Exhibit 10.1


 


4,197,331 Shares


 


CHIPOTLE MEXICAN GRILL, INC.


 


Class A Common Stock (Par Value $0.01 Per
Share)


 


 


UNDERWRITING AGREEMENT


 


 


May 18, 2006


 

















 


May 18, 2006


 


Morgan Stanley & Co. Incorporated


Cowen and Company, LLC


c/o 
Morgan Stanley & Co. Incorporated


1585 Broadway


New York, New York 10036


 


Dear Sirs and
Mesdames:


 


Certain shareholders of Chipotle Mexican
Grill, Inc., a Delaware corporation (the “Company”),
named in Schedule I hereto (the “Selling Shareholders”)
propose to sell to the several Underwriters named in Schedule II hereto
(the “Underwriters”) an aggregate of
4,197,331 shares (the “Firm Shares”)
of the Company’s Class A Common Stock, par value $0.01 per share (the “Class A Common Stock”), each Selling Shareholder selling the
amount set forth opposite such Selling Shareholder’s name in Schedule I hereto.


 


McDonald’s Ventures, LLC, a Delaware limited
liability company (“Ventures”),
which is a Selling Shareholder, also proposes to sell to the several
Underwriters not more than an additional 629,599 shares of Class A Common Stock
(the “Additional Shares”) if and to the
extent that you, as managers of the offering, shall have determined to
exercise, on behalf of the Underwriters, the right to purchase such shares of
Class A Common Stock granted to the Underwriters in Section 3 hereof. The Firm
Shares and the Additional Shares are hereinafter collectively referred to as
the “Shares.”  The shares of Class A Common Stock and Class
B Common Stock, par value $0.01 per share, to be outstanding after giving
effect to the sales contemplated hereby are hereinafter referred to
collectively as the “Common Stock.”


 


The Company has filed with the Securities and
Exchange Commission (the “Commission”) a
registration statement, including a prospectus, relating to the Shares. The
registration statement as amended at the time it becomes effective, including
the information (if any) deemed to be part of the registration statement at the
time of effectiveness pursuant to Rule 430A under the Securities Act of 1933, as
amended (the “Securities Act”), is hereinafter
referred to as the “Registration Statement”;
the prospectus in the form first used to confirm sales of Shares (or in the
form first made available to the Underwriters by the Company to meet requests
of purchasers pursuant to Rule 173 under the Securities Act) is hereinafter
referred to as the “Prospectus.”  If the Company has filed an abbreviated
registration statement to register additional shares of Class A Common Stock
pursuant to Rule 462(b) under the Securities Act (the “Rule 462
Registration Statement”), then any reference herein to the term “Registration
Statement” shall be deemed to include such Rule 462 Registration Statement.


 

















 


For purposes of this Agreement, “free writing prospectus” has the meaning set forth in Rule
405 under the Securities Act, “Time of Sale Prospectus”
means the preliminary prospectus together with any free writing prospectuses
and other items identified in Schedule III hereto, and “broadly
available road show” means a “bona fide electronic road show” as
defined in Rule 433(h)(5) under the Securities Act that has been made available
without restriction to any person.


 


1.             Representations and Warranties of the Company. The Company
represents and warrants to and agrees with each of the Underwriters that:


 


(a)       The Registration
Statement has become effective; no stop order suspending the effectiveness of
the Registration Statement is in effect, and no proceedings for such purpose
are pending before or threatened by the Commission.


 


(b)      (i) The Registration
Statement, when it became effective, did not contain and, as amended or
supplemented, if applicable, will not contain any untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading, (ii) the Registration
Statement and the Prospectus comply and, as amended or supplemented, if
applicable, will comply in all material respects with the Securities Act and
the applicable rules and regulations of the Commission thereunder, (iii) the
Time of Sale Prospectus does not, and at the time of each sale of Shares in
connection with the offering when the Prospectus is not yet available to
prospective purchasers and at the Closing Date (as defined in Section
‎4), the Time of Sale Prospectus, as then amended or supplemented by the
Company, if applicable, will not, contain any untrue statement of a material
fact or omit to state a material fact necessary to make the statements therein,
in the light of the circumstances under which they were made, not misleading, (iv)
the broadly available road show, if any, which is identified in Schedule III as
part of the Time of Sale Prospectus, when considered with the other items
identified in Schedule III as part of the Time of Sale Prospectus, does not
contain any untrue statement of a material fact or omit to state a material
fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading and (v) the Prospectus
does not contain and, as amended or supplemented, if applicable, will not
contain any untrue statement of a material fact or omit to state a material
fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, provided, in each
case, that the representations and warranties set forth in this paragraph do
not apply to statements or omissions in the Registration Statement, the Time of
Sale Prospectus or the Prospectus based upon information relating to any
Underwriter furnished to the Company in writing by such Underwriter through you
expressly for use therein.


 


(c)       The
Company is not an “ineligible issuer” in connection with the offering pursuant
to Rules 164, 405 and 433 under the Securities Act. Any


 


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free writing
prospectus that the Company is required to file pursuant to Rule 433(d) under
the Securities Act has been, or will be, filed with the Commission in
accordance with the requirements of the Securities Act and the applicable rules
and regulations of the Commission thereunder. Each free writing prospectus that
the Company has filed, or is required to file, pursuant to Rule 433(d) under
the Securities Act or that was prepared by or on behalf of or used or referred
to by the Company complies or will comply in all material respects with the
requirements of the Securities Act and the applicable rules and regulations of
the Commission thereunder. Except for the free writing prospectuses, if any,
identified in Schedule III hereto, and electronic road shows, if any, furnished
to you before first use, the Company has not prepared, used or referred to, and
will not, without your prior written consent, prepare, use or refer to, any
free writing prospectus.


 


(d)      The Company has been duly
incorporated, is validly existing as a corporation in good standing under the
laws of the jurisdiction of its incorporation, has the corporate power and
authority to own its property and to conduct its business as described in the
Time of Sale Prospectus and is duly qualified to transact business and is in
good standing in each jurisdiction in which the conduct of its business or its
ownership or leasing of property requires such qualification, except to the
extent that the failure to be so qualified or be in good standing would not
reasonably be expected to have, individually or in the aggregate, a material
adverse effect on the condition, financial or otherwise, earnings or business
or operations of the Company and its subsidiaries, taken as a whole (a “Material Adverse Effect”).


 


(e)       Each “significant
subsidiary” of the Company, as defined in Rule 1-02(w) of Regulation S-X under
the Securities Exchange Act of 1934, as amended (the “Exchange Act”),
has been duly incorporated, is validly existing as a corporation in good
standing under the laws of the jurisdiction of its incorporation, has the
corporate power and authority to own its property and to conduct its business
as described in the Time of Sale Prospectus and is duly qualified to transact
business and is in good standing in each jurisdiction in which the conduct of
its business or its ownership or leasing of property requires such
qualification, except to the extent that the failure to be so qualified or be
in good standing would not reasonably be expected to have a Material Adverse
Effect; all of the issued shares of capital stock of each subsidiary of the
Company have been duly and validly authorized and issued, are fully paid and
non-assessable and, except as listed on Schedule IV hereto, are wholly owned
directly or indirectly by the Company, free and clear of all liens,
encumbrances, equities or claims.


 


(f)       This Agreement has been
duly authorized, executed and delivered by the Company.


 


(g)      The authorized capital
stock of the Company will, immediately prior to the Closing Date, conform as to
legal matters to the description thereof contained in each of the Time of Sale
Prospectus and the Prospectus under the heading “Description of Capital Stock.”


 


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(h)      The shares of Common
Stock (including the Shares to be sold by the Selling Shareholders) outstanding
have been duly authorized and are validly issued, fully paid and non-assessable.


 


(i)        The execution and
delivery by the Company of, and the performance by the Company of its
obligations under, this Agreement will not contravene any (i) provision of
applicable law, (ii) the certificate of incorporation or by-laws of the
Company, (iii) any agreement or other instrument binding upon the Company or
any of its subsidiaries that is material to the Company and its subsidiaries,
taken as a whole, or (iv) any judgment, order or decree of any governmental
body, agency or court having jurisdiction over the Company or any subsidiary,
except, in case of clauses (iii) and (iv) for such contraventions as would not
reasonably be expected to have a Material Adverse Effect, and no consent,
approval, authorization or order of, or qualification with, any governmental
body or agency is required for the performance by the Company of its
obligations under this Agreement, except such as have already been obtained or
may be required by the securities or Blue Sky laws of the various states in
connection with the offer and sale of the Shares.


 


(j)        There has not occurred
any material adverse change, or any development involving a prospective
material adverse change, in the condition, financial or otherwise, or in the
earnings, business or operations of the Company and its subsidiaries, taken as
a whole, from that set forth in the Time of Sale Prospectus.


 


(k)       There are no legal or
governmental proceedings pending or, to the knowledge of the Company,
threatened to which the Company or any of its subsidiaries is a party or to
which any of the properties of the Company or any of its subsidiaries is
subject other than proceedings (i) accurately described in all material
respects in the Time of Sale Prospectus and proceedings that would not have a
Material Adverse Effect on the Company and its subsidiaries, taken as a whole,
or on the power or ability of the Company to perform its obligations under this
Agreement or to consummate the transactions contemplated by the Time of Sale
Prospectus or (ii) that are required to be described in the Registration Statement
or the Time of Sale Prospectus and are not so described or that, if determined
adversely to the Company or any of its subsidiaries, could reasonably be
expected to have, singly or in the aggregate, a Material Adverse Effect; and
there are no statutes, regulations, contracts or other documents that are
required to be described in the Registration Statement or the Prospectus or to
be filed as exhibits to the Registration Statement that are not described or
filed as required.


 


(l)        Each preliminary
prospectus filed as part of the registration statement as originally filed or
as part of any amendment thereto, or filed pursuant to Rule 424 under the
Securities Act, complied when so filed in all material respects with the
Securities Act and the applicable rules and regulations of the Commission
thereunder.


