INTERCREDITOR AGREEMENT

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Exhibit 10.2

INTERCREDITOR AGREEMENT

dated as of March 31, 2004

by and among

WELLS FARGO BANK, N.A.,
as Collateral Agent and as Trustee

and

FLEET NATIONAL BANK,
as Administrative Agent

INTERCREDITOR AGREEMENT

        This Intercreditor Agreement, dated as of March 31, 2004 (as the same may be amended, modified or supplemented from time to time, this " Agreement "), is by and among: (i) WELLS FARGO BANK, N.A., as Trustee under the Indenture (as defined below) for the benefit of the holders from time to time of the Note Obligations (in such capacity, including any successor thereto in such capacity, the " Trustee "), (ii) WELLS FARGO BANK, N.A., as Collateral Agent under the Indenture for the benefit of the holders from time to time of the Note Obligations (in such capacity, including any successor thereto in such capacity, the " Collateral Agent ") and (iii) FLEET NATIONAL BANK, as Administrative Agent (in such capacity, including any successor thereto in such capacity, the " Administrative Agent ") under the Credit Agreement (as defined below) for the benefit of the holders from time to time of the Priority Lien Obligations.

RECITALS

        WHEREAS, pursuant to an Amended and Restated Revolving Credit Agreement, dated as of even date herewith, entered into by Real Mex Restaurants, Inc. (the " Company "), the other borrowers party thereto and the lenders party thereto and led by the Administrative Agent, the Company and the other Obligors have entered into the Priority Lien Security Documents pursuant to which the Obligors have granted the Administrative Agent a first priority security interest in the Collateral;

        WHEREAS, pursuant to an Indenture, dated of even date herewith (as the same may be amended, restated, modified, supplemented, renewed, refunded, replaced or refinanced from time to time, the " Indenture "), by and among the Company, the Guarantors and the Trustee, the Company and the other Obligors have entered into the Security Documents pursuant to which they have granted the Collateral Agent a security interest in the Collateral which security interest is subordinate to the security interest of the Priority Lien therein;

        WHEREAS, the parties hereto desire to enter into this Agreement to confirm their relative rights with respect to the Collateral as provided in this Agreement;

        NOW THEREFORE, in consideration of the premises, covenants and agreements as herein set forth and for other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the parties hereto hereby agree as follows:

AGREEMENT

ARTICLE 1.
DEFINITIONS

        For purposes of this Agreement, the terms listed in this Article 1 shall have the respective meanings set forth in this Article 1. All other capitalized terms used herein and not defined herein shall have the meaning ascribed thereto in the Indenture.

        " Additional Notes " means any Notes issued under the Indenture after the date of the Indenture, as part of the same series as the Initial Notes.

        " Affiliate" of any specified Person means any other Person directly or indirectly controlling or controlled by or under direct or indirect common control with such specified Person. For purposes of this definition, "control," as used with respect to any Person, means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of such Person, whether through the ownership of voting securities, by agreement or otherwise. For purposes of this definition, the terms "controlling," "controlled by" and "under common control with" have correlative meanings.

        " Bankruptcy Law " means Title 11, U.S. Code or any similar federal or state law for the relief of debtors.

 

        " Board of Directors " means:

        (1)   with respect to a corporation, the board of directors of the corporation or any committee thereof duly authorized to act on behalf of such board;

        (2)   with respect to a partnership, the Board of Directors of the general partner of the partnership;

        (3)   with respect to a limited liability company, the managing member or members or any controlling committee of managing members thereof; and

        (4)   with respect to any other Person, the board or committee of such Person serving a similar function.

        " Business Day " means any day other than a Legal Holiday.

        " Capital Lease Obligation " means, at the time any determination is to be made, the amount of the liability in respect of a capital lease that would at that time be required to be capitalized on a balance sheet prepared in accordance with GAAP, and the Stated Maturity thereof shall be the date of the last payment of rent or any other amount due under such lease prior to the first date upon which such lease may be prepaid by the lessee without payment of a penalty.

        " Capital Stock " means:

        (1)   in the case of a corporation, corporate stock;

        (2)   in the case of an association or business entity, any and all shares, interests, participations, rights or other equivalents (however designated) of corporate stock;

        (3)   in the case of a partnership or limited liability company, partnership interests (whether general or limited) or membership interests; and

        (4)   any other interest or participation that confers on a Person the right to receive a share of the profits and losses of, or distributions of assets of, the issuing Person, but excluding from all of the foregoing any debt securities convertible into Capital Stock, whether or not such debt securities include any right of participation with Capital Stock,

including, in each case, Preferred Stock.

