CONFIDENTIAL SETTLEMENT AND RELEASE AGREEMENT

This Confidential Settlement and Release Agreement (“Agreement”) is effective as of the 18th day of June, 2008, and regards the following:

1.   Parties  The following are the “Parties” to this Agreement:

1.1   “EL POLLO LOCO, INC.” . All references in this Agreement to “EL POLLO LOCO, INC.” shall mean El Pollo Loco, Inc. and its parent corporation, Chicken Acquisition Corp., Inc. All references in this Agreement to the   “EL POLLO LOCO, INC. Released Parties” shall mean and include EL POLLO LOCO, INC. and all of its past and present parent companies, subsidiaries, divisions, affiliates, related entities, joint ventures, predecessors, successors and assigns, and all their respective agents, subcontractors, subrogees, sureties, insurers, co-insurers, reinsurers, servants, and attorneys, and all their respective present and former partners, principals, members, directors, officers, employees, stockholders and owners, and all their respective representatives, heirs, executors, personal representatives, administrators, transferees and assigns and anyone claiming by or through them individually and/or collectively.

1.2   “Pollo Loco Mexico” – All references in this Agreement to “Pollo Loco Mexico” shall mean El Pollo Loco, S.A. de C.V.

1.3   “Pollo Loco Mexico Released Parties” - All references in this Agreement to the “Pollo Loco Mexico Released Parties” shall mean and include “Pollo Loco Mexico,” Jose Ochoa, Francisco Ochoa, and all other members of the Ochoa family, their respective past and present parent companies, subsidiaries, divisions, affiliates, related entities, joint ventures, predecessors, successors and assigns, and all their respective agents, subcontractors, subrogees, insurers, co-insurers, reinsurers, servants and attorneys, present and former partners, principals, members, directors, officers, employees, stockholders and owners, and all their respective representatives, heirs, executors, personal representatives, administrators, transferees and assigns.

2.   Recitals

2.1   For the consideration and covenants described in further detail herein, Pollo Loco Mexico, has agreed to settle and compromise any and all Claims and Unknown Claims that were raised, could have been raised, and/or that relate in any way to any or all of the following: (a) the Intellectual Property Agreement attached hereto as Exhibit “A,”; (b) the facts and circumstances underlying the following lawsuit, Case No. 5:045 cv.000048, El Pollo Loco, S.A. de C.V. v. El Pollo Loco, Inc. , in the United States District Court for the Southern District of Texas, Laredo Division (“the District Court Lawsuit”); and/or (c) the following appeal, No. 08-40004, El Pollo Loco, S.A. de C.V. v. El Pollo Loco, Inc. , in the United States Court of Appeals for the Fifth Circuit (the “Fifth Circuit Appeal”) (collectively, the   “Pollo Loco Mexico Dispute”).

2.2 For the consideration and covenants described herein, Pollo Loco Mexico has also agreed: (a) to release, in full, the judgment entered against EL POLLO LOCO, INC. in the District Court Lawsuit; (b) to join and support a motion to return to EL POLLO LOCO, INC. the sum of $1,087,500, plus interest, currently on deposit in the registry of the District Court (the “Registry Deposit”); and, (c) to join and support a motion to release the Safeco bond securing the judgment entered against EL POLLO LOCO, INC. in the District Court Lawsuit.

3.   Settlement Payment and Conditions

3.1   On or before June 23, 2008, and on the terms and conditions described herein, EL POLLO LOCO, INC. or its assigns or representatives agrees to pay, or cause to be paid, to Pollo Loco Mexico the total sum of $10,722,860.00 (“Settlement Payment”), in full and final settlement of the Pollo Loco Mexico Dispute, of which $3,031,500.00 shall be for reimbursement of costs of court, and the remainder to compensate Pollo Loco Mexico for injuries suffered as a result of EL POLLO LOCO, INC.’s alleged false filing of a trademark registration with the IMPI. On or before June 23, 2008, EL POLLO LOCO, INC. shall make the Settlement Payment through wire-transfer to counsel for the Pollo Loco Mexico, per wiring instructions as follows:.