 


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(m)      The Company is not
required to register as an “investment company” as such term is defined in the
Investment Company Act of 1940, as amended.


 


(n)      Except as described in
the Time of Sale Prospectus, the Company and its subsidiaries (i) are in
compliance with any and all applicable foreign, federal, state and local laws
and regulations relating to the protection of human health and safety, the
environment or hazardous or toxic substances or wastes, pollutants or
contaminants (“Environmental Laws”), (ii) have
received all permits, licenses or other approvals required of them under
applicable Environmental Laws to conduct their respective businesses and (iii)
are in compliance with all terms and conditions of any such permit, license or
approval, except where such noncompliance with Environmental Laws, failure to
receive required permits, licenses or other approvals or failure to comply with
the terms and conditions of such permits, licenses or approvals could not
reasonably be expected to have, singly or in the aggregate, a Material Adverse
Effect.


 


(o)      Except as described in
the Time of Sale Prospectus, there are no costs or liabilities associated with
Environmental Laws (including, without limitation, any capital or operating
expenditures required for clean up, closure of properties or compliance with
Environmental Laws or any permit, license or approval, any related constraints
on operating activities and any potential liabilities to third parties) which
could reasonably be expected to have, singly or in the aggregate, a Material
Adverse Effect.


 


(p)      Except as described in
the Time of Sale Prospectus, there are (i) no contracts, agreements or
understandings between the Company and any person granting such person the
right to require the Company to file a registration statement under the
Securities Act with respect to any securities of the Company or (ii) to require
the Company to include such securities with the Shares registered pursuant to
the Registration Statement; all such rights have been validly waived in respect
of the Registration Statement.


 


(q)      Subsequent to the
respective dates as of which information is given in each of the Registration
Statement, the Time of Sale Prospectus and the Prospectus (i) the Company and
its subsidiaries on a consolidated basis have not incurred any material
liability or obligation, direct or contingent, nor entered into any material
transaction; (ii) the Company has not purchased any of its outstanding capital
stock, nor declared, paid or otherwise made any dividend or distribution of any
kind on its capital stock other than ordinary and customary dividends; and (iii)
there has not been any material change in the capital stock, short-term debt or
long-term debt of the Company and its subsidiaries on a consolidated basis,
except in each case as described in each of the Registration Statement, the
Time of Sale Prospectus and the Prospectus.


 


(r)       The Company and its
subsidiaries have good and marketable title in fee simple to all real property
and good and marketable title to all personal


 


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property owned by them which is material to
the business of the Company and its subsidiaries, taken as a whole, in each
case free and clear of all liens, encumbrances and defects except such as are
described in the Time of Sale Prospectus or such as do not materially affect
the value of such property and do not interfere with the use made and proposed
to be made of such property by the Company and its subsidiaries; and any real
property and buildings held under lease by the Company and its subsidiaries
that are material to the Company and its subsidiaries, taken as a whole, are
held by them under valid, subsisting and enforceable leases with such
exceptions as are not material and do not interfere with the use made and
proposed to be made of such property and buildings by the Company and its
subsidiaries, in each case except as described in the Time of Sale Prospectus.


 


(s)       The Company and its
subsidiaries own or possess, or can acquire on reasonable terms, all material
patents, patent rights, licenses, inventions, copyrights, know-how (including
trade secrets and other unpatented and/or unpatentable proprietary or
confidential information, systems or procedures), trademarks, service marks and
trade names currently employed by them in connection with the business now
operated by them, except where the failure to own, possess or have the right to
acquire such intellectual property could not reasonably be expected to have a
Material Adverse Effect, and neither the Company nor any of its subsidiaries
has received any notice of infringement of or conflict with asserted rights of
others with respect to any of the foregoing which, singly or in the aggregate,
if the subject of an unfavorable decision, ruling or finding, could reasonably
be expected to have a Material Adverse Effect.


 


(t)       No material labor
dispute with the employees of the Company or any of its subsidiaries exists,
except as described in the Time of Sale Prospectus, or, to the knowledge of the
Company, is imminent; and the Company is not aware of any existing, threatened
or imminent labor disturbance by the employees of any of its principal suppliers,
manufacturers or contractors that could reasonably be expected to have a
Material Adverse Effect.


 


(u)      The Company and each of
its subsidiaries are insured by insurers of recognized financial responsibility
against such losses and risks and in such amounts as are prudent and customary
in the businesses in which they are engaged; and except as described in the
Time of Sale Prospectus, neither the Company nor any of its subsidiaries has
any reason to believe that it will not be able to renew its existing insurance
coverage as and when such coverage expires or to obtain similar coverage from
similar insurers as may be necessary to continue its business at a cost that
could not reasonably be expected to have a Material Adverse Effect.


 


(v)      The Company and its
subsidiaries possess all certificates, authorizations and permits issued by the
appropriate federal, state or foreign regulatory authorities necessary to
conduct their respective businesses other than such certificates,
authorizations and permits which the failure to so possess could


 


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not reasonably be expected to have a Material
Adverse Effect. Neither the Company nor any of its subsidiaries has received
any notice of proceedings relating to the revocation or modification of any
such certificate, authorization or permit which, singly or in the aggregate, if
the subject of an unfavorable decision, ruling or finding, could reasonably be
expected to have a Material Adverse Effect, except as described in the Time of
Sale Prospectus.


 


(w)      The Company and each of
its subsidiaries maintain a system of internal accounting controls sufficient
to provide reasonable assurance that (i) transactions are executed in
accordance with management’s general or specific authorizations; (ii)
transactions are recorded as necessary to permit preparation of financial
statements in conformity with U.S. generally accepted accounting principles and
to maintain asset accountability; (iii) access to assets is permitted only in
accordance with management’s general or specific authorization; and (iv) the
recorded accountability for assets is compared with the existing assets at
reasonable intervals and appropriate action is taken with respect to any
differences.


 


(x)       Except as described in
the Time of Sale Prospectus, the Company has not sold, issued or distributed
any shares of any class of common stock during the six-month period preceding
the date hereof, including any sales pursuant to Rule 144A under, or Regulation
D or S of, the Securities Act, other than shares issued pursuant to employee
benefit plans, qualified stock option plans or other employee compensation
plans or pursuant to outstanding options, rights or warrants.


 


2.             Representations and
Warranties of Parent, Ventures and the Selling Shareholders other than
Ventures.


 


(a)       Each Selling Shareholder
other than Ventures represents and warrants to and agrees with each of the
Underwriters that:


 


(i)            This Agreement has been duly
authorized, executed and delivered by or on behalf of such Selling Shareholder.


 


(ii)           The execution and delivery by such
Selling Shareholder of, and the performance by such Selling Shareholder of its
obligations under, this Agreement will not contravene any (1) provision of
applicable law, (2) the organizational documents of such Selling Shareholder,
if applicable, (3) any agreement or other instrument binding upon such Selling
Shareholder or, if applicable, any of its subsidiaries that is material to such
Selling Shareholder and its subsidiaries, taken as a whole, or (4) any
judgment, order or decree of any governmental body, agency or court having
jurisdiction over such Selling Shareholder or, if applicable, any of its
subsidiaries, except in the case of clauses (3) and (4) for such contraventions
as would not reasonably be expected to have, individually or in the aggregate,
a material adverse effect on the condition,


 


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financial or otherwise, earnings or business
or operations of such Selling Shareholder and its subsidiaries, taken as a
whole, and no consent, approval, authorization or order of, or qualification
with, any governmental body or agency is required for the performance by such
Selling Shareholder of its obligations under this Agreement, except such as
have already been obtained or may be required by the securities or Blue Sky
laws of the various states in connection with the offer and sale of the Shares.


 


(iii)          The execution and delivery by such
Selling Shareholder of, and the performance by such Selling Shareholder of its
obligations under, the Letter of Transmittal and Custody Agreement signed by
such Selling Shareholder and Computershare Trust Company, Inc., as Custodian,
relating to the deposit of the Shares to be sold by such Selling Shareholder
(the “Custody Agreement”) and the Power of
Attorney appointing certain individuals as such Selling Shareholder’s attorneys
in fact to the extent set forth therein, relating to the transactions
contemplated hereby and by the Registration Statement (the “Power of Attorney”) will not contravene (1) any
provision of applicable law, (2) the organizational documents of such Selling
Shareholder, if applicable, (3) any agreement or other instrument binding upon
such Selling Shareholder or (4) any judgment, order or decree of any
governmental body, agency or court having jurisdiction over such Selling
Shareholder, except in the case of clauses (3) and (4) for such contraventions
as would not reasonably be expected to have, individually or in the aggregate,
a material adverse effect on the condition, financial or otherwise, earnings or
business or operations of such Selling Shareholder and its subsidiaries, taken
as a whole, and no consent, approval, authorization or order of, or
qualification with, any governmental body or agency is required for the
performance by such Selling Shareholder of its obligations under the Custody
Agreement or Power of Attorney of such Selling Shareholder, except such as may
be required by the securities or Blue Sky laws of the various states in
connection with the offer and sale of the Shares.


 


(iv)          Such Selling Shareholder has, and on
the Closing Date will have, valid title to, or a valid “security entitlement”
within the meaning of Section 8-501 of the New York Uniform Commercial Code in
respect of, the Shares to be sold by such Selling Shareholder free and clear of
all security interests, claims, liens, equities or other encumbrances and the
legal right and power, and all authorization and approval required by law,
(1) to enter into this Agreement, (2) to enter into the Custody
Agreement and the Power of Attorney and (3) to sell, transfer and deliver
the Shares to be sold by such Selling Shareholder or a security entitlement in
respect of such Shares.


