85 7th Place East, Suite 500

M I N N E S O T A 55101-2198 D E P A R T M E N T OF www.conimerce.state.mn.us

C O M M E R C E 65I.296.4026 FAX 651.297.1959 An equal opportunity employer

May 24, 2012

ANGELA ARNOLD THOMPSON HAYNES AND BOONE LLP 1615 L STREET NW SUITE 800 WASHINGTON, DC 20036-5610

Re: F-5365 DEL TACO LLC DEL TACO LLC F/A

Dear Ms. Thompson:

The Annual Report has been reviewed and is in compliance with Minnesota Statute Chapter 80C and Minnesota Rules Chapter 2860.

This means that there continues to be an effective registration statement on file and that the franchisor may offer and sell the above-referenced franchise in Minnesota.

The franchisor is not required to escrow franchise fees, post a Franchise Surety Bond or defer receipt of franchise fees during this registration period.

As a reminder, the next annual report is due within 120 days after the franchisor's fiscal year end, which is December 31, 2012.

Sincerely,

MIKE ROTHMAN Commissioner

By:

Daniel Sexton Commerce Analyst Supervisor Registration Division (651)296-4520

MR:DES:dlw

F-5365

STATE OF MINNESOTA DEPARTMENT OF COMMERCE REGISTRATION DIVISION

(651) 296-6328

IN THE MATTER OF THE REGISTRATION OF:

DEL TACO LLC F/A

By DEL TACO LLC

ORDER AMENDING

REGISTRATION

WHEREAS, an a p p l i c a t i o n t o amend the r e g i s t r a t i o n and

amendment fee have been f i l e d ,

IT IS HEREBY ORDERED that the r e g i s t r a t i o n dated

May 17, 2006, i s ainended as of the date set f o r t h below.

MIKE ROTHMAN

Commissioner

Department of Commerce

85 7th Place East, Sui t e 500

St Paul, MN 55101

Date: May 24, 2012

UNIFORM FRANCHISE REGISTRATION APPLICATION Minnesota

APPLICATION FOR:

INITIAL REGISTRATION OF AN OFFER AND SALE OF FRANCHISES

X RENEWAL APPLICATION OR ANNUAL REPORT

PRE-EFFECTIVE AMENDMENT

POST-EFFECTIVE MATERIAL AMENDMENT

File No Fee: S

1. Name of Franchisor:

Del Taco LLC

2. Name of franchise offering:

Del Taco

3. Franchisor's principal business address:

25521 Commercentre Drive, Suite 200 Lake Forest, California 92630

4. Name and address of Franchisor's agent in the state authorized to receive process:

Commissioner of Commerce 85 7"' Place East, Suite 500 St. Paul, Minnesota 55101

5. The states in which this application is or will be shortly on file:

Hawaii, Maryland, Minnesota, North Dakota, Rhode Island, South Dakota, Virginia, Washington and Wisconsin

6. Name, address, telephone and facsimile numbers, and e-mail address of person to whom communications regarding this application should be directed:

Angela Arnold Thompson, Paralegal Haynes and Boone, LLP 1615 L.St. NW, Ste 800 Washington, DC 20036 Phone: (202)654-4552 Fax: (202)654-4277 Email: angela.thompson@,haynesboone.com

W-50870 2.D0C

haynesboone

May 22, 2012 Direct Phone Number: (202) 654-4552 Direct Fax Number: (202) 654-4277

angela. thompson@haynesboom. com

VIA FEDERAL EXPRESS

Mr. Daniel Sexton Minnesota Department of Commerce 85 7" Place East, Suite 500 St Paul, Minnesota 55101

Re; Del Taco LLC (the "Company") Franchise Registration Renewal Application: Your File No. F-5365

Dear Mr. Sexton:

In connection with the Company's franchise registration renewal application, I have enclosed the following:

1. A check in the amount of $300 for the filing fee; 2. Uniform Franchise Registration Application; 3. Certification; 4. Consent to Service of Process and Corporate Acknowledgment; 5. Costs and Source of Funds; 6. Auditor's Consent; 7. Guarantee of Performance; 8. Franchise Seller Disclosure Forms; 9. One clean copy of the Company's Franchise Disclosure Document and exhibits;

and 10. One redlined copy of the Company's Franchise Disclosure Document.

As evidence of receipt, please file-stamp the enclosed duplicate copy of this letter and return it to me in the enclosed self-addressed, stamped envelope. If you have any questions regarding this application, please do not hesitate to contact me by telephone. Thank you in advance for your assistance with this file.

Best regards,

Angela Arnold Thompson Paralegal

Enclosures

W-50863 3.D0C

Haynes and Boone, LLP Attorneys and Counselors

1615 L Street, NW, Suite 800 Washington, DC 20036-5610

Phone: 202.654.4500 Fox: 202.654,4501

www.haynesboone.oom

CERTIFICATION

I certify and swear under penalty of law that I have read and know the contents of this application, including the Franchise Disclosure Document with an issuance date of April 30, 2012 attached as an exhibit, and that all material facts stated in all those documents are accurate and those documents do not contain any material omissions. I further certify that I am duly authorized to make this certification on behalf of the Franchisor and that I do so upon my personal knowledge.

Signed at Lake Forest, California on H c ^ y /6 20

DEL TACO LLC

Title:

By: ^ >^ , . Name: . l ^ c E ^ I

W-DT - Signature Pages(56629_2)

UNIFORM CONSENT TO SERVICE OF PROCESS Minnesota

KNOW ALL MEN BY THESE PRESENTS:

That the undersigned, Del Taco LLC, a limited liability company organized under the laws of the State of California, for the purpose of complying with the laws of the State of Minnesota relating to the registration, exemption from registration, or sale of franchises, hereby irrevocably appoints the Minnesota Commissioner of Commerce and the successors in such office, its attorney in the State of Minnesota upon whom may be served any notice, process or pleading in any action or proceeding against it arising under the aforesaid laws of said state; and the undersigned does hereby consent that any such action or proceeding against it may be commenced in any court of competent jurisdiction and proper venue within said state by service of process upon said officer with the same effect as if the undersigned was organized or created under the laws of said State and had lawfully been served with process in said state.

It is requested that a copy of any notice, process or pleading served hereunder be mailed to:

Jan Gilbert, Esq. Haynes and Boone, LLP 1615 L Street, N.W. Suite 800 Washington, D.C. 20036

Dated: IS day of _ ^ ,20Jir

DELT LLC

Name: Title:

CORPORATE ACKNOWLEDGMENT

STATE OF CALIFORNIA

COUNTY OF ORANGE

On the }S day of _ appeared ^ g . c k. T A n a and that he, as such officer, b'ferng authorized so to do, executed the foregoing instrument for the purposes therein contained, by signing the name of the corporation by himself as such officer.

IN WITNESS WHEREOF, I have hereunto set my hand and official seal.

M , 20_/f^ before me, the undersigned officer, personally known personally to me to be the fissacf^h'. ( renera l CoonSe /

Notary PublK

My Commission Expires:

MIRYAM KERNANDE2 Commlssiofl # 1925638 Notary Public - Ciltfomia

Orange County ^

aComm. ExpifetftfaU. 20151

W-DT - Signature Pages(56629_2)

FRANCHISOR'S COSTS AND SOURCE OF FUNDS

1. State the franchisor's total costs for performing its pre-opening obligations to provide goods or services in connection with establishing each franchised business, including real estate, improvements, equipment, inventory, training and other items stated in the offering.

Real Estate (Site Selection) $ 4,500 Improvements $ 0 Equiprrient $ 0 Inventory $ 0 Training $11,800 Miscellaneous I 0

$16,300

2. State separately the sources of all required funds:

Del Taco LLC funds the foregoing costs out of its general operating funds, which include initial franchise fees paid by new franchisees.

W-59577 I.DOC

II

=!l ERNST &YOUNG Ernst & Young LLP Suite 1000 18111 Von Karman Avenue Irvine. California 92612-1007

Tel: +1949 794 2300 Fax:+1 949 437 0590 www.ev-com

Acknowledgement of Independent Auditors

We agree to the inclusion in the Franchise Disclosure Document of Del Taco LLC (the "Franchisor") on April 30, 2012 of our report dated March 23, 2012, with respect to the consolidated financial statements of Sagittarius Restaurants LLC and Subsidiaries as of January 3, 2012 (Successor) and January 2, 2011 (Successor), and for the fifty-three weeks ended January 3, 2012 (Successor), the thirty-two weeks ended January 2, 2011 (Successor), the twenty weeks ended May 18, 2010 (Predecessor), and the fifty-two weeks ended January 3, 2010 (Predecessor).

Irvine, California April 30, 2012

1204-1354717

A member [irn nl Ernsl & Young Glotol Limilefl

GUARANTEE OF PERFORMANCE

For value received, Sagittarius Restaurants LLC (the "Guarantor"), located at 25521 Commercentre Drive, Lake Forest, California 92630, absolutely and unconditionally guarantees to assume the duties and obligations of its subsidiary, Del Taco LLC, located at 25521 Commercentre Drive, Lake Forest, California 92630 (the "Franchisor"), under its franchise registration in each state where the franchise is registered, and under its Franchise Agreement identified in its 2012 Franchise Disclosure Document, as it may be amended, and as that Franchise Agreement may be entered mto with franchisees and amended, modified or extended from time to time. This guarantee continues until all such obligations of the Franchisor under its franchise registrations and the Franchise Agreements are satisfied or until the liability of Franchisor to its franchisees under the Franchise Agreements has been completely discharged, whichever first occurs. The Guarantor is not discharged from liability if a claim by a fi^chisee against the Franchisor remains outstanding. Notice of acceptance is waived. The Guarantor does not waive receipt of notice of default on the part of the Franchisor. This guarantee is binding on the Guarantor and on its successors and assigns.

The Guarantor signs this guarantee on the 25th day of April, 2012.

GUARANTOR:

SAGITTAtaUS RESTAURANTS LLC

Name: Steven L. Brake

Title: Chief Financial Officer

W-DT- Guarantte of Pctfonnance (Sagittarius Restaurants) P0167_l)

FRANCHISE DISCLOSURE DOCUMENT RED-LINED DEL TACO LLC

A California limited liability company 25521 Commercentre Drive, Suite 200

Lake Forest, California 92630 (949) 462-9300

www.deltaco.com

With this Franchise Disclosure Document (this offering a franchise to operate a Del Taco restaurant.

'Disclosure Document"), Del Taco LLC is

The total investment necessary to begin operation of a Del Taco franchise for each type of restaurant and location offered, excluding the cost to purchase or lease your real estate, but including initial fees of $46,700 to $47,500 (consisting of the $35,000 initial franchise fee, $10,000 promotional fee and technical support costs which are estimated to range from $1,700 to $2,500) that you must pay to us, ranges as follows:

Standard Prototype (4^56 Seats) Expanded Prototype (502Z Seats) Conversion Prototype (47 Seats) End Cap Prototype (44 Seats) Inline Prototype (44 Seats)

$8W;W0ij8L2aa to Shm^XM^^ $632joo_jj2jm to $-m^i^jm $657,700Jljflfl to $-

.miftQto $-

This Disclosure Document summarizes certain provisions of your franchise agreement and other information in plain English. Read this Disclosure Document and all accompanying agreements carefully. You must receive this disclosure document at least 14 calendar days before you sign a binding agreement with, or make any payment to the franchisor or an affiliate in connection with the proposed franchise sale or grant. Note, however, that no governmental agency has verified the information contained in this document

You may wish to receive this Disclosure Document in another format that is more convenient for you. To discuss the availability of disclosures in different formats, please contact.the Franchise Development Department at 25521 Commercentre Drive, Suite 200, Lake Forest, California 92630, 61 :> 750 1077.949-462-9300.

The terms of your contract will govern your franchise relationship. Do not rely on this Disclosure Document alone to understand your contract. Read all of your contract carefully. Show your contract and this Disclosure Document to an advisor, like a lawyer or accountant.

Buying a franchise is a complex investment. The information in this Disclosure Document can help you make up your mind. More information on franchising, such as "A Consumer's Guide to Buying a Franchise," which can help you understand how to use this Disclosure Document is available from the Federal Trade Commission (""FTC'V You can contact the FTC at 1-877-FTC-HELP or by writing to the FTC at 600 Pennsylvania Avenue, N.W., Washington, D.C. 20580. You also can visit the FTC's home page at www.ftc.gov for additional information. Call your state agency or visit your public library for other sources of information on franchising.

Your state also may have other laws on franchising. Ask your state agencies about them.

Date of Issuance: Mav 2. 2011. an amondod .hino 11. 2011 .April 30. 2012.

FDD^ W-DT - 3ft442012 Final FDD Dated 5_2_11, As Amd. 6_M_11, .DOC

STATE COVER PAGE

Your state may have a franchise law that requires a franchisor to register or file with a state franchise administrator before offering or selling in your state. REGISTRATION OF A FRANCHISE BY A STATE DOES NOT MEAN THAT THE STATE RECOMMENDS THE FRANCHISE OR HAS VERIFIED THE INFORMATION IN THIS DISCLOSURE DOCUMENT.

Call the state franchise administrator listed in Exhibit A for information about the franchisor, about Other franchisors, or about franchising in your state.

MANY FRANCHISE AGREEMENTS DO NOT ALLOW YOU TO RENEW UNCONDITIONALLY AFTER THE INITIAL TERM EXPIRES. YOU MAY HAVE TO SIGN A NEW AGREEMENT WITH DIFFERENT TERMS AND CONDITIONS IN ORDER TO CONTINUE TO OPERATE YOUR BUSINESS. BEFORE YOU BUY, CONSIDER WHAT RIGHTS YOU HAVE TO RENEW YOUR FRANCHISE, IF ANY, AND WHAT TERMS YOU MIGHT HAVE TO ACCEPT IN ORDER TO RENEW.

Please consider the following RISK FACTORS before you buy this franchise.

1. AS OF THE END OF ITS LAST FISCAL YEAR fJANUARY a.- (U43. 2012>. OUR GUARANTOR (SAGITTARIUS RESTAURANTS LLC) HAD ONLY $13,665,47213.062.553 IN CURRENT ASSETS AND HAD $44,671,00737.378.410 IN CURRENT LIABILITIES. THIS MEANS THAT FOR EVERY DOLLAR OF LIABILITIES DUE WITHIN ONE YEAR, OUR GUARANTOR HAD ONLY$rm35 IN CURRENT ASSETS.

2. AS OF THE END OF ITS LAST FISCAL YEAR fJANUARY 0 40143 2012 OUR GUARANTOR (SAGITTARIUS RESTAURANTS LLC) HAD NEGATIVE WORKING CAPITAL OF $31 MILLION AND A NEGATIVE NET INCOME OF $56,736.84?.24.315.857.

3. THE FRANCHISE AGREEMENT REQUIRES YOU TO RESOLVE DISPUTES WITH US BY LITIGATION ONLY IN ORANGE COUNTY, CALIFORNIA. OUT OF STATE LITIGATION MAY FORCE YOU TO ACCEPT A LESS FAVORABLE SETTLEMENT. IT ALSO MAY COST MORE TO SUE US IN ORANGE COUNTY, CALIFORNIA, THAN IN YOUR HOME STATE.

4. IF WE TERMINATE YOUR FRANCHISE AGREEMENT AFTER YOU BREACH IT, WE MAY RECOVER OUR FUTURE ROYALTIES FOR THE REMAINING TERM OF THE AGREEMENT.

5. OTHER RISKS MAY EXIST CONCERNING THIS FRANCHISE.

The following states require that we register or file this Franchise Disclosure Document or qualify for an exemption from registration: California, Hawaii, Illinois, Indiana, Maryland, Michigan, Minnesota, New York, North Dakota, Rhode Island, South Dakota, Utah, Virginia, Washington and Wisconsin.

(State Cover Page Continues on Next Page)

FDD 5/11 AMENDED 6/1 ldZ12 W-DT - 2QU2Qn Final FDD Dated 5 2 ll .AsAmd.6 II 11 .jl,Jim;.D0C

DEL TACO LLC STATE REGISTRATION EFFECTIVE DATES

We have filed or registered this Disclosure Document or qualified for an exemption from registration in the following states, with the following effective dates:

State Effective Date California \ . ^ n \ F r\ ' ^ 0 1 1 n ' l m n f * n H f * H l i m p 1 4 California i T i u ^ u , I I , 11^ l U M c i l u t r u J UI1C i

Hawaii N_4n\7 1 \ 1 n i f i r t i f * n H f * H l i i n f * ^ ^ Hawaii iyiixy i-Jj 11, a J UIIICI lUCU JUtIC J--Jy

Illinois ^_^l^\7 ' yew \ n i f i t Y i f * n H p n I i i n f * I d Illinois I V J U j Z \ j I E , U! i U l i i C l l U C U J U I I C 1 ^ ,

3&44April.^r>, inn Indiana Indiana i V l U j X , I t , LUl U l l i C t l U C U J U f IC i

3044April .^0, 2012 Maryland ^ I r i T 1 0 ' ^ n I I f i " f i n i r n H r r f T i l l " ' ^ H Maryland i v i u y " ' 1 u , -^yj 1 1 f L is u i i i C M U C U J M i y J - U .

Michigan \ i in* . f - . ^ ' ^ r ^ l 1 r i m f r t j i f r t Tuf i f^ I d Michigan i V i U i r V ) 1 1) UJJ U l l f i J i i t i t r U J U I I C i ^ ,

Minnesota Minnesota IVIUT j l v r r ^ 'Uo tlllUJIlUCU -JUItC t l f \ \ 1

1 1

New York K.4r>*.f_/^ H ftp • ^ ' • " " r V f i f / i . - l n H f ^ ^ New York I V l u T ^ U r f y U o u l I l U I I U C L l ' J t i l l C

North Dakota fS-4nv 15? 1 0 1 T n ^ - f i m n n H f ^ H T i i n f - 1 fi-North Dakota

Rhode Island \ A f \ \ f 1 1 '111 1 1 n m r f ^ n f i f f i T i i n f * 1 ^ -Rhode Island iTiUj I t , JlU 11^ ttlllCMUVU JUIIC 1 \jy

South Dakota V i ^ n y 1 0 i n i 1 f i>Ti f*nHf*H l i i n f * 1 d South Dakota I V l U T 1 X U I t , t i l I I C I I U C U J U I I C 1 7 0 1 1

Utah Xyt f iu . 0 7 0 1 1 n i Y i f ^ n n f ^ H l i i n f * 1 i l Utah iT r t t y ' V , z^\f I t , U s U i i i C I I U C U J U l IC 7 0 1 1

Virginia Juno 16,2011 Washington Washington

30++ Wisconsin N-^nv ^ ' ^ A l - l n ^ - n m f n f l f f J — l i i t t f * 1 f^-Wisconsin

3044

In all other states, the effective date of this Disclosure Document is the issuance date of May 2. 2011 _ nn nmonHod Juno M _ 2011, Anril 30. 2012.

FDD: W-49790 -WrlLDOC

TABLE OF CONTENTS ITEM PAGE

1 The Franchisor and any Parents, Predecessors and Affiliates 1 2 Business Experience 4 3 Litigation 6 4 Bankruptcy 7 5 Initial Fees 7 6 Other Fees 9 7 Estimated Initial Investment 10 8 Restrictions on Sources of Products and Services 13 9 Franchisee's Obligations 15 10 Financing 16 11 Franchisor's Assistance, Advertising, Computer Systems and Training 16 12 Territory 21 13 Trademarks 22 14 Patents, Copyrights and Proprietary Information 23 15 Obligation to Participate in the Actual Operation of the Franchise Business 24 16 Restrictions on What the Franchisee May Sell 24 17 Renewal, Termination, Transfer and Dispute Resolution 24 18 Public Figures 27 19 Financial Performance Representations 27 20 Outlets and Franchisee Information 29 21 Financial Statements 33 22 Contracts 34 23 RGcoiptsRecfiipl 34

EXHIBITS

A State Agencies and Registered Agents B Financial Statements C CmamntyGuarantee Agreement of Sagittarius Restaurants LLC D Multiple Development Agreement D-4 Dcvolopmcnt Incentive Program Addendum to Multiple DovoloprnGnt Agroomont E Franchise Agreement E-1 DfivnlnpmontOrnwth. Incentive Program Addendum to Franchise Agreement F State Addenda G Hardware and Software License and Support Agreement H Addendum to Lease I Agreement and Sublease Agreement iX Franchisee Information (Including Supplemental Information)

Form of General Release

FDD 5/11 AMENDED 6/11JZ12 W-DT - 304+2012 Final FDD Dated 5 2 ll.AoAmd.6 II l l j -^0 n.DQC

ITEMl THE FRANCHISOR AND ANY PARENTS, PREDECESSORS AND AFFILIATES

To simplify the language in this Disclosure Document, we will use the words "we," "us" and "our" when referring to Del Taco LLC and its subsidiaries. We will use the words "you" and "your" when referring to the individual or business entity which acquires a franchise to operate a Del Taco restaurant. The words "you" and "your" do not include any individual or business entity which owns an interest in you. We may require all individuals and business entities which own an interest in you to guarantee your obligations to us.

We originally formed as a California corporation on January 21, 1988, and converted to a California limited liability company on March 23, 2006. Under California law, a conversion constitutes a continuation of the converting entity, not the creation of a new one.

We presently do business under the names Del Taco LLC and Del Taco. We have our principal business address at 25521 Commercentre Drive, Suite 200, Lake Forest, California. Our registered agents for service of process appear on Exhibit A to this Disclosure Document.

We have operated and franchised Del Taco restaurants since February 1990. We do not operate or offer franchises in any other line of business and have not operated or offered franchises in any other line of business. As of December 28, 2010Januarv 3 2012 {the end of our last fiscal year), we had a total of company-owned and 334245 franchised Del Taco restaurants operating in 4^16 states and one territory (Guam).

We are offering franchises to operate Del Taco restaurants. Del Taco restaurants offer the general public Del Taco food and beverage products through a uniform menu featuring primarily Mexican-American foods like tacos and burritos, along with burgers, shakes, French fries, breakfast items, soft drinks, and similar food and beverage items.

The Del Taco restaurant standard nrototvpe provides seating for 56 customers and the expanded prototype provides seatin^^ for 72 customers. We also offer an end cap or inline restaurant for strip mall locations, providing seating for 44 customers, as well as a restaurant with limited or no seating for non-traditional locations like convenience stores, shopping malls, food courts, and co-branded locations. The smaller Del Taco restaurants offer a menu similar to that of a full-sized Del Taco restaurant b u t j ^ limited, in most cases, to our core menu items.

A Del Taco restaurant employs approximately 20 to 35 persons for a free-standing restaurant and approximately 62fi to S25 persons for an end cap or inline restaurant, depending on the size and sales of the restaurant.

Under our MuUiple Development Agreement (see Exhibit D to this Disclosure Document), you will receive the right to develop one or more Del Taco restaurants within a specified geographic area. You must enter into a separate Franchise Agreement (see Exhibit E to this Disclosure Document) for each Del Taco restaurant you open.

You will have to compete with numerous national and local restaurants. You will compete with other fast-food and full service restaurants that offer similar menus and similar type businesses. The market for fast- food restaurants is well developed.

FDD 5/11 AMENDED e/lMlll W^9790 V^IZDOC

We know of no regulations specific to the operation of a restaurant, although you must comply with all local, state and federal health and sanitation laws in the operation of your restaurant. Other laws may apply to your business and we urge you to make additional inquiries about those laws.

Parents

We are a^wholly-owned subsidiary of Kerry Foods International? L L C ("ICerry Foods"), a California limited liability company and wholly-owned subsidiary of Sagittarius Restaurants L L C ("Sagittarius Restaurants"), a Delaware limited liability company and wholly-owned subsidiary of F & C Restaurant Holding Co. ("F&C"), a Delaware corporation. On December 27, 2004, Sagittarius Acquisitions II Incorporated, a Delaware corporation now known as Del Taco Holdings, Inc. ("Del Taco Holdings"), acquired all of the capital stock of F&C from F&C Holdings (U.S.), L.P., a Delaware limited partnership, itself owned by Lone Star Fund IV (U.S.), L.P. and other affiliated funds known, collectively, as the Lone Star Funds. On March 29, 2006, Sagittarius Restaurants acquired all of the capital stock of Kerry Foods, our immediate parent company. In May 2010, GS Mezzanine Partners 2006 Onshore Fund, L.P. and other affiliates of Goldman Sachs & Co. ("Goldman Sachs") acquired a controlling interest in Del Taco Holdings.

Goldman Sachs is a Delaware limited partnership and has its principal place of business at 8^ Rmft4200 West Street, New York City, New York 10004.10282. Del Taco Holdings, F&C, Sagittarius Restaurants and Kerry Foods share their principal place of business with us at 25521 Commercentre Drive, Suite 200, Lake Forest, California 92630.

Affiliates and Predecessors

Goldman Sachs or its affiliates also hold controlling interests in the following franchising companies:

1. Grupo Vips, MariaCalk de Molina, 28006,£disfln._4. Madrid, Spain. As of its 50092iUJL fiscal year end, Grupo Vips had LIf l franchised locationlQcations. It began offering franchises for restaurants and retail businesses in 2009.

2. Hvntt Hntdr. CoTporatinn. 200 Wont Mndinon St.. ChicQPO. IL 60606.Burger King New Zealand. 6 Antares Place. Mairangi Bav. Auckland. New Zealand. As of its 50092M1 fiscal year end, Hyatt Hotels Corporation had 109Bmyer King New Zealand had 77 franchised locations. It began offering franchises for hfttekBur^er King restauragis in 4 ^ 9 4 T I ^ 6 L

3. Zhcjian C. Stratis Food Chain Co., Ltd., 4F, Zhongohan North Road, Hangzhou, PonplQ'n Ropuhlic of ChinaVikinfr Redninp.stieneste^ Fornehuveien 50. 136(T Lysaker^ Norway. As of its 200921111 fiscal year end, Zhojian C. Stratia Food Chain Co. Ltd. had 222yiking had T5il franchised locations. It began offering franchises for cafofi in 2002.autoniohile service stations in 1935.

4. IFM Investments Limited aka Contur)^ 21, 26/A East Wing, Hanwoi Plaza, No. 7 Guanghua Road, Chaoyang District, Beijing, People's Republic of China. Aa of ita 2009 fiscal year end, IFM Investments Limited had 800 franchised locations.—It began offering franchises for real estate buGinesscG in 2000.

FDD 5/11AMEMDED 6/11JZ12 W-49790 WrlZDOC

D EDU, 2"^ Floor, Block B, Qidi Building, Tsinghua Science Park, Beijing, China. As of its 2009 fiacal year end, D EDU had approximately 500 franchised locations. O'Neill B V . Santa Cruz. California. It began offering franchises for education r.Gr\'icQr. in 2005.clQthing and accessories in 1952.

None of the entities above have ever owned or operated Del Taco restaurants or offered franchises for Del Taco restaurants.

We do not have any affiliates that provide goods or services to our franchisees.

Except as described above, we do not have any affiliates that currently offer or have offered franchises for restaurants or for any other line of business during the past 10 years. We have had no predecessors during the past 10 years.

I T E M 2 BUSINESS E X P E R I E N C E

President and Chief Executive Officer; Member of the Board of Managers: Paul J . B. Murphy, III

Mr. Murphy has served as our President and Chief Executive Officer since February 2009. He has also served as a Member of our Board of Managers since February 2009. From February 2009 to May 2010, he served as our Chairman of the Board. Before joining us, he served as President and Chief Executive Officer of Einstein Noah Restaurant Group, Inc. (formerly. New World Restaurant Group, Inc.) of Lakewood, Colorado, from October 2003 to December 2008.

Senior Vice President^—Chief Development Officer and—Chicf_jQf Operations Officer, Frnnchising: James W. L y o n s j J t o i d Pear

Mr. Lyons has served-as-our Chief Operations Officer, Franchiaing and Chief Development Officer since Februar)^ 2011.—Mr. Lyons has also sor 'cd as our Senior Vice Prosidont and Chief Development Officer since September 2008. He served as Chief Development Officer with Captain D's, L L C ("Captain D'o") of Nashville, Tonncsaoo, from September 2008 to May 2010. Before joining us, ho served as Chief Operating Officer of Popcyc's Chicken and Biscuits of Atlanta, Georgia (a division of A F C Entorpriscs, Inc.), from March 2007 to December 2007, and as Chief Development Officer of Popoyo'a Chicken and Biscuita from July 2001 to March 2007.

M r . Pear has served as Senior Vice President of Operations since January 2012. From Januarv 2009 to January 2012. M r . Pear served as Director of D M A Operations for Taco Bell fVum Brands). From 1985 to January 2009. M r . Pear held various positions with Domino's Pizza. Inc.. most recently as Vice President Operations for Arizona.

Senior Vice President and Chief Financial Officer: Steven L . Brake

Mr. Brake has served as our Senior Vice President and Chief Financial Officer since May 2010. He served as our Treasurer from March 2006 to May 2010 and as our Vice President and Controller from May 2008 to May 2010.

FDD 5/11 AMENDED 6/ndZ12 W^9790 4*12.000

Executive Vice President of Operations: J. Donald Stoops

Mr. Stoops has served as our Executive Vice President of Operations ainco Januar ^ 1991.

Executive Vice President of Supply Chain: Janet D, Erickson

Ms. Erickson has served as our Executive Vice President of Supply Chain since February 2011. She served as our Executive Vice President, Supply Chain and Research and Development from May 2008 to February 2011. From July 2001 to May 2008, she served as our Executive Vice President of Purchasing and Quality Control.

Senior Vice President and Chief Brand Officer: John D. Cappasola, Jr.

Mr. Cappasola has served as our Senior Vice President and Chief Brand Officer since February 2011. Mr. Cappasola served as our Vice President of Marketing from March 2009 to February 2011. From September 2008 to March 2009, he served as our Vice President of Marketing Development. Before joining us, he held various positions in marketing, strategic development and operations at Blockbuster, Inc. of Dallas, Texas from August 2002 to September 2008.

Vice President of Franchise Operations: Barry Barnhart

Mr. Barnhart has served as our Vice President of Franchise Operations since August 2006. Before that, he worked for A&W Restaurants, Inc. ("A&W Restaurants") and Long John Silver's, Inc. ("Long John Silver's") of Louisville, Kentucky, where he sensed as Regional Vice Prosidont from May 2005 to August 2006.

Vice President of Franchise Development: Michael Vogel

Mr. Vogel has served as our Vice President of Franchise Development since December 2010. Before that, Mr. Vogel served as a Director of Franchise Recruiting for us and Sagittarius Restaurants from October 2006 to December 2010. He held the same position with Captain D's of Nashville, Tennessee from October 2006 to May 2010. Mr. Vogel previously sor\'cd as a Director of Franchise Sales for Quizno's Franchising II LLC of Donvor, Colorado from April 2005 to October 2006.—Mr. Vogel has also served as owner of Twin Cities Flooring & Foam of Minneapolis, Minnesota since September 2003.

Member of the Board of Managers: [Timothy J. Fiyn/t]

[ MF. Flynn has served as a member of our jboard of managers, the board of managers of Captain D's, and the board of directors of Del Taco Holdings[ since March 2006. He also has served as a Partner of Leonard Green since 2003. Ho cufrently- serves on the ]board-of directors[ of-The Container Store.']

[Member of the Board of Managers: Andrew S. Janower]

[ Mr. Janower has served as a member of our jboard of managers since March 2006 and as a member of the board of managers of Captain D'a and the board of directors of Del Taco Holdings[ since March 2006. He also has sci-vcd as a Managing Director of Charlcshank Capital Partners,

FDD: w-49790 4frl2.DOC

LLC- ("Charlcsbank--)ra-private investment banking firm based in Boston, Massachusetts, since July

[Member of the Board of Managers: Edward Palicscn]

Mr. Palloson has served as a member of our board of managers since July 2010. Ho has also served on the board of directors of Del Taco Holdings since May 2010.[ He has been employed by the Goldman Sachs Group, Inc. located in New York, New York, in a variety of positions since 1999, jwhcro ho is currently a Managing Director in[ the Merchant Banking Division}:

Member of the Board of Managers: Adrian Joncslaoya Barnes

MfMs- JenesBarn^s has served as a member of our beardBoard of managers since July 2010.—Ho has also served on the board of directors of Do! Taco Holdings since May 2010.—Mfr JenesMaitagers since March 2012. She has been employed by Ihe^Goldmanj Sachs & Co.,C!j:ami» Im^ located in New York, New York, in a variety of positions since 4^942fllQ2» where heshfi is currently a managing diroctorYjce President in the Principal Investment Area (PIA).—Mr. Jones serves on the board of directors of Biomot, Inc., Education Management Corporation, Health Markets, Inc. and Signature Hospital. LLC, off the Merchant Banking Divisionl Ms. Barnes also serves on the Board of Directors of Sprint HpldinsSt LLiL

Member of the Board of Managers: Thomas Connolly

Mr. Connolly has served as a member of our beafdBoard of manggorsManagers since March 2011. Mr. Connolly has been with Goldman, Sachs & Co. since 1996, and has been a partner of the firm since 2004. He is global head of GS Loan Partners, a $10.5 billion senior debt fund managed in the Merchant Banking Division, and is a member of the division's Investment Committee. He is also global co-head of the Principal Debt Group, which oversees the firm's investing activities in senior and mezzanine loans. Before joining the Principal Investment Area, Mr. Connolly was head of Leveraged Finance at Goldman Sachs. Mr. Connolly currently serves on the Board of Directors of Youth, I.N.C.

Member of the Board of Managers: Bradley GrnsrATimothy J. Flvnn\

\ Mr. Flvnn has served as a member of our ]Board of ManagersI since March 2006. He also has served as a Partner of Leonard Green since 2003. He currently serves on the ] Board of DirectorsI of The Container Store.]

\ Member of the Board of Manasers: Andrew S. Janower\

\ Mr. Janower has served as a member of our IBoard of ManagersI since March 2006. He also has served as a Mana^ine Director of Charlesbank Capital Partners. LLC rCharlesbank"). a private investment banking firm based in Boston. Massachusetts, since July 1.996.]

[Member of the Board of Manaeers: Edward Pallesen]

Mr. Gres^PalkSfin has served as a member of our board of managers since July 2010. He hni nlsoBoard of Managers since July 2010. [ He has been employed bv the Goldman Sachs Group. Inc. located in New York. New York, in a variety of positions since 1999. lini-lndin^ as a

FDD 5/11 AMENDED 6/1 \m2 W-49790 4*12.000

memher of the Technolofyy, Media and Telecom Group (TMTV focusing on telecom services as well as selected technology and media comnanies. He is currently a Manaf in^ Director in thef Principal Investment Area\.

Memher of the Board of Manafrers: Frank Vizcarra

Mr. Vizcarra has served on the board of diroctorsBflgrd of Directors of Del Taco Holdings since 'tny -rnin Ur r.mr.r. hnr. hnnn omplnvoH hv r.nlHmnn SnrRr. . r CnSeptember 2011. Mr. Vizcarra has been employed bv The Vizcarra Consultinp Groun located in Carlsbad. California since May 2006 where he serves as the President and CEO. He served nn the Board of Directors of Ensequence Inc.. located in New York, New York, since 1995 and is a Managing Diroctor in the finn's[ Principal Investment Area] (PIA). Mr. Gross is currently on the board of directors of Acroflox, Inc., Coquel Communications Holdings, LLC, First Aviation Services, Inc., nnd Schnollor, LLC from Anril 2007 to June 2010. He also served on the Board of Directors of Oovoo Communications, located in New York^ New York, from June 2006 to June 2007.

Senior Director of Real Estate: James Farley

Mr. Farley has served as our Senior Director of Real Estate since February 2001.

Senior Director of Real Estate: Michael Lucero

Mr. Lucero has served as our Senior Director of Real Estate since May 2007. Before that, he served as our Director of Real Estate from January 2000 to May 2007.

Director of Franchise Development: Eric J. Edwards

Mr. Edwards has served as a Director of Franchise RQcruitinpDevelonment for us and Sagittarius Restaurants since January 2007. He held the same position with Captain D's of Nashville, Tennessee, from January 2007 to May 2010.

Director of Franchise Development: Laura Tanaka

Ms. Tanaka has served as Director of Franchise Development for us since November 2011. Before joining us, heshe served as Director of Development for Palm Beach Tan, Inc. of Fnrmnrr Prnnrh Tnvnr. frntn Ortnhnr 005 to Tnniinn.. 2007 Franchise Sales for steak n Shake Enternrises^ Inc. of Indiananolis. Indiana from January 2011 to November 2011. From Mav 2008 to December 2010. she served as Director. Franchise Business Develonment for THOP Restaurants. Inc. of Glendale. California. Ms. Tanaka .served as Director nf Develonment at Popeyes Louisiana Kitchen of Atlanta. Georgia from Mav 2006 to May 2008.

Market Planning Analyst: Andrew Verostek

Mr. Verostek has served as Market Planning Analyst for us, as well as for^^gnd Sagittarius Restaurants since October 2006. He held the same position with Captain D's of Nashville, Tennessee, from October 2006 to May 2010. He served as our Manager of Franchise Sales from August 2001 to October 2006.

FDD: w-49790 4*i2.DOC

ITEM 3 LITIGATION

Rivera v. Del Taco LLC. On October 17, 2008, Jose Rivera, a former general manager, filed a class action lawsuit in the Superior Court of Los Angeles County, California (Case No. BC400170), alleging violations of the employee expense reimbursement provisions of Section 2802 of the California Labor Code. The plaintiff claimed, among other things, that we engaged in unfair competition by failing to provide certain reimbursements to our employees. The plaintiff seeks damages in unspecified amounts and other relief On March 23, 2010, the parties entered into a settlement stipulation, under which we denied liability but agreed, among other things, to establish a claims procedure under which we will pay the class members a total of not more than $300,000.

Valdez v. Del Taco LLC. On November 25, 2009, Mario Valdez, Jr., a fornier houriy employee, filed a class action lawsuit in the Superior Court of Los Angeles, California (Case No. BC 426538), alleging violations of the meal and rest break provisions of California law. The plaintiff seeks, among other things, damages in an unspecified amount. We have denied violating such provisions and are defending against the lawsuit. The suit is in pretrial di5COvor> Gaor v. Education Management Corp.. ct al. fU.S. District Court in the Western District of Pittsburg. Pennsylvania. Case No. 2:10 cv 01061 NBF RCM) On August II, 2010, a class action was filed against Mr. Adrian Jones, a Member of our Board of Managers, and others alleging violations of the Securities Act of 1933 and the E?tchango Act of 1931 duo to allegedly false statements in connection with the initial public offering of Education Management Corp. and such company's subsoquont press roloasos and filings with the Securities and Exchange Commission. Mr. Jones servos on the Board of Directors for Education Managcmont Corp. The suit is in the pretrial stagc.On Januarv , 2012 the Court denied the plaintiffs' motion for class certification. The plaintiff has appealed that rulinp.

Other than the ^tmi actions disclosed above, no litigation is required to be disclosed in this Item.

ITEM 4 BANKRUPTCY

Paul Murphy, our President and Chief Executive Officer and a member of our Board of Managers, served as Executive Vice President of Operations of Einstein/Noah Bagel Corp. ("ENBC") from March 1998 to June 2001. ENBC and its majority-owned subsidiary, Einstein/Noah Bagel Partners, L.P. ("ENBP") commenced Chapter 11 reorganization proceedings on April 27, 2000, in the United States Bankruptcy Court for the District of Arizona (Case Nos. 00-4447-ECF-CGC and 00-4448-ECF-CGC). In June 2001, ENBC consummated a sale of substantially all of its assets (including 100% ownership of ENBP) to the predecessor of Einstein Noah Restaurant Group, Inc. In August 2003, the bankruptcy court closed the bankruptcy cases of ENBP and ENBC.

Other than this action, no bankruptcy information is required to be disclosed in this Item.

FDD-W49790 4*12.D0C

ITEMS INITIAL FEES

General

If you purchase the rights to develop and operate one Del Taco restaurant under a Franchise Agreement, you must pay us a Franchise Fee of $35,000 and a Promotional Fee of $10,000 when you sign the Franchise Agreement, which must occur no later than 28gitliiiLJil days after construction begijis. We earn those fees when paid and have no obligation to refund them for any reason.

On signing the Multiple Development Agreement, you must pay the full Franchise Fee for the first restaurant, plus $10,000 for each additional restaurant. We will credit the $10,000 against the Franchise Fee for your second and each subsequent restaurant as it opens. We earn those fees when paid and have no obligation to refund them for any reason.

Before the opening of your restaurant, we will provide technical support at your restaurant through the first day of opening of your restaurant. The date and time of the pre-opening support will be determined by us in our sole discretion. You must reimburse us for our travel, meals, lodging and wagos£xit£il&£a, which are estimated to range from $1,700 to $2,500.

You spend the Promotional Fee, with the approval and coordination of our Marketing Department, for the purpose of promoting your restaurant. You must submit invoices to us for promotional expenditures for our direct payment to the vendor or for reimbursement. We will not pay or reimburse you for food or paper costs. If you do not spend the Promotional Fee within one year after the opening date of your restaurant, you will forfeit the unused portion of the fee and we will apply it toward our general advertising programs.

Annual Drawing

Wo may offer, in our solo discretion, to existing franchisees that operate restaurants with gross sales in excess of $1- 000,000 for the prior-1-2 months, the opportunity to participate in an anfHial-dFawing7 the winner of which receives a-waiver of the Franchise Fee for its next Del Taco restaurant. During the last fiscal year wo did not conduct a drawing. In all other cases, and oj copt as disclosed below,-we-charge a uniform Franchise Fce--for—the development of- new Del Taco restaurants.

Company-owned or Company-developed Restaurants

In the case of a conversion of a company-owned restaurant to a franchised restaurant, we will negotiate the purchase price, taking into account the value of the restaurant's equipment, signs, cash flow, and leasehold or other real property interests, plus the Franchise Fee. The total purchase price fflayis-fixpected to range from $50,000 to $1,500,000.

In some cases, we may offer a Franchise Agreement for a specific location being developed by us. In those cases, your Franchise Fee also will include our costs that you pay to us or for our benefit before opening the restaurant under the Agreement and Sublease Agreement for the location. Those costs will comprise (and not duplicate) one or more of the items and amounts disclosed under Item 7, "Initial Investment," below, including (without limitation) the cost of (1) any required site development work, (2) building construction, (3) furnishings, fixtures and equipment, (4) initial lease

FDD 5/11 AMENDED 6/11 jZ12 W-49790 44T12.DOC

deposits and payments, and (5) a negotiated amount to reimburse us for our administrative overhead incurred in connection with the development of the location. The form of Agreement and Sublease Agreement appear as Exhibit HI to this Disclosure Document.

DcvclopmentGroath Incentive Program

We have reyised. renewed and extended our DovGlnprnontGrowth Incentive Program (the "Program") established in 2009. Under the Program, franchisees that open new restaurants by the deadlines specified below will receive certain defined incentives (the "Development Incentives"). The Development Incenfives consist of (!) our waiver of $25,000 of the $35,000 Franchisee Fee for the restaurant, and (21 our contributionwaiver of certain amounts for additional advertising and maritoting activities conducted to market and promote the restaurant, and (3) our reimbursement of a rnrtnin nmniint nfmarkctinp or normal operating expenses and/or capital oxpondituros for the restaurant. The form of nHHnnHn tn thr MnUipln npvnlnpmnnt Afirrnnmont nndaddendum to the Franchise Agreement for the Program aBBeafanoears as Exhibits D 1 andExhihit E-1 to this Disclosure Document.

Subject to your timely performance of all of your obligations under the Franchise Agreement for the restaurant, we will contributeyaiye your Royalty Fee hy an amount equal to 2% of the restaurant's net sales during its first year of operations and 1% of the restaurant's net sales during its second year of operations for additional advertising and marketing activities. We also will reimburse you for the restaurant's normal operating expenses and/or approved capital expenditures during its first year of operations in an amount equal to Wo of the restaurant's not sales during its first year of operations. Wo will contribute the amounts for the advertising and marketing activities in addition to the amounts that wo otherwise would spend and actually spend under the Franchise Agroomont for the restaurant. You will have to obtain our prior written approval of any additional advertising and markcfing activities and their related cost. Wo will pay the vendors' invoiced amounts for the cost of tho additional advertising and marketing activities wo have approved directly or will reimburse you for those amounts if previously paid by you.—Tho additional advertising and marttoting activities must take place during tho first 21 months of tho restaurant's operations.

The Development Incentives will apply to new restaurants opened on or before December 15. 2011.31^ 2013 if opened at a location we approve before April 30, 2011. For now ror.tniirnntr. npnnnH nf n Inrntinn nnt npprnvnH hv nr. hnfnrn thnt dnto, thoafter August 31. 2011. The Development Incentives will also applv ifto new restaurants only if all of the following conditions are met: (si\ the restaurant npnn . nn or hofnro Octnhor 31.is opened on or hefore December 31, 2014. fh> the franchisee entered into a Multinle Deyelnpment AfTreement after March 1, 2012 and (c\ the restaurant is onened under the Multiple Deyelonment Agreement entered into after March 1.2012.

The Development Incentives terminate if you fail to cure any default under any agreement with us on a timely basis. On the termination of the Development Incentives, you will have to pay that amount of the Franchise Fee previously waived for each restaurant and repay any cnntrihutionr.pay Marketing Fees that we previously made towards tho advertising and marketing of each restaurant and as reimbursement for any operating expenses or capital oxpondituresgaiYgd.

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ITEM 6 OTHER FEES

Type of Fee' Amount Due Date Remarks Royalty^ 5% of net sales Payable weekly by electronic

fimds transfer on the third calendar day following each sales week in which the sales occurred

Net sales include all revenue from the restaurant, except for refunds and sales or similar taxes.

Marketing 4% of net sales Payable weekly by electronic funds transfer on the third calendar day following the sales week in which the sales occurred

We may increase the fee to the then current fee we charge new franchisees.

Computer Systems Support Services Fee

$35 per week^ Payable after opening in weekly installments with your royalty fee payments

You must purchase and maintain the systems we require. See Items 8 and 11. We may increase the fee to the then current fee we charge new franchisees.

Transfer Fee At least $5,000 per restaurant and possibly more in order to cover our costs of review and approval, including attorney fees

Before consummation of the transfer

Payable when you sell your franchise or, if a legal entity, when a controlling interest in the entity transfers.

Interest 7 percentage points in excess of the prime rate per annum as published in The Wall Street Journal

As incurred We may charge interest on past due amounts.

Successor Fees The fee being paid by other franchisees for a successor agreement, but not less than $35,000, plus the then current Promotional Fee (currently $10,000)

On execution of the successor franchise agreement

Payable when you transfer the Franchise Agreement or a controlling interest in you. You must pay the Successor Fee and Promotional Fee in addition to any remodel costs required.

Audit Fees and Expenses

Will not exceed our actual out-of-pocket costs (currently about $1,000 to $2,000)

As incurred You must pay all amounts shown as due. If you understated net sales by 1% or more, you also must pay all costs of the audit.

Indemnification Costs Varies As incurred You must pay for the cost of defending us against any liability as a result of your operations.

New Product and Vendor Testing

Will not exceed our actual out-of-pocket costs (currently about $2,000 to $3,000)

As incurred If you desire to purchase any items from an unapproved vendor, you must submit a written request to us for approval. We have the right to require, as a condition of our approval, that our representative inspect the vendor's facilities and take samples from the proposed vendor for testing-

Reimbursement of Insurance

Cost of obtaining coverage On receipt of invoice If you fail to procure the required insurance, we may secure that insurance and require you to reimburse us for the premiums

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10

Type of Fee' Amount Due Date Remarks and other expenses relating to obtaining that insurance.

1. Unless othet^ise noted, you must pay all fees to us and we have no obligation to refund them. The Multiple Development Agreement and Franchise Agreement give us the right to require that you make all payments owed us (other than the Development Fee, Franchisee Fee, and Promotion Fee) via automatic bank draft. We uniformly impose the fees described above.

2. In certain circumstances, we may agree to reduce or rebate a portion of the royalty fee for one or more restaurants opened under a Multiple Development Agreement. On termination of your Franchise Agreement for any of the reasons described in Section 15 of the agreement, we have the right to recover damages for our loss of royalty fees for the remaining term of the Franchise Agreement.

3. . The fee decreases to $30 per week if you operate more than five restaurants and to $25 per week if you operate more than 10 restaurants. In some cases, we may agree to provide you with technical support only. The weekly fee for technical support services only equals $25 per week, $20 per week if you operate more than five restaurants, and $15 per week if you operate more than 10 restaurants.

4 The Incontivo Program opplica to all new Multiple Development AgrGomontG signed during our 2011 fiscal year. We also may oxtond tho program and the Dovolopmont Incentives to existing Multiple Development Agroemonto, by way of on agreed amendment to those agroomonts, depending on the development schedules and development status of those agreements. Franchisees may not transfer the Development Incentives. We may or may not repeat the Program during our 2012 fiscal year.

ITEM?

ESTIMATED INITIAL INVESTMENT

YOUR ESTIMATED INITIAL INVESTMENT

Type of Expenditure

Standard Prototype

Expanded Prototype

Conversion Prototype

End Cap Prototype

Inline Prototype

Method of Payment When Due

To Whom Paid

— J Franchise Fee

$ 35,000 $ 35,000 $ 35,000 $ 35,000 $ 35,000 Lump Sum {Note 2) Us

3 Promotional Fee

$ 10,000 $ 10,000 $ 10,000 $ 10,000 $ 10,000 Lump Sum (Note 2) Us

Professional Fees $ Oto $ 55,000

$ Oto $ 55,000

$ Oto $ 55,000

$ Oto $ 55,000

$ Oto $ 55,000

As Agreed As Agreed Professionals

4 Lease Payment

$ 8,000 to $ 15,000

$ 8,000 to $ 15,000

$ 8,000 to $ 12.000

$ 8,000 to $ 12.000

$ 8,000 to $ 12.000

Monthly As Agreed Landlord

Building'' $ 375,000 to $ 450,000

$100,000 43S,000 lo

-sio.noo

225milo $350,000 37S.00(t

$325,000 250.000 to $295,000 325J1QQ

$ 200,000 to $ 275,000

As Agreed As Agreed Contractor or Owner

Sifc Work and « ns.oooto s ns.oooto «S 75.00(1 tn S; 25.00010 S 25.000 to A-i Apreed As Aprced Contrflffors Fnlitlpmpitt S 37S.000 S; 37^.000 s too,ono s; 100.000 s m.m or Third

Part IPS

Furnishings, Fixtures and Equipment'

$300,000 30s.noo to $350,000 3so,ofln

330.000 10 $350,000 405.000

330.000 to

405,000

$300,000 330.000 lo $325,000

$250,000 255.000 to

305,000

As Agreed As Agreed Vendors

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11

Type of Expenditure

Standard Prototype

Expanded Prototype

Conversion Prototype

End Cap Prototype

Inline Prototype

Method of Payment When Due

To Whom Paid

Computer Systems^

$ 25,000 lo $- 37,000_lQ % 42.000

$ 25,000 to $ 37,000jQ S 42.000

$ 37,000^ % 42.000

$ 25,000 to S 37,000JQ S 42.000

37,000 to $ 5 3 ^ 42,000

As Agreed As Agreed Vendors and Us

Computer Systems^ 37,000 to

$ 5 3 ^ 42,000

As Agreed As Agreed Vendors and Us

Technical Support Fee

$ 1,700 to $ 2,500

$ 1,700 to $ 2,500

$ 1,700 to $ 2,500

$ 1,700 to $ 2,500

$ 1.700 to $ 2,500

Lump Sum On Invoice Us

Insurance'' $ 8,000 to S 20,000

$ 8,000 to $ 20,000

$ 8,000 to $ 20,000

$ 8,000 to $ 20,000

$ 8,000 to $ 20,000

As Agreed As Agreed Vendors

7 Initial Training

$ 15,000 to $ 25,000

$ 15,000 to $ 25,000

$ 15,000 to $ 25,000

$ 15,000 to $ 25,000

$ 15,000 to $ 25,000

As Agreed As Incurred Third Parties

i CrewTraininp

S 4S.000 fn 4«.00ntn S: 48.000 to S 48 00ntn 5 48.000 10 A«i Aprpcd As Inriirred Third Partipti i CrewTraininp S; 6K.000 s 6R,noft % 6s,noo s fis,nfln S; 68.000

'i Working Capital

$ 10,000 to $ 15,000

$ 10,000 to $ 15,000

$ 10,000 to $ 15,000

$ 10,000 to $ 15,000

$ 10,000 to $ 15,000

As Agreed As Incurred Vendors

Inventory $ 7,000 $ 7,000 S 7,000 $ 7,000 $ 7,000 As Apreed As Incurred Third parties

Licenses, Fees and 9

Deposits

$ 3,000 to $ 6,000

$ 3,000 to $ 6,000

$ 3,000 to $ 6,000

$ 3,000 to $ 6,000

$ 3.000 to S 6,000

Lump Sum As Incurred Utilities and Agencies

Additional Funds 10

- 3 months

$ 10,000 to $ 30,000

$ 10,000 to $ 30,000

$ 10,000 to $ 30,000

$ 10,000 to $ 30,000

$ 10.000 to $ 30,000

As Agreed As Incurred Third Parties and Us

T O T A L $ 807,700 <)<)7.700 lo

$ 857,70014182, IQflto

2Q4M

$632,700 797.700 to

$582,700 672,700 lo *r°''i 5001 0

T O T A L

35^500

$ 857,70014182, IQflto

2Q4M 7,500

797.700 to

07,500

NOTES

to us. Whether any third 1. Refunds. We have no obligation to reftind any costs paid party will refiind any costs will depend on the third party involved.

2. Franchise Fee and Promotional Fee. See item 5 of this Disclosure Document for information on when you must pay the Franchise Fee. You pay the Franchise Fee and Promotional Fee when you sign the Franchise Agreement, which must occur nn Intorthnn 2Swithin 10 days after construction begins; however, those fees for your first restaurant become due when you sign a Mulfiple Development Agreement. Under our DovoIopmontilntHtli Incentive Program, we may waive $25,000 of the $35,000 Franchise Fee for certain restaurants.

3. Professional Fees. We recommend that you consult an attorney of your own choosing to review this Disclosure Document, the Franchise Agreement, and the Multiple Development Agreement, as well as an independent accountant to review the attached financial statements, before signing the Franchise Agreement or the Multiple Development Agreement. For markets or areas not already subjected to a real estate market plan approved by us, we also recommend that you engage the services of a reputable market analysis company to perform a thorough market analvsis. Additionallv. vou will need to solicit the services nf an architect once Yftur *iite package has been approved.

4. Real Estate and Improvements. We expect that you will either purchase or lease the real estate for your restaurant. The rent will vary depending on the size and location of your restaurant. Often, the first month's lease payment becomes due upon execution of the lease. We based the amounts on a build-to-suit or build-out lease from a third party, which includes land, building and construction costs. The lease you sign also may include percentage rent, contributions for taxes, common area maintenance fees, and payments for utilities, security deposits, and other

FDD 5/11 AMENDED 6/1 W-19790 -WrliDOC

12

items. We did not include those additional costs in the estimated amounts. Should you choose to purchase and pay separately for the construction of the building, you should adjust the total investment costs to cover the actual land and development costs. Land acquisition costs may range from a low of $^00.000400.000 to a high of $1.000.000.2,000.000. The range of the cost of construction of the restaurant building, excluding on-site and off-site work, will vary depending on local conditions and the size and type of building that you select. The costs of building permits may vary greatly as well, depending on location. Additionally, the lease you sign may include percentage rent, which may result in higher monthly payments, in addifion to contributions for taxes, common area maintenance fees, security deposits, and other items.

5. Furnishings. Fixtures and Equipment. You must purchase certain items of furnishings, fixtures and equipment. The amount of furnishings, fixtures and equipment will depend to some extent on the size of your building. The total costs of the furnishings, fixtures and equipment will also depend on the vendnrsr' pricin;?^ circumstances at your location, your distance from vendors, transportation costs, and similar variables, including point-of-sale equipment, ancillary small comnuter hardware items^ small wares related to kitchen equipment, and^hfi sign and awning package, all of which you must purchase or lease.

6. Insurance. You must carry insurance. The amount listed above represents our best estimate of the premiums required for liability, casualty and worker's compensation insurance during a restaurant's first year of operation You must have coverap;e for comnrehensive general liability insurance in the amount of $2,000^000.

7. Training. We do not charge a training fee for your initial training, although you may have to pay for certain textbook and testing fees as further explained in Item 11. You must pay the costs of transportation, lodging and food for yourself and your employees during training. The costs of those expenses will depend on the distance you must travel, the type of accommodations used, and the number of employees attending the training and their wages. The amounts listed above assume five weeks of training for you, your operator and two managers, as woll-as-assistance with in rf^r.tniirnnt trnininr^ nf vniir crciw mnmhnrfi. Also included are three weeks nf in-restaurant training for crew members, if ynu are oneninp your first restaurant, or two weeks nf training if vnu are npenin^ your secnnd restaurant. The amnunt of crew training can vary, depending on whether you have a Certified Opening Trainer and a training restaurant available in the territory where you are developing a new restaurant.

8. Working Capital. Because of differences in many factors, like sales, managerial skills, and geographic areas, you should view the above estimate of working capital requirements as an absolute minimum. You may need substantially more working capital.

9. Licenses. Fees and Deposits. The range given provides our best estimate of the costs you will incur for business permits and miscellaneous deposits, including utility deposits, but not a lease deposit (listed separately above).

10. Additional Funds - Three Months. The amounts listed above represent an estimate of your operating expenses for the initial three months of business. We have based them on our own experience in operating Del Taco restaurants, mainly in the western United States. They include costs for payroll, taxes, food, paper, supplies, utilities, licenses, permits, bank charges, and repair and maintenance. They do not include advertising or royalty payments made to us. The amounts represent estimates, and we cannot guarantee that you will not have additional expenses starting the

FDD 5/]lAMriNDED6/llja2 13 w-49790 m i L D O C

business. Your costs will depend on factors like the size of your restaurant; how closely you follow our methods and procedures; your management skill, expenses and business acumen; your financing costs; local economic conditions; the local market for restaurants; the prevailing wage rate; competition; and the sales level reached during the initial period.

II. Totals. You should review the amounts listed above carefully with a business advisor before making any decision to purchase the franchise. We do not offer any financing directly or indirectly for any part of the initial investment.

Your Estimated Initial Investment - Sale of Company-owned Restaurants

Occasionally, we may sell one or more existing company-owned restaurants to a franchisee. If you purchase an existing company-owned restaurant from us, your cost will depend on a variety of factors, including (without limitation) the sales history and trend of the restaurant, the assets being purchased, and the nature of the restaurant's trade area. Generally, your cost (excluding the cost to purchase or lease the restaurant's real estate) should not exceed the range of total costs for the development of a new restaurant as described above.

ITEMS RESTRICTIONS ON SOURCES OF PRODUCTS AND SERVICES

You have no obligation to purchase or lease goods or services from us or from others designated by us, except as stated below.

You must develop your restaurant premises and acquire furniture, fixtures and equipment and all necessary signs for your restaurant according to standards and specifications we establish. We expressly reserve the right to modify our standards and specifications from time to time. We will notify you promptly of any modifications. We formulate and modify our specifications and standards based on research, industry trends, and our general business plan.

Generally, you must purchase all goods, products, menu items, foodstuffs, beverages, packaging materials, signage, furniture, fixtures, equipment and small wares ("Supplies") used to operate or furnish your Del Taco restaurant from vendors who demonstrate the ability to meet our standards and specifications and whom we have approved in writing. This requirement helps to establish quality control standards for the items used in the operation of your restaurant and to protect, maintain and promote the product consistency, reputation, goodwill, and public acceptance of our service marks, trademarks and products. We also require the purchase of certain brand name products. We may derive revenue from those vendors in the form of marketing allowances as explained below.

We currently have one approved vendor for food and packaging materials, one approved vendor for small wares, and multiple vendors for restaurant equipment. You do not receive any material benefits from us, other than prices that we may have negotiated, as a result of your use of our designated or approved sources.

We reserve the right to designate more vendors in the future. If you desire to purchase any Supplies from a vendor not already approved, you must obtain our prior written approval, which may take up to 90 days after our receipt of all requested information. As a condition to granting approval, we may require you to submit samples of the proposed vendor's products and to arrange for us to

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visit the vendor's facilities. If we elect to test the samples or inspect the proposed vendor's facilities, you will have to pay a fee not to exceed the actual cost of the inspection or test.

