Exhibit 10.1

THE HABIT RESTAURANTS, LLC

A Delaware Limited Liability Company

FOURTH AMENDED AND RESTATED LIMITED LIABILITY COMPANY AGREEMENT

Dated as of November 25, 2014

THE LIMITED LIABILITY COMPANY INTERESTS IN THE HABIT RESTAURANTS, LLC HAVE NOT
BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED, THE
SECURITIES LAWS OF ANY STATE OR ANY OTHER APPLICABLE SECURITIES LAWS AND ARE
BEING SOLD IN RELIANCE UPON EXEMPTIONS FROM THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT AND SUCH LAWS. SUCH INTERESTS MUST BE ACQUIRED FOR INVESTMENT
ONLY AND MAY NOT BE OFFERED FOR SALE, PLEDGED, HYPOTHECATED, SOLD, ASSIGNED OR
TRANSFERRED AT ANY TIME EXCEPT IN COMPLIANCE WITH (I) THE SECURITIES ACT, ANY
APPLICABLE SECURITIES LAWS OF ANY STATE AND ANY OTHER APPLICABLE SECURITIES
LAWS; (II) THE TERMS AND CONDITIONS OF THIS LIMITED LIABILITY COMPANY AGREEMENT;
AND (III) ANY OTHER TERMS AND CONDITIONS AGREED TO IN WRITING BETWEEN THE
MANAGING MEMBER AND THE APPLICABLE MEMBER. THE LIMITED LIABILITY COMPANY
INTERESTS MAY NOT BE TRANSFERRED OF RECORD EXCEPT IN COMPLIANCE WITH SUCH LAWS,
THIS LIMITED LIABILITY COMPANY AGREEMENT, AND ANY OTHER TERMS AND CONDITIONS
AGREED TO IN WRITING BY THE MANAGING MEMBER AND THE APPLICABLE
MEMBER. THEREFORE, PURCHASERS AND OTHER TRANSFEREES OF SUCH LIMITED LIABILITY
COMPANY INTERESTS WILL BE REQUIRED TO BEAR THE RISK OF THEIR INVESTMENT OR
ACQUISITION FOR AN INDEFINITE PERIOD OF TIME.

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TABLE OF CONTENTS

 

          Page   ARTICLE I DEFINITIONS      2   

Section 1.1.

   Definitions.      2   

Section 1.2.

   Terms Generally.      9    ARTICLE II GENERAL PROVISIONS      10   

Section 2.1.

   Formation.      10   

Section 2.2.

   Name.      10   

Section 2.3.

   Term.      11   

Section 2.4.

   Purpose; Powers.      11   

Section 2.5.

   Existence and Good Standing; Foreign Qualification.      11   

Section 2.6.

   Registered Office; Registered Agent; Principal Office; Other Offices.      11
  

Section 2.7.

   Admission.      12    ARTICLE III CAPITALIZATION      12   

Section 3.1.

   Units; Initial Capitalization; Schedules.      12   

Section 3.2.

   Authorization and Issuance of Additional Units.      12   

Section 3.3.

   Vesting of Unvested Common Units.      15   

Section 3.4.

   Capital Accounts.      16   

Section 3.5.

   No Withdrawal.      17   

Section 3.6.

   Loans From Members.      17   

Section 3.7.

   No Right of Partition.      17   

Section 3.8.

   Non-Certification of Units; Legend; Units are Securities.      18   

Section 3.9.

   Exchange of Units for Common Stock.      19    ARTICLE IV DISTRIBUTIONS     
24   

Section 4.1.

   Distributions.      24   

Section 4.2.

   Unvested Common Units.      24   

Section 4.3.

   Distributions to Habit.      24   

Section 4.4.

   Tax Distributions.      25   

Section 4.5.

   Withholding; Indemnification.      26   

Section 4.6.

   Limitation.      27   

 

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ARTICLE V ALLOCATIONS   27   

Section 5.1.

Allocations for Capital Account Purposes.   27   

Section 5.2.

Allocations for Tax Purposes.   28   

Section 5.3.

Members’ Tax Reporting.   29    ARTICLE VI MANAGEMENT   29   

Section 6.1.

Managing Member; Delegation of Authority and Duties.   29   

Section 6.2.

Officers.   30   

Section 6.3.

Liability of Members.   31   

Section 6.4.

Indemnification by the Company.   32   

Section 6.5.

Investment Representations of Members.   33   

Section 6.6.

Representations and Warranties of Habit.   34   

ARTICLE VII WITHDRAWAL; DISSOLUTION; TRANSFER OF MEMBERSHIP INTERESTS; ADMISSION
OF NEW members

  35   

Section 7.1.

Member Withdrawal.   35   

Section 7.2.

Dissolution.   35   

Section 7.3.

Transfer by Members.   36   

Section 7.4.

Admission or Substitution of New Members.   38   

Section 7.5.

Additional Requirements.   39   

Section 7.6.

Bankruptcy.   39   

ARTICLE VIII BOOKS AND RECORDS; FINANCIAL STATEMENTS AND OTHER INFORMATION; TAX
MATTERS

  39   

Section 8.1.

Books and Records.   39   

Section 8.2.

Information.   40   

Section 8.3.

Fiscal Year.   40   

Section 8.4.

Certain Tax Matters.   40   

ARTICLE IX MISCELLANEOUS

  42   

Section 9.1.

Schedules.   42   

Section 9.2.

Governing Law.   42   

Section 9.3.

Consent to Jurisdiction.   42   

Section 9.4.

Successors and Assigns.   43   

Section 9.5.

Amendments and Waivers.   43   

Section 9.6.

Notices.   44   

Section 9.7.

Counterparts.   45   

Section 9.8.

Power of Attorney.   45   

Section 9.9.

Entire Agreement.   45   

 

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Section 9.10.

Remedies.   45   

Section 9.11.

Severability.   46   

Section 9.12.

Creditors.   46   

Section 9.13.

Waiver.   46   

Section 9.14.

Further Action.   46   

Section 9.15.

Delivery by Facsimile or Email.   46   

 

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LIMITED LIABILITY COMPANY AGREEMENT

OF

THE HABIT RESTAURANTS, LLC

A Delaware Limited Liability Company

This FOURTH AMENDED AND RESTATED LIMITED LIABILITY COMPANY AGREEMENT of The
Habit Restaurants, LLC (the “Company”), dated and effective as of November 25,
2014 (this “Agreement”), is adopted, executed and agreed to, for good and
valuable consideration, by and among the Members (as defined herein).

WHEREAS, the Company was formed as a limited liability company pursuant to the
Delaware Limited Liability Company Act by the filing of a Certificate of
Formation of a limited liability company with the Secretary of State of the
State of Delaware on July 10, 2007 (the “Certificate”), and the execution of the
limited liability company agreement dated July 10, 2007, as amended on May 30,
2008 and October 30, 2009 (the “Pre-IPO Agreement”);

WHEREAS, The Habit Restaurants, Inc., a Delaware corporation (“Habit”), a
holding company that holds as its principal assets shares of subsidiaries, each
of which in turn holds as its principal asset an equity interest in the Company,
has entered into an underwriting agreement (i) to issue and sell to the several
Underwriters named therein (the “Underwriters”) shares of its Class A Common
Stock and (ii) to make a public offering of such shares of Class A Common Stock
(collectively, the “IPO”);

WHEREAS, in connection with the IPO, pursuant to that certain Recapitalization
Agreement dated November 19, 2014 (the “Recapitalization Agreement”), prior to
and on the date of the consummation of the IPO (the “Effective Time”), all of
the outstanding limited liability company interests in the Company were
converted into Common Units;

WHEREAS, the Company will make a distribution of cash proceeds to its members
immediately prior to the IPO;

WHEREAS, immediately after the IPO, Habit will, directly and indirectly,
purchase newly-issued Common Units from the Company using a portion of the
proceeds from the IPO (together with the Recapitalization Transactions, the “IPO
Transactions”);

WHEREAS, Habit will on the date of the IPO issue shares of Class B Common Stock
(as defined below) to the Members other than Habit and its Subsidiaries
(referred to collectively as “Existing Members”), and each such share of Class B
Common Stock, together with a corresponding Unit, may be exchanged for one share
of Class A Common Stock or, at the election of Habit, for certain cash amounts,
as described herein);

WHEREAS, the Company and the Members set forth on Exhibit A attached hereto now
wish to amend and restate the Pre-IPO Agreement to give effect to the IPO
Transactions and to reflect the admission of Habit as a Member and as sole
Managing Member of the Company; and

NOW THEREFORE, in consideration of the mutual covenants and agreements contained
herein, the parties hereto, each intending to be legally bound, agree that the
Pre-IPO Agreement is hereby amended and restated in its entirety as follows:

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ARTICLE I

DEFINITIONS

Section 1.1. Definitions.

Unless the context otherwise requires, the following terms shall have the
following meanings for purposes of this Agreement:

“Act” means the Delaware Limited Liability Company Act, 6 Del. C. Sections
18-101 et seq., as it may be amended from time to time, and any successor to the
Act.

“Additional Member” means any Person that has been admitted to the Company as a
Member pursuant to Section 7.4 by virtue of having received its Company Interest
from the Company and not from any other Member or Assignee.

“Affiliate” when used with reference to another Person means any Person (other
than the Company), directly or indirectly, through one or more intermediaries,
controlling, controlled by, or under common control with, such other Person. In
addition, Affiliates of the Members shall include all their directors, managers,
officers and employees in their capacities as such.

“Agreement” has the meaning set forth in the recitals hereto.

“Asset Value” of any tangible or intangible property of the Company (including
goodwill) means its adjusted basis for federal income tax purposes unless:

(a) the property was accepted by the Company as a contribution to capital at a
value different than its adjusted basis, in which event the initial Asset Value
for such property means the Fair Market Value of such asset, as determined by
the Managing Member; or

(b) as a consequence of the issuance of additional Units or the redemption of
all or part of the Company Interest of a Member, the property of the Company is
revalued in accordance with Section 3.4(b) (“Revaluations of Assets and Capital
Account Adjustments”).

As of any date, references to the “then prevailing Asset Value” of any property
means the Asset Value last determined for such property less the depreciation,
amortization and cost recovery deductions taken into account in computing Net
Income or Net Loss in fiscal periods subsequent to such prior determination
date.

“Assignee” means any Transferee to which a Member or another Assignee has
Transferred all or a portion of its interest in the Company in accordance with
the terms of this Agreement, but that is not admitted to the Company as a
Member.

“Bankruptcy” means, with respect to any Person, (A) if such Person (i) makes an
assignment for the benefit of creditors, (ii) files a voluntary petition in
bankruptcy, (iii) is adjudged a bankrupt or insolvent, or has entered against it
an order for relief, in any bankruptcy or insolvency proceedings, (iv) files a
petition or answer seeking for itself any reorganization, arrangement,
composition, readjustment, liquidation or similar relief under any statute, law
or regulation, (v) files an answer or other pleading admitting or failing to
contest the material allegations of a petition filed against it in any
proceeding of this nature, (vi) seeks, consents to or

 

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acquiesces in the appointment of a trustee, receiver or liquidator of the Person
or of all or any substantial part of its properties, or (B) if 120 days after
the commencement of any proceeding against the Person seeking reorganization,
arrangement, composition, readjustment, liquidation or similar relief under any
statute, law or regulation, if the proceeding has not been dismissed, or if
within 90 days after the appointment without such Person’s consent or
acquiescence of a trustee, receiver or liquidator of such Person or of all or
any substantial part of its properties, the appointment is not vacated or
stayed, or within 90 days after the expiration of any such stay, the appointment
is not vacated. The foregoing definition of “Bankruptcy” is intended to replace
and shall supersede and replace the definition of “Bankruptcy” set forth in
Sections 18-101(1) and 18-304 of the Act.

“Business Day” means any day other than a Saturday, Sunday or other day on which
commercial banks in New York, New York are authorized or required to close.

“Capital Account” means the capital account maintained for a Member pursuant to
Section 3.4.

“Cash Exchange Payment” means an amount in cash equal to the product of (x) the
number of Common Units exchanged, (y) the then-applicable Exchange Rate, and
(z) the average of the daily volume weighted average price (“VWAP”) of a share
of Class A Common Stock for the 15 Trading Days immediately prior to (A) in the
case of a Voluntary Exchange, the date of delivery of the relevant Exchange
Notice, (B) in the case of a Mandatory Exchange in connection with a Change in
Control, the date of the consummation of the Change in Control (and, in the case
of a Change in Control described in (i), (ii) or (iii) of the definition of
Change in Control set forth in Section 1.1 of this Agreement, the date of the
consummation of the transaction approved thereby) or (C) in the case of a
Mandatory Exchange in connection with the termination of a Terminated
Employee-Member, the date of the consummation of the termination of employment
(such date identified in clause (A), (B) or (C), as applicable, the “Exchange
Date”); provided that in calculating such average, (i) the VWAP shall be
determined by calculating the arithmetic average price of a share of Class A
Common Stock on the principal U.S. securities exchange or automated or
electronic quotation system on which Class A Common Stock trades, as reported by
Bloomberg, L.P., or its successor, for each of the fifteen (15) consecutive full
Trading Days ending on and including the last full Trading Day immediately prior
to the Exchange Date, subject to appropriate and equitable adjustment for any
stock splits, reverse splits, stock dividends or similar events affecting the
Class A Common Stock; and (ii) if the Class A Common Stock no longer trades on a
securities exchange or automated or electronic quotation system, then a majority
of the independent members of the board of directors of Habit shall determine
the fair market value of a share of Class A Common Stock in good faith.

“Certificate” has the meaning set forth in the recitals hereto.

A “Change in Control” shall be deemed to have occurred if or upon:

(i) the stockholders of Habit approve the sale, lease or transfer, in one or a
series of related transactions, of all or substantially all of Habit assets
(determined on a consolidated basis) to any person or group (as such term is
used in Section 13(d)(3) of the Exchange Act) other than to any subsidiary of
Habit; provided, that, for clarity and notwithstanding anything to the contrary,
neither the approval of nor consummation of a

 

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transaction treated for U.S. federal income tax purposes as a liquidation into
Habit of its wholly-owned Subsidiaries or merger of such entities into one
another or Habit will constitute a Change in Control;

(ii) the stockholders of Habit approve a merger or consolidation of Habit with
any other person, other than a merger or consolidation which would result in the
Voting Securities of Habit outstanding immediately prior thereto continuing to
represent (either by remaining outstanding or by being converted into Voting
Securities of the surviving entity) at least 50.1% of the total voting power
represented by the Voting Securities of Habit or such surviving entity
outstanding immediately after such merger or consolidation;

(iii) the stockholders of Habit approve the adoption of a plan the consummation
of which would result in the liquidation or dissolution of Habit; or

(iv) the acquisition, directly or indirectly, by any person or group (as such
term is used in Section 13(d)(3) of the Exchange Act) (other than (a) a trustee
or other fiduciary holding securities under an employee benefit plan of Habit;
(b) a corporation or other entity owned, directly or indirectly, by the
stockholders of Habit in substantially the same proportions as their ownership
of stock of Habit; (c) KarpReilly, LLC and its Affiliates ((a) through
(c) collectively are referred to herein as “Exempt Persons”)) of beneficial
ownership (as defined in Rule 13d-3 under the Exchange Act) of more than 50.1%
of the aggregate voting power of the Voting Securities of Habit.

“Class A Common Stock” means the Class A common stock, par value $0.01 per
share, of Habit.

“Class B Common Stock” means the Class B common stock, par value $0.01 per
share, of Habit.

“Code” means the United States Internal Revenue Code of 1986, as amended from
time to time.

“Common Units” has the meaning set forth in Section 3.1(a).

“Company” has the meaning set forth in the recitals hereto.

“Company Interest” means, with respect to each Member, such Member’s economic
interest and rights as a Member.

“Company Interest Certificate” has the meaning set forth in Section 3.8(b).

“Control” means, when used with reference to any Person, the power to direct the
management or policies of such Person, directly or indirectly, by or through
stock or other equity ownership, agency or otherwise, or pursuant to or in
connection with an agreement, arrangement or other understanding (written or
oral); and the terms “controlling” and “controlled” shall have meanings
correlative to the foregoing.

“Effective Time” has the meaning set forth in the recitals hereto.

 

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“Equity Securities” means, as applicable, (i) any capital stock, limited
liability company or membership interests, partnership interests, or other
equity interest, (ii) any securities directly or indirectly convertible into or
exchangeable for any capital stock, limited liability company or membership
interests, partnership interests, or other equity interest or containing any
profit participation features, (iii) any rights or options directly or
indirectly to subscribe for or to purchase any capital stock, limited liability
company or membership interests, partnership interest, other equity interest or
securities containing any profit participation features or to subscribe for or
to purchase any securities directly or indirectly convertible into or
exchangeable for any capital stock, limited liability company or membership
interests, partnership interest, other equity interests or securities containing
any profit participation features, (iv) any equity appreciation rights, phantom
equity rights or other similar rights, or (v) any Equity Securities issued or
issuable with respect to the securities referred to in clauses (i) through
(iv) above in connection with a combination, recapitalization, merger,
consolidation or other reorganization.

