Arcos Dorados Holdings Inc. (Form: F-1, Received: 03/25/2011 07:03:02)

As filed with the Securities and Exchange Commission on March 25, 2011

Registration No. 333-

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM F-1

REGISTRATION STATEMENT

UNDER

THE SECURITIES ACT OF 1933

ARCOS DORADOS HOLDINGS INC.

(Exact name of Registrant as specified in its charter)

Not Applicable

(Translation of Registrant’s name into English)

British Virgin Islands

5812

Not Applicable

(State or other jurisdiction of

incorporation or organization)

(Primary Standard Industrial

Classification Code Number)

(I.R.S. Employer

Identification Number)

Roque Saenz Peña 432

B1636FFB Olivos, Buenos Aires, Argentina

(011-54-11) 4711-2000

(Address, including zip code, and telephone number, including area code, of Registrant’s principal executive offices)

National Registered Agents, Inc.

875 Avenue of the Americas, Suite 501

New York, NY 10001

(212) 356-8340

(Name, address, including zip code, and telephone number, including area code, of agent for service)

Copies to:

Andrés V. Gil

Maurice Blanco

Davis Polk & Wardwell LLP

450 Lexington Avenue

New York, NY 10017

Phone: (212) 450-4000

Fax: (212) 701-5800

Marcelo A. Mottesi

Paul E. Denaro

Milbank, Tweed, Hadley & McCloy LLP

One Chase Manhattan Plaza

New York, NY 10005

Phone: (212) 530-5602

Fax: (212) 822-5602

Approximate date of commencement of proposed sale to the public: As soon as practicable after the effective date of this registration statement.

If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, check the following box. ¨

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ¨

If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ¨

If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ¨

CALCULATION OF REGISTRATION FEE



Title of each class of securities to be registered	Amount to be registered ⁽¹⁾	Proposed maximum offering price per share ⁽²⁾	Proposed maximum aggregate offering price ⁽¹⁾ ⁽²⁾	Amount of registration fee
Class A shares, no par value	71,830,770	$15.00	$1,077,461,550	$125,093.29

(1)	Includes shares which the underwriters have the option to purchase.

(2)	Estimated solely for the purpose of determining the amount of registration fee in accordance with Rule 457(a) under the Securities Act of 1933, as amended.

The Registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933, as amended, or until the registration statement shall become effective on such date as the Commission, acting pursuant to such Section 8(a), may determine.

The information in this prospectus is not complete and may be changed. We may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any state where the offer or sale is not permitted.

Subject to completion

Preliminary Prospectus dated March 25, 2011

PROSPECTUS

62,461,539 Class A Shares

LOGO

Arcos Dorados Holdings Inc.

(incorporated in the British Virgin Islands)

We are offering a total of 12,461,539 class A shares, no par value, of Arcos Dorados Holdings Inc., and the selling shareholders named in this prospectus are offering 50,000,000 class A shares.

The underwriters may also purchase up to 9,369,231 class A shares from the selling shareholders within 30 days to cover over-allotments, if any.

We expect the initial public offering price will be between $13.00 and $15.00 per class A common share. We have applied to list our class A shares on the New York Stock Exchange under the symbol “ARCO.”

Mr. Woods Staton, our Chairman, Chief Executive Officer and controlling shareholder, intends to purchase 2,000,000 class A shares in this offering at the public offering price.

Neither the U.S. Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.

Investing in our class A shares involves risks. See “ Risk Factors ” beginning on page 18 of this prospectus.


	Per Share	Total
Public offering price	$	$
Underwriting discounts and commissions*	$	$
Proceeds, before expenses, to us*	$	$
Proceeds, before expenses, to selling shareholders	$	$

* The underwriters will not receive any discounts or commissions in connection with the sale of class A shares to Mr. Woods Staton. See “Underwriting” beginning on page 161 of this prospectus.

Our class A shares will be ready for delivery on or about , 2011.


BofA Merrill Lynch		J.P. Morgan		Morgan Stanley		Itau BBA			Citi

The date of this prospectus is , 2011.

LOGO

This is an offering by Arcos Dorados Holdings, Inc. and not by McDonald’s Corporation or any of its affiliates.

TABLE OF CONTENTS


	Page
Summary		1
The Offering		10
Summary Financial and Other Information		12
Risk Factors		18
Presentation of Financial and Other Information		35
Cautionary Statement Regarding Forward-Looking Statements		37
Use of Proceeds		39
Dividends and Dividend Policy		40
Capitalization		41
Dilution		42
Exchange Rates		43
Market Information		51
Selected Financial and Other Information		52
Management’s Discussion and Analysis of Financial Condition and Results of Operations		59
Industry		95
Our Relationship with McDonald’s		102
Business		109
Management		135
Principal and Selling Shareholders		141
Related Party Transactions		145
Description of Share Capital and Memorandum and Articles of Association		146
Class A Shares Eligible for Future Sale		157
Taxation		158
Underwriting (Conflicts of Interest)		161
Expenses of the Offering		168
Legal Matters		169
Experts		169
Enforcement of Judgments		170
Where You Can Find More Information		171
Index to Financial Statements		F-1

Unless otherwise indicated or the context otherwise requires, all references in this prospectus to “Arcos Dorados” or the “Company,” “we,” “our,” “ours,” “us” or similar terms refer to Arcos Dorados Holdings Inc., together with its subsidiaries. All references to the “selling shareholders” refer to DLJ South American Partners L.P., DLJSAP Restco Co-Investments LLC, Capital International Private Equity Fund V, L.P., CGPE V, L.P. and Gavea Investment AD, L.P. All references in this prospectus to “systemwide” refer only to the system of McDonald’s-branded restaurants operated by us or our franchisees in the Territories and do not refer to the system of McDonald’s-branded restaurants operated by McDonald’s Corporation, its affiliates or its franchisees (other than us).

This is an offering by Arcos Dorados Holdings Inc. and not by McDonald’s Corporation or any of its affiliates. McDonald’s Corporation and its affiliates make no representation or warranty, express or implied, for or in respect of the information contained herein.

We have not authorized anyone to provide any information other than that contained in this prospectus or in any free writing prospectus prepared by or on behalf of us or to which we may have referred you. We take no responsibility for, and can provide no assurance as to the reliability of, any other information that others may give you. We and the underwriters have not authorized any other person to provide you with different or additional information. Neither we nor the underwriters are making an offer to sell the class A shares in any jurisdiction where the offer or sale is not permitted. This offering is being made in the United States and elsewhere solely on the basis of the information contained in this prospectus. You should assume that the information appearing in this prospectus is accurate only as of the date on the front cover of this prospectus, regardless of the time of delivery of this prospectus or any sale of the class A shares. Our business, financial condition, results of operations and prospects may have changed since the date on the front cover of this prospectus.

SUMMARY

This summary highlights information contained elsewhere in this prospectus. This summary may not contain all the information that may be important to you, and we urge you to read this entire prospectus carefully, including the “Risk Factors,” “Business” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” sections and our consolidated financial statements and notes to those statements, included elsewhere in this prospectus, before deciding to invest in our class A shares.

Our Business

Overview

We are the world’s largest McDonald’s franchisee in terms of systemwide sales and number of restaurants, according to McDonald’s, representing 5.1% of McDonald’s global sales in 2010, and we are the largest quick service restaurant, or QSR, chain in Latin America and the Caribbean in terms of systemwide sales, according to Euromonitor, with a regional market share in terms of sales of 12.4% in 2009, according to Euromonitor. We have the exclusive right to own, operate and grant franchises of McDonald’s restaurants in 19 countries and territories in Latin America and the Caribbean, including Argentina, Aruba, Brazil, Chile, Colombia, Costa Rica, Curaçao, Ecuador, French Guiana, Guadeloupe, Martinique, Mexico, Panama, Peru, Puerto Rico, Uruguay, the U.S. Virgin Islands of St. Croix and St. Thomas, and Venezuela, which we refer to as the Territories. As of December 31, 2010, we operated or franchised 1,755 McDonald’s-branded restaurants, which represented 6.7% of McDonald’s total franchised restaurants worldwide. In 2009 and 2010, we paid $121.9 million and $141.0 million, respectively, in royalties to McDonald’s (not including royalties paid on behalf of our franchisees).

We commenced operations on August 3, 2007, as a result of our purchase of McDonald’s operations and real estate in the Territories, which we refer to collectively as the McDonald’s LatAm business, and the acquisition of McDonald’s franchise rights pursuant to the MFAs, as described below, which, together with the purchase of the McDonald’s LatAm business, we refer to as the Acquisition. We operate McDonald’s-branded restaurants under two different operating formats, those directly operated by us, or Company-operated restaurants, and those operated by franchisees, or franchised restaurants. As of December 31, 2010, of our 1,755 McDonald’s-branded restaurants in the Territories, 1,292 (or 74%) were Company-operated restaurants and 463 (or 26%) were franchised restaurants. We generate revenues primarily from two sources: sales by Company-operated restaurants and revenues from franchised restaurants that primarily consist of rental income, which is generally based on the greater of a flat fee or a percentage of sales reported by franchised restaurants. We own the land for 510 of our restaurants (totaling approximately 1.2 million square meters) and the buildings for all but 12 of our restaurants.

Our business has grown significantly since the Acquisition. We have increased our presence in existing and new markets in the Territories by opening 232 restaurants (168 Company-operated and 64 franchised), 124 McCafé locations, where we sell a variety of customizable beverages, and 430 Dessert Centers, where we sell desserts, since the Acquisition. The McDonald’s brand’s market share of the fast food industry in Latin America and the Caribbean in terms of sales has increased from 11.7% in 2007 to 12.4% in 2009 according to Euromonitor. We have increased our total revenues by 15.8% from 2008 to 2010. More recently, our consolidated net revenues, net income and Adjusted EBITDA (as defined under “Presentation of Financial and Other Information—Other Financial Measures”) increased 13.2%, 32.5% and 12.3%, respectively, in 2010 as compared to 2009, to $3,018.1 million, $106.0 million and $299.1 million, respectively.

and St. Thomas; the North Latin America division, or NOLAD, consisting of Costa Rica, Mexico and Panama; and the South Latin America division, or SLAD, consisting of Argentina, Chile, Colombia, Ecuador, Peru, Uruguay and Venezuela. As of December 31, 2010, 35.1% of our restaurants were located in Brazil, 29.7% in SLAD, 27.1% in NOLAD and 8.1% in the Caribbean division. We focus on our customers by managing operations at the local level, including marketing campaigns and promotions, menu management and monitoring customer satisfaction, while leveraging our size by conducting administrative and strategic functions at the divisional or corporate level, as appropriate.

The following table presents certain operating results and data by operating segment:


	As of and for the Years Ended December 31,
	2010			2009			2008			2007(1)
	(in thousands of U.S. dollars, except percentages)
Total Revenues
Brazil	$	1,595,571		$	1,200,742		$	1,237,208		$	461,868
Caribbean division		260,617			244,774			231,734			90,796
NOLAD		305,017			240,333			232,083			91,932
SLAD (2)		856,913			979,627			905,817			296,743

Total		3,018,118			2,665,476			2,606,842			941,339

Adjusted EBITDA(3)
Brazil	$	250,606		$	160,037		$	144,965		$	39,800
Caribbean division		23,556			21,167			22,013			13,099
NOLAD		15,400			3,918			15,961			10,655
SLAD (2)		83,998			129,889			138,683			36,530
Corporate and others		(74,446	)		(48,628	)		(33,648	)		(9,187	)

Total		299,114			266,383			287,974			90,897

Adjusted EBITDA Margin(4)
Brazil		15.7	%		13.3	%		11.7	%		8.6	%
Caribbean division		9.0			8.6			9.5			14.4
NOLAD		5.0			1.6			6.9			11.6
SLAD (2)		9.8			13.3			15.3			12.3

Total		9.9			10.0			11.0			9.7

Systemwide comparable sales growth(5)(6)		14.9	%		5.5	%		—			—

Brazil		17.5			2.7			—			—
Caribbean division		4.7			4.2			—			—
NOLAD		9.1			(1.7	)		—			—
SLAD		16.1			12.2			—			—


Systemwide Restaurants by Division						Company-operated and Franchised Restaurants

(1)	Data for the year ended December 31, 2007 includes only five months of operations, beginning August 3, 2007, the date on which we commenced operations in the Territories.

(2)

Currency controls in Venezuela and related accounting changes have a significant effect on our results of operations and impact the comparability of our results of operations in 2010 compared to 2009. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Factors Affecting Comparability of Results—Impact of Venezuelan Currency Controls and Related Accounting Changes on Our Results of Operations” for information regarding the translation of the results of our Venezuelan operations.

(3)

Adjusted EBITDA is a measure of our performance that is reviewed by our management. Adjusted EBITDA does not have a standardized meaning and, accordingly, our definition of Adjusted EBITDA may not be comparable to Adjusted EBITDA as used by other companies. For our definition of Adjusted EBITDA and a reconciliation thereof, see “Presentation of Financial and Other Information—Other Financial Measures” and “Selected Financial and Other Information.”

(4)	Adjusted EBITDA margin is Adjusted EBITDA divided by total revenues, expressed as a percentage.

(5)

Systemwide comparable sales growth refers to the change in our restaurant sales in one period from a comparable period for restaurants that have been open for thirteen months or longer. Systemwide comparable sales growth is provided and analyzed on a constant currency basis, which means it is calculated using the same exchange rate over the periods under comparison to remove the effects of currency fluctuations from this trend analysis. We believe this constant currency measure provides a more meaningful analysis of our business by identifying the underlying business trend, without distortion from the effect of foreign currency movements.

(6)

Systemwide comparable sales growth is presented on a systemwide basis, which means it includes sales by our Company-operated restaurants and our franchised restaurants. While sales by our franchisees are not recorded as revenues by us, we believe the information is important in understanding our financial performance because these sales are the basis on which we calculate and record franchised revenues and are indicative of the financial health of our franchisee base.

Our Industry

We operate in the QSR sub-segment of the fast food segment of the Latin American and Caribbean food service industry. In Latin America and the Caribbean, the fast food segment has benefited from the region’s increasing modernization, as people in more densely populated areas adopt lifestyles that increasingly seek convenience, speed and value. According to Euromonitor, fast food segment sales in Latin America and the Caribbean totaled an estimated $34.9 billion (nominal value) in 2010. Euromonitor estimates that the fast food segment in Latin America and the Caribbean grew 97% in the period from 2004 to 2009, which is 27 percentage points higher than the growth of the Latin American and Caribbean food service industry as a whole, representing a compound annual growth rate of 14.5%, which in turn is significantly higher than the 3.0% compound annual growth rate of the U.S. fast food segment.

Euromonitor estimates that QSRs have captured 61.4% of market share within the fast food segment in Latin America and the Caribbean due to the popularity of standardized menus, the consistency of products and services, cost efficient operating systems, the development of products targeted to meet consumer demands, economies of scale, convenience, speed and value. Euromonitor estimates that the growth of QSRs in Latin America and the Caribbean will outpace the growth of the fast food segment generally in the near future, as QSRs tend to be better capitalized and are therefore able to expand through additional restaurant openings and

innovation, and as consumers increasingly prefer the convenience and reliability associated with a well-established brand. Euromonitor estimates that the QSR sub-segment in Latin America and the Caribbean grew 84.2% during the period from 2004 to 2009.

McDonald’s, Burger King, Subway and KFC have positioned themselves as market leaders within the QSR segment. According to Euromonitor, the McDonald’s brand is the largest in Latin America and the Caribbean with almost three times the sales of Burger King, our closest competitor, in Latin America and the Caribbean and with more sales than our next four competitors combined. In addition to these international brands, strong local brands, such as Habib’s, Bob’s, Servicompras and Giraffa’s, exist in certain key markets.

The chart below indicates the percentage market share held by certain major brands in the fast food segment in Latin America and the Caribbean for 2009:

LOGO

Source: Euromonitor, Top Fast Food Brands 2009, Latin America, Published August 2010 .

Our Strengths

We believe the following competitive strengths position us well to achieve future growth:

Superior Brand and Image . The McDonald’s brand is one of the top ten most widely recognized consumer brands in the world, according to Millward Brown Optimor, and it is one of the most widely recognized consumer brands in Latin America and the Caribbean, according to Euromonitor. In addition, we believe that in Latin America and the Caribbean the McDonald’s brand benefits from an aspirational cachet as a “destination” restaurant with a reputation for safe, fresh and good-tasting food in an attractive setting. With the exclusive right to own, operate and grant franchises of McDonald’s restaurants in 19 countries and territories in Latin America and the Caribbean, we believe we represent an important part of the McDonald’s system. As of December 31, 2010, our 1,755 restaurants represented 6.7% of McDonald’s total franchised restaurants.

age profile when compared to more developed markets and improving socio-economic conditions. Based on data from the United Nations Economic Commission for Latin America and the Caribbean, the Territories represented a market of approximately 575.9 million people in 2010, of which approximately 28% are under 14 years old and 46% are under 25 years old. In addition, improvements in macroeconomic conditions in the Territories are leading to a modernization of consumption patterns and increased affordability of our products across socio-economic segments, and we believe we are well placed to capitalize on these trends. For example, according to the Brazilian Ministry of Finance, 29 million Brazilians joined the middle class between 2003 and 2009 and the percentage of the Brazilian population living in poverty decreased by 45.6% during the same period. Moreover, according to Euromonitor, the percentage of households in Brazil with annual disposable incomes of $5,000 or more was greater than that in China and India in 2010.

Pan-regional Market Leader with Geographical Diversification . As the largest QSR chain in Latin America and the Caribbean, according to Euromonitor, our operations include some of the region’s largest markets such as Brazil, Mexico, Argentina, Puerto Rico and Colombia. We believe our diversified market presence reduces our dependence on any one market and helps stabilize the impact of individual countries’ economic cycles on our revenues. Our leading market position and in-depth market knowledge across the Territories also allow us to capitalize on demand for new quick service restaurants in an efficient manner. Furthermore, our long-standing presence in the region has allowed us to build a significant property portfolio with hard-to-replicate locations in key markets across the region that enhance our customers’ experience and ultimately support our brand and market position.

Operational Excellence Translated into Solid Financial Performance . We employ many of the operating procedures used by McDonald’s prior to the Acquisition. We support our McDonald’s-based training programs with an extensive set of quality controls throughout production, processing and distribution and also in our restaurants, where we monitor restaurant managers’ performance and use ongoing external customer satisfaction opportunity reports that analyze key operating indicators. In addition, we develop long-term relationships with reliable suppliers who comply with McDonald’s rigorous quality standards. These procedures allow us to consistently provide our customers with a high-quality experience in both Company-operated and franchised restaurants across the Territories, thereby allowing us to increase the average check on a constant currency basis as well as the number of transactions per restaurant since the Acquisition.

Experienced Management Team and Lead Shareholder . Our senior management team is led by Mr. Staton, our Chairman, Chief Executive Officer, or CEO, and controlling shareholder. Prior to the Acquisition, Mr. Staton was the joint venture partner of McDonald’s Corporation in Argentina for over 20 years and was president of McDonald’s South Latin America division from 2004 until the Acquisition. Mr. Staton will not be selling any shares in this offering. Our senior management team is comprised of committed, experienced restaurant industry executives, almost all of whom have worked for McDonald’s and/or with Mr. Staton in non-McDonald’s businesses for over 10 years. Moreover, none of our divisional presidents, vice presidents, chief financial officer, chief operating officer or CEO have left the Company since the Acquisition. The experience of our management team has been a critical component in enhancing operational performance after the Acquisition.

Our Strategy

We believe there are significant opportunities to further enhance our profitability, grow our business and expand our leadership in the Latin American and Caribbean QSR market by executing the following strategies:

there are opportunities for growth as the ratio of gross domestic product purchase power parity, or GDP PPP, per McDonald’s-branded restaurant, a measure we use to determine penetration, is at least 2.5 times greater than in the United States. As the macroeconomic conditions of the countries in the Territories continue to improve, we believe we will have significant opportunities to expand our business as consumers benefit from expanding purchasing power and higher levels of disposable income, which in turn increase consumer demand for our safe, fresh and good-tasting food, comfortable settings and affordable prices as aspects of food convenience. We expect to continue to open new restaurants opportunistically as we identify attractive markets throughout the Territories. In addition, we have committed to open at least 250 new restaurants throughout the Territories from 2011 to 2013 under our agreement with McDonald’s, and in the first three years since the Acquisition (from August 3, 2007 to December 31, 2010), we exceeded our restaurant opening commitments under our agreement with McDonald’s by 45.0%. We estimate that the cost to comply with our restaurant opening commitments under our MFAs with McDonald’s, as described below, from 2011 to 2013 will be between $100 million and $250 million, depending on, among other factors, the type and location of restaurants we open. Our expansion strategy seeks to continue capitalizing on the positive economic developments in these markets and the untapped demand to fuel our growth, and we intend to use the proceeds of this offering primarily for capital expenditures, including restaurant openings and reimagings in addition to our commitments with McDonald’s.

Continue Our Restaurant Reimaging and Brand Extension Program . We are undertaking an extensive restaurant reimaging and brand extension program throughout the Territories. Our efforts focus on remodeling existing restaurants, creating an inviting, contemporary and highly aspirational environment. We seek to obtain compelling returns on investment, and our restaurants that have undergone reimaging have experienced an additional estimated 4.8% increase in sales per restaurant in the last three years over the comparable sales growth experienced by restaurants which have not been reimaged in the same period. As of December 31, 2010, 540, or 30.8%, of our restaurants had been opened or reimaged since the Acquisition. Our brand extension efforts focus on the development of additional McCafé locations and Dessert Centers. The McCafé concept differentiates the McDonald’s brand and attracts new customers from different market segments to our existing restaurants, particularly during breakfast and after lunch. With an average return on investment from McCafé locations of 46.5% in 2010, the McCafé concept is well-suited for restaurants in large-scale shopping centers and commercial areas. McCafé locations have been a key factor in adding value to our customers’ experience and represented 9.0% of the total transactions and 5.9% of total sales of the restaurants in which they were located in 2010. Our Dessert Centers are conveniently located to attract customers, thereby serving as important transaction generators and providing an effective method of extending our brand presence to non-traditional areas. Dessert Centers represented 27.5% of our transactions and 9.1% of our total sales in 2010 and, with a return on investment of 190.6% in 2010, provide a low-risk investment alternative. From the Acquisition through December 31, 2010, we have opened 124 McCafé locations and 430 Dessert Centers. We believe our restaurant reimaging and brand extension program, which leverages McDonald’s brand relevance and competitive position to generate growth, has been a key source of our growth since the Acquisition.

Expand Product Offerings and Marketing Initiatives . We are required under our agreement with McDonald’s to spend at least 5% of our sales on advertising and promotional activities. We intend to continue our promotional campaigns, such as our successful Big Pleasures, Small Prices value menu program in Brazil, through which we offer a rotating selection of our existing products at reduced prices, to increase traffic to our restaurants. We will continue to develop innovative and locally tailored product offerings, such as breakfast, bone-in-chicken, low-calorie and low-sodium products, and value items, to increase restaurant traffic and expand our customer base. To support these product offerings, we will sponsor regionally popular sporting events such as the Copa Libertadores soccer tournament and leverage global marketing initiatives led by McDonald’s, such as sponsorship of major sporting events and participation in various movie promotions. We believe these branding events provide a cost-effective manner to increase our market recognition.

Maintain Our Focus on Cost Savings Related to Operating Efficiencies . We are focused on streamlining our operations further by reducing costs at the corporate and operating level, including expanding our shared service center, which provides centralized administrative services such as payroll, accounts payable and accounts receivable. Additionally, we intend to further develop and increase our use of local suppliers where appropriate to reduce both import and transportation costs and the volatility of our supply costs. We continue to leverage our operating scale by centralizing our marketing and strategic operations, including menu management, Happy Meal promotions and designs, without losing sight of the need to cater to local preferences.

Our History and Relationship with McDonald’s

McDonald’s Corporation has a longstanding history in Latin America and the Caribbean, dating to the opening of its first restaurant in Puerto Rico in 1967. Since then, McDonald’s expanded its presence across the region as consumer markets and opportunities arose, opening its first stores in Brazil in 1979, in Mexico and Venezuela in 1985 and in Argentina in 1986.

We commenced operations on August 3, 2007, as a result of the Acquisition of McDonald’s LatAm business. Woods Staton, our Chairman, CEO and controlling shareholder, was the joint venture partner of McDonald’s Corporation in Argentina for over 20 years prior to the Acquisition and also served as President of McDonald’s South Latin America division from 2004 until the Acquisition. Our senior management team is comprised mostly of executives who had previously worked in McDonald’s LatAm business or with Mr. Staton. In addition to Mr. Staton, our ownership group includes Gavea Investment AD, L.P. and investment funds controlled by Capital International, Inc. and DLJ South American Partners L.L.C. (through its affiliates). Together, these shareholders control over 99% of our voting and economic interests.

We own our McDonald’s franchise rights pursuant to a Master Franchise Agreement for all of the Territories except Brazil, which we refer to as the MFA, and a separate, but substantially identical, Master Franchise Agreement for Brazil, which we refer to as the Brazilian MFA. We refer to the MFA and the Brazilian MFA, as amended or otherwise modified to date, collectively as the MFAs. The MFAs set forth terms such as the initial 20-year terms of the franchises (our franchise rights for French Guiana, Guadeloupe and Martinique have 10-year terms which we have the option to extend by 10 years), our right to operate and franchise McDonald’s-branded restaurants and the franchise fees payable by us to McDonald’s.

We offer McDonald’s core menu items, including the Big Mac, Happy Meal and Quarter Pounder. Since the Acquisition through December 31, 2010, we have opened 232 new restaurants. We have also undertaken an extensive restaurant reimaging program throughout the Territories, expanded the number of McCafé and Dessert Center locations and focused on adding locally relevant menu items, such as breakfast, bone-in-chicken, low-calorie and low-sodium products, and value items. We have also integrated many of our operations, including our supply chain and distribution functions.

Our Corporate Structure

We were incorporated on December 9, 2010 under the laws of the British Virgin Islands as a direct, wholly-owned subsidiary of Arcos Dorados Limited, the prior holding company for the Arcos Dorados business. On December 13, 2010, Arcos Dorados Limited effected a downstream merger into and with us, with us as the surviving entity. Following the merger, we replaced Arcos Dorados Limited in the corporate structure and replicated its governance structure.

hold at all times at least 51% of our voting interests, which is accomplished through its ownership of 100% of the class B shares of Arcos Dorados Holdings Inc., each having five votes per share. Los Laureles Ltd. has established a voting trust with respect to the voting interests in us held by Los Laureles Ltd. and has contributed its interests in Los Laureles Ltd. to a trust whose sole beneficiaries will be Mr. Staton and his descendants. See “Principal and Selling Shareholders—Los Laureles Ltd.”

Arcos Dorados B.V. owns all the equity interests of LatAm, LLC, the master franchisee, and owns, directly or indirectly, all the equity interests of the subsidiaries operating our restaurants in the Territories. As of the date of this prospectus, our principal shareholders were Los Laureles Ltd. (40.0% economic, 76.9% voting), Gavea Investment AD, L.P. (26.1% economic, 10.0% voting) and investment funds controlled by Capital International, Inc. (20.4% economic, 7.9% voting) and DLJ South America Partners L.L.C. (through its affiliates) (13.2% economic, 5.1% voting).

The following chart shows our corporate structure after giving effect to the contemplated issuance and sale of class A shares in this offering, assuming no exercise of the underwriters’ over-allotment option.

LOGO

(1)	Los Laureles Ltd. is beneficially owned by Mr. Staton, our Chairman and CEO. See “Principal and Selling Shareholders—Los Laureles Ltd.”

Other than as described above, all of our significant subsidiaries are wholly owned by us, except Arcos Dorados Argentina S.A., of which Mr. Staton owns 0.03%.

Our principal executive offices are located at Roque Saenz Peña 432, Olivos, Buenos Aires, Argentina (B1636 FFB). Our telephone number at this address is +54(11) 4711-2000. Our registered office in the British Virgin Islands is Maples Corporate Services (BVI) Limited, Kingston Chambers, P.O. Box 173, Road Town, Tortola, British Virgin Islands.

Investors should contact us for any inquiries through the address and telephone number of our principal executive office. Our principal website is www.mcdonalds.com.ar. The information contained on our website is not a part of this prospectus.

THE OFFERING

This summary highlights information presented in greater detail elsewhere in this prospectus. This summary is not complete and does not contain all the information you should consider before investing in our class A shares. You should carefully read this entire prospectus before investing in our class A shares including “Risk Factors” and our consolidated financial statements.

Issuer

Arcos Dorados Holdings Inc.

Primary offering

We are offering 12,461,539 class A shares.

Secondary offering

The selling shareholders are offering 50,000,000 class A shares.

Offering price range

Between $13.00 and $15.00 per class A share.

Voting rights

Our class A shares have one vote per share. Our class B shares have five votes per share.

Over-allotment option

The selling shareholders have granted the underwriters the right to purchase up to an additional 9,369,231 class A shares from the selling shareholders within 30 days of the date of this prospectus, to cover over-allotments, if any, in connection with the offering.

Listing

We have applied to list our class A shares on the New York Stock Exchange, or NYSE, under the symbol “ARCO.”

Use of proceeds

We estimate that the net proceeds to us from the offering will be approximately $163.5 million, based on the midpoint of the range set forth on the cover page of this prospectus after deducting estimated underwriting discounts and commissions and expenses of the offering that are payable by us. We have agreed with McDonald’s that we will use $150.0 million of the proceeds from this offering for capital expenditures, including for opening and reimaging restaurants, which expenditures will be in addition to our restaurant opening and reinvestment commitments under the MFAs. See “Use of Proceeds.”

We will not receive any of the net proceeds from the sale of class A shares by the selling shareholders.

Conflicts of Interest

A wholly owned subsidiary of JPMorgan Asset Management Holdings Inc., an affiliate of J.P. Morgan Securities LLC, purchased a majority interest in 3F Administração de Recursos Ltda., the parent of GIF Gestão de Investimentos e Participações Ltda. (“GIF”). A selling shareholder, Gavea Investment AD, L.P., is an investment vehicle managed by GIF. Because J.P. Morgan Securities LLC is an underwriter, the offering will be conducted in accordance with FINRA Rule 5121. This rule requires, among other things, that a qualified independent underwriter participate in the preparation of, and exercise the usual standards of “due diligence” with respect to, the registration statement and this prospectus. Merrill Lynch, Pierce, Fenner & Smith Incorporated has agreed to act as qualified independent underwriter for the offering and to undertake the legal

responsibilities and liabilities of an underwriter under the Securities Act of 1933, specifically including those inherent in Section 11 of the Securities Act.

Share capital before and after offering

As of the date of this prospectus, our share capital consists of 120,000,000 class A shares and 80,000,000 class B shares.

Immediately after the offering, we will have 132,461,539 class A shares and 80,000,000 class B shares outstanding.

Dividend policy

Our board of directors will consider the legal requirements with regard to our net income and retained earnings and our cash flow generation, targeted leverage ratios and debt covenant requirements in determining the amount of dividends to be paid in the future, if any. Dividends may only be paid after having fulfilled our capital expenditures program and after satisfying our indebtedness and liquidity thresholds, in that order. See “Dividends and Dividend Policy” and “Description of Share Capital and Memorandum and Articles of Association.”

Lock-up agreements

We have agreed with the underwriters, subject to certain exceptions, not to offer, sell, or dispose of any shares of our share capital or securities convertible into or exchangeable or exercisable for any shares of our share capital during the 180-day period following the date of this prospectus. The selling shareholders and certain of our officers and directors have agreed to substantially similar lock-up provisions, subject to certain exceptions.

Risk factors

See “Risk Factors” and the other information included in this prospectus for a discussion of factors you should consider before deciding to invest in our class A shares.

Unless otherwise indicated, all references in this prospectus to the number and percentages of shares outstanding following this offering:

•

exclude the awards to be issued to certain of our executive officers and other employees under our 2011 Equity Incentive Plan upon the completion of this offering. See “Management—Equity Incentive Plan;” and

•

reflect the redemption of 41,882,966 shares (25,129,780 class A shares and 16,753,186 class B shares) effective as of March 16, 2011 in connection with the split-off of the Axis business. See “Business—Our Operations—Supply and Distribution.”

SUMMARY FINANCIAL AND OTHER INFORMATION

The summary balance sheet data as of December 31, 2010 and 2009 and the income statement data for the years ended December 31, 2010, 2009 and 2008 of Arcos Dorados Holdings Inc. are derived from the consolidated financial statements included elsewhere in this prospectus, which have been audited by Pistrelli, Henry Martin y Asociados S.R.L., member firm of Ernst & Young Global, or E&Y. The summary balance sheet data as of December 31, 2008 and 2007 and the income statement data for the year ended December 31, 2007 of Arcos Dorados Holdings Inc. are derived from consolidated financial statements audited by Pistrelli, Henry Martin y Asociados S.R.L., which are not included herein. We were incorporated on December 9, 2010 as a direct, wholly-owned subsidiary of Arcos Dorados Limited, the prior holding company for the Arcos Dorados business. On December 13, 2010, Arcos Dorados Limited effected a downstream merger into and with us, with us as the surviving entity. The merger was accounted for as a reorganization of entities under common control in a manner similar to a pooling of interest and the consolidated financial statements reflect the historical consolidated operations of Arcos Dorados Limited as if the reorganization structure had existed since Arcos Dorados Limited was incorporated in July 2006. We did not commence operations until the Acquisition on August 3, 2007, consequently, the income statement data for the year ended December 31, 2007 only includes five months of operations.

Included below is historical financial information of McDonald’s LatAm business prior to the date of the Acquisition. This financial information presents the combined results of operations and financial condition of McDonald’s LatAm business (as our predecessor business). The summary income statement and balance sheet data as of and for the year ended December 31, 2006 are derived from the combined financial statements of McDonald’s LatAm business, which have been audited by Ernst & Young LLP (United States), member firm of Ernst & Young Global, and are not included herein. The summary income statement data for the seven-month period ended July 31, 2007 are derived from the combined financial statements of McDonald’s LatAm business, which have been audited by Pistrelli, Henry Martin y Asociados S.R.L., member firm of Ernst & Young Global, and are not included herein.

We maintain our books and records in U.S. dollars and prepare our consolidated financial statements in accordance with U.S. GAAP. This financial information should be read in conjunction with “Presentation of Financial and Other Information,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our consolidated financial statements, including the notes thereto, included elsewhere in this prospectus.

See Note 21 to our annual consolidated financial statements and “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Factors Affecting Comparability of Results—Impact of Venezuelan Currency Controls and Related Accounting Changes on Our Results of Operations” for information regarding the translation of the results of our Venezuelan operations, which affects the comparability of our results of operations in 2010 compared to 2009. In particular, currency controls in Venezuela and related accounting changes have a significant effect on our results of operations and greatly impact the comparability of our results of operations from period to period.