 


(v)           Upon payment for the Shares to be
sold by such Selling Shareholder pursuant to this Agreement, delivery of such
Shares,


 


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as directed by the Underwriters, to Cede
& Co. (“Cede”) or such other nominee as
may be designated by the Depository Trust Company (“DTC”),
registration of such Shares in the name of Cede or such other nominee and the
crediting of such Shares on the books of DTC to securities accounts of the
Underwriters (assuming that neither DTC nor any such Underwriter has notice of
any adverse claim (within the meaning of Section 8-105 of the New York Uniform
Commercial Code (the “UCC”)) to such
Shares), (A) DTC shall be a “protected purchaser” of such Shares within the
meaning of Section 8-303 of the UCC, (B) under Section 8-501 of the UCC, the
Underwriters will acquire a valid security entitlement in respect of such
Shares and (C) no action based on any “adverse claim”, within the meaning of
Section 8-102 of the UCC, to such Shares may be asserted against the
Underwriters with respect to such security entitlement; for purposes of this
representation, such Selling Shareholder may assume that when such payment,
delivery and crediting occur, (X) such Shares will have been registered in the
name of Cede or another nominee designated by DTC, in each case on the Company’s
share registry in accordance with its certificate of incorporation, bylaws and
applicable law, (Y) DTC will be registered as a “clearing corporation” within
the meaning of Section 8-102 of the UCC and (Z) appropriate entries to the
accounts of the several Underwriters on the records of DTC will have been made
pursuant to the UCC.


 


(vi)          If such Selling Shareholder is not an
individual, such Selling Shareholder has been duly organized and is validly
existing as an entity in good standing under the laws of the jurisdiction of
its organization.


 


(vii)         The Custody Agreement and the Power of
Attorney have been duly authorized, executed and delivered by such Selling
Shareholder and are valid and binding agreements of such Selling Shareholder.


 


(viii)        Certificate(s) representing at least the
number of shares of Class B Common Stock convertible into at least the
aggregate number of Shares opposite the name of such Selling Shareholder on
Schedule I hereto have been placed in custody with the Custodian for the
purpose of effecting the conversion of such shares of Class B Common Stock and
the sale of the Shares pursuant to this Agreement.


 


(ix)           Except as described in the Time of
Sale Prospectus, there are no contracts, agreements or understandings between
such Selling Shareholder and any person granting such person the right to
require the Company to file or cause the Company to file a registration
statement under the Securities Act with respect to any securities of the
Company or to require the Company to include such securities with the Shares
registered pursuant to the Registration Statement.


 


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(x)            Such Selling Shareholder has no
reason to believe that the representations and warranties of the Company
contained in Section 1(b) of this Agreement (other than Section 1(b)(ii) as to
which the Selling Shareholder is not called upon to express any belief) are not
true and correct; provided  that,
with respect to any Selling Shareholder who is not a director or officer of the
Company or whose shares are not deemed to be beneficially owned by a director
or officer of the Company under Rule 13d-3 under the Exchange Act, the
representation and warranty set forth in this paragraph 2(a)(x) are limited to
statements or omissions made in reliance upon information relating to such
Selling Shareholder furnished to the Company in writing by such Selling
Shareholder expressly for use in the Registration Statement, the Time of Sale
Prospectus, the Prospectus or any amendments or supplements thereto.


 


(xi)           The sale of the Shares by such
Selling Shareholder pursuant to this Agreement is not prompted by any material
information concerning the Company or any of its subsidiaries which is not set
forth in the Time of Sale Prospectus.


 


(b)           Ventures
represents and warrants to and agrees with each of the Underwriters that:


 


(i)           This Agreement has
been duly authorized, executed and delivered by or on behalf of Ventures.


 


(ii)          Ventures has, and on
the Closing Date will have, valid title to, or a valid “security entitlement”
within the meaning of Section 8-501 of the New York Uniform Commercial Code in
respect of, the Shares to be sold by Ventures free and clear of all security
interests, claims, liens, equities or other encumbrances and the legal right
and power, and all authorization and approval required by law, to enter into
this Agreement and to sell, transfer and deliver the Shares to be sold by
Ventures or a security entitlement in respect of such Shares.


 


(iii)         Upon payment for the
Shares to be sold by Ventures pursuant to this Agreement, delivery of such
Shares, as directed by the Underwriters, to Cede & Co. (“Cede”) or such other nominee as may be designated by the
Depository Trust Company (“DTC”),
registration of such Shares in the name of Cede or such other nominee and the
crediting of such Shares on the books of DTC to securities accounts of the
Underwriters (assuming that neither DTC nor any such Underwriter has notice of
any adverse claim (within the meaning of Section 8-105 of the New York
Uniform Commercial Code (the “UCC”)) to such
Shares), (A) DTC shall be a “protected purchaser” of such Shares within
the meaning of Section 8-303 of the UCC, (B) under Section 8-501
of the UCC, the Underwriters will acquire a valid security entitlement in
respect of such Shares and (C) no action based on any “adverse claim”,
within the


 


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meaning of Section 8-102 of the UCC, to
such Shares may be asserted against the Underwriters with respect to such
security entitlement; for purposes of this representation, Ventures may assume
that when such payment, delivery and crediting occur, (x) such Shares will
have been registered in the name of Cede or another nominee designated by DTC,
in each case on the Company’s share registry in accordance with its certificate
of incorporation, bylaws and applicable law, (y) DTC will be registered as
a “clearing corporation” within the meaning of Section 8-102 of the UCC
and (z) appropriate entries to the accounts of the several Underwriters on
the records of DTC will have been made pursuant to the UCC.


 


(iv)        Ventures has been duly
formed and is validly existing as a limited liability company in good standing
under the laws of the jurisdiction of its formation.


 


(v)         The execution and
delivery by Ventures of, and the performance by Ventures of its obligations
under, this Agreement will not contravene any (1) provision of applicable law, (2)
the organizational documents of Ventures, (3) any agreement or other instrument
binding upon Ventures or any of its subsidiaries that is material to Ventures
and its subsidiaries, taken as a whole, or (4) any judgment, order or decree of
any governmental body, agency or court having jurisdiction over Ventures or any
of its subsidiaries, except, in the case of clauses (3) and (4) for such
contraventions as would not reasonably be expected to have, individually or in
the aggregate, a material adverse effect on the condition, financial or
otherwise, earnings or business or operations of Ventures and its subsidiaries,
taken as a whole, and no consent, approval, authorization or order of, or
qualification with, any governmental body or agency is required for the
performance by Ventures of its obligations under this Agreement, except such as
have already been obtained or may be required by the securities or Blue Sky
laws of the various states in connection with the offer and sale of the Shares.


 


(vi)        Except as described in
the Time of Sale Prospectus, there are no contracts, agreements or
understandings between Ventures and any person granting such person the right
to require the Company to file or cause the Company to file a registration
statement under the Securities Act with respect to any securities of the
Company or to require the Company to include such securities with the Shares
registered pursuant to the Registration Statement.


 


(vii)       Ventures has no reason
to believe that the representations and warranties of the Company contained in
Section 1(b) of this Agreement (other than Section 1(b)(ii) as to
which Ventures is not called upon to express any belief) are not true and
correct; and the sale of the Shares by Ventures pursuant to this Agreement is
not prompted by any


 


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material
information concerning the Company or any of its subsidiaries which is not set
forth in the Time of Sale Prospectus.


 


(c)       McDonald’s Corporation
(the “Parent”) represents and warrants to and
agrees with each of the Underwriters that:


 


(i)            This Agreement has been duly
authorized, executed and delivered by or on behalf of Parent.


 


(ii)           The Parent has no reason to believe
that the representations and warranties of the Company contained in
Section 1(b) of this Agreement (other than Section 1(b)(ii) as to which
the Parent is not called upon to express any belief) are not true and correct;
and the sale of the Shares by Ventures pursuant to this Agreement is not
prompted by any material information concerning the Company or any of its
subsidiaries which is not set forth in the Time of Sale Prospectus.


 


3.             Agreements to Sell and Purchase. Each Selling Shareholder,
severally and not jointly, hereby agrees to sell to the several Underwriters,
and each Underwriter, upon the basis of the representations and warranties
herein contained, but subject to the conditions hereinafter stated, agrees,
severally and not jointly, to purchase from each Selling Shareholder at
$58.8862 per share (the “Purchase Price”)
the number of Firm Shares (subject to such adjustments to eliminate fractional
shares as you may determine) that bears the same proportion to the number of
Firm Shares to be sold by such Selling Shareholder as the number of Firm Shares
set forth in Schedule II hereto opposite the name of such Underwriter bears to
the total number of Firm Shares.


 


On the basis of the representations and
warranties contained in this Agreement, and subject to its terms and
conditions, Ventures agrees to sell to the Underwriters the Additional Shares,
and the Underwriters shall have the right to purchase, severally and not
jointly, up to 629,599 Additional Shares at the Purchase Price. Morgan Stanley
& Co. Incorporated (“Morgan Stanley”)
and Cowen and Company, LLC (“Cowen”) may exercise this right on behalf of the
Underwriters in whole or from time to time in part by giving written notice not
later than 30 days after the date of this Agreement. Any exercise notice shall
specify the number of Additional Shares to be purchased by the Underwriters and
the date on which such shares are to be purchased. Each purchase date must be
at least two business days after the written notice is given and may not be
earlier than the closing date for the Firm Shares nor later than ten business
days after the date of such notice. Additional Shares may be purchased as
provided in Section 5 hereof solely for the purpose of covering over-allotments
made in connection with the offering of the Firm Shares. On each day, if any,
that Additional Shares are to be purchased (an “Option
Closing Date”), each Underwriter agrees, severally and not jointly,
to purchase the number of Additional Shares (subject to such adjustments to
eliminate fractional shares as you may determine) that bears the same
proportion to the total number of Additional Shares to be purchased on such


 


12

















 


Option Closing
Date as the number of Firm Shares set forth in Schedule II hereto opposite the
name of such Underwriter bears to the total number of Firm Shares.