“Exchange” has the meaning set forth in Section 3.9(a).

“Exchange Act” means the Securities Exchange Act of 1934, as amended.

“Existing Members” has the meaning set forth in the recitals hereto.

“Exchange Notice” has the meaning set forth in Section 3.9(b).

“Exchange Rate” means the number of shares of Class A Common Stock for which a
Common Unit, combined with a share of Class B Common Stock, is entitled to be
exchanged. On the date of this Agreement, the Exchange Rate shall be 1 for 1,
subject to adjustment pursuant to Section 3.9 of this Agreement.

“Fair Market Value” means (i) in reference to a particular Common Unit or other
Equity Security issued by the Company or, as the case may be, all of the
outstanding Common Units or other Equity Securities issued by the Company, the
hypothetical amount that would be distributed with respect to such Unit(s) or
Equity Security(ies), as determined pursuant to an appraisal, which appraisal
shall be subject to the approval of the Managing Member, performed at the
expense of the Company by (A) the Company or any of its Subsidiaries or (B) an
investment bank, accounting firm or other Person of national standing having
particular expertise in the valuation of businesses comparable to that of the
Company selected by the Managing Member, and where such appraisal (1) determines
the net equity value of the Company, and (2) assumes the distribution to the
Members pursuant to Section 4.1 and ARTICLE VII of the proceeds that would
hypothetically be received with respect to such Unit(s) or other Equity
Security(ies) issued by the Company based on such net equity value, and (ii) in
reference to assets or securities other than Common Units or other Equity
Securities issued by the Company, the fair market value for such assets or
securities as between a willing buyer and a willing seller in an arm’s length
transaction occurring on the date of valuation, taking into account all relevant
factors determinative of value, as is determined by the Managing Member in its
sole discretion.

“FATCA” has the meaning set forth in Section 8.4(f).

“First Exchange Date” has the meaning set forth in Section 3.9(a)(i).

 

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“Fiscal Year” means the taxable year of the Company.

“GAAP” means accounting principles generally accepted in the United States of
America, consistently applied and maintained throughout the applicable periods.

“Good Faith” shall mean a Person having acted in good faith and in a manner such
Person reasonably believed to be in or not opposed to the best interests of the
Company, and, with respect to a criminal proceeding, having had no reasonable
cause to believe such Person’s conduct was unlawful.

“Governmental Entity” means the United States of America or any other nation,
any state or other political subdivision thereof, or any entity exercising
executive, legislative, judicial, regulatory or administrative functions of
government, including any court, in each case, having jurisdiction over the
Company or any of its Subsidiaries or any of the property or other assets of the
Company or any of its Subsidiaries.

“Habit” has the meaning set forth in the recitals hereto.

“Habit Group” means Habit and any Subsidiary of Habit (other than, for clarity,
the Company).

“HSR Act” has the meaning set forth in Section 7.2(f).

“Indemnified Person” has the meaning set forth in Section 6.4.

“IPO” means the initial public offering and sale of Class A Common Stock of
Habit (as contemplated by Habit’s Registration Statement on Form S-1 (File
No. 333-199394)).

“IPO Transactions” has the meaning set forth in the recitals hereto.

“Managing Member” means Habit, and any assignee to which the managing member of
the Company Transfers all of its Common Units and other Equity Securities of the
Company that is admitted to the Company as the managing member of the Company,
in its capacity as the managing member of the Company.

“Mandatory Exchange” has the meaning set forth in Section 3.9(a) of this
Agreement.

“Member” means each Person listed on the Schedule of Members on the date hereof
(including the Managing Member) and each other Person who is hereafter admitted
as a Member in accordance with the terms of this Agreement and the Act. The
Members shall constitute the “members” (as such term is defined in the Act) of
the Company. Any reference in this Agreement to any Member shall include such
Member’s Successors in Interest to the extent such Successors in Interest have
become Substituted Members in accordance with the provisions of this Agreement.
Except as otherwise set forth herein or in the Act, the Members shall constitute
a single class or group of members of the Company for all purposes of the Act
and this Agreement.

 

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“Net Income” or “Net Loss” means, for any taxable year or relevant part thereof,
the Company’s taxable income or loss for federal income tax purposes for such
period (including all items of income, gain, loss or deduction required to be
stated separately pursuant to Section 703(a)(1) of the Code), with the following
adjustments:

(a) Gain or loss attributable to the disposition of property of the Company with
an Asset Value different from the adjusted basis of such property for federal
income tax purposes shall be computed with respect to the Asset Value of such
property, and any tax gain or loss not included in Net Income or Net Loss shall
be taken into account and allocated for federal income tax purposes among the
Members pursuant to Section 5.2.

(b) In lieu of the depreciation, amortization or other cost recovery deductions
taken into account in computing such taxable income or loss, depreciation,
amortization or cost recovery deductions allowable with respect to any property
the Asset Value of which differs from its adjusted tax basis for federal income
tax purposes shall be equal to an amount that bears the same ratio to such
beginning Asset Value as the federal income tax depreciation, amortization or
other cost recovery deductions for such period bear to such beginning adjusted
tax basis; provided, however, that if the adjusted tax basis of the property at
the beginning of such period is zero, depreciation shall be determined with
respect to such asset using any reasonable method selected by the Managing
Member.

(c) Any items that are required to be specially allocated pursuant to
Section 5.1(b) shall not be taken into account in determining Net Income or Net
Loss.

“Officer” means each Person designated as an officer of the Company pursuant to
and in accordance with the provisions of Section 6.2, subject to any resolution
of the Managing Member appointing such Person as an officer of the Company or
relating to such appointment.

“Pass-Through Entity” has the meaning set forth in Section 6.5.

“Person” means an individual, a partnership (including a limited partnership), a
corporation, a limited liability company, an association, a joint stock company,
a trust, a joint venture, an unincorporated organization, association or other
entity or a Governmental Entity.

“Pledge” means pledge, grant a security interest in, create a lien on, assign
the right to receive distributions or proceeds from, or otherwise encumber,
directly or indirectly, or any act of the foregoing.

“Pre-IPO Agreement” has the meaning set forth in the recitals hereto.

“Proceeding” has the meaning set forth in Section 6.4.

“Recapitalization Agreement” means the Recapitalization Agreement, dated
November 19, 2014, by and among The Habit Restaurants, Inc., The Habit
Restaurants, LLC and the Unit-holders of The Habit Restaurants, LLC.

“Registration Rights Agreement” means the Registration Rights Agreement, dated
November 25, 2014, by and among Habit and the parties named therein.

“Regulatory Allocations” has the meaning set forth in Section 5.1(b).

“Securities Act” means the Securities Act of 1933, as amended.

 

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“Schedule of Members” has the meaning set forth in Section 3.1(b).

“Subsidiary” means, with respect to any Person, any corporation, limited
liability company, partnership, association or business entity of which (i) if a
corporation, a majority of the total voting power of shares of stock entitled
(without regard to the occurrence of any contingency) to vote in the election of
directors, managers or trustees thereof is at the time owned or controlled,
directly or indirectly, by that Person or one or more of the other Subsidiaries
of that Person or a combination thereof, or (ii) if a limited liability company,
partnership, association or other business entity (other than a corporation), a
majority of partnership or other similar ownership interest thereof is at the
time owned or controlled, directly or indirectly, by any Person or one or more
Subsidiaries of that Person or a combination thereof. For purposes hereof, a
Person or Persons shall be deemed to have a majority ownership interest in a
limited liability company, partnership, association or other business entity
(other than a corporation) if such Person or Persons shall be allocated a
majority of limited liability company, partnership, association or other
business entity gains or losses or shall control the management of any such
limited liability company, partnership, association or other business
entity. For purposes hereof, references to a “Subsidiary” of any Person shall be
given effect only at such times that such Person has one or more Subsidiaries
and, unless otherwise indicated, the term “Subsidiary” refers to a Subsidiary of
the Company.

“Substituted Member” means any Person that has been admitted to the Company as a
Member pursuant to Section 7.4 by virtue of such Person receiving all or a
portion of a Company Interest from a Member or an Assignee and not from the
Company.

“Successor in Interest” means any (i) trustee, custodian, receiver or other
Person acting in any Bankruptcy or reorganization proceeding with respect to,
(ii) assignee for the benefit of the creditors of, (iii) trustee or receiver, or
current or former officer, director or partner, or other fiduciary acting for or
with respect to the dissolution, liquidation or termination of, or (iv) other
executor, administrator, committee, legal representative or other successor or
assign of, any Member, whether by operation of law or otherwise.

“Takeover Law” has the meaning set forth in Section 6.6.

“Tax Distribution” has the meaning set forth in Section 4.4.

“Tax Distribution Date” has the meaning set forth in Section 4.4.

“Tax Matters Member” has the meaning set forth in Section 8.4(d).

“Tax Receivable Agreement” means the Tax Receivable Agreement, dated on or about
the date hereof, among the Managing Member, the Company and the other parties
thereto; as such agreement may be amended or supplemented from time to time.

“Terminated Employee-Member” has the meaning set forth in Section 3.9(a).

“Trading Day” means a day on which the New York Stock Exchange or such other
principal United States securities exchange on which the shares of Class A
Common Stock is listed or admitted to trading is open for the transaction of
business (unless such trading shall have been suspended for the entire day), or
if the shares of Class A Common Stock are not listed or admitted to trading on
such an exchange, on the automated quotation system on which the shares of
Class A Common Stock are then authorized for quotation.

 

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“Transfer” means sell, assign, convey, contribute, give, or otherwise transfer,
whether directly or indirectly, voluntarily or involuntarily, by operation of
law or otherwise (including a transfer by way of entering into a financial
instrument or contract the value of which was determined in whole or part by
reference to the Company (including the amount of Company distributions, the
value of Company assets or the results of Company operations)), or any act of
the foregoing, but excludes a Pledge or any act of Pledging. For the avoidance
of doubt, a Transfer of a Unit includes an Exchange of such Unit. The terms
“Transferee,” “Transferor,” “Transferred,” “Transferring Member,” “Transferor
Member” and other forms of the word “Transfer” shall have the correlative
meanings.

“Transfer Agent” has the meaning set forth in Section 3.9(b).

“Treasury Regulations” means the regulations, including temporary regulations,
promulgated by the United States Treasury Department under the Code, as such
regulations may be amended from time to time (including corresponding provisions
of succeeding regulations).

“Underwriters” has the meaning set forth in the recitals hereto.

“Units” mean the Common Units (vested or unvested) and any other Class of
membership interests in the Company denominated as “Units” that is established
in accordance with this Agreement, entitling the holders thereof to the relative
rights, title and interests in the profits, losses, deductions and credits of
the Company at any particular time as set forth in this Agreement, and any and
all other benefits to which a holder thereof may be entitled as a Member as
provided in this Agreement, together with the obligations of such Member to
comply with all terms and provisions of this Agreement.

“Unvested Common Units” has the meaning set forth in Section 3.3.

“Voting Securities” mean any securities of Habit which are entitled to vote
generally in matters submitted for a vote of Habit’s stockholders or generally
in the election of Habit’s Board of Directors.

“Weekly Exchange Date” means the First Exchange Date and the last Business Day
of each sequential week thereafter.

Section 1.2. Terms Generally. In this Agreement, unless otherwise specified or
where the context otherwise requires:

(a) the headings of particular provisions of this Agreement are inserted for
convenience only and will not be construed as a part of this Agreement or serve
as a limitation or expansion on the scope of any term or provision of this
Agreement;

(b) words importing any gender shall include other genders;

(c) words importing the singular only shall include the plural and vice versa;

 

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(d) the words “include,” “includes” or “including” shall be deemed to be
followed by the words “without limitation”;

(e) the words “hereof,” “herein” and “herewith” and words of similar import
shall, unless otherwise stated, be construed to refer to this Agreement as a
whole and not to any particular provision of this Agreement;

(f) references to “Articles,” “Exhibits,” “Sections” or “Schedules” shall be to
Articles, Exhibits, Sections or Schedules of or to this Agreement;

(g) references to any Person include the successors and permitted assigns of
such Person;

(h) the use of the words “or,” “either” and “any” shall not be exclusive;

(i) wherever a conflict exists between this Agreement and any other agreement
among parties hereto, this Agreement shall control but solely to the extent of
such conflict;

(j) references to “$” or “dollars” means the lawful currency of the United
States of America;

(k) references to any agreement, contract or schedule, unless otherwise stated,
are to such agreement, contract or schedule as amended, modified or supplemented
from time to time in accordance with the terms hereof and thereof; and

(l) the parties hereto have participated collectively in the negotiation and
drafting of this Agreement; accordingly, in the event an ambiguity or question
of intent or interpretation arises, it is the intention of the parties that this
Agreement shall be construed as if drafted collectively by the parties hereto,
and that no presumption or burden of proof shall arise favoring or disfavoring
any party hereto by virtue of the authorship of any provisions of this
Agreement.

ARTICLE II

GENERAL PROVISIONS

Section 2.1. Formation. The Company was formed as a Delaware limited liability
company on July 10, 2007 pursuant to the Delaware Limited Liability Company Act
by the execution and filing of a Certificate of Formation of a limited liability
company with the Delaware Secretary of State on July 10, 2007. The Members agree
to continue the Company as a limited liability company under the Act, upon the
terms and subject to the conditions set forth in this Agreement. The rights,
powers, duties, obligations and liabilities of the Members shall be determined
pursuant to the Act and this Agreement. To the extent that the rights, powers,
duties, obligations and liabilities of any Member are different by reason of any
provision of this Agreement than they would be in the absence of such provision,
this Agreement shall, to the extent permitted by the Act, control.

Section 2.2. Name. The name of the Company is “The Habit Restaurants, LLC,” and
all Company business shall be conducted in that name or in such other names that

 

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comply with applicable law as the Managing Member may select from time to
time. Subject to the Act, the Managing Member may change the name of the Company
(and amend this Agreement to reflect such change) at any time and from time to
time without the consent of any other Person. Prompt notification of any such
change shall be given to all Members.

Section 2.3. Term. The term of the Company commenced on the date the Certificate
was filed with the office of the Secretary of State of the State of Delaware and
shall continue in existence perpetually until termination in accordance with the
provisions of Section 7.2(d) and the Act.

Section 2.4. Purpose; Powers.

(a) Managing Powers. The nature of the business or purposes to be conducted or
promoted by the Company is to engage in any lawful act or activity for which
limited liability companies may be formed under the Act. The Company may engage
in any and all activities necessary, desirable or incidental to the
accomplishment of the foregoing. Notwithstanding anything herein to the
contrary, nothing set forth herein shall be construed as authorizing the Company
to possess any purpose or power, or to do any act or thing, forbidden by law to
a limited liability company formed under the laws of the State of Delaware.

(b) Company Action. Subject to the provisions of this Agreement and except as
prohibited by the Act, (i) the Company may, with the approval of the Managing
Member, enter into and perform any and all documents, agreements and
instruments, all without any further act, vote or approval of any Member and
(ii) the Managing Member may authorize any Person (including any Member or
Officer) to enter into and perform any document on behalf of the Company.

Section 2.5. Existence and Good Standing; Foreign Qualification. The Managing
Member may take all action which may be necessary or appropriate (i) for the
continuation of the Company’s valid existence as a limited liability company
under the laws of the State of Delaware (and of each other jurisdiction in which
such existence is necessary to enable the Company to conduct the business in
which it is engaged) and (ii) for the maintenance, preservation and operation of
the business of the Company in accordance with the provisions of this Agreement
and applicable laws and regulations. The Managing Member may file or cause to be
filed for recordation in the office of the appropriate authorities of the State
of Delaware, and in the proper office or offices in each other jurisdiction in
which the Company is formed or qualified, such certificates (including
certificates of limited liability companies and fictitious name certificates)
and other documents as are required by the applicable statutes, rules or
regulations of any such jurisdiction or as are required to reflect the identity
of the Members and the amounts of their respective capital contributions. The
Managing Member may cause the Company to comply, to the extent procedures are
available and those matters are reasonably within the control of the Officers,
with all requirements necessary to qualify the Company as a foreign limited
liability company in any jurisdiction other than the State of Delaware.

Section 2.6. Registered Office; Registered Agent; Principal Office; Other
Offices. The registered office of the Company required by the Act to be
maintained in the State of Delaware shall be the office of the initial
registered agent named in the Certificate or such other office (which need not
be a place of business of the Company) as the Managing Member

 

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may designate from time to time in the manner provided by law. The registered
agent of the Company in the State of Delaware shall be the initial registered
agent named in the Certificate or such other Person or Persons as the Managing
Member may designate from time to time in the manner provided by law. The
principal office of the Company shall be at such place as the Managing Member
may designate from time to time, which need not be in the State of Delaware, and
the Company shall maintain records at such place. The Company may have such
other offices as the Managing Member may designate from time to time.

