Document:

f8k011911ex10i_europa1.htm

Exhibit 10.1

 

 

STOCK PURCHASE AGREEMENT

 

 

Dated as of [01/13], 2011

 

By and Among

 

Allan C. Schwartz

 

And

 

Beige Holdings, LLC

 

And

 

Marlin Financial Group, Inc.

 

And

 

Europa Acquisition I, Inc.

 

  

1

  

 

TABLE OF CONTENTS

 

	SECTION 1. CONSTRUCTION AND INTERPRETATION	 3
	1.1. Principles of Construction 	 3
	SECTION 2. THE TRANSACTION	 4
	2.1. Purchase Price	 4
	2.2. Transfer of Shares and Terms of Payment 	 4
	2.3. Closing	 4
	SECTION 3. REPRESENTATIONS AND WARRANTIES	 4
	3.1. Representations and Warranties of the Sellers	 4
	3.2. Covenants of the Sellers and the Company	 7
	SECTION 4. MISCELLANEOUS	 9
	4.1. Expenses	 9
	4.2. Governing Law	 9
	4.3. Resignation of Old and Appointment of New Board of Directors and Officers	 10
	4.4. Disclosure	 10
	4.5. Notices	 10
	4.6. Parties in Interest 	 11
	4.7. Entire Agreement	 11
	4.8. Amendments	 11
	4.9. Severability	 11
	4.10. Counterparts	 11

 

  

2

  

 

STOCK PURCHASE AGREEMENT

 

This stock purchase agreement ("Agreement"), dated as of 01/13/2011 is entered into by and among Europa Acquisition I, Inc. ("Europa Acquisition" or the "Company"), and Beige Holdings, LLC and Marlin Financial Group, Inc. (each a "Seller" and collectively, the "Sellers"), and Allan C. Schwartz (the "Purchaser" and together with the Company and the Sellers, the "Parties").

 

W1TNESSETH:

 

WHEREAS, the Sellers are shareholders of Europa Acquisition, a corporation organized and existing under the laws of the State of Nevada, who own and/or control in the aggregate 100,000 shares of the Company, which represents 100% of the issued and outstanding common shares of the Company; and

 

WHEREAS, the Purchaser desires to acquire 90,000 shares of the Company which represents 90% of the issued and outstanding common shares of the Company.

 

Now, THEREFORE, in consideration of the premises and of the covenants, representations, warranties and agreements herein contained, the Parties have reached the following agreement with respect to the sale by the Sellers of such common stock of the Company to the Purchaser:

 

SECTION 1. CONSTRUCTION AND INTERPRETATION

 

1.1. Principles of Construction.

 

(a) All references to Articles, Sections, subsections and Appendixes are to Articles, Sections, subsections and Appendixes in or to this Agreement unless otherwise specified. The words "hereof," "herein" and "hereunder" and words of similar import when used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement. The term "including" is not limiting and means "including without limitations."

 

(b) In the computation of periods of time from a specified date to a later specified date, the word "from" means "from and including;" the words "to" and "until" each mean "to but excluding;" and the word "through" means "to and including."

 

(c) The Table of Contents hereto and the Section headings herein are for convenience only and shall not affect the construction hereof.

 

(d) This Agreement is the result of negotiations among and has been reviewed by each Party's counsel. Accordingly, this Agreement shall not be construed against any Party merely because of such Party's involvement in its preparation.

 

(e) Wherever in this Agreement the intent so requires, reference to the neuter, masculine or feminine shall be deemed to include each of the other, and reference to either the singular or the plural shall be deemed to include the other.

 

  

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SECTION 2. THE TRANSACTION

 

2.1. Purchase Price.

 

The Sellers hereby agree to sell to the Purchaser, and the Purchaser, in reliance on the representations and warranties contained herein, and subject to the terms and conditions of this Agreement, agrees to purchase from the Sellers 90,000 common shares of the capital stock of Europa Acquisition (the "Acquired Shares") for a total purchase price of $18,750 (the "Purchase Price"), payable in full to the Sellers according to the terms of this Agreement, in United States currency, as directed by the Sellers at Closing. The Acquired Shares being purchased by the Purchaser hereunder shall include all of the common shares of the Company owned and/or controlled by Marlin Financial Group, Inc.

 

2.2. Transfer of Shares and Terms of Payment.

 

In consideration for the transfer of the Acquired Shares by the Sellers to the Purchaser, the Purchaser shall pay the Purchase Price in accordance with the terms of this Agreement. Transfer of the shares and payment thereof shall be in the following manner:

 

i) Upon execution of this Agreement, the Purchaser shall transfer the Purchase Price to Ellenoff Grossman & Schole LLP (the "Escrow Agent"), with $15,000 payable to Beige Holdings, LLC and $3,750 payable to Marlin Financial Group, Inc.

 

ii) Simultaneously with the transfer of the Purchase Price, the Sellers shall deliver to the Escrow Agent, the certificates for the Acquired Shares duly endorsed for transfer to be released and delivered to the Purchaser upon receipt of the Purchase Price by the Escrow Agent.

 

iii) The Purchaser shall reimburse the Sellers for all reasonable expenses and fees arising out of the transaction contemplated by this Agreement, including reasonable legal fees, whish shall not exceed $2,000 in aggregate.

 

2.3. Closing.

 

Subject to the terms and conditions of this Agreement, the closing (the "Closing") shall take place by wire transfer and overnight mail on or before 5:00 P.M. EST on January 13, 2011 (the "Closing Date").

