Document:

Exhibit
10.1

    ASSET PURCHASE
AGREEMENT

    

    THIS
PURCHASE AGREEMENT (this “Agreement”) is made and
entered into as of the 24th day of September, 2009, by and among FIESTA BRANDS, INC., a
Delaware corporation (“Seller”) and EL POLLO LOCO INC., a Delaware
corporation (“Purchaser”).

    

    WITNESSETH:

    

    WHEREAS, Purchaser is the
franchisor of the El Pollo
Loco® chain of
quick-serve restaurants which feature flame-grilled food products and related
services, and (as such) is the licensor of the trademarks, logos, trade names,
trade dress, service marks, and other property (the “Marks”) necessary to operate
restaurants under the name “El Pollo
Loco®” (the “Franchise”); and

    

    WHEREAS, pursuant to an El
Pollo Loco Franchise Agreement and Amendment to Franchise Agreement dated April,
2007, (collectively, “Franchise
Agreement #1”), issued by Purchaser, Seller owns and operates an El Pollo
Loco® restaurant,
identified as Unit No. 3631 (the “Restaurant #1”), at 885
Thornton Road, Lithia Springs, Georgia (the “Premises #1”);
and

    

    WHEREAS, pursuant to an El
Pollo Loco Franchise Agreement and Amendment to Franchise Agreement dated May,
2007, (collectively, “Franchise
Agreement #2”), issued by Purchaser, Seller owns and operates an El Pollo
Loco® restaurant,
identified as Unit No. 3616 (the “Restaurant #2”), at 3979
Buford Hwy, Atlanta, Georgia (the “Premises #2”);
and

    

    WHEREAS, pursuant to an El
Pollo Loco Franchise Agreement and Amendment to Franchise Agreement dated June,
2007, (collectively, “Franchise
Agreement #3”), issued by Purchaser, Seller owns and operates an El Pollo
Loco® restaurant,
identified as Unit No. 3632 (the “Restaurant #3”), at 895
Holcomb Bridge Road, Roswell, Georgia (the “Premises #3”);
and

    

    WHEREAS, pursuant to an El
Pollo Loco Franchise Agreement and Amendment to Franchise Agreement dated
January 24, 2008, (collectively, “Franchise Agreement #4”),
issued by Purchaser, Seller owns and operates an El Pollo
Loco® restaurant,
identified as Unit No. 3661 (the “Restaurant #4”), at 2521 S.E.
Cobb Parkway, Atlanta, Georgia (the “Premises #4”);
and

    

    WHEREAS, Franchise Agreement
#1, Franchise Agreement #2, Franchise Agreement #3 and Franchise Agreement #4
may be collectively referred to in this Agreement as the “Franchise
Agreements.”

    

    WHEREAS, Restaurant #1,
Restaurant #2, Restaurant #3 and Restaurant #4 may be collectively referred to
in this Agreement as the “Restaurants.”

    

    WHEREAS, Premises #1, Premises
#2, Premises #3 and Premises #4 may be collectively referred to in this
Agreement as the “Premises.”

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

    

    WHEREAS, Lease #1, Lease #2,
Lease #3 and Lease #4 discussed in Section 1.1 (f)-(i) may be collectively
referred to in this Agreement as the “Leases.”

    

    WHEREAS, Seller desires to
sell the Restaurants and the businesses conducted at the Premises as a going
concern, together with certain of the assets used in the conduct thereof
(collectively, the “Businesses”), to Purchaser on
the terms and conditions set forth in this Agreement, which terms and conditions
are acceptable to Seller and Purchaser.

    

    WHEREAS, Seller owns and
operates El
Pollo
Loco®
restaurants identified as Unit No. 3655 (2045 Marketplace Blvd., Ste. A-100,
Cumming, GA), Unit No. 3636 (5375 Fairington Road, Lithonia, GA), Unit No. 3635
(2390 Dallas Hwy, SW, Marietta, GA), Unit No. 3634  (1537 Shallowford
Road, Gainesville, GA) and Unit No. 3633 (1999 Lake Road, Hiram, GA)
(collectively, the “Excluded
Businesses”) under franchise agreements with Purchaser, and desires to
sell only the furniture, fixtures and equipment located at the Excluded
Businesses (collectively, the “Additional FFE”) to Purchaser
and Purchaser desires to acquire the Additional FFE from Seller,

    

    NOW, THEREFORE, in
consideration of the mutual covenants and conditions set forth in this
Agreement, and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Seller and Purchaser agree as
follows:

    

    1.           Purchase
of Assets.

    

    1.1           Assets
Sold.  On the terms and conditions set forth in this Agreement,
Seller will transfer, sell, assign, and convey to Purchaser, all of Seller’s
right, title, and interest in and to the Businesses and the following assets
(the “Purchased
Assets”), free and clear of any and all liens, claims, charges, and
encumbrances:

    

    (a)           All
furniture, fixtures, equipment (including spare parts), light fixtures, art and
decor, floor and wall coverings, signs (including graphic inserts, related
components, and peripherals), and computer hardware and software (subject to any
licensing restrictions in such software and Section 1.3 below), located on or at
the Premises, which are owned by Seller and specifically used in the Businesses,
including those items set forth on the attached Schedule
1.1(a) and Additional FFE specified on Schedule
1.1(a)(i) attached hereto.

    

    (b)           The
agreements, contracts, personal property leases, commitments, and arrangements
listed in the attached Schedule
1.1(b), as well as all service contracts, maintenance agreements, and
warranties applicable or appurtenant to the Businesses or the Purchased Assets
(collectively, the “Assumed
Contracts”).

    

    (c)           All
goodwill directly associated with the Businesses.

    

    (d)           Such
rights as Seller has to use all telephone numbers currently used in connection
with the conduct of the Businesses.

    
      
         

      

      
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    (e)           Intentionally
Omitted.

    

    (f)           All
of Seller’s rights as “Tenant” of Premises #1 under the Lease dated March 23,
2007, (the “Lease #1”),
between Eastwest Venture, LLC, (“Lessor”), and Fiesta Realty,
Inc., which Lease was assigned to Seller.  Attached in Schedule 1.1(f) is a complete
list of Lease #1 and all amendments, addendums, or other modifications of the
Lease, a true and correct copy of which has been delivered to
Purchaser.

    

    (g)           All
of Seller’s rights as “Tenant” of Premises #2 under the Lease dated April 25,
2007, (the “Lease #2”),
between CCD Buford, LLC, (“Lessor”), and Fiesta Realty,
Inc., which Lease was assigned to Seller.  Attached in Schedule 1.1(f) is a complete
list of Lease #2 and all amendments, addendums, or other modifications of the
Lease, a true and correct copy of which has been delivered to
Purchaser.

    

    (h)           All
of Seller’s rights as “Tenant” of Premises #3 under the Lease dated May 4, 2007,
(the “Lease #3”),
between Glenridge Warsaw, LLC, (“Lessor”), and Fiesta Realty,
Inc., which Lease was assigned to Seller.  Attached in Schedule 1.1(f) is a complete
list of Lease #3 and all amendments, addendums, or other modifications of the
Lease, a true and correct copy of which has been delivered to
Purchaser.

    

    (i)           All
of Seller’s rights as “Tenant” of Premises #4 under the Lease dated September
10, 2007, (the “Lease
#4”), between First States Investors Branch One, L.P., (“Lessor”), and Fiesta Realty,
Inc., which Lease was assigned to Seller.  Attached in Schedule 1.1(f) is a complete
list of Lease #4 and all amendments, addendums, or other modifications of the
Lease, a true and correct copy of which has been delivered to
Purchaser.

    

    (j)           All
leasehold improvements to the Premises, including the building in which the
Restaurants are operated, subject to the terms of the applicable
Leases.

    

    (k)           To
the extent assignable, all permits and licenses held by or issued to Seller in
connection with the Premises and all plans, specifications, and drawings related
to improvements to the Premises.  Attached as Schedule 1.1(k) is a list of all licenses
and occupancy permits (including certificates of occupancy, food handling
permits, and sales tax permits) relating to the Restaurants that Seller has been
able to locate after diligent, good-faith search.

    

    (l)           On
the Closing Date, Purchaser and Seller will execute a Termination of the
Franchise Rights and Mutual Release in the form of Exhibit
“A” (the “Termination of
Franchise Rights”).

    

    (m)         All
of Seller’s merchantable foodstuffs, paper goods, and other raw materials, and
packaging materials; all surplus uniforms, office supplies, forms, utensils,
small wares, cleaning materials and supplies, and other similar consumable
personal property and supplies (collectively, the “Supplies”) on the Premises on
the Closing Date (as defined in Section 2.3,
below).

    
      
         

      

      
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    (n)           All
cash on hand in the Restaurants on the Closing Date (including a reasonable
change fund consistent with past operation of the Business) (the “Cash Tills”).

    

    1.2           Possession.  Possession
of the Purchased Assets will be delivered to Purchaser upon the consummation of
the Closing as of the Closing Date.  Purchaser or Purchaser’s
designee, at Purchaser’s sole cost and expense, shall remove the Additional FFE
from the premises of the Excluded Businesses on the Closing Date or on the day
after the Closing Date. Seller shall provide Purchaser access to the premises of
the Excluded Businesses for such two (2) day period to insure that the
Additional FFE is in good working order.  Any Additional FFE not
removed by Purchaser shall be deemed abandoned by Purchaser.

    

    1.3           Equipment
Leases.     Any equipment leases shall be paid
in full by Seller at or before the Closing and the equipment transferred to
Purchaser per the Bill of Sale.

    

    2.           Purchase
Price / Closing.

    

    2.1           Purchase Price and
Payment.  In consideration for the Businesses and the Purchased
Assets, Purchaser will pay to Seller's lender (General Electric Capital
Corporation or "GECC"), One Million Seven Hundred Twenty Thousand and 00/100
Dollars ($1,720,000.00) (the "Purchase Price") in cash by wire transfer on the
Closing Date, subject to (i) adjustments as provided in Section 6 below and (ii)
prorations as provided in Section 8 below. By GECC's signature below, GECC
agrees that they will reimburse Purchaser within ten (10) days the amount
due:  (a) if Seller would have any liabilities to Purchaser under
Sections 13 and 14 of this Agreement, (b) if Purchaser presents to GECC a
written demand for payment with respect to such liabilities within sixty (60)
days of the Closing Date, (c) with respect to any claims for such liabilities up
to $50,000.00 and after Purchaser presents evidence of its payment of such
claims, and (d) with respect to claims for such liabilities exceeding $50,000.00
but not more than $125,000.00 and GECC reasonably determines that Purchaser is
entitled to reimbursement from GECC of such amounts under Sections 13 and 14 of
this Agreement up to a maximum amount of an additional $75,000.00, GECC will
make such determination within (10) days of receipt of the claim from Purchaser,
and if appropriate, reimburse Purchaser.

    

    2.2           Allocation of Purchase
Price.  The parties will allocate the Purchase Price for all
purposes (including accounting and income tax treatment) as set forth in Schedule
2.2.  In support of that treatment, the parties will exchange
executed copies of Internal Revenue Service forms 8594 reflecting this
allocation.

    

    2.3           Closing.  The
closing of the transaction contemplated by this Agreement (the “Closing”) will take place at
10 a.m. eastern time on September 24, 2009, or a later date if mutually agreed
in writing by the parties (the “Closing Date”), effective as
of 12:01 a.m. on the morning of the Closing Date, at the offices of Seller or
Seller’s counsel in the metropolitan Atlanta, Georgia area.

    

    3.           Assumed
Contracts.  On the Closing
Date, Purchaser and Seller will execute an assignment and assumption of the
Assumed Contracts in the form of Exhibit
“B” (the “Assumed
Contracts Assignments”).  If
(a) considered necessary or advisable by Seller or Purchaser, or (b) required by
the other party to any Assumed Contract, the parties will execute a separate a
separate assignment of specific Assumed Contracts.

    
      
         

      

      
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    4.           Assignment
and Assumption of Lease.

    

    4.1           Title to Leased
Property.  Seller has valid and indefeasible leasehold estates
in the Premises, subject only to the terms of the Leases.  To the best
of Seller’s Knowledge, the Lessor has fee simple title to the premises, subject
only to easements and restrictions of record, none of which has or will have any
material adverse impact on the ability of Purchaser to operate the Restaurants
at the Premises following the Closing.

    

    Seller will provide to Purchaser copies
of all title policies and surveys in the possession of Seller relating to the
Premises within three (3) days after execution of this Agreement.

    

    4.2           Environmental
Issues.  Seller will provide to Purchaser copies of all
environmental reports, including any Phase I or Phase II environmental audits,
in the possession of Seller relating to the Premises within two (2) days after
execution of this Agreement.  To the best of Seller’s Knowledge,
Seller is in compliance with all federal, state, and local statutes, rules,
ordinances, and other laws and regulations relating to protection of the
environment, including the Solid Waste Disposal Act, as amended by the Resource
Conservation Act and the Hazardous and Solid Waste Amendments of 1984, 42 U.S.C.
§6901, et seq.; the
Clean Air Act, 42 U.S.C. §7401, et seq.; the Safe Drinking
Water Act, 42 U.S.C. §3007, et
seq.: the Toxic Substances Control Act, 15 U.S.C. §2601, et seq.; the Federal
Insecticide, Fungicide, and Rodenticide Act, 7 U.S.C. §136, et seq.; the Emergency
Planning and Community Right to Know Act, 42 U.S.C. §11001, et seq.; and the
Comprehensive Environmental Response, Compensation and Liability Act, as
amended, 42 U.S.C. §9601, et
seq., and any laws, statutes, rules, orders, ordinances, and other laws
and regulations thereunder, relating to or regulating hazardous or toxic
substances or air, water, or land quality, waste, or other similar environmental
matters applicable to Seller.