Section 2.7. Admission. The Managing Member is hereby admitted as a member of
the company upon its execution of a counterpart signature page to this Agreement
and each member of the Company immediately prior to the effectiveness of this
Agreement shall continue as a Member hereunder.

ARTICLE III

CAPITALIZATION

Section 3.1. Units; Initial Capitalization; Schedules.

(a) Limited Liability Company Interests. Interests in the Company shall be
represented by Units, or such other Equity Securities in the Company, or such
other Company securities, in each case as the Managing Member may establish in
its sole discretion in accordance with the terms hereof. As of the date hereof,
the Units are comprised of one Class of Units (“Common Units”).

(b) Schedule of Members. The Company shall maintain a schedule, from time to
time amended and supplemented, in the form of Exhibit A hereto setting forth the
name and address of each Member, and the number of Units and/or Equity
Securities owned by such Member (such schedule, the “Schedule of Members”). The
Schedule of Members, as amended and supplemented from time to time, shall be the
definitive record of ownership of each Unit or other Equity Security in the
Company. All Members acknowledge, and hereby agree, that the Schedule of Members
is confidential to the Company and that each Member is only entitled to view the
portion of the Schedule of Members representing his, her or its membership
interest in the Company. The Company shall be entitled to recognize the
exclusive right of a Person registered on its records as the owner of Units or
other Equity Securities in the Company for all purposes and shall not be bound
to recognize any equitable or other claim to or interest in Units or other
Equity Securities in the Company on the part of any other Person, whether or not
it shall have express or other notice thereof, except as otherwise provided by
the Act.

(c) As of the date hereof, each Member owns the number of Common Units set forth
opposite the name of such Member in the Schedule of Members set forth in Exhibit
A hereto.

Section 3.2. Authorization and Issuance of Additional Units.

(a) The Managing Member may issue additional Common Units and/or establish and
issue other Classes of Units, other Equity Securities in the Company or other
Company securities from time to time with such rights, obligations, powers,
designations, preferences and other terms, which may be different from,
including senior to, any then-existing or future Classes of Units, other Equity
Securities in the Company or other Company securities,

 

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as the Managing Member shall determine from time to time, in its sole
discretion, without the vote or consent of any other Member or any other Person,
including (i) the right of such Units, other Equity Securities in the Company or
other Company securities to share in Net Income and Net Loss or items thereof;
(ii) the right of such Units, other Equity Securities in the Company or other
Company securities to share in Company distributions; (iii) the rights of such
Units, other Equity Securities or other Company securities upon dissolution and
liquidation of the Company; (iv) whether, and the terms and conditions upon
which, the Company may or shall be required to redeem such Units, other Equity
Securities in the Company or other Company securities (including sinking fund
provisions); (v) whether such Units, other Equity Securities in the Company or
other Company securities are issued with the privilege of conversion or exchange
and, if so, the terms and conditions of such conversion or exchange; (vi) the
terms and conditions upon which such Units, other Equity Securities in the
Company or other Company securities will be issued, evidenced by certificates or
assigned or transferred; (vii) the terms and conditions of the issuance of such
Units, other Equity Securities in the Company or other Company securities
(including the amount and form of consideration, if any, to be received by the
Company in respect thereof, the Managing Member being expressly authorized, in
its sole discretion, to cause the Company to issue Units, other Equity
Securities in the Company or other Company securities for less than Fair Market
Value); and (viii) the right, if any, of the holder of such Units, other Equity
Securities in the Company or other Company securities to vote on Company
matters, including matters relating to the relative designations, preferences,
rights, powers and duties of such Units, other Equity Securities in the Company
or other Company securities. The Managing Member, without the vote or consent of
any other Member or any other Person, is authorized (i) to issue any Units,
other Equity Securities in the Company or other Company securities of any such
newly established Class or any existing Class and (ii) to amend this Agreement
to reflect the creation of any such new Class, the issuance of Units, other
Equity Securities in the Company or other Company securities of such Class, and
the admission of any Person as a Member which has received Units or other Equity
Securities of any such Class, in accordance with Sections 3.2, 7.4 and 9.4.
Except as expressly provided in this Agreement to the contrary, any reference to
“Units” shall include the Common Units and any other Classes of Units that may
be established in accordance with this Agreement.

(b) Notwithstanding the foregoing or anything else to the contrary in this
Agreement, if at any time Habit issues a share of its Class A Common Stock
(including in the IPO) or any other Equity Security of Habit (other than shares
of Class B Common Stock), (i) the Company shall issue to Habit (or one or more
Subsidiaries of Habit) one Common Unit (if Habit issues a share of Class A
Common Stock), or such other Equity Security of the Company (if Habit issues
Equity Securities other than Class A Common Stock) corresponding to the Equity
Security issued by Habit, and with the rights to dividends and distributions
(including distributions upon liquidation) and other economic rights as are
determined in Good Faith to correspond to those of such Equity Securities of
Habit and (ii) the net proceeds received by Habit with respect to the
corresponding share of Class A Common Stock or other Equity Security, if any,
shall be concurrently transferred (directly or indirectly through one or more
Subsidiaries of Habit) to the Company; provided, however, that if Habit issues
any shares of Class A Common Stock (including in the IPO) or other Equity
Securities some or all of the net proceeds of which are to be used to fund
expenses or other obligations of Habit for which Habit (or one or more
Subsidiaries of Habit) would be permitted a cash distribution pursuant to clause
(ii) of Section 4.3, then, Habit shall not be required to transfer such net
proceeds to the Company which are

 

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used or will be used to fund such expenses or obligations; provided, further,
that if Habit issues any shares of Class A Common Stock in order to acquire for
stock or cash from a Member a number of Common Units (together with an equal
number of shares of Class B Common Stock) equal to the number of shares of
Class A Common Stock so issued, then the Company shall not issue any new Common
Units in connection therewith and Habit shall not be required to transfer
(directly or indirectly) such net proceeds to the Company (it being understood
that such net proceeds shall instead be transferred to such Member as
consideration for such purchase). Notwithstanding the foregoing, this
Section 3.2(b) and Section 3.2(c) shall not apply to the issuance and
distribution to holders of shares of Habit Class A Common Stock of rights to
purchase Equity Securities of the Habit under a “poison pill” or similar
shareholders’ rights plan (it being understood that upon Exchange of Common
Units for Class A Common Stock, such Class A Common Stock will be issued
together with any such corresponding right), or to the issuance under Habit’s
employee benefit plans of any warrants, options, other rights to acquire Equity
Securities of Habit or rights or property that may be converted into or settled
in Equity Securities of Habit, but shall in each of the foregoing cases apply to
the issuance of Equity Securities of Habit in connection with the exercise or
settlement of such rights, warrants, options or other rights or property (for
cash or other consideration in accordance with their terms or otherwise). Except
for transactions pursuant to Section 3.9 of this Agreement, (x) the Company may
not issue any additional Common Units to any member of the Habit Group unless
substantially simultaneously Habit issues or sells an equal number of shares of
Habit’s Class A Common Stock to another Person, and (y) the Company may not
issue any other Equity Securities of the Company to any member of the Habit
Group unless substantially simultaneously Habit issues or sells, to another
Person, an equal number of shares of a new class or series of Equity Securities
of Habit with the rights to dividends and distributions (including distributions
upon liquidation) and other economic rights as are determined in Good Faith to
correspond to those of such Equity Securities of the Company.

(c) Habit may not redeem, repurchase or otherwise acquire any shares of Class A
Common Stock (including upon forfeiture of any unvested shares of Class A Common
Stock) unless Habit causes the Company to substantially simultaneously redeem,
repurchase or otherwise acquire from a member of the Habit Group an equal number
of Common Units for the same price per security, and Habit may not redeem,
repurchase or otherwise acquire any other Equity Securities of Habit unless
Habit causes the Company to substantially simultaneously redeem, repurchase or
otherwise acquire from a member of the Habit Group an equal number of Equity
Securities of the Company of a corresponding class or series for the same price
per security. The Company may not redeem, repurchase or otherwise acquire any
Common Units from a member of the Habit Group unless substantially
simultaneously Habit redeems, repurchases or otherwise acquires an equal number
of shares of Class A Common Stock for the same price per security from holders
thereof, and the Company may not redeem, repurchase or otherwise acquire any
other Equity Securities of the Company from a member of the Habit Group unless
substantially simultaneously Habit redeems, repurchases or otherwise acquires
for the same price per security an equal number of Equity Securities of Habit of
a corresponding class or series. Notwithstanding the foregoing, to the extent
that any consideration payable to Habit in connection with the redemption or
repurchase of any shares of Class A Common Stock or other Equity Securities of
Habit consists (in whole or in part) of shares of Class A Common Stock or such
other Equity Securities (including in connection with the cashless exercise of
an option or warrant), then the redemption or repurchase of the corresponding
Common Units or other Equity Securities of the Company shall be effectuated in
an equivalent manner.

 

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(d) The Company shall not in any manner effect any subdivision (by any stock
split, stock dividend, reclassification, recapitalization or otherwise) or
combination (by reverse stock split, reclassification, recapitalization or
otherwise) of the outstanding Common Units unless accompanied by an identical
subdivision or combination, as applicable, of the outstanding Class A Common
Stock with corresponding changes made with respect to any other exchangeable or
convertible securities. Habit shall not in any manner effect any subdivision (by
any stock split, stock dividend, reclassification, recapitalization or
otherwise) or combination (by reverse stock split, reclassification,
recapitalization or otherwise) of the outstanding Class A Common Stock unless
accompanied by an identical subdivision or combination, as applicable, of the
outstanding Common Units, with corresponding changes made with respect to any
other exchangeable or convertible securities.

(e) Notwithstanding anything to the contrary, it is the intention of the Members
that the Habit Group collectively owns an aggregate number of Common Units of
the Company that is equal to the aggregate number of outstanding shares of
Class A Common Stock of Habit (subject to the second sentence of
Section 3.2(b)), and this Section 3.2 shall be interpreted consistent with such
intent, and in the event that a member of the Habit Group acquires from other
Members any Common Units and such acquisition results in the Habit Group
collectively owning an aggregate number of Common Units of the Company that
exceeds the aggregate number of outstanding shares of Class A Common Stock of
Habit (subject to the second sentence of Section 3.2(b)), the Managing Member
may cause a recapitalization or other similar adjustment regarding the Company
and the number of shares of Class B Common Stock held by a Member (or a
recapitalization or other similar adjustment regarding Habit) such that (x) the
Habit Group collectively owns an aggregate number of Common Units of the Company
that is equal to the aggregate number of outstanding shares of Class A Common
Stock of Habit (subject to the second sentence of Section 3.2(b)) and (y) the
Members maintain to the maximum extent possible the economic sharing arrangement
among the Members as in place immediately prior to such recapitalization or
other adjustment.

Section 3.3. Vesting of Unvested Common Units. Unvested Common Units shall vest
according to the following: Notwithstanding anything in this Agreement to the
contrary: (i) the Units held by any Member as a result of the conversion of
Class C Units (as defined in the Pre-IPO Agreement), pursuant to the
Recapitalization Agreement, which as of the date hereof are subject to any
vesting, forfeiture, repurchase or similar provisions pursuant to the Pre-IPO
Agreement or in any applicable management unit subscription agreement or other
agreement pursuant to which such Unvested Common Units were issued (in each
case, “Unvested Common Units”) shall continue to be subject to such vesting,
forfeiture, repurchase or similar provisions; and (ii) no Member may Transfer
any Unvested Common Units, provided that a Member may Transfer Unvested Common
Units pursuant to and in accordance with Section 3.9 of this Agreement if the
Member acknowledges and agrees in writing, in a form reasonably satisfactory to
the Managing Member, that any securities received in exchange therefor shall
continue to be subject to the vesting, forfeiture, repurchase or similar
provisions to which such Unvested Common Units are then subject. Notwithstanding
the terms of any particular award, the Managing Member may at any time
accelerate the time at which an

 

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Unvested Common Unit may vest in its discretion and without the requirement of
equivalent treatment among the Common Units that are the subject of an award. A
Unit shall cease to be an Unvested Common Unit at such time as such Unit ceases
to be subject to such vesting, forfeiture, repurchase or similar provisions. For
the avoidance of doubt, the IPO shall not be considered to be any type of Change
in Control event of the Company with respect to the vesting provisions of the
Class C Units or otherwise. With respect to each share of Class B Common Stock
issued to a Member relating to an Unvested Common Unit, such Member agrees that
each such share of Class B Common Stock will also be subject to the same vesting
restrictions applicable to such corresponding Unvested Common Unit.

Section 3.4. Capital Accounts.

(a) Capital Accounts. A separate account (each a “Capital Account”) shall be
established and maintained for each Member which:

(i) shall be increased by (i) the amount of cash and the Fair Market Value of
any other property contributed (or deemed contributed) by such Member to the
Company as a capital contribution (net of liabilities secured by such property
or that the Company assumes or takes the property subject to) and (ii) such
Member’s share of the Net Income (and other items of income and gain) of the
Company; and

(ii) shall be reduced by (i) the amount of cash and the Fair Market Value of any
other property distributed to such Member (net of liabilities secured by such
property or that the Member assumes or takes the property subject to) and
(ii) such Member’s share of the Net Loss (and other items of loss and deduction)
of the Company.

The Capital Accounts as of the date hereof, as adjusted for the revaluation that
will occur under Section 3.4(b) in connection with the direct or indirect
investment in the Company by Habit that is expected to occur as of the date
hereof, are set forth on Schedule 3.4. It is the intention of the Members that
the Capital Accounts of the Company be maintained in accordance with the
provisions of Section 704(b) of the Code and the Treasury Regulations thereunder
and that this Agreement be interpreted consistently therewith. Notwithstanding
anything expressed or implied to the contrary in this Agreement, in the event
the Managing Member shall determine, in its sole and absolute discretion, that
it is prudent to modify the manner in which the Capital Accounts, or any debits
or credits thereto, are computed in order to effectuate the intended economic
sharing arrangement of the Members or comply with the principles of
Section 704(b) of the Code and the Treasury Regulations thereunder, the Managing
Member may make such modification, notwithstanding any other provision hereof,
without the consent of any other Person.

(b) Revaluations of Assets and Capital Account Adjustments. Unless otherwise
determined by the Managing Member, immediately preceding the issuance of
additional Units in exchange for cash, property or services to a new or existing
Member and upon the redemption of any portion of an interest in the Company of
any Member (or such other times as may be determined by the Managing Member),
the then prevailing Asset Values of the Company shall be adjusted to equal their
respective gross Fair Market Values and any increase in the net equity value of
the Company (Asset Values less liabilities) shall be credited to the Capital
Accounts of the Members in the same manner as Net Income is credited under
Section 5.1 (or

 

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any decrease in the net equity value of the Company shall be debited in the same
manner as Net Loss is debited under Section 5.1). The Capital Accounts of the
Company shall be revalued immediately prior to the (direct or indirect)
investment by Habit in the Company that is expected to occur as of the date
hereof.

(c) Additional Capital Account Adjustments. Additional Capital Account
Adjustments. Any income of the Company that is exempt from federal income tax
shall be credited to the Capital Accounts of the Members in the same manner as
Net Income is credited under Section 5.1 when such income is realized. Any
expenses or expenditures of the Company which may neither be deducted nor
capitalized for tax purposes (or are so treated for tax purposes) shall be
debited to the Capital Accounts of the Members in the same manner as Net Loss is
debited under Section 5.1. If any special adjustments are made to or with
respect to Company property pursuant to Code Sections 734(b) or 743(b), Capital
Accounts shall be adjusted to the extent required by the Treasury Regulations
under Section 704 of the Code. The amount by which the Fair Market Value of any
property to be distributed in kind to the Members exceeds or is less than the
then-prevailing Asset Value of such property shall, to the extent not otherwise
recognized by the Company, be taken into account in determining Net Income and
Net Loss and determining the Capital Accounts of the Members as if such property
had been sold at its Fair Market Value immediately prior to such distribution.

(d) Additional Capital Account Provisions. No Member shall have the right to
demand a return of all or any part of such Member’s capital contributions to the
Company. Any return of the capital contributions of any Member shall be made
solely from the assets of the Company and only in accordance with the terms of
this Agreement. Except to the extent otherwise expressly provided for in this
Agreement, no interest shall be paid to any Member with respect to such Member’s
capital contributions or Capital Account. In the event that all or a portion of
the Units of a Member are transferred in accordance with this Agreement, the
transferee of such Units shall also succeed to all or the relevant portion of
the Capital Account of the transferor. Units held by a Member may not be
transferred independently of the Company Interest to which the Units relate.

Section 3.5. No Withdrawal. No Person shall be entitled to withdraw any part of
such Member’s capital contributions to the Company or Capital Account or to
receive any distribution from the Company, except as expressly provided herein.

Section 3.6. Loans From Members. Loans by Members to the Company shall not be
considered capital contributions to the Company. If any Member shall loan funds
to the Company, then the making of such loans shall not result in any increase
in the Capital Account balance of such Member. The amount of any such loans
shall be a debt of the Company to such Member and shall be payable or
collectible in accordance with the terms and conditions upon which such loans
are made.

