Exhibit 10.3

 

EXECUTION VERSION

 

MANAGEMENT AGREEMENT

 

Dated as of May 11, 2016

 

by and among

 

TACO BELL FUNDING, LLC, as Issuer,

 

THE OTHER SECURITIZATION ENTITIES PARTY HERETO,

 

TACO BELL CORP., as the Manager,

 

and

 

CITIBANK, N.A., as the Trustee

 

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TABLE OF CONTENTS

 

 

Page

 

 

Article I

DEFINITIONS

2

 

 

 

Section 1.1

Certain Definitions

2

 

 

 

Section 1.2

Other Defined Terms

13

 

 

 

Section 1.3

Other Terms

13

 

 

 

Section 1.4

Computation of Time Periods

13

 

 

 

Article II

ADMINISTRATION AND SERVICING OF MANAGED ASSETS

13

 

 

 

Section 2.1

Taco Bell Corp

13

 

 

 

Section 2.2

Accounts

15

 

 

 

Section 2.3

Records

16

 

 

 

Section 2.4

Administrative Duties of Manager

17

 

 

 

Section 2.5

No Offset

18

 

 

 

Section 2.6

Compensation and Expenses

18

 

 

 

Section 2.7

Indemnification

18

 

 

 

Section 2.8

Nonpetition Covenant

20

 

 

 

Section 2.9

Franchisor Consent

20

 

 

 

Section 2.10

Appointment of Sub-managers

20

 

 

 

Section 2.11

Permitted Asset Dispositions

21

 

 

 

Section 2.12

Manager Advances

22

 

 

 

Article III

STATEMENTS AND REPORTS

22

 

 

 

Section 3.1

Reporting by the Manager

22

 

 

 

Section 3.2

Appointment of Independent Auditor

23

 

 

 

Section 3.3

Annual Accountants’ Reports

23

 

 

 

Section 3.4

Available Information

24

 

 

 

Section 3.5

Weekly Manager’s Certificate

24

 

 

 

Article IV

THE MANAGER

24

 

 

 

Section 4.1

Representations and Warranties Concerning the Manager

24

 

 

 

Section 4.2

Existence; Status as Manager

27

 

 

 

Section 4.3

Taxes

27

 

 

 

Section 4.4

Performance of Obligations

28

 

 

 

Section 4.5

Merger and Resignation

31

 

 

 

Section 4.6

Notice of Certain Events

32

 

 

 

Section 4.7

Capitalization

33

 

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TABLE OF CONTENTS

 

 

Page

 

 

 

Section 4.8

Maintenance of Separateness

33

 

 

 

Section 4.9

No Competitive Business

34

 

 

 

Article V

REPRESENTATIONS, WARRANTIES AND COVENANTS

34

 

 

 

Section 5.1

Representations and Warranties Made in Respect of New Assets

34

 

 

 

Section 5.2

Assets Acquired After the Closing Date

35

 

 

 

Section 5.3

Securitization IP

36

 

 

 

Section 5.4

Specified Non-Securitization Debt Cap

36

 

 

 

Section 5.5

Restrictions on Liens

37

 

 

 

Section 5.6

Future Brands

37

 

 

 

Article VI

MANAGER TERMINATION EVENTS

37

 

 

 

Section 6.1

Manager Termination Events

37

 

 

 

Section 6.2

Manager’s Transitional Role

39

 

 

 

Section 6.3

Intellectual Property

41

 

 

 

Section 6.4

Third Party Intellectual Property

41

 

 

 

Section 6.5

No Effect on Other Parties

41

 

 

 

Section 6.6

Rights Cumulative

42

 

 

 

Article VII

CONFIDENTIALITY

42

 

 

 

Section 7.1

Confidentiality

42

 

 

 

Article VIII

MISCELLANEOUS PROVISIONS

43

 

 

 

Section 8.1

Termination of Agreement

43

 

 

 

Section 8.2

Survival

43

 

 

 

Section 8.3

Amendment

44

 

 

 

Section 8.4

Governing Law

45

 

 

 

Section 8.5

Notices

45

 

 

 

Section 8.6

Acknowledgement

45

 

 

 

Section 8.7

Severability of Provisions

45

 

 

 

Section 8.8

Delivery Dates

46

 

 

 

Section 8.9

Limited Recourse

46

 

 

 

Section 8.10

Binding Effect; Assignment; Third Party Beneficiaries

46

 

 

 

Section 8.11

Article and Section Headings

46

 

 

 

Section 8.12

Concerning the Trustee

46

 

 

 

Section 8.13

Counterparts

46

 

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TABLE OF CONTENTS

 

 

 

Page

 

 

 

Section 8.14

Entire Agreement

46

 

 

 

Section 8.15

Waiver of Jury Trial; Jurisdiction; Consent to Service of Process

46

 

 

 

Section 8.16

Joinder of Future Securitization Entities

47

 

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MANAGEMENT AGREEMENT

 

This MANAGEMENT AGREEMENT, dated as of May 11, 2016 (as the same may be amended,
supplemented or otherwise modified from time to time in accordance with the
terms hereof, this “Agreement”), is entered into by and among Taco Bell Funding,
LLC, a Delaware limited liability company (together with its successors and
assigns, the “Issuer”), Taco Bell IP Holder, LLC, a Delaware limited liability
company (“IP Holder”), Taco Bell Franchisor Holdings, LLC, a Delaware limited
liability company (“Franchisor Holdco”), Taco Bell Franchisor, LLC, a Delaware
limited liability company (the “Taco Bell Franchisor”) and Taco Bell Franchise
Holder 1, LLC, a Delaware limited liability company (the “Franchise Holder” and,
together with Franchisor Holdco, IP Holder and Taco Bell Franchisor, the
“Guarantors” and together with the Issuer, the “Securitization Entities”); Taco
Bell Corp., a California corporation, as Manager (together with its successors
and assigns, the “Manager”); and Citibank, N.A., not in its individual capacity
but solely as the indenture trustee under the Indenture (as defined below)
(together with its successor and assigns, the “Trustee”). Capitalized terms used
herein but not otherwise defined herein shall have the meanings assigned to such
terms or incorporated by reference in Annex A to the Base Indenture.

 

RECITALS

 

WHEREAS, the Issuer has entered into the Base Indenture, dated as of the date
hereof, with the Trustee (together with the Series Supplements thereto, and as
the same may be amended, supplemented, or otherwise modified from time to time
in accordance with the terms thereof, the “Indenture”), pursuant to which the
Issuer issued the Series 2016-1 Class A-1 Notes, Series 2016-1 Class A-2-I
Notes, the Series 2016-1 Class A-2-II Notes and the Series 2016-1 Class A-2-III
Notes and may issue additional series of notes from time to time (collectively,
the “Notes”) on the terms described therein;

 

WHEREAS, the Issuer has granted to the Trustee on behalf of the Secured Parties
a Lien on the Collateral owned by it pursuant to the terms of the Indenture;

 

WHEREAS, the Guarantors have guaranteed the obligations of the Issuer under the
Indenture, the Notes and the other Transaction Documents and have granted to the
Trustee on behalf of the Secured Parties a Lien in the Collateral owned by each
of them pursuant to the terms of the Guarantee and Collateral Agreement dated as
of the date hereof (as the same may be amended, supplemented, or otherwise
modified from time to time in accordance with the terms thereof, the “Guarantee
and Collateral Agreement”)

 

WHEREAS, each of the Securitization Entities desires to engage the Manager as
manager as hereinafter provided, and each of the Securitization Entities desires
to have the Manager enforce such Securitization Entity’s rights and powers and
perform such Securitization Entity’s duties and obligations under the Managed
Documents (as defined below) and the Transaction Documents to which it is party
in accordance with the Managing Standard (as defined below), in each case as
hereinafter provided;

 

WHEREAS, IP Holder desires to appoint the Manager as its agent for providing
comprehensive Intellectual Property services, including filing for registration,
clearance,

 

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maintenance, protection, enforcement, licensing, and recording transfers of the
Securitization IP in accordance with the Managing Standard and as provided in
Section 2.1(c) and Section 4.3(b);

 

WHEREAS, each of the Securitization Entities desires to enter into this
Agreement to provide for, among other things, the managing of the respective
rights, powers, duties and obligations of such Securitization Entity under or in
connection with the Contribution Agreements, the Franchise Assets, the
Securitization IP, all other Securitized Assets and each Securitization Entity’s
equity interests in each other Securitization Entity owned by it and in
connection with any other assets acquired by or transferred to such
Securitization Entity (collectively, the “Managed Assets”), all in accordance
with the Managing Standard; and

 

WHEREAS, the Manager desires to enforce such rights and powers and perform such
obligations and duties, all in accordance with the Managing Standard.

 

NOW THEREFORE, in consideration of the premises and the mutual agreements
hereinafter set forth, the parties hereto agree as follows:

 

ARTICLE I

 

DEFINITIONS

 

Section 1.1            Certain Definitions.  Capitalized terms used herein but
not otherwise defined in Annex A to the Base Indenture shall have the following
meanings:

 

“Agreement” has the meaning set forth in the preamble.

 

“Change in Management” means the termination or resignation of more than 50% of
the Leadership Team within twelve (12) months after the date of the occurrence
of a Change of Control; provided, in each case, that termination and/or
resignation of any such member of the Leadership Team will not include (i) a
change in such member’s status in the ordinary course of succession so long as
such member remains affiliated with the Manager or any Affiliate thereof or its
direct or indirect holding companies or subsidiaries as an officer or director,
or in a similar capacity (ii) retirement of any such member, (iii) death or
incapacitation of any such member, or (iv) the replacement of any such member of
the Leadership Team, in the case of part (iv), with the prior written consent of
the Controlling Class Representative.

 

“Change of Control” means an event or a series of events by which
(a) individuals who on the date hereof constituted the Board of Directors of the
Manager, together with any new directors whose election by the Board of
Directors or whose nomination for election by the equity holders of the Manager
was approved by a majority of the directors then still in office who were either
directors or whose election or nomination for election was previously approved
by a majority of the Board of Directors then still in office, cease for any
reason to constitute a majority of the Board of Directors of the Manager then in
office; or (b) any “person” or “group” (as such terms are used for purposes of
Sections 13(d) and 14(d) of the Exchange Act) is or becomes the “beneficial
owner” (as such term is used in Rule 13d-3 under the Exchange Act), directly or
indirectly, of more than 50% of the total voting power of the Voting Equity
Interests of the Manager. For purposes of this definition, a Person will not be
deemed to have beneficial ownership of voting power of the Voting Equity
Interests subject to a stock purchase agreement,

 

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merger agreement or similar agreement until the consummation of the transactions
contemplated by such agreement.

 

“Competitive Business” means any business that, in the good faith determination
of the Manager in accordance with the Managing Standard, is intended to compete
against the Taco Bell Brand in the United States, to the extent such Competitive
Business is not contributed or expected to be contributed to a Securitization
Entity or Future Securitization Entity substantially contemporaneously with
entering into or acquiring such Competitive Business.  For the avoidance of
doubt, the operation of Company-Owned Restaurants in accordance with the
Transaction Documents will not be deemed a Competitive Business.

 

“Controlled Group” means a group of trades or businesses (whether or not
incorporated) under common control that is treated as a single employer for
purposes of Section 302 or Title IV of ERISA.

 

“Closing Date” means the date of this Agreement.

 

“Confidential Information” means trade secrets and other information (including,
without limitation, know how, ideas, techniques, recipes, formulas, customer
lists, customer information, financial information, business methods and
processes, marketing plans, specifications, and other similar information as
well as internal materials prepared by the owner of such information containing
or based, in whole or in part, on any such information) that is confidential and
proprietary to its owner and that is disclosed by one party to an agreement to
another party thereto whether in writing or disclosed orally, and whether or not
designated as confidential.

 

“Current Practice” means, in respect of any action or inaction, the practices,
standards and procedures of the Non-Securitization Entities as performed on or
that would have been performed immediately prior to the Closing Date.

 

“Defective New Asset” means any New Asset that does not satisfy the applicable
representations and warranties of Article V hereof on the New Asset Addition
Date for such New Asset.

 

“Discloser” has the meaning set forth in Section 7.1.

 

“Disentanglement” has the meaning set forth in Section 6.2(a).

 

“Disentanglement Period” has the meaning set forth in Section 6.2(c).

 

“Disentanglement Services” has the meaning set forth in Section 6.2(a).

 

“Employee Benefit Plan” means any “employee benefit plan”, as such term is
defined in Section 3(3) of ERISA, established, maintained or contributed to by
the Manager, or with respect to which the Manager has any liability.

 

“ERISA” means the U.S. Employee Retirement Income Security Act of 1974, as
amended, and any successor statute of similar import, in each case as in effect
from time to time. References to sections of ERISA also refer to any successor
sections.

 

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“ERISA Event” means (a) a “reportable event” within the meaning of Section 4043
of ERISA and the regulations issued thereunder with respect to any Pension Plan
(other than those events as to which the thirty day notice period is waived);
(b) the failure to meet the minimum funding standard of Section 412 of the Code
or Section 302 of ERISA with respect to any Pension Plan (whether or not waived
in accordance with Section 412(c) of the Code) or the failure to make by its due
date a required installment under Section 430 of the Code and Section 303(j) of
ERISA with respect to any Pension Plan; (c) the provision by the administrator
of any Pension Plan pursuant to Section 4041(a)(2) of ERISA of a written notice
of intent to terminate such Pension Plan in a standard termination described in
Section 4041(b) of ERISA or a distress termination described in
Section 4041(c) of ERISA; (d) the complete or partial withdrawal by the Manager,
or any company in the Controlled Group of the Manager, from any Pension Plan
with two or more contributing sponsors or the termination of any such Pension
Plan, in each case, which results in liability pursuant to Section 4063 or 4064
of ERISA; (e) formal written notice from the PBGC of its intent to commence
proceedings to terminate any Pension Plan; (f) the imposition of liability on
the Manager, or any company in the Controlled Group of the Manager, pursuant to
Section 4062(e) or 4069 of ERISA or by reason of the application of
Section 4212(c) of ERISA; (g) the filing of a material claim (other than routine
claims for benefits) against any Pension Plan or the assets thereof, or against
the Manager or any company in the Controlled Group of the Manager, in connection
with any Pension Plan; (h) receipt from the Internal Revenue Service of notice
of the failure of any Pension Plan to qualify under Section 401(a) of the Code
or the failure of any trust forming part of any Pension Plan to qualify for
exemption from taxation under Section 501(a) of the Code; (i) the imposition of
a lien in favor of the PBGC or a Pension Plan pursuant to Section 430(k) of the
Code or pursuant to Section 303(k) of ERISA with respect to any Pension Plan or
(j) the complete or partial withdrawal by the Manager or any member of its
Controlled Group from any Multiemployer Plan that has resulted or could
reasonably be expected to result in a material liability to the Manager under
ERISA.

 

“Franchise Holder” has the meaning set forth in the preamble.

 

“Future Brand” means (1) any franchise brand that Taco Bell or any of its
affiliates acquires or develops after the Closing Date and elects to contribute
to one or more Securitization Entities in a manner consistent with the terms of
the Transaction Documents and (2) any National Mexican Quick Service Restaurant
Brand of a Non-Securitization Entity that the Manager is required to cause to be
contributed to a Securitization Entity pursuant to the terms of this Agreement. 
At the time any Future Securitization Entities are created or acquired, or any
Future Brand is contributed into any Future Securitization Entity or any other
Securitization Entity, the definitions of “Issuer Subsidiaries” and “Taco Bell
Brand” shall be read to include such Future Securitization Entities and Future
Brands, respectively, and the definition of “Securitization IP” shall be read to
include U.S. Intellectual Property related to those Future Securitization
Entities and Future Brands.

 

“Guarantors” has the meaning set forth in the preamble.

 

“Holdco Specified Non-Securitization Debt Cap” has the meaning set forth in
Section 5.4.

 

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“Indemnitee”  has the meaning set forth in Section 2.7(a).

 

“Indenture” has the meaning set forth in the recitals.

 

“Independent Auditors” has the meaning set forth in Section 3.2.

 

“IP Services” means performing IP Holder’s obligations as licensor under the IP
License Agreements; exercising IP Holder’s rights under the IP License
Agreements (and under any other agreements pursuant to which IP Holder licenses
the use of any Securitization IP); and acquiring, developing, managing,
maintaining, protecting, enforcing, defending, licensing, sublicensing and
undertaking such other duties and services as may be necessary in connection
with the Securitization IP, on behalf of IP Holder, in each case in accordance
with and subject to the terms of this Agreement (including, without limitation,
the Managing Standard, unless IP Holder determines, in its sole discretion, that
additional action is necessary or desirable in furtherance of the protection of
the Securitization IP, in which case the Manager shall perform such IP Services
and additional related services as are reasonably requested by IP Holder), the
Indenture, the other Transaction Documents and the Managed Documents, as agent
for IP Holder, including, without limitation, the following activities:
(a) searching, screening and clearing After-Acquired Securitization IP to assess
patentability, registrability and the risk of potential infringement;
(b) filing, prosecuting, defending and maintaining applications and
registrations for the Securitization IP in IP Holder’s name in the
Securitization Jurisdiction, including timely filing of evidence of use,
applications for renewal and affidavits of use and/or incontestability, timely
paying of all registration and maintenance fees, responding to third-party
oppositions of applications or challenges to registrations, and responding to
any office actions, reexaminations, interferences, inter partes reviews, post
grant reviews, or other office or examiner requests, reviews, or requirements;
(c) monitoring third-party use and registration of Intellectual Property, as
applicable, and taking actions the Manager deems appropriate to oppose or
contest the use and any application or registration for Intellectual Property,
as applicable, that could reasonably be expected to infringe, dilute or
otherwise violate the Securitization IP or IP Holder’s rights therein;
(d) confirming IP Holder’s legal title in and to any or all of the
Securitization IP, including obtaining written assignments of Securitization IP
to IP Holder, recording transfers of title in the USPTO and USCO and
transferring internet domain name registrations; (e) with respect to IP Holder’s
rights and obligations under the IP License Agreements and any Transaction
Documents, monitoring the licensee’s use of each licensed Trademark and the
quality of its goods and services offered in connection with such Trademarks,
rendering any approvals (or disapprovals) that are required under the applicable
license agreement(s), and employing reasonable means to ensure that any use of
any such Trademarks by any such licensee satisfies the quality control standards
and usage provisions of the applicable license agreement; (f) protecting,
policing, and, in the event that the Manager becomes aware of any unlicensed
copying, imitation, infringement, dilution, misappropriation, unauthorized use
or other violation of the Securitization IP, or any portion thereof, enforcing
such Securitization IP, including, (i) preparing and responding to
cease-and-desist, demand and notice letters, and requests for a license; and
(ii) commencing, prosecuting and/or resolving claims or suits involving
imitation, infringement, dilution, misappropriation, the unauthorized use or
other violation of such Securitization IP, and seeking monetary and equitable
remedies as the Manager deems appropriate in connection therewith; provided that
IP Holder will, and agrees to, join as a party to any such suits to the extent
necessary to maintain standing; (g) performing such

 

5

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functions and duties, and preparing and filing such documents, as are required
under the Indenture or any other Transaction Document to be performed, prepared
and/or filed by IP Holder, including (i) executing and recording such financing
statements (including continuation statements) or amendments thereof or
supplements thereto or such other instruments as the Issuer or the Control Party
may, from time to time, reasonably request (consistent with the obligations of
IP Holder to perfect the Trustee’s lien in the applicable jurisdictions within
the Securitization Jurisdiction) in connection with the security interests in
the Securitization IP granted by IP Holder to the Trustee under the Indenture
and (ii) preparing, executing and delivering grants of security interests or any
similar instruments as the Issuer or the Control Party may, from time to time,
reasonably request (consistent with the obligations of IP Holder to perfect the
Trustee’s lien in the applicable jurisdictions within the Securitization
Jurisdiction) that are intended to evidence such security interests in the
Securitization IP and recording such grants or other instruments with the
relevant Governmental Authority including the USPTO and USCO; (h) taking such
actions as any licensee under an IP License Agreement may request that are
required by the terms, provisions and purposes of such IP License Agreement (or
by any other agreements pursuant to which IP Holder licenses the use of any
Securitization IP) to be taken by IP Holder, and preparing (or causing to be
prepared) for execution by IP Holder all documents, certificates and other
filings as IP Holder will be required to prepare and/or file under the terms of
such IP License Agreements (or such other agreements); (i) establishing a fair
market value for the royalties or other payments payable to IP Holder under any
licenses of Securitization IP that are required under the Transaction Documents
to include such payments; (j) paying or causing to be paid or discharged, from
funds of the Securitization Entities, any and all taxes, charges and assessments
that may be levied, assessed or imposed upon any of the Securitization IP or
contesting the same in good faith; (k) obtaining licenses of third-party
Intellectual Property for use and sublicense in connection with the Contributed
Franchise Business and any other assets of the Securitization Entities;
(l) sublicensing the Securitization IP to suppliers, manufacturers, advertisers
and other service providers in connection with the provision of products and
services for the Contributed Franchise Business; (m) with respect to Trade
Secrets and other confidential information of IP Holder, taking reasonable
measures to maintain confidentiality and to prevent non-confidential disclosures
thereof, and (n) managing passwords for and access to social media accounts,
website hosting accounts, mobile app accounts, and other similar online
accounts.