	Arcos Dorados												Predecessor(1)
	For the Years Ended December 31,												January 1, 2007 to July 31, 2007			For the Year Ended December 31, 2006
	2010			2009			2008			2007(2)			January 1, 2007 to July 31, 2007			For the Year Ended December 31, 2006
	(in thousands of U.S. dollars)
Income Statement Data:
Sales by Company-operated restaurants	$	2,894,466		$	2,536,655		$	2,480,897		$	895,429		$	1,078,194		$	1,549,783
Revenues from franchised restaurants		123,652			128,821			125,945			45,910			46,881			63,718

Total revenues		3,018,118			2,665,476			2,606,842			941,339			1,125,075			1,613,501
Company-operated restaurant expenses:
Food and paper		(1,023,464	)		(929,718	)		(902,305	)		(332,547	)		(416,615	)		(592,644	)
Payroll and employee benefits		(569,084	)		(491,214	)		(461,602	)		(161,871	)		(196,510	)		(291,895	)
Occupancy and other operating expenses		(765,777	)		(667,438	)		(647,152	)		(238,765	)		(307,391	)		(453,295	)
Royalty fees		(140,973	)		(121,901	)		(118,980	)		(44,878	)		(40,660	)		(30,462	)
Franchised restaurants—occupancy expenses		(37,634	)		(42,327	)		(42,416	)		(13,979	)		(18,491	)		(27,992	)
General and administrative expenses		(254,165	)		(189,507	)		(186,098	)		(71,898	)		(78,081	)		(131,929	)
Other operating expenses, net		(22,464	)		(16,562	)		(26,095	)		(6,310	)		(16,015	)		(71,459	)

Total operating costs and expenses		(2,813,561	)		(2,458,667	)		(2,384,648	)		(870,248	)		(1,073,763	)		(1,599,676	)

Operating income		204,557			206,809			222,194			71,091			51,312			13,825
Net interest expense		(41,613	)		(52,473	)		(26,272	)		(13,978	)		(33,363	)		(25,956	)
Loss from derivative instruments		(32,809	)		(39,935	)		(2,620	)		(13,672	)		—			—
Foreign currency exchange results(3)		3,237			(14,098	)		(74,884	)		(3,542	)		—			—
Other non-operating expenses, net(3)		(23,630	)		(1,240	)		(1,934	)		(43	)		(2,095	)		(8,654	)

Income (loss) before income taxes		109,742			99,063			116,484			39,856			15,854			(20,785	)
Income tax expense		(3,450	)		(18,709	)		(12,067	)		(17,511	)		(31,922	)		(26,367	)

Net income (loss)		106,292			80,354			104,417			22,345			(16,068	)		(47,152	)
Less: Net income attributable to non-controlling interests		(271	)		(332	)		(1,375	)		(43	)		—			—

Net income (loss) attributable to Arcos Dorados Holdings Inc./Predecessor		106,021			80,022			103,042			22,302			(16,068	)		(47,152	)

Earnings per share:
Basic net income per common share attributable to Arcos Dorados Holdings Inc.	$	0.44		$	0.33		$	0.43		$	—		$	—		$	—

Arcos Dorados

Predecessor(1)

As of December 31,

As of
December 31,
2006

2010

2009

2008

2007

(in thousands of U.S. dollars)

Balance Sheet Data(4):

Cash and cash equivalents

208,099

167,975

105,982

92,580

102,383

Total current assets

552,355

394,011

380,275

382,801

292,717

Property and equipment, net

911,730

785,862

709,667

724,673

1,243,232

Total non-current assets

1,231,911

1,088,937

923,488

862,797

1,394,964

Total assets

1,784,266

1,482,948

1,303,763

1,245,598

1,687,681

Accounts payable

186,700

124,560

126,403

125,495

100,041

Short-term debt and current portion of long-term debt

17,947

11,046

15,306

216

6,408

Total current liabilities

605,148

396,810

388,357

375,566

292,724

Long-term debt, excluding current portion

451,423

454,461

351,870

352,460

19,718

Total non-current liabilities

629,923

632,092

474,654

462,253

135,856

Total liabilities

1,235,071

1,028,902

863,011

837,819

428,580

Total shareholders’ equity

549,195

454,046

440,752

407,779

1,259,101

Total liabilities and shareholders’ equity

1,784,266

1,482,948

1,303,763

1,245,598

1,687,681


	As of and for the Years Ended December 31,
	2010			2009			2008			2007(2)
	(in thousands of U.S. dollars, except percentages)
Other Data:
Total Revenues
Brazil	$	1,595,571		$	1,200,742		$	1,237,208		$	461,868
Caribbean division		260,617			244,774			231,734			90,796
NOLAD		305,017			240,333			232,083			91,932
SLAD(5)		856,913			979,627			905,817			296,743

Total		3,018,118			2,665,476			2,606,842			941,339

Operating Income
Brazil	$	208,102		$	127,291		$	102,819		$	23,846
Caribbean division		11,189			10,448			12,454			8,602
NOLAD		(16,718	)		(17,252	)		(4,863	)		2,536
SLAD(5)		66,288			108,261			119,716			29,642
Corporate and others and purchase price allocation		(64,304	)		(21,939	)		(7,932	)		6,465

Total		204,557			206,809			222,194			71,091

Operating Margin(6)
Brazil		13.0	%		10.6	%		8.3	%		5.2	%
Caribbean division		4.3			4.3			5.4			9.5
NOLAD		(5.5	)		(7.2	)		(2.1	)		2.8
SLAD(5)		7.7			11.1			13.2			10.0

Total		6.8			7.8			8.5			7.6

Adjusted EBITDA(7)
Brazil	$	250,606		$	160,037		$	144,965		$	39,800
Caribbean division		23,556			21,167			22,013			13,099
NOLAD		15,400			3,918			15,961			10,655
SLAD(5)		83,998			129,889			138,683			36,530
Corporate and others		(74,446	)		(48,628	)		(33,648	)		(9,187	)

Total		299,114			266,383			287,974			90,897

Adjusted EBITDA Margin(8)
Brazil		15.7	%		13.3	%		11.7	%		8.6	%
Caribbean division		9.0			8.6			9.5			14.4
NOLAD		5.0			1.6			6.9			11.6
SLAD(5)		9.8			13.3			15.3			12.3

Total		9.9			10.0			11.0			9.7

Other Financial Data:
Working capital(9)	$	(52,793	)	$	(2,799	)	$	(8,082	)	$	7,235
Capital expenditures(10)		176,173			101,166			167,893			45,174

Other Operating Data:
Systemwide comparable sales growth(11)(12)		14.9	%		5.5	%		—			—
Brazil		17.5			2.7			—			—
Caribbean division		4.7			4.2			—			—
NOLAD		9.1			(1.7	)		—			—
SLAD		16.1			12.2			—			—
Systemwide average restaurant sales(12)(13)	$	2,288		$	2,147		$	2,186			—
Systemwide sales growth(12)(14)		10.2	%		0.9	%		—			—
Brazil		34.3			(2.4	)		—			—
Caribbean division		3.8			4.6			—			—
NOLAD		19.2			(12.3	)		—			—
SLAD		(20.2	)		9.2			—			—


	As of December 31,
	2010		2009		2008		2007
Number of systemwide restaurants		1,755		1,680		1,640		1,593
Brazil		616		578		564		553
Caribbean division		142		145		145		142
NOLAD		476		456		448		427
SLAD		521		501		483		471
Number of Company-operated restaurants		1,292		1,226		1,155		1,092
Brazil		453		432		426		422
Caribbean division		91		93		89		87
NOLAD		310		289		242		195
SLAD		438		412		398		388
Number of franchised restaurants		463		454		485		501
Brazil		163		146		138		131
Caribbean division		51		52		56		55
NOLAD		166		167		206		232
SLAD		83		89		85		83

(1)	The financial data for our predecessor is not directly comparable to our financial data for several reasons, including:

•

Predecessor data does not include the effect of the purchase accounting due to the Acquisition, which has reduced the accounting value of our long-lived assets and goodwill and the related depreciation and amortization expense.

•

Predecessor data includes royalties that are lower as a percentage of sales than the royalties we are required to pay pursuant to the MFAs.

•

Predecessor data does not include general and administrative expenses related to corporate functions.

•

Predecessor data does not include interest expense related to our long-term debt which resulted from the partial financing of the Acquisition and the subsequent increase in interest expense resulting from our senior notes. Predecessor data does include interest expense related to intercompany loans, which we eliminate in consolidation.

•

Predecessor data includes foreign exchange results related to intercompany loans within the translation adjustment in the other comprehensive income component of shareholders’ equity, while we generally report these results as a component of our earnings since generally we do not consider intercompany loans to be of a long-term nature.

(2)	Data for the year ended December 31, 2007 includes only five months of operations, beginning August 3, 2007, the date on which we commenced operations in the Territories.

(3)	For the year ended December 31, 2006 and the seven months ended July 31, 2007, “Other non-operating expenses, net” includes “Foreign currency exchange results.”

(4)	Does not reflect the split-off of the Axis business. See “Business—Our Operations—Supply and Distribution.”

(5)

(6)	Operating margin is operating income divided by total revenues, expressed as a percentage.

(7)

(8)	Adjusted EBITDA margin is Adjusted EBITDA divided by total revenues, expressed as a percentage.

(9)	Working capital equals current assets minus current liabilities.

(10)	Includes property and equipment expenditures and purchase of restaurant businesses.

(11)

(12)

Systemwide comparable sales growth, systemwide average restaurant sales and systemwide sales growth are presented on a systemwide basis, which means they include sales by our Company-operated restaurants and our franchised restaurants. While sales by our franchisees are not recorded as revenues by us, we believe the information is important in understanding our financial performance because these sales are the basis on which we calculate and record franchised revenues and are indicative of the financial health of our franchisee base.

(13)	Systemwide average restaurant sales is calculated by dividing our sales for the relevant period by the arithmetic mean of the number of our restaurants at the beginning and end of such period.

(14)	Systemwide sales growth refers to the change in sales by all of our restaurants, whether operated by us or by our franchisees, from one period to another.

RISK FACTORS

You should carefully consider the risks and uncertainties described below and the other information in this prospectus before making an investment in our class A shares. Our business, financial condition or results of operations could be materially and adversely affected if any of these risks occurs, and as a result, the market price of our class A shares could decline and you could lose all or part of your investment.

This prospectus also contains forward-looking statements that involve risks and uncertainties. See “Cautionary Statement Regarding Forward-Looking Statements.” Our actual results could differ materially and adversely from those anticipated in these forward-looking statements as a result of certain factors, including the risks facing our company or investments in Latin America and the Caribbean described below and elsewhere in this prospectus.

Certain Factors Relating to Our Business

Our rights to operate and franchise McDonald’s-branded restaurants are dependent on the MFAs, the expiration of which would adversely affect our business, results of operations, financial condition and prospects.

Our rights to operate and franchise McDonald’s-branded restaurants in the Territories, and therefore our ability to conduct our business, derive exclusively from the rights granted to us by McDonald’s in the MFAs through 2027. The initial term of the franchise for French Guiana, Guadeloupe and Martinique expires in 2017, which we may extend for an additional 10-year term at our sole discretion. As a result, our ability to continue operating in our current capacity following the initial term of the MFAs is dependent on the renewal of our contractual relationship with McDonald’s.

McDonald’s has the right, in its reasonable business judgment based on our satisfaction of certain criteria set forth in the MFA, to grant us an option to extend the term of the MFAs with respect to all Territories for an additional period of 10 years after the expiration of the initial term of the MFAs upon such terms as McDonald’s may determine. Pursuant to the MFAs, McDonald’s will determine whether to grant us the option to renew between August 2020 and August 2024. If McDonald’s grants us the option to renew and we elect to exercise the option, then we and McDonald’s will amend the MFAs to reflect the terms of such renewal option, as appropriate. We cannot assure you that McDonald’s will grant us an option to extend the term of the MFAs or that the terms of any renewal option will be acceptable to us, will be similar to those contained in the MFAs or that the terms will not be less favorable to us than those contained in the MFAs.

If McDonald’s elects not to grant us the renewal option or we elect not to exercise the renewal option, we will have a three-year period in which to solicit offers for our business, which offers would be subject to McDonald’s approval. Upon the expiration of the MFAs, McDonald’s has the option to acquire all of the equity interests of our indirectly wholly owned subsidiary LatAm, LLC, the master franchisee of McDonald’s for the Territories except in Brazil, and our wholly owned subsidiary Arcos Dourados Comercio de Alimentos Ltda., the master franchisee of McDonald’s for Brazil, at their fair market value.

In the event McDonald’s does not exercise its option to acquire LatAm, LLC and Arcos Dourados Comercio de Alimentos Ltda., the MFAs would expire and we would be required to cease operating McDonald’s-branded restaurants, identifying our business with McDonald’s and using any of McDonald’s intellectual property. Although we would retain our real estate and infrastructure, the MFAs prohibit us from engaging in certain competitive businesses, including Burger King, Subway, KFC or any other QSR business, or duplicating the McDonald’s system at another restaurant or business during the two-year period following the expiration of the MFAs. As the McDonald’s brand and our relationship with McDonald’s are among our primary competitive strengths, the expiration of the MFAs for any of the reasons described above would materially and adversely affect our business, results of operations, financial condition and prospects.

Our business depends on our relationship with McDonald’s and changes in this relationship may adversely affect our business, results of operations and financial condition.

Our rights to operate and franchise McDonald’s-branded restaurants in the Territories, and therefore our ability to conduct our business, derive exclusively from the rights granted to us by McDonald’s in the MFAs. As a result, our revenues are dependent on the continued existence of our contractual relationship with McDonald’s.

Pursuant to the MFAs, McDonald’s has the ability to exercise substantial influence over the conduct of our business. For example, under the MFAs, we are not permitted to operate any other quick service restaurant chains, we must comply with McDonald’s high quality standards, we must own and operate at least 50% of all McDonald’s-branded restaurants in the Territories, we must maintain certain guarantees in favor of McDonald’s, including a standby letter of credit (or other similar financial guarantee acceptable to McDonald’s) in an amount of $80.0 million, to secure our payment obligations under the MFAs and related credit documents, we cannot incur debt above certain financial ratios, we cannot transfer the equity interests of our subsidiaries, any significant portion of their assets or any of the real estate properties we own without McDonald’s consent, and McDonald’s has the right to approve the appointment of our chief executive officer and chief operating officer. In addition, the MFAs require us to reinvest a significant amount of money on reimaging our existing restaurants, opening new restaurants and advertising, which plans McDonald’s has the right to approve. We are required under the MFAs to spend $180 million from 2011 through 2013 (i.e., $60 million per year) to satisfy our reinvestment commitments. In addition, we estimate that the cost to comply with our restaurant opening commitments under the MFAs from 2011 to 2013 will be between $100 million and $250 million depending on, among other factors, the type and location of the restaurants we open. We cannot assure you that we will have available the funds necessary to finance these commitments, and their satisfaction may require us to incur additional indebtedness, which could adversely affect our financial condition. Failure to comply with these commitments could constitute a material breach of the MFAs and may lead to a termination by McDonald’s of the MFAs.

Notwithstanding the foregoing, McDonald’s has no obligation to fund our operations. In addition, McDonald’s does not guarantee any of our financial obligations, including trade payables or outstanding indebtedness, and has no obligation to do so.

If the terms of the MFAs excessively restrict our ability to operate our business or if we are unable to satisfy our restaurant opening and reinvestment commitments under the MFAs, our business, results of operations and financial condition would be materially and adversely affected.

McDonald’s has the right to acquire all or portions of our business upon the occurrence of certain events and, in the case of a material breach of the MFAs, may acquire our non-public shares or our interests in one or more Territories at 80% of their fair market value.

Pursuant to the MFAs, McDonald’s has the right to acquire our non-public shares or our interests in one or more Territories upon the occurrence of certain events, including the death or permanent incapacity of our controlling shareholder or a material breach of the MFAs. Following the completion of the offering and assuming no exercise of the underwriters’ over-allotment option, in the event McDonald’s were to exercise its right to acquire all of our non-public shares, our public shareholders would own an aggregate of 28.5% of our economic interests and 11.4% of our voting interests.

McDonald’s has the option to acquire all, but not less than all, of our non-public shares at 100% of their fair market value during the twelve-month period following the eighteenth-month anniversary of the death or permanent incapacity of Mr. Staton, our Chairman, CEO and controlling shareholder. In addition, if there is a material breach that relates to one or more Territories in which there are at least 100 restaurants in operation, McDonald’s has the right either to acquire all of our non-public shares or our interests in our subsidiaries in such Territory or Territories. By contrast, if the initial material breach of the MFAs affects or is attributable to any of

the Territories in which there are less than 100 restaurants in operation, McDonald’s only has the right to acquire the equity interests of any of our subsidiaries in the relevant Territory. For example, since we have more than 100 restaurants in Mexico, if a Mexican subsidiary were to materially breach the MFA, McDonald’s would have the right either to acquire our entire business throughout Latin America and the Caribbean or just our Mexican operations, whereas upon a similar breach by our Ecuadorean subsidiary, McDonald’s would only have the right to acquire our interests in our operations in Ecuador.

McDonald’s was granted a perfected security interest in the equity interests of LatAm, LLC, Arcos Dourados Comercio de Alimentos Ltda. and certain of their subsidiaries to protect this right. In the event this right is exercised as a result of a material breach of the MFAs, the amount to be paid by McDonald’s would be equal to 80% of the fair market value of the acquired equity interests. If McDonald’s exercises its right to acquire our interests in one or more Territories as a result of a material breach, our business, results of operations and financial condition would be materially and adversely affected.

We have experienced rapid growth in recent years. The failure to successfully manage this or any future growth may adversely affect our results of operations.

Our business has grown significantly in recent years, largely due to the opening of new restaurants in existing and new markets within the Territories, and also from an increase in comparable store sales. Our total number of restaurant locations has increased from 1,569 at the date of the Acquisition to 1,755 as of December 31, 2010.

Our growth is, to a certain extent, dependent on new restaurant openings. There are many obstacles to opening new restaurants, including determining the availability of desirable locations, securing reliable suppliers, training new personnel and negotiating acceptable lease terms, and, in times of adverse economic conditions, franchisees may be more reluctant to provide the investment required to open new restaurants and may have difficulty obtaining sufficient financing. In addition, our growth in comparable store sales is dependent on continued economic growth in the countries in which we operate as well as our ability to continue to predict and satisfy changing consumer preferences. It is therefore possible that we may not be able to successfully maintain our recent growth rate.

We plan our capital expenditures on an annual basis, taking into account historical information, regional economic trends, restaurant opening and reimaging plans, site availability and the investment requirements of the MFAs in order to maximize our returns on invested capital. The success of our investment plan may, however, be harmed by factors outside our control, such as changes in macroeconomic conditions, changes in demand and construction difficulties that could jeopardize our investment returns and our future results and financial condition.

We depend on oral agreements with third-party suppliers and distributors for the provision of products that are necessary for our operations.

Supply chain management is an important element of our success and a crucial factor in optimizing our profitability. We use McDonald’s centralized supply chain management model, which relies on approved third-party suppliers and distributors for goods, and we generally use several suppliers to satisfy our needs for goods. This system encompasses selecting and developing suppliers of core products—beef, chicken, buns, produce, cheese, dairy mixes, beverages and toppings—who are able to comply with McDonald’s high quality standards, and establishing sustainable relationships with these suppliers. McDonald’s standards include cleanliness, product consistency, timeliness, following internationally recognized manufacturing practices, meeting or exceeding all local food regulations and compliance with our Hazard Analysis Critical Control Plan, a systematic approach to food safety that emphasizes protection within the processing facility, rather than detection, through analysis, inspection and follow-up.

Our 25 largest suppliers account for approximately 80% of our purchases. We have oral agreements with almost all of our suppliers and only a few are party to written contracts with us. Our supplier approval process is thorough and lengthy in order to ensure compliance with McDonald’s high quality standards. We therefore tend to develop strong relationships with approved suppliers and, given our importance to them, have found that oral agreements with them are generally sufficient to ensure a reliable supply of quality products. While we source our supplies from many approved suppliers in Latin America and the Caribbean, thereby reducing our dependence on any one supplier, the informal nature of the majority of our relationships with suppliers means that we may not be assured of long-term or reliable supplies of products from those suppliers.

If our suppliers fail to provide us with products in a timely manner due to unanticipated demand, production or distribution problems or financial distress, if our suppliers decide to terminate their relationship with us or if McDonald’s determines that any product or service offered by an approved supplier is not in compliance with its standards and we are obligated to terminate our relationship with such supplier, we may have difficulty finding replacement suppliers because of the requirement that we only use approved suppliers. As a result, we may face inventory shortages that could negatively affect our operations.

Our financial condition and results of operations depend, to a certain extent, on the financial condition of our franchisees and their ability to fulfill their obligations under their franchise agreements.

Approximately 26% of our restaurants were franchised as of December 31, 2010. Under our franchise agreements, we receive monthly payments which are the greater of a fixed rent or a certain percentage of the franchisee’s gross sales. Franchisees are independent operators over whom we exercise control through the franchise agreements, by owning or leasing the real estate upon which their restaurants are located and through our operating manual that specifies items such as menu choices, permitted advertising, equipment, food handling procedures, product quality and approved suppliers. Our operating results depend to a certain extent on the restaurant profitability and financial viability of our franchisees. The concurrent failure by a significant number of franchisees to meet their financial obligations to us could jeopardize our ability to meet our obligations.

In addition, we are liable for our franchisees’ monthly payment of a continuing franchise fee to McDonald’s, which represents a percentage of those franchised restaurants’ gross sales. To the extent that our franchisees fail to pay this fee in full, we are responsible for any shortfall. As such, the concurrent failure by a significant number of franchisees to pay their continuing franchise fees could have a material adverse effect on our results of operations and financial condition.

We do not have full operational control over the businesses of our franchisees.

We are dependent on franchisees to maintain McDonald’s quality, service and cleanliness standards, and their failure to do so could materially affect the McDonald’s brand and harm our future growth. Although we exercise significant control over franchisees through the franchise agreements, franchisees have some flexibility in their operations, including the ability to set prices for our products in their restaurants, hire employees and select certain service providers. In addition, it is possible that some franchisees may not operate their restaurants in accordance with our quality, service and cleanliness, health or product standards. Although we take corrective measures if franchisees fail to maintain McDonald’s quality, service and cleanliness standards, we may not be able to identify and rectify problems with sufficient speed and, as a result, our image and operating results may be negatively affected.

Ownership and leasing of a broad portfolio of real estate exposes us to potential losses and liabilities.

As of December 31, 2010, we owned the land for 510 of our 1,755 restaurants and the buildings for all but 12 of our restaurants. The value of these assets could decrease or rental costs could increase due to changes in local demographics, the investment climate and increases in taxes.

The majority of our restaurant locations, or those operated by our franchisees, are subject to long-term leases. We may not be able to renew leases on acceptable terms or at all, in which case we would have to find

new locations to lease or be forced to close the restaurants. If we are able to negotiate a new lease at an existing location, we may be subject to a rent increase. In addition, current restaurant locations may become unattractive due to changes in neighborhood demographics or economic conditions, which may result in reduced sales at these locations.

The success of our business is dependent on the effectiveness of our marketing strategy.

Market awareness is essential to our continued growth and financial success. Pursuant to the MFAs, we create, develop and coordinate marketing plans and promotional activities throughout the Territories, and franchisees contribute a percentage of their gross sales to our marketing plan. In addition, we are required under the MFAs to spend at least 5% of our sales on advertising and promotional activities. In addition, pursuant to the MFAs, McDonald’s has the right to review and approve our marketing plans in advance and may request that we cease using the materials or promotional activities at any time if McDonald’s determines that they are detrimental to its brand image. We also participate in global and regional marketing activities undertaken by McDonald’s and pay McDonald’s up to 0.2% of our sales in order to fund such activities. If our advertising programs are not effective, or if our competitors begin spending significantly more on advertising than we do, we may be unable to attract new customers or existing customers may not return to our restaurants and our operating results may be negatively affected.

We use non-committed lines of credit to partially finance our working capital needs.

We use non-committed lines of credit to partially finance our working capital needs. Given the nature of these lines of credit, they could be withdrawn and no longer be available to us, or their terms, including the interest rate, could change to make the terms no longer acceptable to us. The availability of these lines of credit depends on the level of liquidity in financial markets, which can vary based on events outside of our control, including financial or credit crises. Any inability to draw upon our non-committed lines of credit could have an adverse effect on our working capital, financial condition and results of operations.

Covenants and events of default in the indenture governing our senior notes could limit our ability to undertake certain types of transactions and adversely affect our liquidity.

As of December 31, 2010, we had $450.0 million in aggregate principal amount outstanding under our senior notes. The indenture governing our senior notes contains negative and financial covenants and events of default that may limit our financial flexibility and ability to undertake certain types of transactions. For instance, we are subject to negative covenants that restrict our activities, including restrictions on:

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incurring additional indebtedness;

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paying dividends;

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redeeming, repurchasing or retiring our capital stock;

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making investments;

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creating liens;

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creating limitations on the ability of our restricted subsidiaries to pay dividends, make loans or transfer property to us;

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engaging in transactions with affiliates;

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selling assets, including capital stock of our subsidiaries; and

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consolidating, merging or transferring assets.

If we fail to satisfy the covenants set forth in the indenture or another event of default occurs under the indenture, all of our indebtedness under the senior notes could become immediately due and payable. If the senior notes become immediately due and payable and we do not have sufficient cash on hand to pay all amounts due, we could be required to sell assets, to refinance all or a portion of our indebtedness or to obtain additional financing. Refinancing may not be possible and additional financing may not be available on commercially acceptable terms, or at all.

Our inability to attract and retain qualified personnel may affect our growth and results of operations.

We have a strong management team with broad experience in product development, supply chain management, operations, finance, marketing and training. Our significant growth places substantial demands on our management team, and our continued growth could increase those demands. In addition, pursuant to the MFAs, McDonald’s is entitled to approve the appointment of our chief executive officer and chief operating officer. Our ability to manage future growth will depend on the adequacy of our resources and our ability to continue to identify, attract and retain qualified personnel. Failure to do so could have a material adverse effect on our business, financial condition and results of operations.

Also, the success of our operations depends in part on our ability to attract and retain qualified regional and restaurant managers and general staff. If we are unable to recruit and retain our employees, or fail to motivate them to provide quality food and service, our image, operations and growth could be adversely affected.

The resignation, termination, permanent incapacity or death of our CEO could adversely affect our business, results of operations, financial condition and prospects.

Due to Mr. Staton’s unique experience and leadership capabilities, it would be difficult to find a suitable successor for him if he were to cease serving as our CEO and Chairman for any reason. In addition, pursuant to the MFAs, McDonald’s is entitled to approve the appointment of our chief executive officer. If we and McDonald’s have not agreed upon a successor CEO after six months, McDonald’s may designate a temporary CEO in its sole discretion pending our submission of information relating to a further candidate and McDonald’s approval of that candidate. In the event of Mr. Staton’s death or permanent incapacity, McDonald’s has the right to acquire all of our non-public shares during the twelve-month period beginning on the eighteenth-month anniversary of his death or incapacity. A delay in finding a suitable successor CEO could adversely affect our business, results of operations, financial condition and prospects.

Labor shortages or increased labor costs could harm our results of operations.

Our operations depend in part on our ability to attract and retain qualified restaurant managers and crew. While the turnover rate varies significantly among categories of employees, due to the nature of our business we traditionally experience a high rate of turnover among our crew and we may not be able to replace departing crew with equally qualified or motivated staff.

As of December 31, 2010, we had 86,002 employees. Controlling labor costs is critical to our results of operations, and we closely monitor those costs. Some of our employees are paid minimum wages; any increases in minimum wages or changes to labor regulations in the Territories could increase our labor costs. For example, a law enacted in November 2010 in Argentina requires companies to pay overtime to all employees (except directors and managers) working on weekends, and a proposed bill in Argentina would require companies to distribute 10 percent of their profits to employees. These or similar regulations, if adopted, may have an adverse impact on our results of operations. Competition for employees could also cause us to pay higher wages.

A failure by McDonald’s to protect its intellectual property rights, including its brand image, could harm our results of operations.

The profitability of our business depends in part on consumers’ perception of the strength of the McDonald’s brand. Under the terms of the MFAs, we are required to assist McDonald’s with protecting its

intellectual property rights in the Territories. Nevertheless, any failure by McDonald’s to protect its proprietary rights in the Territories or elsewhere could harm its brand image, which could affect our competitive position and our results of operations.

Under the MFAs, we may use, and grant rights to franchisees to use, McDonald’s intellectual property in connection with the development, operation, promotion, marketing and management of our restaurants. McDonald’s has reserved the right to use, or grant licenses to use, its intellectual property in Latin America and the Caribbean for all other purposes, including to sell, promote or license the sale of products using its intellectual property. If we or McDonald’s fail to identify unauthorized filings of McDonald’s trademarks and imitations thereof, and we or McDonald’s do not adequately protect McDonald’s trademarks and copyrights, the infringement of McDonald’s intellectual property rights by others may cause harm to McDonald’s brand image and decrease our sales.

Any tax increase or change in tax legislation may adversely affect our results of operations.

Since we conduct our business in many countries in Latin America and the Caribbean, we are subject to the application of multiple tax laws and multinational tax conventions. Our effective tax rate therefore depends on the effectiveness of our tax planning abilities. Our income tax position and effective tax rate is subject to uncertainty as our income tax position for each year depends on the profitability of Company-operated restaurants and on the profitability of franchised restaurants operated by our franchisees in tax jurisdictions that levy a broad range of income tax rates. It is also dependent on changes in the valuation of deferred tax assets and liabilities, the impact of various accounting rules, changes to these rules and tax laws and examinations by various tax authorities. If our actual tax rate differs significantly from our estimated tax rate, this could have a material impact on our financial condition. In addition, any increase in the rates of taxes, such as income taxes, excise taxes, value added taxes, import and export duties, and tariff barriers or enhanced economic protectionism could negatively affect our business. We cannot assure you that any governmental authority in any country in which we operate will not increase taxes or impose new taxes on our products in the future.

Negative resolution of disputes with taxing authorities in any of the jurisdictions in which we operate may negatively affect our business and results of operations.

We and our predecessor company have in the past been engaged in tax disputes with Venezuelan tax authorities that culminated in temporary closures of our restaurants in Venezuela in 2005 and 2008. On October 10, 2008, government tax officials closed all of our 115 restaurants for a period of 48 hours because they believed our record of purchases was not properly organized in chronological order. However, no finding was made that we had improperly paid taxes nor were any fines imposed on us as a result. Subsequent closures or disagreements with Venezuelan tax authorities could materially and adversely affect our results of operations and financial condition.

We are engaged in several disputes and are currently party to a number of tax proceedings with Brazilian tax authorities and liability for certain of these proceedings was retained by McDonald’s as part of the Acquisition. We cannot assure you, however, that we will not be involved in similar disputes or proceedings in the future, in which case we may be solely liable for the defense thereof and any resulting liability. See “Business—Legal Proceedings.”

Litigation and other pressure tactics could expose our business to financial and reputational risk.

Given that we conduct our business in many countries, we may be subject to multi-jurisdictional private and governmental lawsuits, including but not limited to lawsuits relating to labor and employment practices, taxes, trade and business practices, franchising, intellectual property, consumer, real property, landlord tenant, environmental, advertising, nutrition and antitrust matters. In the past, QSR chains, including McDonald’s Corporation, have been subject to class-action lawsuits claiming that their food products and promotional strategies have contributed to the obesity of some customers. We cannot guarantee that we will not be subject to

these types of lawsuits in the future. We may also be the target of pressure tactics such as strikes, boycotts and negative publicity from suppliers, distributors, employees, special interest groups and customers that may negatively affect our reputation.

Certain Factors Relating to Our Industry

The food services industry is intensely competitive and we may not be able to continue to compete successfully.

Although competitive conditions in the QSR industry vary in each of the countries in which we conduct our operations, we compete with many well-established restaurant companies on price, brand image, quality, sales promotions, new product development and restaurant locations. Since the restaurant industry has few barriers to entry, our competitors are diverse and range from national and international restaurant chains to individual, local restaurant operators. Our largest competitors include Burger King, which as of December 31, 2010 operated 1,139 restaurants throughout Latin America and the Caribbean, Yum! Brands, which as of December 31, 2009 operated at least 600 restaurants in Latin America and the Caribbean, and Subway, which as of March 16, 2011 operated more than 1,700 restaurants in Latin America and the Caribbean. In Brazil, we also compete with Habib’s, a Brazilian QSR chain that focuses on Middle Eastern food, which as of December 31, 2009 operated 305 restaurants, according to Euromonitor, and Bob’s, a primarily Brazilian QSR chain that focuses on hamburger product offerings, which as of December 31, 2009 operated 390 restaurants. We also face strong competition from street vendors of limited product offerings, including hamburgers, hot dogs, pizzas and other local food items. According to Euromonitor, street vendors are expected to represent 11.5% of the Latin American and Caribbean total eating out segment in 2010. We expect competition to increase as our competitors continue to expand their operations, introduce new products and aggressively market their brands.

If any of our competitors offers products that are better priced or more appealing to the tastes of consumers, increases its number of restaurants, obtains more desirable restaurant locations, provides more attractive financial incentives to management personnel, franchisees or hourly employees or has more effective marketing initiatives than we do in any of the markets in which we operate, this could have a material adverse effect on our results of operations.

Increases in commodity prices or other operating costs could harm our operating results.

Food and paper costs represented 34% of our total revenues in 2010, and we import approximately 25% of our products in our various markets and 100% of the toys distributed in our restaurants. We rely on, among other commodities, beef, chicken, produce, dairy mixes, beverages and toppings. The cost of food and supplies depends on several factors, including global supply and demand, weather conditions, fluctuations in energy costs and tax incentives, all of which makes us susceptible to substantial price and currency fluctuations. Due to the competitive nature of the restaurant industry, we may be unable to pass increased operating costs on to our customers, which could have an adverse effect on our results of operations.

Demand for our products may decrease due to changes in consumer preferences or other factors.

Our competitive position depends on our continued ability to offer items that have a strong appeal to consumers. If consumer dining preferences change due to dietary inclinations and our consumers begin to seek out alternative restaurant options, our financial results might be adversely affected. In addition, negative publicity surrounding our products could also materially affect our business and results of operations.

Recently, along with several of our competitors, we have introduced new product offerings to appeal to consumers who seek products that are lower in calories and fat content. Our success in responding to consumer demands depends in part on our ability to anticipate these demands and to introduce new items to address these demands in a timely fashion.

Our business activity may be negatively affected by disruptions, catastrophic events or health pandemics.

Unpredictable events beyond our control, including war, terrorist activities, and natural disasters, could disrupt our operations and those of our franchisees, suppliers or customers, have a negative effect on consumer spending or result in political or economic instability. These events could reduce demand for our products or make it difficult to ensure the regular supply of products through our distribution chain.

In addition, incidents of health pandemics, food-borne illnesses or food tampering could reduce sales in our restaurants. Widespread illnesses such as avian influenza, the H1N1 influenza virus (or swine flu), e-coli, bovine spongiform encephalopathy (or “mad cow” disease), hepatitis A or salmonella could cause customers to avoid meat or fish products. For example, the swine flu outbreak in Argentina and Mexico in 2009 significantly impacted our sales in those countries. Furthermore, our reliance on third-party food suppliers and distributors increases the risk of food-borne illness incidents being caused by third-party food suppliers and distributors who operate outside of our control and/or multiple locations being affected rather than a single restaurant. Media reports of health pandemics or food-borne illnesses found in the general public or in any QSR could dramatically affect restaurant sales in one or several countries in which we operate, or could force us to temporarily close an undetermined number of restaurants. As a restaurant company, we depend on consumer confidence in the quality and safety of our food. Any illness or death related to food that we serve could substantially harm our operations. While we maintain extremely high standards for the quality of our food products and dedicate substantial resources to ensure that these standards are met, the spread of these illnesses is often beyond our control and we cannot assure you that new illnesses resistant to any precautions we may take will not develop in the future.

In addition, our industry has long been subject to the threat of food tampering by suppliers, employees or customers, such as the addition of foreign objects to the food that we sell. Reports, whether true or not, of injuries caused by food tampering have in the past negatively affected the reputations of QSR chains and could affect us in the future. Instances of food tampering, even those occurring solely at competitor restaurants could, by causing negative publicity about the restaurant industry, adversely affect our sales on a local, regional, national or systemwide basis. A decrease in customer traffic as a result of public health concerns or negative publicity could materially affect our business, results of operations and financial condition.

Restrictions on promotions and advertisements directed at families with children and regulations regarding the nutritional content of children’s meals may harm McDonald’s brand image and our results of operations.

A significant portion of our business depends on our ability to make our product offerings appealing to families with children. Argentina, Brazil, Chile, Colombia, Mexico, Uruguay and Venezuela are considering imposing restrictions on the ways in which we market our products, including proposals restricting our ability to sell toys in conjunction with food. In Brazil, the Federal Department of Justice filed suit in 2009 seeking to enjoin various QSRs, including us, from selling toys. As of the date of this prospectus, this legal proceeding is still pending and the outcome is uncertain. In addition, certain jurisdictions in the United States are considering curtailing or have curtailed food retailers’ ability to sell meals to children including toys if these meals do not meet certain nutritional criteria. Similar restrictions, if imposed in the Territories, may have a negative impact on our results of operations. In general, regulatory developments that adversely impact our ability to promote and advertise our business and communicate effectively with our target customers, including restrictions on the use of licensed characters may have a negative impact on our results of operations.

Environmental laws and regulations may affect our business.

We are subject to various environmental laws and regulations. These laws and regulations govern, among other things, discharges of pollutants into the air and water and the presence, handling, release and disposal of and exposure to, hazardous substances. These laws and regulations provide for significant fines and penalties for noncompliance. Third parties may also assert personal injury, property damage or other claims against owners or operators of properties associated with release of, or actual or alleged exposure to, hazardous substances at, on or from our properties.

Liability from environmental conditions relating to prior, existing or future restaurants or restaurant sites, including franchised restaurant sites, may have a material adverse effect on us. Moreover, the adoption of new or more stringent environmental laws or regulations could result in a material environmental liability to us.

We may be adversely affected by legal actions, claims or damaging publicity with respect to our products.

We could be adversely affected by legal actions and claims brought by consumers or regulatory authorities in relation to the quality of our products and eventual health problems or other consequences caused by our products or by any of their ingredients. We could also be affected by legal actions and claims brought against us for products made in a jurisdiction outside the jurisdictions where we are operating. An array of legal actions, claims or damaging publicity may affect our reputation as well as have a material adverse effect on our revenues and businesses.

Certain Factors Relating to Latin America and the Caribbean

Our business is subject to the risks generally associated with international business operations.

We engage in business activities throughout Latin America and the Caribbean. In 2010, 82.3% of our revenues were derived from Brazil, Argentina, Mexico, Puerto Rico and Venezuela. As a result, our business is and will continue to be subject to the risks generally associated with international business operations, including:

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governmental regulations applicable to food services operations;

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changes in social, political and economic conditions;

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transportation delays;

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power and other utility shutdowns or shortages;

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limitations on foreign investment;

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restrictions on currency convertibility and volatility of foreign exchange markets;

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import-export quotas;

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changes in local labor conditions;

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changes in tax and other laws and regulations;

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expropriation and nationalization of our assets in a particular jurisdiction; and

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restrictions on repatriation of dividends or profits.

Some of the Territories have been subject to social and political instability in the past, and interruptions in operations could occur in the future. Our revenues could be adversely affected by any of the foregoing factors.

Changes in governmental policies in the Territories could adversely affect our business, results of operations, financial condition and prospects.

Governments throughout Latin America and the Caribbean have exercised, and continue to exercise, significant influence over the economies of their respective countries. Accordingly, the governmental actions, political developments, regulatory and legal changes or administrative practices in the Territories concerning the

economy in general and the food services industry in particular could have a significant impact on us. We cannot assure you that changes in the governmental policies of the Territories will not adversely affect our business, results of operations, financial condition and prospects.

An economic downturn in Latin America and the Caribbean could have a significant impact on our operating results.

The success of our business is dependent on discretionary consumer spending, which is influenced by general economic conditions, consumer confidence and the availability of discretionary income. Any prolonged economic downturn could result in a decline in discretionary consumer spending. This may reduce the number of consumers who are willing and able to dine in our restaurants, or consumers may make more value-driven and price-sensitive purchasing choices, eschewing our core menu items for our entry level food options. We may also be unable to increase prices of our menu items, which may negatively affect our financial condition.

In addition, a prolonged economic downturn may lead to higher interest rates, significant changes in the rate of inflation or an inability to access capital on acceptable terms. Our suppliers could experience cash flow problems, credit defaults or other financial hardships. If our franchisees cannot adequately access the financial resources required to open new restaurants, this could have a material effect on our growth strategy.