    

    At the option of Purchaser, Purchaser
may obtain so-called “Phase I environmental audit of the Premises, the costs of
which will be borne by Purchaser.  If those audits reveal
environmental concerns, Purchaser may terminate this Agreement.

    

    4.3           Due Diligence
Materials.   Purchaser shall have until 4:00 pm eastern
time, September 23, 2009 (the “Deadline”) to review and
approve or disapprove all due diligence materials provided by Seller or obtained
by Purchaser, including title reports, surveys, environmental reports, tax
bills, licenses and permits, building plans, Purchaser’s books and records, lien
searches, real estate leases and other documents and information regarding the
Purchased Assets (the “Due
Diligence Documents”).  Purchaser shall have until the Deadline
to deliver to Seller a disapproval notice stating that Purchaser’s inspection of
the Purchased Assets has disclosed a defect or an unapproved condition or that
the Purchased Assets are otherwise unacceptable to Purchaser in Purchaser’s sole
and absolute discretion.  If Purchaser delivers a disapproval notice,
Purchaser shall be deemed to have terminated this Agreement.

    
      
         

      

      
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    4.4           Assignment of
Lease.  On the Closing Date, as a condition to Purchaser’s
obligation to proceed with Closing, Purchaser shall have obtained an Assignment
and Assumption of Lease for the Leases substantially in the form of Exhibit “C” (the “Lease Assignment”), accompanied by
an estoppel certificate from Lessors, substantially in the form of Exhibit
“D”.  Additionally, Purchaser's obligation to proceed with
Closing is contingent upon the receipt by Purchaser of (i) any necessary
consents from the landlords under the Leases to the assignment of the respective
leases and (ii) executed amendments to any of the terms of the Leases in a form
acceptable to Purchaser.  Seller will indemnify and hold harmless
Purchaser from any obligations arising under the Leases before the Closing Date;
and Purchaser will indemnify and hold harmless Seller from any obligations
arising under the Leases after the Closing Date.  Purchaser will be
solely responsible for obtaining landlord consents prior to the closing and for
paying any fees or costs incurred to obtain necessary consents; provided,
however, failure to do so shall not be a breach hereunder but shall only be
deemed a failure of a condition to Purchaser’s obligation to proceed with
Closing.

    

    5.           No
Assumption of Debt.  Except for the Leases and the Assumed
Contracts, Purchaser will not assume any existing or future liabilities, debts,
obligations, accounts payable, lease obligations, contracts, warranties, or
agreements of Seller, regardless of how the obligations may have arisen,
including, but not limited to, (a) any taxes or other governmental charges
(including any taxes not yet due and payable which relate to periods prior to
the Closing Date), or claims whether or not disclosed herein and (b) any
liabilities regarding independent contractors or employees of Seller, including
liabilities for vacation pay, sick pay, severance pay, profit-sharing or pension
plans, bonuses, or other employee benefit or “fringe benefit” arrangement, (in
accordance with Section 7.2, Seller
will compensate and terminate all of its employees employed at the four (4)
Restaurants at the Businesses as of the day immediately preceding the Closing
Date and Purchaser may hire any or all of those employees without assuming any
obligations of Seller).

    

    All
liabilities with respect to the operation of the Businesses not otherwise
provided for in this Agreement which are paid or become payable after the
Closing Date will be allocated between Purchaser and Seller according to the
accounting period to which they relate.  Items relating to a time
before the Closing Date will be paid by Seller and those relating to a time
after the Closing Date will be paid by Purchaser. Subject to the following
sentence and subject to Seller’s right to withhold payment in the event that
there exists any bona fide dispute between Seller and the creditor or claimant
thereunder, Seller will, as and when due, pay in full, all debts, liabilities,
claims (both current and contingent), and obligations relating to the Businesses
and the Purchased Assets allocable to Seller pursuant to the terms of this
Agreement.  With respect to those Purchased Assets that secure
indebtedness of Seller, Seller will obtain releases of all liens encumbering the
Purchased Assets, but will not otherwise be obligated to pay the indebtedness in
full or in part.  Seller’s obligations hereunder are contingent upon
receipt of a payoff and release letter (the “Lender Release Instructions”) from
General Electric Capital Corporation (“GE”) stating that it will release its
liens on the Purchased Assets promptly after payment of all of the net proceeds
of the Purchase Price pursuant to instructions provided in the Lender Release
Instructions.

    
      
         

      

      
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    6.           Cash
Tills;
Supplies.  Before the
Restaurants open to business to the public on the Closing Date, representatives
of Seller and Purchaser will meet at the Restaurants.  At that time,
those representatives will take a physical account of the cash on hand in the
Restaurants and record the results of an Acknowledgement in the forms listed on
Schedule 6.

    

    In addition to the Purchase Price,
Purchaser will reimburse Seller for the amount of the Cash
Tills.  Because the Closing is effective before the start of business
on the Closing Date, all expenses incurred on the Closing Date (including costs
of labor) will be for the account of Purchaser, and all income on the Closing
Date will be for the benefit of Purchaser.  The Purchase Price
includes Supplies for operation of the Businesses and as a condition of Closing,
there shall be a sufficient amount of Supplies at the Premises to conduct
business on the Closing Date.

    

    7.           Labor
Matters.  Seller is not
aware of any general unrest among its employees or collective dissatisfaction
with employment or any individual employee claim against Seller or the
employer.  Seller is not a party to any collective bargaining
agreement that could have an effect on the employees at the
Restaurants.  To the best of Seller’s Knowledge, there are no union
organizing efforts underway or any unfair labor practice claims pending or (to
the best of knowledge of Seller) threatened, nor any existing labor strikes,
slowdowns, disputes, grievances, or disturbances.

    

    7.1           Employee
List.  Attached as Schedule 7.1 is a list of all
employees (part-time and full-time) of Seller who, as of the date of this
Agreement, work at the Restaurants, together with the rate of compensation
payable to each and their respective hire dates.  Schedule
7.1 also shows the amount of fringe benefits, paid vacation, or other
such benefits due to each of those employees from Seller.  Seller has
made no promise or commitment, whether orally or in writing, to increase any
employee’s compensation or grant any bonus to any employee.

    

    7.2           Termination and
Hiring.  Effective at the close of business the evening before
the Closing Date, Seller will terminate all of its employees that work at the
Restaurants, and will pay all those employees all accrued wages and salaries
(including vacation pay), fringe benefits, or other benefits due to those
employees in immediately available funds.  Purchaser may (but is not
required) to hire any or all of those employees, at the rates of pay, benefits,
and other conditions of employment chosen by Purchaser.

    

    7.4           Employee
Communications.  From and after the date hereof, Seller will
not communicate to the employees of the Restaurants the fact of the sale of the
Restaurants to Purchaser except in coordination with
Purchaser.  Approximately two (2) days before the scheduled Closing
Date, representatives of Seller and of Purchaser will jointly meet with the
employees at the Restaurants to explain the transition, including the terms of
employment offered by Purchaser.  Seller will cooperate with Purchaser
to endeavor to have a smooth transition of any of Seller’s employees that
Purchaser desires to employ.  Seller makes no representation or
warranty regarding the availability of any of its employees.

    
      
         

      

      
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    8.           Costs, Expenses, and
Prorations.

    

    8.1           Property
Taxes.  Under the terms of the Leases, the tenant is
responsible for payment of all real property taxes directly to the taxing
authorities and CAM charges, if applicable.  Attached as Schedule
8.1 is a copy of the real property tax bills for year 2008 and an email
dated September 16, 2009 from Seller listing the estimated real and personal
taxes for the Premises, which Seller has paid in full.  Real property
taxes for year 2009 will be prorated based upon these tax bills unless estimated
tax payments are made under any of the Leases.  Personal property
taxes with respect to the Businesses and the Purchased Assets for year 2008 and
prior years will be the sole responsibility of Seller.  Personal
property taxes for year 2009 will be prorated based upon the most recently
available tax bills.

    

    8.2           Utilities.  Seller
will use reasonable efforts to cause utilities to be transferred on the Closing
Date.  Bills for utilities, telephone service, and other items not
specifically provided for this Agreement or which are not separately billed and
which relate to a period prior to or after the Closing Date, the amounts of
which are unknown as of the Closing Date, will be prorated as of the Closing
Date between Purchaser and Seller and paid when the invoices therefor are
received.

    

    8.3           Transaction
Costs.  Each party will be responsible for all other costs and
expenses, including attorneys’ fees and other professional fees, incurred by it
in connection with this matter or for deliveries required to be made by the
party.

    

    8.4           Intentionally
Omitted.

    

    8.5           Transfer
Taxes.  All State of Georgia documentary and transfer taxes
arising out of the sale of the Purchased Assets, if any, will be paid by
Seller.  Seller will pay the costs of obtaining or recording any lien
releases with respect to the Purchased Assets necessary to convey free and clear
title thereto to Purchaser.

    

    8.6           Closing
Costs.  Each party shall bear one half the costs of escrow. All
transfer taxes and fees to remove any liens on the Purchased Assets shall be
paid by Seller.  All other customary closing costs shall be borne
equally by each party.  Each party shall pay the fees and expenses of
its own attorneys.

    

    9.           Additional Representations,
Warranties and Covenants of Seller.  To induce Purchaser to
enter into this Agreement and consummate the transactions contemplated by this
Agreement, and in addition to the representations, warranties, and covenants set
forth elsewhere in this Agreement, Seller represents, warrants, and covenants,
as of the date hereof and as of the Closing Date, as follows:

    

    9.1           No
Disability.  Seller is not under any legal or other disability
that would limit the ability of Seller to enter into this Agreement, to conduct
the Businesses, and to own, operate, and lease its properties as and in the
places where the Businesses are now conducted and the properties are now owned,
leased, or operated.

    
      
         

      

      
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    9.2          
Right to
Transfer.  Subject to receipt of the Lender Release
Instructions, Seller has full right, title, and authority to sell, transfer, and
assign, as applicable, the Purchased Assets; and as of the Closing Date, there
will be no liens, claims, charges, obligations, or encumbrances (including, taxes other than
those not yet due and payable) against the Purchased Assets, except as otherwise
disclosed in writing to Purchaser.

    

    9.3           Binding
Obligations.  This Agreement, the Lease Assignments, and all
other documents executed or to be executed by Seller pursuant to this Agreement
each constitute, or when executed, will constitute the valid obligations of
Seller, legally binding upon Seller and enforceable against Seller in accordance
with their terms.

    

    9.4           No
Conflict.  Subject to receipt of and compliance with the Lender
Release Instructions, the execution, delivery, and performance of this Agreement
and the agreements contemplated in this Agreement to which Seller is a party do
not and will not violate the provisions of (a) any mortgage, indenture, security
agreement, contract, undertaking, or other agreement to which Seller is a party
or which is binding upon Seller or any of its property or assets; or (b) any
law, regulation, judgment, or order which is binding upon Seller or any of its
property or assets.

    

    9.5           No
Breaches.  Subject to receipt of and compliance with the Lender
Release Instructions and the effect of Seller’s insolvency, Seller is not in
breach of any contract or agreement regarding the Purchased Assets, the
Businesses, or the Premises and, there is and as of the Closing Date will be no
basis for the assertion against Seller, the Purchased Assets, the Businesses or
the Premises of any liens, claims, charges, encumbrances, liabilities, debts, or
obligations, whether due or to become due, including liabilities or obligations
on account of taxes (but excluding, taxes, if any, arising out of this
transaction) or other governmental charges which could have a material adverse
affect or cause a lien upon the Purchased Assets, or materially diminish the
rights acquired by Purchaser pursuant to this Agreement.  Seller has
filed, or will file, all tax returns (including information returns and reports,
and returns relating to income taxes, property taxes, personal property taxes,
and sales taxes) required of it in connection with the Businesses and has paid
all taxes which have become due and payable in connection with the Businesses,
except as otherwise disclosed in writing to Purchaser.

    

    9.6           Consents.  Other
than with respect to Seller’s lender’s consent (evidenced by delivery of the
Lender Release Instructions) and for any consents required to assign the Leases
to Purchaser, no consent or approval of any other party (including any lending
institution or any governmental authority, bureau, or agency) is required in
connection with the execution, delivery, performance, validity, or
enforceability of this Agreement or the agreements contemplated by this
Agreement, other than consents or approvals which have been or will be obtained
and delivered to Purchaser on or before the Closing Date.

    

    9.7           Litigation.  There
is no action, suit, or proceeding pending or, to the knowledge of the Seller,
threatened against or affecting Seller, the Purchased Assets, the Businesses, or
the Premises before any federal or state court or governmental department,
commission, board, bureau, agency, or instrumentality (including the Georgia
Department of Labor and the federal Equal Employment Opportunity Commission), or
which would have a materially adverse effect on the Businesses, the Premises, or
the Purchased Assets or prevent the sale, transfer, and assignment of the
Businesses and the Purchased Assets as contemplated by this
Agreement.

    
      
         

      

      
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    9.8           Assets and
Condition.  The Purchased Assets are the sole property of
Seller, constitute all of the property needed to conduct the Businesses as
currently conducted (including all equipment, utensils, small wares and other
items required as of the Closing Date to operate the Businesses consistent with
Seller’s past practices) and, are in normal operating condition, substantially
free from any material defects, damages, or malfunction that would have an
adverse impact on the Businesses taken as a whole.  Other than the
Premises and any Assumed Contracts, none of the Purchased Assets are leased by
Seller.  If any of the Purchased Assets are subject to a
manufacturer’s warranty or any service agreement, Seller will assign the
warranty or service agreement to Purchaser to the fullest extent permitted by
the manufacturer or service provider.  Any prepayment of the contracts
will be solely for the benefit of Purchaser.