 

SECTION 3. REPRESENTATIONS AND WARRANTIES

 

3.1. Representations and Warranties of the Sellers and the Company. The Sellers and the Company hereby make the following representations and warranties to the Purchaser:

 

3.1.1 The Company is a corporation duly organized and validly existing under the laws of the State of Nevada and has all corporate power necessary to engage in all transactions in which it has been involved, as well as any general business transactions in the future that may be desired by its directors.

 

  

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3.1.2 The Company is in good standing with the Secretary of State of Nevada.

 

3.1.3 Prior to or at Closing, all of the Company's outstanding debts and obligations shall be paid off (at no expense or liability to the Purchaser) and the Sellers shall provide evidence of such payoff to the Purchaser's reasonable satisfaction. Should the Purchaser discover any obligation of the Company that was not paid prior to the Closing Date, the Sellers undertake to indemnify, severally and not jointly, the Purchaser for any and all such liabilities, whether outstanding or contingent at the time of Closing.

 

3.1.4 The Company will have no assets or liabilities at the Closing Date.

 

3.1.5 The Company is not subject to any pending or threatened litigation, claims or lawsuits from any party, and there are no pending or threatened proceedings against the Company by any federal, state or local government, or any department, board, agency or other body thereof

 

3.1.6 The Company is not a party to any contract, lease or agreement which would subject it to any performance or business obligations after the Closing.

 

3.1.7 The Company does not own any real estate or any interests in real estate.

 

3.1.8 The Company is not liable for any taxes, including income, real or personal property taxes, to any governmental or state agencies whatsoever. The Company has timely filed all income, real or personal property, sales, use, employment or other governmental tax returns or reports required to be filed by it with any federal, state or other governmental agency and all taxes required to be paid by the Company in respect of such returns have been paid in full. None of such returns are subject to examination by any such taxing authority and the Company has not received notice of any intention to require the Company to file any additional tax returns in any jurisdiction to which it may be subject.

 

3.1.9 The Company, to the actual knowledge of Sellers, is not in violation of any provision of laws or regulations of federal, state or local government authorities and agencies.

 

3.1.10 The Sellers either are or on the Closing Date will be, the lawful owners of record of the Acquired Shares, and the Sellers presently have, and will have at the Closing Date, the power to transfer and deliver the Acquired Shares to the Purchaser in accordance with the terms of this Agreement. The delivery to the Purchaser of certificates evidencing the transfer of the Acquired Shares pursuant to the provisions of this Agreement will transfer to the Purchaser good and marketable title thereto, free and clear of all liens, encumbrances, restrictions and claims of any kind.

 

3.1.11 There are no authorized shares of the Company other than 100,000,000 common shares and 10,000,000 preferred shares, and there are no issued and outstanding shares of the Company other than 100,000 common shares. Sellers at the Closing Date will have full and valid title to the Acquired Shares, and there will be no existing impediment or encumbrance to the sale and transfer of the Acquired Shares to the Purchaser; and on delivery to the Purchaser of the Acquired Shares being sold hereby, all of such Shares shall be free and clear of all liens, encumbrances, charges or assessments of any kind; such Shares will be legally and validly issued and fully paid and non-assessable shares of the Company's common stock; and all such common stock has been issued under duly authorized resolutions of the Board of Directors of the Company.

 

  

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3.1.12 All issuances of the Company of the shares in their common stock in past transactions have been legally and validly effected, without violation of any preemptive rights, and all of such shares of common stock are fully paid and non-assessable.

 

3.1.13 There are no outstanding subscriptions, options, warrants, convertible securities or rights or commitments of any nature in regard to the Company's authorized but unissued common stock or any agreements restricting the transfer of outstanding or authorized but unissued common stock. There are no shareholders agreements, voting agreements or other similar agreements with respect to the Company's capital stock to which the Company is a party or, to the knowledge of the Company, between or among any of the Company's shareholders.

 

3.1.14 There are no outstanding judgments, liens or any other security interests filed against the Company or any of its properties.

 

3.1.15 The Company has no subsidiaries.

 

3.1.16 The Company has no employment contracts or agreements with any of its officers, directors, or with any consultants; and the Company has no employees or other such parties.

 

3.1.17 The Company has no insurance or employee benefit plans whatsoever. 

 

3.1.18 The Company is not in default under any contract, or any other document.

 

3.1.19 The Company has no outstanding powers of attorney and no obligations concerning the performance of the Sellers concerning this Agreement.

 

3.1.20 The execution and delivery of this Agreement, and the subsequent closing thereof, will not result in the breach by the Company or the Sellers of (i) any agreement or other instrument to which they are or have been a party or (ii) the Company's Articles of Incorporation or Bylaws.

 

3.1.21 All financial and other information which the Company and/or the Sellers furnished or will furnish to the Purchaser, including information with regard to the Company and/or the Sellers contained in the SEC filings filed by the Company since its inception (i) is true, accurate and complete as of its date and in all material respects except to the extent such information is superseded by information marked as such, (ii) does not omit any material fact, not misleading and (iii) presents fairly the financial condition of the organization as of the date and for the period covered thereby.

 

3.1.22 The common stock of the Company is registered under Section 12(g) of the Securities Exchange Act of 1934, as amended (the "Exchange Act") and there are no proceedings pending to revoke or terminate such registration. Since the date of the common stock's registration under the Exchange Act, the Company has filed all reports with the Securities and Exchange Commission required to be filed by the Exchange Act, including its Quarterly Report on Form 10-Q for the first quarter of 2010, and all such reports were filed timely.