 

“Issuer” has the meaning set forth in the preamble.

 

“Leadership Team” means the persons holding the following offices of Taco Bell
Corp.: (i) Chief Executive Officer, (ii) Chief Operating Officer, (iii) Chief
Financial Officer, (iv) Chief Legal Officer, (v) Chief People Officer,
(vi) Chief R&D/QA Officer, (vii) Chief Product Marketing Officer, (viii) Chief
Marketing Officer, (ix) Chief Development Officer, (x) Chief Information
Officer, (xi) Chief Food Innovation Officer, (xii) any Vice President and
(xiii) any other position that contains substantially the same responsibilities
as of any of the positions listed above or reports to the Chief Executive
Officer, other than administrative assistants.

 

“Managed Assets” has the meaning set forth in the recitals.

 

“Managed Document” means any contract, agreement, arrangement or undertaking
relating to any of the Managed Assets, including, without limitation, the
Contribution Agreements, the Franchise Documents and the IP License Agreements.

 

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“Manager” means Taco Bell Corp., in its capacity as manager hereunder, unless a
successor Person shall have become the Manager pursuant to the applicable
provisions of the Indenture and this Agreement, and thereafter “Manager” shall
mean such successor Person.

 

“Manager Advance” means certain advances of funds made by the Manager to (in its
sole discretion), or on behalf of, a Securitization Entity in connection with
the operation of the Managed Assets and reimbursed pursuant to the Priority of
Payments.

 

“Manager Termination Event” has the meaning set forth in Section 6.1(a).

 

“Managing Standard” means standards that (a) are consistent with Current
Practice or, to the extent of changed circumstances, practices, technologies,
strategies or implementation methods, consistent with the standards as the
Manager would implement or observe if the Managed Assets were owned by the
Manager at such time; (b) will enable the Manager to comply in all material
respects with all of the duties and obligations of the Securitization Entities
under the Transaction Documents and the New Franchise Agreements, Contributed
Franchise Agreements, New Development Agreements and Contributed Development
Agreements (and all agreements or obligations ancillary to any of the
foregoing); (c) are in material compliance with all applicable Requirements of
Law; and (d) with respect to the use and maintenance of IP Holder’s rights in
and to the Securitization IP, are consistent with the standards imposed by the
IP License Agreements.

 

“Multiemployer Plan” means a “multiemployer plan” as defined in
Section 4001(a)(3) of ERISA as to which any company in the same Controlled Group
as the Manager is making or accruing an obligation to contribute or has within
any of the preceding five plan years made or accrued an obligation to make
contributions.

 

“NAFA Account” means the National Advertising Fund Administration account
relating to the Taco Bell Brand.

 

“National Mexican Quick Service Restaurant Brand” means a franchise brand for a
national chain of quick service restaurants, which brand satisfies each of the
following conditions: (i) derives at least 85% of its revenue from the sale of
Mexican-style ready-to-eat food products, (ii) offers drive-thru food service
from at least 85% of its restaurants, (iii) does not offer waiters or wait staff
to take customer orders or provide customer table service, and (iv) has at least
85% of its restaurants located in the United States. The term “quick service
restaurants” specifically excludes “casual dining” or “fast casual” restaurants.

 

“New Asset Addition Date” means, with respect to any New Asset, the earliest of
(i) the date on which such New Asset is acquired by the applicable
Securitization Entity, (ii) the later of (a) the date upon which the closing
occurs under the applicable contract giving rise to such New Asset and (b) the
date upon which all of the diligence contingencies, if any, in the contract for
purchase of the applicable New Asset expire and the Securitization Entity
acquiring such New Asset no longer has the right to cancel such contract and
(iii) if such New Asset is a New Franchise Agreement or a New Development
Agreement, the date on which Taco Bell Franchisor begins receiving Franchisee
Payment Amounts from the applicable Franchisee or counterparty to a New
Development Agreement, as applicable, in respect of such New Asset.

 

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“New Assets” means a New Franchise Agreement, a New Development Agreement or any
other Managed Asset contributed to, or otherwise entered into or acquired by,
the Securitization Entities after the Closing Date.

 

“PBGC” means the Pension Benefit Guaranty Corporation established under
Section 4002 of ERISA.

 

“Pension Plan” means any “employee pension benefit plan,” as such term is
defined in Section 3(2) of ERISA, that is subject to Title IV of ERISA (other
than a Multiemployer Plan) and to which any company in the same Controlled Group
as the Manager has liability, including any liability by reason of having been a
substantial employer within the meaning of Section 4063 of ERISA for any time
within the preceding five years or by reason of being deemed to be a
contributing sponsor under Section 4064 of ERISA.

 

“Post-Opening Services” means the services required to be performed under the
applicable Franchise Documents by the applicable Securitization Entities after
the opening of a Branded Restaurant, in each case in accordance with and subject
to the terms of this Agreement (including, for the avoidance of doubt, the
Managing Standard), the Indenture, the other Transaction Documents and the
Managed Documents, including, as may be required under the applicable Franchise
Document, (a) providing such Restaurant Operator with the standards established
or approved by Taco Bell Franchisor or Franchise Holder, as applicable, for use
by Restaurant Operators; (b) inspecting such Branded Restaurant; (c) providing
such Restaurant Operator with the Manager’s ongoing operating standards and
materials designed for use in the Branded Restaurants; and (d) such other
Post-Opening Services as are required to be performed under applicable Franchise
Documents; provided that such Post-Opening Services provided by the Manager
under this Agreement will not include any “add-on” type corporate services
provided by a Non-Securitization Entity to a Restaurant Operator, whether
pursuant to the related Franchise Agreement or otherwise, the cost of which is
not included in the royalties payable to Taco Bell Franchisor or Franchise
Holder, as applicable, under the related Franchise Agreement, including, without
limitation, repairs and maintenance, gift card administration, employee
training, point-of-sale system maintenance and support and maintenance of other
information technology systems.

 

“Power of Attorney” means the authority granted by a Securitization Entity to
the Manager pursuant to a Power of Attorney in substantially the form set forth
as Exhibit A-1 or Exhibit A-2 hereto.

 

“Pre-Opening Services” means the services required to be performed under the
applicable Franchise Documents by the applicable Securitization Entities prior
to the opening of a Branded Restaurant, in each case in accordance with and
subject to the terms of this Agreement (including, for the avoidance of doubt,
the Managing Standard), the Indenture, the other Transaction Documents and the
Managed Documents, including, as may be required under the applicable Franchise
Document, (a) providing the applicable Restaurant Operator with standards for
the design, construction, equipping and operation of such Branded Restaurant and
the approval of locations meeting such standards; (b) providing such Restaurant
Operator with the Manager’s programs and materials designed for use in the
Branded Restaurants; (c) providing such Restaurant Operator with a loaned copy
of the Taco Bell Manual, and (d) providing such

 

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Restaurant Operator with such other assistance in the pre-opening, opening and
initial operation of such Branded Restaurant, as may be required to be provided
under applicable Franchise Documents; provided that such Pre-Opening Services
provided by the Manager under this Agreement will not include any “add-on” type
corporate services provided by a Non-Securitization Entity to a Restaurant
Operator, whether pursuant to the related Franchise Agreement or otherwise, the
cost of which is not included in the development fee, initial license fee or
royalties payable to Taco Bell Franchisor or Franchise Holder under the related
Franchise Documents, including, without limitation, repairs and maintenance,
gift card administration, employee training and support and maintenance of
information technology systems.

 

“Quarterly Fiscal Period” means each of the following quarterly fiscal periods
of the Securitization Entities: (i) the first three quarterly fiscal periods of
each fiscal year will consist of 12 weeks (three 4-week periods) and (ii) the
fourth quarterly fiscal period of each fiscal year with 52-weeks consists of 16
weeks (four 4-week periods) and each fiscal year with 53-weeks consists of 17
weeks (three 4-week periods and one 5-week period).  References to “weeks” in
“Quarterly Fiscal Period” means the Manager’s fiscal weeks, which begin on each
Wednesday and end on each Tuesday.

 

“Recipient” has the meaning ascribed to such term in Section 7.1.

 

“Securitization Entities” has the meaning set forth in the preamble.

 

“Services” means the servicing and administration by the Manager of the Managed
Assets, in each case in accordance with and subject to the terms of this
Agreement (including, for the avoidance of doubt, the Managing Standard), the
Indenture, the other Transaction Documents and the Managed Documents, on behalf
of the applicable Securitization Entity, including, without limitation:

 

(a)           calculating and compiling information required in connection with
any report or certificate to be delivered pursuant to the Transaction Documents;

 

(b)           preparing and filing all tax returns and tax reports required to
be prepared by any Securitization Entity;

 

(c)           paying or causing to be paid or discharged, in each case from
funds of the Securitization Entities, any and all taxes, charges and assessments
attributable to and required to be paid under applicable Requirements of Law by
any Securitization Entity;

 

(d)           performing the duties and obligations of, and exercising and
enforcing the rights of, the Securitization Entities under the Transaction
Documents, including, without limitation, performing the duties and obligations
of each applicable Securitization Entity under the IP License Agreements;

 

(e)           taking those actions that are required under the Transaction
Documents and Requirements of Law to maintain continuous perfection and priority
(subject to Permitted Liens and the exclusions from perfection requirements
under the Indenture, the Guarantee and Collateral Agreement and the Transaction
Documents) of any Securitization Entity’s and the Trustee’s respective interests
in the Collateral;

 

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(f)            making or causing the collection of amounts owing under the terms
and provisions of each Managed Document and the Transaction Documents,
including, without limitation, managing (i) Taco Bell Franchisor’s or Franchise
Holder’s rights and obligations, as applicable, as franchisor under the
Franchise Agreements, the Company-Owned Restaurant Master Franchise Agreements
and the Development Agreements (including performing Pre-Opening Services and
Post-Opening Services) or taking actions to maintain Taco Bell Franchisor’s net
worth for purposes of state franchisor requirements, including enforcing
Franchisor Holdco’s obligations under the Performance Guaranty and directing the
Trustee in writing to allocate amounts between the Senior Notes Interest Reserve
Accounts and (ii) the right to approve amendments, waivers, modifications and
terminations of (including extensions, modifications, write-downs and write-offs
of obligations owing under) Franchise Documents and other Managed Documents
(which amendments to Franchise Documents may be effected by replacing a
franchise agreement with a new franchise agreement (which new franchise
agreement may be executed by any Securitization Entity)) and to exercise all
rights of the applicable Securitization Entities under such Franchise Documents
and other Managed Documents;

 

(g)           performing due diligence with respect to, selecting and approving
new Franchisees and providing personnel to manage the due diligence, selection
and approval process;

 

(h)           preparing, offering and entering into New Franchise Agreements and
New Development Agreements, in each case, in its own name on behalf of the
Securitization Entities (including in its capacity as franchise broker/franchise
sales agent for the Securitization Entities) or in the name of a Securitization
Entity (pursuant to the applicable Power of Attorney), including, among other
things, adopting variations to the forms of agreements used in documenting such
agreements and preparing and executing documentation of franchise transfers,
terminations, renewals, site relocations and ownership changes, in all cases,
subject to and in accordance with the terms of the Transaction Documents (and
performing such filings as may be required by law to serve as franchise
broker/franchise sales agent for any Securitization Entity);

 

(i)            evaluating and approving assignments of Franchise Agreements,
Company-Owned Restaurant Master Franchise Agreements, Development Agreements and
other Franchise Documents by Restaurant Operators to third-party franchisee
candidates or existing Franchisees;

 

(j)            preparing and filing franchise disclosure documents with respect
to Development Agreements, Franchise Agreements and Company-Owned Restaurant
Master Franchise Agreements to comply, in all material respects, with applicable
Requirements of Law;

 

(k)           complying with franchise industry specific government regulation
and applicable Requirements of Law;

 

(l)            making Manager Advances in its sole discretion;

 

(m)          administering the Management Accounts;

 

(n)           performing the duties and obligations and enforcing the rights of
the Securitization Entities under the Managed Documents, including entering into
new Managed Documents from time to time;

 

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(o)           arranging for legal services with respect to the Managed Assets,
including with respect to the enforcement of the Franchise Documents;

 

(p)           arranging for or providing accounting and financial reporting
services;

 

(q)           establishing and/or providing quality control services and
standards for food, equipment, suppliers and distributors in connection with the
Branded Restaurants and monitoring compliance with such standards;

 

(r)            developing new products and services (or modifying any existing
products and services) to be offered in connection with the Branded Restaurants
and the other assets of the Securitization Entities;

 

(s)            in connection with Branded Restaurants, developing, modifying,
amending and disseminating (i) specifications and standards for restaurant
operations, (ii) operations procedures manuals and (iii) new service or menu
offerings;

 

(t)            performing the IP Services;

 

(u)           acting on behalf of the Securitization Entities with respect to
the NAFA Account and in such capacity, or in any other capacity agreed with the
Franchisees or other Restaurant Operators from time to time, developing and
executing advertising, marketing and promotional strategies, programs and
materials relating to the Taco Bell Brand and Branded Restaurants;

 

(v)           managing the Taco Bell website, social media presence and mobile
app; and

 

(w)          performing such other services as may be necessary or appropriate
from time to time and consistent with the Managing Standard and the Transaction
Documents in connection with the Managed Assets.

 

“Specified Non-Securitization Debt” has the meaning set forth in Section 5.4.

 

“Sub-management Arrangement” means an arrangement whereby the Manager engages
any other Person (including any Affiliate) to perform certain of its duties
under this Agreement excluding the fundamental corporate functions of the
Manager; provided that (i) master franchise arrangements with Restaurant
Operators and temporary arrangements with Restaurant Operators with respect to
the management of one or more Branded Restaurants immediately following the
termination of the former Restaurant Operators, and (ii) any agreement between
the Manager and third-party vendors pursuant to which the Manager purchases a
specific product or service or outsources routine administrative functions,
including any products, services or administrative functions listed on Schedule
1 hereto or any other products, services or administrative functions that are
substantially similar thereto, shall not constitute a Sub-management
Arrangement.

 

“Successor” means any successor to the Manager selected by the Control Party (at
the direction of the Controlling Class Representative) upon the resignation or
removal of the Manager pursuant to the terms of this Agreement.

 

“Term” shall have the meaning set forth in Section 8.1.

 

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“Termination Notice” has the meaning set forth in Section 6.1(a).

 

“Trustee” has the meaning set forth in the preamble.

 

“Weekly Allocation Date” means, in respect of any Weekly Collection Period, the
last Business Day of the calendar week following the week in which such Weekly
Collection Period ends.

 

“Weekly Collection Period” means with respect to Collections, each weekly period
commencing at 12:00 a.m. (New York time) on each Wednesday per week and ending
at 11:59 p.m. (New York time) on each Tuesday per week.

 

“Weekly Manager’s Certificate” has the meaning set forth in Section 3.5.

 

“Weekly Management Fee” means, with respect to each Weekly Allocation Date, the
amount determined by dividing:

 

(i)            an amount equal to the sum of (A) a base fee of $35,000,000, plus
(B) a fee of $15,100 for every $100,000 of aggregate Retained Collections over
the preceding four (4) Quarterly Fiscal Periods; by

 

(ii)           52;

 

provided that the dollar amounts set forth in clauses (i)(A) will be subject to
successive 2% annual increases on the first day of the first Quarterly Fiscal
Period of the fiscal year of the Securitization Entities; provided, further,
that the incremental increased portion of such fees will be payable only to the
extent that the sum of the amounts set forth in clauses (i)(A) and (i)(B) as so
increased will not exceed 35% of the aggregate Retained Collections over the
preceding four (4) Quarterly Fiscal Periods; provided, further, that Retained
Collections for the Quarterly Fiscal Period ended (i) June 9, 2015 will be
deemed to be $121,743,000, (ii) September 1, 2015 will be deemed to be
$121,575,000,  (iii) December 22, 2015 will be deemed to be $158,245,000 and
(iv) March 15, 2016 will be deemed to be $113,098,000 respectively.

 

“Welfare Plan” means any “employee welfare benefit plan” as such term is defined
in Section 3(1) of ERISA.

 

“YBI”  has the meaning set forth in Section 6.2(a).

 

Section 1.2            Other Defined Terms.

 

(a)           Each term defined in the singular form in Section 1.1 or elsewhere
in this Agreement shall mean the plural thereof when the plural form of such
term is used in this Agreement and each term defined in the plural form in
Section 1.1 or elsewhere in this Agreement shall mean the singular thereof when
the singular form of such term is used herein.