        " Collateral " means all properties and assets at any time owned or acquired by the Company or any of the Guarantors, other than Excluded Assets.

        " Collateral Agent " means Wells Fargo Bank, N.A., in its capacity as collateral agent under the Security Documents and this Agreement, together with its successors in such capacity.

        " Credit Agreement " means that certain Amended and Restated Revolving Credit Agreement, dated March 31, 2004, by and among the Company, Fleet National Bank, as administrative agent and as lender, and the other lenders party thereto from time to time, providing for (1) up to $15.0 million of revolving credit borrowings and (2) a separate facility for up to $15.0 million of letters of credit, in each case, including any related notes, guarantees, collateral documents, instruments and agreements executed in connection therewith, and in each case as amended, restated, modified, renewed, refunded, replaced (whether upon or after termination or otherwise) or refinanced (including by means of sales of debt securities to institutional investors) in whole or in part from time to time.

        " Credit Agreement Agent " means Fleet National Bank, in its capacity as collateral agent under the Priority Lien Security Documents, and any successor thereto in such capacity.

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        " Credit Bid Rights " means, in respect of any order relating to a sale of assets in any Insolvency or Liquidation Proceeding, that:

        (1)   such order grants the Holders of Notes (individually and in any combination) the right to bid at the sale of such assets and the right to offset such holders' claims secured by Note Liens upon such assets against the purchase price of such assets if the bid of such holders:

        (a)   is the highest bid or otherwise determined by the court to be the best offer at the sale; and

        (b)   includes a cash purchase price component payable at the closing of the sale in an amount that would be sufficient on the date of the closing of the sale, if such amount were applied to such payment on such date, to pay all unpaid Priority Lien Obligations (except Unasserted Contingent Obligations) and to satisfy all Liens entitled to priority over the Priority Liens that attach to the proceeds of the sale, and such order requires or permits such amount to be so applied; and

        (2)   such order allows the claims of the Holders of Notes in such Insolvency or Liquidation Proceeding to the extent required for the grant of such rights.

        " Credit Facilities " means one or more debt facilities (including, without limitation, the Credit Agreement) or commercial paper facilities, in each case with banks or other institutional lenders providing for revolving credit loans, term loans, receivables financing (including through the sale of receivables to such lenders or to special purpose entities formed to borrow from such lenders against such receivables) or letters of credit, in each case, as amended, restated, modified, renewed, refunded, replaced (whether upon or after termination or otherwise) or refinanced (including by means of sales of debt securities to institutional investors) in whole or in part from time to time.

        " Default " means any event that is, or with the passage of time or the giving of notice or both would be, if it continues uncured, an Event of Default.

        " Discharge of the Priority Lien Obligations " means termination of all commitments to extend credit that would constitute Priority Lien Debt, payment in full in cash of the principal of and interest and premium (if any) on all Priority Lien Debt (except undrawn letters of credit), discharge or cash collateralization (at the lower of (1) 105% of the aggregate undrawn amount and (2) the percentage of the aggregate undrawn amount required for release of liens under the terms of the applicable Priority Lien Document) of all letters of credit outstanding under any Priority Lien Debt, and payment in full in cash of all other Priority Lien Obligations (except Unasserted Contingent Obligations) that are outstanding and unpaid at the time the Priority Lien Debt is Discharged. " Discharged " shall have the correlative meaning.

        " equally and ratably" means, in reference to any sharing of Liens or proceeds from the enforcement of the Collateral Agent's security interests in the Collateral as among the holders of Note Obligations, that such Liens or proceeds:

        (1)   shall be allocated and distributed first to the Trustee, for account of the holders of Notes, ratably in proportion to the principal of and interest and premium (if any) outstanding when the allocation or distribution is made, and thereafter; and

        (2)   shall be allocated and distributed (if any such proceeds remain after payment in full of all of the principal of and interest and premium (if any) on all outstanding Note Debt) to the Trustee, for account of the holders of any remaining Note Obligations with respect to the Notes, ratably in proportion to the aggregate unpaid amount of such remaining Note Obligations due and demanded (with written notice to the Trustee and the Collateral Agent) prior to the date such distribution is made.

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        " Equity Interests " means Capital Stock and all warrants, options or other rights to acquire Capital Stock (but excluding any debt security that is convertible into, or exchangeable for, Capital Stock).

        " Event of Default " has the meaning set forth in Section 6.01 of the Indenture.