 


The Company hereby agrees that, without the
prior written consent of Morgan Stanley and Cowen on behalf of the
Underwriters, it will not, during the period ending 90 days after the date of
the Prospectus, (1) offer, pledge, sell, contract to sell, sell any option or
contract to purchase, purchase any option or contract to sell, grant any
option, right or warrant to purchase, lend or otherwise transfer or dispose of,
directly or indirectly, any shares of Common Stock or any securities
convertible into or exercisable or exchangeable for Common Stock or (2) enter
into any swap or other arrangement that transfers to another, in whole or in
part, any of the economic consequences of ownership of the Common Stock,
whether any such transaction described in clause (1) or (2) above is to be
settled by delivery of Common Stock or such other securities, in cash or
otherwise or (3) file any registration statement with the Commission
relating to the offering of any shares of Common Stock or any securities
convertible into or exercisable or exchangeable for Common Stock.


 


The restrictions contained in the preceding
paragraph shall not apply to (a) the Shares to be sold hereunder, (b) the
issuance by the Company of shares of Common Stock upon the exercise of an
option or warrant or the conversion of a security outstanding on the date
hereof of which the Underwriters have been advised in writing or that is
described in the Time of Sale Prospectus, (c) the grant of options or the
issuance of shares of Common Stock to employees, officers, directors, advisors
or consultants pursuant to any employee benefit plan described in the
Prospectus or (d) the filing of any registration statement on Form S-8 in
respect of any employee benefit plan described in the Prospectus. Notwithstanding
the foregoing, if (i) during the last 17 days of the 90-day restricted period
the Company issues an earnings release or material news or a material event
relating to the Company occurs; or (ii) prior to the expiration of the 90-day
restricted period, the Company announces that it will release earnings results
during the 16-day period beginning on the last day of the 90-day period, the
restrictions imposed by this agreement shall continue to apply until the
expiration of the 18-day period beginning on the issuance of the earnings
release or the occurrence of the material news or material event. The Company
shall promptly notify Morgan Stanley and Cowen of any earnings release, news or
event that may give rise to an extension of the initial 90-day restricted
period.


 


4.             Terms of Public Offering. Each of the Company and the
Selling Shareholders are advised by you that the Underwriters propose to make a
public offering of their respective portions of the Shares as soon after the
Registration Statement and this Agreement have become effective as in your
judgment is advisable. Each of the Company and the Selling Shareholders are
further advised by you that the Shares are to be offered to the public
initially at $61.50 per share (the “Public Offering Price”)
and to certain dealers selected by you at a price that represents a concession
not in excess of $1.70 per share under the Public Offering Price.


 


13

















 


5.             Payment and Delivery. Payment for the Firm Shares to be sold
by each Selling Shareholder shall be made to such Selling Shareholder in
Federal or other funds immediately available in New York City against delivery
of such Firm Shares for the respective accounts of the several Underwriters at
10:00 a.m., New York City time, on May 24, 2006, or at such other time on the
same or such other date, not later than May 31, 2006, as shall be designated in
writing by you. The time and date of such payment are hereinafter referred to
as the “Closing Date.”


 


Payment for any Additional Shares shall be
made to Ventures in Federal or other funds immediately available in New York
City against delivery of such Additional Shares for the respective accounts of
the several Underwriters at 10:00 a.m., New York City time, on the date
specified in the corresponding notice described in Section 3 or at such other
time on the same or on such other date, in any event not later than June 30,
2006, as shall be designated in writing by you.


 


The Firm Shares and Additional Shares shall
be registered in such names and in such denominations as you shall request in
writing not later than one full business day prior to the Closing Date or the
applicable Option Closing Date, as the case may be. The Firm Shares and
Additional Shares shall be delivered to you on the Closing Date or an Option
Closing Date, as the case may be, for the respective accounts of the several
Underwriters, with any transfer taxes payable in connection with the transfer
of the Shares to the Underwriters duly paid, against payment of the Purchase
Price therefor.


 


6.             Conditions to the Underwriters’ Obligations. The obligations
of the Selling Shareholders to sell the Shares to the Underwriters and the
several obligations of the Underwriters to purchase and pay for the Shares on
the Closing Date are subject to the condition that the Registration Statement
shall have become effective not later than 5:00 p.m., New York City time, on
the date hereof.


 


The several obligations of the Underwriters
are subject to the following further conditions:


 


(a)       Subsequent to the
execution and delivery of this Agreement and prior to the Closing Date:


 


(i)            there shall not have occurred any
downgrading, nor shall any notice have been given of any intended or potential
downgrading or of any review for a possible change that does not indicate the
direction of the possible change, in the rating accorded any of the securities
of the Company or any of its subsidiaries by any “nationally recognized
statistical rating organization,” as such term is defined for purposes of Rule
436(g)(2) under the Securities Act; and


 


14

















 


(ii)           there shall not have occurred any
change, or any development involving a prospective change, in the condition,
financial or otherwise, or in the earnings, business or operations of the Company
and its subsidiaries, taken as a whole, from that set forth in the Time of Sale
Prospectus that, in your judgment, is material and adverse and that makes it,
in your judgment, impracticable to market the Shares on the terms and in the
manner contemplated in the Time of Sale Prospectus.


 


(b)      The Underwriters shall
have received on the Closing Date:


 


(i)            a certificate, dated the Closing
Date and signed by an executive officer of the Company to the effect set forth
in Section 6(a)(i) above and to the effect that the representations and
warranties of the Company contained in this Agreement are true and correct as
of the Closing Date and that the Company has complied with all of the
agreements and satisfied all of the conditions on its part to be performed or satisfied
hereunder on or before the Closing Date. The officer signing and delivering
such certificate may rely upon the best of his or her knowledge as to
proceedings threatened;


 


(ii)           a certificate, dated the Closing Date
and signed by an officer of Ventures, who is authorized by corporate action to
provide such certificate, to the effect that the representations and warranties
of Ventures contained in this Agreement are true and correct as of the Closing
Date and that Ventures has complied with all of the agreements and satisfied
all of the conditions on its part to be performed or satisfied hereunder on or
before the Closing Date;


 


(iii)          a certificate, dated the Closing Date
and signed by an officer of Parent, who is authorized by corporate action to
provide such certificate, to the effect that the representations and warranties
of Parent contained in this Agreement are true and correct as of the Closing
Date; and


 


(iv)          a certificate, dated the Closing Date
and signed by Montgomery F. Moran or John R. Hartung, as attorney-in-fact to
the Selling Shareholders (except Ventures), to the effect that the
representations and warranties of the Selling Shareholders (except Ventures)
contained in this Agreement are true and correct as of the Closing Date and
that the Selling Shareholders have complied with all of the agreements and
satisfied all of the conditions on their part to be performed or satisfied
hereunder on or before the Closing Date.


 


(c)       The Underwriters shall
have received on the Closing Date an opinion of Kirkland & Ellis LLP,
outside counsel for the Company, dated the Closing Date, to the effect set
forth in Exhibit B.


 


15

















 


(d)      The Underwriters shall
have received on the Closing Date an opinion of Cleary Gottlieb Steen &
Hamilton LLP, counsel for the Parent and the Selling Shareholders, dated the
Closing Date, to the effect set forth in Exhibit C.


 


(e)       The Underwriters shall
have received on the Closing Date an opinion of Davis Polk & Wardwell,
counsel for the Underwriters, dated the Closing Date, to the effect that:


 


(i)            this Agreement has been duly
authorized, executed and delivered by the Company, the Parent and Ventures;


 


(ii)           the statements relating to legal
matters, documents or proceedings included in the Time of Sale Prospectus and
the Prospectus under the captions “Description of Capital Stock” (with respect
to the Company’s charter and by-laws) and “Underwriters” fairly summarize in
all material respects such matters, documents or proceedings; and


 


(iii)          (A) in the opinion of such counsel,
the Registration Statement, the Time of Sale Prospectus and the Prospectus
(except for the broadly available road show, the financial statements and
financial schedules and other financial and statistical data included therein,
as to which such counsel need not express any belief) appear on their face to
be appropriately responsive in all material respects to the requirements of the
Securities Act and the applicable rules and regulations of the Commission
thereunder, and (B) nothing has come to the attention of such counsel that
causes such counsel to believe that (1) the Registration Statement or the
prospectus included therein (except for the financial statements and financial
schedules and other financial and statistical data included therein, as to
which such counsel need not express any belief) at the time the Registration
Statement became effective contained any untrue statement of a material fact or
omitted to state a material fact required to be stated therein or necessary to
make the statements therein not misleading, (2) the Time of Sale
Prospectus (except for the broadly available road show, the financial
statements and financial schedules and other financial and statistical data
included therein, as to which such counsel need not express any belief) as of
the date of this Agreement or as amended or supplemented, if applicable, as of
the Closing Date contained or contains any untrue statement of a material fact
or omitted or omits to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading or (3) the Prospectus (except for the financial
statements and financial schedules and other financial and statistical data
included therein, as to which such counsel need not express any belief) as of
its date or as amended or supplemented, if applicable, as of the Closing Date
contained or contains any untrue statement of a material fact or omitted or
omits to state a material fact necessary in order to make the statements
therein, in


 


16

















 


the light of the circumstances under which
they were made, not misleading.


 


With respect to Section 6(e)(iii), counsel
for the Underwriters may state that their opinion and belief is based upon
their participation in the preparation of the Registration Statement, the Time
of Sale Prospectus and Prospectus and any amendments or supplements thereto and
review and discussion of the contents thereof, but are without independent
check or verification, except as specified.


 


The opinions of Kirkland & Ellis LLP and
Cleary Gottlieb Steen & Hamilton LLP provided pursuant to Sections 6(c) and
6(d) above shall be rendered to the Underwriters at the request of the Company,
the Parent or the Selling Shareholders, as the case may be, and shall so state
therein.