 

(b)           The words “hereof”, “herein”, “hereunder” and similar terms when
used in this Agreement shall refer to this Agreement as a whole and not to any
particular provision of this Agreement, and article, section, subsection,
schedule and exhibit references herein are

 

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references to articles, sections, subsections, schedules and exhibits to this
Agreement unless otherwise specified.

 

(c)           Unless as otherwise provided herein, the word “including” as used
herein shall mean “including without limitation.”

 

(d)           All accounting terms not specifically or completely defined in
this Agreement shall be construed in conformity with GAAP.

 

(e)           Where the character or amount of any asset or liability or item of
income or expense is required to be determined, or any accounting computation is
required to be made, for the purpose of this Agreement, such determination or
calculation shall be made, to the extent applicable and except as otherwise
specified in this Agreement or the other Transaction Documents, in accordance
with GAAP.  When used herein, the term “financial statement” shall include  the 
notes  and  schedules  thereto.  All  accounting  determinations  and 
computations hereunder shall be made without duplication.

 

Section 1.3            Other Terms.  All terms used in Article 9 of the UCC as
in effect from time to time in the State of New York, and not specifically
defined herein, are used herein as defined in such Article 9.

 

Section 1.4            Computation of Time Periods.  Unless otherwise stated in
this Agreement, in the computation of a period of time from a specified date to
a later specified date, the word “from” means “from and including” and the words
“to” and “until” each means “to but excluding.”

 

ARTICLE II

 

ADMINISTRATION AND SERVICING OF MANAGED ASSETS

 

Section 2.1            Taco Bell Corp. to act as Manager.

 

(a)           Engagement of the Manager. The Manager is hereby authorized by
each Securitization Entity, and hereby agrees, to perform the Services (or
refrain from the performance of the Services) subject to and in accordance with
the Managing Standard and the terms of this Agreement, the other Transaction
Documents and the Managed Documents. With respect to the IP Services, the
Manager shall perform such IP Services in accordance with the Managing Standard
and the IP License Agreements, unless IP Holder determines, in its sole
discretion, that additional action is necessary or desirable in furtherance of
the protection of the Securitization IP, in which case the Manager shall perform
such IP Services and additional related services as are reasonably requested by
IP Holder. The Manager, on behalf of each of the Securitization Entities, shall
have full power and authority, acting alone and subject only to the specific
requirements and prohibitions of this Agreement and in accordance with the
Managing Standard, the Indenture and the other applicable Transaction Documents,
to do and take any and all actions, or to refrain from taking any such actions,
and to do any and all things in connection with performing the Services that the
Manager determines are necessary or desirable. Without limiting the generality
of the foregoing, but subject to the provisions of this Agreement, including
Section 2.8, the Indenture and the other Transaction Documents, the Manager, in

 

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connection with performing the Services, is hereby authorized and empowered to
execute and deliver, in the Manager’s own name (in its capacity as agent for the
applicable Securitization Entity) or in the name of any Securitization Entity
(pursuant to the applicable Power of Attorney), on behalf of any Securitization
Entity any and all instruments of satisfaction or cancellation, or of partial or
full release or discharge, and all other comparable instruments, with respect to
the Managed Assets, including, without limitation, consents to sales, transfers
or encumbrances of a franchise by any Restaurant Operator or consents to
assignments and assumptions of the Franchise Arrangements by any Restaurant
Operator in accordance with the terms thereof. For the avoidance of doubt, the
parties hereto acknowledge and agree that the Manager is providing Services
directly to each applicable Securitization Entity. Nothing in this Agreement
shall preclude any of the Securitization Entities from performing the Services
or any other act on their own behalf at any time and from time to time.

 

(b)           Actions to Create and Perfect Security Interests. Subject to the
terms of the Base Indenture, including any applicable Series Supplement, the
Manager shall take those actions that  are  required  under  the  Transaction 
Documents  and  Requirements  of  Law  to  maintain continuous perfection and
priority (subject to Permitted Liens and the exclusions from perfection
requirements under the Transaction Documents) of the Trustee’s Lien in the
Collateral to the extent required by the Indenture and the Guarantee and
Collateral Agreement. Without limiting the foregoing, the Manager shall file or
cause to be filed with the appropriate government office the financing
statements on Form UCC-1, assignments of financing statements on Form UCC-3, any
filings related to the Securitization IP as set forth in Section 8.25 of the
Base Indenture and other filings required to be filed in connection with the
Indenture and the other Transaction Documents.

 

(c)           Ownership of Manager-Developed IP. The Manager acknowledges and
agrees that all Securitization IP, including any Manager-Developed IP arising
during the Term, shall, as between the parties, be owned by and inure
exclusively to IP Holder. Any copyrightable material included in such
Manager-Developed IP shall, to the fullest extent allowed by law, be considered
a “work made for hire” as that term is defined in Section 101 of the U.S.
Copyright Act of 1976, as amended, and owned by IP Holder. The Manager hereby
irrevocably assigns and transfers, without further consideration, all right,
title and interest in such Manager-Developed IP (and all goodwill connected with
the use of and symbolized by Trademarks included therein) to IP Holder.
Notwithstanding the foregoing, the Manager-Developed IP to be transferred to IP
Holder shall include rights to use third-party Intellectual Property only to the
extent (but to the fullest extent) that such rights are assignable or
sublicensable to IP Holder. All applications to register Manager-Developed IP
shall be filed in the name of IP Holder.

 

The Manager agrees to cooperate in good faith with IP Holder for the purpose of
securing and preserving IP Holder’s rights in and to the applicable
Manager-Developed IP, including executing any documents and taking any actions,
at IP Holder’s reasonable request, or as deemed necessary or advisable by the
Manager, to confirm, file and record in any appropriate registry IP Holder’s
sole legal title in and to such Manager-Developed IP, it being acknowledged and
agreed that any expenses in connection therewith shall be paid by IP Holder. The
Manager hereby appoints IP Holder as its attorney-in-fact authorized to execute
such documents in the event that Manager fails to execute the same within twenty
(20) days following IP Holder’s written request

 

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to do so (it being understood that such appointment is a power coupled with an
interest and therefore irrevocable) with full power of substitution and
delegation.

 

(d)           Grant of Power of Attorney. In order to provide the Manager with
the authority to perform and execute its duties and obligations as set forth
herein, each of the Securitization Entities shall execute and deliver on the
Closing Date a Power of Attorney in substantially the form set forth as
Exhibit A-1 (with respect to IP Holder) and Exhibit A-2 (with respect to the
other Securitization Entities) hereto to the Manager, which Powers of Attorney
shall terminate in the event that the Manager’s rights under this Agreement are
terminated as provided herein.

 

(e)           Manager Insurance. The Manager agrees to maintain adequate
insurance consistent with the type and amount maintained by the Manager as of
the Closing Date, subject, in each case, to any adjustments or modifications
made in accordance with clause (a) of the definition of the Managing Standard.
Such insurance shall cover each of the Securitization Entities, as an additional
insured, to the extent that such Securitization Entity has an insurable interest
therein.

 

Section 2.2            Accounts.

 

(a)           Collection of Payments; Remittances; Collection Account. The
Manager shall maintain and manage the Management Accounts (and certain other
accounts from time to time) in the name of, and for the benefit of, each of the
Securitization Entities. The Manager shall (on behalf of each of the
Securitization Entities) (i) cause the collection of Collections in accordance
with the Managing Standard and subject to and in accordance with the Transaction
Documents and (ii) make all deposits to and withdrawals from the Management
Accounts in accordance with this Agreement (including, for the avoidance of
doubt, the Managing Standard), the Indenture and the applicable Managed
Documents. The Manager shall (on behalf of each of the Securitization Entities)
make all deposits to the Collection Account in accordance with the terms of the
Indenture.

 

(b)           Deposit of Misdirected Funds; No Commingling; Misdirected
Payments. The Manager shall promptly deposit into a Lock-Box Account, a
Concentration Account, the Collection Account or such other appropriate account
within three (3) Business Days immediately following Actual Knowledge of the
Manager of the receipt thereof and in the form received with any necessary
endorsement or in cash, all payments in respect of the Managed Assets
incorrectly deposited into another account. In the event that any funds not
constituting Collections are incorrectly deposited in any Account, the Manager
shall promptly withdraw such amounts after obtaining Actual Knowledge thereof
and shall pay such amounts to the Person legally entitled to such funds. Except
as otherwise set forth herein or in the Base Indenture, the Manager shall not
commingle any monies that relate to Managed Assets with its own assets and shall
keep separate, segregated and appropriately marked and identified all Managed
Assets and any other property comprising any part of the Collateral, and for
such time, if any, as such Managed Assets or such other property are in the
possession or control of the Manager to the extent such Managed Assets or such
other property is Collateral, the Manager shall hold the same in trust for the
benefit of the Trustee and the Secured Parties (or, following termination of the
Indenture, the applicable Securitization Entity).  Additionally, the Manager,
promptly after

 

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obtaining Actual Knowledge thereof, shall notify the Trustee in the Weekly
Manager’s Certificate of any amounts incorrectly deposited into any Indenture
Trust Account and arrange for the prompt remittance by the Trustee of such funds
from the applicable Indenture Trust Account to the Manager. The Trustee shall
have no obligation to verify any information provided to it by the Manager in
any Weekly Manager’s Certificate and shall remit such funds to the Manager based
solely on such Weekly Manager’s Certificate.

 

(c)           Investment of Funds in Management Accounts. The Manager shall have
the right to invest and reinvest funds deposited in any Management Account in
Eligible Investments maturing no later than the Business Day preceding each
Weekly Allocation Date. All income or other gain from such Eligible Investments
will be credited to the related Management Account, and any loss resulting from
such investments will be charged to the related Management Account. The
Investment Income available on deposit in the Management Accounts will be
withdrawn on each Weekly Allocation Date for deposit to the Collection Account
for application as Collections on such Weekly Allocation Date.

 

(d)           The Manager will instruct Restaurant Operators (other than
Franchisees that are licensees under the applicable Franchise Agreement) to pay
certain advertising fees based on a percentage of sales in accordance with the
Company-Owned Restaurant Master Franchise Agreement or Franchise Agreement, as
applicable (“Advertising Fees”), to the NAFA Account.

 

Section 2.3            Records.

 

(a)           The Manager shall, in accordance with the Managing Standard,
retain all material data (including computerized records) relating directly to,
or maintained in connection with, the servicing of the Managed Assets at its
address indicated in Section 8.5 (or at an off-site storage facility reasonably
acceptable to each of the Securitization Entities, the Servicer and the Back-Up
Manager) or, upon thirty (30) days’ notice to each of the Securitization
Entities, the Rating Agency, the Back-Up Manager, the Trustee and the Servicer,
at such other place where the servicing office of the Manager is located
(provided that the servicing office of the Manager shall at all times be located
in the United States), and shall give the Trustee, the Back-Up Manager and the
Servicer access to all such data in accordance with the terms and conditions of
the Transaction Documents; provided, however, that the Trustee shall not be
obligated to verify, recalculate or review any such data. The Manager
acknowledges that IP Holder shall own the Intellectual Property rights in all
such data.

 

(b)           If the rights of Taco Bell Corp., shall have been terminated in
accordance with Section 6.1, the Manager, shall, upon demand of the Trustee
(based upon the written direction  on the Control Party), deliver to the
Successor Manager all data in its possession or under its control (including
computerized records) necessary or desirable for the servicing of the Managed
Assets; provided, however, that the Manager may retain a single set of copies of
any books and records that the Manager reasonably believes will be required by
it for the purpose of performing any of the Manager’s accounting, public
reporting or other administrative functions that are performed in the ordinary
course of the Manager’s business; and provided, further, that the Manager shall
have access, during normal business hours and upon reasonable notice, to all
books and records that the Manager reasonably believes would be necessary or
desirable for the

 

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Manager in connection with the preparation of any tax or other governmental
reports and filings and other uses; and provided, further, that if the Issuer
shall desire to dispose of any of such books and records at any time within five
(5) years of the Manager’s termination, the Issuer shall, prior to such
disposition, give the Manager a reasonable opportunity, at the Manager’s
expense, to segregate and remove such books and records as the Manager may
select. The provisions of this Section 2.3 shall not require the Manager to
transfer any proprietary material or computer programs unrelated to the
servicing of the Managed Assets.

 

Section 2.4            Administrative Duties of Manager.

 

(a)           Duties with Respect to the Transaction Documents. The Manager, in
accordance with the Managing Standard, shall perform the duties of the
applicable Securitization Entities under the Transaction Documents except for
those duties that are required to be performed by the equity holders,
stockholders, directors, or managers of such Securitization Entity pursuant to
applicable law. In furtherance of the foregoing, the Manager shall consult with
the managers or the directors, as the case may be, of each Securitization Entity
as the Manager deems appropriate regarding the duties of such Securitization
Entity under the applicable Transaction Documents. The Manager shall monitor the
performance of the Securitization Entities and, promptly upon obtaining Actual
Knowledge thereof, shall advise the applicable Securitization Entity when action
is necessary to comply with such Securitization Entity’s duties under the
applicable Transaction Documents. The Manager shall prepare for execution by the
Securitization Entities or shall cause the preparation by other appropriate
Persons of all such documents, reports, filings, instruments, certificates,
notices and opinions as it shall be the duty of the Securitization Entities to
prepare, file or deliver pursuant to the applicable Transaction Documents.

 

(b)           Duties with Respect to the Securitization Entities. In addition to
the duties of the Manager set forth in this Agreement or any of the Transaction
Documents, the Manager, in accordance with the Managing Standard, shall perform
such calculations and shall prepare for execution by each of the Securitization
Entities or shall cause the preparation by other appropriate Persons of all such
documents, reports, filings, instruments, certificates, notices and opinions as
it shall be the duty of each of the Securitization Entities to prepare, file or
deliver pursuant to applicable law, including, for the avoidance of doubt,
securities laws and franchise laws. Pursuant to the directions of each of the
Securitization Entities and in accordance with the Managing Standard, the
Manager shall administer, perform or supervise the performance of such other
activities in connection with each of the Securitization Entities as are not
covered by any of the foregoing provisions and as are expressly requested by any
Securitization Entity and are reasonably within the capability of the Manager.

 

(c)           Records.  The Manager shall maintain appropriate books of account
and records relating to the Services performed under this Agreement, which books
of account and records shall be accessible for inspection by each of the
Securitization Entities during normal business hours, and upon reasonable
notice, by the Trustee, the Back-Up Manager, the Servicer and the Controlling
Class Representative in accordance with Section 3.1(d).

 

(d)           Election of Controlling Class Representative.  Pursuant to
Section 11.1(d) of the Base Indenture, if a CCR Election results in a tie, the
Manager shall have the right to

 

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direct the Trustee to appoint one of such tied CCR Candidates selected by the
Manager as the Controlling Class Representative.

 

Section 2.5            No Offset.  The payment obligations of the Manager under
this Agreement shall not be subject to, and the Manager hereby waives, in
connection with the performance of such obligations, any right of offset that
the Manager has or may have against the Trustee, the Servicer or any of the
Securitization Entities, whether in respect of this Agreement, the other
Transaction Documents or any document governing any Managed Asset or otherwise.

 

Section 2.6            Compensation and Expenses.  As compensation for the
performance of its obligations under this Agreement, the Manager will be
entitled to receive (i) the Weekly Management Fee, and (ii) with the written
consent of the Control Party (such consent not to be unreasonably withheld or
delayed), the Supplemental Management Fee, if any, on each Weekly Allocation
Date out of amounts available therefor under the Indenture on such Weekly
Allocation Date in accordance with the Priority of Payments.  The Manager is
required to pay from its own funds all expenses it may incur in performing its
obligations hereunder.

 

Section 2.7            Indemnification.

 

(a)           The Manager agrees to indemnify and hold each of the
Securitization Entities, the Trustee, the Back-Up Manager and the Servicer (both
in its capacity as Servicer and as Control Party) and their respective members,
officers, directors, managers, employees and agents (each, an “Indemnitee”)
harmless against all claims, losses, penalties, fines, forfeitures, liabilities,
obligations, damages, actions, suits and related costs and judgments and other
costs, fees and reasonable expenses, including reasonable and documented fees,
out-of-pocket charges and disbursements of counsel (other than the allocated
costs of in-house counsel), that any of them may incur as a result of (i) the
breach by the Manager of any representation, warranty or covenant under this
Agreement or any other Transaction Document to which it is a party in its
capacity as Manager or (ii) the Manager’s bad faith, gross negligence or willful
misconduct in the performance of its duties under this Agreement and the other
Transaction Documents; provided, however, that there shall be no indemnification
under this Section 2.7(a) in respect of losses on the value of any Collateral
for a breach of any representation, warranty or covenant relating to any New
Asset provided in Article V so long as the Manager has complied with
Section 2.7(b) and Section 2.7(c) hereunder; provided, further, that the Manager
shall have no obligation of indemnity to an Indemnitee to the extent any such
claims, losses, penalties, fines, forfeitures, liabilities, obligations,
damages, actions, suits and related costs and judgments and other costs, fees
and reasonable expenses are caused by the bad faith, gross negligence, willful
misconduct, or breach of this Agreement by such Indemnitee (unless caused by the
Manager with respect to a Securitization Entity). In the event the Manager is
required to make an indemnification payment pursuant to this Section 2.7(a) the
Manager shall promptly pay such indemnification payment directly to the
applicable Indemnitee (or, if due to a Securitization Entity, shall deposit such
indemnification payment directly to the Collection Account).

 

(b)           In the event of a breach of any representation, warranty or
covenant relating to any New Asset provided in Article V that is not remedied
within thirty (30) days of the Manager having obtained Actual Knowledge of such
breach or written notice thereof, the Manager, in its capacity as transferor,
shall promptly notify the Trustee and the Servicer and

 

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cause the New Assets to be reassigned or pay the Indemnification Amount to the
applicable Securitization Entity; provided that if the applicable breach affects
only a portion of such New Asset without a Material Adverse Effect on the cash
flow generated by or in connection with such New Asset, the Manager shall only
be required to pay the Indemnification Amount with respect to such affected
portion of such New Asset.

 

(c)           In addition to the rights provided in Section 2.7(b), the Manager,
in its capacity as transferor, agrees to indemnify and hold each Indemnitee
harmless if any action or proceeding (including any governmental investigation
and/or the assessment of any fines or similar items) shall be brought or
asserted against such Indemnitee in respect of a material breach of any
representation, warranty or covenant relating to any New Asset provided in
Article V to the extent provided in Section 2.7(a).