Section 3.7. No Right of Partition. To the fullest extent permitted by law, no
Member shall have the right to seek or obtain partition by court decree or
operation of law of any property of the Company or any of its Subsidiaries or
the right to own or use particular or individual assets of the Company or any of
its Subsidiaries, or, except as expressly contemplated by this Agreement, be
entitled to distributions of specific assets of the Company or any of its
Subsidiaries.

 

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Section 3.8. Non-Certification of Units; Legend; Units are Securities.

(a) Units shall be issued in non-certificated form; provided that the Managing
Member may cause the Company to issue certificates to a Member representing the
Units held by such Member.

(b) If the Managing Member determines that the Company shall issue certificates
representing Units to any Member, the following provisions of this Section 3.8
shall apply:

(i) The Company shall issue one or more certificates in the name of such Person
in such form as it may approve, subject to Section 3.8(b)(ii) (a “Company
Interest Certificate”), which shall evidence the ownership of the Units
represented thereby. Each such Company Interest Certificate shall be denominated
in terms of the number of Units evidenced by such Company Interest Certificate
and shall be signed by the Managing Member or an Officer on behalf of the
Company.

(ii) Each Company Interest Certificate shall bear a legend substantially in the
following form:

This certificate evidences a Common Unit representing an interest in The Habit
Restaurants, LLC and shall constitute a “security” within the meaning of, and
shall be governed by, (i) Article 8 of the Uniform Commercial Code (including
Section 8-102(a)(15) thereof) as in effect from time to time in the State of
Delaware, and (ii) the corresponding provisions of the Uniform Commercial Code
of any other applicable jurisdiction that now or hereafter substantially
includes the 1994 revisions to Article 8 thereof as adopted by the American Law
Institute and the National Conference of Commissioners on Uniform State Laws and
approved by the American Bar Association on February 14, 1995.

The interests in The Habit Restaurants, LLC represented by this certificate are
subject to restrictions on transfer set forth in the Limited Liability Company
of The Habit Restaurants, LLC, dated as of November 13, 2013, by and among each
of the members from time to time party thereto, as the same may be amended from
time to time.

(iii) Each Unit shall constitute a “security” within the meaning of, and shall
be governed by, (i) Article 8 of the Uniform Commercial Code (including
Section 8-102(a)(15) thereof) as in effect from time to time in the State of
Delaware, and (ii) the corresponding provisions of the Uniform Commercial Code
of any other applicable jurisdiction that now or hereafter substantially
includes the 1994 revisions to Article 8 thereof as adopted by the American Law
Institute and the National Conference of Commissioners on Uniform State Laws and
approved by the American Bar Association on February 14, 1995.

 

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(iv) The Company shall issue a new Company Interest Certificate in place of any
Company Interest Certificate previously issued if the holder of the Units
represented by such Company Interest Certificate, as reflected on the books and
records of the Company:

(A) makes proof by affidavit, in form and substance satisfactory to the Company,
that such previously issued Company Interest Certificate has been lost, stolen
or destroyed;

(B) requests the issuance of a new Company Interest Certificate before the
Company has notice that such previously issued Company Interest Certificate has
been acquired by a purchaser for value in Good Faith and without notice of an
adverse claim;

(C) if requested by the Company, delivers to the Company such security, in form
and substance satisfactory to the Company, as the Managing Member may direct, to
indemnify the Company against any claim that may be made on account of the
alleged loss, destruction or theft of the previously issued Company Interest
Certificate; and

(D) satisfies any other reasonable requirements imposed by the Company.

(v) Upon a Member’s Transfer in accordance with the provisions of this Agreement
of any or all Units represented by a Company Interest Certificate, the
Transferee of such Units shall deliver such Company Interest Certificate, duly
endorsed for Transfer by the Transferee, to the Company for cancellation, and
the Company shall thereupon issue a new Company Interest Certificate to such
Transferee for the number of Units being Transferred and, if applicable, cause
to be issued to such Transferring Member a new Company Interest Certificate for
the number of Units that were represented by the canceled Company Interest
Certificate and that are not being Transferred.

Section 3.9. Exchange of Units for Common Stock.

(a) Types of Exchange.

(i) Voluntary Exchange. Subject to adjustment as provided in this Section 3.9,
each Member shall be entitled to exchange with the Company (or, if Habit so
elects, with Habit), from and after the expiration of the lock-ups imposed by
the Underwriters (the “First Exchange Date”) and each subsequent Weekly Exchange
Date, any (but no less than 1,000 Common Units) or all of such Member’s Common
Units (other than any Unvested Common Units) free and clear of all liens,
encumbrances, rights of first refusal, and the like. Each such Unit, together
with one share of Class B Common Stock (which will be cancelled in connection
with any such exchange), will be exchangeable for, at the option of Habit, (i) a
Cash Exchange Payment calculated with respect to such surrendered Common Units ,
payable in accordance with the instructions provided in the Exchange Notice or
(ii) the issuance to such Member a number of shares of Class A Common Stock that
is equal to the product of the number of Common Units surrendered by such Member
and the Exchange Rate. As any such existing owner exchanges its Common Units,
Habit’s interest in the Company will increase. Each such

 

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exchange of Common Units for Class A Common Stock shall to the extent permitted
by Law be treated for U.S. federal income tax reporting purposes as a taxable
exchange of the Member’s Common Units for Class A Common Stock and corresponding
payments under the Tax Receivable Agreement.

(ii) Mandatory Exchange. Notwithstanding any other provision of this Agreement,
upon the occurrence of any Change in Control, all Units not held by a member of
the Habit Group and all shares of Class B Common Stock shall be automatically
surrendered to the Company (or if Habit so elects, to Habit) (in each case, free
and clear of all liens, encumbrances, rights of first refusal and the like), and
in consideration for such surrender to be delivered on the consummation of such
Change in Control (but, in the case of a Change in Control described in (i),
(ii) or (iii) of the definition of Change in Control set forth in Section 1.1 of
this Agreement, the surrender and delivery of consideration shall occur and be
contingent upon the consummation of the transaction approved thereby), Habit
shall provide to each such Member (or cause to be provided), at its option and
upon the terms and subject to the conditions hereof, either: (x) a Cash Exchange
Payment calculated with respect to such Units surrendered by such Member or
(y) the issuance by Habit to such Member a number of shares of Class A Common
Stock that is equal to the product of the number of Units surrendered by such
Member and the Exchange Rate. For the avoidance of doubt, in connection with a
transaction described in the preceding sentence, in no event shall the Members
(other than the Managing Member and its Subsidiaries) be entitled to receive
aggregate consideration for each Unit and corresponding share of Class B Stock
that is greater than the consideration payable in respect of each share of
Class A Stock in connection with the Change in Control (it being understood
that, for this purpose, payments under or in respect of the Tax Receivable
Agreement shall not be considered part of any such consideration). In addition,
in the case of a holder of Units who is an employee of, or who provides services
to or on behalf of, the Company or an Affiliate thereof, upon the termination of
employment or the performance of services of such Member for any reason (a
“Terminated Employee-Member”), upon notice from the Company, each vested Unit
held by such Terminated Employee-Member at the time of termination shall be
automatically surrendered to the Company (or if Habit so elects, to Habit) (in
each case, free and clear of all liens, encumbrances, rights of first refusal
and the like, with the shares of Class B Common Stock corresponding to such
vested Units to be cancelled) in consideration for, which such consideration
shall be delivered as promptly as practicable following such termination, at the
option of Habit, either: (x) a Cash Exchange Payment calculated with respect to
such surrendered Units by Habit or (y) the issuance by Habit and delivery
(directly or indirectly) to such holder of Units a number of shares of Class A
Common Stock that is equal to the product of the number of Units surrendered
multiplied by the Exchange Rate. (Any exchange described in this
Section 3.9(a)(ii), a “Mandatory Exchange” and, such a Mandatory Exchange or a
Voluntary Exchange, an “Exchange”.) Each Unvested Common Unit and corresponding
share of Class B Common Stock held by such Terminated Employee-Member shall be
automatically cancelled.

(iii) In the event that a Member exchanges a number of Common Units with the
Company and not directly with Habit, Habit will contribute the applicable number
of shares of Class A Common Stock and/or amount of cash to the Company, in

 

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exchange for a number of Common Units equal to the number of Common Units such
Member is exchanging with the Company (which Common Units in each such case the
Company will cancel), for distribution to the Member, which in each case will be
treated as a “disguised sale” for U.S. federal income tax purposes between such
Member and Habit.

(b) In order to exercise the exchange right under Section 3.9(a), the exchanging
Member shall present and surrender the certificate or certificates, if any,
representing such Common Units and shares of Class B Common Stock (in each case,
if certificated) during usual business hours at the principal executive offices
of the Managing Member, or if any agent for the registration or transfer of
shares of Class B Common Stock is then duly appointed and acting (the “Transfer
Agent”), at the office of the Transfer Agent, accompanied by written notice
provided to the Company at least three (3) Business Days prior to the applicable
Weekly Exchange Date substantially in the form of Exhibit B duly executed by the
applicable Member (the “Exchange Notice”) to the Managing Member and the
Transfer Agent stating that the exchanging Member elects to exchange with the
Company (or, if Habit so elects, Habit) a stated number of Common Units and
shares of Class B Common Stock represented, if applicable, by such certificate
or certificates, to the extent specified in such notice, and (if the Class A
Common Stock to be received is to be issued other than in the name of the
exchanging Member) specifying the name(s) of the Person(s) in whose name or on
whose order the Class A Common Stock is to be issued. An Exchange Notice may
specify that the exchange is to be contingent (including as to timing) upon the
consummation of a purchase by another Person (whether in a tender or exchange
offer, an underwritten offering or otherwise) of shares of the Class A Common
Stock into which the Common Units and shares of Class B Common Stock are
exchangeable, or contingent (including as to timing) upon the closing of an
announced merger, consolidation or other transaction or event in which the
Class A Stock would be exchanged or converted or become exchangeable for or
convertible into cash or other securities or property.

(c) If required by the Managing Member, any Exchange Notice shall be accompanied
by instruments of transfer, in form reasonably satisfactory to the Managing
Member and the Transfer Agent, duly executed by the Member or such Member’s duly
authorized representative. After the receipt of such Exchange Notice and the
surrender to the Managing Member or Transfer Agent, if applicable, of the
certificate or certificates, if any, representing such Units and shares of Class
B Common Stock, the Managing Member shall issue and deliver on the next
applicable Weekly Exchange Date, or at Habit’s election cause to be delivered to
the Company, with the Company then delivering on the next applicable Weekly
Exchange Date, to such Member, or on such Member’s written order, the number of
full shares of Class A Common Stock issuable upon such Exchange or the
applicable Cash Exchange Payment, and such shares of Class B Common Stock will
be cancelled in accordance with the Charter of the Managing Member. To the
extent the Class A Common Stock is settled through the facilities of The
Depository Trust Company, the Managing Member will, upon written instruction of
the exchanging Member, use its reasonable efforts to deliver the shares of
Class A Common Stock deliverable to such exchanging Member through the
facilities of The Depository Trust Company, to the account of the participant of
The Depository Trust Company designated by such exchanging Member.

 

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(d) In the event that there is any reclassification, reorganization,
recapitalization or other similar transaction in which the Class A Common Stock
is converted or changed into another security, securities or other property,
then upon any subsequent Exchange, an exchanging Member shall be entitled to
receive the amount of such security, securities or other property that such
exchanging Member would have received if such Exchange had occurred immediately
prior to the effective date of such reclassification, reorganization,
recapitalization or other similar transaction, taking into account any
adjustment as a result of any subdivision (by any split, distribution or
dividend, reclassification, reorganization, recapitalization or otherwise) or
combination (by reverse split, reclassification, recapitalization or otherwise)
of such security, securities or other property that occurs after the effective
time of such reclassification, reorganization, recapitalization or other similar
transaction. For the avoidance of doubt, if there is any reclassification,
reorganization, recapitalization or other similar transaction in which the
Class A Common Stock is converted or changed into another security, securities
or other property, this Section 3.9(e) shall continue to be applicable, mutatis
mutandis, with respect to such security or other property.

(e) Adjustment. The Exchange Rate shall be adjusted if there is: (a) any
subdivision (by any unit split, unit distribution, reclassification,
reorganization, recapitalization or otherwise) or combination (by reverse unit
split, reclassification, reorganization, recapitalization or otherwise) of the
Common Units that is not accompanied by an identical subdivision or combination
of the Class A Common Stock; or (b) any subdivision (by any stock split, stock
dividend or distribution, reclassification, reorganization, recapitalization or
otherwise) or combination (by reverse stock split, reclassification,
reorganization, recapitalization or otherwise) of the Class A Common Stock that
is not accompanied by an identical subdivision or combination of the Common
Units. This Agreement shall apply to the Common Units held by the Members as of
the date hereof, as well as any Common Units hereafter acquired by a Member.
This Agreement shall apply, mutatis mutandis, and all references to “Common
Units” shall be deemed to include, any security, securities or other property of
the Company which may be issued in respect of, in exchange for or in
substitution of Common Units by reason of any distribution or dividend, split,
reverse split, combination, reclassification, reorganization, recapitalization,
merger, exchange (other than an Exchange) or other transaction.

(f) No Member shall be permitted, during any three-month period, to exchange a
number of Common Units which would be in excess of the greater of 1% of the
total aggregate outstanding shares of Class A and Class B Common Stock or the
average reported weekly trading volume of the Class A Common Stock during the
four weeks preceding the Exchange Notice. For the avoidance of doubt, this
limitation shall not apply in connection with any Demand Registration or
Piggyback Registration, as such terms are defined in the Registration Rights
Agreement.

(g) If any Takeover Law or other similar law or regulation becomes or is deemed
to become applicable to this Agreement or any of the transactions contemplated
hereby, the Managing Member shall use its reasonable best efforts to render such
law or regulation inapplicable to all of the foregoing. The Managing Member
shall at all times reserve and keep available out of its authorized but unissued
Equity Securities, solely for the purpose of issuance upon exchange of Common
Units and Class B Common Stock, such number of shares of Class A

 

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Common Stock that shall be issuable upon the exchange of all such outstanding
Common Units and Class B Common Stock; provided, that nothing contained herein
shall be construed to preclude the Managing Member from satisfying its
obligations in respect of the exchange of the Common Units for shares of Class A
Common Stock by delivery of purchased shares of Class A Common Stock which are
held in the treasury of the Managing Member. The Managing Member covenants that
all shares of Class A Common Stock that shall be issued upon exchange of Common
Units and Class B Common Stock shall, upon issuance thereof, be validly issued,
fully paid and non-assessable.

(h) The issuance of Class A Common Stock upon Exchange of Common Units and Class
B Common Stock shall be made without charge to the exchanging Members for any
stamp or other similar tax in respect of such issuance; provided, however, that
if any such shares are to be issued in a name other than that of the exchanging
Member, then the Person or Persons requesting the issuance thereof shall pay to
the Managing Member the amount of any tax that may be payable in respect of any
transfer involved in such issuance or shall establish to the satisfaction of the
Managing Member that such tax has been paid or is not payable. Except as
described in the preceding sentence, the Company and each exchanging Member
shall bear its own expenses in connection with the consummation of any Exchange.

(i) The Managing Member and the Company agree that, to the extent that a
registration statement under the Securities Act is effective and available for
the delivery of shares of Class A Common Stock to be delivered with respect to
any Exchange, shares that have been registered under the Securities Act shall be
delivered in respect of such Exchange. In the event that any Exchange in
accordance with this Agreement is to be effected at a time when any required
registration has not become effective or otherwise is unavailable, upon the
request and with the reasonable cooperation of the Member requesting such
Exchange, the Managing Member shall use commercially reasonable efforts to
promptly facilitate such Exchange pursuant to any reasonably available exemption
from such registration requirements.

(j) If the Class A Common Stock is listed on a securities exchange, the Managing
Member shall use its reasonable best efforts to cause all Class A Common Stock
issued upon an Exchange of Common Units to be listed on the same securities
exchange at the time of such issuance.

(k) For the avoidance of doubt, and notwithstanding anything to the contrary
herein, a Member shall not be entitled to an Exchange as described in this
Section 3.9 to the extent Habit reasonably determines in good faith that such
Exchange (i) would be prohibited by law or regulation or (ii) would not be
permitted under this Agreement or any other agreement with Habit or its
subsidiaries to which such Member is then subject or any written policies of
Habit relating to insider trading then applicable to such Member. For avoidance
of doubt, no Exchange shall be deemed to be prohibited by any law or regulation
pertaining to the registration of securities if such securities have been so
registered or if any exemption from such registration requirements is reasonably
available.

(l) To the extent that amounts are deducted and withheld by Habit or any
applicable withholding agent in respect of an Exchange or other Transfer of
Common Units to a member of the Habit Group, such deducted or withheld amounts
shall be treated for all purposes of this Agreement as having been paid to the
person in respect of which such deduction and withholding was made.