We do not have a purchasing cooperative or distribution cooperative available.

Al l new Del Taco franchisees must purchase their point-of-sale and back office equipment and software from us or vendors that we may designate or approve and, also, must enter into the Hardware and Software License and Support Agreement attached as Exhibit G to this Disclosure Document. The Franchise Agreement and the Multiple Development Agreement generally require that you obtain and install, both in your restaurant and at your business office (if you have one), data processing equipment, computer hardware, required dedicated telephone and power lines, modems, printers, and other computer-related accessory and peripheral equipment, as well as point-of-sale equipment and timers, compatible with our electronic collection and retrieval systems. We also have the right to require proprietary operating systems and processes relative to point-of-sale, bookkeeping, operations, financial information, inventory, and speed of service processes in connection with the operation of your restaurant. Additionally, we have the right to require that you input and maintain in your computer the software programs, data and information that we may prescribe.

Before the opening of your restaurant, we will provide technical support at your restaurant through the first day of opening of your restaurant. The date and time of the pre-opening support will be determined by us in our sole discretion. You must reimburse us for our travel, meals, lodging and vi^egesfixgensfis, which are estimated to range from $1,700 to $2,500.

We notify our franchisees of our current specifications, standards and approved vendors in writing, by letter or e-mail, and through the publication of operating manuals, including the Products & Procedures Manual.

You also must obtain and maintain at your own expense insurance policies with insurers reasonably satisfactory to us covering the items specified in the Franchise Agreement, including comprehensive general liability, fire and extended coverage, and business interruption coverage. If you do not provide proof of insurance to us as required under the Franchise Agreement, we may secure insurance for you and charge the cost to you.

If you decide to lease the land on which you operate your restaurant, you must includcafi have the ripht to renuire that certain prnvisinns are included in the lease specific provision!) relating to use, default, wetenotices. lien waivers, length of term, quiet enjoyment, assignment, remodeling, personal property rights, vnnr rinht to torminnto the right for authorized Del Taco employees tn enter your restaurant, the right for Del Taco to protect its proprietary marks located on your premises and, non-competition by the landlord and its affiliates, condemnation, and common area maintcnanco costs. Wo will give you a checklist of tho provisions specifically required hv 111 hut wo. Those provisions are contained in the Addendum to Lease^ which is attache^jfl this Disclosure Document as Exhibit H . We make no representations or warranties as to the legal validity of any of those provisions. Before you begin construction of your restaurant, you must demonstrate to our reasonable satisfaction that your lease contains the required provisions-lease described a^^fwein the Addendum to Lease, and you must deliver to us a definitive copy of your lease prior tobefore its execution for our review and approval of the terms related tn the Addendum tn Lease.

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The amount of your purchases from a designated vendor or in accordance with our specifications will represent approximately S^77% tn 83% of your total purchases in establishing your restaurant and approximately a«T^33% to 38% of your total purchases in connection with the operation of your restaurant.

During our fiscal year ended Oncnmher 28. 20IO..Ianuary 3, 2012. we did not receive any revenues from the sale of equipment to our franchisees. In addition, neither we nor our affiliates received any payments from our franchisees as a result of any required purchases or leases covered by this Item 8. During our fiscal year ended December 28, 2010,..Tanuary 3. 2012. we received payments (or the benefit of payments) from one vendor based on purchases by our franchisees totaling lesn than 8.8annroxiniately 26% of the purchases involved. We used those funds (directiy or through the advertising fund) to help pay for system-wide promotions.

We do not have any purchasing or distribution cooperatives. However, we do require that you purchase most of your Supplies through MBM Corporation. Except for the Supplies you purchase through MBM Corporation and under an existing beverage marketing agreement with The Coca-Cola Company, we do not negotiate purchase arrangements with vendors, including price terms, for the benefit of our franchisees.

None of our officers own any interest in any required or approved vendor, with the exception of a less than 1% ownership interest in one or more of our publicly-owned vendors.

ITEM 9 FRANCHISEE'S OBLIGATIONS

The following table lists your principal obligations under the Franchise Agreement and Multiple Development Agreement. It will help you find more detailed information about your obligations in those agreements and in other items of this Disclosure Document.

Obligation Section in Franchise Agreement (FA) or Multiple Development Agreement (DA)

Item(s) in Disclosure Document

a. Location selection and acquisition/lease FA - 5 and 6 D A - 7 and 10

7andll

b. Pre-opening purchases/leases F A - 6 D A - 9

7, Sand 11

c. Location development and other pre-openinp requirements

FA - 5 and 6 DA-7 , 8,9 and 10

5, 6, 7, 8 and 11

d. Initial and ongoing training F A - 7 DA - Not Applicable

7 and 11

e. Opening F A - 6 and 10 DA - Not Applicable

7 and 11

f. Fees FA - 4 D A - 5

5, 6 and 7

g. Compliance with standards, policies and manuals

F A - 6 , 7and 10 DA - Not Applicable

8 and 11

h. Trademarks and propnetary information F A - 8 , 13 and 17

DA - Not Applicable

13 and 14

i. Restrictions on products and services offered

F A - 6 DA - 10

16

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Obligation Section in Franchise Agreement (FA) or Multiple Development Agreement (DA)

Item(s) in Disclosure Document

j . Warranty and customer service requirements

F A - N o t Applicable DA - Not Applicable

Not Applicable

k. Territorial development and sales quotas

FA - 2 and Exhibit A DA - 2 and Exhibit A

12

1. Ongoing product and service purchases F A - 6 and 10 DA - Not Applicable

8

m. Maintenance, appearance and remodeling requirements

F A - 6 , lOand II DA - Not Applicable

11

n. Insurance F A - 1 2 DA - Not Applicable

6, 7 and 8

0. Advertising F A - 6 and 10 DA - Not Applicable

5, 6, 7 and 11

p. Indemnification F A - 12 D A - 1 2 and 28

6

q. Owner's participation, management and staffing

F A - 6 and 7 DA - 11

11 and 15

r. Records and reports F A - 6 and 10 DA - Not Applicable

Not Applicable

s. Inspections and audits F A - 6 and 10 DA - Not Applicable

6

t. Transfers FA - 16 D A - 1 1

6 and 17

u. Renewal F A - 3 DA - None

6, 11 and 17

V. Post-termination obligations FA - 15 D A - 1 4

17

w. Non-competition covenants F A - 1 7 D A - 1 6

17

X. Dispute resolution F A - 18 D A - 1 7

17

Generally, all individuals owning a direct or indirect interest in you must execute a guaranty agreement covering all of your obligations under the Multiple Development Agreement and Franchise Agreement.

ITEM 10 FINANCING

Neither we nor any of our affiliates offer, directly or indirectly, any fmancing arrangements to our franchisees. We do not guarantee your notes, leases or other obligations.

ITEM 11 FRANCHISOR'S ASSISTANCE, ADVERTISING,

COMPUTER SYSTEMS AND TRAINING

Except as listed below, we need not provide any assistance to you.

Pre-opening Obligations

Before you open your business, we will provide the following assistance:

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1. Provide a construction package, including plans and specifications, site criteria, and sample site plans. You must adapt those plans and specifications, at your expense, for use at the location selected by you. (Multiple Development Agreement, Sections 76 and ^1; Franchise Agreement, Section 5)

2. Provide one copy of our specifications for furniture, furnishings, fixtures, equipment, signs and all other personal property required for use in your restaurant, which you must adapt, at your expense, depending upon marketing needs and local government requirements. (Franchise Agreement, Section 5)

3. For the first rnntnnrnnttwo restaurants that you open, we will provide initialgrg^ openinp in-restaurant and classroom training in the Del Taco System, including standards, methods, procedures and techniques, at the times and places we designate for our training programs, together with any additional training and assistance we determine necessary in connection with the opening of your restaurant, including assistance by our personnel. (Franchise Agreement, Sections^ and 7) A description of that training appears later in this item. We currently charge no additional fees for those services.

4. Provide information to assist in your recruitment efforts, including directions for placing newspaper and magazine advertisements for management and crew, sample magazine advertisements for management and crew, sample employment applications, sample materials soliciting employment that you can place in your restaurant for distribution and use after your restaurant opens, and a suggested profile of management employees. (Franchise Agreement, Section 7)

Post-opening Obligations

During the operation of the franchised business, we will provide the following assistance:

1. Monitor the level of training and assist you in the maintenance of the proper training of management and crew to promote restaurant profitability through the proper use of the Del Taco System. We will make classroom training available to all of your future management employees during the term of the Franchise Agreement. (Franchise Agreement, Sections 5 and 7)

2. Loan you a copy of our Franchise Operations Manual and other manuals and training aids as revised from time to time. (Franchise Agreement, Sections 5 and 7)

3. Provide merchandising, marketing and other data and advice we periodically develop. (Franchise Agreement, Section 5) An explanation of the advertising program appears in more detail later in this item.

4. Provide periodic individual or group advice, consultation and assistance, rendered by personal visit, telephone or bulletins made available as we deem necessary. (Franchise Agreement, Section 5)

5. Provide bulletins, brochures and reports we periodically publish regarding our plans, policies, research, developments, and activities. (Franchise Agreement, Section 5)

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6. Provide other resources and assistance we may develop in the future. (Franchise Agreement, Section 5)

Location Selection and Opening

We grant each franchise for a specific location. You select the proposed location for your restaurant. We generally do not own the real estate for your location and lease it to you. You must submit the proposed location to us for our acceptance, together with all information relating to the location we request. After our receipt of the complete package, we will visit the proposed location. We will send you written acceptance or rejection of the location within 5045 days after our receipt of all relevant information. If we do not receive all relevant information within a maximum of 60 days after your initial submission of the location for our acceptance, you should consider the location rejected. The failure to submit an acceptable location will result in the termination of the Multiple Development Agreement and, in the absence of an acceptable location, we cannot issue a Franchise Agreement.

The review process largely depends on the time it takes you to submit a complete package. It generally takes 45 to 60 days, but may take up to 90 days or longer. The factors that we consider in approving your location include the property's location, the general character and population density of the neighborhood, demographic characteristics, traffic patterns, lot size and configuration, parking accommodations and ratios established by local zoning ordinances, competition from other businesses and access and visibility of the property from adjoining roads or highways. Our acceptance of any site does not constitute any representation, warranty or guarantee that the site will succeed as a Del Taco restaurant.

Typically 12 to 24 months elapse from the time a franchisee receives our acceptance of a location to the date a restaurant opens for business at that location. The factors affecting that length of time usually include financing arrangements, time for obtaining permits, construction time for the building and related improvements, local ordinance compliance, and delivery and installation of furniture, fixtures, equipment and signs. We typically require the signing of the Franchise Agreement Hnforo tho r.tnrt nfwithin 10 davs after construction of a restaurant begins. The Franchise Agreement requires that you open a restaurant for business to the public within 12 months after the date you sign the Franchise Agreement. Your failure to do that will constitute an event of default under the Franchise Agreement, for which we may terminate your franchise.

Advertising Program

We maintain and administer an advertising program in which you must participate. As described in Item 6, the current marketing fee equals 4% of your net sales. All Del Taco restaurants operated by us also incur marketing expenses.

We oversee all advertising and promotional programs, with sole discretion to approve or disapprove the creative concepts, materials and media use in the programs and their placement and allocation. We generally work with an advertising agency in developing advertising for print, radio or television. You may develop advertising materials for your own use, at your cost and according to our standards and requirements. We must approve any advertising materials in advance and in writing, including, without limitation, any website, home page, or other cyberspace content that you propose to place on the World Wide Web or other computer network, including without limitation, the use of our trtidemnrktradeniarks or trade names in any electronic media. If you do not receive

FDD, w-49790 -W-liDOC

written approval within 15 days after we receive the materials, you must consider us to have disapproved the materials. You may not use any advertising or promotional materials that we have disapproved.

Tn all cases, we will have sole discretion and control over anv nrofilefs^ nsinp; or relating to the Marks^ or that display the Marks, that are maintained on social media ontlets. including without limitation MvSpace^ Facehook and Twitter or other similar outlets, that may exist in the future. We mav use nart of the marketing fee monies we collect under the Franchise Agreement to nav or reimburse the costs associated with the development, maintenance and undate of the profile(sV We may (hut are under no obligation to establish f^uidelines under which you mav establish profiles or otherwise establish a presence on the social media outlets. Tn that event you must comply with the standards^ protocols and restrictions that we impose on that use.

We will use the marketing fees oxcluGivoly to meet all of the costs of maintaining, administering, directing and preparing advertising and/or promotional activities (including the cost of television, radio, magazine and newspaper advertisements), marketing campaigns, marketing surveys, and other public relations activities; employing advertising agencies to assist us; and providing promotional brochures and other marketing materials to Del Taco restaurants. Although we intend to use the monies to develop advertising and marketing materials and programs and to place advertising that will benefit the entire Del Taco System, we have no obligation to use the contributions made from your restaurant or from the restaurants in your area for advertising in the area in which your restaurant operates. We cannot assure you that your restaurant will benefit directly or in proportion to your contribution.

During our last fiscal year, we spent the total marketing fees as follows: 4^74^15^% for the production of advertisements and other promotional materials, 4 ^ T 6 9 6 6 ^ % for media placement, ?r4^a^% for general and administrative expenses, and 4#:^a^% for other expenses, including public relations and research. Of the 4% marketing fee charged to our franchisees, those amounts represented approximately 0.73 porcontago pointaQ^61% for the production of advertisements and other promotional materials, 2.55 porcontago points2iM% for media placement, 0.30 percentage p&ffltsiL32% for general and administrative expenses, and 0.42 porcontago pointsQ,34% for other expenses. We do not have any marketing funds audited. However, you have the right to review the financial statements for the marketing funds once a year on reasonable request. If any funds remain at the end of the tax year in which we received them, we will make all expenditures in the following year first out of the accumulated earnings from the prior years. We do not use any of the marketing fees to pay for the solicitation of new franchisees.

As mentioned in Item 8, above, vendors occasionally pay us marketing allowances based on your purchases, which we may choose to apply to our advertising programs or return to you.

As a part of our marketing program, we may require that you participate in customer surveys and use a computer software program (see Item 8) to compile the requested infomiation.

Del Taco Franchise Marketing Advisory Team

We have established a Franchise Marketing Advisory Team ("FMAT") comprised of seven franchisee representatives selected by us. The FMAT serves in an advisory capacity, and we have the right to change, dissolve and reform the team.

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Computer Systems

All new franchisees after April 1, 2007, must purchase, install, maintain and use the point-of-sale and back office computer systems that we require and must enter into the Hardware and Software License and Support Agreement attached as Exhibit G to this Disclosure Document. You must purchase the required hardware and software from us or from other suppliers that we designate, which must be approved by us in writing. Your estimated costs will range from $5#^0003I.Qflfl to $37,000.42^000. If you purchase any items from us, the purchase price for those items will not become due until after you open your restaurant.

You will use the point-of-sale and back office systcmsyslema to collect, fill and account for your customer orders; collect and monitor a variety of sales datedala, including gross sales, discounts, ticket averages, traffic and other sales detedala; place electronic orders for your inventory and supply items; prepare and distribute your employee work schedules; collect and monitor your food costs, labor costs, and other expenses; and perform sales forecasting, food preparation projections, ideal food cost analyses, menu mix analyses, and cash management activities.

You must implement all modifications, upgrades and updates that we require with regard to the equipment, software and systems described above at your sole cost and expense. The Franchise Agreement and the Hardware and Software License and Support Agreement do not contain any contractual limitations on the frequency or cost of that obligation.

Before the opening of your restaurant, we will provide technical support at your restaurant through the first day of opening of your restaurant. The date and time of the pre-opening support will be determined by us in our sole discretion. You must reimburse us for our travel, meals, lodging and wngoncxpenses, which are estimated to range from $1,700 to $2,500.

We provide support services for your required systems. The annual cost of our support services will equal $35 per week. Each year, we have the right to increase that amount to the then current amount being charged new franchisees. That amount includes all necessary maintenance, repair, upgrades and updates to our proprietary software. You must pay the costs of maintaining and repairing your computer equipment. Your annual equipment maintenance and repair costs will vary depending on your specific needs.

We have used the computer equipment and software identified above in our company-owned Del Taco restaurants since July 2005.

Del Taco Operations Manuals

On request, we will permit you to view our operations manuals at our headquarters or elsewhere as mutually arranged before you purchase a Del Taco franchise.

Training

Before opening your first rostauranttwo restaurants, we offer a complete training pmgffimFranchise Management Training Program (the "FMTP"^ to qualify you, your operator and your restaurant's managers to operate the restaurant in accordance with our standards and procedures. We malcQlnclude^ in the FMTP is pre-opening training available to enable you, your operator and at least twel additional managers to learn the proper preparation and presentation of our

w-49790 4©rl2.DOC

food products. We require that each spend hours before the restaurant's opening in this pre-opening training portion of the F M T P and receive certification from us. We issue that certification based on completion of the training programEMIE to our satisfaction. We require the completion of all F M T P training generally at least twei weeks before the opening of your restaurant. The general manager of each restaurant must have a minimum of one year of quick service restaurant management experience, spend 30024Q hours before the restaurant's opening in this pre-opening job training_s£SsiQJi, satisfactorily complete the training program, and receive our certification. Any subsequent general manager that you may hire also must have the minimum one year of quick service restaurant management experience, safisfactorily complete the training program, and receive our certification. You must have 4 managers for each restaurant (3 managers for each restaurant not open 24 hours a day) who have completed our training program and have received our certification at all times. You and/or your operator may serve as one or more of the required number of trained managers for your restaurant.

An pnrt nfln additigiLiQ the 56 weeks of pre-opening training, we providommirfi 5 days of management classroom training at our headquarters in Orange County, California, which we currently conduct 8 times each year. The 45-week, in-restaurant training program takes place in a certified training restaurant as and when needed. In addition, during the 2 days before your first restaurant's opening, we will continue your training, your operator's training, and your general manager's training by providing assistance in training hourly employees in opening the restaurant.

We also require a 3-week training program for vour crew^ the Franchise Pre-Ooening Crew Training ("FPCT"). You must designate at least 40 crew candidates to participate in the F P C T for 3 weeks hefore the opening of vour first restaurant, or 2 weeks hefore the opening of vour second restaurant. You will he responsible for the crew training^ but we will assist you with that training as we deem appropriate. The amount of crew traininp; can vary, depending on whether you have a Certified Openinp Trainer and a training restaurant available in the territory where you are developing a new restaurant.

We maintain a formal training staff. One or more Del Taco training instructors teach all of the training classes. Our current training instructors have had more than 10 years of restaurant and training experience in the restaurant industry. Our Director of Training is Susan Powell. Ms. Powell has served as our Director of Training since August 2010. From 2006 to 2008, she served as Director, Training and Development for Kirkland's, Inc. and has held executive positions with Blockbuster, Inc. from 1999 to 2005, including her role of Vice- President, Learning and Development. Our training materials consist of a Manager-in-training Manual and the Del Taco Products & Procedures Manual.

After your first restaurant opens and you train new employees, we will monitor the level of training and assist you in the maintenance of proper training of your management and crew to promote the proper use of the Del Taco System. We will make classroom training available to all of your future management employees for the term of the Franchise Agreement. We do not charge a training fee payable for the above-described training, except to reimburse Del Taco for texts and testing fees relating to certain food safety courses. However, you must pay for all costs and expenses, like salaries, wages, supplies, rooms, meals and transportation for you, your managers, and each of your employees participafing in the training program.

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The following chart summarizes the subjects taught during the training:

T R A I N I N G P R O G R A M

Subiect

Hours of Classroom Training

Hours of On-the-job

Training Location Team Member 45-Week Orientation (policies and procedures, safety). Grill, Taco Bar and Service Prep Station Training

0 46O2Q0 Certified Training Restaurant

Management Training Includes operations, supervision, administrative training, Shii^ Management, Guest Services, Interpersonal Skills

32 Certified Training Restaurant

Food Safety* One Week of Classroom Training

8 0 Certified Training Restaurant

*At your option, you may take the local health department required food safety courses from Del Taco or from a third party.

PCI Compliance Profiram

Ynu must implement and maintain an approved Payment Card Tndustrv ^PCQ compliance program for the Del Taco Restaurant. We mav suggest third partv PCI compliance vendors occasionallv^ hut you are free to submit alternative PCI compliaticc vendors to us for approval or seek approval to perform vour own PCI compliance. Ynu must submit PCI compliance reports to us in the manner and freauencv we set in the operations manuals.

I T E M 12 T E R R I T O R Y

Except as described below, we grant you an exclusive territory encompassing all of the area within a one-mile radius of your Del Taco restaurant under the Franchise Agreement.

Except as described below, we grant you an exclusive territory referred to as the "Development Area" under the Multiple Development Agreement. We may describe the designated area by specific city, county or state lines, trade areas, and/or population density. We reserve the right to grant development rights for a specific term and according to a schedule that expedites the development of the area.

The continuation of your rights to the exclusive territory under the Franchise Agreement or to the Development Area under the Multiple Development Agreement does not depend on the achievement of a certain sales volume, market penetration beyond that described in the Development Schedule, or any other contingency and, also, will not change as a result of changes in population, traffic flow, or other similar events.

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We do not restrict you from soliciting or accepting food or beverage orders from consumers outside your protected area, including the internet, catalog sales, telemarketing or direct marketing. However, we have the right to approve all advertising and marketing media and materials you wish to use. No restrictions exist that prevent us from soliciting or accepting orders from consumers inside your territory in the same manner.

If we grant you exclusive rights under the Franchise Agreement or under the Multiple Development Agreement, we will not establish company-owned or franchised Del Taco restaurants in the exclusive area during the term of those agreements, except as described below.

Under the Multiple Development Agreement and the Franchise Agreement, we retain the following rights:

1. The right to construct and operate other Del Taco restaurants and to use the Del Taco System or any part of the Del Taco System at any location outside the Development Area and the Protected Area and to license others to do the same.

2. The right to develop, use and franchise the rights to any trade names, trademarks, service marks, trade symbols, emblems, signs, slogans, logos or copyrights designated by us for use with the Del Taco System for use with the same, similar or different franchise systems for the sale of the same, similar or different products or services as those used in connection with the Del Taco System at any location outside the Development Area and the Protected Area on any terms and conditions we may deem advisable and without granting-the you any rights in them.

3. The right to develop, construct, operate, merchandise, sell, license and/or franchise others to sell Del Taco foods and other products to the public within the Development Area and the Protected Area, including the immediate area surrounding any Del Taco restaurant location you submit to us for approval, or any Del Taco restaurant you establish, irrespecfive of any boundaries otherwise referenced in the Multiple Development Agreement through restaurant outlets (whether mobile or fixed, permanent or temporary) located on military bases, institutional outlets (including, for example, college campuses, hospitals and school lunch programs), fairs, athletic contests or other special events, convenience stores, casinos, airports and larger retail outlets, including (without limitafion) Wal-Mart and Home Depot, toll roads, limited access highways, schools, universities, enclosed shopping malls, hotels, industrial or government facilities, amusement or theme park complexes, train stations, bus stations or transportafion facilifies and other locations owned or operated by major institutions with sites throughout the country or a particular state (collectively, referred to as "Alternative Points of Distribution") and to use the Del Taco System in connection with those Alternative Points of Distribution.

We will notify you in writing of our or another franchisee's intent to develop one or more Del Taco restaurants at the specific Alternative Point of Distribution within the Development Area or Protected Area, as applicable. If you can demonstrate to our safisfaction, within 30 days of your receipt of such notification, that you have the ability to enter into an agreement under the same terms and conditions offered to us or another franchisee, as well as the financial and operational resources available for the development of the Del Taco restaurant at the specific Alternative Point of Distribution, then we will offer the opportunity to you under the same terms and conditions offered to us or another franchisee.

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4. After the expiration or earlier termination of the Multiple Development Agreement or Franchise Agreement, to continue to construct and operate other Restaurants and to use the Del Taco System at any location within the Development Area and Protected Area and to license others to do the same.

Neither we nor any affiliate operates, franchises or plans to operate or franchise any business under a different trademark that sells or will sell goods or services similar to those of Del Taco restaurant. However, we and our affiliates (including those identified in Item 1) may operate or franchise co-branded or multi-branded restaurants within your specified area that use our trade name, trademarks, and service marks together with the trade name, trademarks and service marks of one or more related or unrelated companies. In addition, Goldman Sachs owns an interest in companies which operate restaurants under other brands, which restaurants may be located within the Development Area or within a one-mile radius of your Del Taco restaurant. As such restaurants do not operate under the Del Taco brand, we dot not anticipate a conflict with your rights.

ITEM 13 TRADEMARKS

We grant you the right to operate a restaurant under the name "Del Taco" and to use those other current or future marks that we designate for the operation of your restaurant. By "Marks," we mean trade names, trademarks, service marks, and logos used to identify your restaurant.

In addition to other registered Marks, we have registered the following principal Marks with the United States Patent and Trademark Office on the Principal Register, and we have filed ail required affidavits of continued use regarding the following Marks:

Mark Registration Number Registration Date Del Taco 3,578,966 February 24, 2009 Del Taco (with sunrise logo) 1,793,268 September 14, 1993 Del Taco (with sunrise logo) 1,830,903 April 12, 1994 Del Taco (with 3-D Sunrise) 2,492,285 September 25,2001 Del Taco Express 1,458,796 September 22, 1987 Del Taco Mexican Cafe 1,392,800 May 6, 1986

You must follow our rules when you use the above Marks. You cannot use the Marks as part of a corporate, limited liability company, or partnership name or with modifying words, designs or symbols. You may not use the Marks in connection with the sale of any unauthorized products or services or in any manner not authorized by us.

The Franchise Agreement requires that we protect any or all rights that you have to use our principal Marks and to protect you against claims of infringement or unfair competition with respect to the same. You must inform us promptly in writing of any infringement of the Marks by another party and of any litigation instituted against Del Taco relating to the Marks. We have the right, but not the obligafion, to take action as we deem advisable to prevent any infringement and to join you as a party, if necessary. You must assist us, as our counsel decides appropriate, in protecting our interest in the Marks.

if we decide, in our sole discretion, to modify or discontinue use of any name or Mark and/or use one or more additional or substitute names or Marks, you must do so and we do not have to reimburse you for any costs associated with complying with that obligation.

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25

We do not have to indemnify you against, or reimburse you for, any damages that you suffer in any proceeding arising out of the use of any name or Mark or for any costs incurred by you in the defense of any of those claims.

We also have the right to grant other licenses for the Marks, in addition to those granted to you. We can use the Marks to sell products and services. We also can develop and establish other systems using the same or similar Marks or other marks, and we can grant rights to others to use them without extending them to you for your use.

We know of no effective determinations of the Patent and Trademark Office, Trademark Trial and Appeal Board, the trademark administrator of any state or any court; any pending infringement, opposition or cancellation proceedings; or any pending material litigation involving our Marks relevant to their use in any state. We have no agreements which significantly limit our rights to use or license the use of our Marks. We know of no prior rights or infringing uses that would have a material effect on your use of our Marks.

ITEM 14 PATENTS, COPYRIGHTS AND PROPRIETARY INFORMATION

We hold no patents material to the Del Taco franchise.

We claim copyright protection in our operations manuals and related materials, although we have not registered those copyrights with the United State Copyright Office. We consider the operations manuals and related materials confidential, proprietary and our property. You may use them only in the operafion of your restaurant as provided in the Franchise Agreement. You may not use our confidential and proprietary information in any unauthorized manner and must take reasonable steps to prevent its disclosure to others. Your right to use those materials continues as long as the Franchise Agreement remains in effect.

Neither the United States Copyright Of?ice nor any court has made any currently-effective determinations regarding any of our copyrighted materials. We have no agreements in effect that significantly limit our right to use or license the use of our copyrighted materials. Finally, we know of no infringing uses that could materially affect your use of our copyrighted materials in any state. We have no obligation to protect or defend our copyrights or confidential information, although we intend to do so when in the best interest of our system.

ITEM 15 OBLIGATION TO PARTICIPATE IN THE ACTUAL

OPERATION OF THE FRANCHISE BUSINESS

We require you to participate personally in the direct operation of the franchise. If you operate as a legal entity, someone affiliated with your organization and approved by us must participate personally in the operations. Your designated operator and you must attend and satisfactorily complete the initial training program conducted by us as described in Item 11. We require that the person responsible for the direct operation of the franchise have an equity interest of at least 10% in the business.

FDD 5/11 AMENDED 6/1 liZ12 26 W-49790 4*712.000

We may require that you and each person who is actively involved in the operation of the franchise, including the manager, execute an agreement in the form provided by us, under which each of you agree not to divulge any of our trade secrets or confidential or proprietary information, including the contents of any of our manuals, or to participate in or have any interest in any competitive business.

If you operate as a legal entity, we will require all of your owners to execute the personal guaranty of your obligations attached to the Franchise Agreement and Multiple Development Agreement.

ITEM 16 RESTRICTIONS ON WHAT THE FRANCHISEE MAY SELL

You must offer for sale and sell only those products and services that we have approved. You may not offer for sale any products or perform any services that we have not authorized previously in writing. See Items 8 and 9, above. We have the right to change the types of authorized products and services, without limitation.

We do not restrict whom you may serve. You generally must keep your Del Taco restaurant open to the public 24 hours each day, every day of the year, except Christmas.

ITEM 17 RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION

The following table lists certain important provisions of the Franchise Agreement pertaining to renewals, terminations, transfers and dispute resolutions. You should read those provisions in the Franchise Agreement attached as Exhibit E to this Disclosure Document.

THE FRANCHISE RELATIONSHIP

Provision Section in the Agreement Summary a. Term of the franchise 3 The initial term expires 20 years after the date the

restaurant opens. b. Renewal or extension of the

term 3 We offer 1 successor term of 20 years. To renew, you

will have to sign the then current Franchise Agreement, which may contain materially different terms than the original Franchise Agreement.

c. Requirements for you to renew or extend

3 and 11 No defauh may exist under the existing agreement. We will require that you sign a new Franchise Agreement (which may increase the fees payable by you), sign a general release (see Exhibit K), and pay a Successor Fee and Promotional Fee. We also may require that you remodel your restaurant and complete additional training.

d. Termination by you Not Applicable Not Applicable e. Termination by us without

cause Not Applicable Not Applicable

f Termination by us with cause 15 We may terminate upon default. g. "Cause" defined-defaults

which can be cured 14 You have 30 days to cure operational defaults and five

days for monetary defaults.

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Provision Section in the Agreement Summarv h. "Cause" defined defaults

which cannot be cured 14 The term "cause" includes danger to health or safety,

bankruptcy, assignment for the benefit of creditors, felony conviction, repeated violations, execution of levy not discharged within five days, attachment of property, and unsatisfied final judgments of $10,000 or more for 30 days or longer.

i. Your obligations on termination and non-renewal

15 You must pay amounts due, cease the use of our Marks, retum our manuals, and de-identify the restaurant.

j . Assignment of contract by us 16(h) The agreement contains have no restriction on our right to assign.

k. 'Transfer" by you - definition 16 The term "transfer" includes the transfer of the agreement, the restaurant's assets, or any interest in you.

1. Our approval of transfer by you 16 We have the right to approve all transfers; we will not withhold our consent unreasonably.

m. Conditions for our approval of transfer

16 No default may exist and you pay all amounts due and sign a general release; the transferee must complete our training and meet all of our other requirements, sign our then-current form of franchise agreement, and pay a transfer fee.

n. Our right of first reliisal to acquire your business

16(c) We have an option for 45 days to purchase upon same terms and conditions offered to the third party.

0. Our option to purchase your business

15 We have any option to purchase your business upon the termination or expiration of your Franchise Agreement.

p. Your death or disability 16(b) We will not withhold consent unreasonably to a transfer to your heirs within 90 days, provided the transferee meets our general conditions of transfer.

q. Non-competition covenants during the term of the franchise

17 You cannot use the Del Taco System or any other names, marks, systems, logotypes, symbols or foodstuffs provided by us or an approved supplier in connection with another restaurant; you cannot operate a restaurant that offers Mexican food, looks like a Del Taco restaurant, or operates in a manner tending to have that effect.

r. Non-competition covenants after the franchise terminates or expires

17(e) For a period of two years, you cannot operate a Mexican restaurant within two miles of your original location or any other existing Del Taco restaurant.

s. Modification of the agreement 23 No changes can take place unless mutually agreed to in writing.

t. Integration/ merger clause 23 Only the written terms of the agreement and exhibits bind the parties. However, nothing in this Disclosure Document will exclude that on which you may rely.

u. Dispute resolution by arbitration or mediation

18 The parties must arbitrate any controversy or claim, except that ehher party may file for preliminary injunctive relief, a restraining order, or order of specific performance, including, without limitation, injunctive relief pertaining to the use of the Del Taco System and Marks.

V. Choice of forum 18 and 20 All litigation and arbitration must take place in Orange County, California, subject to applicable state law. See Exhibit F.

w. Choice of law 18 and 20 California law applies, subject to applicable state law. See Exhibit F.

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The following table lists certain important provisions of the Multiple Development Agreement pertaining to renewals, terminations, transfers and dispute resolutions. You should read those provisions in the Multiple Development Agreement attached as Exhibit D to this Disclosure Document.

THE DEVELOPER RELATIONSHIP

Provision Section in the Agreement Summary

a. Term of the franchise 3 The term runs from date of execution to the earlier of the opening date of the last restaurant required or the actual opening date of the last restaurant required.

b. Renewal or extension of the term Not Applicable Not Applicable c. Requirements for you to renew or

extend Not Applicable Not Applicable

d. Termination by you Not Applicable Not Applicable e. Termination by us without cause Not Applicable Not Applicable f Termination by us with cause 15 We can terminate only if you commit any one of several

listed violations. g. "Cause" defined-defaults which

can be cured 14 You have 5 days to cure any monetary defaults and 30

days to cure any other defaults listed in Multiple Development Agreement.

h. "Cause" defined defaults which cannot be cured

14 Grounds for immediate termination include your failure to comply with your Development Schedule, insolvency, having a receiver appointed, having an unsatisfied tlnal judgment of $10,000 or more for 30 days or longer, having your property attached and the proceedings not dismissed within 30 days, having repeated violations, or a suffering a felony conviction.

i . Your obligations on termination and non-renewal

15 You must cease to select or develop sites for Del Taco restaurants.

j . Assignment of contract by us None The agreement does not restrict our right to assign.

k. "Transfer" by you - definition 12 The term "transfer" includes a transfer of the agreement or any ownership interest in you.

1. Our approval of transfer by you 12 You do not have any right to transfer the agreement.

m. Conditions for our approval of transfer

12 You do not have any right to transfer the agreement.

n. Our right of first refusal to acquire your business

Not applicable Not applicable.

o. Our option to purchase your business

Not applicable Not applicable

p. Your death or disability Not applicable Not applicable q. Non-competition covenants

during the term of the franchise 17 You cannot have any interest in a restaurant that offers

Mexican food, operates like, competes with, or imitates a Del Taco restaurant, or uses any part of the Del Taco System.

r. Non-competition covenants after the franchise terminates or expires

Not applicable Not applicable

s. Modification of the agreement 23 All changes require mutual agreement in writing.

t. Integration/ merger clause 23 Only the written terms of agreement and the exhibits bind the parties. However, nothing in this Disclosure Document will exclude that on which you may rely.

FDD-W-49790 Wrli-DOC

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Provision Section in the Agreement Summary u. Dispute resolution by arbitration

or mediation 18 The parties must arbitrate any controversy or claim,

except that either party may file for preliminary injunctive relief, a restraining order, or order of specific performance, including, without limitation, injunctive relief pertaining to the use of the Del Taco System and Marks.

v. Choice of forum 18 and 20 All litigation and arbitration must take place in Orange County, California, subject to applicable state law. See Exhibit F.

w. Choice of law 20 California law applies, subject to applicable state law. See Exhibit F.

ITEM 18 PUBLIC FIGURES

We do not use any public figure to promote the Del Taco franchise.

ITEM 19 FINANCIAL PERFORMANCE REPRESENTATIONS

The Federal Trade Commission's Franchise Rule permits us to provide information about the actual or potential financial performance of our franchised and/or company-owned restaurants, if a reasonable basis for the information exists and we include the information in this Disclosure Document. We may give financial performance information that differs from the information included in this Item 19 only if (1) we provide the actual records of an existing restaurant that yeiH^QU are buying or (2) we supplement the information provided in this item 19, for example, by providing information about possible performance at a particular location or under particular circumstances.

The following amounts represent the average sales and operating figures of all freestanding company-operated Del Taco restaurants for the 52 weeks ended .Tanuarv 3, 2012 and December 28, 2010, that we have operated for at least one year. Qfin fiscal year 2011. of the 273 restaurants, 131 restaurants (48%) had sales in excess of the Sl.187.564 average and 142 restaurants (52%^ had sales less than the average. The restaurants operate in Arizona f31 California (235\. Nevada (34 and Texas (U. Tn fiscal vear 2010. of the 271 restaurants, 133 restaurants (49%) had sales in excess of the $1,193,594 average and 138 restaurants (51%) had sales less than the average. The restaurants operate in Arizona (4), California (234) and Nevada (33).

We do not collect any financial information from our franchises, other than sales information, and havo no basis to present any franchisee financial information in this item.

We do not intend for you to use the following amounts as a forecast of results or to represent the results that any franchised restaurant may achieve. Your results likely will differ from the amounts listed below. Some of our restaurants have achieved the operating sales listed below. However, we cannot give any assurance that you will do as well. If you rely on the following amounts, you must accept the risk that that you might not do as well. Accordingly, you should review the following information only as reference material for your use with other information described in this Disclosure Document. We will substantiate the

FDD 5/11AMEMDED 6/11 jZ12 W-49790 mi2X)0C

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data used in preparing the following amounts on your request. We urge you to consult with your financial, tax and legal advisors regarding the information listed below.

2ftii 2010

Dollacs Perfent of Net Sales Dollars

Percent of Net Sales Louies

Sales (31) l,lH7J>fi4 100% 1,193,594 100.0% 1,192,186 100.0%

Food & Paperi2) 334,602 28.0% 330,132

Labor(3) 3no,s9i 2 5 ^ 302,048 25.3% 304,969

Benefits (4) 72.2f^0 fi.1% 65,986 5.5% ^75%

Utilities (5) 43jai 3.6% 42,723 3.6% 41,220

Repairs & Supplies (5) 42,066 3.5% 4 3 ^ 1 f,o/^

Miscellaneous (6) 1.3% 1.2% 15^% 14.211 11.921

t no/,

Controllable Expenses 68.8% 806,636 67.2% 796,522 66T«%

Controllable Profit (7) 370,878 31.2% 391,958 32.8% 395,66'1

Advertising (8) 47,fS03 4.0% 47,744 4.0% 17,687 A no/

Local Advertising 719 0.1% 706 0.1% 693 04%

Insurance (8) 0.4% 0.3% 4341 3.831 3 99

n TO''r.

operating Profit Before Rent and Real Estate Taxes(9)

3183lf> 339,678 28.5% 311,289 3S.9%

NOTES

(4^ At the end of our 20102flll fiscal year, we had a total of 388282 company-owned restaurants. Of those, 37^222 constitute freestanding restaurants and 3^4222 of which we have operated for more than one year.

(1) (3)-Sales shown reflect net cash sales and include the sales of all food, beverages and promotional items net of sales taxes. The Franchise Agreement requires franchisees to pay a 5% royalty on net sales.—Soles presented do not equatc-tO'and arc-somewhat lower than net sales as defined in tho Franchise Agroomont.

(2X Fond and naner costs can varv denending on the prevailing costs in the area nf the country in which vour restaurant operates and the specific shinning costs involved in ffettinR the products to your restaurant.

(3) Labor includes wages paid to al! hourly and management employees working in the restaurant, as well ao all[ restaurant manager bonuses]. Your cost could vary depending on the prevailing wage rates of the area of the country in which your restaurant operates and the specific labor laws.

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(4) Benefits include all employer and payroll taxes, including worker's compensation, plus amounts for vacation-andj health insurance, andT restaurant manager bonuses]. Factors which could make your costs differ from our costs include the amount of vacation time granted and the amount and type of insurance coverage provided to emnlovees. and vour specific workers* compensation program.

(5) Utilities and repair and maintenance costs vary somewhat with the sales volume. Variables which could impact your total utilities and maintenance include the region of the country in which your restaurant operates.

(6) Miscellaneous costs include local marketing fees, card processing fees and daily cash over or short expenses for the restaurant.

(7) Sales minus the six line items above, inclusive, comprise controllable profit.

(8) Advertising costs include the cost of developing and executing various marketing programs for our restaurants. That includes production and placement of media and print advertising, as well as the cost of in-restaurant, placards, and similar items. Please consult the Franchise Agreement for provisions regarding the level of advertising expenditures that you must make. The insurance costs include comprehensive general liability, property and casualty insurance. The amount does not include the 5% royalty fee that you must pay under Section 4(c) of the Franchise Agreement.

(9) Rent and real estate taxes include base and percentage rent, if any, as well as annual property taxes. Rent and taxes will vary based on the location and size of the property. You also may have to pay other occupancy costs like common area maintenance fees, equipment lease fees, and various taxes and license fees. Those costs will vary depending upon the specifically negotiated common area provisions, lease terms, and local taxes, assessments and license fees.

The financial performance representation figures do not reflect the costs of sales, operating expenses or other costs or expenses that must be deducted from the gross revenues or gross sales figures to obtain your net income or profit. You should conduct an independent investigafion of the costs and expenses you will incur in operating your Del Taco restaurant. There may be other costs or expenses not identified. Franchisees and former franchisees listed in this Disclosure Document may be one source of information.

Many factors exist that may cause your restaurant to achieve different results than one owned and operated by us. Your sales and operating expenses may differ from ours because of several factors, like the royalty payment, trade area of your restaurant, the quality and experience of your management, the extent to which you exceed our specifications and standards, the amount of land, building and equipment leased or purchased, and certain economies of scale that we have because we operate many restaurants. In addition, the amounts presented exclude all overhead costs, tikesmih-as ahnve restaurant level supervision and legal and professional fees.

You will incur additional costs not described above, including, for example, royalty payments, legal and professional fees and other overhead costs.

FDD 5/11AMRND1ID 6/1 ldZ12 32 W-49790

We have presented pre-tax estimated profits. The analysis does not include any estimates of federal, state or local taxes that you may have to pay.

ITEM 20 OUTLETS AND FRANCHISEE INFORMATION

TABLE NO. 1 SYSTEM-WIDE OUTLET SUMMARY

FOR FISCAL YEARS 2«08211M TO 20^2011

Outlet Type Year Outlets al Start

of Year Outlets at

End of Year Net Change

Franchised 300821102 334-228 238211

3009 338 3 ^

2010 231 234 +3

2(iU 2M 245 ±y= Company-Owned 30082002 2^2M 386283 +1

30092010 386282 38?288 +1

30W2aU 38?2M 388282 • 1 Total Outlets 30082QM S06f i l i 544S18 + ^

518 44

2010 518 522 +4

m i l 522 532 ±10

Our franchised restaurants open at the end of our 2008 fiscal year included one co branded Captain D's—Del Taco restaurant operated by our affiliate. Captain D's, under a Master License Agroomont.

TABLE NO. 2 TRANSFERS OF OUTLETS FROM FRANCHISEES TO NEW OWNERS

(OTHER THAN FRANCHISOR) FOR FISCAL YEARS 200820112 TO 20102011

State Vear Numlier of Transfers

Arizona ?QOSlf>fW 31

II 2009 4-

2010 2

2011 Q

California 3W820Q2 31

1 4-

2010 3

2<lll 2

Colorado 20082009 +2 2QQ9 3

2010 2

2011 a

FDD. W-49790 4e.12.DOC

33

stale Year Number of Transfers

Idaho 30082002 02

1 2010 0

2011 Q

New Mexico 200820QS Ql

1 2009 4-

2010 0

2011 0

Ohio 30082009 0 Ohio

2010 1

Ohio

2011 Q

^^etfttsSoiilli 2009 0

2010 ^ 20e820U 61

Washin^fnn 2009 Washin^fnn

2010

Washin^fnn

2011 1

Tnfnls 2009 2 Tnfnls

201(j & Tnfnls

2011 A

TABLE NO. 3 FRANCHISED OUTLETS STATUS SUMMARY

FOR FISCAL YEARS 20082002 TO 20102011

State Vear Outlets at

Start of Vear Outlets Opened Terminations

Non-Renewals

Outlets Reacquired by

Franchisor

Outlet Ceased Operations for Other Reasons

Outlets at End of the

Vear

Arizona 30682009 0 0 0 0 2 3330

2009 53 0 0 • 0 6 3 50

2010 30 1 0 0 0 3 28

2011 2S 6 0 0 0 0 M California see82(M}9 44^122 0 0 0 51 433125

2009 432 4 6 6 0 4 435

2010 125 3 0 0 0 2 126

2QU 126 i 0 Q 0 a 122

Colorado 30082009 18 01 0 0 0 01 18

30092010 18 +3 0 0 0 +2 4819

36462011 +819 3 0 0 0 21 4921

Florida 3oe82(ai2 0 01 0 0 0 0 01

20Q92Q10 01 I 0 0 0 0 +2

3W62QU +2 1 0 0 0 0 33

Guam 50682009 1 0 0 0 0 0 1

26092010 I 0 0 0 0 0 1

364^2011 1 0 0 0 0 0 1

Idaho 30082009 4 0 0 0 0 0 4

30092010 4 0 0 0 0 0 4

FDD 5/11 AMENDED 6/11 jZ12 W-49790 4©rl2JX)C

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state Year Outlets at

Start of Year Outlets Opened Terminations

Non-Renewals

Outlets Reacquired by

Franchisor

Outlet Ceased Operations for Other Reasons

Outlets at End of the

Year

36462011 4 0 0 0 0 0 4

Illinois 30G82£ffi2 I 0 0 0 0 01

30092010 0 0 0 0 +0 0

304^2011 0 0 0 0 0 0 0

Indiana 300820^ 01 ^ 0 0 0 0 1

36692010 1 0 0 0 0 0 I

26 i f l2 f l l l 1 0 0 0 0 0 1

MarvlandMichia 36082002 44 01 0 0 0 -o 05

an 36092010 05 0 0 0 0 0 65

364fl20il OS 0 0 0 0 0 65

MinhipnnlVlk ' ini i 30682009 4 i 0 0 0 0 01

£1 3009MQ 42 0 0 0 0

364e20U ^2 0 02 0 0 0

IUir.r .niinMnnlii i i 300821^ - 1 0 0 0 0 +0 ^1 a

36692010 31 0 0 0 0 -JO 31

364«2flll 31 0 0 0 0 0 31

Mefitanaltoaila 36682002 1 0 0 0 0 0 1

36092010 1 0 0 0 0 0 1

364020U I 0 0 0 0 0 1

Nxvni lnNi 'w 300820Q9 10 0 0 0 0 ^ M f i i r n

36692010 0 0 0 0 01

3 « « 2 0 U +s 0 0 0 0 0 +5

30682009 51 ^ 0 0 0 0 61 Mexicoflhifl

30092010 ^1 0 0 0 0 0 61

364#20U 61 0 0 0 0 51

200S 6 4 6 6 0 6 4

2009 4 6 0 6 6 6 4

2010 4 8 6 6 0 6 4

Oregon 30682002 10 0 0 0 01 65

2009 0 0 0 0 4 $

2010 5 I 0 0 0 0 6

20H 0 0 0 0 0 6

South Carolina 36082009 0 01 0 0 0 0 01

2010 1 1 0 0 0 0 2

2011 2 0 0 Q 0 1 1

TcnniHiuPP 2009 1 0 0 Q 0 1 0

36692010 0 40 0 0 0 0 •JO

364«20U 40 0 0 0 0 30

TfnntM;ia^T<'\iHi 300821ffl9 +0 0 0 0 +0 •JO

36692010 0 0 0 0 +0 0

36402011 0 63 0 0 0 0 03

Utah 30082002 20 03 0 0 0 0 3023

2009 30 5 0 6 0 6 33

2010 23 2 0 0 0 0 25

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State Year Outlets al

Start of Year Outlets Opened I'ermi nations

Non-Renewals

Outlets Reacquired by

Franchisor

Outlet Ceased Operations for Other Reasons

Outlets at End of the

Year

2011 25 1 0 a 0 0 26

Washington 30082QQ2 35 31 0 0 0 0

36692010 56 -JO 0 0 0 01 6S

364^2011 65 0 0 0 0 •JO 5

Wisconsin 36082009 01 •JO 0 0 0 01 •JO

3009^10 •JO 0 0 0 0 •JO 0

364620U 0 0 0 0 0 0 0

Totals 30eS2ffll9 334228 4412 0 0 0 ?2 238231

3009 338 42 e 0 0 9 iU

2010 231 12 0 0 0 9 234

2011 2M IS 2 0 0 5

TABLE NO. 4 -COMPANY-OWNED OUTLETS STATUS SUMMARY

FOR FISCAL YEARS 20082QQ9 TO 20402011

state Year Outlets at Start

of Year Outlets Opened

Outlets Reacquired From Franchisee Outlets

Closed Outlets Sold lo

Franchisee Outlets

At End of Year

Arizona 36082002 11 0 0 01 0 4410

2Q09 44 6 6 4 0

2010 10 0 0 0 1 9

7011 2 0 0 Q 6 3

California 36682002 238 31 0 30 0 358232

2009 338 4 6 0 6 339

2010 239 2 0 2 0 239

30082OL1 4232 Qi 0 1 0 02|2

20Q9 0 6 0 6 0 0

2010 0 6 0 6 0 0

Nevada S60820(H 3532 21 0 0 0 3738

3069 3? 4 0 6 0 58

2010 38 2 0 1 0 39

2011 39 0 0 0 0 32

Texas 36082002 0 0 0 0 0 0

2009 0 0 0 6 0 0

2010 0 1 0 0 0 1

2011 1 2 0 0 Q 3

Totals 30682M12 •*2 0 *1 0 286282

2009 28« 2 6 4 6 387

2010 287 5 0 3 1 288

2011 28S 6 0 1 6 281

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TABLE NO. 5 PROJECTED OPENINGS

AS OF DECEMBER 28,20102Mi

State Franchise Agreements^

Signed But Outlet Not Opened Projected New Franchised Outlets in

the Next Fiscal Year Projected New Company-Owned

OuOetQjillels in the Next Fiscal Year California 0 35 52

Coloradc

Florida 31

Idaho

MichiganNnrfh r n m l i n a

Ohio

Sni i lh C a m l i n M

Texas 45 36

Utah 31

Totals 4312 711

Our fiscal year ends on the Tuesday closest to December 31st of each year. We have presented all of the above numbers as of December 30, 2008, Dccombcr 29, 2009 and20QS> December 28, ^044.2010 and January 3. 2012 . respectively.

List of Current Franchisees

The name, business address and business telephone number of each current franchisee as of DocQmhor 2S. 201 OJanuarv 3 2012 appears on Exhibit i i to this Disclosure Document.

List of Former Franchisees

The name, last known home address and telephone number of every franchisee who has had a Franchise Agreement terminated, cancelled, not renewed, or otherwise voluntarily or involuntarily ceased to do business under a Franchise Agreement during the most recently completed fiscal year or has not communicated with us within 10 weeks of the date of this Disclosure Document, appears on Exhibit i l to this Disclosure Document.

If you buy a Del Taco franchise, we may disclose your contact information to other buyers when you leave the Del Taco system.

Purchase of Previously-Owned Franchise

If you are purchasing a previously-owned franchised outlet, we will provide you additional information on the previously-owned franchised outlet in an addendum to this Disclosure Document.

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Confidentiality Clauses

In some instances, current and former franchisees sign provisions restricting their ability to speak only about their experience with Del Taco. You may wish to speak with current and former franchisees, but be aware that not all such franchisees will be able to communicate with you.

Trademark-Specific Franchisee Organizations

We know of no active franchisee organization associated with the Del Taco system.

I T E M 21 F I N A N C I A L S T A T E M E N T S

Exhibit B to this Disclosure Document contains the audited consolidated financial stntomentshalance sheets of our parent, Sagittarius Restaurants L L C and subsidiaries ("Sagittarius Restaurants") as of January 3, 2012 (Successor) and January 2, 2011 (Successor) and January 3, 2010 (ProdecesGor), and the related consolidated statements of operations, member's equity (deficit), and cash flows for the fifty-three weeks ended January 3. 2012 fSuccessnr), the thirty-two weeks ended January 2, 2011 (Successor), the twenty weeks ended May 18, 2010 (Predecessor)7_aild the fifty-two weeks ended January 3, 2010 (Predecessor) and the fifty two wooks ended Dccombcr 28, 2008 (Predecessor).

Exhibit B to this Disclosure Document also contains the unaudited consolidated condensed financial statomcntsbalance sheets of Sagittarius Restaurants as of March 27, 2011 (Successor) and January 2. 2011 (SuccGfiGor).2012 and_2fllX and the related consolidated condensed statements of operations and cash flows for the twelve weeks ended March 27, 2011 (Successor) and tho twelve woekr, ended March 28. 201Q fPredecosf.nrV2012 and 2011.

Through the fiscal year ended January 2. 2011. Sagittarius Restaurants ronortn itrenorted its consolidated operations on a 52- to 53- week fiscal year ending on the \Tuesdav closest to December ]31. During the fiscal year ended January 3. 2012, Sagittarius Restaurants changed its fiscal year to end on the.Sunday closest to December 31. The fiscal yeafsyear ended January 3, 2012 is a 53-week year^ the fiscal year ended January 2, 2011 and Docombor 28, 2008 wcrois_a 52-week yearsyear and the fiscal year ended January 3, 2010 was a 53-week year. Included in the consolidated financial statcmcnto arc tho results of Korr ^ Foods (Del Taco), whoso fiscal year onds on tho [Tuesday closest to December ]31, as of Docombor 28, 2010 and Dccembor 29, 2009, and for tho 52 weeks ending Docomber 28, 2010, Docombor 29, 2009 and Docombor 30,2008.

Sagittarius Restaurants has guaranteed all of our obligations under the terms of any Multiple Development Agreement, Franchise Agreement, or related agreement issued under this Disclosure Document. A copy of that guaranty agreement appears as Exhibit C to this Disclosure Document.

I T E M 22 C O N T R A C T S

The following agreements are attached as exhibits to this Disclosure Document:

Exhibit D Multiple Development Agreement

FDD 5/1 lAMENDED 6/114112 38 w-49790 4^12.DOC

Exhibit D 1 Development—Incentive—Program—Addendum to Muhiplo—Dovolopmont Agroomont

Exhibit E Franchise Agreement Exhibit E-1 DovelopmcntGximtli Incentive Program Addendum to Franchise Agreement Exhibit F Addenda Required By Certain States Exhibit G Hardware and Software License and Support Agreement Exhibit H Addendum to Lease Exhibit I Agreement and Sublease Agreement Exhibit Form of General Release

ITEM 23 RECEIPT

Two copies of a receipt of this Disclosure Document appear as the last two pages of this circular. Please sign and retum one copy to us and keep the other copy for your records.

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EXHIBIT A

STATE AGENCIES AND REGISTERED AGENTS

State Agencies

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EXHIBIT B

FINANCIAL STATEMENTS

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C O N S O L I D A T E D F I N A N C [ A L STATEMENTS

Sagittarius Restaurants LLC and Subsidiaries As of January 3, 2012 (Successor) and January 2, 2011 (Successor) With Report of Independent Auditors

Ernsts Young LLP

sU ERNST &YOUNG

Sagittarius Restaurants L L C and Subsidiaries

Consolidated Financial Statements

As of January 3, 2012 (Successor) and January 2, 2011 (Successor), and for the Fifty-three Weeks Ended January 3, 2012 (Successor), the Thirty-two Weeks Ended January 2, 2011

(Successor), the Twenty Weeks Ended May 18, 2010 (Predecessor) and the Fifty-two Weeks Ended January 3, 2010 (Predecessor)

Contents

Report of Independent Auditors I

Consolidated Financial Statements

Consolidated Balance Sheets 2 Consolidated Statements of Operations 4 Consolidated Statements of Member's Equity (Deficit) 5 Consolidated Statements of Cash Flows 6 Notes to Consolidated Financial Statements 9

Illl

=!l ERNST &YOUNG Ernst & Younq LLP Suite 1000 18111 Von Karman Avenue Irvine, California 92612-1007

Tel: +1949 794 2300 Fax:+1 949 437 0590 www.ey.com

Report of Independent Auditors

The Audit Committee of the Board of Directors Sagittarius Restaurants LLC

We have audited the accompanying consolidated balance sheets of Sagittarius Restaurants LLC and Subsidiaries (the Company) as of January 3, 2012 (Successor) and January 2, 2011 (Successor), and the related consolidated statements of operations, member's equity (deficit), and cash flows for the fifty-three weeks ended January 3, 2012 (Successor), the thirty-two weeks ended January 2, 2011 (Successor), the twenty weeks ended May 18, 2010 (Predecessor) and the fifty-two weeks ended January 3, 2010 (Predecessor). These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with auditing standards generally accepted in the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. We were not engaged to perform an audit of the Company's internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we. express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the consolidated financial position of Sagittarius Restaurants LLC and Subsidiaries at January 3, 2012 (Successor) and January 2, 2011 (Successor), and the consolidated results of their operations and their cash flows for the fifty-three weeks ended January 3, 2012 (Successor), the thirty-two weeks ended January 2, 2011 (Successor), the twenty weeks ended May 18, 2010 (Predecessor) and the fifty-two weeks ended January 3, 2010 (Predecessor), in conformity with U.S. generally accepted accounting principles.

March 23,2012

1201-1326232

A member firm o( Ernsl S Young Global Limited

Sagittarius Restaurants LLC and Subsidiaries

Consolidated Balance Sheets

Assets Current assets:

Cash and cash equivalents Accounts receivable, less allowance for doubtful accounts

of $57,951 at January 3, 2012 and $70,192 at January 2,2011

Inventories Prepaid expenses and other current assets

Total current assets

Property and equipment: Land Buildings Restaurant and other equipment Leasehold improvements Buildings under capital leases Construction in progress

Less accumulated depreciation and amortization Net property and equipment

Deferred charges, net Goodwill Trademarks Intangible assets, net Other assets, net Total assets

January 3, January 2, 2012 2011

Successor Successor

$ 5,236,264 1 $ 8,532,229

2,450 78 1,940,447 2,151,793 2,022,344 3,224,218 1,170,452 13,062,553 13,665,472

2,610,770 1,818,789 2,120,789 2,111,651 42,707,665 35,244,262 46,126,504 38,247,253 6,516,236 6,516,236 4,777,003 3,004,434

104,858,967 86,942,625 (25,436,129) (11,282,118) 79,422,838 75,660,507

3,208,129 4,347,678 280,474,964 280,474,964 144,000,000 144,000,000 19,154,212 21,026,271 2,639,755 2,620,431

$ 541,962,451 $ 541,795,323

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Sagittarius Restaurants LLC and Subsidiaries

Consolidated Balance Sheets (continued)

Liabilities and member's equity Current liabilities:

Accounts payable Other accrued liabilities Current installments of debt, capital lease obligations

and deemed landlord financing liabilities, net Deferred income taxes

Total current liabilities

Long-term debt, capital lease obligations and deemed landlord financing liabilities, excluding current installments, net

Deferred income taxes Deferred income Warrant liability Other noncurrent liabilities

Commitments and contingencies (Note 17)

Member's equity

Total liabilities and member's equity

See accompanying notes.