        " Excluded Assets " means:

        (1)   any lease, license, contract, property right or agreement to which the Company or any Guarantor is a party or any of its rights or interests thereunder if and only for so long as the grant of a security interest therein under the Security Documents (i) is prohibited by law or would constitute or result in the abandonment, invalidation or unenforceability of any right, title or interest of the grantor of such security interest therein pursuant to applicable law, or (ii) would require the consent of third parties that are not an Affiliate of the Company or any Guarantor and such consent has not been obtained or waived after the Company, or the applicable Guarantor, as the case may be, has used commercially reasonable efforts to try to obtain such consent or a waiver thereof, or (iii) other than as a result of a breach of the provisions thereof, would constitute a default under or result in a termination of such lease, permit, license, contract, property right or agreement, in each case, (other than to the extent that any such provisions thereof would be rendered ineffective pursuant to Sections 9-406, 9-407, 9-408 or 9-409 of the Uniform Commercial Code (or any successor provision or provisions) of any relevant jurisdiction or any other applicable law); provided that, immediately upon (a) the unenforceability, ineffectiveness, lapse or termination of (i) such prohibition, (ii) the provisions that would be so breached or (iii) such breach, default or termination or (b) the obtaining of any such consent or waiver, the Excluded Assets shall not include, and the Company or applicable Guarantor, as the case may be, shall be deemed immediately and automatically to have granted a security interest in, all such leases, licenses, contracts, property rights and agreements and such other rights and interests thereunder as if such prohibition, the provisions that would be so breached or such breach, default or termination had never been in effect and as if such consent had not been required;

        (2)   all "securities" of any of the Company's "affiliates" (as the terms "securities" and "affiliates" are used in Rule 3-16 of Regulation S-X under the Securities Act);

        (3)   money, deposit accounts and letter-of-credit rights that are not supporting obligations, all as defined in Article 9 of the New York Uniform Commercial Code (except that the exclusion of money, deposit accounts and letter-of-credit rights that are not supporting obligations from the Collateral will not affect, limit or impair any security interest of the Collateral Agent in any proceeds of Collateral at any time held as money, held on deposit in any deposit account or constituting letter-of-credit rights); provided that in the event, and to the extent, that, after the date of the Indenture, the security interest granted therein may be perfected by the filing of a financing statement under the Uniform Commercial Code of the relevant jurisdiction, money, deposit accounts and letter-of-credit rights that are not supporting obligations shall cease to be Excluded Assets;

        (4)   (i) any foreign intellectual property of the Company or any of its Restricted Subsidiaries, or (ii) any automobiles, trailers, vehicles or the like of the Company or any of its Restricted Subsidiaries subject to a certificate-of-title statute (within the meaning of Article 9 of the New York Uniform Commercial Code), in each case, in which a security interest may not be perfected by the filing of a financing statement under the Uniform Commercial Code of the relevant jurisdiction;

        (5)   any other property or assets in which a security interest cannot be perfected by the filing of a financing statement under the Uniform Commercial Code of the relevant jurisdiction, so long as the aggregate Fair Market Value of all such property excluded under this clause (5) does not at any time exceed $1.0 million (except that the exclusion of such property from the Collateral will

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not affect, limit or impair any security interest of the Collateral Agent in any proceeds of Collateral at any time held as personal property of a type in which a security interest cannot be perfected by the filing of a financing statement under the Uniform Commercial Code of the relevant jurisdiction);

        (6)   Subject to the proviso to clause (1) of this definition, any real property leased by the Company or any Guarantor; provided that (a) the Company or such Guarantor, as the case may be, shall have used commercially reasonable efforts to obtain the consent of the applicable landlord to the grant of a security interest in favor of the Collateral Agent to secure the Note Obligations in (i) any such leased real property in which the Priority Lien Collateral Agent or any holder of Priority Lien Obligations holds a security interest to secure Priority Lien Obligations and (ii) the Sale-Leaseback Properties, and (b) such consent shall not have been obtained;

        (7)   at any time, any real property interest acquired by the Company or any of its Restricted Subsidiaries after the date of the Indenture in which the Collateral Agent does not have a perfected security interest on such acquisition date, solely to the extent the Company or such Restricted Subsidiary was not then required to grant the Collateral Agent a perfected security interest therein under the Indenture;

        (8)   any assets or properties in which the Collateral Agent is required to release its Note Liens securing Note Obligations pursuant to Section 10.06 of the Indenture, provided that if such Liens are required to be released as a result of the sale, transfer or other disposition of any assets or properties of the Company or any Guarantor, such assets or properties shall cease to be "Excluded Assets" under this clause (8) if the Company or any Guarantor thereafter acquires or reacquires such assets or properties; and