 

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(m) Specific Performance. The parties hereto agree that irreparable damage would
occur in the event that any of the provisions of this Section 3.9 were not
performed in accordance with their specific terms or were otherwise breached. It
is accordingly agreed that the parties shall be entitled to specific performance
of the terms and provisions hereof, in addition to any other remedy to which
they are entitled at law or in equity.

(n) Independent Nature of Members’ Rights and Obligations. The obligations of
each Member under this Section 3.9 are several and not joint with the
obligations of any other Member, and no Member shall be responsible in any way
for the performance of the obligations of any other Member hereunder. The
decision of each Member to enter into to this Agreement has been made by such
Member independently of any other Member. Nothing contained herein, and no
action taken by any Member pursuant hereto, shall be deemed to constitute the
Members as a partnership, an association, a joint venture or any other kind of
entity, or create a presumption that the Members are in any way acting in
concert or as a group with respect to such obligations or the transactions
contemplated hereby and the Corporation acknowledges that the Members are not
acting in concert or as a group, and Habit will not assert any such claim, with
respect to such obligations or the transactions contemplated hereby.

ARTICLE IV

DISTRIBUTIONS

Section 4.1. Distributions. Except as described in Section 3.9, this Article IV
and/or Section 7.2, distributions (other than Tax Distributions) shall be made
to the Members as and when determined by the Managing Member, ratably among the
Members in accordance with their respective number of Common Units. Prior to the
completion of the IPO of Habit, the Company shall distribute to Members the
amounts described in Annex A hereto.

Section 4.2. Unvested Common Units. To the extent that any distribution, other
than a Tax Distribution, is to be made to a Member in respect of any Unvested
Common Unit, such distribution shall be set aside for such Member to be
distributed to such Member at the time that such Unit ceases to be an Unvested
Common Unit. To the extent that such Unvested Common Unit shall be forfeited by
or repurchased from such Member without having ceased to be an Unvested Common
Unit, such distribution shall revert to the Company.

Section 4.3. Distributions to Habit. The Managing Member, in its sole
discretion, may authorize that (i) cash be distributed to members of the Habit
Group (which distribution shall be made without pro rata distributions to the
other Members) in exchange for the redemption, repurchase or other acquisition
of Common Units (or other Equity Securities) held by such person, where the
redemption proceeds are to be used by Habit to acquire its outstanding Class A
Common Stock (or other Equity Securities) in accordance with Section 3.2, and
(ii) cash be distributed to members of the Habit Group (which distributions
shall be made without pro rata distributions to the other Members) as required
for members of the Habit Group to pay (A) operating, administrative and other
similar costs and expenses incurred by the Managing Member or its Affiliates,
and other costs and expenses relating to the investment in or activities of the
Company and its Subsidiaries, including payments in respect of indebtedness and

 

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preferred stock, to the extent used or to be used to pay expenses or other
obligations described in this clause (ii) (in either case only to the extent
economically equivalent indebtedness or Equity Securities of the Company were
not issued to the Managing Member or the applicable Affiliates), fees and
disbursements of all investment bankers, financial advisers, legal counsel,
independent certified public accountants, consultants and other Persons retained
by the board of directors of any member of the Habit Group, and fees associated
with any filings by a member of the Habit Group with any Governmental Entity,
(B) any judgments, settlements, penalties, fines or other costs and expenses in
respect of any claims against, or any litigation or proceedings involving, any
member of the Habit Group, (C) fees and expenses related to any securities
offering, investment or acquisition transaction (whether or not successful)
authorized by the board of directors of any member of the Habit Group, or to any
redemptions or acquisitions of Common Units or other Equity Securities and
(D) other fees and expenses in connection with the maintenance of the existence
of each member of the Habit Group (including any franchise taxes and any costs
or expenses associated with being a public company listed on a national
securities exchange). For the avoidance of doubt, distributions under this
Section 4.3 may not be used to pay or facilitate dividends or distributions on
the Class A Common Stock (other than distributions in redemption of Class A
Common Stock (or other Equity Securities) in accordance with Section 3.2).
Further, and without limiting the foregoing, the Managing Member, in its sole
discretion, may authorize that cash be distributed to members of the Habit Group
to make any payments to be made under the Tax Receivable Agreement or
Section 3.9 of this Agreement, including, without limitation, losses, claims
damages, liabilities and expenses due by the Habit Group under the Registration
Rights Agreement, so long as such distributions are made pro rata in accordance
with Common Units.

Section 4.4. Tax Distributions.

(a) The Company shall distribute ratably among the Members in accordance with
their respective number of Common Units on a quarterly basis by the 10th (or
next succeeding Business Day) of each of March , June, September and December of
each taxable year, or such other dates as may be appropriate in light of tax
payment requirements (each a “Tax Distribution Date”), an aggregate amount (the
“Tax Distribution”) in cash equal to the excess, if any, of (A) the Company’s
Tax Liability (as defined in clause (b) below) with respect to such taxable year
over (B) the amounts previously distributed pursuant to this Section 4.4 with
respect to such taxable year. Notwithstanding the foregoing, Tax Distributions
shall only be made for periods (or portions thereof) beginning on or after the
date hereof. For purposes of computing a Tax Distribution under this
Section 4.4, salaries, bonuses, and any other payments in the nature of
compensation shall not be taken into account, other than as an expense of the
Company.

(b) For purposes of this Section 4.4, the “Company’s Tax Liability” means, with
respect to a taxable year (or portion thereof) beginning as of the first day of
such taxable year (or portion thereof) and ending on the last day of the most
recent relevant determination date, the product of (x) the cumulative excess of
taxable income over taxable losses of the Company, to the extent such losses may
offset such income, for such taxable year (or portion thereof), calculated
without regard to (A) any gain or loss attributable to or realized in connection
with a sale of all or substantially all of the assets of the Company, and
(B) for clarity, any tax deductions or basis adjustments of any Member arising
under Code Section 743, and (y)

 

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the highest combined marginal federal, state and local tax rate then applicable
(including any Medicare Contribution tax on net investment income) to an
individual (or, if higher, to a corporation) resident in Irvine, California
(taking into account the deductibility of state and local taxes (subject to the
limitations in Sections 67 and 68 of the Code) and adjusted to the extent
necessary to calculate federal, state and local tax liability separately so as
to take into account for purposes of calculating the assumed state and local tax
component of the Company’s Tax Liability the calculation under the applicable
state and local tax laws of taxable income and taxable losses and the extent to
which such losses may offset such income) increased if necessary to apply
alternative minimum tax rates and rules in years in which the alternative
minimum tax applies (or would apply based on the assumptions stated herein) to
the Company, if the Company were an individual or corporation. A final
accounting for Tax Distributions shall be made for each taxable year after the
taxable income or loss of the Company has been determined for such taxable year,
and the Company shall promptly thereafter make supplemental Tax Distributions
(or future Tax Distributions will be reduced) to reflect any difference between
estimates previously used in calculating the Company’s Tax Liability and the
relevant actual amounts recognized.

(c) Notwithstanding Section 4.4(a) or (d), if on a Tax Distribution Date there
are not sufficient funds in the Company (or any of its U.S. Subsidiaries that
are disregarded entities for U.S. federal income tax purposes) to distribute the
full amount of the relevant Tax Distribution otherwise to be made or any credit
agreements or other debt documents to which the Company (or any of its
Subsidiaries) is a party do not permit the Company to receive from its
Subsidiaries or distribute to each Member the full amount of the Tax
Distributions otherwise to be made to each such Member, distributions pursuant
to this Section 4.4 shall be made ratably among the Members in accordance with
their respective number of Common Units to the extent of the available funds.

(d) If, following an audit or examination, there is an adjustment that would
affect the calculation of the Company’s taxable income or taxable loss for a
given period or portion thereof after the date of this Agreement, or in the
event that the Company files an amended tax return which has such effect, then,
subject to the availability of cash and any restrictions set forth in any credit
agreements or other debt documents to which the Company (or any of its
Subsidiaries that are disregarded entities for U.S. federal income tax purposes)
is a party, the Company shall promptly recalculate the Company’s Tax Liability
for the applicable period and make additional Tax Distributions ratably among
the Members in accordance with their respective number of Common Units
(increased by an additional amount estimated to be sufficient to cover any
interest or penalties that would be imposed on the Company if it were an
individual (or, if higher, a corporation) resident in Irvine, California) to
give effect to such adjustment or amended tax return.

Section 4.5. Withholding; Indemnification. Each Member shall, to the fullest
extent permitted by law, indemnify and hold harmless the Company, the Managing
Member and each other Person who is or who is deemed to be the responsible
withholding agent for United States federal, state or local or foreign income
tax purposes against all claims, liabilities and expenses of whatever nature
relating to the Company’s, the Managing Member’s or such other Person’s
obligation to withhold and to pay over, or otherwise to pay, any withholding or
other taxes payable by the Company, the Managing Member or any of their
Affiliates with respect to

 

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such Member or as a result of such Member’s ownership of Units, Transfer of
Units (including by Exchange) or participation in the Company. Each Member
hereby authorizes the Company and the Managing Member to withhold and to pay
over, or otherwise to pay, any withholding or other taxes determined by the
Managing Member to be payable by the Company, the Managing Member or any of
their Affiliates (pursuant to any provision of United States federal, state or
local or foreign law) with respect to such Member or as a result of such
Member’s ownership of Units, Transfer of Units (including by Exchange) or as a
result of such Member’s participation in the Company; if and to the extent that
the Company withholds or pays any such withholding or other taxes with respect
to a Member, such Member shall be deemed for all purposes of this Agreement to
have received a distribution from the Company as of the time such withholding or
other tax is paid (or, if earlier, required to be paid) with respect to such
Member’s Company Interest, and, to the extent such taxes exceed the amount that
would otherwise be distributable to such Member, as a demand loan payable by the
Member to the Company with interest at a 10% rate, compounded annually. The
Managing Member may, in its discretion, either demand payment of the principal
and accrued interest on such demand loan at any time, and enforce payment
thereof by legal process, or may withhold from one or more distributions to a
Member amounts sufficient to satisfy such Member’s obligations under any such
demand loan. In the event that the Company receives a refund of taxes previously
withheld, the economic benefit of such refund shall be apportioned among the
Members in a manner reasonably determined by the Managing Member to offset the
prior operation of this Section 4.5 in respect of such withheld taxes.

Section 4.6. Limitation. Notwithstanding any other provision of this Agreement,
the Company, and the Managing Member on behalf of the Company, shall not be
required to make a distribution if such distribution to any Member or Assignee
would violate the Act or other applicable law.

ARTICLE V

ALLOCATIONS

Section 5.1. Allocations for Capital Account Purposes.

(a) Allocations of Net Income and Net Losses. Except as otherwise provided in
this Agreement, Net Income and Net Losses (and, to the extent necessary, and if
determined appropriate by the Managing Member in its sole discretion individual
items of income, gain or loss or deduction of the Company) shall be allocated in
a manner such that the Capital Account of each Member after adjustment by the
Member’s share of “minimum gain” and “partner minimum gain” (as such terms are
used in Treasury Regulation Section 1.704-2) not otherwise required to be taken
into account in such period is, as nearly as possible, equal (proportionately)
to the distributions that would be made pursuant to Section 7.2(c) if the
Company were dissolved, its affairs wound up and its assets sold for cash equal
to their Asset Values, all Company liabilities were satisfied (limited with
respect to each non-recourse liability to the Asset Values of the assets
securing such liability) and the net assets of the Company were distributed to
the Members pursuant to this Agreement.

(b) Regulatory Allocations. Although the Members do not anticipate that events
will arise that will require application of this Section 5.1, provisions are
included in this Agreement governing the allocation of income, gain, loss,
deduction and credit (and items

 

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thereof) as may be necessary to provide that the Company’s allocation provisions
contain a so-called “qualified income offset” and comply with all provisions
relating to the allocation of so-called “non-recourse deductions” and “partner
non-recourse deductions” and the chargeback thereof as set forth in the Treasury
Regulations under Section 704(b) of the Code (such regulatory allocations,
“Regulatory Allocations”); provided, however, that the Members intend that all
Regulatory Allocations that may be required shall be offset by other Regulatory
Allocations or special allocations of items so that the share of the Net Income
and Net Loss of the Company of each Member will be the same as it would have
been had the events requiring the Regulatory Allocations not occurred. For this
purpose the Managing Member, based on the advice of the Company’s auditors or
tax counsel, is hereby authorized to make such special curative allocations as
may be appropriate.

(c) Deficit Capital Accounts. No Member shall be required to pay to the Company,
to any other Member or to any third party any deficit balance which may exist
from time to time in the Member’s Capital Account.

The allocations made pursuant to this Section 5.1 are intended to comply with
the provisions of Section 704(b) of the Code and the Treasury Regulations
thereunder and, in particular, to reflect the Members’ economic interests in the
Company, as set forth herein, and the Managing Member shall interpret this
Section 5.1 in a manner consistent with such intention and shall make such
adjustments to these allocations as the Managing Member determines to be
necessary or appropriate.

Section 5.2. Allocations for Tax Purposes.

(a) Tax Allocations. Except as set forth below or as otherwise required by the
Code or other applicable law, the income, gains, losses and deductions of the
Company shall be allocated for federal, state and local income tax purposes
among the Members in accordance with the allocation of such income, gains,
losses and deductions among the Members for purposes of computing their Capital
Accounts.

(b) Contributed Assets. In accordance with Section 704(c) of the Code, income,
gain, loss and deduction with respect to any property contributed (or deemed
contributed for income tax purposes) to the Company with an adjusted basis for
federal income tax purposes different from the initial Asset Value at which such
property was accepted by the Company shall, solely for tax purposes, be
allocated among the Members so as to take into account such difference in the
manner required by Section 704(c) of the Code and the applicable Treasury
Regulations. All tax allocations required by this Section 5.2(b) and 5.2(c)
shall be made using the so called “traditional method” described in Regulation
1.704-3(b).

(c) Revalued Assets. If the Asset Value of any asset of the Company is adjusted
pursuant to Section 3.4(b), subsequent allocations of income, gain, loss and
deduction with respect to such asset shall, solely for tax purposes, be
allocated among the Members so as to take into account such adjustment in the
same manner as under Section 704(c) of the Code and the applicable Treasury
Regulations.

(d) Reserved.

 

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(e) Section 754 Election. The Members intend that an election under Section 754
of the Code be in effect for the Company (and any Subsidiary of the Company that
is treated as a partnership for U.S. federal income tax purposes) for the
taxable year that includes the date hereof. The Company shall cause (1) such
elections to be in effect for subsequent taxable years of each of the Company
and any Subsidiary described in the preceding sentence for so long as such
entity is treated as a partnership for U.S. federal income tax purposes (and
intends to make additional elections under Section 754 of the Code in the event
there is a termination (within the meaning of Section 708 of the Code) of any
such entity and such entity is treated as a partnership for U.S. federal income
tax purposes following such termination) and (2) any new Subsidiary of the
Company that is treated as a partnership for U.S. federal income tax purposes to
have in effect an election under Section 754 of the Code for so long as such
entity is treated as a partnership for U.S. federal income tax purposes (and
intends to make additional elections under Section 754 of the Code in the event
there is a termination (within the meaning of Section 708 of the Code) of any
such entity and such entity is treated as a partnership for U.S. federal income
tax purposes following such termination).

(f) Section 706 Determination. For purposes of determining the items of Company
income, gain, loss, deduction, or credit allocable to any Member with respect to
any period, such items shall be determined on a daily, monthly, or other basis,
as determined by the Managing Member using any permissible method under Code
Section 706 and the Treasury Regulations promulgated thereunder.

Allocations pursuant to this Section 5.2 are solely for the purposes of federal,
state and local taxes and shall not affect, or in any way be taken into account
in computing, any Member’s Capital Account or share of Net Income, Net Loss,
distributions or other Company items pursuant to any provision of this
Agreement.

Section 5.3. Members’ Tax Reporting. The Members acknowledge and are aware of
the income tax consequences of the allocations made pursuant to this ARTICLE V
and, except as may otherwise be required by applicable law or regulatory
requirements, hereby agree to be bound by the provisions of this ARTICLE V in
reporting their shares of Company income, gain, loss, deduction and credit for
federal, state and local income tax purposes.

ARTICLE VI

MANAGEMENT

Section 6.1. Managing Member; Delegation of Authority and Duties.

(a) Authority of Managing Member. The business, property and affairs of the
Company shall be managed under the sole, absolute and exclusive direction of the
Managing Member, which may from time to time delegate authority to Officers or
to others to act on behalf of the Company. Without limiting the foregoing
provisions of this Section 6.1(a), the Managing Member shall have the sole power
to manage or cause the management of the Company, including the power and
authority to effectuate the sale, lease, transfer, exchange or other disposition
of any, all or substantially all of the assets of the Company (including the
exercise or grant of any conversion, option, privilege or subscription right or
any other right available in connection with any assets at any time held by the
Company) or the merger, consolidation, reorganization or other combination of
the Company with or into another entity.