 


(f)       The Underwriters shall
have received, on each of the date hereof and the Closing Date, a letter dated
the date hereof or the Closing Date, as the case may be, in form and substance
satisfactory to the Underwriters, from Ernst & Young LLP, an independent
registered public accounting firm, containing statements and information of the
type ordinarily included in accountants’ “comfort letters” to underwriters with
respect to the financial statements and certain financial information contained
in the Registration Statement and the Prospectus; provided
that the letter delivered on the Closing Date shall use a “cut-off date” not
earlier than the date hereof.


 


(g)      The “lock-up” agreements,
each substantially in the form of Exhibit A hereto, between you and the Selling
Shareholders, officers and directors of the Company relating to sales and
certain other dispositions of shares of Common Stock or certain other securities,
delivered to you on or before the date hereof, shall be in full force and
effect on the Closing Date.


 


The several obligations of the Underwriters
to purchase Additional Shares hereunder are subject to the delivery to you on
the applicable Option Closing Date of such documents as you may reasonably
request with respect to the good standing of the Company, the due authorization
and issuance of the Additional Shares to be sold on such Option Closing Date
and other matters related to the issuance of such Additional Shares.


 


7.             Covenants of the Company. In further consideration of the
agreements of the Underwriters herein contained, the Company covenants with
each Underwriter as follows:


 


(a)       To furnish to you,
without charge, three signed copies of the Registration Statement (including
exhibits thereto) and for delivery to each other Underwriter a conformed copy
of the Registration Statement (without exhibits thereto) and to furnish to you
in New York City, without charge, prior to 10:00 a.m., New York City time, on
the business day next succeeding the date of this Agreement and during the
period mentioned in Section 7(f) below, as many


 


17

















 


copies of the
Time of Sale Prospectus, the Prospectus and any supplements and amendments
thereto or to the Registration Statement as you may reasonably request.


 


(b)      Before amending or
supplementing the Registration Statement, the Time of Sale Prospectus or the
Prospectus, to furnish to you a copy of each such proposed amendment or
supplement and not to file any such proposed amendment or supplement to which
you reasonably object, and to file with the Commission within the applicable
period specified in Rule 424(b) under the Securities Act any prospectus
required to be filed pursuant to such Rule.


 


(c)       To furnish to you a copy
of each proposed free writing prospectus to be prepared by or on behalf of,
used by, or referred to by the Company and not to use or refer to any proposed
free writing prospectus to which you reasonably object.


 


(d)      Not to take any action
that would result in an Underwriter or the Company being required to file with
the Commission pursuant to Rule 433(d) under the Securities Act a free writing
prospectus prepared by or on behalf of the Underwriter that the Underwriter
otherwise would not have been required to file thereunder.


 


(e)       If the Time of Sale
Prospectus is being used to solicit offers to buy the Shares at a time when the
Prospectus is not yet available to prospective purchasers and any event shall
occur or condition exist as a result of which it is necessary to amend or
supplement the Time of Sale Prospectus in order to make the statements therein,
in the light of the circumstances, not misleading, or if any event shall occur
or condition exist as a result of which the Time of Sale Prospectus conflicts
with the information contained in the Registration Statement then on file, or
if, in the opinion of counsel for the Underwriters, it is necessary to amend or
supplement the Time of Sale Prospectus to comply with applicable law, forthwith
to prepare, file with the Commission and furnish, at its own expense, to the
Underwriters and to any dealer upon request, either amendments or supplements
to the Time of Sale Prospectus so that the statements in the Time of Sale
Prospectus as so amended or supplemented will not, in the light of the
circumstances when delivered to a prospective purchaser, be misleading or so
that the Time of Sale Prospectus, as amended or supplemented, will no longer
conflict with the Registration Statement, or so that the Time of Sale
Prospectus, as amended or supplemented, will comply with applicable law.


 


(f)       If, during such period
after the first date of the public offering of the Shares as in the opinion of
counsel for the Underwriters the Prospectus (or in lieu thereof the notice
referred to in Rule 173(a) under the Securities Act) is required by law to be
delivered in connection with sales by an Underwriter or dealer, any event shall
occur or condition exist as a result of which it is necessary to amend or
supplement the Prospectus in order to make the statements therein, in the light
of the circumstances when the Prospectus (or in lieu thereof the notice


 


18

















 


referred to in Rule 173(a) under the
Securities Act) is delivered to a purchaser, not misleading, or if, in the
opinion of counsel for the Underwriters, it is necessary to amend or supplement
the Prospectus to comply with applicable law, forthwith to prepare, file with
the Commission and furnish, at its own expense, to the Underwriters and to the
dealers (whose names and addresses you will furnish to the Company) to which
Shares may have been sold by you on behalf of the Underwriters and to any other
dealers upon request, either amendments or supplements to the Prospectus so
that the statements in the Prospectus as so amended or supplemented will not,
in the light of the circumstances when the Prospectus (or in lieu thereof the
notice referred to in Rule 173(a) under the Securities Act) is delivered to a
purchaser, be misleading or so that the Prospectus, as amended or supplemented,
will comply with law.


 


(g)      To endeavor to qualify
the Shares for offer and sale under the securities or Blue Sky laws of such
jurisdictions as you shall reasonably request; provided, however, that the
Company shall not be required in connection therewith, as a condition thereof,
to qualify as a foreign corporation or to execute a consent to service of
process in any jurisdiction or subject itself to taxation as doing business in
any jurisdiction in which it is not already conducting its business.


 


(h)      To make generally
available to the Company’s security holders and to you as soon as practicable
an earning statement covering a period of at least twelve months beginning with
the first fiscal quarter of the Company occurring after the date of this
Agreement which shall satisfy the provisions of Section 11(a) of the Securities
Act and the rules and regulations of the Commission thereunder.


 


8.        Expenses.
Whether or not the transactions contemplated in this Agreement are consummated
or this Agreement is terminated, the Company agrees to pay or cause to be paid
all expenses incident to the performance of its obligations under this
Agreement, including:  (i) the fees,
disbursements and expenses of the Company’s counsel and the Company’s
accountants and counsel for the Selling Shareholders in connection with the
registration and delivery of the Shares under the Securities Act and all other
fees or expenses in connection with the preparation and filing of the
Registration Statement, any preliminary prospectus, the Time of Sale
Prospectus, the Prospectus, any free writing prospectus prepared by or on
behalf of, used by, or referred to by the Company and amendments and supplements
to any of the foregoing, including all printing costs associated therewith, and
the mailing and delivering of copies thereof to the Underwriters and dealers,
in the quantities hereinabove specified, (ii) all costs and expenses related to
the transfer and delivery of the Shares to the Underwriters, including any
transfer or other taxes payable thereon, (iii) the cost of printing or
producing any Blue Sky or legal investment memorandum in connection with the
offer and sale of the Shares under state securities laws and all expenses in
connection with the qualification of the Shares for offer and sale under state
securities laws as provided in Section 7(g) hereof, including filing fees and
the


 


19

















 


reasonable fees and disbursements of one firm
of counsel for the Underwriters in connection with such qualification and in
connection with the Blue Sky or legal investment memorandum, (iv) all filing
fees and the reasonable fees and disbursements of one firm of counsel to the
Underwriters incurred in connection with the review and qualification of the
offering of the Shares by the National Association of Securities Dealers, Inc.,
(v) all costs and expenses incident to listing the Shares on the NYSE, (vi) the
cost of printing global certificates representing the Shares, (vii) the costs
and charges of any transfer agent, registrar or depositary, (viii) the costs
and expenses of the Company relating to investor presentations on any “road
show” undertaken in connection with the marketing of the offering of the
Shares, including, without limitation, expenses associated with the preparation
or dissemination of any electronic road show, expenses associated with the
production of road show slides and graphics, fees and expenses of any
consultants engaged in connection with the road show presentations with the
prior approval of the Company, travel and lodging expenses of the
representatives and officers of the Company and any such consultants, and the
cost of any aircraft chartered in connection with the road show, (ix) the
document production charges and expenses associated with printing this
Agreement, (x) all expenses in connection with any offer and sale of the Shares
outside of the United States, including filing fees and the reasonable fees and
disbursements of counsel for the Underwriters in connection with offers and
sales outside of the United States and (xi) all other costs and expenses
incident to the performance of the obligations of the Company hereunder for
which provision is not otherwise made in this Section. It is understood,
however, that except as provided in this Section, Section 10 entitled “Indemnity
and Contribution” and the last paragraph of Section 12 below, the Underwriters
will pay all of their costs and expenses, including fees and disbursements of
their counsel, stock transfer taxes payable on resale of any of the Shares by
them and any advertising expenses connected with any offers they may make.


 


The provisions of this Section shall not
supersede or otherwise affect any agreement that the Selling Shareholders may
otherwise have for the allocation of such expenses among themselves.


 


9.             Covenants of the Underwriters. Each Underwriter severally
covenants with the Company not to take any action that would result in the
Company being required to file with the Commission under Rule 433(d) under the
Securities Act a free writing prospectus prepared by or on behalf of or used by
such Underwriter that otherwise would not be required to be filed by the Company
thereunder, but for the action of the Underwriter.


 


10.           Indemnity
and Contribution. (a) The Company agrees to indemnify and hold
harmless each Underwriter, each person, if any, who controls any Underwriter
within the meaning of either Section 15 of the Securities Act or Section 20 of
the Exchange Act, and each affiliate of any Underwriter within the meaning of
Rule 405 under the Securities Act from and against any and all losses, claims,
damages and liabilities (including, without limitation, any legal or other


 


20

















 


expenses reasonably incurred in connection
with defending or investigating any such action or claim) caused by any untrue
statement or alleged untrue statement of a material fact contained in the Registration
Statement or any amendment thereof, any preliminary prospectus, the Time of
Sale Prospectus, any issuer free writing prospectus as defined in Rule 433(h)
under the Securities Act, any Company information that the Company has filed,
or is required to file, pursuant to Rule 433(d) of the Securities Act, or the
Prospectus or any amendment or supplement thereto, or caused by any omission or
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading, except insofar as
such losses, claims, damages or liabilities are caused by any such untrue
statement or omission or alleged untrue statement or omission based upon
information relating to any Underwriter furnished to the Company in writing by
such Underwriter through you expressly for use therein.