    

    9.9           Licenses.  Other
than ordinary business licenses issued by applicable state and local licensing
authorities (which Seller currently has in full force and effect), there are no
licenses, permits, or other governmental or regulatory authorizations needed to
conduct the Businesses.

    

    9.10         Financial
Statements.

    

      (a)           The
(i) State of Georgia Sales Tax Returns of Seller and (ii) the financial
statements available (including balance sheets and profit and loss and gross
revenue statements), for the Restaurants attached as Schedule 9.10 are true,
correct, and complete in all material respects.

    

     
(b)           Seller
Financial Condition.  Purchaser has been informed and is aware of
Seller’s financial condition and intent to file for Chapter 7 relief under the
United States Bankruptcy Code shortly after consummation of the
Closing.  Seller is entering into the transaction contemplated hereby
for the benefit of its secured and unsecured creditors and will not receive any
Purchase Price proceeds.  Accordingly, Purchaser acknowledges Seller's
ability to comply with any post closing covenants, indemnities or other such
obligations may be severely restricted or denied

    

    9.11          Other
Disputes.  To the best of Seller’s Knowledge, and subject to
Purchaser’s actual knowledge, there are no landlord disputes, material customer
dissatisfaction, licensing problems, material supplier dissatisfaction, material
equipment malfunction or defect, or material and unfavorable employee relations
relating specifically to the Businesses, which is likely to materially adversely
affect the value of the Purchased Assets or the conduct of the Businesses as
presently conducted.

    

    9.12          Utilities.  All
utilities necessary for the conduct of the Businesses at the Premises are in
normal working order and are reasonably adequate for the present needs of the
Premises and the Businesses.  To the best of knowledge of Seller,
there are no facts or circumstances that will result in the termination of the
present access from the Premises to utility services, or from the Premises to
existing streets, highways, and roads adjoining the Premises.  Seller
has no knowledge, and has not received notice, that any of the Premises are or
will be subjected to or affected by (a) any special assessments, whether or not
presently a lien thereon, or (b) any condemnation, eminent domain, or similar
proceedings.

    
      
         

      

      
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    9.13           Compliance with
Laws.  With respect specifically to the Businesses and subject
to the following sentence, Seller is and has been at all times in the past, in
material compliance with all laws, rules, ordinances, governmental regulations,
and orders of all governmental authorities and/or jurisdictions (collectively
“Applicable Laws”)
applicable to the operation of the Businesses at the Premises, including
Applicable Laws relating to zoning, building, public health, and access,
plumbing, electrical, fire, occupational safety, pollution, environmental
protection, and waste disposal matters.  To the best of knowledge of
Seller, at the time of construction, the Premises were constructed in material
compliance with the American with Disabilities Act (the “ADA”).  All “readily
achievable barrier removal” (as defined in the ADA) has been
accomplished.  Seller has not received any Health Department or other
governmental citation with respect to the Premises, the Businesses and/or the
Purchased Assets which has not been cured.

    

    9.14           Brokers.  Seller
and Purchaser represent and acknowledge that no broker’s commission or finders
fee is payable with regard to this transaction.  Purchaser and Seller
each agrees to indemnify and hold the other harmless from and against any and
all liability, claims, demands, damages or costs of any kind arising from or
connected with any broker’s or finder’s fee or commission or charge claimed to
be due any person arising from the other party’s conduct with respect to this
transaction.

    

    9.15           Full
Disclosure.  To the best of Seller’s knowledge, no
representation or warranty by Seller contained in this Agreement, nor any
statement, certificate, schedule or exhibit furnished or to be furnished by or
on behalf of Seller pursuant to this Agreement, nor any document or certificate
delivered to Purchaser pursuant to this Agreement, contains or will contain any
untrue statement of material fact or omits or will omit a material fact
necessary to make the statements contained therein not misleading.

    

    9.16           Other
Contracts.  Other than with respect to the Lease and the
Assumed Contracts and any agreement entered into by Purchaser, Seller is not a
party to (in its own name or as successor in interest), or bound by, any written
or oral (a) lease or sublease with respect to any personal property as lessor,
lessee, sublessor, or sublessee which could be binding upon or deemed assumed by
Purchaser after the Closing Date; (b) contract or commitment involving an
obligation of Seller of more than $500.00 during any 12-month period which could
be binding upon or deemed assumed by Purchaser after the Closing Date; (c)
contract or commitment under which Seller has assumed, guaranteed, endorsed, or
otherwise become liable in connection with the obligation of any person, firm,
or corporation which could be binding upon or deemed assumed by Purchaser after
the Closing Date; (d) barter or other trade or exchange arrangement which could
be binding upon or deemed assumed by Purchaser after the Closing Date; (e)
contract or other arrangement or understanding not included above which (i) was not made in the
ordinary course of the business of Seller; or (ii) is material to the
operation of the Businesses; (f) contract with any labor union which could be
binding upon or deemed assumed by Purchaser after the Closing Date; (g) any
contract directly relating to the Purchased Assets other than the Assumed
Contracts; (h) any contract or commitment involving any profit sharing, pension,
bonus percentage compensation, stock option or warrants, sick pay, vacation pay,
severance pay, health care, or other fringe benefit arrangement which will be
binding upon or assumed by Purchaser after the Closing Date in connection with
the acquisition of the Purchased Assets; or (i) any loan or financing
arrangement encumbering the Purchased Assets which encumbrance will not be
released on or before the Closing Date subject to compliance with the Lender
Release Instructions.

    
      
         

      

      
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    9.17           Further
Assurance.  Seller will, at any time and from time to time
after the Closing Date, upon the reasonable request of Purchaser, execute,
acknowledge, and deliver, or cause to be executed, acknowledged, and delivered,
all further documents as may be required to confirm (a) the title of the
Purchased Assets sold, transferred, and assigned to Purchaser; and (b) the
possession by Purchaser of the property purchased by it pursuant
hereto.

    

    10.         Representations
and Warranties of Purchaser.  Purchaser represents and warrants
as of the date hereof and as of the Closing Date, as follows:

    

    10.1           Due
Organization.  Purchaser is a corporation duly organized,
validly existing, and in good standing under the laws of the State of Delaware,
and is duly qualified to do business in the State of California and
Georgia.

    

    10.2           Authority.  Purchaser
has full right, title, and authority to enter into this Agreement and to
consummate the transactions contemplated hereby.

    

    10.3           Valid
Obligations.  This Agreement and the agreements contemplated by
this Agreement to which Purchaser is a party constitute, or when executed, will
constitute the valid obligation of Purchaser legally binding upon it and
enforceable against it in accordance with their terms.

    

    10.4           No
Violations.  The execution, delivery, and performance of this
Agreement and the agreements contemplated in this Agreement do not and will not
violate the provisions of (a) the articles of incorporation or bylaws of
Purchaser; (b) any mortgage, indenture, security agreement, contract,
undertaking, or other agreement to which Purchaser is a party or which is
binding upon Purchaser; or (c) any law, regulation, judgment, or order which is
binding upon Purchaser.

    

    10.5           Approvals.  No
consent or approval of any other party (including any lending institution or any
governmental authority, bureau, or agency) is required in connection with the
execution, delivery, performance, validity, or enforceability of this Agreement
or the agreements contemplated by this Agreement.

    
      
         

      

      
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    11.           Bulk
Transfer Compliance.  Seller believes that the “Bulk Transfer”
provisions of the Uniform Commercial Code as adopted in Georgia do not apply to
Seller or to the transactions contemplated hereby.  Seller and
Purchaser hereby acknowledge and agree that, to expedite the closing of the
transactions pursuant to this Agreement, Seller shall be under no obligation to
comply with any “Bulk Transfer” provisions of the Uniform Commercial Code, if
applicable. Seller shall pay all of its accounts payable in accordance with the
terms hereof; and Seller shall indemnify and hold harmless Purchaser, upon
demand, from and against any and all liability incurred by Purchaser by reason
of Seller's failure to pay any accounts payable not assumed by Purchaser or by
reason of the failure of Purchaser to comply with the requirements of such Bulk
Transfer provisions, if applicable.

    

    12.           Survival
and Expiration.  All of the
representations, warranties, and covenants of Seller and Purchaser set forth in
this Agreement will survive the consummation of the transactions contemplated by
this Agreement for a period of one year following the Closing Date and shall
thereafter terminate, unless a notice of claim (in accordance with Section 14.1, below),
has previously been given.  Upon the issuance of a notice of claim,
the representation, warranty, or covenant with respect to which the notice of
claim was given will thereafter continue to survive with respect to all matters
covered by the notice of claim until fully resolved.

    

    13.           Indemnification.

    

     13.1           By
Seller.  Seller will indemnify, defend, and hold harmless
Purchaser, on an after-tax basis, from and against any and all loss, liability,
damage, or deficiency (including interest, penalties, and reasonable attorneys’
fees) arising out of or due to:  (a) a breach of, or inaccuracy in,
any representation, warranty, or covenant made by Seller and contained in this
Agreement or any other document executed pursuant to this Agreement; (b) any and
all taxes (local, State, or Federal) owed by Seller relative to the Businesses
or the Purchased Assets for any period before the Closing Date, except any sales
taxes payable on account of the transaction contemplated by this Agreement; (c)
any liability, debt, obligation, account payable, contract, or agreement of
Seller not expressly assumed by Purchaser, or if assumed by Purchaser, which
arises or is allocable to a period before the Closing Date; or (d) any and all
demands made by claimants or employees of Seller against Seller or Purchaser
relating to periods before the Closing Date, including any and all actions,
suits, proceedings, demands, assessments, judgments, costs, and legal and other
expenses.

    

     13.2           By
Purchaser.  Purchaser will indemnify, defend, and hold harmless
Seller, on an after-tax basis, from and against any and all loss, liability,
damage, or deficiency (including interest, penalties, and reasonable attorney’s
fees) arising out of or due to:  (a) a breach of, or inaccuracy in,
any representation, warranty, or covenant made by Purchaser and contained in
this Agreement or any other document executed pursuant to this Agreement; (b)
any material misrepresentation made by Purchaser in any other document delivered
to Seller; or (c) any and all demands made by claimants or employees of
Purchaser against Seller or Purchaser first arising and relating to periods on
or after the Closing Date, including any and all actions, suits, proceedings,
demands, assessments, judgments, costs, and legal and other
expenses.

    

    14.           Claims
for Indemnification.  Whenever any claim arises for
indemnification under Section 13, the
following provisions will apply:

    

     
14.1           Notice of
Claim.  The person asserting a right to indemnification (the
“indemnitee”) will
promptly notify the person from whom indemnification is sought (the “indemnitor”) of the claim and,
when known, the facts constituting the basis for the claim.  The
notice will be accompanied by any evidence of the claim in the indemnitee’s
possession or a description of the basis for the claim if other evidence is
unavailable.

    
      
         

      

      
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    14.2           Third Party
Claims.  If any claim for indemnification results from or in
connection with any claim or legal proceeding by a person who is not a party to
this Agreement (each, a “Third
Party Claim”), the notice will also specify, if known, the amount or an
estimate of the amount of the liability arising from the Third Party
Claim.  With respect to any Third Party Claim, no indemnitee will
settle or compromise or enter into any binding agreement to settle or
compromise, or consent to entry of any judgment arising from, the claim, except
in accordance with Section 14.3 of this
Section or to the extent provided in Section
14.4.

    

    14.3           Defense of
Claims.  The indemnitor will undertake the defense of any Third
Party Claim by representatives of its own choosing reasonably satisfactory to
the indemnitee.  The indemnitee will participate in the defense of a
Third Party Claim with advisory counsel of its own choosing at its own
expense.  If the indemnitor, within a reasonable time after notice of
any Third Party Claim, fails to defend, the indemnitee may undertake the
defense, compromise, or settlement of the Third Party Claim on behalf of or for
the account of the indemnitor, at the expense and risk of the
indemnitor.

    

    14.4           Settlement.  An
indemnitor may not, without the written consent of the indemnitee, settle or
compromise any Third Party Claim or consent to entry of any judgment (a) that
imposes injunctive or similar relief against the indemnitee limiting the
indemnitee’s freedom of action, or (b) that does not include, as an
unconditional term thereof, the giving by the claimant or the plaintiff to the
indemnitee an unconditional release from all liability with respect to the Third
Party Claim.

    

    15.          Pre-Closing
Covenants.  Seller covenants
that through the Closing Date:

    

    15.1           Obligations.  Seller
will perform all of its obligations under all agreements (acknowledging,
however, Seller’s insolvency and loan defaults), contracts and instruments
relating to or affecting the Purchased Assets and the Businesses.

    

    15.2           Compliance.  Seller
will comply in all material respects with all Applicable Laws.

    

    15.3           Other
Agreements.  Seller will not enter into or assume any
agreement, contract, or commitment, except in the ordinary course of business,
disposing of or altering any of the Purchased Assets or the ability of Seller to
convey the Purchased Assets.