        (9)   at any time Priority Lien Obligations exist that have not been Discharged, any properties or assets (other than those specified in clauses (1) through (8) above) acquired by the Company or any Guarantor after the date of the Indenture in which the Priority Lien Collateral Agent or the holders of the requisite percentage of Priority Lien Debt do not obtain a security interest to secure Priority Lien Debt; provided that the aggregate Fair Market Value of all such property and assets does not exceed $500,000;

provided that no asset or property will constitute an Excluded Asset for so long as it is subject to a Priority Lien other than (i) securities of an affiliate to the extent such securities would otherwise be "Excluded Assets" under clause (2) of this definition, (ii) any leased real property held by the Company or any Guarantor from time to time to the extent such leased real property would otherwise be an "Excluded Asset" under clause (6) of this definition or (iii) any deposit account to the extent such deposit account would otherwise be an "Excluded Asset" under clause (3) of this definition; provided that (a) the Company or the applicable Guarantor, as the case may be, shall have used all commercially reasonable efforts to cause a perfected security interest in such deposit accounts and (b) such perfected security interest shall not have been granted.

        " Fair Market Value " means the value that would be paid by a willing buyer to an unaffiliated willing seller in a transaction not involving distress or necessity of either party, determined in good faith by the Board of Directors of the Company, which determination will be conclusive (unless otherwise provided in the Indenture).

        " GAAP " means generally accepted accounting principles set forth in the opinions and pronouncements of the Accounting Principles Board of the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board or in such other statements by such other entity as have been approved by a significant segment of the accounting profession, which are in effect on the date of the Indenture.

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        " Guarantee " means a guarantee other than by endorsement of negotiable instruments for collection in the ordinary course of business, direct or indirect, in any manner including, without limitation, by way of a pledge of assets or through letters of credit or reimbursement agreements in respect thereof, of all or any part of any Indebtedness (whether arising by virtue of partnership arrangements, or by agreements to keep-well, to purchase assets, goods, securities or services, to take or pay or to maintain financial statement conditions or otherwise).

        " Guarantor " means any Subsidiary of the Company that executes a Note Guarantee in accordance with the provisions of the Indenture and its successors and assigns, in each case, until the Note Guarantee of such Person has been released in accordance with the provisions of the Indenture.

        " Hedging Obligations " means, with respect to any specified Person, the obligations of such Person under:

        (1)   interest rate swap agreements (whether from fixed to floating or from floating to fixed), interest rate cap agreements and interest rate collar agreements;

        (2)   other agreements or arrangements designed to manage interest rates or interest rate risk; and

        (3)   other agreements or arrangements designed to protect such Person against fluctuations in currency exchange rates or commodity prices.

        " Holder " means a person in whose name a Note is registered.

        " Indebtedness " means, with respect to any specified Person, any indebtedness of such Person (excluding accrued expenses and trade payables), whether or not contingent:

        (1)   in respect of borrowed money;

        (2)   evidenced by bonds, notes, debentures or similar instruments or letters of credit (or reimbursement agreements in respect thereof);

        (3)   in respect of banker's acceptances;

        (4)   representing Capital Lease Obligations;

        (5)   representing the balance deferred and unpaid of the purchase price of any property or services due more than six months after such property is acquired or such services are completed; or

        (6)   representing any Hedging Obligations,

if and to the extent any of the preceding items (other than letters of credit and Hedging Obligations) would appear as a liability upon a balance sheet of the specified Person prepared in accordance with GAAP. In addition, the term "Indebtedness" includes (a) all Indebtedness of others secured by a Lien on any asset of the specified Person (whether or not such Indebtedness is assumed by the specified Person) and (b) to the extent not otherwise included, the Guarantee by the specified Person of any Indebtedness of any other Person.

        " Initial Notes " means the first $105.0 million aggregate principal amount of Notes issued under the Indenture on the date of the Indenture.

        " Insolvency or Liquidation Proceeding " means:

        (1)   any case commenced by or against the Company or any other Obligor under any Bankruptcy Law, any other proceeding for the reorganization, recapitalization or adjustment or marshalling of the assets or liabilities of the Company or any other Obligor, any receivership or assignment for the benefit of creditors relating to the Company or any other Obligor or any similar

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case or proceeding relative to the Company or any other Obligor or its creditors, as such, in each case whether or not voluntary;

        (2)   any liquidation, dissolution, marshalling of assets or liabilities or other winding up of or relating to the Company or any other Obligor, in each case whether or not voluntary and whether or not involving bankruptcy or insolvency; or

        (3)   any other proceeding of any type or nature in which substantially all claims of creditors of the Company or any other Obligor are determined and any payment or distribution is or may be made on account of such claims.

