Document:

EX-4.87

 Exhibit 4.87 

Execution Version 
 SOHU.COM (GAME) LIMITED
(as Mortgagor) 
 and 
 INDUSTRIAL AND COMMERCIAL BANK
OF CHINA LIMITED, TOKYO BRANCH (as Mortgagee) 
  
  

EQUITABLE SHARE MORTGAGE 
 relating to shares in Changyou.com
Limited 
  
  

94 Solaris Avenue, Camana Bay, PO Box 1348, Grand Cayman KY1-1108, Cayman Islands 

T +1 345 949 4123 F +1 345 949 4647 
  

 

			
	BVI | CAYMAN ISLANDS | GUERNSEY | HONG KONG | JERSEY | LONDON	  	mourant.com

 Table of Contents 
  

							
	 1.
	 	INTERPRETATION	  	 	1	 
			
	 2.
	 	UNDERTAKING TO PAY	  	 	3	 
			
	 3.
	 	CREATION OF SECURITY	  	 	3	 
			
	 4.
	 	DOCUMENTS TO BE DELIVERED	  	 	4	 
			
	 5.
	 	DISTRIBUTION AND VOTING RIGHTS	  	 	6	 
			
	 6.
	 	REPRESENTATIONS	  	 	6	 
			
	 7.
	 	MORTGAGOR’S UNDERTAKINGS	  	 	9	 
			
	 8.
	 	FURTHER ASSURANCE	  	 	10	 
			
	 9.
	 	ENFORCEMENT OF SECURITY	  	 	10	 
			
	 10.
	 	APPOINTMENT AND POWERS OF RECEIVER	  	 	12	 
			
	 11.
	 	PROTECTION OF THIRD PARTIES	  	 	13	 
			
	 12.
	 	APPLICATION OF PROCEEDS	  	 	13	 
			
	 13.
	 	POWER OF ATTORNEY	  	 	13	 
			
	 14.
	 	GENERAL PROVISIONS	  	 	14	 
			
	 15.
	 	PROTECTION OF SECURITY	  	 	16	 
			
	 16.
	 	SET-OFF	  	 	19	 
			
	 17.
	 	ASSIGNMENT	  	 	19	 
			
	 18.
	 	COSTS AND EXPENSES AND INDEMNITY	  	 	19	 
			
	 19.
	 	RELEASE	  	 	20	 
			
	 20.
	 	COMMUNICATIONS	  	 	20	 
			
	 21.
	 	COUNTERPARTS	  	 	21	 
			
	 22.    
	 	GOVERNING LAW AND JURISDICTION	  	 	21	 
		
	 Schedule 1. Initial Shares
	  	 	23	 
		
	 Schedule 2. Form of share transfer form
	  	 	24	 
		
	 Schedule 3. Form of deed of appointment
	  	 	25	 
		
	 Schedule 4. Form of letter of resignation
	  	 	26	 
		
	 Schedule 5. Form of letter of authorisation
	  	 	27	 
		
	 Schedule 6. Form of letter agreement
	  	 	28	 
		
	 Schedule 7. Form of letter of undertaking
	  	 	31	 

  
 i 

 THIS DEED is made on
                     2020 between: 
  

	(1)	 SOHU.COM (GAME) LIMITED, an exempted company incorporated in the Cayman Islands, with registered
number 204645, whose registered office is at Maples Corporate Services Limited, P.O. Box 309, Ugland House, South Church Street, George Town, Grand Cayman KY1-1104, Cayman Islands (the Mortgagor); and

  

	(2)	 INDUSTRIAL AND COMMERCIAL BANK OF CHINA LIMITED, TOKYO BRANCH, of Shin-Marunouchi Building 12F, 1-5-1 Marunouchi, Chiyoda-ku, Tokyo, Japan, 100-6512 (the Mortgagee).

 INTRODUCTION 
  

	(A)	 The Lender proposes to make finance facilities available to the Mortgagor under the Facility Agreement.

  

	(B)	 Pursuant to the terms of the Merger Agreement, Changyou Merger Co. Limited (an exempted company incorporated
with limited liability under the laws of the Cayman Islands (registration number 358665)), will merge with and into with the Company continuing as the surviving company resulting from the merger on and from the Effective Time. 

 

	(C)	 It is a condition to the Facility Agreement that the Mortgagor enter into this Deed. 

IT IS AGREED as follows. 
  

	1.	 INTERPRETATION 

 

	1.1	 Definitions 

The following definitions apply in this Deed unless the context requires otherwise. 

Additional Securities means (following the Effective Time) any shares of any class in, or warrants or other securities of any
kind issued by, the Company but only to the extent such shares, warrants or other securities are issued or distributed to the Mortgagor in the form of, or as, a dividend or other distribution of such shares, warrants or other securities on or with
respect to the Initial Shares (and in which the Mortgagor acquires any interest (whether legal and/or beneficial) at any time after executing this Deed). 

Business Day means: 
  

	 	(a)	 (in the case of delivery of a communication under this Deed) a weekday that is not a public holiday in the
place of receipt; and 

  

	 	(b)	 (in any other case) a weekday that is not a public holiday in the Cayman Islands. 

Collateral means the Securities and any Related Assets held by the Mortgagor. 

Companies Law means the Companies Law (2020 Revision). 

Company means Changyou.com Limited, an exempted company incorporated in the Cayman Islands, with registered number 192730, whose
registered office is at Cricket Square, Hutchins Drive, PO Box 2681, Grand Cayman, KY1-1111, Cayman Islands. 

Delegate means any attorney or agent appointed by the Mortgagee or a Receiver under this Deed. 

Effective Time has the meaning given to that term in the Facility Agreement. 

Facility Agreement means the facility agreement dated on or about the date of this Deed between (among others) the Mortgagor and
the Lender, and includes each amendment or supplement to it (whether or not the amendment or supplement extends, varies or increases the amount of, any existing finance facility or provides for any additional or replacement finance facility). 

  
 1 

 Initial Shares means the shares in the Company identified in Schedule 1 (Initial
Shares) which will, on the Effective Time, be registered in the name of the Mortgagor in the Register of Members. 
 Receiver
means any administrative receiver, receiver and manager or receiver who is appointed as receiver by the Mortgagee under this Deed. 

Register of Members means the register of members of the Company maintained by (or on behalf of) the Company in accordance with
the Companies Law. 
 Registrar means the Registrar of Companies of the Cayman Islands. 

Related Assets means any: 
  

	 	(a)	 dividend, interest or other income or distribution (whether in cash or otherwise) paid or payable in relation
to any Securities; and 

  

	 	(b)	 other right, money, security or other property that accrues or arises at any time and in any way (including by
way of sale, redemption, substitution, conversion, exchange, bonus issue, preference or option) in relation to any Securities. 

Secured Liabilities means all present and future obligations and liabilities (whether actual or contingent and whether owed
jointly or severally or in any other capacity whatsoever) of the Company to the Lender under each Finance Document. 
 Securities
means the Initial Shares and any Additional Securities. 
 Security Interest means any mortgage, charge, pledge, lien, assignment
by way of security, encumbrance or other security interest securing an obligation of any person or any other agreement or arrangement having a similar effect. 

Security Period means the period beginning on the date of this Deed and ending on the date on which the Mortgagee is reasonably
satisfied that all of the Secured Liabilities have been irrevocably and unconditionally paid and discharged in full and no further Secured Liabilities are capable of being outstanding. 

 

	1.2	 Facility Agreement definitions 

Definitions in the Facility Agreement apply in this Deed unless the relevant term is defined in this Deed or the context requires otherwise.

  

	1.3	 Interpretation 

The following rules apply in this Deed unless the context requires otherwise. 

 

	 	(a)	 Headings are for convenience only and do not affect interpretation. 

 

	 	(b)	 The singular includes the plural and the converse. 

 

	 	(c)	 A gender includes all genders. 

 

	 	(d)	 Where a word or phrase is defined, its other grammatical forms have a corresponding meaning.

  

	 	(e)	 Mentioning anything after include, includes or including does not limit what else might be
included. 

  
 2 

	 	(f)	 A reference to a Clause, Schedule or paragraph is to a clause, schedule or paragraph of
this Deed. 

  

	 	(g)	 A reference to any agreement, deed or other document (or any provision of it), includes it as amended, varied,
supplemented, extended, replaced, restated or transferred from time to time. 

  

	 	(h)	 A reference to any legislation (or any provision of it) includes a modification or re-enactment of it, a legislative provision substituted for it and any regulation or statutory instrument issued under it. 

  

	 	(i)	 A reference to any person, corporation, trust, partnership, unincorporated body or other entity includes any of
them. 

  

	 	(j)	 A reference to a party to this Deed or any other document includes any successor or permitted transferee or
assignee of that party. 

  

	 	(k)	 An Event of Default is continuing if it has not been remedied or waived. 

 

	 	(l)	 A reference to the Collateral includes any part of it. 

 

	 	(m)	 A reference to an asset includes any real or personal, present or future, tangible or intangible
property or asset and any right, interest or benefit in, under, or derived from, the property or asset. 

  

	 	(n)	 A reference to the Mortgagor acquiring any Collateral is to it obtaining any interest (whether legal
and/or beneficial) in that Collateral in any way, including by way of purchase, substitution, conversion, exchange, bonus issue, preference or option. 

  

	 	(o)	 A reference to writing includes any means of reproducing words in a permanently visible form.

  

	1.4	 Deed 

It is intended that this Deed will take effect as a deed even if a party to it only executes it under hand. 

 

	1.5	 Third party rights 

 

	 	(a)	 Unless expressly stated to the contrary in this Deed, a person who is not a party to this Deed has no right
under the Contracts (Rights of Third Parties) Law, 2014 to enjoy the benefit of, or enforce any term of, this Deed. 

  

	 	(b)	 Notwithstanding any other provisions in this Deed, this Deed may also be discharged or varied in accordance
with the Facility Agreement. 

  

	2.	 UNDERTAKING TO PAY 

The Mortgagor must pay or discharge the Secured Liabilities in the manner, and at the times, provided for in the Finance Documents. 

 

	3.	 CREATION OF SECURITY 

 

	3.1	 Mortgage 

  

	 	(a)	 The Mortgagor mortgages by way of first equitable mortgage, with effect from the Effective Time, all of its
rights, title and interest in, to and under, the Collateral. 

  

	 	(b)	 If an Event of Default is continuing, the Mortgagee may convert the equitable mortgage created by this Clause
into a legal mortgage by completing and dating any instrument of transfer for the Collateral and causing it to be registered in the name of the Mortgagee or its nominee. The Mortgagee may do so without exercising any power of sale.

  
 3 

	3.2	 Charge 

With effect from the Effective Time, to the extent that any Collateral is not effectively mortgaged under Clause 3.1 (Mortgage), the Mortgagor
charges by way of first fixed charge all of its rights, title and interest in, to and under, the Collateral. 
  

	3.3	 Nature of security 

The security created by this Deed: 
  

	 	(a)	 is created in favour of the Mortgagee; 

 

	 	(b)	 is first ranking and has priority over all other Security Interests over the Collateral; 

 

	 	(c)	 is created over all present and future Collateral; 

 

	 	(d)	 is a continuing security; and 

 

	 	(e)	 secures the due and punctual payment and discharge of all the Secured Liabilities. 

 

	4.	 DOCUMENTS TO BE DELIVERED 

 

	4.1	 Initial Shares 

 

	 	(a)	 Within five Business Days of the Effective Time, the Mortgagor must deliver to the Mortgagee:

  

	 	(i)	 each original share certificate for the Initial Shares or confirmation in writing that no share certificate has
been issued for any Initial Shares or confirmation in writing of loss of share certificate; 

  

	 	(ii)	 a signed (but undated) share transfer form for the Initial Shares in the form set out in Schedule 1 (Form of
share transfer form) with the name of the transferee left blank; 

  

	 	(iii)	 a signed (but undated) deed of appointment relating to the Initial Shares in the form set out in Schedule 3
(Form of deed of appointment); 

  

	 	(iv)	 a certified copy of the Company’s register of directors; 

 

	 	(v)	 a signed (but undated) letter of resignation from each director of the Company in the form set out in Schedule
4 (Form of letter of resignation); 

  

	 	(vi)	 a signed and dated letter of authorisation from each director of the Company in the form set out in Schedule 5
(Form of letter of authorisation); 

  

	 	(vii)	 a signed and dated letter agreement to the Company’s registered office provider in the form set out in
Schedule 6 (Form of letter agreement) (which signed letter agreement shall be delivered by, or on behalf of, the Company to its registered office provider); and 

 

	 	(viii)	 a signed and dated letter of undertaking from the Company in the form set out in Schedule 7 (Form of letter of
undertaking). 

  
 4 

	 	(b)	 Within five Business Days of the Effective Time, the Mortgagor must deliver to the Mortgagee a certified copy
of the Register of Members which shows the following notation in an appropriate place: 

 SOHU.COM (GAME) LIMITED
has created a mortgage and charge over 14,350,000 Class B ordinary shares registered in its name in favour of INDUSTRIAL AND COMMERCIAL BANK OF CHINA LIMITED, TOKYO BRANCH under an equitable share mortgage
dated [●] between SOHU.COM (GAME) LIMITED and INDUSTRIAL AND COMMERCIAL BANK OF CHINA LIMITED, TOKYO BRANCH. This note was entered on
the Company’s register of members on [●]; 
  

	 	(c)	 Within five Business Days of the Effective Time, the Mortgagor must deliver to the Mortgagee a certified copy
of the register of mortgages and charges maintained by the Mortgagor under the Companies Law which shows particulars of the security created by this Deed. 

  

	4.2	 Additional Securities 

 

	 	(a)	 On each date on which the Mortgagor acquires any Additional Securities, the Mortgagor must immediately deliver
to the Mortgagee: 

  

	 	(i)	 each original share certificate for the Additional Securities (or confirmation in writing that no share
certificate has been issued for any Additional Securities or confirmation in writing of loss of share certificate) or (in the case of any Additional Securities that are not shares) other certificates or evidence of title for the Additional
Securities; 

  

	 	(ii)	 a signed (but undated) share transfer form for the Additional Securities in the form set out in Schedule 1
(Form of share transfer form) with the name of the transferee left blank; 

  

	 	(iii)	 a signed (but undated) deed of appointment relating to the Additional Securities in the form set out in
Schedule 3 (Form of deed of appointment); and 

  

	 	(iv)	 in the case of any Additional Securities that are not shares, any signed (but undated) instrument of transfer
with the name of the transferee left blank, register or other document, evidence or annotation that the Mortgagee may reasonably request to create, perfect or protect the security created over the Additional Securities by this Deed.

  

	 	(b)	 Within five Business Days of each date on which the Mortgagor acquires any Additional Securities, the Mortgagor
must deliver to the Mortgagee a certified copy of the Register of Members, annotated in the manner specified in paragraph (b) of Clause 4.1 (Initial Shares), to show particulars of the security created over the Additional Securities by this
Deed. 

  

	4.3	 New directors 

 

	 	(a)	 Within five Business Days of each date on which a person is appointed as a director of the Company, the
Mortgagor must deliver to the Mortgagee: 

  

	 	(i)	 a signed (but undated) letter of resignation from the person in the form set out in Schedule 4 (Form of letter
of resignation); 

  

	 	(ii)	 a signed and dated letter of authorisation from the person in the form set out in Schedule 5 (Form of letter of
authorisation); and 

  

	 	(b)	 Within five Business Days of each date on which a person is appointed as a director of the Company, the
Mortgagor must deliver to the Mortgagee a certified copy of the Company’s register of directors and officers. 

  
 5 

	4.4	 Form of documents 

Each document to be delivered, or annotation or registration to be made, under this Clause must be reasonably satisfactory to the Mortgagee in
form and substance. 
  

	5.	 DISTRIBUTION AND VOTING RIGHTS 

 

	5.1	 Distribution rights 

 

	 	(a)	 If no Event of Default is continuing and any dividend, interest or other income or distribution permitted to be
paid under the Facility Agreement is paid (whether in cash or otherwise) in relation to any Collateral, it will belong to, and must be paid to, the Mortgagor. 

 

	 	(b)	 If an Event of Default is continuing and any dividend, interest or other income or distribution is paid
(whether in cash or otherwise) in relation to any Collateral, it will belong to the Mortgagee and: 

  

	 	(i)	 the Mortgagor must (if paid to it) immediately pay the amount to the Mortgagee (or any person nominated by it),
and before making payment, will hold the amount on trust for the Mortgagee; and 

  

	 	(ii)	 the Mortgagee may (in its discretion) apply the amount to reduce the Secured Liabilities.