January 3, January 2, 2012 2011

Successor Successor

$ 13,200,652 $ 12,074,627 22,246,618 24,750,188

1,550,411 7,440,069 380,729 407,023

37,378,410 44,671,907

315,011,029 311,468,314

60,850,449 59,760,650 6,969,378 6,825,491 9,494,056 15,614,588 11,336,866 9,193,234 403,661,778 402,862,277

100,922,263 94,261,139 S 541,962,451 $ 541,795,323

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Sagittarius Restaurants LLC and Subsidiaries

Consolidated Statements of Operations

53 Weeks Ended 32 Weeks Ended 20 Weeks Ended 52 Weeks Ended

January 3, January 2, May 18, January 3,

2012 2011 2010 2010

Successor Successor Predecessor Predecessor

Revenues:

Restaurant sales S 343,478,177 $ 210,460,409 $ 126,610,163 $ 335,635,131

Franchise fees 11,930,306 7.331.676 4,130,437 11,503,248

355,408,483 217,792,085 130,740,600 347,138,379

Operating expenses:

Food and packaging 100,225,608 60,022,340 34,775,982 93,114,184

Restaurant labor 98,617,649 59,451,971 36,649,099 97,498,413

Occupancy and other 93,864,704 59,583,872 33,755,175 86,405,649 Occupancy and other

292,707,961 179,058,183 105,180,256 277,018,246

General and administrative 23,077,403 15,258,968 10,236,156 27,735,550

Stock-based compensation 5,264,446 - - -Impairment of long-lived assets - - - 237,308

Restaurant closure charges, net 348,416 414,144 17,959 414,425

(Gain) loss on disposal of assets (154,614) 186,049 (105,750) (118,082)

Operating income 34,164,871 22,874,741 15,411,979 41,850,932

Interest expense 37,414,771 23,321,885 29,352,877 79,709,606

Other (income) expense (117,872) (119,567) (20,681) 2,444,215

Restructuring expense 493,106 297,782 4,790,127 -Non-cash change in fair value of warrant liability (6,120,532) 5,798,679 - -Gain on troubled debt restructuring - - (18,378,238) -Non-cash change in fair value of interest rate swap - - (840,508) (4,301,642)

Loss on termination of interest rate swap - - 1,523,356 -Debt retirement costs - - 378,544 -Total other expense 31,669,473 29,298,779 16,805,477 77,852,179

Income (loss) from continuing operations before

income taxes 2,495398 (6,424,038) (1,393,498) (36,001,247)

Provision (benefit) for income taxes 1,153,698 67,844 3,918,557 (2,681,485)

Income (loss) from continuing operations U41,700 (6,491,882) (5,312,055) (33,319,762)

Discontinued operations:

Loss from discontinued operations, including

loss on disposal of $46,251,103 - - (45,663,400) (3,438,011)

Benefit for income taxes - - (730,490) (2,406,060)

Loss from discontinued operations — - (44,932,910) (1,031,951)

Net income (loss) S U41,700 $ (6.491,882) $ (50.244.965) $ (34.351.713)

See accompanying notes.

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Sagittarius Restaurants LLC and Subsidiaries

Consolidated Statements of Member's Equity (Deficit)

Accumulated

Balance at May 18, 2010 (Successor) Contribution and conversion of member interests

net of issuance costs of $867,850 Net loss Change in fair value of interest rate cap Comprehensive loss

Balance at January 2, 2011 (Successor) Stock-based compensation Contribution from issuance of Del Taco Holdings'

common stock Settlement of vested restricted stock units Net income Change In fair value of interest rate cap Comprehensive income

Balance at January 3, 2012 (Successor)

Balance at December 28, 2008 (Predecessor) Cumulative effect of adoption of FIN 48 Net loss Amortization of accumulated other comprehensive

loss related to interest rate swap, net of tax benefit of $1,616,638

Comprehensive loss Balance at January 3, 2010 (Predecessor)

Net loss Amortization of accumulated other comprehensive

loss related to interest rate swap, net of tax benefit of $484,234

Loss on termination of interest rate swap, net of tax benefit of $729,212

Comprehensive loss Balance at May 18, 2010 (Predecessor)

Other Total Comprehensive Member's Member's

Income Equity Equity (Loss) (Deficit) (Deficit)

$ - 3 S

100,798,016

$

100,798,016 - (6,491,882) (6,491,882)

(44,995) - (44,995) (6.536,877)

(44,995) 94,306,134 94,261,139

- 5,264,446 5,264,446

250,000 250,000 - (27,500) (27,500) - 1,341,700 1,341,700

(167,522) - (167,522) 1,174,178

S (212.517) ! B 101,134,780 $ 100.922.263

$ (4,693,055) ! E (19,347,921) $ (24,040,976) - 67,890 67,890 — (34,351,713) (34,351,713)

2,681,328 2.681.328 (31.670,385)

(2,011,727) (53,631,744) (55,643,471) - (50,244,965) (50,244,965)

1,217,583

794,144

1,217,583

794.144 (48.233,238)

- $ (103.876.709) $ (103.876.709)

See accompanying notes.

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Sagittarius Restaurants LLC and Subsidiaries

Consolidated Statements of Cash Flows

53 Weeks Ended 32 Weeks Ended 20 Weeks Ended 52 Weeks Ended January 3, January 2, May 18, January 3,

2012 2011 2010 2010 Successor Successor Predecessor Predecessor

Operating activities Net income (loss) S 1,341,700 $ (6,491,882) $ (50,244,965) $ (34,351,713) Adjustments to reconcile net income (loss) to net cash

provided by operating activities: Loss from discontinued operations - 44,932,910 1,031,951 Provision for losses on accounts receivable 15,000 2,047 - 101,692 Depreciation and amortization 17,207,486 13,032,730 6,072,037 16,445,951 Amortization of leasehold interests (265,140) 153,511 (49,735) 6,082 Amortization of deferred chaises and other

non-cash charges 2,207,485 1,426,658 474,293 1342,396 Subordinated note interest paid-in-kind 22,235,104 12,450,984 14,780,122 37,194,812 Gain on troubled debt restructuring - - (18,378,238) -Restructuring expense 493,106 297,782 4,790,127 -Stock-based compensation 5,264,446 Non-cash change in fair value of interest rate swap - - (840,508) (4,301,642) Amortization of accumulated other comprehensive

loss related to interest rate swap - 1,701,817 4,297,966 Non-cash change in fair value of warrant liability (6,120,532) 5,798,679 - -Deferred income taxes 1,063 05 - 3,564,622 (3,831,785) (Gain) loss on disposal of assets (154,614) 186,049 (105,750) (118,082) Impairment of long-lived assets - - - 237,308 Loss on termination of interest rate swap - 1,523,356 -Changes in operating assets and liabilities, net of

acquisitions: Accounts receivable (524,831) 639,417 441,345 (250,074) Inventories (129,449) (121,512) 6,265 16,085 Income tax receivable - 1,168,365 - 3,241,721 Prepaid expenses and other current assets (2,088,593) 675,235 (1,646,986) • 2,217,725 Accounts payable 1,126,025 (669,073) 1,975,819 (2,546,900) Other accrued liabilities (2,503,570) (767,887) 3,671,665 (4,016,292) Deferred income and other noncurrent liabilities 2.287,519 1,218,343 241,913 1,098,216

Net cash provided by operating activities -continuing operations 41,454,647 28,999,446 12,910,109 17,815,417

Net cash provided by operating activities -discontinued operations - - 4.235,833 11,023,050

Net cash provided by operating activities 41,454,647 28,999,446 17,145,942 28,838,467

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Sagittarius Restaurants LLC and Subsidiaries

Consolidated Statements of Cash Flows (continued)

53 Weeks Ended 32 Weeks Ended 20 Weeks Ended 52 Weeks Ended January 3, January 2, May 18, January 3,

2012 2011 2010 2010 Successor Successor Predecessor Predecessor

Investing activities Purchases of property and equipment $ (19,541,125) $ (10,675,155) $ (4,400,393) $ (11,332,254) Proceeds from disposal of property and equipment 1,499,600 - - -Merger consideration (493,106) (295,739,709) (6,848,188) -Purchases of other assets (961,439) (604,186) (304,145) (1,078,476) Proceeds from sale of discontinued operation - - 35,325,630 -Net cash (used in) provided by investing activities -

continuing operations (19,496,070) (307,019,050) 23,772,904 (12,410,730) Net cash used by investing activities —

discontinued operations - _ (4,017,176) (5,121,315) Net cash (used in) provided by investing activities (19,496.070) (307,019,050) 19,755,728 (17,532,045)

Financing activities Intercompany loan from Parent - (2,335) (18,751) 118,417 Proceeds from issuance of memt)er interests, net of

issuance costs - 93,202,192 - -Proceeds from long-term debt, net of original

issue discount of $4,780,000 - 155,220,000 - -Proceeds from issuance of subordinated notes - 47,590,434 - -Payments on Original Term Loan - - (35,325,630) -Debt retirement costs - - 378,544 -Proceeds from deemed landlord financing liabilities, net 887,001 3,946,166 - 600,000 Payments on long-term debt, capital leases and

deemed landlord financing liabilities (26364,043) (19,746,409) (1,926,150) (7,655,072) Proceeds from revolving credit facility - 5,000,000 6,000,000 36,900,000 Payments on revolving credit facility (5,000,000) - (40,900,000) Proceeds from issuance of Del Taco Holdings' common

stock 250,000 - - -Settlement of vested restricted stock units (27,500) - - -Payment for interest rate cap - (235,100) - -Payments for debt issue costs - (5,093,169) (466,623) (167,699) Net cash (used in) provided by financing activities -

continuing operations (25,254,542) 274,881,779 (31,358,610) (11,104,354) Net cash used in financing activities -

discontinued operations - - (18,320) (40.890) Net cash (used in) provided by financing activities (25,254,542) 274,881,779 (31,376,930) (11,145,244)

(Decrease) increase in cash and cash equivalents (3,295,965) (3,137,825) 5,524,740 161,178 Cash and cash equivalents at beginning of period 8,532,229 11,670,054 6,145,314 5,984.136 Cash and cash equivalents at end of period S 5.236.264 $ 8,532.229 $ II,670_,054 $ 6.I45.3I4

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Sagittarius Restaurants LLC and Subsidiaries

Consolidated Statements of Cash Flows (continued)

53 Weeks Ended January 3,

2012

32 Weeks Ended January 2,

2011

20 Weeks Ended May 18, 2010

52 Weeks Ended January 3.

2010 Successor Successor Predecessor Predecessor

Supplemental schedule of noncash activities: !:quity conversion Changes in fair value of interest rate cap Prepaid equity issuance costs Exchange of subordinated notes Forgiven subordinated note balance Write offs against bad debt reserves

See accompanying notes.

(167,522)

27,241

8,150,639 (44,995) 554,815

102,409,566

15,702 125,410,433

778 317,112

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Sagittarius Restaurants LLC and Subsidiaries

Notes to Consolidated Financial Statements

January 3, 2012

1. Organization and Basis of Presentation

The consolidated financial statements include the accounts of Sagittarius Restaurants LLC and its subsidiaries (collectively, the Company). All significant intercompany accounts and transactions have been eliminated in consolidation.

On March 19, 2006, Sagittarius Restaurants LLC (SAG Restaurants) was formed as a wholly owned subsidiary of F&C Restaurant Holding Co. (F&C RHC) to be the parent of Captain D's, LLC (Captain D's) and Kerry Foods. At the formation date. Captain D's became a wholly owned subsidiary of SAG Restaurants and on March 29, 2006, SAG Restaurants purchased Kerry Foods (the 2006 Acquisition). Following the 2006 Acquisition, Captain D's and Kerry Foods became limited liability companies operating as subsidiaries of SAG Restaurants, F&C RHC and Sagittarius Brands, Inc., F&C RHC's parent company. Subsequent to the 2006 Acquisition, the principal owners of SAG Brands were: Grotech Partners VI, L.P. (Grotech), 25.4%; Charlesbank Equity Funds (Charlesbank), 25.4%; Green Equity Investors, L.P. (Green), 25.0%; and other investors, 24.2%.

On May 18, 2010, Sagittarius Brands, Inc. changed its name to Del Taco Holdings, Inc. (Del Taco Holdings). Subsequent to the restructuring transaction on May 18, 2010 (Restructuring), Del Taco Holdings had 3,897,835 shares of new common stock issued and outstanding that were held as follows: Goldman Sachs Mezzanine Partners (GSMP), 55.4%; Green, 25.1%; Charlesbank, 18.2%; and other investors, 1.3%. These ownership changes resulted in a change in control of Del Taco Holdings, and, as a result, as further discussed in Note 3, the Restructuring has been treated as an acquisition and all assets and liabilities have been adjusted to their respective estimated fair values as of the Restructuring date.

On September 20, 2011, Del Taco Holdings sold 10,000 shares of commons stock to a new member of the Board of Directors, increasing the total shares of common stock issued and outstanding to 3,907,835 shares that were held as follows: GSMP, 55.3%; Green, 25.0%; Charlesbank, 18.1%; and other investors, 1.6%.

As of each balance sheet date presented, F&C RHC and Del Taco Holdings had no significant assets or operations other than their investment in SAG Restaurants, and SAG Restaurants had no significant assets or operations other than its investment in Kerry Foods. As a limited liability company, SAG Restaurants' member's liability is limited to the amount of its investment.

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Sagittarius Restaurants L L C and Subsidiaries

Notes to Consolidated Financial Statements (continued)

1. Organization and Basis of Presentation (continued)

As of January 3, 2012, the Company, through its wholly owned subsidiary Del Taco LLC (Del Taco), owned, operated and franchised Del Taco quick-service Mexican-American restaurants. At January 3, 2012, there were 287 company-operated and 245 franchised Del Taco restaurants located in 16 states, with one franchised unit in Guam. At December 28, 2010, there were 288 company-operated and 234 franchised Del Taco restaurants located in 17 states, with one franchised unit in Guam.

Furthermore, as discussed in Note 4, on May 18, 2010, the Company sold its Captain D's subsidiary. As a result of the Captain D's sale on May 18, 2010, the results of operations and cash flows for Captain D's have been reflected as discontinued operations for all periods presented.

2. Summary of Significant Accounting Policies

Fiscal Year

Included in the consolidated financial statements are the results of Del Taco, whose fiscal year ends on the Tuesday closest to December 31. Prior to Fiscal 2011 (Successor), the Company reported its consolidated operations on a 52- or 53-week fiscal year ending on the Sunday closest to December 31. Beginning in Fiscal 2011 (Successor), the Company changed its fiscal year end to conform to Del Taco. Through May 18, 2010, the consolidated financial statements also included the results of Captain D's (reported as discontinued operations), whose fiscal year ended on the Sunday closest to December 31.

Fiscal year 2011 (Successor) is the 53-week period ended January 3, 2012 for Del Taco and the 52-week plus two-day period ended January 3, 2012 for the Company (Fiscal 2011). The only significant difference in the results of operations under the new fiscal year end compared to the old fiscal year end is interest expense related to the New Senior Credit Facility, the Restructured Company Notes and the Restructured F&S RHC Notes (see Note 8) which includes 366 days during Fiscal 2011 (Successor) compared to 364 days during Fiscal 2010.

The Fiscal 2010 successor period is the 33-week period ended January 2, 2011 for the Company and the 32-week period ended December 28, 2010 for Del Taco (2010 Successor Stub Period).

The Fiscal 2010 predecessor period is the 19-week period ended May 16, 2010 for the Company and Captain D's and the 20-week period ended May 18, 2010 for Del Taco (2010 Predecessor Stub Period).

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Sagittarius Restaurants L L C and Subsidiaries

Notes to Consolidated Financial Statements (continued)

2. Summary of Significant Accounting Policies (continued)

The Fiscal 2010 year ended on January 2, 2011 for the Company and on December 28, 2010 for Del Taco and is comprised of the 2010 Successor Stub Period and the 2010 Predecessor Stub Period (Fiscal 2010).

Fiscal year 2009 (Predecessor) is the 53-week period ended January 3, 2010 for the Company and Captain D's and the 52-week period ended December 29, 2009 for Del Taco (Fiscal 2009).

Variable Interest Entities and Consolidation

On an ongoing basis, the Company evaluates its business relationships such as those it has with franchisees and public limited partnerships to identify potential variable interest entities (VlEs). The principal entities in which the Company possesses a variable interest include four unconsolidated public limited partnerships and franchise entities, which operate its franchised restaurants. Generally, franchisees qualify for a scope exception under the consolidation guidance. The Company has reviewed these franchise entities and determined that these entities are businesses that do qualify for a scope exception under the consolidation guidance.

In addition, Del Taco is the general partner with a 1% ownership interest in four unconsolidated public limited partnerships (Partnerships), which are accounted for under the equity method. Each Partnership was originally formed between 1983 and 1988 to acquire land and build Del Taco restaurants for long-term lease to Del Taco. The leases cover twenty-three restaurants for terms of 32 to 35 years and require monthly rent payments in an amount equal to 12% of gross sales which totaled $2.9 million, $1.8 million, $1.1 million, and $2.9 million for Fiscal 2011 (Successor), the 2010 Successor Stub Period, the 2010 Predecessor Stub Period, and Fiscal 2009 (Predecessor), respectively, and are included in occupancy and other expenses and as contingent rent in Note 16. During May 2011, one of the restaurants was permanently closed after being destroyed by an auto accident and ensuing fire.

The Company has no legal right to the Partnerships' assets nor any obligations with respect to their liabilities. None of the Company's assets serve as collateral for the creditors of the VIEs. The Company's maximum exposure to a loss as a result of its involvement with the VIEs is limited to its percentage share of the annual profits or losses. No additional financial support is provided to the VIEs.

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Sagittarius Restaurants L L C and Subsidiaries

Notes to Consolidated Financial Statements (continued)

2. Summary of Significant Accounting Policies (continued)

The Company has concluded that consolidation of these Partnerships is required because they qualify as VIEs whereby Del Taco is the primary beneficiary. This determination is based on Del Taco, in its role as general partner, having both substantive decision making rights and the right to significant financial benefits that are possible based on the relevant ASC guidance. Based on qualitative and quantitative considerations, including the fact that Del Taco does not have the legal right or title to any of the Partnership assets, the Company has elected not to consolidate these VIEs in the consolidated financial statements for all periods presented.

The impact of consolidation on the consolidated balance sheet as of the end of Fiscal 2011 (Successor) would have been to record a VIE current asset of $0.8 million consisting of cash owned by the Partnerships and a VIE non-current asset of $16.2 million consisting of land and buildings owned by the Partnerships, offset by a $8.1 million reduction to goodwill based on the fair value adjustment to the assets and liabilities of the VIE as of the Restructuring date, for an increase to total assets of $8.9 million that would be offset by a $8.9 million non-controlling interest in a VIE that would be recorded as a component of member's equity. The impact of consolidation on the consolidated statements of operations during Fiscal 2011 (Successor) would have been to record a reduction to occupancy and other expense totaling $2.4 million, representing the elimination of the 12% rent expense net of depreciation expense and an increase to general and administrative expense totaling $0.4 million for a $2.0 million overall increase in operating income, as well as a $2.6 million elimination of the net income attributable to the non-controlling interest in a VIE, for an overall decrease to the Company's net income totaling $0.2 million.

The impact of consolidation on the consolidated balance sheet as of the end of Fiscal 2010 (Successor) would have been to record a VIE current asset of $0.9 million consisting of cash owned by the Partnerships and a VIE non-current asset of $17.3 million consisting of land and buildings owned by the Partnerships, offset by a $8.1 million reduction to goodwill based on the fair value adjustment to the assets and liabilities of the VIE as of the Restructuring date, for an increase to total assets of $10.1 million that would be offset by a $10.1 million non-controlling interest in a VIE that would be recorded as a component of member's equity. The impact of consolidafion on the consolidated statements of operations during Fiscal 2010, aggregating the 2010 Successor Stub Period and the 2010 Predecessor Stub Period, would have been to record a reduction to occupancy and other expense totaling $2.5 million, representing the elimination of the 12% rent expense net of depreciation expense and an increase to general and administrative expense totaling $0.3 million for a $2.2 million overall increase in operating income, as well as a $2.1 million elimination of the net income attributable to the non-controlling interest in a VIE, for an overall increase to the Company's net loss totaling $0.1 million.

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Sagittarius Restaurants L L C and Subsidiaries

Notes to Consolidated Financial Statements (continued)

2. Summary of Significant Accounting Policies (continued)

Use of Estimates

The preparation of the consolidated financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Management believes that such estimates have been based on reasonable and supportable assumptions and the resulting estimates are reasonable for use in the preparation of the consolidated financial statements. Actual results could differ from these estimates.

Financial Statement Reclassification

Certain reclassifications have been made to conform the prior period presentation to the current period presentation. The provision for losses on accounts receivable has been presented with offsetting decreases to the cash provided by the change in accounts receivable in the consolidated statements of cash flows for the 2010 Successor Stub Period, the 2010 Predecessor Stub Period and Fiscal 2009 (Predecessor). Debt retirement costs and intercompany loan from Parent were reclassified from net cash provided by operating activities - continuing operations and from net cash provided by investing activities - continuing operations, respectively, to net cash used in financing activifies - continuing operations for the 2010 Successor Stub Period, the 2010 Predecessor Stub Period and Fiscal 2009 (Predecessor).

Fair Value of Financial Instruments

The fair values of cash and cash equivalents, accounts receivable, accounts payable, and other accrued liabilities approximate the carrying amounts due to their short maturities. The fair value of the Company's long-term debt instruments was determined using a market valuation approach based on applicable interest rates for similar instruments as of the balance sheet date. Additionally, as further discussed in Note 11, the interest rate cap agreement and the warrant liability are recorded at fair value in the consolidated balance sheets.

Guidance included in Accounting Standards Codification (ASC) 820, Fair Value Measurements and Disclosures, provides a framework for measuring fair value under generally accepted accounting principles. ASC 820 defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. ASC 820 requires that valuation techniques maximize the use of observable

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Sagittarius Restaurants L L C and Subsidiaries

Notes to Consolidated Financial Statements (continued)

2. Summary of Significant Accounting Policies (continued)

inputs and minimize the use of unobservable inputs. ASC 820 also establishes a fair value hierarchy which prioritizes the valuation inputs into three broad levels. Based on the underlying inputs, each fair value measurement in its entirety is reported in one of the three tiers in the fair value hierarchy, which prioritizes the inputs used in measuring fair value. These tiers include: Level 1, defined as observable inputs such as quoted prices in active markets; Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable; and Level 3, defined as unobservable inputs which reflect the Company's own estimates of assumptions that market participants would use in pricing the asset or liability. Valuation techniques include the use of third party pricing services, option pricing models, discounted cash flow models and similar techniques.

The following is a summary of the estimated fair values for the Company's long-term debt instruments, warrant liability and interest rate cap agreement:

January 3, 2012

January 2, 2011

(Successor) (Successor) Estimated Fair Value Book Value

Estimated Fair Value Book Value

Term Loan Restructured Company Notes Restructured F&C RHC Notes Warrant liability Interest rate cap agreement

Cash Equivalents

116,807,486 136,768,434 49,734,527 9,494,056

6,921

112,953,452 135,436,448 49^49,640 9,494,056

6,921

$ 145,348,131 122,072,363 44,398,578 15,614,588

190,094

$ 136,901,167 119,130,715 43,320,269 15,614,588

190,094

The Company considers short-term, highly liquid investments with original maturities of three months or less when purchased to be cash equivalents.

Accounts Receivable, Net

Accounts receivable, net are primarily comprised of receivables fi*om franchisees, tenants and a vendor. Receivables from franchisees include rents, royalties, services and contractual marketing fees associated with the franchise agreements. Tenant receivables relate to subleased properties where the Company is a party and obligated on the primary lease agreement. The receivable from a vendor is for earned reimbursements based on volume purchases. The allowance for doubtful accounts is based on historical experience and a review of the collectability of existing receivables.

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Sagittarius Restaurants LLC and Subsidiaries

Notes to Consolidated Financial Statements (continued)

2. Summary of Significant Accounting Policies (continued)

Inventories

Inventories, consisting of food items, packaging and beverages, are valued at the lower of cost (first-in, first-out method) or market.

Property and Equipment

Property and equipment includes land, buildings, leasehold improvements, restaurant and other equipment and buildings under capital leases. Land, property and equipment acquired in business combinations are initially recorded at their estimated fair value. Land, property and equipment acquired or constructed in the normal course of business are initially recorded at cost. The Company provides for depreciation and amortization based on the estimated useful lives of assets using the straight-line method. Estimated useful lives are as follows:

Buildings 20 - 35 years Leasehold improvements Lesser of useful life (typically 20 years) or lease term Buildings under capital leases Lesser of useful life (typically 20 years) or lease term Restaurant and other equipment 3-15 years

Leasehold improvements are amortized on the straight-line basis over the lesser of the estimated useful lives of the assets or the related lease term, which generally includes reasonably assured option periods when the Company would suffer an economic penalty if not exercised. Depreciation and amortization expense associated with property and equipment is primarily included in occupancy and other expenses in the accompanying consolidated statements of operations and totaled $14.4 million, $11.4 million, $5.3 million and $14.4 million for Fiscal 2011 (Successor), the 2010 Successor Stub Period, the 2010 Predecessor Stub Period, and Fiscal 2009 (Predecessor), respectively. Accumulated depreciation and amortization associated with property and equipment includes $1.7 million and $0.7 million of accumulated amortization related to buildings under capital leases as of the end of Fiscal 2011 (Successor) and Fiscal 2010 (Successor), respectively.

Gains and losses on the disposal of assets are recorded as the difference between the net proceeds received and net carrying values of the assets disposed and are included in loss (gain) on disposal of assets in the accompanying consolidated statements of operations.

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Sagittarius Restaurants L L C and Subsidiaries

Notes to Consolidated Financial Statements (continued)

2. Summary of Significant Accounting Policies (continued)

Other Assets, Net

Other assets primarily include deferred charges, goodwill, and intangible assets such as intellectual property (trademarks), leasehold interests and franchise rights. The Company recorded identifiable intangible assets related to franchise contracts, intellectual property (trademarks), leasehold interests and goodwill in connection with both the 2006 Acquisition and the Restructuring. The Company's indefinite-lived trademarks and goodwill are not amortized, but tested annually for impairment and tested for impairment more frequently if events and circumstances indicate that the asset might be impaired (see Note 6).

Leasehold interests represent the fair values of acquired lease contracts having contractual rents that differ from fair market rents as of the acquisition date, and are amortized on the straight-line basis over the lease term to rent expense (occupancy and other expense). Franchise rights, which represent the fair value of fi-anchise contracts based on the projected royalty revenue stream, are amortized to general and administrative expense over the term of the franchise agreements.

Deferred Charges

Upon entering into or modifying its financing arrangements, the Company determines the appropriate accounting for deferred financing costs after assessing whether a troubled debt restructuring, extinguishment, or modification has occurred (see Note 9). If the debt is determined to be settled, all lender and third party costs associated with the new debt are capitalized. Debt balances are presented net of any lender original issue discount (OlD) and other lender fees which are amortized to interest expense over the new term using the effective interest method. Other third party costs are capitalized as deferred charges and amortized to interest expense over the new term using the effective interest method. Deferred charges associated with the old debt are expensed as debt retirement costs. If the modification is determined to be a troubled debt restructuring, any capitalized deferred charges for new debt issuance costs are included in the calculated troubled debt restructuring gain recorded in the consolidated statements of operations.

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Notes to Consolidated Financial Statements (continued)

2. Summary of Significant Accounting Policies (continued)

Goodwill and Indefinite-Lived Intangible Assets

Goodwill represents the excess of cost over the net tangible assets and identifiable intangible assets of the business as of the Restructuring and is attributable to Del Taco as the Company's single reporting unit (Note 3). Trademarks consist of numerous trademarks and service marks which the Company owns and has registered with the United States Patent and Trademark Office, including Del Taco and various versions of the Del Taco logo. The Company believes its trademarks and service marks have value and play an important role in its marketing efforts.

The Company conducts an annual goodwill and indefinite-lived intangible asset impairment tests on the first day of the fourth quarter of each fiscal year or whenever an indicator of impairment exists. If an indicator of impairment exists (e.g., estimated fair value of a reporting unit is less than its carrying value based on expected future cash flows), the goodwill impairment test compares the fair value of a reporting unit, generally based on discounted future cash flows, with its carrying amount including goodwill. If the carrying amount of a reporting unit exceeds its fair value, an impairment loss is measured as the difference between the implied fair value of the reporting unit's goodwill and the carrying amount of goodwill. The Company's indefinite-lived trademark is not amortized, but tested at least annually for impairment and more frequently if events and circumstances indicate that the asset might be impaired.

Long-Lived Assets

Long-lived assets, including property and equipment and intangible assets (other than goodwill and indefinite-lived intangible assets), are amortized over their estimated useful lives. In addition, the Company reviews its long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. Long-lived assets are grouped and evaluated for impairment at the lowest level for which there are identifiable cash flows that are independent of the cash flows of other groups of assets. The Company evaluates cash flows for individual restaurants and franchise contracts. If it is determined that the carrying amounts of such long-lived assets are not recoverable, the assets are written down to their estimated fair values. The Company considers fair value to either be the land and building real estate value for the respective restaurant or the discounted value of the estimated cash flows associated with the respective restaurant or contract.

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Sagittarius Restaurants L L C and Subsidiaries

Notes to Consolidated Financial Statements (continued)

2. Summary of Significant Accounting Policies (continued)

Other Capitalized Costs

Costs related to software developed or acquired for internal use are capitalized and amortized over the estimated useful life. Accordingly, the Company has capitalized the external costs and certain internal payroll costs to acquire and develop computer software. The carrying value of capitalized software costs for Del Taco totaled $1.1 million and $1.0 million at Fiscal 2011 (Successor) and Fiscal 2010 (Successor), respectively, and is included in other assets in the consolidated balance sheets. Amortization expense totaled $0.6 million, $0.4 million, $0.2 million, and $0.5 million for Fiscal 2011 (Successor), the 2010 Successor Stub Period, the 2010 Predecessor Stub Period, and Fiscal 2009 (Predecessor), respectively.

The Company has elected to account for construction costs in a manner such that costs with a future benefit for the projects are capitalized. If the Company subsequently makes a determination that a site for which development costs have been capitalized will not be acquired or developed, any previously capitalized development costs are expensed and included in occupancy and other expenses in the consolidated statements of operations. The Company capitalizes interest in connection with the construction of its restaurants. Interest capitalized totaled $0.1 million, $0.2 million, $0.03 million, and $0.1 million for Fiscal 2011 (Successor), the 2010 Successor Stub Period, the 2010 Predecessor Stub Period, and Fiscal 2009 (Predecessor), respectively.

Revenue Recognition

Restaurant sales from the operation of Company restaurants are recognized when food and service is delivered to customers. Franchise fees are comprised of (i) initial development fees, (ii) initial franchise fees, (iii) on-going royalties, and (iv) renewal fees. Franchise fees received pursuant to individual development agreements, which grant the right to develop franchised restaurants in future periods in specific geographic areas, are deferred and recognized as revenue as the Company has substantially fulfilled its obligation pursuant to the development agreement, which is generally upon store opening. Initial franchise fees are also recognized as revenue when the franchised location opens. Deferred development and initial franchise fees are included in deferred income on the consolidated balance sheets and totaled $1.1 million and $1.3 million as of the end of Fiscal 2011 (Successor) and Fiscal 2010 (Successor), respectively. Royalties from franchised restaurants are recorded in revenue when food and service are delivered to customers. Renewal fees are recognized when a renewal agreement becomes effective. The Company reports revenue net of sales and use taxes collected from customers and remitted to governmental taxing authorities.

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Sagittarius Restaurants L L C and Subsidiaries

Notes to Consolidated Financial Statements (continued)

2. Summary of Significant Accounting Policies (continued)

Vendor Allowances

The Company receives support from one of its vendors in the form of reimbursements. The reimbursements are agreed upon with the vendor, but do not represent specific, incremental, identifiable costs incurred by the Company in selling the vendor's products. Such reimbursements are recorded as a reduction of the costs of purchasing the vendor's products. The noncurrent portion of reimbursements received by the Company in advance is included in deferred income on the consolidated balance sheets and totaled $4.3 million and $4.2 million as of the end of Fiscal 2011 (Successor) and Fiscal 2010 (Successor), respectively. The current portion of these reimbursements is included in other accrued liabilities on the consolidated balance sheets and totaled $2.1 million and $2.2 million as of the end of Fiscal 2011 (Successor) and Fiscal 2010 (Successor), respecfively.

Gift Cards

The Company sells gift cards to customers in its restaurants. The gift cards sold to customers have no stated expiration dates and are subject to potential escheatment laws in the various jurisdictions in which the Company operates. Deferred gift card income is recorded in other noncurrent liabilities on the consolidated balance sheets. The Company recognizes revenue from gift cards when: (i) the gift card is redeemed by the customer; or (ii) the likelihood of the gift card being redeemed by the customer is remote (gift card breakage) and the Company determines that there is not a legal obligation to remit the unredeemed gift cards to the relevant jurisdiction. The determination of the gift card breakage rate is based upon Company specific historical redemption patterns. Any future revisions to the estimated breakage rate may result in changes in the amount of breakage revenue recognized in future periods.

Gains on Asset Sales

For restaurant sale transactions that do not include real estate owned by the Company, gains are recognized at the time of sale if the collection of the sales price is reasonably assured and the Company does not remain contingently liable in the case of a leased property. Gains on asset sales associated with sale-leaseback transactions that do not qualify for sale-leaseback accounting treatment are recorded in deferred income on the consolidated balance sheets and recognized in income over the life of the leaseback period.

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Sagittarius Restaurants L L C and Subsidiaries

Notes to Consolidated Financial Statements (continued)

2. Summary of Significant Accounting Policies (continued)

Rent Expense and Deferred Rent

At inception, the lease is evaluated to determine whether it will be classified as an operating or capital lease. Rent expense on operating leases with scheduled or minimum rent increases is recognized on a straight-line basis over the lease term, which includes the period of time from when the Company takes possession of the leased space until the store opening date (the rent holiday period). Deferred rent represents the excess of rent charged to expense over the rent obligations under the lease agreement. Deferred rent is recorded in other noncurrent liabilities on the consolidated balance sheets. Contingent rentals are generally based on sales levels in excess of stipulated amounts as defined in the lease agreement, and thus are not considered minimum lease payments and are included in rent expense as incurred.

The Company may expend cash for structural additions on leased premises that may be reimbursed in whole or in part by landlords as construction contributions pursuant to agreed-upon terms in the leases. Depending on the specifics of the leased space and the lease agreement, the amounts paid for structural components will be recorded during the construction period as either prepaid rent or construction-in-progress and the landlord construction contributions will be recorded as either an offset to prepaid rent or as a deemed landlord financing liability. Upon completion of construction for those leases that meet certain criteria, the lease may qualify for sale-leaseback treatment. For these leases, the deemed landlord financing liability and the associated construction-in-progress will be removed and the difference will be reclassified to prepaid or deferred rent and amortized over the lease term as an increase or decrease to rent expense. If the lease does not qualify for sale-leaseback treatment, the deemed landlord financing liability will be amortized over the lease term based on the rent payments designated in the lease agreement.

Self-Insurance Accruals

Given the nature of the Company's operating environment, the Company is subject to workers' compensation and general liability claims. To mitigate a portion of these risks, the Company maintains insurance in excess of deductibles per claim (since Fiscal 2008, the Company's insurance deductibles range from $250,000 to $500,000 per occurrence for workers' compensation and $250,000 to $350,000 per occurrence for general liability). The amount of self-insurance loss reserves and loss adjustment expenses is determined based on an estimation process that uses information obtained from both Company-specific and industry data, as well as general economic information. Self-insurance loss reserves are based on undiscounted estimates

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Sagittarius Restaurants L L C and Subsidiaries

Notes to Consolidated Financial Statements (continued)

2. Summary of Significant Accounting Policies (continued)

of expected losses for determining reported claims and as the basis for estimating claims incurred but not reported. The estimation process for self-insurance loss exposure requires management to continuously monitor and evaluate the life cycle of claims. Management also monitors the reasonableness of the judgments made in the prior year's estimation process (referred to as a hindsight analysis) and adjusts current year assumptions based on the hindsight analysis. The Company utilizes actuarial methods to evaluate open claims and estimate the ongoing development exposure related to workers' compensation and general liability.

Advertising Costs

Production costs for radio and television advertising are expensed when the commercials are initially aired. Costs of distribution of advertising are charged to expense on the date the advertising is aired or distributed. These costs, as well as other marketing-related expenses are included in occupancy and other expenses. Advertising expenses for Del Taco were $13.9 million, $8.5 million, $5.1 million, and $12.4 million for Fiscal 2011 (Successor), the 2010 Successor Stub Period, the 2010 Predecessor Stub Period, and Fiscal 2009 (Predecessor), respectively, and are included in occupancy and other expenses in the consolidated statements of operations.

Preopening Costs

Preopening costs, which include restaurant labor, supplies, rent, and other costs associated with the opening of new restaurants, are expensed as incurred. Preopening costs were $0.3 million, $0.2 million, zero, and $0.1 million for Fiscal 2011 (Successor), the 2010 Successor Stub Period, the 2010 Predecessor Stub Period, and Fiscal 2009 (Predecessor), respectively, and are included in occupancy and other expenses in the consolidated statements of operations.

Restaurant Closure Charges, Net

The Company makes decisions to close restaurants based on their cash flows, anticipated future profitability and leasing arrangements. The Company determines if discontinued operations treatment is appropriate and estimates the future obligations, if any, associated with the closure of restaurants and records the corresponding liability at the time the restaurant is closed. These restaurant closure obligations primarily consist of the liability for the present value of future lease obligations, net of estimated sublease income, if any. Restaurant closure charges, net is

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Sagittarius Restaurants L L C and Subsidiaries

Notes to Consolidated Financial Statements (continued)

2. Summary of Significant Accounting Policies (continued)

comprised of initial charges associated with the recording of the liability at fair value, accretion of the liability during the period, and any positive or negative adjustments to the liability in subsequent periods as more information becomes available. To the extent that the disposal or abandonment of related property and equipment results in gains or losses, such gains or losses are included in loss (gain) on disposal of assets in the accompanying consolidated statements of operations.

Stock-Based Compensation Expense

The Company accounts for its stock-based compensation as required by the FASB authoritative guidance on stock compensation, which generally requires, among other things, that all employee stock-based compensation be measured using a fair value method and that the resulting compensation cost be recognized in the financial statements. Compensation expense for the Company's share-based compensation awards is generally recognized using an accelerated graded vesting schedule.

Income Taxes

Del Taco Holdings or SAG Brands is the parent of the consolidated tax group either subsequent or prior to the Restructuring, respectively. The Company pays Del Taco Holdings or SAG Brands the amount of the current income tax liability the Company would have had if the Company had filed separate federal and state income tax returns, or Del Taco Holdings or SAG Brands reimburses the Company for the benefit of its current operating losses and tax credits, as well as net operating loss carryforwards and tax credit carryforwards. The Company reports its income tax expense and deferred tax assets and liabilities following this separate-return method. Management believes the income tax provision, as reflected, is comparable to what the income tax provision would have been if the Company had filed a separate return during the years presented.

The Company uses the liability method of accounting for income taxes. Deferred income taxes are provided for temporary differences between financial statement and income tax reporting, using tax rates scheduled to be in effect at the time the items giving rise to the deferred taxes reverse. The Company adopted the provisions of ASC Topic 740, Income Taxes (ASC 740), related to accounting for uncertainty in income taxes, as of the beginning of Fiscal 2009 (Predecessor). This guidance clarifies the accounting for uncertainty in income taxes recognized in financial statements and requires the impact of a tax position to be recognized in the financial

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Sagittarius Restaurants L L C and Subsidiaries

Notes to Consolidated Financial Statements (continued)

2. Summary of Significant Accounting Policies (continued)

statements if that position is more likely than not of being sustained by the taxing authority. Accordingly, the Company reports a liability for unrecognized tax benefits resulting from uncertain tax positions taken or expected to be taken in a tax retum. The Company recognizes interest and penalties, if any, related to unrecognized tax benefits in income tax expense (see Note 15).

Derivative Instruments and Hedging Activities

The Company is exposed to variability in future cash flows resulting from fluctuations in interest rates related to its variable rate debt. As part of its overall strategy to manage the level of exposure to the risk of fluctuations in interest rates, the Company has used various interest rate contracts including interest rate swaps and interest rate caps. The Company accounts for all of its cash flow hedges under ASC 815, Derivatives and Hedging, which requires companies to recognize all derivative instruments as either assets or liabilities at fair value in the consolidated balance sheets. When they qualify as hedging instruments, the Company designates interest rate swaps and interest rate caps as cash flow hedges of forecasted variable rate interest payments on certain debt principal balances.

ASC 815 requires that the fair values of derivative instruments and their gains and losses be disclosed in a manner that provides adequate information about the impact these instruments can have on a company's financial position, results of operations and cash flows. For derivative instruments that are designated and qualify as cash flow hedges, the effective portion of the gain or loss on the derivative is reported as a component of other comprehensive income (OCI) and reclassified into earnings in the same period or periods during which the hedged transaction affects earnings. Gains and losses on the derivative representing hedge ineffectiveness are recognized in current earnings. As of the end of Fiscal 2011 (Successor), the Company was hedging forecasted transactions expected to occur through June 2013 with an interest rate cap.

The Company enters into interest rate derivative contracts with major banks and is exposed to losses in the event of nonperformance by these banks. The Company anticipates, however, that these banks will be able to fully satisfy their obligations under the contracts. Accordingly, the Company does not obtain collateral or other security to support the contracts.

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Sagittarius Restaurants L L C and Subsidiaries

Notes to Consolidated Financial Statements (continued)

2. Summary of Significant Accounting Policies (continued)

Comprehensive Income (Loss)

Comprehensive income (loss) includes changes in equity from transactions and other events and circumstances from nonoperational sources, including, among other things, the Company's unrealized gains and losses on effective interest rate caps and swaps which are included in other comprehensive income (loss), net of tax.

Concentration of Risks

Financial instruments that potentially subject the Company to a concentration of credit risk are cash and cash equivalents. The Company maintains its day-to-day operating cash balances in non-interest-bearing accounts. While the Federal Deposit Insurance Corporation insures depository account balances up to $250,000, it is temporarily providing unlimited coverage on non-interest-bearing depository account balances through December 31, 2012. Although the Company at times maintains balances that exceed the federally insured limit, it has not experienced any losses related to these balances and management believes the credit risk to be minimal.

The Company extends credit to franchisees for franchise fees and advertising fees on customary credit terms, which generally do not require franchisees to provide collateral or other security to the Company. Additionally, management believes there is no concentration of risk with any single franchisee or small group of franchisees whose failure or nonperformance would materially affect the Company's results of operations.

The Company has entered into a long-term purchase agreement with MBM Corporation for delivery of essentially all of its necessary food and paper supplies to all company-operated restaurants and all franchised restaurants except for Guam. Disruption in shipments from MBM Corporation could have a material adverse effect on the results of operations and financial condition of the Company. However, management of the Company believes it would be able to negotiate a similarly priced contract with another distributor.

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Sagittarius Restaurants LLC and Subsidiaries

Notes to Consolidated Financial Statements (continued)

2. Summary of Significant Accounting Policies (continued)

Including its franchise locations, as of January 3, 2012, Del Taco operated a total of 369 restaurants in California (242 were company-owned and 127 were franchised locations). As a result, the Company is particularly susceptible to adverse trends and economic conditions in California. In addition, given this geographic concentration, negative publicity regarding any of the restaurants in California could have a material adverse effect on the Company's business and operations, as could other regional occurrences such as local strikes, earthquakes or other natural disasters.

Subsequent Events

The Company evaluated subsequent events through March 23, 2012, the date the financial statements were available for issuance. There were no subsequent events that required recognifion or disclosure.

Recently Issued Accounting Standards

Fair Value Disclosures

In May 2011, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2011-04, Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and International Financial Reporting Standards (IFRS). This pronouncement was issued to provide a consistent definition of fair value and ensure that the fair value measurement and disclosure requirements are similar between U.S. GAAP and IFRS. ASU 2011-04 changes certain fair value measurement principles and enhances the disclosure requirements particularly for level 3 fair value measurements. This guidance is effective for reporting periods beginning on or after December 15, 2011. The Company has not yet completed its evaluation of the adopfion of ASU 2011-04 on its consolidated financial statements.

Comprehensive Income

The FASB issued ASU No. 2011-05, Presentation of Comprehensive Income, in June 2011 and ASU No. 2011-12, Comprehensive Income, in December 2011. ASU 2011-05 eliminates the option to report other comprehensive income and its components in the statement of member's equity and requires an entity to present the total of comprehensive income, the components of net income and the components of other comprehensive income either in a single continuous

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Notes to Consolidated Financial Statements (continued)

2. Summary of Significant Accounting Policies (continued)

statement or in two separate but consecutive statements. ASU 2011-12 delayed the effective date of this guidance to fiscal years, and interim periods within those years, beginning after December 15,2012. The Company believes the adoption of ASU 2011-05 and ASU 2011-12 concerns presentation and disclosure only and will not have an impact on its consolidated financial position or results of operations.

Impairment of Goodwill

In September 2011, the FASB issued ASU No. 2011-08, Testing Goodwill for Impairment. ASU 2011-08 simplifies how entifies test goodwill for impairment and permits an entity to first assess qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount as a basis for determining whether it is necessary to perform the two-step goodwill impairment test. This guidance is effective for annual and interim goodwill impairment tests performed for fiscal years beginning after December 15, 2011. The Company believes the adoption of ASU 2011-08 will not have an impact on the Company's consolidated financial position or results of operations.

3. Restructuring

On May 18, 2010, a definitive agreement to sell Captain D's was funded and the Company received initial proceeds totaling $35.4 million, subject to working capital and other purchase price adjustments subsequent to closing (Captain D's Sale). Further, a newly formed entity (Merger Co) issued common stock and Merger Co was merged with and into SAG Brands (Merger) at which point the separate existence of Merger Co thereupon ceased, with SAG Brands as the corporation surviving the Merger and continuing its corporate existence under the name of Del Taco Holdings.

At the time of the Merger, each share of SAG Brands common stock issued and outstanding immediately prior to the Merger was converted into the right to receive (1) consideration in the form of cash or (2) a combination of cash and new common stock of the restructured company, except that pursuant to the restructuring agreement, the existing common stock held by Charlesbank, Green and GSMP, collectively the Continuing Sponsors, was required to receive new common stock consideration and the existing common stock held by Grotech, an owner prior to the Merger, was required to receive cash consideration. In addition to receiving the new common stock consideration for their existing common stock, the Continuing Sponsors also purchased additional new common stock totaling $85.0 million (New Equity Infusion) and

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Notes to Consolidated Financial Statements (continued)

3. Restructuring (continued)

Charlesbank and Green provided the Company with a capital contribution totaling $4.2 million (Capital Contribution). Certain Continuing Sponsors also contributed $4.3 million for the purchase of shares in the predecessor entity from exiting shareholders and converted $8.2 million of shares in the predecessor entity into shares of the newly formed Del Taco Holdings entity. Unvested restricted stock units held by employees of the Company were immediately vested in conjunction with the Merger. As a result of this vesting, cash payments made to employees for vested restricted units totaled $1.7 million. In addition, 499,515 shares of new common stock, representing 10% on a fijlly diluted basis, have been reserved for a management stock-based compensation program, as more fully described in Note 5.

Immediately prior to the Merger, the Subordinated Notes (more fully described in Note 8) with an outstanding balance of approximately $311.6 million, including capitalized and accrued but unpaid interest of $76.6 million held exclusively by GSMP, were delivered to the Company in exchange for (1) restructured notes issued by the Company and F&C RHC in the aggregate principal amount of $110.0 million (Restructured Company Notes) and $40.0 million (Restructured F&C RHC Notes), respectively, less the amount of Restructured Company Notes and Restructured F&C RHC Notes subscription by Green and Charlesbank which totaled $28.7 million and $18.9 million, respectively (Aggregate Subscription), (2) an amount in cash equal to the Aggregate Subscription, and (3) warrants to purchase 597,802 shares of new common stock of the Company (2010 Note Exchange). The Restructured Company Notes and Restructured F&C RHC Notes are more fully described in Note 8. At the time of the Restructuring, the Company also entered into a senior secured credit facility totaling $199.0 million consisting of a $160.0 million term loan borrowing and a $39.0 million revolving credit facility, of which $5.0 million was drawn at closing, each with a five-year maturity (the New Senior Credit Facility). The New Senior Credit Facility is more fully described in Note 8.

Proceeds from the New Senior Credit Facility, Captain D's Sale, Capital Contribution and New Equity Infusion were used to retire the existing term loan and revolver indebtedness including accrued interest totaling approximately $266.6 million (including accrued interest of approximately $3.4 million), to pay off the interest rate swap liability of $6.3 million and for transaction expenses.

As a result of the Restructuring, entities controlled by GSMP acquired a controlling interest in Del Taco Holdings and all of its wholly owned subsidiaries; therefore, the Restructuring transaction has been treated as an acquisition and all assets and liabilities have been adjusted to their respective fair values as of the Restructuring date. The following table summarizes the

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Notes to Consolidated Financial Statements (continued)

3. Restructuring (continued)

consideration paid for the Company and the fair value of the assets acquired and liabilities assumed recognized at the acquisition date, as well as total acquisition-related costs:

Consideration Equity, net of issuance costs of $867,850 $ 100,798,016 New Senior Credit Facility - net of original issue discount

and debt issue costs 155,204,116 Restructured company notes 110,000,000 Restructured F&C RHC notes 40,000,000 Fair value of total consideration transferred $ 406,002,132

Recognized amounts of identifiable assets acquired and liabilities assumed

Net working capital deficit $ (17,736,223) Property and equipment 67,806,553 Buildings under capital leases 8,670,004 Other long-term assets 2,615,367 Franchise agreements 23,000,000 Trademarks 144,000,000 Leasehold interests (773,956) Capital lease obligations and deemed landlord financing liabilities (16,397,234) Deferred income taxes (61,041,051) Warrant liability (9,815,909) Other noncurrent liabilities (14,800,383) Total identifiable net assets 125,527,168 Goodwill 280,474,964

$ 406,002,132

Acquisition-related costs included in restructuring expense in the consolidated statements of operations were $0.5 million for Fiscal 2011 (Successor), $0.3 million for the 2010 Successor Stub Period and $4.8 million for the 2010 Predecessor Stub Period. None of the goodwill recognized is expected to be deductible for income tax purposes.

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Notes to Consolidated Financial Statements (continued)

4. Discontinued Operations

On May 18, 2010, in order to focus on the profitability and growth opportunities of its core Del Taco brand, the Company finalized the Captain D's sale and received adjusted proceeds totaling $35.1 million, net of working capital adjustment payments made subsequent to closing. The Company recorded a net loss on disposal of the discontinued operation of $46.3 million. The loss on disposition includes an impairment charge of $36.2 million to write down intangible assets held for sale to their fair value. As a result of the Captain D's Sale, the results of operations and cash flows for Captain D's are reflected as discontinued operations for all periods presented. Loss from discontinued operations, net of tax was $44.9 million in the 2010 Predecessor Stub Period and $1.0 million in Fiscal 2009 (Predecessor). The losses from discontinued operations in the consolidated statements of operations are summarized as follows:

53 Weeks Ended

January 3, 2012

32 Weeks Ended

January 2, 2011

20 Weeks Ended

May 18, 2010

53 Weeks Ended

January 3, 2010

Successor Successor Predecessor Predecessor

Revenues $ $ $ 91,461,320 $ 249,023,506

Loss before income taxes Income tax benefit

$ $ $ (45,663,400) (730,490)

$ (3,438,011) (2,406,060)

Loss from discontinued operations $ $ $ (44,932,910) $ (1,031,951)

5. Transactions with Related Parties

On March 29, 2006, SAG Brands entered into a Corporate Development and Administrative Services Agreement with Charlesbank, Grotech and Green Equity (together the Advisors) under which SAG Brands is obligated to pay a monitoring fee to the Advisors equal to the greater of $1.5 million per annum or 1% of earnings before interest, taxes, depreciation and amortization for the trailing year of the Company. As there are no operations at SAG Brands, the monitoring fee was paid by the Company (through Captain D's and Del Taco). The management fee under this agreement totaled $0.6 million and $1.5 million during the 2010 Predecessor Stub Period and Fiscal 2009 (Predecessor), respectively, and is included in general and administrative expense in the accompanying consolidated statements of operations. Cash payment of the monitoring fee was suspended for the First Amendment Period (see Note 8) and this management fee was terminated and the outstanding unpaid balance due to each of the Advisors was forgiven in connection with the Restructuring. No management fees were recorded during

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Notes to Consolidated Financial Statements (continued)

5. Transactions with Related Parties (continued)

Fiscal 2011 (Successor) and the 2010 Successor Stub Period under this, or any other arrangement. Grotech received $1.5 million of consideration in connection with the Restructuring which included reimbursement for fees and expenses.

6. Goodwill and Intangible Assets

Intangible assets primarily consist of franchise rights, leasehold interests and trademarks arising from the Restructuring. Goodwill represents the excess of purchase price over the estimated fair value of net assets acquired. Amortizable intangible assets are summarized as follows:

Leasehold interests Franchise rights Other Total

January 3, 2012 Januarv 2,2011 Successor Successor

Gross Carrying Accumulated Amount Amortization

Gross Carrying Amount

Accumulated Amortization

$ 344,016 $ (1,006,343) 22,440,881 (2,789,723)

262,230 (96,849)

$ (595,301) 22,843,076

261,780

$ (332,166) (1,084,023)

(67,095) S 23,047,127 $ (3,892,915) $ 22,509,555 $ (1,483,284)

Leasehold interests include both assets and liabilities depending on whether the interest, when acquired, related to an above- or below- market leasing arrangement. Leasehold interests are amortized on a lease-by-lease basis using the straight-line method over the remaining lease terms of the underlying leases. Franchise rights are amortized using the straight-line method over the remaining life of the franchise agreements or 40 years, whichever is less. The weighted average amortization periods as of January 3, 2012 (Successor) for leasehold interests and franchise rights equaled 9.4 years and 14.7 years, respectively.

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Notes to Consolidated Financial Statements (continued)

6. Goodwill and Intangible Assets (continued)

Aggregate amortization expense for amortizable intangible assets totaled $2.1 million, $1.5 million, $0.6 million, and $1.6 million for Fiscal 2011 (Successor), the 2010 Successor Stub Period, the 2010 Predecessor Stub Period, and Fiscal 2009 (Predecessor), respectively. The estimated ftiture amortization for leasehold interests and franchise rights for the next five years is as follows:

Leasehold Franchise Interests Rights

2012 $ 575,990 $ 1,675,222 2013 405,843 1,620,262 2014 158,106 1,596,580 2015 (3,082) 1,513,489 2016 (68,837) 1,489,125

During the fourth quarter of both Fiscal 2011 (Successor) and Fiscal 2010 (Successor), the Company completed its annual impairment test of goodwill and determined that the fair value is greater than the carrying value for Del Taco, the Company's single reporting unit, and therefore, there is no impairment of goodwill as of the end of Fiscal 2011 (Successor) or Fiscal 2010 (Successor).

As of the end of Fiscal 2011 (Successor) and Fiscal 2010 (Successor), the Company completed its annual impairment test of its indefinite-lived trademark intangible assets and determined that Del Taco's trademark was not impaired as of the end of Fiscal 2011 (Successor) or Fiscal 2010 (Successor). The carrying value of trademarks and goodwill totaled $144.0 million and $280.5 million, respectively, at the end of both Fiscal 2011 (Successor) and Fiscal 2010 (Successor).

7. Impairment or Disposal of Long-Lived Assets and Restaurant Closures

Impairment

The Company evaluates capitalized design costs for indicators of impairment based on future development plans. During Fiscal 2009 (Predecessor), Del Taco recorded impairment charges totaling $0.2 million. No impairment charges were recorded in continuing operations in the accompanying consolidated statements of operations for any of the other periods presented.

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Notes to Consolidated Financial Statements (continued)

7. Impairment or Disposal of Long-Lived Assets and Restaurant Closures (continued)

Restaurant Closures and Lease Reserves

The Company records restaurant closure charges to accrue the estimated liability for future lease obligations on closed stores and for shortfalls between contractual rent and sublease income. Charges are estimated by discounting future minimum lease payments, net of expected sublease income, for remaining lease obligations extending beyond one year. Changes to the esfimated liability for future lease obligations based on new facts and circumstances are considered to be a change in estimate and are recorded prospectively. Accretion expense is recorded in order to appropriately reflect the present value of the lease obligations as of the end of a reporting period. Lease payments made related to these obligations reduce the overall liability.

The following table presents restaurant closure liability activity for each period presented:

53 Weeks 32 Weeks 20 Weeks 52 Weeks Ended Ended Ended Ended

January 3, December 28, May 18, December 29, 2012 2010 2010 2009

Successor Successor Predecessor Predecessor Number of units closed due to

lease expiration - 3 - -Number of units closed due to

underperforming - - - 1 Total number of units closed - 3 - 1

Stores with sublease shortfalls 1 3 - 1

Closure liability at beginning of period S (1,105,341) $ (836,039) $ (859,853) $ (600,000)

Charges related to current period activity - (466,762) - (323,921)

Adjustments to prior period activity (265,785) 109,590 -

Charges for accretion in current period (80,524) (56,973) (17,959) (53,370)

Cash payments made 344,653 144,843 41,773 117,438 Closure liability at end of period $ (1,106,997) $ (1,105,341) $ (836,039) $ (859,853)

No discontinued operations treatment was required for any of the closures noted in the above table.

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Notes to Consolidated Financial Statements (continued)

8. Debt and Obligations under Capital Leases

Debt, obligations under capital leases and deemed landlord financing liabilities at the end of Fiscal 2011 (Successor) and Fiscal 2010 (Successor) consisted of the following:

Maturity Dates

Term Loan, net of original issue discount of $3,046,548 and $4,098,833 at January 3, 2012 (Successor) and January 2, 2011 (Successor), respectively

Restructured Company notes Restructured F&C RHC notes Revolver

Obligations under capital leases and deemed landlord fmancing liabilities

Total debt Less amounts due within one year Amounts due after one year

May 18,2015 March 31, 2016 March 31, 2016 May 18,2015

March 31, 2012-July 31, 2031

January 3, January 2, 2012 2011

Successor Successor

$ 112,953,452 $ 136,901,167 135,436,448 119,130,715 49,249,640 43,320,269

297,639,540 299,352,151

18,921,900 19,556,232 316,561,440 318,908,383

1,550,411 7,440,069 $ 315,011,029 $ 311,468,314

2006 Facility

In connection with the 2006 Acquisition, the Company entered into credit facilities totaling $590.0 million consisting of a $295.0 million term loan (Original Term Loan), a $60.0 million revolving credit facility (Original Revolver), and $235.0 million of senior subordinated notes (Subordinated Notes) (collectively, the 2006 Facility).

Amendments to the 2006 Facility

Effective March 31, 2008, the Original Term Loan and Original Revolver were amended in the First Amendment to the Credit Agreement (Amended Credit Agreement) to adjust certain existing quarterly financial covenants commencing March 31, 2008 through the first quarter of Fiscal 2010 (First Amendment Period) (Predecessor) in exchange for (a) an amendment fee of $3.5 million; (b) increasing the interest rate on the Original Term Loan and Original Revolver to either (i) LIBOR (not to be less than 4.0% per annum through March 31, 2011) plus an applicable margin of 5.5% or (ii)the greater of the Prime Rate (not to be less than 5.0% per annum through March 31, 2011) or the Federal Funds Effective Rate plus 0.5%, each plus an applicable margin of 4.5%o, whereas commencing January 1, 2009, the applicable margins for the

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Notes to Consolidated Financial Statements (continued)

8. Debt and Obligations under Capital Leases (continued)

Original Term Loan and Original Revolver became subject to future increases or reductions based on certain financial ratios measured on a quarterly basis; (c) increasing the prepayment to 100% of cumulative excess cash flow (as defined in the Amended Credit Agreement) on a quarterly basis where 50% of the quarterly excess cash flow payments may be deferred until the end of the fiscal year during the First Amendment Period; (d) a requirement to pursue sale-leaseback transactions with respect to certain owned land and building whereby the net cash proceeds (as defined in the Amended Credit Agreement) shall be applied as mandatory prepayments of the Original Term Loan; (e) increasing the quarterly payments of principal on the Original Term Loan from an amount equal to 0.25% of the original principal amount of the Original Term Loan to $1.5 million per quarter commencing during 2009 through maturity in 2013; (f) halting the cash payment of the monitoring fee to the New Advisors during the First Amendment Period; and (g) other modifications to impose new and increase existing restrictions on capital expenditures, reinvestment events, incurrence of additional debt, liens and contingent liabilities, distributions on common stock, mergers, consolidations or similar transactions and other affirmative and negative covenants, including certain modifications to the Subordinated Notes discussed below. The requirement to pursue sale-leaseback transactions was flilfiUed during 2008 and net cash proceeds (as defined in the Amended Credit Agreement) totaling $23.0 million were raised from the sale-leaseback of 15 owned properties at Del Taco and used to prepay the Original Term Loan.

