Exhibit 10.5

THE SECURITIES EVIDENCED BY THIS INSTRUMENT HAVE BEEN ISSUED AND SOLD WITHOUT
REGISTRATION UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE
“SECURITIES ACT”), OR THE SECURITIES LAWS OF ANY OTHER FOREIGN, FEDERAL, STATE,
LOCAL OR OTHER JURISDICTION (A “FOREIGN OR STATE ACT”). THE SECURITIES EVIDENCED
BY THIS CERTIFICATE CANNOT BE SOLD, ASSIGNED OR OTHERWISE TRANSFERRED UNLESS
SUCH SALE, ASSIGNMENT OR OTHER TRANSFER IS (I) MADE PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND IN ACCORDANCE WITH EACH
APPLICABLE FOREIGN OR STATE ACT OR (II) EXEMPT FROM, OR NOT SUBJECT TO, THE
SECURITIES ACT (INCLUDING PURSUANT TO REGULATION S THEREUNDER) AND EACH
APPLICABLE FOREIGN OR STATE ACT. IF THE PROPOSED SALE, ASSIGNMENT OR OTHER
TRANSFER WILL BE MADE PURSUANT TO CLAUSE (II) ABOVE, THE HOLDER MUST, PRIOR TO
SUCH SALE, ASSIGNMENT OR OTHER TRANSFER, FURNISH TO THE ISSUER SUCH
CERTIFICATIONS, LEGAL OPINIONS AND OTHER INFORMATION AS THE ISSUER MAY
REASONABLY REQUIRE TO DETERMINE THAT SUCH SALE, ASSIGNMENT OR OTHER TRANSFER IS
BEING MADE IN ACCORDANCE WITH SUCH CLAUSE.

WARRANT No. 1

to purchase

891,348

Shares of Common Stock

YUM CHINA HOLDINGS, INC.

a Delaware Corporation

Issue Date: January 9, 2017

1.    Definitions. Unless the context otherwise requires, when used herein the
following terms shall have the meanings indicated.

“Affiliate” has the meaning ascribed to it in the Investment Agreement.

“AF Warrant 1” has the meaning set forth in the Investment Agreement.

“AF Warrant 2” has the meaning set forth in the Investment Agreement.

“Aggregate Consideration” has the meaning ascribed to it in Section 12(ii).

“Appraisal Procedure” means a procedure whereby two independent, nationally
recognized appraisers, one chosen by the Corporation and one by Warrantholder(s)
representing in excess of 50% of the Warrant Shares then issuable upon exercise
in full of this Warrant shall mutually agree upon the determinations then the
subject of appraisal. Each party shall deliver a notice to the other appointing
its appraiser within 15 days after the Appraisal Procedure is invoked. If within
30 days after appointment of the two appraisers they are unable to agree upon
the amount in question, a third independent, nationally recognized appraiser
shall be chosen within 10 days thereafter by the mutual consent of such first
two appraisers or, if such two first appraisers fail to agree upon the
appointment of a third appraiser, such appointment shall be made by the American
Arbitration Association, or any organization successor thereto, from a panel of
arbitrators having experience in appraisal of the subject matter to be
appraised. In such event, the decision of the third appraiser so appointed and
chosen shall be given within 30 days after the selection of such third
appraiser. If three appraisers shall be appointed and the determination of one
appraiser is disparate from the middle determination by more than twice the
amount by which the other determination is disparate from the middle
determination, then the determination of such appraiser shall be excluded, the
remaining two determinations shall be averaged and such average shall be binding
and conclusive upon the Corporation and the Warrantholder(s); otherwise, the
average of all three determinations shall be binding upon the Corporation and
the Warrantholder(s). 50% of the costs of conducting any Appraisal Procedure
shall be borne by the Corporation, and 50% of the costs of conducting any
Appraisal Procedure shall be borne by Warrantholder(s) (pro rata, based on the
Warrant Shares issuable upon exercise of this Warrant in full as of the opening
of business on the date on which the Appraisal Procedure is invoked
(disregarding whether or not this Warrant is exercisable by its terms at such
time)), on the other hand.

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“Board of Directors” means the board of directors of the Corporation.

“Business Combination” means a merger, consolidation, statutory share exchange,
reorganization, recapitalization or similar extraordinary transaction (which may
include a reclassification) involving the Corporation.

“Business Day” has the meaning ascribed to it in the Investment Agreement.

“Cash Exercise” has the meaning set forth in Section 3.

“Cashless Exercise” has the meaning set forth in Section 3.

“Cashless Exercise Ratio” with respect to any exercise of this Warrant means a
fraction (i) the numerator of which is the excess of (x) the average of the
daily Market Prices for the Common Stock for the 20 Trading Day period
immediately preceding such exercise date over (y) the Exercise Price, and (ii)
the denominator of which is the average of the daily Market Prices for the
Common Stock for the 20 Trading Day period immediately preceding such exercise
date.

“Common Stock” means the Corporation’s Common Stock, $0.01 par value per share.

“conversion” has the meaning ascribed to it in Section 12(ii).

“Convertible Securities” has the meaning ascribed to it in Section 12(ii).

“Corporation” means Yum China Holdings, Inc., a Delaware corporation.

“Election Mechanic” has the meaning set forth in Section 12(v).

“Equity Interests” means any and all (i) shares, interests, participations or
other equivalents (however designated) of capital stock or other voting
securities of a corporation, any and all equivalent or analogous ownership (or
profit) or voting interests in a Person (other than a corporation), (ii)
securities convertible into or exchangeable for shares, interests,
participations or other equivalents (however designated) of capital stock or
voting securities of (or other ownership or profit or voting interests in) such
Person, and (iii) any and all warrants, rights or options to purchase any of the
foregoing, whether voting or nonvoting, and, in each case, whether or not such
shares, interests, participations, equivalents, securities, warrants, options,
rights or other interests are authorized or otherwise existing on any date of
determination.

 

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“Exchange Act” means the Securities Exchange Act of 1934, as amended, or any
successor statute, and the rules and regulations promulgated thereunder.

“Exercise Period” has the meaning set forth in Section 3.

“Exercise Price” means $31.40, subject to adjustment pursuant to the terms
hereof.

“Exercise Start Date” has the meaning set forth in Section 3.

“Expiration Time” has the meaning set forth in Section 3.

