
controlled by, such Person.  As used in
this definition, “control” (including, with its correlative meanings, “controlled
by” and “under common control with”) shall mean possession, directly or
indirectly, of power to direct or cause the direction of management or policies
(whether through ownership of securities or partnership or other ownership
interests, by contract or otherwise).

 

“Board” means the board of directors of the Company.

 

“Cause” means (i) the commission of a felony or a crime by
Executive involving moral turpitude or the commission of any other act or
omission by Executive involving dishonesty, disloyalty or fraud with respect to
any member of the Company Group, (ii) conduct by Executive which brings
any member of the Company Group into substantial public disgrace or disrepute, (iii) failure
by Executive to perform material duties as reasonably directed by the Board
and, if susceptible to remedy or cure, is not cured or remedied and continues
for fifteen (15) days after the Board has given written notice to the Executive
specifying in reasonable detail the manner in which Executive has continued to
fail to perform his duties, (iv) gross negligence or willful misconduct by
Executive with respect to any member of the Company Group, or (v) any
breach of a material provision of this Agreement by Executive that is not
susceptible to remedy or cure, or if susceptible to remedy or cure, is not
cured or remedied and continues for fifteen (15) days after the Board has given
written notice to Executive specifying the manner in which Executive has
breached this Agreement.

 

“Company Group” means, collectively, the Company and its
Subsidiaries and any successors thereto.

 

“Employment Period” has the meaning set forth in Section 2.1.

 

“Good Reason” means a material diminution in Executive’s responsibilities
and duties in his capacity as President and Chief Executive Officer of the
Company.  For purposes of this Agreement,
Good Reason shall not be deemed to exist unless Executive’s termination of
employment for Good Reason occurs within two years following the initial
existence of the condition set forth above, Executive provides the Company with
written notice of the existence of such condition within ninety (90) days after
the initial existence of the condition, and the Company fails to remedy the
condition within thirty (30) days after its receipt of such notice.

 

“Permanent Disability” means either (i) Executive is or (ii) in
the good faith determination of the Board, Executive will likely be unable to
substantially perform, by reason of illness, accident, injury, physical or
mental incapacity or other disability, his duties or obligations under this
Agreement for a period of ninety (90) consecutive days or for shorter periods
aggregating 120 days during any period of 

 

2

twelve (12) consecutive months; provided, that such
disability constitutes a disability for purposes of Section 409A.

 

“Person” means an individual, a partnership, a corporation, an
association, a joint stock company, a limited liability company, a trust, a
joint venture, an unincorporated organization or a governmental entity or any
department, agency or political subdivision thereof.

 

“Subsidiary” means, with respect to any Person, any corporation,
partnership, association or other business entity of which (i) if a
corporation, a majority of the total voting power of shares of stock entitled
(without regard to the occurrence of any contingency) to vote in the election
of directors, managers or trustees thereof is at the time owned or controlled,
directly or indirectly, by that Person or one or more of the other Subsidiaries
of that Person or a combination thereof, or (ii) if a partnership,
association or other business entity, a majority of the partnership or other
similar ownership interests thereof is at the time owned or controlled,
directly or indirectly, by any Person or one or more Subsidiaries of that
Person or a combination thereof.  For
purposes hereof, a Person or Persons shall be deemed to have a majority
ownership interest in a partnership, association or other business entity if
such Person or Persons shall be allocated a majority of partnership,
association or other business entity gains or losses or shall be or control the
managing director or general partner of such partnership, association or other
business entity.

 

ARTICLE II

 

Employment

 

2.1           Employment. 
The Company agrees to employ Executive, and Executive hereby accepts
employment with the Company and such other members of the Company Group as the
Board shall determine, upon the terms and conditions set forth in this
Agreement for the period beginning on August 21, 2006 (the “Commencement
Date”) and ending as provided in Section 2.4 (the “Employment
Period”).