 

  

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The representations and warranties herein by the Sellers shall be true and correct in all material respects on and as of the Closing Date hereof with the same force and effect as though said representations and warranties had been made on and as of the Closing Date.

 

The representations and warranties made above shall survive the Closing Date and shall expire for all purposes in the date numerically corresponding to the Closing Date in the twelfth month after the Closing Date.

 

3.2. Covenants of the Sellers and the Company.

 

From the date of this Agreement and until the Closing Date, the Sellers and the Company covenant the following:

 

3.2.1 The Sellers will, to the best of their respective abilities, preserve intact the current status of the Company as an issuer registered under Section 12(g) of the 1934 Exchange Act.

 

3.2.2 The Sellers will furnish Purchaser with all corporate records and documents, such as Articles of Incorporation and Bylaws, minute books, stock books, or any other corporate document or record (including financial and bank documents, books and records) requested by the Purchaser.

 

3.2.3 The Company will not enter into any contract or business transaction, merger or business combination, or incur any further debts or obligations without the express written consent of the Purchaser.

 

3.2.4 The Company will not amend or change its Articles of Incorporation or Bylaws, or issue any further shares or create any other class of shares in the Company without the express written consent of the Purchaser.

 

3.2.5 The Company will not issue any stock options, warrants or other rights or interests in or to its shares without the express written consent of the Purchaser.

 

3.2.6 The Sellers will not encumber or mortgage any right or interest in their shares of the common stock being sold to the Purchaser hereunder, and also they will not transfer any rights to such shares of the common stock to any third party whatsoever.

 

3.2.7 The Company will not declare any dividend in cash or stock, or any other benefit.

 

3.2.8 The Company will not institute any bonus, benefit, profit sharing, stock option, pension retirement plan or similar arrangement.

 

3.2.9 At Closing, the Company and the Sellers will obtain and submit to the Purchaser resignations of current officers and directors.

 

  

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3.2.10 The Sellers agree to indemnify, severally and not jointly, the Purchaser against and to pay any loss, damage, expense or claim or other liability incurred or suffered by the Purchaser by reason of the breach of any covenant or inaccuracy of any warranty or representation relating to the Company contained in this Agreement. Each Seller agrees to indemnify the Purchaser against and to pay any loss, damage, expense or claim or other liability incurred or suffered by the Purchaser by reason of the breach of any covenant or inaccuracy of any warranty or representation made by such Seller contained in this Agreement.

 

3.3 Representations and Warranties of the Purchaser. The Purchaser hereby makes the following representations and warranties to the Sellers:

 

3.3.1 The Purchaser has the requisite power and authority to enter into and perform this Agreement and to purchase the shares being sold to it hereunder. The execution, delivery and performance of this Agreement by such Purchaser and the consummation by it of the transactions contemplated hereby and thereby have been duly authorized by all necessary action, and no further consent or authorization of such Purchaser is required. This Agreement has been duly authorized, executed and delivered by such Purchaser and constitutes, or shall constitute when executed and delivered, a valid and binding obligation of such Purchaser enforceable against such Purchaser in accordance with the terms thereof.

 

3.3.2 The Purchaser is, and will be at the time of the execution of this Agreement, an "accredited investor", as such term is defined in Regulation D promulgated by the Commission under the Securities Act of 1933, as amended (the "1933 Act"), is experienced in investments and business matters, has made investments of a speculative nature and has purchased securities of United States publicly-owned companies in the past and, with its representatives, has such knowledge and experience in financial, tax and other business matters as to enable such Purchaser to utilize the information made available by the Company to evaluate the merits and risks of and to make an informed investment decision with respect to the proposed purchase, which represents a speculative investment. The Purchaser has the authority and is duly and legally qualified to purchase and own shares of the Company. The Purchaser is able to bear the risk of such investment for an indefinite period and to afford a complete loss thereof. The information set forth on the signature page hereto regarding the Purchaser is accurate.

 

3.3.3 On the Closing Date, such Purchaser will purchase the Acquired Shares pursuant to the terms of this Agreement for its own account for investment only and not with a view toward, or for resale in connection with, the public sale or any distribution thereof.

 

3.3.4 The Purchaser understands and agrees that the Acquired Shares have not been registered under the 1933 Act or any applicable state securities laws, by reason of their issuance in a transaction that does not require registration under the 1933 Act (based in part on the accuracy of the representations and warranties of the Purchaser contained herein), and that such Acquired Shares must be held indefinitely unless a subsequent disposition is registered under the 1933 Act or any applicable state securities laws or is exempt from such registration. In any event, and subject to compliance with applicable securities laws, the Purchaser may enter into lawful hedging transactions in the course of hedging the position they assume and the Purchaser may also enter into lawful short positions or other derivative transactions relating to the Acquired Shares, or interests in the Acquired Shares, and deliver the Acquired Shares, or interests in the Acquired Shares, to close out their short or other positions or otherwise settle other transactions, or loan or pledge the Acquired Shares, or interests in the Acquired Shares, to third parties who in turn may dispose of these Acquired Shares.

 

  

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3.3.5 The Acquired Shares shall bear the following or similar legend:

 

	 	"THE ISSUANCE AND SALE OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, NOR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR (B) AN OPINION OF COUNSEL (WHICH COUNSEL SHALL BE SELECTED BY THE HOLDER), IN A GENERALLY ACCEPTABLE FORM, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR (II) UNLESS SOLD PURSUANT TO RULE 144 OR RULE 144A UNDER SAID ACT. NOTWITHSTANDING THE FOREGOING, THE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY THE SECURITIES."	 