    
      
         

      

      
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    15.4           Maintain Business and
Property.  Seller will maintain, at its sole expense, all of
the Purchased Assets in normal repair, order, and condition, reasonable wear and
use and damage by fire or unavoidable casualty excepted.  In the event
of any fire or casualty, Seller will promptly notify Purchaser; and at the
option of Purchaser, (a) this Agreement will terminate, and neither party will
have any further rights, liabilities, or obligations under this Agreement, or
(b) this Agreement will remain in full force and effect, and Seller, at the time
of the Closing Date, will transfer and assign to Purchaser all of Seller’s
right, title, and interest in and to the insurance proceeds received or to be
received by reason of the damage or destruction, as a result of the damage or
destruction, in addition to the other items to be delivered at Closing in
accordance with this Agreement.  This option will be exercised by
Purchaser by delivering to Seller written notice of exercise on or before the
2nd day following the date on which Purchaser receives from Seller written
notice of the damage or destruction and the amount of insurance proceeds
available as a result of the damage or destruction.  If Purchaser
fails to exercise this option within the 2-day period, then Purchaser will be
deemed to have elected to proceed with Closing and receive the insurance
proceeds.

    

      Seller will not make any
material changes to the manner in which the Businesses are conducted prior to
Closing without Purchaser’s prior written consent.  Without limiting
the generality of the foregoing, Seller will not transfer employees or equipment
to or from the Restaurants, or otherwise remove from the Premises any of the
items used in connection with the Businesses, except for sale of products made
from the Supplies to customers in the ordinary course of business and except as
otherwise performed with the consent of Purchaser.

    

    15.5           No Contracts or
Commitments.  Seller will not enter into any contract relating
to the Purchased Assets or the Businesses extending beyond the Closing Date
without Purchaser’s prior written approval.

    

    15.6           Maintain
Insurance.  Seller will maintain insurance upon all of the
Purchased Assets and with respect to the conduct of the Businesses in at least
the amounts and of the kinds that were maintained as of the date of this
Agreement.

    

    15.7           No
Mortgages.  Seller will not subject any of the Purchased Assets
to any additional mortgage, pledge, or
lien.

    

    15.8           Litigation.  Seller
will promptly notify Purchaser in writing of any judgments, orders or decrees
entered or any suits, actions, claims, administrative proceedings or labor
negotiations instituted, threatened, or asserted by or against Seller, after the
date of this Agreement and before the Closing Date.

    

    15.9           Notice of
Changes.  Seller will promptly advise Purchaser in writing of
any adverse change in the financial condition, operation, business, properties,
or prospects of Seller relative to the Purchased Assets, the Premises or the
Businesses.

    

    15.10        Cooperation.  Seller
will cooperate with Purchaser in securing all necessary licenses, approvals,
consents, and estoppel letters required by this Agreement or as may be requested
under the Lease Agreements.

    
      
         

      

      
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    16.         Conditions
Precedent to Obligations of Purchaser.  The following
constitute conditions precedent to Purchaser’s obligations to consummate the
transactions contemplated by this Agreement, and the failure of any of these
condition will give Purchaser the option of terminating this
Agreement.

    

    16.1           Due Diligence.
Purchaser’s approval on or before the Deadline of the Due Diligence Documents
referenced in paragraph 4.3 and all matters of title, survey or other
investigations, prior to the Deadline.

    

    16.2           Intentionally
Omitted.

    

    16.3           Representations and
Warranties.  All representations and warranties of Seller
contained in this Agreement will be true and correct as of the Closing Date;
Seller will have complied with, performed, or satisfied all agreements,
covenants, and conditions required by this Agreement to be complied with,
performed or satisfied by it; and, Seller will have delivered to Purchaser a
certificate to that effect or stating, which, if any, representations are no
longer true or the extent of modification.

    

    16.4           Absence of
Changes.  Since the date of this Agreement, there have not
occurred any material adverse change in the condition (financial or otherwise),
business, properties, assets, or prospects of Seller of the Businesses, or of
the Premises.

    

    16.5           Actions.  No
action, suit, or proceeding will have been instituted before a court or
governmental body, or instituted or threatened by any governmental agency or
body, to restrain or prevent the carrying out of the transactions contemplated
by this Agreement, which has not been disposed of to the satisfaction of
Purchaser.

    

    16.6           Consents.  Seller
will have received and delivered to Purchaser written consents to the transfer
or assignment to Purchaser of (a) the Purchased Assets and (b) all agreements,
licenses, and other material contracts to be assumed by Purchaser pursuant to
this Agreement, including the Lease Assignment, where the consent of any other
party to any such contract may, in the opinion of Purchaser’s counsel, be
required for assignment or transfer.

    

    16.7           Tax Clearance
Certificates.  Seller will have applied for Georgia state,
county, and (where applicable) city tax clearance certificates.

    

    17.         Conditions
Precedent to Obligations of Seller.  The following will
constitute conditions precedent to Seller’s obligations to consummate the
transactions contemplated by this Agreement, and the failure of any of these
conditions will give Seller the option of terminating this Agreement (which will
result in termination of this Agreement in full).

    

    17.1           Representations and
Warranties.  The representations and warranties of Purchaser
contained in Section
10 will be true and correct as of the Closing Date; Purchaser will have
complied with, performed, or satisfied all agreements, covenants, and conditions
required by this Agreement to be complied with, performed, or satisfied by it;
and, Purchaser will have delivered to Seller a certificate to that
effect.

    
      
         

      

      
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    17.2           Actions.  No
action, suit, or proceeding will have been instituted before a court or
governmental body, or instituted or threatened by any governmental agency or
body, to restrain or prevent the carrying out of the transactions contemplated
by this Agreement, which has not been disposed of to the satisfaction of
Seller.

    

    17.3           Consents.  Seller
will have received written consents to the transfer or assignment to Purchaser
of (a) the Purchased Assets, and (b) all agreements, licenses, and other
material contracts to be assumed by Purchaser pursuant to this Agreement,
including without limitation the Lease Assignments, where the consent of any
other party to any such contract may, in the opinion of Seller’s counsel, be
required for assignment or transfer.

    

    18.          Documents
Delivered at Closing.  Execution and delivery of the following
documents, in form and substance acceptable to counsel for Purchaser and Seller
will also be conditions precedent to Closing:

    

    (a)           A
Bill of Sale in the form attached hereto as Exhibit
“G”;

    

    (b)           The
Termination of Franchise Rights in the form attached hereto as Exhibit
“A” for each Franchise Agreement and Development Agreement;

    

    (c)           The
Assumed Contracts Assignments;

    

    (d)           The
Assignment and Assumption of Lease Agreement for each Lease;

    

    (e)           Estoppel
Certificate and Consent to Assignment for each Lease;

    

    (f)           An
Officer’s Certificate from the Secretary of Purchaser, certifying as true and
correct the authority of the signatories, dated as of the Closing
Date;

    

    (g)           A
certificate of good standing and existence of Purchaser in the State of Delaware
and authority to transact business in the State of California, each of which was
issued not more than 30 days before the Closing Date by the respective Secretary
of States;

    

    (h)           The
“bring down” certificates described in Sections 16.1 and
17.1 above;

    

    (i)           The
Acknowledgment;

    

    (j)           All
other customary documents reasonably necessary to evidence compliance by
Purchaser and Seller with the terms and conditions set forth in this
Agreement;

    

    (k)           The
closing statement reflecting the Purchase Price, prorations, and disbursements
made to effect the sale contemplated hereby; and

    

    (l)           The
Memorandum of Assignment of Lease in the form attached hereto as Exhibit
“H” for each
of the Leases.

    
      
         

      

      
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    19.        
Intentionally
Omitted.

    

    20.         Release.  Seller absolutely
and forever releases and discharges Purchaser and its predecessors, affiliates,
direct and indirect subsidiaries, successors, assigns, agents, employees,
attorneys, and the respective officers, directors, shareholders, heirs,
executors, and representatives of each of the foregoing, and from and against
any and all obligations, actions, proceedings, losses, claims, demands, damages,
debts, liabilities, accounts, costs, expenses, attorney's fees, liens, and
causes of action of every kind and nature whatsoever ("Released Matters"), whether
now known or unknown, suspected or unsuspected, which Seller now has, owns, or
holds, or at any time heretofore ever had, owned, or held, pertaining to,
arising out of, or in connection with the Franchise Agreements and/or the Leases
and/or the business relationship between Seller, on the one hand, and Purchaser
on the other hand, including claims relating to any violation of any state or
federal franchise law, rule, or regulation in connection with Seller’s purchase
of the Franchise Agreements, or the relationship between the parties, excepting
only those continuing obligations of Seller and Purchaser described in Section 21 below and
their obligations under this Agreement and the documents executed in connection
with this Agreement.

    

    20.1           Waiver.  Seller
acknowledges that he is familiar with Section 1542 of the Civil Code of the
State of California which provides as follows:

    

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

    

    Seller waives and relinquishes every
right or benefit which he has under Section 1542 of the Civil Code of the State
of California, and any similar statute under any other state or federal law, to
the full extent that he may lawfully waive that right or benefit pertaining to
the subject matter of this Release.  In connection with this waiver
and relinquishment, with respect to the Released Matters, Seller acknowledges
that he is aware that he may hereafter discover facts in addition to or
different from those which he now knows or believes to be true with respect to
the subject matter of this release, but that it is his intention hereby fully,
finally, and forever, to settle and release all Released Matters, disputes, and
differences, known or unknown, suspected or unsuspected, which now exist, may
exist, or heretofore existed, and in furtherance of that intention, the release
given in this Section 20 will be and remain in effect as a full and complete
release, notwithstanding the discovery or existence of any such additional or
different facts.

    

    21.         Intentionally
Omitted.

    

    22.         Miscellaneous.

    

    22.1           Benefit.  This
Agreement will be binding upon and inure to the benefit of Seller, Purchaser,
and their respective heirs, administrators, executors, assigns, and successors,
except as otherwise provided in this Agreement.

    
      
         

      

      
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    22.2       Notices. Except as
otherwise expressly provided in this Agreement, all notices and documents
permitted or required to be delivered by the provisions of this Agreement will
be delivered by hand, by telegraph or confirmed facsimile transmission, by
overnight courier service, or by deposit with United States mail by Registered
or Certified Mail, Return Receipt Requested, postage prepaid, and will be deemed
delivered at the time delivered by hand, one business day after transmission by
confirmed facsimile transmission, two business days after deposit with overnight
courier service for “Priority” delivery, or seven business days after placement
in the United States mail by Registered or Certified Mail, Return Receipt
Requested, postage prepaid, and addressed as follows:

    

    In the
case of Seller:

    

    Fiesta
Brands, Inc.

    Attn: Christopher
Elliot/Joseph Uhl

    2110
Powers Ferry Road, Suite 270

    Atlanta,
GA 30339

    Facsimile:  (678)
578-7970

    

    With
concurrent copy to:

    Cohen
Pollock Merlin & Small, P.C.

    3350
Riverwood Parkway, SE, Suite 1600

    Atlanta,
GA  30339-3359

    ATTN:  Steven
A. Fetter and Karen White

    Email:
sfetter@cpmas.com; kwhite@cpmas.com

    

    In the case of Purchaser:

    

    El Pollo
Loco, Inc.

    Attn:  Jerry
Lovejoy

    3535
Harbor Blvd, Suite 100

    Costa
Mesa, CA 92626

    Facsimile:  (714)
599-5585

    

    22.3       Governing
Law.  This Agreement and all rights, obligations, and
liabilities arising under this Agreement will be construed and governed by the
substantive law of California, without giving effect to the principles of
conflicts of law thereof.

    

    22.4.      Construction.  In
the event any parts of this Agreement are found to be void, the remaining
provisions of this Agreement will nevertheless be binding with the same effect
as though the void parts were deleted.

    

    This Agreement was negotiated and
drafted jointly by the parties, and will not be construed either for or against
either party.  All words and phrases (except as specifically defined
in this Agreement) are used in their normal, everyday sense or (where necessary
to the context) in the sense used in the restaurant industry.

    
      
         

      

      
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      The verb “to include” (and its
variation “including”) is always used in the non-exclusionary sense (as if
followed by the phrase “but [is] not limited to”).

    

    22.5           Execution of
Agreement.  This Agreement may be executed in one or more
counterparts, each of which will constitute an original, but all of which
together will constitute but a single document.  Execution and
delivery of this Agreement may also be made by facsimile
transmission.

    

    22.6           Entire
Agreement.  This Agreement, together with the written
agreements executed contemporaneously with this Agreement or as contemplated by
this Agreement will contain the entire Agreement of the parties, and no
representations, warranties, covenants, or agreements not embodied or
incorporated herein or therein, oral or otherwise, will be of any force of
effect.

    

    22.7           Headings.  The
headings or titles of the paragraphs of this Agreement are for convenience only,
are not a part of this Agreement and will not be used as an aid in the
construction of any provision hereof.

    

    22.8           Waiver.  A
waiver of any breach of this Agreement under by any party will not constitute a
waiver by that party of any other breach or a waiver by that party of the same
breach on any other occasion; and, to be effective, any waiver must be in
writing.

    

    22.9           Attorney’s
Fees.  Should any action, proceeding, or arbitration arise by
virtue of a dispute concerning this Agreement between the parties, the
prevailing party will be entitled to recover reasonable attorney’s fees and
associated court costs from the non-prevailing party.

    

    22.10         Further
Assurances.  Each party agrees that, upon request of the other,
it will from time to time execute and deliver to the other party all instruments
and documents of further assurance or otherwise and will do any and all acts and
things as may be reasonably required to carry out the obligations of the parties
hereunder and to consummate the transactions provided for and contemplated
hereby.

    
      
         

      

      
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    IN WITNESS WHEREOF, Seller has
duly executed and delivered this Agreement, and Purchaser has caused this
Agreement to be executed and delivered by its duly authorized officers, all as
of the day and year first above written.