“Fair Market Value” means, with respect to any security or other property, the
fair market value of such security or other property as determined by the Board
of Directors, acting in good faith and evidenced by a written notice delivered
promptly to the Warrantholder(s) (which written notice shall include certified
resolutions of the Board of Directors in respect thereof), in accordance with
the following rules: (i) for Common Stock or any other security traded or quoted
on the New York Stock Exchange or any other United States national securities
exchange, the Fair Market Value will be the average of the closing prices of
such security on such securities exchange over a twenty (20) consecutive Trading
Day period, ending on the Trading Day immediately prior to the date of
determination; (ii) for any security that is not so traded or quoted, the Fair
Market Value shall be determined: (x) by the Board of Directors, or (y) by a
nationally recognized investment bank, appraisal or accounting firm (whose fees
and expenses will be paid by the Corporation) selected by mutual agreement
between the Board of Directors and Warrantholder(s) representing in excess of
50% of the Warrant Shares then issuable upon exercise in full of this Warrant,
should such Warrantholder(s) object in writing to the Board of Director’s
calculation within 10 Business Days of receipt of written notice thereof; or
(iii) for any other property, the Fair Market Value shall be determined by the
Board of Directors in good faith assuming a willing buyer and a willing seller
in an arms’-length transaction; provided that if Warrantholder(s) representing
in excess of 50% of the Warrant Shares then issuable upon exercise in full of
this Warrant object in writing to a determination of the Board of Directors made
pursuant to this clause (iii) within 10 Business Days of receipt of written
notice thereof, the Fair Market Value of such property shall be determined
pursuant to the Appraisal Procedure.

“Initial Number” has the meaning ascribed to it in Section 12(ii).

“Investment Agreement” means the Investment Agreement, dated as of September 1,
2016, as amended from time to time, by and among the Corporation, Yum! Brands,
Inc., API (Hong Kong) Investment Limited, including all annexes, schedules and
exhibits thereto.

 

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“Market Price” means, with respect to the Common Stock or any other security, on
any given day, the last sale price, regular way, or, in case no such sale takes
place on such day, the average of the closing bid and asked prices, regular way,
of the shares of the Common Stock or of such security, as applicable, on the New
York Stock Exchange on such day. If the Common Stock or such security, as
applicable, is not listed on the New York Stock Exchange as of any date of
determination, the Market Price of the Common Stock or such security, as
applicable, on such date of determination means the closing sale price on such
date as reported in the composite transactions for the principal U.S. national
or regional securities exchange on which the Common Stock or such security, as
applicable, is so listed or quoted, or, if no closing sale price is reported,
the last reported sale price on such date on the principal U.S. national or
regional securities exchange on which the Common Stock or such security, as
applicable, is so listed or quoted, or if the Common Stock or such security, as
applicable, is not so listed or quoted on a U.S. national or regional securities
exchange, the last quoted bid price on such date for the Common Stock or such
security, as applicable, in the over-the-counter market as reported by Pink
Sheets LLC or similar organization, or, if that bid price is not available, the
Market Price of the Common Stock or such security, as applicable, on that date
shall mean the Fair Market Value per share as of such date of the Common Stock
or such security. For the purposes of determining the Market Price of the Common
Stock or any such security, as applicable, on the “Trading Day” preceding, on or
following the occurrence of an event, (i) that Trading Day shall be deemed to
commence immediately after the regular scheduled closing time of trading on the
applicable exchange, market or organization, or, if trading is closed at an
earlier time, such earlier time and (ii) that Trading Day shall end at the next
regular scheduled closing time, or if trading is closed at an earlier time, such
earlier time (for the avoidance of doubt, and as an example, if the Market Price
is to be determined as of the last Trading Day preceding a specified event and
the closing time of trading on a particular day is 4:00 p.m. and the specified
event occurs at 5:00 p.m. on that day, the Market Price would be determined by
reference to such 4:00 p.m. closing price).

“Other Voting Securities” means any, other than (i) Common Stock (and, for the
avoidance of doubt, Common Stock expressly excludes, and “Other Voting
Securities” expressly includes, any separate class or series of common stock of
the Corporation with the right to vote in the election of any directors of the
Corporation or otherwise on any other matters (whether separately as a class or
series, or together with shares of Common Stock) with respect to which Common
Stock is entitled to vote), (ii) any rights issued (or any securities issued in
respect of such rights) in connection with the adoption of a stockholder rights
plan in customary form (including with respect to the receipt of such rights in
respect of shares of Common Stock (including Warrant Shares) issued subsequent
to the initial dividend or distribution of such rights) or (iii) any securities
issued to directors, advisors, employees or consultants of the Corporation
pursuant to a stock option plan, employee stock purchase plan, restricted stock
plan, other employee benefit plan or similar compensatory arrangement or
agreement approved by the Board of Directors, any (a) securities with the right
to vote in the election of any directors of the Corporation or otherwise on any
other matters (whether separately as a class or series, or together with shares
of Common Stock) with respect to which Common Stock is entitled to vote, and (b)
securities convertible into or exchangeable for any such securities, and any and
all warrants, rights or options to purchase any of the foregoing.

“Permitted ASRP Transactions” means any “accelerated share repurchases” by the
Corporation or any Affiliate thereof so long as the “covering” purchases are
made in compliance with the requirements of Rule 10b-18 (other than Rule
10b-18(b)(1) and Rule 10b-18(b)(2)) under the Exchange Act (assuming Rule 10b-18
was applicable thereto).

“Permitted Transactions” has the meaning ascribed to it in Section 12(ii).

 

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“Person” has the meaning given to it in Section 3(a)(9) of the Exchange Act and
as used in Sections 13(d)(3) and 14(d)(2) of the Exchange Act.

“Post-Issuance Adjustment” has the meaning set forth in Section 12(ii).

“Pricing Date” has the meaning set forth in Section 12(ii).

“Principal Market” means, with respect to the Common Stock, the New York Stock
Exchange or such other primary United States national securities exchange on
which Common Stock subsequently becomes traded, and with respect to any other
security, the principal securities exchange or trading market for such other
security.

“PV Warrant 1” has the meaning set forth in the Investment Agreement.

“PV Warrant 2” has the meaning set forth in the Investment Agreement.

“Repurchases” means any transaction or series of related transactions to
purchase Equity Interests of the Corporation or any of its subsidiaries by the
Corporation or any subsidiary thereof, whether pursuant to any tender offer or
exchange offer (whether or not subject to Section 13(e) or 14(e) of the Exchange
Act or Regulation 14E promulgated thereunder), open market transactions, private
negotiated transactions or otherwise, and, in each case, whether for cash,
Equity Interests of the Corporation, other securities of the Corporation,
evidences of indebtedness of the Corporation or any other Person or any other
property (including Equity Interests, other securities or evidences of
indebtedness of a subsidiary), or any combination thereof, effected while this
Warrant is outstanding; provided that “Repurchases” shall not include (a) any
purchases effected solely by diversified mutual and/or pension funds managed by
independent investment advisers or pension plans established solely for the
benefit of the Corporation’s or its subsidiaries’ employees, or any of the
Corporation’s or its subsidiaries’ employee benefit plans for which investment
decisions are made by independent trustees, (b) any purchases of Equity
Interests of the Corporation by the Corporation or any Affiliate thereof
pursuant to and in compliance with the requirements of Rule 10b-18 under the
Exchange Act, or (c) Permitted ASRP Transactions.