 


(b)      The Parent and Ventures
agree to indemnify and hold harmless each Underwriter, each person, if any, who
controls any Underwriter within the meaning of either Section 15 of the Securities
Act or Section 20 of the Exchange Act, and each affiliate of any Underwriter
within the meaning of Rule 405 under the Securities Act from and against any
and all losses, claims, damages and liabilities (including, without limitation,
any legal or other expenses reasonably incurred in connection with defending or
investigating any such action or claim) caused by any untrue statement or
alleged untrue statement of a material fact contained in the Registration
Statement or any amendment thereof, any preliminary prospectus, the Time of
Sale Prospectus, any issuer free writing prospectus as defined in Rule 433(h)
under the Securities Act, any Company information that the Company has filed,
or is required to file, pursuant to Rule 433(d) of the Securities Act, or the
Prospectus or any amendment or supplement thereto, or caused by any omission or
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading, except insofar as
such losses, claims, damages or liabilities are caused by any such untrue
statement or omission or alleged untrue statement or omission based upon
information relating to any Underwriter furnished to the Company in writing by
such Underwriter through you expressly for use therein, but only with reference
to information relating to the Parent or Ventures furnished by or on behalf of
the Parent or Ventures for use in the Registration Statement, any preliminary
prospectus, the Time of Sale Prospectus, any issuer free writing prospectus,
the Prospectus or any amendments or supplements thereto.


 


(c)       Each Selling Shareholder
other than Ventures agrees, severally and not jointly, to indemnify and hold
harmless each Underwriter, each person, if any, who controls any Underwriter
within the meaning of either Section 15 of the Securities Act or Section 20 of
the Exchange Act, and each affiliate of any Underwriter within the meaning of
Rule 405 under the Securities Act from and against any and all losses, claims,
damages and liabilities (including, without limitation, any legal or other
expenses reasonably incurred in connection with


 


21

















 


defending or
investigating any such action or claim) caused by any untrue statement or
alleged untrue statement of a material fact contained in the Registration
Statement or any amendment thereof, any preliminary prospectus, the Time of
Sale Prospectus, any issuer free writing prospectus as defined in Rule 433(h)
under the Securities Act, any Company information that the Company has filed,
or is required to file, pursuant to Rule 433(d) of the Securities Act, or the
Prospectus or any amendment or supplement thereto, or caused by any omission or
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading, except insofar as
such losses, claims, damages or liabilities are caused by any such untrue
statement or omission or alleged untrue statement or omission based upon
information relating to any Underwriter furnished to the Company in writing by
such Underwriter through you expressly for use therein, but only with reference
to information relating to such Selling Shareholder furnished by or on behalf
of such Selling Shareholder for use in the Registration Statement, any
preliminary prospectus, the Time of Sale Prospectus, any issuer free writing
prospectus, the Prospectus or any amendments or supplements thereto.


 


(d)      Each Underwriter agrees,
severally and not jointly, to indemnify and hold harmless the Company, each
Selling Shareholder, the directors of the Company, the officers of the Company
who sign the Registration Statement and each person, if any, who controls the
Company or a Selling Shareholder within the meaning of either Section 15 of the
Securities Act or Section 20 of the Exchange Act to the same extent as the
foregoing indemnity from the Company to such Underwriter, but only with
reference to information relating to such Underwriter furnished to the Company
in writing by such Underwriter through you expressly for use in the
Registration Statement, any preliminary prospectus, the Time of Sale
Prospectus, any issuer free writing prospectus or the Prospectus or any
amendment or supplement thereto.


 


(e)       In case any proceeding
(including any governmental investigation) shall be instituted involving any
person in respect of which indemnity or contribution may be sought pursuant to
Section  10(a), 10(b), 10(c), 10(d) or
10(f) such person (the “indemnified party”)
shall promptly notify the person against whom such indemnity or contribution
may be sought (the “indemnifying party”)
in writing and the indemnifying party, upon request of the indemnified party,
shall retain counsel reasonably satisfactory to the indemnified party to
represent the indemnified party and any others the indemnifying party may
designate in such proceeding and shall pay the fees and disbursements of such
counsel related to such proceeding.  In
any such proceeding, any indemnified party shall have the right to retain its
own counsel, but the fees and expenses of such counsel shall be at the expense
of such indemnified party unless (i) the indemnifying party and the indemnified
party shall have mutually agreed to the retention of such counsel or (ii) the
named parties to any such proceeding (including any impleaded parties) include
both the indemnifying party and the indemnified party and representation of
both parties by the same counsel would


 


22

















 


be
inappropriate due to actual or potential differing interests between them.  It is understood that the indemnifying party
shall not, in respect of the legal expenses of any indemnified party in
connection with any proceeding or related proceedings in the same jurisdiction,
be liable for (i) the fees and expenses of more than one separate firm (in
addition to any local counsel) for all Underwriters and all persons, if any,
who control any Underwriter within the meaning of either Section 15 of the
Securities Act or Section 20 of the Exchange Act or who are affiliates of any
Underwriter within the meaning of Rule 405 under the Securities Act, (ii) the
fees and expenses of more than one separate firm (in addition to any local
counsel) for the Company, and each of its directors, officers who sign the
Registration Statement and each person, if any, who controls the Company within
the meaning of either such Section and (iii) the fees and expenses of more than
one separate firm (in addition to any local counsel) for all Selling
Shareholders and all persons, if any, who control any Selling Shareholder
within the meaning of either such Section, and that all such fees and expenses
shall be reimbursed as they are incurred. 
In the case of any such separate firm for the Underwriters and such
control persons and affiliates of any Underwriters, such firm shall be
designated in writing by Morgan Stanley and Cowen.  In the case of any such separate firm for the
Company, and such directors, officers and control persons of the Company, such
firm shall be designated in writing by the Company.  In the case of any such separate firm for the
Selling Shareholders and such control persons of any Selling Shareholders, such
firm shall be designated in writing by Ventures.  The indemnifying party shall not be liable
for any settlement of any proceeding effected without its written consent, but
if settled with such consent or if there be a final judgment for the plaintiff,
the indemnifying party agrees to indemnify the indemnified party from and
against any loss or liability by reason of such settlement or judgment.  Notwithstanding the foregoing sentence, if at
any time an indemnified party shall have requested an indemnifying party to
reimburse the indemnified party for fees and expenses of counsel as
contemplated by the second and third sentences of this paragraph, the
indemnifying party agrees that it shall be liable for any settlement of any
proceeding effected without its written consent if (i) such settlement is
entered into more than 45 days after receipt by such indemnifying party of the
aforesaid request and (ii) such indemnifying party shall not have reimbursed
the indemnified party in accordance with such request prior to the date of such
settlement.  No indemnifying party shall,
without the prior written consent of the indemnified party, effect any
settlement of any pending or threatened proceeding in respect of which any
indemnified party is or could have been a party and indemnity could have been
sought hereunder by such indemnified party, unless such settlement includes an
unconditional release of such indemnified party from all liability on claims
that are the subject matter of such proceeding.


 


(f)       To the extent the
indemnification provided for in Section 10(a), 10(b), 10(c), or 10(d) is
unavailable to an indemnified party or insufficient in respect of any losses,
claims, damages or liabilities referred to therein, then each indemnifying party
under such paragraph, in lieu of indemnifying such


 


23

















 


indemnified
party thereunder, shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages or liabilities (i)
in such proportion as is appropriate to reflect the relative benefits received
by the indemnifying party or parties on the one hand and the indemnified party
or parties on the other hand from the offering of the Shares or (ii) if the
allocation provided by clause 10(f)(i) above is not permitted by applicable
law, in such proportion as is appropriate to reflect not only the relative
benefits referred to in clause 10(f)(i) above but also the relative fault of
the indemnifying party or parties on the one hand and of the indemnified party
or parties on the other hand in connection with the statements or omissions
that resulted in such losses, claims, damages or liabilities, as well as any
other relevant equitable considerations. 
The relative benefits received by the Company and the Selling
Shareholders on the one hand and the Underwriters on the other hand in
connection with the offering of the Shares shall be deemed to be in the same
respective proportions as the net proceeds from the offering of the Shares
(before deducting expenses) received by the Selling Shareholders and the total
underwriting discounts and commissions received by the Underwriters, in each
case as set forth in the table on the cover of the Prospectus, bear to the
aggregate Public Offering Price of the Shares. 
The relative fault of the Company and the Selling Shareholders on the
one hand and the Underwriters on the other hand shall be determined by
reference to, among other things, whether the untrue or alleged untrue statement
of a material fact or the omission or alleged omission to state a material fact
relates to information supplied by such Selling Shareholders or by the
Underwriters and the parties’ relative intent, knowledge, access to information
and opportunity to correct or prevent such statement or omission.  The Underwriters’ respective obligations to
contribute pursuant to this Section 10 are several in proportion to the
respective number of Shares they have purchased hereunder, and not joint.  The Selling Shareholders’ respective
obligations to contribute pursuant to this Section 10 are several in proportion
to the respective number of Shares they have sold hereunder, and not joint.