    

    
      
        	
                SELLER:

              
	
                FIESTA
      BRANDS, INC.,

              
	
                a
      Delaware corporation

              
	 
      
	
                By:

              	
                /s/ Christopher P.
  Elliott

              
	
                Christopher
      P. Elliott

              
	
                Its:  CEO
      and President

              
	 
      
	
                By:

              	
                /s/ Joseph M. Uhl

              
	
                Joseph
      M. Uhl

              
	
                Its:  COO

              
	 
      
	
                PURCHASER:

              
	
                EL
      POLLO LOCO, INC.,

              
	
                a
      Delaware corporation

              
	 
      
	
                By:

              	
                /s/ Brian Carmichall

              
	
                Brian
      Carmichall

              
	
                Its:  Vice
      President, Development

              
	 
      

      

    

    Acknowledged
and Agreed to for Purposes of Section 2.1 only:

    

    
      
        
          	
                  General
      Electric Capital Corporation, a Delaware corporation

                
	 
      
	
                  By:

                	 
      
	
                  Printed Name:
      ______________________________________

                
	
                  Its:
      Authorized
Signatory

                

        

      

    

    
      
         

      

      
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    INDEX TO SCHEDULES AND
EXHIBITS

     

    Schedule
1.1(a) – Furniture, Fixtures and Equipment

    Schedule
1.1(a)(i) – Additional FFE

    Schedule
1.1(b) – Assumed Contracts

    Schedule
1.1(f) – Listing of all Amendments, Addendums, or other Modifications of the
Lease

    Schedule
1.1(k) – Licenses and Operating Permits

    Schedule
2.2 – Allocation of Purchase Price

    Schedule
6 – Acknowledgement of Cash Tills

    Schedule
7.1 – Employee Listing

    Schedule
8.1 – Real Property Tax Bills for 2008 and Email from Seller dated September 16,
2009

    Schedule
9.10 – Financial Statements

    Exhibit A
– Termination of Franchise Rights

    Exhibit B
– Assumed Contracts Assignment

    Exhibit C
– Form of Assignment and Assumption of Lease Agreement

    Exhibit D
– Form of Landlord’s Estoppel Certificate

    Exhibit E
- Reserved

    Exhibit F
- Reserved

    Exhibit G
– Bill of Sale

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    Exhibit
“A”

    

    TERMINATION OF FRANCHISE
RIGHTS

    

    This
Termination of Franchise Rights (the "Agreement") is made as of this 24th day of
September, 2009, by and between EL POLLO LOCO, INC., a Delaware corporation
(the "Company") and FIESTA
BRANDS, INC., a Delaware corporation ("Franchisee").

    

    RECITALS

    

    A.           The
Company and Franchisee entered into that certain El Pollo Loco Franchise
Agreement and Amendment to the Franchise Agreement dated April 2007
(collectively, the “Franchise
Agreement #1”) , pertaining to the operation of an El Pollo Loco
Restaurant (“Unit
#3631”) located at 885 Thornton Road, Lithia Springs, Georgia (the "Restaurant
#1").  Franchisee is the sole tenant under that certain Lease
dated March 23, 2007 as assigned on March 31, 2009, with respect to Restaurant
#1, (the “Lease #1”).

    

    B.           The
Company and Franchisee entered into that certain El Pollo Loco Franchise
Agreement and Amendment to the Franchise Agreement dated May 2007 (collectively,
the “Franchise Agreement
#2”) , pertaining to the operation of an El Pollo Loco Restaurant (“Unit #3616”) located at 3979
Buford Hwy., Atlanta, Georgia (the "Restaurant
#2"). Franchisee is the sole tenant under that certain Lease dated
April 25, 2007, as amended by the First Amendment of the Lease on June 8, 2007,
Second Amendment of the Lease, Third Amendment of the Lease on July 3, 2008 with
respect to Restaurant, (the “Lease #2”)

    

    C.           The
Company and Franchisee entered into that certain El Pollo Loco Franchise
Agreement and Amendment to the Franchise Agreement dated June 2007
(collectively, the “Franchise
Agreement #3”) , pertaining to the operation of an El Pollo Loco
Restaurant (“Unit
#3632”) located at 895 Holcomb Bridge Rd., Roswell, Georgia (the "Restaurant
#3"). Franchisee is the sole tenant under that certain Lease dated
May 4, 2007 with respect to Restaurant, (the “Lease #3”)

    

    D.           The
Company and Franchisee entered into that certain El Pollo Loco Franchise
Agreement and Amendment to the Franchise Agreement dated January 24, 2008
(collectively, the “Franchise
Agreement #4”) , pertaining to the operation of an El Pollo Loco
Restaurant (“Unit
#3661”) located at 2521 SE Cobb Parkway, Atlanta, Georgia (the "Restaurant
#4"). Franchisee is the sole tenant under that certain Lease dated
September 10, 2007, as amended by the First Amendment of the Lease on May
22, 2008 with respect to Restaurant, (the “Lease #4”)

    

    E.           The
Company and Franchisee (as Developer) entered into that certain El Pollo Loco
Franchise Development Agreement dated August 10, 2009 (the “Development Agreement”),
pertaining to the development of fifty (50) El Pollo Loco
Restaurants  (includes option of twenty-five (25) El Pollo Loco
restaurants) in a selected territory as described in Exhibit “A” of the
Development Agreement (the “Territory”), such restaurants
to be developed pursuant to the development schedule contained in Exhibit “B” of
the Agreement (the “Development
Schedule”).

    

    F.           The
Company and Franchisee entered into those certain El Pollo Loco Franchise
Agreements and Amendments to the Franchise Agreements with respect to El Pollo
Loco® restaurants
identified as Unit No. 3655 (2045 Marketplace Blvd., Ste. A-100, Cumming, GA),
Unit No. 3636 (5375 Fairington Road, Lithonia, GA), 3635 (2390 Dallas Hwy, SW,
Marietta, GA) and Unit No.3633 (1999 Lake Road, Hiram, GA) (the “Closed Business Franchise
Agreements”).

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    G.           WHEREAS, Franchise Agreement
#1, Franchise Agreement #2, Franchise Agreement #3, Franchise Agreement #4 and4,
Development Agreement and the Closed Business Franchise Agreements may be
collectively referred to in this Agreement as the “Franchise
Agreements.”

    

    H.           WHEREAS, Restaurant #1,
Restaurant #2, Restaurant #3 and Restaurant #4 may be collectively referred to
in this Agreement as the “Restaurants.”

    

    I.           WHEREAS, Premises #1, Premises
#2, Premises #3 and Premises #4 may be collectively referred to in this
Agreement as the “Premises.”

    

    J.           WHEREAS, the Company and
Franchisee have entered into an Asset Purchase Agreement dated September ___,
2009 (“Asset Purchase
Agreement”), whereby Company is purchasing the assets of the Restaurants
and certain of the assets from the premises related to the Closed Business
Franchise Agreements from Franchisee.

    

    K.           WHEREAS, the Company and
Franchisee now desire to terminate the Franchise Agreements upon the terms and
conditions set forth in this Agreement.

    

    NOW, THEREFORE, in consideration of the
mutual covenants contained herein, the parties hereto agree as
follows:

    

    AGREEMENT

    

    1.0           Termination

    

    1.1           Provided
the parties comply with all the terms and provisions of this Agreement, the
Franchise Agreements and, except as otherwise specifically provided herein, all
rights, interests, obligations, and liabilities of the parties thereunder shall
terminate effective as of the date of the closing pursuant to the Asset Purchase
Agreement ("Closing
Date").

    2.0           Obligations
of Franchisee upon Termination

    

    2.1           Upon
the Closing Date, Franchisee shall immediately return to the Company any of the
Company's manuals, trade secrets, proprietary information, rights, interests,
policies, procedures, techniques, methods and materials acquired by Franchisee
in connection with the franchise relationship established by the Franchise
Agreements, including, but not limited to, the following:

    

    Exhibit G
– Form of Bill of Sale and Assignment

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    a.           Specifications,
recipes and descriptions of food products;

    

    b.           Company
manuals, memoranda, bulletins, forms, reports, instructions, directives and
supplements thereto;

    

    c.           Any
training methods or materials provided by the Company;

    

    d.           Brochures,
posters and other advertising materials; and

    

    
      e.           
Any other
items containing any of the Company's trademarks, trade names, service marks,
logo types, labels, designs and other identifying symbols and names pertaining
thereto.

    

    

    
      	
               
      

            	
              3.0

            	
              Indemnification

            

    

    

    3.1       
     Franchisee agrees to indemnify, defend and hold
Company, its parent companies, and all subsidiaries and affiliates thereof, and
the officers, directors, employees and representatives of such corporations,
harmless from and against any and all claims, obligations, liabilities,
expenses, damages, actions and causes of action that may arise from Franchisee’s
acts or omissions regarding operation of the Restaurants.

    

    4.0          Consideration

    

    4.1           Franchisee
acknowledges full responsibility for all amounts that are now due and payable
and which become due and payable to the Company, its subsidiaries or affiliates
under the Franchise Agreements, including, but not limited to, royalty fees and
advertising fees, through the Closing Date.  In addition, any amounts
accruing before and through the Closing Date which are due to the Company under
the Franchise Agreements, but determined after the Closing Date, shall be paid
by Franchisee within ten (10) days after the Company’s written demand
therefore.  Franchisee agrees to pay interest to the Company on any
amounts which may become due to Company from Franchisee, if such are not paid
when due, at the rate of fifteen percent (15%) per annum or the maximum interest
rate permitted by law, whichever is less.  Franchisee agrees that all
Development Fees have been fully earned by Company.

    

    Exhibit G
– Form of Bill of Sale and Assignment

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    5.0           Release
of Claims

    

    5.1           Release
by Franchisee

    

    Franchisee, on behalf of itself and its
heirs, executors, administrators, assigns and successors in interest, does
hereby fully release, exonerate and forever discharge Company, its parent
companies, and all subsidiaries and affiliates thereof, and all of their
respective officers, directors, employees, agents, shareholders, assigns and
successors in interest, in their corporate, individual or other capacity (each a
“Released Party”), from any and all claims, obligations, liabilities, actions
and causes of action of whatsoever nature, in law or equity, whether known or
unknown, suspected or unsuspected, which Franchisee now has, has had, or may
have hereafter claim to have had, by reason of any matter, omission, cause or
event whatsoever that arises on or before the Closing Date, including, but not
limited to, any claimed violation or breach of the Franchise Agreements or any
violation of federal or state laws and any claim arising out of Franchisee’s
operation of the Restaurant under the Franchise Agreements, as well as any
representation made in connection therewith.

    

    Franchisee expressly agrees and
acknowledges that, in executing this General Release, Franchisee does not rely
upon and has not relied upon any representations or statements by any Released
Party.  Franchisee expressly agrees and acknowledges that, prior to
executing this General Release, it has made such investigation as it deems
necessary and has consulted independent legal counsel and other advisors of its
own choosing in connection therewith and in connection with the rights it may be
relinquishing as a result of the execution of this General
Release.  Franchisee expressly assumes the risk of any mistake of fact
or law which it may be under in connection with the execution of this General
Release and any rights which it may be relinquishing thereby.

    

    Franchisee expressly acknowledges that
this General Release includes unknown or unsuspected claims and specifically
waives the benefit of the provisions of Section 1542 of the Civil Code of the
State of California (“Section 1542”), which provides as follows:

    

    “A
GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR
SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF
KNOWN BY HIM MUST HAVE MATERIALLY AFFECTED HIS SETTLEMENT WITH THE
DEBTOR.”

    

    Franchisee UNDERSTANDS AND
ACKNOWLEDGES THE SIGNIFICANCE AND CONSEQUENCE OF THIS SPECIFIC WAIVER OF THE
PROVISIONS OF Section 1542, and hereby assumes full responsibility for any
damage, loss, or liability which it may incur by reason of such
waiver.

    

    5.2           Release
by Company

    

    Except for claims of indemnification
arising pursuant to Section 3.0 above, Company, on behalf of itself and its
heirs, executors, administrators, assigns and successors in interest, does
hereby fully release Franchisee and its parent, any subsidiary corporation, or
affiliate, and all of their respective officers, directors, employees, agents,
shareholders, assigns and successors in interest, in their corporate, individual
or other capacity (each a “Released Party”), from any and all claims,
liabilities, suits or causes of action of whatever kind or nature, in law or
equity, whether known or unknown, suspected or unsuspected, which Company now
has, has had, or may have hereafter claim to have had, by reason of any matter,
act, omission, cause or event relating to Franchisee’s execution of and
operation under the Franchise Agreements,  any and guarantees which
arises after the Closing Date.  Company hereby expressly releases
Christopher P. Elliott and Joseph M. Uhl from their respective guarantees of the
obligation of the Franchisee under all Franchise Agreements, including without
limitation the Closed Business Franchise Agreements and the Development
Agreement and all restrictive covenants related thereto.

    

    Exhibit G
– Form of Bill of Sale and Assignment

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    Company expressly agrees and
acknowledges that, in executing this General Release, Company does not rely upon
and has not relied upon any representations or statements by any Released
Party.  Company expressly agrees and acknowledges that, prior to
executing this General Release, it has made such investigation as it deems
necessary and has consulted independent legal and other advisors of its own
choosing in connection therewith and in connection with the rights it may be
relinquishing as a result of the execution of this General
Release.  Company expressly assumes the risk of any mistake of fact or
law which it may be under in connection with the execution of this General
Release and any rights which it may be relinquishing thereby.

    

    Company expressly acknowledges that
this General Release includes unknown or unsuspected claims and specifically
waives the benefit of the provisions of Section 1542 of the Civil Code of the
State of California (“Section 1542”), which provides as follows:

    

    “A GENERAL RELEASE DOES NOT EXTEND TO
CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE
TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM MUST HAVE MATERIALLY
AFFECTED HIS SETTLEMENT WITH THE DEBTOR.”