“SEC” means the U.S. Securities and Exchange Commission.

“Securities Act” means the Securities Act of 1933, as amended, or any successor
statute, and the rules and regulations promulgated thereunder.

“Shareholders Agreement” means the Shareholders Agreement, dated as of November
1, 2016, as amended from time to time, by and among the Corporation, Pollos
Investment L.P., a Cayman Islands limited partnership, and API (Hong Kong)
Investment Limited, a company incorporated under the laws of Hong Kong,
including all annexes, schedules and exhibits thereto.

“Subject Adjustment” has the meaning set forth in Section 12(vii).

“Subject Record Date” has the meaning set forth in Section 12(vii).

“subsidiary” has the meaning ascribed to the term “Subsidiary” in the Investment
Agreement.

 

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“Trading Day” means any day on which the Common Stock is traded on its Principal
Market; provided that “Trading Day” shall not include any day on which the
Principal Market is open for trading for fewer than 4.5 hours.

“Warrant” means this Warrant, issued pursuant to the Investment Agreement.

“Warrants” means AF Warrant 1, AF Warrant 2, PV Warrant 1, and PV Warrant 2.

“Warrant Shares” has the meaning set forth in Section 2.

“Warrantholder” has the meaning set forth in Section 2.

2.    Number of Warrant Shares; Exercise Price. This certifies that, for value
received, API (Hong Kong) Investment Limited, a company incorporated under the
laws of Hong Kong, or its permitted assigns (the “Warrantholder”) is entitled,
upon the terms hereinafter set forth, to acquire from the Corporation, in whole
or in part, up to an aggregate of 891,348 fully paid and nonassessable shares of
Common Stock (the “Warrant Shares”), at a purchase price per share of Common
Stock equal to the Exercise Price. The Warrant Shares and Exercise Price are
subject to adjustment as provided herein, and all references to “Common Stock,”
“Warrant Shares” and “Exercise Price” herein shall be deemed to include any such
adjustment or series of adjustments.

3.    Exercise of Warrant; Term; Other Agreements; Cancelation.

(i)    Subject to Section 2, Section 12(vi) and Section 13, the right to
purchase the Warrant Shares represented by this Warrant is exercisable, in whole
or in part by the Warrantholder, at any time or from time to time from and after
January 9, 2017 (the “Exercise Start Date”), but in no event later than 5:00
p.m., New York City time, October 31, 2021 (such time, the “Expiration Time” and
such period from and after the Exercise Start Date through the Expiration Time,
the “Exercise Period”), by (A) the surrender of this Warrant and the Notice of
Exercise attached as Annex A hereto, duly completed and executed on behalf of
the Warrantholder, at the principal executive office of the Corporation located
at 16/F Two Grand Gateway, 3 Hongqiao Road, Shanghai 200030, The People’s
Republic of China (or such other office or agency of the Corporation as it may
designate by notice in writing to the Warrantholder(s)), and (B) payment of the
Exercise Price for the Warrant Shares thereby purchased by, at the sole election
of the Warrantholder, either: (i) tendering in cash, by certified or cashier’s
check payable to the order of the Corporation, or by wire transfer of
immediately available funds to an account designated by the Corporation (such
manner of exercise, a “Cash Exercise”) or (ii) without payment of cash, by
reducing the number of Warrant Shares obtainable upon the exercise of this
Warrant (either in full or in part, as applicable) and payment of the Exercise
Price in cash so as to yield a number of Warrant Shares obtainable upon the
exercise of this Warrant (either in full or in part, as applicable) equal to the
product of (A) the number of Warrant Shares issuable upon the exercise of this
Warrant (either in full or in part, as applicable) (if payment of the Exercise
Price were being made in cash) and (B) the Cashless Exercise Ratio (such manner
of exercise, a “Cashless Exercise”).

(ii)    If the Warrantholder does not exercise this Warrant in its entirety, the
Warrantholder will be entitled to receive from the Corporation a new warrant of
like tenor in substantially identical form for the purchase of that number of
Warrant Shares equal to the difference between the number of Warrant Shares
subject to this Warrant and the number of Warrant Shares as to which this
Warrant is so exercised.

 

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(iii)    This Warrant, including with respect to its cancelation, is subject to
the terms and conditions of the Investment Agreement and the Shareholders
Agreement. Without affecting in any manner any prior exercise of this Warrant
(or any Warrant Shares previously issued hereunder), if the Warrantholder
delivers to the Corporation a written, irrevocable commitment not to exercise
this Warrant, this Warrant shall be automatically and immediately canceled and
terminated and shall forthwith become void, and the Corporation shall have no
obligation to issue, and the Warrantholder shall have no right to acquire, any
Warrant Shares under this Warrant. Upon receipt of notice of cancelation of this
Warrant, the Warrantholder shall, as promptly as practicable, surrender this
Warrant to the Corporation at the principal executive office of the Corporation
located at 16/F Two Grand Gateway, 3 Hongqiao Road, Shanghai 200030, The
People’s Republic of China (or such other office or agency of the Corporation as
it may designate by notice in writing to the Warrantholder(s)).

4.    Issuance of Warrant Shares; Authorization; Listing. Certificates for
Equity Interests issued upon exercise of this Warrant will be issued on the
third Business Day following the date of exercise of this Warrant in accordance
with its terms in the name of the Warrantholder and will be delivered to the
Warrantholder. The Corporation hereby represents and warrants that any Equity
Interests issued upon the exercise of this Warrant in accordance with the
provisions of Section 3 will be validly issued, fully paid and nonassessable and
free of any liens or encumbrances (other than liens or encumbrances created by
the Investment Agreement and Shareholders Agreement (including, without
limitation, Article II of the Shareholders Agreement), arising as a matter of
applicable law or created by or at the direction of the Warrantholder or any of
its respective Affiliates). The Corporation agrees that the Equity Interests so
issued will be deemed for all purposes to have been issued to the Warrantholder
as of the close of business on the date on which this Warrant and payment of the
Exercise Price are delivered to the Corporation in accordance with the terms of
this Warrant, notwithstanding that the stock transfer books of the Corporation
may then be closed or certificates representing such Equity Interests may not be
actually delivered on such date. The Corporation will at all times reserve and
keep available, out of its authorized but unissued Equity Interests, solely for
the purpose of providing for the exercise of this Warrant, the aggregate Equity
Interests issuable upon exercise of this Warrant in full (disregarding whether
or not this Warrant is exercisable by its terms at any such time).

5.    No Fractional Shares or Scrip. No fractional Warrant Shares or other
Equity Interests or scrip representing fractional Warrant Shares or other Equity
Interests shall be issued upon any exercise of this Warrant. In lieu of any
fractional share to which a Warrantholder would otherwise be entitled, the
Warrantholder shall be entitled to receive a cash payment equal to the Market
Price of the Common Stock or such other Equity Interests on the last Trading Day
preceding the date of exercise less the Exercise Price for such fractional
share.