  

	5.2	 Voting rights 

 

	 	(a)	 If no Event of Default is continuing, the Mortgagor may exercise (or cause to be exercised) any voting rights
or other rights or powers attaching to the Collateral. The Mortgagor must not do anything under this paragraph which is prejudicial to the interests of the Mortgagee or inconsistent with the terms of this Deed or any other Finance Document.

  

	 	(b)	 If an Event of Default is continuing, any voting rights or other rights or powers attaching to the Collateral
may only be exercised by, or at the direction of, the Mortgagee. The Mortgagee may (in its discretion) complete any deed of appointment delivered to it under this Deed and exercise any voting rights and any other rights or powers which may be
exercised by the legal or beneficial owner of the Collateral. 

  

	6.	 REPRESENTATIONS 

 

	6.1	 Time for making representations 

 

	 	(a)	 The Mortgagor makes each representation in this Clause on the date of this Deed. 

 

	 	(b)	 The Mortgagor is taken to repeat each representation in this Clause on: 

 

	 	(i)	 the Effective Time; 

  

	 	(ii)	 on each date on which any representation is repeated under the Facility Agreement; and 

 

	 	(iii)	 on each date on which any Additional Securities are acquired by the Mortgagor. 

 

	 	(c)	 When a representation is repeated, it is applied to the circumstances existing at the time of repetition.

  
 6 

	6.2	 Status 

It is duly incorporated, validly existing and in good standing under the laws of its jurisdiction of incorporation. 

 

	6.3	 Power and authority 

It has the power to enter into, and perform its obligations under, and has taken all necessary action to authorise its entry into, and its
performance of its obligations under, this Deed and the transactions contemplated by this Deed. 
  

	6.4	 Solvency 

It is solvent and able to pay its debts as they fall due and (to the best of its knowledge) no action has been taken by any person to commence
or threaten any insolvency, administration, reorganisation or similar proceedings in respect of or against it. 
  

	6.5	 No conflict 

Its entry into, and the performance of its obligations under, this Deed and the transactions contemplated by this Deed do not, and will not,
conflict with: 
  

	 	(a)	 any law or regulation applicable to it; 

 

	 	(b)	 its or the then effective Company’s constitutional documents as at the Effective Time; or

  

	 	(c)	 any document binding on it or any of its assets. 

 

	6.6	 Authorisations 

It has obtained any Authorisation necessary to enable it to enter into, and perform its obligations under, this Deed and the transactions
contemplated by this Deed and each Authorisation is in full force and effect. 
  

	6.7	 No documentary taxes 

No stamp, registration, notarial or similar tax or fee is payable on, or in relation to, this Deed and the transactions contemplated by this
Deed except that nominal stamp duty of up to CI$500 will be payable if this Deed is executed in, or an original copy of it is brought into, the Cayman Islands. 
  

	6.8	 Governing law and enforcement 

The choice of Cayman Islands law as the governing law of this Deed, and any judgment obtained in the Cayman Islands in connection with this
Deed, will be recognised and enforced in its jurisdiction of incorporation. 
  

	6.9	 Legal validity 

Subject to general equitable principles, insolvency laws and other laws affecting creditors’ rights generally, its obligations under this
Deed are legal, valid, binding and enforceable. 
  

	6.10	 Ownership 

  

	 	(a)	 From the Effective Time, it will be the sole legal and beneficial owner of the Collateral free of any Security
Interest other than the security created by this Deed. 

  

	 	(b)	 Except for this Deed, it has not transferred, sold, granted any option over, or otherwise disposed of, or
created any interest in, any Collateral. 

  
 7 

	6.11	 Securities 

  

	 	(a)	 All Securities comprised in the Collateral will, from the Effective Time, be properly issued and fully paid and
it does not owe any money or other liability in relation to any Collateral. 

  

	 	(b)	 The Initial Shares comprise 20% of the issued and outstanding shares of the Company as at the Effective Time.

  

	 	(c)	 All documents or certificates of title to the Securities delivered to the Mortgagee under this Deed are the
only documents or certificates of title for the Securities. 

  

	 	(d)	 Other than the Company’s memorandum and articles of association, from the Effective Time, there are no
documents or arrangements in force governing the relationship between the shareholders of the Company, the management of the Company or the issue or ownership of shares in the Company. 

 

	6.12	 No restrictions on transfer 

 

	 	(a)	 The Collateral is not subject to any: 

 

	 	(i)	 option, pre-emptive right or similar right or any other third party
interest; or 

  

	 	(ii)	 restriction or prohibition on transfer which would restrict or prohibit any transfer to or by the Mortgagee (or
any nominee appointed by it) under this Deed. 

  

	 	(b)	 The Mortgagee does not need to obtain the consent or approval of any person to: 

 

	 	(i)	 exercise any of its rights under, or to enforce the security created by, this Deed; or 

 

	 	(ii)	 transfer any Collateral to itself or any other person under this Deed. 

 

	6.13	 No restrictions notice 

The Collateral is not subject to any restrictions notice (as defined in the Companies Law). 

 

	6.14	 Security 

  

	 	(a)	 This Deed creates the security it intends to create. 

 

	 	(b)	 The security created by this Deed is first ranking and is not liable to be avoided or otherwise set aside on
the insolvency, liquidation or administration of the Mortgagor or otherwise. 

  

	6.15	 No filing or registration 

This Deed does not need to be filed, recorded or registered at any governmental, administrative or other authority or court in any jurisdiction
to perfect the security created by it or to establish its priority or enforceability. 
  

	6.16	 Finance Documents 

It has received a copy of each Finance Document. 

  
 8 

	7.	 MORTGAGOR’S UNDERTAKINGS 

The Mortgagor undertakes to the Mortgagee as follows. 
  

	7.1	 Ownership 

Subject only to this Deed, it will, from the Effective Time, be and remain the sole legal and beneficial owner of the Collateral. 

 

	7.2	 Calls and other obligations 

It will pay all calls and other payments in respect of the Collateral and will remain liable to observe and perform all other obligations in
respect of the Collateral. 
  

	7.3	 Restrictions on dealing 

 

	 	(a)	 It will not (without the prior written consent of the Mortgagee) take or permit any action that may result in:

  

	 	(i)	 the Company’s memorandum or articles of association being amended in any way which is prejudicial to the
interests of the Mortgagee in any material respect or inconsistent in any material respect with the terms of this Deed or any other Finance Document; 

  

	 	(ii)	 the Company paying, making or distributing any Related Asset unless it is permitted to do so under the Facility
Agreement; 

  

	 	(iii)	 any rights attaching to any Collateral being altered; 

 

	 	(iv)	 any replacement certificates of title being issued for any Collateral; 

 

	 	(v)	 the appointment of any director of the Company unless the Mortgagee is provided with each document specified in
Clause 4.3 (New directors) on the date of appointment; 

  

	 	(vi)	 a change in the Company’s registered office address or registered office provider; 

 

	 	(vii)	 the Company’s registered office provider ceasing to maintain the Register of Members;

  

	 	(viii)	 the Company merging or consolidating with any other body corporate, unless otherwise permitted under the
Facility Agreement; 

  

	 	(ix)	 the Company being liquidated; or 

 

	 	(x)	 the Company ceasing to be registered under the Companies Law or in good standing with the Registrar.

  

	 	(b)	 It will not (without the prior written consent of the Mortgagee) transfer, sell, grant any option over,
surrender, redeem or otherwise dispose of, part with possession of, or (except as permitted by Clause 5 (Distribution and voting rights)) deal with, any Collateral or permit any of these things to happen. 

 

	 	(c)	 It will not (without the prior written consent of the Mortgagee) create, or allow to exist, any Security
Interest or other third party interest over any Collateral. 

  

	7.4	 No other acts 

It will not do or permit to be done (or omit to do or permit to be done) anything that may in any way: 

 

	 	(a)	 materially diminish or materially adversely affect the value of any Collateral; or 

 

	 	(b)	 adversely affect the security created by this Deed. 

  
 9 

	7.5	 Documents and information 

 

	 	(a)	 Immediately upon receipt, it will deliver to the Mortgagee a copy of any communication or other document
relating to any Collateral that would reasonably be considered to be material to the security created by this Deed. 

  

	 	(b)	 It will promptly disclose to the Mortgagee any information relating to any Collateral that the Mortgagee may
reasonably request. 

  

	7.6	 Receipts 

If the Mortgagee or any Receiver or Delegate sells any Collateral under this Deed, it will, immediately on request, deliver a valid receipt for
the proceeds of sale of the Collateral to the purchaser. 
  

	8.	 FURTHER ASSURANCE 

 

	8.1	 Further assurance 

The Mortgagor must (at its own cost and expense) take any action the Mortgagee or a 

Receiver may reasonably require to: 
  

	 	(a)	 create, perfect, register or protect any security intended to be created by this Deed; or

  

	 	(b)	 facilitate the realisation of any Collateral or the exercise any right, power or discretion in respect of the
Collateral conferred on the Mortgagee or any Receiver by this Deed or provided by law. 

  

	8.2	 Actions 

The things that the Mortgagor must do under this Clause include: 
  

	 	(a)	 executing any power of attorney, mortgage, charge, transfer, assignment or assurance of any property or rights
whether to the Mortgagee, its nominee or otherwise; or 

  

	 	(b)	 giving any notice, order or direction or making any registration or filing, 

the Mortgagee considers reasonably necessary or desirable. 
  

	9.	 ENFORCEMENT OF SECURITY 

 

	9.1	 When security becomes enforceable 

The security created by this Deed becomes enforceable immediately if an Event of Default is continuing. 

 

	9.2	 Exercise of Mortgagee’s powers 

After the security created by this Deed becomes enforceable, the Mortgagee may (in its discretion) exercise (or refrain from exercising) any
power of enforcement under this Deed or provided by law: 
  

	 	(a)	 without notice to the Mortgagor (unless otherwise required under the Facility Agreement) or prior authorisation
from any court or any person; and 

  

	 	(b)	 in respect of all or any part of the Collateral in any way it thinks fit. 

  
 10 

	9.3	 Mortgagee’s powers 

 

	 	(a)	 The Mortgagee’s powers of enforcement include the power to: 

 

	 	(i)	 assume control of, and to have it or its nominee registered as holder of legal title to, any Collateral;

  

	 	(ii)	 sell, exchange, grant options over, or otherwise dispose of, any Collateral by any method, at any time and on
any terms, it thinks fit or to postpone doing of any of these things; 

  

	 	(iii)	 complete, date and deliver any document delivered to it under this Deed; and 

 

	 	(iv)	 exercise any other right, power or remedy given to it under this Deed (including to appoint a Receiver) or
provided by law. 

  

	 	(b)	 The Mortgagee may do (or refrain from doing) any of these things in any manner it thinks fit.

  

	9.4	 Prior Security Interests 

 

	 	(a)	 In addition to the Mortgagee’s powers under Clause 9.3 (Mortgagee’s powers), the Mortgagee may:

  

	 	(i)	 redeem any prior Security Interest against any Collateral; 

 

	 	(ii)	 procure the transfer of the Security Interest to it; or 

 

	 	(iii)	 settle and pass the accounts of the holder of the Security Interest, and those accounts will be, in the absence
of manifest error, conclusive and binding on the Mortgagor. 

  

	 	(b)	 The Mortgagor must pay the Mortgagee, immediately on demand, any reasonable and documented out-of-pocket cost or expense (including any principal or interest) incurred by it in connection with any redemption or transfer. 

 

	9.5	 Powers conferred by law 

The powers conferred on mortgagees by law are exercisable at any time after the security created by this Deed becomes enforceable. 

 

	9.6	 No liability as mortgagee in possession 

Neither the Mortgagee nor any Receiver will be liable, by reason of entering into possession of any Collateral, to account as mortgagee in
possession or for any loss on realisation or for any default or omission for which a mortgagee in possession might be liable, except to the extent resulting from any deliberate misconduct or deliberate default of the Mortgagee or any Receiver. 

 

	9.7	 Contingencies 

If the security created by this Deed is enforced at a time when no amount is due in respect of the Secured Liabilities or any Secured
Liabilities are contingent or future, the Mortgagee or any Receiver may pay the proceeds of any recoveries made by it into any account to be held by it as security and applied in accordance with the terms of this Deed. 

  
 11 

	10.	 APPOINTMENT AND POWERS OF RECEIVER 

 

	10.1	 Appointment 

  

	 	(a)	 The Mortgagee may appoint a Receiver in relation to any Collateral if: 

 

	 	(i)	 the security created by this Deed becomes enforceable; or 

 

	 	(ii)	 the Mortgagor requests it to do so in writing. 

 

	 	(b)	 If the Mortgagee appoints more than one Receiver in relation to any Collateral, each Receiver may act
individually unless the Receiver’s terms of appointment state otherwise. 

  

	10.2	 Removal 

The Mortgagee may remove any Receiver appointed by it and may appoint a new Receiver in place of any Receiver whose appointment has terminated
for any reason. 
  

	10.3	 Remuneration 

The Mortgagee may fix the remuneration of any Receiver appointed by it. 

 

	10.4	 Agent of Mortgagor 

A Receiver will be an agent of the Mortgagor. The Mortgagor is solely responsible for any contracts, engagements, acts, omissions, defaults and
losses of a Receiver and for any liabilities incurred by a Receiver, except to the extent resulting from any deliberate misconduct or deliberate default of any such Receiver. 
  

	10.5	 Exercise of Receiver’s powers by Mortgagee 

To the extent permitted by law, any right, power or discretion conferred on a Receiver by this Deed or provided by law may, after the security
created by this Deed becomes enforceable, be exercised by the Mortgagee in relation to any Collateral. The Mortgagee may do so without first appointing a Receiver or even if it has appointed a Receiver. 

 

	10.6	 Receiver’s powers 

In addition to any powers provided by law, and except to the extent specifically excluded by a Receiver’s terms of appointment, each
Receiver has power to do anything in relation to the Collateral that the Mortgagor could do. This includes power to: 
  

	 	(a)	 take possession of, get in and collect, any Collateral; 

 

	 	(b)	 raise or borrow money and grant security over any Collateral on any terms the Receiver thinks fit;

  

	 	(c)	 sell, exchange, grant options over, or otherwise dispose of, any Collateral by any method, at any time and on
any terms, the Receiver thinks fit or to postpone doing of any of these things; 

  

	 	(d)	 appoint or remove any manager, officer, attorney or accountant or other professionally qualified person to
assist with the performance of the Receiver’s functions; 

  

	 	(e)	 bring, defend or abandon, any action or proceedings in relation to any Collateral; 

 

	 	(f)	 make any arrangement or compromise in relation to any Collateral; 

 

	 	(g)	 exercise any voting or other rights in relation to any Collateral; 

  
 12 

	 	(h)	 give a valid receipt for any moneys and execute any assurance or thing which the Receiver thinks necessary or
desirable for realising any Collateral; 

  

	 	(i)	 (subject to any limitation in the Receiver’s terms of appointment) delegate any of the Receiver’s
powers to any person on any terms the Receiver thinks fit; and 

  

	 	(j)	 do all acts and things the Receiver considers necessary or desirable to protect, improve or realise any
Collateral, or incidental or conducive, to the exercise of any of the Receiver’s rights, powers or discretions. 

  

	11.	 PROTECTION OF THIRD PARTIES 

No person (including a purchaser) dealing with the Mortgagee or any Receiver or Delegate need enquire as to: 

 

	 	(a)	 whether or not an Event of Default is continuing; 

 

	 	(b)	 whether the Secured Liabilities have become due or payable; 

 

	 	(c)	 whether any right or power which the Mortgagee, Receiver or Delegate is attempting to exercise has become
exercisable or is being properly exercised; or 

  

	 	(d)	 how any money paid to the Mortgagee or Receiver will be applied. 

 

	12.	 APPLICATION OF PROCEEDS 

 

	12.1	 Application of proceeds 

All moneys received or recovered by the Mortgagee or any Receiver under this Deed after the security created by this Deed has become
enforceable will be applied in accordance with the following order of priority: 
  

	 	(a)	 first in paying or providing for all costs and expenses incurred by the Mortgagee or any Receiver
under, or in connection with, this Deed (including any Receiver’s remuneration); 

  

	 	(b)	 secondly in paying or providing for the Secured Liabilities; and 

 

	 	(c)	 thirdly in paying the surplus (if any) to the Mortgagor or other person entitled to it.