On March 31, 2008, the Subordinated Notes were amended to (a) cease payment of cash interest during the period from April 1, 2008 to and including March 31, 2010, with pay-in-kind interest at 13.5% during that period due upon maturity; (b) limit payment of quarterly cash interest to 50% during the period from April 1, 2010 to and including March 31, 2011, with interest at 12.5% during that period (whereby the 50% pay-in-kind interest is due upon maturity) followed by quarterly cash interest payments at the original fixed interest rate of 10.5% after March 31, 2011 through maturity; (c) impose a requirement whereby upon certain events subsequent to the maturity of the Original Term Loan and Original Revolver, the Company may be required to prepay interest payments on the Subordinated Notes if the accumulated pay-in-kind interest reaches a predetermined level and (d) require an amendment fee of $2.4 million. Pay-in-kind interest on the Subordinated Notes totaled $14.8 million and $37.2 million during the 2010 Predecessor Stub Period and Fiscal 2009 (Predecessor), and is included in interest expense in the consolidated statements of operations.

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Notes to Consolidated Financial Statements (continued)

8. Debt and Obligations under Capital Leases (continued)

The Company determined that the amendments to the Original Term Loan resulted in a substantial modification of terms and was, therefore, accounted for as an extinguishment, while the amendments to the Subordinated Notes did not result in a substantial modification. Accordingly, the related existing debt issue costs and fees incurred to modify these agreements have been accounted for as described in Note 9.

Subject to certain exceptions, the obligations under the amended 2006 Facility were guaranteed by SAG Brands and F&C RHC. The amended 2006 Facility was secured by a first priority security interest in substantially all of the tangible and intangible assets, as well as the assets of SAG Brands and F&C RHC and both Del Taco and Captain D's as subsidiary guarantors, including a pledge of all of the capital stock and member interests and the capital stock and member interests of each of the Company's direct and indirect domestic subsidiaries. The amended 2006 Facility contained provisions that (1) required satisfaction of certain financial ratios and tests; (2) imposed limitations on capital expenditures; (3) limited the ability to incur additional debt and contingent liabilities; (4) prohibited dividends and distributions on common stock; (5) limited mergers, consolidations or similar transactions; and (6) included other affirmative and negative covenants.

2010 Restructuring

At the time of the Restructuring, the Company entered into a New Senior Credit Facility totaling $199.0 million consisting of a $160.0 million term loan (Term Loan) borrowing and a $39.0 million revolving credit facility (Revolver), of which $5.0 million was drawn at closing, each with a five year maturity (the New Senior Credit Facility). In conjunction with the Term Loan and Revolver borrowings, the Company paid original issue discount (OlD) of 2.5% on the Term Loan and 2.0% on the Revolver for a total of $4.8 million on the Restructuring date.

The Term Loan bears interest at LIBOR (not to be less than 2.0%) plus a margin of 5.5%. The weighted-average interest rate on the Term Loan at both January 3, 2012 (Successor) and January 2, 2011 (Successor) was 7.5%. Principal borrowings are payable on a quarterly basis in the amount of $1.5 million beginning with September 30, 2010, with mandatory annual prepayment equal to 75% of excess cash flow beginning in Fiscal 2011 (Successor) which may be reduced by voluntary prepayments made during the fiscal year and which may be fiirther reduced if the senior leverage ratio is less than 2.00 to 1.00, with the remaining principal and accrued interest payable in full at maturity on May 18, 2015. During Fiscal 2011 (Successor) and the 2010 Successor Stub Period, the Company made voluntary Term Loan prepayments with a

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Notes to Consolidated Financial Statements (continued)

8. Debt and Obligations under Capital Leases (continued)

102%) call protection premium through May 18, 2011 and with a 101% call protecfion premium applicable from May 18, 2011 through May 18, 2012. These prepayments have been designated to cover the mandatory quarterly principal payments through September 30, 2014. The call protection premium has been recorded as interest expense in the consolidated statements of operations for Fiscal 2011 (Successor) and the 2010 Successor Stub Period. Interest accrued on the borrowings is due and payable in arrears upon the termination of each underlying LIBOR contract which management expects to be quarterly. The drawn portion of the Revolver with $39.0 million borrowing availability bears interest at LIBOR (not to be less than 2.0%) plus a margin of 5.0%, with the unused commitment subject to a 0.5% fee. The weighted-average interest rate on the Revolver at both January 3, 2012 (Successor) and January 2, 2011 (Successor) was 7.0%. Revolver capacity used to support letters of credit incurs fees equal to the margin of 5.0%. Revolver capacity of $14.9 million and $16.4 million was used to support outstanding letters of credit at January 3, 2012 (Successor) and January 2, 2011 (Successor), respectively. Unused Revolver capacity at January 3, 2012 (Successor) and January 2, 2011 (Successor) was $24.1 million and $22.6 million, respectively. Both the margin and commitment fee are subject to fliture reductions based on certain financial ratios measured on a quarterly basis. The New Senior Credit Facility contains provisions that (1) require satisfaction of certain financial ratios, (2) impose limitations on capital expenditures, (3) require mandatory prepayments upon certain events, and (4) include other affirmative and negative covenants. The Company was in compliance with all these financial covenants at the end of Fiscal 2011 (Successor) and management expects the Company to be in compliance throughout the 2012 fiscal year based on projected results of operations. During Fiscal 2011 (Successor), the Company sold six Company-operated restaurants in Arizona to a franchisee, and this transaction resulted in a $1.5 million mandatory prepayment paid during Fiscal 2011 (Successor).

The Company determined, based on both quantitative and qualitative assessments, that the Restructuring related to the New Senior Credit Facility resulted in an extinguishment, due to the fact that the fair value of the obligation to pay the Original Term Loan lenders was fully settled in cash in an amount equal to the Company's carrying amount of the payable in the consolidated balance sheet. Accordingly, the related existing deferred charges, new debt issuance costs and OID incurred to modify this agreement have been accounted for as described in Note 9.

Pursuant to the 2010 Note Exchange described in Note 3, both the Restructured Company Notes and Restructured F&C RHC Notes have no scheduled principal repayments until their maturity on March 31, 2016. The Restructured Company Notes have an interest rate of 13.0%, with interest accrued to principal so long as, pursuant to the senior credit facility, the fixed charge

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Notes to Consolidated Financial Statements (continued)

8. Debt and Obligations under Capital Leases (continued)

coverage ratio is less than 1.50 to 1.00 or senior leverage is greater than 2.00 to 1.00. If the fixed charge coverage is greater than 1.50 to 1.00 and senior leverage ratio is less than 2.00 to 1.00 and greater than 1.50 to 1.00, then the Company has the option to pay cash interest at 6.0% with the balance payable in kind for a total interest rate of 12.5%. If the fixed charge coverage ratio is greater than 1.50 to 1.00 and the senior leverage is equal to or less than 1.50 to 1.00, then the Company has the option to pay cash interest at 12.0%. Interest on the Restructured F&C RHC Notes is to be capitalized at an interest rate of I3.0%o during its entire term through March 31, 2016 with no cash interest option. Pay-in-kind interest on the Restructured Company Notes and Restructured F&C RHC Notes totaled $22.2 million and $12.5 million during Fiscal 2011 (Successor) and the 2010 Successor Stub Period, respectively.

The Restructured Company Notes have a financial covenant which limits capital expenditures. The Restructured F&C RHC Notes do not have any financial covenants. Both have other affirmative and negative covenants. As of January 3, 2012 (Successor), the Company was in compliance with all of the covenants associated with either the Restructured Company Notes or the Restructured F&C RHC Notes. Management expects to be in compliance with these financial covenants throughout the 2012 fiscal year based on its projected results of operations.

The Company determined that the 2010 Note Exchange resulted in a troubled debt restructuring based on the significant concessions granted by the lenders. Accordingly, an $18.4 million gain on troubled debt restructuring was recorded in the 2010 Predecessor Stub Period due to the fact that the total cash flows on the Restructured Company Notes and the Restructured F&C RHC Notes were less than the carrying value of the Subordinated Notes. Deferred charges related to the Subordinated Notes and debt issuance costs associated with the 2010 Note Exchange have been included in the calculated gain recorded in the consolidated statements of operations. The Restructured Company Notes and the Restructured F&C RHC Notes were initially recorded in the Predecessor period at the total amount of cash flows expected to be generated under the Subordinated Notes. In conjunction with the Restructuring transaction and the change in control, the Restructured Company Notes and the Restructured F&C RHC Notes were then adjusted to their respective fair values as of the Restructuring date.

At both the end of Fiscal 2011 (Successor) and Fiscal 2010 (Successor), there were no borrowings under the Revolver under the New Senior Credit Facility.

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Notes to Consolidated Financial Statements (continued)

8. Debt and Obligations under Capital Leases (continued)

Other Debt Information

Based on debt agreements and leases in place as of the end of Fiscal 2011 (Successor), future maturities of debt, obligations under capital leases and deemed landlord financing liabilities were as follows:

2012 $ 1,550,411 2013 1,601,079 2014 3,151,892 2015 113,077,770 2016 186,212,524 Thereafter 10,967,764 Total $ 316,561,440

Cash paid for interest was $13.0 million, $9.6 million, $12.3 million, and $44.0 million for Fiscal 2011 (Successor), the 2010 Successor Stub Period, the 2010 Predecessor Stub Period, and Fiscal 2009 (Predecessor), respectively.

9. Deferred Charges

The Company determined that the May 18, 2010 modification to the New Senior Credit Facility resulted in an extinguishment of the 2006 Facility. Deferred charges of $0.4 million related to the 2006 Facility have been expensed as debt retirement costs in the consolidated financial statements in the 2010 Predecessor Stub Period. Al l lender and third party costs associated with the New Senior Credit Facility were capitalized and deferred. Lender OID of $4.8 million was paid and deferred in the 2010 Successor Stub Period, is presented net of the Term Loan in the consolidated balance sheet and is adjusted to interest expense over the new term using the effective interest method. Capitalized OID included in the net Term Loan balance at the end of Fiscal 2011 (Successor) and Fiscal 2010 (Successor) was $3.0 million and $4.1 million, respectively. Other lender and third party costs of $5.1 million were paid and deferred during the 2010 Successor Stub Period and are amortized to interest expense over the new term using the effective interest method.

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Notes to Consolidated Financial Statements (continued)

9. Deferred Charges (continued)

The Company determined that the 2010 Note Exchange resulted in a troubled debt restructuring based on the significant concessions granted. Deferred charges of $6.5 million related to the Subordinated Notes and debt issuance costs of $1.3 million associated with the 2010 Note Exchange have been included in the calculated gain on troubled debt restructuring recorded in the consolidated statements of operations in the 2010 Predecessor Stub Period.

Amortization of deferred debt issue costs and other non-cash charges including OID totaled $2.2 million, $1.4 million, $0.9 million, and $1.3 million during Fiscal 2011 (Successor), the 2010 Successor Stub Period, the 2010 Predecessor Stub Period, and Fiscal 2009 (Predecessor), respectively. At the end of Fiscal 2011 (Successor) and Fiscal 2010 (Successor), the carrying value of debt issue costs was $3.2 million and $4.3 million, respectively, and was presented as deferred charges on the consolidated balance sheets.

10. Derivative Instruments

Interest Rate Swap Agreements

The 2006 Facility required the Company, within 120 days of closing, to enter into hedging agreements for at least 50% of the aggregate principal of the Original Term Loan. Effective April 3, 2006, the Company entered into five-year hedging agreements on $162.5 million of the Original Term Loan that effectively converted that portion of the loan outstanding from variable rate debt to fixed rate debt, resulting in a change in the applicable interest rate from an interest rate of three-month LIBOR plus the applicable percentage (as provided by the 2006 Facility) to a fixed interest rate of 5.285%) plus the applicable percentage. The notional amounts on the 2006 Facility interest rate swaps were $135.6 million and $148.6 million at the end of the 2010 Predecessor Stub Period and Fiscal 2009 (Predecessor), respectively.

To ensure the effectiveness of the 2006 Facility interest rate swap, the Company elected the three-month LIBOR rate option for its variable rate interest payments on the 2006 Facility as of each reset date. Since the reset dates and other critical terms on the 2006 Facility coincide with the interest rate swap reset dates and other critical terms, the 2006 Facility hedge was perfectly effecfive until the March 31, 2008 effective date of the First Amendment which imposed an interest rate of LIBOR (not to be less than 4.0% per annum) plus an applicable margin of 5.5%. This minimum LIBOR rate eliminated the effectiveness of the interest rate swap. Therefore, commencing on April I, 2008, the Company has abandoned hedge accounting and recorded non­cash ineffective interest expense for the change in fair value of the interest rate swap, adjusted

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Notes to Consolidated Financial Statements (continued)

10. Derivative Instruments (continued)

for the nonperformance risk of the parties to the swap, which resulted in interest income of ($0.8) million and ($4.3) million and interest expense of $0.5 million during the 2010 Predecessor Stub Period and Fiscal 2009 (Predecessor), respectively, in the consolidated statement of operations. On April I, 2008, the Company began amortizing amounts previously recorded in accumulated other comprehensive loss to interest expense over the remaining term of the instrument using the effective interest rate method. This amortization totaled $1.7 million and $4.3 million during the 2010 Predecessor Stub Period and Fiscal 2009 (Predecessor), respectively, and was recorded as interest expense in the consolidated statement of operations. In conjunction with the Restructuring, the interest rate swap contract was terminated, and as a result, the Company discontinued hedge accounting and reclassified an additional $1.5 million from other comprehensive loss into net loss during the 2010 Predecessor Stub Period.

Interest Rate Cap Agreement

The New Senior Credit Facility required the Company, within 120 days of closing, to enter into, and thereafter maintain, hedging agreements to provide that at least 50% of the aggregate principal amount of the Term Loans is subject to either a fixed interest rate or interest rate protection for a period of not less than three years.

Effective June 29, 2010, the Company entered into an interest rate cap with a three-year term on an initial notional amount of $80.0 million of the Term Loan that effectively converted that portion of the loan outstanding from variable rate debt to capped variable rate debt, resulting in a change in the applicable interest rate from an interest rate of three-month LIBOR plus the applicable percentage (as provided by the 2010 Facility) to a capped interest rate of 2.0% to 4.0%) plus the applicable percentage. At the end of each calendar quarter commencing December 31,2010 through the three-year term, the notional amount of the Term Loan subject to the cap decreases by $750,000.

To ensure the effectiveness of the Term Loan interest rate cap, the Company elected the three-month LIBOR rate option for its variable rate interest payments on the Term Loan as of each reset date. Since the reset dates and other critical terms on the Term Loan coincide with the interest rate cap reset dates and other critical terms, the Term Loan hedge was perfectly matched during Fiscal 2011 (Successor) and the 2010 Successor Stub Period.

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Notes to Consolidated Financial Statements (continued)

10. Derivative Instruments (continued)

As of the end of Fiscal 2011 (Successor) and Fiscal 2010 (Successor), the Company determined that, based upon counterparty quotes, with appropriate adjustments for nonperformance risk of the parties to the interest rate cap contract, the fair value of the interest rate cap agreement was a $0.01 million asset and a $0.2 million asset, respectively. This interest rate cap asset is included in other assets in the consolidated balance sheet as of the end of Fiscal 2011 (Successor) and Fiscal 2010 (Successor).

As of January 3, 2012, the Company was hedging forecasted transactions expected to occur through June 2013. Assuming interest rates at January 3, 2012 remain constant, $0.2 million of interest expense related to hedges of these transactions is expected to be reclassified into earnings over the next 18 months. The Company intends to ensure that this hedge remains effective; therefore approximately $0.1 million is expected to be reclassified into interest expense over the next 12 months in conjunction with the expiration of individual caplet contracts within the interest rate cap agreement.

Warrant Liability

In connection with the Restructuring and the 2010 Note Exchange, the Company issued warrants to GSMP to purchase 597,802 shares of new common stock of Del Taco Holdings. The warrants have an exercise price of $25.00 per share and are exercisable at any time until the expiration of the ten-year term. The exercise of the warrants is subject to certain restrictions, including: (l)that any such exercise must be exempt from the registration requirements of the Securities Act, and (2) that the warrants are qualified for sale or exempt from qualification under the applicable securities laws. In the event that the Company enters into any transaction as defined per the warrant agreement, then, the holders of the warrant shall be entitled, in their sole discretion, to either exercise the warrants prior to consummation of such transaction or surrender the warrants to the Company concurrently with the consummation of such transaction in exchange for a cash payment equal to the excess value the current common stock price over the exercise price multiplied by the number of warrants surrendered. The fair value of the warrants is recorded as a liability. As of the end of Fiscal 2011 (Successor) and Fiscal 2010 (Successor), the Company determined that the fair value of the warrant liability was $9.5 million and $15.6 million, and recorded mark-to-market adjustments totaling a reduction of $6.1 million and an increase of $5.8 million in the consolidated statements of operations for Fiscal 2011 (Successor) and the 2010 Successor Stub Period, respectively.

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Notes to Consolidated Financial Statements (continued)

10. Derivative Instruments (continued)

For the periods presented, the losses related to interest rate derivative instruments have been recorded in the consolidated statements of operations as follows:

53 Weeks 32 Weeks 20 Weeks 52 Weeks Ended Ended Ended Ended

Januarys, January 2, May 18, January 3, 2012 2011 2010 2010

vocation Successor Successor Predecessor Predecessor

Loss recognized in OCI on derivatives designated as effective hedges

Loss reclassified from accumulated OCI into income

Income tax benefit reclassified from accumulated OCI into income

Loss on termination of interest rate swap reclassified from accumulated OCI into income

Income tax benefit associated with loss on termination of interest rate swap reclassified from accumulated OCI into income

Gain recognized in income on derivatives designated as ineffective

Other Comprehensive Income

Interest Expense

Income Tax Benefit

Interest Expense

Income Tax Benefit

Interest Expense

$ 167,522 $ 44,995 $

1,701,817 4,297,966

(484,234) (1,616,638)

1,523,356

(729,212)

(840,508) (4,301,642)

As of the end of Fiscal 2011 (Successor) and Fiscal 2010 (Successor), the Company had an interest rate cap agreement that was entered into to hedge cash flows associated with interest rate fluctuations on variable rate debt. This agreement had a fair value of $0.01 million and $0.2 million, and a notional amount of $75.5 million and $78.5 million, as of Fiscal 2011 (Successor) and Fiscal 2010 (Successor), respectively. The individual caplet contracts within the interest rate cap agreement expire at various dates through June 2013.

11. Fair Value Measurements

As of the end of Fiscal 2011 (Successor) and Fiscal 2010 (Successor), the Company held certain assets and liabilities that are required to be measured at fair value on a recurring basis. These included the Company's derivative instruments related to interest rates and warrants to purchase common stock of Del Taco Holdings, which are not traded on a public exchange. The Company determines the fair values of the interest rate cap contracts based on counterparty quotes, with appropriate adjustments for any significant impact of nonperformance risk of the parties to the interest rate cap contracts. Therefore, the Company has categorized these interest rate cap contracts as Level 2.

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Notes to Consolidated Financial Statements (continued)

11. Fair Value Measurements (continued)

The warrant liability represents warrants to purchase shares of Del Taco Holdings' non-public, common stock (Common Stock), which has limited marketability. The fair value of the warrant liability is determined using the Black-Scholes option pricing model. This model includes as its inputs, an estimated fair value of the Common Stock, an expected warrant term, estimated Common Stock volatility and the risk free interest rate. Determining the fair value and volatility of the Common Stock involves a significant degree of management resources and judgment as no quoted prices exist and there are transfer restrictions on such securities. The Company uses an independent third party valuation of the Common Stock as an input to the pricing model for determining the fair value of such securities, using commonly accepted valuation techniques, including the use of earnings multiples based on comparable public securities, industry-specific non-earnings-based multiples and discounted cash flow models. In determining the fair value and volatility of the Common Stock, the Company also considers events such as equity issuances or other observable transactions. As a result of certain unobservable inputs, the Company has categorized the warrant liability as a Level 3 fair value measurement.

The Company has consistently applied these valuation techniques in all periods presented and believes it has obtained the most accurate information available for the types of derivative contracts it holds. See Note 10 for further information on the Company's derivative instruments and hedging activities.

The Company's assets and liabilities measured at fair value on a recurring basis as of the end of Fiscal 2011 (Successor) and Fiscal 2010 (Successor) were as follows:

Warrant liability Interest rate cap Total assets (liabilities) measured

at fair value

Warrant liability Interest rate cap Total assets (liabilities) measured

at fair value

January 3, 2012

(Successor)

Markets for Identical Assets

(Level 1)

Observable Inputs

(Level 2)

Unobservable Inputs

(Level 3)

$ (9,494,056) 6,921

$ $ 6,921

$ (9,494,056)

$ (9,487,135) S S 6,921 $ (9,494,056)

January 2, 2011

(Successor)

Markets for Identical Assets

(Level 1)

Observable Inputs

(Level 2)

Unobservable Inputs

(Level 3)

$ (15,614,588) 190,094

$ $ 190,094

$ (15,614,588)

$ (15,424,494) $ $ 190,094 $ (15,614,588)

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Notes to Consolidated Financial Statements (continued)

11. Fair Value Measurements (continued)

Changes in Level 3 Fair Value Category

The following tables present the changes in the Level 3 fair value category for Fiscal 2011 (Successor) and the 2010 Successor Stub Period. No warrant liability was outstanding for any of the other periods presented. The Company classifies financial instruments in Level 3 of the fair value hierarchy when there is reliance on at least one significant unobservable input to the valuation model. In addition to these unobservable inputs, the valuation models for Level 3 financial instruments typically also rely on a number of inputs that are readily observable either directly or indirectly. Thus, the charge included below, which is included in non-cash change in fair value of warrant liability in the consolidated statement of operations for the 2010 Successor Stub Period, includes changes in the fair value related to both observable and unobservable inputs.

January 3, 2010 (Predecessor) Issuance of warrant liability (Predecessor Stub Period) Non-cash change in fair value of warrant liability

(Successor Stub Period) January 2, 2011 (Successor)

Non-cash change in fair value of warrant liability January 3, 2012 (Successor)

Number of Warrants

Outstanding Fair Value

$ 597,802 (9,815,909)

_ (5,798,679) 597,802 (15,614,588)

— 6,120,532 597,802 $(9,494,056)

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Notes to Consolidated Financial Statements (continued)

12. Other Accrued Liabilities

A summary of other accrued liabilities follows:

Employee compensation and related items Accrued insurance Accrued sales tax Accrued advertising Unearned trade discount Other

13. Other Noncurrent Liabilities

A summary of other noncurrent liabilities follows:

Accrued insurance Deferred rent liability Accrued restaurant closure costs Other

January 3, 2012

January 2, 2011

Successor Successor

6,794,651 4,982,813 2,892,692 1,933,810 2,131,949 3,510,703

7,884,745 5,059,710 3,123,201 2,661,964 2,154,552 3,866,016

S 22,246,618 $ 24,750,188

January 3, January 2, 2012 2011

Successor Successor

$ 7,421,000 $ 6,704,000 1,879,133 529,129

797,674 774,533 1,239,059 1,185,572

$ 11,336,866 $ 9,193,234

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Notes to Consolidated Financial Statements (continued)

14. Stock-Based Compensation

During Fiscal 2011 (Successor), a stock-based payment plan under Del Taco Holdings was finalized under which 499,515 shares of new common stock, representing approximately 10% on a fully diluted basis, were reserved for a management stock-based compensation program of which 459,500 restricted stock units (RSUs) were issued to employees of the Company in May 2011 with a fair value of $25.00 per RSU. The Company esfimates fair value by obtaining periodic third party valuations of Del Taco Holdings' common stock. The Company records stock-based compensation expense as the RSUs vest using an accelerated graded vesting schedule. The RSUs vest over five years starting from the May 18, 2010 Restructuring and, accordingly, 20% of the RSUs vested on May 18, 2011. The following is a summary of the nonvested RSUs as of January 3, 2012 (Successor), and changes during Fiscal 2011 (Successor):

Weighted-Average

Grant-Date Restricted Stock Unit Activity RSUs Fair Value

Nonvested at January 2, 2011 (Successor) - $25.00 Granted 459,500 $25.00 Vested (91,900) $25.00 Forfeited (14,800) $25.00 Settled (1,100) $25.00 Nonvested at January 3,2012 (Successor) 351,700 $25.00

In September 2011, a member of the Board of Directors of Del Taco Holdings purchased 10,000 shares of Del Taco Holdings common stock for $25.00 per share and was granted 20,000 options to purchase common stock with an exercise price of $25.00 per share which vest over three years. The Company records stock-based compensation as the options vest using an accelerated graded vesting schedule. The grant date fair value of the options was calculated using a Black-Scholes valuation model. The assumptions used to value this stock option grant were as follows:

Expected volafility 43.91% Expected dividends 0.00% Expected term (in years) 5.66 Risk-free rate 1.03% Grant-date fair value of common stock $25.00

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Notes to Consolidated Financial Statements (continued)

14. Stock-Based Compensation (continued)

The grant-date fair value of the options granted in Fiscal 2011 (Successor) was $10.40 per option and there were no vested options as of January 3, 2012 (Successor).

Since there are no operations or employees at the SAG Brands or Del Taco Holdings level, the stock-based compensation is allocated to the Company. All share-based payments to employees, including grants of employee stock options, are recognized in the consolidated statements of operations based upon their fair values. The Company recorded $5.3 million, zero, $0.04 million, and $0.1 million, respectively, of stock-based compensation expense during Fiscal 2011 (Successor), the 2010 Successor Stub Period, the 2010 Predecessor Stub Period, and Fiscal 2009 (Predecessor), for share-based payments (stock options and non-vested stock granted at SAG Brands and restricted stock units granted at Del Taco Holdings) within general and administrative expenses, except for Fiscal 2011 (Successor) where it has been presented separately, in the consolidated statements of operations. The total income tax benefit recognized in the statement of operations for stock-based compensation arrangements was $2.1 million for fiscal 2011 (Successor).

As of January 3, 2012 (Successor), there was $6.1 million of unrecognized compensation cost related to nonvested stock-based compensation arrangements which is expected to be recognized through May 2015.

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Notes to Consolidated Financial Statements (continued)

15. Income Taxes

The components of the provision (benefit) for income taxes are as follows:

53 Weeks 32 Weeks 20 Weeks 52 Weeks Ended Ended Ended Ended

January 3, January 2, May 18, January 3, 2012 2011 2010 2010

Successor Successor Predecessor Predecessor Current:

Federal S U46 $ $ (1,062,816) $ (654,588)

state 88,847 67,844 (134,276) (390,678) 90,193 67,844 (1,197,092) (1,045,266)

Deferred: Federal (548,162) - 38,684 (1,433,957) State 1,611,667 5,076,965 (202,262)

1,063,505 5,115,649 (1,636,219) Income tax provision (benefit)

from continuing operations $ 1,153,698 $ 67,844 $ 3,918,557 $ (2,681,485)

Income tax benefit from discontinued operations $ $ $ (730,490) $ (2,406,060)

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Notes to Consolidated Financial Statements (continued)

15. Income Taxes (continued)

The effective tax rates for continuing operations for Fiscal 2011 (Successor), the 2010 Successor Stub Period, the 2010 Predecessor Stub Period, and Fiscal 2009 (Predecessor), were 46.2%, (1.1%), (281.2%), and 7.5%, respectively. The difference between these effective rates and the statutory federal income tax rate for continuing operations is composed of the following items:

53 Weeks 32 Weeks 20 Weeks 52 Weeks Ended Ended Ended Ended

January 3, January 2, May 18, January 3, 2012 2011 2010 2010

Successor Successor Predecessor Predecessor Federal income taxes based on the

statutory tax rate $ 873,389 3 S (2,248,413) $ (487,724) $ (12,600,436) State and local income taxes, net

of federal tax benefit (156,076) 47,359 162,269 (910,829) Targeted job credits (368,458) (227,349) (124,607) (254,130) Warrant liability (2,142,186) 2,029,538 - -Interest rate swap - (44,331) -Attribute reduction (211,694) - 25,951,018 -Transaction costs 172,587 - 1,676,545 -Change in state tax rate

apportionment factor 809,900 - 1,376,529 -Change in valuation allowances 2,588,508 493,662 (24,793,018) 10,529,639 Change in tax reserve 32,097 (45,232) 12,613 (42,836) Permanent tax differences and

other (444,369) 18,279 189,263 597,107 Income tax provision (benefit) S 1,153,698 ! E 67,844 $ 3,918,557 $ (2,681,485)

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Notes to Consolidated Financial Statements (continued)

15. Income Taxes (continued)

Significant components of the Company's deferred tax assets and liabilities are as follows;

Deferred tax assets: Straight-line rent Accrued insurance Reserve for restructuring and closed stores Net operating loss carryforwards and state tax credits Deferred income Stock-based compensation Other, net

Deferred tax assets Less valuation allowance Net deferred tax assets

Deferred tax liabilities: Property, equipment, and intangibles Investment in subsidiary Prepaid expenses

Deferred tax liabilities Net deferred tax liabilities

The balance sheet classification of the net deferred tax liabilities is as follows:

January 3, January 2, 2012 2011

Successor Successor

$ 750,946 $ 199,657 4,844,852 4,555,277

441,926 441,345 3,124,155 1,995,149 2,509,215 2,456,332 2,092,807 — 1,676,698 1,833,483

15,440,599 11,481,242 (6,805,962) (4,150,511) 8,634,637 7,330,731

63,160,751 61,641,668 3,685,354 2,670,720 3,019,710 3,186,016

69,865,815 67,498,404 $(61,231,178) $(60,167,673)

ifies is as follows:

January 3, January 2, 2012 2011

Successor Successor

Current deferred tax liabilities Noncurrent deferred tax liabilities Total net deferred tax liabilities

$ (380,729) (60,850,449)

$ (407,023) (59,760,650)

$(61,231,178) $(60,167,673)

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Notes to Consolidated Financial Statements (continued)

15. Income Taxes (continued)

As a result of the Merger and Restructuring that occurred on May 18, 2010, the Company realized $139.9 million of cancellation of debt (COD) income for income tax purposes. The Internal Revenue Code (IRC) permits the Company to exclude from taxable income the COD income to the extent the Company was deemed insolvent. The amount of excludable COD income is calculated after taxable income has been determined for the tax year in which the COD event occurred. The Company has determined that $127.7 million of COD income is excludable from tax. However, the IRC requires that the Company's existing tax attributes be reduced to the extent of excludable COD income. The Company accounted for the tax attribute reduction as of May 18, 2010. This resulted in the Company reducing its federal net operating losses by $41.9 million, state net operafing losses by $85.6 million, federal tax credits by $4.2 million, federal basis in subsidiary stock by $103.2 million, state basis in subsidiary stock by $126.4 million, federal basis in other tax assets by $1.1 million, and state basis in other tax assets by $1.4 million. Net deferred tax assets decreased by $26.0 million and the valuafion allowance decreased by $23.3 million. As a result of the Merger, federal and state deferred tax liabilities of $2.7 million were established for the respective differences between the book and tax basis of Kerry Foods. Purchase accounting adjustments increased the Company's total net deferred tax liabilities by $22.2 million.

The Company maintains deferred tax liabilities related to trademarks and other indefinite lived assets that are not netted against the deferred tax assets as reversal of the taxable temporary difference cannot serve as a source for realization of the deferred tax assets, because the deferred tax liability will not reverse until some indefinite future period when the assets are either sold or written down due to an impairment. As of the end of Fiscal 2011 (Successor) and Fiscal 2010 (Successor), a valuation allowance of $6.8 million and $4.2 million, respecfively, has been provided for certain deferred tax assets that management believes may not be realized.

State net operating loss carryforwards at the end of Fiscal 2011 (Successor) totaled $33.7 million and begin to expire in 2032. State tax credit carryforwards at the end of Fiscal 2011 (Successor) totaled $0.2 million and do not expire. As of the end of Fiscal 2011 (Successor), federal net operating loss carryforwards totaled $0.6 million and begin to expire in 2029. Federal tax credit carryforwards at the end of Fiscal 2011 (Successor) totaled $0.6 million and do not expire.

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Notes to Consolidated Financial Statements (continued)

15. Income Taxes (continued)

During Fiscal 2009 (Predecessor), the Company recorded a catch-up adjustment to correct the valuation allowance recorded in Fiscal 2008 (Predecessor). The adjustment was made to properly account for state net operating loss carry forwards and it reduced the valuation allowance and increased benefits for income taxes by approximately $2.9 million. The adjustment was a correction of an error and not a change in accounting principle. Management concluded that the adjustment related to the 2008 valuation allowance was not material to the 2009 financial statements.

As of the beginning of Fiscal 2009 (Predecessor), the Company adopted the provisions of ASC 740, related to accounting for uncertainty in income taxes. ASC 740 clarifies the accounting for uncertainty in income taxes recognized in financial statements and requires the impact of a tax position to be recognized in the financial statements if that position is more likely than not of being sustained by the taxing authority. As a result of adopting ASC 740, the Company recognized a net increase of $0.1 million to the Fiscal 2008 (Predecessor) opening balance of member's equity (or reduction of member's deficit). The Company recognizes interest and penalties related to uncertain tax positions in income tax expense. As of the end of Fiscal 2011 (Successor) and Fiscal 2010 (Successor), accrued interest and penalties related to uncertain tax positions totaled $0.4 million and $0.3 million, respectively. The Company does not expect any significant increases or decreases within the next twelve months to its unrecognized tax benefits.

The Company is subject to U.S. and state income taxes. The Company is no longer subject to federal and state income tax examinations for years before 2005 and 2007, respectively. The Company is currently under federal examination for Fiscal 2008 (Predecessor) and has extended the statute for Fiscal 2007 (Predecessor) and Fiscal 2006 (Predecessor).

The Company received net tax refunds of $0.1 million during Fiscal 2011 (Successor), $1.1 million during the 2010 Successor Stub Period, zero during the 2010 Predecessor Stub Period, and $4.2 million during Fiscal 2009 (Predecessor).

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Notes to Consolidated Financial Statements (continued)

16. Leases

The Company has non-cancelable lease agreements for certain restaurant land and buildings under terms ranging up to 35 years, with one to four options to extend the lease generally for five to ten years per option period, which are classified as either operating or capital leases. Certain leases provide for contingent rentals based on percentages of net sales or have other provisions obligating the Company to pay related property taxes and certain other expenses. Certain leases contain fixed and determinable escalation clauses for which the Company recognizes rental expense under these leases on the straight-line basis over the lease terms, which includes the period of time from when the Company takes possession of the leased space until the store opening date, and the cumulative expense recognized on the straight-line basis in excess of the cumulative payments is included in other noncurrent liabilities. As of the end of Fiscal 2011 (Successor) and Fiscal 2010 (Successor), deferred rent liability was $1.9 million and $0.5 million, respectively. Additionally, the Company subleases certain buildings and equipment to franchisees, licensees, and other nonrelated third parties, which are classified as direct financing leases and/or operating leases. Direct financing leases are presented on a net present value basis within other assets on the consolidated balance sheets with interest income being recognized over the lease term to provide a constant rate of return.

Total rent expense for Del Taco for all non-cancelable operating leases and subleases is included in occupancy and other expenses in the consolidated statements of operations, and is comprised of the following:

53 Weeks 32 Weeks 20 Weeks 52 Weeks Ended Ended Ended Ended

January 3, December 28, May 18, January 3, 2012 2010 2010 2010

Successor Successor Predecessor Predecessor

Minimum rentals $ 20,193,839 $ 11,906,179 ; $ 7,324,736 I S 18,621,988 Leasehold interest amortization (265,140) 153,511 (49,735) 6,082 Straight-line rent 755,675 430,692 152,964 453,337

Contingent rent 4,175,801 2,801,228 1,686,452 4,590,382 Sublease rent (1,897,924) (1,120,863) (706,790) (2,005,829)

$ 22,962^52 $ 14,170,747 ; $ 8,407,627 ; $ 21,665,960

Sublease rental income includes contingent rentals based on sales totaling $0.5 million, $0.3 million, $0.2 million, and $0.6 million during each of Fiscal 2011 (Successor), the 2010 Successor Stub Period, the 2010 Predecessor Stub Period, and Fiscal 2009 (Predecessor), respectively. As of January 3, 2012, the Company is obligated under various capital leases having interest rates that average approximately 12%.

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Notes to Consolidated Financial Statements (continued)

16. Leases (continued)

Minimum rental commitments and sublease minimum rental receipts at the end of Fiscal 2011 (Successor), under capital and operating leases having an initial non-cancelable term of one year or more are shown in the following table:

Rental Payments Rental Receipts Capital Lease

and Sale Direct Leaseback Operating Financing Sale Leaseback Operating Net Lease Obligations Leases Subleases Obligations Subleases Commitments

2012 $ 3,482,339 $ 21,230,861 $ (54,511) $ (81,900) ; S (1,261.727) $ 23,315.062 2013 3.347,193 19,708,137 (42,842) (81,900) (1,085,574) 21,845,014 2014 3,202,389 17,037,802 (38,416) (81,900) (881,343) 19,238,532 2015 2.981,217 15,264,374 (15,804) (83,265) (759,703) 17,386,819 2016 2,694,670 14,336,925 (90,090) (735,751) 16,205,755 Thereafter 15,283,481 105,683,775 - (345,345) (8,362.285) 112,259,627 Total minimum lease

payments 30,991,289 $193,261,875 (151,573) $ (764,400) ; £ (13,086,383) $210,250,809 Imputed interest (12,069.389) Present value of payments $ 18,921,900

25.518 $ (126,055)

The Company entered into a sale and leaseback transaction in the 2010 Successor Stub Period. This transaction did not qualify for sales leaseback accounting because of the Company's deemed continuing involvement with the buyer-lessor due to guarantees of an additional tenant's rental payments, which results in the transaction being recorded under the financing method. Under the financing method, the assets remain on the consolidated balance sheet and the proceeds from the transactions are recorded as a financing liability. A portion of lease payments are applied as payments of deemed principal and imputed interest. The future minimum lease payments and future subleases rental receipts for the sale leaseback obligation for each of the next five years and thereafter are included in the above table.

The current and noncurrent present value of the direct financing sublease payments are recorded within accounts receivable and other assets, respectively.

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Notes to Consolidated Financial Statements (continued)

17. Commitments and Contingencies

The primary claims in the Company's business are workers' compensation and general liabilities. These insurance programs are self-insured or high deductible programs with excess coverage that management believes is sufficient to adequately protect the Company. In the opinion of management, adequate provision has been made for all incurred claims up to the self-insured or high deductible limits, including provision for estimated claims incurred but not reported. Because of the uncertainty of the ultimate resolution of outstanding claims, as well as the uncertainty regarding claims incurred but not reported, it is possible that management's provision for these losses could change materially. However, no estimate can currently be made of the range of additional losses.

Severance and Executive Employment Agreements

The Company has Severance Agreements and Executive Employment Agreements with certain key officers of the Company, which provided for payment of one year base salary, bonus incentive plan payments and certain benefits, in the event that the officers are terminated without cause. The Company's total contingent liability with respect to the aforementioned agreements is $2.2 million at the end of Fiscal 2011 (Successor). The Company's policy for officers not party to any agreement is to provide severance benefits of up to twelve months' salary for such officers in the event they are terminated without cause.

Leasing Activities

The Company has subleased its leasehold interest with respect to 15 properties to other third parties where the Company remains primarily liable to the landlord for the performance of all obligations in the event that the sub-lessee does not perform its obligations under the lease. As a result of the sublease arrangements, future minimum rental commitments under operating leases will be offset by sublease amounts to be paid by the sub-lessee. The total of minimum sublease amounts to be received in the future under non-cancelable subleases is $14.0 million as of the end of Fiscal 2011 (Successor) (see Note 16).

The Company has also assigned its leasehold interest with respect to one property to another third party where the Company remains secondarily liable to the landlord for the performance of all obligations in the event that the assignee does not perfonn its obligations under the lease. The Company did not incur any expenses under this arrangement for any of the periods presented.

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Notes to Consolidated Financial Statements (continued)

17. Commitments and Contingencies (continued)

Estimated obligations under such arrangement as of the end of Fiscal 2011 (Successor) are shown in the following table:

2012 $ 69,252 2013 69,252 2014 57,299 Total $ 195,803

Litigation

On or about September 1, 2010, Del Taco received a draft complaint from a franchisee alleging that Del Taco had breached its franchise agreements. This franchisee had previously filed for Chapter 11 bankruptcy protection in December 2009 and currently operates two Del Taco restaurants. In February 2011, Del Taco entered into a Settlement Agreement with this franchisee to settle the complaint in exchange for a fixed payment to be paid during 2011, plus a contingent payment that may be required depending upon the amount of net proceeds the franchisee may obtain in connection with a potential transfer or sale of one or both of the two restaurants. In any event, pursuant to the Settlement Agreement, both restaurants must be transferred or closed no later than June 30, 2011. The Bankruptcy Court approved the Settlement Agreement on March 16, 2011 and the fixed payment, which did not have a material impact on the Company's consolidated financial statements, was recorded within general and administrative expense during the 2010 Successor Stub Period and paid during Fiscal 2011 (Successor). The contingent payment, which was not accounted for during the 2010 Successor Stub Period due to uncertainty regarding the amount, was not required to be made in Fiscal 2011 (Successor) and the Company has no future obligation in this regard as the restaurants were permanently closed.

In November 2009, a former Del Taco employee filed a threatened class action alleging that Del Taco has not appropriately provided meal and rest breaks to its California hourly employees. In December 2010, plaintiffs counsel decided to remove the original class representative and replaced him with two new class representatives. During January 2012, the trial court denied the Plaintiffs motion for class certification and the Plaintiff has appealed the ruling. Del Taco will continue to assert all of its defenses to this threatened class action and the individual claims. Del Taco has several defenses to the action that it believes should prevent the certification of the class, as well as the potential assessment of any damages either on a class or individual basis. Therefore, Del Taco has not recorded any amount for the claim as of the end of Fiscal 2011 (Successor). In addition, the likelihood of loss has been judged to be reasonably possible, but a range of loss cannot be reasonably estimated.

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Notes to Consolidated Financial Statements (continued)

17. Commitments and Contingencies (continued)

From time to time, Del Taco has defended lawsuits alleging that some of its restaurants do not comply with the Americans with Disabilities Act of 1990. Del Taco has historically defended against those lawsuits vigorously. Although no such lawsuits were pending as of the end of Fiscal 2011 (Successor) or Fiscal 2010 (Successor), the settlement of future similar lawsuits could involve required modifications to Del Taco's restaurants that require capital expenditures.

The Company and its subsidiaries are parties to other legal proceedings incidental to their businesses. In the opinion of management, based upon information currently available, the ultimate liability with respect to those other actions will not have a material effect on the operating results or the financial position of the Company.

18. Retirement Plans

Effective January I, 2008, the Del Taco and Captain D's 401(k) plans were merged into a combined Sagittarius Restaurants 401(k) Plan (the Sagittarius Plan). Effective May 18, 2010, the Sagittarius Plan was amended to change its name to the Del Taco Savings Plan (the Del Taco Savings Plan) and to limit participating employees to those who are employed by Del Taco. The Sagittarius Plan employees who were employed by Captain D's were given the option to take a lump-sum distribution, rollover their account to another tax deferred account or leave their account in the Del Taco Savings Plan. The Sagittarius Plan and the Del Taco Savings Plan covered all employees who meet certain age and minimum service hour requirements and provided for matching contributions totaling $0.1 million, $0.1 million, $0.02 million, and $0.1 million during each of Fiscal 2011 (Successor), the 2010 Successor Stub Period, the 2010 Predecessor Stub Period, and Fiscal 2009 (Predecessor), respectively.

1201-1326232 57

Ernsts Young LLP

Assurance | Tax | Transactions | Advisory

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Ernst & Young refers to the global organization of member firms of Ernst & Young Giobal Limited, each of which is a separate legal entity. Ernst & Young Global Limited, a UK company limited by guarantee, does not provide services to clients. This Report has been prepared by Ernst & Young LLP, a client serving member firm located in the United States.

THESE FINANCIAL STATEMENTS HAVE BEEN PREPARED WITHOUT AN AUDIT. PROSPECTIVE FRANCHISEES AND AREA REPRESENTATIVES OR SELLERS OF FRANCHISES SHOULD BE ADVISED THAT NO INDEPENDENT CERTIFIED PUBLIC ACCOUNTANT HAS AUDITED THESE FIGURES OR EXPRESSED AN OPINION WITH REGARD TO THEIR CONTENT OR FORM.

FDD 5/11 AMENDED 6/1 ldZL2

Sagittarius Restaurants LLC Consolidated Condensed Balance Sheets

Assets

March 27, 2012

(Unaudited)

January 3, 2012

Current assets: Cash and cash equivalents Accounts receivable, net Inventories

Prepaid expenses and other current assets Total cun^ent assets

9,769,725 1,128,620 2,113,787 3,921,871

5,236,264 2.450,278 2,151,793 3,224,218

16,934,003 13,062,553

Property and equipment Less accumulated depreciation and amortization

Net property and equipment

109,530,046 (28,467,394)

81,062,652

104,858,967 (25,436,129) 79,422,838

Deferred charges Goodwill Trademarks Intangible assets, net Other assets

2,972,042 280,474,964 144,000,000 18,556,705 2,703,177

3,208,129 280,474,964 144,000,000

19,154,212

2,639,755

Total assets 1 546,703,543 $ 541,962,451

Liabilities and member's equity

Current liabilities: Accounts payable Other accnjed liabilities

Current installments of debt, capital lease obligations and deemed landlord financing liabilities

Deferred income taxes Total current liabilities

13,631,324 27,405,426

1,550,411 380,729

42,967,890

13,200,652 22,246.618

1,550,411 380,729

37,378,410

Long-term debt, capital lease obligations and deemed landlord financing liabilities, excluding current installments 317,365,772 315,011,029

Deferred income taxes Deferred income Warrant liability Other noncurrent liabilities

60,850,449 6,531,124 9,494,056

10,698,913

404,930,314

60,850,449 6,969,378 9,494,056

11,336,866 403,661,778

Member's equity

Total liabilities and member's equity

98,805,339

$ 546,703,543

100.922,263

$ 541,962,451

Sagittarius Restaurants LLC Consolidated Condensed Statements of Operations

(Unaudited)

Twelve Weeks Ended

March 27, 2012

Twelve Weeks Ended

March 27, 2011

Revenues: Restaurant sales Franchise fees

76,359.391 2,773.633

79.133.024

76,764,351 2,587,863

79,352,214

Operating expenses: Food and packaging Restaurant labor Occupancy and other

General and administrative Stock-based compensation Restaurant closure charges, net Loss on disposal of assets Operating income

22,565,760 22,216,767 21,540.074

66,322,601

6,165,654 681,019 59,244 63,298

5,841,208

21,930,175 22,280,769 20,731.464

64,942,408

5,866,910

22,852

8,520,044

Interest expense Other income Restructuring expense

Loss before income taxes

Provision for income taxes

8,675,462 (38,713)

(2,795,541)

11,167

8,623,840 (23,236) 275,356

(355,917)

396,387

Net loss $ (2,806,708) $ (752,304)

Sagittarius Restaurants LLC Consolidated Condensed Statements of Cash Flows

(Unaudited)

Operating activities Net loss Adjustments to reconcile net loss to net cash

provided by operating activities: Depreciation and amortization Amortization of leasehold interests Amortization of deferred charges and other non-cash charges Subordinated note interest paid-in-kind Loss on disposal of assets Stock-based compensation Restructuring expense Changes in operating assets and liabilities

Net cash provided by operating activities

Investing activities Purchases of property and equipment Purchases of other assets

Net cash used in investing activities

Financing activities

Payments on long-term debt, capital leases and deemed landlord financing liabilities

Net cash used in financing activities

Twelve Weeks Ended

March 27, 2012

$ (2,806,708)

Increase in cash and cash equivalents Cash and cash equivalents at beginning of period

Cash and cash equivalents at end of period

3,786,678 208,449 470,697

5,534,661 63,298

681,019

5,175,286

13,113,380

(4,998,685) (236,473)

(5,235,158)

(3,344,761)

(3,344,761)

4,533,461 5,236,264

Weeks Ended March 27,

2011

$ (752.304)

3,827,846

124.562

470,664

4,930,229

275,356

3.292,832

$ 9,769,725

12.169,185

(3,043,494)

(170,243)

(3,213,737)

(5,314,592)

(5,314,592)

3,640,857

8.532,229

"$ 12.173,086

EXHIBIT C

GUARANTEE AGREEMENT OF SAGITTARIUS RESTAURANTS LLC

FDD 5/11 AMENDED 6/1 \Atl2 W49790 -{^n-DOC

GUARANTEE OF PERFORMANCE

For value received, Sagittarius Restaurants LLC (the "Guarantor"), located at 25521 Commercentre Drive, Lake Forest, California 92630, absolutely and unconditionally guarantees to assume the duties and obligations of its subsidiary, Del Taco LLC, located at 25521 Commercentre Drive, Lake Forest, California 92630 (the "Franchisor"), under its franchise registration in each state where the franchise is registered, and under its Franchise Agreement identified in its 2012 Franchise Disclosure Document, as it may be amended, and as that Franchise Agreement may be entered into with franchisees and amended, modified or extended from time to time. This guarantee continues until all such obligations of the Franchisor under its franchise registrations and the. Franchise Agreements are satisfied or until the liability of Franchisor to its fi:anchisees under the Franchise Agreements has been completely discharged, whichever first occurs. The Guarantor is not discharged from liability if a claim by a fi:anchisee against the Franchisor remains outstanding. Notice of acceptance is waived. The Guarantor does not waive receipt of notice of default on the part of the Franchisor. This guarantee is binding on the Guarantor and on its successors and assigns.

The Guarantor signs this guarantee on the 25th day of April, 2012.

GUARANTOR:

SAGITTAjaUS RESTAURANTS LLC

By:}:

Name: Steven L. Brake

Title: Chief Financial Officer

W-DT - Guarantee of Perfbmmace {Sagittarius Restauniiils)(50167_I)

EXHIBIT D

MULTIPLE DEVELOPMENT AGREEMENT

FDD 5/11 AMENDED 6/11JZU W-49790 mrl2S>OC

MULTIPLE DEVELOPMENT AGREEMENT

Del Taco LLC, a California limited liability company ("Del Taco"), and the undersigned (the "Developer") enter into this Multiple Development Agreement (this "Agreement") as of the day of , -

RECITALS

A. Del Taco engages in the business of owning, operating, and granting franchises to others to own and operate Del Taco restaurants for the sale of food items featuring Mexican-American dishes. Del Taco has developed a system with respect to its operations and management that includes (without limitation) the following items:

(1) Site selection and layout criteria;

(2) Designs for various types of standardized Del Taco buildings;

(3) Signs, graphics, names, logos and other decorative features;

(4) Recipes and menus;

(5) Furniture, fixtures and equipment specifications;

(6) Marketing and advertising materials;

(7) Operating procedures, including operating and management manuals;

(8) Training procedures and materials;

(9) Specifications for food products and supplies; and

(10) Other materials and procedures that Del Taco may develop and use in the development, construction and operation of Del Taco restaurants.

All of the above, as Del Taco may change or modify from time to time, shall constitute the "Del Taco System."

B. Del Taco has established an excellent reputation and goodwill with the public with respect to the quality of products and services available at Del Taco restaurants, which reputation and goodwill have been and continue to be of major benefit to Del Taco and its franchisees.

C. The Developer recognizes the benefits from being identified with and licensed by Del Taco and being able to utilize the Del Taco System.

D. The Developer desires to obtain the right to develop Del Taco restaurants in the geographic area referred to in this Agreement, all upon the terms and conditions set forth in this Agreement.

Now, therefore, in consideration of the foregoing and the covenants set forth below, the parties to this Agreement agree as follows:

Multiple Development Agreemenl (04 i \ I\4HD Form 1 W-DT - 3&H-2fll2 Final Development Agmt - Amended 6 11 llA^iJi2.D0C

1. Definitions. As used in this Agreement, the following words and phrases shall have the meanings indicated:

(a) "Affiliate" shall mean (1) any person controlling, controlled by or under common control with the Developer (as defined by the Securities Act of 1933, as amended, and the rules and regulations promulgated under that act), (2) any officer, director or more than 10% owner of the Developer or (3) any legal entity in which the Developer or any officer, director or more than 10% owner of the Developer has an interest of 10% or more.

(b) "Del Taco System" shall have the meaning defined in Recital A of this Agreement.

(c) "Development Area" shall mean, subject to Del Taco's retention of rights pursuant to the terms and conditions of Section 13 of this Agreement, that geographic area, if any, described on Exhibit A to this Agreement.

(d) "Development Fee" shall mean the fee that the Developer pays to Del Taco in consideration of the Development Rights granted in this Agreement as set forth in Section 5 of this Agreement.

(e) "Development Rights" shall mean the rights to develop Restaurants in accordance with this Agreement.

(f) "Development Schedule" shall mean the schedule for the submission of Site Approval Packages and the development of Restaurants as set forth on Exhibit B to this Agreement.

(g) "Restaurant" or "Restaurants" shall mean one or more Del Taco restaurants.

(h) "Site Approval Package" shall mean the information and forms required by Section 7 of this Agreement.

(i) "Altemafive Point(s) of Distribufion" shall mean those locations as further defined in Section 13(c) of this Agreement.

2. Grant of Development Rights. Del Taco hereby grants to the Developer, subject to the terms and conditions of this Agreement and as long as the Developer complies with this Agreement and all other agreements with Del Taco, the exclusive Development Rights for Restaurants identified on Exhibit B. The Developer shall have the exclusive rights to develop Restaurants in the Development Area for the term of this Agreement. The Developer shall submit Site Approval Packages and shall develop and open the total number of Restaurants set forth on and in accordance with the Development Schedule. This Agreement is not a franchise agreement and does not grant the Developer any right to use the Del Taco System or any part of the Del Taco System. The Developer shall have no right under this Agreement to license others to use the Del Taco System or any part of this Del Taco System.

3. Term. This Agreement and all Development Rights shall expire immediately upon the required opening date for the last Restaurant set forth on the Development Schedule or the actual opening date for the last Restaurant, whichever first occurs, unless sooner terminated in accordance with the terms and conditions of this Agreement.

Multiple Development Agreement (04 11 11Form 2 W-50169 ^2.DOC

4. Time of Essence. Time is of the essence of this Agreement.

5. Fees. The Developer shall pay to Del Taco the following fees:

(a) In consideration of the Development Rights granted in this Agreement, the Developer shall pay to Del Taco a fully non-refundable Development Fee of $35,000 for the first Restaurant scheduled for opening and $10,000 for each additional Restaurant scheduled for opening, payable upon execution and delivery by the Developer of this Agreement. Del Taco shall earn the Development Fee upon the execution of this Agreement and shall not have any obligation to refund any portion of the Development Fee.

(b) Upon the execution by the Developer of a Franchise Agreement, Del Taco shall credit from the Development Fee $35,000 for the first Restaurant scheduled for opening and $10,000 for each subsequent Restaurant scheduled for opening towards the initial franchise fee for each of those Restaurants. The Developer shall pay the balance of the initial franchise fee for the second and each subsequent Restaurant scheduled for opening. The Developer acknowledges that, once it has executed a Franchise Agreement for a Restaurant, the Developer will not have the right to a refund of any portion of the foregoing fees.

(c) Any amount owing from the Developer to Del Taco pursuant to this Section 5, if not paid when due, shall bear interest at the rate of seven percentage points in excess of the prime rate per annum, subject to any applicable limits imposed by California law, after the due date until paid.

6. Services by Del Taco. Del Taco shall provide to the Developer one copy of the following:

(a) Del Taco's standard site selection criteria as then in effect;

(b) Sample site plans and layouts; and

(c) A standard construction package (which Del Taco may modify from time to time), including (without limitation) plans and specifications, with the understanding that the Developer shall adapt the plans and specifications, at the Developer's expense, for use at any approved site.

7. Site Selection. The Developer shall complete and submit the forms and information that Del Taco may require from time to time in connection with any proposed site for a Del Taco restaurant. In addition, the Developer shall submit financial information relating to the Developer's then current financial condition and the expected development costs and projected results of operation of the Restaurant proposed for development on the proposed site as required by Del Taco from time to time. Within 5045 days af er its receipt of all of the required information, Del Taco shall approve or reject any proposed site by written notice to the Developer. Del Taco shall have the right to refuse to approval any site if (i) the site does not conform with general site selection criteria we establish from time to time, including, without limitation, demographic characteristics, traffic pattems, parking accommodations, character of the neighborhood, competition from other businesses, or any reasonable conditions as determined by Del Taco in its sole discretion; (ii) the Developer fails to meet Del Taco's then current financial and operational requirements for

Multiple Development Agreement (04' 11 1 Mi l l ) Form 3 W-50169 6T2.DOC

developers, franchisees and/or the development of Restaurant; or (iii) if the Developer is in default under this Agreement or any other agreement with Del Taco. Del Taco's approval of any site shall not constitute any representation, warranty or guarantee by Del Taco that the site will consfitute a successful location for a Restaurant. Del Taco shall have the right to refuse to approve any site within one mile of a Restaurant located or proposed for development outside the Development Area, if any. Only a duly-authorized officer of Del Taco has the authority to approve any proposed site, which approval must take place in writing. Any other approvals, whether oral or written, shall have no force or effect. In connection with the Developer's acquisition of the real estate for any Restaurant, the Developer shall submit a draft of any lease or sublease agreement for the real estate to Del Taco for its review and approval prior to the Developer's execution of any final lease or sublease agreement. The lease or sublease agreement shall include the following provisions:

(a) The landlord shall agree to send to Del Taco a copy of any notice of default;

(b) In the event of default by the Developer, Del Taco shall have the right, but not the obligation, to cure the default and assume the rights of the Developer under the lease;

(c) The lease shall restrict the use of the real estate to a Del Taco restaurant for as long as the Franchise Agreement remains in effect;

(d) The landlord shall consent to the use by the Developer of Del Taco's signage and proprietary marks;

(e) The furniture, fixtures and equipment shall remain the personal property of the Developer (or the Developer's equipment lessor);

(f) The Developer shall have the unrestricted right to assign the lease to Del Taco or another franchisee of Del Taco;

(g) The Developer shall have the right to remodel every five years, pursuant to the terms of the Franchise Agreement;

(h) The Developer shall have the right to de-identity the premises upon the termination or expiration of the Franchise Agreement and Del Taco shall have the right to enter the premises and de-identity the premises if the Developer fails to do that;

(i) The Landlord shall agree not to operate or allow the operation of any land owned or controlled by the landlord within a one-mile radius of the premises for a competing Mexican quick service restaurant;

(j) The lease shall have a term at least equal to the term of the Franchise Agreement; and

(k) The lease shall provide that no amendment of any of the foregoing provisions may take place without the written consent of Del Taco.

Del Taco mav. at its option, require Developer and its landlord to execute a lease addendum, incorporating the above nrovisions^ in such form as Del Taco may designate. Del

Multiple Development Agreement (04 11-1 li(12) Form 4 W-50t69 6T2.D0C

Taco, in its sole and absolute discrefion, may waive any one or more of the foregoing requirements, and the Developer shall not have any rights or claims against Del Taco if Del Taco waives or fails to insist on the compliance with any of the foregoing requirements.

8. Franchise Agreement. Subject to Del Taco's written approval of a proposed site and the construction plans for the Restaurant proposed for development at the site, Del Taco shall send the Developer a Franchise Agreement for the proposed site using the then current form of Franchise Agreement being offered to new Del Taco franchisees. Within 10 days (or any longer time required by law) after the receipt of the Franchise Agreement from Del Taco for an approved site, the Developer shall execute the Franchise Agreement and retum it to Del Taco, together with all payments then due Del Taco. Promptly upon Del Taco's receipt of the properly-executed Franchise Agreement and all payments then due Del Taco, Del Taco shall execute the same and retum a copy to the Developer. If Del Taco does not receive the properiy-executed Franchise Agreement and all payments than due Del Taco within that 10~day period, Del Taco shall have the right to revoke its approval of the proposed site and, if Del Taco revokes its approval, the Developer shall have not have any right to open a Restaurant on that site.

9. Acquisifion. Development and Construction of Restaurant Site. The Developer shall have sole responsibility for the acquisition (through purchase, lease, sublease or otherwise), development and construction of a Restaurant on the approved site.

10. Pre-Construction Obligations of Developer. The Developer shall not begin construction of any Restaurant unless the following events have taken place:

(a) Del Taco has approved the site, without conditions, in accordance with Section 7 of this Agreement.

(b) The Developer has obtained the right to use the site, either by purchase or lease, and has obtained all necessary permits, govemmental approvals, and other necessary rights to construct, maintain and operate a Restaurant on the approved site.