 


(g)      Each of the Company, the
Selling Shareholders and the Underwriters agrees that it would not be just or
equitable if contribution pursuant to this Section 10 were determined by pro rata allocation (even if the Underwriters were treated
as one entity for such purpose) or by any other method of allocation that does
not take account of the equitable considerations referred to in Section
10(f).  The amount paid or payable by an
indemnified party as a result of the losses, claims, damages and liabilities
referred to in Section 10(f) shall be deemed to include, subject to the
limitations set forth above, any legal or other expenses reasonably incurred by
such indemnified party in connection with investigating or defending any such
action or claim.  Notwithstanding the
provisions of this Section 10, no Underwriter shall be required to contribute
any amount in excess of the amount by which the total price at which the Shares
underwritten by it and distributed to the public were offered to the public
exceeds the amount of any damages that such Underwriter has otherwise been
required to pay by reason of such untrue or alleged untrue statement or
omission or alleged


 


24

















 


omission.  No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation.  The
remedies provided for in this Section 10 are not exclusive and shall not limit
any rights or remedies which may otherwise be available to any indemnified party
at law or in equity.


 


(h)      The indemnity and
contribution provisions contained in this Section 10 and the representations,
warranties and other statements of the Company, the Parent and the Selling
Shareholders contained in this Agreement shall remain operative and in full
force and effect regardless of (i) any termination of this Agreement, (ii) any
investigation made by or on behalf of any Underwriter, any person controlling
any Underwriter or any affiliate of any Underwriter, the Parent or any person controlling
the Parent, any Selling Shareholder or any person controlling any Selling
Shareholder or the Company, its officers or directors or any person controlling
the Company and (iii) acceptance of and payment for any of the Shares.


 


11.           Termination.  The Underwriters may terminate this Agreement
by notice given by you to the Company, if after the execution and delivery of
this Agreement and prior to the Closing Date (i) trading generally shall have
been suspended or materially limited on, or by, as the case may be, any of the
New York Stock Exchange, the American Stock Exchange, the Nasdaq National
Market, the Chicago Board of Options Exchange, the Chicago Mercantile Exchange
or the Chicago Board of Trade, (ii) trading of any securities of the Company shall
have been suspended on any exchange or in any over-the-counter
market, (iii) a material disruption in securities settlement, payment or
clearance services in the United States shall have occurred, (iv) any
moratorium on commercial banking activities shall have been declared by Federal
or New York State authorities or (v) there shall have occurred any outbreak or
escalation of hostilities, or any change in financial markets or any calamity
or crisis that, in your judgment, is material and adverse and which, singly or
together with any other event specified in this clause (v), makes it, in your
judgment, impracticable or inadvisable to proceed with the offer, sale or
delivery of the Shares on the terms and in the manner contemplated in the Time
of Sale Prospectus or the Prospectus.


 


12.           Effectiveness;
Defaulting Underwriters.  This
Agreement shall become effective upon the execution and delivery hereof by the
parties hereto.


 


If, on the Closing Date or an Option Closing Date, as the case may be,
any one or more of the Underwriters shall fail or refuse to purchase Shares
that it has or they have agreed to purchase hereunder on such date, and the
aggregate number of Shares which such defaulting Underwriter or Underwriters
agreed but failed or refused to purchase is not more than one-tenth of
the aggregate number of the Shares to be purchased on such date, the other
Underwriters shall be obligated severally in the proportions that the number of
Firm Shares set forth


 


25

















 


opposite their
respective names in Schedule II bears to the aggregate number of Firm Shares
set forth opposite the names of all such non-defaulting Underwriters, or
in such other proportions as you may specify, to purchase the Shares which such
defaulting Underwriter or Underwriters agreed but failed or refused to purchase
on such date; provided that in no event shall the number of Shares that any
Underwriter has agreed to purchase pursuant to this Agreement be increased
pursuant to this Section 12 by an amount in excess of one-ninth of such
number of Shares without the written consent of such Underwriter.  If, on the Closing Date, any Underwriter or
Underwriters shall fail or refuse to purchase Firm Shares and the aggregate
number of Firm Shares with respect to which such default occurs is more than
one-tenth of the aggregate number of Firm Shares to be purchased on such
date, and arrangements satisfactory to you, the Company and the Selling
Shareholders for the purchase of such Firm Shares are not made within 36 hours
after such default, this Agreement shall terminate without liability on the
part of any non defaulting Underwriter, the Company or the Selling
Shareholders.  In any such case either
you or the Selling Shareholders shall have the right to postpone the Closing
Date, but in no event for longer than seven days, in order that the required
changes, if any, in the Registration Statement, in the Time of Sale Prospectus,
in the Prospectus or in any other documents or arrangements may be effected.  If, on an Option Closing Date, any
Underwriter or Underwriters shall fail or refuse to purchase Additional Shares
and the aggregate number of Additional Shares with respect to which such
default occurs is more than one-tenth of the aggregate number of Additional
Shares to be purchased on such Option Closing Date, the non-defaulting
Underwriters shall have the option to (i) terminate their obligation hereunder
to purchase the Additional Shares to be sold on such Option Closing Date or (ii)
purchase not less than the number of Additional Shares that such non defaulting
Underwriters would have been obligated to purchase in the absence of such
default.  Any action taken under this
paragraph shall not relieve any defaulting Underwriter from liability in
respect of any default of such Underwriter under this Agreement.


 


If this Agreement shall be terminated by the Underwriters, or any of
them, because of any failure or refusal on the part of the Company, the Parent
or any Selling Shareholder to comply with the terms or to fulfill any of the
conditions of this Agreement, or if for any reason the Company, the Parent or
any Selling Shareholder shall be unable to perform its obligations under this
Agreement, or if the underwriters elect to terminate this Agreement pursuant to
Section 11 hereof, the Company will reimburse the Underwriters or such
Underwriters as have so terminated this Agreement with respect to themselves,
severally, for all out of pocket expenses (including the fees and disbursements
of their counsel) reasonably incurred by such Underwriters in connection with
this Agreement or the offering contemplated hereunder.


 


13.           Counterparts.  This Agreement may be signed in two or more
counterparts, each of which shall be an original, with the same effect as if the
signatures thereto and hereto were upon the same instrument.


 


26

















 


14.           Applicable
Law.  This Agreement shall be
governed by and construed in accordance with the internal laws of the State of
New York.


 


15.           Headings.  The headings of the sections of this
Agreement have been inserted for convenience of reference only and shall not be
deemed a part of this Agreement.


 


16.           Entire
Agreement.  (a) This
Agreement, together with any contemporaneous written agreements and any prior
written agreements (to the extent not superseded by this Agreement) that relate
to the offering of the Shares, represents the entire agreement between the
Company and the Selling Shareholders, on the one hand, and the Underwriters, on
the other, with respect to the preparation of any preliminary prospectus, the
Time of Sale Prospectus, the Prospectus, the conduct of the offering, and the
purchase and sale of the Shares.


 


(b)      The Company acknowledges
that in connection with the offering of the Shares:  (i) the Underwriters have acted at arms
length, are not agents of, and owe no fiduciary duties to, the Company or any
other person, (ii) the Underwriters owe the Company only those duties and
obligations set forth in this Agreement and prior written agreements (to the
extent not superseded by this Agreement), if any, and (iii) the Underwriters
may have interests that differ from those of the Company.  The Company waives to the full extent
permitted by applicable law any claims it may have against the Underwriters
arising from an alleged breach of fiduciary duty in connection with the
offering of the Shares.


 


17.           Notices.  All communications hereunder shall be in
writing and effective only upon receipt and (a) if to the Underwriters, shall
be delivered, mailed or sent to you in care of Morgan Stanley & Co.
Incorporated, 1585 Broadway, New York, New York 10036, Attention:  Legal Department, and Cowen and Company, LLC,
1221 Avenue of the Americas, New York, New York 10020, Attention:  General Counsel, (b) if to the Company, shall
be delivered, mailed or sent to 1543 Wazee Street, Denver, Colorado 80202,
Attention:  Montgomery Moran, (c) if to
Parent or Ventures, shall be delivered, mailed or sent to 2915 Jorie Blvd., Oak
Brook, Illinois 60523, Attention: General Counsel, or (d) if to the Selling
Shareholders other than Ventures, shall be delivered, mailed or sent to 1543
Wazee Street, Denver, Colorado 80202, Attention:  Montgomery Moran and Jack Hartung.


 


27

















 


	
   

  	
  Very truly
  yours,

  
	
   

  	
   

  
	
   

  	
  CHIPOTLE
  MEXICAN GRILL, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
    /s/
  John R. Hartung

  
	
   

  	
   

  	
  Name:

  	
  John R.
  Hartung

  
	
   

  	
   

  	
  Title:

  	
  Chief
  Finance and Development Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  MCDONALD’S
  VENTURES, LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
    /s/
  Catherine A. Griffin

  
	
   

  	
   

  	
  Name:
  Catherine A. Griffin

  
	
   

  	
   

  	
  Title: Vice
  President, General Counsel and Secretary

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  MCDONALD’S
  CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
    /s/
  Catherine A. Griffin

  
	
   

  	
   

  	
  Name:

  	
  Catherine A.
  Griffin

  
	
   

  	
   

  	
  Title:

  	
  Vice
  President — Deputy General Counsel and

  Assistant Secretary

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  THE SELLING SHAREHOLDERS

  (OTHER THAN MCDONALD’S

  VENTURES, LLC)

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
    /s/
  Montgomery F. Moran

  
	
   

  	
   

  	
  Attorney-in-Fact
  for the Selling

  Shareholders (other than

  McDonald’s Ventures, LLC)

  
	
   

  	
   

  	
  Name:
  Montgomery F. Moran

  
	
   

  	
   

  	
  Title:
  President & COO

  
					



 

















 


	
  Accepted as
  of the date hereof

  
	
   

  
	
  MORGAN
  STANLEY & CO. INCORPORATED

  COWEN AND COMPANY, LLC

  
	
  Acting
  severally on behalf of themselves

  and the several Underwriters named in

  Schedule II hereto

  
	
   

  
	
  By:

  	
  Morgan
  Stanley & Co. Incorporated

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
    /s/
  Kristen C. Rossi

  	
   

  
	
   

  	
  Name:

  	
  Kristen C.
  Rossi

  
	
   

  	
  Title:

  	
  Vice
  President

  
	
   

  	
   

  
	
  By:

  	
  Cowen and
  Company, LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
    /s/
  William B. Buchanan, Jr.