 

3.3.6 The offer to sell the Acquired Shares was directly communicated to such Purchaser by the Company. At no time was such Purchaser presented with or solicited by any leaflet, newspaper or magazine article, radio or television advertisement, or any other form of general advertising or solicited or invited to attend a promotional meeting otherwise than in connection and concurrently with such communicated offer.

 

3.3.7 The Purchaser represents that the foregoing representations and warranties are true and correct as of the date hereof and, unless such Purchaser otherwise notifies the Company prior to the Closing Date shall be true and correct as of the Closing Date.

 

3.3.8 The foregoing representations and warranties shall survive the Closing Date. 

 

SECTION 4. MISCELLANEOUS

 

4.1. Expenses.

 

Each of the Parties shall bear his own expenses in connection with the transactions contemplated by this Agreement. All the expenses incurred by or on behalf of the Company after the Closing Date shall be borne or repaid by the Company.

 

4.2. Governing Law.

 

The interpretation and construction of this Agreement, and all matters relating hereto, shall be governed by the laws of the State of Nevada applicable to agreements executed and to be wholly performed solely within such state.

 

  

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4.3. Board of Directors and Officers.

 

The Company and the Purchaser agree and represent to Beige Holdings, LLC that each of below named persons shall not be removed from his/her positions listed below with the Company without the prior written consent by Beige Holdings, LLC.

 

	 	Name	Position
	 	Gregory Schwartz	Director, President and CEO

 

4.4. Disclosure.

 

Each Party agrees that it will not make any public comments, statements, or communications with respect to, or otherwise disclose the execution of this Agreement or the terms and conditions of the transactions contemplated by this Agreement without the prior written consent of other Parties, which consent shall not be unreasonably withheld.

 

4.5. Notices.

 

Any notice or other communication required or permitted under this Agreement shall be sufficiently given if delivered in person or sent by facsimile or by overnight registered mail, postage prepaid, addressed as follows:

 

If to Sellers, to:

 

Beige Holdings, LLC

Roy S. Bejarano

Managing Director, Beige Group 5 Penn Plaza, 14th Floor

New York, NY 10001

 

Marlin Financial Group, Inc. 

9812 Falls Road

Suite 114-198

Potomac, MD 20854

 

If to the Company:

 

Europa Acquisition I, Inc.

 

With a copy to (which shall not constitute notice):

 

Ellenoff Grossman & Schole LLP

150 East 42nd Street

llth Floor

New York, New York 10017 

Ph: (212) 370-1300

Fax: (212) 370-7889

Attn: Phi H. D. Nguyen

 

  

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If to the Purchaser, to:

 

Allan C. Schwartz

5 Penn Plaza, 14th Floor 

New York, NY 10001

 

With a copy to (which shall not constitute notice):

 

Or such other address or number as shall be furnished in writing by any such Party, and such notice or communication shall, if properly addressed, be deemed to have been given as of the date so delivered or sent by facsimile.

 

4.6. Parties in Interest.

 

This Agreement may not be transferred, assigned or pledged by any Party hereto, other than by operation of law. This Agreement shall be binding upon and shall inure to the benefit of the Parties hereto and their respective heirs, executors, administrators, successors and permitted assigns.

 

4.7. Entire Agreement.

 

This Agreement and the other documents referred to herein contain the entire understanding of the Parties hereto with respect to the subject matter contained herein. This Agreement shall supersede all prior agreements and understandings between the Parties with respect to the transactions contemplated herein.

 

4.8. Amendments.

 

This Agreement may not be amended or modified orally, but only by an agreement in writing signed by the Parties.

 

4.9. Severability.

 

In case any provision in this Agreement shall be held invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions hereof will not in any way be affected or impaired thereby.

 

4.10. Counterparts.

 

This Agreement may be executed in any number of counterparts, including counterparts transmitted by telecopier, PDF or facsimile transmission, any one of which shall constitute an original of this Agreement. When counterparts of copies have been executed by all parties, they shall have the same effect as if the signatures to each counterpart or copy were upon the same document and copies of such documents shall be deemed valid as originals. The Parties agree that all such signatures may be transferred to a single document upon the request of any Party.

 

 

[signature page follows]

 

  

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IN WITNESS WHEREOF, each of the Parties hereto has caused its/his name to be hereunto subscribed as of the day and year first above written.

 

	 	Company:	 
	 	 	 
	 	Europa Acquisitions Corp. I. Inc.	 
	 	 	 	 
	 	
By: 

	/s/ Gregory Schwartz	 
	 	Name:	Gregory Schwartz	 
	 	Title:	Chief Executive Officer	 
	 	 	 	 

 

	 	Sellers:	 
	 	 	 
	 	Beige Holdings, LLC	 
	 	 	 	 
	 	
By: 

	/s/ Roy S. Bejarano	 
	 	Name:	Roy S. Bejarano	 
	 	Title:	Managing Director	 
	 	 	 	 

 

	 	Marlin Financial Group, Inc.	 
	 	 	 	 
	 	
By: 

	 /s/ Mark Levin	 
	 	Name:	Mark Levin	 
	 	Title:	President	 
	 	 	 	 

 

	 	Purchaser:	 
	 	 	 	 
	 	
By: 

	/s/ Allan C. Schwartz	 
	 	Name:	Allan C. Schwartz, Individually	 
	 	 	 	 

 

 

12ex10-1.htm

 

EXHIBIT 10.1

 

AMENDED AND RESTATED EMPLOYMENT AGREEMENT

STEPHEN J. SATHER

 

AMENDED AND RESTATED EMPLOYMENT AGREEMENT (the “Agreement”) dated as of January 18, 2011 by and between El Pollo Loco, Inc. (the “Company”) and Stephen J. Sather (the “Executive”).