 

(d)           Any Indemnitee that proposes to assert the right to be indemnified
under this Section 2.7 shall promptly, after receipt of notice of the
commencement of any action, suit or proceeding against such party in respect of
which a claim is to be made against the Manager, notify the Manager of the
commencement of such action, suit or proceeding, enclosing a copy of all papers
served. In the event that any action, suit or proceeding shall be brought
against any Indemnitee, such Indemnitee shall notify the Manager of the
commencement thereof and the Manager shall be entitled to participate in, and to
the extent that it shall wish, to assume the defense thereof, with its counsel
reasonably satisfactory to such Indemnitee (which, in the case of a
Securitization Entity, shall be reasonably satisfactory to the Control Party, as
well), and after notice from the Manager to such Indemnitee of its election to
assume the defense thereof, the Manager shall not be liable to such Indemnitee
for any legal expenses subsequently incurred by such Indemnitee in connection
with the defense thereof; provided that the Manager shall not enter into any
settlement with respect to any claim or proceeding unless such settlement
includes a release of such Indemnitee from all liability on claims that are the
subject matter of such settlement; and provided, further, that the Indemnitee
shall have the right to employ its own counsel in any such action the defense of
which is assumed by the Manager in accordance with this Section 2.7(d), but the
fees and expenses of such counsel shall be at the expense of such Indemnitee
unless (i) the employment of counsel by such Indemnitee has been specifically
authorized by the Manager, (ii) the Manager is advised in writing by counsel to
such Indemnitee or the Control Party that joint representation would give rise
to a conflict of interest between such Indemnitee’s position and the position of
the Manager in respect of the defense of the claim, (iii) the Manager shall have
failed within a reasonable period of time to assume the defense of such action
or proceeding and employ counsel reasonably satisfactory to the Indemnitee in
any such action or proceeding or (iv) the named parties to any such action or
proceeding (including any impleaded parties) include both the Indemnitee and the
Manager, and the Indemnitee shall have been advised by counsel that there may be
one or more legal defenses available to it which are different from or
additional to those available to the Manager (in which case, the Indemnitee
notifies the Manager in writing that it elects to employ separate counsel at the
expense of the Manager, the reasonable fees and expenses of such Indemnitee’s
counsel shall be borne by the Manager and the Manager shall not have the right
to assume the defense of such action or proceeding on behalf of such Indemnitee,
it being understood, however, that the Manager shall not, in connection with any
one such action or proceeding or separate but substantially similar or related
actions or proceedings in the same jurisdiction arising out of the same general
allegations or circumstances, be liable for such fees and expenses of more than
one separate firm of

 

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attorneys at any time for the Indemnitee). The provisions of this Section 2.7
shall survive the termination of this Agreement or the earlier resignation or
removal of any party hereto; provided, however, that no Successor Manager shall
be liable under this Section 2.7 with respect to any Defective New Asset or any
other matter occurring prior to its succession hereunder. Notwithstanding
anything in this Section 2.7 to the contrary, any delay or failure by an
Indemnitee in providing the Manager with notice of any action shall not relieve
the Manager of its indemnification obligations except to the extent the Manager
is materially prejudiced by such delay or failure of notice.

 

Section 2.8            Nonpetition Covenant.  Until the date that is one year
and one day after the date upon which the Issuer has paid in full all Series of
Notes Outstanding (and the Transaction Documents have been terminated), the
Manager will not institute against any Securitization Entity, or join with any
other Person in instituting against any Securitization Entity, any
arrangement, Insolvency or receivership proceeding under any federal or state
Insolvency or similar law or consent to, or make application for or institute or
maintain any action for, the dissolution of any Securitization Entity under the
Delaware LLC Act or any other applicable Requirements of Law.

 

Section 2.9            Franchisor Consent.  Subject to the Managing Standard and
the terms of the Indenture, the Manager shall have the authority, on behalf of
the applicable Securitization Entities, to grant or withhold consents of the
“franchisor” or “licensor” required under the Franchise Documents.

 

Section 2.10          Appointment of Sub-managers.   The Manager may enter into
Sub-management Arrangements with third parties (including Affiliates) (each, a
“Sub-manager”) to provide any of the Services hereunder; provided that, other
than with respect to a Sub-management Arrangement with an Affiliate of the
Manager, that no Sub-management Arrangement shall be effective unless and until
(i) the Manager receives the consent of the Control Party (not unreasonably
withheld or delayed), (ii) such Sub-manager executes and delivers an agreement,
in form and substance reasonably satisfactory to the Control Party, to perform
and observe, or in the case of an assignment, an assumption by such successor
entity of the due and punctual performance and observance of, the applicable
covenants and conditions to be performed or observed by the Manager under this
Agreement; provided that such Sub-management Arrangement shall be terminable by
the Control Party upon a Manager Termination Event and shall contain
transitional servicing provisions substantially similar to those provided in
Section 6.2 and intellectual property provisions substantially similar to those
provided in Section 6.3, and (iii) a written notice has been provided to the
Trustee, the Back-Up Manager, the Sub-manager and the Control Party. The Manager
shall not enter into any Sub-management Arrangement which delegates the
performance of any fundamental business operations such as responsibility for
the franchise development, operations and marketing strategies for Franchise
Holder, Taco Bell Franchisor, IP Holder and Branded Restaurants as a whole to
any Person that is not an Affiliate without receiving the prior written consent
of the Control Party. The Manager may delegate to any Sub-management
administration of any Management Account; provided that, prior to accepting
instructions from any such Sub-manager regarding any such Managed Account, the
Trustee may require that such Sub-manager provide all applicable
know-your-customer documentation required by the Trustee. Notwithstanding
anything to the contrary

 

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herein or in any Sub-management Arrangement, the Manager shall remain primarily
and directly liable for its obligations hereunder and in connection with any
Sub-management Arrangement.

 

Section 2.11          Permitted Asset Dispositions.  The Manager (acting on
behalf of each of the Securitization Entities), in accordance with Section 8.16
of the Base Indenture and the Managing Standard, may dispose of property of any
of the Securitization Entities from time to time pursuant to a Permitted Asset
Disposition. Upon receipt of any Asset Disposition Proceeds from any Permitted
Asset Disposition, the Manager (on behalf of the applicable Securitization
Entities), in accordance with Section 5.10 of the Base Indenture, shall deposit
or cause the deposit of such Asset Disposition Proceeds to the Asset Disposition
Proceeds Account. At the election of the Manager (on behalf of the applicable
Securitization Entity) and so long as no Rapid Amortization Event shall have
occurred and be continuing, the Manager (on behalf of the Securitization
Entities) may reinvest such Asset Disposition Proceeds in Eligible Assets within
the applicable Asset Disposition Reinvestment Period.

 

Section 2.12          Manager Advances.  The Manager may, but is not obligated
to, make Manager Advances to, or on behalf of, any Securitization Entity in
connection with the operation of the Managed Assets. Manager Advances will
accrue interest at the Advance Interest Rate and shall be reimbursable on each
Weekly Allocation Date in accordance with the Priority of Payments.

 

ARTICLE III

 

STATEMENTS AND REPORTS

 

Section 3.1            Reporting by the Manager.

 

(a)           Reports Required Pursuant to the Indenture. The Manager, on behalf
of each of the Securitization Entities, shall furnish, or cause to be furnished,
to the Trustee, all reports and notices required to be delivered to the Trustee
by any Securitization Entity pursuant to the Indenture (including pursuant to
Article IV of the Base Indenture) or any other Transaction Document.

 

(b)           Instructions as to Withdrawals and Payments. The Manager, on
behalf of the Issuer, will furnish, or cause to be furnished, to the Trustee or
the Paying Agent, as applicable, written instructions to make withdrawals and
payments from the Collection Account and any other Base Indenture Accounts or
any Series Account, as contemplated herein, in the Base Indenture and in any
Series Supplement. The Trustee and the Paying Agent shall follow any such
written instructions in accordance with the terms and conditions of the Base
Indenture and any applicable Series Supplement.

 

(c)           Delivery of Financial Statements. The Manager shall provide the
financial statements of the Issuer and each of the Securitization Entities as
required under Section 4.1(f) of the Base Indenture.

 

(d)           Franchisee Termination Notices. The Manager shall send to the
Trustee, the Servicer and the Back-Up Manager, as soon as reasonably practicable
but in no event later than 15 Business Days of the transmittal thereof, a copy
of any notices of termination of one or

 

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more Franchise Agreements sent by the Manager on behalf of any Securitization
Entity to any Franchisee unless (i) the related Franchised
Restaurant(s) generated less than $1,000,000 in Franchisee Royalty Payments
during the immediately preceding fiscal year or (ii) the related Franchised 
Restaurant  continues  to  operate  pursuant to an agreement between any
Securitization Entity  or the Manager on its behalf and such Franchisee or any
other Franchisee.

 

(e)           Additional Information; Access to Books and Records. The Manager
shall furnish from time to time such additional information regarding the
Collateral or compliance with the covenants and other agreements of any
Securitization Entity under the Transaction Documents as the Trustee, the
Back-Up Manager or the Servicer may reasonably request, subject at all times to
compliance with the Exchange Act, the Securities Act and any other applicable
law and appropriate confidentiality requirements. The Manager shall, and shall
cause each Securitization Entity to, permit, at reasonable times upon reasonable
notice, the Servicer, the Controlling Class Representative and the Trustee or
any Person appointed by any of them as its agent to visit and inspect any of its
properties, examine its books and records and discuss its affairs with its
officers, directors, managers, employees and independent certified public
accountants, and up to one such visit and inspection by any of the Servicer, the
Controlling Class Representative and the Trustee, or any Person appointed by
them shall be reimbursable as a Securitization Operating Expense per calendar
year, with any additional visit or inspection by any such Person being at such
Person’s sole cost and expense; provided, however, that during the continuance
of a Warm Back-Up Management Trigger Event or Manager Termination Event, or to
the extent expressly required without the instruction of any other party under
the terms of any Transaction Documents, any such Person may visit and conduct
such activities at any time and all such visits and activities will constitute a
Securitization Operating Expense; provided, further that the Servicer, the
Trustee and the Controlling Class Representative shall use commercially
reasonable efforts to coordinate their visit and inspection such that they will
occur concurrently. Notwithstanding the foregoing, the Manager shall not be
required to disclose or make available communications protected by the
attorney-client privilege.

 

(f)            Leadership Team Changes. The Manager shall promptly notify the
Trustee, the Back-Up Manager and the Servicer of any termination or resignation
of three or more persons included in the Leadership Team that occurs within
twelve (12) months of a Change of Control.

 

Section 3.2            Appointment of Independent Auditor.  On or before the
Closing Date, the Securitization Entities shall appoint a firm of independent
public accountants of recognized national reputation that is reasonably
acceptable to the Control Party to serve as the independent auditors
(“Independent Auditors”) for purposes of preparing and delivering the reports
required under Section 3.3. It is hereby acknowledged that the accounting firm
of KPMG LLP is acceptable for purposes of serving as Independent Auditors. The
Securitization Entities may not remove the Independent Auditors without first
giving thirty (30) days’ prior written notice to the Independent Auditors, with
a copy of such notice also given concurrently to the Trustee, the Rating Agency,
the Control Party, the Manager (if applicable) and the Servicer. Upon any
resignation by such firm or removal of such firm, the Securitization Entities
shall promptly appoint a successor thereto that shall also be a firm of
independent public accountants of recognized national reputation to serve as the
Independent Auditors hereunder. If the Securitization Entities shall fail to
appoint a successor firm of Independent Auditors within thirty

 

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(30) days after the effective date of any such resignation or removal, the
Control Party shall promptly appoint a successor firm of independent public
accountants of recognized national reputation that is reasonably satisfactory to
the Manager to serve as the Independent Auditors hereunder.  The fees of any
Independent Auditors shall be payable by the Securitization Entities.

 

Section 3.3            Annual Accountants’ Reports.  The Manager shall furnish,
or cause to be furnished to the Trustee, the Servicer and the Rating Agency,
within one hundred and twenty (120) days after the end of each fiscal year of
the Manager, commencing with the fiscal year ending on or about December 27,
2016, (i) a report of the Independent Auditors (who may also render other
services to the Manager) or the Back-Up Manager summarizing the findings of a
set of agreed-upon procedures performed by the Independent Auditors or the
Back-Up Manager with respect to compliance with the Quarterly Noteholders’
Reports for such fiscal year (or other period) with the standards set forth
herein, and (ii) a report of the Independent Auditors or the Back-Up Manager to
the effect that such firm has examined the assertion of the Manager’s management
as to its compliance with its management requirements for such fiscal year (or
other period), and that (x) in the case of the Independent Auditors, such
examination was made in accordance with standards established by the American
Institute of Certified Public Accountants and (y) except as described in the
report, management’s assertion is fairly stated in all material respects. In the
case of the Independent Auditors, the report will also indicate that the firm is
independent of the Manager within the meaning of the Code of Professional Ethics
of the American Institute of Certified Public Accountants (each, an “Annual
Accountants’ Report”). In the event such Independent Auditors require the
Trustee to agree to the procedures to be performed by such firm in any of the
reports required to be prepared pursuant to this Section 3.3, the Manager shall
direct the Trustee in writing to so agree as to the procedures described
therein; it being understood and agreed that the Trustee shall deliver such
letter of agreement (which shall be in a form reasonably satisfactory to the
Trustee) in conclusive reliance upon the direction of the Manager, and the
Trustee has not made any independent inquiry or investigation as to, and shall
have no obligation or liability in respect of, the sufficiency, validity or
correctness of such procedures.

 

Section 3.4            Available Information.  The Manager, on behalf of each of
the Securitization Entities, shall make available the information requested by
prospective purchasers necessary to satisfy the requirements of Rule 144A under
the Securities Act, as amended, subject to the Manager’s confidentiality
requirements. The Manager shall deliver such information, and shall promptly
deliver copies of all Quarterly Noteholders’ Reports and Annual Accountants’
Reports, to the Trustee as contemplated under Section 4.4 of the Base Indenture,
to enable the Trustee to redeliver such information to purchasers or prospective
purchasers of the Notes as contemplated by Section 4.4 of the Base Indenture.

 

Section 3.5            Weekly Manager’s Certificate.  The Manager shall deliver
a weekly certificate in the form of Exhibit C to the Trustee as required under
the terms of this Agreement and the Indenture.

 

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ARTICLE IV

 

THE MANAGER

 

Section 4.1            Representations and Warranties Concerning the Manager. 
The Manager represents and warrants to each Securitization Entity, the Trustee
and the Servicer, as of the Closing Date (except if otherwise expressly noted),
as follows:

 

(a)           Organization and Good Standing. The Manager (i) is a corporation,
duly formed and organized, validly existing and in good standing under the laws
of the State of California, (ii) is duly qualified to do business as a foreign
corporation and in good standing under the laws of each jurisdiction where the
character of its property, the nature of its business or the performance of its
obligations under the Transaction Documents make such qualification necessary
and (iii) has the power and authority (x) to own its properties and to conduct
its business as such properties are currently owned and such business is
currently conducted and (y) to perform its obligations under this Agreement,
except in each case referred to in clause (ii) or (iii) to the extent that a
failure to do so would not reasonably be expected to result in a Material
Adverse Effect on the Manager.

 

(b)           Power and Authority; No Conflicts. The execution and delivery by
the Manager of this Agreement and its performance of, and compliance with, the
terms hereof are within the power of the Manager and have been duly authorized
by all necessary corporate action on the part of the Manager. Neither the
execution and delivery of this Agreement, nor the consummation of the
transactions herein, nor compliance with the provisions hereof, shall conflict
with or result in a breach of, or constitute a default (or an event which, with
notice or lapse of time, or both, would constitute a default) under, any order
of any Governmental Authority or any of the provisions of any Requirement of Law
binding on the Manager or its properties, or the charter or bylaws or other
organizational documents of the Manager, or any of the provisions of any
material indenture, mortgage, lease, contract or other instrument to which the
Manager is a party or by which it or its property is bound or result in the
creation or imposition of any Lien upon any of its property pursuant to the
terms of any such indenture, mortgage, leases, contract or other instrument,
except, in each case, (i) pursuant to the Indenture and the other Transaction
Documents or (ii) to the extent such default, creation or imposition would not
reasonably be expected to result in a Material Adverse Effect on the Manager,
the Collateral, taken as a whole, or any of the Securitization Entities.

 

(c)           Consents. Except (i) for filings and/or registrations as a
franchise broker or franchise sales agent as may be required under state
franchise statutes and regulations, (ii) to the extent that a state or foreign
franchise law requires filing and other compliance actions by virtue of
considering the Manager as a “subfranchisor”, (iii) for any consents, licenses,
approvals, authorizations, registrations, notifications, waivers or declarations
that have been obtained or made and are in full force and effect and (iv) to the
extent that a failure to do so would not reasonably be expected to result in a
Material Adverse Effect on the Manager, the Collateral, taken as a whole, or any
of the Securitization Entities, the Manager is not required to obtain the
consent of any other party or the consent, license, approval or authorization
of, or file any registration or declaration with, any Governmental Authority in
connection with the execution,

 

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delivery or performance by the Manager of this Agreement, or the validity or
enforceability of this Agreement against the Manager.

 

(d)           Due Execution and Delivery. This Agreement has been duly executed
and delivered by the Manager and constitutes a legal, valid and binding
obligation of the Manager enforceable against the Manager in accordance with its
terms (subject to applicable insolvency laws and to general principles of
equity).

 

(e)           No Litigation. There are no actions, suits, investigations or
proceedings pending or, to the Actual Knowledge of the Manager, threatened
against or affecting the Manager, before or by any Governmental Authority having
jurisdiction over the Manager or any of its properties or with respect to any of
the transactions contemplated by this Agreement asserting the illegality,
invalidity or unenforceability, or seeking any determination or ruling that
would affect the legality, binding effect, validity or enforceability of this
Agreement or which would reasonably be expected to result in a Material Adverse
Effect on the Manager, the Collateral, taken as a whole, or any of the
Securitization Entities.

 

(f)            Compliance with Requirements of Law. The Manager is in compliance
with all Requirements of Law except to the extent that the failure to comply
therewith would not, in the aggregate, reasonably be expected to result in a
Material Adverse Effect on the Manager, the Collateral, taken as a whole, or any
of the Securitization Entities.

 

(g)           No Default. The Manager is not in default under any agreement,
contract, instrument or indenture to which the Manager is a party or by which it
or its properties is or are bound, or with respect to any order of any
Governmental Authority, except to the extent such default would not reasonably
be expected to result in a Material Adverse Effect on the Manager or the
Collateral, taken as a whole; and no event has occurred which with notice or
lapse of time or both would constitute such a default with respect to any such
agreement, contract, instrument or indenture, or with respect to any such order
of any Governmental Authority.

 

(h)           Taxes. The Manager has filed or caused to be filed and shall file
or cause to be filed all federal tax returns and all material state and other
tax returns that are required to be filed except where the failure to do so
would not reasonably be expected to result in a Material Adverse Effect. The
Manager has paid or caused to be paid, and shall pay or cause to be paid, all
material taxes owed by the Manager pursuant to said returns or pursuant to any
assessments made against it or any of its property (other than any amount of tax
the validity of which is currently being contested in good faith by appropriate
proceedings and with respect to which reserves in accordance with GAAP, to the
extent required, have been provided on the books of the Manager).

