Document:

Exhibit 10.5

 

NAME LICENSE AGREEMENT

 

THIS NAME LICENSE AGREEMENT (this “Agreement”) is made effective as of October 31, 2016 (the “Effective Date”) by and between Yum! Brands, Inc., a North Carolina corporation having its principal place of business at 1441 Gardiner Lane, Louisville, Kentucky 40213 (“Licensor”), and Yum China Holdings, Inc., a Delaware corporation having its principal place of business at 16/F Two Grand Gateway, 3 Hong Qiao Road, Shanghai 200030, People’s Republic of China (“Licensee”) (each, a “Party,” and collectively, the “Parties”).

 

RECITALS

 

WHEREAS, Licensor owns rights to the name and mark “YUM!” in various countries throughout the world, including, without limitation, the People’s Republic of China (the “PRC”);

 

WHEREAS, under the Master License Agreement dated October 31, 2016 between Yum! Restaurants Asia Pte. Ltd., a wholly-owned indirect subsidiary of Licensor (“YRAPL”), and Yum Restaurants Consulting (Shanghai) Company Ltd., a wholly-owned indirect subsidiary of Licensee (“YCCL”) (as such Master License Agreement may be amended from time to time in accordance with its terms, the “MLA”), YRAPL granted YCCL a license to the Brand System IP owned by Licensor and its subsidiaries to operate Brand Restaurant Businesses and to grant Sublicenses to others to operate Restaurants under the Brands in the Territory;

 

WHEREAS, Licensee was formed as a result of a spin-off of Licensor’s business division with primary responsibility for the conduct of the Brand Restaurant Businesses in the PRC; and

 

WHEREAS, Licensee is incorporated under the corporate name Yum China Holdings, Inc. (the “Licensee Name”) and would like to formalize, and Licensor is willing to formally grant to Licensee, the right and license to use (i) the name and mark “YUM” (without the exclamation mark) (the “Licensed Mark”) as part of the Licensee Name and, on letterhead or business cards of Licensee, in conjunction with the Yum! Bubble Logo as shown in Schedule 1 and as may be amended by Licensor from time to time (the “Licensed Logo”); (ii) the Licensed Mark as part of the domain name “yumchina.com” (the “Domain Name”); and  (iii) the Licensed Mark as part of its stock identification symbol “YUMC” (the “Licensee Ticker Symbol”) on any stock exchange on which the Licensee’s common stock is listed (each, an “Applicable Exchange”), and to permit those subsidiaries of Licensee established under the law of the PRC and identified on Schedule 2 to this Agreement (each, a “Subsidiary”) to use as a part of such Subsidiary’s corporate name the Licensed Mark, as such corporate name has been approved in advance in writing by Licensor to Licensee (each, a “Subsidiary Name”).

 

NOW, THEREFORE, the Parties agree, in consideration for the mutual promises herein, as follows:

 

1.             Definitions.  Any capitalized term used in this Agreement and not defined in this Agreement (including, without limitation, the term “Territory”) shall have the meaning given to such term in the MLA.  In addition, the word “Term” means the period of time commencing on the Effective Date and ending upon the termination of this Agreement.

 

2.             Licensee Name, Licensed Logo, Domain Name, and Licensee Ticker Symbol.  Subject to the terms and conditions of this Agreement, Licensor hereby grants to Licensee during the Term a non-exclusive, non-transferable, non-sublicensable (except by Licensee to the Subsidiaries under Section 3), royalty-free right to use (i) the Licensed Mark solely as part of the Licensee Name as approved in advance in writing by Licensor to Licensee, (ii) the Licensed Logo on letterhead or business cards of Licensee, (iii) the Licensed Mark as part of the Domain Name, and (iv) the Licensed Mark as part of the Licensee Ticker Symbol, all only in connection with, and while, operating one or more Brand Restaurant Businesses in the Territory, always subject to and in compliance with the terms and conditions of this Agreement. Without Licensor’s express prior written consent, Licensee shall not and shall cause its Affiliates not to: (i) use the Licensee Name, or the Licensee Ticker Symbol as or in or directly with a logo (including the Licensed Logo) or in a stylized form or appearance; (ii) use the Licensed Mark or a variation thereof in any domain name, or obtain a registration for a domain name

 

1

 

using the Licensed Mark or a variation thereof, other than the Domain Name; (iii) use any translation or transliteration of the Licensed Mark, Licensee Name, Domain Name, or Licensee Ticker Symbol; or (iv) make any use the Licensed Mark standing alone or otherwise apart from the Licensee Name, the Licensed Logo on letterhead or business cards of Licensee, the Domain Name, or the Licensee Ticker Symbol.  For the avoidance of doubt, Licensor does not grant or give, and Licensor shall not be deemed in this Section 2 or otherwise under this Agreement to grant or give, any license or permission for any sublicensee or franchisee of Licensee or any Subsidiary to use, or for Licensee or any Subsidiary to grant any such sublicensee or franchisee the right to use, the Licensed Mark or any translation or transliteration thereof (other than Licensee’s right to grant rights to the Subsidiaries under Section 3). For the purpose of clarification, the “百胜” term is not a translation or transliteration of the Licensed Mark.  Licensee agrees that it shall and that it shall cause its Subsidiaries to refer to Licensor solely as “Yum! Brands, Inc.” (and not, for the avoidance of doubt, as any Chinese transliteration thereof), unless otherwise consented to in advance in writing by Licensor.

 

3.             Subsidiary Names.   Subject to the terms and conditions of this Agreement, Licensor hereby grants to Licensee during the Term a non-exclusive, non-transferable, royalty-free right to sublicense to each Subsidiary the right to use in the Subsidiary Name of such Subsidiary the Licensed Mark as approved in advance in writing by Licensor to Licensee for such Subsidiary Name, subject to, and on the condition that, such Subsidiary complies with all provisions in this Agreement with regard to such Subsidiary Name to the same extent as they apply to the Licensee Name, always subject to and in compliance with the terms and conditions of this Agreement.  Without Licensor’s express prior written consent, Licensee shall cause each Subsidiary not to: (i) use its Subsidiary Name as or in or directly with a logo or in a stylized form or appearance; or (ii) use any translation or transliteration of the Licensed Mark or Subsidiary Name.