 

WHEREAS, the Company and Executive entered into that certain Employment Agreement dated as of January 9, 2006 (the "Prior Agreement") pursuant to which Executive serves as the Company's Vice President, Operations;

 

WHEREAS, the Company desires to employ Executive as the Company's President and Chief Executive Officer and to amend and restate the Prior Agreement in connection with such promotion; and

 

WHEREAS, Executive is willing to accept such promotion on the terms hereinafter set forth in this Agreement.

 

NOW, THEREFORE, in consideration of the premises and mutual covenants herein and for other good and valuable consideration, the parties agree as follows:

 

	
1.

	
Term of Employment; Executive Representation.

 

	
  

	
(a)

	
Employment Term.  Subject to the terms and conditions set forth in this Agreement, the term of Executive's employment under this Agreement shall commence on January 18, 2011 (the “Effective Date”) and end on the second anniversary of the Effective Date (the “Employment Term”).  Notwithstanding the preceding sentence, commencing on the second anniversary of the Effective Date and on each anniversary thereafter (each an “Extension Date”), the Employment Term shall be automatically extended for an additional one-year period, unless the Company or Executive provides the other party hereto at least sixty (60) days’ prior written notice before the next Extension Date that the Employment Term shall not be so extended.  For the avoidance of doubt, the term “Employment Term” shall include any extension that becomes applicable pursuant to the preceding sentence. The Employment Term shall terminate upon termination of Executive's employment as set forth in Section 7.

 

	
  

	
(b)

	
Executive Representation.  Executive hereby represents to the Company that the execution and delivery of this Agreement by Executive and the Company and the performance by Executive of the Executive’s duties hereunder shall not constitute a breach of, or otherwise contravene, the terms of any employment agreement or other agreement or policy to which Executive is a party or otherwise bound.

 

	
2.

	
Position.

  

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(a)

	
During the Employment Term, Executive shall serve as the Company’s President and Chief Executive Officer and shall principally perform Executive’s duties to the Company and its affiliates from the Company’s offices in the Orange County, California metropolitan area, subject to normal and customary travel requirements in the conduct of the Company’s business.  Executive shall have such authorities, duties and responsibilities as the Board of Directors of the Company (the "Board") may from time to time assign to him and reasonably consistent with those customarily performed by a chief executive officer of a company having a similar size and nature of the Company.

 

	
  

	
(b)

	
During the Employment Term, Executive will devote Executive’s full business time and best efforts to the performance of Executive’s duties hereunder and will not engage in any other business, profession or occupation (including in an advisory capacity, consulting capacity, or otherwise) for compensation or otherwise which would conflict with the rendition of such services either directly or indirectly, without the prior written consent of the Board; provided that Executive shall be permitted to participate in such charitable and community-related services as Executive may choose; provided further that in each case, and in the aggregate, such services do not materially interfere with his duties hereunder.

 

	
3.

	
Compensation.

 

	
  

	
(a)

	
During the Employment Term, the Company shall pay Executive a base salary (the “Base Salary”) at the annual rate of $350,000 (less applicable withholding taxes), payable in regular installments in accordance with the Company’s usual payment practices.  Executive shall be entitled to such increases in Executive’s Base Salary, if any, as may be determined from time to time in the sole discretion of the Board.

 

	
  

	
(b)

	
With respect to each full calendar year during the Employment Term, Executive shall be eligible to earn an annual bonus award (an “Annual Bonus”) based on the achievement of specified performance goals, which shall be determined by the Board in its sole discretion within ninety (90) days following the commencement of each calendar year, with a targeted bonus equal to seventy-five percent (75%) of Executive’s then current Base Salary (the “Target Bonus”).  The Annual Bonus, if any, will be paid between January 1 and April 15 of the year following the year to which it relates.

 

	
  

	
(c)

	
During the Employment Term, Executive shall continue to receive the automobile allowance and related benefits on the same terms and conditions as Executive was entitled to receive from the Company immediately prior to the date hereof.

 

	
4.

	
Equity.  During the Employment Term, Executive shall be eligible to participate in the Company's equity-based compensation plan, subject to the terms and conditions thereof.

  

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5.

	
Employee Benefits.  During the Employment Term, Executive shall be provided, in accordance with the terms of the Company’s employee benefit plans as in effect from time to time, health insurance, retirement benefits and fringe benefits (collectively “Employee Benefits”) on the same basis as those benefits are generally made available to other senior executives of the Company.  Executive shall be provided with annual vacation of four (4) weeks per each twelve (12) month period or additional weeks on a basis consistent with Company policy.

 

	
6.

	
Business Expenses.  During the Employment Term, reasonable, documented business expenses incurred by Executive in the performance of Executive’s duties hereunder shall be reimbursed by the Company in accordance with Company policies.

 

	
7.

	
Termination.  The Employment Term and Executive’s employment hereunder may be terminated by either party at any time and for any reason; provided that Executive will be required to give the Company at least ninety (90) days advance written notice of any resignation of Executive’s employment.  Notwithstanding any other provision of this Agreement, the provisions of this Section 7 shall exclusively govern Executive’s rights upon termination of employment with the Company and its affiliates.