 

2.2           Position and Duties.

 

(a)           Commencing on the date hereof and continuing during the
Employment Period, Executive shall serve as President and Chief Executive
Officer of each of the Company and such other members of the Company Group as
the Board shall determine and shall have the typical duties, 

 

3

responsibilities and authority of a Person serving in such capacities
in an organization of similar size and structure as the Company, subject in
each instance to the supervision and direction of the Board or such Person as
the Board may designate.  Executive shall
report directly to the Board or to such other Person as the Board may
designate.

 

(b)           Executive shall devote his best efforts and his full
business time and attention (except for permitted vacation periods and
reasonable periods of illness or other incapacity) to the business and affairs
of the Company Group and the performance of Executive’s duties as President and
Chief Executive Officer of the Company and such other members of the Company
Group as the Board shall determine.  The
Executive shall perform his duties and responsibilities to the best of his
abilities in a diligent, trustworthy, businesslike and efficient manner.

 

(c)           With respect to all regular elections
of directors during the Employment Period, each of the Company and such other
members of the Company Group as the Board shall determine shall nominate, and
use their respective best efforts to elect, Executive to serve as a member of
their respective boards of directors.

 

2.3           Base Salary, Bonus and Benefits.

 

(a)           During the Employment Period, Executive’s total base
salary shall be $473,000 per annum or such greater amount as the Board shall
determine, from time to time, in its sole discretion (the “Base Salary”),
which salary shall be payable in regular installments in accordance with the
Company’s general payroll practices and shall be subject to customary
withholding.  The Company will review the
Executive’s total base salary annually.

 

(b)           During the Employment Period,
Executive shall be eligible to receive an annual (based on the Company’s fiscal
year) bonus of up to 66-2/3% of his Base Salary (the “Bonus”).  The Bonus shall be based upon the Company’s
annual financial results, as reflected in its audited financial statements, and
shall consist of a single lump sum cash payment payable within thirty (30) days
after the completion of the Company’s audited annual financial statements, but
in no event later than 2 1⁄2 months after the end of the Company’s fiscal
year.  The Bonus shall be determined as
follows:  Within a mutually 

 

4

agreeable time period prior
to the beginning of each fiscal year of the Company, Executive shall submit to
the Board for its approval the Company’s operational plan, including a fiscal
budget, for the next fiscal year of the Company.  The Board shall establish financial targets
and set conditions each year based on the approved operational plan (a “Bonus
Plan”).  The financial targets and
conditions established for Executive’s Bonus shall be consistent with those
established for other senior executives of the Company.  Executive shall receive the percentage of the
maximum Bonus specified by the applicable Bonus Plan, depending on whether the
Company attains all or a portion of the financial targets established, and
meets all of the conditions set under such Bonus Plan for that year.  Any of the Company’s financial results that
are used to calculate a Bonus shall be taken only from the Company’s audited
financial statements for the applicable year.

 

(c)           During the Employment Period,
consistent with past custom and practice, Executive shall be entitled to (i) participate
in all of the Company Group’s employee benefit programs for which senior
executive employees of the Company Group are generally eligible, including, if
offered by the Company to such executives, medical surgical, hospitalization,
dental, worker’s compensation insurance and disability coverage, (ii) four
(4) weeks of paid vacation each year (which shall include reimbursement of
up to $5,000 paid to Executive for an annual comparative shopping trip for
research and development purposes to be taken during such vacation), which if
not taken may not be carried forward to any subsequent year, (iii) the
payment by the Company, or such other member of the Company Group as the Board
shall determine to the Executive of a car allowance of $1,000 a month, payable
no less frequently than quarterly, plus reimbursement of all reasonable,
documented expenses related to the operation of an automobile, including
repairs, maintenance, insurance and registration fees, (iv) payment by the
Company of the premiums on a $1 million term life insurance policy on the life
of the Executive, the death benefit of which will be payable to the Estate of
the Executive or his designee (the cost of the premiums thereon not to exceed
$10,000 a year); provided, however, that Executive shall assist the Company in
procuring such insurance by submitting to reasonable medical examinations and
by filling out, executing and delivering such applications and other
instruments in writing as may reasonably be 

 

5

required by any insurer to
which the Company may apply, and (v) such other benefits as the Board may
from time to time determine.  The
benefits described in Section 2.3(c)(i)-(v) above are collectively
referred to herein as the Executive’s “Benefits.”