        " Legal Holiday " means a Saturday, a Sunday or a day on which banking institutions are closed or are authorized by law, regulation or executive order to remain closed (1) in the City of New York, (2) in the city in which the Corporate Trust Office of the Trustee is located, (3) at a place of payment or (4) at any other location identified in the definition of "Business Day" (or the equivalent thereof) in the applicable Priority Lien Document; provided that the Trustee and the Collateral Agent have previously been advised of such location in writing; and provided , further , that, for purposes of the Credit Agreement, such location shall be Boston, Massachusetts, unless and until the Trustee and the Collateral Agent are notified in writing of any substitute or additional location. If a payment date is a Legal Holiday at a place of payment, payment may be made at that place on the next succeeding day that is not a Legal Holiday.

        " Lenders " means, at any time, the parties then holding (or committed to provide) loans, letters of credit or other extensions of credit or obligations that constitute (or when provided will constitute) Priority Lien Obligations.

        " Lien " means, with respect to any asset, any mortgage, lien, pledge, charge, security interest or encumbrance of any kind in respect of such asset, whether or not filed, recorded or otherwise perfected under applicable law, including any conditional sale or other title retention agreement, any lease in the nature thereof, any option or other agreement to sell give a security interest in and any filing of or agreement to give any financing statement relating to a lien on an asset under the Uniform Commercial Code (or equivalent statutes) of any jurisdiction.

        " Liquidated Damages " means all liquidated damages then owing pursuant to the Registration Rights Agreement.

        " Non-Recourse Debt " means Indebtedness:

        (1)   as to which neither the Company nor any of its Restricted Subsidiaries (a) provides credit support of any kind (including any undertaking, agreement or instrument that would constitute Indebtedness), (b) is directly or indirectly liable as a guarantor or otherwise, or (c) constitutes the lender;

        (2)   no default with respect to which (including any rights that the holders of the Indebtedness may have to take enforcement action against an Unrestricted Subsidiary) would permit upon notice, lapse of time or both any holder of any other Indebtedness of the Company or any of its Restricted Subsidiaries to declare a default on such other Indebtedness or cause the payment of the Indebtedness to be accelerated or payable prior to its Stated Maturity; and

        (3)   as to which the lenders have been notified in writing that they will not have any recourse to the stock or assets of the Company or any of its Restricted Subsidiaries.

        " Note Debt " means:

        (1)   the Initial Notes; and

        (2)   any Additional Notes that are permitted to be incurred under the Indenture

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provided , that the satisfaction of the requirement in clause (2) shall be conclusively established, for purposes of entitling the holders of Additional Notes to share equally and ratably with the other holders of Note Obligations in the benefits and proceeds of the Collateral Agent's security interests in the Collateral, if the Company delivers to the Collateral Agent an Officers' Certificate stating that such requirement has been satisfied and that the Additional Notes constitute "Note Obligations," and the holders of such Additional Notes and Obligations in respect thereof will be entitled to rely conclusively thereon.

        " Note Documents " means, collectively, the Indenture, the Notes (including any Additional Notes), the Note Guarantees, the Security Documents, the Intercreditor Agreement and all agreements governing, securing or relating to any Note Obligations.

        " Note Guarantee " means the Guarantee by each Guarantor of the Company's obligations under the Indenture and on the Notes, executed pursuant to the provisions of the Indenture.

        " Note Lien " means a Lien granted pursuant to a Security Document by the Company or any other Obligor to the Collateral Agent (or any other holder, or representative of holders, of Note Obligations) upon any property or assets of the Company or such Obligor to secure Note Obligations.

        " Note Obligations " means Note Debt and all other Obligations in respect thereof.

        " Notes " means the 10% Senior Secured Notes due 2010 (including without limitation, Additional Notes).

        " Obligations " means:

        (1)   any principal (including reimbursement obligations with respect to letters of credit whether or not drawings have been made thereon), interest (including any interest accruing at the then applicable rate provided in any applicable Secured Debt Document after the maturity of the Indebtedness thereunder and any reimbursement obligations therein and interest accruing at the then applicable rate provided in any applicable Secured Debt Document after the filing of any petition in bankruptcy, or the commencement of any insolvency, reorganization or like proceeding, whether or not a claim for post- filing or post-petition interest is allowed in such proceeding), penalties, fees, indemnifications, reimbursements, damages and other liabilities payable under the documentation governing any Indebtedness;

        (2)   the obligation to pay an amount equal to all damages that a court shall determine any holder of the applicable Secured Debt has suffered by reason of a breach by the applicable obligor thereunder of any obligation, covenant or undertaking with respect to any applicable Secured Debt Document; and

        (3)   any net obligations of the obligor under any applicable Secured Debt Document to any holder of Secured Debt (or any representative on its behalf) or any Affiliate thereof under any Hedging Obligations in respect of interest rates or currency exchange rates.