  

	12.2	 Prior claims 

This Clause is subject to the payment of any claims having priority over the security created by this Deed. 

 

	12.3	 Shortfall 

This Clause does not prejudice the right of the Mortgagee to recover any shortfall from the Mortgagor. 

 

	13.	 POWER OF ATTORNEY 

 

	13.1	 Power 

The Mortgagor, by way of security, irrevocably appoints the Mortgagee, any Receiver and any Delegate individually to be its attorney (with full
power to appoint substitutes and to delegate) to do any act or thing, and execute (under hand or seal) and deliver any deed or document of any kind, which the Mortgagee, Receiver or Delegate (in its discretion) reasonably considers necessary or
desirable to: 
  

	 	(a)	 create, perfect, register, maintain or give full effect to, the security intended to be created by this Deed;

  
 13 

	 	(b)	 more satisfactorily secure any Collateral; 

 

	 	(c)	 make any claim, take any action or bring any proceedings, to protect the security created by this Deed;

  

	 	(d)	 exercise any right, power or remedy under this Deed, including to: 

 

	 	(i)	 complete, date and deliver any document delivered under Clause 4 (Documents to be delivered); and

  

	 	(ii)	 exercise any voting rights which may be exercised by the Mortgagor in relation to any Collateral;

  

	 	(e)	 do anything that the Mortgagor is required to do under this Deed; and/or 

 

	 	(f)	 remedy any breach of this Deed by the Mortgagor. 

 

	13.2	 Ratification 

The Mortgagor ratifies and confirms anything that an attorney may do in the proper exercise or intended exercise of the powers conferred by
this Clause. 
  

	14.	 GENERAL PROVISIONS 

 

	14.1	 Payments by Mortgagor 

 

	 	(a)	 All payments by the Mortgagor under this Deed must be made without
set-off, counterclaim or deduction of any kind. 

  

	 	(b)	 If the Mortgagor is required by the law of any jurisdiction to deduct any amount (whether on account of tax or
otherwise) from any payment under this Deed, it must pay any additional amount that is necessary to ensure that the Mortgagee or any Receiver receives a net amount equal to the full amount of the original payment. 

 

	14.2	 New account 

  

	 	(a)	 If the Mortgagee receives any actual or constructive notice of a subsequent Security Interest affecting any
Collateral, it may open a separate account in its records in the name of the Mortgagor. 

  

	 	(b)	 If the Mortgagee does not open a new account, it will be treated as if it had done so at the time it received
actual or constructive notice of the subsequent Security Interest. 

  

	 	(c)	 From the time the new account is opened or taken to be open, all payments to the Mortgagee will be credited or
treated as having been credited to the new account and will not operate to reduce the Secured Liabilities. 

  

	14.3	 Delegation by Mortgagee 

 

	 	(a)	 The Mortgagee or (subject to any limitation in the Receiver’s terms of appointment) any Receiver may
delegate by power of attorney or in any other manner any right, power or discretion exercisable by it under this Deed. 

  

	 	(b)	 Any delegation may be made on any terms (including the power to
sub-delegate), and to any person, the Mortgagee or Receiver thinks fit. 

  
 14 

	 	(c)	 Neither the Mortgagee nor any Receiver will be liable or responsible for any loss or liability arising from any
act, default, omission or misconduct by any delegate or sub-delegate, unless such loss or liability arises or results from any deliberate misconduct or deliberate default of any such delegate or sub-delegate. 

  

	14.4	 Discretion and consents 

Except where expressly stated otherwise, the Mortgagee or any Receiver or Delegate may: 

 

	 	(a)	 give or withhold or give conditionally any approval or consent; 

 

	 	(b)	 be satisfied or not satisfied as to any matter or thing; 

 

	 	(c)	 form any opinion; and 

 

	 	(d)	 exercise any right, power or discretion, 

in the person’s sole discretion having regard to the interests of the Mortgagee alone. 

 

	14.5	 Rights cumulative 

 

	 	(a)	 The rights of the Mortgagee and any Receiver under this Deed: 

 

	 	(i)	 may be exercised as often as necessary; 

 

	 	(ii)	 are cumulative and not exclusive of its rights provided by law; and 

 

	 	(iii)	 may only be waived in writing and specifically. 

 

	 	(b)	 Any delay in exercising, or the non-exercise of, any right is not a
waiver of that right. 

  

	14.6	 No obligation to perform, etc 

Neither the Mortgagee nor any Receiver need in relation to any Collateral: 

 

	 	(a)	 perform any obligation of the Mortgagor; 

 

	 	(b)	 make any payment; 

  

	 	(c)	 enquire as to the nature or sufficiency of any payment received by it or the Mortgagor; or

  

	 	(d)	 present or file any claim, or take any other action, to collect or enforce the payment of any amount to which
it is entitled under this Deed. 

  

	14.7	 Payment of Mortgagor’s obligations 

 

	 	(a)	 If the Mortgagor has failed to do so, the Mortgagee or any Receiver may pay any liability of the Mortgagor in
relation to any Collateral. Any payment made by the Mortgagee or any Receiver will form part of the Secured Liabilities. 

  

	 	(b)	 The Mortgagor must reimburse the Mortgagee or Receiver immediately on demand for any payment made by it under
this Clause. 

  

	14.8	 Protection of Mortgagee, Receiver etc 

To the extent permitted by law and unless otherwise expressly provided in this Deed, neither the Mortgagee nor any Receiver or Delegate will be
liable for any: 
  

	 	(a)	 conduct, delay, negligence or breach of duty in the exercise or
non-exercise of any right, power or discretion under this Deed or provided by law; or 

  
 15 

	 	(b)	 loss (including consequential loss) which results, 

except where it arises from the person’s deliberate misconduct or deliberate default. 

 

	14.9	 Change in Mortgagee 

This Deed will remain valid and enforceable despite any change in the name, composition or constitution of the Mortgagee or any merger,
amalgamation or consolidation by the Mortgagee with any other body corporate. 
  

	14.10	 Currency conversion 

 

	 	(a)	 The Mortgagee or any Receiver may convert any moneys received, recovered or realised by it under this Deed from
their existing currency into any other currency it thinks fit. 

  

	 	(b)	 Any conversion will be made at a market rate and any commissions or charges payable in respect of the
conversion will form part of the Secured Liabilities. 

  

	14.11	 Certificate conclusive 

Any certificate or determination by the Mortgagee as to the amount of any Secured Liability is, in the absence of manifest error, conclusive.

  

	14.12	 Severability 

If any provision of this Deed is or becomes illegal, invalid or unenforceable in any jurisdiction, this will not affect the legality, validity
or enforceability in: 
  

	 	(a)	 that jurisdiction of any other provision of this Deed; or 

 

	 	(b)	 any other jurisdiction of that or any other provision of this Deed. 14.13 Time of the essence

 Time is of the essence for the purposes of this Deed, both as regards the dates and periods mentioned in any Finance
Document and any dates and periods which the Mortgagor and the Mortgagee agree in writing to substitute for them. 
  

	14.14	 Variations in writing 

No variation to this Deed will be valid unless it is in writing and signed on behalf of each party to this Deed. 

 

	14.15	 Failure to execute 

If, for any reason, a party to this Deed fails to execute it on or before the date on which it is dated, it will be valid and binding on those
parties who have executed it. That party may execute and deliver this Deed on any later date and will become bound by it with effect from that date. 
  

	15.	 PROTECTION OF SECURITY 

 

	15.1	 Continuing security 

The security created by this Deed is a continuing security for, and will extend to the ultimate balance of, the Secured Liabilities regardless
of any intermediate payment or discharge in whole or part. 

  
 16 

	15.2	 Application of this Deed 

The Mortgagor intends that the security created by this Deed, and its obligations under this Deed, will extend to any transfer, variation,
increase, extension, replacement or addition of, or to, any Finance Document and/or any finance facility or amount made available under any Finance Document for any purpose, even if it is fundamentally different or more onerous. 

 

	15.3	 Avoidable payments 

If the Mortgagee considers any amount paid by the Mortgagor in respect of the Secured Liabilities is capable of being avoided or set aside on
the insolvency, liquidation or administration of the Mortgagor or otherwise, that amount is not considered to have been paid for the purposes of this Deed. 
  

	15.4	 Reinstatement 

 

	 	(a)	 If any release (whether in respect of the obligations of any Obligor or any security for those obligations or
otherwise) or arrangement is made in whole or part on the faith of any payment, security or other disposition which is reduced, avoided or liable to be reduced or avoided by any insolvency, breach of duty or otherwise, the liability of the Mortgagor
under, and the security created by, this Deed will continue or be reinstated as if the release or arrangement had not occurred. 

  

	 	(b)	 The Mortgagee may concede or compromise any claim that any payment, security or other disposition is liable to
be avoided or restored. 

  

	 	(c)	 This Clause continues to apply after this Deed has been discharged. 

 

	15.5	 Appropriations 

Until the Security Period has ended, the Mortgagee (or any trustee or agent on its behalf) or Receiver may, without affecting the liability of
the Mortgagor under this Deed: 
  

	 	(a)	 refrain from applying or enforcing any moneys, security or rights held or received by it in respect of the
Secured Liabilities or apply or enforce them in any manner or order it thinks fit (whether against the Secured Liabilities or otherwise); and 

  

	 	(b)	 hold in a suspense account any moneys received from the Mortgagor or on account of the Secured Liabilities.

  

	15.6	 Waiver of defences 

The obligations of the Mortgagor under this Deed will not be affected by any act, omission, matter or thing which, but for this Clause, would
reduce, release or prejudice any obligation or liability of the Mortgagor under this Deed (whether or not known to it), including: 
  

	 	(a)	 any time, waiver, concession or indulgence granted to any person; 

 

	 	(b)	 the release of any person under any composition or arrangement; 

 

	 	(c)	 the taking, variation, compromise, exchange, renewal or release of, or refusal or neglect to perfect, take up
or enforce, any rights against, or security over, any assets of any person; 

  

	 	(d)	 any non-presentation or
non-observance of any formality or other requirement in respect of any instrument or any failure to realise the full value of any security; 

 

	 	(e)	 any incapacity or lack of power, authority or legal personality of, or dissolution or change in the members or
status of, any person; 

  
 17 

	 	(f)	 any amendment (however fundamental or onerous) or replacement of any Finance Document or any other document or
security (including any change in the purpose of, any extension of, or any increase in, any finance facility provided under or pursuant to any Finance Document); 

 

	 	(g)	 any unenforceability, illegality, invalidity or non-provability of any
obligation of any person under any Finance Document or any other document or security; or 

  

	 	(h)	 any insolvency, liquidation or similar proceedings. 

 

	15.7	 No competition 

 

	 	(a)	 Until the Security Period has ended, the Mortgagor may not (unless the Mortgagee directs it to do so in
writing) after any claim has been made against it, or by virtue of any payment or performance by it, under this Deed: 

  

	 	(i)	 be subrogated to any rights, security or moneys held, received or receivable by the Mortgagee (or any trustee
or agent on its behalf) or Receiver; 

  

	 	(ii)	 be entitled to any right of contribution or indemnity in respect of any payment made or moneys received on
account of the Secured Liabilities; 

  

	 	(iii)	 claim, rank, prove or vote as a creditor of any person or any person’s estate in competition with the
Mortgagee (or any trustee or agent on its behalf) or Receiver; 

  

	 	(iv)	 receive, claim or have the benefit of, any payment, distribution or security from, or on account of, any
Obligor; or 

  

	 	(v)	 exercise any right of set-off against any Obligor.

  

	 	(b)	 The Mortgagor must immediately pay or transfer to the Mortgagee, and before making that payment or transfer,
must hold on trust for the Mortgagee: 

  

	 	(i)	 any payment or distribution or benefit of security received by it; and 

 

	 	(ii)	 an amount equal to any right of set-off exercised by it, contrary to
this Clause. 

  

	15.8	 Immediate recourse 

To the extent permitted by law, neither the Mortgagee nor any Receiver is obliged, before exercising any right, power or remedy under this Deed
or provided by law to: 
  

	 	(a)	 make any demand of any person, except to the extent required by the Facility Agreement; 

 

	 	(b)	 take any action or obtain judgment in any court against any person; 

 

	 	(c)	 make or file any claim or proof in a bankruptcy, liquidation or dissolution of any person; or

  

	 	(d)	 enforce or seek to enforce any security taken in respect of, or under, any Finance Document or any other
document or arrangement relating to the Secured Liabilities. 

  

	15.9	 Exclusion of legislation 

To the extent permitted by law, all legislation which (directly or indirectly): 

  
 18 

	 	(a)	 lessens, varies or affects any obligation of the Mortgagor under this Deed; or 

 

	 	(b)	 delays, prevents or prejudicially affects the exercise by the Mortgagee or any Receiver of any right, power or
remedy under this Deed, is excluded from this Deed. 

  

	15.10	 Additional security 

The security created by this Deed: 
  

	 	(a)	 is independent from, and in addition to; and 

 

	 	(b)	 will not merge in, be prejudicially affected by, or prejudicially affect, any other Security Interest for any
of the Secured Liabilities now or subsequently held by the Mortgagee. 

  

	16.	 SET-OFF 

 

	16.1	 Set-off 

The Mortgagee may at any time while an Event of Default is continuing (and despite any settlement of account or any other matter) set-off any matured obligation due from the Mortgagor under any Finance Document (to the extent beneficially owned by the Mortgagee) against any matured obligation owed by the Mortgagee to the Mortgagor, regardless
of the place of payment, booking branch or currency of either obligation. 
  

	16.2	 Currencies 

If the obligations are in different currencies, the Mortgagee may convert either obligation at a prevailing market rate of exchange for the
purpose of the set-off. 
  

	17.	 ASSIGNMENT 

  

	17.1	 Mortgagor 

The Mortgagor may not assign any of its rights or transfer any of its rights and obligations under this Deed without the prior written consent
of the Mortgagee. 
  

	17.2	 Mortgagee 

  

	 	(a)	 The Mortgagee may assign its rights, or transfer (in whole or part) its rights and obligations, under this Deed
to any person to whom it assigns its rights, or transfers its rights and obligations, under the Facility Agreement (in whole or part) in accordance with the terms of the Facility Agreement. 

 

	 	(b)	 The Mortgagee may disclose any information regarding the Mortgagor, the Secured Liabilities or the Collateral
to any potential assignee or transferee permitted in accordance with the terms of the Facility Agreement. 

  

	18.	 COSTS AND EXPENSES AND INDEMNITY 

 

	18.1	 Costs and expenses 

The Mortgagor must pay on demand (on a full indemnity basis) all documented out- of-pocket costs and expenses of any kind incurred by the Mortgagee or any Receiver or Delegate in connection with: 
  

	 	(a)	 the creation, perfection or registration of the security intended to be created by this Deed;

  
 19 

	 	(b)	 the actual or attempted protection, preservation or enforcement of the security created by this Deed;

  

	 	(c)	 the exercise, or attempted exercise, of any right, power or remedy under this Deed; 

 

	 	(d)	 the conversion of an amount denominated in one currency into another; 

 

	 	(e)	 the breach by the Mortgagor of any of its obligations under this Deed; or 

 

	 	(f)	 any proceedings to recover the Secured Liabilities. 

 

	18.2	 Indemnity 

  

	 	(a)	 The Mortgagor must indemnify (on a full indemnity basis) the Mortgagee, any Receiver, any Delegate and any
employee of any of them (each, an Indemnified Person) against any documented out-of-pocket cost, expense, loss, liability or claim, whether arising
in contract, tort or otherwise, incurred by, or made against, any Indemnified Person in connection with anything: 

  

	 	(i)	 referred to in Clause 18.1 (Costs and expenses); or 

 

	 	(ii)	 done or not done by any Indemnified Person in relation to any Collateral or any right, power or remedy under
this Deed. 

  

	 	(b)	 This indemnity does not apply to any cost, expense, loss, liability or claim arising as a result of any
Indemnified Person’s deliberate misconduct or deliberate default. 