 

	
  

	
(a)

	
By the Company For Cause or By Executive’s Resignation without Good Reason.

 

	
  

	
(i)

	
The Employment Term and Executive’s employment hereunder may be terminated by the Company for Cause (as defined below) or by Executive’s resignation without Good Reason (as defined below).

 

	
  

	
(ii)

	
For purposes of this Agreement, “Cause” shall mean action by the Executive that constitutes misconduct, dishonesty, the failure to comply with specific directions of the Board that are consistent with the terms hereof (after having been given a reasonably detailed written notice of, and a period of 20 days to cure, such misconduct or failure), a deliberate and premeditated act by Executive against the Company or its affiliates, Executive's commission of a felony, substance abuse or alcohol abuse which renders the Executive unfit to perform his duties, or any breach of the covenants set forth in Section 8 of this Agreement by Executive. Any voluntary termination of employment by the Executive in anticipation of an involuntary termination of the Executive’s employment by the Company for Cause shall be deemed to be a termination for Cause.

 

	
  

	
(iii)

	
If Executive’s employment is terminated by the Company for Cause, or if Executive resigns without Good Reason, Executive shall be entitled to receive:

 

	
  

	
(A)

	
the Base Salary through the date of termination;

 

	
  

	
(B)

	
any Annual Bonus earned but unpaid as of the date of termination for any previously completed calendar year;

  

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(C)

	
reimbursement for any unreimbursed business expenses properly incurred by Executive in accordance with Company policy prior to the date of Executive’s termination;

 

	
  

	
(D)

	
such Employee Benefits, if any, as to which Executive may be entitled under the employee benefit plans of the Company; and

 

	
  

	
(E)

	
any additional amounts or benefits due under any applicable plan, program, agreement or arrangement of the Company or its affiliates or pursuant to applicable law (the amounts described in clauses (A) through (E) hereof being referred to as the “Accrued Rights”).  The Accrued Rights under this Section 7 shall in all events be paid in accordance with the Company’s normal payroll procedures, expense reimbursement procedures or plan terms, as applicable.

 

Following such termination of Executive’s employment by the Company for Cause or resignation by Executive without Good Reason, except as set forth in this Section 7(a), Executive shall have no further rights to any contract damages, other compensation or any other benefits under this Agreement.

 

	
  

	
(b)

	
Disability or Death.

 

	
  

	
(i)

	
The Employment Term and Executive’s employment hereunder shall terminate upon Executive’s death or if Executive (A) is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than twelve (12) months, or (ii) is, by reason of any medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than twelve (12) months, receiving income replacement benefits for a period of not less than three (3) months under an accident and health plan, or disability plan, covering employees of the Company or an affiliate of the Company (such incapacity is hereinafter referred to as “Disability”).

 

Any question as to the existence of the Disability of Executive as to which Executive and the Company cannot agree shall be determined in writing by a qualified independent physician mutually acceptable to Executive and the Company.  If Executive and the Company cannot agree as to a qualified independent physician, each shall appoint such a physician and those two physicians shall select a third who shall make such determination in writing.  The determination of Disability made in writing to the Company and Executive shall be final and conclusive for all purposes of the Agreement.

 

	
  

	
(ii)

	
Upon termination of Executive’s employment hereunder for either Disability or death, Executive or Executive’s estate (as the case may be) shall be entitled to receive:

  

4

  

 

	
  

	
(A)

	
the Accrued Rights; and

 

	
  

	
(B)

	
the Annual Bonus, if any, that the Executive would have been entitled to receive pursuant to Section 3(b) hereof in respect of the year in which such termination occurs based upon the actual achievement of the performance goals, multiplied by a fraction the numerator of which is the number of days Executive is employed by the Company in such year and the denominator of which is the total number of days in such year, payable when such Annual Bonus would have otherwise been payable in accordance with Section 3(b) had the Executive’s employment not terminated (the "Pro-Rata Bonus").

 

Following Executive's termination of employment due to death or Disability, except as set forth in this Section 7(b), Executive or Executive’s estate (as the case may be) shall have no further rights to any contract damages, other compensation or any other benefits under this Agreement.

 

	
  

	
(c)

	
By the Company Without Cause or by Executive’s Resignation with Good Reason.

 

	
  

	
(i)

	
The Employment Term and Executive’s employment hereunder may be terminated by the Company without Cause or by Executive with Good Reason.

 

	
  

	
(ii)

	
For purposes of this Agreement, “Good Reason” shall mean:

 

	
  

	
(A)

	
Executive’s relocation by the Company outside Orange County, California;

 

	
  

	
(B)

	
a material diminution of Executive’s authority, duties, title or responsibilities as set forth in Section 2(a) hereof;

 

	
  

	
(C)

	
a material reduction of Executive’s Base Salary (as increased from time to time) as set forth in Section 3(a) hereof;

 

	
  

	
(D)

	
the failure of the Company to provide or cause to be provided to Executive any of the Employee Benefits described in Section 5 hereof; or

 

	
  

	
(E)

	
a requirement that Executive report to anyone other than the Board; provided that none of the events described in clauses (A) through (E) of this Section 7(c)(ii) shall constitute Good Reason unless Executive shall have notified the Company in writing describing the event which constitutes Good Reason within thirty (30) days of the initial occurrence of such event and then only if the Company shall have failed to cure such event within thirty (30) days after the Company’s receipt of such written notice.