INCOMING WIRE TRANSFER INSTRUCTIONS

International Bank of Commerce

1200 San Bernardo Avenue

Laredo, Texas 78042

ABA:                      114 902 528

OUR ACCOUNT NO.:

3.2   Counsel for Pollo Loco Mexico shall hold the Settlement Payment in escrow until all of the conditions set out in this paragraph 3.2. have been satisfied:

A.   Within three business days of the execution of this agreement, Pollo Loco Mexico shall join EL POLLO LOCO, INC. in the filing of three pleadings in the District Court:

1.   A Joint Motion to Return to EL POLLO LOCO, INC. Funds on Deposit in Registry. The form of this motion is attached hereto as Exhibit “B.”

2.   A Joint Motion to Release Surety Bond, seeking the unconditional release of Safeco Insurance Company of America for any and all obligations under bond number 6462586 issued on or about 12/18/07 on behalf of El Pollo Loco, Inc. The form of this motion is attached hereto as Exhibit “C”; and

B.   The District Court shall have entered the following Orders:

1.   An Order directing the Clerk to release the Registry Deposit to EL POLLO LOCO, INC..

2.   An Order releasing Safeco Insurance Company of America for any and all obligations under bond number 6462586 issued on or about 12/18/07 on behalf of El Pollo Loco, Inc.

B.   Pollo Loco Mexico shall execute the assignment attached hereto as Exhibit “E.” By its signature on this agreement, and its signature on Exhibit “E,” Pollo Loco Mexico acknowledges that EL POLLO LOCO, INC. has executed all documents necessary to: (a) return to Pollo Loco Mexico the intellectual property originally conveyed pursuant to the Intellectual Property Agreement attached hereto as Exhibit “A,” and (b) satisfy the provisions of the District Court Judgment requiring the return of the Intellectual Property to Pollo Loco Mexico. Pollo Loco Mexico further represents and warrants that no further documents, or rights, titles, or interests remain owing to Pollo Loco Mexico by reason of either the District Court Judgment or Exhibit “A.” El Pollo Loco, Inc. agrees that it will cease and refrain from the use of the Intellectual Property assigned under the assignment attached hereto as Exhibit E.

3.3.   Upon the last to occur of the conditions described in paragraph 3.2, counsel for Pollo Loco Mexico may release the settlement funds to Pollo Loco Mexico. Upon the last to occur of the conditions described in paragraph 3.2, EL POLLO LOCO, INC. shall dismiss the Fifth Circuit Appeal, with prejudice. Should it be necessary to obtain a further extension of the briefing schedule in order to accomplish the conditions set out in paragraph 3.2, Pollo Loco Mexico shall join EL POLLO LOCO, INC. in seeking an additional thirty day extension of the briefing schedule in the Fifth Circuit Appeal.

3.4.   Other than as set forth in paragraph 3.1, each party hereto shall pay its own costs, expenses and attorneys’ fees incurred or to be incurred in connection with the Pollo Loco Mexico Dispute and this Agreement.

4.1   Pollo Loco Mexico, for good and valuable consideration, the sufficiency of which is hereby acknowledged, forever releases EL POLLO LOCO, INC. and the EL POLLO LOCO, INC. Released Parties from any and all Claims and Unknown Claims of any nature whatsoever that Pollo Loco Mexico ever had, now has, or can, shall or may have, by reason of any matter, cause or thing occurring from the beginning of the world to the date of this Agreement, whether known or unknown, (a) arising out of or in any way related to the facts, transactions, allegations, and claims of liability described in the District Court Lawsuit, or (b) that were brought or alleged, or could have been brought or alleged, in the District Court Lawsuit, or (c) that relate in any way to the Pollo Loco Mexico Dispute. Pollo Loco Mexico, represents and warrants that it is authorized to execute and grant this broad release for itself, and for and on behalf of any member of the Ochoa family who claims (or could have claimed) that it suffered injury in connection with the Pollo Loco Mexico Dispute.

4.2   EL POLLO LOCO, INC., for good and valuable consideration, the receipt and sufficiency of which it hereby acknowledges, forever releases Pollo Loco Mexico from any and all Claims and Unknown Claims, of any nature whatsoever against Pollo Loco Mexico that EL POLLO LOCO, INC. ever had, now has, or can, shall or may have, by reason of any matter, cause or thing occurring from the beginning of the world to the date of this Agreement, whether known or unknown, (a) arising out of or related to the facts, transactions, allegations, and claims of liability described in District Court Lawsuit; (b) that were brought or alleged or could have been brought or alleged in the District Court Lawsuit, or (c) that relate in any way to the Pollo Loco Mexico Dispute.

4.3   “Claims” shall mean any claim or claims, action or acti