  

	19.	 RELEASE 

At the end of the Security Period, the Mortgagee will (at the request and cost and expense of the Mortgagor): 

 

	 	(a)	 execute all such documents and take all such actions as may be reasonably necessary to release the security
created by this Deed; and 

  

	 	(b)	 return to the Mortgagor any document delivered to the Mortgagee under Clause 4 (Documents to be delivered).

  

	20.	 COMMUNICATIONS 

 

	20.1	 In writing 

Any communication in connection with this Deed must be in writing and, unless otherwise stated, may be given in person, by registered post or
fax. 
  

	20.2	 Contact details 

 

	 	(a)	 The contact details of the Mortgagor for this purpose are: 

 

			
	Address:	  	Level 18, Sohu.com Media Plaza
		
		  	Block 3, No. 2 Kexueyuan South Road
		
		  	Haidian District, Beijing 100190
		
		  	People’s Republic of China
		
	TEL number:	  	(8610) 62726611
		
	Fax number:	  	(8610) 56412892
		
	Attention:	  	Ms. Joanna Lv

  
 20 

	 	    	 or any substitute address, fax number or officer that the Mortgagor may by not less than five Business
Days’ notice specify. 

  

	 	(b)	 The contact details of the Mortgagee for this purpose are: 

 

			
	Address:	  	Shin-Marunouchi Building 12F, 1-5-1 Marunouchi, Chiyoda-ku,
		
		  	Tokyo, Japan, 100-6512
		
	Fax number:	  	+81 03-5219 8525
		
	Attention:	  	Wang Meng/Han Jiangpeng

  

	 	    	 or any substitute address, fax number or officer that the Mortgagee may specify by not less than five Business
Days’ notice. 

  

	20.3	 Effectiveness 

 

	 	(a)	 Except as provided below, any communication in connection with this Deed will be taken to be given:

  

	 	(i)	 (if it is delivered in person or left at an address) at the time it is delivered or left;

  

	 	(ii)	 (if it is sent by registered post) seven Business Days after being deposited in the post, postage prepaid, in a
correctly addressed envelope; and 

  

	 	(iii)	 (if it is sent by fax) when the transmission has been successfully completed. 

 

	 	(b)	 A communication given under paragraph (a) above but received on a
non-Business Day or after 5pm in the place of receipt will only be taken to be given on the next Business Day in that place. 

 

	20.4	 Language 

Any communication or document given in connection with this Deed must be in English or (if not in English) accompanied by a certified English
translation. A certified English translation of any document will prevail and may be relied upon by the Mortgagee. 
  

	21.	 COUNTERPARTS 

This Deed may be executed in any number of counterparts. This has the same effect as if the signatures on the counterparts were on a single
copy of this Deed. 
  

	22.	 GOVERNING LAW AND JURISDICTION 

 

	22.1	 Governing law 

The laws of the Cayman Islands govern this Deed and its interpretation. 

 

	22.2	 Jurisdiction 

  

	 	(a)	 The courts of the Cayman Islands have jurisdiction to settle any dispute or claim arising under, or in
connection with, this Deed and the Mortgagor irrevocably submits to the jurisdiction of those courts. 

  
 21 

	 	(b)	 Subject to any applicable law: 

 

	 	(i)	 nothing contained in this Clause prevents the Mortgagee from bringing proceedings against the Mortgagor in any
other court of competent jurisdiction; and 

  

	 	(ii)	 if the Mortgagee brings proceedings against the Mortgagor in more than one jurisdiction, this does not prevent
the Mortgagee from bringing proceedings (whether or not concurrent) against the Mortgagor in any other jurisdiction. 

  

	 	(c)	 The Mortgagor irrevocably and unconditionally waives any: 

 

	 	(i)	 objection which it may have at any time to any proceedings being brought against it in any court referred to in
this Clause; and 

  

	 	(ii)	 claim that those proceedings have been commenced in an inconvenient forum. 

 

	 	(d)	 The Mortgagor unconditionally agrees that a judgment in any proceedings brought in any court referred to in
this Clause will be conclusive and binding on the Mortgagor and may be enforced in the courts of any other jurisdiction. 

 This Deed is
executed and delivered, and takes effect, as a deed on the date written above. 

  
 22 

 Schedule 1. Initial Shares 

 

			
	Company name and number	  	Changyou.com Limited (company number 192730)
		
	Description of shares	  	Class B Ordinary Shares of US$0.01 par value each
		
	Amount paid on shares	  	Fully paid
		
	Number of shares	  	14,350,000 Class B Ordinary Shares, which represent 20% of the issued and outstanding shares of the Company, as of the Effective Time
		
	Share certificate number(s)	  	1

  
 23 

 Schedule 2. Form of share transfer form 

SHARE TRANSFER FORM 
  

					
		  	Changyou.com Limited	  	
	Company	  	(company number 192730)	  	
	(Name, company number and address)	  	Cricket Square	  	
		  	Hutchins Drive	  	
		  	PO Box 2681	  	
		  	Grand Cayman	  	
		  	KY1-1111	  	
		  	Cayman Islands	  	
			
	Share(s)	  	Description	  	Number
			
		  	Class B Ordinary Shares of US$0.01 par value each	  	
		
	Transferor	  	Sohu.com (Game) Limited
	(Name and address)	  	(company number 204645)
		  	Maples Corporate Services Limited,
		  	P.O. Box 309,
		  	Ugland House, South Church Street, George Town,
		  	Grand Cayman KY1-1104, Cayman Islands
	Transferee	  		  	
	(Name and address)	  		  	
		
	The Transferor, who is recorded in the Company’s register of members as the holder of the Share(s), transfers the Share(s) to the Transferee	  	
			 
		  		  	Date
			
	For and on behalf of	  		  	
	Transferor	  		  	
	
	The Transferor requests that all necessary entries be made in the Company’s register of members to record the transfer of the Share(s) to the Transferee

  
 Share Mortgage (Target)

 24 

 Schedule 3. Form of deed of appointment 

Changyou.com Limited 

(the Company) 
 DEED OF
APPOINTMENT 
 We, Sohu.com (Game) Limited, of Maples Corporate Services Limited, P.O. Box 309, Ugland House, South Church Street, George Town, Grand
Cayman KY1-1104, Cayman Islands are a shareholder of the Company. 
 This Deed relates to 14,350,000 Class B
Ordinary Shares, which represent 20% of the issued and outstanding shares of the Company, as of the Effective Time (as defined in the Share Mortgage) (the Shares) that are registered in our name in the Company’s register of members. 

Pursuant to an equitable share mortgage dated [●] (the Share Mortgage) between Industrial and Commercial Bank of China
Limited, Tokyo Branch as mortgagee (the Appointee) and us, we have created an equitable mortgage and charge over (among other things) the Shares in favour of the Appointee. 

Definitions and principles of construction in the Share Mortgage apply in this Deed unless the context requires otherwise. 

We irrevocably appoint the Appointee as our: 
  

	1.	 proxy to attend any meeting of shareholders of the Company (and any adjournment) and to exercise (or refrain
from exercising) all voting rights attaching to the Shares in relation to any resolution considered by the meeting (or adjourned meeting) in any manner the Appointee thinks fit; and 

 

	2.	 attorney (with full power to appoint substitutes and to delegate) to exercise all of our rights and powers as a
shareholder of the Company, including to: 

  

	 	(a)	 appoint any proxy to attend and vote at any meeting of shareholders of the Company; 

 

	 	(b)	 sign or consent to any resolutions in writing of the shareholders of the Company; and 

 

	 	(c)	 requisition any meeting of the shareholders of the Company. 

We ratify and confirm anything that the Appointee may do under, or in connection with, this Deed. 

This Deed is given to secure the Appointee’s proprietary interest in the Shares under the Share Mortgage. This Deed will remain in force until the
Appointee notifies you in writing that the Secured Liabilities have been irrevocably and unconditionally paid or discharged the Secured Liabilities in full. 

The laws of the Cayman Islands govern this Deed and its interpretation. 

This Deed is executed and delivered, and takes effect, as a deed on the date written below. 

DATED 
  

					
	EXECUTED as a deed on behalf of	  	)	  	
	SOHU.COM (GAME) LIMITED	  	)	  	
		  	)	  	

  
 Share Mortgage (Target)

 25 

 Schedule 4. Form of letter of resignation 

The Directors 
 Changyou.com Limited 

Cricket Square 
 Hutchins Drive 

PO Box 2681 
 Grand Cayman 

KY1-1111 
 Cayman Islands

 Changyou.com Limited (the Company)—resignation as a director 

I resign as a director of the Company with immediate effect and without compensation for loss of office. 

I confirm that I have no claim or right of action of any kind against the Company or any of its parents, subsidiaries or affiliates arising out of, or in
connection with, my holding office with the Company or otherwise. To the extent that any such claim or right of action may exist, I irrevocably and unconditionally waive it and release each such person from any liability in respect of it. 

The laws of the Cayman Islands govern this letter and its interpretation. 

Yours faithfully 
  

	
	  

	[Name]
	
	  

	Date

  
 Share Mortgage (Target)

 26 

 Schedule 5. Form of letter of authorisation 

Industrial and Commercial Bank of China Limited, Tokyo Branch 

Shin-Marunouchi Building 12F, 
 1-5-1 Marunouchi, Chiyoda-ku, 
 Tokyo, Japan, 100-6512 
 [Date] 

Dear Sirs 
 Changyou.com Limited (the Company) - resignation
authorisation 
 I refer to the equitable share mortgage dated on or about the date of this letter (the Share Mortgage) between Sohu.com
(Game) Limited and Industrial and Commercial Bank of China Limited, Tokyo Branch as mortgagee (the Mortgagee) relating to shares in the Company. 

Definitions and principles of construction in the Share Mortgage apply in this letter unless the context requires otherwise. 

Enclosed is my signed but undated letter of resignation under which I resign as a director of the Company without compensation for loss of office. 

The Mortgagee is irrevocably authorised to date and deliver my letter of resignation to the Company if an Event of Default is continuing. 

The laws of the Cayman Islands govern this letter and its interpretation. 

Yours faithfully 
  

	
	  

	[Name]

  
 Share Mortgage (Target)

 27 

 Schedule 6. Form of letter agreement 

Conyers Trust Company (Cayman) Limited, 
 Cricket Square Hutchins
Drive PO Box 2681 Grand Cayman KY1-1111 Cayman Islands 
 Date: _____________________ 

Dear Sirs 
 Changyou.com Limited (the Company): Agreement re
Register of Members of the Company 
 We hereby notify you that pursuant to an equitable share mortgage (the Mortgage) dated [●] 2020
between Sohu.com (Game) Limited, as mortgagor (the Mortgagor), and Industrial and Commercial Bank of China Limited, Tokyo Branch, as mortgagee (the Mortgagee), the Mortgagor has granted a security interest in favour of the Mortgagee
over (among other things) 14,350,000 Class B Ordinary Shares, which represent 20% of the issued and outstanding shares of the Company, as of the Effective Time (as defined in the Mortgage), standing in its name on the register of members of the
Company (the Register) and all the Additional Securities (as defined in the Mortgage) from time to time legally or beneficially owned by the Mortgagor in the Company (the Shares). 

 

	1.	 You are to make an annotation of the existence of the Mortgage and the security interests created thereby in
the Register and, only upon your receipt of the Discharge Notice (as defined below), you shall amend such annotation to record that the Mortgage and such security interests have been released and discharged. 

 

	2.	 At any time after the Mortgagee notifies you in writing that an Event of Default (as defined in the Mortgage)
has occurred, you are authorised and entitled to rely upon the instructions of the Mortgagee to register the Mortgagee or its nominee (as the Mortgagee may direct) in the Register as the registered holder of the Shares pursuant to the Mortgage
(provided that the Mortgagee delivers to you a duly completed and executed transfer form together with the relevant share certificates (if any) in respect of the Shares being transferred), and to otherwise comply with any directions or instructions
from the Mortgagee in relation thereto. Such authorisation and entitlement to rely upon the instructions of the Mortgagee shall only terminate upon your receipt of a notification in writing from the Mortgagee confirming that the Mortgage has been
discharged (such notification being the Discharge Notice). 

  

	3.	 In performing your obligations under the terms of this letter you shall be entitled to rely upon instructions
given by, or purporting to be given by, a director or other officer or authorised signatory of the Mortgagee. 

  

	4.	 The Mortgagee’s instructions shall prevail in all circumstances in respect of the matters referred to in
paragraphs 1 and 2 above and you are entitled to comply with such instructions of the Mortgagee. 

  

	5.	 The Company, the Mortgagor and the Mortgagee shall jointly and severally indemnify (on a full indemnity basis)
and hold harmless you, the firm of Conyers Dill & Pearman and any entities, whether partnerships, companies or otherwise, owned or controlled by, or under common control with or affiliated with, Conyers Dill & Pearman as may be
established from time to time (for themselves and on trust and as agents for the benefit of the other persons mentioned below), their successors and assigns and their respective directors, officers, employees, agents and partners present and future
and each of them, as the case may be, against all liabilities, obligations losses, damages, penalties, actions, proceedings, claims, judgements, demands, costs, expenses or disbursements of any kind (including legal fees and expenses) whatsoever
which you may reasonably incur or be subject to in consequence of acting pursuant to any instructions received from the Mortgagee in respect of the matters referred to in 1 and 2 above. This indemnity provision shall survive termination of the
agreement set out in this letter 

  
 Share Mortgage (Target)

 28 

	6.	 The agreement set out in this letter shall terminate upon the earlier of the date of (i) the Discharge
Notice and (ii) you ceasing to maintain the Register. 

  

	7.	 The terms set out in this letter are governed by, and shall be construed in accordance with, the laws of the
Cayman Islands. 

  
 Share Mortgage (Target)

 29 

 Yours faithfully 
  

			
	                                      
      	  	                                      
      
	Authorised Signatory	  	Authorised Signatory
	for and on behalf of the Company	  	for and on behalf of the Mortgagee
	Changyou.com Limited	  	Industrial and Commercial Bank of China Limited, Tokyo Branch
		
	                                      
      	  	
	Authorised Signatory	  	
	for and on behalf of the Mortgagor	  	
	Sohu.com (Game) Limited	  	

  
 Share Mortgage (Target)

 30 

 Schedule 7. Form of letter of undertaking 

 

			
	To:	  	Industrial and Commercial Bank of China Limited, Tokyo Branch (the Mortgagee)
		
	From:	  	Changyou.com Limited (the Company)
		
	From:	  	Sohu.com (Game) Limited (the Mortgagor)

 Date: _____________________ 

Dear Sirs 
 We refer to the equitable share mortgage dated
[●] 2020 (as may be amended and/or supplemented from time to time, the Share Mortgage) between the Mortgagor and the Mortgagee. 
 Definitions
and principles of construction in the Share Mortgage apply in this letter unless the context requires otherwise. 
 Pursuant to the Share Mortgage, the
Mortgagor has created a mortgage and charge over (among other things) 14,350,000 Class B Ordinary Shares, which represent 20% of the issued and outstanding shares of the Company, as of the Effective Time (as defined in the Share Mortgage)) and
any additional shares issued by the Company to the Mortgagor and/or any other shares mortgaged or charged by the Mortgagor pursuant to the Share Mortgage in the future that are registered in our name from time to time in the Register of Members
(together, the Shares) in favour of the Mortgagee. 
 This letter of undertaking is given pursuant to the Share Mortgage. 

For valuable consideration receipt of which is hereby acknowledged, the Company irrevocably undertakes to the Mortgagee as follows. 

 

	1.	 Immediately upon receipt, it will act (or ensure that its registered office provider acts) in accordance with
any dated, completed and signed document that is substantially in the form of Schedule 2 (Form of share transfer form), Schedule 3 (Form of deed of appointment) or Schedule 4 (Form of letter of resignation) of the Share Mortgage.

  

	2.	 Immediately upon becoming aware, it will notify the Mortgagee if: 

 

	 	a.	 the Mortgagor attempts to do, or has done, anything in breach of Clause 7.3 (Restrictions on dealing) of the
Share Mortgage; or 

  

	 	b.	 the directors of the Company attempt to do, or have done, anything referred to in paragraph (a) of Clause
7.3 (Restrictions on dealing) of the Share Mortgage. 

  

	3.	 It irrevocably waives any lien or right of forfeiture that may arise at any time during the Security Period
under its memorandum or articles of association or otherwise in relation to the Collateral. 

  

	4.	 It will ensure that, on each date on which a person is appointed as a director of the Company, the Mortgagee is
provided with each document specified in Clause 4.3 (New directors) of the Share Mortgage. 