  

5

  

 

	
  

	
(iii)

	
If Executive’s employment is terminated by the Company without Cause (other than by reason of death or Disability), or by Executive with Good Reason, Executive shall be entitled to receive:

 

	
  

	
(A)

	
the Accrued Rights;

 

	
  

	
(B)

	
the Pro-Rata Bonus; and

 

	
  

	
(C)

	
subject to Executive’s execution of a general release of claims in a form reasonably determined by the Company (the “Release”), the expiration of the applicable revocation period with respect to such Release within sixty (60) days following the date of termination and Executive’s continued compliance with the provisions of Section 8 and 9, continued payment of the Base Salary in accordance with the Company's normal payroll practices for a period of twelve (12) months following the date of such termination, which shall commence on the sixtieth (60th) day following such termination (with the first payment equal to the cumulative amount that would have been paid in such initial sixty (60) day period); provided that aggregate amount described in this clause (C) shall be in lieu of any other cash severance or termination benefits payable to Executive under any other plans, programs or arrangements of the Company or its affiliates.

 

Following Executive’s termination of employment by the Company without Cause (other than by reason of Executive’s death or Disability) or by Executive’s resignation with Good Reason, except as set forth in this Section 7(c), Executive shall have no further rights to any contract damages, other compensation or any other benefits under this Agreement.

 

	
  

	
(d)

	
Notice of Termination.  Any purported termination of employment by the Company or by Executive (other than due to Executive’s death) shall be communicated by written Notice of Termination to the other party hereto in accordance with Section 11(g) hereof.  For purposes of this Agreement, a “Notice of Termination” shall mean a notice which shall indicate the specific termination provision in this Agreement relied upon and shall set forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of employment under the provision so indicated.

 

	
8.

	
Non-Interference/Non-Solicitation.  Executive acknowledges and recognizes that in the course of performing services for the Company, Executive will have access to certain confidential and proprietary information of the Company and its affiliates that is extremely valuable to  the Company and its affiliates and is not known to the general public. Accordingly, Executive agrees as follows:

 

	
  

	
(a)

	
Executive agrees that during the term of employment and until the first anniversary of the date of termination of Executive's employment with the Company or any subsidiary of the Company, as the case may be (the "Restricted

  

6

  

 

	
  

	 	
Period"), the Executive will not directly or indirectly, use any Company Confidential Information (as defined in Section 9) to interfere with business relationships (whether formed before or after the date of this Agreement) between the Company or any of its affiliates and customers, suppliers, partners, members or investors of the Company or its affiliates.

 

	
  

	
(b)

	
Executive further agrees that during the Restricted Period, Executive will not, directly or indirectly, (i) solicit or encourage any employee of the Company or its affiliates to leave the employment of the Company or its affiliates, or (ii) solicit or encourage to cease to work with the Company or its affiliates any consultant then under contract with the Company or its affiliates; provided, however, that general advertising not directed specifically at employees of the Company or any affiliate shall not be deemed to violate this Section 8(b).

 

	
  

	
(c)

	
It is expressly understood and agreed that although Executive and the Company consider the restrictions contained in this Section 8 to be reasonable, if a final judicial determination is made by a court of competent jurisdiction that any restriction contained in this Agreement is an unenforceable restriction against Executive, the provisions of this Agreement shall not be rendered void but shall be deemed amended to apply as to such maximum time and territory and to such maximum extent as such court may judicially determine or indicate to be enforceable.  Alternatively, if any court of competent jurisdiction finds that any restriction contained in this Agreement is unenforceable, and such restriction cannot be amended so as to make it enforceable, such finding shall not affect the enforceability of any of the other restrictions contained herein.

 

	
9.

	
Confidentiality.  Executive will not at any time (whether during or after Executive's employment with the Company) disclose or use for Executive's own benefit or purposes or the benefit or purposes of any other person, firm, partnership, joint venture, association, corporation or other business organization, entity or enterprise other than the Company and any of its subsidiaries or affiliates, any trade secrets, information, data, or other confidential information relating to customers, development programs, costs, marketing, trading, investment, sales activities, promotion, credit and financial data, manufacturing processes, financing methods, plans, or the business and affairs of the Company generally, or of any subsidiary or affiliate of the Company (“Company Confidential Information”); provided that the foregoing shall not apply to information which is not unique to the Company or which is generally known to the industry or the public other than as a result of Executive's breach of this covenant; provided further that the foregoing shall not apply when Executive is required to divulge, disclose or make accessible such information by a court of competent jurisdiction or an individual duly appointed thereby, by any administrative body or legislative body (including a committee thereof) having supervisory authority over the business of the Company, or by any administrative body or legislative body (including a committee thereof) with jurisdiction to order Executive to divulge, disclose or make accessible such information.  Executive agrees that upon termination of Executive's employment with the Company for any reason, he will return to the Company immediately all memoranda, books, papers, plans, information, letters and other data, and all copies thereof or therefrom, in any way relating to the business of

  

7

  

 

	
 

	
the Company and its affiliates and/or containing any Company Confidential Information, except that he may retain personal notes, notebooks and diaries that do not contain Company Confidential Information of the type described in the preceding sentence.  Executive further agrees that he will not retain or use for Executive's account at any time any trade names, trademark or other proprietary business designation used or owned in connection with the business of the Company or its affiliates.

 

	
10.

	
Specific Performance. Executive acknowledges and agrees that the Company's remedies at law for a breach or threatened breach of any of the provisions of Section 8 or Section 9 would be inadequate and, in recognition of this fact, Executive agrees that, in the event of such a breach or threatened breach, in addition to any remedies at law, the Company, shall be entitled to cease making any payments or providing any benefit otherwise required by this Agreement and obtain equitable relief in the form of specific performance, temporary restraining order, temporary or permanent injunction or any other equitable remedy which may then be available.