6.    No Rights as Stockholders; Transfer Books. Without limiting in any respect
the provisions of the Investment Agreement or the Shareholders Agreement, and
except as otherwise provided by the terms of this Warrant, this Warrant does not
entitle the Warrantholder to (i) receive dividends or other distributions, (ii)
consent to any action of the stockholders of the Corporation, (iii) receive
notice of or vote at any meeting of the stockholders, (iv) receive notice of any
other proceedings of the Corporation or (v) exercise any other rights
whatsoever, in any such case as a stockholder of the Corporation prior to the
date of exercise hereof.

 

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7.    Charges, Taxes and Expenses. Issuance of certificates for Equity Interests
to the Warrantholder upon the exercise of this Warrant shall be made without
charge to the Warrantholder for any issue or transfer tax (other than taxes in
respect of any transfer occurring contemporaneously therewith) or other
incidental expense in respect of the issuance of such certificates, all of which
taxes and expenses shall be paid by the Corporation.

8.    Transfer/Assignment.

(i)    This Warrant and the Warrant Shares may only be transferred in accordance
with the terms of the Shareholders Agreement. Subject to compliance with the
first sentence of this Section 8, the securities laws of the United States of
America and any applicable foreign jurisdiction, and the legend as set forth on
the cover page of this Warrant, this Warrant and all rights hereunder are
transferable, in whole or in part, upon the books of the Corporation by the
registered holder hereof in person or by duly authorized attorney, and a new
Warrant shall be made and delivered by the Corporation, of the same tenor and
date as this Warrant but registered in the name of one or more transferees, upon
surrender of this Warrant, duly endorsed, to the office or agency of the
Corporation described in Section 3. If the transferring holder does not transfer
the entirety of its rights to purchase all Warrant Shares hereunder, such holder
will be entitled to receive from the Corporation a new Warrant in substantially
identical form for the purchase of that number of Warrant Shares as to which the
right to purchase was not transferred. All expenses (other than stock transfer
taxes) and other charges payable in connection with the preparation, execution
and delivery of the new Warrants pursuant to this Section 8 shall be paid by the
Corporation, other than the costs and expenses of counsel or any other advisor
to the Warrantholder and its transferee.

(ii)    If and for so long as required by the Investment Agreement and
Shareholders Agreement, this warrant certificate shall contain a legend as set
forth in Section 3.1 of the Investment Agreement.

9.    Exchange and Registry of Warrant. This Warrant is exchangeable, subject to
applicable securities laws, upon the surrender hereof by the Warrantholder to
the Corporation, for a new warrant or warrants of like tenor and representing
the right to purchase the same aggregate number of Warrant Shares. The
Corporation shall maintain a registry showing the name and address of the
Warrantholder as the registered holder of this Warrant. This Warrant may be
surrendered for exchange or exercise, in accordance with its terms, at the
office of the Corporation, and the Corporation shall be entitled to rely in all
respects, prior to written notice to the contrary, upon such registry.

10.    Loss, Theft, Destruction or Mutilation of Warrant. Upon receipt by the
Corporation of evidence reasonably satisfactory to it of the loss, theft,
destruction or mutilation of this Warrant, and in the case of any such loss,
theft or destruction, upon receipt of a bond, indemnity or security reasonably
satisfactory to the Corporation, or, in the case of any such mutilation, upon
surrender and cancellation of this Warrant, the Corporation shall make and
deliver, in lieu of such lost, stolen, destroyed or mutilated Warrant, a new
Warrant of like tenor and representing the right to purchase the same aggregate
number of Warrant Shares as provided for in such lost, stolen, destroyed or
mutilated Warrant.

 

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11.    Saturdays, Sundays, Holidays, etc. If the last or appointed day for the
taking of any action or the expiration of any right required or granted herein
shall not be a Business Day, then such action may be taken or such right may be
exercised on the next succeeding day that is a Business Day.

12.    Adjustments and Other Rights. The Exercise Price and Warrant Shares
issuable upon exercise of this Warrant shall be subject to adjustment from time
to time as follows; provided that if more than one subsection of this Section 12
is applicable to a single event, the subsection shall be applied that produces
the largest adjustment and no single event shall cause an adjustment under more
than one subsection of this Section 12 so as to result in duplication.

(i)    Stock Splits, Subdivisions, Reclassifications or Combinations. If the
Corporation shall at any time or from time to time (a) declare, order, pay or
make a dividend or make a distribution on its Common Stock in shares of Common
Stock, (b) split, subdivide or reclassify the outstanding shares of Common Stock
into a greater number of shares or (c) combine or reclassify the outstanding
shares of Common Stock into a smaller number of shares, the number of Warrant
Shares issuable upon exercise of this Warrant at the time of the record date for
such dividend or distribution or the effective date of such split, subdivision,
combination or reclassification shall be proportionately adjusted so that the
Warrantholder(s) immediately after such record date or effective date, as the
case may be, shall be entitled to purchase the number of shares of Common Stock
which such holder(s) would have owned or been entitled to receive in respect of
the shares of Common Stock subject to this Warrant after such date had this
Warrant been exercised in full immediately prior to such record date or
effective date, as the case may be (disregarding whether or not this Warrant had
been exercisable by its terms at such time). In the event of such adjustment,
the Exercise Price in effect at the time of the record date for such dividend or
distribution or the effective date of such split, subdivision, combination or
reclassification shall be immediately adjusted to the number obtained by
dividing (x) the product of (1) the number of Warrant Shares issuable upon the
exercise of this Warrant in full before the adjustment determined pursuant to
the immediately preceding sentence (disregarding whether or not this Warrant was
exercisable by its terms at such time) and (2) the Exercise Price in effect
immediately prior to the record or effective date, as the case may be, for the
dividend, distribution, split, subdivision, combination or reclassification
giving rise to such adjustment by (y) the new number of Warrant Shares issuable
upon exercise of the Warrant in full determined pursuant to the immediately
preceding sentence (disregarding whether or not this Warrant is exercisable by
its terms at such time).