  

	5.	 It will ensure that the Company’s shareholders do not pass any resolution to amend its memorandum or
articles of association in any way that is prejudicial to the interests of the Mortgagee or inconsistent with the terms of the Share Mortgage. 

  
 Share Mortgage (Target)

 31 

	6.	 It irrevocably consents to any transfer of any Securities made under, or in connection with, the Share
Mortgage. 

  

	7.	 During the Security Period, it will only register in the Register of Members a transfer of Securities at the
request, or with the prior written consent, of the Mortgagee. 

  

	8.	 It will ensure that the Register of Members is annotated in accordance with paragraph (b) of Clause 4.1
(Initial Shares) and paragraph (b) of Clause 4.2 (Additional Securities) of the Share Mortgage. 

  

	9.	 It will take all actions under this undertaking promptly, and in any event, in a timeframe that will allow the
Mortgagor to comply with its obligations under the Share Mortgage. 

  

	10.	 It will not issue a restrictions notice (as defined in the Companies Law) in relation to the Collateral without
the Mortgagee’s prior written consent. 

 This letter may be executed in any number of counterparts. This has the same effect as if
the signatures on the counterparts were on a single copy of this letter. 
 The laws of the Cayman Islands govern this letter and its interpretation. 

This letter is executed as a deed and delivered, and takes effect, as a deed on the date written above. 

 

			
	                                      
      	  	                                      
      
	Authorised Signatory	  	Authorised Signatory
	for and on behalf of the Company	  	for and on behalf of the Mortgagor
	Changyou.com Limited	  	Sohu.com (Game) Limited

  
 Share Mortgage (Target)

 32 

 Signature page 

 

					
	Mortgagor	  		  	
	EXECUTED as a deed on behalf of	  	)	  	
	Sohu.com (Game) Limited	  	)	  	
		  	)	  	

  

					
	Mortgagee	  		  	
	EXECUTED as a deed on behalf of	  	)	  	
	Industrial and Commercial Bank of China	  	)	  	
	Limited, Tokyo Branch	  	)	  	

  
 Share Mortgage (Target)

 33EX-10.1

 Exhibit 10.1 

NICOLA T. HANNA 
 United States Attorney 

BRANDON D. FOX 
 Assistant United States Attorney 

Chief, Criminal Division 
 JOSEPH O. JOHNS (Cal. Bar
No. 144524) 
 Assistant United States Attorney 
 Chief,
Environmental and Community Safety 
 Crimes Section 
 MARK A.
WILLIAMS (Cal. Bar No. 239351) 
 Assistant United States Attorney 

Deputy Chief, Environmental and Community 
 Safety Crimes Section

 SONIA W. NATH 
 Special Assistant United States Attorney 

1300 United States Courthouse 

312 North Spring Street 
 Los
Angeles, California 90012 
 Telephone: (213) 894-4536 / (213)
894-3359 

E-mail:        joseph.johns@usdoj.gov 

mark.a.williams@usdoj.gov 
 GUSTAV W. EYLER 

Director 
 DANIEL E. ZYTNICK 

Trial Attorney 
 Consumer Protection Branch 

U.S. Department of Justice 
 P.O. Box 386 

Washington, DC 20044 
 Telephone:
(202) 598-8337 
 Email:        daniel.e.zytnick@usdoj.gov

 Attorneys for Plaintiff 
 UNITED STATES OF AMERICA 

UNITED STATES DISTRICT COURT 
 FOR
THE CENTRAL DISTRICT OF CALIFORNIA 
  

			
	 UNITED STATES OF AMERICA,

 
 Plaintiff,

 
 v.

 
 CHIPOTLE MEXICAN GRILL, INC.,

 
 Defendant.

 
	  	 Case No. CR 20-
  

DEFERRED PROSECUTION AGREEMENT FOR DEFENDANT CHIPOTLE MEXICAN GRILL, INC.

  
 1 

 1.    This constitutes the deferred prosecution agreement between
defendant CHIPOTLE MEXICAN GRILL, INC. (“defendant” or “Chipotle”), the United States Attorney’s Office for the Central District of California (the “USAO”), and the United States Department of Justice’s
Consumer Protection Branch (“DOJ-CPB”) (collectively, the “Government”) in the above-captioned case. This agreement is limited to the United States Department of Justice, including the USAO
and DOJ-CPB, on the one hand, and Chipotle, on the other, and cannot bind any other federal, state, local, or foreign prosecuting, enforcement, administrative, or regulatory authorities, except as noted in
paragraph 3(d). 
 DEFENDANT’S OBLIGATIONS 

2.    Defendant agrees to: 

a)    At the earliest opportunity requested by the Government, agree to the filing of a
two-count information, in the form attached to this agreement as Exhibit A or a substantially similar form, that charges defendant with adulterating food and causing food to become adulterated while held for
sale after shipment of one or more of its components in interstate commerce in violation of the Federal Food, Drug, and Cosmetic Act (FDCA), 21 U.S.C. §§ 331(k) and 333(a)(1). 

b)    Pay a total criminal fine of $25,000,000, consisting of one payment of $10,000,000 no later than June 1, 2020,
followed by three payments of $5,000,000 each, no later than every 30 days after the prior payment. 
 c)    Sign, file,
and enter a Stipulation Regarding Request for (1) Continuance of Trial Date, and (2) Findings of Excludable Time Periods Pursuant to Speedy Trial Act, in the form attached to this agreement as Exhibit D or a substantially similar form.

  
 2 

 d)    Comply with all terms in this agreement and the Compliance Program
attached hereto as Exhibit C, which is incorporated herein by reference. 
 e)    Not contest any facts or information
agreed to in this agreement and the Statement of Facts attached hereto as Exhibit B. 
 f)    Appear for all court
appearances, obey all conditions of any bond, and obey any other ongoing court order in this matter. 
 g)    Not commit
any federal, state, or local crime. 
 h)    Be truthful at all times with the USAO,
DOJ-CPB, the United States Food and Drug Administration (“FDA”), and the Court. 
 THE
GOVERNMENT’S OBLIGATIONS 
 3.    The Government agrees to: 

a)    Not contest facts agreed to in this agreement and the Statement of Facts attached hereto as Exhibit B. 

b)    Sign, file, and enter a Stipulation Regarding Request for (1) Continuance of Trial Date, and (2) Findings
of Excludable Time Periods Pursuant to Speedy Trial Act, in the form attached to this agreement as Exhibit D or a substantially similar form. 

c)    If defendant is in full compliance with all of its obligations under this agreement at the conclusion of the
three-year deferred prosecution term, within 15 calendar days of the conclusion of the three-year term, move to dismiss the two-count information. 

d)    Except for civil and criminal tax violations (including conspiracy to commit such violations chargeable under 18
U.S.C. § 371), not further prosecute defendant for criminal and/or 

  
 3 

 
civil violations arising out of defendant’s conduct described in the attached statement of facts. This provision is binding upon Chipotle, the USAO,
DOJ-CPB, and the United States Attorney’s Office for each of the other 93 judicial districts of the United States. Chipotle understands that this Agreement does not bind: (i) any state or local
prosecuting authorities; (ii) the Tax Division of the U.S. Department of Justice; and (iii) the Internal Revenue Service of the U.S. Department of the Treasury. Defendant understands that the USAO,
DOJ-CPB, and any other prosecuting authority are free to criminally prosecute defendant for any other unlawful past conduct or any unlawful conduct that occurs after the date of this agreement. 

TERM OF AGREEMENT 

4.    This agreement is effective upon signature and execution by defendant’s authorized representative,
defendant’s counsel, and Government counsel, and will remain in effect for a period of three years from the date this agreement is filed in court (the “three- year term”). 

5.    Defendant and the Government understand that the Agreement to defer prosecution of Chipotle must be approved as to
waiver of the requirements of the Speedy Trial Act by the Court, in accordance with 18 U.S.C. § 3161(h)(2). Should the Court decline to approve the Agreement to defer prosecution for any reason: (a) both the Government and Chipotle are
released from any obligation imposed upon them by the Agreement; and (b) the Agreement shall be null and void, except for the parties’ waiver of the statute of limitations. 

  
 4 

 CIRCUMSTANCES OF THIS AGREEMENT 

6.    The Government enters into this agreement based on the individual facts and circumstances presented in this case,
including: 
 a)    The nature and seriousness of the offense conduct; 

b)    The changes made by defendant to improve food safety at its restaurants since 2015, including: 

i)    Development of new food safety practices designed to address the threat of norovirus and other pathogens, such as a
program that limits the number of team members involved in preparing food, and the installation of new dish sanitizers; 

ii)    Institution of a Food Safety Advisory Council made up of independent food safety experts to evaluate the
company’s procedures and make regular recommendations to corporate officers; 
 iii) The ongoing evaluation by the company of
additional food safety enhancements, including its ongoing evaluation of an improved, automated Hazard Analysis Critical Control Point (HACCP) monitoring systems as well as an automated wellness check system for employees; and 

iv)    Continued, regular, internal and third-party food safety inspections and audits. 

CORPORATE AUTHORIZATION 

7.    Defendant represents that it is authorized to enter into this agreement. On or before the date this agreement is
signed, defendant shall provide the Government and file with the Court a notarized legal document certifying that defendant is authorized to enter into and comply with all of the provisions of this agreement. 

  
 5 

 Such legal document shall designate a company representative who is authorized to take the actions specified
in this agreement, and shall also state that all legal formalities for such authorizations have been observed. 
 ORGANIZATIONAL CHANGES
AND APPLICABILITY 
 8.    This agreement shall bind defendant, its successor entities (if any), parent companies,
and any other person or entity that assumes the liabilities contained herein (“successors-in-interest”). Defendant, or its successors-in-interest, if applicable, shall provide the Government and the Court with immediate notice of any name change, business reorganization, sale or purchase of assets, divestiture of assets, or
similar action impacting their ability to pay the fine or affecting this agreement. No change in name, change in corporate or individual control, business reorganization, change in ownership, merger, change of legal status, sale or purchase of
assets, or similar action shall alter defendant’s responsibilities under this agreement. Defendant shall not engage in any action to seek to avoid the obligations and conditions set forth in this agreement. 

NATURE OF THE OFFENSE 

9.    Defendant understands that for defendant to be guilty of the crimes charged in the information, that is,
adulterating food and causing food to become adulterated while held for sale after shipment of one or more of its components in interstate commerce in violation of the FDCA, 21 U.S.C. §§ 331(k) and 333(a)(1), the following must be true:
defendant committed an act with respect to a food, while the food was held for sale after shipment in interstate commerce that resulted in such food being adulterated under 21 U.S.C. § 342(a)(4). 

  
 6 

 PENALTIES 

10.    Defendant understands that the statutory maximum sentence that the Court can impose for each misdemeanor violation
of 21 U.S.C. §§ 331(k) and 333(a)(1), is: five years’ probation; a fine of $200,000 or twice the gross gain or gross loss resulting from the offense, whichever is greatest; and a mandatory special assessment of $125. Therefore,
defendant understands that the total statutory maximum sentence that the Court can impose in this matter is: five years’ probation; a fine of $400,000 or twice the gross gain or gross loss resulting from the offenses, whichever is greatest; and
a mandatory special assessment of $250. The parties stipulate and agree that a fine of $25,000,000 is appropriate and is no more than twice the gross gain or gross loss resulting from the offenses. 

SUSPENSION, REVOCATION, AND DEBARMENT 

11.    Defendant understands that if defendant holds any regulatory licenses or permits, this agreement may result in the
suspension or revocation of those licenses and/or permits. The Government makes no representation or promise concerning suspension or debarment of defendant from contracting with the United States or with any office, agency, or department thereof.
Suspension and debarment of organizations is a discretionary administrative action solely within the authority of those federal contracting agencies. Defendant understands that unanticipated collateral consequences such as this will not serve as
grounds to withdraw from this agreement. 

  
 7 

 FACTUAL BASIS 

12.    Defendant and the Government agree to the Statement of Facts attached hereto as Exhibit B and incorporated herein
by this reference, and agree that the Statement of Facts is sufficient to support misdemeanor convictions for the charges described in this agreement. The attached Statement of Facts is not meant to be a complete recitation of all facts relevant to
the underlying criminal conduct or all facts known to the parties that relate to that conduct. 
 WAIVER OF STATUTE OF LIMITATIONS

 13.    Having been fully advised by defendant’s attorney regarding application of the statute of limitations to
the two norovirus offenses to which this agreement applies, along with the Boston, Massachusetts norovirus offense that occurred on or about December 2015, the Sterling, Virginia norovirus offense that occurred on or about July 2017, and the Powell,
Ohio Clostridium perfringens offense that occurred on or about July 2018, defendant hereby knowingly, voluntarily, and intelligently waives, relinquishes, and gives up: (a) any right that defendant might have not to be prosecuted for
these offenses because of the expiration of the statute of limitations for the offenses prior to the filing of the information(s) alleging the offenses; and (b) any defense, claim, or argument defendant could raise or assert that prosecution of
the offenses is barred by the expiration of the applicable statute of limitations, pre-indictment delay, or any speedy trial violation. 

  
 8 

 BREACH OF AGREEMENT 

14.    Defendant agrees that if any Chipotle officer or employee at or senior to the rank Field Leader (or functional
equivalent),1 at any time after the signature of this agreement and execution of all required certifications by defendant, defendant’s counsel, and Government counsel, knowingly violates or
fails to perform any of defendant’s obligations under this agreement (“a breach”), the Government may declare this agreement breached. All of defendant’s obligations are material, a single breach of this agreement is sufficient
for the Government to declare a breach, and defendant shall not be deemed to have cured a breach without the express agreement of the Government in writing. If the Government declares this agreement breached, and the Court finds such a breach to
have occurred, then the Government will be relieved of all its obligations under this agreement. 
 15.    Following the
Court’s finding of a knowing breach of this agreement by defendant, should the Government choose to pursue any charge or any criminal, civil, administrative, or regulatory action that was either dismissed or not filed as a result of this
agreement, including, the Simi Valley, California norovirus offense that occurred on or about August 2015, the Los Angeles, California norovirus offense that occurred on or about December 2017, the Boston, Massachusetts norovirus offense that
occurred on or about December 2015, the Sterling, Virginia norovirus offense that 
  

	1 	 For the first 180 days after this agreement is signed and executed, the relevant rank is Team Director (or
functional equivalent) instead of Field Leader (or functional equivalent). 

  
 9 

 
occurred on or about July 2017, and the Powell, Ohio Clostridium perfringens offense that occurred on or about July 2018, then: 

a)    Defendant agrees that any applicable statute of limitations is tolled between the date of defendant’s signing
of this agreement and the filing commencing any such action. 
 b)    Defendant waives and gives up all defenses based
on the statute of limitations, any claim of pre-indictment delay, or any speedy trial claim with respect to any such action, except to the extent that such defenses existed as of the date of defendant’s
signing this agreement. 
 c)    Defendant agrees that: (i) any statements made by defendant, under oath, at any
hearing (if such a hearing occurred prior to the breach); (ii) the agreed to factual basis statement attached to this agreement; and (iii) any evidence derived from such statements, shall be admissible against defendant in any such action
against defendant, and defendant waives and gives up any claim under the United States Constitution, any statute, Rule 410 of the Federal Rules of Evidence, Rule 11(f) of the Federal Rules of Criminal Procedure, or any other federal rule, that the
statements or any evidence derived from the statements should be suppressed or are inadmissible. 
 COURT AND PROBATION OFFICE NOT
PARTIES 
 16.    Defendant understands that the Court and the United States Probation Office are not parties to
this agreement. 