        " Obligor " means the Company and each Restricted Subsidiary of the Company (if any) that at any time guarantees or provides collateral security or credit support for any Note Obligations.

        " Officer " means, with respect to any Person, the Chairman of the Board, the Chief Executive Officer, the President, the Chief Operating Officer, the Chief Financial Officer, the Treasurer, any assistant Treasurer, the Controller, the Secretary or any Vice-President of such Person.

        " Officers' Certificate " means (1) with respect to the Company, a certificate signed on behalf of the Company by two Officers of the Company, one of whom must be the principal executive officer, the principal financial officer, the treasurer, or the principal accounting officer of the Company, that meets the requirements of Section 13.05 of the Indenture, and (2) with respect to any holder of Priority Liens, a certificate signed on behalf of such holder by two Officers of such holder.

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        " Opinion of Counsel " means an opinion from legal counsel who is reasonably acceptable to the Trustee, that meets the requirements of Section 13.05 of the Indenture. The counsel may be an employee of or counsel to the Company or the Trustee.

        " Permitted Liens " means:

        (1)   Liens on assets of the Company or any of its Restricted Subsidiaries securing Indebtedness and other Obligations under Credit Facilities that was incurred pursuant to clause (1) of the definition of "Permitted Debt" contained in the Indenture;

        (2)   Liens in favor of the Company or the Guarantors;

        (3)   Liens on property or shares of Capital Stock of a Person existing at the time such Person is merged with or into or consolidated with the Company or any Subsidiary of the Company; provided that such Liens were in existence prior to the contemplation of such merger or consolidation and do not extend to any assets other than those of the Person merged into or consolidated with the Company or the Subsidiary;

        (4)   Liens on property (including Capital Stock) existing at the time of acquisition of the property by the Company or any Subsidiary of the Company; provided that such Liens were in existence prior to such acquisition and not incurred in contemplation of such acquisition;

        (5)   Liens to secure the performance of statutory obligations, surety or appeal bonds, performance bonds or other obligations of a like nature, in each case, other than for the payment of Indebtedness incurred in the ordinary course of business (including, without limitation, rights of offset and set-off);

        (6)   Liens to secure Indebtedness permitted by clause (4) of the definition of "Permitted Debt" contained in the Indenture, in each case covering only the assets acquired with or financed by such Indebtedness;

        (7)   Liens existing on the date of the Indenture;

        (8)   Liens for taxes, assessments or governmental charges or claims that are not yet delinquent or that are being contested in good faith by appropriate proceedings promptly instituted and diligently concluded; provided that any reserve or other appropriate provision as is required in conformity with GAAP has been made therefor;

        (9)   pledges or deposits by a Person under worker's compensation laws, unemployment insurance laws or similar legislation, or good faith deposits in connection with bids, tenders, contracts (other than for the payment of Indebtedness) or leases or licenses to which such Person is a party, or deposits as security for contested taxes or import duties or for the payment of rent, in each case incurred in the ordinary course of business;

        (10) Liens imposed by law, such as carriers', warehousemen's, landlord's and mechanics' Liens, in each case, incurred in the ordinary course of business;

        (11) judgment Liens not giving rise to an Event of Default under the Indenture so long as such Lien is adequately bonded and any appropriate legal proceedings which may have been duly initiated for the review of such judgment shall not have been finally terminated or the period within which such proceedings may be initiated shall not have expired;

        (12) Liens arising solely by virtue of any statutory or common law provision relating to banker's Liens, rights of set-off or similar rights and remedies as to deposit accounts or other funds maintained with a creditor depository institution; provided , however , that (a) such deposit account is not a dedicated cash collateral account and is not subject to restrictions against access by the Company or any of its Restricted Subsidiaries in excess of those set forth by regulations

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promulgated by the Federal Reserve Board and (b) such deposit account is not intended by the Company or any Restricted Subsidiary to provide collateral to the depository institution;

        (13) with respect to the Company or any of its Restricted Subsidiaries, survey exceptions, easements or reservations of, or rights of others for, licenses, rights-of-way, sewers, electric lines, telegraph and telephone lines and other similar purposes, or zoning or other similar restrictions as to the use of real property that were not incurred in connection with Indebtedness and that do not in the aggregate materially adversely affect the value of said properties or materially impair their use in the operation of the business of the Company or such Restricted Subsidiary, as the case may be;

        (14) Liens securing Hedging Obligations so long as such Hedging Obligations relate to Indebtedness that is permitted to be incurred under the Indenture;

        (15) Note Liens;

        (16) leases or subleases granted to Persons other than the Company or any of its Restricted Subsidiaries in the ordinary course of business, and not materially interfering with the ordinary course of business of the Company or any of its Restricted Subsidiaries;