 

(i)            Accuracy of Information. No written report, financial statements,
certificate or other information furnished (other than projections, budgets,
other estimates and general market, industry and economic data) to the Servicer
by or on behalf of the Manager in connection with the transactions contemplated
hereby or pursuant to any provision of this Agreement or any other Transaction
Document (when taken together with all other information furnished by or on
behalf of the Manager to the Servicer), contains any material misstatement of
fact as of the date furnished or omits to state any material fact necessary to
make the statements

 

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therein not materially misleading in each case when taken as a whole and in the
light of the circumstances under which they were made; and with respect to its
projected financial information, the Manager represents only that such
information was prepared in good faith based on assumptions believed to be
reasonable at the time.

 

(j)            Financial Statements. As of the Closing Date, the consolidated
balance sheet of YBI included in the Offering Memorandum reported on and
accompanied by a report from the Independent Auditors, presents fairly in all
material respects the financial condition of YBI as of such date. Such financial
statement, including the related schedules and notes thereto, has been prepared
in accordance with GAAP (except as otherwise stated therein).

 

(k)           No Material Adverse Change. Since May 11, 2016, except as
otherwise set forth in the Offering Memorandum, there has been no development or
event that has had or would reasonably be expected to result in a Material
Adverse Effect on the Manager or the Collateral, taken as a whole.

 

(l)            ERISA. During the five-year period prior to the date on which
this representation is made or deemed made with respect to any Pension Plan or
Multiemployer Plan, no ERISA Event has occurred which would reasonably be
expected to have a Material Adverse Effect. Except as would not reasonably be
expected to have a Material Adverse Effect, neither the Manager nor any of its
Subsidiaries has any contingent liability with respect to any post-retirement
medical benefits under a Welfare Plan, other than liability for continuation
coverage described in Part 6 of Subtitle B of Title I of ERISA or other
applicable similar continuation of coverage laws. Except as would not reasonably
be expected to have a Material Adverse Effect, (i) no Multiemployer Plan is
insolvent (as defined in Section 4245 of ERISA) and (ii) no non-exempt
prohibited transaction (as defined in Section 406 of ERISA or Section 4975 of
the Code) has occurred involving any Employee Benefit Plan.

 

(m)          No Manager Termination Event. No Manager Termination Event has
occurred or is continuing, and, to the Actual Knowledge of the Manager, there is
no event which, with notice or lapse of time, or both, would constitute a
Manager Termination Event.

 

(n)           Location of Records. The offices at which the Manager keeps its
records concerning the Managed Assets are located at the addresses indicated in
Section 8.5.

 

(o)           DISCLAIMER. EXCEPT FOR THE MANAGER’S REPRESENTATIONS AND
WARRANTIES SET FORTH HEREIN AND IN ANY OTHER TRANSACTION DOCUMENT, THE MANAGER
MAKES NO WARRANTIES, EXPRESS OR IMPLIED, EITHER IN FACT OR BY OPERATION OF LAW,
STATUTORY OR OTHERWISE, WITH RESPECT TO THE SUBJECT MATTER HEREOF TO ANY OTHER
PARTY, AND EACH PARTY EXPRESSLY DISCLAIMS ANY IMPLIED WARRANTIES, INCLUDING
WARRANTY OF TITLE, NON-INFRINGEMENT, MERCHANTABILITY OR FITNESS FOR A PARTICULAR
PURPOSE.

 

Section 4.2            Existence; Status as Manager.  The Manager shall (a) keep
in full effect its existence under the laws of the state of its incorporation,
(b) maintain all rights and privileges necessary or desirable in the normal
conduct of its business and the performance of its

 

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obligations hereunder except to the extent that failure to do so would not
reasonably be expected to result in a Material Adverse Effect and (c) obtain and
preserve its qualification to do business in each jurisdiction in which the
failure to so qualify either individually or in the aggregate would reasonably
be expected to result in a Material Adverse Effect.

 

Section 4.3            Taxes.  The Manager shall file or cause to be filed all
federal tax returns and all material state and other tax returns which, to the
Actual Knowledge of the Manager, are required to be filed by the Manager, except
where the failure to do so would not reasonably be expected to result in a
Material Adverse Effect. The Manager shall pay or make adequate provisions for
the payment of all taxes shown as due on such returns, and all assessments made
against it or any of its property (other than any amount of such tax the
validity of which is being contested in good faith by appropriate proceedings
and with respect to which reserves in accordance with GAAP have been provided on
the books of the Manager).

 

Section 4.4            Performance of Obligations.

 

(a)           Performance. The Manager shall perform and observe all of its
obligations and agreements contained in this Agreement and the other Transaction
Documents in all material respects in accordance with the terms hereof and
thereof and in accordance with the Managing Standard, as applicable.

 

(b)           Special Provisions as to Securitization IP.  The Manager
acknowledges and agrees that IP Holder has the right and duty to control the
quality of the goods and services offered under IP Holder’s Trademarks included
in the Securitization IP and the manner in which such Trademarks are used in
order to maintain the validity and enforceability of and its ownership of the
Trademarks included in the Securitization IP. The Manager shall not take any
action contrary to the express written instruction of IP Holder with respect to:
(A) the promulgation of standards with respect to the operation of the Branded
Restaurants, including quality of food, cleanliness, appearance, and level of
service (or the making of material changes to the existing standards), (B) the
promulgation of standards with respect to new businesses, products and services
which IP Holder approves for inclusion in the license granted under any IP
License Agreement (or other license agreement or sublicense agreement for which
the Manager is performing IP Services), (C) the nature and implementation of
means of monitoring and controlling adherence to the standards, (D) the terms of
any Franchise Agreements or other sublicense agreements relating to the quality
standards which licensees must follow with respect to businesses, products, and
services offered under the Trademarks included in the Securitization IP and the
usage of such Trademarks, (E) the commencement and prosecution of enforcement
actions with respect to the Trademarks included in the Securitization IP and the
terms of any settlements thereof, (F) the adoption of any variations on the Taco
Bell Brand which are not in use on the date hereof, or other new Trademarks to
be included in the Securitization IP, (G) the abandonment of any Securitization
IP and (H) any uses of the Securitization IP that are not consistent with the
Managing Standard. IP Holder shall have the right to monitor the Manager’s
compliance with the foregoing and its performance of the IP Services and, in
furtherance thereof, Manager shall provide IP Holder, at its written request
from time to time, with copies of Franchise Documents and other sublicenses,
samples of products and materials bearing the Trademarks included in the
Securitization IP used by Franchisees and other licensees and sublicensees.
Nothing in this Agreement shall limit IP Holder’s rights or the licensees’

 

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obligations under the IP License Agreements or any other agreement with respect
to which the Manager is performing IP Services.

 

(d)           IP Holder hereby grants to the Manager a non-exclusive,
royalty-free sublicensable license to use the Securitization IP in connection
with the performance of the Services under this Agreement, including a license
to modify and develop Securitization IP consistent with the Managing Standard.
In connection with the Manager’s or any Sub-manager’s use of any Trademark
included in the Securitization IP pursuant to the foregoing license, the Manager
agrees to adhere to the quality control provisions and sublicensing provisions,
with respect to sublicenses issued hereunder, which are contained in each IP
License Agreement, as applicable to the product or service to which such
Trademark pertains, as if such provisions were incorporated by reference herein.

 

(e)           License from Manager and Sub-manager to IP Holder. The Manager and
each Sub-manager hereby grant IP Holder and any Successor Manager a perpetual,
non- exclusive, royalty-free, sublicensable, worldwide right and license to use
any proprietary software owned by the Manager or such Sub-manager, as
applicable, for use in connection with operation of the Branded Restaurants.

 

(f)            Right to Receive Instructions. Without limiting the Manager’s
obligations under Section 4.4(b) above, in the event that the Manager is unable
to decide between alternative courses of action, or is unsure as to the
application of any provision of this Agreement, the other Transaction Documents
or any Managed Documents, or any such provision is, in the good faith judgment
of the Manager, ambiguous as to its application, or is, or appears to be, in
conflict with any other applicable provision, or in the event that this
Agreement, any other Transaction Document or any Managed Document permits any
determination by the Manager or is silent or is incomplete as to the course of
action which the Manager is required to take with respect to a particular set of
facts, the Manager may make a Consent Request to the Control Party for written
instructions in accordance with the Indenture and the other Transaction
Documents and, to the extent that the Manager shall have acted or refrained from
acting in good faith in accordance with instructions, if any, received from the
Control Party with respect to such Consent Request, the Manager shall not be
liable on account of such action or inaction to any Person; provided that the
Control Party shall be under no obligation to provide any such instruction if it
is unable to decide between alternative courses of action. Subject to the
Managing Standard, if the Manager shall not have received appropriate
instructions from the Control Party within ten (10) Business Days of such notice
(or within such shorter period of time as may be specified in such notice), the
Manager may, but shall be under no duty to, take or refrain from taking such
action, not inconsistent with this Agreement or the Transaction Documents, as
the Manager shall deem to be in the best interests of the Noteholders and each
of the Securitization Entities. The Manager shall have no liability to any
Secured Party or the Controlling Class Representative for such action or
inaction taken in reliance on the preceding sentence except for the Manager’s
own bad faith, gross negligence or willful misconduct.

 

(g)           Limitation on Manager’s Duties and Responsibilities. The Manager
shall not have any duty or obligation to manage, make any payment in respect of,
register, record, sell, reinvest, dispose of, create, perfect or maintain title
to, or any security interest in, or otherwise deal with the Collateral, to
prepare or file any report or other document or to otherwise take or

 

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refrain from taking any action under, or in connection with, any document
contemplated hereby to which the Manager is a party, except as expressly
provided by the terms of this Agreement or the other Transaction Documents and
consistent with the Managing Standard, and no such implied duties or obligations
shall be read into this Agreement against the Manager. The Manager nevertheless
agrees that it shall, at its own cost and expense, promptly take all action as
may be necessary to discharge any Liens (other than Permitted Liens) on any part
of the Managed Assets which result from valid claims against the Manager
personally and not related to the ownership or administration of the Managed
Assets or the transactions contemplated by the Transaction Documents. Except as
otherwise set forth herein and in the other Transaction Documents, the Manager
shall have no responsibility under this Agreement other than to render the
Services in good faith and consistent with the Managing Standard.

 

(h)           Dealing with Collateral.  The Manager shall not manage, control,
use, sell, reinvest, dispose of or otherwise deal with any part of the
Collateral except in accordance with the powers granted to, and the authority
conferred upon, the Manager pursuant to this Agreement or the other Transaction
Documents.

 

(i)            Limitations on the Manager’s Liabilities, Duties and
Responsibilities. Subject to Section 2.7 and except for any loss, liability,
expense, damage, action, suit or injury arising out of, or resulting from,
(i) the breach by the Manager of any representation, warranty or covenant made
by it herein or any other Transaction Document to which it is a party in its
capacity as Manager or (ii) acts or omissions constituting the Manager’s own bad
faith, gross negligence or willful misconduct in the performance of its duties
hereunder or under the other Transaction Documents to which it is a party in its
capacity as Manager, neither the Manager nor any of its Affiliates, managers,
officers, members or employees shall be liable to any Securitization Entity, the
Noteholders or any other Person under any circumstances, including, without
limitation:

 

(1)       for any action taken or omitted to be taken by the Manager in good
faith in accordance with the instructions of the Trustee or the Control Party;

 

(2)       for any representation, warranty, covenant, agreement or Indebtedness
of any Securitization Entity under the Notes, any other Transaction Documents or
the Managed Documents, or for any other liability or obligation of any
Securitization Entity;

 

(3)       for the validity or sufficiency of this Agreement or the due execution
hereof by any party hereto other than the Manager, or the form, character,
genuineness, sufficiency, value or validity of any part of the Collateral
(including the creditworthiness of any Franchisee, lessee or other obligor
thereunder), or for, or in respect of, the validity or sufficiency of the
Transaction Documents;

 

(4)       for any action or inaction of the Trustee, the Back-Up Manager or the
Servicer or  for  the  performance  of,  or  the  supervision  of  the 
performance  of,  any obligation under this Agreement or any other Transaction
Document that is required to be performed by the Trustee, the Back-Up Manager or
the Servicer; and

 

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(5)       for any error of judgment made in good faith that does not violate the
Managing Standard.

 

(j)            No Financial Liability. Notwithstanding anything in this
Agreement to the contrary, no provision of this Agreement (other than
Section 2.7, 4.4(g) and 4.4(k)) shall require the Manager to expend or risk its
funds or otherwise incur any financial liability in the performance of any of
its rights or powers hereunder, if the Manager shall have reasonable grounds for
believing that repayment of such funds or adequate indemnity against such risk
or liability is not compensated by the payment of the Weekly Management Fees and
is otherwise not reasonably assured or provided to the Manager. The Manager
shall not be liable under the Notes and shall not be responsible for any amounts
required to be paid by the Issuer under or pursuant to the Indenture.

 

(k)           Reliance. The Manager may, reasonably and in good faith,
conclusively rely on, and shall be protected in acting or refraining from acting
when doing so, in each case in accordance with any signature, instrument,
notice, resolution, request, consent, order, certificate, report, opinion, bond
or other document or paper reasonably believed by it to be genuine and believed
by it to be signed by the proper party or parties other than its Affiliates. The
Manager may reasonably accept a certified copy of a resolution of the board of
directors or other governing body of any corporate or other entity other than
its Affiliates as conclusive evidence that such resolution has been duly adopted
by such body and that the same is in full force and effect. As to any fact or
matter the manner or ascertainment of which is not specifically prescribed
herein, the Manager may in good faith for all purposes hereof reasonably rely on
a certificate, signed by any Authorized Officer of the relevant party, as to
such fact or matter, and such certificate reasonably relied upon in good faith
shall constitute full protection to the Manager for any action taken or omitted
to be taken by it in good faith in reliance thereon.

 

(l)            Consultations with Third Parties; Advice of Counsel. In the
exercise and performance of its duties and obligations hereunder or under any of
the Transaction Documents, the Manager (A) may act directly or through agents or
attorneys pursuant to agreements entered into with any of them; provided that
the Manager shall remain primarily liable hereunder for the acts or omissions of
such agents or attorneys and (B) may, at the expense of the Manager, consult
with external counsel or accountants selected and monitored by the Manager in
good faith and in the absence of gross negligence, and the Manager shall not be
liable for anything done, suffered or omitted in good faith by it in accordance
with the advice or opinion of any such external counsel or accountants with
respect to legal or accounting matters.

 

(m)          Independent Contractor. In performing its obligations as manager
hereunder the Manager acts solely as an independent contractor of each of the
Securitization Entities, except to the extent the Manager is deemed to be an
agent of any of the Securitization Entities by virtue of engaging in franchise
sales activities, as a broker, or receiving payments on behalf of each of the
Securitization Entities, as applicable. Nothing in this Agreement shall, or
shall be deemed to, create or constitute any joint venture, partnership,
employment, or any other relationship between any of the Securitization Entities
and the Manager other than the independent contractor contractual relationship
established hereby.   Nothing herein shall be deemed to vest in the Manager
title to, or ownership or property interest in, any of the Securitization IP.
Except as otherwise expressly provided herein or in the other Transaction

 

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Documents, the Manager shall not be, nor shall be deemed to be, liable for any
acts or obligations of the Securitization Entities, the Trustee, the Back-Up
Manager or the Servicer.

 

Section 4.5            Merger and Resignation.

 

(a)           Preservation of Existence. The Manager shall not merge into any
other Person or convey, transfer or lease substantially all of its assets;
provided, however, that nothing contained in this Agreement shall be deemed to
prevent (i) the merger into the Manager of another Person, (ii) the
consolidation of the Manager and another Person, (iii) the merger of the Manager
into another Person or (iv) the sale of substantially all of the property or
assets of the Manager to another Person, so long as (A) the surviving Person of
the merger or consolidation or the purchaser of the assets of the Manager shall
continue to be engaged in the same line of business as the Manager and shall
have the capacity to perform its obligations hereunder with at least the same
degree of care, skill and diligence as measured by customary practices with
which the Manager is required to perform such obligations hereunder, (B) in the
case of a merger, consolidation or sale, the surviving Person of the merger or
the purchaser of the assets of the Manager shall expressly assume the
obligations of the Manager under this Agreement and expressly agree to be bound
by all other provisions applicable to the Manager under this Agreement in a
supplement to this Agreement in form and substance reasonably satisfactory to
the Trustee and the Control Party and (C) with respect to such event, in and of
itself, the Rating Agency Condition has been satisfied.

 

(b)           Resignation. The Manager shall not resign from the rights, powers,
obligations and duties hereby imposed on it except upon determination that
(A) the performance of its duties hereunder is no longer permissible under
applicable Requirements of Law and (B) there is no reasonable action that the
Manager could take to make the performance of its duties hereunder permissible
under applicable Requirements of Law. Any such determination permitting the
resignation of the Manager pursuant to clause (A) above shall be evidenced by an
Opinion of Counsel to such effect delivered to the Trustee, the Back-Up Manager
and the Control Party. No such resignation shall become effective until a
Successor Manager shall have been appointed by the Control Party (acting at the
direction of the Controlling Class Representative) and shall have assumed the
responsibilities and obligations of the Manager in accordance with
Section 6.1(a). The Trustee, the Securitization Entities, the Back-Up Manager,
the Control Party, the Servicer and the Rating Agency shall be notified of such
resignation in writing by the Manager. From and after such effectiveness, the
Successor Manager shall be, to the extent of the assignment, the “Manager”
hereunder. Except as provided above in this Section 4.5 the Manager may not
assign this Agreement or any of its rights, powers, duties or obligations
hereunder.

 

(c)           Term of Manager’s Obligations. Except as provided in
Section 4.5(b), the duties and obligations of the Manager under this Agreement
shall commence on the date hereof and continue until this Agreement shall have
been terminated as provided in Section 6.1 or Section 8.1, and shall survive the
exercise by any Securitization Entity, the Trustee or the Control Party of any
right or remedy under this Agreement (other than the right of termination
pursuant to Section 6.1), or the enforcement by any Securitization Entity, the
Trustee,  the  Servicer,  the  Back-Up  Manager,  the  Control  Party,  the 
Controlling  Class Representative or any

 

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Noteholder of any provision of the Indenture, the Notes, this Agreement or the
other Transaction Documents.

 

Section 4.6            Notice of Certain Events.  The Manager shall give written
notice to the Trustee, the Back-Up Manager, the Servicer and the Rating Agency
promptly upon the occurrence of any of the following events (but in any event no
later than five (5) Business Days after the Manager has Actual Knowledge of the
occurrence of such an event): (a) an ERISA Event, (b) notice of the institution
of proceedings or the taking of any other action by the PBGC or the Manager or
any member of its Controlled Group that is intended to result in the withdrawal
from, or the termination or insolvency of, any Pension Plan or Multiemployer
Plan, (c) any other event or condition shall occur or exist with respect to a
Plan (but in each case in clauses (a) through (c) above, only if such event or
condition, together with all other such events or conditions, if any, would
reasonably be expected to result in a Material Adverse Effect); (d) a Manager
Termination Event, an Event of Default, a Hot Back-Up Management Trigger Event,
a Warm Back-Up Management Trigger Event or a Rapid Amortization Event or any
event which would, with the passage of time or giving of notice or both, would
become one or more of the same; or (e) any action, suit, investigation or
proceeding pending or, to the Actual Knowledge of the Manager, threatened
against or affecting the Manager, before or by any court, administrative agency,
arbitrator or governmental body having jurisdiction over the Manager or any of
its properties either asserting the illegality, invalidity or unenforceability
of any of the Transaction Documents, seeking any determination or ruling that
would affect the legality, binding effect, validity or enforceability of any of
the Transaction Documents or that would reasonably be expected to result in a
Material Adverse Effect.