 

2.4           Term; Severance Payments; Release.

 

(a)           The Employment Period shall end five years from the
Commencement Date, subject to earlier termination (i) by reason of
Executive’s death or Permanent Disability, (ii) by resolution of a
majority of the directors of the Board, terminating Executive’s employment
hereunder, with or without Cause, (iii) upon Executive’s voluntary
resignation without Good Reason or (iv) upon Executive’s resignation for
Good Reason.

 

(b)           If the Employment Period is terminated by the Board for
Cause or by Executive’s voluntary resignation without Good Reason, the
Executive shall be entitled to his Base Salary and Benefits up to the date of
termination, but shall not be entitled to any further Base Salary or Benefits
or any then unpaid Bonus for that fiscal year, any prior year, or any future
year, or to any severance compensation of any kind, nature or amount.

 

(c)           If Executive’s employment is terminated as a result of his
death or Permanent Disability, the Company shall pay or cause to be paid to
Executive or his Estate, as applicable, (i) unpaid Base Salary and
Benefits up to the date of such termination, (ii) any previously awarded
but unpaid Bonus, and (iii) such prorated Bonus for the fiscal year in
which the termination occurs as the Board shall determine in good faith on a
basis consistent with past custom and practice, payable in substantially equal
installments over the same period as severance payments under Section 2.4(d) (that
is, over two (2) years if Executive’s termination occurs within two (2) years
of the Commencement Date, or one (1) year if Executive’s termination
occurs at a later date); and neither Executive nor his Estate shall be entitled
to any further Base Salary, Benefits or Bonus for that year or any future year,
or to any severance compensation of any kind, nature or amount.

 

(d)           Subject to paragraph 2.4(e), if the Employment Period is
terminated by the Board without Cause or by Executive’s voluntary resignation
for Good Reason, Executive shall be entitled to

 

6

(i) unpaid Base Salary and Benefits up to the date of such termination,
(ii) any previously awarded but unpaid Bonus, and (iii) if such
termination occurs within two years following the Commencement Date, for a
period of two (2) years following the date of such termination (the “severance
period”), severance payments equal in the aggregate to his annual Base Salary
(payable in accordance with the terms of Section 2.4(f) below) (it
being understood and agreed that if such termination occurs after two years
following the Commencement Date, the severance period for all purposes of this
Agreement shall be one (1) year following the date of such
termination).  Until the earlier of the
end of the severance period and such time as Executive begins to receive
medical benefits other than those contemplated herein, Executive shall continue
to participate at the Company’s cost in the Company’s medical plan on a level
no less favorable than that enjoyed by the Executive at the time of his
termination.   In the event that (i) the
Company shall be precluded under its existing policy from providing such
coverage to Executive or (ii) Executive would no longer be eligible for
continuation coverage under Section 4980B of the Code (“COBRA”)
during the severance period and the provision of coverage would be subject to Section 409A,
the Company shall pay Executive a cash payment on the first payroll date of
each month an amount equal to the COBRA cost for medical coverage under the
Company’s health, less the amount that the Executive would be required to
contribute for such medical coverage as if Executive were an active employee of
the Company.  Executive shall not be
entitled to any further Base Salary, Benefits or then unpaid Bonus for that
year, any prior year, or any future year, or to any further severance
compensation of any kind, nature or amount except as herein provided.