 

4.             Change of Licensee Name, Licensed Logo, Domain Name, or Licensee Ticker Symbol or Subsidiary Name.  Licensee may not change, amend, alter, or replace all or any part of the Licensee Name, the Domain Name, or the Licensee Ticker Symbol, if the amended Licensee Name, Domain Name, or Licensee Ticker Symbol still incorporates the Licensed Mark or anything similar, without an amendment to this Agreement in accordance with Section 13(h). Licensee may not change, amend, or alter the Licensed Logo.  In the event that Licensee is required, by applicable law, regulation, rule, or order of a court or governmental agency, or the applicable rules governing the listing of stock on any Applicable Exchange, to change, amend, alter, or replace all or any part of the Licensee Name, the Domain Name, or the Licensee Ticker Symbol, Licensee shall promptly notify Licensor of such requirement in writing.  Licensee shall cause each Subsidiary not to change, amend, alter, or replace all or any part of its Subsidiary Name, if the amended Subsidiary Name still incorporates the Licensed Mark or anything similar, without Licensor’s express prior written consent to Licensee.  In the event that a Subsidiary is required, by applicable law, regulation, rule, or order of a court or governmental agency, to change, amend, alter, or replace all or any part of its Subsidiary Name, Licensee shall promptly notify Licensor of such requirement in writing.  Licensor shall have the discretionary right to refuse to agree to any change, amendment, alteration, or replacement of the Licensee Name, the Domain Name, the Licensee Ticker Symbol, or any Subsidiary Name, if the amended Licensee Name, Domain Name, or Licensee Ticker Symbol still incorporates the Licensed Mark or anything similar.

 

5.             Limitations.  Other than the limited rights under Sections 2 and 3 during the Term, Licensee does not have a license or right to, and Licensee shall not and shall cause each Subsidiary not to: (i) transfer, assign, sublicense, or grant the right to sublicense, or otherwise grant others, the right to use the Licensed Mark (or any other mark or name confusingly similar to the Licensed Mark or any translation or transliteration of the Licensed Mark or any other mark or name confusingly similar to the Licensed Mark) in any manner or for any purpose; (ii) register or list securities or apply to register or list securities with any stock exchange, or any exchange of stock, equity, bonds, or other publicly traded instruments, anywhere in the world other than an Applicable Exchange, without the express prior approval of Licensor; (iii) use, adopt, register, seek registration of, obtain a domain name registration for, or assert ownership or rights to any trademark, service mark, tradename, corporate name, business name, domain name, social media name or handle, or other source identifier that consists of or includes the Licensed Mark, or any other mark or name proprietary to Licensor, or any mark or name confusingly similar to, or any translation or transliteration of the Licensed Mark; (iv) challenge Licensor’s ownership or rights in or to, or challenge the validity or enforceability of, the Licensed Mark or any other mark or name proprietary to Licensor anywhere in the world; or (v) cause or assist with any

 

2

 

activity by a third party that would violate the foregoing provisions of this Section 5 if such activity had been that of Licensee or a Subsidiary.

 

6.             Quality Control; Use.  Licensee shall, at all times, cause the Brand Restaurant Businesses to be operated in accordance with the requirements, including, without limitation, the quality control requirements, under the MLA.  Licensee shall and shall cause the Subsidiaries to comply with any standards for use of the Licensed Mark, as notified in writing by Licensor to Licensee from time to time.  Licensee shall and shall cause the Subsidiaries to at all times conduct business and operations in compliance with all applicable laws and maintain a good reputation.  Upon Licensor’s request from time to time, Licensee shall promptly provide Licensor with documentary evidence showing Licensee’s and each Subsidiary’s representative use of the Licensed Mark.  Licensor and/or its representatives shall be entitled to audit and inspect Licensee’s and each Subsidiary’s records related to the use of the Licensed Mark during Licensee’s or such Subsidiary’s ordinary business hours, as applicable.

 

7.             Ownership and Reservation of Rights.  Licensor is and shall be and remain the sole owner of all rights, title, and interest in and to the Licensed Mark and all goodwill represented thereby or arising or resulting from the Licensed Mark.  Any and all use of the Licensed Mark will inure to the sole benefit of Licensor, and all goodwill in or accruing in, or arising or resulting from any use of, the Licensed Mark shall belong to, and all value and benefits arising therefrom, shall be owned solely by Licensor without any claim thereto, or for any compensation in connection with same, by Licensee, a Subsidiary, or any third party.  Licensor reserves all rights to the Licensed Mark.  Licensor does not grant or give to Licensee, a Subsidiary, or any third party any ownership, right, title, interest, license (with the sole exception of the limited rights to use the Licensed Mark under Sections 2 and 3 during the Term), or encumbrance, or any claim or right to any ownership, right, title, interest, license, or encumbrance, in or to the Licensed Mark or any other name, mark, or intellectual property in or under this Agreement.  Licensor shall have the sole discretionary right to file and prosecute any application for, and to seek and obtain and maintain any registration, for the Licensed Mark anywhere in the world.  If Licensor decides to file any application or to seek or obtain any registration for the Licensed Mark, Licensee agrees to assist Licensor in connection therewith.  In the event that Licensee or a Subsidiary acquires, obtains, or owns any right, title, interest, license (with the sole exception of the limited rights to use the Licensed Mark under Sections 2 and 3 during the Term), or encumbrance, or any claim or right thereto, in or to, or owns an application or a registration for, or a domain name registration (other than the Domain Name) including the Licensed Mark,  or any other mark or name of Licensor or any of its Affiliates, or any mark or name confusingly similar to the Licensed Mark, or such other mark or name of Licensor or any of its Affiliates, or any translation or transliteration of the Licensed Mark, any such other mark or name, or any such confusingly similar mark or name, Licensee hereby assigns, transfers, and conveys, and shall cause such Subsidiary to assign, transfer, and convey, to Licensor all such right, title, interest, license, encumbrance, claim, application, and/or registration, free of any payment or payment obligation by Licensor.  If and to the extent requested by Licensor, Licensee agrees to assist with any recordation, action, or step necessary to secure the continued ownership pursuant to this Section 7, to otherwise implementing and effecting the provisions of this Section 7, and to assist Licensor with enforcing any of its rights in and to the Licensed Mark, including, without limitation, by executing and filing any document, giving any statement or testimony, and provide any other assistance.

