TAX RECEIVABLE AGREEMENT AMENDMENT
This Tax Receivable Agreement Amendment (the Agreement) is entered into as of January 5, 2020, by and among The Habit Restaurants, Inc., a Delaware corporation (the Company), The Habit Restaurants, LLC, a Delaware limited liability company (Opco LLC), KarpReilly, LLC, a Delaware limited liability company (the KarpReilly Representative), and certain LLC Unit Holders listed on Annex A (collectively, the Parties).
WHEREAS, the Company, Opco LLC, the wholly-owned subsidiaries of the Company, and certain other persons entered into that certain Tax Receivable Agreement, dated as of November 25, 2014 (the TRA);
WHEREAS, the Company, YUM! Brands, Inc., a North Carolina corporation (Parent), and YEB Newco Inc., a Delaware corporation entered into that certain Agreement and Plan of Merger, dated as of January 5, 2020 (the Merger Agreement);
WHEREAS, Article IV of the TRA provides for an Early Termination Payment in the event of a Change in Control;
WHEREAS, Section 4.3 of the TRA provides the method for calculating the Early Termination Payment required under Article IV;
WHEREAS, the Company shall make payments contemplated by the TRA for the 2019 taxable year in connection with the consummation of the transactions contemplated by the Merger Agreement (which payments are listed on Annex B hereof under the heading Amount Payable in Respect of the 2019 Taxable Year), and the Early Termination Payment contemplated herein is in addition to, not in lieu of, those payments;
WHEREAS, the Company desires to amend the amount of payments owed to each person entitled to payments under the TRA (each such person, an LLC Unit Holder), including the obligations under Article IV of the TRA, and each LLC Unit Holder will accept payment of the amounts set forth on Annex B hereof and will release the Company from all further obligations under the TRA, as specified in this Agreement; and
WHEREAS, pursuant to Section 7.5(b) of the TRA, the Parties desire to amend the TRA pursuant to its terms.
NOW, THEREFORE, in consideration of the promises and the mutual agreements and covenants hereinafter set forth, and intending to be legally bound, the Parties hereby agree as follows:
1. Definitions; References. Unless otherwise specifically defined herein, each capitalized term used herein but not otherwise defined herein shall have the meaning assigned to such term in the TRA. To the extent there is a conflict or inconsistency between the terms of this Agreement and the terms of the TRA (prior to giving effect to this Agreement), this Agreement shall constitute an amendment of the TRA.
2. TRA Acceleration. The Parties agree that the consummation of the transactions contemplated by the Merger Agreement will give rise to a Change in Control as defined in the TRA (such Change in Control, the MA Change in Control). Furthermore, the Parties agree that the TRA shall be terminated in its entirety upon payment of the Termination Payments (defined below), and thereafter no party shall have any further obligations under the TRA other than those obligations set forth in this Agreement.