  
 10 

 NO ADDITIONAL AGREEMENTS 

17.    Defendant understands that, except as set forth herein, and in the parties’ tolling agreement, there are no
promises, understandings, or agreements between the Government and defendant or defendant’s attorney, and that no additional promise, understanding, or agreement may be entered into unless in writing and signed by all parties or on the record
in court. 
 AGREED AND ACCEPTED 
 UNITED STATES
ATTORNEY’S OFFICE 
 FOR THE CENTRAL DISTRICT OF CALIFORNIA 

NICOLA T. HANNA 
 United States Attorney 

 

			
	 /s/ Mark Williams
	  	 4/20/2020

	 JOSEPH O. JOHNS

MARK A. WILLIAMS

Assistant United States Attorneys

SONIA W. NATH

Special Assistant United States

Attorney
	  	 Date

	
	 UNITED STATES DEPARTMENT OF JUSTICE

CONSUMER PROTECTION BRANCH
  

GUSTAV W. EYLER

Director

	 /s/ Daniel Zytnick
	  	 4/20/2020

	 DANIEL ZYTNICK

Trial Attorney
	  	 Date

  
 11 

					
	 /s/ Roger Theodoredis
	  		  	 4/17/2020

			
	NAME: Roger Theodoredis	  		  	Date
			
	TITLE: Chief Legal Officer	  		  	
			
	 Authorized Representative of
 Defendant CHIPOTLE
MEXICAN GRILL,
 INC.
	  		  	
			
	 /s/ Jack P. DiCanio
	  		  	 4/17/2020

	JACK P. DiCANIO	  		  	Date
	 Skadden, Arps, Slate, Meagher
 & Flom
LLP
	  		  	
	Attorney for Defendant	  		  	
	CHIPOTLE MEXICAN GRILL, INC.	  		  	
			
	 /s/ David Scheper
	  		  	 4/17/2020

	DAVID SCHEPER	  		  	Date
	Scheper Kim & Harris LLP	  		  	
	Attorney for Defendant	  		  	
	CHIPOTLE MEXICAN GRILL, INC.	  		  	

  
 12 

 CERTIFICATION OF DEFENDANT 

I have been authorized by defendant CHIPOTLE MEXICAN GRILL, INC. (“defendant”) to enter into this agreement on behalf of defendant.
I have read this agreement in its entirety. I have had enough time to review and consider this agreement, and I have carefully and thoroughly discussed every part of it with defendant’s attorney. I understand the terms of this agreement, and I
voluntarily agree to those terms on behalf of defendant. I have discussed the evidence with defendant’s attorney, and defendant’s attorney has advised me of defendant’s rights, of possible pretrial motions that might be filed, of
possible defenses that might be asserted either prior to or at trial, of the sentencing factors set forth in 18 U.S.C. § 3553(a), of relevant Sentencing Guidelines provisions, and of the consequences of entering into this agreement. No
promises, inducements, or representations of any kind have been made to me or to defendant other than those contained in this agreement. No one has threatened or forced me or defendant in any way to enter into this agreement. I am satisfied with the
representation of defendant’s attorney in this matter. 
  

					
	 /s/ Roger Theodoredis
	 		 	 4/17/2020

	 NAME: Roger Theodoredis
	 		 	 Date

			
	 TITLE: Chief Legal Officer
	 		 	
			
	 Authorized Representative of
	 		 	
	 Defendant
	 		 	
	 CHIPOTLE MEXICAN GRILL, INC.
	 		 	

  

  
 13 

 CERTIFICATION OF COUNSEL 

I am defendant CHIPOTLE MEXICAN GRILL, INC.’s attorney. I have carefully and thoroughly discussed every part of this agreement with the
authorized representative of my client. Further, I have fully advised my client and its authorized representative of its rights, of possible motions that might be filed, of possible defenses that might be asserted either prior to or at trial, of the
sentencing factors set forth in 18 U.S.C. § 3553(a), of relevant Sentencing Guidelines provisions, and of the consequences of entering into this agreement. To my knowledge: no promises, inducements, or representations of any kind have been made
to my client other than those contained in this agreement; no one has threatened or forced my client in any way to enter into this agreement; my client’s decision to enter into this agreement is an informed and voluntary one; and the factual
basis set forth in this agreement is sufficient to support convictions to the charges specified in this agreement. 
  

					
	 /s/ Jack DiCanio
	  		  	 4/17/2020

	JACK P. DiCANIO	  		  	Date
	Skadden, Arps, Slate, Meagher	  		  	
	& Flom LLP	  		  	
	Attorney for Defendant	  		  	
	CHIPOTLE MEXICAN GRILL, INC.	  		  	

  
 14 

 CERTIFICATION OF COUNSEL 

I am defendant CHIPOTLE MEXICAN GRILL, INC.’s attorney. I have carefully and thoroughly discussed every part of this agreement with the
authorized representative of my client. Further, I have fully advised my client and its authorized representative of its rights, of possible motions that might be filed, of possible defenses that might be asserted either prior to or at trial, of the
sentencing factors set forth in 18 U.S.C. § 3553(a), of relevant Sentencing Guidelines provisions, and of the consequences of entering into this agreement. To my knowledge: no promises, inducements, or representations of any kind have been made
to my client other than those contained in this agreement; no one has threatened or forced my client in any way to enter into this agreement; my client’s decision to enter into this agreement is an informed and voluntary one; and the factual
basis set forth in this agreement is sufficient to support convictions to the charges specified in this agreement. 
  

					
	 /s/ David Scheper
	 		 	 4/17/2020

	 DAVID SCHEPER
	 		 	 Date

	 Scheper Kim & Harris LLP
	 		 	
	 Attorney for Defendant
	 		 	
	 CHIPOTLE MEXICAN GRILL, INC.
	 		 	

  
 15 

 Exhibit A 

UNITED STATES DISTRICT COURT 
 FOR
THE CENTRAL DISTRICT OF CALIFORNIA 
  

			
	 UNITED
STATES OF AMERICA,
  
 Plaintiff,

 
 v.

 
 CHIPOTLE MEXICAN GRILL, INC.

 
 Defendant.
	  	 CR No. 20-
  

I N F O R M A T I O N

 
 [21 U.S.C. §§ 331(k), 333(a)(1):

Adulterating and Causing the
 Adulteration of Food While Held

for Sale After Shipment in
 Interstate Commerce]

 The United States Attorney charges: 

COUNT ONE 
 [21 U.S.C.
§§ 331(k), 333(a)(1)] 
 On or about August 18, 2015, through August 24, 2015, in Simi Valley, California, within the
Central District of California, and elsewhere, defendant CHIPOTLE MEXICAN GRILL, INC. (“CHIPOTLE”) did adulterate food, and cause food to become adulterated, within the meaning of the Federal Food, Drug, and Cosmetic Act, 21 U.S.C.
§§ 321(f), 342(a)(4), while such food was held for sale after shipment in interstate commerce.    Specifically, defendant CHIPOTLE held food that was adulterated because it was prepared, packed, and held under
insanitary conditions whereby it may have been contaminated with filth, and whereby it may have been rendered injurious to health, while such food was held for sale after shipment of one or more of its components in interstate commerce. 

 COUNT TWO 

[21 U.S.C. §§ 331(k), 333(a)(1)] 

On or about December 13, 2017, through December 18, 2017, in Los Angeles County, within the Central District of California, and
elsewhere, defendant CHIPOTLE did adulterate food, and cause food to become adulterated, within the meaning of the Federal Food, Drug, and Cosmetic Act, 21 U.S.C. §§ 321(f), 342(a)(4), while such food was held for sale after shipment in
interstate commerce.    Specifically, defendant CHIPOTLE held food that was adulterated because it was prepared, packed, and held under insanitary conditions whereby it may have been contaminated with filth, and whereby it may
have been rendered injurious to health, while such food was held for sale after shipment of one or more of its components in interstate commerce. 
  

			
	 GUSTAV W. EYLER
 Director

Consumer Protection Branch
	  	 NICOLA T. HANNA
 United States
Attorney

	  
 DANIEL ZYTNICK

Trial Attorney
 Consumer Protection Branch

U.S. Department of Justice
	  	  
  

BRANDON D. FOX
 Assistant United States Attorney

Chief, Criminal Division
  

JOSEPH O. JOHNS
 Assistant United States Attorney

Chief, Environmental and Community
 Safety Crimes Section

 
 MARK A. WILLIAMS

Assistant United States Attorney
 Deputy Chief, Environmental
and
 Community Safety Crimes Section

  
 2 

 EXHIBIT B 

Statement of Facts 

The following Statement of Facts is incorporated by reference as part of the Deferred Prosecution Agreement (this “Agreement”)
between the United States Attorney’s Office for the Central District of California and the United States Department of Justice’s Consumer Protection Branch (collectively, “the Government”) and Chipotle Mexican Grill, Inc.
(“Chipotle”). Chipotle hereby agrees and stipulates that the following information is true and accurate. Chipotle admits, accepts, and acknowledges that it is responsible for the acts of its employees as set forth below. From in or about
August 2015 to in or about July 2018, in the Central District of California and elsewhere, Chipotle violated 21 U.S.C. § 331(k) by doing and causing to be done acts that caused articles of food to become adulterated within the meaning of 21
U.S.C. § 342(a)(4), while such articles were held for sale after shipment of one or more of their components in interstate commerce. Should the Government pursue the prosecution that is deferred by this Agreement, Chipotle agrees that it will
neither contest the admissibility of, nor contradict, this Statement of Facts. 
  

	I.	 BACKGROUND: RAPID GROWTH AND PROFITABILITY 

1.    Chipotle is a Delaware corporation based in Newport Beach, California, in the Central District of California. From
1993 through 2018, Chipotle was based in Colorado. 

  
 1 

 2.    The first Chipotle opened its doors on July 13, 1993.1 The second and third opened in 1995 and 1996.2 Subsequent growth was much faster, in large part due to McDonald’s investment in Chipotle in
1998. By the end of 2008, Chipotle owned over 800 restaurants.3 By September 30, 2015, Chipotle had 1,895 restaurants in the United
States.4 That number includes 150 new restaurants opened in the first nine months of 2015,5 an average of almost four per week. 

3.    For the calendar years from 2011 to 2015, Chipotle’s revenue nearly doubled, from $2.27 billion for 2011
to $4.50 billion for 2015. Net income more than doubled during the same time frame, from $214.95 million in 2011 to $475.60 million in 2015.6 

4.    In 2014, a restaurant trade publication ranked Chipotle 15th in sales among other “fast-food” operations.7 
 5.    Also in 2014, Forbes published an article praising Chipotle
as “the leader in the fast casual segment” and comparing the company’s “double digit revenue growth” to McDonald’s and Burger King’s “2% and -4% annual growth.”8 The Motley Fool published an article in 2014, stating that the company has “already bested the competition” and has “all the right pieces in place for continued growth.”9 
  
  

	1 	 https://money.cnn.com/2010/10/06/smallbusiness/chipotle_started.fortune/index.htm 

	2 	
https://www.cnbc.com/2017/11/29/how-steve-ells-built-chipotle-mexican-grill- into-a-burrito-empire.html 

	3 	 https://www.sec.gov/Archives/edgar/data/1058090/000119312509033199/d10k.htm 

	4 	 https://www.sec.gov/Archives/edgar/data/1058090/000105809015000044/cmg-20150930x10q.htm 

	5 	 https://www.sec.gov/Archives/edgar/data/1058090/000105809015000044/cmg-20150930x10q.htm 

	6 	 https://www.sec.gov/Archives/edgar/data/1058090/000105809016000058/cmg-20151231x10k.htm 

	7 	
https://www.qsrmagazine.com/reports/qsr50-2014-top-50-chart
 

	8 	
https://www.forbes.com/sites/greatspeculations/2014/12/30/2014-year-in-review-
 chipotle-mexican-grill/#647f564552f3 

	9 	
https://www.fool.com/investing/general/2014/10/17/why-chipotle-mexican-grill- stock-looks-like-a-grea.aspx 

  
 2 

 6.    As of December 31, 2018, Chipotle owned 2,452 restaurants in
the United States bearing the Chipotle name and selling fast casual Mexican food, and employed 73,000 employees, including about 5,100 salaried employees and about 67,900 hourly employees. 

7.    A typical Chipotle restaurant is staffed with a general manager (sometimes called a “Restaurateur”), one
to three hourly service managers, one to three hourly kitchen managers and an average of 22 full and part-time crew members.10 Chipotle restaurants
generally have two shifts per day. Employees are cross-trained so that they can each work a variety of stations within the restaurant with a focus on “on the job” training for the various positions. Most of Chipotle’s restaurants also
employ an apprentice manager.11 
 8.    According to Chipotle’s earnings reports, labor costs comprised
22.0 percent of yearly revenues for 2014. By 2017, labor costs had risen to 26.9 percent of yearly revenues. 12 

9.    Since going public in 2006, Chipotle has acknowledged in its annual disclosures to the Securities and Exchange
Commission (“SEC”) that foodborne illness outbreaks are a risk associated with operating its restaurants. Chipotle’s 2014 and 2015 annual reports 
  

 

	10 	 https://www.sec.gov/Archives/edgar/data/1058090/000105809019000007/cmg-20181231x10k.htm 

	11 	 https://www.sec.gov/Archives/edgar/data/1058090/000105809019000007/cmg-20181231x10k.htm 

	12 	 https://table.skift.com/2018/02/14/the-trouble-with-chipotle-is-labor-and-food- costs/ 

  
 3 

 state that it “may be at a higher risk for food-borne illness outbreaks than some
competitors due to our use of fresh produce and meats rather than frozen, and our reliance on employees cooking with traditional methods rather than automation.” 13 

 

	II.	 FAST-CASUAL FOOD SERVICE, WITH KNOWN FOOD SAFETY RISKS 

10.    Chipotle sought to revolutionize the food industry by “demonstrat[ing] that food served fast doesn’t have
to be a ‘fast- food’ experience,” and the company looked “to fine-dining restaurants for inspiration.” Chipotle touted its use of “high- quality raw ingredients, classic cooking methods and a distinctive interior
design,” which it described as “features that are more frequently found in the world of fine dining.”14 Chipotle also marketed itself using the term “food with integrity,”
a phrase that the company uses to describe its dedication to, among other things, naturally-raised meat, sustainably grown produce, and “great preparation” by “skilled crews us[ing] classic cooking techniques.”15 
 11.    Chipotle strives to use locally sourced ingredients
wherever possible in its restaurants; however, at least some of the components of its food held for sale in its restaurants were shipped in interstate commerce. 

12.    From approximately 2015 to 2018, Chipotle faced at least five food safety incidents at various restaurants around
the country, which stemmed primarily from store-level employees’ failure 
  

 

	13 	 https://www.sec.gov/Archives/edgar/data/1058090/000119312514035451/d629534d10k.htm 

	14	 https://www.sec.gov/Archives/edgar/data/1058090/000104746906003640/a2168474z10- k.htm 

	15 	 https://www.chipotle.com/food-with-integrity 

  
 4 

 to follow Chipotle’s food safety policies and procedures, including the policy requiring the exclusion
of restaurant employees who were sick or recently had been sick, as well as a failure by restaurant employees to hold food at appropriate temperatures to prevent and control for the growth of foodborne pathogens.    These
failures contributed to norovirus outbreaks in late 2015 and 2017 at four Chipotle restaurants as well as one outbreak of foodborne illness related to Clostridium perfringens in July 2018. Collectively, more than 1,100 people reported
becoming ill in connection with these incidents. 
  

	III.	 FOODBORNE ILLNESSES 

13.    Based on estimates from the United States Centers for Disease Control and Prevention on the incidence of foodborne
disease, publicly available data on wages, peer-reviewed synthesis of data on medical costs, and economic, medical, and epidemiological literature, the Economic Research Service of the United States Department of Agriculture has estimated that the
costs of major foodborne illnesses in the United States total over $15.6 billion annually,16 with $2.2 billion attributable to norovirus outbreaks and $342 million attributable to
Clostridium perfringens outbreaks.17 Norovirus is the leading cause of illness and outbreaks from contaminated food in the United
States.18 
  

 

	16 	
https://www.foodsafetynews.com/2014/10/foodborne-illnesses-cost-usa-15-6-
 billion-annually/ 

	17 	
https://www.ers.usda.gov/data-products/cost-estimates-of-foodborne-illnesses/
 

	18	 https://www.cdc.gov/norovirus/about/transmission.html 

  
 5 

 A.    NOROVIRUS 

14.    Norovirus is a “highly infective pathogen[] that can easily be transmitted by food workers and cause severe
illness.”19 Norovirus outbreaks are commonly reported in healthcare facilities (including hospitals and long-term care facilities), schools and child care facilities and on cruise ships as well as in restaurants and other catered events.20 The CDC states that food handlers with norovirus can easily cause an outbreak: 
 If you
work with food when you have norovirus illness, you can spread the virus to others. You can easily contaminate food and drinks that you touch with bare hands. People who consume the food or drinks can get norovirus and become sick. This can cause an
outbreak. 
  
 ... 