 

Section 4.7            Capitalization.  The Manager shall  have  sufficient 
capital  to perform all of its obligations under this Agreement at all times
from the Closing Date and until the Indenture has been terminated in accordance
with the terms thereof.

 

Section 4.8            Maintenance of Separateness.  The Manager covenants that,
except as otherwise contemplated by the Transaction Documents:

 

(a)           the books and records of the Securitization Entities shall be
maintained in such a manner as to permit them to be readily and inexpensively
separated from those of the Manager and each of its Affiliates that is not a
Securitization Entity;

 

(b)           the Manager shall observe (and shall cause each of its Affiliates
that is not a Securitization Entity to observe) corporate and limited liability
company formalities in its dealings with any Securitization Entity;

 

(c)           in the event there shall be separate financial statements for the
Manager, all such financial statements of the Manager that are consolidated to
include any Securitization Entity and that are distributed to any party shall
contain detailed notes clearly stating that (i) all of such Securitization
Entity’s assets are owned by such Securitization Entity and (ii) such
Securitization Entity is a separate entity and has separate creditors;

 

(d)           except as contemplated under Sections 2.2(d)-(e) of this
Agreement, the Manager shall not (and shall not permit any of its Affiliates
that is not a Securitization Entity to)

 

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commingle its funds with any funds of any Securitization Entity; provided that
the foregoing shall not prohibit the Manager or any successor to or assignee of
the Manager from holding funds of any of the Securitization Entities in its
capacity as Manager for such entity in a segregated account identified for such
purpose;

 

(e)           the Manager shall (and shall cause each of its Affiliates that is
not a Securitization Entity to) maintain arm’s length relationships with each
Securitization Entity, and each of the Manager and each of its Affiliates that
is not a Securitization Entity shall be compensated at market rates for any
services it renders or otherwise furnishes to any Securitization Entity, it
being understood that the Weekly Management Fee, the Supplemental Management Fee
and this Agreement are representative of such arm’s length relationship;

 

(f)            the Manager shall not be, and shall not hold itself out to be,
liable for the debts of any Securitization Entity or the decisions or actions in
respect of the daily business and affairs of any of the Securitization Entities
and the Manager shall not permit any of the Securitization Entities to hold the
Manager out to be liable for the debts of such Securitization Entity or the
decisions or actions in respect of the daily business and affairs of such
Securitization Entity; and

 

(g)           upon an officer or other responsible party of the Manager
obtaining Actual Knowledge that any of the foregoing provisions in this
Section 4.8 has been breached or violated in any material respect, the Manager
shall promptly notify the Trustee, the Back-Up Manager, the Control Party and
the Rating Agency of same and shall take such actions as may be reasonable and
appropriate under the circumstances to correct and remedy such breach or
violation as soon as reasonably practicable under such circumstances.

 

Section 4.9            No Competitive Business.  The Manager shall (i) not
engage in any Competitive Business and (ii) cause the applicable
Non-Securitization Entities to contribute to one or more Securitization Entities
any National Mexican Quick Service Restaurant Brand that, in the good faith
determination of the Manager in accordance with the Managing Standard, is
intended to compete with and will have a material adverse effect on the Taco
Bell Brand or any Future Brand.

 

ARTICLE V

 

REPRESENTATIONS, WARRANTIES AND COVENANTS

 

Section 5.1            Representations and Warranties Made in Respect of New
Assets.

 

(a)           New Franchise Agreements. As of the applicable New Asset Addition
Date with respect to a New Franchise Agreement acquired or entered into on such
New Asset Addition Date, the Manager represents and warrants to the
Securitization Entities, the Trustee and the Servicer that: (i) such New
Franchise Agreement does not contain terms and conditions that are reasonably
expected to result in (A) a material decrease in the amount of Collections
constituting Franchisee Royalty Payments, taken as a whole, (B) a material
adverse change in the nature, quality or timing of Collections constituting
Franchisee Royalty Payments, taken as a whole, or (C) a material adverse change
in the types of underlying assets generating Collections

 

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constituting Franchisee Royalty Payments, taken as a whole, in each case when
compared to the amount, nature or quality of, or types of assets generating,
Collections that would have been reasonably expected to result had such New
Franchise Agreement been entered into in accordance with the then-current
Franchise Documents; (ii) such New Franchise Agreement is genuine, and is the
legal, valid and binding obligation of the parties thereto and is enforceable
against the parties thereto in accordance with its terms (except as such
enforceability may be limited by bankruptcy or Insolvency Laws and by general
principles of equity, regardless of whether such enforceability shall be
considered in a proceeding in equity or at law); (iii) such New Franchise
Agreement complies in all material respects with all applicable Requirements of
Law; (iv) the Franchisee related to such New Franchise Agreement is not, to the
Actual Knowledge of the Manager, the subject of a bankruptcy proceeding;
(v) royalty fees payable pursuant to such New Franchise Agreement are payable by
the related Franchisee at least monthly; (vi) except as required by applicable
Requirements of Law, such New Franchise Agreement contains no contractual rights
of set-off in favor of Franchisees; and (vii) except as required by applicable
Requirements of Law, such New Franchise Agreement is freely assignable by the
applicable Securitization Entities.

 

(b)           New Development Agreements. As of the applicable New Asset
Addition Date with respect to a New Development Agreement acquired or entered
into on such New Asset Addition Date, the Manager represents and warrants to the
Securitization Entities, the Trustee and the Servicer that: (i) such New
Development Agreement does not contain terms and conditions that are reasonably
expected to result in (A) a material decrease in the amount of Collections or
Retained Collections, taken as a whole, (B) a material adverse change in the
nature, quality or timing of Collections, taken as a whole, or (C) a material
adverse change in the types of underlying assets generating Collections, taken
as a whole, in each case when compared to the amount, nature or quality of, or
types of assets generating Collections that would have been reasonably expected
to result had such New Development Agreement been entered into in accordance
with the then-current Franchise Documents; (ii) such New Development Agreement
is genuine, and is the legal, valid and binding obligation of the parties
thereto and is enforceable against the parties thereto in accordance with its
terms (except as such enforceability may be limited by bankruptcy or insolvency
laws and by general principles of equity, regardless of whether such
enforceability shall be considered in a proceeding in equity or at law);
(iii) such New Development Agreement complies in all material respects with all
applicable Requirements of Law; (iv) the counterparty related to such New
Development Agreement is not, to the Actual Knowledge of the Manager, the
subject of a bankruptcy proceeding; (v) except as required by applicable
Requirements of Law, such New Development Agreement contains no contractual
rights of set-off; and (vi) except as required by applicable Requirements of
Law, such New Development Agreement is freely assignable by the applicable
Securitization Entities.

 

(c)           New Franchisee Notes. As of the applicable New Asset Addition Date
with respect to a Franchisee Note entered into on such New Asset Addition Date,
the Manager represents and warrants to the Securitization Entities, the Trustee
and the Servicer that: (i) to its Actual Knowledge, such agreement is genuine,
and is the legal, valid and binding obligation of the Franchisee and is
enforceable against such Franchisee in accordance with its terms (except as such
enforceability may be limited by bankruptcy or insolvency laws and by general
principles of equity, regardless of whether such enforceability shall be
considered in a proceeding in equity or at law); (ii) such agreement complies in
all material respects with all applicable Requirements

 

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of Law; (iii) the Franchisee related to such agreement is not, to the Actual
Knowledge of the Manager, the subject of a bankruptcy proceeding; and
(iv) except as required by applicable Requirements of Law, such agreement is
freely assignable by the applicable Securitization Entities.

 

(d)           Leases of Securitization-Owned Restaurants. If any
Securitization-Owned Restaurants are acquired or opened by the Securitization
Entities after the Closing Date, no lease under which a Securitization Entity is
lessee with respect to any such Securitization-Owned Restaurant shall
(i) require any Non-Securitization Entity to provide a guaranty of any
obligation of any Securitization Entity or (ii) include any event of default
under such lease on the part of any Securitization Entity due to a bankruptcy of
any Non-Securitization Entity.

 

Section 5.2            Assets Acquired After the Closing Date.

 

(a)           The Manager shall cause the applicable Securitization Entity to
enter into or acquire each of the following after the Closing Date: (a) all
Franchise Agreements and all Development Agreements in the Securitization
Jurisdictions, (b) all New Franchise Agreements and New Development Agreements
and (c) all After-Acquired Securitization IP, excluding, in each case, any
Non-Contributed Property and any Licensee-Developed IP and Manager-Developed IP
on the Closing Date. The Manager may, but shall not be obligated to, cause any
of the Securitization Entities to enter into, develop or acquire assets other
than the foregoing from time to time; provided that the entry into, development
or acquisition by any Securitization Entity of any material assets that are not
reasonably ancillary to the restaurant business or the foodservice industry will
require the prior satisfaction of the Rating Agency Condition and the prior
written consent of the Control Party.

 

(b)           Unless otherwise agreed to in writing by the Control Party, any
contribution to, or development or acquisition by, any Securitization Entity of
assets after the Closing Date described in Section 5.2(a) shall be subject to
all applicable provisions of the Indenture, this Agreement  (including the
applicable representations and warranties and covenants in Articles II and V of
this Agreement), the IP License Agreements and the other Transaction Documents.

 

Section 5.3            Securitization IP.  All Securitization IP shall be owned
solely by IP Holder, and shall not be assigned, transferred or licensed out by
IP Holder to any other entity other than another Securitization Entity or as
otherwise permitted or provided under the Transaction Documents.

 

Section 5.4            Specified Non-Securitization Debt Cap.  Following the
closing of the Securitization Transaction, but provided such Manager Termination
Event shall not be cured within forty-five (45) days of the Actual Knowledge
thereof of the Manager, a Manager Termination Event (and therefore a Rapid
Amortization Event) will occur if the Non-Securitization Entities incur (such
incurrence to be tested on the initial incurrence thereunder (and not in
connection with any subsequent borrowings or reborrowings under any existing
commitment under any revolving facility), but assuming any variable funding or
revolving facility is fully drawn) any Indebtedness for borrowed money
(“Specified Non-Securitization Debt”) if, after giving effect to such incurrence
(and any repayment of Specified Non-

 

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Securitization Debt on such date), such incurrence would cause the Holdco
Leverage Ratio to be greater than 7.00x (the “Holdco Specified
Non-Securitization Debt Cap”); provided, that the creditors (if any) of the
Initial Manager with respect to any such Indebtedness that causes the Holdco
Leverage Ratio to exceed 6.50x (calculated in the manner set forth above,
including creditors benefiting from a guarantee of the Initial Manager with
respect to such Indebtedness, but excluding any creditor in respect of an
aggregate amount of outstanding Indebtedness of less than $500,000) will be
required to execute a non-disturbance agreement with the Trustee with respect to
such Indebtedness, as directed by the Manager and in a form reasonably
satisfactory to the Servicer and the Trustee, that acknowledges the bankruptcy
remote status of the Securitization Entities; provided, further, that the Holdco
Specified Non-Securitization Debt Cap will not be applicable to Specified
Non-Securitization Debt that is (i) issued or incurred to refinance the
Series 2016-1 Notes in whole, (ii) considered Indebtedness due solely to a
change in accounting rules that takes effect subsequent to the Closing Date, but
was not considered Indebtedness prior to such date, (iii) in respect of any
obligation of any Non-Securitization Entity to reimburse the Issuer for any
draws under one or more Letters of Credit, (iv) in respect of intercompany notes
among Non-Securitization Entities, or (v) any letter of credit that is 100% cash
collateralized.

 

Section 5.5            Restrictions on Liens.  The Manager shall not, and shall
not permit any of its Subsidiaries to, create, incur, assume, permit or suffer
to exist any Lien (other than Liens in favor of the Trustee for the benefit of
the Secured Parties and any Permitted Lien set forth in clauses (a), (g) and
(i) of the definition thereof) upon the Equity Interests of any Securitization
Entity.

 

Section 5.6            Future Brands.  The Manager may, but shall not be
obligated to, create or acquire additional subsidiaries of the Issuer (“Future
Securitization Entities”) after the Closing Date, in respect of (a) any non-U.S.
operations or assets, (b) new Franchise Agreements and (c) acquisitions of
additional franchise brand subsidiaries (which may include non-U.S.
subsidiaries) in connection with Future Brands. To the extent, a franchise brand
that is substantially different from the then-current business of the
Securitization Entities is contributed to a Securitization Entity, the Manager
and the Securitization Entities will request that the definition of “National
Mexican Quick Service Restaurant Brand” herein and the Base Indenture be amended
accordingly to incorporate such franchise brand.

 

ARTICLE VI

 

MANAGER TERMINATION EVENTS

 

Section 6.1            Manager Termination Events.

 

(a)           Manager Termination Events. Each of the following events shall
constitute a “Manager Termination Event” under this Agreement, the assertion as
to the occurrence of which may be made, and notice of which may be given, by
either a Securitization Entity, the Back-Up Manager, the Servicer or the Trustee
(acting at the direction of the Control Party):

 

(i)            the Interest-Only DSCR as calculated as of any Quarterly
Calculation Date is less than 1.20x;

 

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(ii)           any failure by the Manager to remit a payment required to be
deposited from a Concentration Account to the Collection Account or any other
Indenture Trust Account, within three (3) Business Days of the later of (a) its
Actual Knowledge of its receipt thereof and (b) the date such deposit is
required to be made pursuant to the Transaction Documents; provided that any
inadvertent failure to remit such a payment shall not be a breach of this clause
(ii) if in an amount less than $5 million and corrected within three
(3) Business Days after the Manager obtains Actual Knowledge thereof (it being
understood that the Manager will not be responsible for the failure of the
Trustee to remit funds that were received by the Trustee from or on behalf of
the Manager in accordance with the applicable Transaction Documents);

 

(iii)          any failure by the Manager to provide certain certificates or
reports as required by Section 4.4 of the Indenture that shall not be cured
within ten (10) Business Days (or solely with respect to Quarterly Noteholders’
Reports and the Quarterly Compliance Certificates, five (5) Business Days) of
the Manager’s Actual Knowledge thereof;

 

(iv)          a material default by the Manager in the due performance and
observance of any covenant set forth herein or any other Transaction Document to
which it is party (other than a default subject to subpart (ii) above) that
shall have a Material Adverse Effect shall have occurred, and such default shall
not be cured within thirty (30) days after the Manager’s Actual Knowledge
thereof, provided, however, that as long as the Manager is diligently attempting
to cure such default (so long as such default is capable of being cured), such
cure period shall be extended by an additional period as may be required to cure
such default, but in no event by more than an additional thirty (30) days;
including, if applicable, by payment of liquidated damages in an amount equal to
the Indemnification Amount and provided further that no Manager Termination
Event shall occur under this clause (iv) due to the breach of any covenant
relating to a New Asset set forth in Article V as long as the Manager has
complied with Section 2.7(b) or 2.7(c) in respect thereof;

 

(v)           any representation, warranty or statement of the Manager herein or
in any other Transaction Document that is not qualified by materiality or the
definition of “Material Adverse Effect” proves to be incorrect in any material
respect, or any such representation, warranty or statement of the Manager that
is qualified by materiality or the definition of “Material Adverse Effect”
proves to be incorrect in any respect and such breach is not cured within thirty
(30) days after the Manager has obtained Actual Knowledge thereof;

 

(vi)          an Event of Bankruptcy with respect to the Manager;

 

(vii)         any final, non-appealable order against the Manager decreeing the
dissolution of the Manager that is in effect for more than ten (10) Business
Days;

 

(viii)        a final, non-appealable judgment for an amount in excess of
$200,000,000 (exclusive of any portion thereof which is insured) is rendered
against the Manager and is not discharged or stayed within forty-five (45) days
of the date when due;

 

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(ix)          an acceleration of more than $200,000,000 of the Indebtedness of
the Manager, which Indebtedness has not been discharged or which acceleration
has not been rescinded and annulled;

 

(x)           this Agreement or a material portion thereof ceases to be in full
force and effect or enforceable in accordance with its terms (other than in
accordance with the express termination provisions hereof) or the Manager
asserts as much in writing;

 

(xi)          a failure by the Initial Manager to comply or cause compliance
with the Holdco Specified Non-Securitization Debt Cap, and such failure has
continued for a period of forty-five (45) days after the Initial Manager has
been notified in writing by any Securitization Entity, the Control Party, the
Back-Up Manager or the Trustee, or otherwise has obtained Actual Knowledge of
such non-compliance; and/or

 

(xii)         the occurrence of a Change in Management following the occurrence
of a Change of Control.

 

If a Manager Termination Event has occurred and is continuing, the Control Party
(acting at the direction of the Controlling Class Representative) may (i) waive
such Manager Termination Event (except for a Manager Termination Event described
in clauses (vi) or (vii) above) or (ii) direct the Trustee to terminate the
Manager in its capacity as such by the delivery of a termination notice (a
“Termination Notice”) to the Manager (with a copy to each of the Securitization
Entities, the Back-Up Manager and the Rating Agency); provided, that the
delivery of a Termination Notice will not be required in respect of any Manager
Termination Event relating to the Manager Termination Events described in
clauses (vi) or (vii) above. If the Trustee, acting at the direction of the
Control Party (acting at the direction of the Controlling Class Representative),
delivers a Termination Notice to the Manager pursuant to this Agreement (or
automatically upon the occurrence of any Manager Termination Event relating to
the Manager Termination Events described in clauses (vi) or (vii) above), all
rights, powers, duties, obligations and responsibilities of the Manager under
this Agreement and the other Transaction Documents (other than with respect to
the payment of Indemnification Amounts or its obligations with respect to
Disentanglement), including with respect to the Accounts or otherwise, shall
vest in and be assumed by the Successor Manager appointed by the Control Party
(acting at the direction of the Controlling Class Representative). If no
Successor Manager has been appointed by the Control Party (acting at the
direction of the Controlling Class Representative), the Back-Up Manager shall
serve as the Successor Manager and will work with the Servicer to implement the
Transition Plan until a Successor Manager (other than the Back-Up Manager) has
been appointed by the Control Party (acting at the direction of the Controlling
Class Representative).

 

(b)           From the occurrence and during the continuation of a Manager
Termination Event, each Securitization Entity and the Trustee (acting at the
direction of the Control Party) are hereby irrevocably authorized and empowered
to execute and deliver, on behalf of the Manager, as attorney-in-fact or
otherwise, all documents and other instruments (including any notices to
Franchisees deemed necessary or advisable by the applicable Securitization
Entity or the Control Party), and to do or accomplish all other acts or take
other measures reasonably necessary or appropriate, to effect such vesting and
assumption.

 

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Section 6.2            Manager’s Transitional Role.

 

(a)           Disentanglement. Following the delivery of a Termination Notice to
the Manager pursuant to Section 6.1(a) above or notice of resignation of the
Manager pursuant to Section 4.5(b) and for the duration of the Disentanglement
Period, the Manager shall (and provided such Manager Termination Event shall
occur as a result of a Change in Management following a Change of Control, for a
period ending not later than the twelfth (12th) month after the date of
consummation of any transaction in which YUM! Brands, Inc. (“YBI”) ceases to own
a majority of the equity in the Initial Manager, the Initial Manager shall enter
into sub-management arrangements with YBI such that YBI and its affiliates shall
be required to, for reasonable compensation and subject to reimbursement of its
out-of-pocket costs and expenses), (x) (i) cooperate with the Back-Up Manager
and the Control Party in connection with the implementation of the Transition
Plan and the transition to a Successor Manager, without material interruption or
adverse impact on the provision of Services (the “Disentanglement”), (ii) use
its commercially reasonable efforts to maintain as appropriate and as needed to
assist in the Transition Plan the existing staffing and resources of the Manager
devoted to or shared with the provision of the Services prior to the date of
such Termination Notice and (iii) allow for reasonable access to the Manager’s
premises, systems and offices during the Disentanglement Period (such activities
the “Continuity of Services”).  During the period beginning on the date of
(A) delivery of the Termination Notice to the Manager or (B) delivery of a
resignation notice by the Manager, and in each case ending no later than twelve
(12) months after the date of such termination or resignation, as applicable
(the “Disentanglement Period”), the Manager will (and provided such Manager
Termination Event shall occur as a result of a Change in Management following a
Change of Control, for a period ending not later than the twelfth (12th) month
after the date of consummation of any transaction in which YBI ceases to own a
majority of the equity of the Initial Manager), the Initial Manager shall enter
into sub-management arrangements with YBI such that YBI and its affiliates shall
be required to, for reasonable compensation and subject to reimbursement of its
out-of-pocket costs and expenses) (x) cooperate with the Successor Manager and
otherwise promptly take all actions reasonably required to assist in effecting a
Disentanglement while using commercially reasonable efforts to maintain
Continuity of Services and shall follow any reasonable directions that may be
provided by the Back-Up Manager and the Control Party in connection therewith,
(y) provide all information and assistance regarding the terminated Services
reasonably required for Disentanglement and Continuity of Services, including
data conversion and migration, interface specifications, and related
professional services, and (z) provide for the prompt and orderly conclusion of
all work, as the Control Party and the Back-Up Manager may reasonably direct,
including completion or partial completion of projects, documentation of all
work in progress, and other measures to assure an orderly transition to the
Successor Manager. All services relating to Disentanglement and Continuity of
Services (collectively, the “Disentanglement Services”), including all
reasonable training for personnel of the Back-Up Manager, the Successor Manager
or the Successor Manager’s designated alternate service provider in the
performance of the Services, shall be deemed a part of the Services to be
performed by the Manager.

 

(b)           Fees and Charges for the Disentanglement Services. So long as the
Manager continues to provide the Services (whether or not the Manager has been
terminated as the Manager) during the Disentanglement Period, the Manager will
continue to be paid the Weekly Management Fee. The Manager shall be entitled to
reimbursement from time to time of

 

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its actual costs for the provision of any Disentanglement Services, other than
those related to Continuity of Services, which shall remain separate obligations
of the Manager.

 

(c)           Duration of Obligations. The Manager’s obligation to provide
Disentanglement Services will begin on the date of the delivery of a Termination
Notice to the Manager pursuant to Section 6.1(a) above or the Manager’s delivery
of notice of its resignation pursuant to Section 4.5(b), and shall end no later
than twelve (12) months after the date of such termination or resignation, as
applicable (the “Disentanglement Period”).

 

(d)           Sub-manager Arrangements; Authorizations.

 

With respect to each Sub-management Arrangement and unless the Control Party
elects to terminate such Sub-management Arrangement in accordance with
Section 2.10, the Manager shall, during the Disentanglement Period:

 

(x)           assign to the Successor Manager (or such Successor Manager’s
designated alternate service provider) all of the Manager’s rights under such
Sub-management Arrangement to which it is party used by the Manager in
performance of the transitioned Services; and

 

(y)           procure any third party authorizations necessary to grant the
Successor Manager (or such Successor Manager’s designated alternate service
provider) the use and benefit of such Sub-management Arrangement to which it is
party (used by the Manager in performing the transitioned Services), pending
their assignment to the Successor Manager under this Agreement.

 

If the Control Party elects to terminate such Sub-management Arrangement in
accordance with Section 2.10, the Manager shall take all reasonable actions
necessary or reasonably requested by the Control Party to accomplish a complete
transition of the Services performed by such Sub-management to the Successor
Manager, or to any alternate service provider designated by the Control Party,
without material interruption or adverse impact on the provision of Services.

 

Section 6.3            Intellectual Property.  Within sixty (60) days of
termination of this Agreement for any reason, the Manager shall deliver and
surrender up to IP Holder (with a copy to the Successor Manager and the
Servicer) and shall terminate all use of all Securitization IP, including Trade
Secrets; provided that (for the avoidance of doubt) any rights granted to the
Manager and the other Non-Securitization Entities as licensees pursuant to the
IP License Agreements shall continue pursuant to the terms thereof
notwithstanding the termination of this Agreement and/or its role as Manager.

 

Section 6.4            Third Party Intellectual Property.  During the
Disentanglement Period, the Manager shall assist and cooperate with the
Successor Manager or its designated alternate service provider in obtaining any
necessary licenses or consents to use any third party Intellectual Property then
being used by the Manager or any Sub-manager. During the Disentanglement Period,
the Manager shall assign, and shall cause each Sub-manager to assign, any such
license or sublicense directly to the Successor Manager or its designated
alternate

 

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service provider to the extent the Manager, or each Sub-manager as applicable,
has the rights to assign such agreements to the Successor Manager without
incurring any additional cost.

 

Section 6.5            No Effect on Other Parties.  Upon any termination of the
rights and powers of the Manager from time to time pursuant to Section 6.1 or
upon any appointment of a Successor Manager, all the rights, powers, duties,
obligations, and responsibilities of each of the Securitization Entities or the
Trustee under this Agreement, the Indenture and the other Transaction Documents
shall remain unaffected by such termination or appointment and shall remain in
full force and effect thereafter, except as otherwise expressly provided in this
Agreement or in the Indenture.

 

Section 6.6            Rights Cumulative.  All rights and remedies from time to
time conferred upon or reserved to any of the Securitization Entities, the
Trustee, the Servicer, the Control Party, the Back-Up Manager and the
Noteholders or to any or all of the foregoing are cumulative, and none is
intended to be exclusive of another or any other right or remedy which they may
have at law or in equity. Except as otherwise expressly provided herein, no
delay or omission in insisting upon the strict observance or performance of any
provision of this Agreement, or in exercising any right or remedy, shall be
construed as a waiver or relinquishment of such provision, nor shall it impair
such right or remedy. Every such right and remedy may be exercised from time to
time and as often as deemed expedient.

 

ARTICLE VII

 

CONFIDENTIALITY

 

Section 7.1            Confidentiality.

 

(a)           Each of the parties hereto acknowledges that during the Term such
party (the “Recipient”) may receive Confidential Information from another party
hereto (the “Discloser”). Each such party (except for the Trustee, whose
confidentiality obligations shall be governed in accordance with the Indenture)
agrees to maintain the Confidential Information of the other party in the
strictest of confidence and shall not, except as otherwise contemplated herein,
at any time, use,  disseminate or disclose any Confidential Information to any
Person other than (i) its officers, directors, managers, employees, agents,
advisors, Affiliates or representatives (including legal counsel and
accountants) who have a “need to know” and who have been apprised of this
restriction or (ii) Franchisees and prospective Franchisees, suppliers or other
service providers under written confidentiality agreements that contain
provisions at least as protective as those set forth in this Agreement. The
Recipient shall be liable for any breach of this Section 7.1 by any of its
officers, directors, managers, employees, agents, advisors, representatives,
Franchisees and prospective Franchisees, suppliers or other services providers
and shall immediately notify Discloser in the event of any loss or disclosure of
any Confidential Information of the Discloser. Upon termination of this
Agreement, Recipient shall return to the Discloser, or at Discloser’s request,
destroy, all documents and records in its possession containing the Confidential
Information of the Discloser. Confidential Information shall not include
information that: (A) is already known to Recipient without restriction on use
or disclosure prior to receipt of such information from the Discloser; (B) is or
becomes part of the public domain other than by breach of this Agreement by, or
other wrongful act of, the Recipient;

 

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(C) is developed by the Recipient independently of and without reference to any
Confidential Information of the Discloser; (D) is received by the Recipient from
a third party who is not under any obligation to the Discloser to maintain the
confidentiality of such information; or (E) is required to be disclosed by
applicable law, statute, rule, regulation, subpoena, court order or legal
process; provided that the Recipient shall promptly inform the Discloser of any
such requirement and cooperate with any attempt by the Discloser to obtain a
protective order or other similar treatment. It shall be the obligation of
Recipient to prove that such an exception to the definition of Confidential
Information exists.

 

(b)           Notwithstanding anything to the contrary contained in
Section 7.1(a), the parties hereto may use, disseminate or disclose Confidential
Information (other than Trade Secrets) to any Person in connection with the
enforcement of rights of the Trustee or the Noteholders under the Indenture or
the Transaction Documents; provided, however, that prior to disclosing any such
Confidential Information:

 

to any such Person other than in connection with any judicial or regulatory
proceeding, such Person shall agree in writing to maintain such Confidential
Information in a manner at least as protective of the Confidential Information
as the terms of Section 7.1(a) and Recipient shall provide Discloser with the
written opinion  of counsel that such disclosure contains Confidential
Information only to the extent necessary to facilitate the enforcement of such
rights of the Trustee or the Noteholders; or

 

to any such Person or entity in connection with any judicial or regulatory
proceeding, Recipient shall (x) promptly notify Discloser of each such
requirement and identify the documents so required thereby so that Discloser may
seek an appropriate protective order or similar treatment and/or waive
compliance with the provisions of this Agreement; (y) use reasonable efforts to
assist Discloser in obtaining such protective order or other similar treatment
protecting such Confidential Information prior to any such disclosure; and
(z) consult with Discloser on the advisability of taking legally available steps
to resist or narrow the scope of such requirement. If, in the absence of such a
protective order or similar treatment, the Recipient is nonetheless required by
law to disclose any part of Discloser’s Confidential Information, then the
Recipient may disclose such Confidential Information without liability under
this Agreement, except that the Recipient shall furnish only that portion of the
Confidential Information which is legally required.

 

ARTICLE VIII

 

MISCELLANEOUS PROVISIONS

 

Section 8.1            Termination of Agreement.  The respective duties and
obligations of the Manager and each of the Securitization Entities created by
this Agreement shall commence on the date hereof and shall, unless earlier
terminated pursuant to Section 6.1(a), terminate upon the earlier to occur of
(x) the final payment or other liquidation of the last Managed Asset included in
the Collateral or (y) satisfaction and discharge of the Indenture pursuant to
Section 12.1 of the Base Indenture (the “Term”). Upon termination of this
Agreement pursuant to this Section 8.1, the Manager shall pay over to the
applicable

 

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Securitization Entity or any other Person entitled thereto all proceeds of the
Managed Assets held by the Manager.

 

Section 8.2            Survival.  The provisions of Section 2.1(c), Section 2.7,
Section 2.8, Section 5.1, Article VI or Article VII, this Section 8.2,
Section 8.4, Section 8.5 and Section 8.9 shall survive termination of this
Agreement.

 

Section 8.3            Amendment.

 

(a)           This Agreement may only be amended, from time to time, in writing,
upon the written consent of the Trustee (acting at the direction of the Control
Party), the Securitization Entities and the Manager; provided that any amendment
that would materially adversely affect the interests of the Noteholders shall
require the consent of the Control Party, which consent shall not be
unreasonably withheld or delayed; provided, further, that no consent of the
Trustee or the Control Party shall be required in connection with any amendment
to accomplish any of the following:

 

(i)            to correct or amplify the description of any required activities
of the Manager;

 

(ii)           to add to the duties or covenants of the Manager for the benefit
of any Noteholders or any other Secured Parties, or to add provisions to this
Agreement so long as such action does not modify the Managing Standard,
materially adversely affect the enforceability of the Securitization IP (taken
as a whole), or materially adversely affect the interests of the Noteholders;

 

(iii)          to correct any manifest error or to cure any ambiguity, defect or
provision that may be inconsistent with the terms of the Base Indenture or any
other Transaction Document, or to correct or supplement any provision herein
that may be inconsistent with the terms of the Base Indenture or any offering
memorandum for the Notes;

 

(iv)          to evidence the succession of another Person to any party to this
Agreement;

 

(v)           to comply with Requirements of Law;

 

(vi)          to allow any Future Brand or other assets to be contributed to, or
acquired by, the Securitization Entities in a manner that does not violate the
Managing Standard and to provide for any applicable provisions with respect
thereto; or

 

(vii)         to take any action necessary and appropriate to facilitate the
origination of New Franchise Agreements or the management and preservation of
the Franchise Documents, in each case, in accordance with the Managing Standard.

 

(b)           Promptly after the execution of any such amendment, the Manager
shall send to the Trustee, the Servicer, the Back-Up Manager and each Rating
Agency a conformed copy of such amendment, but the failure to do so shall not
impair or affect its validity.

 

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(c)           Any such amendment or modification effected contrary to the
provisions of this Section 8.3 shall be null and void.

 

The Issuer and the Trustee each agree not to amend the Indenture or the
Transaction Documents to which it is a party without the Manager’s consent if
such amendment would materially increase the Manager’s obligations or
liabilities, or materially decrease the Manager’s rights or remedies under this
Agreement, the Indenture or any other Transaction Document.

 

Section 8.4            Governing Law.  THIS AGREEMENT SHALL BE CONSTRUED IN
ACCORDANCE WITH, AND GOVERNED BY, THE INTERNAL LAWS OF THE STATE OF NEW YORK
WITHOUT REGARD TO CHOICE OF LAW RULES (OTHER THAN SECTIONS 5-1401 AND 5-1402 OF
THE NEW YORK GENERAL OBLIGATIONS LAW).

 

Section 8.5            Notices.  All notices, requests or other communications
desired or required to be given under this Agreement shall be in writing and
shall be sent by (a) certified or registered mail, return receipt requested,
postage prepaid, (b) national prepaid overnight delivery service, (c) electronic
mail (of a pdf or similar file) or (d) personal delivery with receipt
acknowledged in writing, to the address set forth in Section 14.1 of the Base
Indenture. If the Indenture or this Agreement permits reports to be posted to a
password-protected website, such reports shall be deemed delivered when posted
on such website. Any party hereto may change its address for notices hereunder
by giving notice of such change to the other parties hereto, with a copy to the
Control Party. Any change of address of a Noteholder shown on a Note Register
shall, after the date of such change, be effective to change the address for
such Noteholder hereunder. All notices and demands to any Person hereunder shall
be deemed to have been given either at the time of the delivery thereof at the
address of such Person for notices hereunder, or on the third day after the
mailing thereof to such address, as the case may be.

 

Section 8.6            Acknowledgement.  Without limiting the foregoing, the
Manager hereby acknowledges that, on the date hereof, each of the Securitization
Entities will pledge to the Trustee under the Indenture and the Guarantee and
Collateral Agreement, as applicable, all of such Securitization Entity’s right
and title to, and interest in, this Agreement and the Collateral, and such
pledge includes all of such Securitization Entity’s rights, remedies, powers and
privileges, and all claims of such Securitization Entity against the Manager,
under or with respect to this Agreement (whether arising pursuant to the terms
of this Agreement  or  otherwise available at law or in equity), including
(i) the rights of such Securitization Entity and the obligations of the Manager
hereunder and (ii) the right, at any time, to give or withhold consents,
requests, notices, directions, approvals, demands, extensions or waivers under
or with respect to this Agreement or the obligations in respect of the Manager
hereunder to the same extent as such Securitization Entity may do. The Manager
hereby consents to such pledges described above, acknowledges and agrees that
(x) the Control Party and the Controlling Class Representative shall be
third-party beneficiaries of the rights of such Securitization Entity arising
hereunder and (y) during the continuance of an Event of Default, the Control
Party and the Controlling Class Representative may, to the extent provided in
the Indenture and the Guarantee and Collateral Agreement, enforce the provisions
of this Agreement, exercise the rights of such Securitization Entity and enforce
the obligations of the Manager hereunder without the consent of such
Securitization Entity.

 

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Section 8.7            Severability of Provisions.  If one or more of the
provisions of this Agreement shall be for any reason whatever held invalid or
unenforceable, such provisions shall be deemed severable from the remaining
covenants, agreements and provisions of this Agreement and such invalidity or
unenforceability shall in no way affect the validity or enforceability of such
remaining provisions, or the rights of any parties hereto. To the extent
permitted by law, the parties hereto waive any provision of law that renders any
provision of this Agreement invalid or unenforceable in any respect.

 

Section 8.8            Delivery Dates.  If the due date of any notice,
certificate or report required to be delivered by the Manager hereunder falls on
a day that is not a Business Day, the due date for such notice, certificate or
report shall be automatically extended to the next succeeding day that is a
Business Day.

 

Section 8.9            Limited Recourse.  The obligations of each of the
Securitization Entities under this Agreement are solely the limited liability
company obligations of such Securitization Entity. The Manager agrees that each
of the Securitization Entities shall be liable for any claims that it may have
against such Securitization Entity only to the extent that funds or assets are
available to pay such claims pursuant to the Indenture and that, to the extent
that any such claims remain unpaid after the application of such funds and
assets in accordance with the Indenture, such claims shall be extinguished.

 

Section 8.10          Binding Effect; Assignment; Third Party Beneficiaries. 
The provisions of this Agreement shall be binding upon and inure to the benefit
of the respective successors and assigns of the parties hereto. Any assignment
of this Agreement without the written consent of the Control Party shall be null
and void. Each of the Back-Up Manager and the Servicer (in its capacities as
Control Party and Servicer) is an intended third party beneficiary of this
Agreement and may enforce the Agreement as though a party hereto to the extent
provided in Section 8.6. The Control Party and the Controlling
Class Representative are third party beneficiaries to the extent set forth in
Section 8.6.

 

Section 8.11          Article and Section Headings.  The Article and
Section headings herein are for convenience of reference only, and shall not
limit or otherwise affect the meaning hereof.

 

Section 8.12          Concerning the Trustee.  In acting under this  Agreement, 
the Trustee shall be afforded the rights, privileges, protections, immunities
and indemnities set forth in the Indenture as if fully set forth herein.