 

	
11.

	
Miscellaneous.

 

	
  

	
(a)

	
Governing Law.  This Agreement shall be governed by and construed in accordance with the laws of the State of California, without regard to conflicts of laws principles thereof.

 

	
  

	
(b)

	
Entire Agreement/Amendments.  This Agreement contains the entire understanding of the parties with respect to the employment of Executive by the Company.  There are no restrictions, agreements, promises, warranties, covenants or undertakings between the parties with respect to the subject matter herein other than those expressly set forth herein.  This Agreement supersedes any other agreements or representations, oral or otherwise, express or implied, with respect to the subject matter hereof which have been made by either party, including, without limitation, the Prior Agreement.  This Agreement may not be altered, modified, or amended except by written instrument signed by the parties hereto.

 

	
  

	
(c)

	
No Waiver.  The failure of a party to insist upon strict adherence to any term of this Agreement on any occasion shall not be considered a waiver of such party’s rights or deprive such party of the right thereafter to insist upon strict adherence to that term or any other term of this Agreement.

 

	
  

	
(d)

	
Severability.  In the event that any one or more of the provisions of this Agreement shall be or become invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions of this Agreement shall not be affected thereby.

 

	
  

	
(e)

	
Assignment.  This Agreement shall not be assignable by Executive.  This Agreement may be assigned by the Company to a company which is a successor in interest to substantially all of the business operations of the Company.  Such assignment shall become effective when the Company notifies the Executive of such assignment or at such later date as may be specified in such notice.  Upon

  

8

  

 

	
  

	
 

	
such assignment, the rights and obligations of the Company hereunder shall become the rights and obligations of such successor company, provided that any assignee expressly assumes the obligations, rights and privileges of this Agreement.

 

	
  

	
(f)

	
Successors Binding Agreement.  This Agreement shall inure to the benefit of and be binding upon personal or legal representatives, executors, administrators, successors, heirs, distributes, devises and legatees.

 

	
  

	
(g)

	
Notice.  For the purpose of this Agreement, notices and all other communications provided for in the Agreement shall be in writing and shall be deemed to have been duly given when delivered or mailed by United States registered mail, return receipt requested, postage prepaid, addressed to the respective addresses set forth below Agreement, or to such other address as either party may have furnished to the other in writing in accordance herewith, except that notice of change of address shall be effective only upon receipt.

 

If to the Company:

 

El Pollo Loco, Inc.

3535 Harbor Boulevard, Suite 100

Costa Mesa, CA 92626

Attn: President

With a copy to:

Trimaran Capital Partners

1325 Avenue of the Americas, 34th Floor

New York, NY 10019

Attn: Dean Kehler

 

If to Executive: To the most recent address of Executive set forth in the personnel records of the Company.

 

	
  

	
(h)

	
Withholding Taxes.  The Company may withhold from any amounts payable under this Agreement such Federal, state and local taxes as may be required to be withheld pursuant to any applicable law or regulation.

 

	
  

	
(i)

	
Section 409A.  The intent of the parties is that payments and benefits under this Agreement comply with Section 409A of the Internal Revenue Code of 1986, as amended (the "Code"), to the extent subject thereto, and accordingly, to the maximum extent permitted, this Agreement shall be interpreted and administered to be in compliance therewith.  Notwithstanding anything contained herein to the contrary, Executive shall not be considered to have terminated employment with the Company for purposes of any payments under this Agreement which are subject to Section 409A of the Code until the Executive has incurred a “separation from service” from the Company within the meaning of Section 409A of the Code.  Each amount to be paid or benefit to be provided under this Agreement shall be

  

9

  

 

	
  

	
 

	
construed as a separate identified payment for purposes of Section 409A of the Code.  Without limiting the foregoing and notwithstanding anything contained herein to the contrary, to the extent required in order to avoid accelerated taxation and/or tax penalties under Section 409A of the Code, amounts that would otherwise be payable and benefits that would otherwise be provided pursuant to this Agreement during the six-month period immediately following an Executive’s separation from service shall instead be paid on the first business day after the date that is six months following the Executive’s separation from service (or, if earlier, the Executive’s date of death).  To the extent required to avoid an accelerated or additional tax under Section 409A of the Code, amounts reimbursable to Executive under this Agreement shall be paid to Executive on or before the last day of the year following the year in which the expense was incurred and the amount of expenses eligible for reimbursement (and in kind benefits provided to Executive) during one year may not affect amounts reimbursable or provided in any subsequent year.  The Company makes no representation that any or all of the payments described in this Agreement will be exempt from or comply with Section 409A of the Code and makes no undertaking to preclude Section 409A of the Code from applying to any such payment.

 

	
  

	
(j)

	
Counterparts.  This Agreement may be signed in counterparts, each of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument.

 

 

 

 

[signature page follows]

 

  

10

  

 

IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of the day and year first above written.

 

 

 

	  	
/s/ Stephen J. Sather

	  	
STEPHEN J. SATHER

	  	  	  
	  	  	  
	  	  	  
	  	  	  
	  	
CHICKEN ACQUISITION CORP.,

	  	
on behalf of its subsidiary:

	  	  
	  	  
	  	
EL POLLO LOCO, INC.

	  	  
	  	
By:

	
/s/ Dean Kehler

	  	  	
Name:     

	
Dean Kehler

	  	  	
Title:

	
Director

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