Inflation and government measures to curb inflation, may adversely affect the economies in the countries where we operate, our business and results of operations.

Many of the countries in which we operate have experienced, or are currently experiencing, high rates of inflation. Although inflation rates in many of these countries have been relatively low in the recent past, we cannot assure you that this trend will continue. The measures taken by the governments of these countries to control inflation have often included maintaining a tight monetary policy with high interest rates, thereby restricting the availability of credit and retarding economic growth. Inflation, measures to combat inflation and public speculation about possible additional actions have also contributed materially to economic uncertainty in many of these countries and to heightened volatility in their securities markets. Periods of higher inflation may also slow the growth rate of local economies, that could lead to reduced demand for our core products and decreased sales. Inflation is also likely to increase some of our costs and expenses, which we may not be able to fully pass on to our customers, which could adversely affect our operating margins and operating income.

Exchange rate fluctuations against the U.S. dollar in the countries in which we operate could negatively affect our results of operations.

We are exposed to exchange rate risk in relation to the United States dollar. While substantially all of our income is denominated in the local currencies of the countries in which we operate, our supply chain management involves the importation of various products, and some of our imports, as well as some of our capital expenditures, are denominated in U.S. dollars. As a result, any decrease in the value of the local currencies of the countries in which we operate as compared to the U.S. dollar will increase our costs. In addition, 97% of our outstanding financial debt was denominated in U.S. dollars as of December 31, 2010.

As such, any fluctuation in the value of the U.S. dollar with respect to the various currencies of the countries in which we operate or in U.S. dollar interest rates could adversely impact on our net income, results of operations and financial condition.

Price controls in certain countries have affected and may continue to affect our results of operations.

Certain countries in which we conduct operations have imposed price controls that restrict our ability, and the ability of our franchisees, to adjust the prices of our products. This places downward pressure on the prices at which our products are sold and may limit the growth of our revenue. We cannot assure you that the

negative effects of the previously imposed price controls will not continue into the future, or that new controls will not be imposed. Our inability to control the prices of our products could have an adverse effect on our results of operations.

We could be subject to expropriation or nationalization of our assets and government interference with our business in certain countries in which we operate.

We face a risk of expropriation or nationalization of our assets and government interference with our business in several of the countries in which we do business. These risks are particularly acute in Venezuela. The current Venezuelan government has promoted a model of increased state participation in the economy through welfare programs, exchange and price controls and the promotion of state-owned companies. We can provide no assurance that Company-operated or franchised restaurants will not be threatened with expropriation and that our operations will not be transformed into state-owned enterprises. In addition, the Venezuelan government may pass laws, rules or regulations which may directly or indirectly interfere with our ability to operate our business in Venezuela which could result in a material breach of the MFAs, in particular if we are unable to comply with McDonalds’ operations system and standards. A material breach of the MFAs would trigger McDonald’s option to acquire our non-public shares or our interests in Venezuela. See “—Certain Factors Relating to Our Business—McDonald’s has the right to acquire all or portions of our business upon the occurrence of certain events and, in the case of a material breach of the MFAs, may acquire our non-public shares or our interests in one or more Territories at 80% of their fair market value.”

We are subject to significant foreign currency exchange controls in certain countries in which we operate.

Certain Latin American economies have experienced shortages in foreign currency reserves and their respective governments have adopted restrictions on the ability to transfer funds out of the country and convert local currencies into U.S. dollars. This may increase our costs and limit our ability to convert local currency into U.S. dollars and transfer funds out of certain countries. Any shortages or restrictions may impede our ability to convert these currencies into U.S. dollars and to transfer funds, including for the payment of dividends or interest or principal on our outstanding debt. In the event that any of our subsidiaries are unable to transfer funds to us due to currency restrictions, we are responsible for any resulting shortfall.

There are currency restrictions in place in Venezuela that limit our ability to repatriate bolívares fuertes held in Venezuela at the government’s official exchange rate. In Venezuela, the official bolívar fuerte -U.S. dollar exchange rate is established by the Central Bank of Venezuela and the Venezuelan Ministry of Finance, and the acquisition of foreign currency at the official exchange rate by Venezuelan companies to pay foreign debt or dividends is subject to registration with and approval by the relevant Venezuelan authorities. Since January 2010, a two-tiered official exchange rate system has established an exchange rate of 2.60 bolívares fuertes per U.S. dollar for essential goods and an exchange rate of 4.30 bolívares fuertes per U.S. dollar for non-essential goods, subject to registration with, application to and approval by the Comisión de Administración de Divisas , or CADIVI.

These approvals have become more difficult to obtain over time, which led to the development of a bond-based exchange process under which bolívar fuerte -denominated bonds are purchased in Venezuela and then are immediately exchanged outside Venezuela for bonds denominated in U.S. dollars at a specified, and less favorable, parallel market exchange rate.

During 2009, our access to the official exchange rate for purposes of paying for imports was more limited than in 2008 due to an increase in restrictions and a more rigorous approval process. In addition, we historically have not been able to access the official exchange rate for royalty payments, and have instead utilized the parallel exchange market to make our royalty payments, honor other foreign debts and pay intercompany loans. In 2009 and 2008, we exchanged bonds for $37.1 million and $38.0 million, respectively (at an average

exchange rate of Bs.F5.19 and Bs.F3.76 per U.S. dollar in 2009 and 2008, respectively) and recorded a loss of $52.5 million and $28.5 million, respectively, in connection with the payment of intercompany loans.

In May 2010, the Central Bank of Venezuela increased its control of this bond-based exchange process and, as a result, bond-based exchanges may solely be conducted by the Central Bank of Venezuela. Consequently, the parallel exchange market in Venezuela ended, limiting companies’ ability to obtain foreign currency other than through foreign currency trades approved by and conducted through CADIVI or the Central Bank of Venezuela through the System for Transactions with Securities in Foreign Currency, which we refer to as SITME. Pursuant to the new system, companies without access to CADIVI can access SITME to convert a maximum cash equivalent of up to $50,000 per day or $350,000 per month of foreign currency at an exchange rate based on the range of prices for the purchase and sale of bonds published daily by the Central Bank of Venezuela. At December 31, 2010, this exchange rate was 5.30 bolívares fuertes per U.S. dollar. As a result of the foregoing, the acquisition of foreign currency by Venezuelan companies to honor foreign debt, pay dividends or otherwise move capital out of Venezuela is subject to the approval of CADIVI or the Central Bank of Venezuela, and to the availability of foreign currency within the guidelines set forth by Venezuelan National Executive Power for the allocation of foreign currency.

In addition, in 2001 and 2002, Argentina imposed exchange controls and transfer restrictions substantially limiting the ability of companies to make payments abroad. While these restrictions have eased, Argentina may tighten exchange controls or transfer restrictions in the future to prevent capital flight, counter a significant depreciation of the Argentine peso or address other unforeseen circumstances.

In 2010, our subsidiaries in Venezuela and Argentina represented 7.5% and 17.2% of our operating income, respectively. If we are prohibited from transferring funds out of Venezuela and/or Argentina, or if we become subject to similar restrictions in other countries in which we operate, our results of operations and financial condition could be adversely affected.

If we fail to comply with or become subject to more onerous government regulations, our business could be adversely affected.

We are subject to various federal, state and municipal laws and regulations in the countries in which we operate, including those related to the food services industry, health and safety standards, marketing and promotional activities, nutritional labeling, zoning and land use, environmental standards and consumer protection. We strive to abide by and maintain compliance with these laws and regulations. The imposition of new laws or regulations, including potential trade barriers, may increase our operating costs or impose restrictions on our operations, which could have an adverse impact on our financial condition.

Regulations governing the food services industry have become more restrictive. We cannot assure you that new and stricter standards will not be adopted or become applicable to us, or that stricter interpretations of existing laws and regulations will not occur. Any of these events may require us to spend additional funds to gain compliance with the new rules, if possible, and therefore increase our cost of operation.

Certain Factors Relating to Our Class A Shares and the Offering

There is no existing market for our class A shares, and we do not know whether one will develop to provide you with adequate liquidity. If our stock price fluctuates after this offering, you could lose a significant part of your investment.

Prior to this offering, there has not been a public market for our class A shares. If an active trading market does not develop, you may have difficulty selling any of our class A shares that you buy. We cannot predict the extent to which investor interest in our company will lead to the development of an active trading market on the NYSE, or otherwise or how liquid that market might become. The initial public offering price for

the class A shares will be determined by negotiations between us and the underwriters and may not be indicative of prices that will prevail in the open market following this offering. Consequently, you may not be able to sell our class A shares at prices equal to or greater than the price paid by you in this offering. In addition to the risks described above, the market price of our class A shares may be influenced by many factors, some of which are beyond our control, including:

•

the failure of financial analysts to cover our class A shares after this offering or changes in financial estimates by analysts;

•

actual or anticipated variations in our operating results;

•

changes in financial estimates by financial analysts, or any failure by us to meet or exceed any of these estimates, or changes in the recommendations of any financial analysts that elect to follow our class A shares or the shares of our competitors;

•

announcements by us or our competitors of significant contracts or acquisitions;

•

future sales of our shares; and

•

investor perceptions of us and the industries in which we operate.

In addition, the stock market in general has experienced substantial price and volume fluctuations that have often been unrelated or disproportionate to the operating performance of particular companies affected. These broad market and industry factors may materially harm the market price of our class A shares, regardless of our operating performance. In the past, following periods of volatility in the market price of certain companies’ securities, securities class action litigation has been instituted against these companies. This litigation, if instituted against us, could adversely affect our financial condition or results of operations.

The initial public offering price per class A share is substantially higher than our net tangible book value per class A common share immediately after the offering, and you will incur immediate and substantial dilution.

The initial public offering price per class A share is substantially higher than our net tangible book value per class A share immediately after the offering. As a result, you may pay a price per share that substantially exceeds the tangible book value of our assets after subtracting our liabilities. Investors who purchase class A shares in the offering will be diluted by $11.15 per share after giving effect to the sale of class A shares in this offering (assuming a price per class A share equal to the midpoint of the range set forth on the cover page of this prospectus). See “Dilution.” Grants to our employees pursuant to our equity incentive plan or any other grants in the future to our employees, or other issuances of class A shares, will result in further dilution.

Upon completion of the offering, Mr. Staton, our Chairman and CEO, will continue to control all matters submitted to a shareholder vote, which will limit your ability to influence corporate activities and may adversely affect the market price of our class A shares.

Upon completion of the offering, including his purchase of class A shares as part thereof, Mr. Staton, our Chairman and CEO, will own or control common stock representing 38.6% and 75.5%, respectively, of our economic and voting interests. As a result, Mr. Staton is and will be able to strongly influence or effectively control the election of our directors, determine the outcome of substantially all actions requiring shareholder approval and shape our corporate and management policies. The MFAs’ requirement that Mr. Staton at all times hold at least 51% of our voting interests likely will have the effect of preventing a change in control of us and discouraging others from making tender offers for our shares, which could prevent shareholders from receiving a premium for their shares. Moreover, this concentration of share ownership may make it difficult for shareholders

to replace management and may adversely affect the trading price for our class A shares because investors often perceive disadvantages in owning shares in companies with controlling shareholders. This concentration of control could be disadvantageous to other shareholders with interests different from those of Mr. Staton and the trading price of our class A shares could be adversely affected. See “Principal and Selling Shareholders” for a more detailed description of our share ownership.

Furthermore, the MFAs contemplate instances where McDonald’s could be entitled to purchase the shares of Arcos Dorados Holdings Inc. held by Mr. Staton, Gavea Investment AD, L.P., Capital International, Inc. and DLJ South American Partners L.L.C. (through its affiliates). However, our publicly-held class A shares will not be similarly subject to acquisition by McDonald’s.

Sales of substantial amounts of our class A shares in the public market, or the perception that these sales may occur, could cause the market price of our class A shares to decline.

Sales of substantial amounts of our class A shares in the public market, or the perception that these sales may occur, could cause the market price of our class A shares to decline. This could also impair our ability to raise additional capital through the sale of our equity securities. Under our articles of association, we are authorized to issue up to 420,000,000 class A shares, of which 132,461,539 class A shares will be outstanding following this offering. We have agreed with the underwriters, subject to certain exceptions, not to offer, sell, or dispose of any shares of our share capital or securities convertible into or exchangeable or exercisable for any shares of our share capital during the 180-day period following the date of this prospectus. The selling shareholders have agreed to substantially similar lock-up provisions, subject to certain exceptions. Following the expiration of the lock-up period, our existing shareholders have the right to demand that we file a registration statement covering the offer and sale of their securities under the Securities Act for as long as each holds unregistered securities. See “Description of Share Capital and Memorandum and Articles of Association—Shareholders’ Agreement—Demand Registration Rights.” We cannot predict the size of future issuances of our shares or the effect, if any, that future sales and issuances of shares would have on the market price of our class A shares.

Transformation into a public company may increase our costs and disrupt the regular operations of our business.

This offering will have a significant transformative effect on us. Our business historically has operated as a privately owned company, and we expect to incur significant additional legal, accounting, reporting and other expenses as a result of having publicly traded class A shares. We will also incur costs which we have not incurred previously, including, but not limited to, costs and expenses for directors’ fees, increased directors and officers insurance, investor relations, and various other costs of a public company.

We also anticipate that we will incur costs associated with corporate governance requirements, including requirements under the Sarbanes-Oxley Act of 2002, as amended, as well as rules implemented by the SEC and NYSE. We expect these rules and regulations to increase our legal and financial compliance costs and make some management and corporate governance activities more time-consuming and costly. These rules and regulations may make it more difficult and more expensive for us to obtain director and officer liability insurance, and we may be required to accept reduced policy limits and coverage or incur substantially higher costs to obtain the same or similar coverage. This could have an adverse impact on our ability to recruit and bring on a qualified independent board. We estimate the additional costs we will incur as a public company, including costs associated with corporate governance requirements, will be approximately $3.0 million on an annual basis.

The additional demands associated with being a public company may disrupt regular operations of our business by diverting the attention of some of our senior management team away from revenue producing activities to management and administrative oversight, adversely affecting our ability to attract and complete business opportunities and increasing the difficulty in both retaining professionals and managing and growing our businesses. Any of these effects could harm our business, financial condition and results of operations.

As a foreign private issuer, we are permitted to, and we will, rely on exemptions from certain NYSE corporate governance standards applicable to U.S. issuers, including the requirement that a majority of an issuer’s directors consist of independent directors. This may afford less protection to holders of our Class A shares.

Section 303A of the NYSE Listing Rules requires listed companies to have, among other things, a majority of their board members be independent, and to have independent director oversight of executive compensation, nomination of directors and corporate governance matters. As a foreign private issuer, however, we are permitted to, and we will, follow home country practice in lieu of the above requirements. British Virgin Islands law, the law of our country of incorporation, does not require that a majority of our board to consist of independent directors or the implementation of a nominating and corporate governance committee, and our board may thus not include, or include fewer, independent directors than would be required if we were subject to the NYSE Listing Rule. Since a majority of our board of directors may not consist of independent directors as long as we rely on the foreign private issuer exemption to the NYSE Listing Rule, our board’s approach may, therefore, be different from that of a board with a majority of independent directors, and as a result, the management oversight of our Company may be more limited than if we were subject to the NYSE Listing Rule.

Certain Risks Relating to Investing in a British Virgin Islands Company

We are a British Virgin Islands company and it may be difficult for you to obtain or enforce judgments against us or our executive officers and directors in the United States.

We are incorporated under the laws of the British Virgin Islands. Most of our assets are located outside the United States. Furthermore, most of our directors and officers and the experts named in this prospectus reside outside the United States, and most of their assets are located outside the United States. As a result, you may find it difficult to effect service of process within the United States upon these persons or to enforce outside the United States judgments obtained against us or these persons in U.S. courts, including judgments in actions predicated upon the civil liability provisions of the U.S. federal securities laws. Likewise, it may also be difficult for you to enforce in U.S. courts judgments obtained against us or these persons in courts located in jurisdictions outside the United States, including actions predicated upon the civil liability provisions of the U.S. federal securities laws. It may also be difficult for an investor to bring an action in a British Virgin Islands court predicated upon the civil liability provisions of the U.S. federal securities laws against us or these persons.

As there is no treaty in force on the reciprocal recognition and enforcement of judgments in civil and commercial matters between the United States and the British Virgin Islands, courts in the British Virgin Islands will not automatically recognize and enforce a final judgment rendered by a U.S. court.

Any final and conclusive monetary judgment obtained against us in U.S. courts, for a definite sum, may be treated by the courts of the British Virgin Islands as a cause of action in itself so that no retrial of the issued would be necessary, provided that in respect of the U.S. judgment:

•

the U.S. court issuing the judgment had jurisdiction in the matter and we either submitted to such jurisdiction or were resident or carrying on business within such jurisdiction and were duly served with process;

•

the judgment given by the U.S. court was not in respect of penalties, taxes, fines or similar fiscal or revenue obligations of ours;

•

in obtaining judgment there was no fraud on the part of the person in whose favor judgment was given or on the part of the court;

•

recognition or enforcement of the judgment in the British Virgin Islands would not be contrary to public policy; and

•

the proceedings pursuant to which judgment were obtained were not contrary to public policy.

Under our articles of association, we indemnify and hold our directors harmless against all claims and suits brought against them, subject to limited exceptions. Under our articles of association, to the extent allowed by law, the rights and obligations among or between us, any of our current or former directors, officers and employees and any current or former shareholder will be governed exclusively by the laws of the British Virgin Islands and subject to the jurisdiction of the British Virgin Islands courts, unless those rights or obligations do not relate to or arise out of their capacities as such. Although there is doubt as to whether U.S. courts would enforce this provision in an action brought in the United States under U.S. securities laws, this provision could make enforcing judgments obtained outside the British Virgin Islands more difficult to enforce against our assets in the British Virgin Islands or jurisdictions that would apply British Virgin Islands law.

You may have more difficulty protecting your interests than you would as a shareholder of a U.S. corporation.

Our affairs are governed by the provisions of our memorandum of association and articles of association, as amended and restated from time to time, and by the provisions of applicable British Virgin Islands law. The rights of our shareholders and the responsibilities of our directors and officers under the British Virgin Islands law are different from those applicable to a corporation incorporated in the United States. There may be less publicly available information about us than is regularly published by or about U.S. issuers. Also, the British Virgin Islands regulations governing the securities of British Virgin Islands companies may not be as extensive as those in effect in the United States, and the British Virgin Islands law and regulations in respect of corporate governance matters may not be as protective of minority shareholders as state corporation laws in the United States. Therefore, you may have more difficulty protecting your interests in connection with actions taken by our directors and officers or our principal shareholders than you would as a shareholder of a corporation incorporated in the United States.

You may not be able to participate in future equity offerings, and you may not receive any value for rights that we may grant.

Under our memorandum and articles of association, existing shareholders are entitled to preemptive subscription rights in the event of capital increases. However, our articles of association also provide that such preemptive subscription rights do not apply to certain issuances of securities by us, including (i) pursuant to any employee compensation plans; (ii) as consideration for (a) any merger, consolidation or purchase of assets or (b) recapitalization or reorganization; (iii) in connection with a pro rata division of shares or dividend in specie or distribution; or (iv) in a bona fide public offering that has been registered with the SEC.

PRESENTATION OF FINANCIAL AND OTHER INFORMATION

All references to “U.S. dollars,” “dollars” or “$” are to the U.S. dollar. All references to “Argentine pesos ” or “ARS$” are to the Argentine peso . All references to “Brazilian reais ” or “R$” are to the Brazilian real . All references to “Mexican pesos ” or “Ps.” are to the Mexican peso . All references to “Venezuelan bolívares ” or “Bs” are to the Venezuelan bolívar , the legal currency in Venezuela. All references to “Venezuelan bolívares fuertes ” or “Bs.F” are to the Venezuelan bolívar fuerte , which is equal to 1,000 bolívares and is subject to conversion as per the Currency Conversion Law. See “Exchange Rates” for information regarding exchange rates for the Argentine, Brazilian, Mexican and Venezuelan currencies since January 1, 2005.

Financial Statements

We maintain our books and records in U.S. dollars and prepare our financial statements in accordance with accounting principles and standards generally accepted in the United States, or U.S. GAAP.

The financial information contained in this prospectus includes our consolidated financial statements at December 31, 2010 and 2009 and for the years ended December 31, 2010, 2009 and 2008, which have been audited by Pistrelli, Henry Martin y Asociados S.R.L., member firm of Ernst & Young Global, or E&Y, as stated in their report included elsewhere in this prospectus. We were incorporated on December 9, 2010 as a direct, wholly-owned subsidiary of Arcos Dorados Limited, the prior holding company for the Arcos Dorados business. On December 13, 2010, Arcos Dorados Limited effected a downstream merger into and with us, with us as the surviving entity. The merger was accounted for as a reorganization of entities under common control in a manner similar to a pooling of interest and the consolidated financial statements reflect the historical consolidated operations of Arcos Dorados Limited as if the reorganization structure had existed since Arcos Dorados Limited was incorporated in July 2006.

Our fiscal year ends December 31. References in this prospectus to a fiscal year, such as “fiscal year 2010,” relate to our fiscal year ended on December 31 of that calendar year.

Operating Data

We operate McDonald’s-branded restaurants under two different operating formats: those directly operated by us, or Company-operated restaurants, and those operated by franchisees, or franchised restaurants. As of December 31, 2010, we operated or franchised 1,755 restaurants, of which we operated 1,292 (or 74%) and our franchisees operated 463 (or 26%). All references to “restaurants” are to our freestanding, food court, in-store and mall store restaurants and do not refer to our McCafé locations or Dessert Centers. Systemwide data represents measures for both our Company-operated restaurants and our franchised restaurants.

We are the majority stakeholder in several joint ventures with third parties that collectively own 24 restaurants. We consider these restaurants to be Company-operated restaurants. We also have granted developmental licenses to 12 restaurants. Developmental licensees own or lease the land and buildings on which their restaurants are located and pay a franchise fee to us in addition to the continuing franchise fee due to McDonald’s. We consider these restaurants to be franchised restaurants.

Other Financial Measures

We disclose in this prospectus a financial measure titled Adjusted EBITDA. We use Adjusted EBITDA to facilitate operating performance comparisons from period to period. Adjusted EBITDA is defined as our operating income plus depreciation and amortization plus/minus the following losses/gains included within other operating expenses, net and within general and administrative expenses in our statement of income: compensation expense related to an award granted to our CEO, incremental compensation expense related to a change in the valuation formula of our 2008 long-term incentive plan, gains from sale of property and equipment, write-off of property and equipment, contract termination losses and impairment of long-lived assets and goodwill.

We believe Adjusted EBITDA facilitates company-to-company operating performance comparisons by backing out potential differences caused by variations such as capital structures (affecting net interest expense and other financial charges), taxation (affecting income tax expense) and the age and book depreciation of facilities and equipment (affecting relative depreciation expense), which may vary for different companies for reasons unrelated to operating performance. In addition, we exclude compensation expense related to the award granted to our CEO due to its special nature; gains from sale of property and equipment not related to our core business; write-offs of property and equipment and impairment of long-lived assets and goodwill that do not result in cash payments; and contract termination losses due to its infrequent nature. In addition, in 2010 we excluded the incremental compensation expense recorded at the end of the year in connection with our 2008 long-term incentive plan because our decision in 2011 to replace the existing formula for determining the current value of the award with the price of our shares sold in this offering resulted in the remeasurement of our liability under the plan. Our management believes that disclosure of Adjusted EBITDA provides useful information to investors, financial analysts and the public in their evaluation of our operating performance.

Market Share and Other Information

Market data and certain industry forecast data used in this prospectus were obtained from internal reports and studies, where appropriate, as well as estimates, market research, publicly available information (including information available from the United States Securities and Exchange Commission website) and industry publications, including Euromonitor, Millward Brown Optimor, the United Nations Economic Commission for Latin America and the Caribbean, and the CIA World Factbook. Industry publications generally state that the information they include has been obtained from sources believed to be reliable, but that the accuracy and completeness of such information is not guaranteed. Similarly, internal reports and studies, estimates and market research, which we believe to be reliable and accurately extracted by us for use in this prospectus, have not been independently verified. However, we believe such data is accurate and agree that we are responsible for the accurate extraction of such information from such sources and its correct reproduction in this prospectus.

Basis of Consolidation

The accompanying consolidated financial statements have been prepared on the accrual basis of accounting and include the accounts of the Company and its subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation.

Rounding

We have made rounding adjustments to some of the figures included in this prospectus. Accordingly, numerical figures shown as totals in some tables may not be an arithmetic aggregation of the figures that preceded them.

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

This prospectus contains statements that constitute forward-looking statements. Many of the forward-looking statements contained in this prospectus can be identified by the use of forward-looking words such as “anticipate,” “believe,” “could,” “expect,” “should,” “plan,” “intend,” “estimate” and “potential,” among others.

Forward-looking statements appear in a number of places in this prospectus and include, but are not limited to, statements regarding our intent, belief or current expectations. Forward-looking statements are based on our management’s beliefs and assumptions and on information currently available to our management. Such statements are subject to risks and uncertainties, and actual results may differ materially from those expressed or implied in the forward-looking statements due to of various factors, including, but not limited to, those identified under the section entitled “Risk Factors” in this prospectus. These risks and uncertainties include factors relating to:

•

general economic, political, demographic and business conditions in Latin America and the Caribbean;

•

fluctuations in inflation and exchange rates in Latin America and the Caribbean;

•

our ability to implement our growth strategy;

•

the success of operating initiatives, including advertising and promotional efforts and new product and concept development by us and our competitors;

•

our ability to compete and conduct our business in the future;

•

changes in consumer tastes and preferences, including changes resulting from concerns over nutritional or safety aspects of beef, poultry, french fries or other foods or the effects of health pandemics and food-borne illnesses such as “mad cow” disease and avian influenza or “bird flu,” and changes in spending patterns and demographic trends, such as the extent to which consumers eat meals away from home;

•

the availability, location and lease terms for restaurant development;

•

our intention to focus on our restaurant reimaging plan;

•

our franchisees, including their business and financial viability and the timely payment of our franchisees’ obligations due to us and to McDonald’s;

•

our ability to comply with the requirements of the MFAs, including McDonald’s standards;

•

our decision to own and operate restaurants or to operate under franchise agreements;

•

the availability of qualified restaurant personnel for us and for our franchisees, and the ability to retain such personnel;

•

changes in commodity costs, labor, supply, fuel, utilities, distribution and other operating costs;

•

our ability, if necessary, to secure alternative distribution of supplies of food, equipment and other products to our restaurants at competitive rates and in adequate amounts, and the potential financial impact of any interruptions in such distribution;

•

changes in government regulation;

•

other factors that may affect our financial condition, liquidity and results of operations; and

•

other risk factors discussed under “Risk Factors.”

Forward-looking statements speak only as of the date they are made, and we do not undertake any obligation to update them in light of new information or future developments or to release publicly any revisions to these statements in order to reflect later events or circumstances or to reflect the occurrence of unanticipated events.

USE OF PROCEEDS

We expect to receive total estimated net proceeds of approximately $163.5 million, based on the midpoint of the range set forth on the cover page of this prospectus after deducting estimated underwriting discounts and commissions and expenses of the offering that are payable by us. Each $1.00 increase (decrease) in the public offering price per class A share would increase (decrease) our net proceeds, after deducting estimated underwriting discounts and commissions and expenses, by approximately $12.0 million. We will not receive any of the net proceeds from the sale of class A shares by the selling shareholders.

We have agreed with McDonald’s that we will use $150.0 million of the proceeds from this offering for capital expenditures, including for opening and reimaging restaurants, which expenditures will be in addition to our restaurant opening and reinvestment commitments under the MFAs described under “Our Relationship with McDonald’s—The MFAs—Restaurant Opening Plan and Reinvestment Plan.”

DIVIDENDS AND DIVIDEND POLICY

On March 23, 2011, we declared a dividend of $12.5 million with respect to our results of operations for fiscal year 2010, which will be paid in full on April 1, 2011. Since the Acquisition, the only other dividend we have declared is a $40 million dividend with respect to our results of operations for fiscal year 2009, which has been paid in full. Our board of directors will consider the legal requirements with regard to our net income and retained earnings and our cash flow generation, targeted leverage ratios and debt covenant requirements in determining the amount of dividends to be paid, if any. Dividends may only be paid in accordance with the provisions of our memorandum and articles of association and Section 57 of the BVI Business Companies Act, 2004 (as amended) and after having fulfilled our capital expenditures program and after satisfying our indebtedness and liquidity thresholds, in that order. Pursuant to our memorandum and articles of association, all dividends unclaimed for three years after having been declared may be forfeited by a resolution of directors for the benefit of the Company. See “Description of Share Capital and Memorandum and Articles of Association.”

CAPITALIZATION

The table below sets forth our capitalization (defined as long-term debt and shareholders’ equity) as of December 31, 2010 derived from our audited consolidated financial statements prepared in accordance with U.S. GAAP:

•

on an actual basis;

•

as adjusted for the redemption of 41,882,966 shares (25,129,780 class A shares and 16,753,186 class B shares) effective as of March 16, 2011 in connection with the split-off of the Axis business and the distribution of dividends declared on March 23, 2011; and

•

as further adjusted to give effect to our sale of the class A shares in the offering, and the receipt of approximately $163.5 million in estimated net proceeds, considering an offering price of $14.00 per class A share (the midpoint of the range set forth on the cover of this prospectus), after deduction of the underwriting discounts and commissions and estimated offering expenses payable by us in connection with the offering, and the use of proceeds therefrom.

Investors should read this table in conjunction with our consolidated financial statements included in this prospectus.


	As of December 31, 2010
	Actual			As Adjusted			As Further Adjusted
	(in thousands of U.S. dollars)
Cash and cash equivalents	$	208,099		$	160,724		$	324,226
Long-term debt, excluding current portion		451,423			451,423			451,423
Shareholders’ equity:
420,000,000 class A shares, no par value, authorized and 145,129,780 such shares issued and outstanding at December 31, 2010, actual; 420,000,000 class A shares, no par value, authorized and 120,000,000 such shares issued and outstanding at December 31, 2010, as adjusted; 420,000,000 class A shares, no par value, authorized and 132,461,539 such shares issued and outstanding at December 31, 2010, as further adjusted		226,528			199,373			362,875
80,000,000 class B shares, no par value, authorized and 96,753,186 such shares issued and outstanding at December 31, 2010, actual; 80,000,000 class B shares, no par value, authorized, issued and outstanding at December 31, 2010, as adjusted; 80,000,000 class B shares, no par value, authorized, issued and outstanding at December 31, 2010, as further adjusted(1)		151,018			132,915			132,915
Additional paid-in capital		(2,468	)		(2,468	)		(2,468	)
Accumulated other comprehensive loss		(98,664	)		(98,664	)		(98,664	)
Retained earnings		271,387			258,887			258,887

Total Arcos Dorados Holdings Inc. shareholders’ equity		547,801			490,043			653,545
Non-controlling interests in subsidiaries		1,394			1,394			1,394
Total shareholders’ equity(2)		549,195			491,437			654,939

Total capitalization(2)(3)		1,000,618			942,860			1,106,362

(1)	For a description of changes in our authorized capital, see Note 22 to our annual consolidated financial statements.

(2)	Each $1.00 increase (decrease) in the offering price per class A share would increase (decrease) our total capitalization and shareholders’ equity by approximately $12.0 million.

(3)	Total capitalization consists of long-term debt (excluding current portion) plus total shareholders’ equity.

DILUTION

At December 31, 2010, we had a net tangible book value attributed to Arcos Dorados Holdings Inc. shareholders of $500.5 million, corresponding to a net tangible book value of $2.07 per share. Net tangible book value represents the amount of our total assets less our total liabilities, excluding goodwill and other intangible assets, divided by 241,882,966, the total number of our shares outstanding at December 31, 2010 after giving retrospective effect to the stock split approved after year-end.

After giving effect to the redemption of 41,882,966 of our shares in consideration for the split-off of our Axis business and to the distribution of dividends declared on March 23, 2011, our adjusted net tangible book value as of December 31, 2010 would have been $442.8 million, corresponding to an adjusted net book value of $2.21 per share based on the number of outstanding shares at the date of this prospectus of 200,000,000.

After giving effect to the split-off of the Axis business, the distribution of dividends, and the sale by us of the 12,461,539 class A shares offered by us in the offering, and considering an offering price of $14.00 per class A share (the midpoint of the range set forth on the cover of this prospectus), after deducting the estimated underwriting discounts and commissions and estimated offering expenses payable by us, our net tangible book value estimated at December 31, 2010 would have been approximately $606.3 million, representing $2.85 per share. This represents an immediate increase in net tangible book value of $0.64 per share to existing shareholders and an immediate dilution in net tangible book value of $11.15 per share to new investors purchasing class A shares in this offering. Dilution for this purpose represents the difference between the price per class A shares paid by these purchasers and net tangible book value per common share immediately after the completion of the offering.

The following table illustrates this dilution to new investors purchasing class A shares in the offering.


Net tangible book value per class A share at December 31, 2010	$	2.07
Increase in net tangible book value per class A share attributable to the split-off of our Axis business		0.21
Decrease in net tangible book value per class A share attributable to the distribution of dividends		(0.06	)
Adjusted net tangible book value per class A share at December 31, 2010		2.21
Increase in net tangible book value per class A share attributable to new investors		0.64
Pro forma net tangible book value per class A share after the offering		2.85
Dilution per class A share to new investors		11.15
Percentage of dilution in net tangible book value per class A share for new investors		80	%

Each $1.00 increase (decrease) in the offering price per class A share, respectively, would increase (decrease) the net tangible book value after this offering by $0.06 per class A share and the dilution to investors in the offering by $0.94 per class A share.

EXCHANGE RATES

In 2010, 82.3% of our total revenues was derived from our restaurants in Argentina, Brazil, Mexico, Puerto Rico and Venezuela. While we maintain our books and records in U.S. dollars, our revenues are conducted in the local currency of the territories in which we operate, and as such may be affected by changes in the local exchange rate to the U.S. dollar.

Argentina

On January 6, 2002, the Argentine federal congress ended ten years of U.S. dollar-Argentine peso parity, eliminating the requirement that the Central Bank of Argentina maintain a certain level of reserves and granting the executive branch the power to set the exchange rate between the Argentine peso and foreign currencies and issue regulations related to the foreign exchange market. As of January 11, 2002, the Argentine peso /U.S. dollar exchange rate floated freely.

Heightened demand for limited U.S. dollars caused the Argentine peso to trade well above the rate of one Argentine peso per one U.S. dollar that had been previously established. Since the economic crisis in Argentina that began in December 2001, the Argentine peso /U.S. dollar exchange rate has fluctuated considerably. In 2002, an executive order was enacted that established a single free foreign exchange market that required all foreign exchange transactions to be carried out at a rate agreed upon between parties in accordance with the requirements of the Central Bank of Argentina. The Argentine peso depreciated 2.3% against the U.S. dollar in 2007, 9.5% in 2008, 10.4% in 2009 and 4.7% in 2010.

For the last few years, the Argentine government has maintained a policy of limited-intervention in the foreign exchange markets, conducting periodic transactions for the purchase or sale of U.S. dollars. We cannot assure you that the Argentine government will maintain its current policies with regard to the Argentine peso or that the Argentine peso will not further depreciate or appreciate significantly in the future.

The following table sets forth, for the periods indicated, the high, low, average and period-end exchange rates for the purchase of U.S. dollars expressed in Argentine pesos per U.S. dollar. The average rate is calculated by using the average of Argentina’s Central Bank reported exchange rates on each day during a monthly period and on the last day of each month during an annual period. As of March 23, 2011 the exchange rate for the purchase of U.S. dollars as reported by Argentina’s Central Bank was ARS$4.042 per U.S. dollar.


	Period- End		Average for Period		Low		High
	(Argentine *pesos* per U.S. dollar)
	ARS$		ARS$		ARS$		ARS$
Year Ended December 31:
2006		3.070		3.078		3.031		3.107
2007		3.151		3.120		3.055		3.180
2008		3.454		3.162		3.013		3.454
2009		3.797		3.729		3.450		3.855
2010		3.976		3.912		3.794		3.986
Quarter Ended:
March 31, 2010		3.876		3.840		3.794		3.876
June 30, 2010		3.932		3.902		3.868		3.933
September 30, 2010		3.961		3.942		3.931		3.972
December 31, 2010		3.976		3.967		3.792		3.986
Month Ended:
September 30, 2010		3.961		3.952		3.944		3.972
October 31, 2010		3.957		3.397		3.950		3.961
November 30, 2010		3.984		3.968		3.957		3.984
December 31, 2010		3.976		3.978		3.973		3.986
January 2011		4.001		3.981		3.972		4.001
February 2011		4.031		4.022		4.009		4.031
March 2011 (through March 23)		4.042		4.034		4.029		4.042

Exchange Controls

Prior to December 1989, the Argentine foreign exchange market was subject to exchange controls. From December 1989 until April 1991, Argentina had a freely floating exchange rate for all foreign currency transactions, and the transfer of dividend payments in foreign currency abroad and the repatriation of capital were permitted without prior approval of the Central Bank of Argentina. From April 1, 1991, when the Convertibility Law became effective, until December 21, 2001, when the Central Bank of Argentina decided to close the foreign exchange market, the Argentine currency was freely convertible into U.S. dollars.

In January 2002, the Argentine government imposed a number of monetary and currency exchange control measures through Decree 1570/01, which included restrictions on the free disposition of funds deposited with banks and tight restrictions on transferring funds abroad without the Central Bank of Argentina’s prior authorization subject to specific exceptions for transfers related to foreign trade. Beginning in January 2003, the Central Bank of Argentina has gradually eased these restrictions and expanded the list of transfers of funds abroad that do not require its prior authorization. However, in June 2003 the Argentine government instituted restrictions on capital flows into Argentina, which mainly consisted of a prohibition against the transfer abroad of any funds until 180 days after their entry into the country.