Most of these outbreaks occur in the food service settings like restaurants. Infected food workers are frequently the source of the outbreaks,
often by touching ready-to-eat foods, such as raw fruits and vegetables, with their bare hands before serving
them.21 
 15.    The Food and Drug Administration has recommended
that, to prevent the spread of norovirus at retail food establishments, “[m]anagement should explain to food employees the importance of reporting specific symptoms and any diagnoses or exposures to foodborne illness,” including vomiting,
diarrhea, and any norovirus diagnosis.22 
  

 

	19	
www.fda.gov/food/guidanceregulation/retailfoodprotection/industryandregulatoryassistanceandtrainingresources/ucm113827.htm

	20 	 https://www.cdc.gov/norovirus/trends-outbreaks/outbreaks.html 

	21 	 www.cdc.gov/norovirus/food-handlers/work-with-food.html 

  
 6 

 16.    The most common symptoms of norovirus are: diarrhea, vomiting,
nausea, and stomach pain.23 Norovirus also causes acute gastroenteritis, which is an inflammation of the stomach or intestines.24 

17.    A person usually develops symptoms 12 to 48 hours after being exposed to norovirus. People with norovirus illness
can feel extremely ill, and vomit or have diarrhea many times a day. This can lead to dehydration, especially in young children, older adults, and people with other illnesses. Most people with norovirus illness get better within 1 to 3 days.25 
  

	 	B.	 CLOSTRIDIUM PERFRINGENS 

18.    Clostridium perfringens (C. perfringens) is a spore- forming gram-positive bacterium that is found in
many environmental sources as well as in the intestines of humans and animals. C. perfringens is commonly found on raw meat and poultry. It prefers to grow in conditions with very little or no oxygen, and, under ideal conditions, can multiply
very rapidly. Some strains of C. perfringens produce a toxin in the intestine that causes illness.26 According to the CDC, “it is one of the most common types of foodborne illness in
the United States. The CDC estimates it causes nearly 1 million cases of foodborne illness each year.”27 
  

 

	22 	
www.fda.gov/food/guidanceregulation/retailfoodprotection/industryandregulatoryassistanceandtrainingresources/ucm113827.htm

	23 	 https://www.cdc.gov/norovirus/about/symptoms.html 

	24 	 https://www.cdc.gov/norovirus/about/symptoms.html 

	25 	 Id. 

	26	 https://www.cdc.gov/foodsafety/diseases/clostridium-perfringens.html 

	27	 Id. 

  
 7 

 19.    Beef, poultry, gravies, and dried or pre-cooked foods are common sources of C. perfringens infections. C. perfringens infection often occurs when foods are prepared in large quantities and kept warm for a long time before serving.28 
 20.    People infected with C. perfringens develop diarrhea
and abdominal cramps within 6 to 24 hours (typically 8 to 12 hours). The illness usually begins suddenly and lasts for less than 24 hours. People infected with C. perfringens usually do not have fever or vomiting. The illness is not passed
from one person to another.29 
 21.    Everyone is susceptible to
food poisoning from C. perfringens. The very young and elderly are most at risk of C. perfringens infection and can experience more severe symptoms that may last for 1 to 2 weeks. Complications, including dehydration, may occur in
severe cases.30 
  

	IV.	 CHIPOTLE’S APPROACH TO FOOD SAFETY 

22.    As of 2015, Chipotle had five main corporate departments responsible for food safety, all of which remain in place
today: Restaurant Operations; Safety Security & Risk (“SSR”); Supply Chain; Training; and Food Safety & Quality Assurance (“FSQA”). Chipotle’s employee handbook and training materials state that ensuring
food safety was a “top priority” of the company and was part of every employee’s job and responsibility.31 

23.    Although not required by the FDA for restaurants, Chipotle took the initiative to adopt a Hazard Analysis and 

 
  

	28 	 Id. 

	29	 https://www.cdc.gov/foodsafety/diseases/clostridium-perfringens.html 

	30 	 Id. 

	31 	 (2014 Chipotle Employee Handbook, at 13-16.) 

  
 8 

 Critical Control Point (“HACCP”) plan, which is a food safety management system focused on
preventing food safety problems by identifying critical control points (“CCPs”) in the restaurant. According to the FDA, a CCP is defined as a “step at which control can be applied and is essential to prevent or eliminate a food
safety hazard or reduce it to an acceptable level.”32 Some examples of CCPs identified by Chipotle include: carefully monitoring and regulating hot and cold holding temperatures; wellness and
personal hygiene checks; walk-in and reach-in cooler temperatures; grill temperatures; grilled meat temperatures; and the process of cooling cooked foods. 

24.    Chipotle also retained an outside company, EcoLab, to conduct audits of its restaurants at periodic intervals.
Those audits reviewed food temperature controls, sanitizer levels, and water levels. However, the EcoLab audits did not look at training records; it was Chipotle management’s responsibility to review and verify employee training. 

25.    SSR was one of Chipotle’s headquarters-based units that included a customer incident team, which was
responsible for tracking reports of both customer incidents (including illnesses) and employee illnesses. After learning about illnesses, SSR would sometimes contact individual Chipotle restaurants to determine if there were any additional reports
of customer or employee illness. SSR was a first-responder team that sometimes learned of employee illnesses from store management or after following up on reports of consumer illnesses; these reports sometimes were viewed skeptically 

 
  

	32 	
https://www.fda.gov/food/hazard-analysis-critical-control-point-haccp/haccp-
principles-application-guidelines#defs 

  
 9 

 by the company. As one former SSR Customer Incident Analysist stated, Chipotle “never honored a
foodborne illness claim when there was only one customer complaint of foodborne illness.” 
 26.    The Norwalk
Prevention Protocols (“NPPs”) are a comprehensive set of protocols designed specifically for Chipotle to help combat norovirus. The NPPs include the implementation of employee symptom surveys to ensure the exclusion of sick employees,
sanitizing the restaurant using bleach solution, increased handwashing protocols and restrictions on sharing employees and food transfers. These protocols are put into place when reports of illness occur in a restaurant or when a high risk of
norovirus is suspected within the community in which the restaurant is located. 
 27.    In compliance with
Chipotle’s policies and procedures, Chipotle restaurants did not implement the NPPs until after SSR was notified of potential illnesses and SSR instructed the restaurant to implement them. Once SSR was notified and began investigating
complaints of customer illnesses at the restaurants located in Simi Valley, California; Boston, Massachusetts; Sterling, Virginia; Los Angeles, California, and Powell, Ohio, it took action in implementing the NPPs. As set out herein, store-level
employees’ failure to follow Chipotle’s food safety protocols, including the sick exclusion policy, and the failure to timely notify SSR, contributed to the size of foodborne illness outbreaks stemming from those restaurants. 

 

	V.	 CHIPOTLE RESTAURANTS FAILED TO FOLLOW THE COMPANY’S ESTABLISHED PROTOCOLS TO PREVENT SICK EMPLOYEES
FROM WORKING 

 28.    In 2008, more than 400 people were sickened by norovirus at a Chipotle
restaurant in Ohio. In response to that incident, Chipotle worked to develop the company-wide NPPs, which are not mandated by the FDA. 

  
 10 

 29.    Minor changes to the NPPs were made between 2008 and 2017. The
October 2014 version mandated that the NPPs must be implemented “immediately” in any restaurant: 
 (1) When two or more unrelated
customers report” getting sick “within 12 to 48 hours after eating at Chipotle and the customer’s symptoms are vomiting or a combination of” diarrhea, nausea, fever, or stomach cramps; 

(2) “When a restaurant level employee becomes ill with vomiting or a combination of” diarrhea, nausea, fever, or stomach cramps; or

 (3) “When a crew member or customer vomits in the restaurant.” 

When any of these three situations occurred, the manager in charge was to “immediately call” a regional Field Leader and SSR. The NPPs also stated
that managers must “immediately call” the SSR and Field Leader in the event of “multiple ill employees or multiple customer complaints.” 

30.    The October 2014 NPPs further required the manager to “immediately complete [an] attached Employee Symptom
Survey with every employee, and continue to do so for five days.” The NPPs required mandatory exclusion for sick employees: “If any employee answers ‘Yes’ to vomiting or a combination of the following: diarrhea, nausea, fever, or
stomach cramps, that employee must be excluded from Chipotle, working or visiting, for 5 complete days from the date that employee last had symptoms.”The NPPs required “any and all ‘Yes’ answers” to be reported to the Field
Leader and 

  
 11 

 SSR. The October 2014 NPPs also required managers to watch for sick employees: “Managers must be on the
lookout for employees who are or may be sick but have not reported being sick.” 
 31.    When implemented, the
NPPs dictated an enhanced cleaning protocol for the affected restaurant. The October 2014 NPPs specified that the cleaning protocols must be “followed for 5 days.” 

32.    Chipotle also had an employee illness policy, which required employees suffering from a list of symptoms, including
vomiting, to “immediately report it to the manager in charge [●]” The employee illness policy stated that, “[i]f you are ill and you vomit, you must immediately report this to the manager in charge, and you may be excluded from
working at Chipotle for a period of five days from the date you last became ill.” 
 33.    Since at least 2007,
Chipotle has had a formal written sick exclusion policy, requiring that any employee symptomatic with vomiting be excluded from the restaurant. The Company’s policy on this issue was explained in more detail in a December 2013 internal
newsletter: 
 Any employee who is vomiting must be sent home immediately, if they’re in the restaurant. They must also
be off for at least 5 full days — regardless of any doctors’ notes or if they say they feel better. No exemptions! Employees can be contagious, even after their symptoms have subsided. Maintaining the
‘5-Days Policy’ is a very important part not only of keeping our food safe for our customers, but to prevent other employees from becoming ill. 

  
 12 

 34.    On July 1, 2015, before the norovirus incidents at issue
here, Chipotle adopted a paid sick leave policy, pursuant to which employees would accrue three days, or 24 hours, per year of annual paid sick leave. Less than a year later, on March 28, 2016, Chipotle altered this policy to eliminate the
accrual requirement so that employees received 24 hours of paid sick leave on their first day of employment. 

35.    Despite the requirement that store managers contact SSR in certain situations, there were occasions when customer
incident analysts at SSR would not find out about restaurant employee illnesses until the analysts contacted the restaurant because of a customer illness report, which then led to delayed implementation of the NPPs. For example, in May 2014, a
consumer illness report prompted an SSR customer incident analyst to contact a Chipotle restaurant in El Segundo, California, whose kitchen manager informed the customer incident analyst that an employee was “vomiting at work and was sent home
yesterday.” The customer incident analyst directed the restaurant to begin the NPPs. According to the protocols, the restaurant should have contacted SSR and begun the NPPs the previous day because of the employee vomiting at work. The next
month, an SSR customer incident analyst directed a Chipotle restaurant in Maryland to begin the NPPs after learning that a restaurant employee “vomited at the restaurant” five days earlier. Thus, the restaurant had failed to follow company
policy to timely report the illness to SSR and to implement the NPPs despite an employee vomiting in the restaurant. While the NPPs were ongoing, the customer incident analyst directed the restaurant to continue following the protocols for five more
days after being informed that 

  
 13 

 a crew member was “vomiting this morning and worked today,” which also violated company policy.
Similarly, in December 2014, after receiving a consumer illness report regarding a Chipotle restaurant in Boynton Beach, Florida, an SSR customer incident analyst learned from a restaurant employee that “multiple crew members have been sick and
that a crew member vomited in the restaurant on” December 26, 2014. The customer incident analyst directed the restaurant to immediately begin the NPPs, three days after the employee vomited in the restaurant. The restaurant failed to follow
company policy by not timely notifying SSR about the employee vomiting in the restaurant and immediately implementing the NPPs. These three incidents in Chipotle restaurants across the country (California, Maryland, and Florida) demonstrate that
some store-level Chipotle employees were not following the company’s policies and illness reporting requirements, which contributed to the norovirus outbreaks at issue. 

36.    Similar failures and violations of the NPPs occurred in 2014 and 2015. In the three months from May to July of
2015, the NPPs were implemented three times. Each of those implementations involved a consumer reporting an illness, which prompted an SSR customer incident analyst to contact a Chipotle restaurant only to subsequently learn that an employee had
returned to work the day after vomiting. In each of those instances, SSR learned about the employee illnesses only because of later consumer illness reports. 

37.    In August 2015, over the course of at least seven days, approximately 234 consumers and employees of a Chipotle
restaurant in Simi Valley, California, in the Central District of California, reported becoming ill. On August 19, 2015, an employee of that 

  
 14 

 
restaurant was sent home because he vomited. Although Chipotle’s policies required the restaurant to report such illnesses to SSR and implement the NPPs, the restaurant did not do so. Two
days later, following multiple consumer illness reports, a customer incident analyst and a regional manager spoke with the restaurant’s apprentice manager and learned that another employee reported having a contagious illness the previous day.
The customer incident analyst directed the restaurant to implement the NPPs. As part of the NPPs, employees completed symptoms surveys, and at least four employees reporting having symptoms potentially related to norovirus earlier in the week. Some
of the staff cleaning the restaurant as part of the NPPs were also sick, with symptoms potentially related to norovirus. Additionally, on or about September 7, 2015, after implementation of the NPPs, a general manager came to work at the Simi
Valley store while sick. At least one Chipotle employee notified Chipotle headquarters of this incident in writing, but never received a response. 

38.    In December 2015, over the course of at least nine days, approximately 141 people reported illness related to a
norovirus incident at a Chipotle restaurant in Boston, Massachusetts. This outbreak is likely the result of an ill apprentice manager working in the restaurant. On December 3, the apprentice manager informed a regional Chipotle manager that he
vomited in the restaurant. 
 Although this incident should have triggered the NPPs, no one reported the illness to SSR or implemented the
NPPs. Instead, the regional manager instructed the apprentice manager to stay until closing, a clear violation of Chipotle’s food safety policies. The apprentice manager did not work the following day, but returned on 

  
 15 

 December 5 and helped package a catering order for a Boston College basketball team, whose members were
among the consumers sickened by the outbreak. 
 39.    In July 2017, over the course of at least four days, at least
135 people reported illness related to a norovirus incident at a Chipotle restaurant in Sterling, Virginia. The restaurant’s general manager allowed the kitchen manager to work while sick, aggravating the Sterling norovirus outbreak. The county
health department found in 2015 that “[e]mployees or applicants are not aware of the reporting procedures concerning information about their health and activities if they are suspected of causing, or being exposed to a confirmed disease
outbreak caused by Salmonella, Shigella, E. coli O157:H7, Hepatitis A virus or norovirus.” The county health department found a similar violation in 2013: “Employees or applicants are not aware of the reporting procedures concerning
information about their health and activities as they relate to diseases that are transmissible through food, including ... norovirus.”33 

40.    In December 2017, over the course of six days, at least 28 people, including at least 11 Chipotle employees,
reported illness related to a norovirus incident at the Chipotle restaurant on West Pico Boulevard in Los Angeles, California, in the Central District of California. The employees exhibited symptoms of diarrhea, weakness, vomiting, and body aches.

 41.    The sick employees at the West Pico Boulevard Chipotle restaurant reported serving as food handlers in the
restaurant. 
  
  

	33	 www.healthspace.com/Clients/VDH/Loudoun/Web.nsf/formFacility.xsp?id=81436EC5EB1CD4 5C8825703E00417E86

  
 16 

 Several sick employees were sent home and told not to work; however, at least one employee who was sick
during the December outbreak was not excluded for the appropriate number of days, in violation of the NPPs. She was sent home from work on Tuesday, December 12, 2017, returned to work on Thursday, December 14, 2017, and worked all day,
before the end of the exclusion period required by the NPPs. On Friday, December 15, 2017, she reported for work and was again sent home for being sick. 
  

	VI.	 A CHIPOTLE RESTAURANT FAILED TO HOLD FOOD AT APPROPRIATE TEMPERATURES 

42.    In July 2018, over the course of at least eight days, approximately 647 people who dined at a Chipotle restaurant in
Powell, Ohio reported illness related to Clostridium perfringens, a pathogen that grows rapidly when food is not held at appropriate temperatures. The local health department determined that the restaurant had critical violations of the local
food regulations, including those specific to time and temperature controls for lettuce and beans. 
  