    

    Company UNDERSTANDS AND ACKNOWLEDGES
THE SIGNIFICANCE AND CONSEQUENCE OF THIS SPECIFIC WAIVER OF THE PROVISIONS OF
Section 1542, and hereby assumes full responsibility for any damage, loss, or
liability which it may incur by reason of such waiver.

    

    6.0           No
Release of Certain Covenants

    

    6.1           This
Termination Agreement shall not terminate those obligations and liabilities of
Franchisee, which, by their nature, survive the termination of the Franchise
Agreements, including, but not limited to, those obligations relating to
indemnification and confidentiality but specifically excluding any covenants
of non-competition or other restrictive covenants related to Christopher
Elliott, Joe Uhl or other officers/employees of Franchisee.

    

    7.0           Successors
and Assigns

    

    7.1           This
Agreement shall be binding upon and inure to the benefit of the parties hereto
and their respective successors, assigns, employees, representatives,
affiliates, heirs, executors and administrators.   Franchisee
agrees to assign to Company all rights of and interest in Franchisee to the
Leases for the Premises.

    

    Exhibit G
– Form of Bill of Sale and Assignment

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    8.0           Entire
Agreement

    

    8.1           This
Agreement constitutes the entire agreement between the parties hereto with
respect to termination of the Franchise Agreements.  This Agreement
may not be amended except in writing, executed by all parties
hereto.

    

    9.0           Enforcement
of Agreement

    

    9.1           This
Agreement shall be construed and enforced in accordance with the laws of the
State of California.

    

    //

    

    //

    

    //

    

    //

    

    //

    

    //

    

    //

    

    //

    

    Exhibit G
– Form of Bill of Sale and Assignment

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    10.0           Attorneys'
Fees

    

    10.1           In
the event of the bringing of any action by any party hereto against another
against another hereon or hereunder, or by reason of the breach by such party of
any covenant, term or condition contained herein or in connection with any other
matter arising out of this Termination Agreement, the party in whose favor final
judgment shall be entered shall be entitled to have and to recover from the
other party reasonable attorneys' fees to be fixed by the court rendering such
judgment.

    

    IN WITNESS WHEREOF, the
parties have executed this Termination Agreement

    as of the
day and year first above written.

    

    
      
        
          
            
              
                	
                        COMPANY:

                      	
                        FRANCHISEE:

                      
	
                        EL
      POLLO LOCO, INC.,

                      	
                        FIESTA
      BRANDS, INC.,

                      
	
                        a
      Delaware corporation

                      	
                        a
      Delaware corporation

                      
	 
      	 
      	 
      	 
      	 
      
	
                        By:

                      	
                        s/s Gary Campanaro

                      	 
      	
                        By:

                      	
                        /s/ Christopher P.
  Elliott

                      
	 
      	
                        Gary
      Campanaro

                      	 
      	 
      	
                        Christopher
      P. Elliott

                      
	 
      	
                        Senior
      Vice President & CFO

                      	 
      	 
      	
                        CEO
      and President

                      
	
                        Date:

                      	  
      	 
      	
                        Date:

                      	  
      
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	
                        By:

                      	
                        /s/ Joseph M. Uhl

                      
	 
      	 
      	 
      	 
      	
                        Joseph
      M. Uhl

                      
	 
      	 
      	 
      	 
      	
                        COO

                      
	 
      	 
      	 
      	
                        Date:

                      	  
      

              

            

          

        

      

    

    

    Exhibit G
– Form of Bill of Sale and AssignmentExhibit
10.2

    

    THIS
COMMON STOCK PURCHASE WARRANT AND THE SECURITIES ISSUABLE UPON EXERCISE HEREOF
HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY
NOT BE TRANSFERRED IN VIOLATION OF SUCH ACT, THE RULES AND REGULATIONS
THEREUNDER OR THE PROVISIONS OF THIS COMMON STOCK PURCHASE WARRANT.

     

    Number of
Shares of Common Stock: __________

    Warrant
No. W09-Rx___

     

    COMMON
STOCK PURCHASE WARRANT

     

    To
Purchase Common Stock of

    ThermoEnergy
Corporation

     

    This Is
To Certify That Rexon Limited, or registered assigns, is entitled, at any time
from the Issue Date (as hereinafter defined) to the Expiration Date (as
hereinafter defined), to purchase from ThermoEnergy Corporation, a Delaware
corporation (the “Company”),
__________ shares of Common Stock (as hereinafter defined and subject to
adjustment as provided herein), in whole or in part, including fractional parts,
at a purchase price per share of $_____, subject to adjustment as provided
herein (the “Exercise
Price”), all on the terms and conditions and pursuant to the provisions
hereinafter set forth.

     

    
      	
               
      

            	
              1.

            	
              DEFINITIONS

            

    

     

    As used
in this Common Stock Purchase Warrant (this “Warrant”), the following terms
shall have the respective meanings set forth below:

     

     “Business Day” shall mean any
day that is not a Saturday or Sunday or a day on which banks are required or
permitted to be closed in the City of New York.

     

    “Commission” shall mean the
Securities and Exchange Commission or any other federal agency then
administering the Securities Act and other federal securities laws.

     

    “Common Stock” shall mean
(except where the context otherwise indicates) the Common Stock, par value
$0.001 per share, of the Company as constituted on the Issue Date, and any
capital stock into which such Common Stock may thereafter be changed, and shall
also include (i) capital stock of the Company of any other class (regardless of
how denominated) issued to the holders of shares of Common Stock upon any
reclassification thereof which is also not preferred as to dividends or assets
over any other class of stock of the Company and which is not subject to
redemption and (ii) shares of common stock of any successor or acquiring
corporation received by or distributed to the holders of Common Stock of the
Company in the circumstances contemplated by Section 4.4.

     

    “Convertible Securities” shall
mean evidences of indebtedness, shares of stock or other securities which are
convertible into or exchangeable, with or without payment of additional
consideration in cash or property, for shares of Common Stock, either
immediately or upon the occurrence of a specified date or a specified
event.

     

    “Event” shall have the meaning
set forth in Section 4.3.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    “Event Date” shall have the
meaning set forth in Section 4.3.

     

    “Exchange Act” shall mean the
Securities Exchange Act of 1934, as amended, or any successor federal statute,
and the rules and regulations of the Commission thereunder, all as the same
shall be in effect from time to time.

     

    “Exercise Period” shall mean
the period during which this Warrant is exercisable pursuant to Section
2.1.

     

    “Expiration Date” shall mean
___________, 2014.

     

    “Fundamental Corporate Change”
shall have the meaning set forth in Section 4.4.

     

    “Holder” shall mean the Person
in whose name the Warrant or Warrant Stock set forth herein is registered on the
books of the Company maintained for such purpose.

     

    “Issue Date” means
_____________, 2009.

     

    “Market Price” shall mean, on
any date of determination,(i) the closing price of a share of Common Stock on
such day as reported on the principal Trading Market on which the Common Stock
is listed or traded, or (ii) if the Common Stock is not listed on a Trading
Market, the closing bid price for a share of Common Stock on such day in the
over-the-counter market, as reported by the OTC Bulletin Board, or (iii) if the
Common Stock is not then listed or quoted on the OTC Bulletin Board, the closing
bid price for a share of Common Stock on such day in the over-the-counter market
as reported by the National Quotation Bureau Incorporated (or any similar
organization or agency succeeding to its functions of reporting
prices).

     

    “Other Property” shall have the
meaning set forth in Section 4.4.

     

    “Person” shall mean any
individual, sole proprietorship, partnership, joint venture, trust, incorporated
organization, association, corporation, institution, public benefit corporation,
entity or government (whether federal, state, county, city, municipal or
otherwise, including, without limitation, any instrumentality, division, agency,
body or department thereof).

     

    “Securities Act” shall mean the
Securities Act of 1933, as amended, or any successor federal statute, and the
rules and regulations of the Commission thereunder, all as the same shall be in
effect at the time.

     

     “Subsequent Adjustment
Date” shall have the meaning set forth in
Section 4.3.

    

    “Trading Day” means (i) a day
on which the Common Stock is traded on a Trading Market, or (ii) if the Common
Stock is not listed on a Trading Market, a day on which the Common Stock is
traded in the over-the-counter market, as reported by the OTC Bulletin Board, or
(iii) if the Common Stock is not then quoted on the OTC Bulletin Board, a day on
which the Common Stock is quoted in the over-the-counter market as reported by
the National Quotation Bureau Incorporated (or any similar organization or
agency succeeding to its functions of reporting prices); provided, that in the
event that the Common Stock is not listed or quoted as set forth in (i), (ii)
and (iii) hereof, then the term “Trading Day” shall mean a Business
Day.

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

    

    “Trading Market” means
whichever of the New York Stock Exchange, the American Stock Exchange, the
Nasdaq National Market, or the Nasdaq Small Cap Market on which the Common Stock
is listed or quoted for trading on the date in question.

     

    “Transfer” shall mean any
disposition of any Warrant or Warrant Stock or of any interest in either
thereof, which would constitute a sale thereof within the meaning of the
Securities Act.

     

    “Warrant Stock” shall mean the
shares of Common Stock issued or issuable to the Holders of the Warrants upon
the exercise thereof.

     

    “Warrants” shall mean this
Warrant and all warrants issued upon transfer, division or combination of, or in
substitution for, this Warrant.  All Warrants shall at all times be
identical as to terms, conditions and date.

     

    
      	
               
      

            	
              2.

            	
              EXERCISE
      OF WARRANT

            

    

     

    
      	
               
      

            	
              2.1

            	
              Manner
      of Exercise

            

    

     

    From and
after the Issue Date and until 6:00 p.m., New York time, on the Expiration Date,
the Holder may exercise this Warrant, on any Business Day, for all or any part
of the number of shares of Common Stock purchasable hereunder.

     

    In order
to exercise this Warrant, in whole or in part, the Holder shall surrender this
Warrant to the Company at its principal office at 124 West Capitol Street, Suite
880, Little Rock, Arkansas, or at the office or agency designated by the Company
pursuant to Section 12, together with a written notice of the Holder’s election
to exercise this Warrant, which notice shall specify the number of shares of
Common Stock to be purchased, and shall be accompanied by payment of the
Exercise Price (a) in cash or wire transfer or cashier’s check drawn on a United
States bank or (b) by written direction to the Company to cancel a portion of
this Warrant sufficient to satisfy the “cashless exercise” provisions of this
Section 2.1.  Such notice shall be substantially in the form of the
subscription form appearing at the end of this Warrant as Exhibit A, duly
executed by the Holder or its agent or attorney.  Upon receipt of the
items referred to above, the Company shall, as promptly as practicable, and in
any event within three Business Days thereafter, execute or cause to be executed
and deliver or cause to be delivered to the Holder a certificate or certificates
representing the aggregate number of full shares of Common Stock issuable upon
such exercise, together with cash in lieu of any fraction of a share, as
hereinafter provided.  The stock certificate or certificates so
delivered shall be, to the extent possible, in such denomination or
denominations as the Holder shall request in the notice and shall be registered
in the name of the Holder or, subject to Section 9, such other name as shall be
designated in the notice.  This Warrant shall be deemed to have been
exercised and such certificate or certificates shall be deemed to have been
issued, and the Holder or any other Person so designated to be named therein
shall be deemed to have become the holder of record of such shares for all
purposes, as of the date the notice, together with the cash or check or wire
transfer of funds and this Warrant (or direction to cancel a portion of this
Warrant pursuant to the “cashless exercise” provisions), is received by the
Company as described above and all taxes required to be paid by the Holder, if
any, pursuant to Section 2.2 prior to the issuance of such shares have been
paid. If this Warrant shall have been exercised in part, the Company shall, at
the time of delivery of the certificate or certificates representing Warrant
Stock, deliver to the Holder a new Warrant evidencing the rights of the Holder
to purchase the unpurchased shares of Common Stock called for by this Warrant,
which new Warrant shall in all other respects be identical with this Warrant,
or, at the request of the Holder, appropriate notation may be made on this
Warrant and the same returned to the Holder.  Notwithstanding any
provision herein to the contrary, the Company shall not be required to register
shares in the name of any Person who acquired this Warrant (or part hereof) or
any Warrant Stock otherwise than in accordance with this
Warrant.

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

     

    In lieu
of payment of the Exercise Price in cash, the Holder may direct the Company to
cancel a portion of this Warrant having a value equal to the Exercise Price for
the number of shares of Warrant Stock as to which the Holder exercises this
Warrant, determined by multiplying the number of shares of Warrant Stock as to
which this Warrant is directed to be cancelled by an amount equal to the
difference between (i) the Market Price on the date of exercise and (ii) the
Exercise Price then in effect.  Payment by such cancellation is
referred to herein as “cashless exercise.”

     

    
      	
               
      

            	
              2.2

            	
              Payment
      of Taxes and Charges

            

    

     

    All
shares of Common Stock issuable upon the exercise of this Warrant pursuant to
the terms hereof shall be validly issued, fully paid and nonassessable, freely
tradable and without any preemptive rights.  The Company shall pay all
expenses in connection with, and all taxes and other governmental charges that
may be imposed with respect to, the issuance or delivery thereof, unless such
tax or charge is a tax on income imposed by law upon the Holder, in which case
such taxes or charges shall be paid by the Holder.

     

    
      	
               
      

            	
              2.3

            	
              Fractional
      Shares

            

    

     

    The
Company shall not be required to issue a fractional share of Common Stock upon
exercise of any Warrant.  As to any fraction of a share which the
Holder would otherwise be entitled to purchase upon such exercise, the Company
shall pay a cash adjustment in respect of such fraction in an amount equal to
the same fraction of the Market Price per share of Common Stock as of the date
of exercise of the Warrant giving rise to such fraction of a share.