 

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(b) Members. No Member who is not also a Managing Member, in his or her or its
capacity as such, shall participate in or have any control over the business of
the Company. Except as expressly provided herein, the Units, other Equity
Securities in the Company, or the fact of a Member’s admission as a member of
the Company do not confer any rights upon the Members to participate in the
management of the affairs of the Company. Except as expressly provided herein,
no Member who is not also a Managing Member shall have any right to vote on any
matter involving the Company, including with respect to any merger,
consolidation, combination or conversion of the Company, or any other matter
that a Member might otherwise have the ability to vote or consent with respect
to under the Act, at law, in equity or otherwise. The conduct, control and
management of the Company shall be vested exclusively in the Managing Member. In
all matters relating to or arising out of the conduct of the operation of the
Company, the decision of the Managing Member shall be the decision of the
Company. Except as required by law, or expressly provided in Section 6.1(c) or
by separate agreement with the Company, no Member who is not also a Managing
Member (and acting in such capacity) shall take any part in the management or
control of the operation or business of the Company in its capacity as a Member,
nor shall any Member who is not also a Managing Member (and acting in such
capacity) have any right, authority or power to act for or on behalf of or bind
the Company in his or her or its capacity as a Member in any respect or assume
any obligation or responsibility of the Company or of any other Member.

(c) Delegation by Managing Member. The Company may employ one or more Members
from time to time, and such Members, in their capacity as employees or agents of
the Company (and not, for clarity, in their capacity as Members of the Company),
may take part in the control and management of the business of the Company to
the extent such authority and power to act for or on behalf of the Company has
been delegated to them by the Managing Member. To the fullest extent permitted
by law, the Managing Member shall have the power and authority to delegate to
one or more other Persons the Managing Member’s rights and powers to manage and
control the business and affairs of the Company, including to delegate to agents
and employees of a Member or the Company (including Officers), and to delegate
by a management agreement or another agreement with, or otherwise to, other
Persons. The Managing Member may authorize any Person (including any Member or
Officer) to enter into and perform any document on behalf of the Company.

Section 6.2. Officers.

(a) Designation and Appointment. The Managing Member may, from time to time,
employ and retain Persons as may be necessary or appropriate for the conduct of
the Company’s business, including employees, agents and other Persons (any of
whom may be a Member) who may be designated as Officers of the Company, with
such titles as and to the extent authorized by the Managing Member. Any number
of offices may be held by the same Person. In its discretion, the Managing
Member may choose not to fill any office for any period as it may deem
advisable. Officers need not be residents of the State of Delaware or
Members. Any Officers so designated shall have such authority and perform such
duties as the Managing Member may from time to time delegate to them. The
Managing Member may assign titles to particular Officers. Each Officer shall
hold office until his successor shall be duly designated and shall qualify or
until his death or until he shall resign or shall have been removed in the
manner hereinafter provided. The salaries or other compensation, if any, of the
Officers of

 

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the Company shall be fixed from time to time by the Managing Member. Designation
of an Officer shall not of itself create any employment or, except as provided
in Section 6.4, contractual rights.

(b) Resignation and Removal. Any Officer may resign as such at any time. Such
resignation shall be made in writing and shall take effect at the time specified
therein, or if no time is specified, at the time of its receipt by the Managing
Member. The acceptance of a resignation shall not be necessary to make it
effective, unless expressly so provided in the resignation. All employees,
agents and Officers shall be subject to the supervision and direction of the
Managing Member and may be removed, with or without cause, from such office by
the Managing Member and the authority, duties or responsibilities of any
employee, agent or Officer of the Company may be suspended by or altered the
Managing Member from time to time, in each case in the sole discretion of the
Managing Member.

(c) Duties of Officers. The Officers, in the performance of their duties as
such, shall owe to the Company duties of loyalty and due care of the type owed
by officers of a Delaware corporation pursuant to the laws of the state of
Delaware.

Section 6.3. Liability of Members.

(a) No Personal Liability. Except as otherwise required by applicable law and as
expressly set forth in this Agreement, no Member shall have any personal
liability whatsoever in such Person’s capacity as a Member, whether to the
Company, to any of the other Members, to the creditors of the Company or to any
other third party, for the debts, liabilities, commitments or any other
obligations of the Company or for any losses of the Company. Except as otherwise
required by the Act, each Member shall be liable only to make payments to the
Company as provided for expressly herein.

(b) Return of Distributions. In accordance with the Act and the laws of the
State of Delaware, a Member may, under certain circumstances, be required to
return amounts previously distributed to such Member. It is the intent of the
Members that no distribution to any Member pursuant to ARTICLE IV shall be
deemed a return of money or other property paid or distributed in violation of
the Act. The payment of any such money or distribution of any such property to a
Member shall be deemed to be a compromise within the meaning of
Section 18-502(b) of the Act, and, to the fullest extent permitted by law, any
Member receiving any such money or property shall not be required to return any
such money or property to the Company or any other Person. However, if any court
of competent jurisdiction holds that, notwithstanding the provisions of this
Agreement, any Member is obligated to make any such payment, such obligation
shall be the obligation of such Member and not of any other Member.

(c) No Duties. Notwithstanding any other provision of this Agreement or any duty
otherwise existing at law, in equity or otherwise, the parties hereby agree that
the Members (including the Managing Member), shall, to the maximum extent
permitted by law, including Section 18-1101(c) of the Act, owe no duties
(including fiduciary duties) to the Company, the other Members or any other
Person who is a party to or otherwise bound by this Agreement; provided,
however, that nothing contained in this Section 6.3(c) shall eliminate the
implied contractual covenant of good faith and fair dealing. To the extent that,
at law or in equity, any Member (including the Managing Member) has duties
(including fiduciary duties) and liabilities

 

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relating thereto to the Company, to another Member or to another Person who is a
party to or otherwise bound by this Agreement, the Members (including the
Managing Member) acting under this Agreement will not be liable to the
Company, to any such other Member or to any such other Person who is a party to
or otherwise bound by this Agreement, for their good faith reliance on the
provisions of this Agreement. The provisions of this Agreement, to the extent
that they restrict or eliminate the duties and liabilities relating thereto of
any Member (including the Managing Member) otherwise existing at law, in equity
or otherwise, are agreed by the parties hereto to replace to that extent such
other duties and liabilities of the Members (including the Managing Member)
relating thereto. The Managing Member may consult with legal counsel,
accountants and financial or other advisors and any act or omission suffered or
taken by the Managing Member on behalf of the Company or in furtherance of the
interests of the Company in good faith in reliance upon and in accordance with
the advice of such counsel, accountants or financial or other advisors will be
full justification for any such act or omission, and the Managing Member will be
fully protected in so acting or omitting to act so long as such counsel or
accountants or financial or other advisors were selected with reasonable
care. Notwithstanding any other provision of this Agreement or otherwise
applicable provision of law or equity, whenever in this Agreement the Managing
Member is permitted or required to make a decision (i) in its “sole discretion”
or “discretion” or under a grant of similar authority or latitude, the Managing
Member shall be entitled to consider only such interests and factors as it
desires, including its own interests, and shall, to the fullest extent permitted
by applicable law, have no duty or obligation to give any consideration to any
interest of or factors affecting the Company or the other Members, or (ii) in
its “good faith” or under another expressed standard, the Managing Member shall
act under such express standard and shall not be subject to any other or
different standards.

Section 6.4. Indemnification by the Company. Subject to the limitations and
conditions provided in this Section 6.4, each Person who was or is made a party
or is threatened to be made a party to or is involved in any threatened, pending
or completed action, suit or proceeding, whether civil, criminal, administrative
or arbitrative (each, a “Proceeding”), or any appeal in such a Proceeding or any
inquiry or investigation that could lead to such a Proceeding, by reason of the
fact that he, she or it, or a Person of which he, she or it is the legal
representative, is or was a Member or an Officer or a Tax Matters Member (each,
an “Indemnified Person”), in each case, shall be indemnified by the Company to
the fullest extent permitted by applicable law, as the same exists or may
hereafter be amended (but, in the case of any such amendment, only to the extent
that such amendment permits the Company to provide broader indemnification
rights than such law permitted the Company to provide prior to such amendment)
against all judgments, penalties (including excise and similar taxes and
punitive damages), fines, settlements and reasonable expenses (including
reasonable attorneys’ fees and expenses) actually incurred by such Indemnified
Person in connection with such Proceeding, appeal, inquiry or investigation, if
such Indemnified Person acted in Good Faith. Reasonable expenses incurred by an
Indemnified Person who was, is or is threatened to be made a named defendant or
respondent in a Proceeding shall be paid by the Company in advance of the final
disposition of the Proceeding upon receipt of an undertaking by or on behalf of
such Person to repay such amount if it shall ultimately be determined that he,
she or it is not entitled to be indemnified by the Company. Indemnification
under this Section 6.4 shall continue as to a Person who has ceased to serve in
the capacity which initially entitled such Person to indemnity hereunder. The
rights granted pursuant to this Section 6.4 shall be deemed contract rights, and

 

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no amendment, modification or repeal of this Section 6.4 shall have the effect
of limiting or denying any such rights with respect to actions taken or
Proceedings, appeals, inquiries or investigations arising prior to any
amendment, modification or repeal. It is expressly acknowledged that the
indemnification provided in this Section 6.4 could involve indemnification for
negligence or under theories of strict liability. Notwithstanding the foregoing,
no Indemnified Person shall be entitled to any indemnity or advancement of
expenses in connection with any Proceeding brought (i) by such Indemnified
Person against the Company (other than to enforce the rights of such Indemnified
Person pursuant to this Section 6.4), any Member or any Officer, or (ii) by or
in the right of the Company, without the prior written consent of the Managing
Member.

Section 6.5. Investment Representations of Members. Each Member hereby
represents, warrants and acknowledges to the Company that:

(a) such Member has such knowledge and experience in financial and business
matters and is capable of evaluating the merits and risks of an investment in
the Company and is making an informed investment decision with respect thereto;

(b) such Member is acquiring interests in the Company for investment only and
not with a view to, or for resale in connection with, any distribution to the
public or public offering thereof;

(c) the execution, delivery and performance of this Agreement have been duly
authorized by such Member or all necessary corporate or other entity action on
the part of such Member;

(d) the Common Units and shares of Class B Common Stock being delivered pursuant
to an Exchange are free and clear of all liens, encumbrances, rights of first
refusal, and the like;

(e) such Member has executed and provided the Company properly completed copies
of IRS Form W-8 or W-9, as applicable, which are valid as of the date hereof,
and will promptly provide any additional information or documentation requested
by the Managing Member relating to tax matters (including any information
reasonably requested in connection with ensuring compliance under FATCA); if any
such information or documentation previously provided becomes incorrect or
obsolete, such Member will promptly notify the Managing Member and provide
applicable updated information and documentation;

(f) such Member is not a disregarded entity for U.S. federal income tax purposes
and is acquiring its Company Interest for its own account and is the sole
beneficial owner thereof for U.S. federal income tax purposes; provided,
however, that if at any time on or following the date hereof, such Member is
treated as disregarded as an entity separate from its owner for U.S. federal
income tax purposes (a “DRE”), then (i) none of such Member, such Member’s owner
for U.S. federal income tax purposes (“Tax Owner”), or any other entity that is
treated as a DRE of Tax Owner and that owns a direct or indirect interest in
such Member (a “DRE Affiliate”) will create or issue, or participate in the
creation or issuance of, any “interest” in the Company within the meaning of
Treasury Regulation Section 1.7704-1(a)(2) and (ii) if as a result of (A) a
Transfer, directly or indirectly, of all or any part of the ownership interests
in

 

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such Member or any DRE Affiliate, (B) the issuance of any security or other
instrument by such Member or any DRE Affiliate, or (C) such Member or any DRE
Affiliate otherwise ceasing to be a DRE of Tax Owner (any such event described
in clause (A), (B), or (C), a “Tax Transfer”), any part of the interests in the
Company would be treated as being transferred within the meaning of Treasury
Regulation Section 1.7704-1(a)(3), then such Tax Transfer shall not be
undertaken without the prior written consent of the Managing Member (which such
consent may be withheld in its sole discretion);

(g) either (1) such Member is not, for U.S. federal income tax purposes, a
partnership, trust, estate or “S Corporation” as defined in the Code (in each
case a “Pass-Through Entity”) or (2) such Member is, for U.S. federal income tax
purposes, a Pass-Through Entity, and within the meaning of Treasury Regulations
Section 1.7704-1 (A) it is not a principal purpose of the use of the tiered
arrangement involving such Member to permit the Company to satisfy the
100-partner limitation described in Treasury Regulations
Section 1.7704-1(h)(1)(ii) or (B) at no time during the term of the Company will
substantially all of the value of a beneficial owner’s interest in such Member
(directly or indirectly) be attributable to such Member’s ownership of its
Company Interest, and such Member has not transferred and will not transfer its
Company Interest on or through (x) an established securities market or (y) a
secondary market or the substantial equivalent thereof, all within the meaning
of Code Section 7704(b); and

(h) such Member’s taxable year-end is December 31 (or, in the case of a member
of the Habit Group, such Member has a 52-53 week taxable year ending on the last
Tuesday of each calendar year) or has been otherwise indicated to the Managing
Member in writing.

Section 6.6. Representations and Warranties of Habit. Habit represents and
warrants that:

(a) it is a corporation duly incorporated and is existing in good standing under
the laws of the State of Delaware;

(b) it has all requisite corporate power and authority to enter into and perform
this Agreement and to consummate the transactions contemplated hereby and to
issue the Common Stock in accordance with the terms hereof;

(c) the execution and delivery of this Agreement by Habit and the consummation
by it of the transactions contemplated hereby (including the issuance of the
Common Stock) have been duly authorized by all necessary action on the part of
Habit, including but not limited to all actions necessary to ensure that the
acquisition of shares Common Stock pursuant to the transactions contemplated
hereby, to the fullest extent of Habit’s Board of Directors’ power and authority
and to the extent permitted by law, shall not be subject to any “moratorium,”
“control share acquisition,” “business combination,” “fair price” or other form
of anti-takeover laws and regulations of any jurisdiction that may purport to be
applicable to this Agreement or the transactions contemplated hereby
(collectively, “Takeover Laws”); and

(d) this Agreement constitutes a legal, valid and binding obligation of Habit
enforceable against Habit in accordance with its terms, except as enforcement
may be limited by equitable principles or by bankruptcy, insolvency,
reorganization, moratorium, or similar laws relating to or limiting creditors’
rights generally.

 

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ARTICLE VII

WITHDRAWAL; DISSOLUTION; TRANSFER OF MEMBERSHIP INTERESTS;

ADMISSION OF NEW MEMBERS

Section 7.1. Member Withdrawal. No Member shall have the power or right to
withdraw or otherwise resign or be expelled from the Company prior to the
dissolution and winding up of the Company except pursuant to a Transfer
permitted under this Agreement.

Section 7.2. Dissolution.

(a) Events. The Company shall be dissolved and its affairs shall be wound up on
the first to occur of (i) the determination of the Managing Member, (ii) the
entry of a decree of judicial dissolution of the Company under Section 18-802 of
the Act or (iii) the termination of the legal existence of the last remaining
Member or the occurrence of any other event which terminates the continued
membership of the last remaining Member in the Company unless the Company is
continued without dissolution in a manner permitted by the Act.

(b) Actions Upon Dissolution. When the Company is dissolved, the business and
property of the Company shall be wound up and liquidated by the Managing Member
or, in the event of the unavailability of the Managing Member or if the Managing
Member shall so determine, such Member or other liquidating trustee as shall be
named by the Managing Member.

(c) Priority. A reasonable time shall be allowed for the orderly winding up of
the business and affairs of the Company and the liquidation of its assets
pursuant to this Section 7.2 to minimize any losses otherwise attendant upon
such winding up. Upon dissolution of the Company, the assets of the Company
shall be applied in the following manner and order of priority: (i) to
creditors, including Members who are creditors, to the extent otherwise
permitted by law, in satisfaction of liabilities of the Company (including all
contingent, conditional or unmatured claims), whether by payment or the making
of reasonable provision for payment thereof; and (ii) the balance shall be
distributed in accordance with Article 4 hereof.

(d) Cancellation of Certificate. The Company shall terminate when (i) all of the
assets of the Company, after payment of or due provision for all debts
liabilities and obligations of the Company, shall have been distributed to the
Members in the manner provided for in this Agreement and (ii) the Certificate
shall have been canceled in the manner required by the Act.

(e) Return of Capital. The liquidators of the Company shall not be personally
liable for the return of capital contributions to the Company or any portion
thereof to the Members (it being understood that any such return shall be made
solely from Company assets).

(f) Hart Scott Rodino. Notwithstanding any other provision in this Agreement, in
the event the Hart Scott Rodino Antitrust Improvements Act of 1976, as amended
(the “HSR Act”), is applicable to any Member by reason of the fact that any
assets of the Company will be distributed to such Member in connection with the
dissolution of the Company,

 

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the distribution of any assets of the Company shall not be consummated until
such time as the applicable waiting periods (and extensions thereof) under the
HSR Act have expired or otherwise been terminated with respect to each such
Member.