In June 2005, the Argentine government issued Decree 616/05, which established additional restrictions over all capital flows that could result in the decreased availability of international credit. Pursuant to the decree, all private sector indebtedness of physical persons or corporations in Argentina are required to be agreed upon and repaid not prior to 365 days from the date of entry of the funds into Argentina, regardless of the form of repayment. The decree outlines several types of transactions that are exempt from its requirements, including foreign trade financings and primary offerings of debt securities issued pursuant to a public offering and listed on a self-regulated market.

In addition, section 3 of the decree stipulates that all capital inflows within the private sector to the local exchange market of physical persons or corporations within Argentina (excluding foreign trade financings and primary offerings of debt securities issued pursuant to a public offering and listed on a self-regulated market), as well as all capital inflows of non-residents received by the local exchange market destined for local money holdings, acquisition of active or passive private sector financings (financial or non-financial), excluding foreign direct investment and primary offerings of debt securities issued pursuant to a public offering and listed on a self-regulated market and investments in securities issued by the public sector that are acquired in secondary markets, must meet certain requirements described in section 4 of the decree, as outlined below:

•

the funds may be transferred only outside the local exchange market after a 365-day period from the date of entry of the funds into Argentina;

•

any amounts resulting from the exchange of the funds are to be credited to an account within the Argentine banking system;

•

a non-transferable, non-interest-bearing deposit must be maintained for a term of 365 calendar days, in an amount equal to 30% of any inflow of funds to the local foreign exchange market arising from certain enumerated transactions; and

•

the deposit shall be in U.S. dollars in any of the financial entities of Argentina and may not be used as collateral or guaranty for any credit transaction. Any breach to the provisions of Decree 616/05 is subject to criminal penalties of the Exchange Regime.

In addition, on November 16, 2005, the Ministry of Economy and Production issued Resolution 637/05, pursuant to which Decree 616/05 was regulated, providing that any inflow of funds to the local exchange market in connection with an initial public offering of securities, bonds or certificates issued by a trustee under a trust,

whether or not the trust is publicly offered and listed in a self-regulated market, shall comply with all requirements provided for section 4 of Decree 616/05 whenever those requirements are applicable to the inflow of funds to the local exchange market in connection with the acquisition of any of the assets under the trust.

Regarding payment by local residents of services rendered to them, there are no restrictions on remittances abroad for payment of services rendered by non-residents (Communication “A” 3826).

Interest Payments. Foreign currency necessary to pay interest on foreign indebtedness may be purchased and transferred abroad:

(a)

up to 15 days in advance of the relevant interest payment date and to pay interest accrued within such interest period;

(b)

to pay interest accrued during the period between the date of disbursement of the funds abroad and the date of settlement of the disbursed funds through the local foreign exchange market; provided that the amount of foreign currency so purchased is equal to the amount resulting from the difference between the interest accrued on the relevant foreign indebtedness and the earnings derived from the placement of the funds abroad, proof of which must be presented to the Central Bank of Argentina by the debtor; or

(c)

to pay interest accrued during the period between the date of disbursement of the funds and the date of settlement of the disbursed funds through the local foreign exchange market; provided that the funds disbursed abroad were credited in correspondent accounts of entities authorized to settle such funds through the local exchange market, within 48 business hours as from the date of their disbursement (Communication “A” 4643).

In order to proceed with remittances abroad for debt interest payments of all types, the entities involved must first verify that the debtor has complied with the reporting requirements imposed under Communication “A” 3602 dated May 7, 2002 and meets all other requirements set forth in Communication “A” 4177, paragraph 4.

Principal Repayments. Foreign currency necessary to pay principal on foreign indebtedness owed by the private non-financial sector may be acquired:

(a)

within 30 days prior to the stated maturity of the applicable obligation; provided that the funds disbursed under such obligation have remained in Argentina for at least 365 days; or

(b)

within the term necessary for performing the payment obligations, in the case of facilities entered into on or after February 11, 2002, when such payment obligations depend on the occurrence of specific conditions set forth in the related contracts, such as a cash flow excess clause or automatic cash reinvestment clause.

Principal Prepayments. The foreign currency required to prepay principal on foreign indebtedness may be acquired to make partial or full payments more than 30 days prior to the stated maturity of the relevant obligation, provided that (x) the funds disbursed under the debt facility have remained in Argentina for at least 365 days; (y) the amount in foreign currency to be prepaid does not exceed the current value of the portion of the debt being prepaid or (z) if the prepayment is financed totally or partially with a new cross-border loan or is made as part of a restructuring process with foreign creditors, the terms and conditions of the new financing and the net cash prepayment must not result in an increase in the present value of the debt being refinanced.

Dividends. Additionally, access to the local foreign exchange market is permitted for remittances abroad to pay earnings and dividends in so far as they arise from closed and audited balance sheets (Communication “A” 3859).

Brazil

On March 4, 2005, the Brazilian Monetary Council issued Resolution No. 3,265, providing for several changes in Brazilian foreign exchange regulation, including the unification of the foreign exchange markets into a single exchange market; the easing of several rules for acquisition of foreign currency by Brazilian residents; and the extension of the term for converting foreign currency derived from Brazilian exports. On May 29, 2008, the Brazilian Monetary Council issued Resolution No. 3,568, which expressly revoked Resolution 3,265 but maintained many of the regulatory aspects concerning the monetary policies already set by the revoked resolution. Resolution No. 3,568 also included in the Brazilian Exchange Market the operations related to receipts, payments and transfers to and from abroad through the use of debit and credit cards, as well as the transactions related to international postal transfers of money, including postal vouchers, and international postal reimbursements.

Resolution 3,568 established that, without prejudice to the duty of identifying customers, operations of foreign currency purchase or sale up to $3,000 or its equivalent in other currencies are not required to submit documentation relating to legal transactions underlying these foreign exchange operations. According to Resolution 3,568, the Central Bank of Brazil may define simplified forms to record operations of foreign currency purchases and sales of up to $3,000 or its equivalent in other currencies.

The Brazilian Monetary Council may issue further regulations in relation to foreign exchange transactions, as well as on payments and transfers of Brazilian currency between Brazilian residents and non-residents (such transfers being commonly known as the international transfer of reais ), including those made through the so-called non-resident accounts.

From 2001 until early 2003, the value of the Brazilian real declined against the U.S. dollar, primarily due to financial and political instability in Brazil and Argentina. According to the Central Bank of Brazil, in 2004, 2005, 2006 and 2007, however, the Brazilian real appreciated in relation to the U.S. dollar 8.8%, 13.4%, 9.5% and 20.5%, respectively. In 2008, the Brazilian real depreciated 31.9% in relation to the U.S. dollar, and in 2009 and 2010 the Brazilian real appreciated 34.2% and 4.3%, respectively, in relation to the U.S. dollar.

Although the Central Bank of Brazil has intervened occasionally to control movements in the foreign exchange rates, the exchange market may continue to be volatile as a result of capital movements or other factors, and, therefore, the Brazilian real may substantially decline or appreciate in value in relation to the U.S. dollar in the future.

The following table sets forth, for the periods indicated, the high, low, average and period-end exchange rates for the purchase of U.S. dollars expressed in Brazilian reais per U.S. dollar as reported by the Central Bank of Brazil. As of March 23, 2011, the exchange rate for the purchase of U.S. dollars as reported by the Central Bank of Brazil was R$1.660 per U.S. dollar.


	Period- End		Average for Period		Low		High
	(Brazilian *reais* per U.S. dollar)
	R$		R$		R$		R$
Year Ended December 31:
2006		2.138		2.215		2.059		2.371
2007		1.771		1.944		1.733		2.156
2008		2.337		2.030		1.559		2.500
2009		1.741		1.994		1.702		2.422
2010		1.666		1.759		1.655		1.881
Quarter Ended:
March 31, 2010		1.781		1.800		1.723		1.877
June 30, 2010		1.802		1.793		1.731		1.881
September 30, 2010		1.694		1.749		1.694		1.785
December 31, 2010		1.666		1.697		1.655		1.734
Month Ended:
September 30, 2010		1.694		1.720		1.694		1.744
October 31, 2010		1.701		1.684		1.655		1.711
November 30, 2010		1.716		1.713		1.680		1.734
December 31, 2010		1.666		1.693		1.666		1.712
January 2011		1.673		1.675		1.651		1.691
February 2011		1.661		1.668		1.661		1.678
March 2011 (through March 23)		1.660		1.663		1.646		1.676

Mexico

For the last few years, the Mexican government has maintained a policy of non-intervention in the foreign exchange markets, other than conducting periodic auctions for the purchase of U.S. dollars, and has not had in effect any exchange controls (although these controls have existed and have been in effect in the past). We cannot assure you that the Mexican government will maintain its current policies with regard to the Mexican peso or that the Mexican peso will not further depreciate or appreciate significantly in the future.

The following table sets forth, for the periods indicated, the high, low, average and period end free-market exchange rate for the purchase of U.S. dollars, expressed in nominal Mexican pesos per U.S. dollar, as reported by the Central Bank of Mexico in the Federal Official Gazette. All amounts are stated in Mexican pesos per U.S. dollar. The annual average rates reflect the average of month-end rates, and monthly average rates reflect the average of daily rates. As of March 23, 2011, the free-market exchange rate for the purchase of U.S. dollars as reported by the Central Bank of Mexico in the Federal Official Gazette as the rate of payment of obligations denominated in non-Mexican currency payable in Mexico was Ps.12.06 per U.S. dollar.


	Period- End		Average for Period		Low		High
	(Mexican *pesos* per U.S. dollar)
	Ps.		Ps.		Ps.		Ps.
Year Ended December 31:
2006		10.88		10.92		10.43		11.48
2007		10.90		10.94		10.66		11.27
2008		13.77		11.14		9.92		13.92
2009		13.07		13.50		12.60		15.37
2010		12.36		12.64		12.16		13.18
Quarter Ended:
March 31, 2010		12.33		12.76		12.33		13.18
June 30, 2010		12.84		12.57		12.16		13.18
September 30, 2010		12.60		12.80		12.48		13.17
December 31, 2010		12.36		12.39		12.21		12.60
Month Ended:
September 30, 2010		12.60		12.83		12.48		13.06
October 31, 2010		12.34		12.44		12.32		12.59
November 30, 2010		12.49		12.31		12.21		12.49
December 2010		12.36		12.40		12.33		12.55
January 2011		12.02		12.15		12.02		12.38
February 2011		12.17		12.08		11.99		12.19
March 2011 (through March 23)		12.06		12.04		11.92		12.12

Venezuela

Venezuela suspended foreign exchange trading on January 23, 2003 in response to a significant decrease in the amount of foreign currency generated from the sale of oil and an increase in the demand for foreign currency, which produced a decline in Venezuela’s reserves of international currencies. On February 5, 2003, the Venezuelan government adopted a series of exchange agreements, decrees and regulations establishing a new exchange control regime. The Comisión de Administración de Divisas , or CADIVI, administers, manages and controls the new exchange control regime. Purchases and sales of foreign currencies are centralized in the Central Bank of Venezuela. The Ministry of Finance and the Central Bank of Venezuela are responsible for setting the exchange rate with respect to the U.S. dollar and other currencies.

The following table sets forth, for the periods indicated, the exchange rates set by the Ministry of Finance and the Central Bank of Venezuela for the purchase and sale of U.S. dollars and the payment of external public debt in U.S. dollars, in each case expressed in nominal Venezuelan bolívares or bolívares fuertes , as applicable, per U.S. dollar.


	Purchase		Sale		Payment of External Public Debt
	(Venezuelan *bolívares* per U.S. dollar)
Period:	Bs.		Bs.		Bs.
February 5, 2003 through February 8, 2004		1,596.00		1,600.00		1,600.00
February 9, 2004 through March 2, 2005		1,915.20		1,920.00		1,920.00
March 3, 2005 through December 31, 2007		2,144.60		2,150.00		2,150.00

Purchase

Sale

Payment of
External
Public Debt

(Venezuelan bolívares fuertes

per U.S. dollar)

Bs.F

January 1, 2008 through January 7, 2010(1)

2.1446

2.1500


	Essential Goods		Non-essential Goods
	(Venezuelan *bolívares fuertes* per U.S. dollar)
	Bs.F		Bs.F
January 8, 2010 through December 31, 2010(1)		2.60		4.30

Purchase

Sale

Payment of
External
Public Debt

(Venezuelan bolívares fuertes

per U.S. dollar)

Bs.F

January 1, 2011 through March 23, 2011(1)

4.2893

4.3000

(1)	Effective January 1, 2008, the currency of Venezuela was converted to the bolívar fuerte , which represents one thousand bolívares .

The exchange control regime provides that all foreign currency generated through public or private sector operations must be sold to the Central Bank of Venezuela at the established exchange rate. In addition, all foreign currency that enters the country must be registered through banks and financial institutions authorized by CADIVI. If the acquisition of foreign currency by a private sector entity must be approved by CADIVI, the entity must prove, among other things, that its social security contributions and tax payments are up to date. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Factors Affecting Comparability of Results—Impact of Venezuelan Currency Controls and Related Accounting Changes on Our Results of Operations.”

loans. In 2009 and 2008, we exchanged bonds for $37.1 million and $38.0 million, respectively (at an average exchange rate of Bs.F5.19 and Bs.F3.76 per U.S. dollar in 2009 and 2008, respectively) and recorded a loss of $52.5 million and $28.5 million, respectively, in connection with the payment of intercompany loans.

On January 8, 2010, the Venezuelan government announced the devaluation of the bolívar fuerte and the creation of a two-tiered official exchange rate system. The official exchange rate moved from 2.15 bolívares fuertes per U.S. dollar to 2.60 bolívares fuertes per U.S. dollar for essential goods and to 4.30 bolívares fuertes per U.S. dollar for non-essential goods.

On December 30, 2010, the Venezuelan government announced the elimination of the official exchange rate for essential goods. Effective January 1, 2011, each U.S. dollar is valued at 4.2893 bolívares fuertes for purchases and 4.3000 bolívares fuertes for sales. In addition, the exchange rate is set at 4.3000 bolívares fuertes per U.S. dollar for the payment of external public debt.

In May 2010, the Central Bank of Venezuela increased its control of the bond-based exchange process and, as a result, bond-based exchanges may solely be conducted by the Central Bank of Venezuela. Consequently, the parallel exchange market in Venezuela ended, limiting companies’ ability to obtain foreign currency other than through foreign currency trades approved by and conducted through CADIVI or the Central Bank of Venezuela through SITME. Pursuant to the new system, companies without access to CADIVI can access SITME to convert a maximum cash equivalent of up to $50,000 per day or $350,000 per month of foreign currency at an exchange rate based on the range of prices for the purchase and sale of bonds published daily by the Central Bank of Venezuela. At December 31, 2010, this exchange rate was 5.30 bolívares fuertes per U.S. dollar. As a result of the foregoing, the acquisition of foreign currency by Venezuelan companies to honor foreign debt, pay dividends or otherwise move capital out of Venezuela is subject to the approval of CADIVI or the Central Bank of Venezuela, and to the availability of foreign currency within the guidelines set forth by the Venezuelan National Executive Power for the allocation of foreign currency.

MARKET INFORMATION

Prior to this offering, there has been no public market for our class A shares. We cannot assure that an active trading market will develop for our class A shares, or that our class A shares will trade in the public market subsequent to the offering at or above the initial public offering price.

SELECTED FINANCIAL AND OTHER INFORMATION

The selected balance sheet data as of December 31, 2010 and 2009 and the income statement data for the years ended December 31, 2010, 2009 and 2008 of Arcos Dorados Holdings Inc. are derived from the consolidated financial statements included elsewhere in this prospectus, which have been audited by Pistrelli, Henry Martin y Asociados S.R.L., member firm of Ernst & Young Global, or E&Y. The selected balance sheet data as of December 31, 2008 and 2007 and the income statement data for the year ended December 31, 2007 of Arcos Dorados Holdings Inc. are derived from consolidated financial statements audited by Pistrelli, Henry Martin y Asociados S.R.L., which are not included herein. We were incorporated on December 9, 2010 as a direct, wholly-owned subsidiary of Arcos Dorados Limited, the prior holding company for the Arcos Dorados business. On December 13, 2010, Arcos Dorados Limited effected a downstream merger into and with us, with us as the surviving entity. The merger was accounted for as a reorganization of entities under common control in a manner similar to a pooling of interest and the consolidated financial statements reflect the historical consolidated operations of Arcos Dorados Limited as if the reorganization structure had existed since Arcos Dorados Limited was incorporated in July 2006. We did not commence operations until the Acquisition on August 3, 2007, consequently, the income statement data for the year ended December 31, 2007 only includes five months of operations.

Included below is historical financial information of McDonald’s LatAm business prior to the date of the Acquisition. This financial information presents the combined results of operations and financial condition of McDonald’s LatAm business (as our predecessor business). The selected income statement and balance sheet data as of and for the year ended December 31, 2006 are derived from the combined financial statements of McDonald’s LatAm business, which have been audited by Ernst & Young LLP (United States), member firm of Ernst & Young Global, and are not included herein. The summary income statement data for the seven-month period ended July 31, 2007 are derived from the combined financial statements of McDonald’s LatAm business, which have been audited by Pistrelli, Henry Martin y Asociados S.R.L., member firm of Ernst & Young Global, and are not included herein.


	Arcos Dorados												Predecessor(1)
	For the Years Ended December 31,												January 1, 2007 to July 31, 2007			For the Year Ended December 31, 2006
	2010			2009			2008			2007(2)			January 1, 2007 to July 31, 2007			For the Year Ended December 31, 2006
	(in thousands of U.S. dollars)
Income Statement Data:
Sales by Company-operated restaurants	$	2,894,466		$	2,536,655		$	2,480,897		$	895,429		$	1,078,194		$	1,549,783
Revenues from franchised restaurants		123,652			128,821			125,945			45,910			46,881			63,718

Total revenues		3,018,118			2,665,476			2,606,842			941,339			1,125,075			1,613,501
Company-operated restaurant expenses:
Food and paper		(1,023,464	)		(929,718	)		(902,305	)		(332,547	)		(416,615	)		(592,644	)
Payroll and employee benefits		(569,084	)		(491,214	)		(461,602	)		(161,871	)		(196,510	)		(291,895	)
Occupancy and other operating expenses		(765,777	)		(667,438	)		(647,152	)		(238,765	)		(307,391	)		(453,295	)
Royalty fees		(140,973	)		(121,901	)		(118,980	)		(44,878	)		(40,660	)		(30,462	)
Franchised restaurants—occupancy expenses		(37,634	)		(42,327	)		(42,416	)		(13,979	)		(18,491	)		(27,992	)
General and administrative expenses		(254,165	)		(189,507	)		(186,098	)		(71,898	)		(78,081	)		(131,929	)
Other operating expenses, net		(22,464	)		(16,562	)		(26,095	)		(6,310	)		(16,015	)		(71,459	)

Total operating costs and expenses		(2,813,561	)		(2,458,667	)		(2,384,648	)		(870,248	)		(1,073,763	)		(1,599,676	)

Operating income		204,557			206,809			222,194			71,091			51,312			13,825
Net interest expense		(41,613	)		(52,473	)		(26,272	)		(13,978	)		(33,363	)		(25,956	)
Loss from derivative instruments		(32,809	)		(39,935	)		(2,620	)		(13,672	)		—			—
Foreign currency exchange results(3)		3,237			(14,098	)		(74,884	)		(3,542	)		—			—
Other non-operating expenses, net(3)		(23,630	)		(1,240	)		(1,934	)		(43	)		(2,095	)		(8,654	)

Income (loss) before income taxes		109,742			99,063			116,484			39,856			15,854			(20,785	)
Income tax expense		(3,450	)		(18,709	)		(12,067	)		(17,511	)		(31,922	)		(26,367	)

Net income (loss)		106,292			80,354			104,417			22,345			(16,068	)		(47,152	)
Less: Net income attributable to non-controlling interests		(271	)		(332	)		(1,375	)		(43	)		—			—

Net income (loss) attributable to Arcos Dorados Holdings Inc./Predecessor		106,021			80,022			103,042			22,302			(16,068	)		(47,152	)

Earnings per share:
Basic net income per common share attributable to Arcos Dorados Holdings Inc.	$	0.44		$	0.33		$	0.43		$	—		$	—		$	—

Arcos Dorados

Predecessor(1)

As of December 31,

As of
December 31,
2006

2010

2009

2008

2007

(in thousands of U.S. dollars)

Balance Sheet Data(4):

Cash and cash equivalents

208,099

167,975

105,982

92,580

102,383

Total current assets

552,355

394,011

380,275

382,801

292,717

Property and equipment, net

911,730

785,862

709,667

724,673

1,243,232

Total non-current assets

1,231,911

1,088,937

923,488

862,797

1,394,964

Total assets

1,784,266

1,482,948

1,303,763

1,245,598

1,687,681

Accounts payable

186,700

124,560

126,403

125,495

100,041

Short-term debt and current portion of long-term debt

17,947

11,046

15,306

216

6,408

Total current liabilities

605,148

396,810

388,357

375,566

292,724

Long-term debt, excluding current portion

451,423

454,461

351,870

352,460

19,718

Total non-current liabilities

629,923

632,092

474,654

462,253

135,856

Total liabilities

1,235,071

1,028,902

863,011

837,819

428,580

Total shareholders’ equity

549,195

454,046

440,752

407,779

1,259,101

Total liabilities and shareholders’ equity

1,784,266

1,482,948

1,303,763

1,245,598

1,687,681


	As of and for the Years Ended December 31,
	2010			2009			2008			2007(2)
	(in thousands of U.S. dollars, except percentages)
Other Data:
Total Revenues
Brazil	$	1,595,571		$	1,200,742		$	1,237,208		$	461,868
Caribbean division		260,617			244,774			231,734			90,796
NOLAD		305,017			240,333			232,083			91,932
SLAD(5)		856,913			979,627			905,817			296,743

Total		3,018,118			2,665,476			2,606,842			941,339

Operating Income
Brazil	$	208,102		$	127,291		$	102,819		$	23,846
Caribbean division		11,189			10,448			12,454			8,602
NOLAD		(16,718	)		(17,252	)		(4,863	)		2,536
SLAD(5)		66,288			108,261			119,716			29,642
Corporate and others and purchase price allocation		(64,304	)		(21,939	)		(7,932	)		6,465

Total		204,557			206,809			222,194			71,091

Operating Margin(6)
Brazil		13.0	%		10.6	%		8.3	%		5.2	%
Caribbean division		4.3			4.3			5.4			9.5
NOLAD		(5.5	)		(7.2	)		(2.1	)		2.8
SLAD(5)		7.7			11.1			13.2			10.0

Total		6.8			7.8			8.5			7.6

Adjusted EBITDA(7)
Brazil	$	250,606		$	160,037		$	144,965		$	39,800
Caribbean division		23,556			21,167			22,013			13,099
NOLAD		15,400			3,918			15,961			10,655
SLAD(5)		83,998			129,889			138,683			36,530
Corporate and others		(74,446	)		(48,628	)		(33,648	)		(9,187	)

Total		299,114			266,383			287,974			90,897

Adjusted EBITDA Margin(8)
Brazil		15.7	%		13.3	%		11.7	%		8.6	%
Caribbean division		9.0			8.6			9.5			14.4
NOLAD		5.0			1.6			6.9			11.6
SLAD(5)		9.8			13.3			15.3			12.3

Total		9.9			10.0			11.0			9.7

Other Financial Data:
Working capital(9)	$	(52,793	)	$	(2,799	)	$	(8,082	)	$	7,235
Capital expenditures(10)		176,173			101,166			167,893			45,174

Other Operating Data:
Systemwide comparable sales growth(11)(12)		14.9	%		5.5	%		—			—
Brazil		17.5			2.7			—			—
Caribbean division		4.7			4.2			—			—
NOLAD		9.1			(1.7	)		—			—
SLAD		16.1			12.2			—			—
Systemwide average restaurant sales(12)(13)	$	2,288		$	2,147		$	2,186			—
Systemwide sales growth(12)(14)		10.2	%		0.9	%		—			—
Brazil		34.3			(2.4	)		—			—
Caribbean division		3.8			4.6			—			—
NOLAD		19.2			(12.3	)		—			—
SLAD		(20.2	)		9.2			—			—


	As of December 31,
	2010		2009		2008		2007
Number of systemwide restaurants		1,755		1,680		1,640		1,593
Brazil		616		578		564		553
Caribbean division		142		145		145		142
NOLAD		476		456		448		427
SLAD		521		501		483		471
Number of Company-operated restaurants		1,292		1,226		1,155		1,092
Brazil		453		432		426		422
Caribbean division		91		93		89		87
NOLAD		310		289		242		195
SLAD		438		412		398		388
Number of franchised restaurants		463		454		485		501
Brazil		163		146		138		131
Caribbean division		51		52		56		55
NOLAD		166		167		206		232
SLAD		83		89		85		83

(1)	The financial data for our predecessor is not directly comparable to our financial data for several reasons, including:

•

Predecessor data includes royalties that are lower as a percentage of sales than the royalties we are required to pay pursuant to the MFAs.

•

Predecessor data does not include general and administrative expenses related to corporate functions.

•

(2)	Data for the year ended December 31, 2007 includes only five months of operations, beginning August 3, 2007, the date on which we commenced operations in the Territories.

(3)	For the year ended December 31, 2006 and the seven months ended July 31, 2007, “Other non-operating expenses, net” includes “Foreign currency exchange results.”

(4)	Does not reflect the split-off of the Axis business. See “Business—Our Operations—Supply and Distribution.”

(5)

Changes on Our Results of Operations” for information regarding the translation of the results of our Venezuelan operations.

(6)	Operating margin is operating income divided by total revenues, expressed as a percentage.

(7)

Adjusted EBITDA is a measure of our performance that is reviewed by our management. Adjusted EBITDA does not have a standardized meaning and, accordingly, our definition of Adjusted EBITDA may not be comparable to Adjusted EBITDA as used by other companies. For our definition of Adjusted EBITDA, see “Presentation of Financial and Other Information—Other Financial Measures.”

Presented below is the reconciliation between net income and Adjusted EBITDA:


	For the Years Ended December 31,
Consolidated Adjusted EBITDA Reconciliation	2010			2009			2008			2007(2)
	(in thousands of U.S. dollars)
Net income attributable to Arcos Dorados Holdings Inc.	$	106,021		$	80,022		$	103,042		$	22,302
Plus (Less):
Net interest expense		41,613			52,473			26,272			13,978
Loss from derivative instruments		32,809			39,935			2,620			13,672
Foreign currency exchange results		(3,237	)		14,098			74,884			3,542
Other non-operating expenses, net		23,630			1,240			1,934			43
Income tax expense		3,450			18,709			12,067			17,511
Net income attributable to non-controlling interests		271			332			1,375			43

Operating income		204,557			206,809			222,194			71,091

Plus (Less):
Items excluded from computation that affect operating income:
Depreciation and amortization		60,585			54,169			49,496			18,263
Compensation expense related to the award granted to our CEO		16,392			4,334			11,060			—
Gains from sale of property and equipment		(5,299	)		(8,465	)		(4,592	)		—
Write-offs of property and equipment		2,635			9,434			5,144			1,543
Impairment of long-lived assets		4,668			—			—			—
Incremental compensation expense related to our long-term incentive plan		15,576			—			—			—
Contract termination losses		—			—			3,606			—
Impairment of goodwill		—			102			1,066			—

Adjusted EBITDA		299,114			266,383			287,974			90,897

(8)	Adjusted EBITDA margin is Adjusted EBITDA divided by total revenues, expressed as a percentage.

(9)	Working capital equals current assets minus current liabilities.

(10)	Includes property and equipment expenditures and purchase of restaurant businesses.

(11)

(12)

(13)	Systemwide average restaurant sales is calculated by dividing our sales for the relevant period by the arithmetic mean of the number of our restaurants at the beginning and end of such period.

(14)	Systemwide sales growth refers to the change in sales by all of our restaurants, whether operated by us or by our franchisees, from one period to another.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL

CONDITION AND RESULTS OF OPERATIONS

The following discussion of our financial condition and results of operations should be read in conjunction with our audited consolidated financial statements as of and for the years ended December 31, 2010, 2009 and 2008 and the notes thereto, included elsewhere in this prospectus, as well as the information presented under “Presentation of Financial and Other Information” and “Selected Financial and Other Information.”

The following discussion contains forward-looking statements that involve risks and uncertainties. Our actual results may differ materially from those discussed in the forward-looking statements as a result of various factors, including those set forth in “Cautionary Statement Regarding Forward-Looking Statements” and “Risk Factors.”

Overview

We received exclusive master franchising rights from McDonald’s for the Territories on August 3, 2007 when we acquired the operations of McDonald’s in the Territories and entered into MFAs, under which we directly operate or franchise McDonald’s restaurants in Latin America and the Caribbean. As of December 31, 2010, of our 1,755 McDonald’s-branded restaurants in the Territories, 1,292 (or 74%) were Company-operated restaurants and 463 (or 26%) were franchised restaurants. Under our conventional franchise arrangements, franchisees provide a portion of the required capital by initially investing in the equipment, signs, seating and décor of their restaurant businesses, and by reinvesting in the business over time. We typically own or secure long-term leases for the land and building for both Company-operated and franchised restaurant sites. The average term remaining on our long-term leases was approximately 8.3 years as of December 31, 2010. This maintains long-term occupancy rights, helps control related costs and assists in alignment of our goals with those of franchisees.

We divide our operations into four geographical divisions: Brazil; the Caribbean division, consisting of Aruba, Curaçao, French Guiana, Guadeloupe, Martinique, Puerto Rico and the U.S. Virgin Islands of St. Croix and St. Thomas; the North Latin America division, or NOLAD, consisting of Costa Rica, Mexico and Panama; and the South Latin America division, or SLAD, consisting of Argentina, Chile, Colombia, Ecuador, Peru, Uruguay and Venezuela. As of December 31, 2010, 35.1% of our restaurants were located in Brazil, 29.7% in SLAD, 27.1% in NOLAD and 8.1% in the Caribbean division. We focus on our customers by managing operations at the local level, including marketing campaigns and promotions, menu management and monitoring customer satisfaction, while leveraging our size by conducting administrative and strategic functions at the divisional or corporate level, as appropriate.

We are required to report information about operating segments in our financial statements in accordance with ASC Topic 280. Operating segments are components of a company about which separate

financial information is available that is regularly evaluated by the chief operating decision maker(s) in deciding how to allocate resources and assess performance. We have determined that our reportable segments are those that are based on our method of internal reporting, and we manage our business and operations through our four geographical divisions (Brazil, the Caribbean division, NOLAD and SLAD). The accounting policies of the segments are the same as those for the Company on a consolidated basis.

Principal Income Statement Line Items

Revenues

We generate revenues primarily from two sources: sales by Company-operated restaurants and revenue from franchised restaurants, which primarily consists of rental income, typically based on the greater of a flat fee or a percentage of sales reported by our franchised restaurants. This rent, along with occupancy and operating rights, is stipulated in our franchise agreements. These agreements typically have a 20-year term but may be shorter if necessary to mirror the term of the real estate lease. In 2010, sales by Company-operated restaurants and revenues from franchised restaurants represented 95.9% and 4.1% of our total revenues, respectively. In 2009, sales by Company-operated restaurants and revenues from franchised restaurants represented 95.2% and 4.8% of our total revenues, respectively.

Operating Costs & Expenses

Our sales are heavily influenced by brand advertising, menu selection and initiatives to improve restaurant operations. Sales are also affected by the timing of restaurant openings and closures. We do not record sales from our franchised restaurants as revenues.

Company-operated restaurants incur four types of operating costs and expenses:

•

food and paper costs, which represent the costs of the products that we sell to customers in Company-operated restaurants;

•

payroll and employee benefit costs, which represent the wages paid to Company-operated restaurant managers and crew, as well as the costs of benefits and training, and which tend to increase as we increase sales, but at a lower rate than sales growth;

•

occupancy and other operating expenses, which represent all other direct costs of our Company-operated restaurants, including advertising and promotional expenses, the costs of outside rent and land, which are tied to sales and therefore increase as we increase our sales, building and leasehold improvement depreciation (for restaurant properties owned by us), depreciation on equipment, repairs and maintenance, insurance, restaurant operating supplies and utilities; and

•

royalty fees, representing the continuing franchise fees we pay to McDonald’s pursuant to the MFAs, which are determined as a percentage of gross product sales.

Although our costs increase as we increase our sales, they generally increase at a lower rate than sales growth, leading to a direct improvement in restaurant profitability.

Franchised restaurant occupancy expenses include, as applicable, the costs of depreciating and maintaining the land and buildings upon which franchised restaurants are situated or the cost of leasing that property. A significant portion of our leases establish that rent payments are based on the greater of a flat fee or a specified percentage of the restaurant’s sales.

We promote the McDonald’s brand and our products by advertising in all of the Territories. Pursuant to the MFAs, we are required to spend at least 5% of our gross sales on advertisement and promotion activities

annually. These activities are guided by our overall marketing plan, which identifies the key strategic platforms that we leverage to drive sales. Our franchisees are generally required to pay us 5% of their gross sales to cover advertising expenditures related to their restaurants. We account for these payments as a deduction to our advertising expenses. As a result, our advertising expenses only reflect the expenditures related to Company-operated restaurants. Advertising expenses are recorded within the “Occupancy and other operating expenses” line item in our consolidated income statement. The only exception to this policy is in Mexico, where both we and our franchisees contribute funds to a cooperative that is responsible for advertisement and promotion activities for Mexico.

General and administrative expenses include the costs of overhead, including salaries and facilities, travel expenses, depreciation of office equipment, situated buildings and vehicles, amortization of intangible assets, occupancy costs, professional services and the cost of field management for Company-operated and franchised restaurants.

Other operating expenses, net, include gains and losses on asset dispositions, impairment charges, rental income and depreciation expenses of excess properties, results and depreciation from distribution centers, the equity awards granted to our CEO and other miscellaneous items.

Other Line Items

Net interest expense primarily includes interest expense on our short-term and long-term debt as well as the amortization of deferred financing costs. In November 2008, we entered into a term credit agreement for $350 million bearing interest at LIBOR plus a margin of 4.25% per annum. In October 2009, we prepaid the amount outstanding under the credit agreement in connection with the issuance of our senior notes for an aggregate principal amount of $450 million bearing interest at a fixed rate of 7.5% per annum and maturing on October 1, 2019.

Loss from derivative instruments relates to the negative change in the fair market value of our derivative instruments, primarily cross-currency swap agreements to hedge the U.S. dollar to the Brazilian real which we use to help mitigate some of our foreign currency exchange rate risk.

Foreign currency exchange results relate to the impact of remeasuring monetary assets and liabilities denominated in currencies other than our functional currencies. See “—Foreign Currency Translation.”

Other non-operating expenses, net primarily include charitable donations not related to our operations, asset taxes we are required to pay in certain countries and other non-operating charges.

Income tax expense includes both current and deferred income taxes. Current income taxes represents the amount accrued during the period to be paid to the tax authorities while deferred income taxes represent the earnings impact of the change in deferred tax assets and liabilities that are recognized in our balance sheet for future income tax consequences.

Net income attributable to non-controlling interests relate to the participation of non-controlling interests in the net income of certain subsidiaries that collectively own 24 restaurants.

Key Business Measures

We track our results of operations and manage our business by using three key business measures: comparable sales growth, average restaurant sales and sales growth. In addition, we use Adjusted EBITDA to facilitate operating performance comparisons from period to period. See “Presentation of Financial and Other Information” and “Selected Financial and Other Information.” Systemwide results are driven primarily by our Company-operated restaurants, as 74% of our systemwide restaurants are Company-operated as of December 31,

2010. Systemwide data represents measures for both Company-operated and franchised restaurants. While sales by franchisees are not recorded as revenues by us, management believes the information is important in understanding our financial performance because these sales are the basis on which we calculate and record franchised restaurant revenues and are indicative of the financial health of our franchisee base. Unless otherwise stated, comparable sales growth, average restaurant sales and sales growth are presented on a systemwide basis.

Comparable Sales

Comparable sales is a key performance indicator used within the retail industry and is indicative of the success of our initiatives as well as local economic, competitive and consumer trends. Comparable sales are driven by changes in traffic and average check, which is affected by changes in pricing and product mix. Increases or decreases in comparable sales represent the percent change in sales from the prior year for all restaurants in operation for at least thirteen months, including those temporarily closed. Some of the reasons restaurants may close temporarily include reimaging or remodeling, rebuilding, road construction and natural disasters. With respect to restaurants where there are changes in ownership, primarily changes from being franchised restaurants to becoming Company-operated restaurants, all previous months’ sales are reclassified according to the new ownership category when reporting comparable sales. As a result, there will be discrepancies between the sales figures used to calculate comparable sales and our results of operations. We report on a calendar basis, and therefore the comparability of the same month, quarter and year with the corresponding period of the prior year is impacted by the mix of days. The number of weekdays, weekend days and timing of holidays in a period can impact comparable sales positively or negatively. We refer to these impacts as calendar shift/trading day adjustments. These impacts vary geographically due to consumer spending patterns and have the greatest effect on monthly comparable sales while annual impacts are typically minimal. In 2008, there was an additional full day of sales due to the leap year.

We calculate and analyze comparable sales and average check in our divisions and systemwide on a constant currency basis, which means they are calculated using the same exchange rate in the applicable division or systemwide, as applicable, over the periods under comparison to remove the effects of currency fluctuations from the analysis. We believe these constant currency measures provide a more meaningful analysis of our business by identifying the underlying business trend, without distortion from the effect of foreign currency fluctuations.