     

    
      	
               
      

            	
              3.

            	
              TRANSFER,
      DIVISION AND COMBINATION

            

    

     

    
      	
               
      

            	
              3.1

            	
              Transfer

            

    

     

    Subject
to compliance with Section 9, transfer of this Warrant and all rights hereunder,
in whole or in part, shall be registered on the books of the Company to be
maintained for such purpose, upon surrender of this Warrant at the principal
office of the Company referred to in Section 2.1 or the office or agency
designated by the Company pursuant to Section 12, together with a written
assignment of this Warrant substantially in the form of Exhibit B hereto duly
executed by the Holder or its agent or attorney and funds sufficient to pay any
transfer taxes payable upon the making of such transfer.  Upon such
surrender and, if required, such payment, the Company shall, subject to Section
9, execute and deliver a new Warrant or Warrants in the name of the assignee or
assignees and in the denomination specified in such instrument of assignment,
and shall issue to the assignor a new Warrant evidencing the portion of this
Warrant not so assigned, and this Warrant shall promptly be
canceled.  A Warrant, if properly assigned in compliance with Section
9, may be exercised by a new the Holder for the purchase of shares of Common
Stock without having a new warrant issued.

     

    
      	
               
      

            	
              3.2

            	
              Division
      and Combination

            

    

     

    Subject
to Section 9, this Warrant may be divided or combined with other Warrants upon
presentation hereof at the aforesaid office or agency of the Company, together
with a written notice specifying the names and denominations in which new
Warrants are to be issued, signed by the Holder or its agent or
attorney.  Subject to compliance with Sections 3.1 and 9, as to any
transfer which may be involved in such division or combination, the Company
shall execute and deliver a new Warrant or Warrants in exchange for the Warrant
or Warrants to be divided or combined in accordance with such
notice.

    
      
         

      

      
        4

        
          

        

      

      
         

      

    

     

    
      	
               
      

            	
              3.3

            	
              Expenses

            

    

     

    The
Company shall prepare, issue and deliver at its own expense (other than transfer
taxes) the new Warrant or Warrants under this Section 3.

     

    
      	
               
      

            	
              3.4

            	
              Maintenance
      of Books

            

    

     

    The
Company agrees to maintain, at its aforesaid office or agency, books for the
registration and the registration of transfer of the Warrants.

     

    
      	
               
      

            	
              4.

            	
              ADJUSTMENTS

            

    

     

    The
number of shares of Common Stock for which this Warrant is exercisable, or the
price at which such shares may be purchased upon exercise of this Warrant, shall
be subject to adjustment from time to time as set forth in this Section 4. The
Company shall give the Holder notice of any event described below which requires
an adjustment pursuant to this Section 4 at the time of such event.

     

    
      	
               
      

            	
              4.1

            	
              Stock
      Dividends, Subdivisions and
Combinations

            

    

     

    If at any
time the Company shall:

     

    (a)           Declare
or pay to the holders of its Common Stock a dividend payable in, or other
distribution of, shares of Common Stock or in Convertible
Securities;

     

    (b)           subdivide
its outstanding shares of Common Stock into a larger number of shares of Common
Stock; or

     

    (c)           combine
its outstanding shares of Common Stock into a smaller number of shares of Common
Stock;

     

    then (i)
the number of shares of Common Stock for which this Warrant is exercisable
immediately after the occurrence of any such event shall be adjusted to equal
the number of shares of Common Stock which a record holder of the same number of
shares of Common Stock for which this Warrant is exercisable immediately prior
to the occurrence of such event would own or be entitled to receive after the
happening of such event, and (ii) the then-current Exercise Price shall be
adjusted to equal (A) the then-current Exercise Price multiplied by the number
of shares of Common Stock for which this Warrant is exercisable immediately
prior to the adjustment divided by (B) the number of shares for which this
Warrant is exercisable immediately after such adjustment.

     

    
      	
               
      

            	
              4.2

            	
              Certain
      Other Distributions

            

    

     

    If at any
time the Company shall declare or pay to the holders of its Common Stock any
dividend or other distribution of:

     

    (a)           cash;

    
      
         

      

      
        5

        
          

        

      

      
         

      

    

     

    (b)           any
evidences of its indebtedness, any shares of its stock or any other securities
or property of any nature whatsoever (other than cash, Convertible Securities or
additional shares of Common Stock); or

     

    (c)           any
warrants or other rights to subscribe for or purchase any evidences of its
indebtedness, any shares of its stock or any other securities or property of any
nature whatsoever (other than cash, Convertible Securities or additional shares
of Common Stock);

     

    then,
upon exercise of this Warrant, the Holder shall be entitled to receive such
dividend or distribution as if the Holder had exercised this Warrant prior to
the date of such dividend or distribution.  A reclassification of the
Common Stock (other than a change in par value, or from par value to no par
value or from no par value to par value) into shares of Common Stock and shares
of any other class of stock shall be deemed a distribution by the Company to the
holders of its Common Stock of such shares of such other class of stock within
the meaning of this Section 4.2 and, if the outstanding shares of Common Stock
shall be changed into a larger or smaller number of shares of Common Stock as a
part of such reclassification, such change shall be deemed a subdivision or
combination, as the case may be, of the outstanding shares of Common Stock
within the meaning of Section 4.1.

     

    
      	
               
      

            	
              4.3

            	
              Other
      Provisions Applicable to Adjustments under this
  Section

            

    

     

    The
following provisions shall be applicable to the making of adjustments of the
number of shares of Common Stock for which this Warrant is exercisable and the
current Exercise Price provided for in this Section 4:

     

    (a)           When Adjustments to be
Made.  The adjustments required by this Section 4 shall be made
whenever and as often as any specified event requiring an adjustment shall
occur.  For the purpose of any adjustment, any specified event shall
be deemed to have occurred at the close of business on the date of its
occurrence.

     

    (b)           Fractional
Interests.   In computing adjustments under this Section
4, fractional interests in Common Stock shall be taken into account to the
nearest 1/10th of a share.

     

    (c)           When Adjustment not
Required.  If the Company shall take a record of the holders of
its Common Stock for the purpose of entitling them to receive a dividend or
distribution or subscription or purchase rights and shall, thereafter and before
the distribution to the holders thereof, legally abandon its plan to pay or
deliver such dividend, distribution, subscription or purchase rights, then
thereafter no adjustment shall be required by reason of the taking of such
record and any such adjustment previously made in respect thereof shall be
rescinded and annulled.

     

    (d)           Challenge to Good Faith
Determination.  Whenever the Board of Directors of the Company
shall be required to make a determination in good faith of the fair value of any
item under this Section 4, such determination may be challenged in good faith by
the Holder, and any dispute shall be resolved by an investment banking firm of
recognized national standing selected by the Company and acceptable to the
Holder.  The fees and expenses of such investment banking firm shall
be paid by the Company.

    
      
         

      

      
        6

        
          

        

      

      
         

      

    

     

    
      	
               
      

            	
              4.4

            	
              Reorganization,
      Reclassification, Merger, Consolidation or Disposition of
      Assets

            

    

     

    In case
the Company shall reorganize its capital, reclassify its capital stock,
consolidate or merge with or into another Person (where the Company is not the
survivor or where there is a change in or distribution with respect to the
Common Stock of the Company), or sell, convey, transfer or otherwise dispose of
all or substantially all its property, assets or business to another Person, or
effectuate a transaction or series of related transactions in which more than
50% of the voting power of the Company is disposed of (each, a “Fundamental Corporate Change”)
and, pursuant to the terms of such Fundamental Corporate Change, shares of
common stock of the successor or acquiring corporation, or any cash, shares of
stock or other securities or property of any nature whatsoever (including
warrants or other subscription or purchase rights) in addition to or in lieu of
common stock of the successor or acquiring corporation (“Other Property”), are to be
received by or distributed to the holders of Common Stock of the Company, then
the Holder shall have the right thereafter to receive, upon exercise of the
Warrant, such number of shares of common stock of the successor or acquiring
corporation or of the Company, if it is the surviving corporation, and Other
Property as is receivable upon or as a result of such Fundamental
Corporate Change by a the holder of the number of shares of Common Stock for
which this Warrant is exercisable immediately prior to such Fundamental
Corporate Change.  In case of any such Fundamental Corporate Change,
the successor or acquiring corporation (if other than the Company) shall
expressly assume the due and punctual observance and performance of each and
every covenant and condition of this Warrant to be performed and observed by the
Company and all the obligations and liabilities hereunder, subject to such
modifications as may be deemed appropriate (as determined by resolution of the
Board of Directors of the Company) in order to provide for adjustments of shares
of Common Stock for which this Warrant is exercisable which shall be as nearly
equivalent as practicable to the adjustments provided for in this Section
4.  For purposes of this Section 4.5, “common stock of the successor or
acquiring corporation” shall include stock of such corporation of any
class which is not preferred as to dividends or assets over any other class of
stock of such corporation and which is not subject to redemption and shall also
include any evidences of indebtedness, shares of stock or other securities which
are convertible into or exchangeable for any such stock, either immediately or
upon the arrival of a specified date or the happening of a specified event and
any warrants or other rights to subscribe for or purchase any such
stock.  The foregoing provisions of this Section 4.4 shall similarly
apply to any successive Fundamental Corporate Change.

     

    
      	
               
      

            	
              4.5

            	
              Other
      Action Affecting Common Stock

            

    

     

    In case
at any time or from time to time the Company shall take any action in respect of
its Common Stock, other than any action described in this Section 4, which would
have a materially adverse effect upon the rights of the Holder, the number of
shares of Common Stock and/or the purchase price thereof shall be adjusted in
such manner as may be equitable in the circumstances, as determined in good
faith by the Board of Directors of the Company.

     

    
      	
               
      

            	
              4.6

            	
              Certain
      Limitations

            

    

     

    Notwithstanding
anything herein to the contrary, the Company agrees not to enter into any
transaction which, by reason of any adjustment hereunder, would cause the
current Exercise Price to be less than the par value per share of Common
Stock.

    
      
         

      

      
        7

        
          

        

      

      
         

      

    

     

    
      	
               
      

            	
              5.

            	
              NOTICES
      TO THE HOLDER

            

    

     

    
      	
               
      

            	
              5.1

            	
              Notice
      of Adjustments

            

    

     

    Whenever
the number of shares of Common Stock for which this Warrant is exercisable, or
whenever the price at which a share of such Common Stock may be purchased upon
exercise of the Warrants, shall be adjusted pursuant to Section 4, the Company
shall forthwith prepare a certificate to be executed by the chief financial
officer of the Company setting forth, in reasonable detail, the event requiring
the adjustment and the method by which such adjustment was calculated (including
a description of the basis on which the Board of Directors of the Company
determined the fair value of any evidences of indebtedness, shares of stock,
other securities or property or warrants or other subscription or purchase
rights referred to in Section 4.2), specifying the number of shares of Common
Stock for which this Warrant is exercisable and (if such adjustment was made
pursuant to Section 4.2 or 4.5) describing the number and kind of any other
shares of stock or Other Property for which this Warrant is exercisable, and any
change in the purchase price or prices thereof, after giving effect to such
adjustment or change.  The Company shall promptly cause a signed copy
of such certificate to be delivered to the Holder in accordance with Section
14.2.  The Company shall keep at its office or agency designated
pursuant to Section 12 copies of all such certificates and cause the same to be
available for inspection at said office during normal business hours by the
Holder or any prospective purchaser of a Warrant designated by the
Holder.

     

    
      	
               
      

            	
              5.2

            	
              Notice
      of Corporate Action

            

    

     

    If at any
time:

     

    (a)           the
Company shall take a record of the holders of its Common Stock for the purpose
of entitling them to receive a dividend or other distribution, or any right to
subscribe for or purchase any evidences of its indebtedness, any shares of stock
of any class or any other securities or property, or to receive any other right;
or

     

    (b)           there
shall be any capital reorganization of the Company, any reclassification or
recapitalization of the capital stock of the Company or any consolidation or
merger of the Company with, or any sale, transfer or other disposition of all or
substantially all the property, assets or business of the Company to, another
corporation; or

     

    (c)           there
shall be a voluntary or involuntary dissolution, liquidation or winding up of
the Company;

     

    then, in
any one or more of such cases, the Company shall give to Holder (i) at least 10
days’ prior written notice of the date on which a record date shall be selected
for such dividend, distribution or right or for determining rights to vote in
respect of any such reorganization, reclassification, merger, consolidation,
sale, transfer, disposition, dissolution, liquidation or winding up, and (ii) in
the case of any such reorganization, reclassification, merger, consolidation,
sale, transfer, disposition, dissolution, liquidation or winding up, at least 10
days’ prior written notice of the date when the same shall take
place.  Such notice in accordance with the foregoing clause also shall
specify (i) the date on which any such record is to be taken for the purpose of
such dividend, distribution or right, the date on which the holders of Common
Stock shall be entitled to any such dividend, distribution or right, and the
amount and character thereof, and (ii) the date on which any such
reorganization, reclassification, merger, consolidation, sale, transfer,
disposition, dissolution, liquidation or winding up is to take place and the
time, if any such time is to be fixed, as of which the holders of Common Stock
shall be entitled to exchange their shares of Common Stock for securities or
other property deliverable upon such reorganization, reclassification, merger,
consolidation, sale, transfer, disposition, dissolution, liquidation or winding
up.    Each such written notice shall be sufficiently given
if addressed to the Holder at the last address of the Holder appearing on the
books of the Company and delivered in accordance with Section
14.2.