 

(e)           Executive agrees that Executive shall be entitled to the
payments provided for in Section 2.4(d) if and only if Executive has
not materially breached as of the date of termination of the Employment Period
the provisions of Sections 2.5, 2.6 and 2.7 hereof and does not breach such
Sections at any time during the severance period, and the Company will be
relieved of any obligation to make such payments during any portion of the
severance period in which the Executive is in breach of any such obligation;
provided that the Company will resume making such payments to Executive during
the 

 

7

severance period at such time as the Board determines in good faith
that any such breach has ceased or otherwise been cured.

 

(f)            Any payments pursuant to Section 2.4(c) or (d) 
shall be made in installments on the payment dates on which Executive’s Base
Salary would have otherwise been paid if the Employment Period had continued
(net of any withholding taxes), and as of the date of the final such payment
none of the Company or any other member of the Company Group shall have any
further obligation to Executive pursuant to this Section 2.4 except as
provided by law.

 

(g)           Executive hereby agrees that no severance compensation of
any kind, nature or amount shall be payable to Executive in connection with any
termination of the Employment Period, except as expressly set forth in this Section 2.4,
and Executive hereby irrevocably waives any claim for any other severance
compensation.

 

(h)           Executive acknowledges and agrees that notwithstanding
anything to the contrary set forth above, no payments shall be made to the
Executive by the Company following any termination of this Agreement unless, if
so requested by the Company, Executive executes, does not revoke, and delivers
to the Company, within 60 days following Executive’s termination of
employment, a release in form satisfactory to the Company pursuant to which
Executive releases and forever discharges the Company, its then or former
parents, subsidiaries and affiliates, their respective predecessors and
successors, and their respective officers, employees, agents, and directors,
from all claims or actions of any kind arising on or before the date of
termination.  This general release and
waiver shall include, but not be limited to, all claims or actions arising out
of, or relating in any way to the Executive’s employment with the Company,
including any claim for compensation, or any claim of discrimination under any
state, federal or local law or regulation, including under the Age
Discrimination in Employment Act of 1967, as amended, or any claim for wrongful
termination, breach of contract, breach of covenant of good faith and fair
dealing, negligence or intentional infliction of emotional distress,
misrepresentation or defamation.  If
Executive maintains, or participates in any claim or action, in any court or
agency, based wholly or partially upon a claim or action Executive has released
or waived under this Agreement, Executive agrees 

 

8

to pay all expenses and costs (including reasonable attorney’s fees)
incurred by the Company and those associated with the Company in defense of
such claim or action.  This release shall
not be construed as a waiver of any rights executive has under any pension or
other benefit plan maintained by the Company for its employees generally or any
rights of indemnification provided by the Company’s Certificate of Incorporation
and Bylaws for services rendered as an officer or director of the Company.

 

2.5           Confidential Information.  The Executive acknowledges that- he may have
access to certain confidential, non-public and proprietary information (the “Confidential
Information”), concerning the Company and other members of the Company
Group and their respective officers, directors, shareholders, employees, agents
and representatives and agrees that: (i) unless pursuant to prior written
consent by the Board (which shall not be unreasonably withheld), the Executive
shall not disclose any Confidential Information or the provisions of this
Agreement to any third party, unless compelled by court order or subpoena, in
which case Executive shall (A) immediately notify the Company of any such
court order or subpoena in order to enable the Company to contest such court
order or subpoena, (B) fully cooperate with any efforts by the Company to
limit the extent of such disclosure and (C) disclose only so much of such
confidential information as is necessary to comply with such court order or
subpoena; (ii) the Executive shall treat as confidential all Confidential
Information and shall take reasonable precautions to prevent unauthorized
access to the Confidential Information; (iii) the Executive shall not use
the Confidential Information in any way detrimental to the Company or any other
member of the Company Group and shall use the Confidential Information for the
exclusive purpose of effecting his duties of employment with the Company; and (iv) the
Executive agrees that the Confidential Information obtained during his
employment with the Company shall remain the exclusive property of the Company
and any other member of the Company Group, and the Executive shall promptly
return to the Company all material which incorporates, or is derived from, all
such Confidential Information immediately following the date of
termination.  It is hereby agreed that
Confidential Information does not include information generally available and
known to the public or obtained from a source not bound by a confidentiality
agreement with any member of the Company Group.