 

8.             Warranties; Liability.  Each Party represents and warrants that it has the full power and corporate authority to enter into and perform its obligations under this Agreement.  WITH THE SOLE EXCEPTION OF THE FOREGOING REPRESENTATION AND WARRANTY OF A PARTY SET FORTH ABOVE IN THIS SECTION 8, NEITHER PARTY MAKES ANY, AND EACH PARTY DISCLAIMS ALL, REPRESENTATIONS, WARRANTIES, AND CONDITIONS OF ANY KIND, WHETHER EXPRESS OR IMPLIED, INCLUDING, WITHOUT LIMITATION, ANY RELATED TO MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, NON-INFRINGEMENT, OR TITLE.  IN NO EVENT SHALL LICENSOR BE LIABLE FOR ANY DAMAGES RELATED TO THE LICENSED MARK, THE LICENSEE NAME, THE LICENSED LOGO, THE DOMAIN NAME, THE LICENSEE TICKER SYMBOL, A SUBSIDIARY NAME, OR ANY USE THEREOF, INCLUDING, WITHOUT LIMITATION, ANY INFRINGEMENT OR CLAIM OR ALLEGATION OF INFRINGEMENT.

 

3

 

9.             Term.  This Agreement, and the rights granted in Sections 2 and 3, shall be effective as of the Effective Date and continue until this Agreement is terminated pursuant to Section 10 or applicable law.

 

10.          Termination.

 

a.             Termination of Agreement (Other than Right to Use Domain Name and Licensee Ticker Symbol). Licensor may terminate this Agreement and the rights and licenses granted herein (other than Licensee’s right to use the Domain Name and Licensee Ticker Symbol), at any time by written notice of termination to Licensee:

 

(i)            in the event of a material breach of this Agreement by Licensee, which material breach shall be identified in such written notice, and which termination shall become effective at the end of thirty (30) days of such written notice of termination unless Licensee fully cures such material breach within such thirty (30) day period; or

 

(ii)           in the event of a termination of the license under the MLA for one or more of the Brands (other than the termination of the MLA resulting in the termination of this Agreement under Section 10(c)(i)); or

 

(iii)          in the event of a material breach of the MLA as set forth in Sections 14.1.1 through 14.1.4 of the MLA; or

 

(iv)          in the event of a non-curable material breach of the MLA as set forth in and determined in accordance with Sections 14.1.5.C (Failure to Comply with Brand Standards or Enforce the Sublicenses), .D (Loss of Rights in Brand System IP), .F (Failure to Meet Sales Growth Metric) or .G (Failure to Meet the Taco Bell Brand Development Initiative) of the MLA; or

 

(v)           as provided in Section 12; or

 

(vi)          if Licensor assigns its rights to the “YUM” mark to a third party that is not an Affiliate of Licensor; or

 

(vii)         if Licensee discontinues its business operations, is dissolved or suspended from operating, takes steps to dissolve or cease to exist, admits its inability to pay its debts as they become due, files or is or becomes subject to a petition in bankruptcy (or similar reorganization proceeding) or makes a general assignment for the benefit of its creditors, or becomes subject to the appointment of a receiver.

 

b.             Termination of Agreement in Its Entirety by Licensor.  By written notice of termination to Licensee, Licensor may terminate this Agreement in its entirety, and the rights and licenses granted herein, including without limitation with respect to the Domain Name and the Licensee Ticker Symbol, following a non-curable material breach of the MLA as set forth in and determined in accordance with Sections 14.1.5.A (Criminal Conviction/Adverse Publicity), .B (Unauthorized Disclosure of Confidential Information; Violation of Non-Compete), or .E (Threat or Danger to Public Health or Safety) of the MLA, subject to Section 10(e).

 

c.             Automatic Termination of Agreement in Its Entirety.  This Agreement, and the rights and licenses granted herein, shall terminate automatically, without need for any additional or other notice or action, subject to Section 10(e), upon the earliest of the following events:

 

(i)            the termination, expiration, or cancellation of the MLA; or

 

(ii)           Licensor’s written notice under Section 4 refusing to agree to any change, amendment, alteration, or replacement of the Licensee Name and/or the Licensee Ticker

 

4

 

Symbol required by applicable law, regulation, rule, or court order, or the applicable rules governing the listing of stock on any Applicable Exchange

 

d.             Actions Following Termination Under Section 10(a) or Section 12.  In the event of a termination pursuant to Section 10(a) or Section 12, Licensee shall discontinue use of the Licensed Logo and modify or replace its corporate name such that it does not include the Licensed Mark or any variation, translation, or transliteration thereof, which modification or replacement shall be legally effective and complete at the end of sixty (60) days from such termination or at the end of any longer period of time that is required or necessary to legally effect such modification or replacement in accordance with all applicable laws, regulations, rules, or orders of a court or governmental agency, provided that Licensee pursues such modification or replacement in good faith with all deliberate effort and speed; and Licensee shall cause each Subsidiary to modify or replace its corporate name such that it does not include the Licensed Mark, or any variation, translation, or other transliteration thereof, which modification or replacement shall be legally effective and complete at the end of sixty (60) days from such termination or at the end of any longer period of time that is required or necessary to legally effect such modification or replacement in accordance with all applicable laws, regulations, rules, or orders of a court or governmental agency, provided that such Subsidiary shall pursue such modification or replacement in good faith with all deliberate effort and speed. Upon Licensor’s request, Licensee shall, at Licensee’s cost, provide copies of all filings or submissions made for effecting the relevant corporate name changes.