Company-operated comparable sales growth refers to comparable sales growth for Company-operated restaurants and franchised comparable sales growth refers to comparable sales growth for franchised restaurants. We believe comparable sales growth is a key indicator of our performance, as influenced by our strategic initiatives and those of our competitors.

Average Restaurant Sales

Average restaurant sales, or ARS, is an important measure of the financial performance of our systemwide restaurants and changes in the overall direction and trends of sales. ARS is calculated by dividing the sales for the relevant period by the arithmetic mean of the number of restaurants at the beginning and end of such period. ARS is influenced mostly by comparable sales performance and restaurant openings and closures. As ARS is provided in nominal terms, it is affected by movements in foreign currency exchange rates.

Sales Growth

Sales growth refers to the change in sales by all restaurants, whether operated by us or by franchisees, from one period to another. We present sales growth both in nominal terms and on a constant currency basis, which means the latter is calculated using the same exchange rate over the periods under comparison to remove the effects of currency fluctuations from the analysis.

Foreign Currency Translation

The financial statements of our foreign operating subsidiaries are translated in accordance with guidance in ASC Topic 830, Foreign Currency Matters. See Note 3 to our consolidated financial statements. Except for our Venezuelan operations during 2010, the functional currencies of our foreign operating subsidiaries are the local currencies of the countries in which they conduct their operations. Therefore, the assets and liabilities of these subsidiaries are translated into U.S. dollars at the exchange rates as of the balance sheet date, and revenues and expenses are translated at the average exchange rates prevailing during the period. Translation adjustments are included in the “Accumulated other comprehensive (loss) income” component of shareholders’ equity. We record foreign currency exchange results related to monetary assets and liabilities denominated in currencies other than our functional currencies in our consolidated income statement.

Effective January 1, 2010, Venezuela is considered to be highly inflationary. Under U.S. GAAP, an economy is considered to be highly inflationary when its three-year cumulative rate of inflation meets or exceeds 100%. Under the highly inflationary basis of accounting, the financial statements of our Venezuelan subsidiaries are remeasured as if their functional currency were our reporting currency (U.S. dollars), with remeasurement gains and losses recognized in earnings, rather than in the cumulative translation adjustment component of other comprehensive (loss) income within shareholders’ equity.

Factors Affecting Comparability of Results

Seasonality

Our sales and revenues are generally greater in the second half of the year than in the first half. Although the impact on our results of operations is relatively small, this impact is due to increased consumption of our products during the winter and summer holiday seasons, affecting July and December, respectively.

Impact of Venezuelan Currency Controls and Related Accounting Changes on Our Results of Operations

We have operations in Venezuela, including 138 restaurants as of December 31, 2010, which represented 6.1%, 7.5%, 1.7% and 6.1% of our total revenues, operating income, net income and Adjusted EBITDA, respectively, for 2010 and 17.3%, 35.1%, 9.2% and 29.6% of our total revenues, operating income, net income and Adjusted EBITDA, respectively, for 2009. These decreases are due in large part to Venezuelan currency controls and related accounting changes. As a result, our results of operations have been and may continue to be significantly impacted by operations in Venezuela. See “Risk Factors—Certain Factors Relating to Latin America and the Caribbean—We are subject to significant foreign currency exchange controls in certain countries in which we operate” and “Risk Factors—Certain Factors Relating to Latin America and the Caribbean—Exchange rate fluctuations against the U.S. dollar in the countries in which we operate could negatively affect our results of operations.”

The table below presents historical summarized financial and other information of our operations in Venezuela for each of the periods presented and also summarized financial and other information in constant currency for 2010, which means the results of operations for that period have been calculated using a constant exchange rate (2.15 bolívares fuertes per U.S. dollar) to remove the effects of currency fluctuations from the trend analysis. We believe this presentation using constant currency provides a more meaningful analysis of our results of operations for Venezuela by identifying the underlying business trends, without distortion from the effect of foreign currency translation for financial reporting purposes. See Note 21 to our annual consolidated financial statements for information regarding the translation of the results of our Venezuelan operations, which affects the comparability of our results of operations during the years and periods presented herein.


	For the Years Ended December 31,
	2010			2010		2009			2008			2007(1)
	(in constant currency)			(in nominal terms)
Income statement data:
Total revenues	$	498,478		$	184,657	$	460,160		$	393,845		$	126,020
Operating income		39,258			15,385		72,496			90,886			26,577
Foreign currency exchange results		(2,043	)		26		(52,533	) (2)		(28,482	) (2)		(15,059	) (2)
Net income attributable to Arcos Dorados Holdings Inc.		1,651			1,781		7,325			24,897			284

Other data:
Adjusted EBITDA(3)		46,707			18,169		78,915			97,206			29,134

(1)	Data for the year ended December 31, 2007 includes only five months of operations, beginning August 3, 2007, the date on which we commenced operations in the Territories.

(2)	These losses were mainly due to the difference between the foreign currency exchange rate at which we purchased U.S. dollars in Venezuela and the official foreign currency exchange rate used for financial statement reporting purposes.

(3)

Adjusted EBITDA is a measure of our performance that is reviewed by our management. Adjusted EBITDA does not have a standardized meaning and, accordingly, our definition of Adjusted EBITDA may not be comparable to Adjusted EBITDA as used by other companies. For our definition of Adjusted EBITDA, see “Presentation of Financial and Other Information—Other Financial Measures.”

The table below shows the reconciliation between net income and Adjusted EBITDA:


	For the Years Ended December 31,
Venezuela Adjusted EBITDA Reconciliation	2010			2009			2008			2007
	(in thousands of U.S. dollars)
Net income attributable to Arcos Dorados Holdings Inc.	$	1,781		$	7,325		$	24,897		$	284
Plus (Less):
Net interest expense		2,318			2,046			2,292			2,773
Foreign currency exchange results		(26	)		52,533			28,482			15,059
Other non-operating expenses (income), net		(4,132	)		1			(11	)		—
Income tax expense		15,444			10,591			35,226			8,461

Operating income		15,385			72,496			90,886			26,577

Plus (Less):
Items excluded from computation that affect operating income:
Depreciation and amortization		3,562			8,713			6,322			2,556
Gains from sale of property and equipment		(778	)		(6,245	)		—			—
Write-offs of property and equipment		—			3,951			(2	)		1

Adjusted EBITDA		18,169			78,915			97,206			29,134

Accounting Changes Relating to Our Venezuelan Operations

There are currency restrictions in place in Venezuela that limit our ability to repatriate bolívares fuertes held in Venezuela. These funds remain freely available for use in Venezuela. In Venezuela, the official bolívar fuerte -U.S. dollar exchange rate is established by the Central Bank of Venezuela and the Venezuelan Ministry of Finance, and the acquisition of foreign currency at the official exchange rate by Venezuelan companies to pay foreign debt or dividends is subject to registration with and approval by the relevant Venezuelan authorities. See “Exchange Rates—Venezuela.”

As a consequence of the currency controls described above, effective December 31, 2009, we changed our accounting treatment for Venezuela regarding the exchange rate used for purposes of translation. In accordance with ASC Topic 830, we use the exchange rate applicable for purposes of dividend remittances to translate foreign currency financial statements, except when unusual circumstances exist. Prior to December 31, 2009, we had concluded that the existence of the parallel market in Venezuela did not constitute unusual circumstances which justified the use of an exchange rate other than the official exchange rate for purposes of foreign currency translation. Therefore, the official exchange rate of 2.15 bolívares fuertes per U.S. dollar was used to translate the operations of our Venezuelan subsidiaries for 2009 and 2008. As conditions in Venezuela changed during 2009, we reassessed the appropriateness of use of the official exchange rate for translation purposes. As a result, effective December 31, 2009, we changed the translation rate from the official exchange rate of 2.15 bolívares fuertes per U.S. dollar at December 31, 2009 to the parallel market exchange rate of 5.97 bolívares fuertes per U.S. dollar. This change resulted in a $76.4 million charge recorded in the cumulative translation adjustment component of other comprehensive income within shareholders’ equity.

In addition, effective January 1, 2010, Venezuela is considered to be highly inflationary, and as such, the financial statements of our Venezuelan subsidiaries are remeasured as if their functional currency were the reporting currency (U.S. dollars). As a result, remeasurement gains and losses are recognized in earnings rather than in the cumulative translation adjustment, component of other comprehensive income within shareholders’ equity. In 2010, since we had access to and used the parallel exchange market to acquire U.S. dollars, we used the parallel market exchange rate to measure transactions denominated in local currency and convert them to the U.S. dollar functional currency during the period from January 1, 2010 through May 31, 2010 at an average exchange rate of 6.96 bolívares fuertes per U.S. dollar. The last available quotation of the parallel market rate before the system was cancelled was 8.10 bolívares fuertes per U.S. dollar. Effective June 1, 2010 the Company started to use the exchange rate of 5.30 bolívares fuertes per U.S. dollar to measure transactions denominated in local currency.

Critical Accounting Policies and Estimates

This management’s discussion and analysis of financial condition and results of operations is based upon our consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses as well as related disclosures. On an ongoing basis, we evaluate our estimates and judgments based on historical experience and various other factors that we believe to be reasonable under the circumstances. Actual results may differ from these estimates under varying assumptions or conditions.

We consider an accounting estimate to be critical if:

•

the nature of the estimates or assumptions is material due to the levels of subjectivity and judgment necessary to account for highly uncertain matters or the susceptibility of such matters to change; and

•

the impact of the estimates and assumptions on our financial condition or operating performance is material.

We believe that of our significant accounting policies, the following encompass a higher degree of judgment and/or complexity:

Depreciation of Property and Equipment

Accounting for property and equipment involves the use of estimates for determining the useful lives of the assets over which they are to be depreciated. We believe that the estimates we make to determine an asset’s useful life are critical accounting estimates because they require our management to make estimates about technological evolution and competitive uses of assets. We depreciate property and equipment on a straight-line basis over their useful lives based on management’s estimates of the period over which these assets will generate revenue (not to exceed the lease term plus renewal options for leased property). The useful lives are estimated based on historical experience with similar assets, taking into account anticipated technological or other changes. We periodically review these lives relative to physical factors, economic considerations and industry trends. If there are changes in the planned use of property and equipment, or if technological changes occur more rapidly than anticipated, the useful lives assigned to these assets may need to be shortened, resulting in the recognition of increased depreciation and amortization expense or write-offs in future periods. No significant changes to useful lives have been recorded in the past. A significant change in the facts and circumstances that we relied upon in making our estimates may have a material impact on our operating results and financial condition.

Impairment of Long-Lived Assets and Goodwill

We review long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. We review goodwill for impairment annually in the fourth quarter. In assessing the recoverability of our long-lived assets and goodwill, we consider changes in economic conditions and make assumptions regarding, among other factors, estimated future cash flows by market and by restaurant, discount rates by country and the fair value of the assets. Estimates of future cash flows are highly subjective judgments based on our experience and knowledge of our operations. These estimates can be significantly impacted by many factors, including changes in global and local business and economic conditions, operating costs, inflation, competition, and consumer and demographic trends. A key assumption impacting estimated future cash flows is the estimated change in comparable sales. In the fourth quarter of 2010, we performed impairment testing of our long-lived assets in Mexico, Puerto Rico and Peru considering the operating losses incurred in recent periods in these markets, which is an indicator of potential impairment. As a result of this analysis, no impairment was recorded for our operations in Puerto Rico and Peru since our estimates of undiscounted future cash flows for each restaurant in these markets or fair market value exceeded its carrying value. Regarding Mexico, we recorded an impairment charge associated with certain restaurants because our estimated undiscounted future cash flows for these restaurants are insufficient to cover their carrying value. The impairment charge totaling $4.7 million was measured by the excess of the carrying amount of the restaurants over their fair value, determined by estimating market value. No impairments were recognized during fiscal years 2009 and 2008, except for the recognition of an impairment of goodwill amounting to $1.1 million in fiscal year 2008 related to the acquisition of a non-controlling interest. If our estimates or underlying assumptions change in the future, we may be required to record additional impairment charges.

Share-Based Compensation

We have share-based compensation plans that authorize the granting of liability awards to: (a) certain employees under a long-term incentive plan, and (b) the CEO. The accrued liability is remeasured at the end of each reporting period until settlement using a closed-form pricing model (Black-Scholes) based on the estimated fair value of the Company. In 2011, our board of directors decided that on a going forward basis, our long-term incentive awards would be valued based on the market price of our class A shares instead of the formula that had previously been used to value the long-term incentive awards. As such, we have used the estimated initial public offering price per class A share to determine the fair value of the awards. See Note 16 to our consolidated financial statements.

Accounting for our share-based compensation plans involves the use of estimates for determining: (a) the number of units that will vest based on the estimated completion of the requisite service period and the performance requirement (the latter only for the award granted to the CEO), and (b) the assumptions required by the closed-form pricing model, such as an expected volatility of 28.5%, a dividend yield of 1.5%, a risk-free interest rate of 3.9%, an estimated initial public offering price per class A share based on the mid-point of current estimates and an expected term based on the period extending through the last vesting date of each grant. As there is no market information about our shares, the expected volatility was estimated based on a historical one-year implied volatility of comparable Latin American companies, calculated as the standard deviation of the logarithms of daily price returns, annualized by the square root of the number of days. All of these assumptions significantly impact the estimated fair value of the awards. We use historical data and estimates to determine these assumptions, and if these assumptions change significantly in the future, our operating results and financial condition could be significantly impacted.

Accounting for Income Taxes

We record a valuation allowance to reduce the carrying value of deferred tax assets if it is more likely than not that some portion or all of our deferred assets will not be realized. Our valuation allowance as of December 31, 2010 and 2009 amounted to $220.2 million and $298.8 million, respectively. We have considered future taxable income and ongoing prudent and feasible tax strategies in assessing the need for the valuation allowance. This assessment is carried out on the basis of internal projections, which are updated to reflect our most recent operating trends, such as expiration date for tax losses carryforward. Because of the imprecision inherent in any forward-looking data, the further into the future our estimates cover, the less objectively verifiable they become. Therefore, we apply judgment to define the period of time to include projected future income to support the future realization of the tax benefit of an existing deductible temporary difference or carryforward and whether there is sufficient evidence to support the projections at a more-likely-than-not level for this period of time. Determining whether a valuation allowance for deferred tax assets is necessary often requires an extensive analysis of positive (e.g., a history of accurately projecting income) and negative evidence (e.g., historic operating losses) regarding realization of the deferred tax assets and inherent in that, an assessment of the likelihood of sufficient future taxable income. During 2010, 2009 and 2008, we recognized a gain for the change in the valuation allowance amounting to $91.4 million, $30.0 million and $42.5 million, respectively, due to improvements in projected taxable income and a relative increase of positive evidence as compared to negative evidence due to the reversal of trends of historic operating losses in some markets. If these estimates and assumptions change in the future, we may be required to adjust the valuation allowance. This could result in a charge to, or an increase in, income in the period this determination is made.

Provision for Contingencies

We have certain contingent liabilities with respect to existing or potential claims, lawsuits and other proceedings, including those involving labor, tax and other matters. Accounting for contingencies involves the use of estimates for determining the probability of each contingency and the estimated amount to settle the obligation, including related costs. We accrue liabilities when it is probable that future costs will be incurred and the costs can be reasonably estimated. The accruals are based on all the information available at the issuance date of the financial statements, including our estimates of the outcomes of these matters and our lawyers’ experience in contesting, litigating and settling familiar matters. If we are unable to reliably measure the obligation, no provision is recorded and information is then presented in the notes to our consolidated annual financial statements. As the scope of the liabilities becomes better defined, there may be changes in the estimates of future costs. Because of the inherent uncertainties in this estimation, actual expenditures may be different from the originally estimated amount recognized.

Results of Operations

We have based the following discussion on our consolidated financial statements. You should read it along with these financial statements, and it is qualified in its entirety by reference to them.

In a number of places in this prospectus, in order to analyze changes in our business from period to period, we present our results of operations and financial condition on a constant currency basis, which isolates the effects of foreign exchange rates on our results of operations and financial condition. In particular, we have isolated the effects of appreciation and depreciation of local currencies in the Territories against the U.S. dollar because we believe that doing so is useful in understanding the development of our business. For these purposes, we eliminate the effect of movements in the exchange rates by converting the balances for both periods being compared from their local currencies to the U.S. dollar using the same exchange rate.

Year Ended December 31, 2010 Compared to Year Ended December 31, 2009

Set forth below are our results of operations for the years ended December 31, 2010 and 2009. See “—Factors Affecting Comparability of Results—Impact of Venezuelan Currency Controls and Related Accounting Changes on Our Results of Operations.”


	For the Years Ended December 31						% Increase (Decrease)
	2010			2009			% Increase (Decrease)
	(in thousands of U.S. dollars)
Sales by Company-operated restaurants	$	2,894,466		$	2,536,655			14.1	%
Revenues from franchised restaurants		123,652			128,821			(4.0	)

Total revenues		3,018,118			2,665,476			13.2

Company-operated restaurant expenses:
Food and paper		(1,023,464	)		(929,718	)		10.1
Payroll and employee benefits		(569,084	)		(491,214	)		15.9
Occupancy and other operating expenses		(765,777	)		(667,438	)		14.7
Royalty fees		(140,973	)		(121,901	)		15.6
Franchised restaurants – occupancy expenses		(37,634	)		(42,327	)		(11.1	)
General and administrative expenses		(254,165	)		(189,507	)		34.1
Other operating expenses, net		(22,464	)		(16,562	)		35.6

Total operating costs and expenses		(2,813,561	)		(2,458,667	)		14.4

Operating income		204,557			206,809			(1.1	)
Net interest expense		(41,613	)		(52,473	)		(20.7	)
Loss from derivative instruments		(32,809	)		(39,935	)		(17.8	)
Foreign currency exchange results		3,237			(14,098	)		(123.0	)
Other non-operating expenses, net		(23,630	)		(1,240	)		1,805.6

Income before income taxes		109,742			99,063			10.8
Income tax expense		(3,450	)		(18,709	)		(81.6	)

Net income		106,292			80,354			32.3
Less: Net income attributable to non-controlling interests		(271	)		(332	)		(18.4	)

Net income attributable to Arcos Dorados Holdings Inc.		106,021			80,022			32.5

Set forth below is a summary of changes to our systemwide, Company-operated and franchised restaurant portfolios in 2010 and 2009.


Systemwide Restaurants	For the Years Ended December 31,
	2010			2009
Systemwide restaurants at beginning of period		1,680			1,640
Restaurant openings		85			58
Restaurant closings		(10	)		(18	)

Systemwide restaurants at end of period		1,755			1,680


Company-operated Restaurants	For the Years Ended December 31,
	2010			2009
Company-operated restaurants at beginning of period		1,226			1,155
Restaurant openings		63			44
Restaurant closings		(9	)		(16	)
Net conversions of franchised restaurants to Company-operated restaurants(1)		12			43

Company-operated restaurants at end of period		1,292			1,226


Franchised Restaurants	For the Years Ended December 31,
	2010			2009
Franchised restaurants at beginning of period		454			485
Restaurant openings		22			14
Restaurant closings		(1	)		(2	)
Net conversions of franchised restaurants to Company-operated restaurants(1)		(12	)		(43	)

Franchised restaurants at end of period		463			454

(1)	Includes three refranchisings of Company-operated restaurants in 2009.

Key Business Measures

We track our results of operations and manage our business by using three key business measures: comparable sales growth, average restaurant sales and sales growth. Unless otherwise stated, comparable sales growth, average restaurant sales and sales growth are presented on a systemwide basis.

Comparable Sales


	For the Year Ended December 31, 2010
Arcos Dorados
Systemwide comparable sales growth		14.9	%
Company-operated comparable sales growth		14.9
Franchised comparable sales growth		14.9

Systemwide Comparable Sales Growth by Division
Brazil		17.5	%
Caribbean division		4.7
NOLAD		9.1
SLAD		16.1

Company-operated Comparable Sales Growth by Division
Brazil		17.0	%
Caribbean division		6.1
NOLAD		10.4
SLAD		15.7

Franchised Comparable Sales Growth by Division
Brazil		18.8	%
Caribbean division		1.5
NOLAD		6.7
SLAD		17.2

Our comparable sales growth on a consolidated basis in 2010 was mainly driven by the increases in consumer spending caused by the improved macroeconomic conditions in almost all of the Territories as

consumers sought out higher quality food and increased restaurant consumption. Average check growth caused 56% of the increase in comparable sales and resulted primarily from a shift in product mix in Brazil and price increases in line with or above inflation in most of the markets in SLAD. An increase in traffic caused 44% of the increase in comparable sales and was mainly driven by the increase in consumer spending. In addition, in 2009, our sales were negatively affected by certain events such as the swine flu outbreak in Mexico, Argentina and Chile and general strikes in Martinique and Guadeloupe, events that did not recur in 2010.

Average Restaurant Sales


	For the Years Ended December 31,
	2010		2009
	(in thousands of U.S. dollars)
Systemwide average restaurant sales	$	2,288	$	2,147
Company-operated average restaurant sales		2,299		2,131
Franchised average restaurant sales		2,257		2,189

Our ARS improved in 2010 because of comparable sales growth of 14.9% and the appreciation of most currencies in the Territories against the U.S. dollar. This improvement, however, was more than offset by the change in the exchange rate used for purposes of translating our results of operations in Venezuela. See “—Factors Affecting Comparability of Results—Impact of Venezuelan Currency Controls and Related Accounting Changes on Our Results of Operations.”

Sales Growth


	For the Year Ended December 31, 2010
	(in nominal terms)			(in constant currency)
Brazil		34.3	%		20.6	%
Caribbean division		3.8			5.2
NOLAD		19.2			12.6
SLAD		(20.2	)		18.1

Total Systemwide Sales Growth		10.2			17.4

In nominal terms, sales growth increased during 2010 due to comparable sales growth of 14.9%, the net addition of 115 restaurants systemwide since the beginning of 2009 and the positive impact of the appreciation of most currencies in the Territories against the U.S. dollar. This increase, however, was partially offset by the change in the exchange rate used for translating our results of operations in Venezuela. We had 1,292 Company-operated restaurants and 463 franchised restaurants as of December 31, 2010, compared to 1,226 Company-operated restaurants and 454 franchised restaurants as of December 31, 2009.

Revenues


	For the Years Ended December 31,				% Increase (Decrease)
	2010		2009		% Increase (Decrease)
	(in thousands of U.S. dollars)
Sales by Company-operated Restaurants
Brazil	$	1,531,386	$	1,156,818		32.4	%
Caribbean division		248,470		232,583		6.8
NOLAD		287,920		224,566		28.2
SLAD		826,690		922,688		(10.4	)

Total		2,894,466		2,536,655		14.1

Revenues from Franchised Restaurants
Brazil	$	64,185	$	43,924		46.1	%
Caribbean division		12,147		12,191		(0.4	)
NOLAD.		17,097		15,767		8.4
SLAD		30,223		56,939		(46.9	)

Total		123,652		128,821		(4.0	)

Total Revenues
Brazil	$	1,595,571	$	1,200,742		32.9	%
Caribbean division		260,617		244,774		6.5
NOLAD		305,017		240,333		26.9
SLAD		856,913		979,627		(12.5	)

Total		3,018,118		2,665,476		13.2

Sales by Company-operated Restaurants

Total sales by Company-operated restaurants increased by $357.8 million, or 14.1%, from $2,536.7 million in 2009 to $2,894.5 million in 2010. The 14.9% growth in Company-operated restaurants comparable sales, 56% of which resulted from a higher average check and the rest of which resulted from increased traffic, caused sales to increase by $383.8 million. In addition, sales by Company-operated restaurants increased by $174.8 million as a result of the appreciation of most currencies in the Territories against the U.S. dollar and by $77.0 million as a result of 82 net restaurant openings and the conversion of 55 franchised restaurants into Company-operated restaurants since the beginning of 2009. These increases in sales, however, were offset by the change in the exchange rate used for the translation of our results of operations in Venezuela, which decreased sales by Company-operated restaurants by $277.8 million.

In Brazil, sales by Company-operated restaurants increased by $374.6 million, or 32.4%, to $1,531.4 million. The main causes of this growth were the 17.0% growth in Company-operated restaurants comparable sales and the appreciation of the real against the U.S. dollar, which represent $195.7 million and $155.6 million of the increase, respectively. Average check growth represented 69% of comparable sales growth and the rest resulted from increased traffic. Average check growth resulted primarily from a shift in product mix, as in 2010 we did not continue our promotional campaign for ice cream products, which generally have lower prices. The increase in traffic was driven by other promotional campaigns and the extension of operating hours as well as increases in consumer spending as a result of improved macroeconomic conditions. Twenty five net restaurant openings and the conversion of two franchised restaurants into Company-operated restaurants since the beginning of 2009 contributed $23.3 million to the increase in sales in Brazil.

In the Caribbean division, sales by Company-operated restaurants increased by $15.9 million, or 6.8%, to $248.5 million. The 6.1% increase in Company-operated restaurants comparable sales contributed

$14.3 million of the sales increase. Increased traffic, caused by our successful promotional campaign and the introduction of our breakfast menu in Puerto Rico, represented 66% of comparable sales growth, and the rest resulted from average check growth. In addition, general strikes in Martinique and Guadeloupe negatively impacted our sales in 2009, but did not recur in 2010. Even though we closed two Company-operated restaurants at the end of 2010, the opening of two Company-operated restaurants in 2009 and the conversion of two franchised restaurants into Company-operated restaurants since the beginning of 2009 increased sales by $6.4 million in 2010. These increases were partially offset by the depreciation of the euro, which is the local currency in various Territories in the Caribbean, against the U.S. dollar, which caused sales to decrease by $4.8 million.

In NOLAD, sales by Company-operated restaurants increased by $63.4 million, or 28.2%, to $287.9 million. This growth was mainly explained by comparable sales growth of 10.4%, which caused sales in NOLAD to increase by $24.6 million. The increase in comparable sales resulted from increased traffic due to our value menu offerings in 2010 and the swine flu outbreak in April and May 2009 that forced us to partially or completely close most of our restaurants in Mexico for several weeks and had a negative impact on tourism in the country. Average check in NOLAD remained almost unchanged. In addition, 21 net restaurant openings, the conversion of 47 franchised restaurants into Company-operated restaurants since the beginning of 2009 and the appreciation of local currencies in Mexico and Costa Rica resulted in sales increases of $21.7 million and $17.0 million, respectively.

In SLAD, sales by Company-operated restaurants decreased by $96.0 million, or 10.4%, to $826.7 million, due to the change in the exchange rate used for translating our results of operations in Venezuela. This change caused our results of operations in Venezuela for 2010 to be translated into U.S. dollars at a weighted average rate of 5.80 bolívares fuertes per U.S. dollar, while our results of operation for 2009 were translated into U.S. dollars using the official exchange rate of 2.15 bolívares fuertes per U.S. dollar. In constant currencies, SLAD’s sales by Company-operated restaurants grew by $174.8 million, mostly as a result of comparable sales growth of 15.7%, which represented a $149.2 million sales increase. The increase in comparable sales was caused almost equally by a higher average check and by increased traffic. The average check increased due to price increases in line with or above inflation in most of the markets in SLAD. The exception was Venezuela, where we were more conservative with our pricing policy as a consequence of the difficult economic situation. Traffic growth was caused primarily by improved macroeconomic conditions in most of the countries in SLAD, successful promotional campaigns, mainly in Argentina and Colombia, and the swine flu outbreaks in Argentina and Chile in 2009. In addition, sales grew $25.6 million due to the opening of 36 Company-operated restaurants and the conversion of four franchised restaurants into Company-operated restaurants since the beginning of 2009.

Revenues from Franchised Restaurants

Our total revenues from franchised restaurants decreased by $5.2 million, or 4.0%, from $128.8 million in 2009 to $123.7 million in 2010 mostly due to the accounting change affecting the translation of our results of operations in Venezuela. On a constant currency basis, revenues from franchised restaurants increased by $23.4 million. The main contributor to this increase was comparable sales growth of 14.9%, which resulted in an increase in revenue of $18.4 million. In addition, increased rent revenues, as most of our franchise agreements provide for rent increases when sales increase, resulted in increased revenues from franchised restaurants of $3.7 million, respectively. The opening of 33 net franchised restaurants since the beginning of 2009, which was partially offset by the conversion of 55 franchised restaurants into Company-operated restaurants since the beginning of 2009, caused revenues from franchised restaurants to increase $1.4 million. The reason for this increase was that we opened most of the new franchised restaurants in Brazil while the majority of conversions of franchised restaurants into Company-operated restaurants occurred in Mexico, and sales per restaurant are higher in Brazil than in Mexico. In 2010, 73% and 27% of revenues from franchised restaurants were earned on the basis of a percentage of sales and on a flat fee basis, respectively, compared to 74% and 26%, respectively, in 2009.

In Brazil, revenues from franchised restaurants increased by $20.3 million, or 46.1%, to $64.2 million primarily as a result of comparable sales growth of 18.8% and the appreciation of the real against the U.S. dollar,

which explained $8.3 million and $6.5 million of the increase, respectively. In addition, 27 net franchised restaurants openings since the beginning of 2009 contributed $2.9 million of the increase, while higher sales increased rent by $2.6 million.

In the Caribbean division, revenues from franchised restaurants remained almost unchanged, at $12.1 million in 2010 as compared to $12.2 million in 2009. This is despite the conversion of two franchised restaurants into Company-operated restaurants, which was offset by the increase in comparable sales and by an increase in rent resulting from increased sales. Franchised comparable sales growth was lower than that of Company-operated restaurants because the latter was driven by sales growth in Guadeloupe and Martinique, where there are only Company-operated restaurants.

In NOLAD, revenues from franchised restaurants increased by $1.3 million, or 8.4%, to $17.1 million. This growth was caused by the 6.7% increase in comparable sales and by the appreciation of the Mexican peso against the U.S. dollar, which caused revenues from franchised restaurants to increase $0.9 million and $0.9 million, respectively. The increase in comparable sales resulted in an increase in rent of $0.5 million. Revenues were negatively impacted by the conversion of 47 franchised restaurants in Mexico to Company-operated restaurants since the beginning of 2009, which caused revenues from franchised restaurants to decrease by $0.9 million.

In SLAD, revenues from franchised restaurants decreased by $26.7 million, or 46.9%, to $30.2 million due to the accounting change affecting the translation of our results of operations in Venezuela, which caused revenues to decrease by $36.0 million. On a constant currency basis, revenues from franchised restaurants increased by $9.3 million, mainly due to a 17.2% increase in comparable sales, which resulted in revenue growth of $9.0 million.

Operating Costs and Expenses

Food and Paper

Our total food and paper costs increased by $93.7 million, or 10.1%, to $1,023.5 million in 2010, as compared to 2009. As a percentage of our total sales by Company-operated restaurants, food and paper costs decreased 1.3 percentage points to 35.4%, mainly as a consequence of the appreciation of most currencies in the Territories against the U.S. dollar, as approximately 25% of our food and paper raw materials and 100% of our Happy Meal toys are imported and paid for in U.S. dollars while our revenues are generated in local currencies.

In Brazil, food and paper costs increased by $106.8 million, or 26.7%, to $506.6 million. As a percentage of the division’s sales by Company-operated restaurants, food and paper costs decreased 1.5 percentage points to 33.1%, primarily as a result of the appreciation of the Brazilian real against the U.S. dollar.

In the Caribbean division, food and paper costs increased by $1.7 million, or 2.1%, to $81.4 million, largely in line with the increase in sales. As a percentage of the division’s sales by Company-operated restaurants, food and paper costs decreased 1.5 percentage points to 32.8% because we were able to increase prices at a higher rate than that at which our food and paper costs increased. In addition, in 2009 we had inventory losses resulting from the general strikes that occurred in Martinique and Guadeloupe, an event that did not recur in 2010.

In NOLAD, food and paper costs increased by $23.2 million, or 24.0%, to $120.1 million, largely in line with the increase in sales. As a percentage of the division’s sales by Company-operated restaurants, food and paper costs decreased 1.4 percentage points to 41.7% mainly as a consequence of the appreciation of the local currencies in Mexico and Costa Rica against the U.S. dollar.

In SLAD, food and paper costs decreased by $35.6 million, or 10.2%, to $312.6 million. On a constant currency basis, food and paper costs increased by $79.4 million, or 22.8%, to $427.6 million largely in line with the increase in sales. As a percentage of the division’s sales by Company-operated restaurants, food and paper costs remained almost unchanged at 37.8%.

Payroll and Employee Benefits

Our total payroll and employee benefits costs increased by $77.9 million, or 15.9%, to $569.1 million in 2010, as compared to 2009. As a percentage of our total sales by Company-operated restaurants, payroll and employee benefits costs increased 0.3 percentage points to 19.7%. This slight increase is mostly attributable to wage increases that outpaced our sales growth in several markets, which offset both the positive impact of sales growth on the fixed portion of our payroll costs and increased operational efficiency. Wages increased mostly due to government-mandated minimum wage increases in several Territories.

In Brazil, payroll and employee benefits costs increased by $74.3 million, or 34.5%, to $289.7 million. As a percentage of the division’s sales by Company-operated restaurants, payroll and employee benefits costs increased 0.3 percentage points to 18.9% mostly because we increased the hourly rate for our night crew to improve staffing levels during that shift.

In the Caribbean division, payroll and employee benefits costs increased by $4.4 million, or 7.0%, to $67.7 million, largely in line with the increase in sales. As a percentage of the division’s sales by Company-operated restaurants, payroll and employee benefits costs remained almost unchanged at 27.3%.

In NOLAD, payroll and employee benefits costs increased by $8.9 million, or 23.9%, to $46.1 million. As a percentage of the division’s sales by Company-operated restaurants, payroll and employee benefits costs decreased 0.6 percentage points to 16.0% driven by increased operational efficiency and the effect of higher sales in Mexico.

In SLAD, payroll and employee benefits costs decreased by $9.8 million, or 5.6%, to $165.6 million. On a constant currency basis, payroll and employee benefits costs increased by $39.5 million, or 22.5%, to $214.8 million. As a percentage of the division’s sales by Company-operated restaurants, payroll and employee benefits costs increased 1.0 percentage points to 20.0% as a result of wage increases that outpaced our sales growth, mainly in Argentina and Venezuela.

Occupancy and Other Operating Expenses

Our total occupancy and other operating expenses increased by $98.3 million, or 14.7%, to $765.8 million in 2010, as compared to 2009, largely in line with the increase in sales. As a percentage of our total sales by Company-operated restaurants, occupancy and other operating expenses increased 0.1 percentage points to 26.5%. This slight increase is mostly attributable to the increased weight of Brazil’s higher-than-average occupancy and other operating expenses as a percentage of sales in our total occupancy and other operating expenses in 2010, as compared to 2009.

In Brazil, occupancy and other operating expenses increased by $102.0 million, or 31.9%, to $421.5 million, largely in line with the increase in sales. As a percentage of the division’s sales by Company-operated restaurants, occupancy and other operating expenses decreased 0.1 percentage points to 27.5% mainly because sales volumes increased while a portion of these expenses remained fixed.

In the Caribbean division, occupancy and other operating expenses increased by $5.2 million, or 9.0%, to $62.8 million, largely in line with the increase in sales. As a percentage of the division’s sales by Company-operated restaurants, occupancy and other operating expenses increased 0.5 percentage points to 25.3% as a result of higher utility expenses, mainly in Puerto Rico.

In NOLAD, occupancy and other operating expenses increased by $18.3 million, or 23.5%, to $96.2 million, largely in line with the increase in sales. As a percentage of the division’s sales by Company-operated restaurants, occupancy and other operating expenses decreased 1.3 percentage points to 33.4% mainly because sales volumes increased, while a portion of these expenses remained fixed.

In SLAD, occupancy and other operating expenses decreased by $24.5 million, or 10.4%, to $211.9 million. On a constant currency basis, occupancy and other operating expenses increased by $46.3 million, or 19.6%, to $282.7 million. As a percentage of the division’s sales by Company-operated restaurants, occupancy and other operating expenses remained unchanged at 25.6%.

Royalty Fees

Our total royalty fees increased by $19.1 million, or 15.6%, to $141.0 million in 2010, as compared to 2009, in line with the increase in our sales by Company-operated restaurants.

In Brazil, royalty fees increased by $19.2 million, or 34.3%, to $75.1 million in 2010, as compared to 2009, in line with the increase in sales by Company-operated restaurants.

In the Caribbean division, royalty fees increased by $0.8 million, or 6.8%, to $12.2 million in 2010, as compared to 2009, in line with the increase in sales by Company-operated restaurants.

In NOLAD, royalty fees increased by $3.6 million, or 35.1%, to $13.8 million in 2010, as compared to 2009. As a percentage of the division’s sales by Company-operated restaurants, royalty fees increased 0.2 percentage points to 4.8% because McDonald’s waived April 2009 royalties in Mexico due to the swine flu outbreak.

In SLAD, royalty fees decreased by $4.5 million, or 10.1%, to $39.8 million in 2010, as compared to 2009. On a constant currency basis, royalty fees increased by $8.3 million, or 18.8%, to $52.6 million in line with the increase in sales by Company-operated restaurants.

Franchised Restaurants—Occupancy Expenses

Occupancy expenses from franchised restaurants decreased by $4.7 million, or 11.1%, to $37.6 million in 2010, as compared to 2009, primarily due to the accounting change affecting the translation of our results of operations in Venezuela and the conversion of 55 franchised restaurants, primarily in Mexico, into Company-operated restaurants since the beginning of 2009, which resulted in decreased rent expenses for leased properties.

In Brazil, occupancy expenses from franchised restaurants increased by $4.8 million, or 24.6%, to $24.1 million in 2010, as compared to 2009, primarily due to increased rent expenses for leased properties as a consequence of the increase in sales from franchised restaurants.

In the Caribbean division, occupancy expenses from franchised restaurants remained almost unchanged at $3.5 million in 2010, as compared to 2009.