  	
   

  
	
   

  	
  Name:
  William B. Buchanan, Jr.

  
	
   

  	
  Title:
  Managing Director

  
					



 

















 


SCHEDULE I


 


	
  Selling Shareholder

  	
   

  	
  Number of Firm Shares

  to be Sold

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  McDonald’s
  Ventures, LLC

  	
   

  	
  4,100,000

  	
   

  
	
  Kurt P.
  Altman

  	
   

  	
  180

  	
   

  
	
  Michael
  Baghramian

  	
   

  	
  2,000

  	
   

  
	
  Neil W.
  Flanzraich

  	
   

  	
  22,896

  	
   

  
	
  Neil
  Flanzraich Trust

  	
   

  	
  34,792

  	
   

  
	
  Alan H. and
  Darlene J. Friedman Revocable Trust

  	
   

  	
  8,926

  	
   

  
	
  Melvyn and
  Lynn Goodman Intervivos Trust

  	
   

  	
  15,000

  	
   

  
	
  Marlene S.
  Harrington

  	
   

  	
  2,620

  	
   

  
	
  MDG Company

  	
   

  	
  10,917

  	
   

  
	
  Total:

  	
   

  	
  4,197,331

  	
   

  



 

















 


SCHEDULE II


 


	
  Underwriter

  	
   

  	
  Number of Firm

  Shares

  To Be Purchased

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Morgan
  Stanley & Co. Incorporated

  	
   

  	
  1,678,930

  	
   

  
	
  Cowen and
  Company, LLC

  	
   

  	
  1,049,333

  	
   

  
	
  Banc of
  America Securities LLC

  	
   

  	
  419,733

  	
   

  
	
  Citigroup
  Global Markets Inc.

  	
   

  	
  251,840

  	
   

  
	
  J.P. Morgan
  Securities Inc.

  	
   

  	
  251,840

  	
   

  
	
  Merrill
  Lynch, Pierce, Fenner & Smith Incorporated

  	
   

  	
  251,840

  	
   

  
	
  SunTrust
  Capital Markets, Inc.

  	
   

  	
  167,893

  	
   

  
	
  M.R. Beal
  and Company

  	
   

  	
  20,987

  	
   

  
	
  Cabrera
  Capital Markets, Inc.

  	
   

  	
  20,987

  	
   

  
	
  Loop Capital
  Markets, LLC

  	
   

  	
  20,987

  	
   

  
	
  Samuel A.
  Ramirez & Company, Inc.

  	
   

  	
  20,987

  	
   

  
	
  Muriel
  Siebert & Co., Inc.

  	
   

  	
  20,987

  	
   

  
	
  The Williams
  Capital Group, L.P.

  	
   

  	
  20,987

  	
   

  
	
  Total:

  	
   

  	
  4,197,331

  	
   

  



 

















 


SCHEDULE III


 


Time of Sale Prospectus


 


1.             Preliminary
Prospectus issued May 12, 2006


 


2.             Roadshow
of the Company available at www.netroadshow.com


 


3.             Final
Term Sheet attached hereto as Exhibit D


 

















 


SCHEDULE IV


 


List of Subsidiaries Not Wholly Owned by the Company


 


Chipotle Mexican Grill of Maryland, LLC


 


Chipotle Mexican Grill of Berwyn Heights, LLC


 


CMG of Prince Georges, LLC


 

















 


EXHIBIT A


 


	
   

  	
   

  	
  May           ,
  2006

  
	
   

  
	
  Morgan Stanley & Co. Incorporated

  
	
  Cowen and Company, LLC

  
	
  c/o

  	
   

  	
  Morgan Stanley & Co. Incorporated

  
	
   

  	
   

  	
  1585 Broadway

  
	
   

  	
   

  	
  New York, NY 10036

  
					



 


Dear Sirs and Mesdames:


 


The undersigned understands that Morgan Stanley & Co. Incorporated
(“Morgan Stanley”) and Cowen and Company,
LLC (“Cowen”) propose to enter into an
Underwriting Agreement (the “Underwriting Agreement”)
with Chipotle Mexican Grill, Inc., a Delaware corporation (the “Company”), and
certain holders of shares of class B common stock of the Company, providing for
the public offering (the “Public Offering”)
by the several Underwriters, including Morgan Stanley and Cowen (the “Underwriters”), of shares (the “Shares”) of class A common
stock of the Company, par value $0.01 per share (the “Class A
Common Stock”, and, collectively with the class B common stock of
the Company, the “Common Stock”).


 


To induce the Underwriters that may participate in the Public Offering
to continue their efforts in connection with the Public Offering, the
undersigned hereby agrees that, without the prior written consent of Morgan
Stanley and Cowen on behalf of the Underwriters, it will not, during the period
commencing on the date hereof and ending 90 days after the date of the
Underwriting Agreement (the “Restricted Period”),
(1) offer, pledge, sell, contract to sell, sell any option or contract to
purchase, purchase any option or contract to sell, grant any option, right or
warrant to purchase, lend, or otherwise transfer or dispose of, directly or
indirectly, any shares of Common Stock or any securities convertible into or
exercisable or exchangeable for Common Stock, or (2) enter into any swap or
other arrangement that transfers to another, in whole or in part, any of the
economic consequences of ownership of the Common Stock, whether any such
transaction described in clause (1) or (2) above is to be settled by delivery
of Common Stock or such other securities, in cash or otherwise.


 


The foregoing sentence shall not apply to (a) transactions relating to
shares of Class A Common Stock or other securities acquired in open market
transactions after the completion of the Public Offering, provided
that no filing under Section 16(a) of the Securities Exchange Act of 1934, as
amended (the “Exchange Act”) shall be required
or shall be voluntarily made in connection with subsequent sales of Common
Stock or other securities acquired in such open


 

















 


market transactions, (b) transfers of shares
of Common Stock or any security convertible into Common Stock as a bona fide
gift, (c) transfers of shares of Common Stock to any trust, partnership or
limited liability company for the direct or indirect benefit of the undersigned
or the immediate family of the undersigned provided that
any such transfer shall not involve a disposition for value, (d) transfers of
shares of Common Stock to any beneficiary of the undersigned pursuant to a will
or other testamentary document or applicable laws of descent, (e) transfers of
shares of Common Stock or any securities convertible into or exercisable or
exchangeable for Common Stock to the Company, (f) distributions of shares of
Common Stock or any security convertible into Common Stock to limited partners
or stockholders of the undersigned provided that
any such transfer shall not involve a disposition for value, (g) transfers of
shares of Common Stock to any wholly-owned subsidiary of the undersigned or to
the parent corporation of the undersigned or any wholly-owned subsidiary of
such parent corporation provided that
any such transfer shall not involve a disposition for value, or (h) transfers
of shares of Common Stock with the prior written consent of Morgan Stanley and
Cowen, provided that in the case of any
transfer or distribution pursuant to clause (b), (c), (d), (e), (f) or (g) of
this lock-up letter, (i) each donee, distributee or transferee shall sign
and deliver a lock-up letter substantially in the form of this letter and
(ii) no filing under Section 16(a) of the Exchange Act, reporting a reduction
in beneficial ownership of shares of Common Stock, shall be required or shall
be voluntarily made during the restricted period referred to in the foregoing
sentence.  For purposes of this lock-up
letter, “immediate family” shall mean any relationship by blood, marriage,
domestic partnership or adoption, not more remote than first cousin.


 


In addition, the undersigned agrees that, without the prior written
consent of Morgan Stanley and Cowen on behalf of the Underwriters, it will not,
during the Restricted Period, make any demand for or exercise any right with
respect to, the registration of any shares of Common Stock or any security
convertible into or exercisable or exchangeable for Common Stock.  The undersigned also agrees and consents to
the entry of stop transfer instructions with the Company’s transfer agent and
registrar against the transfer of the undersigned’s shares of Common Stock
except in compliance with the foregoing restrictions.


 


If:


 


(1)           during the last 17 days
of the Restricted Period the Company issues an earnings release or material
news or a material event relating to the Company occurs; or


 


(2)           prior to the expiration
of the Restricted Period, the Company announces that it will release earnings
results during the 16-day period beginning on the last day of the
Restricted Period;


 

















 


the restrictions imposed by this agreement
shall continue to apply until the expiration of the 18-day period
beginning on the issuance of the earnings release or the occurrence of the
material news or material event.


 


The undersigned shall not engage in any transaction that may be
restricted by this agreement during the 34-day period beginning on the
last day of the initial Restricted Period unless the undersigned requests and
receives prior written confirmation from the either Company or Morgan Stanley
and Cowen on behalf of the Underwriters that the restrictions imposed by this
agreement have expired.


 


This lock-up letter shall be terminated (i) if for any reason the
Underwriting Agreement is terminated prior to the closing of the Public
Offering or (ii) if, prior to the execution and delivery of the Underwriting
Agreement, (a) July 31, 2006 occurs or (b) McDonald’s Corporation publicly
announces that the Company will not be proceeding with the Public Offering.


 


The undersigned understands that the Company and the Underwriters are
relying upon this agreement in proceeding toward consummation of the Public
Offering.  The undersigned further
understands that this agreement is irrevocable and shall be binding upon the
undersigned’s heirs, legal representatives, successors and assigns.


 

















 


Whether or not the Public Offering actually occurs depends on a number
of factors, including market conditions. 
Any Public Offering will only be made pursuant to an Underwriting
Agreement, the terms of which are subject to negotiation between the Company
and the Underwriters.


 


 


	
   

  	
  Very truly
  yours,

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Address:

  



 

















 


EXHIBIT B


 


FORM OF COMPANY COUNSEL OPINION


 

















 


EXHIBIT C


 


FORM OF PARENT AND SELLING SHAREHOLDERS’


COUNSEL OPINION


 

















 


EXHIBIT D


 


FINAL TERM SHEET