 

e.             Actions Following Termination Under Section 10(b) or (c).  In the event of a termination pursuant to Section 10(b) or (c) (including without limitation to the extent not already implemented in connection with a termination under Section 10(a)):  (i) Licensee shall discontinue use of the Licensed Logo and modify or replace its corporate name and its stock identification symbol such that it does not include the Licensed Mark or any variation, translation, or transliteration thereof, which modification or replacement shall be legally effective and complete at the end of thirty (30) days from this Agreement’s termination or at the end of any longer period of time that is required or necessary to legally effect such modification or replacement in accordance with all applicable laws, regulations, rules, or orders of a court or governmental agency, or the applicable rules governing the listing of stock on any Applicable Exchange, provided that Licensee pursues such modification or replacement in good faith with all deliberate effort and speed; (ii) Licensee shall transfer the registration of the Domain Name free-of-charge to Licensor; and (iii) Licensee shall cause each Subsidiary to modify or replace its corporate name such that it does not include the Licensed Mark, or any variation, translation, or other transliteration thereof, which modification or replacement shall be legally effective and complete at the end of thirty (30) days from this Agreement’s termination or at the end of any longer period of time that is required or necessary to legally effect such modification or replacement in accordance with all applicable laws, regulations, rules, or orders of a court or governmental agency, provided that such Subsidiary shall pursue such modification or replacement in good faith with all deliberate effort and speed.. Upon Licensor’s request, Licensee shall, at Licensee’s cost, provide copies of all filings or submissions made for effecting the relevant corporate name and stock identification symbol changes.

 

f.             Notwithstanding the termination of this Agreement, all rights and remedies accrued under this Agreement theretofore, the provisions in Sections 7, 10(d) and 10(e), and this Section 10(f), and Sections 1, 11, and 13 as applicable to Sections 7, 10(d), 10(e) and 10(f), shall survive the termination of this Agreement.

 

11.          Governing Law; Disputes.  This Agreement, its interpretation and construction, its enforcement, and the resolution of any dispute under this Agreement will be governed by and in accordance with the laws of the State of Texas, United States of America, without regard to conflict of laws principles that may require the application of the laws of any other jurisdiction.    The procedures for discussion, negotiation, mediation and arbitration set forth in Article 17 of the MLA shall apply to all disputes, controversies or claims (whether sounding in contract, tort or otherwise) that may arise out of or relate to, or arise under or in connection with, this Agreement.

 

12.          Acquisition or Operation of Other Brands.   If Licensee or any of its Affiliates acquires, adopts, operates, licenses or franchises a brand (other than Little Sheep or East Dawning, or a homegrown brand that operates only in the Territory) that is not a Brand and that at any time comprises more than one hundred (100) restaurants or other outlets (such acquisition, adoption, operation, licensing or franchising, a “New Business”),

 

5

 

Licensee shall give prompt written notice of the New Business to Licensor, including such information as would be reasonably necessary for Licensor to assess the size, scope and nature of the New Business (the “New Business Notice”).  If Licensee or any of its Affiliates acquires, adopts, operates, licenses or franchises a New Business, Licensor shall have the right to terminate this Agreement and the rights and licenses granted herein (other than Licensee’s right to use the Domain Name and Licensee Ticker Symbol), subject to Section 10(d), upon written notice of termination to Licensee delivered at any time prior to the date which is thirty (30) days after Licensor’s receipt of the New Business Notice.

 

13.          General Provisions.

 

a.             All notices, demands, or other communications to be given or delivered to a Party under or by reason of a provision of this Agreement shall be in writing and shall be deemed to have been given to such Party when delivered personally to such Party at, or sent to such Party by reputable express courier service (charges prepaid) to, such Party’s address set forth in the caption of this Agreement or another address notified hereunder in writing at least thirty (30) days before such notice, demand, or other communication by such Party to the other Party, addressed to the attention of Scott A. Catlett if to Licensor or Shella Ng if to Licensee.

 

b.             A reference in this Agreement to “including” (or “include” or like term) will not be construed restrictively but will mean “including (or “include” or like term) without prejudice to the generality of the foregoing” and “including (or “include” or like term) but without limitation”.  The term “shall” is a term of obligation.  References to this Agreement will include any Recitals and Exhibits to it, and references to Sections are (unless otherwise indicated) to the sections of this Agreement.  The headings are for convenience only and will not affect the interpretation of this Agreement. Unless the context otherwise requires or permits, references to the singular number will include references to the plural number and vice versa; references to a “person” will include any company, limited liability partnership, association, partnership, business trust, unincorporated association or other entity; references to a company will include any company, corporation or any body corporate, wherever incorporated; and words denoting any gender will include all genders.

 

c.             Licensee recognizes that any violation, breach, or non-performance of, or default under, any provision in this Agreement may cause irreparable injury to Licensor for which Licensor may have no adequate remedy at law.  Therefore, Licensor shall be entitled to injunctive relief or specific performance, without need or obligation to post any bond, to enforce any obligation, agreement, covenant, and provision of this Agreement in the event of any actual or impending violation, breach, or non-performance of, or default under, any provision of this Agreement by Licensee, in addition to any other rights and remedies available to Licensor as Licensor elects in its sole discretion.  In the event that Licensor enforces any right or remedy under or related to this Agreement or any right herein against Licensee and prevails, Licensor shall be entitled to recover from Licensee all reasonable attorneys’ fees and other legal costs incurred or accrued in connection with such enforcement, whether in or outside any judicial or governmental forum.

 

d.             Licensor and Licensee are independent contractors.  Neither Party shall hold itself out as a partner, joint-venturer, affiliate, associate, agent, employee, or legal representative of the other. Neither Party shall have any right to obligate or bind the other Party in any manner whatsoever, and nothing herein contained shall give or is intended to give any rights of any kind to any third persons.

 

e.             The Parties do not intend any third party to be, and no third party is, a third party beneficiary under or in connection with this Agreement.

 

f.             Licensor may transfer, assign, or extend this Agreement, without requirement for consent by or notice to Licensee.  Licensee may not transfer this Agreement or assign any of its rights, or assign or delegate any of its obligations, in or under this Agreement to any third party without express prior written consent of the Licensor. The terms of this Agreement shall inure to the benefit of and be binding upon each Party and each Party’s permitted successors and assigns.