(c) Del Taco has approved the Developer's Site Approval Package and final site plan, layout and construction plans, with the understanding that Del Taco's approval of a Site Approval Package and any site plan, layout or plans does not constitute any representafion, warranty or guarantee by Del Taco regarding the future success of the site for a Restaurant.

U . Construction Requirements. As soon as the Developer has acquired the right to use the site, obtained all necessary permits and governmental approvals; otherwise obtained the rights to construct, maintain and operate the Restaurant; and entered into a construction contract for the Restaurant, the Developer shall notify Del Taco and shall commence construction of the Restaurant in accordance with the following terms and conditions:

(a) Unless the Developer is remodeling an existing building, the Developer shall construct the Restaurant in accordance with the site plan approved by Del Taco for the Restaurant and with Del Taco's standard construcfion plans, specifications and layouts, subject, however, to any alterations required by any applicable law, regulation or ordinance. Del Taco shall approve or reject any proposed site plan within 15 days after the receipt of the same from the Developer. If the Developer must make any alterations to the site plan approved by Del Taco or to

Multiple Development Agreement (01 11 11 jZ12) Form 5 W-50169 4T3.DOC

any of Del Taco's construcfion plans, specifications or layouts, for any reason, Del Taco must approve those alterations before the Developer begins any work. The Developer acknowledges that Del Taco's approval of any alterations to its standard construction plans, specificafions or layouts does not constitute any representation, warranty or guarantee by Del Taco that the alterations will result in the construction of a successful, operating Restaurant or comply with local building codes or ordinances. The Developer shall pay the cost, including engineering and architectural fees, incurred in obtaining approvals by the appropriate govemmental authorities of the site plan, construction plans, specificafions and layout.

(b) If Developer is remodeling an existing building, Del Taco must approve all remodel plans and specifications before the Developer begins any work.

(c) During the course of construction of the Restaurant, the Developer shall permit authorized personnel of Del Taco to enter the Restaurant at any time during normal business hours, with or without notice, for the purpose of inspecting and examining the construction of the Restaurant to ascertain whether it complies with the terms of this Agreement. The Developer shall cooperate and shall cause its general contractor to cooperate with Del Taco's representatives by rendering any assistance reasonably requested. Upon notice from Del Taco, the Developer, at its sole cost and expense, promptly shall correct any deficiencies detected by an inspecfion.

12. Restrictions on and Obligations of the Developer. The Developer acknowledges and agrees as follows:

(a) This Agreement includes only the right to select sites for the construction of Restaurants and to submit the same to Del Taco for its approval. This Agreement does not include the grant of a license by Del Taco to the Developer of any rights to use the Del Taco System or any part of this Del Taco System or to open or operate any Restaurants within the Development Area. The Developer shall obtain the license to use those additional rights at each Restaurant upon the execution of each Franchise Agreement by both the Developer and Del Taco and by payment of the franchise fee set forth in Section 5 of this Agreement.

(b) The Development Rights granted under this Agreement constitute personal services and the Developer cannot sell, assign, transfer or encumber them, in whole or in part.

(c) The Developer shall have no right to use in its name the name "Del Taco," "Del" or other names used by Del Taco.

(d) The Developer shall indicate clearly the independent ownership of the Developer's business.

(e) The Developer shall indemnify and hold Del Taco harmless from any liability, damage or cost (including reasonable attorneys' fees) as a result of claims, demands or judgments, of any kind or nature, by any person or entity, arising out of, or otherwise connected with, this Agreement, the Development Rights, the acquisition of any restaurant site, or the development or construction of any Restaurant.

Multiple Development Agreement (04 11 114Z12) Form 6 w-50169 6.2.D0C

(f) In connection with any development or construction of any Restaurant under this Agreement, the Developer shall comply with all applicable state, federal and local laws, rules and regulations applicable to its development and construcfion.

(g) Concurrent with the execution of this Agreement, if the Developer is not an individual, each holder of an ownership interest in the Developer shall execute the Personal Guarantee included with this Agreement.

(h) The Developer shall meet with representatives of Del Taco at the Developer's Restaurant or business offices, annually upon Del Taco's reasonable request, to review the Developer's staffing, sales, future development plans, the Developer's qualificafion status for further development, and any other matters Del Taco reasonably may determine to review.

(i) Concurrent with the opening of the first Restaurant under this Agreement, the Developer shall install at its business office, if any, a computer system compatible with and that meets all the same standards as the computer system in each Restaurant, including the installation of any dedicated telephone and power lines and modems required to bring the computer system "on-line" with Del Taco's computer system at its headquarters. Del Taco shall have the right to access the Developer's computer system, as Del Taco decides necessary or appropriate, to retrieve data and information relating to the Restaurants, including (without limitation) daily sales, menu mix, point of sale, bookkeeping, operations and financial information; customer survey results; and inventory information. Should Del Taco develop proprietary software programs, system documentation manuals, and other proprietary materials in connection with the operation of the Restaurants, the Developer shall utilize Del Taco's proprietary software and programs and, upon request by Del Taco, shall pay a software license fee and execute a standard form of software license agreement. The Developer also shall purchase from Del Taco any new or upgraded proprietary software programs, manuals and computer- related materials that Del Taco decides to adopt or upgrade at the prices and upon the terms Del Taco may establish.

13. Retention of Rights. Except as provided in Section 2 of this Agreement, Del Taco shall retain the following rights:

(a) The right to construct and operate other Del Taco restaurants and to use the Del Taco System or any part of the Del Taco System at any location outside the Development Area and to license others to do the same.

(b) The right to develop, use and franchise the rights to any trade names, trademarks, service marks, trade symbols, emblems, signs, slogans, logos or copyrights designated by Del Taco for use with the Del Taco System for use with the same, similar or different franchise systems for the sale of the same, similar or different products or services as those used in connection with the Del Taco System at any location outside the Development Area on any terms and conditions Del Taco may deem advisable and without granting the Developer any rights in them.

(c) The right to develop, construct, operate, merchandise, sell, license and/or franchise others to sell Del Taco foods and other products to the public within

Multiple Development Agreement (04 i+ \ 1JZ12) Form 7 w-50169 ^ZDOC

the Development Area, including the immediate area surrounding any Del Taco restaurant location submitted by Developer to Del Taco for approval, or any Del Taco restaurant established by Developer, irrespective of any boundaries otherwise referenced in this Agreement through restaurant outlets (whether mobile or fixed, permanent or temporary) located on military bases, institutional outlets (including, without limitation, college campuses, hospitals and school lunch programs), fairs, athletic contests or other special events, convenience stores, casinos, airports and larger retail outlets, including (without limitation) Wal-Mart and Home Depot, toll roads, limited access highways, schools, universities, enclosed shopping malls, hotels, industrial or government facilities, amusement or theme park complexes, train stations, bus stations or transportation facilities, and other locations owned or operated by major institutions with sites throughout the country or a particular state (collectively, referred to as "Alternative Points of Distribution") and to use the Del Taco System in connection with those Alternative Points of Distribution.

Del Taco shall notify Developer in writing of Del Taco's or another franchisee's intent to develop one or more Del Taco restaurants at the specific Alternative Point of Distribution within the Development Area. If Developer can demonstrate to Del Taco's satisfaction, within 30 days of Developer's receipt of such notification, that Developer has the ability to enter into an agreement under the same terms and conditions offered to Del Taco or another franchisee, as well as the financial and operational resources available to it for the development of the Del Taco restaurant at the specific Alternative Point of Distribution, then Del Taco shall offer the opportunity to Developer under the same terms and conditions offered to Del Taco or another franchisee.

(d) After the expirafion or eariier termination of this Agreement, to continue to construct and operate other Restaurants and to use the Del Taco System at any location within the Development Area and to license others to do the same.

14. Defaults. The occurrence of any of the following events shall constitute a default under this Agreement:

(a) The Developer fails to submit a complete Site Approval Package by the time set forth in the Development Schedule.

(b) The Developer begins construction on any Restaurant prior to Del Taco's approval of the site and construction plans for the proposed Restaurant.

(c) The Developer fails to open the Restaurants by the time set forth in the Development Schedule.

(d) The Developer uses the Del Taco System or any other names, marks, systems, logos, symbols or rights belonging to Del Taco except pursuant to, and in accordance with, a valid and effective Franchise Agreement.

(e) The Developer or any Affiliate of the Developer has any interest, direct or indirect, in the ownership or operation of any restaurant which offers Mexican food or operates like, competes with, looks like, copies or imitates any Restaurant or uses any part of the Del Taco System other than in accordance with this Agreement.

Multiple Development Agreement (04 11 11 jZ12) Form 8 W-50169 6 T Z D 0 C

(f) The Developer fails to remit to Del Taco any payments required by Section 5 when due.

(g) The Developer begins work upon any Restaurant at any site before satisfying all of the conditions set forth in this Agreement.

(h) The Developer attempts to effect any assignment of its rights under this Agreement.

(i) The Developer makes, or has made, any misrepresentations to Del Taco in connection with obtaining this Agreement or any Franchise Agreement or in acquiring, developing or constructing any Restaurant.

(j) The Developer fails to obtain Del Taco's prior written approval or consent as expressly required by this Agreement.

(k) The Developer defaults in the performance of any other obligation under this Agreement.

(I) The Developer defaults in the performance of any obligation under any Franchise Agreement or other agreement with Del Taco, whether or not terminated as a result of the default.

(m) The Developer or any guarantor of the Developer (1) becomes insolvent by reason of or admits its inability to pay its debts as they mature, (2) is adjudicated a bankrupt, or (3) files or has filed against it a petition in bankruptcy, reorganization or similar proceedings.

(n) A court of competent jurisdiction appoints a receiver, permanent or temporary, of the business, assets or property of the Developer or any guarantor of the Developer.

(o) The Developer or any guarantor of the Developer requests the appointment of a receiver or makes a general assignment for the benefit of creditors.

(p) The Developer suffers a final judgment against it or any guarantor of the Developer in the amount of $10,000 or more that remains unsatisfied or of record for 30 days or longer.

(q) Anyone attaches the bank accounts, property or receivables of the Developer or any guarantor of the Developer.

(r) Anyone executes a levy against the business or property of the Developer or any guarantor of the Developer.

(s) The Developer repeatedly fails on more than two occasions during any 12-month period to comply with one or more requirements of this Agreement or any other agreement with Del Taco, whether or not corrected after notice.

Multiple Development Agreement (04-11 I lAlll) Form w-50169 6r2.DOC

(t) The Developer or any Affiliate of the Developer is convicted of any felony or any other crime involving moral turpitude.

15. Termination. Upon the occurrence of any event of default, Del Taco, without prejudice to any other rights or remedies contained in this Agreement or provided by law, shall have the following rights and remedies:

(a) With regard to any default involving the non-payment of money, Del Taco may terminate this Agreement if the Developer fails to cure the default within five days (or any longer period required by applicable state law) after Del Taco gives written notice of the default to the Developer.

(b) With regard to any default not involving the non-payment of money or a non-curable default listed below, Del Taco may terminate this Agreement if the Developer fails to cure the default within 30 days (or any longer period required by applicable state law) after Del Taco gives written notice of the default to the Developer.

(c) With regard to any of the defaults other than those listed in paragraphs (a), (f), (k) or (I) of Section 14, Del Taco may terminate this Agreement immediately upon written notice to the Developer, subject to applicable state law.

(d) Upon termination of this Agreement for any reason, and without limiting any rights or remedies available to Del Taco under this Agreement or the law, the Developer shall cease immediately any attempts to select or develop sites on which lo construct Restaurants.

(e) The termination of this Agreement shall not affect the rights of the Developer to operate Restaurants in accordance with the terms of any Franchise Agreement with Del Taco until and unless those agreement terminate or expire.

16. Legal Form of Developer. If the Developer or its successor is a legal entity, the following provisions shall apply:

(a) The articles of incorporation and bylaws, partnership agreement, limited liability company operating agreement, or similar organizational documents (the "Charter Documents") shall limit the purpose of the entity to the development and operation of Del Taco Restaurants and shall prohibit the issuance and transfer of the ownership interests in the Developer in violation of this Agreement. The Developer shall furnish Del Taco, at the time of execution of this Agreement or upon the issuance or transfer of any ownership interests in the Developer, certified copies of its Charter Documents evidencing compliance with the foregoing and an agreement executed by all owners of the Developer, stating that no owner shall sell, assign or transfer, voluntarily or by operation of law, any ownership interests in the Developer to any person or entity other than existing owners, to the extent permitted by this Agreement, without the prior written consent of Del Taco. All ownership interests issued by the Developer shall bear the following legend, which shall appear legibly and conspicuously on each document or certificate evidencing an ownership interest:

Multiple Development Agreement (04 11-114/12) Form 10 w-50169 fc2.D0C

"The transfer of these securities is subject to the terms and conditions of an agreement with Del Taco LLC."

(b) The Developer shall recall any presently issued and outstanding ownership interests and place the foregoing legend on them. The Developer shall place a stop transfer order against the transfer of any ownership interests, except transfers permitted by this Section 16. Each holder of an ownership interest in the Developer shall execute the Personal Guarantee included with this Agreement.

17. Confidentiality and Covenants Not to Compete. The Developer shall comply with the following confidentiality and covenant not to compete provisions:

(a) The Developer and its Affiliates shall not use, in connection with the operation of any restaurant (other than the Restaurant) any part of the Del Taco System or any other names, marks, systems, logos, symbols or foodstuffs provided by Del Taco or proprietary foodstuffs provided by an approved vendor to the Developer or cause or permit any restaurant to offer Mexican food or look like, copy or imitate the Restaurant other than pursuant to an agreement with Del Taco.

(b) The Developer and its Affiliates shall hold the Del Taco System and all parts of the Del Taco System in confidence. The Developer acknowledges that Del Taco has developed the Del Taco System over an extended period of time and at a substantial cost to Del Taco and, if used by other persons, firms or entities, would give those other persons, firms or entities an unfair competitive advantage. The Developer shall not disclose (except to employees or agents that need access to the information in order to construct or operate the Restaurant) or use or permit the use of the Del Taco System, or any part of the Del Taco System, except as authorized by this Agreement.

(c) The Developer and its Affiliates shall treat as and keep confidential the Franchise Operations Manual, any other manuals or materials designated for use with the Del Taco System, and any other information Del Taco may designate from time to time for confidential use with the Del Taco System, as well as all other trade secrets, confidential information, knowledge and know-how concerning the construction or operation of the Restaurant imparted to, or acquired by, the Developer from time to time in connection with this Agreement. The Developer acknowledges the unauthorized use or disclosure of that confidential information and trade secrets will cause incalculable and irreparable injury to Del Taco. The Developer accordingly agrees that it shall not disclose (except to employees or agents that need access to the information in order to construct or operate the Restaurant) or use or permit the use of that information, in whole or in part, or otherwise make the same available to any unauthorized person or source. Any and all information, knowledge and know-how about the Del Taco System; Del Taco's products, services, standards, specifications, systems, procedures and techniques; and any other information or material Del Taco may designate as confidential shall constituted confidential information for the purposes of this Agreement. The Franchise Operations Manual; any other manuals or materials designated for use with the Del Taco System; the knowledge concerning the logic, structure and operation of computer software programs that Del Taco authorizes for use in connection with the operation of the Restaurants; and all confidential information and trade secrets shall remain the sole property of Del Taco, and the Developer shall not acquire any right, title or interest in

Multiple Development Agreement (0111 I \4112) Form 11 W-50169 6:2.D0C

it by virtue of its authorization pursuant to this Agreement to possess and use the same.

(d) The Developer shall cause each person actively involved in the management or operation of the business of the Developer or the operation of the Restaurant, at the time of his or her employment, to enter into a confidentiality agreement in the form required from time to time by Del Taco. The Developer shall prevent any person from using, in connection with the operation of any restaurant, the Del Taco System or from operating any restaurant which offers Mexican food or looks like, copies, competes with, or imitates the Restaurant or any Del Taco restaurant or operates in a manner that seeks to serve the same customers as Del Taco or any franchisee of Del Taco, other than pursuant to an agreement with Del Taco. If the Developer has reason to believe that any person has violated the provisions of the confidentiality agreement or this Section 17, the Developer shall notify Del Taco and shall cooperate with Del Taco to protect Del Taco against infringement or other unlawful use of the Del Taco System, including (without limitation) the prosecution of any lawsuits if deemed necessary or advisable by Del Taco.

(e) The Developer (and if a legal entity, the Developer's owners holding a 10% or greater interest in the Developer), during the term of this Agreement and for a period of two years after the expiration or terminafion of this Agreement, shall not engage in or acquire any direct or indirect interest in any business that uses, duplicates or simulates in any way the Del Taco System or any portion of the Del Taco System. In addition, the Developer (and if a legal entity, the Developer's owners holding a 10% or greater interest in Developer), during the term of this Agreement and for a period of two years after the expiration or termination of this Agreement, shall not engage in any food service business similar to the food service business operated under the Del Taco System within the Protected Area of any Restaurant or within two miles of any other Del Taco restaurant owned and/or operated by Del Taco or any other franchisee or licensee of Del Taco.

(f) The Developer acknowledges that any violafion of this Section 17 shall constitute both a material breach of this Agreement and a tortious interference with Del Taco's rights in its confidential information and trade secrets. The Developer further acknowledges that any violation will cause irreparable and incalculable harm to Del Taco and agrees that Del Taco shall have the right to obtain temporary and permanent injunctions to prevent violations.

18. Arbitration. Del Taco and the Developer shall submit any controversy or claim arising out of or relating to this Agreement, or with respect to a breach of the terms of this Agreement, and any other controversy, claim or dispute between the parties to arbitration in accordance with the following provisions:

(a) Demand to Arbitrate. The claimant shall sent a notice of a demand for arbitration, in writing, to the other party to the dispute. The demand shall state with particularity the nature and grounds of the claim, dispute or controversy and the nature of relief being sought. A claimant shall make a demand for arbitration promptiy after the claim, dispute or other matter in question has arisen; but, in any event, before the applicable statute of limitations would bar the institution of legal or equitable proceedings based on the claim, dispute or other matter in question.

Multiple Development Agreement (04-11-11 jZ12) Form 12 w-50169 6T2.DOC

(b) Appointment of Arbitrators. Within 10 days after the demand to arbitrate, Del Taco and the Developer each shall request the appointment of three neutral arbitrators by the American Arbitration Association, or its successor, and the three arbitrator chosen shall conduct the arbitration. If the failure or refusal of either party to cooperate in the selection of the arbitrators prevents the selection of the arbitrators within 30 days after the demand for arbitration, the failure or refusal shall constitute an irrevocable consent to the arbitrators appointed by the American Arbitration Association. Unless otherwise specifically stated in this Section 18, the appointment of arbitrators take place in accordance with the rules of the American Arbitration Association, or its successor, then in effect. If the American Arbitration Association, or successor, no longer exists, either party may apply to the Orange County Superior Court for the appointment of the arbitrators.

(c) Conduct of Arbitration. Notwithstanding any requirements imposed by law (except to the extent mandatory), the following provisions shall apply to any arbitration conducted under this Section 18:

(1) Power of Chairman. The arbitrators shall select a chairman of the arbitration panel, who shall rule on all procedural matters including (without limitation) the selection of the time and place for the hearing, matters relating to discovery, and the admissibility of evidence.

(2) Response to Demand. Within five days after the appointment of the last arbitrator, the party against whom arbitration is sought shall file with the arbitrators and serve on the other party a statement (i) responding with particularity to the claims set forth in the demand to arbitrate, (ii) setting forth any defensive matters, and (iii) setting forth any claims that the person has against the party instituting the arbitration. The statement required by this provision shall take substantially the same form as required for answers and cross-complaints by the Federal Rules of Civil Procedure. If the other party does not file statement required by this provision in a timely manner, it shall not have the right to assert any defensive matters or any claims against the party instituting the arbitration.

(3) Amendment of Claim. If, after the delivery of the notice of demand for arbitration, either party desires to make any new or different claim, the party shall make the claim made in writing and shall file it with the arbitrators if the chairman, upon good cause shown, determines the other party may file the amended claim. The filing of an amended claim shall not extend the time for the holding of the arbitration hearing or the making of an award.

(4) Time for Arbitration Hearing. The arbitration hearing shall take place no sooner than 60 nor later than 90 days after the appointment of the last arbitrator and the chairman shall give notice of the date, time and place of the hearing to the parties within 10 days after the appointment of the last arbitrator.

Multiple Development Agreement (04 11 1 \ iLl2) Form 13 W-50169 6.2.000

(5) List of Witnesses and Documents. Either party, within 10 days after receipt of the notice of the hearing, shall have the right to demand in writing, served personally or by registered or certified mail, that the other party provide a list of witnesses it intends to call, designating which witnesses it will callas expert witnesses, and a list of documents it intends to introduce at the hearing, provided that the demanding party provides its lists of witnesses and documents at the time of its demand. The demanding party shall serve a copy of those demands and the demanding party's lists on the arbitrators at the time served on the other party. The recipient of the request shall serve on the requesting party personally or by certified mail, within 10 days after receipt of the request, copies of the lists requested and, also, shall serve such lists on the arbitrators at the same time. The party shall make any documents listed available for inspection and copying at reasonable times prior to the hearing. The failure to list a witness or a document shall bar the testimony of an unlisted witness or the introduction of any undesignated document at the hearing.

(6) Record. The arbitrators shall make the necessary arrangements for the taking of a stenographic record whenever requested by a party. The arbitrators shall determine the allocation of the cost of providing that record between the parties.

(7) Attendance at Hearings. Any person who is a party to the arbitration may attend the hearings. The arbitrators otherwise shall have the power to exclude any witness, other than a party or other essential person, during the testimony of any other witness. The arbitrators also shall have the power to exclude the attendance of any other person.

(8) Adjournments. Except for adjournments required by law or caused by to illness or disability of an arbitrator, the arbitrators shall not adjourn, continue or otherwise delay the hearing without the written consent of the parties.

(9) Production of Witnesses and Records. Upon application of a party to the arbitration or upon his or her own determination, the chairman may issue subpoenas for the attendance of witnesses and subpoenas duces tecum for the production of books, records, documents and other evidence. The parties shall serve and may enforce subpoenas in accordance with the provisions of the Federal Rules of Civil Procedure then in effect.

(10) Absence of a Partv. The arbitration may proceed in the absence of any party who, after the notice of the hearing, fails to attend. The arbitrators shall not make an award solely on the default of a party, and the arbitrators shall require the party present to submit evidence required for the making of an award.

(11) Authoritv to Administer Oaths. The chairman may administer oaths.

Multiple Development Agreement (04 1111HH) Form 14 w-50169 6T7.DOC

(12) Evidence. The parties may offer any evidence they desire and shall produce any additional evidence the arbitrators may deem necessary to an understanding and determination of the dispute. The chairman shall judge the relevancy and materiality of the evidence offered and need not conform to the legal rules of evidence. The parties shall present all evidence in the presence of all of the arbitrators and all of the parties, except when a party has failed to appear or has waived his or right to attend.

(13) Evidence bv Affidavit and Filing of Documents. The arbitrators shall receive and consider the evidence of witnesses by affidavit, but shall give it only as much weight as they deem it entitied to after consideration of any objections made to its admission. Each party shall file all documents not filed with the arbitrators at the hearing, but arranged for at the hearing or subsequently by agreement of the parties, shall be filed with the arbitrators. All parties shall have the opportunity to examine those documents.

(14) Discovery. The parties to the arbitration shall have the right to take depositions and to obtain discovery regarding the subject matter of the arbitration and, to that end, to use and exercise all the same rights, remedies and procedures (subject to all the same duties, liabilities and obligations) in the arbitration with respect to the subject matter as provided in the Federal Rules of Civil Procedure then in effect. Notwithstanding the foregoing, a party may take a deposition on 10 days' notice at any time after the delivery of the notice of demand to arbitrate and may require an answer or response to interrogatories or requests for admission within 15 days after their receipt. In connection with any discovery, the chairman shall have the power to enforce the rights, remedies, procedures, duties, liabilities and obligations of discovery by the imposition of the same terms, conditions, consequences, liabilities, sanctions and penalties available in like circumstances in a civil action by a federal court under the provisions of the Federal Rules Civil Procedure, except the power to order the arrest or imprisonment of any person. The chairman may consider, determine and make any orders imposing any terms, conditions, consequences, liabilities, sanctions and penalties, deemed necessary or appropriate at any time or stage of the course of the arbitration, and those orders shall constitute conclusive, final and enforceable arbitration awards on the merits.

(15) Reopening of Hearings. The arbitrators may reopen an arbitration hearing on their own motion or upon application of a party at any time before making an award; provided, however, that, if the reopening of the hearing will prevent the making of the award within the time specified in this Section 18, the arbitrators may not reopen the matter unless the parties agree to an extension of the time limit.

Multiple Development Agreement (04-1 \ -\\4Ll2) Form 15 w-50169 6T2.DOC

(16) Extensions. The parties may modify any period of time by mutual agreement, but the arbitrators shall not have the power to extend any period of time whatsoever.

(17) Time for Award. The arbitrators shall render the award no later than 20 days after the completion of the hearing.

(d) Application of Federal Rules of Civil Procedure. Except to the provided otherwise in this Section 18, any arbitration conducted under this Section 18 shall take place in accordance with the Federal Rules of Civil Procedure then in effect.

(e) Finality; Enforcement; Venue. The award of the arbitrators shall constitute a final award and shall bind all parties to the arbitration, and the parties may enter a judgment on the aware in any court of competent jurisdiction. All arbitrations shall take place in Orange County, California.

(f) Arbitration Costs. Attorneys' Fees and Costs. Each party shall bear their share of the costs of the arbitration proceeding. The prevailing party to the arbitration shall have the right to an award of its reasonable attorneys' fees and costs incurred after the filing of the demand for arbitration.

(g) Injunctive Relief Notwithstanding anything to the contrary contained in this Section 18, either party may file suit in a court of competent jurisdiction for the entry of temporary or preliminary injunctive relief, restraining orders and orders of specific performance, including (without limitation) injunctive relief pertaining to the Developer's use of the Del Taco System, including Del Taco's trademarks and service marks.

19. Notices. Except as otherwise provided in this Agreement, when this Agreement makes provision for notice or concurrence of any kind, the sending party shall deliver or address the notice to the other party by hand delivery, certified mail, delivery via a nationally-recognized ovemight delivery service, telecopy or e-mail to the following address, as applicable:

Del Taco: 25521 Commercentre Drive Lake Forest, California 92630 Telecopy Number: (949) 462-9300

The Developer: The Developer's notice address set forth on Exhibit A to this Agreement

All notices pursuant to the provisions of this Agreement shall run from the date that the other party receives or refuses delivery of the notice or three business days after the party places the notice in the United States mail. Each party may change the party's address by giving written notice to the other party.

20. Governing Law and Venue. The internal laws of California, without regard to its conflicts of laws provisions, shall govem the interpretafion and enforcement of this Agreement. However, the laws of the state in which the Developer resides or has its principal place of business shall govem the interpretation and enforcement of the non-compete provisions of Section 17 of this Agreement. Subject to the terms and provisions of Section 18, above, Del Taco and the Developer

Multiple Development Agreement (04-11 1 \ iL\ l ) Form 16 W-50169 6T2.D0C

shall bring any controversy or claim arising out of this Agreement only before a court of competent jurisdiction in Orange County, California.

21. Remedies. Waiver, Consents and Damages. Except as set forth in this Agreement, no rights or remedies set forth in this Agreement shall exclude any other right or remedy allowed by law or in equity. No waiver by a party of any covenant or condition or breach of any covenant or condition of this Agreement shall constitute a waiver of any subsequent breach or nonobservance on any other occasion of the same or any other covenant or condition of this Agreement. Subsequent acceptance by Del Taco of payments due it shall constitute a waiver by Del Taco of any prior breach. Whenever this Agreement requires Del Taco's prior approval or consent, the Developer shall make a timely written request to Del Taco for the approval or consent, which Del Taco shall grant, if at all, only in writing. Del Taco makes no warranties or guarantees upon which the Developer may rely, and assumes no liability or obligation to the Franchisee, by providing any waiver, approval, consent or suggestion to the Developer in connection with this Agreement or by reason of any neglect, delay or denial of any request. The Developer and the Developer's owners hereby waive any right to or claim for punitive or exemplary damages, multiple damages, or consequential damages (even if the Developer has advised Del Taco of the possibility of those damages), or any other damages, whether based on contract, tort or otherwise, except for actual damages. The actual damages that the Developer may recover shall not exceed the aggregate amount of development fees paid by the Developer to Del Taco since the occurrence of the act or omission giving rise to the claim for damages and shall remain subject to any applicable statute of limitations.

22. Severability. If a court or arbitrator finds any provision of this Agreement or the application of any of its provisions to any person or to any circumstances invalid or unenforceable, that finding shall not affect any other provision of this Agreement or its application to any other person or circumstance.

23. Entire Agreement. This Agreement and any addendum to this Agreement contain the entire agreement between the parties to this Agreement relating to the subject matter of this Agreement. The Developer acknowledges that Del Taco and its representatives have made no representations to the Developer and, further, that the Developer has not relied on any representations other than or inconsistent with the provisions of this Agreement and the information set forth in the most recent franchise disclosure document provided to the Developer. Nothing in this Agreement or in any related agreements is intended to disclaim the representations made in the franchise disclosure document. No agreement of any kind relating to the matters covered by this Agreement shall bind either party unless in writing and executed by all interested parties.

24. Designated Persons. Del Taco and the Developer certify to each other that (a) it is not acting, directly or indirectly, for or on behalf of any person, group, entity or nation named by an Executive Order or the United States Treasury Department as a terrorist, "Specifically Designated Nation and Blocked Person," or other banned or blocked person, group, entity or nation pursuant to any law, order, rule or regulation enforced or administered by the Office of Foreign Assets control; and (g) it is not engaged in this transaction, directly or indirectly on behalf of, or instigating or facilitating this transaction, directly or indirectly on behalf of, any such person, group, entity or nation.

25. Joint and Several Obligation. If the Developer consists of more than one person or entity, each person and entity shall have joint and several liability for the Developer's obligations under this Agreement.

Multiple Development Agreement (04-11-1 \4112) Form 17 W-50169 6:2.DOC

26. Incorporation of Exhibits. All exhibits referred to in this Agreement constitute an integral part of this Agreement.

27. Headings and Pronouns. The headings in this Agreement appear for convenience only and shall not alter or affect any provisions. Each pronoun used in this Agreement shall include the other numbers and genders, as appropriate.

28. Representations. Warranties and Acknowledgments. The Developer represents, warrants and acknowledges to Del Taco as follows:

(a) The Developer has conducted an independent investigation of the business contemplated by this Agreement and recognizes that the business involves risks that make the success of the venture dependent upon factors beyond the control of Del Taco. Del Taco expressly disclaims the making of, and the Developer acknowledges that it has not received or relied upon, any warranty or guarantee, expressed or implied, as to the potential volume, profits or success of the business venture contemplated by this Agreement.

(b) The Developer has no knowledge of, and has not relied upon, any representations by Del Taco or its officers, directors, owners, employees, agents or servants about the business contemplated by this Agreement contrary to the terms of this Agreement and further represents to Del Taco, as an inducement to Del Taco's entry into this Agreement, and that it has made no misrepresentations in obtaining this Agreement.

(c) The Developer has received, read and understands this Agreement and Del Taco has afforded the Developer ample time and opportunity to consult with advisors of its own choosing about the potential benefits and risks of entering into this Agreement.

(d) The Developer understands that present and future franchisees of Del Taco may operate under different forms of agreement and, consequently, the obligations and rights of the parties to those agreements may differ materially from the obligations and rights contained in this Agreement.

(e) The execution, delivery and performance of this Agreement shall not constitute a breach of any agreement, contract or other instrument binding on the Developer.

(f) No one has any right to any fees or commissions incurted by the Developer in connection with this Agreement and the Developer shall indemnify and hold Del Taco harmless from all liabilities, costs and expenses (including reasonable attorneys' fees) in connection with any claims for fees or commissions.

29. Developer Not Del Taco's Agent. This Agreement does not in any way create the relationship of principal and agent between Del Taco and the Developer. The Developer shall not act or attempt to act or represent itself, directly or by implication, as an agent of Del Taco or in any manner assume or create or attempt to assume or create any obligation on behalf of or in the name of Del Taco nor shall the Developer act or represent itself as an affiliate of any other authorized franchisee of Del Taco. The Developer shall represent and conduct itself as an independent

Multiple Development Agreement (04-4+444Z12) Form W-50169 6T2.D0C

contractor of Del Taco. The Developer shall not have the authority, express or implied, to bind or obligate Del Taco in any way.

30. Binding Effect. This Agreement shall bind the parties and their respective executors, administrators, successors and assigns.

31. Interference with Employment Relations. During the term of this Agreement, neither Del Taco nor the Developer shall employ or seek to employ, directly or indirectiy, any person serving in a managerial position for the other party or its subsidiaries or for any other franchisee in the Del Taco System, except with the other employer's written consent. For purposes of this section, "managerial position" shall include all restaurant employees serve as shift supervisors and above.

Executed and delivered as of the day and year first set forth above.

Del Taco: Del Taco LLC

By: Jack T. Tang, Associate General Counsel

Developer:

B y : _ lts:__ Date:

Concurrent with its execution of this Agreement, if the Developer is not an individual, each holder of an equity interest in the Developer (e.g., shareholder, partner, member) shall execute this Personal Guarantee.

Personal Guarantee

Each of the undersigned hereby personally guarantees the performance of any and all obligations (the "Obligations") of this Multiple Development Agreement. Each of the undersigned agrees that Del Taco or its successor or assignee may proceed against the undersigned directly and independently of the Developer, and the cessation of the liability of the Developer for any reason other than the full performance of all Obligations, or any extension, renewal or forbearance of the performance of the Obligations, or any impairment or suspension of Del Taco's or its successor's or assignee's remedies or rights against the Developer, shall not in any way affect the liability of the undersigned.

Date:

Date:

Multiple Development Agreement (04-11 1 iALU) Form 19 W-50169 ^2.DOC

Exhibit A

Identification of Developer and Development Area

Name of the Developer:

Notice Address:

Telecopy:

The Development Area shall consist of the following cities or counties in accordance with their boundaries in effect as of the date of this Agreement, excluding (1) the protected areas of any existing franchised Del Taco restaurants within that area and (2) a circular area within a one-mile radius of the front door of any existing company-owned Del Taco restaurants:

The Developer may develop a restaurant up to a boundary of above-described area and, if defined by a road, up to the side of the right-of-way for the road in the direction of the interior of the area. If Del Taco accepts a location near a boundary of the above-described area, the Development Area also shall include all of the protected area of the Del Taco restaurant at that accepted location, including the portion of the protected area extending outside the area otherwise described above. Similariy, if an adjacent mufti-unit franchisee receives Del Taco's acceptance of a location near a boundary of the above-described area, the Development Area for that adjacent developer or franchisee shall include all of the protected area of the Del Taco restaurant at that accepted location and the Development Area shall not include that portion of the other developer's or franchisee's protected area extending into the area otherwise described above.

Notwithstanding the foregoing, Del Taco shall have the right to operate, or license others to operate, any co-branded or multi-branded restaurant within the Development Area that utilizes Del Taco's trademarks and other intellectual property and sells the same or similar menu items as a Del Taco restaurant together with the trademarks, intellectual property, and menu items of one or more other related or unrelated companies.

[Optional Provision: Notwithstanding any other provisions in this Agreement, the Developer shall have only the non-exclusive right to develop Del Taco restaurants in the above-described area. When Del Taco grants exclusive rights to all or any part of the above-described area to another individual or entity or when Del Taco designates all or any part of the above-described area as reserved exclusively for its development of company-owned restaurants, the Developer's non­exclusive rights to develop in the affected area shall terminate. Del Taco reserves the right to develop Del Taco restaurants itself in the above-described area and grant exclusive or non-exclusive development rights to all or any part of the above-described area to another individual or entity without notice to the Developer. The Developer shall obtain exclusive rights to a specific locafion within the above-described area only upon the submission of a complete location approval package followed by the execution of a written agreement for that location within 60 days after the submission of the package. The written agreement shall specify the duration (one year) and geographic scope (one mile) of the Developer's exclusive rights for that location. The submission of

Multiple Development Agreement (04 11 114Z12) Form w-50169 #TI.DOC

the package must occur prior to Del Taco's grant of exclusive rights to any area that includes the location to another individual or entity or Del Taco's designation of any area that includes the location as reserved exclusively for the development of company-owned restaurants.]

[Optional Provision: Notwithstanding any other provisions in this Agreement, the protected area for an inline or end cap location specified in a Franchise Agreement issued pursuant to this Agreement shall not exceed a circular area within three blocks from the front door of the Del Taco restaurant if located at any location within an urban, inner-city area, as determined by Del Taco in its sole discretion. In addition, notwithstanding any other provision in this Agreement, Del Taco reserves the right to require an impact study for any inline or end cap location proposed by the Developer, in Del Taco's sole discretion, at the Developer's sole cost and expense. If the impact study provides evidence, in Del Taco's sole opinion, of potential impact on an existing or planned Del Taco restaurant location, Del Taco may disapprove the location.]

The following map shall serve only as a general illustration of the area described above. In the event of any conflict between the foregoing description and the following map, the foregoing description shall control.

Multiple Development Agreement (04-11-4 I4Z12) Form w-50169 5TI .D0C

Exhibit B

Development Schedule

Restaurants Site Approval Package Due Date Restaurant Opening Date

One

Two

Three

Multiple Development Agreement (04-M-M4Z12) Form W-50169 6 T Z D 0 C

EXHIBIT D-

DEVELOPMENT INCENTIVE PROGRAM ADDENDUM TO MULTIPLE DEVELOPMENT AGREEMENT

DEVELOPMENT INCENTIVE PROGR.\M ADDENDUM TO MULTIPLE DEVELOPMENT AGREEMENT

Del Taco LLC ("Del Taco") and (tho "Dovclopor") hcroby enter into this Addendum to that certain Multiple Dovolopmont Agrooment dated , , by and botwGon Del Taco and the Developer (tho "Dovolopmont Agroomom").

W I T N E S S E T H :

WhoroQO, Dol Taco and tho Dovelopcr wish to ontor into a Dovolopmont Agreement for tho development of one or-more Del Taco restaurants; and

Whcroas, Dol Taco and tho Dovolopor wish to modify certain provisions of tho Dovolopmont Agreement as sot forth below;

Now, theroforo, in considorotion of tho covenants and agroomonts set forth in tho Dovolopmont Agroomont and this Addendum, tho parties horoby agroo as follows:

4-; Dovolopmont Incontivo Program. Dol Taco shall refund any deposits made pursuant to Section 5 of tho Dovolopmont Agroomont for any now restaurant opened by the Dovclopor in tho Development Area on or before-Deccmbor 15,-^011, if opened at a location approved by Del Taco on or boforo April 30, 2011, and to any now restaurant opened by tho Dovolopor in tho Dovolopmont Area on or-before October-3 U 20^3^ if opened at any other location.

2. Transforability. The Dovolopor shall not have any rights to transfer this Addendum or tho rights granted to tho Dovolopor by it.

3T No Other Modifications. Except as spocificallv sot forth in this Addendum, the terms

of the Development Agroomont shall remain unchanged and in full force and effect.

Executed and doliverod as of tho dato of the Dovolopmont Agroomont.

Dol Taco: Del Taco LLC

By: Jack T. Tang, Associate General Counsel

Dovolopor:

(corporation) By: Title-

FDD-W-49790 WrJiDOC

(individual)

Date: -EXHIBIT E

FRANCHISE AGREEMENT

w-J97qn ixnnr

FRANCHISE AGREEMENT

Del Taco LLC ("Del Taco"), a California limited liability company, and the undersigned (the "Franchisee") enter into this Franchise Agreement (this "Agreemenf) as of the day of

RECITALS

A. Del Taco and its predecessors have engaged in the business of owning, operating and franchises to others to own and operate Del Taco restaurants for the sale of food items featuring Mexican-American dishes. Del Taco has developed a unique and proprietary system with respect to its operations and management which includes the following:

1. Site selection and layout criteria;

2. Designs for various types of standardized Del Taco buildings;

3. Signs, graphics, names, logos and other decorative features;

4. Recipes and menus;

5. Furniture, fixtures and equipment specifications;

6. Marketing and advertising materials;

7. Operating procedures, including operating manuals;

8. Training procedures and materials;

9. Specifications for food and beverage products and supplies; and

10. Other material and procedures developed and used in the development, construction and operation of Del Taco restaurants.

All of the above, as changed or modified from time to time, constitutes the "Del Taco System." The Franchisee has considered the costs of developing its own system and of purchasing other franchise rights carefully and has conducted its own inspection and investigation of Del Taco, its restaurant, and its personnel. Based on that inspection and investigation, the Franchisee has determined that it wishes to enter into this Agreement.

B. The Franchisee has had the opportunity to invesfigate the Del Taco System and the competitive market in which Del Taco operates.

C. The Franchisee acknowledges that each Del Taco restaurant operation depends upon each of the franchisees in the franchise system to establish and maintain the goodwill necessary for a successful operation of the Del Taco System. The Franchisee further acknowledges that it is essential to the maintenance of the high standards that the public has come to expect of Del Taco restaurants and to the preservation of the integrity of Del Taco's trademarks, service marks, trade names, trade secrets, and goodwill that each franchisee adhere lo the uniform standards, procedures and policies described in this Agreement.

Franchise Agreement (04 11 11 i l l l ) Form 1 W-DT - 3&442QU Final Franchise Agmt - AmonH<.H j i .1 . n 12.D0C

D. The Franchisee desires to operate a Del Taco restaurant on the site specified on Exhibit A to this Agreement on the terms and conditions set forth in this Agreement.

Now, therefore, in consideration of the foregoing and of the covenants contained in this Agreement, the parties agree as follows:

1. Definitions. As used in this Agreement, the following words and phrases shall have the following meanings:

(a) "Affiliate" shall mean (i) any person controlling, controlled by, or under common control with the Franchisee (with those terms having the meanings used in the Securities Act of 1933, as amended, and the rules and regulations promulgated under that act); (ii) any officer, director or more than 10% owner of the Franchisee; or (iii) any limited liability company, corporation, partnership or other entity in which the Franchisee or any director, officer or more than 10% owner of the Franchisee has an interest of 10% or more.

(b) "Building" shall mean the real property and improvements on the real property at the location of the Restaurant.

(c) "Del Taco System" shall have the meaning defined in Recital A of this Agreement.

(d) "Equipment" shall mean the furniture, fixtures, furnishings, equipment, signs and all other personal property that Del Taco may specify for use in the Restaurant.

(e) "Net Sales" shall mean the amount of sales of all goods and services sold in, on, about or from the Restaurant, whether for cash or credit, and without reserve or deduction for bad debts, but excluding any goods or services furnished in replacement of any goods or services already sold, refunds lo customers, and amounts collected for any sales or similar taxes.

(f) "Operating Principal" shall mean an individual who (1) has completed Del Taco's required training program, (2) Del Taco has approved to supervise the day-to-day operations of the Restaurant, (3) owns at least 10% of the Franchisee, and (4) lives no more than a three-hour drive from the Restaurant.

(g) "Protected Area" shall mean all of the circular area within a one-mile radius of the front door of the Restaurant, with the exception of any outlet that is defined in this Agreemenl as an Alternative Point of Distribution that is developed, constructed, operated, merchandised, sold, licensed and/or franchised to others by Del Taco to sell Del Taco menu items and other products lo the public within the Protected Area.

(h) "Restaurant" shall mean the Del Taco restaurant operated under this Agreement.

(i) "Alternative Point(s) of Distribution" shall mean any restaurant outlet described in Section 9(c) of this Agreement.

Franchise Agreement (04 11 1 \iI12) Form W-50168 ?T2.D0C

2. Grant of Franchise. Del Taco hereby grants to the Franchisee the exclusive right to construct, own and operate a Del Taco restaurant at the location set forth on Exhibit A to this Agreement. Del Taco hereby grants to the Franchisee the non-exclusive right to use the Del Taco System at the Restaurant.

3. Term of Agreement. This Agreement and all rights under this Agreement shall expire 20 years after the date the Restaurant opens for business with the public, unless sooner terminated in accordance with the terms and conditions of this Agreement. The Franchisee may apply for a successor franchise for the operation of the Restaurant for 1 additional 20-year period upon the terms and conditions then being offered to other franchisees (excluding franchisees controlled by or under common control with Del Taco), subject to the following conditions:

(a) The Franchisee shall deliver to Del Taco a written request for successor franchise and pay a successor fee not sooner than 18 months nor later than 12 months prior to the expiration of this Agreement or the successor agreement, as applicable. Notwithstanding any term or condition in this Agreement to the contrary, the successor fee shall equal an amount not less than $35,000 or shall equal the fee then being charged to other franchisees (excluding franchisees controlled by or under common control with Del Taco).

(b) The Franchisee shall not have received written notice of a default under this Agreement or the successor agreement, as applicable, on more than 3 separate occasions.

(c) The Franchisee shall have the right to remain in possession of the Restaurant.

(d) The Franchisee shall refurbish, remodel and renovate the Restaurant lo conform to the then current image of the Del Taco System for new Del Taco restaurants of the same type.

(e) The Franchisee shall execute a general release in a form satisfactory to Del Taco of any and all claims against Del Taco and its Affiliates.

(f) The Franchisee shall execute the then-current form of successor agreement. Upon execution of the successor agreement, the Franchisee also shall pay a promotional fee of the higher of (1) $10,000 or (2) an amount equal to the promotional fee then being charged to new franchisees.

The Franchisee accepts this franchise with the full and complete understanding that the franchise grant contains no promise or assurance of any successor agreement.

4. Payments. The Franchisee shall make the following payments pursuant to the terms of this Agreement:

(a) Franchise Fee. The Franchisee shall pay to Del Taco an initial franchise fee of $35,000 upon Franchisee's execution of this Agreement. The Franchisee must pay the Franchise Fee and execute this Agreement no later than ^within in calendar days after the commencement of construction of the Restaurant. Del Taco shall not have any obligation to refund the initial franchise fee for any reason whatsoever.

Franchise Agreement (04 11 I IjZll) Form W-50168 ?.9.D0C

(b) Promotional Fee. Upon the Franchisee's execution of this Agreement, the Franchisee shall pay Del Taco a Promotional Fee of $10,000 to promote the Restaurant. Tho Promotional Foe shall bo due no later than 28 days after the commencement of construetien of the Restaurant.—The Franchisee shall not contract for nor make any expenditures related to the promotion of the Restaurant unless the Franchisee has submitted a request and received the written approval of Del Taco. The Franchisee shall submit invoices for promotional expenditures to Del Taco for direct payment to the vendor or for reimbursement. Del Taco shall not pay or reimburse food or paper costs. Del Taco shall not have any obligation to refund any portion of the promotional fee for any reason. If the Franchisee fails to spend all of the promotional fee within 12 months after the opening of the Restaurant, the Franchisee shall forfeit the unused portion of the fee and Del Taco shall have the right to apply it toward Del Taco's general advertising programs.

(c) Royalty. The Franchisee shall pay to Del Taco as a royally for the use of the Del Taco System during the entire term of this Agreement an amount equal to 5% of the Restaurant's Net Sales. The Franchisee shall pay the fee within three days after the close of the sales week as designated by Del Taco in its sole and absolute discretion by electronic funds transfer. Del Taco expressly reserves the right to change the due date of the royalty upon 10 days' prior written notice to the Franchisee. The Franchisee shall give Del Taco authorization (in the form attached as Exhibit B to this Agreement) for direct debits from the Franchisee's business bank operating account. All payments shall become due and payable in the manner set forth above as to any business of the Franchisee using any portion of the Del Taco System, whether operated directly or indirectly by the Franchisee or any of its Affiliates.

(d) Marketing Fee. Franchisee shall pay to Del Taco a marketing fee equal lo 4% of the Restaurant's Net Sales. Del Taco reserves the right to increase the marketing fee to the then current fee that it charges new franchisees. The Franchisee shall pay the fee within three days of the close of the sales week as designated by Del Taco in its sole and absolute discretion by electronic funds transfer. Del Taco expressly reserves the right to change the due date of the marketing fee upon 10 days' prior written notice to the Franchisee. With the money contributed by the Franchisee and other franchisees of Del Taco, Del Taco shall develop and carry out a plan for advertising and marketing Del Taco goods and services. That plan may include advertising campaigns, placement of media advertisements, assistance with local advertising and promotion, surveys of customers, and the development of new products and systems to enhance the Del Taco System. Del Taco may use a portion of Franchisee's marketing fee for the creative and administrative costs of that plan, including (without limitation) materials, services, salaries and overhead incurted by Del Taco in connection with that plan. Del Taco also may choose to contribute to the development and implementation of Del Taco's plan for advertising Del Taco goods and services any marketing or promotional rebates or allowances from vendors as a result of the Franchisee's purchase of supplies, products, foodstuffs or menu items.

(e) No Refunds. Upon the expiration or earlier termination of this Agreement, Del Taco shall not refund any amounts paid pursuant to this Agreement for any reason whatsoever.

Franchise Agreemem(04-1 \-UAIH) Form W-50168 ?r9,DOC

(f) Interest. Any amount properly owing from Franchisee to Del Taco pursuant to this Section 4, if not paid when due (whether shown on any report submitted by the Franchisee or subsequently determined by verification, examination or audit as due), shall bear interest at the rate of seven percentage points in excess of the prime rale per annum, subject to any applicable limits imposed by California law, from the date due until paid.

5. Services By Del Taco. Subject lo the Franchisee's compliance with its obligations set forth in this Agreement, Del Taco shall provide the following materials and services to the Franchisee:

(a) One copy of its standard construction package as modified from time to time, including (without limitation) plans and specifications, site criteria, and sample site plans, which the Franchisee must adapt, at the Franchisee's expense, for use at the site selected by the Franchisee;

(b) One copy of its specifications for Equipment, which the Franchisee must adapt, at the Franchisee's expense, for use at the Restaurant, depending upon marketing needs and local govemmental requirements;

(c) Training in the Del Taco System as specified in Section 7 of this Agreemenl;

(d) Before the opening of Franchisee's Del Taco restaurant, Del Taco shall provide technical support at Franchisee's Del Taco restaurant through the first day of opening of the Del Taco restaurant. The date and time of the pre-opening support will be determined by Del Taco in its sole discretion. Franchisee must reimburse Del Taco for travel, meals, lodging and wages;

(e) The use of Del Taco's Franchise Operations Manual and other manuals, as revised from time to time;

(f) Merchandising, marketing and other data and advice as developed by Del Taco from time to time;

(g) Periodic individual or group advice, consultation and assistance, rendered by personal visit, telephone, mail or e-mail and made available from time to time to franchisees of Del Taco, as Del Taco may deem necessary or appropriate;

(h) Bulletins, brochures and reports published by Del Taco from time lo time regarding its plans, policies, research, developments and activities; and

(i) Other resources and assistance developed and offered by Del Taco lo its franchisees.

6. Obligations of Franchisee. The Franchisee shall have the following obligations in addition to any other obligations specified elsewhere in this Agreement:

(a) The Franchisee shall use the Del Taco System strictly in accordance with the terms of this Agreement. Any unauthorized use of the Del Taco System shall constitute an infringement of Del Taco's rights and a material breach of this

Franchise Agreement (04 11 \ \ i l l l ) Form W-50168 TriDOC

Agreement. The Franchisee shall use its commercially reasonable efforts to support and promote the Del Taco brand and shall not disparage the Del Taco brand, Del Taco, or its other franchisees.

(b) The Franchisee shall select, develop and construct the Restaurant in accordance with the applicable provisions of the applicable Development Agreement between Del Taco and the Franchise or, if none, in accordance with the applicable provisions of the form of Development Agreement included as an exhibit to the Franchise Disclosure Document last delivered lo the Franchisee in connection with the execution of this Agreement.

(c) Unless approved otherwise in writing by Del Taco, the Franchisee shall have installed in the Restaurant only the Equipment that strictly conforms to the standards and specifications of Del Taco. Only Del Taco, or a vendor who has been approved in writing by Del Taco, shall install the Equipment. Prior to commencement of operation of the Restaurant, the Franchisee shall procure and have installed the data processing equipment, computer hardware, required dedicated telephone and power lines, modems, printers and other computer-related accessory or peripheral equipment, including point of sale equipment, that Del Taco may specify. A Del Taco computer technician must assist and facilitate in the implementation of the computer system and software for the preparation of the opening of the Restaurant. The Franchisee shall provide to Del Taco any assistance required by Del Taco to bring the Franchisee's computer system "on-line" with Del Taco's computer system at its headquarters. The Franchisee shall maintain reliable broad-band internet connectivity with a static Internet Protocol address to which Del Taco shall have access. Del Taco shall have the right to access the Franchisee's computer system, as Del Taco may decide necessary or appropriate, to retrieve any data and information relating to the Restaurant, including (without limitation) daily sales, menu mix, inventory, financial information, and customer survey results.

(d) The Franchisee shall use only software programs that Del Taco may designate from time to time and, upon request by Del Taco, shall pay a software license fee and execute a standard form of software license agreement. The Franchisee also shall purchase from Del Taco any new or upgraded software programs, manuals and computer-related materials that Del Taco may require at the prices and upon the terms Del Taco may establish. Del Taco's modification of the required computer system may require the Franchisee to incur costs to purchase or lease new or modified computer hardware and software and to obtain service and support for the system.

(e) The Franchisee shall operate the Restaurant in accordance with the requirements of Section 10 of this Agreement. The Franchisee shall submit any advertising which the Franchisee may wish to use to Del Taco for written approval before its use. The Franchisee shall not place any advertisements for the Restaurant, regardless of media, without Del Taco's prior written approval.

(f) The Franchisee shall not to promote, offer or sell any products or services relating to the Restaurant through, or use any of the Proprietary Marks on, the Internet, social networking sites, or other future technological advances without the prior written approval of Del Taco, which may be granted or withheld in Del Taco's sole discretion. In connection with any such approval, Del Taco may

Franchise Agreement (01 11 1 i i l H ) Form W-50168 ?T9.D0C

condition its approval on such terms as it deems appropriate. Any approval by Del Taco shall limit the Franchisee's ability to promote and market the Restaurant over the Internet to a single website ("Authorized Website") that meets all of Del Taco's standards and requirements (as Del Taco may establish and modify from time to time in the Manual or otherwise.) The website may only be identified by a domain name designated by Del Taco ("Authorized Domain Name").

The Franchisee acknowledges that: (1) its Authorized Website constitutes advertising and promotion subject to Section 6(e); (2) any copyright in its Authorized Website shall be deemed to be owned by Del Taco; (3) it must sign all documents that Del Taco deems necessary or appropriate to affirm Del Taco's ownership of the copyright; (4) it must have the lawful right lo use any proprietary materials of others that appear on its Authorized Website; (5) it must obtain Del Taco's prior written approval of all pages, materials and content on its Authorized Website; (6) it must obtain Del Taco's prior written approval for use of all hyperlinks and other links on its Authorized Website; and (7) it must obtain Del Taco's prior written approval to any changes lo its Authorized Website.

In all cases. Del Taco shall have sole discretion and control over anv profile(s) using or relatinp to the Proprietary Marks^ or that display th£ Proprietary Marks^ that are maintained on social media outlets^ including without limitation MvSnace. Facehook and Twitter or other similar outlets, that mav exist in the future. Del Taco mav use nart of the marketing fee monies it collects under this Agreement to nay or reimburse the costs associated with the develonment. maintenance and undate of such nrofilefs^. Del Taco mav (but is under no obligation to) establish guidelines under which Franchisee may establish profiles or otherwise establish a presence on the social media outlets. In that event^ Franchisee must comnlv with the standards^ protocols and restrictions that J)e\ Taco imposes on such use.

(g) The Franchisee shall keep accurate and complete records of its business and shall provide Del Taco the following reports: (I) annually, an income statement, a statement of sources and application of funds, and a balance sheet within 45 days after the close of the Franchisee's fiscal year; (2) quarteriy, an income statement and balance sheet within 30 days after the end of each quarter, beginning with the first full quarter after the Restaurant opens, (3) monthly, a profit and loss statement within 15 days after the end of each month, (4) weekly, a report of Net Sales within two days after the end of each week, including weekly sales, average check amounts, transaction counts, promotional sales, and menu mix. Each statement and balance sheet shall be signed by Franchisee or by Franchisee's Treasurer or Chief Financial Officer attesting that it is true, correct and complete and uses accounting principles applied on a consistent basis which accurately and completely reflect the financial condition of Franchisee. The Franchisee shall prepare all reports in a form and manner designated by Del Taco in its sole and absolute discretion. Del Taco may change the form and manner of the foregoing reports as frequently as it desires, including requiring the Franchisee to install equipment compatible with Del Taco's equipment that will allow the Franchisee to provide a report on the Restaurant's sales by an electronic method of transmission. In addition, the Franchisee shall provide Del Taco with any other information and data reasonably requested by Del Taco in connection with recordkeeping and in a form and manner Del Taco may designate. The Franchisee shall retain for the

Franchise Agreement (04 'II 114Z12) Form w-50168 ?T9.DOC

longer of (I) 24 months or (2) the time required by applicable law and, upon reasonable request, make available to Del Taco copies of all records and reports, including (without limitation) state sales tax returns and all supporting data and records relating to sales.

(h) The Franchisee shall satisfy the training requirements set forth in Section 7 of this Agreement.

(i) The Franchisee shall maintain the competitive and high operational standards required by Section 10 of this Agreemenl.

(j) The Franchisee shall procure and maintain the insurance required by Section 12 of this Agreement.

(k) The Franchisee at all times shall indicate clearly the independent ownership of the Franchisee's business.

(I) An Operating Principal shall participate personally in the direct operation of the Restaurant. If the Franchisee is an individual and meets the required qualifications, the Franchisee may serve as the Operating Principal for the Restaurant. The Franchisee shall notify Del Taco promptly if the individual serving as the Principal Operator for the Restaurant no longer serves as an employee of the Franchisee or no longer meets the requirements of being a Principal Operator for the Restaurant.

(m) Concurtcnt with its execution of this Agreement, if the Franchisee is not an individual, each holder of an equity interest in the Franchisee shall execute the Personal Guarantee included with this Agreement.

(n) The Franchisee acknowledges that Del Taco has entered into franchise agreements in the past under terms and conditions substantially different from those in this Agreement and that Franchisee may compete with franchisees of Del Taco who may operate under substantially different franchise agreements. In addition, the Franchisee acknowledges that Del Taco may enter into franchise agreements in the future under terms and conditions different from those in this Agreement and that Franchisee may compete with franchisees of Del Taco who may operate under those substantially different agreements.

7. Training. The Franchisee acknowledges and understands that the operation of a Restaurant in compliance with the Del Taco System requires the continuing recruiting and training of Restaurant management and crew. The assistance and training which the Franchisee and the Franchisee's initial management team may require shall vary according to the ability, experience and motivation of the individuals involved. Del Taco and the Franchisee agree to the following provisions regarding training:

(a) Pre-Opening Recruiting. Del Taco shall provide the Franchisee with a recruiting package, which shall include, among other things, directions for placing newspaper and magazine type advertisements for management and crew, sample newspaper and magazine type advertisements for management and crew, sample employment applications, sample materials soliciting employment that the Franchisee

Franchise Agreement (04 11 11 jZ12) Form W-50168 ?r2.D0C

can place in the Restaurant for distribution and use after the Restaurant opens, and a suggested profile of management employees.

(b) Pre-Opening Management Training. For the first Rostauranttmt Restaurants that the Franchisee opens, Del Taco may require the following pre­opening training of the Franchisee and the Franchisee's management employees:

(1) On-the-job training consisting of working at a Del Taco restaurant selected by Del Taco for a period of time, determined by Del Taco in its reasonable discretion, to learn all employee positions and the proper preparation and presentation of Del Taco food products. Del Taco may require that the Franchisee, its Principal Operator, and thfeeat least two managers spend S0024Q hours prior to the Restaurant's opening in that on-the-job training; and

(2) Classroom training in the Del Taco System, which currently consists of two sessions of classes for a total of five classroom days for general managers;

(3) Use of Del Taco's Franchise Operations Manual and other manuals and training materials to supplement the classroom and on-the-job training.

(4) Of te la f l to twethree weeks prior to the Restaurants opening, the Franchisee shall hire the crew. Two days prior to the Restaurant opening, a representative of Del Taco shall advise the Franchisee and the Franchisee's management employees with regard to the training of the Franchisee and the Franchisee's management employees in the Restaurant while supervising the training of the crew.