(ii)    Certain Issuances of Common Shares or Convertible Securities. If the
Corporation shall at any time or from time to time issue shares of Common Stock
(or rights or warrants or any other securities or rights exercisable or
convertible into or exchangeable (collectively, a “conversion”) for shares of
Common Stock) (collectively, “convertible securities”) (other than in Permitted
Transactions or a transaction to which the adjustments set forth in subsection
(i) of this Section 12 are applicable), without consideration or at a
consideration per share (or having a conversion price per share) that is less
than 100% of the Market Price of Common Stock immediately prior to the date of
the agreement on pricing of such shares (or of such convertible securities)
(such date of agreement, the “Pricing Date”) then, in such event:

 

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(A) the number of Warrant Shares issuable upon the exercise of this Warrant
immediately prior to the Pricing Date (the “Initial Number”) shall be increased
to the number obtained by multiplying the Initial Number by a fraction (I) the
numerator of which shall be the sum of (x) the number of shares of Common Stock
outstanding immediately prior to the Pricing Date and (y) the number of
additional shares of Common Stock issued (or into which convertible securities
may be converted) and (II) the denominator of which shall be the sum of (x) the
number of shares of Common Stock outstanding immediately prior to the Pricing
Date and (y) the number of shares of Common Stock (rounded to the nearest whole
share) which the Aggregate Consideration in respect of such issuance of shares
of Common Stock (or convertible securities) would purchase at the Market Price
of Common Stock immediately prior to the Pricing Date; and

(B) the Exercise Price payable upon exercise of this Warrant shall be adjusted
by multiplying such Exercise Price in effect immediately prior to the Pricing
Date by a fraction, the numerator of which shall be the number of shares of
Common Stock issuable upon exercise of this Warrant in full immediately prior to
the adjustment pursuant clause (disregarding whether or not this Warrant was
exercisable by its terms at such time) (A) above, and the denominator of which
shall be the number of shares of Common Stock issuable upon exercise of this
Warrant in full immediately after the adjustment pursuant to clause (A) above
(disregarding whether or not this Warrant is exercisable by its terms at such
time).

For purposes of the foregoing, (1) the “Aggregate Consideration” in respect of
such issuance of shares of Common Stock (or convertible securities) shall be
deemed to be equal to the sum of the net offering price (before deduction of any
related expenses payable to third parties, including discounts and commissions)
of all such shares of Common Stock and convertible securities, plus the
aggregate amount, if any, payable upon conversion of any such convertible
securities (assuming conversion in accordance with their terms immediately
following their issuance (and further assuming for this purpose that such
convertible securities are convertible at such time)); (2) in the case of the
issuance of such shares of Common Stock or convertible securities for, in whole
or in part, any non-cash property (or in the case of any non-cash property
payable upon conversion of any such convertible securities), the consideration
represented by such non-cash property shall be deemed to be the Market Price (in
the case of securities) and/or Fair Market Value (in all other cases), as
applicable, of such non-cash property as of immediately prior to the Pricing
Date (before deduction of any related expenses payable to third parties,
including discounts and commissions); (3) on any increase in the number of
shares of Common Stock deliverable upon conversion of any such issued
convertible securities, and/or any decrease in the consideration receivable by
the Corporation in respect of any such conversion (each, a “Post-Issuance
Adjustment”), then, to the extent that, in respect of the same facts and events,
the adjustment provisions set forth in this Section 12 (excluding this clause
(3)) do not result in a proportionate increase in the number of Warrant Shares
issuable upon the exercise of this Warrant, and/or proportionate decrease in the
Exercise Price payable upon exercise of this Warrant, in each case equal to or
greater than the proportionate increase and/or decrease, respectively, in
respect of such convertible securities, then the number of Warrant Shares
issuable, and the Exercise Price payable, upon exercise of this Warrant, in each
case then in effect, shall forthwith be readjusted to such number of Warrant
Shares and such Exercise Price as would have been obtained had the Post-Issuance
Adjustment been effective in respect of such convertible securities as of
immediately prior to the Pricing Date of such convertible securities; (4) if the
Exercise Price and the number of Warrant Shares issuable upon exercise of this
Warrant shall have been adjusted upon the issuance of any convertible securities
in accordance with this Section 12, subject to clause (3) above, no further
adjustment of the Exercise Price and the number of Warrant Shares issuable upon
exercise of this Warrant shall be made for the actual issuance of shares of
Common Stock upon the actual conversion of such convertible securities in
accordance with their terms; and (5) “Permitted Transactions” mean (a) issuances
of shares of Common Stock (including upon exercise of options) to directors,
advisors, employees or consultants of the Corporation pursuant to a stock option
plan, employee stock purchase plan, restricted stock plan, other employee
benefit plan or other similar compensatory agreement or arrangement approved by
the Board of Directors, and (b) the exercise of the Warrants. Any adjustment
made pursuant to this Section 12(ii) shall become effective immediately upon the
date of such issuance. For the avoidance of doubt, no increase to the Exercise
Price or decrease in the number of Warrant Shares issuable upon exercise of this
Warrant shall be made pursuant to this Section 12(ii).

 

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(iii)    Distributions. If the Corporation shall fix a record date for the
making of a dividend or other distribution (by spin-off or otherwise) on shares
of Common Stock, whether in cash, Equity Interests of the Corporation, other
securities of the Corporation, evidences of indebtedness of the Corporation or
any other Person or any other property (including Equity Interests, other
securities or evidences of indebtedness of a subsidiary), or any combination
thereof, excluding (A) dividends or distributions subject to adjustment pursuant
to Section 12(i) or (B) dividends or distributions of rights in connection with
the adoption of any stockholder rights plan in customary form (including with
respect to the receipt of such rights in respect of shares of Common Stock
(including Warrant Shares) issued subsequent to the initial dividend or
distribution of such rights), then in each such case, the number of Warrant
Shares issuable upon exercise of this Warrant in full (disregarding whether or
not this Warrant had been exercisable by its terms at such time) shall be
increased by multiplying such number of Warrant Shares by a fraction, the
numerator of which is the Market Price per share of Common Stock on such record
date and the denominator of which is the Market Price per share of Common Stock
on such record date less the Fair Market Value of the cash and/or any other
property, as applicable, to be so paid or distributed in such dividend or
distribution in respect of one share of Common Stock (in each case as of the
record date of such dividend or distribution); such adjustment shall take effect
on the record date for such dividend or distribution. In the event of such
adjustment, the Exercise Price shall immediately be decreased by multiplying
such Exercise Price by a fraction, the numerator of which is the number of
Warrant Shares issuable upon the exercise of this Warrant in full immediately
prior to such adjustment (disregarding whether or not this Warrant was
exercisable by its terms at such time), and the denominator of which is the new
number of Warrant Shares issuable upon exercise of this Warrant determined in
accordance with the immediately preceding sentence. Notwithstanding the
foregoing, in the event that the Fair Market Value of the cash and/or any other
property, as applicable, to be so paid or distributed in such dividend or
distribution in respect of one share of Common Stock (in each case as of the
record date of such dividend or distribution) is equal to or greater than the
Market Price per share of Common Stock on such record date, then proper
provision shall be made such that upon exercise of this Warrant, the
Warrantholder shall receive, in addition to the applicable Warrant Shares, the
amount and kind of such cash and/or any other property such Warrantholder would
have received had such Warrantholder exercised this Warrant immediately prior to
such record date (disregarding whether or not this Warrant had been exercisable
by its terms at such time). For purposes of the foregoing, in the event that
such dividend or distribution in question is ultimately not so made, the
Exercise Price and the number of Warrant Shares issuable upon exercise of this
Warrant then in effect shall be readjusted, effective as of the date when the
Board of Directors determines not to make such dividend or distribution, to the
Exercise Price that would then be in effect and the number of Warrant Shares
that would then be issuable upon exercise of this Warrant if such record date
had not been fixed. For the avoidance of doubt, no increase to the Exercise
Price or decrease in the number of Warrant Shares issuable upon exercise of this
Warrant shall be made pursuant to this Section 12(iii).