 

g.             Licensee shall and shall cause each Subsidiary to, at all times, strictly comply with all applicable laws and governmental orders, now or hereafter in effect, relating to the performance of its activities, and not engage in any practices or activities that are prohibited or in violation of any such law or

 

6

 

governmental order.  Section 19.7 of the MLA is hereby incorporated by reference and shall apply between Licensor and Licensee to the same extent as between “Licensor” and “Licensee” under the MLA as if expressly set forth in this Section 13(g).

 

h.             This Agreement constitutes the entire understanding and agreement between the Parties hereto related to the Licensee Name, the Licensed Mark, the Licensed Logo, the Domain Name, the Licensee Ticker Symbol, and the related rights and obligations of Licensee and Licensor in addition to provisions of the MLA included by reference herein.

 

(i)            Neither this Agreement nor any term or provision hereof may be waived except by an instrument in writing signed by the person against whom the enforcement of any waiver is sought.  A failure of a Party to exercise any right provided for herein shall not be deemed to be a waiver of any right hereunder, and the selection of any right or remedy shall not be deemed to be a waiver of any other right or remedy.

 

(ii)           Other than a waiver of this Agreement or any term or provision hereof as provided under Section 13(h)(i), no modification, amendment, or supplement to this Agreement will be binding upon the Parties unless made in a writing identifying the relevant provisions and signed by each Party through its authorized representative.  A transfer or assignment permitted under Section 13(f) shall not constitute any modification, amendment, variation, or extension under the immediately preceding sentence if this Agreement does not change as a result of such assignment (other than the identity and contact information of the assignor to the assignee).

 

i.              If any provision of this Agreement is held to be invalid or unenforceable, the meaning of said provision will be construed, to the extent feasible, so as to render the provision valid and enforceable, and if no feasible interpretation shall save such provision, it will be severed from the remainder of this Agreement, as appropriate.  The remainder of this Agreement shall remain in full force and effect unless the severed provision is essential and material to the rights or benefits received by a Party.  In such event, the Parties will use their best efforts to negotiate, in good faith, a substitute, valid and enforceable provision or agreement, which most nearly effects the Parties’ intent in entering into this Agreement, as appropriate.

 

j.              This Agreement may be executed in one or more counterparts (any one of which may be by facsimile or PDF), all of which shall constitute one and the same agreement.

 

[Signature page follows.]

 

7

 

IN WITNESS WHEREOF, each Party has signed this Agreement through its duly authorized representative as of the Effective Date.

 

	
Licensor:
    	
 
    	
Licensee:
    
	
 
    	
 
    	
 
    
	
Yum! Brands, Inc.,
    	
 
    	
Yum China   Holdings, Inc.,
    
	
a North Carolina corporation
    	
 
    	
a Delaware corporation
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
/s/ Greg Creed
    	
 
    	
/s/ Micky Pant
    
	
Name: 
    	
Greg Creed
    	
 
    	
Name: 
    	
Micky Pant
    
	
Title: 
    	
Chief Executive Officer
    	
 
    	
Title: 
    	
Chief Executive Officer
    

 

8

 

SCHEDULE 1

 

THE LICENSED LOGO

 

 

9

 

SCHEDULE 2

 

SUBSIDIARIES

 

Yum! (Shanghai) Food Co., Ltd. *

Yum! Asia Holdings Pte. Ltd.

Yum China E-Commerce Limited

Yum! China Finance S.à r.l.

Yum! Franchise China IV S.à r.l.

Yum! Franchise China Trust

Yum! Franchise China Trust I S.à r.l.

Yum! Franchise China Trust II

Yum! Franchise China Trust III

Yum! Franchise China Trust III S.à r.l.

Yum! Franchise China Trust IV

Yum! Global Investments I B.V.

Yum! Global Investments II B.V.

Yum! Global Investments III LLC

Yum! Restaurants (Chengdu) Co., Ltd. *

Yum Restaurants (China) Investment Company Limited*

Yum! Restaurants (Fuzhou) Co., Ltd. *

Yum! Restaurants (Guangdong) Co., Ltd. *

Yum! Restaurants (Shenyang) Co., Ltd. *

Yum! Restaurants (Shenzhen) Co. Ltd. *

Yum! Restaurants (Wuhan) Co., Ltd. *

Yum! Restaurants (Xian) Co., Ltd. *

Yum Restaurants Consulting (Shanghai) Company Limited*

Yum! Restaurants International S.a.r.l.

 

*Note: These Chinese companies’ official company names (registered with relevant Chinese government authorities) are in Chinese, not in English. These Chinese companies use their English names in their operations mainly for the purpose of reference.

 

10Exhibit 10.6

 

GUARANTY FOR MLA

 

Yum China Holdings, Inc., a Delaware corporation (“Guarantor”),  hereby executes this Guaranty (this “Guaranty”), which shall be deemed a part of the Master License Agreement (including, for the avoidance of doubt, the Exhibits thereto, the “Agreement”) between Yum! Restaurants Asia Pte. Ltd., a private limited company organized and existing under the laws of Singapore (“YRAPL”), and Yum Restaurants Consulting (Shanghai) Company Limited, a company organized under the laws of the People’s Republic of China (“YCCL”), for purposes of making the following guaranty in favor, and for the benefit, of YRAPL.

 

Capitalized terms used herein without definition shall have the meaning ascribed thereto in the Agreement.

 

A.            Guaranty

 

Guarantor, intending to be legally bound, hereby absolutely, irrevocably and unconditionally guarantees, as primary obligor and not merely as a surety, to YRAPL the prompt and complete performance of each and all of the obligations of YCCL under the Agreement, including prompt payment when due, whether at stated maturity, by required prepayment, upon acceleration, upon demand or otherwise, and at all times thereafter, of any and all of the payment obligations, whether for principal, interest, premiums, fees, indemnities, damages, costs, expenses or otherwise, of YCCL to YRAPL under the Agreement (each such obligation, a “Guarantee Obligation,” and collectively, the “Guarantee Obligations”).  Upon failure by YCCL to perform any Guarantee Obligation, Guarantor shall forthwith without demand perform such obligation in the manner specified herein.   Guarantor hereby agrees that its obligations hereunder shall be an absolute, irrevocable and unconditional guarantee of payment and performance and not merely a guaranty of collection.