        (17) Liens under licensing agreements entered into by the Company or any of its Restricted Subsidiaries for use of intellectual property entered into in the ordinary course of business;

        (18) Liens arising out of conditional sale, title retention, consignment or similar arrangements for the sale of goods entered into by the Company or any of its Restricted Subsidiaries in the ordinary course of business;

        (19) (a) Liens securing Indebtedness under Credit Facilities and (b) Liens to secure Indebtedness represented by Capital Lease Obligations, mortgage financings or purchase money indebtedness, in each case that, at the time that such Indebtedness was incurred, after giving pro forma effect to such Indebtedness as if such Indebtedness had been incurred at the beginning of the four fiscal quarters most recently completed prior to the date of such incurrence for which internal financial statements are available, and to the pro forma application of the net proceeds of such Indebtedness, did not result in a Fixed Charge Coverage Ratio for such four-quarter period that was less than 3.0 to 1;

        (20) Liens to secure any Permitted Refinancing Indebtedness permitted to be incurred under the Indenture; provided , however , that:

        (a)   the new Lien shall be limited to all or part of the same property and assets that secured or, under the written agreements pursuant to which the original Lien arose, could secure the original Lien (plus improvements and accessions to, such property or proceeds or distributions thereof); and

        (b)   the Indebtedness secured by the new Lien is not increased to any amount greater than the sum of (x) the outstanding principal amount, or, if greater, committed amount, of the Permitted Refinancing Indebtedness and (y) an amount necessary to pay any fees and expenses, including premiums, related to such renewal, refunding, refinancing, replacement, defeasance or discharge;

        (21) Liens securing reimbursement obligations with respect to letters of credit permitted under clause (13) of the definition of "Permitted Debt" contained in the Indenture which encumber documents and other property relating to such letters of credit and products and proceeds thereof;

        (22) Liens to secure Indebtedness permitted by clause (14) of the definition of "Permitted Debt" contained in the Indenture; and

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        (23) Liens incurred in the ordinary course of business of the Company or any of its Restricted Subsidiaries securing obligations (other than obligations under any Credit Facility) that do not exceed $500,000 at any time outstanding.

        " Permitted Refinancing Indebtedness " means any Indebtedness of the Company or any of its Restricted Subsidiaries issued in exchange for, or the net proceeds of which are used to refund, refinance, replace, defease or discharge other Indebtedness of the Company or any of its Restricted Subsidiaries (other than intercompany Indebtedness), including Indebtedness of the Company or any Restricted Subsidiary used to refinance Permitted Refinancing Indebtedness; provided that:

        (1)   the principal amount (or accreted value, if applicable) of such Permitted Refinancing Indebtedness does not exceed the principal amount (or accreted value, if applicable) of the Indebtedness renewed, refunded, refinanced, replaced, defeased or discharged (plus all accrued interest on the Indebtedness and the amount of all fees and expenses, including premiums, incurred in connection therewith);

        (2)   such Permitted Refinancing Indebtedness has a final maturity date later than the final maturity date of, and has a Weighted Average Life to Maturity equal to or greater than the Weighted Average Life to Maturity of, the Indebtedness being renewed, refunded, refinanced, replaced, defeased or discharged;

        (3)   if the Indebtedness being renewed, refunded, refinanced, replaced, defeased or discharged is subordinated in right of payment to the Notes, such Permitted Refinancing Indebtedness has a final maturity date later than the final maturity date of, and is subordinated in right of payment to, the Notes on terms at least as favorable to the Holders of Notes as those contained in the documentation governing the Indebtedness being renewed, refunded, refinanced, replaced, defeased or discharged; and

        (4)   such Indebtedness is incurred either by the Company or by the Restricted Subsidiary who is the obligor on the Indebtedness being renewed, refunded, refinanced, replaced, defeased or discharged.

        " Person " means any individual, corporation, partnership, joint venture, association, joint-stock company, trust, unincorporated organization, limited liability company or government or other entity.

        " Pledged Collateral " means (1) any tangible property in the possession of the Priority Lien Collateral Agent (or its agents or bailees) in which a security interest is perfected by such possession, including, without limitation, negotiable documents, goods, instruments, money or tangible chattel paper or (2) any other Collateral as to which the Priority Lien Collateral Agent (or its agents or bailees) has control and in which a security interest is perfected by such control including, without limitation, any investment property, cash collateral account, deposit account, electronic chattel paper or letter of credit rights. For purposes hereof, the terms "negotiable documents," "goods," instruments," "money," "tangible chattel paper," "investment property," "deposit account," "electronic chattel paper" and "letter of credit rights" shall have the meanings given such terms in the New York Uniform Commercial Code, as in effect on the date hereof.