In NOLAD, occupancy expenses from franchised restaurants decreased by $0.6 million, or 6.1%, to $10.0 million in 2010, as compared to 2009, primarily due to the conversion of 47 franchised restaurants in Mexico into Company-operated restaurants since the beginning of 2009.

In SLAD, occupancy expenses from franchised restaurants decreased by $4.0 million, or 34.7%, to $7.6 million in 2010, as compared to 2009. On a constant currency basis, occupancy expenses from franchised restaurants increased by $4.3 million, or 37.4%, to $16.0 million, primarily due to increased rent expenses for leased properties as a consequence of the increase in sales from franchised restaurants.

Set forth below are the margins for our franchised restaurants in 2010 and 2009. The margin for our franchised restaurants is expressed as a percentage and is equal to the difference between revenues from franchised restaurants and occupancy expenses from franchised restaurants, divided by revenues from franchised restaurants.


	For the Years Ended December 31,
	2010			2009
Brazil		62.4	%		56.0	%
Caribbean Division		71.4			70.2
NOLAD		41.4			32.4
SLAD		74.9			79.6

Total		69.6			67.1

General and Administrative Expenses

General and administrative expenses increased by $64.7 million, or 34.1%, to $254.2 million in 2010, as compared to 2009. This increase was a consequence of the appreciation of most local currencies in the Territories against the U.S. dollar, increased payroll costs as a result of salary increases and the hiring of employees to fill new corporate positions in expectation of continued growth, and higher travel and professional services expenses. In addition, in 2010 we recorded an incremental compensation expense related to a change in the valuation formula of our 2008 long-term incentive plan of $15.6 million. See Note 16 to our consolidated financial statements. This increase was partially offset by the accounting change affecting the translation of our results of operations in Venezuela.

In Brazil, general and administrative expenses increased by $13.7 million, or 22.5%, to $74.8 million in 2010, as compared to 2009. This increase resulted primarily from the appreciation of the real against the U.S. dollar and, to a lesser extent, from higher payroll and travel expenses as a consequence of the hiring of employees to fill new positions. In addition, in 2010 our variable compensation accrual increased in line with our improved results for this division for 2010, as compared to 2009.

In the Caribbean division, general and administrative expenses increased by $2.7 million, or 14.6%, to $20.8 million in 2010, as compared to 2009. This increase was mostly due to higher payroll and travel expenses as a consequence of the hiring of employees to fill new positions.

In NOLAD, general and administrative expenses increased by $2.7 million, or 11.6%, to $26.4 million in 2010, as compared to 2009. This increase was mostly a consequence of the appreciation of the local currencies in Mexico and Costa Rica.

In SLAD, general and administrative expenses decreased by $0.8 million, or 1.5%, to $54.0 million in 2010, as compared to 2009. On a constant currency basis, general and administrative expenses increased by $20.3 million, or 37.0%, to $75.1 million primarily as a result of higher payroll, travel and professional expenses mainly in Argentina and Venezuela, countries that have inflation levels above those of the rest of the countries in the region. In addition, in 2010 our variable compensation accrual increased in some countries, because we had better results in 2010, as compared to 2009.

General and administrative expenses for Corporate and others increased by $46.4 million, or 145.9%, to $78.2 million in 2010, as compared to 2009. This increase was mostly due to higher payroll and travel expenses as a consequence of the hiring of employees to fill new corporate positions and salary increases linked to Argentina’s inflation, as our corporate headquarters is located in Argentina. In addition, we had higher professional services expenses resulting from our ongoing systems integration and shared service center implementation throughout the region. In 2010, we recorded an incremental compensation expense related to a change in the valuation formula of our 2008 long-term incentive plan of $15.6 million. See Note 16 to our consolidated financial statements.

Other Operating Expenses, Net

Other operating expenses, net increased by $5.9 million, or 35.6%, to $22.5 million in 2010, as compared to 2009. This increase was primarily attributable to a higher compensation expense related to the equity award granted to our CEO for $12.1 million, which was offset partially by lower charges for contingencies and other expenses.

Operating Income


	For the Years Ended December 31,						% Increase (Decrease)
	2010			2009			% Increase (Decrease)
	(in thousands of U.S. dollars)
Brazil	$	208,102		$	127,291			63.5	%
Caribbean division		11,189			10,448			7.1
NOLAD		(16,718	)		(17,252	)		(3.1	)
SLAD		66,288			108,261			(38.8	)
Corporate and others and purchase price allocation		(64,304	)		(21,939	)		193.1

Total		204,557			206,809			(1.1	)

Operating income decreased by $2.3 million, or 1.1%, to $204.6 million in 2010, as compared to 2009.

Net Interest Expense

Net interest expense decreased by $10.9 million, or 20.7%, to $41.6 million in 2010, as compared to 2009, primarily due to a decrease of $4.5 million in the interest expense related to our short-term indebtedness denominated in local currency and an increase of $1.4 million in the interest income on our short-term investments. The decrease in our interest expense resulted from the refinancing of most of our short-term debt with long-term debt.

In October 2009, we issued senior notes in an amount of $450 million at a fixed rate of 7.5% per annum to prepay the amounts outstanding under our credit agreement and certain other short-term debt. Due to the increase in the principal amount and interest rate of our long-term debt, the related interest expense increased by $9.3 million in 2010 as compared to 2009, but this increase was more than offset by the acceleration of the amortization of deferred financing costs of $10.8 million incurred in 2009 in connection with the repayment of the credit agreement. In addition, in 2009 we maintained an interest rate swap in order to hedge our LIBOR exposure under the credit agreement, which generated a loss of $4.6 million in 2009. Due to the prepayment of the credit agreement, we settled the related interest rate swap in October 2009 and had no such interest expense in 2010.

Loss from Derivative Instruments

Loss from derivative instruments decreased by $7.1 million, or 17.8%, to $32.8 million in 2010, as compared to 2009, primarily due to changes in the fair market value of our cross-currency swaps as a result of changes in the Brazilian reais forward rate curve.

Foreign Currency Exchange Results

Foreign currency exchange results improved by $17.3 million, to a $3.2 million gain in 2010, as compared to 2009. This was a consequence of decreased losses generated by the purchases of U.S. dollars as part of the bond-based exchange process in Venezuela, which was partially offset by decreased gains resulting from the effect of exchange rate fluctuations on foreign currency-denominated assets and liabilities.

Other Non-Operating Expenses, Net

Other non-operating expenses, net increased by $22.4 million to $23.6 million in 2010, as compared to 2009, primarily due to an agreement reached with McDonald’s Corporation in connection with the indemnification for certain disputes with Brazilian tax authorities that were included in an amnesty program in 2010, which resulted in a loss of $22.5 million. See Note 17 to our consolidated financial statements.

Income Tax Expense

Income tax expense decreased by $15.3 million, or 81.6%, from $18.7 million in 2009 to $3.5 million in 2010, resulting primarily from the reversal of our valuation allowance related to our deferred tax assets mainly in Brazil where the significant improvements in our operations led us to conclude that the valuation allowance was no longer required. As a consequence of this reversal, our consolidated effective tax rate decreased by 15.7 percentage points to 3.1% in 2010, as compared to 2009.

Net Income Attributable to Non-controlling Interests

Net income attributable to non-controlling interests remained almost unchanged at $0.3 million in 2010, as compared to 2009.

Net Income Attributable to Arcos Dorados Holdings Inc.

As a result of the foregoing, net income attributable to Arcos Dorados Holdings Inc. increased by $26.0 million, or 32.5%, to $106.0 million in 2010, as compared to 2009.

Year Ended December 31, 2009 Compared to Year Ended December 31, 2008

Set forth below are our results of operations for the years ended December 31, 2009 and 2008.


	For the Years Ended December 31,						% Increase (Decrease)
	2009			2008			% Increase (Decrease)
	(in thousands of U.S. dollars)
Sales by Company-operated restaurants	$	2,536,655		$	2,480,897			2.2	%
Revenues from franchised restaurants		128,821			125,945			2.3

Total revenues		2,665,476			2,606,842			2.2

Company operated restaurant expenses:
Food and paper		(929,718	)		(902,305	)		3.0
Payroll and employee benefits		(491,214	)		(461,602	)		6.4
Occupancy and other operating expenses		(667,438	)		(647,152	)		3.1
Royalty fees		(121,901	)		(118,980	)		2.5
Franchised restaurants – occupancy expenses		(42,327	)		(42,416	)		(0.2	)
General and administrative expenses		(189,507	)		(186,098	)		1.8
Other operating expenses, net		(16,562	)		(26,095	)		(36.5	)

Total operating costs and expenses		(2,458,667	)		(2,384,648	)		3.1

Operating income		206,809			222,194			(6.9	)
Net interest expense		(52,473	)		(26,272	)		99.7
Loss from derivative instruments		(39,935	)		(2,620	)		1,424.2
Foreign currency exchange results		(14,098	)		(74,884	)		(81.2	)
Other non-operating expenses, net		(1,240	)		(1,934	)		(35.9	)

Income before income taxes		99,063			116,484			(15.0	)
Income tax expense		(18,709	)		(12,067	)		55.0

Net income		80,354			104,417			(23.0	)
Less: Net income attributable to non-controlling interests		(332	)		(1,375	)		(75.9	)

Net income attributable to Arcos Dorados Holdings Inc.		80,022			103,042			(22.3	)

Set forth below is a summary of changes to our systemwide, Company-operated and franchised restaurant portfolios in the years ended December 31, 2009 and 2008.


Systemwide Restaurants	For the Years Ended December 31,
	2009			2008
Systemwide restaurants at beginning of period		1,640			1,593
Restaurant openings		58			64
Restaurant closings		(18	)		(17	)

Systemwide restaurants at end of period		1,680			1,640


Company-operated Restaurants	For the Years Ended December 31,
	2009			2008
Company-operated restaurants at beginning of period		1,155			1,092
Restaurant openings		44			43
Restaurant closings		(16	)		(16	)
Net conversions of franchised restaurants to Company-operated restaurants(1)		43			36

Company-operated restaurants at end of period		1,226			1,155


Franchised Restaurants	For the Years Ended December 31,
	2009			2008
Franchised restaurants at beginning of period		485			501
Restaurant openings		14			21
Restaurant closings		(2	)		(1	)
Net conversions of franchised restaurants to Company-operated restaurants(1)		(43	)		(36	)

Franchised restaurants at end of period		454			485

(1)	Includes three refranchisings of Company-operated restaurants in 2009 and one refranchising in 2008.

Key Business Measures

Comparable Sales


	For the Year Ended December 31, 2009
Arcos Dorados
Systemwide comparable sales growth		5.5	%
Company-operated comparable sales growth		5.5
Franchised comparable sales growth		5.4

Systemwide Comparable Sales Growth by Division
Brazil		2.7	%
Caribbean division		4.2
NOLAD		(1.7	)
SLAD		12.2
Company-operated Comparable Sales Growth by Division
Brazil		2.5	%
Caribbean division		4.3
NOLAD		—
SLAD		11.7

Franchised Comparable Sales Growth by Division
Brazil		3.3	%
Caribbean division		3.9
NOLAD		(4.6	)
SLAD		13.8

Our comparable sales growth on a consolidated basis during 2009 was primarily the result of a moderate increase in average check, offset in part by reduced traffic. In some markets, however, comparable sales were negatively affected by even greater decreases in traffic due to particular events, such as the swine flu epidemic in Mexico, Argentina and Chile and the general strikes in Guadeloupe and Martinique.

Average Restaurant Sales


	For the Year Ended December 31,
	2009		2008
	(in thousands of U.S. dollars)
Systemwide average restaurant sales	$	2,147	$	2,186
Company-operated average restaurant sales		2,131		2,208
Franchised average restaurant sales		2,189		2,134

Our ARS deterioration during 2009 was primarily due to the depreciation of most regional local currencies against the U.S. dollar, as full year weighted average exchange rates for 2009 were higher than the ones for 2008. This was partially offset by positive comparable sales growth of 5.5%, which increased for the reasons discussed in the prior paragraph.

Sales Growth


	For the Year Ended December 31, 2009
	(in nominal terms)			(in constant currency)
Brazil		(2.4	)%		5.1	%
Caribbean division		4.6			5.7
NOLAD		(12.3	)		1.8
SLAD		9.2			15.4

Total Systemwide Sales Growth		0.9			8.2

In nominal terms, sales growth showed a slight increase during 2009, as comparable sales growth and 87 net restaurant openings systemwide since the beginning of 2008 offset the depreciation of most local currencies. We had 1,226 Company-operated restaurants and 454 franchised restaurants as of December 31, 2009, compared to 1,155 Company-operated restaurants and 485 franchised restaurants as of December 31, 2008.

Revenues


	For the Years Ended December 31,				% Increase (Decrease)
	2009		2008		% Increase (Decrease)
	(in thousands of U.S. dollars)
Sales by Company-operated Restaurants
Brazil	$	1,156,818	$	1,194,340		(3.1	)%
Caribbean division		232,583		220,045		5.7
NOLAD		224,566		208,978		7.5
SLAD		922,688		857,534		7.6

Total		2,536,655		2,480,897		2.2

Revenues from Franchised Restaurants
Brazil	$	43,924	$	42,868		2.5	%
Caribbean division		12,191		11,689		4.3
NOLAD.		15,767		23,105		(31.8	)
SLAD		56,939		48,283		17.9

Total		128,821		125,945		2.3

Total Revenues
Brazil	$	1,200,742	$	1,237,208		(2.9	)%
Caribbean division		244,774		231,734		5.6
NOLAD		240,333		232,083		3.6
SLAD		979,627		905,817		8.1

Total		2,665,476		2,606,842		2.2

Sales by Company-operated Restaurants

Total sales by Company-operated restaurants increased by $55.8 million, or 2.2%, from $2,480.9 million in 2008 to $2,536.7 million in 2009. This growth was the result of an increase of 5.5% in Company-operated comparable sales and 55 net Company-operated restaurant openings and the conversion of 79 franchised restaurants to Company-operated restaurants since the beginning of 2008, resulting in sales increases of $139.7 million and $108.2 million, respectively. The comparable sales growth was caused mainly by a 6.8% increase in average check, offset in part by reduced traffic. These increases in sales, however, were offset in large part by the depreciation of local currencies against the U.S. dollar, which decreased sales by $192.1 million.

In Brazil, sales by Company-operated restaurants decreased by $37.5 million, or 3.1%, to $1,156.8 million, primarily as a result of the depreciation of the real , which caused sales to decrease by $89.2 million. This decrease was partially offset by Company-operated comparable sales growth of 2.5% and by eight net Company-operated restaurant openings and the conversion of two franchised restaurants into Company-operated restaurants since the beginning of 2008, which resulted in sales increases of $29.6 million and $22.0 million, respectively. Average check growth represented 64% of comparable sales growth, and the rest was caused by increased traffic due to the successful introduction of the Big Pleasures, Small Prices promotion, where we offer a rotating selection of our existing products at reduced prices.

In the Caribbean division, sales by Company-operated restaurants increased by $12.5 million, or 5.7%, to $232.6 million mostly due to comparable sales increase of 4.3%, which resulted in a sales increase of $9.6 million. The successful “ McCombo del Día ” (“McCombo of the Day”) promotional campaign and our breakfast

menu in Puerto Rico were the main causes of comparable sales growth, which was partially offset by the general strikes that occurred in Martinique and Guadeloupe during February and March of 2009. Average check growth represented 56% of the increase in Company-operated comparable sales. In addition, the opening of four net Company-operated restaurants and the conversion of two franchised restaurants into Company-operated restaurants since the beginning of 2008 resulted in a sales increase of $6.5 million. The depreciation of the euro against the U.S. dollar resulted in a sales decrease, which decreased sales by $3.6 million.

In NOLAD, sales by Company-operated restaurants increased by $15.6 million, or 7.5%, to $224.6 million as a result of the conversion of 75 franchised restaurants in Mexico to Company-operated restaurants and 19 net Company-operated restaurant openings. This increase was partially offset by the depreciation of local currencies in Mexico and Costa Rica, which caused sales to decrease by $33.0 million. In spite of a positive change in Costa Rica and Panama, NOLAD’s comparable sales were unchanged due to the swine flu outbreak in Mexico, resulting in lower traffic due to the total or partial closing of most of our restaurants for several weeks in April and May of 2009. In addition, the Mexican economy was heavily impacted by the recession in the U.S., and its recovery lagged that of the rest of the Territories. The 1.2% decrease in traffic was offset by an equal increase in average check.

In SLAD, sales by Company-operated restaurants increased by $65.2 million, or 7.6%, to $922.7 million due primarily to a comparable sales increase of 11.7% and 24 net Company-operated restaurant openings since the beginning of 2008, which caused sales growth of $100.3 million and $31.2 million, respectively. Comparable sales growth came from Argentina, Venezuela and Colombia, where we were able to increase average check at the same rate as, or higher than, inflation due to the strength and appeal of our brand and was partially reduced by the negative impact on traffic of the swine flu in Argentina and Chile in 2009. In 2009, average check grew 17.2%, but traffic decreased 4.7%. The increase in sales in SLAD was offset in party by the depreciation of local currencies against the U.S. dollar, which caused sales to decrease by $66.4 million.

Revenues from Franchised Restaurants

Our total revenues from franchised restaurants increased by $2.9 million, or 2.3%, from $125.9 in 2008 to $128.8 million in 2009 mostly as a consequence of comparable sales growth of 5.4% and rent increases resulting from the increase in sales and the elimination of rent reliefs in 2009. These two factors caused revenue increases of $7.5 million and $3.7 million, respectively. The depreciation of local currencies against the U.S. dollar and the conversion of 79 franchised restaurants to Company-operated restaurants since the beginning of 2008 resulted in revenue decreases of $7.3 million and $1.0 million, respectively. In 2009, 25% and 75% of revenues from franchised restaurants were earned on a flat fee basis and on the basis of a percentage of sales, respectively, compared to 26% and 74%, respectively, in 2008.

In Brazil, revenues from franchised restaurants increased by $1.1 million, or 2.5%, to $43.9 million as a result of 17 net franchised restaurant openings since the beginning of 2008, comparable sales growth of 3.3% and rent increases due to increased sales, resulting in revenue growth of $1.7 million, $1.4 million and $1.3 million, respectively. This revenue growth was partially offset by the depreciation of the real , which caused revenues to decrease by $3.4 million.

In the Caribbean division, revenues from franchised restaurants increased by $0.5 million, or 4.3%, to $12.2 million as a result of the 3.9% growth in comparable sales and an increase in rent due to increased sales.

In NOLAD, revenues from franchised restaurants decreased by $7.3 million, or 31.8%, to $15.8 million mostly due to the conversion of 75 franchised restaurants in Mexico to Company-operated restaurants since the beginning of 2008 and the 4.6% decrease in comparable sales from franchised restaurants, which together decreased revenues by $3.6 million and $0.8 million, respectively. In addition, the depreciation of local currencies against the U.S. dollar in Mexico and in Costa Rica resulted in a decrease in revenues of $2.9 million.

In SLAD, revenues from franchised restaurants increased by $8.7 million, or 17.9%, to $56.9 million due to 13.8% growth in comparable sales, rent increases due to the increase in sales and the elimination of rent reliefs and six net franchised restaurant openings, which resulted in revenue increases of $6.5 million, $2.2 million and $1.1 million, respectively. This increase was partially offset by the depreciation of local currencies against the U.S. dollar, which decreased revenues by $1.1 million.

Operating Costs and Expenses

Food and Paper

Our total food and paper costs increased by $27.4 million, or 3.0%, to $929.7 million in 2009, as compared to 2008. As a percentage of our total sales by Company-operated restaurants, food and paper costs increased 0.3 percentage points to 36.7%.

In Brazil, food and paper costs decreased by $27.2 million, or 6.4%, to $399.8 million. As a percentage of Brazil’s sales by Company-operated restaurants, food and paper costs decreased 1.2 percentage points to 34.6% due to a reduction in the price of beef and operating efficiencies, which offset the effect of the depreciation of the real against the U.S. dollar on the cost of imported food and paper products.

In the Caribbean division, food and paper costs increased by $5.5 million, or 7.3%, to $79.7 million largely in line with sales increases. As a percentage of the division’s sales by Company-operated restaurants, food and paper costs increased 0.5 percentage points to 34.3% mainly because of inventory losses in Guadeloupe and Martinique during the general strikes.

In NOLAD, food and paper costs increased by $11.9 million, or 14.0%, to $96.9 million, due to the depreciation of the local currencies in Mexico and Costa Rica. As a percentage of the division’s sales by Company-operated restaurants, food and paper costs increased 2.5 percentage points to 43.2% mainly as a consequence of our promotional strategy implemented in Mexico to maintain sales volume through a product mix with lower percentage margins.

In SLAD, food and paper costs increased by $29.1 million, or 9.1%, to $348.2 million. As a percentage of the SLAD division’s sales by Company-operated restaurants, food and paper costs increased 0.5 percentage points to 37.7%, primarily because of the increase in the number of items in Venezuela that we were not able to purchase at the official exchange rate and, to a lesser extent, the depreciation of most of this division’s local currencies.

Payroll and Employee Benefits

Our total payroll and employee benefits costs increased by $29.6 million, or 6.4%, to $491.2 million in 2009, as compared to 2008. As a percentage of our total sales by Company-operated restaurants, payroll and employee benefits costs increased 0.8 percentage points to 19.4%. This increase can be mostly attributed to wage inflation in several markets that was higher than our sales growth, and to a decrease in traffic caused by one-time events such as the swine flu epidemic in Mexico, Argentina and Chile and general strikes in Guadeloupe and Martinique.

In Brazil, payroll and employee benefits costs decreased by $1.8 million, or 0.8%, to $215.4 million. As a percentage of the division’s sales by Company-operated restaurants, payroll and employee benefits costs increased 0.4 percentage points to 18.6% mostly because wages increased slightly more than our average prices.

In the Caribbean division, payroll and employee benefits costs increased by $5.8 million, or 10.1%, to $63.3 million. As a percentage of the division’s sales by Company-operated restaurants, payroll and employee benefits costs increased 1.1 percentage points to 27.2% mainly due to minimum wage increases in Puerto Rico and wage increases granted to employees in Guadeloupe and Martinique after the general strike.

In NOLAD, payroll and employee benefits costs increased by $5.1 million, or 16.0%, to $37.2 million. As a percentage of the division’s sales by Company-operated restaurants, payroll and employee benefits costs increased 1.2 percentage points to 16.6%. Even though traffic decreased due to the swine flu epidemic in Mexico, we maintained fully staffed restaurants. In addition, to improve service quality, we increased the number of crew employees in the last quarter of 2008.

In SLAD, payroll and employee benefits costs increased by $20.5 million, or 13.3%, to $175.3 million. As a percentage of the division’s sales by Company-operated restaurants, payroll and employee benefits costs Occupancy and Other Operating Expenses increased 0.9 percentage points to 19.0% as wage increases outpaced our sales growth and there were certain changes in labor regulations in several markets that increased labor costs.

Occupancy and Other Operating Expenses

Our total occupancy and other operating expenses increased by $20.3 million, or 3.1%, to $667.4 million in 2009, as compared to 2008, largely in line with our increase in sales. As a percentage of our total sales by Company-operated restaurants, occupancy and other operating expenses increased 0.2 percentage points to 26.3%.

In Brazil, occupancy and other operating expenses decreased by $24.1 million, or 7.0%, to $319.5 million. As a percentage of the division’s sales by Company-operated restaurants, occupancy and other operating expenses decreased 1.2 percentage points to 27.6%, mainly as a result of a decrease in the use of operating supplies and advertising.

In the Caribbean division, occupancy and other operating expenses increased by $1.3 million, or 2.3%, to $57.6 million. As a percentage of our total sales by Company-operated restaurants, occupancy and other operating expenses decreased 0.8 percentage points to 24.8%, mainly as a result of a decrease in advertising and a reduction in energy costs in Puerto Rico.

In NOLAD, occupancy and other operating expenses increased by $10.1 million, or 14.9%, to $77.9 million, largely due to higher advertising and maintenance expenses. As a percentage of the division’s sales by Company-operated restaurants, occupancy and other operating expenses increased 2.2 percentage points to 34.7% as a result of lower sales volumes due to the swine flu epidemic in Mexico and the increase in expenses described above.

In SLAD, occupancy and other operating expenses increased by $29.0 million, or 14.0%, to $236.4 million, largely due to higher maintenance and repair and outside services expenses due to the effect of local currency depreciation on the imported portion of these expenses. As a percentage of the division’s sales by Company-operated restaurants, occupancy and other operating expenses increased 1.4 percentage points to 25.6%. This increase was mainly the result of the cost increases described above, which outpaced our sales growth.

Royalty Fees

Our total royalty fees increased by $2.9 million, or 2.5%, to $121.9 million in 2009, as compared to 2008, in line with the increase in our sales by Company-operated restaurants.

In Brazil, royalty fees decreased by $1.1 million, or 2.0%, to $55.9 million in 2009, as compared to 2008, in line with the decrease in sales by Company-operated restaurants.

In the Caribbean division, royalty fees increased by $0.6 million, or 5.8%, to $11.4 million in 2009, as compared to 2008, in line with the increase in sales by Company-operated restaurants.

In NOLAD, royalty fees increased by $0.3 million, or 3.0%, to $10.2 million in 2009, as compared to 2008. As a percentage of the division’s sales by Company-operated restaurants, royalty fees decreased 0.2 percentage points to 4.6% because McDonald’s waived April 2009 royalties in Mexico due to the swine flu outbreak.

In SLAD, royalty fees increased by $3.1 million, or 7.6%, to $44.3 million in 2009, as compared to 2008, in line with the increase in sales by Company-operated restaurants.

Franchised Restaurants—Occupancy Expenses

Occupancy expenses from franchised restaurants in 2009, at $42.3 million, were essentially unchanged from those in 2008.

In Brazil, occupancy expenses from franchised restaurants increased by $0.4 million, or 2.2%, to $19.3 million in 2009, as compared to 2008, in line with the increase in revenues from franchised restaurants.

In the Caribbean division, occupancy expenses from franchised restaurants increased by $0.1 million, or 4.3%, to $3.6 million in 2009, as compared to 2008, in line with the increase in revenues from franchised restaurants.

In NOLAD, occupancy expenses from franchised restaurants decreased by $4.1 million, or 27.9%, to $10.7 million in 2009, as compared to 2008, as a result of the conversion of 75 franchised restaurants in Mexico to Company-operated restaurants from January 2008 to December 31, 2009.

In SLAD, occupancy expenses from franchised restaurants increased by $1.5 million, or 14.7%, to $11.6 million in 2009, as compared to 2008, in line with the increase in revenues from franchised restaurants.

Set forth below are the margins for our franchised restaurants for the years ended December 31, 2009 and 2008.


	For the Years Ended December 31,
	2009			2008
Brazil		56.0	%		55.8	%
Caribbean Division		70.2			70.1
NOLAD		32.4			36.0
SLAD		79.6			79.0

Total		67.1			66.3

General and Administrative Expenses

General and administrative expenses increased by $3.4 million, or 1.8%, to $189.5 million in 2009, as compared to 2008. This increase was a consequence of higher payroll costs and the hiring of new corporate staff in order to meet the additional demands of our expected growth, which offset the positive effect of the depreciation of most local currencies.

In Brazil, general and administrative expenses increased by $1.3 million, or 2.2%, to $61.1 million in 2009, as compared to 2008. This increase was primarily due to higher payroll costs as a result of increased variable compensation accrual, and was partially offset by the depreciation of the real against the U.S. dollar.

In the Caribbean division, general and administrative expenses increased by $1.3 million, or 7.6%, to $18.1 million in 2009, as compared to 2008. This increase was mostly due to higher payroll expenses.

In NOLAD, general and administrative expenses decreased by $2.2 million, or 8.5%, to $23.7 million in 2009, as compared to 2008. This decrease was mostly a consequence of the depreciation of local currencies in Mexico and Costa Rica.

In SLAD, general and administrative expenses increased by $1.9 million, or 3.5%, to $54.8 million in 2009, as compared to 2008, primarily as a result of higher payroll costs driven by salary increases linked to Argentina’s and Venezuela’s inflation. This was partially offset by the depreciation of local currencies against the U.S. dollar in most of SLAD’s countries.

General and administrative expenses in Corporate and others increased by $1.1 million, or 3.2%, to $36.1 million in 2009, as compared to 2008. This increase was mostly a consequence of the hiring of new corporate staff in order to meet the additional demands of our expected growth,

Other Operating Expenses, Net

Other operating expenses, net decreased by $9.5 million, or 36.5%, to $16.6 million in 2009, as compared to 2008. The decrease was primarily attributable to higher gains from property and equipment sales and lower compensation expense related to the equity award to our CEO in 2009, partially offset by a higher amount of write-offs of property and equipment. In addition, in 2008 we made a one-time severance payment to a supplier.

Operating Income


	For the Years ended December 31,						% Increase (Decrease)
	2009			2008			% Increase (Decrease)
	(in thousands of U.S. dollars)
Brazil	$	127,291		$	102,819			23.8	%
Caribbean division		10,448			12,454			(16.1	)
NOLAD		(17,252	)		(4,863	)		254.8
SLAD		108,261			119,716			(9.6	)
Corporate and others and purchase price allocation		(21,939	)		(7,932	)		176.6

Total		206,809			222,194			(6.9	)

Operating income decreased by $15.4 million, or 6.9%, to $206.8 million in 2009, as compared to 2008.

Net Interest Expense

Net interest expense increased by $26.2 million, or 99.7%, to $52.5 million in year 2009, as compared to 2008.

In October 2009, we issued senior notes in an amount of $450 million at a fixed rate of 7.5% per annum to prepay the amounts outstanding under the credit agreement and certain other short-term debt. The increase in the amount of net interest expense is primarily due to the a higher amount of interest on our long-term debt ($8.3 million) and to an increase in the amount of short-term indebtedness denominated in local currency maintained by us during most part of the year, until it was mostly prepaid with the bond issuance ($8.0 million).

Due to the prepayment of the credit agreement, we accelerated the amortization of the deferred financing costs incurred in connection with the credit agreement ($5.9 million increase with respect to 2008) and had to settle the related interest rate swap, which generated a loss of $4.6 million in 2009.

In addition, in accordance with our risk management policy and in order to mitigate our foreign exchange risk in Venezuela, in October 2009 one of our Venezuelan subsidiaries issued short-term commercial paper for Bs.F. 40 million at a fixed rate of 19.5%.

Loss from Derivative Instruments

Loss on derivative instruments increased by $37.3 million to $39.9 million in 2009, as compared to 2008, primarily due to changes in the fair market value of our cross-currency swaps as a result of changes in the Brazilian reais forward rate curve.

Foreign Currency Exchange Results

Foreign currency exchange results improved by $60.8 million, or 81.2%, to a loss of $14.1 million in 2009, as compared to 2008. The effect of exchange rate fluctuations on foreign currency denominated assets and liabilities represented a $84.8 million increase from a loss of $46.4 million in 2008 to a gain of $38.4 in 2009, primarily due to the appreciation of most regional currencies as of December 31, 2009 compared to December 31, 2008. This was partially offset by the $24.0 million increase in the losses generated by the difference between the foreign currency exchange rate at which we purchased U.S. dollars in Venezuela and the official foreign currency exchange rate used for financial statement reporting purposes.

Other Non-Operating Expenses, Net

Other non-operating expenses, net decreased by $0.7 million, or 35.9%, to $1.2 for 2009, as compared to 2008.

Income Tax Expense

Income tax expense increased by $6.6 million, or 55.0%, from $12.1 million in 2008 to $18.7 million in 2009, due to a lesser deferred income tax benefit of $1.4 million and a higher current income tax expense of $5.3 million in 2009 compared to 2008. Our consolidated effective tax rate increased by 8.5 percentage points to 18.9% in 2009 compared to 2008 primarily due to a decreased recovery of our valuation allowance related to our deferred tax assets.

Net Income Attributable to Non-controlling Interests

Net income attributable to non-controlling interests decreased $1.0 million, or 75.9%, to $0.3 million in 2009, as compared to 2008.

Net Income Attributable to Arcos Dorados Holdings Inc.

As a result of the foregoing, net income attributable to Arcos Dorados Holdings Inc. decreased by $23.0 million, or 22.3%, to $80.0 million in 2009, as compared to 2008.

Liquidity and Capital Resources

Our financial condition and liquidity is and will continue to be influenced by a variety of factors, including:

•

our ability to generate cash flows from our operations;

•

the level of our outstanding indebtedness and the interest we are obligated to pay on this indebtedness;

•

changes in exchange rates which will impact our generation of cash flows from operations when measured in U.S. dollars; and

•

our capital expenditure requirements.

Overview

Net cash provided by operations was $263.9 million for 2010, compared to $148.0 million for 2009. We accelerated our capital expenditures program, investing $81.9 million more than in 2009. Cash used in financing activities increased by $75.7 million, from $24.4 million provided by financing activities in 2009 to a use of $51.3 million in 2010, mainly because of the inflow of $446.1 million in 2009 from the issuance of our senior notes, which was used partially to repay our credit agreement for $350.0 million, and because of the dividends that we paid to our shareholders of $33.4 million in 2010, which were partially offset by the reimbursement in 2010 of the collateral deposit made in 2009 for $25.0 million.

For 2009, net cash provided by operations was $148.0 million, compared to $198.4 million for 2008. Our investment program was reduced by $55.8 million in 2009, to $96.4 million, as a response to the decreased cash generation. Cash from financing activities increased by $39.2 million, from a use of $14.8 million for 2008, to a source of $24.4 million for 2009. This was mainly attributable to the proceeds from the issuance of the senior notes, after the repayment of the credit agreement, and was partially offset by higher payments related to other financing activities and the repayment of certain short-term debt.

At December 31, 2010, our total financial debt was $564.0 million, consisting of $11.7 million in short-term debt, $457.6 million in long-term debt (of which $446.6 million was related to the senior notes, including the original issue discount), and $94.7 million related to the fair market value of our derivative instruments primarily consisting of our Brazilian reais cross-currency swaps.

At December 31, 2009, our total financial debt was $551.5 million, consisting of $6.7 million in short-term debt denominated in bolívares fuertes (Bs.F 40 million), $458.8 million in long-term debt (of which $446.2 million was related to the senior notes, including the original issue discount), and $86.0 million related to the fair market value of our derivative instruments.

Comparative Cash Flows

The following table sets forth our cash flows for the periods indicated:


	For the Years Ended December 31,
	2010			2009			2008
	(in thousands of U.S. dollars)
Net cash provided by operating activities	$	263,876		$	148,022		$	198,363
Net cash used in investing activities		(178,224	)		(96,370	)		(152,166	)
Net cash (used in) provided by financing activities		(51,287	)		24,372			(14,809	)
Effect of exchange rate changes on cash and cash equivalents		5,759			(14,031	)		(17,986	)

Increase in cash and cash equivalents		40,124			61,993			13,402

Operating Activities


	For the Years Ended December 31,
	2010		2009		2008
	(in thousands of U.S. dollars)
Net income attributable to Arcos Dorados Holdings Inc.	$	106,021	$	80,022	$	103,042
Non-cash charges and credits		99,196		45,555		69,343
Changes in working capital items		58,659		22,445		25,978

Net cash provided by operating activities		263,876		148,022		198,363

Operating Activities

In 2010, net cash provided by operating activities was $263.9 million, compared to $148.0 million in 2009. The $115.9 million increase is mainly attributable to a higher operating income adjusted for non-cash charges (depreciation and amortization and accrued compensation expense), lower losses incurred in the acquisition of U.S. dollars in Venezuela, decreased income tax paid and higher working capital generation, which factors were partially offset by a higher amount of interest paid.

In 2009, net cash provided by operating activities was $148.0 million, compared to $198.4 million in 2008. The $50.3 million decrease is attributable to a lower operating income, excluding depreciation and amortization, increased interest and income tax paid, increased losses incurred in the acquisition of U.S. dollars in Venezuela and lower working capital generation.

Investing Activities

New restaurant investments are primarily concentrated in markets with opportunities for long-term growth and returns on investment above a pre-defined threshold that is significantly above our cost of capital. Average development costs vary widely by market depending on the types of restaurants built and the real estate and construction costs within each market and are affected by foreign currency fluctuations. These costs, which include land, buildings and equipment, are managed through the use of optimally sized restaurants, construction and design efficiencies and the leveraging of best practices.

The following table presents our cash used in investing activities by type:


	For the Years Ended December 31,
	2010			2009			2008
	(in thousands of U.S. dollars)
Property and equipment expenditures	$	(175,669	)	$	(90,105	)	$	(148,894	)
Purchases of restaurant businesses		(504	)		(11,061	)		(18,999	)
Proceeds from sales of property and equipment		6,215			12,368			5,230
Collection of receivable with McDonald’s Corporation		—			—			15,015
Others, net		(8,266	)		(7,572	)		(4,518	)

Net cash used in investing activities		(178,224	)		(96,370	)		(152,166	)

The following table presents our property and equipment expenditures by type:


	For the Years Ended December 31,
	2010		2009		2008
	(in thousands of U.S. dollars)
New restaurants	$	69,448	$	38,226	$	38,410
Existing restaurants		68,140		29,523		85,218
Other(1)		38,081		22,356		25,266

Total property and equipment expenditures		175,669		90,105		148,894

(1)	Primarily corporate equipment and other office related expenditures.

In 2010, net cash used in investing activities was $178.2 million, compared to $96.4 million in 2009. This $81.9 million increase was primarily attributable to the increase of our investment program.

Property and equipment expenditures increased by $85.6 million, from $90.1 million in 2009 to $175.7 million in 2010. The increase in property and equipment expenditures was primarily due to higher investment in new restaurants and reinvestment in existing ones. Property and equipment expenditures reflected our

commitment to growing sales, including through the reimaging of existing restaurants and the opening of McCafé locations and Dessert Centers. In this period, we opened 85 restaurants, including 47 in the fourth quarter, and closed 10 restaurants.