 

All payments made of a Guarantee Obligation will be paid free and clear of and without deduction or withholding for or on account of any Tax (as defined in the Tax Matters Agreement), except as may be required by Law. If Guarantor shall be required by Applicable Law to deduct or withhold any Taxes from such payments, then (i) Guarantor shall make such deductions or withholdings as are required by Applicable Law, (ii) Guarantor shall timely pay the full amount deducted or withheld to the applicable Tax Authority (as defined in the Tax Matters Agreement) and provide YRAPL with receipts or other proof of such payment promptly upon receipt, and (iii) if the amount received by YRAPL is less than the amount it would have received had the applicable payment been made by YCCL (after making any deductions or withholdings as YCCL would have been required to make under Applicable Law), Guarantor shall gross up the payment to YRAPL so that the net amount that YRAPL receives is the same as the amount it would have received (after making any deductions or withholdings) had the applicable payment been made by YCCL.

 

Guarantor hereby agrees that its obligations hereunder shall not be released, diminished, impaired, reduced or affected by any renewal, extension, adjustment or modification of any of the Guarantee Obligations, including the time, place or manner of payment or performance thereof, and Guarantor hereby consents to any changes in the terms of any of the Guarantee Obligations as agreed to by YRAPL and YCCL, and to any settlement or adjustment with respect to any of the Guarantee Obligations entered into between YRAPL and YCCL.

 

1

 

Guarantor hereby acknowledges that it will receive substantial benefits from the transactions contemplated by the Agreement, and this Guaranty, including the waivers set forth herein, is knowingly made in contemplation of such benefits.  The Guarantee Obligations shall conclusively be deemed to have been created, contracted or incurred in reliance on this Guaranty.

 

No failure or delay on the part of YRAPL in the exercise of any right or remedy with respect to any of the Guarantee Obligations shall operate as a waiver thereof or any obligations of Guarantor hereunder, and no single or partial exercise by YRAPL of any right or remedy with respect to any of the Guarantee Obligations shall preclude any other or further exercise thereof or the exercise of any other right or remedy.  YRAPL shall not have any obligation to proceed at any time or in any manner against, or to exhaust any or all of YRAPL’s rights against, YCCL or any other Person liable for any of the Guarantee Obligations prior to proceeding against Guarantor hereunder.  Without limiting the foregoing, YRAPL shall not be obligated to file any claim relating to the Guarantee Obligations in the event that YCCL becomes subject to a bankruptcy, reorganization or similar proceeding, and the failure of YRAPL to so file shall not affect the Guarantee Obligations or the obligations of Guarantor.  Guarantor’s obligations hereunder shall remain in full force and effect until all Guarantee Obligations shall have been performed in full.  If at any time any performance of any Guarantee Obligation is rescinded or must be otherwise restored or returned upon YCCL’s insolvency, bankruptcy or reorganization or otherwise, Guarantor’s obligations hereunder with respect to such performance shall be reinstated as though such performance had been due but not made at such time.

 

Guarantor hereby acknowledges and agrees that its obligations hereunder shall not be released, discharged or affected by (a) any change in corporate existence, structure or ownership of YCCL or any other Person, (b) any insolvency, bankruptcy, reorganization or similar proceeding affecting YCCL or any other Person, (c) the addition, substitution or release of any Person now or hereafter liable with respect to the Guarantee Obligations, (d) any rescission, waiver or amendment of the Agreement, (e) the existence of any claim, set-off or other right that Guarantor may have against any Person, (f) the adequacy of any other means of YRAPL obtaining payment or performance related to any of the Guarantee Obligations, (g) the validity or enforceability of the Agreement, or (h) any other act or omission to act or delay of any kind by YRAPL, YCCL or any other Person or any other circumstance which might, but for the provisions hereof, constitute a legal or equitable discharge of or defense to Guarantor’s obligations hereunder (other than to the extent such act, omission, delay or circumstance gives rise to a defense available to YCCL under the Agreement to performance of the Guarantee Obligations).

 

Guarantor hereby waives any and all rights or defenses which would otherwise require an election of remedies by YRAPL, and further waives promptness, diligence, presentment, demand for payment, default, dishonor and protest, notice of any Guarantee Obligations incurred and all other notices of any kind (other than those expressly required by the Agreement), all defenses that may be available by virtue of any valuation, stay, moratorium or similar Applicable Law now or hereafter in effect, any right to require the marshalling of assets of YCCL or any other Person and all suretyship defenses generally (other than fraud and defenses that are available to YCCL under the Agreement to performance of the Guarantee Obligations).   Guarantor hereby waives and agrees not to exercise any rights that it may have or acquire against YCCL that arise from the existence, payment, performance or enforcement of the Guarantee Obligations (other than any such rights that YCCL has against YRAPL under the

 

2

 

Agreement), including any right of subrogation, reimbursement, exoneration, contribution or indemnification and any right to participate in any claim or remedy of YRAPL against YCCL, whether or not such claim, remedy or right arises in equity or under contract, statute or common law, including the right to take or receive from YCCL, directly or indirectly, in cash or other property or by set-off or in any other manner, payment or security on account of such claim, remedy or right, unless and until the Guarantee Obligations shall have been performed in full (including, with respect to any payment obligations, all such amounts due having been paid to YRAPL in cash in full).  If any amount shall be paid to Guarantor in violation of the immediately preceding sentence at any time prior to the performance in full of the Guarantee Obligations, such amount shall be received and held in trust for the benefit of YRAPL, shall be segregated from other property and funds of Guarantor and shall forthwith be paid or delivered to YRAPL in the same form as so received (with any necessary endorsement or assignment) to be credited and applied to the Guarantee Obligations.