 

9

 

2.6           Inventions and Patents.  The Executive hereby agrees that all
inventions, innovations or improvements in the method of conducting the
business (including improvements, ideas and discoveries, whether patentable or
not) of the Company or any other member of the Company Group whether prior to,
the date hereof or thereafter, in each case conceived or made by him in the
course of his employment with the Company, belong to the Company and such other
member of the Company Group, except for such inventions, innovations and
improvements that have become part of the public domain and are not entitled to
statutory or common law protection.  The
Executive will promptly disclose such inventions, innovation or improvements to
the Board and perform all actions reasonably requested by the Board to
establish and confirm such ownership by the applicable member of the Company
Group.

 

2.7           Noncompete, Nonsolicitation.

 

(a)           The Executive acknowledges that in the course of his
employment with the Company or any other member of the Company Group he has
become familiar, and he will become familiar, with the Company Group’s trade
secrets and with other Confidential Information and that his services have been
and will be of special, unique and extraordinary value to the Company Group.  Therefore, the Executive agrees that, (1) during
the time he is employed by the Company or any other member of the Company Group
and (ii) during the severance period (the “Noncompete Period”), the
Executive shall not directly or indirectly own, manage, control, participate
in, consult with, render services for, or in any manner engage in, any business
competing directly or indirectly with the business of the Company Group (as
defined below), within any metropolitan area in which any member of the Company
Group engages or has definitive plans to engage in such business as of the date
of termination by the Company Group; provided, that the Executive shall not be
precluded from purchasing or holding publicly-traded securities of any such
entity so long as the Executive shall hold less than 2% of the outstanding
units of any such class of securities and has no active participation in the
business of such entity.  At the Company’s
option, the Noncompete Period shall be extended for up to one (1) additional
year provided that the Company extend the severance period for a corresponding
period.  As used in this Section 2.7(a) the
business of the Company Group means the ownership, management, operation, or 

 

10

franchising of restaurants, canteens, cafeterias, kiosks and other food
service operations featuring Mexican food and the manufacture and distribution
of Mexican food products.

 

(b)           During the Noncompete Period, the Executive shall not
directly or indirectly (i) induce or attempt to induce any employee of the
Company or any other member of the Company Group to leave the employ of the
Company or such other member of the Company Group, (ii) hire any person
who was an employee of the Company or any other member of the Company Group at
any time during the Executive’s employment with the Company or any, other
member of the Company Group except for such employees whose employment has been
terminated for at least six months, or (iii) induce or attempt to induce
any customer, supplier, licensee, licensor, franchisee, franchisor or other
business relation of the Company or any other member of the Company Group to
cease doing business with the Company or such other member of the Company
Group.

 

(c)           The Executive agrees that (i) the covenants set forth
in this Section 2.7 are reasonable in geographical and temporal scope and
in all other respects, (ii) the Company would not have entered into this
Agreement but for the covenants of the Executive contained herein, and (iii) the
covenants contained herein have been made in order to induce the Company to
enter into this Agreement.

 

(d)           If, at the time of enforcement of this Section 2.7, a
court shall hold that the duration, scope or area restrictions stated herein
are unreasonable under circumstances then existing, the parties agree that the
maximum duration, scope, or area reasonable under such circumstances shall be
substituted for the stated duration, scope or area and that the court shall be
allowed to revise the restrictions contained herein to cover the maximum
period, scope and area permitted by law.

 

2.8           Compliance with Section 409A.

 

(a)           This Agreement shall be interpreted to avoid any penalty
sanctions and adverse tax consequences under Section 409A.  If any payment or benefit cannot be provided
or made at the time specified herein without incurring penalty sanctions or
adverse tax consequences under Section 409A, then such benefit or payment
shall be provided in full at the earliest time thereafter when such sanctions and
adverse tax consequences will not be imposed. 
All payments to be made upon a termination of 

 

11

employment under this Agreement may only be made upon a “separation
from service” as that term is defined for purposes of Section 409A.  In no event may the Executive, directly or
indirectly, designate the calendar year of payment.