Section 7.3. Transfer by Members.

(a) Generally. Except as otherwise provided in Section 7.3(b), no Person may,
directly or indirectly, Transfer all or any portion of his Units or any interest
in the Company without the prior written consent of the Managing Member, which
consent may be given or withheld in the Managing Member’s sole discretion.
Notwithstanding anything to the contrary in this Section 7.3, (i) each of the
Members may exchange all or a portion of the Units owned by such Member in
accordance with Section 3.9 of this Agreement or (ii) if the Managing Member and
the exchanging Member shall mutually agree, Transfer such Units, together with a
corresponding number of shares of Class B Stock, to the Managing Member for
other consideration at any time following the consummation of the IPO.

(b) Permitted Transferees. Subject to Section 7.3(c), any Person shall have the
right to transfer, at any time, all or any portion of the Units or interests in
the Company held by such Person to such Person’s Permitted Transferee so long as
the Company is able to satisfy the 100-partner limitation under Regulations
Section 1.7704-1(h)(1)(ii) after such transfer, as determined by the Managing
Member in its sole discretion exercised in good faith. “Permitted Transferee”
for these purposes shall be:

(i) in the case of a Member that is an individual, (x) a transferee for bona
fide estate planning purposes, (y) any trust, partnership, limited liability
company or other entity for the direct or indirect benefit of the Member and/or
one or more members of his/her immediate family or (z) any immediate family
member or other dependent of such Member;

(ii) in the case of a Member that is a trust, (x) any individual that is a
settlor or direct or indirect beneficiary of such trust and/or one or more
members of the immediate family and/or other dependents of any such individual
or (y) any trust, partnership or other entity for the direct or indirect benefit
of any individual that is a settlor or direct or indirect beneficiary of such
trust and/or one or more members of the immediate family and/or other dependents
of any such individual;

(iii) in the case of a Member that is a partnership for U.S. federal income tax
purposes, (x) its limited partners, members or stockholders in a pro rata
distribution or (y) any investment fund or other entity managed by the same
entity that manages the Member (for so long as the transferee and transferor
continue to be managed by the same entity); or

(iv) any transferee with the prior written consent of the Board of Directors of
the Managing Member (in each case, in its sole discretion).

(v) For purposes of this Agreement, “immediate family” shall mean any
relationship by blood, current or former marriage or adoption, not more remote
than first cousin.

 

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(c) Conditions to Transfer. In addition to the other requirements set forth
in Section 7.3(a), unless waived by the Managing Member, no Transfer of all or
any portion of Units or any interest in the Company shall be made unless the
following conditions are met:

(i) The Transfer will not violate registration requirements under any federal or
state securities laws;

(ii) The Transfer is not made to any Person who lacks the legal right, power or
capacity to own such Unit or other interest in the Company;

(iii) The Transfer will not cause the Company to be treated as a “publicly
traded partnership” within the meaning of Section 7704 of the Code and the
regulations promulgated thereunder;

(iv) The Transfer will not cause any portion of the assets of the Company to
become “plan assets” of any “benefit plan investor” within the meaning of
regulations issued by the U.S. Department of Labor at Section 2510.3-101 of
Part 2510 of Chapter XXV, Title 29 of the Code of Federal Regulations as
modified by Section 3(42) of the Employee Retirement Income Security Act of
1974, as amended from time to time;

(v) The Transfer will not result in the Company being subject to the Investment
Company Act of 1940, as amended;

(vi) The Transfer is not made prior to the expiration of the lock-ups imposed by
the Underwriters, except as described in Section 3.9 of this Agreement or in the
case of Transfers by Habit to one or more of its Subsidiaries;

(vii) The transferor also Transfers to the same transferee a number of shares of
Class B Stock equal to the number of Units transferred to such Person; and

(viii) The transferee shall have executed and delivered to the Managing Member
such legal and/or tax opinions and written instruments (including copies of any
instruments of Transfer and such Assignee’s consent to be bound by this
Agreement as an Assignee) that are in a form satisfactory to the Managing
Member, as determined in the Managing Member’s sole discretion.

For the avoidance of doubt, the restrictions on Transfer contained in this
Section 7.3 shall not apply to the Transfer of any capital stock of the Managing
Member; provided that no shares of Class B Stock may be transferred unless a
corresponding number of Units are Transferred therewith in accordance with this
Agreement.

In addition, notwithstanding any contrary provision in this Agreement, to the
extent the Managing Member shall determine that there is a material risk the
Company (and interests in the Company) do not or will not meet the requirements
of Treasury Regulation Section 1.7704-1(h), the Managing Member may impose such
restrictions on the Transfer of Units or other interests in the Company as the
Managing Member may determine to be necessary or advisable to avoid any material
risk that the Company could be treated as a publicly traded partnership under
Section 7704 of the Code.

 

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Any Transfer in violation of this Section 7.3 shall be null and void ab initio
and of no effect. For purposes of this Section 7.3 only, the term “Transfer”
includes any Pledge. For the avoidance of doubt and notwithstanding anything to
the contrary, any “disguised sale” described in Section 8.4(g) hereof shall be
permitted hereunder.

(d) Effect of Transfer in Violation of Agreement. Each Member hereby
acknowledges the reasonableness of the prohibition contained in
this Section 7.3 in view of the purposes of the Company and the relationship of
the Members. Any purported Transfer in violation of this Agreement shall be null
and void and ineffective to transfer any Units or other interests in the Company
and shall not be binding upon or be recognized by the Company, and any such
purported transferee shall not be treated as or deemed to be a Member for any
purpose. In the event that any Member shall at any time transfer Units in
violation of any of the provisions of this Agreement, in addition to any other
rights and remedies that the Company may be entitled to, at law or in equity,
the Company shall have the right to obtain and be entitled to, an order
restraining or enjoining such Transfer, it being expressly acknowledged and
agreed that damages at law would be an inadequate remedy for a Transfer in
violation of this Agreement.

(e) Indirect Transfers. The parties each acknowledge and agree that each Member
shall not, for so long as it holds Units, without the prior written consent of
the Managing Member, directly or indirectly (x) issue new equity of itself or
equity-like rights, options, warrants or other rights to acquire equity or
equity-like rights or any economic rights (including debt) of itself to any
Person except to its initial owners or its Permitted Transferees or Permitted
Transferees of its initial owners or (y) permit any Transfer of the membership
and/or economic interests in itself and/or equity interests or economic rights
(including debt) of itself other than to its Permitted Transferees or as
permitted by Section 7.3.

Section 7.4. Admission or Substitution of New Members.

(a) Admission. Without the consent of any other Person, the Managing Member
shall have the right to admit as a Substituted Member or an Additional Member,
any Person who acquires an interest in the Company, or any part thereof, from a
Member or from the Company. Concurrently with the admission of a Substituted
Member or an Additional Member after the date hereof, the Managing Member shall
forthwith (i) amend the Schedule of Members to reflect the name and address of
such Substituted Member or Additional Member and to eliminate or modify, as
applicable, the name and address of the Transferring Member with regard to the
Transferred Units and (ii) cause any necessary papers to be filed and recorded
and notice to be given wherever and to the extent required showing the
substitution of a Transferee as a Substituted Member in place of the
Transferring Member, or the admission of an Additional Member, in each case, at
the expense, including payment of any professional and filing fees incurred, of
such Transferor. In addition, the Transferring Member hereby indemnifies the
Managing Member and the Company against any losses, claims, damages or
liabilities to which the Managing Member, the Company, or any of their
Affiliates may become subject arising out of or based upon any false
representation or warranty made by, or breach or failure to comply with any
covenant or agreement of, such Transferring Member or such Substituted Member in
connection with such Transfer.

 

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(b) Conditions and Limitations. The admission of any Person as a Substituted
Member or an Additional Member shall be conditioned upon (i) such Person’s
written acceptance and adoption of all the terms and provisions of this
Agreement, either by (A) execution and delivery of a counterpart signature
page to this Agreement countersigned by the Managing Member on behalf of the
Company or (B) any other writing evidencing the intent of such Person to become
a Substituted Member or an Additional Member and such writing is accepted by the
Managing Member on behalf of the Company.

(c) Effect of Transfer to Substituted Member. Following the Transfer of any Unit
or other interest in the Company that is permitted under Sections 7.3, the
Transferee of such Unit or other interest in the Company shall be treated as
having made all of the capital contributions in respect of, as having been
allocated all the items of income and loss allocated in respect of, and received
all of the distributions received in respect of, such Unit or other interest in
the Company, shall succeed to the Capital Account balance associated with such
Unit or other interest in the Company, shall receive allocations and
distributions under ARTICLE IV, ARTICLE V and Section 7.2 in respect of such
Unit or other interest in the Company and otherwise shall become a Substituted
Member entitled to all the rights of a Member with respect to such Unit or other
interest in the Company.

Section 7.5. Additional Requirements. Notwithstanding any contrary provision in
this Agreement, for the avoidance of doubt, the Managing Member may impose such
vesting requirements, forfeiture provisions, Transfer restrictions, minimum
retained ownership requirements or other similar provisions with respect to any
interests in the Company that are outstanding as of the date of this Agreement
or are created hereafter, with the written consent of the holder of such
interests in the Company. Such requirements, provisions and restrictions need
not be uniform among holders of interests in the Company and may be waived or
released by the Managing Member in its sole discretion with respect to all or a
portion of the interests in the Company owned by any one or more Members or
Assignees at any time and from time to time, and such actions or omissions by
the Managing Member shall not constitute the breach of this Agreement or of any
duty hereunder or otherwise existing at law, in equity or otherwise.

Section 7.6. Bankruptcy. Notwithstanding any other provision of this Agreement,
the Bankruptcy of a Member shall not cause such Member to cease to be a partner
of the Company and upon the occurrence of such an event, the Company shall
continue without dissolution.

ARTICLE VIII

BOOKS AND RECORDS; FINANCIAL STATEMENTS AND OTHER INFORMATION;

TAX MATTERS

Section 8.1. Books and Records. The Company shall keep at its principal
executive office (i) correct and complete books and records of account (which,
in the case of financial records, shall be kept in accordance with GAAP),
(ii) minutes of the proceedings of meetings of the Members, (iii) a current list
of the directors and officers of the Company and its Subsidiaries and their
respective residence addresses, and (iv) a record containing the names and
addresses of all Members, the total number of Units held by each Member, and the
dates when they respectively became the owners of record thereof. Any of the
foregoing books, minutes or records may be in written form or in any other form
capable of being converted into written form within a reasonable time. Except as
expressly set forth in this Agreement, notwithstanding the rights set forth in
Section 18-305 of the Act, no Member shall have the right to obtain information
from the Company.

 

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Section 8.2. Information.

(a) All determinations, valuations and other matters of judgment required to be
made for ordinary course accounting purposes under this Agreement shall be made
by the Managing Member and shall be conclusive and binding on all Members, their
Successors in Interest and any other Person who is a party to or otherwise bound
by this Agreement, and to the fullest extent permitted by law or as otherwise
provided in this Agreement, no such Person shall have the right to an accounting
or an appraisal of the assets of the Company or any successor thereto.

Section 8.3. Fiscal Year. The Company shall operate on a 52- or 53-week fiscal
year ending on the last Tuesday of each calendar year for financial reporting
purposes, except as determined by the Managing Member in its sole discretion or
required under Section 706 of the Code.

Section 8.4. Certain Tax Matters.

(a) Preparation of Returns. The Managing Member shall use commercially
reasonable efforts to cause to be prepared all federal, state and local tax
returns of the Company for each year for which such returns are required to be
filed and shall use commercially reasonable efforts to cause such returns to be
timely filed. The Managing Member shall determine the appropriate treatment of
each item of income, gain, loss, deduction and credit of the Company and the
accounting methods and conventions under the tax laws of the United States of
America, the several states and other relevant jurisdictions as to the treatment
of any such item or any other method or procedure related to the preparation of
such tax returns. Except as specifically provided otherwise in this Agreement,
the Managing Member may cause the Company to make or refrain from making any and
all elections permitted by such tax laws. The Managing Member shall use
reasonable best efforts to cause the Company to provide to each Member a
Schedule K-1 with respect to the Company (and such other information with
respect to the Company necessary for such Member to prepare its U.S. federal
income, state and local tax returns) for each taxable year within one-hundred
(100) days after the close of such taxable year. Additionally, the Managing
Member shall cause the Company to provide to each Member, to the extent
commercially reasonable and available to the Company without undue cost, any
information reasonably required by the Member to prepare, or in connection with
an audit of, such Member’s income tax returns.

(b) Consistent Treatment. Each Member agrees that it shall not, except as
otherwise required by applicable law or regulatory requirement (i) treat, on its
tax returns, any item of income, gain, loss, deduction or credit relating to its
interest in the Company in a manner inconsistent with the treatment of such item
by the Company as reflected on the Form K-1 or other information statement
furnished by the Company to such Member for use in preparing its tax returns or
(ii) file any claim for refund relating to any such item based on, or which
would result in, such inconsistent treatment. Each Member that determines it is
required by applicable law or regulatory requirement to take any of the actions
described in clause (i) or (ii) of the preceding sentence shall provide thirty
(30) day’s advance written notice to the Managing Member.

 

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(c) Tax Reporting on Unvested Common Units. The Company shall treat a Member
holding an Unvested Common Unit as the owner of such Unit, and the Company shall
file its IRS Form 1065, and the Company shall issue appropriate Schedule K-1s,
if any, to such Member, allocating to such Member its distributive share of all
items of income, gain, loss, deduction and credit associated with such Unvested
Common Unit as if it were fully vested. Each Member agrees to take into account
such distributive share in computing its U.S. federal income tax liability for
the entire period during which it holds any Unvested Common Unit. The Company
and each Member agree not to claim a deduction (as wages, compensation or
otherwise) for U.S. federal, state and local income tax purposes the fair market
value of any Unvested Common Unit issued to a Member, whether at the time of
grant of the Unit or at the time the Unit becomes a vested Unit. Each recipient
of a Common Unit that is subject to vesting conditions at the time of issuance
agrees to timely and properly file an election under Section 83(b) of the Code
with respect to such Common Unit and shall promptly provide the Company with a
copy of such election.

(d) Duties of the Tax Matters Member. The Company and each Member hereby
designate the Managing Member (or such other Person as the Managing Member may
designate) as the “tax matters partner” for purposes of Code Section 6231(a)(7)
and any analogous provisions of state land and in such capacity is referred to
as the “Tax Matters Member”. The Tax Matters Member, on behalf of the Company
and its Members, shall (subject to the terms of the Recapitalization Agreement,
Section 3.9 of this Agreement, and the Tax Receivable Agreement) be permitted to
make any filing, election, settlement or determination under the Code, the
Treasury Regulations, or any other law or regulation permitted by law. Any
actions of the Tax Matters Member shall be final and binding upon the Company
and all Members. All expenses incurred by the Tax Matters Member in connection
therewith (including attorneys’, accountants’ and other experts’ fees and
disbursements) shall be expenses of, and payable by, the Company. No Member
shall have the right, without the consent of the Tax Matters Member (but subject
to the terms of the Recapitalization Agreement, Section 3.9 of this Agreement,
and the Tax Receivable Agreement), to (1) participate in the audit of any
Company tax return, (2) file any amended return or claim for refund in
connection with any item of income, gain, loss, deduction or credit (other than
items which are not partnership items within the meaning of Code
Section 6231(a)(4) or which cease to be partnership items under Code
Section 6231(b)) reflected on any tax return of the Company, (3) participate in
any administrative or judicial proceedings conducted by the Company or the Tax
Matters Member arising out of or in connection with any such audit, amended
return, claim for refund or denial of such claim, or (4) appeal, challenge or
otherwise protest any adverse findings in any such audit conducted by the
Company or the Tax Matters Member or with respect to any such amended return or
claim for refund filed by the Company or the Tax Matters Member or in any such
administrative or judicial proceedings conducted by the Company or the Tax
Matters Member.

(e) Certain Filings. Upon the Transfer of an interest in the Company (within the
meaning of the Code), a sale of Company assets or a liquidation of the Company,
the Members shall provide the Managing Member with information and shall make
tax filings as reasonably requested by the Managing Member and required under
applicable law.

 

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(f) FATCA. Notwithstanding anything in this Agreement to the contrary, the
Managing Member may take such actions as it determines necessary or appropriate
(including causing a Member to withdraw from the Company under such terms and
conditions established by the Managing Member) to comply with FATCA. “FATCA”
means (i) Sections 1471 through 1474 of the Code or any successor provision that
is substantively the equivalent thereof (and, in each case, any Treasury
Regulations promulgated thereunder or official interpretations thereof),
(ii) any similar legislation, regulations or guidance enacted in any
jurisdiction that seeks to implement similar tax reporting and/or withholding
tax regimes, and (iii) any treaty, agreement with any governmental authority or
intergovernmental agreement related to the foregoing. Each Member shall
indemnify and hold harmless the Managing Member and the Company for any costs
and expenses arising out of its failure to provide information, documentation,
waivers or certifications requested by the Managing Member to satisfy any
requirement imposed under FATCA.