        " Preferred Stock " means any Equity Interest with preferential right of payment (i) of dividends, or (ii) upon liquidation, dissolution or winding up of the issuer of such Equity Interest.

        " Priority Lien " means a Lien granted pursuant to a Priority Lien Security Document by the Company or any other Obligor to any holder, or representative of holders, of Priority Lien Obligations upon any property or assets of the Company or such Obligor to secure Priority Lien Obligations.

        " Priority Lien Collateral Agent " means the Credit Agreement Agent or, after all Priority Lien Obligations in respect of the Credit Agreement have been Discharged, a single representative of all

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holders of Priority Liens most recently designated by the Company in an Officers' Certificate delivered to the Trustee and Collateral Agent or the successor of such representative in its capacity as such.

        " Priority Lien Debt " means:

        (1)   the principal amount of any Indebtedness which, when incurred (or, in the case of any reimbursement obligation for a letter of credit issued under any Credit Facility, when such letter of credit was issued), either (a) was permitted to be secured by Liens permitted by clause (1), (19)(a), (21) or (22) of the definition of "Permitted Liens" or (b) was incurred (or, in the case of any such reimbursement obligation, relates to a letter of credit that was issued) upon delivery to the Priority Lien Collateral Agent, the Trustee and the Collateral Agent of an Officers' Certificate to the effect that, at the time of such incurrence, such Indebtedness was permitted to be secured by Liens permitted by clause (1), (19)(a), (21) or (22) of the definition of "Permitted Liens," including without limitation any such Indebtedness incurred in any Insolvency or Liquidation Proceeding to the extent constituting Indebtedness permitted to be secured by Liens permitted by clause (1), (19)(a), (21) or (22) of the definition of "Permitted Liens"(it being agreed that, for purposes of qualifying as "Priority Lien Debt," any loan advanced or letter of credit issued under a line of credit will be deemed "incurred" at the time the Credit Facility governing such Indebtedness is entered into); provided that any holder of Priority Lien Debt and the Priority Lien Collateral Agent shall be conclusively entitled to rely on an Officers' Certificate from the Company addressed to any such holder or the Priority Lien Collateral Agent (a copy of which Officers' Certificate is provided substantially concurrently to the Collateral Agent and the Trustee) that any borrowings, issuances of letters of credit or other extensions of credit under any Credit Facility were incurred, and are permitted to be incurred, under the terms of the Indenture; and

        (2)   Hedging Obligations permitted to be secured by Liens permitted by clause (14) of the definition of "Permitted Liens"; provided that, pursuant to the Credit Agreement, the Hedging Obligations secured thereby are secured by and all and Liens securing Indebtedness incurred under the Credit Agreement.

        " Priority Lien Documents " means the Credit Agreement, the Priority Lien Security Documents and all other agreements governing, securing or relating to any Priority Lien Obligations (other than this Agreement).

        " Priority Lien Obligation " means the Priority Lien Debt and all other Obligations of the Company or any Obligor under the Priority Lien Documents.

        " Priority Lien Security Documents " means one or more security agreements, pledge agreements, collateral assignment, mortgages, deed of trust or other grants or transfers for security executed and delivered by the Company or any other Obligor creating (or purporting to create) a Lien upon property owned or to be acquired by the Company or any other Obligor in favor of any holder or holders of Priority Lien Debt, or any trustee, agent or representative acting for any such holders, as security for any Priority Lien Obligations, in each case, as amended, modified, renewed, restated or replaced, in whole or in part, from time to time, in accordance with its terms.

        " Registration Rights Agreement " means the Registration Rights Agreement, dated as of March 31, 2004, among the Company, the Guarantors and the other parties named on the signature pages thereof, as such agreement may be amended, modified or supplemented from time to time and, with respect to any Additional Notes, one or more registration rights agreements among the Company, the Guarantors and the other parties thereto, as such agreement(s) may be amended, modified or supplemented from time to time, relating to rights given by the Company to the purchasers of Additional Notes to register such Additional Notes under the Securities Act of 1933, as amended.

        " Restricted Subsidiary " of a Person means any Subsidiary of the referent Person that is not an Unrestricted Subsidiary.

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        " Sale-leaseback Properties " means each of the following properties to be acquired by CRICACAPULCO, LLC from El Torito Restaurants, Inc. on or around the date of the Indenture and concurrently leased back by CRICACAPULCO, LLC to El Torito Restaurants, Inc. (or, in the case of the property listed in clause (2) below, Acapulco Restaurants, Inc.):

        (1)   8855 Tampa Ave, Northridge, Los Angeles County, California;

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