 

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Notwithstanding the foregoing provisions of this Section 12(iii), in the event
that all or any portion of any such dividend or other distribution is in Other
Voting Securities, then with respect to such dividend or distribution (or such
portion thereof that is in Other Voting Securities, as applicable), the
Warrantholder shall have the option, exercisable in writing delivered to the
Corporation within 7 days of such Warrantholder’s receipt of the Corporation’s
notice pursuant to Section 12(ix) relating to such dividend or other
distribution, to elect (1) for the foregoing adjustments set forth in this
Section 12(iii) to apply with respect to such dividend or distribution (or such
portion thereof that is in Other Voting Securities, as applicable) or (2) in
lieu of the foregoing adjustments set forth in this Section 12(iii) with respect
to such dividend or distribution (or such portion thereof that is in Other
Voting Securities, as applicable), but, for all purposes of this clause (2),
after giving effect to the foregoing adjustments set forth in this Section
12(iii) with respect to any portion of such dividend or distribution that is in
securities, cash and/or any other property, in each case other than Other Voting
Securities, for its right to receive Warrant Shares upon exercise of this
Warrant to be converted, effective as of the record date of such dividend or
distribution, into the right to exercise this Warrant to acquire such Warrant
Shares plus the Other Voting Securities that such Warrant Shares would have been
entitled to receive upon consummation of such dividend or distribution, assuming
the exercise in full of this Warrant immediately prior to such record date
(disregarding whether or not this Warrant was exercisable by its terms at such
time); provided that for purposes of this clause (2), (x) the number and type of
Other Voting Securities so deliverable upon any exercise of this Warrant shall
be adjusted to take into account any stock or security dividends, splits,
reverse splits, spin-offs, split-ups, mergers, reclassifications,
reorganizations, recapitalizations, combinations or exchanges of securities and
the like from and after the consummation of such dividend or distribution in
question and at or prior to such exercise of this Warrant, and (y) with respect
to any such Other Voting Securities that are described in clause (b) of the
definition of Other Voting Securities, the terms of such Other Voting
Securities, as issued upon exercise of this Warrant, shall take into account any
anti-dilution or other adjustments that would have been applicable to such Other
Voting Securities had such Other Voting Securities been outstanding from and
after the consummation of such dividend or distribution in question. In the
event that such dividend or distribution in question (or such portion thereof
that is in Other Voting Securities, as applicable) is ultimately not so made,
this Warrant shall be readjusted, effective as of the date when the Board of
Directors determines not to make such dividend or distribution (or such portion
thereof that is in Other Voting Securities, as applicable), as though the record
date thereof had not been fixed.

 

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(iv)    In case the Corporation effects a Repurchase, then the Exercise Price
shall be adjusted to the price determined by multiplying the Exercise Price in
effect immediately prior to the effective date of such Repurchase by a fraction
of which the numerator shall be (i) the product of (x) the number of shares of
Common Stock outstanding immediately before such Repurchase and (y) the Market
Price of a share of Common Stock on the Trading Day immediately preceding the
first public announcement by the Corporation or any of its Affiliates of the
intent to effect such Repurchase (or, if such Repurchase is not publicly
announced, the Trading Day immediately preceding the day such Repurchase is
effected), minus (ii) the aggregate purchase price of the Repurchase, and of
which the denominator shall be the product of (i) the number of shares of Common
Stock outstanding immediately prior to such Repurchase minus the number of
shares of Common Stock so repurchased and (ii) the Market Price per share of
Common Stock on the Trading Day immediately preceding the first public
announcement by the Corporation or any of its Affiliates of the intent to effect
such Repurchase (or, if such Repurchase is not publicly announced, the Trading
Day immediately preceding the day such Repurchase is effected). In such event,
the number of shares of Common Stock issuable upon the exercise of this Warrant
shall be adjusted to the number obtained by dividing (x) the product of (1) the
number of Warrant Shares issuable upon the exercise of this Warrant before such
adjustment, and (2) the Exercise Price in effect immediately prior to the
Repurchase giving rise to this adjustment by (y) the new Exercise Price
determined in accordance with the immediately preceding sentence.

(v)    Business Combinations. In case of any Business Combination or
reclassification of Common Stock (other than a reclassification of Common Stock
subject to adjustment pursuant to Section 12(i)), notwithstanding anything to
the contrary contained herein, (a) the Corporation shall notify the
Warrantholder(s) in writing of such Business Combination or reclassification as
promptly as practicable (but in no event later than 10 Business Days prior to
the effectiveness thereof), and (b) the Warrantholder(s)’ right to receive
Warrant Shares upon exercise of this Warrant shall be converted, effective upon
the occurrence of such Business Combination or reclassification, into the right
to exercise this Warrant to acquire the number of shares of stock or other
securities or property (including cash) that the Common Stock issuable (at the
effective time of such Business Combination or reclassification) upon exercise
of this Warrant in full immediately prior to such Business Combination or
reclassification (disregarding whether or not this Warrant was exercisable by
its terms at such time) would have been entitled to receive upon consummation of
such Business Combination or reclassification; and in any such case, if
applicable, the provisions set forth herein with respect to the rights and
interests thereafter of the Warrantholder(s) shall be appropriately adjusted so
as to be applicable, as nearly as may reasonably be, to the Warrantholder(s)’
right to exercise this Warrant in exchange for any shares of stock or other
securities or property pursuant to this paragraph. In determining the kind and
amount of stock, securities or the property receivable upon exercise of this
Warrant upon and following adjustment pursuant to this paragraph, if the holders
of Common Stock have the right to elect the kind or amount of consideration
receivable upon consummation of such Business Combination (an “Election
Mechanic”), then the Warrantholder(s) shall have the right to make the same
election upon exercise of this Warrant with respect to the number of shares of
stock or other securities or property which the Warrantholder(s) will receive
upon exercise of this Warrant. The Corporation, or the Person or Persons formed
by the applicable Business Combination or reclassification, or that acquire(s)
the applicable shares of Common Stock, as the case may be, shall make lawful
provisions to establish such rights and to provide for such adjustments that,
for events from and after such Business Combination or reclassification, shall
be as nearly equivalent as possible to the rights and adjustments provided for
herein, and the Corporation agrees that it will not be a party to or permit any
such Business Combination or reclassification to occur unless such provisions
are made as a part of the terms thereof.