	VII.	 CHIPOTLE SIGNIFICANTLY ENHANCED ITS FOOD SAFETY POLICIES AND PROCEDURES IN THE WAKE OF THE FOOD SAFETY
INCIDENTS AT ISSUE HERE 

 43.    In the wake of the incidents discussed above, Chipotle took
numerous steps to improve its food safety policies and procedures. As part of its continuous process of safety improvements, Chipotle enhanced its paid sick leave policy to automatically grant all employees 3 days of paid sick leave per year;
established a Food Safety Advisory Council, composed of experts in the food safety industry, who meet quarterly to review company-wide food safety issues and report directly to Chipotle’s board; made
sweeping leadership changes, including hiring a new 

  
 17 

 CEO and a new General Counsel, both of whom have extensive experience in food safety issues; adopted new
training and audit procedures; and made significant changes to its food preparation techniques, including preparing more of its meats and produce in off-site commissaries. 

44.    On January 12, 2016, just a few months into Chipotle’s campaign to enhance food safety, Chipotle’s
Investor Relations Manager represented that “the initial estimate on the cost of all food safety changes is $80-100 million.” 

 

	VIII.	 SOME CHIPOTLE EMPLOYEES REPORTED STRESSFUL WORKING CONDITIONS AND INADEQUATE STAFFING AND TRAINING
OPPORTUNITIES 

 45.    Some former employees reported that they did not receive sufficient
training at the beginning of their employment and were not adequately prepared when they started working at the company’s restaurants. Chipotle relied heavily on “on the job” or “shoulder-to-shoulder” training on food safety policies and procedures. Chipotle supplemented this training with “Chip Talk Notes,” commonly referred to as “Food Safety Notes” by
former employees. These notes were developed to reinforce certain food safety policies and procedures at the store level, and every employee was required to sign a form verifying that he or she reviewed and understood the Food Safety Notes. Some
former employees indicated that they did not have sufficient time to review the Food Safety Notes. Chipotle also requires, as part of its training, that employees watch training videos. Some former employees stated that Chipotle did not give them
adequate opportunity to view these training videos. 

  
 18 

 46.    During the period from 2015 to 2018, store-level Chipotle
employees felt that they could not stay at home when they were sick. Chipotle had a staffing model for each restaurant that was based on sales volume and safety considerations. Pursuant to this staffing model, each restaurant was required to have a
set baseline of employees, regardless of the sales volume, in order to safely and efficiently operate. The staffing model further provided for each restaurant to add additional staffing on an incremental basis as sales volume increased to ensure
that each restaurant could comply with Chipotle’s food safety policies and procedures. Based on this staffing model, restaurant managers would hire employees and set a roster of team members, who consisted of entry level crew members and
lower-level management who were responsible for food storage, food handling, and food safety at each restaurant. 

47.    Despite Chipotle’s staffing model, some former Chipotle employees reported feeling stress and pressure because
they felt overworked and short-staffed, particularly during peak hours. For example, one former employee noted that when there were supposed to be eight employees on a shift, there were often only three to seven employees. Additionally, some
Chipotle employees reported that they were responsible for finding their own coverage for their shifts if they became ill. Due to the pressure of not wanting to let their teammates down, or of finding their own coverage, these employees reported
feeling pressure to work while sick, even though this was against Chipotle’s sick exclusion policies. For example, one former employee who worked for Chipotle for over four years stated that it was “somewhat 

  
 19 

 difficult” to find a replacement employee and that “very frequently,” either the manager
covered the sick employee’s position, or the shift worked short-handed. 
 48.    Many Chipotle employees were
teenagers and young adults, who were often expected to quickly learn and perform key food safety and food preparation tasks. Chipotle employees were often expected to learn these tasks through “on the job” training from current Chipotle
team members and management. As Chipotle has acknowledged in its SEC reports, Chipotle “may be at a higher risk for food-borne illness outbreaks than some competitors due to [its] use of fresh produce and meats rather than frozen, and [its]
reliance on employees cooking with traditional methods rather than automation.” Training of Chipotle’s employees is critical to ensuring food safety and food handling tasks, particularly because so much of the responsibility for these
tasks is placed on entry-level employees who prepare fresh food for consumers under a fast-paced, high-pressure environment. 

49.    Some Chipotle employees described working at Chipotle as a tough job that had high pressure. One former employee at
the Simi Valley restaurant noted that “the turnover rate was insane.” The turnover for Chipotle as a whole ranged from 121.7% in December 2014 to 151% in December 2017. In 2016, when Chipotle had a turnover rate of 131%, other fast casual
restaurants had a 122% turnover rate, whereas other quick service restaurants had a 152% turnover rate. Experienced employees noted that the high turnover rate made their jobs even more difficult. 

  
 20 

 EXHIBIT C 

Compliance Program 

Chipotle Mexican Grill, Inc. (“Chipotle”), hereby agrees to the following conditions of the deferred prosecution agreement: 

1.    Chipotle shall, in consultation with its Food Safety Council, develop, maintain, and implement a comprehensive
compliance program to ensure that it complies with all applicable federal and state food safety laws, including, but not limited to, the Federal Food, Drug, and Cosmetic Act, 21 U.S.C. §§ 301 et seq. (“FDCA”). 

The compliance program shall be implemented for at least three years from the date of this agreement. 

2.    Chipotle shall, in consultation with its Food Safety Council, which it established in 2017, and any other
independent contractor or consultant it may choose to retain, within six months of the date of this Agreement: 

a)    Review in detail all records in Chipotle’s possession, including, but not limited to, documents from its
Safety, Security & Risk department (“SSR”), training records, emails, notes, and any other materials maintained by the restaurants for the outbreaks that occurred in Simi Valley, California; Boston, Massachusetts; Sterling,
Virginia; Powell, Ohio; and Los Angeles, California, from 2015 through 2018; 
 b)    Conduct a root cause analysis of
the failures that led to these five outbreaks; 
 c)    Evaluate whether Chipotle’s current approach to compliance
with state and federal food safety laws and regulations is appropriate given the nature of Chipotle’s fresh, non-frozen 

  
 1 

 ingredients, including a review of Chipotle’s Hazard Analysis Critical Control Point
(“HACCP”) plans and Critical Control Points (“CCPs”) for each step in its preparation process for each of the five restaurants mentioned in Paragraph 2(a) to determine whether the HACCP plans are adequate; 

d)    Review the implementation of Chipotle’s HACCP plans at the five restaurants outlined in Paragraph 2(a) and
whether such process is effective, and how it can be improved; 
 e)    Review Chipotle’s approach to food safety
audits, including an analysis of such audits for the five restaurants that were the source of the outbreaks described in Paragraph 2(a) and a determination whether such audits are adequately ensuring that Chipotle’s restaurants comply with all
federal and state food safety laws perpetually, not only at the time of the audits; 
 f)    Review the staffing model
employed at the five restaurants discussed in Paragraph 2(a) to determine how to accommodate appropriate staffing in a high turn-over retail environment and an appropriate revised staffing plan to address food safety concerns identified in Paragraph
2(b) above; 
 g)    Review existing training policies and procedures for all hourly staff and propose enhancements to
ensure hourly staff in a high turn-over retail environment have sufficient time to review the training materials and to ensure that any food safety audits include a review of employee training and knowledge of key food safety concepts and proper
food handling practices; 
 h)    Identify any additional steps that Chipotle or its employees can take to mitigate the
issues that led to the outbreaks identified in Paragraph 2(a); and 

  
 2 

 i)    Document all such analysis, findings, and recommendations in a
comprehensive report (the “Food Safety Plan”) that shall be shared with the U.S. Attorney’s Office for the Central District of California and the Consumer Protection Branch of the Civil Division of the U.S. Department of Justice
(collectively, “DOJ”), and the U.S. Food and Drug Administration (“FDA”) upon request. 

3.    After the initial analysis and report outlined in Paragraph 2 is completed, Chipotle shall engage in a similar
analysis and documented Food Safety Plan for all Chipotle restaurants on an annual basis. The Food Safety Plans shall be available to the DOJ and FDA upon request. 

4.    In addition to providing the Food Safety Plan to the DOJ and FDA upon request, Chipotle and its employees will
respond to any inquiries by the DOJ and FDA pertaining to any foodborne illness outbreaks at any Chipotle restaurants within fifteen (15) business days, including, but not limited to, providing any documentation developed by Chipotle, its Food
Safety Council, or any independent contractor Chipotle may hire to assist in completing the Food Safety Plan to the DOJ and FDA upon request. 

5.    Chipotle shall not distribute any food, as defined in 21 U.S.C. § 321(f), that fails to comply with the FDCA.

 6.    All terms of this agreement are apart from, and in addition to, any existing authorities of the government or
obligations of Chipotle under state and federal law. 
 7.    Chipotle’s Vice President of Food Safety, or another
executive officer designated by Chipotle, shall certify to the DOJ that Chipotle is in compliance with Paragraphs 2 and 3 of this agreement on an annual basis. 

  
 3 

 Exhibit D 

NICOLA T. HANNA 
 United States Attorney 

BRANDON D. FOX 
 Assistant United States Attorney 

Chief, Criminal Division 
 JOSEPH O. JOHNS (Cal. Bar
No. 144524) 
 Assistant United States Attorney 
 Chief,
Environmental and Community Safety 
 Crimes Section 
 MARK A.
WILLIAMS (Cal. Bar No. 239351) 
 Assistant United States Attorney 

Deputy Chief, Environmental and Community 
 Safety Crimes Section

 SONIA W. NATH 
 Special Assistant United States Attorney 

1300 United States Courthouse 

312 North Spring Street 
 Los
Angeles, California 90012 
 Telephone: (213) 894-4536 / (213)
894-3359 

E-mail:        joseph.johns@usdoj.gov 

mark.a.williams@usdoj.gov 
 GUSTAV W. EYLER 

Director 
 DANIEL E. ZYTNICK 

Trial Attorney 
 Consumer Protection Branch 

U.S. Department of Justice 
 P.O. Box 386 

Washington, DC 20044 
 Telephone:
(202) 598-8337 
 Email:    daniel.e.zytnick@usdoj.gov 

Attorneys for Plaintiff 
 UNITED STATES OF AMERICA 

UNITED STATES DISTRICT COURT 
 FOR
THE CENTRAL DISTRICT OF CALIFORNIA 
  

			
	 UNITED STATES OF AMERICA,

 
 Plaintiff,

 
 v.

 
 CHIPOTLE MEXICAN GRILL, INC.,

 
 Defendant.

 
	  	 Case No.
  

STIPULATION REGARDING REQUEST FOR
 (1) CONTINUANCE
OF TRIAL DATE AND
 (2) FINDINGS OF EXCLUDABLE TIME

PERIODS PURSUANT TO SPEEDY TRIAL
 ACT; [proposed]
ORDER

	  	
	  	

 Plaintiff United States of America, by and through its counsel of record, the United States
Attorney’s Office for the Central District of California and the United States Department of Justice’s Consumer Protection Branch (collectively, the “Government”), and defendant CHIPOTLE MEXICAN GRILL, INC.
(“CHIPOTLE”), both individually and by and through its counsel of record, Jack P. DiCanio and David C. Scheper, hereby stipulate as follows: 

1.    The Information and Deferred Prosecution Agreement in this case were filed on
                . The Speedy Trial Act, 18 U.S.C. § 3161, originally required that the trial commence on or before
                . 
 2.    By this
stipulation, CHIPOTLE moves to continue the trial date to                 . This is the first request for a continuance of the trial date. 

3.    CHIPOTLE requests the continuance based upon the following facts, which the parties believe demonstrate good cause
to support the appropriate findings under the Speedy Trial Act: 
 a.    CHIPOTLE is charged with adulterating food and
causing food to become adulterated while held for sale after shipment of one or more of its components in interstate commerce in violation of the Federal Food, Drug, and Cosmetic Act (“FDCA”) Title 21, United States Code, Sections 331(k)
and 333(a)(1). 
 b.    CHIPOTLE has entered into a Deferred Prosecution Agreement with the Government, which was filed
on                 . 
 c.    In
light of the foregoing, the parties represent that additional time is necessary for CHIPOTLE to demonstrate its compliance with the provisions of the Deferred Prosecution Agreement during the term of the agreement. 

  
 2 

 d.    CHIPOTLE believes that failure to grant the continuance would be
likely to make a continuation of the proceeding impossible or result in a miscarriage of justice. 
 e.    The
Government does not object to the continuance. 
 f.    The requested continuance is not based on congestion of the
Court’s calendar, lack of diligent preparation on the part of the attorneys for the Government or the defense, or failure on the part of the attorneys for the Government to obtain available witnesses. 

4.    For purposes of computing the date under the Speedy Trial Act by which CHIPOTLE’s trial must commence, the
parties agree that the time period of                  to                 ,
inclusive, should be excluded pursuant to 18 U.S.C. §§ 3161(h)(7)(A), (h)(7)(B)(i), and (h)(7)(B)(iv) because the delay results from a continuance granted by the Court at CHIPOTLE’s request, without government objection, on the basis
of the Court’s finding that: (i) the ends of justice served by the continuance outweigh the best interest of the public and CHIPOTLE in a speedy trial; and (ii) failure to grant the continuance would be likely to make a continuance of
the proceeding impossible, or result in a miscarriage of justice. 
 5.    In addition, the parties agree that the time
period of                  to                 , inclusive, should be excluded pursuant to
18 U.S.C. § 3161(h)(2) because the delay constitutes a period during which prosecution is deferred by the attorneys for the Government pursuant to a written agreement with CHIPOTLE, with the approval of the Court, for the purpose of allowing
CHIPOTLE to demonstrate its good conduct. 

  
 3 

 6.    Nothing in this stipulation shall preclude a finding that other
provisions of the Speedy Trial Act dictate that additional time periods be excluded from the period within which trial must commence. Moreover, the same provisions and/or other provisions of the Speedy Trial Act may in the future authorize the
exclusion of additional time periods from the period within which trial must commence. 
 IT IS SO STIPULATED. 

 

			
	 Dated: April     , 2020
	  	 Respectfully submitted,

 
 NICOLA T. HANNA

		  	 United States Attorney

		  	 Central District of California

		
		  	  

		  	 JOSEPH O. JOHNS

MARK A. WILLIAMS

		  	 Assistant United States Attorneys

		  	 SONIA W. NATH

		  	 Special Assistant United States

		  	 Attorney

		
		  	 Attorneys for Plaintiff

		  	 UNITED STATES OF AMERICA

		
	 Dated: April     , 2020
	  	 Respectfully submitted,

		
		  	 GUSTAV W. EYLER

Director

		  	 Consumer Protection Branch

		  	 U.S. Department of Justice

		
		  	  

		  	 DANIEL E. ZYTNICK

Trial Attorney

		  	  
 Attorney for
Plaintiff

		  	 UNITED STATES OF AMERICA

  
 4 

 I am CHIPOTLE MEXICAN GRILL’s attorney. I have carefully discussed every part of this
stipulation and the continuance of the trial date with my client. I have fully informed my client of its Speedy Trial rights. To my knowledge, my client understands those rights and agrees to waive them. I believe that my client’s decision to
give up the right to be brought to trial earlier than is an informed and voluntary one. 
  

			
	  
	    	  

	 JACK P. DICANIO

Attorney for Defendant

CHIPOTLE MEXICAN GRILL, INC.
	    	 Date

 I am CHIPOTLE MEXICAN GRILL’s attorney. I have carefully discussed every part of this stipulation and the
continuance of the trial date with my client. I have fully informed my client of its Speedy Trial rights. To my knowledge, my client understands those rights and agrees to waive them. I believe that my client’s decision to give up the right to
be brought to trial earlier than is an informed and voluntary one. 
  

			
	  
	    	  

	 DAVID C. SCHEPER

Attorney for Defendant

CHIPOTLE MEXICAN GRILL, INC.
	    	 Date

  
 5 

 I have been authorized by defendant CHIPOTLE MEXICAN GRILL, INC. (“CHIPOTLE”) to
enter into this stipulation. I have read this stipulation and have carefully discussed it with CHIPOTLE’s attorney. I understand CHIPOTLE’s Speedy Trial rights. On behalf of CHIPOTLE, I voluntarily agree to the continuance of the trial
date, and give up CHIPOTLE’s right to be brought to trial earlier than     . 
  

			
	  
	    	  

	NAME:	    	Date
		
	TITLE:	    	
		
	Authorized Representative of	    	
	Defendant	    	
	CHIPOTLE MEXICAN GRILL, INC.	    	

  
 6

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