 

(b)           To the maximum extent permitted under Section 409A,
the severance payments payable under this Agreement are intended to comply with
the “short-term deferral exception” under Section 409A and any remaining
amount is intended to comply with the “separation pay exception” under Section 409A.  For purposes of applying the provisions of Section 409A
to this Agreement, each separately identified amount to which the Executive is
entitled under this Agreement shall be treated as a separate payment.  In addition, to the extent permissible under Section 409A,
any series of installment payments under this Agreement, including any payment
pursuant to the Company’s regular payroll practices, shall be treated as a
right to a series of separate payments.

 

(c)           Notwithstanding anything to the contrary in this
Agreement, if Executive is a “specified employee” at the time of his separation
from service for purposes of Section 409A (as determined by the Company),
no payment shall be made on account of such separation from service before the
date that is six months after Executive’s separation from service (or, if
earlier, the date of Executive’s death) if and to the extent that such payment
or benefit constitutes deferred compensation (or may be nonqualified deferred
compensation) under Section 409A and such deferral is required to comply
with the requirements of Section 409A. 
Any payment or benefit delayed by reason of the prior sentence shall be
paid out or provided in a single lump sum at the end of such required delay
period in order to catch up to the original payment schedule.

 

(d)           Notwithstanding anything to the contrary in this
Agreement, all reimbursements and in kind benefits provided under this
Agreement shall be made or provided in accordance with the requirements of Section 409A,
including, where applicable, the requirement that (i) any reimbursement is
for expenses incurred during Executive’s lifetime (or during a shorter period
of time specified in this Agreement), (ii) the amount of expenses eligible
for reimbursement, or in kind benefits provided, during a calendar year may not
affect the expenses eligible for reimbursement, or in kind benefits to be
provided, 

 

12

in any other calendar year, (iii) the reimbursement of an eligible
expense will be made on or before the last day of the calendar year following
the year in which the expense is incurred, and (iv) the right to
reimbursement or in kind benefits is not subject to liquidation or exchange for
another benefit.

 

ARTICLE III

 

Miscellaneous

 

3.1           Executive’s Representations.  Executive hereby represents and warrants to
the Company that (i) the execution, delivery and performance of this
Agreement by the Executive do not and shall not conflict with, breach, violate
or cause a default under any contract, agreement, instrument, order, judgment
or decree to which Executive is a party or by which he is bound, (ii) the
Executive is not a party to or bound by any employment agreement, consulting or
service agreement, noncompete agreement or confidentiality agreement with any
other person or entity, and (iii) upon the execution and delivery of this
Agreement by the Company, this Agreement shall be the valid and binding
obligation of the Executive, enforceable in accordance with its terms.  The Executive hereby acknowledges and
represents that he has consulted with independent legal counsel regarding his
rights and obligations; under this Agreement and that he fully understands the
terms and conditions contained herein.

 

3.2           Survival. 
Sections 2.4, 2.5, 2.6 and 2.7 and Sections 3.1 through 3.12 shall
survive and continue in full force in accordance with their terms
notwithstanding any termination of the Employment Period.

 

3.3           Notices.  All
notices, demands or other communications to be given or delivered under or by
reason of the provisions of this Agreement will be in writing and will only be
deemed to have been given when delivered personally, sent via a nationally
recognized overnight courier, or sent via facsimile to the recipient.  Such notices, demands and other
communications will be sent to the address indicated below:

 

	
  To
  the Company:

  
	
   

  
	
  To
  the Executive:

  

 

13

or
such other address or to the attention of such other person as the recipient
party shall have specified by prior written notice to the sending party.