 

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(vi)    Rounding of Calculations; Minimum Adjustments. All calculations under
this Section 12 shall be made to the nearest one-tenth (1/10th) of a cent or to
the nearest one-hundredth (1/100th) of a share, as the case may be. Any
provision of this Section 12 to the contrary notwithstanding, no adjustment in
the Exercise Price or the number of Warrant Shares into which this Warrant is
exercisable shall be made if the amount of such adjustment would be less than
$0.01 or one-tenth (1/10th) of a share of Common Stock, but any such amount
shall be carried forward and an adjustment with respect thereto shall be made at
the time of and together with any subsequent adjustment which, together with
such amount and any other amount or amounts so carried forward, shall aggregate
$0.01 or 1/10th of a share of Common Stock, or more.

(vii)    Timing of Issuance of Additional Securities Upon Certain Adjustments.
In any case in which (1) the provisions of this Section 12 shall require that an
adjustment (the “Subject Adjustment”) shall become effective immediately after a
record date (the “Subject Record Date”) for an event and (2) the Warrantholder
exercises this Warrant after the Subject Record Date and before the consummation
of such event, the Corporation may defer until the consummation of such event
(i) issuing to such Warrantholder the incrementally additional shares of Common
Stock or other property issuable upon such exercise by reason of the Subject
Adjustment and (ii) paying to such Warrantholder any amount of cash in lieu of a
fractional share of Common Stock; provided, however, that the Corporation upon
request shall promptly deliver to such Warrantholder a due bill or other
appropriate instrument evidencing such Warrantholder’s right to receive such
additional shares (or other property, as applicable), and such cash, upon the
consummation of such event.

(viii)    Statement Regarding Adjustments. Whenever the Exercise Price or the
Warrant Shares into which this Warrant is exercisable shall be adjusted as
provided in Section 12, the Corporation shall forthwith prepare a statement
showing in reasonable detail the facts requiring such adjustment and the
Exercise Price that shall be in effect and the Warrant Shares into which this
Warrant shall be exercisable after such adjustment, and cause a copy of such
statement to be delivered to each Warrantholder as promptly as practicable.

(ix)    Notice of Adjustment Event. In the event that the Corporation shall
propose to take any action of the type described in this Section 12 (but only if
the action of the type described in this Section 12 would result in an
adjustment in the Exercise Price or the Warrant Shares into which this Warrant
is exercisable or a change in the type of securities or property to be delivered
upon exercise of this Warrant), the Corporation shall provide written notice to
each Warrantholder, which notice shall specify the record date, if any, with
respect to any such action and the approximate date on which such action is to
take place. Such notice shall also set forth the facts with respect thereto as
shall be reasonably necessary to indicate the effect on the Exercise Price and
the number, kind or class of shares or other securities or property which shall
be deliverable upon exercise of this Warrant. In the case of any action which
would require the fixing of a record date, such notice shall be given at least
10 days prior to the date so fixed. In case of all other action, such notice
shall be given at least 10 days prior to the taking of such proposed action
unless the Corporation reasonably determines in good faith that, given the
nature of such action, the provision of such notice at least 10 days in advance
is not reasonably practicable from a timing perspective, in which case such
notice shall be given as far in advance prior to the taking of such proposed
action as is reasonably practicable from a timing perspective.

 

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(x)    Adjustment Rules. Any adjustments pursuant to this Section 12 shall be
made successively whenever an event referred to herein shall occur. If an
adjustment in Exercise Price made hereunder would reduce the Exercise Price to
an amount below par value of the Common Stock, then such adjustment in Exercise
Price made hereunder shall reduce the Exercise Price to the par value of the
Common Stock.

(xi)    No Impairment. The Corporation will not, by amendment of its certificate
of incorporation, bylaws or any other organizational document, or through any
reorganization, transfer of assets, consolidation, merger, dissolution, issue or
sale of securities or any other voluntary action, avoid or seek to avoid the
observance or performance of any of the terms to be observed or performed
hereunder by the Corporation, but will at all times in good faith assist in the
carrying out of all the provisions of this Warrant. In furtherance and not in
limitation of the foregoing, the Corporation agrees that it will not take or
permit to be taken any action which would entitle the Warrantholder(s) to an
adjustment under this Section 12 if the total number of shares of Common Stock
issuable after such action upon exercise of this Warrant in full (disregarding
whether or not this Warrant is exercisable by its terms at such time), together
with all shares of Common Stock then outstanding and all shares of Common Stock
then issuable upon the exercise in full of any and all outstanding Equity
Interests (disregarding whether or not any such Equity Interests are exercisable
by their terms at such time) would exceed the total number of shares of Common
Stock then authorized by its certificate of incorporation.

(xii)    Proceedings Prior to Any Action Requiring Adjustment. As a condition
precedent to the taking of any action which would require an adjustment pursuant
to this Section 12, the Corporation shall take any and all action which may be
necessary, including obtaining regulatory or other governmental, New York Stock
Exchange or other applicable securities exchange, corporate or stockholder
approvals or exemptions, in order that the Corporation may thereafter validly
and legally issue as fully paid and nonassessable all shares of Common Stock,
and/or all other securities or other property, that the Warrantholder(s) are
entitled to receive upon exercise of this Warrant pursuant to this Section 12.

13.    Mandatory Exercise Upon Change of Control. Notwithstanding anything to
the contrary contained herein, in the event of the consummation prior to the
Expiration Time of a Business Combination where all outstanding shares of Common
Stock are exchanged solely for cash consideration, the Corporation shall have
the right to cause the Warrantholder to exercise this Warrant; provided that the
Corporation must give written notice to the Warrantholder at least 10 Business
Days prior to the date of consummation of such qualifying Business Combination,
which notice shall specify the expected date on which such qualifying Business
Combination is to take place and set forth the facts with respect thereto as
shall be reasonably necessary to indicate the amount of cash deliverable upon
exercise of this Warrant and to each outstanding share of Common Stock;
provided, further that the Corporation may only cause this Warrant to be
exercised concurrently with the consummation of such qualifying Business
Combination and the Warrantholder shall be entitled to receive the cash
consideration as determined pursuant to Section 12(v). If the Warrantholder is
required to exercise this Warrant pursuant to this Section 13, the Warrantholder
shall notify the Corporation within 5 Business Days after receiving the
Corporation’s written notice described above in this Section 13 whether it is
electing to exercise this Warrant through a Cash Exercise or a Cashless
Exercise. If (i) the Warrantholder does not provide such notice within 5
Business Days after receiving the Corporation’s written notice described above
in this Section 13, or (ii) the Warrantholder elects a Cash Exercise but does
not pay the applicable Exercise Price for the Warrant Shares thereby purchased
to the Corporation upon the consummation of such qualifying Business
Combination, then the Corporation shall effect the exercise of this Warrant
through a Cashless Exercise.