 

Section 8.13          Counterparts.  This Agreement may be executed by the
parties hereto in several counterparts (including by facsimile or other
electronic means of communication), each of which when so executed shall be
deemed to be an original and all of which when taken together shall constitute
but one and the same agreement.

 

Section 8.14          Entire Agreement.  This Agreement, together with the
Indenture and the other Transaction Documents and the Managed Documents
constitute the entire agreement and understanding among the parties with respect
to the subject matter hereof. Any

 

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previous agreement among the parties with respect to the subject matter hereof
is superseded by this Agreement, the Indenture, the other Transaction Documents
and the Managed Documents.

 

Section 8.15          Waiver of Jury Trial; Jurisdiction; Consent to Service of
Process.

 

(a)           The parties hereto each hereby waives any right to have a jury
participate in resolving any dispute, whether in contract, tort or otherwise,
arising out of, connected with, relating to or incidental to the transactions
contemplated by this Agreement.

 

(b)           The parties hereto each hereby irrevocably submits (to the fullest
extent permitted by applicable law) to the non-exclusive jurisdiction of any New
York state or federal court sitting in the borough of Manhattan, New York City,
State of New York, over any action or proceeding arising out of or relating to
this Agreement or any Transaction Documents, and the parties hereto hereby
irrevocably agree that all claims in respect of such action or proceeding shall
be heard and determined in such New York state or federal court. The parties
hereto each hereby irrevocably waive, to the fullest extent permitted by
applicable law, any objection each may now or hereafter have, to remove any such
action or proceeding, once commenced, to another court on the grounds of forum
non conveniens or otherwise.

 

(c)           Each party to this Agreement irrevocably consents to service of
process in the manner provided for notices in Section 8.5. Nothing in this
Agreement shall affect the right of any party to this Agreement to serve process
in any other manner permitted by law.

 

Section 8.16          Joinder of Future Securitization Entities.

 

(a)           In the event that the Issuer, or the Manager on its behalf, shall
form a Future Securitization Entity pursuant to Section 8.30 of the Base
Indenture, such Future Securitization Entity shall execute and deliver to the
Manager and the Trustee (i) a Joinder Agreement substantially in the form of
Exhibit B and (ii) Power of Attorney(s) in the form of Exhibit A-1 (in the case
of any Future Securitization Entity that holds any Securitization IP) and
Exhibit A-2 (in the case of any Future Securitization Entity that does not hold
any Securitization IP), and such New Securitization Entity shall thereafter for
all purposes be a party hereto and have the same rights, benefits and
obligations as a Securitization Entity party hereto on the Closing Date.

 

[The remainder of this page is intentionally left blank.]

 

46

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed by their respective officers thereunto duly authorized as of the day
and year first above written.

 

 

 

TACO BELL CORP., as Manager

 

 

 

By:

/s/ Elizabeth Williams

 

 

Name: Elizabeth Williams

 

 

Title: President and Treasurer

 

[Signature Page to Management Agreement]

 

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TACO BELL FUNDING, LLC

 

 

 

 

 

 

By:

/s/ William L. Gathof

 

 

Name:

 

 

Title:

 

 

 

 

 

 

 

TACO BELL IP HOLDER, LLC

 

 

 

 

 

 

By:

/s/ William L. Gathof

 

 

Name: William L. Gathof

 

 

Title: Authorized Signatory

 

 

 

 

 

 

 

TACO BELL FRANCHISOR HOLDINGS, LLC

 

 

 

 

 

 

By:

/s/ William L. Gathof

 

 

Name: William L. Gathof

 

 

Title: Authorized Signatory

 

 

 

 

 

 

 

TACO BELL FRANCHISOR, LLC

 

 

 

 

 

 

By:

/s/ William L. Gathof

 

 

Name: William L. Gathof

 

 

Title: Authorized Signatory

 

 

 

 

 

 

 

TACO BELL FRANCHISE HOLDER 1, LLC

 

 

 

 

 

 

By:

/s/ William L. Gathof

 

 

Name: William L. Gathof

 

 

Title: Authorized Signatory

 

[Signature Page to Management Agreement]

 

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CITIBANK, N.A., not in its individual capacity, but solely as Trustee

 

 

 

By:

/s/ Anthony Bausa

 

 

Name: Anthony Bausa

 

 

Title: Vice President

 

[Signature Page to Management Agreement]

 

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SCHEDULE 1

 

LIST OF PRODUCTS OR SERVICES PURCHASED FROM THIRD PARTY VENDORS BY THE MANAGER

 

None.

 

Schedule 1-1

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EXHIBIT A-1

 

POWER OF ATTORNEY OF IP HOLDER

 

KNOW ALL PERSONS BY THESE PRESENTS, that in connection with the Management
Agreement, dated as of the Closing Date, among Taco Bell Funding, LLC (the
“Issuer”), Taco Bell SPV Guarantor, LLC (“Funding Holdco”), Taco Bell IP Holder,
LLC (“IP Holder”), Taco Bell Franchisor, LLC (“Franchise Holder” and, together
with Funding Holdco and IP Holder, the “Guarantors” and, together with the
Issuer and each future Subsidiary of the Issuer or Funding Holdco, the
“Securitization Entities”) and Citibank, N.A., not in its individual capacity
but solely as the indenture trustee (together with its successor and assigns,
the “Trustee”), IP Holder hereby appoints Taco Bell Corp. (the “Manager”) and
any and all officers thereof as its true and lawful attorney in fact, with full
power of substitution, in connection with the IP Services described below being
performed with respect to the Securitization IP, with full irrevocable power and
authority in the place of IP Holder that is the owner thereof and in the name of
IP Holder or in its own name as agent of IP Holder, to take any and all
appropriate action and to execute any and all documents and instruments which
may be necessary or desirable to accomplish the foregoing, subject to the
Management Agreement, including, without limitation, the full power to perform:

 

(a)           searching, screening and clearing After-Acquired Securitization IP
to assess patentability, registrability and the risk of potential infringement;

 

(b)           filing, prosecuting, defending and maintaining applications and
registrations for the Securitization IP in IP Holder’s name in the
Securitization Jurisdiction, including timely filing of evidence of use,
applications for renewal and affidavits of use and/or incontestability, timely
paying of all registration and maintenance fees, responding to third-party
oppositions of applications or challenges to registrations, and responding to
any office actions, reexaminations, interferences, inter partes reviews, post
grant reviews, or other office or examiner requests, reviews, or requirements;

 

(c)           monitoring third-party use and registration of Intellectual
Property, as applicable, and taking actions the Manager deems appropriate to
oppose or contest the use and any application or registration for Intellectual
Property, as applicable, that could reasonably be expected to infringe, dilute
or otherwise violate the Securitization IP or IP Holder’s rights therein;

 

(d)           confirming IP Holder’s legal title in and to any or all of the
Securitization IP, including obtaining written assignments of Securitization IP
to IP Holder, recording transfers of title in the USPTO and USCO and
transferring internet domain name registrations;

 

(e)           with respect to IP Holder’s rights and obligations under the IP
License Agreements and any Transaction Documents, monitoring the licensee’s use
of each licensed Trademark and the quality of its goods and services offered in
connection with such Trademarks, rendering any approvals (or disapprovals) that
are required under the applicable license agreement(s), and employing reasonable
means to ensure that any use of any such Trademarks

 

A-1-1

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by any such licensee satisfies the quality control standards and usage
provisions of the applicable license agreement;

 

(f)            protecting, policing, and, in the event that the Manager becomes
aware of any unlicensed copying, imitation, infringement, dilution,
misappropriation, unauthorized use or other violation of the Securitization IP,
or any portion thereof, enforcing such Securitization IP, including,
(i) preparing and responding to cease-and-desist, demand and notice letters, and
requests for a license; and (ii) commencing, prosecuting and/or resolving claims
or suits involving imitation, infringement, dilution, misappropriation, the
unauthorized use or other violation of such Securitization IP, and seeking
monetary and equitable remedies as the Manager deems appropriate in connection
therewith; provided that IP Holder will, and agrees to, join as a party to any
such suits to the extent necessary to maintain standing;

 

(g)           performing such functions and duties, and preparing and filing
such documents, as are required under the Indenture or any other Transaction
Document to be performed, prepared and/or filed by IP Holder, including
(i) executing and recording such financing statements (including continuation
statements) or amendments thereof or supplements thereto or such other
instruments as the Issuer or the Control Party may, from time to time,
reasonably request (consistent with the obligations of IP Holder to perfect the
Trustee’s lien in the applicable jurisdictions within the Securitization
Jurisdiction) in connection with the security interests in the Securitization IP
granted by IP Holder to the Trustee under the Indenture and (ii) preparing,
executing and delivering grants of security interests or any similar instruments
as the Issuer or the Control Party may, from time to time, reasonably request
(consistent with the obligations of IP Holder to perfect the Trustee’s lien in
the applicable jurisdictions within the Securitization Jurisdiction) that are
intended to evidence such security interests in the Securitization IP and
recording such grants or other instruments with the relevant Governmental
Authority including the USPTO and USCO;

 

(h)           taking such actions as any licensee under an IP License Agreement
may request that are required by the terms, provisions and purposes of such IP
License Agreement (or by any other agreements pursuant to which IP Holder
licenses the use of any Securitization IP) to be taken by IP Holder, and
preparing (or causing to be prepared) for execution by IP Holder all documents,
certificates and other filings as IP Holder will be required to prepare and/or
file under the terms of such IP License Agreements (or such other agreements);

 

(i)            establishing a fair market value for the royalties or other
payments payable to IP Holder under any licenses of Securitization IP that are
required under the Transaction Documents to include such payments;

 

(j)            paying or causing to be paid or discharged, from funds of the
Securitization Entities, any and all taxes, charges and assessments that may be
levied, assessed or imposed upon any of the Securitization IP or contesting the
same in good faith;

 

(k)           obtaining licenses of third-party Intellectual Property for use
and sublicense in connection with the Contributed Franchise Business and any
other assets of the Securitization Entities;

 

A-1-2

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(l)            sublicensing the Securitization IP to suppliers, manufacturers,
advertisers and other service providers in connection with the provision of
products and services for the Contributed Franchise Business;

 

(m)          with respect to Trade Secrets and other confidential information of
IP Holder, taking reasonable measures to maintain confidentiality and to prevent
non-confidential disclosures thereof; and

 

(n)           managing passwords for and access to social media accounts,
website hosting accounts, mobile app accounts, and other similar online
accounts.

 

THIS POWER OF ATTORNEY IS GOVERNED BY THE LAWS OF THE STATE OF NEW YORK
APPLICABLE TO POWERS OF ATTORNEY MADE AND TO BE EXERCISED WHOLLY WITHIN SUCH
STATE.

 

Dated:                 , 2016

 

 

TACO BELL IP HOLDER

 

 

 

By:

 

 

 

Name:

 

 

Title:

 

A-1-3

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STATE OF            

)

 

)  ss.:

COUNTY OF            )

 

 

On the      day of         ,     , before me the undersigned, personally
appeared, personally known to me or proved to me on the basis of satisfactory
evidence to be the individual whose name is subscribed to the within instrument
and acknowledged to me that he executed the same in his capacity, and that by
his signature on the instrument, the individual, or the person upon behalf of
which the individual acted, executed the instrument.

 

 

 

 

Notary Public

 

A-1-4

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EXHIBIT A-2

 

POWER OF ATTORNEY OF THE SECURITIZATION ENTITIES

 

KNOW ALL PERSONS BY THESE PRESENTS, that in connection with the Management
Agreement, dated as of the Closing Date, among Taco Bell Funding, LLC (the
“Issuer”), Taco Bell SPV Guarantor, LLC (“Funding Holdco”), Taco Bell IP Holder,
LLC (“IP Holder”), Taco Bell Franchisor, LLC (“Franchise Holder” and, together
with Funding Holdco and IP Holder and the, the “Guarantors” and, together with
the Issuer and each future Subsidiary of the Issuer or Funding Holdco, the
“Securitization Entities”) and Citibank, N.A., not in its individual capacity
but solely as the indenture trustee (together with its successor and assigns,
the “Trustee”), each of the Securitization Entities hereby appoints Taco Bell
Corp. (the “Manager”) and any and all officers thereof as its true and lawful
attorney in fact, with full power of substitution, in connection with the
Services (as defined in the Management Agreement) being performed with respect
to the Managed Assets, with full irrevocable power and authority in the place of
each Securitization Entity and in the name of each Securitization Entity or in
its own name as agent of each Securitization Entity, to take any and all
appropriate action and to execute any and all documents and instruments that may
be necessary or desirable to accomplish the foregoing, subject to the Management
Agreement, including, without limitation, the full power to:

 

(a)           perform such functions and duties, and prepare and file such
documents, as are required under the Indenture and the other Transaction
Documents to be performed, prepared and/or filed by any of the Securitization
Entities, including: (i) recording such financing statements (including
continuation statements) or amendments thereof or supplements thereto or other
instruments as the Trustee and any of the Securitization Entities may from time
to time reasonably request in order to perfect and maintain the Lien in the
Collateral granted by any of the Securitization Entities to the Trustee under
the Transaction Documents in accordance with the UCC; and (ii) executing grants
of security interests or any similar instruments required under the Transaction
Documents to evidence such Lien in the Collateral; and

 

(b)           take such actions on behalf of each Securitization Entity as such
Securitization Entity or Manager may reasonably request that are expressly
required by the terms, provisions and purposes of the Management Agreement; or
cause the preparation by other appropriate Persons, of all documents,
certificates and other filings as each Securitization Entity shall be required
to prepare and/or file under the terms of the Transaction Documents.

 

A-2-5

Management Agreement

 

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This power of attorney is coupled with an interest. Capitalized terms used
herein, and not defined herein shall have the meanings applicable to such terms
in the Management Agreement.

 

THIS POWER OF ATTORNEY IS GOVERNED BY THE LAWS OF THE STATE OF NEW YORK
APPLICABLE TO POWERS OF ATTORNEY MADE AND TO BE EXERCISED WHOLLY WITHIN SUCH
STATE.

 

Dated:                 , 2016

 

 

TACO BELL FUNDING, LLC, as Issuer

 

 

 

By:

 

 

 

Name:

 

 

Title:

 

 

 

 

 

 

 

TACO BELL IP HOLDER, LLC, as IP Holder

 

 

 

 

By:

 

 

 

Name:

 

 

Title:

 

 

 

 

 

 

 

TACO BELL FRANCHISOR HOLDINGS, LLC, as Franchisor Holdco

 

 

 

 

By:

 

 

 

Name:

 

 

Title:

 

 

 

 

 

 

 

TACO BELL FRANCHISOR, LLC, as Taco Bell Franchisor

 

 

 

 

By:

 

 

 

Name:

 

 

Title:

 

 

 

 

 

 

 

TACO BELL FRANCHISE HOLDER 1, LLC, as Franchise Holder

 

 

 

 

By:

 

 

 

Name:

 

 

Title:

 

A-2-6

Management Agreement

 

--------------------------------------------------------------------------------

 

STATE OF            

)

 

)  ss.:

COUNTY OF           

)

 

On the      day of            ,     , before me the undersigned, personally
Appeared personally known to me or proved to me on the basis of satisfactory
evidence to be the individual whose name is subscribed to the within instrument
and acknowledged to me that he executed the same in his capacity, and that by
his signature on the instrument, the individual, or the person upon behalf of
which the individual acted, executed the instrument.

 

 

 

 

Notary Public

 

A-2-7

Management Agreement

 

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EXHIBIT B

 

JOINDER AGREEMENT

 

JOINDER AGREEMENT, dated as of               , 20   (this “Joinder Agreement”),
made by                 a              (the “Future Securitization Entity”), in
favor of Taco Bell Corp., a California corporation, as Manager (the “Manager”),
and Citibank, N.A., as Trustee (in such capacity, together with its successors,
the “Trustee”). All capitalized terms not defined herein shall have the meaning
ascribed to them in the Management Agreement (as defined below).

 

W I T N E S S E T H:

 

WHEREAS, Taco Bell Funding, LLC, a Delaware limited liability company (the
“Issuer”), and the Trustee, have entered into a Base Indenture dated as of
May 11, 2016 (as amended, restated, supplemented or otherwise modified from time
to time, exclusive of any Series Supplements, the “Base Indenture” and, together
with all Series Supplements, the “Indenture”), providing for the issuance from
time to time of one or more Series of Notes thereunder; and

 

WHEREAS, in connection with the Indenture, the Issuer, the other Securitization
Entities party thereto from time to time, the Manager and the Trustee have
entered into the Management Agreement, dated as of May 11, 2016 (as amended,
restated, supplemented or otherwise modified from time to time, the “Management
Agreement”); and

 

WHEREAS, the Future Securitization Entity has agreed to execute and deliver this
Joinder Agreement in order to become a party to the Management Agreement;

 

NOW, THEREFORE, IT IS AGREED:

 

1.             Management Agreement. By executing and delivering this Joinder
Agreement, the Future Securitization Entity, as provided in Section 8.16 of the
Management Agreement, hereby becomes a party to the Management Agreement as a
Securitization Entity thereunder with the same force and effect as if originally
named therein as a Securitization Entity and, without limiting the generality of
the foregoing, hereby expressly assumes all obligations and liabilities of a
Securitization Entity thereunder. Each reference to a “Securitization Entity” in
the Management Agreement shall be deemed to include the Future Securitization
Entity. The Management Agreement is hereby incorporated herein by reference.

 

2.             Counterparts; Binding Effect. This Joinder Agreement may be
executed in counterparts (and by different parties hereto on different
counterparts), each of which shall constitute an original, but all of which
taken together shall constitute a single contract. This Joinder Agreement shall
become effective when each of the Additional Franchise Entity, the Manager and
the Trustee has executed a counterpart hereof. Delivery of an executed
counterpart of a signature page of this Joinder Agreement (including by
facsimile or other electronic means of communication) shall be effective as
delivery of a manually executed counterpart of this Joinder Agreement.

 

B-1

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3.             Full Force and Effect. Except as expressly supplemented hereby,
the Management Agreement shall remain in full force and effect.

 

4.             Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED
AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT
REGARD TO CONFLICTS OF LAW PRINCIPLES (OTHER THAN SECTIONS 5-1401 AND 5-1402 OF
THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK).

 

[The remainder of this page is intentionally left blank.]

 

B-2

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IN WITNESS WHEREOF, the undersigned has caused this Joinder Agreement to be duly
executed and delivered as of the date first above written.

 

 

[FUTURE SECURITIZATION ENTITY]

 

 

 

By:

 

 

 

Name:

 

 

Title:

 

 

 

 

AGREED TO AND ACCEPTED

 

 

 

TACO BELL CORP., as Manager

 

 

 

 

 

By:

 

 

 

Name:

 

 

Title:

 

 

 

 

 

 

 

CITIBANK, N.A., in its capacity as Trustee

 

 

 

 

 

 

 

By:

 

 

 

Name:

 

 

Title:

 

 

B-3

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EXHIBIT C

 

FORM OF WEEKLY MANAGER’S CERTIFICATE

 

C-1

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