    
      
         

      

      
        8

        
          

        

      

      
         

      

    

     

    
      	
               
      

            	
              6.

            	
              NO
      IMPAIRMENT

            

    

     

    The
Company shall not by any action, including, without limitation, amending its
articles of incorporation or through any reorganization, transfer of assets,
consolidation, merger, dissolution, issuance or sale of securities or other
voluntary action, avoid or seek to avoid the observance or performance of any of
the terms of this Warrant, but will at all times in good faith assist in the
carrying out of all such terms and in the taking of all such actions as may be
necessary or appropriate to protect the rights of the Holder against
impairment.  Without limiting the generality of the foregoing, the
Company will (a) not increase the par value of any shares of Common Stock
receivable upon the exercise of this Warrant above the amount payable therefor
upon such exercise immediately prior to such increase in par value, (b) take all
such action as may be necessary or appropriate in order that the Company may
validly and legally issue fully paid and nonassessable shares of Common Stock
upon the exercise of this Warrant, and (c) use its best efforts to obtain all
such authorizations, exemptions or consents from any public regulatory body
having jurisdiction thereof as may be necessary to enable the Company to perform
its obligations under this Warrant.

     

    Upon the
request of the Holder, the Company will at any time during the period this
Warrant is outstanding acknowledge in writing, in form satisfactory to the
Holder, the continuing validity of this Warrant and the obligations of the
Company hereunder.

     

    
      	
               
      

            	
              7.

            	
              RESERVATION
      AND AUTHORIZATION OF COMMON STOCK

            

    

     

    From and
after the Issue Date, the Company shall at all times reserve and keep available
for issuance upon the exercise of Warrants such number of its authorized but
unissued shares of Common Stock as will be sufficient to permit the exercise in
full of all outstanding Warrants.  All shares of Common Stock which
shall be so issuable, when issued upon exercise of any Warrant and payment
therefor in accordance with the terms of such Warrant, shall be duly and validly
issued and fully paid and nonassessable and not subject to preemptive
rights.

     

    Before
taking any action which would cause an adjustment reducing the then-current
Exercise Price below the then par value, if any, of the shares of Common Stock
issuable upon exercise of the Warrants, the Company shall take any corporate
action which may be necessary in order that the Company may validly and legally
issue fully paid and nonassessable shares of such Common Stock at such adjusted
current Exercise Price.

     

    Before
taking any action which would result in an adjustment in the number of shares of
Common Stock for which this Warrant is exercisable or in the then-current
Exercise Price, the Company shall obtain all such authorizations or exemptions
thereof, or consents thereto, as may be necessary from any public regulatory
body or bodies having jurisdiction thereof.

     

    
      	
               
      

            	
              8.

            	
              TAKING
      OF RECORD; STOCK AND WARRANT TRANSFER
BOOKS

            

    

     

    In the
case of all dividends or other distributions by the Company to the holders of
its Common Stock with respect to which any provision of Section 4 refers to the
taking of record of such holders, the Company will in each case take such a
record and will take such record as of the close of business on a Business
Day.  The Company will not at any time, except upon dissolution,
liquidation or winding up of the Company, close its stock transfer books or
Warrant transfer books so as to result in preventing or delaying the exercise or
transfer of any Warrant.

     

    
      	
               
      

            	
              9.

            	
              RESTRICTIONS
      ON TRANSFERABILITY

            

    

     

    The
Warrants and the Warrant Stock shall not be transferred, hypothecated or
assigned except in compliance with the provisions of the Securities Act with
respect to the Transfer of any Warrant or any Warrant Stock.  The
Holder, by acceptance of this Warrant, agrees to be bound by the provisions of
this Section 9.

    
      
         

      

      
        9

        
          

        

      

      
         

      

    

     

    
      	
               
      

            	
              10.

            	
              SUPPLYING
      INFORMATION

            

    

     

    The
Company shall cooperate with the Holder in supplying such information as may be
reasonably necessary for the Holder to complete and file any information
reporting forms presently or hereafter required by the Commission as a condition
to the availability of an exemption from the Securities Act for the sale of any
Warrant or Warrant Stock.

     

    
      	
               
      

            	
              11.

            	
              LOSS
      OR MUTILATION

            

    

     

    Upon
receipt by the Company from the Holder of evidence reasonably satisfactory to it
of the ownership of and the loss, theft, destruction or mutilation of this
Warrant and indemnity reasonably satisfactory to it (it being understood that
the written agreement of the Holder shall be sufficient indemnity), and in case
of mutilation upon surrender and cancellation hereof, the Company will execute
and deliver in lieu hereof a new Warrant of like tenor to the Holder; provided, in the case of
mutilation no indemnity shall be required if this Warrant in identifiable form
is surrendered to the Company for cancellation.

     

    
      	
               
      

            	
              12.

            	
              OFFICE
      OF THE COMPANY

            

    

     

    As long
as any of the Warrants remain outstanding, the Company shall maintain an office
or agency (which may be the principal executive offices of the Company) where
the Warrants may be presented for exercise, registration of transfer, division
or combination as provided in this Warrant.

     

    
      	
               
      

            	
              13.

            	
              LIMITATION
      OF LIABILITY

            

    

     

    No
provision hereof, in the absence of affirmative action by the Holder to purchase
shares of Common Stock, and no enumeration herein of the rights or privileges of
the Holder hereof, shall give rise to any liability of the Holder for the
purchase price of any Common Stock or as a stockholder of the Company, whether
such liability is asserted by the Company or by creditors of the
Company.

     

    
      	
               
      

            	
              14.

            	
              MISCELLANEOUS

            

    

     

    
      	
               
      

            	
              14.1

            	
              Nonwaiver
      and Expenses

            

    

     

    No course
of dealing or any delay or failure to exercise any right hereunder on the part
of the Holder shall operate as a waiver of such right or otherwise prejudice the
Holder’s rights, powers or remedies.  If the Company fails to make,
when due, any payments provided for hereunder, or fails to comply with any other
provision of this Warrant, the Company shall pay to the Holder such amounts as
shall be sufficient to cover any costs and expenses including, without
limitation, reasonable attorneys’ fees, including those of appellate
proceedings, incurred by the Holder in collecting any amounts due pursuant
hereto or in otherwise enforcing any of its rights, powers or remedies
hereunder.

     

    
      	
               
      

            	
              14.2

            	
              Notice
      Generally

            

    

     

    Except as
may be otherwise provided herein, any and all notices or other communications or
deliveries required or permitted to be provided hereunder shall be in writing
and shall be deemed given and effective on the earliest of (a) the date of
transmission, if such notice or communication is delivered via e-mail, facsimile
or other means of electronic transmission (provided the sender receives a
machine-generated confirmation of successful transmission) prior to 6:00 p.m.
(New York City time) on a Trading Day, (b) the next Trading Day after the date
of transmission, if such notice or communication is delivered via e-mail,
facsimile or other means of electronic transmission (provided the sender
receives a machine-generated confirmation of successful transmission) on a day
that is not a Trading Day or later than 6:00 p.m. (New York City time) on any
Trading Day, (c) the Trading Day following the date of mailing, if sent by a
nationally recognized overnight courier service, or (d) upon actual receipt by
the party to whom such notice is required to be given.   Notices
to the Company shall be addressed to the Company’s principal executive offices
and notices to the Holder shall be addressed to the last known address of such
Holder in the Company’s records.

    
      
         

      

      
        10

        
          

        

      

      
         

      

    

     

    
      	
               
      

            	
              14.3

            	
              Indemnification

            

    

     

    The
Company agrees to indemnify and hold harmless the Holder from and against any
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
claims, costs, attorneys’ fees, expenses and disbursements of any kind which may
be imposed upon, incurred by or asserted against the Holder in any manner
relating to or arising out of any failure by the Company to perform or observe
in any material respect any of its covenants, agreements, undertakings or
obligations set forth in this Warrant; provided, however, that the Company will
not be liable hereunder to the extent that any liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, claims, costs, attorneys’ fees,
expenses or disbursements are found in a final nonappealable judgment by a court
to have resulted from the Holder’s gross negligence, bad faith or willful
misconduct in its capacity as a stockholder or warrantholder of the
Company.

     

    
      	
               
      

            	
              14.4

            	
              Remedies

            

    

     

    The
Holder in addition to being entitled to exercise all rights granted by law,
including recovery of damages, will be entitled to specific performance of its
rights under Section 9 of this Warrant.  The Company agrees that
monetary damages would not be adequate compensation for any loss incurred by
reason of a breach by it of the provisions of Section 9 of this Warrant and
hereby agrees to waive the defense in any action for specific performance that a
remedy at law would be adequate.

     

    
      	
               
      

            	
              14.5

            	
              Successors
      and Assigns

            

    

     

    Subject
to the provisions of Sections 3.1 and 9, this Warrant and the rights evidenced
hereby shall inure to the benefit of and be binding upon the successors of the
Company and the successors and assigns of the Holder.  The provisions
of this Warrant are intended to be for the benefit of all holders from time to
time of this Warrant and, with respect to Section 9 hereof, the holders of
Warrant Stock, and shall be enforceable by any such holder or the holder of
Warrant Stock.

     

    
      	
               
      

            	
              14.6

            	
              Amendment

            

    

     

    This
Warrant and all other Warrants may be modified or amended or the provisions
hereof waived with the written consent of the Company and the
Holder.

     

    
      	
               
      

            	
              14.7

            	
              Severability

            

    

     

    Wherever
possible, each provision of this Warrant shall be interpreted in such manner as
to be effective and valid under applicable law, but if any provision of this
Warrant shall be prohibited by or invalid under applicable law, such provision
shall only be ineffective to the extent of such prohibition or invalidity,
without invalidating the remainder of such provision or the remaining provisions
of this Warrant.

    
      
         

      

      
        11

        
          

        

      

      
         

      

    

     

    
      	
               
      

            	
              14.8

            	
              Headings

            

    

     

    The
headings used in this Warrant are for the convenience of reference only and
shall not, for any purpose, be deemed a part of this Warrant.

     

    
      	
               
      

            	
              14.9

            	
              Governing
      Law

            

    

     

    This
Warrant shall be governed by the laws of the State of New York, without regard
to the provisions thereof relating to conflicts of law.

     

    In
Witness Whereof, the Company has caused this Warrant to be duly executed
by its Chairman and Chief Executive Officer.

     

    Dated:  _______________,
2009

    

    
      
        
          
            
              
                
                  	
                          ThermoEnergy
      Corporation

                        
	 
      	 
      
	
                          By: 

                        	  
      
	 	
                          Dennis
      C. Cossey, Chairman and
CEO 

                        

                

              

            

          

        

      

    

    
      
         

      

      
        12

        
          

        

      

      
         

      

    

     

    EXHIBIT
A

     

    SUBSCRIPTION
FORM

     

    [To be
executed only upon exercise of Warrant]

     

    The
undersigned registered owner of this Warrant irrevocably exercises this Warrant
for the purchase of __________ shares of Common Stock of ThermoEnergy
Corporation and herewith makes payment therefor, all at the price and on the
terms and conditions specified in this Warrant and requests that certificates
for the shares of Common Stock hereby purchased (and any securities or other
property issuable upon such exercise) be issued in the name of and delivered
to

    
      
        
          
            	 
      
	 
      
	 	 
	
                    whose
      address is

                  	 
      
	 
      	 
      
	 
      

          

        

      

    

     

    and, if
such shares of Common Stock shall not include all of the shares of Common Stock
issuable as provided in this Warrant, that a new Warrant of like tenor and date
for the balance of the shares of Common Stock issuable hereunder be delivered to
the undersigned.

    

    
      
        
          
            
              
                
                  	
                          Check
      here for cashless exercise: ____

                        	 
      	 
      
	 
      	 
      	
                          (Name
      of Registered Owner)

                        
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	 
      	
                          (Signature
      of Registered Owner)

                        
	 	 	 
	 
      	 
      	 
      
	 
      	 
      	
                          (Street
      Address)

                        
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	 
      	
                          (City)
                 (State)
                 (Zip
      Code)

                        
	 
      	 
      	 
      
	 
      	 
      	
                          Notice:  The
      signature on this subscription must correspond with the name as written
      upon the face of the within Warrant in every particular, without
      alteration or enlargement or any change
  whatsoever.

                        

                

              

            

          

        

      

    

    
      
         

      

      
        A-1

        
          

        

      

      
         

      

    

     

    EXHIBIT
B

     

    ASSIGNMENT
FORM

     

    For Value
Received the undersigned registered owner of this Warrant hereby sells, assigns
and transfers unto the Assignee named below all of the rights of the undersigned
under this Warrant, with respect to the number of shares of Common Stock set
forth below:

    

    
      
        	
                 

                Name and Address of
Assignee

              	 
      	
                No.
      of Shares of

                Common Stock

              
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	 
      	 
      

      

    

    

    
      
        
          
            	
                    and
      does hereby irrevocably constitute and appoint

                  
	 
      	 
      
	 

          

        

      

    

     

    attorney-in-fact
to register such transfer on the books of ThermoEnergy Corporation maintained
for the purpose, with full power of substitution in the premises.

     

    Dated:  _____________________

    

    
      
        
          
            
              	 
      	 
      
	 	
                      (Print
      Name)

                    
	 
      	 
      
	 
      	 
      
	
                      By: 

                    	 
      
	 
      	
                      (Signature)

                    
	 
      	 
      
	Notice:  The
      signature on this assignment must correspond with the name as written upon
      the face of the within Warrant in every particular, without alteration or
      enlargement or any change
whatsoever.

            

          

        

      

    

    
      
         

      

      
        B-1

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