(c) Pre-Opening Crew Training. A ^ F o r the first two Restaurants that Franchisee opens and after the Franchisee has hired the crew, Del Taco shall provide Franchisee with auck^assistance as Del Taco deems advisable in training the crew in opening the Restaurant. Franchisee shall designate at least 40 crew candidates to narticipate in such training^ which shall take place at the Restaurant nremises. Such assistance will be for a duration of three weeks before the onening of vour first Restaurant, and for two weeks before the opening of the second Restaurant. Franchisee shall be responsible for the crew training. The Franchisee shall hire sufficient crew to fill all crew positions for all hours of the Restaurant's operation and shall comply with all procedures specified by Del Taco.

(d) Continuing Management and Crew Training. After the Restaurant has opened, Del Taco shall monitor the level of training and assist the Franchisee in the maintenance of proper training of management and crew to promote the proper use of the Del Taco System. The Franchisee at all times shall maintain at least one certified general manager in the Restaurant and shall have a minimum of four managers (inclusive of the Principal Operator) trained and certified by Del Taco for the Restaurant. If Del Taco has given the Franchisee written consent to operate the Restaurant less than 24 hours each day, the Franchisee shall have a minimum of three managers (inclusive of the Principal Operator) trained and certified by Del Taco for

Franchise Agreement (01 11 Wi l l i ) Form W-50!68 7--2.DOC

the Restaurant. Del Taco shall make classroom training available to all future management employees of the Franchisee. Every future manager must complete, to Del Taco's satisfaction, the pre-opening management training described in subparagraph (b), above, and receive certification by Del Taco. If a manager's position becomes vacant, the Franchisee shall fill the vacancy within 60 days with a fully-trained and certified manager.

(e) General Terms. The Franchisee, its Principal Operator, and every person actively involved in the management of the Restaurant must attend the Del Taco classroom training and complete the same to Del Taco's satisfaction. Del Taco shall use its best efforts to schedule classroom and on-the-job training at places and times reasonably convenient to the Franchisee or the Franchisee's management employees. Del Taco shall not charge a fee for participation in the classroom training, on-the-job training, or other ordinary training services of a Del Taco representative. The Franchisee shall have sole responsibility for all costs and expenses, like salaries, wages, supplies, room, meals and transportation, of each of the Franchisee's employees attending any Del Taco training program or participating in on-the-job training. The Franchisee, if an individual, its Principal Operator, and every person actively involved in the management of the Restaurant shall attend all of Del Taco's advanced management training programs or seminars at the Franchisee's sole cost and expense. Del Taco reserves the right to change any format, method or time of training. The Franchisee acknowledges that the success or failure of training depends in large part on the quality and motivation of the student and the student's continued application of the training while on the job. Therefore, Del Taco makes no guarantee, warranty or representation that the successful completion of its training program will create a successful Restaurant employee.

8. Restrictions on Franchisee. Except as expressly provided by this Agreement, the Franchisee shall acquire no right, title or interest in and to the Del Taco System; any and all goodwill associated with the Del Taco System shall inure exclusively to Del Taco's benefit; and, upon the expiration or termination of this Agreement for any cause whatsoever, Del Taco shall not have any obligation to pay any monetary for any goodwill associated with the Franchisee's use of the Del Taco System. The Franchisee shall not take any action whatsoever to contest the validity or ownership of the Del Taco System or the goodwill associated with the Del Taco System. The Franchisee shall have no right to use in its name the name "Del Taco," "Del" or any other names used by Del Taco.

9. Reservation of Rights to Del Taco. Except as provided in Section 2 of this Agreement, the Franchisee has received non-exclusive rights under this Agreement, and Del Taco retains the following rights:

(a) The right to continue to construct and operate other Del Taco restaurants and to use the Del Taco System or any part of the Del Taco System at any location outside the Protected Area and to license others to do so.

(b) The right to develop, use and franchise the rights to any trade names, trademarks, service marks, trade symbols, emblems, signs, slogans, logos or copyrights designated by Del Taco for use with the Del Taco System for use with the same, similar or different franchise systems for the sale of the same, similar or different products or services as those used in connection with the Del Taco System at any location outside the Protected Area on any terms and conditions Del Taco may deem advisable and without granting the Franchisee any rights in them.

Franchise Agreement (0A-H-H4111) Form 10 w-50168 ?T2.D0C

(c) The right to develop, construct, operate, merchandise, sell, license and/or franchise others to sell Del Taco foods and other products to the public within the Protected Area through Alternative Points of Distribution, which include outlets (whether mobile or fixed, permanent or temporary) located on military bases, institutional outiets (including, without limitation, college campuses, hospitals and school lunch programs), fairs, athletic contests or other special events, convenience stores, casinos, airports and larger retail outlets, including (without limitation) Wal-Mart and Home Depot, toll roads, limited access highways, schools, universities, enclosed shopping malls, hotels, industrial or government facilities, amusement or theme park complexes, train stations, bus stations or other transportation facilities and other locations owned or operated by major institutions with sites throughout the country or a particular state (collectively, referred to as "Alternative Points of Distribution") and to use the Del Taco System in connection with those Alternative Points of Distribution.

Del Taco shall notify Franchisee in writing of Del Taco's or another franchisee's intent to develop one or more Del Taco restaurants at the specific Alternative Point of Distribution within the Protected Area. If Franchisee can demonstrate to Del Taco's satisfaction, within 30 days of Franchisee's receipt of such notification, that Franchisee has the ability to enter into an agreement under the same terms and conditions offered to Del Taco or another franchisee, as well as the financial and operational resources available to it for the development of the Del Taco restaurant at the specific Alternative Point of Distribution, then Del Taco shall offer the opportunity to Franchisee under the same terms and conditions offered to Del Taco or another franchisee.

Del Taco specifically reserves the right and privilege, in its sole and absolute discretion and as it may deem in the best interests of all concerned in any specific instance, to vary standards for any franchisee based upon the peculiarities of a particular site or circumstance, density of population, business potential, population of trade area, existing business practices, or any other condition which Del Taco deems important to the successful operation of the franchisee's business. The Franchisee shall not have any right to complain on account of any variation from standard specifications and practices granted to any other franchisee and shall have not right to require Del Taco to grant to the Franchisee a like or similar variation.

10. Operational Requirements. The Franchisee shall operate the Restaurant in accordance with the following provisions:

(a) In order to protect the Del Taco System and to maintain high quality standards of operation, the Franchisee shall operate the Restaurant in accordance with Del Taco's then current Franchise Operations Manual and any other manuals, materials and notices that Del Taco may distribute to the Franchisee from time to time (collectively the "Operational Requirements"). Del Taco may revise the contents of the Operational Requirements to implement new or different operation standards generally applicable to all Del Taco restaurants, and the Franchisee shall comply with each changed standard within any reasonable time Del Taco may require. The Franchisee shall keep its copy of any Operation Requirements current and up to date. The master copies of the Operational Requirements maintained by Del Taco at its principal place of business shall control any disputes with regard to its contents.

Franchise Agreement (O'l 11 1 l i l l l ) Form 1 1 W-50168 ?T2.D0C

(b) In order to protect the Del Taco System and the goodwill associated with the Del Taco System, the Franchisee shall comply with the following requirements;

(1) The Franchisee shall operate the Restaurant under the name Del Taco or any other name designated by Del Taco and use the Del Taco System solely in the manner prescribed by Del Taco.

(2) The Franchisee shall comply with any requirements regarding Del Taco's service marks, trade names, trademarks, and copyrights and any fictitious name registrations that Del Taco may designate from time to time.

(3) The Franchisee shall participate in any customer survey or market research program that Del Taco may designate from time to time.

(c) The Franchisee shall sell from the Restaurant all products specified by Del Taco and shall not sell or offer for sale any other products of any kind or character without first obtaining the express written consent of Del Taco. The Franchisee shall purchase all products only from vendors approved by Del Taco. The Franchisee shall use only food products and ingredients that conform to the specifications and standards of Del Taco in effect from time to time. The Franchisee shall follow the methods of preparation, service and presentation that conform to the specifications and standards of Del Taco in effect from time to time. The Franchisee shall accept the credit and debit cards, gift cards, and loyalty cards that Del Taco may designate from time to time. The Franchisee shall use only supplies and paper products that conform to Del Taco's specifications in effect from time to time. The Franchisee shall use only products purchased or leased from a vendor approved by Del Taco and shall discontinue selling or offering for sale or using any products that Del Taco, in its sole and absolute discretion, may delete from its standards and specificafions. The Franchisee shall notify Del Taco immediately in writing if the Franchisee has any knowledge whatsoever of any party reselling any products sold by the Franchisee from the Restaurant.

(d) The Franchisee shall maintain, repair and replace at all times, at its expense, the Restaurant, Building, Equipment, and related parking and landscape areas in a good, clean, attractive and safe condition in conformity with Del Taco's high standards.

(e) The Franchisee shall comply with all laws, ordinances and regulations affecting the operation of the Restaurant. Without limiting the generality of the foregoing, the Franchisee specifically shall comply with all applicable health and safety laws, ordinances and regulations in a manner to achieve the highest available health and safety classification rating by the appropriate govemmental authorities and to furnish to Del Taco, within 10 days after the Franchisee's receipt, copies of all inspection reports, warnings and citations relating to those laws, ordinances and regulations.

(f) The Franchisee shall cooperate with and assist Del Taco with any customer or marketing research program which Del Taco may institute from time to

Franchise Agreement (Q'l 11 W i l l i ) Form 12 W-50168 ?T2.D0C

time. The Franchisee's cooperation and assistance shall include (without limitation) the distribution, display and collection of customer comment cards, questionnaires and similar items.

(g) The Franchisee shall notify Del Taco in writing within 10 days after notice to the Franchisee of the commencement of any action, suit or proceeding, and of the issuance of any order, writ, injunction, award or decree of any court, agency or other govemmental instrumentality, which may have an adverse effect on the Franchisee's financial condition, the Franchisee's ability to operate the Restaurant or any other Del Taco restaurant, or the Franchisee's ability to meet its obligations under this Agreement or otherwise. The Franchisee shall provide Del Taco, at the Franchisee's sole cost, copies of all pleadings or other documents relating to the foregoing.

(h) The Franchisee shall permit authorized personnel of Del Taco to enter the Restaurant at any time during normal business hours, with or without notice, for the purpose of inspecting and examining the operations, products and facilities, the computer system and other equipment, including (without limitation) testing and sampling. The Franchisee shall cooperate with Del Taco's representatives by rendering any assistance reasonably requested. Del Taco's representatives may remove samples of any ingredients and products, without payment, in amounts necessary for testing by Del Taco or an independent certified laboratory. Upon notice from Del Taco, the Franchisee promptly shall correct any deficiencies detected by inspection or testing. In addition to any other remedies Del Taco may have under this Agreement or under law, Del Taco may require the Franchisee to bear the cost of that testing if Del Taco has not approved the vendor from whom the Franchisee acquired the ingredients and products or if the sample fails to conform to Del Taco's specifications.

(i) The Franchisee shall purchase all Equipment, inventory and other supplies, products, ingredients and materials used in the operation of the Restaurant, which Del Taco may specify from time to time, solely from vendors who demonstrate to Del Taco's continuing satisfaction the ability to meet Del Taco's standards and specifications. In approving any vendor, Del Taco may consider factors like the vendor's financial strength, quality controls, and capacity to supply the Franchisee's needs promptly and reliably. All vendors must receive and maintain Del Taco's approval in writing. If the Franchisee desires to purchase any items from an unapproved vendor, the Franchisee shall submit to Del Taco a written request for approval. Del Taco shall have the right to require, as a condition of its approval and review, that the vendor allow its representatives to inspect the vendor's facilities and provide samples to Del Taco or its designee for testing. The Franchisee shall pay the cost of inspection and testing Franchisee and Del Taco shall not have any liability for damage to or the retum of any sample. Del Taco reserves the right to re-inspect the facilities and to retest the product of any approved vendor and to revoke any approval if the vendor has failed to continue to meet Del Taco's high standards.

(j) Del Taco may serve as a party to agreements with vendors of products which provide for marketing or promotional rebates or allowances. With regard to any rebates or allowances eamed under those agreements that direct result from the Franchisee's purchase of the vendor's products, Del Taco (in its sole and absolute

Franchise Agreement (04-11-1 \ i l l l ) Form 13 w-50168 ^riDOC

discretion) may (a) rebate to the Franchisee, (b) contribute towards the cost of the marketing services described in Section 4(d) of this Agreement or (c) retain them.

(k) The Franchisee shall use the Restaurant solely for the operation of the franchise business and shall keep it open and in normal operation seven days a week, 24 hours a day, or the days and hours that Del Taco may specify otherwise in writing. The Franchisee, with Del Taco's prior written approval, may curtail the days or hours of operation of the Restaurant.

(1) The Franchisee shall pay when due for all goods and services used in the operation of the Restaurant. The Franchisee understands that the failure to make prompt payment to its vendors may cause irreparable harm to the reputation and credit of Del Taco and its other franchisees.

(m) If either the Franchisee is not an individual or does not personally participate in the direct operation of the Restaurant, prior to operating the Restaurant, the Franchisee shall obtain Del Taco's prior written approval of the individual who shall participate personally in the direct operation of the Restaurant. Del Taco shall not withhold that approval unreasonably.

(n) The Franchisee shall allow Dei Taco or its representatives, at Del Taco's expense, at all reasonable times, to examine or audit the books, records, computer data bases, state sales tax returns, or accounts of the Franchisee. If the audit discloses an understatement of Net Sales, the Franchisee immediately shall pay all amounts due plus late charges and interest charges. Additionally, if the audit discloses an understatement of Net Sales by i % or more, the Franchisee shall reimburse Del Taco for all reasonable costs of the audit, including travel, lodging and wages.

(o) If an event occurs at a the Restaurant that has caused or reasonably may cause harm or injury to guests or employees (e.g., food spoilage or poisoning, food tampering or sabotage, slip and fall injuries, natural disasters, robberies, shootings, etc.) or damage the Proprietary Marks, the Del Taco System, or the reputation of Del Taco (collectively "Crisis Situation"), the Franchisee (1) shall contact appropriate emergency care providers immediately to assist it in curing the harm or injury and (2) shall inform Del Taco immediately by telephone of the Crisis Situation. The Franchisee shall refrain from making any internal or external announcements (/.f., no communication with the news media) regarding the Crisis Situation (unless otherwise directed by Del Taco or public health officials). To the extent Del Taco deems appropriate, in its sole and absolute discretion, Del Taco may control the manner in which the parties handle the Crisis Situation, including (without limitation) conducting all communication with the news media, providing care for injured persons, or temporarily closing the Restaurant. The parties acknowledge that, in directing the management of any Crisis Situation, Del Taco may engage the services of attorneys, experts, doctors, testing laboratories, public relations firms, and those other professionals as it deems appropriate. The Franchisee and its employees shall cooperate fully with Del Taco in its efforts and activities in this regard and shall abide by all further crisis situation procedures developed by Del Taco from time to time.

Franchise Agreement (0'1 11 1 Mi l l ) Form 14 W-50168 ^T2.D0C

rn The Franchisee must implement and maintain an annroved Payment Card Tndustrv (VCD compliance nrogram for the Restaurant. Del Taco may suggest third party PCI compliance vendors occasionally, but Franchisee is free to submit alternative PCI compliance vendors to Del Taco for annroval or seek annroval tn perform Franchisee's own PCI compliance-Franchisee must submit PCI compliance reports to Del Taco in the manner and frequency Del Taco sets in the operations manuals. Franchisee's failure to comnlv will be a material default under this Agreement.

11. Maintenance of Competitive and Operational Standards. Del Taco shall have the right (the "Remodel Right") to require the Franchisee to perform remodeling, repairs, replacements and redecoration in and upon the Building and Equipment as Del Taco, in its sole and absolute discretion, may deem necessary and practical to bring the Building and Equipment up to the then current operational standards and image of Del Taco and the then current state of the art in fast food restaurants (an "Image Enhancement"). Del Taco may exercise its Remodel Right upon (a) the expiration of every five-year period following the opening of the Restaurant for business with the public; (b) the sale, assignment, transfer or encumbrance (collectively, the "Transfer") of any of the rights created by this Agreement, any part of the Del Taco System, or any other interest created under this Agreement, including, without limitation, if Franchisee is a legal entity, the sale, resale, pledge, assignment, transfer or encumbrance of any ownership interest in the Franchisee that, alone or together with any other related, previous, simultaneous or proposed transfers, would result in a change in "control" of the Franchisee within the meaning of the Securities Act of 1933, as amended, and the rules and regulations promulgated under that act; or (c) the issuance of a successor franchise agreement. If Del Taco, in its absolute and sole discretion, chooses to exercise its Remodel Right upon the occurrence of a Transfer, then, after the Transfer, Del Taco may exercise its Remodel Right upon the occurrence of any of the following events: (a) the expiration of every five-year period following the Transfer; (b) a subsequent Transfer; or (c) the issuance of a successor franchise agreement. Del Taco reserves the right to dictate, in its sole and absolute discretion, the specifics, type and scheduling of the refurbishing, remodeling and/or renovation referred to above. If the Franchisee at any time deems it necessary and practical to replace any Equipment or repair or remodel the Building or take any similar action, the Franchisee shall perform the replacement, repairs or remodeling in accordance with Del Taco's then current standards and specifications. The obligations imposed under this section supplement any obligation to maintain, restore or repair the Building imposed under any lease or sublease with respect to the Restaurant.

12. Indemnification and Insurance. The Franchisee shall comply with the following indemnification and insurance provisions:

(a) Indemnification. The Franchisee shall have responsibility for all loss or damage arising from or relating to the operation of the Restaurant and for all claims or demands for damages to property or for injury, illness or death of persons directly or indirectly arising from or relating to the operation of the Restaurant. The Franchisee shall defend, indemnify and hold Del Taco and its limited liability company managers, officers, employees and agents harmless from and against any and all losses, liabilities, damages, costs, expenses (including, without limitation, any reasonable attorneys' fees) and claims arising from injury or damage to any person or property occasioned by any acts, omissions or commissions of the Franchisee or of any of its agents, employees or contractors with respect to, or arising out of, the use or occupancy of Restaurant or the operation of the business on the Restaurant. The Franchisee's obligations under this Section 12(a) shall survive the expiration or termination of this Agreement.

Franchise Agreement (04-1 \ -Wi l l l ) Form 15 w-50168 ?T2.D0C

(b) Insurance. The Franchisee, at its sole cost and expense, shall procure and maintain in full force and effect, at all times during the term of this Agreement, insurance policies with insurers reasonably satisfactory to Del Taco and with a Best's policyholder rating of not less than "A," and with Del Taco and its subsidiaries and affiliates named as an additional named insured, containing not less than the following coverage:

(i) Liability. A comprehensive general liability policy in the amount of !lil ,000-0002,0no,0flfl combined single limit bodily injury liability per person and per occurtcnce and property damage liability per occurrence, including, but not limited to, premises, operations, products and completed operations, broad form property damage, blanket contractual owner's and contractor's protective, personal injury, and non-owned or hired automobiles.

(ii) Fire. Fire, extended coverage and "all risk" or direct physical loss, subject to standard exclusions, in an amount not less than 100% of the replacement value of the Building (exclusive of foundation and excavation costs), including, but not limited to, all Equipment and any additions to or substitutions for the Building and Equipment. The replacement cost values as defined in said policy shall include the replacement value of stated items then being constructed or purchased by Del Taco at the time of loss.

(iii) Business Interruption. Business interruption insurance in an amount not less than adequate to pay for the monthly rent reserved under any real property lease or sublease, restaurant equipment lease or sublease, sign lease or sublease, and other continuing expenses up to six months without possibility of co-insurance penalty.

(c) Evidence of Insurance. The Franchisee shall submit to Del Taco, or its designee, originals or copies of all policies of insurance required by this Section 12 or certificates indicating that it has the required insurance in effect. No policy shall have a deductible in excess of 10% of the amount of a claim. Each policy shall contain a full waiver of subrogation and shall provide that the insurance company may not cancel the policy or reduce the limits of coverage under the policy except upon 30 days' prior written notice to Del Taco. However, no such policy shall be so canceled nor shall such limits of coverage be so reduced without the prior written consent of Del Taco. Franchisee shall carry all required statutory worker's compensation insurance, unemployment insurance, disability insurance and such other insurance coverage as may be required by law.

(d) General. All required insurance policies shall be subject to increased amounts of coverage at the reasonable request of Del Taco. If new or additional insurance becomes available which is then customarily carried for operations like the Restaurant, Del Taco shall have the right, in its reasonable discretion, to require Franchisee to carry that new or additional insurance. If the Franchisee fails to provide any required insurance, Del Taco, at its option, may secure the required insurance for the Franchisee's account and the premiums and other expenses relating

Franchise Agreement (O'l 11 IMl l l ) Form 16 W-50168 ?T9.D0C

to obtaining that insurance shall become a liability of the Franchisee payable upon demand. The Franchisee's obligation to obtain and maintain the required policies of insurance shall not be limited in any way by reason of any insurance maintained by Del Taco, nor shall the Franchisee's performance of its insurance obligation relieve it of liability under the indemnity provision set forth in Section 12(a), above. When the Franchisee obtains any sort of policy insuring against business interruption, the Franchisee shall name Del Taco and its designated Affiliates as an additional named insured.

13. Trademarks and Service Marks. Del Taco shall bring all actions for infringement and/or unfair competition arising from, or in connection with, the use by others of any copyrights or names, symbols and devices comprising, consisting of, or similar to the name Del Taco or any variation or colorable imitations of Del Taco. In any such action, Del Taco may require the Franchisee to join as a party as the circumstances of the case may require at no cost or expense to the Franchisee. The Franchisee shall lend its full cooperation and assistance in those actions. The Franchisee promptiy shall disclose to Del Taco all discoveries and ideas, whether patentable or not, relating to Del Taco's business, which the Franchisee or any of its Affiliates, solely or jointly with others, conceive during the term of this Agreement, whether or not Del Taco's facilities, materials or personnel are utilized in the conception or making of such discoveries or ideas. All of the foregoing discoveries and ideas shall constitute the exclusive property of Del Taco and Del Taco shall have no obligation to the Franchisee with respect to them.

14. Defaults. The occurrence of any of the following events shall constitute a default under this Agreement:

(a) If the Franchisee misuses the Del Taco System or any other names, marks, systems, logos, symbols or rights provided by Del Taco to the Franchisee; otherwise materially impairs the goodwill associated therewith or Del Taco's rights therein; or uses, at the Restaurants, any names, marks, systems, logos or symbols not authorized by Del Taco in writing prior to such use.

(b) If the Franchisee or any of its Affiliates has any interest, direct or indirect, in the ownership or operation of any restaurant which offers any Mexican food, operates like, looks like, competes with, copies or imitates any Del Taco restaurant or uses any part of the Del Taco System, other than pursuant to an agreement with Del Taco.

(c) If the Franchisee fails to make any payments when due to Del Taco or to any other creditor of the Franchisee if the failure to make the payment to the creditor impairs the operation of the Restaurant.

(d) If the Franchisee fails to submit to Del Taco any financial or other information required under this Agreement.

(e) If the Franchisee fails to construct, maintain, repair or renovate the Restaurant in accordance with this Agreement or Del Taco's plans and specifications or fails to equip the Restaurant in accordance with Del Taco's standards and specifications.

(f) If the Franchisee fails to operate the Restaurant in accordance with this Agreement, including (without limitation) operating the Restaurant in

Franchise Agreement (0 11-11.4Z12) Form 17 W-50168 ^±DOC

compliance with the operating standards and specifications established from time to time by Del Taco as to the quality of service, cleanliness, health and sanitation, or if Franchisee receives a failing score on any inspection conducted in accordance with Section 10(h) hereof

(g) if the Franchisee purports to effect any assignment of its rights under this Agreement other than in accordance with this Agreement.

(h) If Franchisee defaults under any lease or sublease of the Building.

(i) If a threat or danger to public health or safety results from the operation of the Restaurant, including the construction and maintenance of the Restaurant.

(j) If the Franchisee makes, or has made, any misrepresentation to Del Taco in connection with obtaining this Agreement or in conducting the business franchised and licensed under this Agreement.

(k) If the Franchisee fails to obtain Del Taco's prior written approval or consent as expressly required by this Agreement.

(1) If the Franchisee defaults in the performance of any other obligation under this Agreement or any other agreement with Del Taco or any of its Affiliates.

(m) If the Restaurant ceases operations without the written consent of Del Taco for any reason, except for a period of not more than 90 days as a result of fire, condemnation or Act of God.

(n) If the Franchisee or any Affiliate of the Franchisee (1) becomes insolvent by reason of, or admits to its inability to pay its debts as they mature or (2) files or has filed against it a petition in bankruptcy, reorganization or similar proceeding.

(o) If a court of competent jurisdiction appoints a receiver, permanent or temporary, of the all or any portion of the business, assets or property of the Franchisee or any Affiliate of the Franchisee.

(p) If the Franchisee or any Affiliate of the Franchisee requests the appointment of a receiver or makes a general assignment for the benefit of creditors.

(q) If a final judgment against the Franchisee or any Affiliate of the Franchisee in the amount of $10,000 or more remains unsatisfied or of record for 30 days or longer.

(r) If an attachment of the bank accounts, property or receivables of the Franchisee or any Affiliate of the Franchisee is not dismissed within 30 days.

(s) If any execution levied against the business or property of the Franchisee or any Affiliate of the Franchisee is not discharged within five days.

(t) If the Franchisee fails on more than two occasions during any 12-month period to comply with one or more requirements of this Agreement or any

Franchise Agreement (04-i-\-Willl) Form 1 • W-50168 ?T9.DOC

other agreement with Del Taco, whether or not corrected after notice.

(u) If the Franchisee or any Affiliate of the Franchisee is convicted of any felony or any other crime involving moral turpitude.

(v) If the Franchisee, prior to operating the Restaurant, does not obtain Del Taco's prior written approval of an Operating Principal if (I) the Franchisee is not an individual or (2) the Franchisee does not participate personally in the direct operation of the Restaurant.

(w) If the right of the Franchisee to possess the Restaurant terminates for any reason whatsoever.

15. Termination. Upon the occurrence of any event of default, Del Taco, without prejudice to any other rights or remedies contained in this Agreement or provided by law, shall have the following rights and remedies:

(a) Termination for Monetary Defaults. With regard to any default involving the non-payment of money, Del Taco may terminate this Agreement if the Franchisee fails to cure the default within five days after Del Taco gives written notice of the default to the Franchisee. If Franchisee receives a third notice of default within any 12 month period, Del Taco shall be entitled to send Franchisee a notice of termination without providing Franchisee an opportunity to remedy the default.

(b) Termination for Non-monetary Defaults. With regard to any default not involving the non-payment of money or a non-curable default listed below, Del Taco may terminate this Agreement if the Franchisee fails to cure the default within 30 days after Del Taco gives written notice of the default to the Franchisee.

(c) Termination for Non-curable Defaults. With regard to any of the defaults listed in paragraph (i) or paragraphs (n) through (u) of Section 14, Del Taco may terminate this Agreement immediately upon written notice to the Franchisee.

(d) Assumption of Operations. Without terminating this Agreement if the Franchisee fails to cure a default within the applicable cure period, Del Taco may elect to assume complete operating control and possession of the Restaurant and operate the same in the capacity of a receiver. Del Taco shall apply funds received from that operation, first to the payment of all of Del Taco's costs and expenses of operation, then to the current obligations of the Franchisee to Del Taco or any third party, and then to the past due obligations of the Franchisee to Del Taco or any third party, with any remaining funds paid over to the Franchisee.

(e) Temporary Closure. Without terminating this Agreement if the Franchisee fails to cure a default within the applicable cure period, Del Taco may require the Franchisee to close the Restaurant and take the necessary steps to bring the Restaurant (including, without limitation, the operation, maintenance, repair and restoration of the Restaurant) into strict conformity with Del Taco's standards and specifications and the requirements of this Agreement. The Franchisee shall not reopen the Restaurant until the Franchisee has brought it into conformity with Del Taco's standards and specifications.

Franchise Agreement (04-44-44^^2) Form 19 w-50168 ?.a.DOC

(f) Remedies upon Termination. Upon termination of this Agreement as a result of an event of default by the Franchisee, Del Taco shall have the following rights and remedies and the Franchisee shall have the following obligations:

(1) The Franchisee shall pay Del Taco all sums then due plus damages for the right to receive the royalty fees for the remaining term of this Agreement, together with any other damages suffered by Del Taco as a result of the default. The damages for royalties due during the remainder of the term of this Agreement shall equal the product of the average yeariy amount of all fees paid by the Franchisee under Section 4(c) of this Agreement during the three years immediately preceding the termination, times the number of years remaining in the term. The Franchisee shall pay to Del Taco, in addition to any amounts then due and owing, all expenses incurred by Del Taco as a result of any default, including reasonable attorneys' fees.

(2) The Franchisee shall cease immediately to use the Del Taco System and confusingly similar names, marks, systems, logos, symbols or other rights, procedures or methods, except pursuant to another agreement with Del Taco.

(3) The Franchisee shall retum Del Taco's manuals, plans and specifications, designs, records, data, samples, models, programs, handbooks and drawings relating to Del Taco's operations or business.

(4) The Franchisee shall cease immediately to hold itself out in any way as a franchisee of Del Taco or to do anything which would indicate any relationship between Franchisee and Del Taco, except pursuant to another agreement with Del Taco.

(5) The Franchisee shall remove all signs and advertisements identifiable in any way with Del Taco's name or business from the Restaurant within seven days and shall permit Del Taco to enter the Restaurant and remove or permanentiy cover all signs or advertisements identifiable in any way with Del Taco's name or business, at the Franchisee's expense.

(6) Del Taco shall have an option to purchase and, if exercised, the Franchisee shall sell all of the Equipment at the Restaurant on the following terms and conditions:

(A) Del Taco shall give written notice of its exercise of its option concurrently with Del Taco's notice of termination pursuant to this Agreement.

(B) Del Taco shall establish the purchase price for the Equipment based upon its fair market value as determined by an outside appraiser. Notwithstanding any term or provision in this

Franchise Agreement (01 11 Wi l l i ) Form 20 w-50168 TriDOC

subparagraph to the contrary, Del Taco expressly reserves the right, but not the obligation, to negotiate to purchase the Equipment directly from the lessor of the Equipment.

(C) The transfer of the Equipment from the Franchisee to De! Taco shall take place 30 days after the termination of this Agreement upon receipt of payment or any applicable transfer and release documents from Del Taco; provided, however, that if the transfer cannot take place within that time period because of delays caused by the Franchisee's lender or lessor, the time period shall extend by a like number of days.

(D) The Franchisee acknowledges that, if Del Taco exercises the foregoing option, it will do it in order to operate the Restaurant for its own account. Accordingly, if Del Taco exercises the foregoing option, the Franchisee shall leave all of the Equipment at the Restaurant in good working order and repair and shall allow Del Taco to use the Equipment without charge until the transfer of the Equipment takes place.

(7) The Franchisee acknowledges that the design of the Building and the specifications and installation plans for the Equipment constitute an integral part of the Del Taco System and that their use by the Franchisee after termination or the expiration of the this Agreement would constitute unfair competition and an infringement of Del Taco's rights in the Del Taco System. Accordingly, at any time within 30 days after the termination or expiration of this Agreement, upon the demand of Del Taco, the Franchisee, at its sole cost and expense, shall take the following actions:

(A) Remove the Equipment (or as much of the Equipment as Del Taco may specify) from the Restaurant and not reinstall the same or any furniture, fixtures or equipment similar to that specified by Del Taco for the Equipment.

(B) Remodel the Building to an extent that it no longer appears confusingly similar in color or design to any then existing Del Taco restaurant.

(g) Other Rights of Franchisee. The termination of this Agreement shall not affect the rights of the Franchisee to operate other Del Taco restaurants in accordance with the terms of any other applicable franchise agreements with Del Taco until and unless the other franchise agreements, or any of them, terminate or expire.

Franchise Agreement (01 11-1 l j^2) Form 21 W-50168 ?72.DOC

16. Assignment. Conditions and Limitations. The following provisions shall apply to any sale, assignment or transfer of this Agreement:

(a) The Franchisee shall not sell, assign, transfer or encumber any of the rights created by this Agreement, any part of the Del Taco System, or any other interest created under this Agreement, nor suffer or permit any assignment, transfer or encumbrance to occur by operation of law (including, without limitation, any transfer in connection with the dissolution of the marriage of the Franchisee) or otherwise, without the prior written consent of Del Taco. Any purported transfer without Del Taco's consent shall have no force or effect. If the Franchisee is a legal entity, the terms of this Section 16 shall apply to any sale, assignment, transfer or encumbrance of the ownership interests in the Franchisee that, alone or together with any other related, previous, simultaneous or proposed transfers, would result in a change of "control" of the Franchisee within the meaning of the Securities Act of 1933, as amended, and the rules and regulations promulgated under that act.

(b) In the event of the death, disability or permanent incapacity of the Franchisee (or any owner of the Franchisee), Del Taco shall not withhold its consent to the transfer of all of the interest of the Franchisee (or owner) under this Agreement to the Franchisee's (or owners) spouse, heirs or relatives, by blood or marriage, whether by will or by operation of law, as long as the transfer satisfies the requirements of Section 16(f), below, within 90 days. If the Franchisee's (or owner's) heirs do not obtain the consent of Del Taco as required, the personal representative of the Franchisee (or owner) shall have a reasonable time period within which to dispose of the Franchisee's (or owner's) interest, subject to all of the terms and conditions for transfers under this Agreement.

(c) If the Franchisee receives a bona fide written offer to purchase all or any part of the business, franchise or other rights under this Agreement or in the event of an involuntary transfer by operation of law that the Franchisee desires or must accept, the Franchisee shall give Del Taco written notice of the proposed transfer. The notice shall include an executed counterpart of any proposed document of transfer, shall name the proposed transferee, shall specify the assets being transferred, shall state the consideration being paid and the terms of payment, and shall provide any other information about the business and operations of the Franchise that Del Taco reasonably may request with regard to the Restaurant. The Franchisee also shall deliver to Del Taco a copy of the Franchisee's annual financial statements (audited, if available) as of the end of the Franchisee's most recent fiscal year and subsequent interim period then ended. In addition, the Franchisee shall deliver to Del Taco any financial and other information relating to the third party that Del Taco reasonably may request. Del Taco or its nominee shall have the option, exercisable within 45 days after its receipt of all of the foregoing information, to purchase the assets being transferred on the same terms and conditions as offered by the third party. If Del Taco does not exercise its option, the Franchisee, within 60 days after the earlier of the expiration of Del Taco's option period or Del Taco's written rejection of the offer, may sell, assign and transfer the proposed assets to the third party, if Del Taco also has consented to the transfer as required by this Section 16. Any material change in the terms of the offer prior to the closing of the sale to the third party shall constitute a new offer, subject to the same right of first refusal by Del Taco or its nominee as in the case of an initial offer. The failure by Del Taco to exercise the

Franchise Agreement (04-1-1-1 \ i l l l ) Form 22 w-50168 ?T2.D0C

option created by this Section 16(c) shall not constitute a waiver of any other provision of this Agreement.

(d) If the Franchisee or its successor is a legal entity, the following provisions shall apply:

(1) The articles of incorporation and bylaws, partnership agreement, limited liability company operating agreement, or similar organizational documents (the "Charter Documents") shall limit the purpose of the entity to the development and operation of Del Taco Restaurants and shall prohibit the issuance and transfer of the ownership interests in the Franchisee in violation of this Agreement. The Franchisee shall furnish Del Taco, at the time of execution of this Agreement or upon the issuance or transfer of any ownership interests in the Franchisee, certified copies of its Charter Documents evidencing compliance with the foregoing and an agreement executed by all owners of the Franchisee, stating that no owner shall sell, assign or transfer, voluntarily or by operation of law, any ownership interests in the Franchisee to any person or entity other than existing owners, to the extent permitted by this Agreement, without the prior written consent of Del Taco. All ownership interests issued by the Franchisee shall bear the following legend, which shall appear legibly and conspicuously on each document or certificate evidencing an ownership interest:

"The transfer of these securities is subject to the terms and conditions of an agreement with Del Taco LLC."

(2) The Franchisee shall recall any presently issued and outstanding ownership interests and place the foregoing legend on them. The Franchisee shall place a stop transfer order against the transfer of any ownership interests, except transfers permitted by this Section 16. Each holder of an ownership interest in the Franchisee shall execute the Personal Guarantee included with this Agreement.

(3) If the Franchisee ever desires to sell its ownership interests to the public, it shall present any offering circular or prospectus to Del Taco at least 30 days prior to the offering becoming effective. The Franchisee shall not offer its ownership interests by using the name Del Taco or any name confusingly similar to Del Taco in the title of the offering. The Franchisee may make appropriate reference in the text of the offering to the fact that Franchisee is a franchisee of Del Taco.

(e) Any assignment or transfer permitted by this Section 16 shall not have effect until Del Taco receives a fully-executed copy of all transfer documents and consents to the transfer in writing.

(f) Del Taco shall not withhold its consent unreasonably to a sale, assignment or transfer by the Franchisee. In addition to any other reasonable cause

Franchise Agreement (01 11 1 MUD Form 23 W-50i68 ?T2.D0C

for withholding consent, Del Taco may refijse to consent to any transfer unless the Franchisee satisfies the following conditions:

(1) The transferee assumes all obligations of the Franchisee created by this Agreement, any lease or sublease between Del Taco and the Franchisee for the Restaurant, and any other agreement between Del Taco and Franchisee relating to the Restaurant.

(2) The Franchisee pays all amounts owed Del Taco and Del Taco's Affiliates.

(3) The Franchisee is not in default under this Agreement or any other agreement with Del Taco, and the transferee, if a current franchisee of Del Taco, is not in default under any agreements with Del Taco.

(4) The transferee satisfactorily completes the training program required of franchisees by Del Taco at the date of transfer.

(5) The Franchisee satisfies Del Taco that the transferee meets all of the requirements of Del Taco for franchisees.

(6) The Franchisee and the transferee, if a current franchisee of Del Taco, execute a general release in a form satisfactory to Del Taco of any and all claims against Del Taco and Del Taco's Affiliates.

(7) The transferee executes the then current form of franchise agreement for the remainder of the initial term of the Franchisee's franchise agreement, which agreement shall include the royalty and marketing fee curtently paid by the Franchisee and shall not require the payment of a franchise fee.

(8) The Franchisee or the transferee pays to Del Taco a transfer fee of $5,000 per Restaurant, to cover Del Taco's reasonable costs (including attorneys' fees) incurred in reviewing, negotiating and effecting the transfer.

(g) If the Franchisee proposes to assign or otherwise transfer its rights under this Agreement and, in that regard, Del Taco incurs costs (including attorneys' fees) in reviewing, negotiating or attempting to effect the assignment or other transfer, the Franchisee shall pay upon demand all costs incurred by Del Taco regardless of whether the assignment or other transfer takes place.

(h) This Agreement shall inure to the benefit of Del Taco, its successors and assigns, and Del Taco shall have the right to transfer or assign all or any part of its interests in this Agreement to any person or entity.

17. Confidentiality and Covenant Not To Compete. The Franchisee shall comply with the following confidentiality and covenant not to compete provisions:

Franchise Agreement (04 11 1 Mi l l ) Form 24 w-50168 TriDOC

(a) The Franchisee and its Affiliates shall not use, in connection with the operation of any restaurant (other than the Restaurant) any part of the Del Taco System or any other names, marks, systems, logos, symbols or foodstuffs provided by Del Taco or proprietary foodstuffs provided by an approved vendor to the Franchisee or cause or permit any restaurant to offer Mexican food or look like, copy or imitate the Restaurant other than pursuant to an agreement with Del Taco. During the term of this Agreement, Del Taco shall have the right to inspect the Restaurant, without any prior notice. If Del Taco has reason to believe that the Franchisee is not complying with the provisions of this Section 17, Del Taco shall give notice of that non-compliance to the Franchisee, specifying the nature of the non-compliance. If the Franchisee believes that it is complying with this Section 17, the Franchisee shall have the burden of establishing that compliance within 10 days after receipt of the foregoing notice from Del Taco. Unless the Franchisee establishes compliance, it immediately shall take all steps to cause compliance in a manner satisfactory to Del Taco.

(b) The Franchisee and its Affiliates shall hold the Del Taco System and all parts of the Del Taco System in confidence. The Franchisee acknowledges that Del Taco has developed the Del Taco System over an extended period of time and at a substantial cost to Del Taco and, if used by other persons, firms or entities, would give those other persons, firms or entities an unfair competitive advantage. The Franchisee shall not disclose (except to employees or agents that need access to the information in order to construct or operate the Restaurant) or use or permit the use of the Del Taco System, or any part of the Del Taco System, except as authorized by this Agreement.

(c) The Franchisee and its Affiliates shall treat as and keep confidential the Franchise Operations Manual, any other manuals or materials designated for use with the Del Taco System, and any other information Del Taco may designate from time to time for confidential use with the Del Taco System, as well as all other trade secrets, confidential information, knowledge and know-how concerning the construction or operation of the Restaurant imparted to, or acquired by, the Franchisee from time to time in connection with this Agreement. The Franchisee acknowledges the unauthorized use or disclosure of that confidential information and trade secrets will cause incalculable and irreparable injury to Del Taco. The Franchisee accordingly agrees that it shall not disclose (except to employees or agents that need access to the information in order to construct or operate the Restaurant) or use or permit the use of that information, in whole or in part, or otherwise make the same available to any unauthorized person or source. Any and all information, knowledge and know-how about the Del Taco System; Del Taco's products, services, standards, specifications, systems, procedures and techniques; and any other information or material Del Taco may designate as confidential shall constituted confidential information for the purposes of this Agreement. The Franchise Operations Manual; any other manuals or materials designated for use with the Del Taco System; the knowledge concerning the logic, structure and operation of computer software programs that Del Taco authorizes for use in connection with the operation of the Restaurants; and all confidential information and trade secrets shall remain the sole property of Del Taco, and the Franchisee shall not acquire any right, title or interest in it by virtue of its authorization pursuant to this Agreement to possess and use the same.

Franchise Agreement (04-44-44^12) Form 25 w-50168 ^T9JX)C

(d) The Franchisee shall cause each person actively involved in the management or operation of the business of the Franchisee or the operation of the Restaurant, at the time of his or her employment, to enter into a confidentiality agreement in the form required from time to time by Del Taco. The Franchisee shall prevent any person from using, in connection with the operation of any restaurant, the Del Taco System or from operating any restaurant which offers Mexican food or looks like, copies, competes with, or imitates the Restaurant or any Del Taco restaurant or operates in a manner that seeks to serve the same customers as Del Taco or any franchisee of Del Taco, other than pursuant to an agreement with Del Taco. If the Franchisee has reason to believe that any person has violated the provisions of the confidentiality agreement or this Section 17, the Franchisee shall notify Del Taco and shall cooperate with Del Taco to protect Del Taco against infringement or other unlawful use of the Del Taco System, including (without limitation) the prosecution of any lawsuits if deemed necessary or advisable by Del Taco.

(e) The Franchisee (and if a legal entity, the Franchisee's owners holding a 10% or greater interest in the Franchisee), during the term of this Agreement and for a period of two years after the expiration or termination of this Agreement, shall not engage in or acquire any direct or indirect interest in any business that uses, duplicates or simulates in any way the Del Taco System or any portion of the Del Taco System. In addition, the Franchisee (and if a legal entity, the Franchisee's owners holding a 10% or greater interest in Franchisee), during the term of this Agreement and for a period of two years after the expiration or termination of this Agreement, shall not engage in any food service business similar to the food service business operated under the Del Taco System within the Protected Area of the Restaurant or within two miles of any other Del Taco restaurant owned and/or operated by Del Taco or any other franchisee or licensee of Del Taco.

(f) The Franchisee acknowledges that any violation of this Section 17 shall constitute both a material breach of this Agreement and a tortious interference with Del Taco's rights in its confidential information and trade secrets. The Franchisee further acknowledges that any violation will cause irteparable and incalculable harm to Del Taco and agrees that Del Taco shall have the right to obtain temporary and permanent injunctions to prevent violations.

18. Arbitrations. Del Taco and the Franchisee shall submit any controversy or claim arising out of or relating to this Agreement, or with respect to a breach of the terms of this Agreement, and any other controversy, claim or dispute between the parties to arbitration in accordance with the following provisions:

(a) Demand to Arbitrate. The claimant shall send a notice of a demand for arbitration, in writing, to the other party to the dispute. The demand shall state with particularity the nature and grounds of the claim, dispute or controversy and the nature of relief being sought. A claimant shall make a demand for arbitration promptly after the claim, dispute or other matter in question has arisen; but, in any event, before the applicable statute of limitations would bar the institution of legal or equitable proceedings based on the claim, dispute or other matter in question.

(b) Appointment of Arbitrator. Within 10 days after the demand to arbitrate, Del Taco and the Franchisee each shall request the appointment of one

Franchise Agreement (04 11 1 ] i i l l ) Form 26 W-50168 ?T2.D0C

neutral arbitrator by the American Arbitration Association, or its successor, and the one arbitrator chosen shall conduct the arbitration. If the failure or refusal of either party to cooperate in the selection of the arbitrator prevents the selection of the arbitrator within 30 days after the demand for arbitration, the failure or refusal shall constitute an irrevocable consent to the arbitrator appointed by the American Arbitration Association. Unless otherwise specifically stated in this Section 18, the appointment of an arbitrator shall take place in accordance with the rules of the American Arbitration Association, or its successor, then in effect. If the American Arbitration Association, or successor, no longer exists, either party may apply to the Orange County Superior Court for the appointment of the arbitrator.

(c) Conduct of Arbitration. Notwithstanding any requirements imposed by law (except to the extent mandatory), the following provisions shall apply to any arbitration conducted under this Section 18:

(1) Power of Arbitrator. The arbitrator shall rule on all procedural matters including (without limitation) the selection of the time and place for the hearing, matters relating to discovery, and the admissibility of evidence.

(2) Response to Demand. Within five days after the appointment of arbitrator, the party against whom arbitration is sought shall file with the arbitrator and serve on the other party a statement (i) responding with particularity to the claims set forth in the demand to arbitrate, (ii) setting forth any defensive matters, and (iii) setting forth any claims that the person has against the party instituting the arbitration. The statement required by this provision shall take substantially the same form as required for answers and cross-complaints by the Federal Rules of Civil Procedure. If the other party , does not file statement required by this provision in a timely manner, it shall not have the right to assert any defensive matters or any claims against the party instituting the arbitration.

(3) Amendment of Claim. If, after the delivery of the notice of demand for arbitration, either party desires to make any new or different claim, the party shall make the claim made in writing and shall file it with the arbitrator if the arbitrator, upon good cause shown, determines the other party may file the amended claim. The filing of an amended claim shall not extend the time for the holding of the arbitration hearing or the making of an award.

(4) Time for Arbitration Hearing. The arbitration hearing shall take place no sooner than 60 nor later than 90 days after the appointment of the last arbitrator and the arbitrator shall give notice of the date, time and place of the hearing to the parties within 10 days after the appointment of the arbitrator.

(5) List of Witnesses and Documents. Either party, within 10 days after receipt of the notice of the hearing, shall have the right to demand in writing, served personally or by registered or certified mail, that the other party provide a list of witnesses it intends to call,

Franchise Agreement (04 11 1 \ i l l l ) Form 27 W-50168 ?T2.D0C

designating which witnesses it will callas expert witnesses, and a list of documents it intends to introduce at the hearing, provided that the demanding party provides its lists of witnesses and documents at the time of its demand. The demanding party shall serve a copy of those demands and the demanding party's lists on the arbitrator at the time served on the other party. The recipient of the request shall serve on the requesting party personally or by certified mail, within 10 days after receipt of the request, copies of the lists requested and, also, shall serve such lists on the arbitrator at the same time. The party shall make any documents listed available for inspection and copying at reasonable times prior to the hearing. The failure to list a witness or a document shall bar the testimony of an unlisted witness or the introduction of any undesignated document at the hearing.

(6) Record. The arbitrator shall make the necessary arrangements for the taking of a stenographic record whenever requested by a party. The arbitrator shall determine the allocation of the cost of providing that record between the parties.

(7) Attendance at Hearings. Any person who is a party to the arbitration may attend the hearings. The arbitrator otherwise shall have the power to exclude any witness, other than a party or other essential person, during the testimony of any other witness. The arbitrator also shall have the power to exclude the attendance of any other person

(8) Adjournments. Except for adjournments required by law or caused by the illness or disability of the arbitrator, the arbitrator shall not adjourn, continue or otherwise delay the hearing without the written consent of the parties.

(9) Production of Witnesses and Records. Upon application of a party to the arbitration or upon his or her own determination, the arbitrator may issue subpoenas for the attendance of witnesses and subpoenas duces tecum for the production of books, records, documents and other evidence. The parties shall serve and may enforce subpoenas in accordance with the provisions of the Federal Rules of Civil Procedure then in effect.

(10) Absence of a Party. The arbitration may proceed in the absence of any party who, after the notice of the hearing, fails to attend. The arbitrator shall not make an award solely on the default of a party, and the arbitrator shall require the party present to submit evidence required for the making of an award.

(11) Authoritv to Administer Oaths. The arbitrator may administer oaths.

(12) Evidence. The parties may offer any evidence they desire and shall produce any additional evidence the arbitrator may deem necessary to an understanding and determination of the dispute. The arbitrator shall judge the relevancy and materiality of the evidence

Franchise Agreement (04 11 114 12) Form 28 w-50168 7-5.DOC

offered and need not conform to the legal rules of evidence. The parties shall present all evidence in the presence of the arbitrator and all of the parties, except when a party has failed to appear or has waived his or right to attend.

(13) Evidence by Affidavit and Filing of Documents. The arbitrator shall receive and consider the evidence of witnesses by affidavit, but shall give it only as much weight as they deem it entitled to after consideration of any objections made to its admission. Each party shall file all documents not filed with the arbitrator at the hearing, but arranged for at the hearing or subsequently by agreement of the parties, shall be filed with the arbitrator. All parties shall have the opportunity to examine those documents.

(14) Discovery. The parties to the arbitration shall have the right to take depositions and to obtain discovery regarding the subject matter of the arbitration and, to that end, to use and exercise all the same rights, remedies and procedures (subject to all the same duties, liabilities and obligations) in the arbitration with respect to the subject matter as provided in the Federal Rules of Civil Procedure then in effect. Notwithstanding the foregoing, a party may take a deposition on 10 days' notice at any time after the delivery of the notice of demand to arbitrate and may require an answer or response to interrogatories or requests for admission within 15 days after their receipt. In connection with any discovery, the arbitrator shall have the power to enforce the rights, remedies, procedures, duties, liabilities and obligations of discovery by the imposition of the same terms, conditions, consequences, liabilities, sanctions and penalties available in like circumstances in a civil action by a federal court under the provisions of the Federal Rules Civil Procedure, except the power to order the arrest or imprisonment of any person. The arbitrator may consider, determine and make any orders imposing any terms, conditions, consequences, liabilities, sanctions and penalties, deemed necessary or appropriate at any time or stage of the course of the arbitration, and those orders shall constitute conclusive, final and enforceable arbitration awards on the merits.

(15) Reopening of Hearings. The arbitrator may reopen an arbitration hearing on his or her own motion or upon application of a party at any time before making an award; provided, however, that, if the reopening of the hearing will prevent the making of the award within the time specified in this Section 18, the arbitrator may not reopen the matter unless the parties agree to an extension of the time limit.

(16) Extensions. The parties may modify any period of time by mutual agreement, but the arbitrator shall not have the power to extend any period of time whatsoever.

(17) Time for Award. The arbitrator shall render the award no later than 20 days after the completion of the hearing.

Franchise Agreement (04 11 i MI12) Form 29 w-50168 ?T2.DOC

(d) Application of Federal Rules of Civil Procedure. Except to the provided otherwise in this Section 18, any arbitration conducted under this Section 18 shall take place in accordance with the Federal Rules of Civil Procedure then in effect.

(e) Finality; Enforcement; Venue. The award of the arbitrator shall constitute a final award and shall bind all parties to the arbitration, and the parties may enter a judgment on the aware in any court of competent jurisdiction. All arbitrations shall take place in Orange County, California.

(f) Arbitration Costs. Attorneys' Fees and Costs. Each party shall bear their share of the costs of the arbitration proceeding. The prevailing party to the arbitration shall have the right to an award of its reasonable attomeys' fees and costs incurted after the filing of the demand for arbitration.

(g) Injunctive Relief Notwithstanding anything to the contrary contained in this Section 18, either party may file suit in a court of competent jurisdiction for the entry of temporary or preliminary injunctive relief, restraining orders and orders of specific performance, including (without limitation) injunctive relief pertaining to the Franchisee's use of the Del Taco System, including Del Taco's trademarks and service marks.

19. Notices. Except as otherwise provided in this Agreement, when this Agreement makes provision for notice or concurtence of any kind, the sending party shall deliver or address the notice to the other party by hand delivery, certified mail, delivery via a nationally-recognized ovemight delivery service, telecopy or e-mail to the following address, as applicable:

Del Taco: 25521 Commercentre Drive Lake Forest, California 92630 Fax Number: (949) 462-9300

The Franchisee: The Franchisee's notice address set forth on Exhibit A to this Agreement

All notices pursuant to the provisions of this Agreement shall run from the date that the other party receives or refuses delivery of the notice or three business days after the party places the notice in the United States mail. Each party may change the party's address by giving written notice to the other party.

20. Goveming Law and Venue. The internal laws of California, without regard to its conflicts of laws provisions, shall govem the interpretation and enforcement of this Agreement. However, the laws of the state in which the Restaurant operates shall govem the interpretation and enforcement of the non-compete provisions of Section 17 of this Agreement. Subject to the terms and provisions of Section 18, above, Del Taco and the Franchisee shall bring any controversy or claim arising out of this Agreement only before a court of competent jurisdiction in Orange County, California.

21. Remedies. Waiver, Consents and Damages. Except as set forth in this Agreement, no rights or remedies set forth in this Agreement shall exclude any other right or remedy allowed by law or in equity. No waiver by a party of any covenant or condition or breach of any covenant or

Franchise Agreement (04-11-1 Mill) Form 30 W-50168 ^±DOC

condition of this Agreement shall constitute a waiver of any subsequent breach or nonobservance on any other occasion of the same or any other covenant or condition of this Agreement. Subsequent acceptance by Del Taco of payments due it shall constitute a waiver by Del Taco of any prior breach. Whenever this Agreement requires Del Taco's prior approval or consent, the Franchisee shall make

a timely written request to Del Taco for the approval or consent, which Del Taco shall grant, if at all, only in writing. Del Taco makes no warranties or guarantees upon which the Franchisee may rely, and assumes no liability or obligation to the Franchisee, by providing any waiver, approval, consent or suggestion to the Franchisee in connection with this Agreement or by reason of any neglect, delay or denial of any request. The Franchisee and the Franchisee's owners hereby waive any right to or claim for punitive or exemplary damages, multiple damages, or consequential damages (even if the Franchisee has advised Del Taco of the possibility of those damages), or any other damages, whether based on contract, tort or otherwise, except for actual damages. The actual damages that the Franchisee may recover shall not exceed the aggregate amount of royalty fees paid by the Franchisee to Del Taco since the occurrence of the act or omission giving rise to the claim for damages and shall remain subject to any applicable statute of limitations.

22. Severability. If a court or arbitrator finds any provision of this Agreement or the application of any of its provisions to any person or to any circumstances invalid or unenforceable, that finding shall not affect any other provision of this Agreement or its application to any other person or circumstance.

23. Entire Agreement. This Agreement and any addendum to this Agreement contain the entire agreement between the parties to this Agreement relating to the subject matter of this Agreement. The Franchisee acknowledges that Del Taco and its representatives have made no representations to the Franchisee and, further, that the Franchisee has not relied on any representations other than or inconsistent with the provisions of this Agreement and the information set forth in the most recent franchise disclosure document provided to the Franchisee. Nothing in this Agreement or in any related agreements is intended to disclaim the representations made in the franchise disclosure document. No agreement of any kind relating to the matters covered by this Agreement shall bind either party unless in writing and executed by all interested parties.

24. Designated Persons. Del Taco and the Franchisee certify to each other that (a) it is not acting, directly or indirectly, for or on behalf of any person, group, entity or nation named by an Executive Order or the United States Treasury Department as a terrorist, "Specifically Designated Nation and Blocked Person," or other banned or blocked person, group, entity or nation pursuant to any law, order, rule or regulation enforced or administered by the Office of Foreign Assets control; and (g) it is not engaged in this transaction, directly or indirectiy on behalf of, or instigating or facilitating this transaction, directly or indirectly on behalf of, any such person, group, entity or nation.

25. Joint and Several Obligation. If the Franchisee consists of more than one person or entity, each person and entity shall have joint and several liability for the Franchisee's obligations under this Agreement.

26. Incorporation of Exhibits. All exhibits referred to in this Agreement constitute an integral part of this Agreement.

27. Headings and Pronouns. The headings in this Agreement appear for convenience only and shall not alter or affect any provisions. Each pronoun used in this Agreement shall include the other numbers and genders, as appropriate.

Franchise Agreement (04-14-1 Mi l l ) Form 3 1 W-50168 •7T9.DOC

28. Representations. Wartanties and Acknowledgments. The Franchisee represents, warrants and acknowledges to Del Taco as follows:

(a) The Franchisee has conducted an independent investigation of the business contemplated by this Agreement and recognizes that the business involves risks which make the success of the venture dependent upon factors which are beyond the control of Del Taco. Del Taco expressly disclaims the making of, and the Franchisee acknowledges that it has not received or relied upon, any warranty or guarantee, expressed or implied, as to the potential sales volume, profits or operating success of the business venture contemplated by this Agreement.

(b) The Franchisee has no knowledge of, and has not relied upon, any representations by Del Taco or its officers, directors, owners, employees, or agents about the business contemplated by this Agreement contrary to the terms of this Agreement or the information set forth in the most recent franchise disclosure document provided to the Franchisee. The Franchisee represents to Del Taco, as an inducement to Del Taco's entry into this Agreement, that the Franchisee has made no misrepresentations in obtaining this Agreement.

(c) The Franchisee has received, read and understands this Agreement and Del Taco has afforded the Franchisee ample time and opportunity to consult with advisors of its own choosing about the potential benefits and risks of entering into this Agreement.

(d) The Franchisee understands that present and future franchisees of Del Taco may operate under different forms of agreements and, consequently, the obligations and rights of the parties to those agreements may differ materially from the obligations and rights contained in this Agreement.

(e) The Franchisee understands that a franchisee who is a party to a Del Taco Development Agreement may enjoy significantly more favorable terms and conditions under its Del Taco Franchise Agreement than the terms and conditions contained in this Agreement.

(f) The execution, delivery and performance of this Agreement shall not constitute a breach of any agreement, contract or other instmment binding on the Franchisee.

29. Franchisee Not Del Taco's Agent. This Agreement does not in any way create the relationship of principal and agent between Del Taco and the Franchisee. The Franchisee shall not act or attempt to act or represent itself, directly or by implication, as an agent of Del Taco or in any manner assume or create or attempt to assume or create any obligation on behalf of or in the name of Del Taco nor shall the Franchisee act or represent itself as an affiliate of any other authorized franchisee of Del Taco. The Franchisee shall represent and conduct itself as an independent contractor of Del Taco. The Franchisee shall not have the authority, express or implied, to bind or obligate Del Taco in any way.

30. Binding Effect. This Agreement shall bind the parties and their respective executors, administrators, successors and assigns.

31. Force Majeure. Any Event of Force Majeure, as defined below, shall excuse the Franchisee from the performance of its obligations under the Franchise Agreement to the extent and

Franchise Agreement (04 11 1 Mi l l ) Form 32 W-50168 ?T9.D0C

as long an Event of Force Majeure prevents the Franchisee from performing the obligation. An "Event of Force Majeure" shall mean any event or condition beyond the reasonable control of the Franchisee, including (without limitation) weather, accidents, labor unrest, and acts of violence. An Event of Force Majeure shall not excuse any payment obligations.

32. Interference with Employment Relations. During the term of this Agreement, neither Del Taco nor the Franchisee shall employ or seek to employ, directly or indirectly, any person serving in a managerial position for the other party or its subsidiaries or for any other franchisee in the Del Taco System, except with the other employer's written consent. For purposes of this section, "managerial position" shall include all restaurant employees who serve as shift supervisors and above.

Executed as of the day and year first set forth above.