 

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14.    Governing Law and Jurisdiction. This Warrant shall be governed by, and
construed and enforced in accordance with, the laws of the State of Delaware,
without regard to any choice or conflict of law provision or rule (whether of
the State of Delaware or any other jurisdiction) that would cause the
application of the laws of any jurisdiction other than the State of Delaware. In
addition, each of the parties hereto irrevocably and unconditionally submit to
the exclusive jurisdiction of Delaware Court of Chancery (or if, (but only if)
the Delaware Court of Chancery shall be unavailable, any other court of the
State of Delaware or any federal court sitting in the State of Delaware), with
respect to any actions, suits or proceedings arising out of or relating to this
Warrant and the transactions contemplated hereby and further agree that service
of any process, summons, notice or document by registered mail to the addresses
set forth on this Agreement shall be effective service of process for any
action, suit or proceeding brought against any such party in any such court.
Each of the parties hereto hereby irrevocably and unconditionally waives any
objection to the laying of venue of any action, suit or proceeding arising out
of this Warrant or the transactions contemplated hereby, in the Delaware Court
of Chancery (or if, (but only if) the Delaware Court of Chancery shall be
unavailable, any other court of the State of Delaware or any federal court
sitting in the State of Delaware), and hereby further irrevocably and
unconditionally waives and agrees not to plead or claim in any such court that
any such action, suit or proceeding brought in any such court has been brought
in an inconvenient forum. EACH OF THE PARTIES HERETO HEREBY WAIVES TRIAL BY JURY
AND/OR ANY DEFENSES BASED UPON THE VENUE, THE INCONVENIENCE OF THE FORUM, OR THE
LACK OF PERSONAL JURISDICTION IN ANY ACTION OR SUIT ARISING FROM SUCH DISPUTE
WITH JURISDICTION AND/OR VENUE SO SELECTED.

15.    Binding Effect. This Warrant shall be binding upon any successors or
assigns of the Corporation.

16.    Amendments. This Warrant may be amended and the observance of any term of
this Warrant may be waived only with the written consent of the Corporation and
the Warrantholder(s).

17.    Notices. Any notice, request, instruction or other document to be given
hereunder by any party to the other will be in writing and will be deemed to
have been duly given (a) on the date of delivery if delivered personally, or by
facsimile, upon confirmation of receipt, or (b) on the second Business Day
following the date of dispatch if delivered by a recognized next day courier
service. All notices hereunder shall be delivered as set forth below, or
pursuant to such other instructions as may be designated in writing by the party
to receive such notice.

 

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If to the Corporation, to:

Yum China Holdings, Inc.

16/F Two Grand Gateway

3 Hongqiao Road

Shanghai 200030

The People’s Republic of China

Attention:    Chief Legal Officer

Fax:             +86-21-2407-7898

with a copy to (which copy alone shall not constitute notice):

Sidley Austin LLP

One South Dearborn Street

Chicago, Illinois 60603

Attention:    Paul L. Choi

                    Beth E. Peev

Fax:             (312) 853-7036

and

Wachtell, Lipton, Rosen & Katz

51 West 52nd Street

New York, New York 10019

Attention:    Benjamin Roth

Fax:             (212) 403-2000

If to a Warrantholder, to the address appearing in the Corporation’s records;
provided that if the applicable Warrantholder is API (Hong Kong) Investment
Limited or its Affiliates, then

API (Hong Kong) Investment Limited

c/o Zhejiang Ant Small and Micro Financial Services Group Co., Ltd.

Block B, Dragon Times Plaza, 18 Wantang Road, Xihu District

Hangzhou, China 310099

Attention: Jason Zhu

Facsimile: +86-571-8163-5410

with a copy (which shall not constitute notice) to:

Legal Department

c/o Zhejiang Ant Small and Micro Financial Services Group Co., Ltd.

Block B, Dragon Times Plaza, 18 Wantang Road, Xihu District

Hangzhou, China 310099

Facsimile: +86-571-8163-5410

and

 

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Simpson Thacher & Bartlett LLP

425 Lexington Avenue

New York, New York 10017

Attention: Patrick J. Naughton

Facsimile: +1-212-455-2502

18.    Entire Agreement. This Warrant and the forms attached hereto, the
Shareholders Agreement, and the Investment Agreement contain the entire
agreement between the parties with respect to the subject matter hereof and
supersede all prior and contemporaneous arrangements or undertakings with
respect thereto.

19.    Specific Performance. The parties hereto agree that failure of any party
to perform its agreements and covenants hereunder, including a party’s failure
to take all actions as are necessary on such party’s part in accordance with the
terms and conditions of this Warrant to consummate the transactions contemplated
hereby, will cause irreparable injury to the other parties, for which monetary
damages, even if available, will not be an adequate remedy. It is agreed that
the parties shall be entitled to equitable relief including injunctive relief
and specific performance of the terms hereof, without the requirement of posting
a bond or other security, and each party hereby consents to the issuance of
injunctive relief by any court of competent jurisdiction to compel performance
of a party’s obligations and to the granting by any court of the remedy of
specific performance of such party’s obligations hereunder, this being in
addition to any other remedies to which the parties are entitled at law or
equity.

[Remainder of page intentionally left blank]

 

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IN WITNESS WHEREOF, the Corporation has caused this Warrant to be duly executed
by a duly authorized officer.

Dated: January 9, 2017

 

YUM CHINA HOLDINGS, INC.

By:

 

/s/ MICKY PANT

 

Name: Micky Pant

 

Title: Chief Executive Officer

 

 

Acknowledged and Agreed API (HONG KONG) INVESTMENT LIMITED By:  

/s/ LEIMING CHEN

  Name: Leiming Chen   Title: Authorized Signatory

[Signature Page to Warrant 1 (AF)]

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Annex A

[Form of Notice of Exercise]

Date:                    

TO:    Yum China Holdings, Inc.

RE:    Election to Purchase Common Stock

The undersigned, pursuant to the provisions set forth in the attached Warrant,
hereby agrees to subscribe for and purchase the number of shares of the Common
Stock set forth below covered by such Warrant. The undersigned, in accordance
with Section 3 of the Warrant, hereby agrees to pay the aggregate Exercise Price
for such shares of Common Stock. A new warrant evidencing the remaining shares
of Common Stock covered by such Warrant, but not yet subscribed for and
purchased, if any, should be issued in the name of the Warrantholder.

Number of shares of Common Stock with respect to which the Warrant is being
exercised (including shares to be withheld as payment of the Exercise Price
pursuant to Section 3(ii), if any):                                        
        

Method of Payment of Exercise Price (note if cashless exercise pursuant to
Section 3(ii) of the Warrant or cash exercise pursuant to Section 3(i) of the
Warrant):                                                  

Aggregate Exercise Price:                                                 

 

Holder:  

 

By:  

 

Name:  

 

Title: