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Exhibit
10.36
FEE
AGREEMENT
This
Fee Agreement (the "Agreement") is made and entered into as of
December 19, 2007 among El Pollo Loco, Inc. (the "Company"), a
Delaware corporation, Chicken Acquisition Corp. ("CAC"), a
Delaware corporation, and Trimaran Fund II, LLC ("Provider"),
a Delaware limited liability company.
WHEREAS,
the Company is required to post a bond (the "Bond") securing
its obligation to pay a judgment (the "Judgment") in
connection with the El Pollo Loco S.A. de C.V. v. El Pollo
Loco, Inc. litigation (the "Litigation");
WHEREAS,
Provider agrees to assist the Company in posting the Bond by
entering into the following agreements: (1) a Reimbursement
Agreement, dated the date hereof (the "Reimbursement
Agreement"), among Provider, CIBC as Administrative Agent, in
respect of a letter of credit to be posted to secure the Bond,
in consideration for the Company and CAC entering into this
Agreement and (2) a payment and subscription agreement, dated
the date hereof (the "Payment and Subscription Agreement"),
among Provider, the Company and CAC, pursuant to which the
Company or CAC, as the case may be, shall reimburse Provider
for any amounts paid by Provider, directly or indirectly,
relating to the Bond or the Judgment.
NOW,
THEREFORE, in consideration of the mutual promises, covenants,
representations and warranties herein contained, the Company,
CAC and Provider hereby agree as follows:
1.
Fees .
(a)
Up-Front Fee. On
the date hereof, the Company shall pay to Provider a fee equal to
3% (the "Up-Front Fee") of the stated amount of the Letter of
Credit (as defined in the Reimbursement Agreement), which fee shall
be earned, due and payable in full immediately upon Provider's
entering into the Reimbursement Agreement in any one or more of the
forms of consideration provided for in Section 1(c) below, at
Provider's option.
(b)
Periodic Fee and Fee Upon Provision of Cash Collateral
.
In the event that, after the Company pays the Up-Front Fee to
Provider, Provider is required to pay any amount(s) (each such
amount, a "Periodic Fee") in connection with the Letter of Credit
other than the Cash Collateral Fee (as defined below), the Company
shall pay, in any one or more of the forms of consideration
provided for in Section 1(c) below, at Provider’s option, a
fee equal to such amount(s) to Provider on or before each date such
amount(s) is due and payable by Provider. In the event that the
Provider provides cash collateral pursuant to Section 2.02 of the
Reimbursement Agreement, the Company shall owe to Provider a fee at
a per annum rate equal to 13.25% (the "Cash Collateral Fee" and,
together with the Up-Front Fee and any Periodic Fees, the "Fees")
of the amount of cash collateral so provided. The Cash Collateral
Fee shall be due and payable quarterly in arrears, in each case, in
any one or more of the forms of consideration provided for in
Section 1(c) below, at Provider's option.
(c)
Fee Payment or Subscription .
At each Closing (as defined below) upon the terms and subject to
the conditions set forth in this Agreement, as payment of any Fees
to be paid at such Closing, at Provider's option:
(i)
the
Company or CAC shall pay Provider or Provider's designee an
amount in U.S. dollars in immediately available funds equal to
up to the Fees to be paid at such Closing;
(ii)
the
Company or CAC, at Provider's option, shall issue to Provider
or Provider's designee a promissory note with a principal
amount equal to up to the Fees to be paid at such Closing
containing terms substantially similar to those set forth in
Schedule A hereto, subject to applicable preemptive rights as
described below;
(iii)
Provider
or Provider's designee shall automatically, and with no
further action by any party hereto, have a right of payment
due immediately from the Company or CAC, at Provider's option,
for payment in full of an amount equal to up to the Fees to be
paid at such Closing, accruing interest at a rate of 13.25%
per annum, compounded annually, which rate shall increase by
0.50% per calendar quarter (with the first such increase
occurring at the beginning of the second calendar quarter
after the Closing) up to a maximum rate of 17.5% per
annum;
(iv)
CAC
shall issue to Provider or Provider's designee shares of
Convertible Preferred Stock, par value $0.01 per share (the
"Convertible Preferred Stock"), in CAC at a price per share
and on terms substantially similar to those set forth in
Schedule B hereto in an aggregate issue price equal to up to
Fees to be paid at such Closing, subject to applicable
preemptive rights as described below;
(v)
CAC
shall issue to Provider or Provider's designee shares of
common stock, par value $0.01 per share (the "Common Stock"),
of CAC at a price per share as set forth in Schedule C hereto
in an aggregate amount equal to up to Fees to be paid at such
Closing, subject to applicable preemptive rights as described
below; or
(vi)
Provider
may choose any combination of (i) through (v) above for an
aggregate amount equal to up to Fees to be paid at such
Closing;
provided
that ,
Provider may choose options (i) through (vi) only to the extent
that such options do not result in a default under the terms of the
Company's or CAC's outstanding indebtedness at the time of the
Closing;
provided
further that
any Issuance (as defined below), including any issuance pursuant to
Section 1(d) below, to a party to the LLC Operating Agreement (as
defined below) shall be held, at Provider's option, either: (i)
directly by the purchasing stockholder or (ii) through Trimaran
Pollo Partners, LLC. For purposes of this Agreement, the "Payment"
shall mean any of (i) through (vi) above.
(d)
Preemptive Rights .
Any issuance of shares or debt securities under this Agreement or
the Fee Agreement (each, an "Issuance") pursuant to Sections
1(c)(ii), (iv), (v) or (vi) above shall be subject to applicable
preemptive rights pursuant to the Stockholders Agreement (the
"Stockholders Agreement"), dated November 18, 2005, by and among
CAC and the stockholders listed therein, and the Second Amended and
Restated Limited Liability Company Operating Agreement (the "LLC
Operating Agreement"), dated March 8, 2006, of Trimaran Pollo
Partners, LLC. To the extent any parties to such agreements elect
to exercise applicable preemptive rights with respect to any
Issuance, at Provider's option:
(i)
upon
such Issuance, Provider shall sell to each party who has duly
exercised applicable preemptive rights the number of shares or
debt securities (or pro rata portion of such debt security, as
the case may be) as to which such preemptive rights have been
exercised at a price per share or per debt security equal to
the price per share or per debt security in the Issuance;
or
(ii)
CAC
shall (A) repurchase from Provider the number of shares or
debt securities as to which such preemptive rights have been
duly exercised at a price per share or per debt security equal
to the price per share or per debt security in the Issuance
and (B) sell such shares or debt securities to each party who
has duly exercised applicable preemptive rights.
(e)
Closings .
(i)
The
closing of the Up-Front Fee (the "Up-Front Fee Closing") shall
take place on the date on which all of the conditions set
forth in Section 3(a)(i) of this Agreement have been satisfied
or waived (other than those conditions which by their terms
are intended to be satisfied at the Closing) at the offices of
Skadden, Arps, Slate, Meagher & Flom LLP, Four Times
Square, New York, New York 10036, or on such other date as
mutually agreed by the parties to this Agreement.
(ii)
The
closing of each Periodic Fee or Cash Collateral Fee (together
with the Up-Front Fee Closing, each a "Closing") shall take
place no later than five days after all of the conditions set
forth in Section 3(a)(ii) of this Agreement have been
satisfied or waived (other than those conditions which by
their terms are intended to be satisfied at such Closing) at
the offices of Skadden, Arps, Slate, Meagher & Flom LLP,
Four Times Square, New York, New York 10036, or on such other
date as mutually agreed by the parties to this
Agreement.
(f)
Blue Sky Compliance .
The Company, Provider and CAC shall comply with all state
securities or "blue sky" laws which are applicable to the Payment
hereunder, and Provider agrees to provide the Company and CAC with
such information, and cooperate with such filings, as may be
required in connection with such compliance.
(g)
Stockholders Agreement .
If shares of capital stock are to be issued pursuant to this
Agreement or the Fee Agreement, (i) the Provider shall, if
necessary, execute a Joinder (the "Joinder") to the Stockholders
Agreement pursuant to which Provider becomes a party to the
Stockholders Agreement as an Additional Stockholder (as defined in
the Stockholders Agreement) and bound by the provisions thereto and
(ii) CAC shall cause such amendments to the Stockholders Agreement
as are required pursuant to the terms thereto to reflect Provider
or Provider’s designee, as applicable, as an Additional
Stockholder.
(h)
Compliance with Indentures .
If requested by Trimaran, the Company or CAC, as applicable, shall
engage (at the Company or CAC's expense, as applicable) an
investment banking firm of national standing to give an opinion as
to the fairness to the Company or CAC, as the case may be, of the
transactions contemplated by this Agreement. Each of the Company
and CAC shall use best efforts to comply with Section 4.11 of the
Indenture, dated as of November 18, 2005, among El Pollo Loco, Inc.
(as successor to EPL Finance Corp. by merger), EPL Intermediate,
Inc. and The Bank of New York Trust Company, N.A., as trustee (the
"EPL Indenture") and Section 4.11 of the Indenture, dated as of
November 18, 2005, between EPL Intermediate, Inc. (as successor to
EPL Intermediate Finance Corp. by merger) and The Bank of New York
Trust Company, N.A., as trustee (the "Intermediate Indenture" and,
together with the EPL Indenture, the Indentures), to the extent
applicable, including by delivering an officer's certificate or
fairness opinion if required;
provided that,
if either the Company or CAC are unable to so comply with the
Indentures, this Agreement shall be modified by the parties but
only to the extent required to so comply with the
Indentures.
2.
Representations and Warranties and Other Agreements
.
(a)
Representations and Warranties and Agreements of
Provider .
Provider represents and warrants to, and agrees with, the Company
and CAC that, as of the date hereof and as of each
Closing:
(i)
Any
shares of capital stock (the "Shares"), notes or obligations
acquired by Provider pursuant to this Agreement (collectively
with the Shares, "Securities") are for Provider's own account
for investment purposes or to satisfy preemptive rights
pursuant to the Stockholders Agreement or the LLC Operating
Agreement and not with a view to distribution of the
Securities or for sale in vi olation
of the Securities Act of 1933, as amended, and the rules and
regulations in effect from time to time thereunder (the
"Securities Act") or other applicable law; provided that the
disposition of Provider's property shall at all times be
within Provider's control.
(ii)
Provider
has been advised by the Company and CAC that: (A) neither
the offer nor sale of any Securities has been registered under
the Securities Act or any state or foreign securities or "blue
sky" laws and neither the Company nor CAC is required to
register the Securities; (B) the Securities, when issued,
are characterized as "restricted securities" under the
Securities Act as they are being acquired from CAC in a
transaction not involving a public offering and that Provider
may not resell the Securities and must continue to bear the
economic risk of the investment
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