Franchisor: Del Taco LLC

By: Jack T. Tang, Associate General Counsel

Franchisee:

By :_ Its:_ Date:

Franchise Agreement (04 11 114^2) Form 3 3 W-50168 ?r2.D0C

Concurrent with its execution of this Agreement, if Franchisee is not an individual, each holder of an equity interest in Franchisee (e.g., shareholder, partner, member) shall execute this Personal Guarantee.

PERSONAL GUARANTEE

Each of the undersigned hereby personally guarantees the performance of any and all obligations (the "Obligations") of the Franchisee under this Del Taco Franchise Agreement. Each of the undersigned agrees that Del Taco, or its successor or assignee, may proceed against the undersigned directly and independently of the Franchisee and that the cessation of the liability of the Franchisee for any reason other than the full performance of all of the Obligations; any extension, renewal or forbearance of the performance of the Obligations; or any impairment or suspension of Del Taco's or its successor's or assignee's remedies or rights against the Franchisee shall not affect the liability of the undersigned in any way.

Date:

Date:

Franchise Agreement (01 11 1 \ i l l l ) Form 34 W-50168 ?r9.D0C

Exhibit A

Identification of Franchisee

1. Name of Franchisee:

2. Notice Address of Franchisee:

Fax Number:

3. Location of Restaurant:

4. Protected Area: A circular area within a one-mile radius from the front door of the Restaurant as further defined in Section 1(g) of this Agreement.

5. Date of Opening:

Franchise Agreement (04-11 4 14 12) Form W-50168 7T2JX)C

Exhibit B

Authorization Agreement for Prearranged Payments (Direct Debits)

The undersigned depositor ("Depositor") hereby authorizes Del Taco LLC ("Del Taco") to initiate debit entries and/or credit correction entries to the Depositor's checking and/or savings account(s) indicated below and the depository ("Depository") to debit such account pursuant to Del Taco's instructions.

Depository Branch

Street Address, City, State, Zip Code

Bank Transit/ABA Number Account Number

This authority is to remain in full force and effect until Depository has received joint written notification from Del Taco and Depositor of the Depositor's termination of such authority in such time and in such manner as to afford Depository a reasonable opportunity to act on it. Notwithstanding the foregoing. Depository shall provide Del Taco and Depositor with 30 days' prior written notice of the termination of this authority. If an erroneous debit entry is initiated to Depositor's account. Depositor shall have the right to have the amount of such entry credited to such account by Depository, if within 15 calendar days following the date on which Depository sent to Depositor a statement of account or a written notice pertaining to such entry or 45 days after posting, whichever occurs first. Depositor shall have sent to Depository a written notice identifying such entry, stating that such entry was in ertor and requesting Depository to credit the amount thereof to such account. These rights are in addition to any rights Depositor may have under federal and state banking laws.

Depositor Depository

By: By: Titie: Titie: Date: Date:

Franchise Agreement (04 11 1 \ m i ) Form w-50168 7T2.DOC

EXHIBIT E-1

DEVELOPMENTGROWTH INCENTIVE PROGRAM ADDENDUM TO FRANCHISE AGREEMENT

FDD 5/11 AMENDED 6/Hiin2 W^9790 4*12.DOC

DEVELOPMENTGROWTH INCENTIVE PROGRAM ADDENDUM TO FRANCHISE AGREEMENT

Del Taco LLC ("Del Taco") and the undersigned (the "Franchisee") hereby enter into this Addendum to Franchise Agreement (this "Addendum") to that certain Franchise Agreement dated

, 20 , by and between Del Taco and the Franchisee (the "Franchise Agreement").

W I T N E S S E T H :

Whereas, Del Taco and the Franchisee wish to enter into the Franchise Agreement for the operation of a Del Taco restaurant at the location specified in the Franchise Agreement (the "Restaurant"); and

Whereas, Del Taco and the Franchisee wish to modify and/or add certain provisions to the Franchise Agreement as set forth below;

Now, therefore, in consideration of the covenants and agreements set forth in the Franchise Agreement and this Addendum, the parties hereby agree as follows:

1. DovclopmeftfGrowth Incentive Program. The following provisions shall apply to the Restaurant if (x) the RestaurantJs-Opened on or before December 15, 2011.31, 2013, at a location approved by Del Taco on or before April 30, 2011, or if opened on or boforo October 31, 2012, at any other locationgfter August 31, 2011 nr (v) the Restaurant is opened on or before Decemher 31, 2014, Franchisee entered into a Multiple Development Afireemeut after March 1 2012 and the Restaurant is opening under the Multiple Development Agreement entered into after M a r c h L 2 n i 2 :

(a) Del Taco shall waive $25,000 of the $35,000 Initial Franchise Fee required by Section 4(a) of the Franchise Agreement.

(b) Del Taco shall contributoaaiyfi, beginning with the first partial week of the Restaurant's operations and continuing for 52 fiscal weeks thereafter (the "First Ye3r"\ Franchisee's Royalty Fee described in Section 4fc^ of the Franchi.se Agreement hv an amount equal to 2% of the Restaurant's Net Sales for additional advertising and marketing activities conducted by the Franchisee to morket-and promote the Restaurant. Beginning with the expiration of the First Year and continuing for 52 fiscal weeks thereafter, Del Taco shall contribute an amount equal to 1% of tho Restaurant's-Net Sales for—additional advertising and morketing aetivities conducted by the Franchisee to market and promote the Restaurant.—Del Taco shall contribute the amounts for the foregoing advertising and marketing activities in addition to the amounts that Del Taco othorwisc would spend and actually r.pondn nurr.uant tnwaive Franchisee's Royalty Fee described in Section 4££)_Qf the Franchise Agreement for tho Restaurant. The Franchisee shall obtain Del Taco's prior written approval of any additional advertising and marketing activities and their related costs. Dol Taco shall pay tho vendors' invoiced amounts for tho cost of tho additional advertising and marketing activities directly or shall reimburse tho Franchisee for those amounts if previously paid by the Franchisee. Tho additional advertising and marketing activities shall take place during the first 21 months of the

Restaurant's operations.(c) Del Taco shall contribute, during the First Year,bK an amount equal to 1% of the Restaurant's Net Sales to reimburse tho Franchisee for tho

Addendum to FA re Growth Incentive (04-11-1 \ill2) Form W-19790 447I2.DOC

Restaurant's normal operating cxponsoG and/or capital oKponditurcs approved by Del Taco.

2. Timely Performance of Franchisee's Obligations. The Franchisee's rights and Del Taco's obligations set forth in Section 1 of this Addendum shall depend on the Franchisee's timely performance of all of its obligations under the Franchise Agreement. The Franchisee's rights shall terminate if the Franchisee fails to cure any default under the Franchise Agreement or any other agreement with Del Taco within the applicable cure period; and, in that event, the Franchisee promptly shall pay that amount of the Initial Franchise Fee previously waived and shall repay any contributionsnav Marketing Fees that Del Taco previously mode towards tho advertising and marketing of tho Restaurant and as reimbursement for any operating ojtponso or capital expend itures:aalY£d.

3. Transferability. The Franchisee shall not have any right to transfer this Addendum or the rights granted to the Franchisee by it.

4. Other Terms and Provisions. Except as expressly modified by this Addendum, all of the terms and provisions of the Franchise Agreement shall remain in full force and effect.

Executed as of the date of the Franchise Agreement as set forth above.

Del Taco: Del Taco LLC

By: Jack T. Tang Associate General Counsel

Date:

Franchisee:

By:_

Date:

Addendum to FA re Growth Incentive (01 11 1 Mi l l ) Form W-49790 +*12.D0C

EXHIBIT F

STATE ADDENDA

FDD 5/11 AMENDED 6/1 \ i l l l W-49790 4*12.DOC

Exhibit F-1

ADDENDUM TO DEL TACO MULTIPLE DEVELOPMENT AGREEMENT FOR HAWAII

Del Taco L L C (the "Franchisor") and the undersigned (the "Developer") enter into this Addendum to that certain Multiple Development Agreement dated , , between the Franchisor and the Developer.

WITNESSETH:

Whereas, the Franchisor and the Developer wish to enter into a Multiple Development Agreement for the development of one or more Del Taco franchised restaurants subject to the laws of the state of Hawaii; and

Whereas, the State of Hawaii Business Registration Division has required the Franchisor to modify certain provisions of the Multiple Development Agreement as a condition to the registration of the Franchisor's franchise.

Now, therefore, for and in consideration of the covenants and agreements set forth in this Addendum and in the Multiple Development Agreement, the parties hereby agree as follows:

1. Development Fee. Notwithstanding the provisions of Section 5 of the Multiple Development Agreement to the contrary, the development fee shall become due, on a pro rata basis based on the number of Del Taco restaurants scheduled for development within the Territory, only upon the opening of each licensed Del Taco restaurant built within the Territory.

2. Other Provisions. Except as expressly modified by this Addendum, all of the other provisions of the Multiple Development Agreement shall remain in full force and effect.

Executed as of the day of , .

DEVELOPER: FRANCHISOR:

DEL TACO LLC

By:

Title:

FDD; WA9790 49.m>OC

ADDENDUM TO DEL TACO FRANCHISE AGREEMENT FOR HAWAII

THIS AGREEMENT is an addendum to that certain Franchise Agreement dated (the "Franchise Agreement") by and between Del Taco LLC (hereinafter referred to as the

"Franchisor") and (hereinafter referred to as the "Franchisee") in connection with a Del Taco Restaurant to be located at .

WITNESSETH:

WHEREAS, Franchisor and Franchisee wish to enter into the Franchise Agreement for operation of a Del Taco Restaurant to be located within the State of Hawaii; and

WHEREAS, the State of Hawaii Business Registration Division has required Franchisor to modify certain provisions of the Franchise Agreement as a condition to registration of Franchisor's franchise;

NOW, THEREFORE, for and in consideration of the covenants and agreements as set forth herein and in the Franchise Agreement, it is mutually agreed as follows:

1. Payments. The fees payable under Section 4 of the Franchise Agreement shall not become due until the opening of the business at the Franchised Site.

2. Other Provisions. Except as expressly modified by this Addendum, all of the other provisions of the Franchise Agreement shall remain in full force and effect.

IN WITNESS WHEREOF, the parties have executed this Agreement as of the date of the Franchise Agreement.

FRANCHISEE: FRANCHISOR:

DEL TACO LLC

By:

Title:

FDD 5/11 AMENDCD 6/1 M i l l w-49790 4«rl2JX)C

Exhibit F-2

ADDENDUM TO DEL TACO MULTIPLE DEVELOPMENT AGREEMENT FOR MARYLAND

Del Taco LLC (the "Franchisor") and the undersigned (the "Developer") enter into this Addendum to that certain Multiple Development Agreement dated , , between the Franchisor and the Developer.

WITNESSETH:

Whereas, the Franchisor and the Developer wish to enter into a Multiple Development Agreement for the development of one or more Del Taco franchised restaurants subject to the laws of the state of Maryland; and

Whereas, the Securities Division of the Office of the Maryland Attorney General has required the Franchisor to modify certain provisions of the Multiple Development Agreement as a condition to the registration of the Franchisor's franchise.

Now, therefore, for and in consideration of the covenants and agreements set forth in this Addendum and in the Multiple Development Agreement, the parties hereby agree as follows:

1. Effect of Bankruptcy. With regard to Section 14 of the Multiple Development Agreement, the parties acknowledge that federal bankruptcy laws may not allow the enforcement of the provisions for termination upon bankruptcy of the Developer.

2. Choice of Forum. The parties amend Section 20 of the Multiple Development Agreement by adding the following sentence: "This section shall not abrogate or reduce any rights of the Developer as provided for under the Maryland Franchise Registration and Disclosure Law, including the right to submit matters to the jurisdiction of the courts of Maryland." Any risk factor warnings included on the cover page of the Franchisor's Franchise Disclosure Document inconsistent with the Maryland Franchise Registration and Disclosure Law shall not apply to Maryland franchisees.

3. Disclaimers. Pursuant to Section 14-226 of the Maryland Franchise Registration and Disclosure Law, no acknowledgement provision or disclaimer shall constitute a release, assignment, novation, waiver or estoppel that would relieve a person from liability under the Maryland Franchise Registration and Disclosure Law.

4. Statute of Limitations. The Developer may bring claims arising under the Maryland Franchise Registration and Disclosure Law within three years after the grant of the franchise.

5. Other Provisions. Except as expressly modified by this Addendum, all of the other provisions of the Multiple Development Agreement shall remain in full force and effect.

Executed as of the day of , .

DEVELOPER: FRANCHISOR:

DEL TACO LLC

By:

Title:

FDD 5/11 AMENDED 6/11JZ12 W-49790 W7I2.DOC

ADDENDUM TO DEL TACO FRANCHISE AGREEMENT FOR MARYLAND

Del Taco LLC (the "Franchisor") and (the "Franchisee") enter into this Addendum to that certain Franchise Agreement dated , (the "Franchise Agreemenf), by and between the Franchisor and the Franchisee in connection with a Del Taco restaurant located at .

WITNESSETH:

Whereas, the Franchisor and the Franchisee wish to enter into the Franchise Agreement for operation of a Del Taco restaurant in Maryland or subject to the laws of Maryland; and

Whereas, the Securities Division of the Office of the Maryland Attorney General has required the Franchisor to modify certain provisions of the Franchise Agreement as a condition to registration of the Franchisor's franchise;

Now, therefore, for and in consideration of the covenants and agreements as set forth in this Addendum and in the Franchise Agreement, the parties agree as follows:

1. Release Requirement. The parties amend Section 3 of the Franchise Agreement to provide that any release required or contemplated by that section shall not apply to any liability under the Maryland Franchise Registration and Disclosure Law.

2. Effect of Bankruptcy. With regard to Section 14 of the Franchise Agreement, the parties acknowledge that federal bankruptcy laws may not allow the enforcement of the provisions for termination upon bankruptcy of the Franchisee.

3. Choice of Forum. The parties amend Section 20 of the Franchise Agreement by adding the following sentence: "This section shall not abrogate or reduce any rights of the Franchisee as provided for under the Maryland Franchise Registration and Disclosure Law, including the right to submit matters to the jurisdiction of the courts of Maryland." Any risk factor warnings included on the cover page of the Franchisor's franchise disclosure document inconsistent with the Maryland Franchise Registration and Disclosure Law shall not apply to Maryland franchisees.

4. Disclaimers. Pursuant to Section 14-226 of the Maryland Franchise Registration and Disclosure Law, no acknowledgement provision or disclaimer shall constitute a release, assignment, novation, waiver or estoppel that would relieve a person from liability under the Maryland Franchise Registration and Disclosure Law.

5. Statute of Limitations. The Franchisee may bring claims arising under the Maryland Franchise Registration and Disclosure Law within three years after the grant of the franchise.

6. Other Provisions. Except as expressly modified by this Addendum, all of the other provisions of the Franchise Agreement shall remain in full force and effect.

Executed as of the date of the Franchise Agreement.

FRANCHISEE: FRANCHISOR:

DEL TACO LLC

By:

Title:

FDD W-49790 4fti2.DOC

Exhibit F-3

ADDENDUM TO DEL TACO FRANCHISE AGREEMENT AND FRANCHISE DISCLOSURE DOCUMENT FOR MINNESOTA

Del Taco LLC (the "Franchisor") and (the "Franchisee") enter into this Addendum to the Franchise Disclosure Document (the "Disclosure Document") and that certain Franchise Agreement dated , (the "Franchise Agreement"), by and between the Franchisor and the Franchisee in connection with a Del Taco restaurant located at .

WITNESSETH:

Whereas, the Franchisor and the Franchisee wish to enter into the Franchise Agreement for operation of a Del Taco Restaurant within the Minnesota or subject to the laws of Minnesota; and

Whereas, the Department of Commerce has required the Franchisor to modify certain provisions of the Disclosure Document and the Franchise Agreement as a condition to registration of the Franchisor's franchises;

Now, therefore, for and in consideration of the covenants and agreements set forth in this Addendum and in the Franchise Agreement, the parties agree as follows:

1. Notwithstanding the provisions of Section 4 of the Franchise Agreement, the Franchisee shall not have any obligation to pay any fees until the opening of the licensed Del Taco restaurant at the Franchised Site.

2. The parties amend Section I2(b)(i) of the Franchise Agreement by deleting the numbers and words "30" and "five" where they appear and substituting in the place the number "60."

3. The parties amend Section 17 of the Franchise Agreement by adding the following sentence: "This section shall not in any way abrogate or reduce any rights of the Franchisee as provided for in Minnesota Statutes, Chapter 80C, including the right to submit matters to the jurisdiction of the courts of Minnesota." Any risk factor warnings included on the cover page of the Franchisor's franchise disclosure document that are inconsistent with Minnesota Statutes, Chapter 80C shall not apply to Minnesota franchisees.

4. Subdivisions 3 through 5 of Section 80C.14 of the Minnesota Statutes provides as follows:

Subd. 3. Termination or Cancellation, (a) No person may terminate or cancel a franchise unless: (i) that person has given written notice setting forth all the reasons for the termination or cancellation at least 90 days in advance of termination or cancellation, and (ii) the recipient of the notice fails to correct the reasons stated for termination or cancellation in the notice within 60 days of receipt of the notice; except that the notice is effective immediately upon receipt where the alleged grounds for termination or cancellation are:

(1) voluntary abandonment of the franchise relation-ship by the franchisee;

(2) the conviction of the franchisee of an offense directly related to the business conducted pursuant to the franchise; or

(3) failure to cure a default under the franchise agreement which materially impairs the goodwill associated with the franchisor's trade name, trademark, service mark, logotype or

FDD w-49790 40:12J30C

other commercial symbol after the franchisee has received written notice to cure of at least 24 hours in advance thereof.

(b) No person may terminate or cancel a franchise except for good cause. "Good cause" failure by the franchisee to substantially comply with the material and reasonable franchise requirements imposed by the franchisor including, but not limited to:

(1) the bankruptcy or insolvency of the franchisee;

(2) assignment for the benefit of creditors or similar disposition of the assets of the franchise business;

(3) voluntary abandonment of the fi-anchise business;

(4) conviction or a plea of guilty or no contest to a charge of violating any law relating to the franchise business; or

(5) any act by or conduct of the franchisee which materially impairs the goodwill associated with the franchisor's trademark, trade name, service mark, logotype or other commercial symbol.

Subd. 4 Failure to Renew. Unless the failure to renew a franchise is for good cause as defined in subdivision 3, paragraph (b), and the franchise has failed to correct reasons for termination as required by subdivision 3, no person may fail to renew a franchise unless (1) the franchisee has been given written notice of the intention not to renew at least 180 days in advance of the expiration of the franchise; and (2) the franchisee has been given an opportunity to operate the franchise over a sufficient period of time to enable the franchisee to recover the fair market value of the franchise as a going concern, as determined and measured from the date of the failure to renew. No franchisor may refuse to renew a franchise if the refusal is for the purpose of converting the franchisee's business premises to an operation that will be owned by the franchisor for its own account.

Subd. 5. WithholdinR Consent to Transfer. It is unfair and inequitable for a person to unreasonably withhold consent to an assignment, transfer, or sale of the franchise whenever the franchisee to be substituted meets the present qualifications and standards required of the franchisees of the particular franchisor.

5. With respect to franchises granted within the State of Minnesota, the Minnesota Department of Commerce requires that the Franchisor indemnify Minnesota Franchisees against liability to third parties resulting from claims by third parties that the Franchisee's use of the Franchisor's trademark infringes trademark rights of the third party. Franchisor does not indemnify against the consequences of Franchisee's use of the Franchisor's trademark except in accordance with the requirements of the franchise, and, as a condition to indemnification. Franchisee must provide notice to Franchisor of any such claim within 10 days and tender the defense of the claim to Franchisor. If Franchisor accepts the tender of defense. Franchisor has the right to manage the defense of the claim including the right to compromise, settle or otherwise resolve the claim, and to determine whether to appeal a final determination of the claim.

6. With respect to franchises granted within the State of Minnesota, Minn. Rule 2860.4400D prohibits a franchisor from requiring a general release.

FDD: W-49790 -WriZ-DOC

IN WITNESS WHEREOF, the parties have executed this Agreement as of the date of the Franchise Agreement.

FRANCHISEE: FRANCHISOR:

DEL TACO LLC

By:

Titie:

FDD 5/11 AMENDED 6/1 l i i m W-49790 44.12.DOC

ADDENDUM TO DEL TACO MULTIPLE DEVELOPMENT AGREEMENT FOR MINNESOTA

Del Taco LLC (the "Franchisor") and the undersigned (the "Developer") enter into this Addendum to that certain Multiple Development Agreement dated , , between the Franchisor and the Developer.

WITNESSETH:

Whereas, the Franchisor and the Developer wish to enter into a Multiple Development Agreement for the development of one or more Del Taco franchised restaurants subject to the laws of the state of Minnesota; and

Whereas, the Minnesota Department of Commerce has required the Franchisor to modify certain provisions of the Multiple Development Agreement as a condition to the registration of the Franchisor's franchise.

Now, therefore, for and in consideration of the covenants and agreements set forth in this Addendum and in the Multiple Development Agreement, the parties hereby agree as follows:

1. Development Fee. Notwithstanding the provisions of Section 5 of the Multiple Development Agreement to the contrary, the development fee shall become due, on a pro rata basis based on the number of Del Taco restaurants scheduled for development within the Territory, only upon the opening of each licensed Del Taco restaurant built within the Territory.

2. Other Provisions. Except as expressly modified by this Addendum, all of the other provisions of the Multiple Development Agreement shall remain in full force and effect.

Executed as of the day of , .

DEVELOPER: FRANCHISOR:

DEL TACO LLC

By:

Titie:

FDD g/4 AMENDED 6/4 M i l l W-49790 44-mX)C

Exhibit F-4

ADDENDUM TO DEL TACO MULTIPLE DEVELOPMENT AGREEMENT FOR NORTH DAKOTA

Del Taco L L C (the "Franchisor") and the undersigned (the "Developer") enter into this Addendum to that certain Multiple Development Agreement dated , , between the Franchisor and the Developer.

WITNESSETH:

Whereas, the Franchisor and the Developer wish to enter into a Multiple Development Agreement for the development of one or more Del Taco franchised restaurants subject to the laws of the state of North Dakota; and

Whereas, the North Dakota Securities Department has required the Franchisor to modify certain provisions of the Multiple Development Agreement as a condition to the registration of the Franchisor's franchise.

Now, therefore, for and in consideration of the covenants and agreements set forth in this Addendum and in the Multiple Development Agreement, the parties hereby agree as follows:

1. Restrictive Covenants. Notwithstanding any provision in the Multiple Development Agreement to the contrary, if and to the extent required by the applicable provisions of the North Dakota Century Code (the "North Dakota Code"), the Multiple Development Agreement shall not require Developer to agree to any covenants restricting competition contrary to the provisions of Section 9-08-06 of the North Dakota Code.

2. Site of Arbitration Proceedings. Notwithstanding any provision in the Multiple Development Agreement to the contrary, if and to the extent required by the applicable provisions of the North Dakota Code, the Multiple Development Agreement shall not require that Developer arbitrate any dispute at a location remote from the location of the franchised Del Taco restaurant.

3. Restriction on Forum. Notwithstanding any provision in the Multiple Development Agreement to the contrary, if and to the extent required by the applicable provisions of the North Dakota Code, the Multiple Development Agreement shall not require Developer to consent to the jurisdiction of any court outside of North Dakota.

4. Liquidated Damages and Termination Penalties. Notwithstanding any provision in the Multiple Development Agreement to the contrary, i f and to the extent required by the applicable provisions of the North Dakota Code, the Muhiple Development Agreement shall not require Developer to consent to liquidated damages or termination penalties.

5. Applicable Laws. Notwithstanding any provision in the Multiple Development Agreement to the contrary, if and to the extent required by the applicable provisions of the North Dakota Code, the Multiple Development Agreement shall not require that the law of any state other than North Dakota shall govem the Multiple Development Agreement.

6. Waiver of Trial bv Jurv. Notwithstanding any provision in the Multiple Development Agreement to the contrary, if and to the extent required by the applicable provisions of the North Dakota Code, the Multiple Development Agreement shall not require Developer to consent to the waiver of a trial by jury.

FDD 5/11 AMENDED 6/1 M i l l W-49790 4«rl2.DOC

7. Waiver of Exemplary and Punitive Damages. Notwithstanding any provision in the Multiple Development Agreement to the contrary, if and to the extent required by the applicable provisions of the North Dakota Code, the Multiple Development Agreement shall not require Developer to consent to the waiver of damages.

8. General Release. Notwithstanding any provision in the Multiple Development Agreement to the contrary, if and to the extent required by the applicable provisions of the North Dakota Code, the Multiple Development Agreement shall not require Developer to sign a general release upon the renewal of the Multiple Development Agreement.

9. Limitation of Claims. Notwithstanding any provision in the Multiple Development Agreement to the contrary, if and to the extent required by the applicable provisions of the North Dakota Code, the Multiple Development Agreement shall not require Developer to consent to a limitation of claims inconsistent with the statute of limitations that applies under North Dakota law.

10. Other Provisions. Except as expressly modified by this Addendum, all of the other provisions of the Multiple Development Agreement shall remain in full force and effect.

Executed as of the day of , .

DEVELOPER: FRANCHISOR:

DEL TACO L L C

By:

Title:

FDD 5/11 AMENDED 6/1 M i l l W-49790 4*12J)OC

ADDENDUM TO DEL TACO FRANCHISE AGREEMENT AND FRANCHISE DISCLOSURE DOCUMENT FOR NORTH DAKOTA

Del Taco L L C (the "Franchisor") and (the "Franchisee") enter into this Addendum to Franchise Agreement and Franchise Disclosure Document (the "Disclosure Document") for that certain Franchise Agreement dated , (the "Franchise Agreement"), by and between the Franchisor and the Franchisee.

WITNESSETH:

Whereas, the Franchisor and the Franchisee wish to enter into the Franchise Agreement for the operation of a Del Taco restaurant subject to the laws of North Dakota; and

Whereas, the North Dakota Securities Commissioner has required the Franchisor to modify certain provisions of the Franchise Agreement and the Franchise Disclosure Document as a condition to the registration or an exemption from registration of the Franchisor's franchises;

Now, therefore, for and in consideration of the covenants and agreements set forth in this Addendum to Franchise Agreement and Franchise Disclosure Document, the parties agree and understand as follows:

1. Restrictive Covenants. Notwithstanding any provision in the Franchise Agreement to the contrary, if and to the extent required by the applicable provisions of the North Dakota Century Code (the "North Dakota Code"), the Franchise Agreement shall not require Franchisee to agree to any covenants restricting competition contrary to the provisions of Section 9-08-06 of the North Dakota Code.

2. Site of Arbitration Proceedings. Notwithstanding any provision in the Franchise Agreement to the contrary, if and to the extent required by the applicable provisions of the North Dakota Code, the Franchise Agreement shall not require that Franchisee arbitrate any dispute at a location remote from the location of the franchised Del Taco restaurant.

3. Restriction on Forum. Notwithstanding any provision in the Franchise Agreement to the contrary, if and to the extent required by the applicable provisions of the North Dakota Code, the Franchise Agreement shall not require Franchisee to consent to the jurisdiction of any court outside of North Dakota.

4. Liquidated Damages and Termination Penalties. Notwithstanding any provision in the Franchise Agreement to the contrary, if and to the extent required by the applicable provisions of the North Dakota Code, the Franchise Agreement shall not require Franchisee to consent to liquidated damages or termination penalties.

5. Applicable Laws. Notwithstanding any provision in the Franchise Agreement to the contrary, if and to the extent required by the applicable provisions of the North Dakota Code, the Franchise Agreement shall not require that the law of any state other than North Dakota shall govern the Franchise Agreement.

6. Waiver of Trial bv Jury. Notwithstanding any provision in the Franchise Agreement to the contrary, if and to the extent required by the applicable provisions of the North Dakota Code, the Franchise Agreement shall not require Franchisee to consent to the waiver of a trial by jury.

FDD 5/11 AMENDED 6/1 Mill W-49790 ^ILDOC

7. Waiver of Exemplary and Punitive Damages. Notwithstanding any provision in the Franchise Agreement to the contrary, if and to the extent required by the applicable provisions of the North Dakota Code, the Franchise Agreement shall not require Franchisee to consent to the waiver of damages.

8. General Release. Notwithstanding any provision in the Franchise Agreement to the contrary, if and to the extent required by the applicable provisions of the North Dakota Code, the Franchise Agreement shall not require Franchisee to sign a general release upon the renewal of the Franchise Agreement.

9. Limitation of Claims. Notwithstanding any provision in the Franchise Agreement to the contrary, if and to the extent required by the applicable provisions of the North Dakota Code, the Franchise Agreement shall not require Franchisee to consent to a limitation of claims inconsistent with the statute of limitations that applies under North Dakota law.

Executed as of the same date as the Franchise Agreement.

FRANCHISEE: FRANCHISOR:

DEL TACO LLC

By:

Titie:

FDD 5/11 AMENDED 6/1 M i l l W-49790 4ftl2.DOC

Exhibit F-5

ADDENDUM TO DEL TACO FRANCHISE DISCLOSURE DOCUMENT FOR SOUTH DAKOTA

With regard to the offer or sale of any Del Taco franchise subject to the franchise disclosure laws and regulations of South Dakota, Del Taco LLC ("Del Taco") hereby supplements this Franchise Disclosure Statement as follows:

I. Payments. The fees payable under Item 5 of the Disclosure Document shall not become due until the opening of the business at the Franchised Site.

FDD 5/11 AMENDED 6/1 \ i l U w-49790 4e7liDOC

ADDENDUM TO DEL TACO MULTIPLE DEVELOPMENT AGREEMENT FOR SOUTH DAKOTA

Del Taco LLC (the "Franchisor") and the undersigned (the "Developer") enter into this Addendum to that certain Multiple Development Agreement dated , , between the Franchisor and the Developer.

WITNESSETH:

Whereas, the Franchisor and the Developer wish to enter into a Multiple Development Agreement for the development of one or more Del Taco franchised restaurants subject to the laws of the state of South Dakota; and

Whereas, the South Dakota Department of Labor and Regulation has required the Franchisor to modify certain provisions of the Multiple Development Agreement as a condition to the registration of the Franchisor's franchise.

Now, therefore, for and in consideration of the covenants and agreements set forth in this Addendum and in the Multiple Development Agreement, the parties hereby agree as follows:

1. Development Fee. Notwithstanding the provisions of Section 5 of the Multiple Development Agreement to the contrary, the development fee shall become due, on a pro rata basis based on the number of Del Taco restaurants scheduled for development within the Territory, only upon the opening of each licensed Del Taco restaurant built within the Territory.

2. Other Provisions. Except as expressly modified by this Addendum, all of the other provisions of the Multiple Development Agreement shall remain in full force and effect.

Executed as of the day of ,

DEVELOPER: FRANCHISOR:

DEL TACO LLC

By:

Title:

FDD 5/11 AMENDED 6/1 M i l l W-49790 4frl2.DOC

ADDENDUM TO DEL TACO FRANCHISE AGREEMENT FOR SOUTH DAKOTA

THIS AGREEMENT is an addendum to that certain Franchise Agreement dated (the "Franchise Agreement") by and between Del Taco LLC (hereinafter referred to as the

"Franchisor") and (hereinafter referred to as the "Franchisee") in connection with a Del Taco Restaurant to be located at .

WITNESSETH:

WHEREAS, Franchisor and Franchisee wish to enter into the Franchise Agreement for operation of a Del Taco Restaurant to be located within the State of South Dakota; and

WHEREAS, the State of South Dakota Department of Labor and Regulation has required Franchisor to modify certain provisions of the Franchise Agreement as a condition to registration of Franchisor's franchise;

NOW, THEREFORE, for and in consideration of the covenants and agreements as set forth herein and in the Franchise Agreement, it is mutually agreed as follows:

1. Payments. The fees payable under Section 4 of the Franchise Agreement shall not become due until the opening of the business at the Franchised Site.

2. Other Provisions. Except as expressly modified by this Addendum, all of the other provisions of the Fmnchise Agreement shall remain in full force and effect.

IN WITNESS WHEREOF, the parties have executed this Agreement as of the date of the Franchise Agreement.

FRANCHISEE: FRANCHISOR:

DEL TACO LLC

By:

Title:

FDD 5/11 AMENDED 6/114Z12 w-49790 4^1iDOC

Exhibit F-6

ADDENDUM TO DEL TACO FRANCHISE DISCLOSURE DOCUMENT FOR VIRGINIA

With regard to the offer or sale of any Del Taco franchise subject to the franchise disclosure laws and regulations of Virginia, Del Taco LLC ("Del Taco") hereby supplements this Franchise Disclosure Statement as follows:

1. Payments. The Virginia State Corporation Commission's Division of Securities and Retail Franchising requires us to defer payment of the initial franchise fee and other initial payments owed by the franchisees to us until we have completed our pre-opening obligations under the Franchise Agreement.

FDD 5/11 AMENDED 6/1 I j m W-f9790 4ftI2JX)C

ADDENDUM TO PEL TACO MULTIPLE DEVELOPMENT AGREEMENT FOR VIRGINIA

Del Taco LLC (the "Franchisor") and the undersigned (the "Developer") enter into this Addendum to that certain Multiple Development Agreement dated , , between the Franchisor and the Developer.

WITNESSETH:

Whereas, the Franchisor and the Developer wish to enter into a Multiple Development Agreement for the development of one or more Del Taco franchised restaurants subject to the laws of the state of Virginia; and

Whereas, the Virginia State Corporation Commission's Division of Securities and Retail Franchising has required the Franchisor to modify certain provisions of the Multiple Development Agreement as a condition to the registration of the Franchisor's franchise.

Now, therefore, for and in consideration of the covenants and agreements set forth in this Addendum and in the Multiple Development Agreement, the parties hereby agree as follows:

L Development Fee. Notwithstanding the provisions of Section 5 of the Multiple Development Agreement to the contrary, the Virginia State Corporation Commission's Division of Securities and Retail Franchising requires Franchisor to defer payment of the development fee and other initial payments owed by the Developer to Franchisor until Franchisor has completed its pre-opening obligations under the Multiple Development Agreement.

2. Other Provisions. Except as expressly modified by this Addendum, all of the other provisions of the Multiple Development Agreement shall remain in full force and effect.

Executed as of the day of , .

DEVELOPER: FRANCHISOR:

DEL TACO LLC

By:

Title:

FDD 5/11 AMENDED 6/1 liZ12 W-19790 4fti2.DOC

ADDENDUM TO DEL TACO FRANCHISE AGREEMENT FOR VIRGINIA

THIS AGREEMENT is an addendum to that certain Franchise Agreement dated (the "Franchise Agreement") by and between Del Taco LLC (hereinafter referred to as the

"Franchisor") and (hereinafter referred to as the "Franchisee") in connection with a Del Taco Restaurant to be located at .

WITNESSETH:

WHEREAS, Franchisor and Franchisee wish to enter into the Franchise Agreement for operation of a Del Taco Restaurant to be located within the State of Virginia; and

WHEREAS, the Virginia State Corporation Commission's Division of Securities and Retail Franchising has required Franchisor to modify certain provisions of the Franchise Agreement as a condition to registration of Franchisor's franchise;

NOW, THEREFORE, for and in consideration of the covenants and agreements as set forth herein and in the Franchise Agreement, it is mutually agreed as follows:

I. Payments. The Virginia State Corporation Commission's Division of Securities and Retail Franchising requires Franchisor to defer payment of the initial franchise fee and other initial payments owed by Franchisee to Franchisor under Section 4 of the Franchise Agreement until Franchisor has completed its pre-opening obligations under the Franchise Agreement.

IN WITNESS WHEREOF, the parties have executed this Agreement as of the date of the Franchise Agreement.

FRANCHISEE: FRANCHISOR:

DEL TACO LLC

By:

Title;

FDD: W49790 4frl2.DOC

EXHIBIT G

HARDWARE AND SOFTWARE LICENSE AND SUPPPORT AGREEMENT

FDD. W-49790 -WrirDOC

HARDWARE AND SOFTWARE LICENSE AND SUPPORT AGREEMENT

This Hardware and Software License and Support Agreement ("Agreement") is made as of the day of , 20 , by and between Del Taco LLC, a California limited liability company having its principal place of business at 25521 Commercentre Drive, Lake Forest, California 92630 ("Del Taco"). and having his principal place of business at ("Licensee").

RECITALS

Del Taco operates franchises and licenses Del Taco Restaurants that feature Mexican-American and American dishes. Del Taco and Licensee have entered into to or propose to enter into one or more Franchise Agreements (each a Franchise Agreement" and, collectively, the "Franchise Agreements").

As a result of the expenditure of time, skill, effort and money, Del Taco has developed, and owns all rights to, the Software (as defined below) and associated Documentation (as defined below) (collectively, the "Software and Documentation") for use in restaurants operated by Del Taco and its franchisees.

Licensee wishes to obtain from Del Taco and Del Taco wishes to grant to Licensee a license to use the Software and Documentation in each of the designated franchised Del Taco Restaurants (the "Licensed Restaurants") listed on appendices to this Agreement. Del Taco must grant its consent for additional Restaurants to be added to this License Agreement by additional appendices. Each additional Restaurant shall be designated by a letter that is successive to the previous appendix and dated as of the date that Del Taco grants its approval ("Approval Date").

Del Taco will provide to Licensee certain technical support services, as determined by Del Taco, in its sole discretion, for the Software and Licensee's Covered Equipment (as defined below), on the terms and conditions set forth in this Agreement. Licensee will make the Restaurant available to a licensed Del Taco technician for the times requested by the technician, which will include the opening day of the Restaurant. The amount of time required by the technician to prepare the Restaurant for opening will be determined by the technician in his or her sole discretion.

NOW THEREFORE, in consideration of the mutual covenants, agreements and obligations set forth below, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows:

ARTICLE 1

DEFINED TERMS L I "Billable Services" means any Support Service, other than Covered Services,

performed by Del Taco, or a third party vendor approved by Del Taco ("Approved Vendor"), at the times determined by Del Taco, in its sole discretion, or the Approved Vendor, which will include, but not be limited to, the period of time deemed necessary by Del Taco or the Approved Vendor to provide Support Services to implement the Software and Licensee's Covered Equipment for the preparation of the store opening, or conversion, to Covered Equipment.

Hardware & Software Agreement (04-11-11) Form W-49790 i^nSfOC

L2 "Confidential Information" means the Software and Documentation, and the terms and conditions of this Agreement, which each are confidential and proprietary to Del Taco.

1.3 "Covered Equipment" means the equipment described on the appendices to this Agreement approved for purchase by Del Taco and located in the Licensed Restaurants. The parties may add additional equipment to the Covered Equipment from time to time by adding additional appendices to include the additional equipment (with Del Taco's consent).

1.4 "Covered Services" means 20-hour telephonic Help Desk support for the Software and the Covered Equipment, which is available 365 days a year.

1.5 "Designated Contact" means Licensee's managerial employee at each Licensed Restaurant that is identified on the appendices who will be trained in the use of the Software and who will serve as Del Taco's point of contact with respect to the Support Services.

1.6 "Documentation" means the proprietary and confidential manuals and other documentation (if any) for the Software.

1.7 "Effective Date" means the date that Del Taco or the Approved Vendor completes the installation of the Software at all of the Licensed Restaurants.

1.8 "License" means a non-exclusive, non-transferable license to use a single copy of the object code version of the Software and the Documentation solely for Licensee's internal business purposes and only at one personal computer in each Licensed Restaurant.

1.9 "License Fee" means that one-time fee payable to Del Taco for use of the Software and Documentation for each Licensed Restaurant.

1.10 "Releases" means any and all updates to the Software that incorporate changes to the Software that: (i) improve the operating performance but do not alter the basic function of the Software; or (ii) incorporate fixes or bypasses for errors; and (iii) Del Taco offers generally to other users of the Software.

1.11 "Service Period" means a period of one calendar year.

1.12 "Software" means Del Taco's proprietary ULTRABOS software system, which is designed for use in the Licensed Restaurants and all Releases and Upgrades of any kind, if any, in machine-readable, object code form, as well as all computer programs, if any, subsequently delivered to Licensee in machine-readable, object code form for maintenance of the ULTRABOS software system. The Software is designed to be used in labor scheduling, calculating ideal food costs, and maintaining inventory and sales records.

1.13 "Support Services" means Covered Services provided by Del Taco, and Billable Services, which may be performed by De! Taco with respect to the Software or by Del Taco or an Approved Vendor, with respect to the Covered Equipment.

1.14 "Support Services Fee" means that weekly fee payable to Del Taco for the Covered Services available for each Licensed Restaurant.

Hardware & Softw'are Agreement (04-11-11) Form W-49790 4*12.D0C

1.15 "Upgrades" means all improvements to the Software that add to, or alter, the basic fijnctions of the Software and that Del Taco offers generally to other users of the Software.

ARTICLE 2

LICENSE AND TERM

2.1 License. Pursuant to the terms of this Agreement, Del Taco hereby grants to Licensee a License to use the Software and Documentation during the term of this Agreement at one personal computer in each of the Licensed Restaurants at which Licensee remains a franchisee in good standing. Each License granted under this Agreement is solely for the use of the Software and Documentation at one Licensed Restaurant by no more than one individual user at a time. Unless Del Taco agrees otherwise in writing, the Software may not be used on a network. The License for each Licensed Restaurant shall be considered a separate License under this Agreement. Del Taco will provide one copy of the Documentation to Licensee's Designated Contact for each Licensed Restaurant.

2.2 Term. The term of this Agreement shall begin on the Effective Date and shall expire on the I-year anniversary of the Effective Date, unless this Agreement is terminated with respect to all of the Licensed Restaurants at an earlier date pursuant to Article 12. Del Taco shall forward a notice to Licensee memorializing the Effective Date. This Agreement shall renew automatically thereafter for successive one-year renewal terms unless terminated at an earlier date with respect to all of the Licensed Restaurants in accordance with Article 12. _

ARTICLE 3

USE LIMITATIONS 3.1 Limitations on Use. The "use" that Del Taco licenses to Licensee under this

Agreement means the initial installation of the Software and operation of the Software in accordance with procedures outlined in the Documentation. Licensee may make one back-up copy of the Software for archival or backup purposes only provided that all titles, trademarks, copyright, proprietary and restricted rights notices shall be reproduced in any such copy and any such copy shall be subject to the terms of this Agreement. Licensee shall not otherwise copy, de­compile, reformat, duplicate or disassemble all or any portion of any component of the Software, or otherwise attempt to reproduce the source code thereof or its equivalent. Licensee shall not, under any condition, copy the Documentation without Del Taco's prior written consent. Licensee shall not attempt to circumvent any anti-copy or other security measure adopted by Del Taco.

3.2 Distribution. Except as explicitly provided in this Agreement, Licensee shall not: (i) make available or distribute all or part of the Software or Documentation to any third party by assignment, sublicense or by any other means; (ii) use the Software to operate in or as a time-sharing, outsourcing, or service bureau environment, or in any way allow third party access to the Software.

3.3 Inspection Rights. Del Taco shall have the right to periodically inspect the Licensed Restaurants to verify Licensee's compliance with the terms of this Agreement.

Hardware & Software Agreement (04-11-11) Form W-49790 V^ILDOC

ARTICLE 4

SITE PREPARATION, DEDICATED DATA LINE AND TRAINING 4.1 Site Preparation. Licensee shall, at Licensee's sole expense, be responsible for

all site preparation necessary for installation and use of the Software, including, but not limited to electrical, air conditioning and cables between printers, the point of sale terminals and the personal computer.

4.2 Dedicated Data Line. Licensee shall provide all assistance required by Del Taco to bring Licensee's computer system on-line with the computer system designated by Del Taco and maintained by Del Taco or its affiliates at the earliest possible time. Licensee agrees to procure and install such required dedicated data lines including telephone and/or high speed Internet connections, modems, and other computer-related accessory or peripheral equipment as specified by Del Taco. Licensee's dedicated data lines for each Licensed Restaurant are identified in the appendices.

4.3 Training. Del Taco shall provide one half-day of initial training to Licensee's Designated Contact for each Licensed Restaurant. The initial training will be held at Del Taco's corporate headquarters in Lake Forest, California. Del Taco does not charge a tuition fee for this initial training, however. Licensee will be required to pay all travel, living and other expenses incurred by its employees while attending the training. De! Taco will provide the initial training to additional management employees at Licensee's request. Within 30 days from the date of receipt of an invoice. Licensee shall pay a tuition fee as established by Del Taco from time to time for training any additional personnel. Licensee will be required to pay all travel, living and other expenses incurred by its additional personnel while attending the initial training.

ARTICLE 5

RELEASES, UPGRADES AND ACCESS TO DATA 5.1 Release and Upgrades. During the Term of this Agreement, provided that

Licensee is not in default of its obligations under this Agreement, any franchise or license agreement that governs any Licensed Restaurant, or any other agreement between Licensee and Del Taco or any of its affiliates, Del Taco shall deliver to Licensee, at no additional cost, any Releases or Upgrades to the Software to the same extent that Del Taco offers such Releases or Upgrades to other users of the Software.

5.2 Access to Data. Licensee agrees that Del Taco and/or its designee shall have the free and unfettered right to retrieve any data and other information from Licensee's computers as Del Taco, in its sole discretion, deems appropriate, including electronically polling the daily sales, computer information and other data of the Licensed Restaurants, with the cost of the retrieval to be borne by Del Taco. Licensee shall backup all data on its computer system daily and comply with any and ail other operational requirements required by its franchise or license agreements and any manuals that govem the operation of the Licensed Restaurants.

Hardware & Software Agreement (04-11-11) Form W-49790 44-ljLDOC

ARTICLE 6

SUPPORT SERVICES

6.1 Support Services. Del Taco shall provide Support Services (including the Covered Services and any Billable Services required by Licensee) to Licensee for the Software and the Covered Equipment pursuant to Del Taco's standards, which may change from time to time. Licensee may request Support Services by calling the Del Taco Help Desk at (949) 462-7499.

6.2 Covered Equipment. In order to facilitate the Support Services, Licensee agrees to operate the Covered Equipment in accordance with Del Taco's and the manufacturer's instructions.

6.3 Billable Services. Del Taco may perform the following types of on-site service: (i) computer and software install; (ii) computer and software upgrades; and (iii) on-site troubleshooting and repairs. Licensee shall pay the Billable Services Fees applicable for any Billable Services performed by Del Taco at a Licensed Restaurant and any costs of travel for a Del Taco representative to arrive at Licensee's restaurant(s) as further described in Article 7.4.

6.4 Additional Services. As part of the Covered Services, Del Taco shall install menu changes and price updates on the Licensee's personal computer on a periodic basis, as reasonably requested by the Licensee. Del Taco shall not provide any Additional Services with respect to alternate concepts or products not a part of the standard Del Taco restaurant system unless approved in writing by Del Taco's Purchasing Department.

ARTICLE 7

FEES 7.1 License Fee. Within five days after the opening date of each Licensed

Restaurant, Licensee shall pay a one time fee to Del Taco in the amount set forth on Exhibit A for each License to acquire the Software and Documentation for each Licensed Restaurant. If Licensee desires to acquire Licenses for additional Licensed Restaurant(s), the parties shall insert additional appendices to incorporate the additional Licensed Restaurant(s) and Licensee shall then pay a License Fee to Del Taco for each additional License. Del Taco may, upon 30 days' prior written notice to Licensee, increase the License Fee.

7.2 Software Maintenance and Support Services Fee. Beginning after the opening date of each Licensed Restaurant, Licensee shall pay per Licensed Restaurant a Software Maintenance Fee for the UltraBOS Back Office Software (if applicable) and a Support Services Fee for the Covered Services as set forth on Exhibit A. Del Taco may, in its sole discretion, increase the Software Maintenance and Support Services Fee effective upon 30 days' prior written notice to Licensee, to the then current fee being charged new Del Taco franchisees.

7.3 Billable Services Fees. The applicable rates for Billable Services are set forth on the appendices. Del Taco will send periodic invoices to Licensee for the Billable Services Fees, which are due upon receipt. Del Taco may, in its sole discretion, increase the Billable Services Fees effective upon 30 days' prior written notice to Licensee.

Hardware & Software Agreement (04-11-11) Form W-19790 W7I2.DOC

7.4 Travel Charges. Licensee shall pay for travel time (currently $35 per hour billed in 30 minute increments) and travel expenses in connection with Billable Services. Travel expenses include hotel, food, rental car, tolls, parking and other out-of-pocket travel expenses. Del Taco calculates the charges for travel from the time the technician is in route to the Restaurant until the technician reaches the Restaurant, and then the time required for the technician to return to his or her place of business. Licensee shall pay all travel charges to Del Taco within 30 days of receipt of invoice.

7.5 Shipping. Licensee shall pay Del Taco for any shipping charges incurred in providing any Support Services under this Agreement.

7.6 Payment of Fees and Charges.

7.6.1 Simultaneously with the execution of this Agreement, Licensee shall pay the License Fee and the Support Services Fees for the Licensed Restaurants, which amount shall be prorated based upon the.number of months remaining in the initial Service Period. The appendices identify the License Fees and Support Services due for all the Licensed Restaurants for the initial Service Period. Thereafter, Licensee shall pay the License Fee and the Support Services Fee within 30 days of receipt of invoice, which shall be at least 30 days prior to the beginning of a Service Period. If Licensee adds a Licensed Restaurant to this Agreement, Licensee shall pay the License Fee and Support Services Fee to Del Taco for that Licensed Restaurant, which amount shall be prorated for the number of months remaining in the Service Period, within 30 days of receipt of invoice.

7.6.2 Licensee shall pay all fees and charges incurred under this Agreement to Del Taco (by electronic funds transfer, check, pre-arranged draft, sweep of Licensee's bank account or by any other form that Del Taco designates) within 30 days from the date of receipt of an invoice from Del Taco. Licensee shall perform those acts and sign and deliver those documents as may be necessary to accomplish payment by any method selected by Del Taco. If Licensee fails to make any payment required under this Agreement within 30 days after the date such payment becomes due and payable, Del Taco may, in its sole discretion, (i) assess a late fee in an amount equal to the lesser of 1.5% per month or the maximum rate permitted by law on the delinquent amount; and/or (ii) terminate this Agreement effective immediately upon receipt of notice of termination.

7.7 Tax. Licensee shall be responsible for any applicable sales or use taxes or any value added or similar taxes payable with respect to the licensing of the Software, or arising out of or in connection with this Agreement, other than taxes levied or imposed based upon Del Taco's income. In the event that Del Taco pays any such taxes on behalf of Licensee, Del Taco shall invoice Licensee for such taxes and Licensee agrees to pay such taxes within 30 days from the date of receipt of the invoice.

ARTICLE 8

CONFIDENTIAL INFORMATION AND INTELLECUTAL PROPERTY RIGHTS 8.1 Confidential Information. Licensee agrees that it shall not, without Del Taco's

prior written consent: (i) modify any Confidential Information; (ii) reverse engineer, decompile, decrypt, or disassemble the Confidential Information or attempt to do so; (iii) transfer, rent, lease, lend or sublicense any Confidential Information to anyone for any purpose; or (iv) reveal

Hardware & Software Agreement (04-11-11) Form W^9790 +0rl2.DOC

or disclose any Confidential Information for any purpose to any other person, firm, corporation or other entity, other than Licensee's employees with a need to know such Confidential Information to perform employment responsibilities consistent with Licensee's rights under this Agreement. Licensee shall safeguard and protect the Confidential Information from theft, piracy or unauthorized access in a manner at least consistent with the protections Licensee uses to protect its own most confidential information. Licensee shall inform its employees of their obligations under this Agreement and shall take such steps as may be reasonable in the circumstances, or as may be reasonably requested by Del Taco, to prevent any unauthorized disclosure, copying or use of the Confidential Information.

8.2 Unauthorized Disclosure. Licensee shall notify Del Taco immediately upon discovery of any prohibited use or disclosure of the Confidential Information, or any other breach of these confidentiality obligations by Licensee, and shall fully cooperate with Del Taco to help Del Taco regain possession of the Confidential Information and prevent the further prohibited use or disclosure of the Confidential Information.

8.3 Intellectual Property Rights. Licensee acknowledges and agrees that the copyright, patent, trade secret, and all other intellectual property rights of whatever nature in the Software and Documentation are and shall remain the property of Del Taco, and nothing in this Agreement should be construed as transferring any aspects of such rights to Licensee or any third party. Intellectual Property Rights include all forms of intellectual property rights and protections, including, without limitation, all right, title and interest in and to all: (i) Letters Patent, and all filed, pending or potential applications for Letters Patent, including any reissue, reexamination, division, continuation or continuation in-part applications, throughout the world now or hereafter issued; (ii) trade secrets, and all trade secret rights and equivalent rights arising under common law, state law, federal law and laws of foreign countries; (iii) mask works, copyrights, other literary property or authors' rights, whether or not protected by copyright or as a mask work, under common law, state law, federal law and laws of foreign countries; and (iv) proprietary indicia, trademarks, trade names, symbols, logos and/or brand names under common law, state law, federal law and laws of foreign countries.

8.4 Notice of Infringement. Licensee shall promptly notify Del Taco in writing upon its discovery of any unauthorized use or infringement of any of the Intellectual Property Rights. Such notice shall contain the name and address, if known, of the potential or alleged infringer and the location or nature of the alleged infringement. Licensee shall reasonably assist Del Taco, at Del Taco's expense, in the investigation, prosecution or defense of any suit, action or proceeding relating to any of the Intellectual Property Rights, including, without limitation, the prosecution of a potential or alleged infringer, abatement of an infringement or defense of any action, counter suit, or claim made by a potential or alleged infringer.

ARTICLE 9

NO WARRANTY

9.1 DEL TACO MAKES NO WARRANTIES RELATING TO THE SOFTWARE AND DOCUMENTATION. THE SOFTWARE AND DOCUMENTATION ARE PROVIDED "AS IS" AND DEL TACO DISCLAIMS ALL WARRANTIES, EXPRESS OR IMPLIED, INCLUDING, BUT NOT LIMITED TO, ANY WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE, ANY

Hardware & Software Agreement (04-11-11) Forni W-49790 +O7JL2.DOC

WARRANTY AS TO THE RELIABILITY, OPERABILITY, FUNCTIONALITY OR USEFULNESS OF THE SOFTWARE AND DOCUMENTATION, ANY WARRANTY THAT LICENSEE'S USE OF THE SOFTWARE WILL BE UNINTERRUPTED OR ERROR FREE, AND ANY WARRANTY THAT THE RESULTS OBTAINED WILL SATISFY LICENSEE'S REQUIREMENTS.

ARTICLE 10

INDEMNIFICATION

10.1 Bv Del Taco. Subject to Secfion 10.2, Del Taco will indemnify Licensee against any claim that the Software, furnished and used within the scope of this Agreement, infringes any U.S. copyright or patent, provided that: (i) Del Taco is given prompt notice of the claim; (ii) Del Taco is given immediate and complete control over the defense and/or settlement of the claim and Licensee fully cooperates with Del Taco in such defense and/or settlement; (iii) Licensee does not prejudice in any manner Del Taco's conduct of such claim; and (iv) the alleged infringement is not based upon the use of the Software in a manner prohibited under this Agreement, in a manner for which the Software was not designed, or in a manner not in accordance with the Del Taco's specifications.

10.2 Altered Version. Del Taco shall have no liability for any claim of infringement based on: (!) the use of a superseded or altered version of the Software if infringement would have been avoided by the use of a current or unaltered version of the Software which Del Taco made available to Licensee; or (ii) the combination, operation or use of the Software with software, hardware or other materials not furnished or approved for use with the Software by Del Taco.

10.3 Injunction, if a final injunction is obtained against the use of any part of the Software by reason of infringement of a U.S. copyright or patent, Del Taco shall have the right, at its option, either to: (i) procure for Licensee the right to continue to use the Software; (ii) modify the Software so that it becomes non-infringing; or (iii) terminate this Agreement without penalty.

10.4 Liability. Sections 7.1 to 7.3 state Del Taco's enfire obligation and liability with respect to the infringement of any Intellectual Property Right.

10.5 Bv Licensee. Licensee will indemnify Del Taco against any claim for: (i) alleged infringement of any U.S. copyright or patent, arising out of the use of the Software by Licensee in any manner prohibited by this Agreement; (ii) any claim (other than a claim indemnified by Del Taco pursuant to Section 7.1) related to or arising out of Licensee's use or misuse of the Software; and (iii) Licensee's breach of its obligations under this Agreement.

ARTICLE 11

LIMITATION ON LIABILITY

11.1 DEL TACO SHALL HAVE NO LIABILITY FOR CONSEQUENTIAL, EXEMPLARY, SPECIAL, INCIDENTAL OR PUNITIVE DAMAGES WITH RESPECT TO ITS OBLIGATIONS UNDER THIS AGREEMENT OR OTHERWISE EVEN IF IT

Hardware & Software Agreement (04-11-11) Form W-49790 +fri2.D0C

HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES. DEL TACO WILL NOT BE RESPONSIBLE FOR ANY LOSS OF SALES BY LICENSEE DURING THE PERIOD IN WHICH THE SOFTWARE IS INOPERATIVE, NOR WILL DEL TACO BE RESPONSIBLE FOR ANY LOSS OR INACCURACY OF DATA CAUSED BY THE SOFTWARE. IN ANY EVENT, THE LIABILITY OF DEL TACO TO LICENSEE FOR ANY REASON AND UPON ANY CAUSE OF ACTION SHALL BE LIMITED TO THE AMOUNT PAID TO DEL TACO BY LICENSEE UNDER THIS AGREEMENT (EXCLUSIVE OF CLAIMS DESCRIBED IN SECTION 10.1 ABOVE). THIS LIMITATION APPLIES TO ALL CAUSES OF ACTION IN THE AGGREGATE, INCLUDING WITHOUT LIMITATION TO BREACH OF CONTRACT, BREACH OF WARRANTY, NEGLIGENCE, STRICT LIABILITY, MISREPRESENTATIONS, AND OTHER TORTS. BOTH PARTIES UNDERSTAND AND AGREE THAT THE REMEDIES AND LIMITATIONS SET FORTH IN THIS ARTICLE 11 ALLOCATE THE RISKS OF PRODUCT AIVD SERVICE NONCONFORMITY BETWEEN THE PARTIES AS AUTHORIZED BY THE UNIFORM COMMERCIAL CODE AND OF OTHER APPLICABLE LAWS. THE FEES IN THIS AGREEMENT REFLECT, AND ARE SET IN RELIANCE UPON, THIS ALLOCATION OF RISK AND THE EXCLUSION OF CONSEQUENTIAL DAMAGES SET FORTH IN THIS AGREEMENT.

ARTICLE 12

TERMINATION

12.1 Termination. Either party may terminate this Agreement or the Licenses granted by this Agreement with respect to any or all of the Licensed Restaurants, at the end of any initial or renewal term by notifying the other party in writing at least 45 days before the end of the then-current term. The termination will be effective at the end of the relevant Service Period. If Licensee exceeds the authorized scope of the License granted under this Agreement or violates any obligation under Articles 3 or 8 of this Agreement with respect to any License, Del Taco may, in its sole discretion, immediately terminate this Agreement or the License granted with respect to anv or all of the Licensed Restaurants without prior notice. Del Taco may, in its sole discretion, immediately terminate this Agreement or the License granted with respect to any Licensed Restaurant(s): (i) without prior notice, if Licensee fails to pay the License Fee or Support Services Fee pertaining to that Licensed Restaurant within 30 days after it is due; (ii) without prior notice, if the franchise or license agreement for that Licensed Restaurant is terminated; (iii) without prior notice, if the franchise, franchise agreement or Licensed Restaurant is transferred; or (iv) if Licensee fails to cure any other breach of this Agreement within 15 days of written notice of the breach.

12.2 Discontinuation of Software and Documentation. Del Taco may discontinue publication or distribution of the Software and Documentation for any reason. If Del Taco discontinues publication or distribution of the Software and Documentation, this Agreement shall terminate immediately with respect to all Licenses. In that event, Del Taco will refund or credit a pro rata portion of any License Fees already paid by Licensee, as determined by Del Taco in its sole discretion.