In 2009, net cash used in investing activities was $96.4 million, compared to $152.2 million in 2008. This $55.8 million decrease was primarily attributable to the decrease of our capital expenditures program to adapt to the lower cash generation resulting from prevailing economic conditions. In addition, during 2008 we collected a receivable of $15.0 million from McDonald’s related to the amount paid in excess of the final purchase price for the Acquisition.

In 2009, property and equipment expenditures decreased by $58.8 million, from $148.9 million in 2008 to $90.1 million in 2009, as a consequence of the decrease in our investment program. Proceeds from sales of property and equipment increased by $7.1 million to $12.4 million in 2009, as compared to 2008, primarily as a consequence of sales of equipment to franchisees, mainly in Venezuela. In addition, we used $11.1 million to purchase 39 franchised restaurants. In this period, we opened 58 restaurants and closed 18 restaurants.

In 2008, we had property and equipment expenditures amounting to $148.9 million. Property and equipment expenditures reflected our commitment to growing sales from existing restaurants, including reinvestment initiatives such as reimaging and the opening of McCafé locations and Dessert Centers. In addition, we acquired 34 franchised restaurants in Mexico and one franchised restaurant in Brazil for $19.0 million and we acquired the minority interests in our subsidiaries located in Ecuador and Peru for $3.6 million. As previously stated, in 2008, we collected $15.0 million of a receivable from McDonald’s related to the amount paid in excess of the final purchase price for the Acquisition. In 2008, we opened 61 restaurants and closed 17 restaurants.

Financing Activities


	For the Years Ended December 31,
	2010			2009			2008
	(in thousands of U.S. dollars)
Issuance of the senior notes	$	—		$	446,112		$	—
Repayment of the credit agreement		—			(350,000	)		—
Payment of deferred financing costs		—			(10,826	)		(8,712	)
Payment of derivative instruments		(37,815	)		(30,167	)		(3,567	)
Net short-term borrowings		3,805			(2,539	)		14,286
Collateral deposits		25,000			(25,000	)		(15,000	)
Distribution of dividends to our shareholders		(33,400	)		—			—
Other financing activities		(8,877	)		(3,208	)		(1,816	)

Net cash (used in) provided by financing activities		(51,287	)		24,372			(14,809	)

Net cash used in financing activities was $51.3 million in 2010, compared to $24.4 million provided by financing activities in 2009. The $75.7 million increase in the amount of cash used in financing activities was primarily attributable to net inflows totaling $96.1 million in 2009 from the issuance of senior notes and the repayment of the credit agreement as well as the payment of dividends to our shareholders in 2010 of $33.4 million. The increase in the amount of cash used in financing activities was partially offset by the reimbursement in 2010 of the collateral deposit made in 2009 for $25.0 million.

Net cash provided by financing activities was $24.4 million in 2009, compared to a use of $14.8 million in 2008. The $39.2 million increase in the amount of cash provided by financing activities was primarily attributable to the proceeds from the issuance of the senior notes, after repaying amounts due under the credit agreement, of $96.1 million, partially offset by higher payments related to our swap agreements of $26.6 million, higher collateral deposits of $10.0 million and repayment of $2.5 million of short-term debt in 2009 compared to short-term borrowings of $14.3 million in 2008.

Senior Notes

In October 2009, our subsidiary, Arcos Dorados B.V., issued senior notes for an aggregate principal amount of $450 million under an indenture dated October 1, 2009. The senior notes mature on October 1, 2019 and bear interest of 7.5% per year. Interest is paid semiannually on April 1 and October 1. The gross proceeds from this issuance were principally used to repay indebtedness under our credit agreement and certain of our other short-term debt. The senior notes are redeemable at our option at any time at the applicable redemption prices set forth in the indenture.

The senior notes are fully and unconditionally guaranteed on a senior unsecured basis by the majority of our subsidiaries. The senior notes rank equally with all of our unsecured and unsubordinated indebtedness and are effectively junior to all of our secured indebtedness. The indenture governing the senior notes imposes certain restrictions on us and our subsidiaries, including some restrictions on our ability to: (i) incur additional indebtedness; (ii) pay dividends or redeem, repurchase or retire our capital stock; (iii) make investments; (iv) create liens; (v) create limitations on the ability of our subsidiaries to pay dividends, make loans or transfer property to the us; (vi) engage in transactions with affiliates; (vii) sell assets including the capital stock of the subsidiaries; and (viii) consolidate, merge or transfer assets. These covenants are subject to a number of important limitations and exceptions. The indenture governing the senior notes also provides for events of default, which, if any of them occurs, would permit or require the principal, premium, if any, and interest on all then outstanding senior notes to be due and payable immediately.

We may issue additional notes from time to time pursuant to the indenture governing the senior notes.

Contractual Obligations and Commitments

The following table presents information relating to our contractual obligations as of December 31, 2010.


	Payment Due by Period
Contractual Obligations	Total		2011		2012		2013		2014		2015		Thereafter
	(in thousands of U.S. dollars)
Capital lease obligations(1)	$	2,961	$	601	$	481	$	481	$	481	$	481	$	436
Operating lease obligations		718,188		105,968		91,916		85,754		78,534		68,803		287,213
Contractual purchase obligations		2,326		2,326		—		—		—		—		—
Senior notes(1)		753,750		33,750		33,750		33,750		33,750		33,750		585,000
Other long-term borrowings(1)		9,323		6,219		2,358		387		341		18		—
Derivative instruments		98,599		41,156		29,216		27,305		922		—		—

Total		1,585,147		190,020		157,721		147,677		114,028		103,052		872,649

(1)	Includes interest payments.

The table set forth above excludes projected payments on our restaurant opening and reinvestment plans pursuant to the MFAs in respect of which we do not yet have any contractual commitments.

Other Matters

Impact of Inflation

We believe that our results of operations are not materially impacted by moderate changes in the inflation rate. Inflation and changing commodity prices did not have a material impact on our operations in 2008, 2009 or 2010. Severe increases in inflation, however, could affect Latin American and Caribbean economies and could have an adverse impact on our business, financial condition and results of operations.

Research and Development, Patents and Licenses

We do not have significant research and development activities because we rely primarily on McDonald’s research and development. McDonald’s operates research and development facilities in the United States, Europe and Asia, and independent suppliers also conduct research activities that benefit McDonald’s and us. Nevertheless, we have developed certain menu items, such as bone-in-chicken, Pao de Queijo (in Brazil), McBurrito a la Mexicana (in Mexico) and dessert items, to better tailor our product offerings to local tastes and to provide our customers with additional food options.

Trend Information

Our business and results of operations have recently experienced the following trends, which we expect will continue in the near term:

•

Social upward mobility in Latin America and the Caribbean : Our sales have benefited, and we expect to continue to benefit, from our Territories’ population size, younger age profile when compared to more developed markets and improving socio-economic conditions. This has led to a modernization of consumption patterns and increased affordability of our products across socio-economic segments, leading to greater demand for our products.

•

Decline in free time : More single-parent and dual-earner households have increased the demand for the convenience offered by eating out and takeout food.

•

Product offerings : Our beverage, dessert, breakfast, low-calorie and low-sodium products, and value menu item offerings have been popular among customers and have allowed us to increase traffic while at the same time allowing us to focus on our revenue management strategy.

•

Increased competition in some markets : The popularity of the QSR concept in markets such as Puerto Rico and Mexico has attracted new competitors. Even though we have been able to maintain or even increase market share in these markets, we have seen a reduction in pricing flexibility and have had to increase the focus of our marketing efforts on value offerings in order to drive traffic.

•

Inflationary environment : Over the last few years, we have been able through our revenue management strategy to mitigate cost increase tied to inflation. However, inflation has been, and will continue to be, an important factor affecting our results of operations, specifically impacting our food and paper costs, occupancy and other operating expenses, and general administrative expenses.

•

Increased general and administrative costs to support future growth : Our business has been growing at a very rapid pace, and we have experienced increasing general and administrative expenses in order to support and prepare for our future growth (both operationally and as a public company). However, we expect that general and administrative expenses as a percentage of total sales will begin to decrease in the medium term as our recent and planned investments begin to generate revenues.

•

Increased volatility of foreign exchange rates : Our results of operations have been impacted by increased volatility in foreign exchange rates in many of the Territories. We expect that foreign exchange rates will continue to be an important factor affecting our foreign currency exchange results and the “Accumulated other comprehensive (loss) income” component of shareholders’ equity and, consequently, our results of operations and financial condition.

Off-Balance Sheet Arrangements

We do not have any off-balance sheet arrangements.

Quantitative and Qualitative Disclosures About Market Risk

Risk Management

In the ordinary course of our business activities, we are exposed to various market risks that are beyond our control, including fluctuations in foreign exchange rates and the price of our primary supplies, and which may have an adverse effect on the value of our financial assets and liabilities, future cash flows and profit. As a result of these market risks, we could suffer a loss due to adverse changes in foreign exchange rates and the price of commodities in the international markets. Our policy with respect to these market risks is to assess the potential of experiencing losses and the consolidated impact thereof, and to mitigate these market risks. We are not currently exposed to significant interest rate risk because most of our long-term debt is at fixed interest rates.

Foreign Currency Exchange Rate Risk

We are exposed to foreign currency exchange rate risk primarily in connection with the fluctuation in the value of the local currencies of the countries in which we operate, primarily the Brazilian real , Mexican peso and Argentine peso , against the U.S. dollar. We generate revenues and cash from our operations in local currencies while all of our long-term debt is denominated in U.S. dollars. An adverse change in foreign currency exchange rates would therefore affect the generation of cash flow from operations in U.S. dollars, which could negatively impact our ability to pay amounts owed in U.S. dollars.

To help mitigate some of this foreign currency exchange rate risk, we have entered into derivatives contracts, including cross-currency swap agreements and forward agreements, to hedge the U.S. dollar to the Brazilian real . As of December 31, 2010, the notional amounts were $200 million and amortize throughout the life of the agreements and ultimately mature on November 10, 2013. These agreements are carried at fair market value in our consolidated balance sheet with changes reported in earnings.

Following the issuance of the senior notes and the prepayment of the credit agreement, we entered into a series of derivative transactions to restructure the existing cross currency obligations mentioned above to match our new payment obligations under the senior notes. Under the resulting structure, we have hedged 44% of the principal and coupon payments of the senior notes.

Revenues from our restaurants are denominated in local currency. Moreover, our continuing franchise fee payments to McDonald’s pursuant to the MFAs must be in U.S. dollars, payable on the seventh day subsequent to each month-end. As such, in the intervening period we are subject to significant foreign exchange risk. In particular, in the case of Venezuela, there are currency restrictions in place that limit our ability to repatriate bolívares fuertes held in Venezuela at the government’s official exchange rate. See “—Factors Affecting Comparability of Results—Impact of Venezuelan Currency Controls and Related Accounting Changes on Our Results of Operations.”

While substantially all our income is denominated in the local currencies of the countries in which we operate, our supply chain management involves the importation of various products, and some of our imports are denominated in U.S. dollars. Therefore, we are exposed to foreign currency exchange risk related to imports. We have entered into various forward contracts maturing in 2011 to hedge a portion of the foreign exchange risk associated with the forecasted imports of Chile. See Note 12 to our consolidated financial statements. In addition, we attempt to minimize this risk also by entering into annual and semi-annual pricing arrangements with our main suppliers.

We are also exposed to foreign exchange risk related to U.S. dollar-denominated intercompany debt held by certain of our operating subsidiaries with our holding companies and to foreign currency-denominated intercompany debt held by our holding companies with certain subsidiaries. Although these intercompany balances are eliminated through consolidation, an adverse change in exchange rates could have a significant impact on our results through the recognition of foreign currency exchange losses in our consolidated income statement.

A decrease of 10% in the value of the Brazilian real against the U.S. dollar would result in a foreign exchange loss of $7.0 million over our currently outstanding foreign-denominated debt of $70.2 million as of December 31, 2010.

A decrease of 10% in the value of the Argentine peso against the U.S. dollar would result in a foreign exchange loss of $3.7 million over our currently outstanding foreign-denominated debt of $36.9 million as of December 31, 2010.

A decrease of 10% in the value of the Chilean peso against the U.S. dollar would result in a foreign exchange loss of $1.9 million over our currently outstanding foreign-denominated debt of $19.5 million as of December 31, 2010.

An increase of 10% in the value of the euro against the U.S. dollar would result in a foreign exchange loss of $2.1 million over our currently outstanding foreign-denominated debt of $21.0 million as of December 31, 2010.

Fluctuations in the value of the Mexican peso against the U.S. dollar would not result in foreign exchange gain or loss since our Mexican subsidiaries did not have any outstanding foreign-denominated debt as of December 31, 2010.

Commodity Price Risk

We purchase our primary supplies, including beef, chicken, buns, produce, cheese, dairy mixes and toppings pursuant to oral agreements with our approved suppliers at prices that are derived from international market prices. We therefore carry market risk exposure to changes in commodity prices that have a direct impact on our costs. We do not enter into futures or options contracts to protect ourselves against changes in commodity prices, although we may do so in the future. We attempt to minimize this risk by entering into annual and semi-annual pricing arrangements with our main suppliers. This allows us to provide cost predictability while avoiding the costs related to the use of derivative instruments, which we may not be able to pass on to our customers due to the competitive nature of the QSR industry.

INDUSTRY

The Latin American and Caribbean Food Service Industry

The Latin American and Caribbean food service industry offers a wide variety of away-from-home eating options at commercial food and drink establishments. Most of these establishments remain independent, family-owned businesses, but food contractors and international companies have rapidly been gaining market share. According to Euromonitor, the total food service industry in Latin America and the Caribbean was worth approximately $222.3 billion in sales in 2010.

The Latin American and Caribbean food service industry can be divided into two segments: (i) the competitive eating out segment, which, according to Euromonitor, was worth an estimated $153.9 billion in sales in 2010, and (ii) the remaining eating out segment, which includes cafes and bars (other than specialty coffee shops) and was worth an estimated $68.3 billion in sales in 2010, according to Euromonitor. In Latin America and the Caribbean, the remaining eating out segment is dominated by small, local food service providers who independently own and operate cafes and bars, according to Euromonitor. However, multinationals such as Starbucks and our McCafé locations have recently had success in penetrating the specialty coffee market. It is for this reason that we treat specialty coffee shops as part of the competitive eating out segment rather than the remaining eating out segment.

The competitive eating out segment of the Latin American and Caribbean food service industry is divided by Euromonitor into six sub-segments: (i) street vendors, stalls and kiosks, which refers to small, mobile, independently owned and operated outdoor food service providers with a limited product offering, (ii) self-service cafeterias, (iii) full-service restaurants serving various cuisines in a formal or a casual setting, (iv) delivery/take-away establishments that do not provide facilities for customers to eat at the restaurant’s premises, (v) specialty coffee shops, such as Starbucks and our McCafé locations, where vendors serve a broad variety of coffee types and related food items such as pastries, baked goods and sandwiches, and (vi) fast food restaurants, which comprises typical QSRs and other restaurants, with faster service and more affordable prices than other competitive eating out sub-segments. The fast food sub-segment includes most internationally recognized QSR brands, such as McDonald’s, Burger King, Pizza Hut and KFC. Under Euromonitor market segmentation criteria, we are part of the fast food sub-segment and, correspondingly, the Latin American and Caribbean competitive eating out segment. According to Euromonitor, during the period from 2004 to 2009, the Latin American and Caribbean competitive eating out segment grew by 61.4%, and Euromonitor estimates it will grow at a compound annual growth rate of 6.6% over the next five years.

The fast food segment of the Latin American and Caribbean food service industry can be further divided into two sub-segments: (i) QSRs, which generally provide customers with a standardized menu and rapidly prepared food items and (ii) other fast food restaurants. QSR restaurants are categorized into those that focus primarily on burger products, such as us, Burger King and Bob’s (in Brazil), chicken products such as KFC, bakery products such as Dunkin’ Donuts, Latin American and Tex-Mex food products such as Tortas Locas (in Mexico), Asian products such as Jin Jin (in Brazil) and Teriyaki Sam (in Mexico), fish products such as Sushi Ito (in Mexico) and Vivenda do Camarão (in Brazil), pizza products such as Pizza Hut, and Middle Eastern products such as Habib’s (in Brazil). “Other fast food” restaurants include the remaining types of fast food restaurants focusing on other types of products, such as ice cream, and convenience stores such as Servicompras (in Argentina).

Below is a chart showing the Latin American and Caribbean food service industry broken down by segment and showing the expected value of each segment and sub-segment by sales (in millions of U.S. dollars) for 2010 as well as the percentage share of each sub-segment of the fast food market:

LOGO

Source :

Euromonitor Forecast 2010—Current Prices—Fixed 2009 Exchange Rates.

The Latin American and Caribbean Fast Food and Quick Service Restaurant Segments

We operate in the QSR sub-segment of the fast food segment. In Latin America and the Caribbean, the QSR sub-segment has benefited from the region’s increasing modernization, as people in more densely populated areas adopt lifestyles that increasingly seek convenience, quality and value.

Euromonitor estimates that during the period from 2004 to 2009, the fast food segment in Latin America and the Caribbean grew by 97% in nominal terms, compared with 70% growth, in nominal terms, for the Latin American and Caribbean food service industry as a whole. Euromonitor estimates that the fast food segment will be worth approximately $35 billion (nominal value) in annual sales in 2010, representing approximately 22% of the competitive eating out segment.

Euromonitor estimates that QSRs have captured 61.4% of market share within the fast food segment due to the popularity of standardized menus, the consistency of products and services, cost efficient operating systems, the development of products targeted to meet consumer demands, economies of scale, convenience, speed and value. Euromonitor expects the growth of QSRs to outpace the growth of the fast food segment generally in the near future, as QSRs tend to be better capitalized and are therefore able to expand through additional restaurant openings and innovation, and as consumers increasingly prefer the convenience and reliability associated with a well-established brand.

According to Euromonitor, in comparison to the QSR sub-segment in more developed markets, such as the United States and Europe, the QSR sub-segment in Latin America and the Caribbean has experienced higher growth rates in terms of both QSRs per inhabitant and QSRs per GDP per capita. The higher growth rates are primarily driven by rapidly increasing income in lower socioeconomic segments in Latin America and the Caribbean and to faster overall population growth, which combine to increase QSRs’ potential customer base as well as the average check.

We believe the QSR sub-segment in Latin America and the Caribbean offers significant growth opportunities. For example, in many of the Territories, including Argentina, Brazil, Chile, Colombia, Ecuador, Mexico and Peru, the ratio of GDP PPP per McDonald’s-branded restaurant is at least 2.5 times greater than in the United States.

Euromonitor estimates that the QSR sub-segment in Latin America and the Caribbean grew at a rate of 84.2% during the period from 2004 to 2009. We expect that QSRs will increasingly gain market share as chain restaurants are better equipped to meet the increasingly stringent health and safety standards that we believe will be imposed in Latin America and the Caribbean.

Key Fast Food Markets in Latin America and the Caribbean

Within Latin America and the Caribbean, Argentina, Brazil, Chile, Colombia, Mexico, Puerto Rico and Venezuela are the primary markets for the fast food segment. According to Euromonitor, from 2010 to 2014, the fast food segment is expected to grow by 19% in Argentina, 27% in Brazil, 26% in Chile, 31% in Colombia, 17% in Mexico, 4% in Puerto Rico and 7% in Venezuela.

Below is a chart showing actual and expected growth the fast food segment in several Latin American and Caribbean countries, in millions of U.S. dollars, from 2006 and forecast through 2010:

LOGO

Source :

Euromonitor, Market Sizes, Historic 2006 and Forecast 2010—Current Prices—Fixed 2009 Exchange Rates.

Fast Food Growth Potential

The potential for growth of the fast food segment in Latin America and the Caribbean is highly correlated to the consumption, purchasing power and disposable income of the general population. This in turn is driven by the absolute gross domestic product, or GDP, per capita in Latin America and the Caribbean. In addition, the measurement of the customer count per million inhabitants and the “average check”—the average amount spent by a customer during a visit—relative to GDP per capita indicates the potential for growth in the fast food segment in the region.

Our financial condition and operational results are influenced by macroeconomic developments in Latin America and the Caribbean. In recent years, macroeconomic conditions in the region have shown improvement in many of the Territories, including growth in GDP, stabilizing currency exchange rates, increase of foreign investment, expanding purchasing power and higher levels of disposable income.

The table below sets forth real GDP growth, real GDP per capita growth, inflation, unemployment, country risk premium, U.S. dollar exchange rate, and sovereign ratings for the periods and countries and territories indicated.


	Argentina			Brazil			Mexico			Puerto Rico			Venezuela
Real GDP growth (Year-over-year)
2007		8.7	%		5.7	%		3.3	%		(1.4	)%		8.4	%
2008		6.8			5.1			1.3			(1.4	)		4.8
2009		0.9			(0.2	)		(6.5	)		(2.4	)		(3.1	)
2010		N/A			7.5	%		5.5			(1.9	)		(1.4	)
GDP per capita growth (Year-over-year)
2007		7.6	%		4.1	%		2.2	%		(1.8	)%		6.6	%
2008		6.0			3.5			0.2			(1.7	)		3.7
2009		(0.1	)		(1.1	)		(7.4	)		(2.7	)		(4.7	)
2010		N/A			6.5	%		4.5			(2.3	)		(3.4	)
Inflation
2007		8.5	%		4.5	%		3.8	%		5.2	%		22.5	%
2008		7.2			5.9			6.5			6.4			30.9
2009		6.2			4.9			5.3			2.8			28.6
2010		10.9			5.9			4.4			1.0			27.2
Unemployment
2007		7.5	%		7.5	%		3.4	%		10.4	%		6.2	%
2008		7.3			6.8			4.3			11.0			6.1
2009		8.7			8.1			5.5			13.4			7.9
2010		7.8			6.7			5.4			16.1			8.5
Country risk premium(1)
2007		404.9			131.0			66.1			—			354.4
2008		1,433.6			221.1			191.9			—			1,013.8
2009		1,988.8			236.3			255.8			—			1,499.6
2010		841.4			147.7			144.0			—			1,005.5
End of period U.S. dollar exchange rate
2007		3.15			1.78			10.90			—			2.15
2008		3.45			2.31			13.67			—			2.15
2009		3.80			1.74			13.06			—			2.15
2010		4.02			1.69			12.38			—			4.30
Sovereign rating(2)		B3/B			Baa3/BBB-			Baa1/BBB			—			B2/BB-

(1)	Average for the period of the Credit Default Swap for each country’s 10 year domestic sovereign bond.

(2)	Sovereign credit rating for long-term debt in foreign currency.

Sources :

Bloomberg, Brazilian Institute of Geography and Statistics, Central Bank of Argentina, Central Bank of Brazil, Central Bank of Mexico, Central Bank of Venezuela, Global Insight, National Institute of Statistics and Census of Argentina, National Institute of Statistics and Geography of Mexico and National Statistics Institute of Spain.

According to the CIA World Factbook, for 2010, GDP per capita was estimated to be $14,700 in Argentina, $10,900 in Brazil, $13,800 in Mexico, $16,300 in Puerto Rico and $12,600 in Venezuela. The differential in the GDP per capita leads to a difference in the average check and the customer count per million inhabitants. For example, in 2009, according to Euromonitor, the total fast food industry in Brazil, where GDP per capita is $10,000, was worth approximately $17.4 billion in sales and had 5.4 billion transactions, whereas in 2009 the total fast food industry in the United States, where GDP per capita is $46,000, was worth approximately $181.2 billion in sales and had 34.4 billion transactions. Accordingly, the average fast food check and fast food customer count per million inhabitants in Brazil were $3.24 and 28.2 million, respectively, whereas the average check and customer count per million inhabitants in the United States were $5.28 and 110.3 million, respectively, according to Euromonitor.

QSR Customer Profile and Behavior

The population demographics in Latin America and the Caribbean favor the QSR segment. The region’s demographics are heavily weighted towards young adults and families with children, the principal target customers of QSRs. In addition, as countries in Latin America and the Caribbean experience improving macroeconomic conditions, consumers benefit from expanding purchasing power, greater consumer financing and higher levels of disposable income, which serve to increase consumer demand for food convenience. We believe that the McDonald’s brand in Latin America and the Caribbean benefits from an aspirational cachet as a “destination” restaurant with a reputation for safe, fresh and good-tasting food in an attractive setting. The confluence of these favorable factors throughout the region, including growth in our target demographic market, offers an opportunity for profitable growth and the ability to serve an ever-increasing number of customers.

Major QSR Brands in Latin America and the Caribbean

McDonald’s, Burger King, Subway and KFC have positioned themselves as market leaders within the QSR sub-segment. According to Euromonitor, the McDonald’s brand is the largest with almost three times the sales of Burger King, our closest competitor, in Latin America and the Caribbean and with more sales than its next four competitors combined. In addition to these international brands, strong local brands, such as Habib’s, Bob’s, Servicompras and Giraffa’s, exist in certain key markets.

The chart below indicates the percentage market share held by certain major brands in the fast food segment in Latin America and the Caribbean for 2009:

LOGO

Source:

Euromonitor, Top Fast Food Brands 2009, Latin America, Published August 2010 .

McDonald’s

McDonald’s is the world’s largest global food service retailer, as measured by systemwide sales, according to Euromonitor. As of December 31, 2010, McDonald’s owned or franchised 32,737 restaurants in 117 countries. Of the total number of McDonald’s restaurants globally, 6,399 were company-owned restaurants and 26,338 were franchised restaurants.

McDonald’s opened its first restaurant in Latin America and the Caribbean in 1967, in Puerto Rico. As of December 31, 2010, there were 1,879 McDonald’s-branded restaurants in Latin America and the Caribbean, of which 1,755 were owned or franchised by us. Out of these 1,755 restaurants, 1,292 were Company-operated restaurants and 463 were franchised restaurants. The other 124 McDonald’s-branded restaurants in Latin America and the Caribbean not operated or franchised by us correspond to developmental licensees who owned those restaurants prior to the Acquisition.

Burger King

Burger King is one of the world’s largest fast food hamburger restaurants, as measured by number of restaurants and systemwide sales. According to Burger King, as of September 30, 2010, there were 12,206 Burger King owned or franchised restaurants in 76 countries and U.S. territories. Of these restaurants, 11% were company-owned and 89% were franchised.

With 1,139 Burger King restaurants throughout Latin America and the Caribbean as of December 31, 2010, Burger King is McDonald’s largest competitor with revenues in Latin America and the Caribbean of $109.0 million in the fiscal year ended June 30, 2010.

Burger King opened its first international franchise restaurant in the region in 1963, in Puerto Rico, and its strong presence in Latin America and the Caribbean is primarily concentrated in Mexico and Puerto Rico, with 421 and 179 restaurants in each country, respectively, as of December 31, 2009. Burger King was recently acquired by 3G, a Brazilian-based private equity fund.

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KFC

KFC is owned by YUM! Brands, the world’s largest quick service restaurant company as measured by number of system units. Through its five brands, KFC, Pizza Hut, Taco Bell, Long John Silver and A&W, YUM! Brands develops, operates, franchises and licenses a worldwide system of restaurants. According to Yum! Brands, Yum! Brands had more than 37,000 units in more than 110 countries and territories as of December 31, 2010, including key Latin American and Caribbean markets such as Mexico, Puerto Rico and Chile. YUM! Brands’ strongest brand in Latin America and the Caribbean is KFC, of which there were 494 restaurants in the region as of December 31, 2009 according to Euromonitor.

Subway

According to Subway, there are over 34,139 Subway locations in 95 countries worldwide. As of March 16, 2011, there were more than 1,700 Subway restaurants in Latin America and the Caribbean. All Subway restaurants are operated by franchisees. Only one company-owned restaurant exists as a testing facility.

Subway focuses on three key markets in Latin America and the Caribbean: Brazil, Mexico and Puerto Rico. As of March 16, 2011, there were 571 Subway restaurants in Brazil, 506 restaurants in Mexico and 213 restaurants in Puerto Rico.

Local Competitors

Although the fast food segment in Latin America and the Caribbean is dominated by large multinational brands, there are important local competitors.

There are two local QSR chains based in Brazil that are significant in terms of sales volume within Latin America: Habib’s and Bob’s. Unlike in other Latin American and Caribbean markets, these strong local brands compete effectively with multinational QSRs. Habib’s is a local QSR chain that focuses on Middle Eastern food. According to Euromonitor, as of December 31, 2009, Habib’s was the largest local QSR operator in Brazil, with 305 restaurants and an estimated $487.7 million in sales for 2009.

Bob’s, formally called BFFC do Brasil, focuses on the burger product line and is the second-largest local QSR chain in Brazil. According to Euromonitor, as of December 31, 2009, Bob’s had 390 restaurants (386 in Brazil and four in Chile) and $276.2 million in sales for 2009. In 2007, Bob’s began operating KFC restaurants in Rio de Janeiro as a Yum! Brands franchisee and, in 2008, Bob’s began operating as a franchisee of Pizza Hut, another Yum! Brands restaurant. Bob’s also entered into an agreement with Doggis, a leading hot dog QSR chain in Chile, whereby Bob’s operates Doggis franchised hot-dog stores in Brazil while Doggis develops Bob’s brand in Chile. In addition to Habib’s and Bob’s, Alsea is a publicly traded multi-brand franchisee. As of September 30, 2010, Alsea operated 190 Burger King franchises, 607 Domino’s Pizza franchises and 337 Starbucks franchises in Mexico, Argentina, Chile, Colombia and Brazil.

We compete with smaller local chains in several of our key markets. In Venezuela, we compete with Arturo’s, and in Central America we compete with Pollo Campero, both of which are restaurant chains that specialize in chicken products. In Argentina, we compete with Mostaza, a hamburger and sandwich chain, and convenience stores such as Servicompras. In Colombia, we compete with Hamburguesas El Corral, a hamburger chain, and in Mexico we compete with Sanborns, a chain of department stores with in-store restaurants, and VIPS, a full-service restaurant chain.

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OUR RELATIONSHIP WITH MCDONALD’S

We received exclusive master franchising rights from McDonald’s for the Territories on August 3, 2007 when Mr. Staton, our Chairman, CEO and controlling shareholder, Gavea Investment AD, L.P. and investment funds controlled by Capital International, Inc. and DLJ South American Partners L.L.C. (through its affiliates) purchased McDonald’s LatAm business for $698.1 million (including $18.7 million of acquisition costs) and entered into the MFAs. Prior to the Acquisition, Mr. Staton had been the joint venture partner of McDonald’s Corporation in Argentina for over 20 years and had served as President of McDonald’s South Latin America division since 2004.

McDonald’s has a longstanding presence in Latin America and the Caribbean dating to the opening of its first restaurant in Puerto Rico in 1967. Since then, McDonald’s expanded its footprint across the region as consumer markets and opportunities arose, opening its first restaurants in Brazil in 1979, in Mexico and Venezuela in 1985 and in Argentina in 1986.

We hold our McDonald’s franchise rights pursuant to the MFA for all of the Territories except Brazil, executed on August 3, 2007, entered into by us, our wholly owned subsidiary Arcos Dorados Coöperatieve U.A., Arcos Dorados B.V. (or these two entities together with us collectively, the Owner Entities), LatAm, LLC, or the Master Franchisee, certain subsidiaries of the Master Franchisee, Los Laureles, Ltd. and McDonald’s. On the same date, our subsidiary Arcos Dourados Comercio de Alimentos Ltda., or the Brazilian Master Franchisee, and McDonald’s entered into the separate, but substantially identical, Brazilian MFA.

The MFAs

The MFAs set forth McDonald’s and our rights and obligations in respect of the ownership and operation of the McDonald’s-branded restaurants located in the Territories. The MFAs do not include the following Latin American and Caribbean countries and territories, among others: Anguilla, Antigua and Barbuda, the Bahamas, Barbados, Belize, Bolivia, the British Virgin Islands, the Cayman Islands, Cuba, Dominica, Dominican Republic, El Salvador, Grenada, Guatemala, Guiana, Haiti, Honduras, Jamaica, Montserrat, Nicaragua, Paraguay, Suriname, St. Barthélemy, St. Kitts and Nevis, St. Lucia, St. Maarten, St. Vincent and the Grenadines, Trinidad & Tobago, Turks & Caicos Islands and the U.S. Virgin Islands, with the exception of St. Croix and St. Thomas.

The material provisions of the MFAs are set forth below.

Term

The initial term of the franchise granted pursuant to the MFAs is 20 years for all of the Territories other than French Guiana, Guadeloupe and Martinique. After the expiration of the initial term, McDonald’s may grant us an option to extend the term of the MFAs with respect to all Territories for an additional period of 10 years. The initial term of the franchise for French Guiana, Guadeloupe and Martinique is 10 years. We have the right to extend the term of the MFA with respect to French Guiana, Guadeloupe and Martinique for an additional term of 10 years.

Our Right to Own and Operate McDonald’s-Branded Restaurants

Under the MFAs, in the Territories, we have the exclusive right to (i) own and operate, directly or indirectly, McDonald’s restaurants, (ii) license and grant franchises with respect to McDonald’s-branded restaurants, (iii) adopt and use, and to grant the right and license to franchisees to adopt and use, the McDonald’s operations system in our restaurants, (iv) advertise to the public that we are a franchisee of McDonald’s, and (v) to use, and to sublicense to our franchisees the right to use the McDonald’s intellectual property solely in connection with the development, ownership, operation, promotion and management of our restaurants, and to engage in related advertising, promotion and marketing programs and activities.

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Under the MFAs, McDonald’s cannot grant the rights described in clauses (i), (ii) and (iii) of the preceding paragraph to any other person while the MFAs are in effect. Notwithstanding the foregoing, McDonald’s has reserved, with respect to the McDonald’s restaurants located in the Territories, all rights not specifically granted to us, including the right, directly or indirectly, to (i) use and sublicense the McDonald’s intellectual property for all other purposes and means of distribution, (ii) sell, promote or license the sale of products or services under the intellectual property and (iii) use the intellectual property in connection with all other activities not prohibited by the MFAs.

In addition, under the MFAs, McDonald’s provides us with know-how and new developments, techniques and improvements in the areas of restaurant management, food preparation and service, and operations manuals that contain the standards and procedures necessary for the successful operation of McDonald’s-branded restaurants.

Franchise Fees

Under the MFAs, we are responsible for the payment to McDonald’s of initial franchise fees, continuing franchise fees and transfer fees.

The initial franchise fee is payable upon the opening of a new restaurant and the extension of the term of any existing franchise agreement. For Company-operated restaurants, the initial fee is based on the term remaining under the MFAs for the country in which the restaurant is located. For franchised restaurants, we receive an initial fee from the franchisee based on the term of the franchise agreement (generally 20 years), and pay 50% of this fee to McDonald’s.

The continuing franchise fee is paid, with respect to each calendar month, to McDonald’s in an amount generally equal to 7% of the U.S. dollar equivalent of the gross sales, as defined therein, of each of the McDonald’s restaurants in the Territories for that calendar month, minus, as applicable, a brand building adjustment. During the first 10 years of the MFAs, the brand building adjustment is 2% of the gross sales, for a net continuing franchise fee payment of 5% of the gross sales. During years 11 through 15 of the MFAs, the brand building adjustment will be 1% of the gross sales, for a net continuing franchise fee payment of 6%; and the brand building adjustment will be 0% thereafter, for a net continuing franchise fee payment of 7% of the gross sales. We are responsible for collecting the continuing franchise fee from our franchisees and must pay that amount to McDonald’s. In the event that a franchisee does not pay the full amount of the fee or any of our subsidiaries are unable to transfer funds to us due to currency restrictions or otherwise, we are responsible for any resulting shortfall. See “Risk Factors—Certain Factors Relating to Our Business—Our financial condition and results of operations depend, to a certain extent, on the financial condition of our franchisees and their ability to fulfill their obligations under their franchise agreements” and “Risk Factors—Certain Factors Relating to Latin America and the Caribbean—We are subject to significant foreign currency controls in certain countries in which we operate.”

In the event of a voluntary or involuntary transfer of any of the McDonald’s restaurants located in the Territories to a person other than a subsidiary of ours or an affiliate of one of our franchisees, we must charge a transfer fee of not less than $10,000, and must pay to McDonald’s an amount equal to 50% of the fee charged.

All payments to McDonald’s must be made in U.S. dollars, but are based on local currency exchange rates at the time of payment.

Material Breach

A material breach under the MFAs would occur if we, or our subsidiaries that are a party to the MFAs, materially breached any of the representations or warranties or obligations (not cured within 30 days after receipt of notice thereof from McDonald’s) relating to or otherwise in connection with any aspect of the master franchise

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business, the franchised restaurants or any other matter in or affecting any one or more Territories. The following events, among others, constitute a material breach under the MFAs: our non-compliance with anti-terrorism or anti-corruption policies and procedures required by applicable law; our bankruptcy, insolvency, voluntary filing or filing by any other person of a petition in commercial insolvency; our conviction or that of our subsidiaries, or of our or our subsidiaries’ agents or employees for a crime or offense that is punishable by incarceration for more than one year or a felony, or a crime or offense or the indictment on charges thereof that, in the determination of McDonald’s, is likely to adversely affect the reputation of such person, any franchised restaurant or McDonald’s; the entry of any judgment against us or our subsidiaries in excess of $1,000,000 that is not duly paid or otherwise discharged within 30 days (unless such judgment is being contested on appeal in good faith); our failure to achieve (a) at least 80% of the targeted openings during any one calendar year of any restaurant opening plan; or (b) at least 90% of the targeted openings during the three-calendar year term of any restaurant opening plan; and our failure to comply with at least 80% of the funding requirements of any reinvestment plan with respect to any Territory for a period of one year.