 

3.4           Severability. 
Whenever possible, each provision of this Agreement will be interpreted
in such manner as to be effective and valid under applicable law, but if any
provision of this Agreement is held to be invalid, illegal or unenforceable in
any respect under any applicable law or rule in any jurisdiction, such
invalidity, illegality or unenforceability will not affect any other provision
or any other jurisdiction, but this Agreement will be reformed, construed and
enforced in such jurisdiction as if such invalid, illegal or unenforceable provision
had never been contained herein.

 

3.5           Complete Agreement. 
This Agreement embodies the complete agreement and understanding among
the parties and supersede and preempt any prior understandings, agreements or
representations by or among the parties, written or oral, including the Prior
Employment Agreement.

 

3.6           Counterparts. 
This Agreement may be executed in separate counterparts, each of which
is deemed to be an original and all of which taken together constitute one and
the same agreement.

 

3.7           Successors and Assigns.  Except as otherwise provided herein, all
covenants and agreements contained in this Agreement shall bind and inure to
the benefit of and be enforceable by Executive, the Company and their
respective successors and assigns. 
Notwithstanding anything to the contrary contained herein, the Company
shall have the right to assign any and/or all of its rights and obligations
under this Agreement (i) to one or more other members of the Company
Group; provided, however that no such assignment by the Company
shall relieve the Company of its obligations hereunder in the event that any
such obligations are not satisfied by the other members of the Company Group
and (ii) in connection with the sale of the Company, whether by merger,
consolidation, reorganization, sale of all or substantially all of the Company’s
assets, or sale of a majority of the outstanding shares of the Company’s stock
or otherwise.

 

14

3.8           No Strict Construction.  The language used in this Agreement will be
deemed to be the language chosen hereto by the parties hereto to express their
mutual intent, and no rule of strict construction shall be applied to this
Agreement.

 

3.9           Descriptive Headings.  The descriptive headings of this Agreement
are inserted for convenience only and do not constitute a part of this
Agreement.

 

3.10         Governing Law. 
All questions concerning the construction, validity and interpretation
of this Agreement and the exhibits and schedules hereto will be governed by and
construed in accordance with the domestic laws of the State of Delaware,
without giving effect to any choice of law or conflict of law provision or rule (whether
of the State of Delaware or any other jurisdiction) that would cause the
application of the laws of any jurisdiction other than the State of Delaware.

 

3.11         Remedies.  Each
of the parties to this Agreement will be entitled to enforce its rights, under
this Agreement specifically, to recover damages caused by any actual or
threatened breach or violation of any provision of this Agreement and to
exercise all other rights existing in its favor.  The parties hereto agree and acknowledge that
money damages may not be an adequate remedy for any actual or threatened breach
of the provisions of this Agreement and that, in addition to any other remedies
available under applicable law, any party may in its sole discretion apply to
any court of law or equity of competent jurisdiction (without posting any bond
or deposit) for specific performance and/or other injunctive relief in order to
enforce or prevent any violations of the provisions of this Agreement.

 

3.12         Amendment and Waiver. 
The provisions of this Agreement may be amended and waived only with the
prior written consent of the Company and Executive.

 

15

IN WITNESS WHEREOF, the parties hereto have executed this Amended and
Restated Executive Employment Agreement as of the dates set forth below.

 

	
   

  	
   

  	
   

  	
  REAL
  MEX RESTAURANTS, INC.

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Dated:

  	
  2/28/08

  	
   

  	
  By:

  	
  /s/
  Steven Tanner

  	
   

  
	
   

  	
   

  	
   

  	
  Name:
  

  	
  Steven
  Tanner

  
	
   

  	
   

  	
   

  	
  Title:
  

  	
  Chief
  Financial Officer

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Dated:

  	
  2/28/08

  	
   

  	
   

  	
  /s/
  Frederick Wolfe

  	
   

  	 

	
   

  	
   

  	
   

  	
  Frederick
  Wolfe

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