12.3 Cessation of Use. Upon termination of this Agreement, Licensee shall cease using the Software and Documentation and promptly retum all copies of the Software, Documentation and all other Confidential Information in its possession or control. Licensee

Hardware & Software Agreement (04-11-11) Form Q VIA9790 4erl2.D0C

shall delete all copies of such materials residing in on-line or off-line computer memory, and destroy all copies of such materials that also incorporate any Confidential Information. Del Taco shall be entitled to enter the Licensed Restaurants to repossess and remove the Software and Documentation, and any other Confidential Information. Licensee shall, within 7 days from the effective date of the termination, certify to Del Taco, in writing by an officer or director, that all copies of the Software and Documentation have been returned, deleted or destroyed. In the event of termination of the Licenses granted by this Agreement for fewer than all Licensed Restaurants, Licensee shall comply with the foregoing with respect to the applicable Licenses and Licensed Restaurants.

12.4 Iniunctive Relief. Licensee acknowledges and agrees that its failure to comply with the terms of this Agreement, including the failure to fully comply with the post-termination obligations set forth in Section 12.3, is likely to cause irreparable harm to Del Taco not fully compensable by money damages and therefore Del Taco shall not have an adequate remedy at law. Therefore, Licensee agrees that, in the event of a breach or threatened breach of any of the terms of this Agreement by Licensee, Del Taco shall be entitled to a preliminary and final injunction restraining the breach and/or to specific performance, without the necessity of posting any bond or undertaking in connection therewith. Any equitable remedies sought by Del Taco shall be in addition to, and not in lieu of, all remedies and rights that Del Taco otherwise may have arising under applicable law or by virtue of any breach of this Agreement.

ARTICLE 13

MISCELLANEOUS

13.1 Choice of Law. The laws of the State of California shall govern the interpretation and construction of this Agreement, without regard to conflicts of laws principles.

13.2 Choice of Forum. Any judicial proceeding relating to this Agreement shall be filed in the state or federal court located in the jurisdiction in which Del Taco's corporate offices are located at the time the proceeding is filed. Licensee waives any right to challenge the existence of personal jurisdiction in that state or federal court and the convenience of the forum.

13.3 Limitation on Actions. Any judicial action or proceeding brought with respect to this Agreement must be brought within a period of 18 months from the occurrence of the event that is the basis of the action. The parties waive, to the fullest extent permitted by law, the right to bring, or be a member in, any class action suit and the right to trial by jury.

13.4 Entire Agreement. This Agreement and the attachments to this Agreement constitute the entire agreement between Del Taco and Licensee, and supersede any prior understandings, commitments or agreements, oral or written, regarding the Software, Documentation and Support Services.

13.5 No Waiver. This Agreement may not be amended or changed, nor may any provision be waived, except in writing signed by the parties. Neither trade usage nor the course of conduct between Del Taco and Licensee or between Del Taco and other licensees of the Software and Documentation shall modify this agreement.

13.6 Notices. All notices and other communications under this Agreement shall be in writing and shall be deemed effective when delivered by hand or by facsimile transmission (with

Hardware & Software Agreement (04-11-11) Form I Q W-49790 4*JJLDOC

receipt acknowledged by the receiving party) or upon receipt when sent by a nationally reputable courier or mailed by registered or certified mail (return receipt requested), postage prepaid, to a party at the address set forth in the preamble to this Agreement (or at such other address for a party as shall be specified in writing by the party from time to time). All notices sent to Del Taco shall be marked "Attention: Legal Department." Any notice sent by facsimile transmission shall be sent to Del Taco at (949) 462-7444 or to Licensee at the number specified in the appendices.

13.7 Force Majeure. Except for the obligation to make payments under this Agreement, nonperformance by either party shall be excused to the extent such performance is rendered impossible by strike, fire, flood, govemmental acts or orders or restrictions, or any other reason where failure to perform is beyond the reasonable control of and is not caused by the negligence of the non-performing party.

13.8 Assignment and Binding Effect. Licensee shall not assign this Agreement or any of its rights or obligations under this Agreement to any third party without the prior written consent of Del Taco; provided, however, that the merger or consolidation of Licensee into, or the sale of all or substantially all of the assets of Licensee to, a third party shall not be deemed to be an assignment. Del Taco may freely assign this Agreement or any of its rights or obligations under this Agreement. Subject to the foregoing, this Agreement shall be binding upon and inure to the benefit of the parties to this Agreement and their permitted successors and assigns.

13.9 Attorneys' Fees. If either party files any action or brings any proceeding against the other arising from this Agreement, the prevailing party shall be entitled to recover as an element of its costs of suit, and not as damages, reasonable attorneys' fees to be fixed by the court. The prevailing party shall be the party who is entitled to recover its costs of suit, whether or not suit proceeds to final judgment. A party not entitled to recover its costs shall not recover attorneys' fees. No sum for attorneys' fees shall be included in calculating the amount of a judgment for purposes of deciding whether a party is entitled to its costs or attorneys' fees.

13.10 Headings. The section headings are intended for reference only and do not affect the meaning or interpretation of this Agreement.

13.11 No Third Partv Beneficiary. There are no third party beneficiaries of this Agreement and nothing in this Agreement, express or implied, is intended to or shall confer upon any person other than the parties, and their respective successors and assigns, any rights, remedies, obligations or liabilifies.

13.12 Counterparts. This Agreement may be executed in multiple counterparts, each of which shall be deemed an original and all of which together shall constitute one instrument.

13.13 SurvivaL Articles 8, 10, 11, 12 and 13 shall survive the terminafion of this Agreement for any reason.

Hardware & Software Agreement {04-11-11) Form | 1 W-49790 4^1iD0C

IN WITNESS WHEREOF, Del Taco and Licensee have caused this Agreement to be executed by their duly authorized representatives as of the date first written above.

DEL TACO LLC FRANCHISEE

By: By: Jack T. Tang Associate General Counsel

Date: Date:

Hardware & SoftTOre Agreement (04-11-11} Form | 9 W-49790 W.12JX)C

Personal Guarantee

Each of the undersigned hereby personally guarantees the performance of any and all obligations (the "Obligations") of the Licensee under this Software License and Support Agreement. Each of the undersigned agrees that Del Taco, or its successor or assignee, may proceed against the undersigned directly and independently of the Licensee and that the cessation of the liability of the Licensee for any reason other than the fuW performance of all of the Obligations; any extension, renewal or forbearance of the performance of the Obligations; or any impairment or suspension of Del Taco's or its successor's or assignee's remedies or rights against the Licensee shall not affect the liability of the undersigned in any way.

Date: „

Date:

Date:

DO NOT WRITE BELOW THIS LINE

Hardware and Software License and Support Agreement No.

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APPENDIX A

1.

2.

3.

4.

Licensee's Facsimile Number:

One-time License Fee:

Software Maintenance and Support Services Fee: • Software Maintenance and Support Services Fee: $35 per week • Support Services Only: $25 per week

Licensed Restaurant Information:

Unit Number

Licensed Restaurant Location

DDL Number/ IP Address

(To be completed by Licensee)

Designated Contact

(To be completed by Licensee)

5. Covered Equipment:

Point of Sale/Line Buster UltraBOS Back Office System Restaurant Systems Network Kitchen Display Systems

6. Billable Services Fees:

On-Site Software Troubleshooting/Install: Billed by the hour, al 15 minute increments On-Site PC Install: Billed by the hour, at 15 minute increments

All hourly rates are subject to geographical rates and should be disclosed at the time a commitment is made to provide Billable Services.

DEL TACO LLC

By: Jack T. Tang Associate General Counsel

FRANCHISEE

By:

Date: Date:

FDD 5/11 AMEMDED 6/1 \ l l l l W-49790 4©rl2.DOC

Personal Guarantee

Each of the undersigned hereby personally guarantees the performance of any and all obligations (the "Obligations") of the Licensee under this Software License and Support Agreement. Each of the undersigned agrees that Del Taco, or its successor or assignee, may proceed against the undersigned directly and independently of the Licensee and that the cessation of the liability of the Licensee for any reason other than the full performance of all of the Obligations; any extension, renewal or forbearance of the performance of the Obligations; or any impairment or suspension of Del Taco's or its successor's or assignee's remedies or rights against the Licensee shall not affect the liability of the undersigned in any way.

Date:

Date:

Date:

DO NOT WRITE BELOW THIS LINE

Hardware and Software License and Support Agreement No.

FDD 5/11 AMENDED 6/I1JZ12 W-49790 -Wril-DOC

EXHIBIT H

AnnFNDUMTOLFASF

FDD: W-49790 4©.JL2J50C

A O n E N D U M TO LEASE

THIS ADDENDUM TO L E A S E (this "Addendum"^ is dated and is entered into hy and between

("Landlord"^ and ("Tenant"^.

WHEREAS I--andlord and Tenant have entered into a Lease dated (the "Lease") for Tenant's operation of a Del Taco Restaurant (the "Restaurant") at

WHEREAS Tenant has requested and I^andlord has agreed to incornorate certain provisions into the Lease required hv Tenant's franchisor. Del Taco L L C , a California limited liability comnanv ("Del Taco"l

NOW. THEREFORE, notwithstanding anything to the contrarv contained in the Lease, for valuable consideration, the Landlord and Tenant a^ree as follows:

1. Tn the event of Tenant's default under the Lease for which Landlord is obligated to give Tenant written notice^ at the same time that Landlord sends notice to Tenant^ I.,andlord shall send notice to Del Taco at the following addressi

Del Taco LLC 25521 Commercentre Drive, Suite 20ft Lake Forest. California 9263ft Attn: Senior Vice President. General Counsel

In the event of Tenant's default under the Lease, and within thirty (30^ davs of its receipt of written notice thereof. Del Taco shall have the right, but not the obligation, to cure Tenant's default, to assume Tenant's position under the Lea.se. to take over the operation of the Restaurant, and/or to assign its rights under the Lease to an approved franchisee of Del Taco in which event Pcl Taco Shall be relieved from any further liability.

The use of the real property shall he restricted to a Del Taco Restaurant during the term of the Franchise Agreement with DcLIa£Q>

The provisions referred to in paragraphs numbered 1 and 2 of this Addendum cannot he amended without Del Taco's orior written approval.

Landlord consents to Tenant's use in the Restaurant and on the premises of the signage, interior and exterior design, including graphics, logos and all other decorative features as mav be reauired bv Del Taco (collectively the "Proprietary Marks"), provided that said Proprietary Marks meet all current governmental agency requirements.

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5x All furniture, fixtures and equipment Installed hv Tenant in the Demised Premises shall at all times be and remain personal property, regardless of the method in which the same is affixed to the Demised Premises, and shall remain the ner.sonal property of Tenant and/or the equipment-lessor or conditional landlord of such furniture, fixtures and equipment, as the case mav be. Landlord specifically agrees that Landlord's rights and the rights of any holder of anv present or future encumbrance nn the Demi.sed Premises, if anv. in anv such furniture, fixtures and equipment shall at all times he .subject and subordinate to the rights nf Tenant and anv equipment-lessor or equipment-landlord of such furniture, fixtures, and equipment, or other person or entity who acquires a security interest in the same as a result of a financial transaction with Tenant Landlord shall. UPOD request of Tenant, promptly furnish a Landlord's Waiver and/or Mortgagee's Waiver or similar document as mav he reasonably required hv an equipment-landlord and approved hv Del Taco LLC, equipment-lessor or other person or entity in connection with Tenant's acquisition or financing respecting such personal property, equipment, furniture and fixtures.

6; Tenant shall have the unrestricted right to assign the Lease to Del Taco or its designee during the term of the Lease.

2i Upon the expiration of every five (5> year period following the opening of the Restaurant for business. Tenant shall have the right, subiect to Landlord's prior written consent not to he unreasonahly withheld, to remodel the Restaurant to bring the Restaurant UP to the then current standards of Pel Taco as required under tjie franchise Agreement, provided that said remodeling meets all current governmental agency requirements.

8; Within thirty (3ft davs of expiration or early termination of the Lease, should the Tenant fail to do so. Del Taco shall have the right hut not the obligation to enter upon the premises and make such changes to the Restaurant building as are necessary to protect its Proprietary Marks, including, if determined necessary hv Del Taco. the right to remodel the Restaurant building to such an extent that it is no longer confusingly similar in color nr design to anv then existing Del Taco restaurant.

2 Landlord, its affiliates, its successors or assigns agree, during the term of this Lease and any extension thereof, to hold anv land now or hereafter owned or controlled bv Landlord within a radius of one (1) mile of the Demised Premises subject to the following restrictions for the benefit of Tenant: no nart of SUCh land shall be sold. leased or used for a Mexican nuick service restaurant which competes with Tenant including, hut not limited to. Taco Bell. Green Burrito, El Polio Loco, etc. I andlnrd further covenants to include such restrictions in all leases and/or sales of the ahoxe described land. Such restrictions shall he included in and recorded with tll£ Memorandum of Lease.

Ifl. Landlord consents to the nneration of the Restaurant on a 24-hour basis.

The provisions of this Addendum shall not he modified or terminated without the prior written COnsCflt of Del Taco.

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IN WITNESS THEREOF. Landlord and Tenant have executed this Addendum.

Landlord Tenant

Bv: Bv:

Its: Its:

Date: Date:

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EXHIBIT I

AGREEMENT AND SUBLEASE AGREEMENT

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AGREEMENT

Del Taco LLC ("Del Taco"), a California limited liability company, and (the "Franchisee"), a corporation, enter into this Agreement (this "Agreement") as of the

day of , 20___.

W I T N E S S E T H :

Whereas, the Franchisee is interested in subleasing and operating a Del Taco restaurant which Del Taco intends to construct at in , (the "Restaurant"), as a franchisee of Del Taco; and

Whereas, Del Taco is interested in constructing and subleasing the Restaurant to the Franchisee and granting the Franchisee a franchise to operate the Restaurant as a Del Taco restaurant;

Now, therefore, in consideration of the premises; of the mutual covenants set forth in this Agreement; and of other good and valuable consideration, the receipt and sufficiency of which each party hereby acknowledges, the parties to this Agreement hereby agree as follows:

1. Construction of Restaurant. On or before , 20 , Del Taco shall complete the construction of the Restaurant in accordance with the construction plans as approved by the city of , . The Franchisee shall have the right to approve any changes to those construction plans, which approval the Franchisee may not withhold, delay or condition unreasonably.

2. Reimbursement of Construction Costs. The Franchisee shall pay and/or reimburse Del Taco for the cost of constructing the Restaurant pursuant to the provisions of Section 7 of the Sublease Agreement, as defined below.

3. Trade Fixtures. Equipment. Small Wares, and Contracts. Within 15 days after the completion of the construction of the Restaurant and the installation of all of the trade fixtures, equipment and small wares reasonably necessary to open and operate the Restaurant, the Franchisee shall pay and/or reimburse Del Taco for the cost to purchase and install the necessary trade fixtures, equipment and small wares for the Restaurant. Upon the receipt of the Franchisee's final payment and/or reimbursement required by this Section 3, Del Taco and the Franchisee shall sign and deliver the Bill of Sale and Assignment of Contracts attached as Exhibit A to this Agreement (the "Bill of Sale"). Del Taco and the Franchisee shall complete the Attachment I to the Bill of Sale prior to its delivery in order to have it list (as completely as reasonably possible) all items of trade fixtures, equipment and small wares being purchased by the Franchisee and all contracts being assigned to the Franchisee. The reimbursed costs shall include all sales taxes owed by the Franchisee for the trade fixtures, equipment and small wares installed in the Restaurant, and Del Taco shall indemnify and hold the Franchisee harmless from any obligation to pay any additional sales taxes on those items.

4. Sublease Agreement. Simultaneously with the execution of this Agreement, Del Taco and the Franchisee shall execute and deliver the Sublease Agreement attached as Exhibit B to this Agreement (the "Sublease Agreement").

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5. Franchise Agreement. Simultaneously with the execution of this Agreement, Del Taco and the Franchisee shall execute and deliver the Del Taco Franchise Agreement attached as Exhibit C to this Agreement (the "Franchise Agreement"). At the same time, the Franchisee shall pay Del Taco the $35,000 initial franchise fee and the $10,000 promotional fee required by Sections 4(a) and 4(b) of the Franchise Agreement.

6. Software Agreement. Simultaneously with the execution of this Agreement, Del Taco and the Franchisee shall execute and deliver the Del Taco Hardware and Software License and Support Agreement attached as Exhibit D to this Agreement (the "Software Agreement").

7. Release. The Franchisee hereby releases all claims the Franchisee may have as of the date of this Agreement against Del Taco or its limited liability company managers, officers or employees. In connection with the foregoing release, the Franchisee expressly waives any and all rights and benefits against Del Taco conferred upon the Franchisee by the provisions of Section 1542 of the California Civil Code, which reads as follows:

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

8. Opening of Restaurant. The Franchisee shall have responsibility for all actions required to prepare for the opening of the Restaurant, other than the construction of the Restaurant as set forth in Section 1, above. Del Taco shall use its reasonable efforts to assist the Franchisee with those actions and shall perform its obligafions under the Franchise Agreement and the Software Agreement in that regard. The actions contemplated by this section include (without limitation) (a) the establishment of utilities service accounts for the Restaurant and the placement of any required deposits or bonds for those service accounts; (b) the establishment of a bank account for the Restaurant and initial cash fund for the Restaurant, (c) the hiring of the initial employees to manage and operate the restaurant on behalf of the Franchisee; (d) the ordering and payment for the initial inventory, supplies and uniforms required to open and operate the Restaurant; and (e) the retention of all other services required to open and operate the Restaurant, the execution and delivery of all service contracts for those services, and the placement of any deposits or bonds for those services. The Franchisee shall reimburse Del Taco for any costs that Del Taco incurs in connection with any of the foregoing items within 15 days after receiving a written request or invoice for the amounts due.

9. Representations of the Franchisee. The Franchisee shall assume sole responsibility for the operation of the Restaurant and acknowledges that, while Del Taco chose the Restaurant's location and will furnish advice and assistance to the Franchisee pursuant to the terms of this Agreement and the Franchise Agreement, Del Taco does not guarantee the success or profitability of the Restaurant in any manner whatsoever and shall not have any liability in that regard. The Franchisee understands and acknowledges that any business venture involves significant risks and that the Franchisee's own efforts will constitute the primary factor in the success or failure of the Restaurant. The Franchisee acknowledges that Del Taco and its representatives have made no representations to the Franchisee other than those set forth in its most recent franchise disclosure document provided to the Franchisee. The Franchisee understands that it should not rely on any representations not set forth in that

FDD 5/11 AMENDED 6/1 Mill W-49790 WrllDOC

franchise disclosure document and, in fact, has not relied on any representations not set forth in that franchise disclosure document. The Franchisee has undertaken this venture solely in reliance on the matters set forth in the disclosure document and the Franchisee's own independent investigation of the merits of this venture.

10. Resolution of Disputes. The parties shall resolve all disputes relating to or arising out of this Agreement or any of the transactions contemplated by this Agreement in accordance with the arbitration provisions of Section 15 of the Franchise Agreement.

11. Legal Fees. If either party succeeds in any legal action to enforce the provisions of this Agreement, the prevailing party shall have the right to its attorneys' fees and costs incurred in connection with the action from the other party, in addition to any other relief obtained by the prevailing party in the action.

12. Assignment. Neither party shall not have the right to assign this Agreement or any of its rights under this Agreement to any other person without the prior, written consent of the other party.

13. Waiver. The failure of a party to insist in any one or more instances on the performance of any term or condition of this Agreement shall not operate as a waiver of any future performance of that term or condition.

14. Goveming Law. Notwithstanding the place where the parties execute this Agreement, the intemal laws of California shall govem the construction of the terms and the application of the provisions of this Agreement. The federal and state courts in Orange County, California, shall constitute the proper, sole and exclusive venue and forum for any action arising out of or in any way related to this Agreement. Each party to this Agreement hereby consents to any of those courts' exercise of personal jurisdiction over the party in that type of action and expressly waives all objections the party otherwise might have to that exercise of personal jurisdiction.

15. Headings. The headings used in this Agreement appear strictly for the parties' convenience in identifying the provisions of this Agreement and shall not affect the construction or interpretation of the provisions of this Agreement.

16. Binding Effect. This Agreement binds and benefits the parties and their respective permitted successors, heirs, legal representatives, and assigns. This section does not address, directly or indirectly, whether a party may assign its rights or delegate its performance under this Agreement. Section 12 addresses those matters.

17. Amendments. No amendments to this Agreement shall become effective or binding on the parties, unless agreed to in writing by all of the parties.

18. Time. Time constitutes an essential part of each and every part of this Agreement.

19. Entire Agreement. This Agreement constitutes the entire agreement of the parties with regard to the subject matter of this Agreement and replaces and supersedes all other written and oral agreements and statements of the parties relating to the subject matter of this Agreement.

FDD 5/11 AMENDED 6/1 \ i l l l W-49790 4*12.000

Executed as of the day and year first set forth above.

Del Taco: Del Taco LLC

By: Senior Vice President

The Franchisee:

By: Its:

FDD 5/11 AMENDED 6/1 M i l l W-49790 4frl2.D0C

Exhibit A

Bill of Sale and Assignment of Contracts

FDD 5/11 AMEMDED 6/1 liZ12 W-49790 44-12J30C

Bill of Sale and Assignment of Contracts

Del Taco LLC (the "Seller"), a California limited liability company, in consideration of $10.00 and other good and valuable consideration, the sufficiency and receipt of which the Seller hereby acknowledges, and pursuant to that certain Agreement (the "Agreement") dated as of , 20 , has sold and hereby assigns, transfers and conveys to (the "Buyer"), a corporation, all of the Seller's right, title and interest in and to all of the trade fixtures, equipment and small wares installed in the Del Taco restaurant at in , , including (without limitation) the trade fixtures, equipment and small wares listed and described on Attachment 1 to this Bill of Sale and Assignment of Rights.

The Seller further assigns and transfers all of its right, title and interest in and to the contracts listed and described on Attachment I to this Bill of Sale and Assignment of Rights. The Buyer hereby accepts the assignment of those contracts and hereby assumes all of the Seller's duties and obligations under those contracts.

The Seller hereby warrants that the Seller is the lawflil owner of the assets described above and has good title to those assets, free and clear of all mortgages, pledges, claims, liens, charges, or other encumbrances except those specifically listed below. The Seller hereby warrants and agrees to defend the title to all of the assets as described above for the benefit of the Buyer, its successors, and its assigns against all persons.

Notwithstanding any of the foregoing provisions to the contrary, the assignment and transfer of any of the foregoing contracts shall depend on and remain subject to any required consents from the other parties to those contracts.

Executed as of the day of , 20 .

The Seller: Del Taco LLC

By: Senior Vice President

The Buyer:

By: Its:

FDD: W-49790 i^lZDOC

Attachment 1

Trade Fixtures. Equipment and Small Wares

Contracts

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Exhibit B

Sublease Agreement

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FRANCHISE SUBLEASE

Del Taco LLC (the "Landlord") and (the "Tenant") enter into this Franchise

Sublease (this "Sublease") as of the day of , .

W I T N E S S E T H :

Whereas, the Landlord is a tenant under that certain Lease Agreement dated , , with , and subsequently assigned to (the "Master Landlord") and Landlord, as amended by that certain dated , , and that certain dated , (the "Master Lease"), attached

as Exhibit A to this Sublease; and

Whereas, the Landlord wishes to sublease the property covered by the Master Lease to the Tenant.

Now, therefore, for good and valuable consideration, the receipt and adequacy of which each of the parties hereby acknowledge, the Landlord and the Tenant hereby agree as follows:

1. Location and Description of Premises. The Landlord hereby subleases to the Tenant and the Tenant hereby subleases from Landlord that certain real property (including all improvements from time to time located on the real property), situated in the ,

County, , having a street address of ; and more particularly described on Exhibit B to this Sublease (the "Property"). The Property comprises a land area of approximately square feet.

2. Improvements. The Building located on the Property, consists of approximately square feet, with related improvements, including a drive-thru lane (individually, the

"Improvement" and, collectively, the "Improvements"). For the sake of convenience, except when the context provides otherwise, this Sublease shall refer to the Property and the Improvements as the "Demised Premises."

3. Master Lease. The Tenant shall perform all the terms of the Master Lease as if the Tenant were the original tenant under the Master Lease and the Landlord were the original landlord under the Master Lease, except and only to the extent that this Sublease expressly provides otherwise.

4. Commencement Date. The term of this Sublease shall run for a period of years, commencing on and expiring on .

5. Monthly Rent. The Tenant shall pay the Landlord annual rental for the Property in the amount of $ , payable in monthly installments of $ (the "Base Rental"), in advance on the first day of each calendar month during the term of this Sublease.

5. Monthly Rent. [OTHER OPTION] The Tenant shall pay Landlord monthfy rental for the Property in an amount equal to the amount paid by the Landlord under the Master Lease, as and when due under the Master Lease (the "Base Rental"). The Landlord shall pay the Master Landlord all rent and other charges required of the Landlord under the Master Lease in the manner

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provided in the Master Lease. The Tenant shall have an abatement or diminution of rent under this Sublease equal to any abatement or diminution of rent by the Landlord under the Master Lease.

6. Adjustment of Monthly Rent. [IF NEEDED] The Tenant shall pay the Base Rental, without adjustment, through . Thereafter, the Base Rental shall adjust as follows:

(a) From through , the Base Rental shall equal $_ or $ per month.*

(b) From through , the Base Rental shall equal $ or $ per month.

7. Percentage Rent. In addition to the Base Rent, the Tenant shall pay the Landlord all percentage rent that the Landlord must pay under the Master Lease during the term of this Sublease. In addition, the Tenant shall complete all reporting requirements pursuant to the Master Lease at least 10 days prior to the time for the Landlord to provide those items in the Master Lease.

7. Percentage Rent. [OTHER OPTION] In addition to the Base Rent, the Tenant shall pay the Landlord, at the time and in the manner set forth below, percentage rental in an amount equal to % of the Tenant's gross receipts, as defined below, during each year of the term of this Sublease, less the amount of the Base Rent paid by the Tenant, as follows:

(a) The parties shall compute the percentage rent weekly during the term of this Sublease and the Tenant shall pay to the Landlord the percentage rent, less the minimum weekly rental previously paid for the week, on the day of the week that the Landlord designates in writing. At the end of each lease year (being each 12-month period commencing as of a date determined by the Landlord) the Landlord shall make an accounting of all rent paid during the year. If the amount of rent for the year actually paid by the Tenant exceeds

% of the gross sales of the Tenant during the lease year, the Landlord shall credit the excess rental payments against subsequent installments of the Base Rent. However, the Tenant never shall pay less than the Base Rent during any lease year.

(b) The phrase "Gross Receipts" shall mean the selling price of all goods and services sold (including sales from food vending machines and commissions from any coin-operated vending machines and telephones) on the Property by the Tenant, whether on credit or for cash, but excluding any goods or services to employees, rebates and/or refunds to customers, food or services given for promotional purposes in replacement of any goods or services sold, and the amount of any sales taxes or other similar taxes.

(c) The Tenant shall keep full, complete and proper books, records and accounts of the gross receipts and credits of the Property. The Tenant shall maintain those books, records and accounts, including any sales tax reports that the Tenant must furnish to any govemmental agency, at all reasonable times open to the inspection of the Landlord, the Landlord's auditor, or any other authorized

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representative or agent of the Landlord. If any inspection or audit conducted by the Landlord shall disclose an understatement of gross receipts as submitted by the Tenant to the Landlord in accordance with the terms of this Sublease to the extent of at least 3%, the Tenant (as additional rental) shall reimburse the Landlord for all costs and expenses reasonably incurted by the Landlord in making the audit and inspection.

8. Use of Property. Notwithstanding the provisions of the Master Lease to the contrary, the Tenant shall use and occupy the Property only for the operation of a restaurant business under a Franchise Agreement between the Tenant and the Landlord (the "Franchise Agreement") relating to the Property and for no other purpose or purposes without the Landlord's written consent. The Tenant shall comply with all applicable laws, rules, regulations and ordinances of every govemmental body or agency whose authority extends to the Property or to any business conducted on the Property.

9. Conflict with Provisions of Franchise Agreement and Concurtent Termination. If any provision of this Sublease conflicts with the Franchise Agreement, the Franchise Agreement shall control. If the Franchise Agreement terminates or expires prior to the termination or expiration of this Sublease, this Sublease shall terminate concurrently with the termination or expiration of the Franchise Agreement.

10. Notices from Master Landlord. The Landlord shall deliver to the Tenant copies of any notices received by the Landlord from the Master Landlord that concern the Property within 10 days after the Landlord receives it. If the Master Landlord defaults the Master Lease, the Tenant shall send any required notices to the Master Landlord with a copy to the Landlord, and the Landlord shall joint with the Tenant, at the Tenant's expense, in making a demand on the Master Landlord to fialfill its obligation under the Master Lease. The Landlord shall not do or permit anything that would constitute a breach of or default under the Master Lease or that would cause the termination or forfeiture of the Master Lease. The Landlord shall indemnify, defend and hold the Tenant harmless from and against any and all claims, demands, losses, damages and reasonable costs and expenses arising out of or relating to the Landlord's breach of or default under the Master Lease.

11. Maintenance and Repairs. The Tenant shall maintain the Property in good condition and repair and shall make all repairs and replacements necessitated by any cause. Upon the expiration or termination of this Sublease, the Tenant shall quit and surrender the Property in good condition and repair, reasonable wear and tear excepted.

12. Damage and Destruction of Premises. If, during the term of this Sublease, the Property suffers any damage or destruction, the Tenant shall comply with the obligations regarding reconstruction, restoration and repair of the Property as set forth in the Master Lease. The Landlord shall not have any responsibility or obligation to effect any restoration, reconstruction or other repairs to the Property.

13. Insurance. During this Sublease, the Tenant shall obtain and maintain at the Tenant's cost and expense (a) extended coverage insurance covering all buildings and other improvements on the Property and their contents (but which need not include fixtures, equipment, furniture, and other personal property belonging to the Tenant) for full replacement

w-49790 ^iijyoc

cost, insuring against all risks of direct physical loss and damage, excluding unusual perils like earth movement, flood and war, and (b) comprehensive public liability insurance for death and injury and property loss and damage with a combined single limit coverage of not less than $2 million. The Tenant shall list the Landlord as an additional insured on all of the foregoing policies. The Tenant shall provide the Landlord with a binder or certificate of insurance which shows that the Tenant has obtained the appropriate insurance, that the Tenant has paid the premiums, and that the cartier cannot cancel or make a material change to the insurance without at least 10 days' written notice from the carrier to the Landlord. The obligations set forth in this Section 14 shall supplement and not replace the Tenant's assumed obligations under the Master Lease.

14. Condemnation Awards. The Tenant shall have the right to any and all condemnation awards available to the Landlord for the Property, and the Landlord shall cooperate with the Tenant in any condemnation proceedings affecting the Property. The Landlord immediately shall deliver to the Tenant any and all notices it receives regarding any threatened or actual condemnation.

15. Alterations. The Tenant shall not make or allow any alterations of the Property without the prior written consent of the Landlord. Any additions to or alterations of the Property shall become a part of the reality and shall belong to the Landlord or the Master Landlord. If the Tenant obtains the written consent of the Landlord to any proposed alterations, the Tenant shall advise the Landlord in writing of the date upon which the Tenant will begin the alterations in order to permit the Landlord and the Master Landlord to post a notice of non-responsibility. The Tenant shall indemnify and hold the Landlord free and harmless from any liability, loss or damage and shall defend the Landlord by attorneys of the Tenant's selection (at the Tenant's sole expense) against any mechanic's lien claim for work performed or materials flimished in connection with any alterations.

16. Assignment and Subletting. The Tenant shall not assign this Sublease or any interest in this Sublease and shall not sublet all or any part of the Property without the prior written consent of the Landlord, which consent the Landlord may not withhold. Among other reasonable causes which may exist, the Landlord may withhold its consent to any proposed assignment or sublease unless it takes place in connection with an assignment of the Franchise Agreement, which the Landlord also must approve in writing.

17. Landlord's Remedies Upon Breach. The following provisions shall apply with regard to a breach of this Sublease by the Tenant:

(a) Definition of Breach. As used in this Sublease, the word "breach" shall mean any of the following events: (i) the failure of the Tenant to pay when due any rent, monies or charges required by this Sublease for 10 days after a written demand for payment from the Landlord to the Tenant; (ii) the failure of the Tenant to perform any act, other than the payment of rent, monies or charges, required by this Lease; (iii) any attachment, execution or other judicial levy upon the leasehold estate created by this Sublease not vacated within 60 days; (iv) any assignment of the leasehold estate created by this Sublease for the direct or indirect benefit of the creditors of the Tenant; (v) any judicial appointment of a receiver or similar officer to take possession of the leasehold

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estate created by this Sublease or the Property not vacated within 60days; (vi) any filing of a petition by, for or against the Tenant under any chapter of the Federal Bankruptcy Act not vacated within 60 days; or (vii) any default by the Tenant under the Franchise Agreement or any related agreement not cured within the specified time.

(b) Damages if Lease not Terminated. If any breach occurs, the Landlord may recover from the Tenant rent as it becomes due under this Sublease and any other amount necessary to compensate the Landlord for all of the detriment proximately caused by the Tenant's failure to perform its obligations under this Sublease or which, in the ordinary course of things, likely will result. The Landlord may sue for those amounts monthly, annually or after any other equal or unequal period that the Landlord may desire. The right set forth in this paragraph shall end upon the Landlord's termination of the Tenant's right to possession pursuant to the following paragraph.

(c) Damages if Lease Terminated. If the Landlord elect's to terminate this Lease, the Landlord may recover from the Tenant: (i) the worth at the time of award of the unpaid rent earned at the time of termination; (ii) the worth at the time of award of the amount by which the unpaid rent that the Landlord would have earned after the termination until the time of award exceeds the amount of the rental loss that the Tenant proves the Landlord reasonably could have avoided; (iii) the worth at the time of award of the amount by which the unpaid rent for the balance of the term of the Sublease after the time of award exceeds the amount of the rental loss that the Tenant proves the Landlord reasonably could avoid; and (iv) any other amount necessary to compensate the Landlord for all the detriment proximately caused by the Tenant's failure to perform its obligations under this Sublease or which, in the ordinary course of events, likely would result. As used in this paragraph, the parties shall compute the "worth at the time of award" in accordance with Section 1951.2(b) of the Califomia Civil Code, with interest at the maximum lawftil rate.

(d) Notice of Breach. If the breach of this Sublease constitutes something other than a failure of the Tenant to pay, when due, any required rent, monies or charges, the Landlord shall not exercise any of the remedies above described unless and until the Landlord shall have delivered to the Tenant a written notice describing with reasonable particularity the breach and the Tenant fails to cure the breach within 10 days (or any longer period as the notice may specify) after delivery; provided, however, that, if the Tenant cannot cure the breach within 10 days, the Landlord shall not exercise any remedy if the Tenant has commenced the cure within the 10-day period and, thereafter, diligently pursues the same to completion.

(e) No Surtender Upon Landlord's Re-entry. No unlawful detainer action, re-entry or other action by the Landlord shall terminate this Sublease or the Tenant's obligations under the Sublease, unless the Landlord notifies the Tenant in writing that the Landlord has elected to terminate this Sublease.

FDD 5/11 AMENDED 6/11^02 I 3 w-49790 -WrllDOC

(f) Remedies are Cumulative. The remedies set forth in this Sublease shall supplement and not exclude any other remedies the Landlord may have for the Tenant's breach of this Sublease.

18. Subordination. The Tenant hereby makes this Sublease subordinate to the lien of any mortgage, deed of trust, or other encumbrance, together with any renewals, extensions, replacements of any mortgage, deed of trust, or other encumbrance, now or later placed, charged or enforced against all or any portion of the Property; provided that the beneficiary of the mortgage, deed of trust, or other encumbrance shall have agreed that, as long as the Tenant does not default in any of the terms, covenants or conditions of this Sublease, neither this Sublease nor any of the rights of Tenant under this Sublease shall terminate as a result of any trustee's sale or any action or proceeding in foreclosure. In connection with the foregoing, the Tenant shall execute, at any time and from time to time, any such documents required to evidence the foregoing subordination.

19. Landlord's Right to Inspect the Property. The shall allow the Landlord and its agents free access to the Property during reasonable hours for the purpose of examining the Property to ascertain if the same are in good repair and to make reasonable repairs or alterations which the Landlord may have any obligation to make.

20. Arbitration. The Landlord and the Tenant shall resolve any controversy or claim arising out of or relating to this Sublease pursuant to binding arbitration in accordance with the provisions of the Franchise Agreement.

21. Interest on Late Payments and Attorneys' Fees. All amounts owed by the Tenant and past due under this Sublease shall bear interest at an annual rate equal to the prime interest rate as published in The Wall Street Journal plus four percentage points from the due date until paid. The prevailing party in any action brought to enforce the terms of this Sublease shall have the right to recover its reasonable attorneys' fees and costs from the unsuccessful party.

22. Entire Agreement. This Sublease constitutes the entire agreement of the parties with regard to the subject matter of this Sublease and replaces and supersedes all other written and oral agreements and statements of the parties relating to the subject matter of this Sublease.

23. Waiver. The failure of a party to insist in any one or more instances on the performance of any term or condition of this Sublease shall not operate as a waiver of any future performance of that term or condition.

24. Goveming Law. Notwithstanding the place where the parties execute this Sublease, the intemal laws of shall govern the construction of the terms and the application of the provisions of this Sublease.

25. Construction. The parties acknowledge that each party and/or its legal counsel have reviewed and made revisions to this Sublease. The rule of construction requiring the resolution of any ambiguities in this Sublease against the drafting party shall not apply to the construction of this Sublease or any exhibits to this Sublease. The addition, deletion or modification of any language contained in any prior draft of this Sublease shall not create any inferences.

w-49790 4^12J30C

26. Headings. The headings used in this Sublease appear strictly for the parties' convenience in identifying the provisions of this Sublease and shall not affect the construction or interpretation of the provisions of this Sublease.

27. Binding Effect. This Sublease shall bind and benefit the parties and their respective permitted successors, heirs, legal representatives, and assigns. This section does not address, directly or indirectly, whether a party may assign its rights or delegate its performance under this Agreement. Section 17 addresses those matters.

28. Severability. If a court of competent jurisdiction holds any provision of this Sublease invalid or ineffective with respect to any person or circumstance, the holding shall not affect the remainder of this Sublease or the application of this Sublease to any other person or circumstance. If a court of competent jurisdiction holds any provision of this Sublease too broad to allow enforcement of the provision to its full extent, the court shall have the power and authority to enforce the provision to the maximum extent permitted by law and may modify the scope of the provision accordingly pursuant to an order of the court.

29. Amendments. No amendments to this Sublease shall become effective or binding on the parties, unless agreed to in writing by all of the parties.

30. Time. Time constitutes an essential part of each and every part of this Sublease.

31. Notices. Except as otherwise provided in this Sublease, when this Sublease makes provision for notice or concurtence of any kind, the sending party shall deliver or address the notice to the other party by hand delivery, certified mail, or delivery via a nationally-recognized ovemight delivery service, charges prepaid and properly addressed, to the following address:

Landlord: Del Taco LLC 25521 Commercentre Drive, Suite 200 Lake Forest, California 92630

Tenant:

All notices pursuant to the provisions of this Sublease shall run from the date that the other party receives or refuses delivery of the notice or three business days after the party places the notice in the United States mail. Each party may change the parfy's address by giving written notice to the other party.

32. Counterparts. The parties may execute this Sublease in counterparts, each of which shall constitute an original and all of which, when taken together, shall constitute one and the same instrument.

FDD 5/11 AMENDED 6/11 jOZ 15 W-49790 4e-llX)0C

In witness of their agreement, the parties have executed and delivered this Sublease as of the day and year first set forth above.

Landlord: Del Taco LLC

By: Its:

Tenant; By: Its:

w-49790 +^12.DOC

EXHIBIT A

Master Lease

W^9790 4ftlZD0C

EXHIBIT B

Legal Description

FDD. W-49790 44rl2JX>C

EsfeihitEX^SC

Franchise Agreement

FDD 5/11 AMENDED 6/114Z12 19 W-49790 44-12JX>C

ferfHbitEXHIBllD

Software Agreement

FDD 5/11 AMENDED 6/1 \ i l l l 20 W-49790 44-12.D0C

EXHIBIT U

FRANCHISEE INFORMATION (INCLUDING SUPPLEMENTAL INFORMATION)

Del Taco Franchisees As of nocomhor 2S. 201 OJanuarv 4. 2012

" . -^Entity ^ 'Address n^.citv^w t^*^Ofnce^Number

Aparicio Enterprises, L.L.C. 2925 N 127th Drive Avondale AZ (623)261-7232

Desert Taco, LLC 17704 N. 92nd Street Place Scottsdale AZ ('4&06021 7 0 8 -

Desert Taco East, LLC 17704 N. 92nd Street Place Scottsdale AZ (480602) I D S -

Desert Taco III. LLC 17704 N. 92nd Street Place Scottsdale AZ

nesprt Tarn IV. M - C 17704 N. 92nd Street Place Srnttsdale AZ (6n2^ 708-3040

DTRA Investment, LLC 1024 N. San Francisco, Suite 103 Flagstaff AZ (928) 779-4523

Linda-Franklin and Chant ManoukianLimla 1234 Camino Diestro Oro Valley AZ (520)219-0979

OK. New Mex, Inc. 101 E. Hopi Drive Holbrcok AZ (928) 524-3680

892 DT Foods, Inc. 3435 Wilshire Boulevard, Suite 2820 Los Angeles CA (213)487-8444

Ahoa Groupl. Inc. 490 Novara Way Oak Park CA (805)497-3038

AYv & RC EnterpriaesAltnf^pthpr. IwirlAT. P.O. Box2«10692.-^ Missinn Crnvp Pkwv Mission i iefeRivprsirip CA

(0497141367208-&826Qm

Arizona Del Restaurants, LLC 31072 Via Peralta Coto De Caza CA (949) 766-9378

AS-IS 11 Corporation 5 Alegria Irvine CA (714) 832-6148

Batla Enterprises. Inc. 1605 E. VallpvlSlfi W. ImpprialfMfwvHwv EscondidoLos Anpeles CA (760)741-3504

' — Rflfla Fnfernrises Two. Inr.

I S l f i W . Imperial Hwv I ns Anpples CA nam 741-3504

Bay Valley Foods, Inc. 2323 Monte Vista Drive Pinole CA (510) 502-8490 Redrnssian^Tak and Amy Bedrossianand Aftpeiikfninn Apraham 10245 Candleberry Lane Northridge CA (323)467-8631

Reri Aiav and 1 Jithra Rirk V . fifinn naip St. Siiitpi04 Buen^ Park CA ^ U ^ 863-8900

Sean-Boissiere-aftd- Span A. Sandy-Boissiere 2652 Vista Beik Victoria Riverside CA (951) 328-8333 Aftdy-Borruelj^ndy. Steven P.-Borruel-and Timothy W. and_Borruel.Kttli£rt 27790 Brucite Road Barstow CA (760) 252-5998

CatvirTaco IV, Inc. 8200 Stockdale Hwy Bakersfield CA (661) 836-9667

FDD 5/11 AMENDED 6/1 M i l l W-49790 -WrllDOC

Entity .Address Citv ' ' State • Office'Number

Thandi. Nachhattar S^and Susan E. Chandi P.O. Box 2817 Indio CA (760) 396-9260

Chaudhry Investments, Inc. 7247 Archibald Ave. Rancho Cucamonga CA (909) 987-7628

Corvem, Inc. 16810 Lakeshore Dr. Lake Elsinore CA (951)674-7667

Deico Enterprises. Inc. 8212 ArtoGiaBlvd Buena Pork GA (711) 863 8900

David Del rah imJia i i i l 4242 Vicasa Drive Calabasas CA {815)535-9322

EA and AK. Enterpries, Inc. P.O. Box 2819 Mission Viejo CA (949) 367-0826

Finley-Vanderweel, a Califomia GP 6923 Mission Grove Pkwy Riverside CA (909) 780-5143

Galaxy Investments, Ltd. 1107 E. Chapman Ave., Suite 108 Orange CA (714) 639-9207

Geoffrey B. Wickett, Trustee of Gooffroy B. Wiokert Living Trust 19712 MacArthur Blvd., Suite 222 Irvine CA (949) 252-8488

KeHey-GillilandJi£ll£y 872 Hemlock Ridge Ct Simi Valley CA (805) 444-7755

GoldGate Foods. Inc. 397 BeGton WnvfilftS Rrid^psfnne Cirele ValkieDiibiiu CA (707) 64^246-

Fdwnrd R Harkharth Edward ^- Ir. and Robert Borruel P.O. Box 1086 Corona CA (951)780-2027

FHwnrd E Har.kharth F.riward K. Sr.. Dale Hackbarth and Eugene Haokborth P O Rnv 10«9293 WinHpld Cirrle Corona CA (951) 734-1124

Tony-Hae tbarth 108 N . 2nd Ave BaFstow € A (71'1)731 112^

N4ike-Hansberger and Jeff HansbergerLemy 5 1/2 E. State Street, Suite 4 Red lands CA (909) 793-2428

Hpwitt .lames D. Hewitt 23612 Verrazanno Bay Monarch Beach CA (949) 443-2327

KanT»li Mike and Shirin-Kamali 4 Desoto Way Coto De Caza CA (949) 582-2678

Kenny Family Trust 2561 Crestview Drive Newport Beach CA (949) 646-2074

Krihhs Shirley faibbs 20469 Rancho La Floresta Road Covina CA (626) 332-0726

M.K.Z., Ltd P.O. Box 45 Corona CA (951)737-2521

M3 Holdings. L L C 1600 VirginiaVirfina Avenue Glendale CA (818)482-4850

Hrft^MehrvarJLR. 1367 Mandrake Way Beaumont CA (714) 768-4763

SheFH-Mehrvar_Slifem 300 S. Highland Springs Ave, Suite 6C-121 Banning CA (714) 639-2251

Mo Bro Enterprises, Inc. P.O. Box 9854 Glendale CA (818)482-0930

Ahmnd Mnalej Ahmad P.O. Box 126 Pacific Palisades CA (310) 908-5792

Nor-cal Foods, Inc. 3421 Tulley Road, Suite G-1 Modesto CA (209)521-9201

Old Road, Inc. 25660 Oak Meadow Drive Valencia CA (661)212-8102

Organa One, Inc. 217 Wimbledon Ct. San Ramon CA (720) 427-9690

Pacific Coast Restaurants, LLC 1078 Harter Road Yuba City CA (714) 600-8687

FDD 5/11 AMENDED 6/1MIM W-49790 44T12D0C

Kntity Address • Citv State . -.- •Office Number

l^roke-Polosajian and Rofier-KardakiianKnlm 13223 Ventura Blvd^, Suite G Studio City CA (310)350-0306

Quick Bites, Inc. 1040 North Benson Ave. Upland CA (909) 394-4728

REP Restaurant Company, Inc. 1930 Forbidden Court Rockiin CA (916) 774-6142

RPR Restaurant. Inc. 1930 Forbidden Court Roektin GA (916)77^ 6112

S & G Foods Incorporated 242 Ave. La Cuesta San Clemente CA (760)871-5128

ARs©i-Sanchez.An££l 1510 East "F" St. Oakdale CA (209)537-0181

Skybl Corporation P.O. Box 2038 Victorville CA (760) 245-2373

R6sa-Song_RQsa 322 Allendale Rd., Unit 104 Pasadena CA (626)441-3486

SyedJCaleem Syed and& Humera-Syed 2051 Hathaway Avenue Westlake Village CA (805)492-3628

Tavlnr RandVr Heather, Travis and I,anra N . Rimrnrk Rnad Hayden C A n m 772-77.S7

lesla-Martin L. Testa 2385 A Street Santa Maria CA (805) 739-0809

Carolyn and Dan Villars Dan & Carnlvn 19444 Kinai Rd. Apple Valley CA (760)946-0371

Jeffy-WalkerJerri!: P.O. Box 11527 Palm Desert CA (760) 772-7984

Rniondra Yadav Ranjenrlra 3550 Mowry Ave #300 Fremont CA (510) 791-8239

Robert Ya eoubian 1130 Fallen Leaf Arcadia GA (626)215 3333

PeteF-HowserJied and Fred HowserEfcter 4314 9th Street Boulder CO (949) 566-9155

Mountain DeL I IT. SSS F.ldorarlo Blvri, Suite 200 Rronmfield C Q 460-8800

Rocky Star, inc. 6075 S. Q Liebec Street, Suite 200 Englewoo d CO (303): .21-1121

WCG One, L L C 555 Eldorado Blvd, Suite 200 Broomfield GO (303) 160 8800

Edward J. Howie, Ram ReddyRnff, Steve McDonnell and Lisa BaumgaftBeF& Howie

R & H Taylor, Inc.

Michiana Hospitality. Inc.

DT Venture, L L C

Stovo and Kim Lajiness Stpvpn and Kim

Providential Restaurant Group, Inc.

7505 Waters Ave., Suite C7

P.O. Box "L"

23835 N . Rimrock Road

19176 Edinburgh Drive?j>6? S New Rnad

17800 Laurel Park Drive North, Suite 200C

8633 SecorRoad

41160 Ten Mile RdrRnad

Savannah

Hagatna

Hayden SetrthNnrm BendLiherty

Livonia

Lambertville

Novi

GA

GU

ID

IN

Ml

Ml

MI

(912)352-8100

(671)646-6083

(208) 772-7757

(574) 532-0617

(248)262-1000

(419) 304-8544

(248) 476-9696

D.F. Restaurants. LLC 16650 Chesterfield Grove Road. Suite 120 Chesterfield 1TJV- ' (636) 530 2213

Sem-B rad v_S£an 5032 Poly QfUiixR Billings MT (406) 656-5675

Marx Jeffrey and Janette-Mafs 1602 Pearlstone Lane Matthews NC (980) 297-2827

FCDT, LLC 10777 West Twain Ave., Suite 333 Las Vegas NV (702) 222-2222

FDD .5/11 AMENDED 6/114Z12 W-49790 mrlZDOC

Entity Address . G l t v » f e isStS itajOfficelNuraber •

3 Brothers Restaurants. LLC 838 SW First AverAmme, Suite 210 Portland OR (503)957-3102

Cactus Enterprise, LLC 2921 Fredrick Dr Med ford OR (541)773-5075

Central Oregon Fast Food, LLC 2063 Cabot Lake Ct. Bend OR (541) 312-8855

Zoya Foods, Inc. 16500 N.W. Bethany Court, Suite 150 Beaverton OR (503) 906-1290

IHS Fnnd-iTarn Siinremn. t i ^ L L C 1 Lamotte St-3318 Fnrest Lane Suite 200 Spnrtanhurgnallas SGI

X (864222)

83^2212

Riley Rvan W. Riloy Q-jOOGnalic rirole9172 Hidden Peak Dr. West Jordan UT (801)484-5722

Utah Del, Inc. 4760 S. Highland Drive #604 Salt Lake City UT (801) 574-5004

Ejaz H. Chaudhry and lmatiaz ChaudhryFiaz H. 15002 North West 15th Ave. Vancouver WA (360) 577-0607

Del Norte, LLC 5150 Village Park Drive SE, Suite 107 Bellevue WA (425) 2894M41M1

Del Quatro. LLC 26 E. Main Straet. Ste 7909 Stovall Rnad Walla Walla WA (509) 536201-

4^2021

Liberty Foods and GVD LLG 810 East 28th Avenue Spokane WA (509)531 5805

FDD 5/11 AMEMDHD 6/114/12 W-49790 ii^lZDOC

Supplemental Information As nf DocomhQr2«. 201 OJanuarv 4. 2012

Following is a list of Franchisees, City and State, and last known telephone number, who had an outlet terminated, canceled, not renewed, or otherwise voluntarily or involuntarily ceased to do business under the franchise agreement during the most recently completed fiscal year or who has not communicated within 10 weeks of the disclosure document issuance date.

If you buy this franchise, your contact information may be disclosed to other buyers when you leave the franchise system.

Franchisee Addresa City State Zin Code Telephone Number

Galft-AZ Holdings, 4«p-F,rnifi A harm

670 Palnmar Street GestaChuIa Mesayista

CA 91911-2607 (SOG242)

?t83005SS2

Arizona Dol, LLCRflhert 1717SFastrf>lima Road Coto do OftWiHacienda Heipht.s

CA 91745-6701 (949626) Yafrhniihian

Coto do OftWiHacienda Heipht.s

CA (949626)

AdaRandy GkmiRamirez

6021 Stanford Ranch Santa AtwRocklin

CA 9576S-44I4 r?44916)

W86142

Peter and Fred D. l i n O l . V street RoulHer C Q 80302 ( 9 m 566-9155 Howser

C Q

D F Restaurants. r , r r 1033 Mcransland St. Louis MO 63117-1924 (636) 530-2213 Avenue

n F Restaurants. IA.C 212 South Grand Avenue St. Kouis MO 6310.V2419 f636^ 530-2213

Ken Mnior,leffrev and 1800 BoilinP SnrinPS CnlorndnRoilinp COS

c 29316

880222-69+02S21

.laneltp Mar\ Springs COS

c 880222-69+02S21

Rocky Mountain Dol, Groonwood CO

VillQse CO (303)711 8900

Del Norte, LLC Bellevue •WA (425)289 1611

FDD 5/11 AMENDED 6/1 M i l l W-49790 Wrl iDOC

EXHIBIT 4K

FORM OF GENERAL RELEASE

FDD 5/11 AMI^MDED 6/1 liZ12 W-49790 Wrl iDOC

FORM OF GENERAL RELEASE

1. The Assignor, on behalf of itself, parents, affiliates, subsidiaries and their heirs, successors and assigns, hereby releases all claims that the Assignor may have against Del Taco LLC ("Del Taco"). as well as any and all of its parents, affiliates, directors, limited liability company managers, officers, owners, employees,, agents, attomeys, and any and all of their respective representatives, successors and assigns, from any and all claims, demands, liabilities, costs, expenses and damages of every kind, known or unknown, which Assignor has or may have against any of them as of the date of this assignment (the "Assignment"), including (without limitation) any claimed violation or breach of the Agreement or state or federal laws, including franchise investment laws, and covenants not to sue any of the foregoing for any of those claims. In connection with that release, the Assignor expressly waives any and all rights and benefits against Del Taco conferred upon the Assignor by the provisions of Section 1542 of the Califomia Civil Code, which reads as follows;

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

2. The Assignor (and if a legal entity, Assignor's owners holding a 10% or greater interest in Assignor), for a period of two years after the date of this Assignment, shall not engage in any food service business similar to the food service business operated under the Del Taco System within the Protected Area of the Restaurant (as described in the Agreement) or within two miles of any other Del Taco restaurant owned and/or operated by Del Taco or any other franchisee or licensee of Del Taco.

3. The Assignor acknowledges that any violation of Section 2. above shall constitute both a material breach of this Assignment and a tortious interference with Del Taco's rights in its confidential information and trade secrets. The Assignor further acknowledges that any violation wilt cause irreparable and incalculable harm to Del Taco and agrees that Del Taco shall have the right to obtain temporary and permanent injunctions to prevent violations.

FDD 5/11 AMENDED 6/lliZ12 W-49790 -WriZJ^OC

RECEIPT

This Disclosure Document summarizes certain provisions of the franchise agreement and other information in plain language. Read this Disclosure Document and all agreements carefully.

If Del Taco LLC ("Del Taco") offers you a franchise, Del Taco must provide this Disclosure Document to you at least 14 calendar days (or sooner, if required by applicable state law) before you sign a binding agreement with, or make a payment to, Del Taco, or any affiliate of Del Taco in connection with the proposed franchise sale.

New York, Oklahoma and Rhode Island require that Del Taco give you this Disclosure Document at the earlier of the first personal meeting or 10 business days before the execution of the franchise or other agreement or the payment of any consideration that relates to the franchise relationship. Michigan, Washington and Wisconsin require that Del Taco give you this Disclosure Document at least 10 business days before the execution of any binding franchise or other agreement or the payment of any consideration, whichever occurs first.

If Del Taco does not deliver this Disclosure Document on time or if it contains a false or misleading statement or a material omission, a violation of federal law and state law may have occurred and should be reported to the Federal Trade Commission, Washington, D.C. 20580 and the applicable state agency listed on Exhibit A to this Disclosure Document.

Only the following individuals have the authority to offer and sell Del Taco franchises:

James Lyons, 25521 Commercentre Drive, Lalcc Forest, Califomia 92630 (919) 162 7303; Michael Vogel, 25521 Commercentre Drive, Lake Forest, Califomia 92630 (612) 750-4077; Eric Edwards, 25521 Commercentre Drive, Lake Forest, Califomia 92630 (214) 870-3888. Laura Tanaka, Cnmmfrcent re Drive. Lake Forest. Cal i fornia 92fi3ft 949^ 462-7379.

We have authorized the persons listed on Exhibit A to this Franchise Disclosure Document to receive service of process for us in the listed states.

Date of Issuance: Mnv 7. ? n i L nr. nmondod Juno 11. 3n] 1,April 30^ 2012.

1 have received this Disclosure Document dated Mav 2, 2011. as amended-Juno 14. 201 I.April 3ft, 2012. Please refer to the State Cover Page for the effective date of this Disclosure Statement in your state. This Disclosure Document included the following exhibits:

A State Agencies and Registered Agents B Financial Statements C Guaranty Agreement of Sagittarius Restaurants LLC D Multiple Development Agreement &-4 Development Incentive Program Addendum to Multiple Development Agreement E Franchise Agreement E-1 Dftvelopmenir;rowth Incentive Program Addendum to Franchise Agreement F State Addenda G Hardware and Software License and Support Agreement H Addendum to Kease

1 Agreement and Sublease Agreement i i Franchisee Information (Including Supplemental Information) JK Form of General Release

Date of Receipt Signature of Prospective Franchisee (on behalf of the prospective franchisee and any corporation, limited liability company, or other business entity having or proposed to have an interest in the franchise or any proposed franchised location)

Print Name

FDD 5/11 AMENDED 6 /Wi l l l W-49790 447m>0C

RECEIPT

This Disclosure Document summarizes certain provisions of the franchise agreement and other information in plain language. Read this Disclosure Document and all agreements carefully.

If Del Taco LLC ("Del Taco") offers you a franchise, Del Taco must provide this Disclosure Document to you at least 14 calendar days {or sooner, if required by applicable state law) before you sign a binding agreement with, or make a payment to, Del Taco, or any afTiliate of Del Taco in connection with the proposed franchise sale.

New York, Oklahoma and Rhode Island require that Del Taco give you this Disclosure Document at the earlier of the first personal meeting or 10 business days before the execution of the franchise or other agreement or the payment of any consideration that relates to the franchise relationship. Michigan, Washington and Wisconsin require that Del Taco give you this Disclosure Document at least 10 business days before the execution of any binding franchise or other agreement or the payment of any consideration, whichever occurs first.

If Del Taco does not deliver this Disclosure Document on time or if it contains a false or misleading statement or a material omission, a violation of federal law and state law may have occurred and should be reported to the Federal Trade Commission, Washington, D.C. 20580 and the applicable state agency listed on Exhibit A to this Disclosure Document.

Only the following individuals have the authority to offer and sell Del Taco franchises:

James Lyons, 25521 Commorccntro Drive, Lake Forest, Califomia 92630 (919) 162 7303; Michael Vogel, 25521 Commercentre Drive, Lake Forest, Califomia 92630 (612) 750-4077; Eric Edwards, 25521 Commercentre Drive, Lake Forest, Califomia 92630 (214) 870-3888. Kaura Tanaka. 2SS2I rommercentre Drive. Lake Fnrest. Cal i fornia 92630 (949\ 462-7379.

We have authorized the persons listed on Exhibit A to this Franchise Disclosure Document to receive service of process for us in the listed states.

Date of Issuance: Mny 2, ?.ni 1, ns nmended June 14 201] L April 3fl.,.2M2^

I have received this Disclosure Document dated May 2. 2011. as amended Juno 14, 201 I.April 30 2ftl2. Please refer to the State Cover Page for the effective date of this Disclosure Statement in your state. This Disclosure Document included the following exhibits:

A State Agencies and Registered Agents B Financial Statements C Guaranty Agreement of Sagittarius Restaurants LLC D Multiple Development Agreement D-4 Development-lnceftlive Program Addendum to Multiple Development Agreement E Franchise Agreement F-l Development Growth Incentive Program Addendum to Franchise Agreement F State Addenda G Hardware and SofUvare License and Support Agreement H Addendum tn Keasg I Agreement and Sublease Agreement y Franchisee Information (Including Supplemental Information)

Form of General Release

Date of Receipt Signature of Prospective Franchisee (on behalf of the prospective franchisee and any corporation, limited liability company, or other business entity having or proposed to have an interest in the franchise or any proposed franchised location)

Print Name

FDD: w-49790 W;12.D0C