 

Guarantor hereby acknowledges and agrees that this Guaranty is a primary obligation of Guarantor, and that YRAPL shall be entitled to make a demand hereunder, and pursue all of its rights and remedies against Guarantor, whether or not YRAPL has made any demand or pursued any remedies, or during the pendency of any demand made or remedies pursued, against YCCL or any other Person.  Guarantor represents and warrants to YRAPL that (a) Guarantor has the financial capacity to pay and perform the Guarantee Obligations, (b) Guarantor has all requisite power and authority to execute, deliver and perform this Guaranty, (c) the execution, delivery and performance of this Guaranty has been duly authorized by all necessary action by Guarantor, (d) this Guaranty constitutes the legal, valid and binding obligation of Guarantor, enforceable against Guarantor in accordance with its terms, (e) this Guaranty does not contravene any provision of Guarantor’s organizational documents or violate, in any material respect, any Applicable Laws or contractual restriction binding on Guarantor or any of its assets and (f) all consents, approvals, authorizations and permits of, and all filings with and notifications to, any Governmental Authority necessary for the due execution, delivery and performance of this Guaranty by Guarantor have been obtained or made and all conditions thereof have been duly complied with, and no other action by, and no notice to or filing with, any Governmental Authority is required in connection with the execution, delivery or performance of this Guaranty.

 

B.            Dispute Resolution

 

(1)         Certain Definitions.  For purposes of this Guaranty, the term “Parties” means YRAPL, YCCL and Guarantor and the term “Party” means any of them.

 

(2)         Governing Law.  This Guaranty shall be interpreted and construed under the laws of  the United States of America and the State of Texas, U.S.A. (without regard to, and without giving effect to, their conflict of laws rules).

 

(3)         Pre-Arbitration Dispute Resolution.  Subject to Section 14.1.6.C. of the Agreement,

 

(a)         Prior to submitting any dispute under the Agreement (with the exception of any disputes concerning breaches thereof which YRAPL has determined not to be curable) or this Guaranty to mediation, arbitration or any court or other tribunal, YRAPL or YCCL (in the case of the Agreement) or YRAPL or Guarantor (in

 

3

 

the case of this Guaranty) shall provide written notice of the dispute to the other Parties.  Upon such notice appropriate executives of YCCL and YRAPL who have authority to resolve the dispute will meet either in person or by video conference or similar means and shall discuss and use good faith efforts to resolve the dispute. If the dispute cannot be resolved within thirty (30) days of such notice, then the Parties shall submit the claim for resolution to non-binding mediation in accordance with Section B(3)(b).

 

(b)         If the Parties are unable to resolve a dispute under the Agreement or this Guaranty accordance with Section B(3)(a), the Parties agree to submit the dispute (with the exception of any disputes concerning breaches of the Agreement which YRAPL has determined not to be curable) to non-binding mediation before bringing such dispute to arbitration in accordance with Section B(4).  The Parties shall select a mediator within twenty (20) days of the date the dispute is submitted to mediation by a Party.  The mediation shall be conducted in English by a mediator mutually and jointly approved by YRAPL, on the one hand, and YCCL and Guarantor, on the other hand, and failing agreement of the Parties within the twenty (20) day period, by a mediator appointed by the International Institute for Conflict Prevention and Resolution (“CPR”) in accordance with its mediation rules. The mediation shall be conducted at a location mutually and jointly selected by YRAPL, on the one hand, and YCCL and Guarantor, on the other hand, within ten (10) days following the date on which the mediator is appointed, and failing agreement of the Parties within such time period, then the mediation will be held in Dallas, Texas, U.S.A.  The costs and expenses of any such mediation, including compensation and expenses of the mediator (and except for the lawyers’ fees incurred by any Party), shall be borne by YRAPL, on the one hand, and YCCL and Guarantor, on the other hand, equally.

 

(4)         Arbitration.  If the Parties are unable to resolve a dispute under the Agreement or this Guaranty by mediation in accordance with Section B(3)(b), then such dispute and any other controversy or claim arising out of or relating to the Agreement or this Guaranty, or the breach hereof, including without limitation the determination of the scope or applicability of this agreement to arbitrate, shall, upon written request of a Party (the “Arbitration Request”), be determined by arbitration administered by CPR in accordance with the CPR Rules for Administered Arbitration (“Administered Rules”). Subject to Section 14.1.6.C of the Agreement, details of the arbitration are as follows:

 

(a)         There shall be three (3) arbitrators.  The panel of three (3) arbitrators will be chosen as follows:  (i) within fifteen (15) days from the date of the receipt of the Arbitration Request, each of YRAPL, on the one hand, and YCCL and Guarantor, on the other hand, will name an arbitrator; and (ii) the two (2) arbitrators so appointed will thereafter name a third, independent arbitrator who will act as chairperson of the arbitral tribunal.  In the event that YRAPL, on the one hand, or YCCL and Guarantor, on the other, fails to name an arbitrator within fifteen (15) days following the date of receipt of the Arbitration Request, then upon written application by a Party, that arbitrator shall be appointed pursuant to the Administered Rules.  In the event that, within thirty (30) days from

 

4

 

the date on which the second of the two (2) arbitrators was named, the two (2) appointed arbitrators fail to appoint the third, then the third arbitrator will be appointed pursuant to the Administered Rules.

(b)         The arbitration shall be conducted in English.  Any document that a Party seeks to use that is not in English shall be provided along with an English translation.

(c)          The place of arbitration shall be Dallas, Texas, U.S.A.

(d)         The arbitrators shall establish procedures under which each Party will be entitled to conduct discovery.

(e)          The arbitrators shall award to the substantially prevailing Party (as determined by the arbitrators) the costs and expenses of the proceeding, including reasonable attorneys’ and experts’ fees.

(f)           The arbitrators will issue a reasoned award.