(g) Tax Treatment of Certain IPO Proceeds. The parties agree to report for all
tax and Capital Account purposes as a “disguised sale” pursuant to Code
Section 707 of partnership interests in the Company between the Members (other
than the members of the Habit Group) and the members of the Habit Group (x) the
distribution on or near the date hereof of cash proceeds by the Company to the
Members (other than the members of the Habit Group) and (y) the contribution on
or near the date hereof of an equal amount of cash proceeds to the Company by
the members of the Habit Group.

ARTICLE IX

MISCELLANEOUS

Section 9.1. Schedules. The Managing Member may from time to time execute and
deliver to the Members schedules which set forth information contained in the
books and records of the Company and any other matters deemed appropriate by the
Managing Member. Such schedules shall be for information purposes only and shall
not be deemed to be part of this Agreement for any purpose whatsoever.

Section 9.2. Governing Law. THIS AGREEMENT IS GOVERNED BY AND SHALL BE CONSTRUED
IN ACCORDANCE WITH THE LAW OF THE STATE OF DELAWARE, EXCLUDING ANY CONFLICT OF
LAWS RULE OR PRINCIPLE THAT MIGHT REFER THE GOVERNANCE OR THE CONSTRUCTION OF
THIS AGREEMENT TO THE LAW OF ANOTHER JURISDICTION.

Section 9.3. Consent to Jurisdiction. Each party to this Agreement, by its
execution hereof, (a) hereby irrevocably submits to the exclusive jurisdiction
of the Delaware Court of Chancery, for the purpose of any action, claim, cause
of action or suit (in contract, tort or otherwise), inquiry, proceeding or
investigation arising out of or based upon this Agreement or relating to the
subject matter hereof, (b) hereby waives to the extent not prohibited by
applicable law, and agrees not to assert, and agrees not to allow any of its
Subsidiaries to assert, by way of motion, as a defense or otherwise, in any such
action, any claim that it is not subject personally to the jurisdiction of the
above-named court, that its property is exempt or immune from attachment or
execution, that any such proceeding brought in the above-named court is
improper, or that this Agreement or the subject matter hereof or thereof may not
be enforced in or by such court and (c) hereby agrees not to commence or
maintain an action, claim, cause of

 

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action or suit (in contract, tort or otherwise), inquiry, proceeding or
investigation arising out of or based upon this Agreement or relating to the
subject matter hereof or thereof other than before the above-named court nor to
make any motion or take any other action seeking or intending to cause the
transfer or removal of any such action, claim, cause of action or suit (in
contract, tort or otherwise), inquiry, proceeding or investigation to any court
other than the above-named court whether on the grounds of inconvenient forum or
otherwise. Notwithstanding the foregoing, to the extent that any party hereto is
or becomes a party in any litigation in connection with which it may assert
indemnification rights set forth in this agreement, the court in which such
litigation is being heard shall be deemed to be included in clause (a) above.
Notwithstanding the foregoing, any party to this Agreement may commence and
maintain an action to enforce judgment of the above-named court in any court of
competent jurisdiction. Each party hereto hereby consents to service of process
in any such proceeding in any manner permitted by Delaware law, and agrees that
service of process by registered or certified mail, return receipt requested, at
its address specified pursuant to Section 9.6 hereof is reasonably calculated to
give actual notice.

Section 9.4. Successors and Assigns. This Agreement shall be binding upon and
shall inure to the benefit of the parties hereto and their respective Successors
in Interest; provided that no Person claiming by, through or under a Member
(whether as such Member’s Successor in Interest or otherwise), as distinct from
such Member itself, shall have any rights as, or in respect to, a Member
(including the right to approve or vote on any matter or to notice thereof).

Section 9.5. Amendments and Waivers. This Agreement may be amended,
supplemented, waived or modified by the written consent of the Managing Member
in its sole discretion without the approval of any other Member or other Person;
provided that except as otherwise provided herein (including in Section 3.2(a)),
no amendment may materially and adversely affect the rights of a holder of
Units, as such, other than on a pro rata basis with other holders of Units of
the same Class without the consent of such holder (or, if there is more than one
such holder that is so affected, without the consent of a majority of such
affected holders in accordance with their holdings of Units), provided further,
however, that notwithstanding the foregoing, the Managing Member may, without
the written consent of any other Member or any other Person, amend, supplement,
waive or modify any provision of this Agreement and execute, swear to,
acknowledge, deliver, file and record whatever documents may be required in
connection therewith, to reflect: (1) any amendment, supplement, waiver or
modification that the Managing Member determines to be necessary or appropriate
in connection with the creation, authorization or issuance of any Class of Units
or other Equity Securities in the Company or other Company securities in
accordance with this Agreement; (2) the admission, substitution, withdrawal or
removal of Members in accordance with this Agreement; (3) a change in the name
of the Company, the location of the principal place of business of the Company,
the registered agent of the Company or the registered office of the Company;
(4) any amendment, supplement, waiver or modification that the Managing Member
determines in its sole discretion to be necessary or appropriate to address
changes in Treasury Regulations, legislation or interpretation; or (5) a change
in the Fiscal Year of the Company and any other changes that the Managing Member
determines to be necessary or appropriate as a result of a change in the Fiscal
Year of the Company, including a change in the dates on which distributions are
to be made by the Company; provided further, that the books and records of the
Company shall be deemed amended from time to time to reflect the admission of a
new Member, the withdrawal or

 

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resignation of a Member, the adjustment of the Units or other interests in the
Company resulting from any issuance, Transfer or other disposition of Units or
other interests in the Company, in each case that is made in accordance with the
provisions hereof. If an amendment has been approved in accordance with this
agreement, such amendment shall be adopted and effective with respect to all
Members. Upon obtaining such approvals as may be required by this Agreement, and
without further action or execution on the part of any other Member or other
Person, any amendment to this Agreement may be implemented and reflected in a
writing executed solely by the Managing Member and the other Members shall be
deemed a party to and bound by such amendment.

Notwithstanding the foregoing, in addition to any other consent that may be
required, any amendment of this Agreement that requires a holder of Common Units
on the date hereof to make a capital contribution to the Company (including as a
condition to maintaining any rights necessary to permit such holders to exercise
their rights under Section 3.9 of this Agreement) shall require the consent of
such holder of Common Units.

No failure or delay by any party in exercising any right, power or privilege
hereunder (other than a failure or delay beyond a period of time specified
herein) shall operate as a waiver thereof nor shall any single or partial
exercise thereof preclude any other or further exercise thereof or the exercise
of any other right, power or privilege. The rights and remedies herein provided
shall be cumulative and not exclusive of any rights or remedies provided by law.

Section 9.6. Notices. Whenever notice is required or permitted by this Agreement
to be given, such notice shall be in writing and shall be given to any Member at
such Member’s address or facsimile number shown in the Company’s books and
records, or, if given to the Company, at the following address:

The Habit Restaurants, LLC

17320 Red Hill Avenue, Suite 140

Irvine, California

Attention: Russell Bendel

Email: RBendel@habitburger.com

Facsimile: (949) 852-4650

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

KarpReilly, LLC

104 Field Point Road

Greenwich, CT 06830

Attention:     Christopher Reilly

Email:           creilly@karpreilly.com

Facsimile:     (203) 504-9912

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

Ropes & Gray

1211 Avenue of the Americas

New York, New York 10036

 

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Attention:     Carl Marcellino, Esq.

Email:           carl.marcellino@ropesgray.com

Facsimile:     (646) 728-1523

Each proper notice shall be effective upon any of the following: (a) personal
delivery to the recipient, (b) when sent by facsimile to the recipient (with
confirmation of receipt), (c) one Business Day after being sent to the recipient
by reputable overnight courier service (charges prepaid) or (d) three Business
Days after being deposited in the mail (first class or airmail postage prepaid).

Section 9.7. Counterparts. This Agreement may be executed simultaneously in two
or more separate counterparts, any one of which need not contain the signatures
of more than one party, but each of which shall be an original and all of which
together shall constitute one and the same agreement binding on all the parties
hereto.

Section 9.8. Power of Attorney. Each Member hereby irrevocably appoints the
Managing Member as such Member’s true and lawful representative and attorney in
fact, each acting alone, in such Member’s name, place and stead, (a) to make,
execute, sign and file all instruments, documents and certificates which, from
time to time, may be required to set forth any amendment to this Agreement or
which may be required by this Agreement or by the laws of the United States of
America, the State of Delaware or any other state in which the Company shall
determine to do business, or any political subdivision or agency thereof and
(b) to execute, implement and continue the valid and subsisting existence of the
Company or to qualify and continue the Company as a foreign limited liability
company in all jurisdictions in which the Company may conduct business. Such
power of attorney is coupled with an interest and shall survive and continue in
full force and effect notwithstanding the subsequent withdrawal from the Company
of any Member for any reason and shall survive and shall not be affected by the
disability, incapacity, bankruptcy or dissolution of such Member. No power of
attorney granted in this Agreement shall revoke any previously granted power of
attorney.

Section 9.9. Entire Agreement. Immediately prior to the IPO, the Managing Member
shall enter into the Tax Receivable Agreement. This Agreement, the Tax
Receivable Agreement and the other documents and agreements referred to herein
or entered into concurrently herewith embody the entire agreement and
understanding of the parties hereto in respect of the subject matter contained
herein; provided that such other agreements and documents shall not be deemed to
be a part of, a modification of or an amendment to this Agreement. There are no
restrictions, promises, representations, warranties, covenants or undertakings,
other than those expressly set forth or referred to herein.

Section 9.10. Remedies. Each Member shall have all rights and remedies set forth
in this Agreement and all rights and remedies that such Person has been granted
at any time under any other agreement or contract and all of the rights that
such Person has under any applicable law. Any Person having any rights under any
provision of this Agreement or any other agreements contemplated hereby shall be
entitled to enforce such rights specifically (without posting a bond or other
security) to recover damages by reason of any breach of any provision of this
Agreement and to exercise all other rights granted by applicable law.

 

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Section 9.11. Severability. Whenever possible, each provision of this Agreement
shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement is held to be invalid,
illegal or unenforceable in any respect under any applicable law or rule in any
jurisdiction, such invalidity, illegality or unenforceability shall not affect
any other provision or any other jurisdiction, but this Agreement shall be
reformed, construed and enforced in such jurisdiction as if such invalid,
illegal or unenforceable provision had never been contained herein.

Section 9.12. Creditors. None of the provisions of this Agreement shall be for
the benefit of or enforceable by any creditors of the Company or any of its
Affiliates, and no creditor who makes a loan to the Company or any of its
Affiliates may have or acquire (except pursuant to the terms of a separate
agreement executed by the Company in favor of such creditor) at any time as a
result of making the loan any direct or indirect interest in Company profits,
losses, distributions, capital or property other than as a secured creditor.

Section 9.13. Waiver. No failure by any party to insist upon the strict
performance of any covenant, duty, agreement or condition of this Agreement or
to exercise any right or remedy consequent upon a breach thereof shall
constitute a waiver of any such breach or any other covenant, duty, agreement or
condition.

Section 9.14. Further Action. The parties agree to execute and deliver all
documents, provide all information and take or refrain from taking such actions
as may be necessary or appropriate to achieve the purposes of this Agreement.

Section 9.15. Delivery by Facsimile or Email. This Agreement, the agreements
referred to herein, and each other agreement or instrument entered into in
connection herewith or therewith or contemplated hereby or thereby, and any
amendments hereto or thereto, to the extent signed and delivered by means of a
facsimile machine or email with scan or facsimile attachment, shall be treated
in all manner and respects as an original agreement or instrument and shall be
considered to have the same binding legal effect as if it were the original
signed version thereof delivered in person. At the request of any party hereto
or to any such agreement or instrument, each other party hereto or thereto shall
re execute original forms thereof and deliver them to all other parties. No
party hereto or to any such agreement or instrument shall raise the use of a
facsimile machine or email to deliver a signature or the fact that any signature
or agreement or instrument was transmitted or communicated through the use of a
facsimile machine or email as a defense to the formation or enforceability of a
contract, and each such party forever waives any such defense.

 

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IN WITNESS WHEREOF, the parties have executed this Limited Liability Company
Agreement.

 

MANAGING MEMBER THE HABIT RESTAURANTS, INC. By:

/s/ Russell W. Bendel

Name: Russell W. Bendel Title: Chief Executive Officer

[Signature Page to The Habit Restaurants, LLC Limited Liability Company
Agreement]

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MEMBERS:

 

KarpReilly Investments LLC By:

/s/ Chris Reilly

Name: Chris Reilly Title: Managing Member

[Signature Page to The Habit Restaurants, LLC Limited Liability Company
Agreement]

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

MEMBERS:     LLC MEMBERS     By:         Name:       Title:  

[Signature Page to The Habit Restaurants, LLC Limited Liability Company
Agreement]

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

Exhibit A

SCHEDULE OF MEMBERS

 

Member

   Common Units    Unvested Common
Units    Percentage Interest KarpReilly HB Co-Invest, LLC          Habit
Restaurant Holdings 45, Inc.          Habit Restaurant Holdings 25, Inc.      
   Habit Restaurant Holdings 15, Inc.          Habit Restaurant Holdings 10,
Inc.          Habit Restaurant Holdings 5, Inc.         

J.P. Morgan US Direct Corporate Financial Institutional Investors III LLC

         522 5th Avenue Fund, L.P.          Reichard Bros. Enterprises, Inc.   
      Habit Founders, LLC          Fresh Concepts, LLC          Axiom Partners
LLC          Russell Bendel          Ira Fils          Anthony Serritella      
   Certain Employees         

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Exhibit B

EXCHANGE NOTICE

The Habit Restaurants, Inc.

17320 Red Hill Avenue

Suite 140

Irvine, CA 92614

Attention: Chief Financial Officer

Reference is hereby made to the Amended and Restated Limited Liability Company
Agreement, dated as of [            ], 2014 (the “LLC Agreement”), among The
Habit Restaurants, Inc., a Delaware corporation, and the holders of LLC Units
(as defined herein) from time to time party thereto. Capitalized terms used but
not defined herein shall have the meanings given to them in the LLC Agreement.

The undersigned LLC Unit-holder hereby transfers to the Corporation the number
of LLC Units set forth below in exchange for a Cash Exchange Payment to the
account set forth below or for shares of Common Stock to be issued in its name
as set forth below, as set forth in the Limited Liability Company Agreement.

Legal Name of LLC Unit-holder:                 
                                         
                                         
                                                               

Address:                                                                  
                                         
                                         
                                                      

Number of LLC Units to be Exchanged:               
                                         
                                         
                                                     

Cash Exchange Payment Instructions:                 
                                         
                                         
                                                      

The undersigned hereby represents and warrants that (i) the undersigned has full
legal capacity to execute and deliver this Exchange Notice and to perform the
undersigned’s obligations hereunder; (ii) this Exchange Notice has been duly
executed and delivered by the undersigned and is the legal, valid and binding
obligation of the undersigned enforceable against it in accordance with the
terms thereof or hereof, as the case may be, subject to applicable bankruptcy,
insolvency and similar laws affecting creditors’ rights generally and the
availability of equitable remedies; (iii) the LLC Units subject to this Exchange
Notice are being transferred to the Corporation free and clear of any pledge,
lien, security interest, encumbrance, equities or claim; and (iv) no consent,
approval, authorization, order, registration or qualification of any third party
or with any court or governmental agency or body having jurisdiction over the
undersigned or the LLC Units subject to this Exchange Notice is required to be
obtained by the undersigned for the transfer of such LLC Units to the
Corporation.

The undersigned hereby irrevocably constitutes and appoints any officer of the
Corporation as the attorney of the undersigned, with full power of substitution
and resubstitution in the premises, to do any and all things and to take any and
all actions that may be necessary to transfer to the Corporation the LLC Units
subject to this Exchange Notice and to deliver to the undersigned the shares of
Common Stock or cash to be delivered in Exchange therefor.

IN WITNESS WHEREOF the undersigned, by authority duly given, has caused this
Exchange Notice to be executed and delivered by the undersigned or by its duly
authorized attorney.

 

 

Name: Dated:

 

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Annex A

 

Member

 

Distribution Proceeds

KarpReilly HB Co-Invest, LLC   Habit Restaurant Holdings 45, Inc.   Habit
Restaurant Holdings 25, Inc.   Habit Restaurant Holdings 15, Inc.   Habit
Restaurant Holdings 10, Inc.   Habit Restaurant Holdings 5, Inc.   J.P. Morgan
US Direct Corporate Financial Institutional Investors III LLC   522 5th Avenue
Fund, L.P.   Reichard Bros. Enterprises, Inc.   Habit Founders, LLC   Fresh
Concepts, LLC   Axiom Partners LLC   Russell Bendel   Ira Fils   Anthony
Serritella   Certain Employees