(g)          Notwithstanding any language herein to the contrary, the Parties agree that the award rendered by the arbitrators (the “Original Award”) may be appealed under the CPR Arbitration Appeal Procedure (“Appeal Procedure”).  Appeals must be initiated within thirty (30) days of receipt of an Original Award, in accordance with Rule 2 of the Appeal Procedure, by filing a written notice with CPR.  The Original Award shall not be considered final until after the expiration of the time for filing the notice of appeal pursuant to the Appeal Procedure.  Following the appeal process,  either (i) the Original Award, if no changes have been made by the appellate Tribunal, or (ii) the appellate award, if the Original Award has been changed by the appellate tribunal, may be entered in any court having jurisdiction thereof.  Unless otherwise agreed by the Parties, the appeal shall be conducted at the place of the original arbitration.

(h)         Any award rendered by the arbitrators that is not appealed in accordance with the foregoing provisions or that is not modified by the appeal tribunal, and any award as modified or established by the appeal tribunal, shall be final and judgment may be entered thereon in any court having jurisdiction thereof.

(i)             Each Party retains the right to apply to any court of competent jurisdiction for provisional and/or conservatory relief, including prearbitral attachments or injunctions, and any such request shall not be deemed incompatible with the agreement to arbitrate or a waiver of the right to arbitrate.

(j)            The existence and content of the arbitral proceedings and any rulings or award shall be kept confidential by the Parties and members of the arbitral tribunal except (i) to the extent that disclosure may be required of a Party to comply with Applicable Laws or the rules of any applicable stock exchange, protect or pursue a contractual right or perform a contractual obligation, or enforce or challenge an award in bona fide legal proceedings before a court or other judicial authority, (ii) with the consent of all Parties, (iii) where needed for the preparation or presentation of a claim or defense in arbitration, (iv) where such information is already in the public domain other than as a result of a breach of this Section, or (v) by order of the arbitral tribunal upon application of a Party.

 

(5)         Limitations Period.  Any claim arising out of or relating to the Agreement or this Guaranty shall be governed by the statute of limitations under the governing law set forth in Section B(2).

 

5

 

(6)         Enforcement Costs.  Each Party shall bear its own legal costs (including attorneys’ and experts’ fees, and all other expenses) incurred in enforcing the Agreement or this Guaranty or in otherwise pursuing, or defending against, a claim, demand, action, or proceeding under or in connection with the Agreement or this Guaranty.

 

C.            Miscellaneous

 

If any term or other provision of this Guaranty is determined by a court of competent jurisdiction to be invalid, illegal or incapable of being enforced by any rule of law or public policy, all other terms, provisions and conditions of this Guaranty shall nevertheless remain in full force and effect.  No Party hereto shall assert, and each Party shall cause its respective Affiliates not to assert, that this Guaranty or any part hereof is invalid, illegal or unenforceable.  Upon such determination that any term or other provision is invalid, illegal or incapable of being enforced, the Parties hereto shall negotiate in good faith to modify this Guaranty so as to effect the original intent of the Parties as closely as possible to the fullest extent permitted by Applicable Law in an acceptable manner to the end that the transactions contemplated hereby are fulfilled to the extent possible.

 

This Guaranty, together with the Agreement, constitutes the entire agreement, and supersedes all other prior agreements and understandings, both written and oral, among the Parties with respect to the subject matter hereof.  No amendment, modification or waiver of any provision hereof shall be enforceable unless approved by each Party in writing.

 

The provisions of this Guaranty are solely for the benefit of the Parties and do not and are not intended to confer upon any Person except the Parties any rights or remedies hereunder, and there are no third-party beneficiaries of this Guaranty and this Guaranty shall not provide any third Person with any remedy, claim, liability, reimbursement or other right in excess of those existing without reference to this Guaranty.

 

This Guaranty shall remain in full force and effect and shall be binding on Guarantor, and its successors and assigns, until all the Guarantee Obligations have been performed in full.

 

Section 19.10 (Construction) of the Agreement is hereby incorporated in this Guaranty as if fully set forth herein.  This Guaranty may be executed in one (1) or more counterparts, all of which shall be considered one (1) and the same agreement, and shall become effective when one (1) or more counterparts have been signed by each of the Parties and delivered to the other Parties (it being agreed that delivery of a manual, stamp or mechanical signature, whether in person, by courier, by facsimile or by email in portable document format, shall be effective).

 

[Signatures to Follow]

 

6

 

IN WITNESS WHEREOF, Guarantor has caused this Guaranty to be executed and delivered as of the date first written above by its officer thereunto duly authorized.

 

	
 
    	
YUM   CHINA HOLDINGS, INC.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Micky Pant
    
	
 
    	
 
    	
Name: 
    	
Micky Pant
    
	
 
    	
 
    	
Title: 
    	
Chief Executive Officer
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
Address:
    
	
 
    	
Yum China   Holdings, Inc.
    
	
 
    	
16/F Two Grand Gateway,   3 Hongqiao Road
    
	
 
    	
Shanghai, the People’s   Republic of China
    

 

[Signature Pages to Guaranty]

 

 

	
Accepted   and agreed to by:
    	
 
    
	
 
    	
 
    
	
YUM!   RESTAURANTS ASIA PTE. LTD.
    	
 
    
	
 
    	
 
    
	
/s/ Vinod Mahboobani
    	
 
    
	
Name: 
    	
Vinod Mahboobani
    	
 
    
	
Title:
    	
Director
    	
 
    
	
 
    	
 
    
	
Address:
    	
 
    
	
Yum! Restaurants Asia   Pte. Ltd.
    	
 
    
	
99 Bukit Timah Road,   #06-09
    	
 
    
	
Singapore 229835
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
YUM RESTAURANTS   CONSULTING (SHANGHAI) COMPANY LIMITED
    
	
 
    	
 
    
	
 
    	
 
    
	
/s/ Mark Chu
    	
 
    
	
Name: 
    	
Mark Chu
    	
 
    
	
Title:
    	
Legal Representative
    	
 
    
	
 
    	
 
    
	
Address:
    	
 
    
	
Yum Restaurants Consulting   (Shanghai) Company Limited
    	
 
    
	
16/F Two Grand Gateway,   3 Hongqiao Road
    	
 
    
	
Shanghai, the People’s   Republic of China
    	
 
    
				

 

[Signature Pages to Guaranty]

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00263-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00263-of-00352.parquet"}]]