Business of the Company and the Other Owner Entities

In addition to the payment of franchise fees described above, we and the other Owner Entities are subject to a variety of obligations and restrictions under the MFAs.

Under the MFAs, we cannot, directly or indirectly, enter into any other QSR business or any business other than the operation of McDonald’s-branded restaurants in the Territories. Neither we nor any of the other Owner Entities can engage in a business other than holding, directly or indirectly, our equity interests. In addition, neither we nor any of the other Owner Entities can engage in any activity or participate in any business that competes with McDonald’s business.

Under the MFAs, Los Laureles Ltd., a British Virgin Islands company beneficially owned by Mr. Staton, our Chairman, CEO and controlling shareholder, is required to own not less than 40% of our economic interests and 51% of our voting interests. In the event of an initial public offering, or IPO, the economic interests of Los Laureles Ltd. in our Company could be diluted below 40% but no less than 30% of our economic interests. Los Laureles Ltd. is required to maintain at all times direct ownership of not less than 51% of our voting interests. Also, under the MFAs, we are required to own, directly or indirectly, 100% of the equity interests of our subsidiaries and cannot enter into any partnership, joint venture or similar arrangement without McDonald’s consent. In addition, at least 50% of all McDonald’s-branded restaurants in the Territories must be Company-operated restaurants.

Under the MFAs, we may effect an initial public offering, or IPO, provided that, among other things, (i) there has been no material breach of the MFAs by us in the preceding 24 months, (ii) we have achieved at least 95% of the targeted openings in the preceding two calendar years under our restaurant opening plan, (iii) we have entered into employment agreements with each of our CEO, chief financial officer and chief operating officer on customary terms and conditions with a minimum term of two years, (iv) Los Laureles Ltd. has entered into a voting trust agreement relating to the 51% of our aggregate voting interests owned by it in a form acceptable to McDonald’s, (v) the IPO is effected with respect to no more than 60% of our economic interests, (vi) at least $150 million of the proceeds from the IPO will be used by us for capital expenditures, including restaurant openings and reimaging, which will be in addition to our restaurant opening and reinvestment commitments under the MFAs, (vii) Los Laureles, Ltd. retains a voting interest of at least 51% in Arcos Dorados Holdings Inc. and (viii) the IPO does not result in the imposition of obligations on McDonald’s or its affiliates in addition to those contemplated by the MFAs or additional obligations upon the exercise of McDonald’s rights under the MFAs, including obligations imposed in connection with the listing on a national securities exchange or registration with any governmental authority. At the launch of this offering, we will be in compliance with these conditions.

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Real Estate

Under the MFAs, we must own or lease the real estate property where all of our Company-operated restaurants are located. We cannot transfer or encumber any of the real estate properties that we own without McDonald’s consent. Due to the geographic and commercial importance of certain restaurants, we may not sell certain “iconic” properties without the prior written consent of McDonald’s. For certain of these selected properties, we have already perfected a first priority lien in favor of McDonald’s.

Under the MFAs, no more than 50% of the total number of restaurants in each Territory, and no more than 10% of the total number of restaurants in all the Territories, can be located on real estate property that is owned, held or leased by our franchisees.

In addition, the MFA lists 25 restaurants, including some of our most valuable properties, that we are prohibited from selling or otherwise transferring without McDonald’s consent.

Transfer of Equity Interests or Significant Assets

Under the MFAs, neither we nor any of the other Owner Entities can transfer or pledge the equity interests of any of our subsidiaries, or any significant portion of our assets, without McDonald’s consent.

Operational Control

Under the MFAs, McDonald’s is entitled to approve the appointment of our chief executive officer and our chief operating officer.

In the event that McDonald’s modifies its standards applicable to technology and related equipment, we must purchase any new or modified technology, software, hardware or equipment necessary to comply with the modified standards.

Restaurant Opening Plan and Reinvestment Plan

Under the MFAs, we are required to agree with McDonald’s on a restaurant opening plan and a reinvestment plan for each three-year period during the term of the MFAs. The restaurant opening plan specifies the number and type of new restaurants to be opened in the Territories during the applicable three-year period, while the reinvestment plan specifies the amount we must spend reimaging or upgrading restaurants during the applicable three-year period. Prior to the expiration of the then-applicable three-year period we must agree with McDonald’s on a subsequent restaurant opening plan and reinvestment plan. Under the initial restaurant opening plan, we were required to open 43 restaurants in the period from the Acquisition to the end of 2008, 54 restaurants in 2009 and 63 restaurants in 2010. As of December 31, 2010, we had met our commitments under the restaurant opening plan, having opened 232 restaurants since the Acquisition. Under the initial reinvestment plan, we were required to reinvest $45.6 million from August 2007 to July 2008, $47.4 million from August 2008 to July 2009 and $49.6 million from August 2009 to July 2010 reimaging and upgrading our restaurants. As of December 31, 2010, we had satisfied our commitments under the reinvestment plan.

As part of the reinvestment plan with respect to the next three-year period that commenced on January 1, 2011, we must reinvest an aggregate of at least $60 million per year in the Territories. In addition, we have committed to open no less than 250 new restaurants during the next three-year restaurant opening plan. We estimate that the cost to comply with our restaurant opening commitments under the MFAs from 2011 to 2013 will be between $100 million and $250 million, depending on, among other factors, the type and location of restaurants we open. In the event we are unable to reach an agreement on subsequent plans prior to the expiration of the then-existing plan, the MFAs provide for an automatic increase of 20% in the required amount of reinvestments as compared to the then-existing plan and a number of new restaurants no less than 210 multiplied by a factor that increases each period during the subsequent three-year restaurant opening plan.

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Advertising and Promotion Plan

Under the MFAs, we must develop and implement a marketing plan with respect to each Territory that must be approved in advance by McDonald’s. The MFAs require us to spend at least 5% of our gross sales on advertisement and promotion activities. Our advertisement and promotion activities are guided by our overall marketing plan, which identifies the key strategic platforms that we aim to leverage in order to drive sales.

Insurance

Under the MFAs, we are required to acquire and maintain a variety of insurance policies with certain minimum coverage limits, including commercial general liability, workers compensation, “all risk” property and business interruption insurance, among others.

Call Option Right and Security Interest in Equity Interests of the Company

Under the MFAs, McDonald’s has the right, or Call Option, to acquire our non-public shares or our interests in one or more Territories upon: (i) the expiration of the initial term of the MFAs on August 2, 2027 if the initial term is not extended, (ii) the occurrence of a material breach of the MFAs or (iii) during the period of 12 months following the earlier of (x) the 18th month anniversary of the death or permanent incapacity of Mr. Staton or (y) the receipt by McDonald’s of notice from Mr. Staton’s heirs that they have elected to have the period of 12 months commence as of the date specified in the notice. McDonald’s generally has the right either to exercise the Call Option with respect to all of the Territories, or, in its sole discretion, with respect to the Territory or Territories identified by McDonald’s as being affected by such material breach or to which such material breach may be attributable except upon the occurrence of an initial material breach relating to any Territory or Territories in which there are less than 100 restaurants in operation. In such case, McDonald’s only has the right to acquire the equity interests of any of our subsidiaries in the relevant Territory or Territories. As of December 31, 2010, we had more than 100 restaurants in operation in each of Argentina, Brazil, Mexico, Puerto Rico and Venezuela. No other Territory had more than 70 restaurants in operation.

If McDonald’s exercises the Call Option upon the occurrence of the events described in clause (i) or (iii) of the preceding paragraph, it must pay a purchase price equal to 100% of the fair market value of our non-public shares. If the Call Option is exercised upon the occurrence of a material breach, however, the purchase price is reduced to 80% of the fair market value of all of our non-public shares or of all of the equity interests of the subsidiaries operating restaurants in the Territory related to such material breach, as applicable. The purchase price paid by McDonald’s upon exercise of the Call Option is, in all events, reduced by the amount of debt and contingencies and increased by the amount of cash attributable to the entity whose equity interests are being acquired pursuant to the Call Option. Following the completion of the offering and assuming no exercise of the underwriters’ over-allotment option, in the event McDonald’s were to exercise its right to acquire all of our non-public shares, our public shareholders would own an aggregate of 28.5% of our economic interests and 11.4% of our voting interests.

If McDonald’s exercises the Call Option with respect to any of our subsidiaries (but not all of them) and the amount of debt and contingencies (minus cash) attributable to the equity interests of those subsidiaries is greater than the fair market value of those equity interests, we must, at our election, either (i) assume the debts and contingencies (minus cash) and deliver the equity interests to McDonald’s free of any obligations with respect thereto or (ii) pay to McDonald’s the absolute value of that amount. The fair market value of any of the equity interests is to be determined by internationally recognized investment banks without taking into consideration the debt, contingencies or cash attributable to the equity interests.

In order to secure McDonald’s right to exercise the Call Option, McDonald’s was granted a perfected security interest in the equity interests of the Master Franchisee, the Brazilian Master Franchisee and our subsidiaries other than our subsidiaries organized in Costa Rica, Mexico, French Guiana, Guadeloupe and

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Martinique. The equity interests of our subsidiaries organized in Costa Rica and Mexico were transferred to a trust for the benefit of McDonald’s. McDonald’s does not have a security interest in the equity interests of our subsidiaries organized in French Guiana, Guadeloupe and Martinique.

The equity interests were transferred to Citibank, N.A., acting as escrow agent. Subject to the terms of the Escrow Agreement and the Intercreditor Agreement, upon McDonald’s exercise of the Call Option and its payment of the respective purchase price, the escrow agent must transfer the equity interests, free of any liens or encumbrances, to McDonald’s.

Limitations on Indebtedness

Under the MFAs, we cannot incur any indebtedness secured by the collateral pledged by us and certain of our subsidiaries in connection with the letters of credit or amend or waive any of the terms related to the collateral, without McDonald’s consent. The pledged collateral includes our equity interest, the equity interests of certain of our subsidiaries, certain of our rights under certain of the Acquisition documents, franchise document payment rights, and our intercompany debt and notes.

Under the MFAs, we must maintain a fixed charge coverage ratio (as defined therein) at least equal to (a) 1.25 from August 31, 2010 through the fiscal quarter ended September 30, 2011 and (b) 1.50, commencing with the fiscal quarter ended December 31, 2011 and thereafter; and a leverage ratio (as defined therein) not in excess of (a) 5.0, from August 31, 2010 through the fiscal quarter ended June 30, 2011, (b) 4.75 for the fiscal quarter ended September 30, 2011, and (c) 4.25, commencing with the fiscal quarter ended December 31, 2011 and thereafter. As of December 31, 2010, our fixed charge coverage ratio was 1.82 and our leverage ratio was 3.79.

Letter of Credit

As security for the performance of our obligations under the MFAs, we (i) obtained an irrevocable standby letter of credit in favor of McDonald’s in an amount of $65.0 million, issued by Credit Suisse acting as issuing bank through its Cayman Island Branch, and (ii) pledged cash collateral in favor of McDonald’s in an amount of $15.0 million. The letter of credit expires on November 10, 2014, but we will be required by the MFAs to renew this letter of credit or obtain a new standby letter of credit in the same amount.

The letter of credit and reimbursement agreement contains a limited number of customary affirmative and negative covenants. These include limitations on (i) any transfer of the MFAs, (ii) amendment or waiver of the MFAs without the consent of the issuing bank, (iii) our leverage ratio, (iv) taking any action to elect to assume the debt of any of our subsidiaries upon McDonald’s exercise of a partial Call Option, (v) our ability to guaranty obligations of our subsidiaries, and (vi) amendments to the credit agreement.

Issuing Bank’s Security Interests

The issuing bank has a security interest in certain of our rights under certain Acquisition documents, franchise document payment rights, pledged cash collateral and our intercompany debt notes. In addition, our subsidiaries (other than those organized in Ecuador, French Guiana, Guadeloupe, Martinique and Peru, and certain subsidiaries organized in Argentina, Colombia and Mexico) guaranteed to the issuing bank the full and prompt payment of our obligations under the letter of credit and reimbursement agreement.

Termination

The MFAs automatically terminate without the need for any party to it to take any further action if any type of insolvency or similar proceeding in respect of us or any of the other Owner Entities commences.

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In the event of the occurrence of certain material breaches, such as if we fail to comply with the reinvestment or restaurant opening plans, McDonald’s has the right to terminate the MFAs.

Upon the termination of the MFAs, McDonald’s has the right to acquire all, but not less than all, of our equity interests at fair market value, which is to be calculated by internationally recognized investment banks selected by us and McDonald’s. The fair market value of our equity interests shall be calculated in U.S. dollars based on the amount that would be received for our equity interests in an arm’s-length transaction between a willing buyer and a willing seller, taking into account the benefits provided by the MFAs.

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BUSINESS

Overview

We are the world’s largest McDonald’s franchisee in terms of systemwide sales and number of restaurants, according to McDonald’s, representing 5.1% of McDonald’s global sales in 2010, and we are the largest QSR chain in Latin America and the Caribbean in terms of systemwide sales, according to Euromonitor, with a regional market share in terms of sales of 12.4% in 2009, according to Euromonitor. We have the exclusive right to own, operate and grant franchises of McDonald’s restaurants in the Territories. As of December 31, 2010, we operated or franchised 1,755 McDonald’s-branded restaurants, which represented 6.7% of McDonald’s total franchised restaurants worldwide. In 2009 and 2010, we paid $121.9 million and $141.0 million, respectively, in royalties to McDonald’s (not including royalties paid on behalf of our franchisees).

We commenced operations on August 3, 2007, as a result of the Acquisition. We operate McDonald’s-branded restaurants under two different operating formats, Company-operated restaurants and franchised restaurants. As of December 31, 2010, of our 1,755 McDonald’s-branded restaurants in the Territories, 1,292 (or 74%) were Company-operated restaurants and 463 (or 26%) were franchised restaurants. We generate revenues primarily from two sources: sales by Company-operated restaurants and revenues from franchised restaurants that primarily consist of rental income, which is generally based on the greater of a flat fee or a percentage of sales reported by franchised restaurants. We own the land for 510 of our restaurants (totaling approximately 1.2 million square meters) and the buildings for all but 12 of our restaurants.

Our business has grown significantly since the Acquisition. We have increased our presence in existing and new markets in the Territories by opening 232 restaurants (168 Company-operated and 64 franchised), 124 McCafé locations and 430 Dessert Centers since the Acquisition. The McDonald’s brand’s market share of the fast food industry in Latin America and the Caribbean in terms of sales has increased from 11.7% in 2007 to 12.4% in 2009 according to Euromonitor. We have increased our total revenues by 15.8% from 2008 to 2010. More recently, our consolidated net revenues, net income and Adjusted EBITDA (as defined under “Presentation of Financial and Other Information—Other Financial Measures”) increased 13.2%, 32.5% and 12.3%, respectively, in 2010 as compared to 2009, to $3,018.1 million, $106.0 million and $299.1 million, respectively.

We divide our operations into four geographical divisions: Brazil; the Caribbean division, consisting of Aruba, Curaçao, French Guiana, Guadeloupe, Martinique, Puerto Rico and the U.S. Virgin Islands of St. Croix and St. Thomas; NOLAD, consisting of Costa Rica, Mexico and Panama; and SLAD, consisting of Argentina, Chile, Colombia, Ecuador, Peru, Uruguay and Venezuela. As of December 31, 2010, 35.1% of our restaurants were located in Brazil, 29.7% in SLAD, 27.1% in NOLAD and 8.1% in the Caribbean division. We focus on our customers by managing operations at the local level, including marketing campaigns and promotions, menu management and monitoring customer satisfaction, while leveraging our size by conducting administrative and strategic functions at the divisional or corporate level, as appropriate.

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The following table presents certain operating results and data by operating segment:


	As of and for the Years Ended December 31,
	2010			2009			2008			2007(1)
	(in thousands of U.S. dollars, except percentages)
Total Revenues
Brazil	$	1,595,571		$	1,200,742		$	1,237,208		$	461,868
Caribbean division		260,617			244,774			231,734			90,796
NOLAD		305,017			240,333			232,083			91,932
SLAD (2)		856,913			979,627			905,817			296,743

Total		3,018,118			2,665,476			2,606,842			941,339


Adjusted EBITDA(3)
Brazil	$	250,606		$	160,037		$	144,965		$	39,800
Caribbean division		23,556			21,167			22,013			13,099
NOLAD		15,400			3,918			15,961			10,655
SLAD (2)		83,998			129,889			138,683			36,530
Corporate and others		(74,446	)		(48,628	)		(33,648	)		(9,187	)

Total		299,114			266,383			287,974			90,897


Adjusted EBITDA Margin(4)
Brazil		15.7	%		13.3	%		11.7	%		8.6	%
Caribbean division		9.0			8.6			9.5			14.4
NOLAD		5.0			1.6			6.9			11.6
SLAD (2)		9.8			13.3			15.3			12.3

Total		9.9			10.0			11.0			9.7

Systemwide comparable sales growth(5)(6)		14.9	%		5.5	%		—			—

Brazil		17.5			2.7			—			—
Caribbean division		4.7			4.2			—			—
NOLAD		9.1			(1.7	)		—			—
SLAD		16.1			12.2			—			—


Systemwide Restaurants by Division		Company-operated and Franchised Restaurants

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(1)	Data for the year ended December 31, 2007 includes only five months of operations, beginning August 3, 2007, the date on which we commenced operations in the Territories.

(2)

(3)

(4)	Adjusted EBITDA margin is Adjusted EBITDA divided by total revenues, expressed as a percentage.

(5)

(6)

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Our Industry

The chart below indicates the percentage market share held by certain major brands in the fast food segment in Latin America and the Caribbean for 2009:

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Source: Euromonitor, Top Fast Food Brands 2009, Latin America, Published August 2010 .

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Our Strengths

We believe the following competitive strengths position us well to achieve future growth:

Leading Position in a Region with Favorable Demographics and Economic Conditions . We are the leading QSR chain in Latin America and the Caribbean, according to Euromonitor, with a 12.4% market share of the fast food segment, which was more than three times that of our closest competitor, based on systemwide sales in 2009. As a business focused on young adults in the 14 to 35 age range and families with children, our operations have benefited, and we expect to continue to benefit, from our Territories’ population size, younger age profile when compared to more developed markets and improving socio-economic conditions. Based on data from the United Nations Economic Commission for Latin America and the Caribbean, the Territories represented a market of approximately 575.9 million people in 2010, of which approximately 28% are under 14 years old and 46% are under 25 years old. In addition, improvements in macroeconomic conditions in the Territories are leading to a modernization of consumption patterns and increased affordability of our products across socio-economic segments, and we believe we are well placed to capitalize on these trends. For example, according to the Brazilian Ministry of Finance, 29 million Brazilians joined the middle class between 2003 and 2009 and the percentage of the Brazilian population living in poverty decreased by 45.6% during the same period. Moreover, according to Euromonitor, the percentage of households in Brazil with annual disposable incomes of $5,000 or more was greater than that in China and India in 2010.

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and was president of McDonald’s South Latin America division from 2004 until the Acquisition. Mr. Staton will not be selling any shares in this offering. Our senior management team is comprised of committed, experienced restaurant industry executives, almost all of whom have worked for McDonald’s and/or with Mr. Staton in non-McDonald’s businesses for over 10 years. Moreover, none of our divisional presidents, vice presidents, chief financial officer, chief operating officer or CEO have left the Company since the Acquisition. The experience of our management team has been a critical component in enhancing operational performance after the Acquisition.

Our Strategy

Accelerate Growth in Selected Countries . We believe we have significant opportunities to increase our presence and market share in those countries that we believe offer the best growth prospects and those that are most economically and financially stable, such as Brazil, Chile, Colombia, Mexico and Peru. For example, in many of the Territories, including Argentina, Brazil, Chile, Colombia, Ecuador, Mexico and Peru, we believe there are opportunities for growth as the ratio of gross domestic product purchase power parity, or GDP PPP, per McDonald’s-branded restaurant, a measure we use to determine penetration, is at least 2.5 times greater than in the United States. As the macroeconomic conditions of the countries in the Territories continue to improve, we believe we will have significant opportunities to expand our business as consumers benefit from expanding purchasing power and higher levels of disposable income, which in turn increase consumer demand for our safe, fresh and good-tasting food, comfortable settings and affordable prices as aspects of food convenience. We expect to continue to open new restaurants opportunistically as we identify attractive markets throughout the Territories. In addition, we have committed to open at least 250 new restaurants throughout the Territories from 2011 to 2013 under our agreement with McDonald’s, and in the first three years since the Acquisition (from August 3, 2007 to December 31, 2010), we exceeded our restaurant opening commitments under our agreement with McDonald’s by 45.0%. We estimate that the cost to comply with our restaurant opening commitments under the MFAs from 2011 to 2013 will be between $100 million and $250 million, depending on, among other factors, the type and location of restaurants we open. Our expansion strategy seeks to continue capitalizing on the positive economic developments in these markets and the untapped demand to fuel our growth, and we intend to use the proceeds of this offering primarily for capital expenditures, including restaurant openings and reimagings in addition to our commitments with McDonald’s.

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Our History and Relationship with McDonald’s

We offer McDonald’s core menu items, including the Big Mac, Happy Meal and Quarter Pounder. Since the Acquisition through December 31, 2010, we have opened 232 new restaurants. We have also undertaken an extensive restaurant reimaging program throughout the Territories, expanded the number of McCafé and Dessert Center locations and focused on adding locally relevant menu items, such as breakfast, bone-in-chicken, low-calorie and low-sodium products and value items. We have also integrated many of our operations, including our supply chain and distribution functions.

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Our Corporate Structure

We conduct substantially all our business through our indirect, wholly-owned Dutch subsidiary Arcos Dorados B.V. Our majority shareholder is Los Laureles Ltd., a British Virgin Islands company, which is beneficially owned by Mr. Staton, our Chairman and CEO. Under the MFAs, Los Laureles Ltd. is required to hold at all times at least 51% of our voting interests, which is accomplished through its ownership of 100% of the class B shares of Arcos Dorados Holdings Inc., each having five votes per share. Los Laureles Ltd. has established a voting trust with respect to the voting interests in us held by Los Laureles Ltd. and has contributed its interests in Los Laureles Ltd. to a trust whose sole beneficiaries will be Mr. Staton and his descendants. See “Principal and Selling Shareholders—Los Laureles Ltd.”

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(1)	Los Laureles Ltd. is beneficially owned by Mr. Staton, our Chairman and CEO. See “Principal and Selling Shareholders—Los Laureles Ltd.”

Other than as described above, all of our significant subsidiaries are wholly owned by us, except Arcos Dorados Argentina S.A., of which Mr. Staton owns 0.03%. In addition, due to certain legal restrictions in Panama, we operate our restaurants there through certain entities that we do not own; however, we are currently working on a corporate reorganization that will allow us to acquire those entities in Panama.

Our Operations

Company-Operated and Franchised Restaurants

We operate our McDonald’s-branded restaurants under two basic structures: (i) Company-operated restaurants operated by us and (ii) franchised restaurants operated by franchisees. Under both operating alternatives the real estate location may either be owned or leased by us.

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We own, fully manage and operate Company-operated restaurants and retain any operating profits generated by such restaurants, after paying operating expenses and the franchise and other fees owed to McDonald’s under the MFAs. In Company-operated restaurants, we assume the capital expenditures for the building and equipment of the restaurant and, if we own the real estate location, for the land as well.

In contrast to Company-operated restaurants, franchised restaurants are operated and managed by the franchisee with technical and operational support from us as master franchisee, including training programs, operations manuals, access to our supply and distribution network and marketing assistance. Under our conventional franchise arrangements, franchisees provide a portion of the capital required by initially investing in the equipment, signs, seating and decor of their restaurants, and by reinvesting in the business over time. We are required by the MFAs to own the real estate or to secure long-term leases for franchised restaurant sites. We subsequently lease or sublease the property to franchisees. This arrangement allows for long-term occupancy of the property and assists in the alignment of our franchisees’ interests with our own.

In exchange for the lease and services, franchisees pay a monthly rent to us, based on the greater of a fixed rent or a certain percentage of gross sales. In addition to this monthly rent, we collect the monthly continuing franchise fee, which generally is 5% of the U.S. dollar equivalent of the restaurant’s gross sales, and pay these fees to McDonald’s pursuant to the MFAs. However, if a franchisee fails to pay its monthly continuing franchise fee, we remain liable for payment in full of these fees to McDonald’s. Pursuant to the MFAs, franchisees pay an initial franchise fee in connection with the opening of a new franchised restaurant and a transfer fee upon transfer of a franchised restaurant, both of which are subsequently shared by McDonald’s and us. See “Our Relationship with McDonald’s—Franchise Fees.”

The chart below illustrates the economics for Company-operated restaurants and franchised restaurants in the case of owned and leased real estate:

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Source: Arcos Dorados

In addition, we are the majority stakeholder in several joint ventures that collectively own 24 restaurants, in Argentina, Chile and Colombia. We have also granted developmental licenses to 12 restaurants.

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Pursuant to the developmental licenses, the developmental licensees own or lease the land and building on which the restaurants are located and pay a franchise fee to us in addition to the continuing franchise fee due to McDonald’s. All of our joint ventures and developmental licenses were in existence at the time of the Acquisition.

Restaurant Categories

We classify our restaurants into one of four categories: (i) freestanding, (ii) food court, (iii) in-store and (iv) mall stores. Freestanding restaurants are the largest type of restaurant, have ample indoor seating and include a drive-through area. Food court restaurants are located in malls and consist primarily of a front counter and kitchen and do not have their own seating area. In-store restaurants are part of a larger building and resemble freestanding restaurants, except for the lack of a drive-through area. Mall stores are located in malls like food court restaurants, but have their own seating areas. As of December 31, 2010, 808 (or 46.2%) of our restaurants were freestanding, 359 (or 20.5%) were food court, 265 (or 15.1%) were in-stores and 319 (or 18.2%) were mall stores. In addition, we have four non-traditional stores, such as food carts. These percentages vary by country, and may shift as opportunities in malls and more densely populated areas become available in some of the Territories.

Below are examples of each type of our restaurant categories:



Freestanding		In-store

Mall Store		Food Court

Source: Arcos Dorados

Returns on investment in each type of restaurant vary significantly due to the different capital expenditures required and their different sales potential; mall stores generally provide the highest return on investment while freestanding restaurants generally provide the lowest. Moreover, returns vary significantly on a country by country basis.

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Reimaging

An important component of our development plan is the reimaging of existing restaurants. As of December 31, 2010, we had completed the reimaging of 308 of the 1,569 restaurants we purchased in the Acquisition. Both we and McDonald’s are committed to maintaining an image for our restaurants that creates a contemporary dining experience. Over the last few years, we have invested substantially in the reimaging of our restaurants, and we, pursuant to the MFAs, have committed to a significant reimaging plan. See “Our Relationship with McDonald’s—The MFAs—Restaurant Opening Plan and Reinvestment Plan.” Many of the reimaging projects include the addition of McCafé locations to the restaurant.

Objectives of the reimaging include elevating the customer’s perception of McDonald’s and creating a more sophisticated and highly aspirational environment. We have developed systemwide guidelines for the interior and exterior design of reimaged restaurants. When carrying out a reimaging project, we minimize the impact on the operations and sales of the restaurants by keeping the restaurants open and operating during the renovations and working in specific areas of the location at particular times.

Below are images of the exterior of a few of our restaurants that have benefited from reimaging:

Source: Arcos Dorados

McCafé Locations and Dessert Centers

McCafé locations are stylish, separate areas within restaurants where customers can purchase a variety of customizable beverages, including lattes, cappuccinos, mochas, hot and iced premium coffees and hot chocolate. McCafé locations have been very successful in creating a different customer experience, optimizing the use of our restaurants at all hours of operation and providing a higher profit margin than our regular restaurant operations. We believe the primary benefit of McCafé locations is that they attract new customers by increasing the variety of our product offerings and improving our image. As of December 31, 2010, there were 267 McCafé locations in the Territories, of which 12% were operated by franchisees. Argentina, with 71

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locations, has the greatest number of McCafé locations, followed by Brazil, with 67 locations. The first McCafé in Latin America was opened in Argentina in 1999. Pursuant to the MFAs we have the right to add McCafé locations to the premises of our restaurants.

Below are images of the interior of two of our McCafé locations:

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Source: Arcos Dorados

In addition to McCafé locations, Dessert Centers have been a very successful brand extension. Dessert Centers operate separately from existing restaurants, but depend on them for supplies and operational support. For example, a mall store restaurant can provide support for several Dessert Centers located in different locations throughout the same mall. At Dessert Centers, customers can purchase a variety of dessert items, including the McFlurry and soft-serve ice cream. Dessert Centers require low capital expenditures and provide returns on investment and operating margins that are significantly higher than our regular restaurant operations. As such, we believe they are an important driver in increasing our market penetration. As of December 31, 2010, there were 1,306 Dessert Centers in the Territories. Dessert Centers are highly successful in Brazil, where we have 730 locations. The first Dessert Center was created in Costa Rica in 1986 and was launched in Brazil in 1990.

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The following maps sets forth our McCafé locations and Dessert Centers in each of the Territories as of December 31, 2010:

Network of McCafé Locations

Network of Dessert Centers

267 total McCafé locations

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1,306 total Dessert Centers

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Source: Arcos Dorados

The McDonald’s Brand

McDonald’s is one of the most well-recognized consumer food service brands in the world with a brand equity that is unparalleled in the restaurant industry, according to Millward Brown Optimor. McDonald’s strong brand equity stems from the dedicated execution of its brand promise and its ability to associate with the local community where it operates. McDonald’s sets the standard in the restaurant industry worldwide for brand stewardship and marketing leadership. In 2010, Millward Brown Optimor’s annual survey of global brand strength ranked the McDonald’s brand as the sixth most valuable brand in the world.

Product Offerings

A crucial part of delivering the brand to clients depends on our product offerings, or more specifically, our menu strategy and management. The key objective of our menu strategy is the development and offering of quality food choices that attract customers back to our restaurants on a regular basis. The elements we utilize to achieve this goal include offering McDonald’s core menu, our product innovation initiatives and our focus on food safety.

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Our menus feature three tiers of products: affordable entry-level options, such as our Big Pleasures, Small Prices or “ Combo del Día ” (“Daily Extra Value Meal”) offerings, core menu options, such as the Big Mac, Happy Meal and Quarter Pounder, and premium options, such as Big Tasty or Angus premium hamburgers and chicken sandwiches and low-calorie or low-sodium products that are marketed through common platforms rather than as individual items. These platforms can be based on the type of products, such as beef, chicken, salads or desserts, or on the type of customer targeted, such as the children’s menu.

Our core menu is the most important element of our menu strategy and boasts all-time favorite food choices that have global customer acceptance and are what customers repeatedly order at McDonald’s-branded restaurants worldwide.

Product Development

We have been very innovative in our product development in Latin America and the Caribbean. In key countries, our understanding of the local market has enabled us to successfully introduce new items to appeal to local tastes and to provide our customers with additional food options. Our Big Pleasures, Small Prices and bone-in-chicken offerings are examples of our product development efforts, through which we introduce affordable new products every few months. Also, we carefully monitor the sales of our products and are able to quickly modify them if sales begin to lag. For instance, although we always offer the McFlurry dessert product, we include in this product platform a promotional topping that is offered for a limited period of time. When the positive sales impact of the promotional topping begins to wane, we introduce a new promotional topping to maintain the sales momentum.

In 2006, McDonald’s global innovation team introduced a new food preparation platform called the Bridge Operating Platform, or BOP, which combines product innovation with operational efficiency throughout our restaurants. This platform is a significant system enhancement, and it allows for customization of products without compromising the restaurants’ ability to handle a large influx of customers at peak periods. The BOP has now been implemented in all large Latin American and Caribbean markets.

We work closely with McDonald’s to develop new product offerings and McDonald’s considers our recommendations regarding regional tastes and preferences and works with us to accommodate such tastes and preferences. We continue to benefit from McDonald’s product development efforts following the Acquisition and have access to a library of products developed globally for the McDonald’s system. In addition, we continue to benefit from the Hamburger Universities in the United States and Brazil and the food studio located in Brazil that aims to develop locally relevant products for the region. The Hamburger Universities and the food studio models have been McDonald’s main global source of people and product development. The Hamburger Universities provide restaurant managers, mid-managers and owner/operators with training on best practices in different aspects of the business, like restaurant and people management, sales and accounting, while emphasizing consistent restaurant operations procedures, service, quality and cleanliness. The food studios across the globe have been responsible for some of McDonald’s most innovative food concepts and play a crucial role in developing new menu options that cater to the local tastes.

Product Development Strategy

Value perceptions change significantly between markets and even between areas within a single market. In order to adjust pricing to meet customers’ expectations in each market, we have developed local expertise aimed at understanding the dynamics of the local marketplace and the characteristics of their customers. We also examine trends in the pricing of raw materials, packaging, product related operating costs as well as individual item sales volumes to fully understand profitability by item. These insights feed into the local markets’ menu and pricing strategy as well as the marketing plan that is disseminated to both Company-operated and franchised restaurants. Restaurants may then adjust pricing and/or item offerings as they choose in an attempt to optimize sales, profitability and local preferences. This cycle is part of an overall revenue management philosophy and is part of our business management practices utilized throughout the region.

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Advertisement & Promotion

We believe that sales in the QSR sub-segment can be significantly affected by the frequency and quality of our advertising and promotional programs. In particular, we benefit from the strength of McDonald’s global resources, including its global alliances with some of the largest multinational conglomerates and sponsorship of sporting events such as the Olympic Games and the World Cup and participation in various movie promotions, which provides us with important advertising and promotion opportunities.

We promote the McDonald’s brand and our products by advertising in all of the Territories. We create, develop and coordinate marketing plans and promotional activities throughout the Territories; however, pursuant to the MFAs, McDonald’s reserves the right to review and approve any advertising materials and related promotional activities and may request that we cease using the materials or promotional activities at any time if McDonald’s determines that they are detrimental to its brand image. We are required under the MFAs to spend at least 5% of our gross sales, and our franchisees generally are required to pay us 5% of their gross sales for the portion of advertising expenditures related to their restaurants, on advertisement and promotion activities. The only exception to this policy is in Mexico, where both we and our franchisees contribute funds to a cooperative that is responsible for advertisement and promotion activities for Mexico.

Our advertisement and promotion activities are guided by our overall marketing plan, which identifies the key strategic platforms that we aim to leverage to drive sales. The advertisement and promotion program is formulated based on the amount of advertisement and promotion support needed for each strategic platform for the year. During 2010, our key strategic platforms include menu relevance, convenience, strengthening the kids and family experience and price segmentation for margin optimization. In terms of menu relevance, we continue to support the breakfast menu that we introduced during 2008 in many of our key markets, such as Brazil, and introduced our premium Angus burger and bone-in-chicken premium products. In terms of convenience, we increased the efficiency of some of our restaurants by including more McCafé locations and Dessert Centers and developing locally relevant menu items, such as breakfast choices and bone-in-chicken product offerings in Colombia, Ecuador, Peru and Venezuela. In terms of pricing, we understand that our customers seek great-tasting food at affordable prices and that their perception of value while at the restaurant is a significant factor in determining overall satisfaction and frequency of visits. Our Big Pleasures, Small Prices and our “ Combo del Día ” programs in Latin America and the Caribbean, which are based on best practices and experience in the United States and Europe, have been successful in addressing a broad range of value expectations in our restaurants without sacrificing restaurant profitability. We continue leveraging these platforms to increase penetration and grow market share.

Through the execution of these initiatives, we work to enhance the McDonald’s experience for customers throughout the Territories, increase our sales and customer counts. We aim to position ourselves as a “forever young” brand by delivering a youthfully energetic, distinctly casual, personally engaging and delightful dining/brand experience.

Regional Operations

The Company is divided into four geographical divisions: Brazil, the Caribbean division, NOLAD and SLAD. Except for Brazil, the divisions are subsequently divided into sub-groups comprised of individual Territories. The presidents of the divisions report directly to our chief operating officer.

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The following map sets forth the number of our restaurants in each of our operating divisions as of December 31, 2010:

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Source: Arcos Dorados

We remain close to customers by managing operations at the local level, including implementing recruiting centers, conducting marketing campaigns and promotions, monitoring consumer perception and managing menu offerings. We conduct administrative and strategic activities at either the divisional level or at our headquarters, as appropriate. We provide services such as accounts payable, accounts receivable and payroll through our centralized shared service center located in Buenos Aires, Argentina. In addition, we have designed standardized crew recruiting manuals and have implemented an online communication platform for crew and managers. These centralized operations help us maintain consistent procedures, quality control and brand management across all of our markets.

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Set forth below is a summary of our restaurant portfolio as of December 31, 2010:


	Ownership										Store Type(1)												Building/Land
Portfolio by Division	Company- Operated		Joint Venture		Franchised		Developmental License		Total		Freestanding		Food Court		In-Store		Mall Store		Dessert Centers		McCafé Locations		Owned		Leased
Brazil		453		—		163		—		616		237		159		80		140		730		67		116		500
Caribbean Division		91		—		50		1		142		114		2		6		20		7		9		50		91
NOLAD		310		—		155		11		476		245		128		51		51		187		55		169		296
SLAD		414		24		83		–		521		212		70		128		108		382		136		175		345

Total		1,268		24		451		12		1,755		808		359		265		319		1,306		267		510		1,232

(1)	In addition, we have four non-traditional stores, such as food carts.

Brazil

Brazil is our largest division in terms of restaurants, with 616 restaurants as of December 31, 2010 and $1,595.6 million in revenues in 2010, representing 35.1% and 52.9% of our total restaurants and revenues, respectively. Our operations in Brazil are based in Sao Paulo and McDonald’s has been present in Brazil since opening its first restaurant in Rio de Janeiro in 1979.

Caribbean Division

The Caribbean division includes eight territories with 142 restaurants as of December 31, 2010 and $260.6 million in revenues in 2010, representing 8.1% and 8.6% of our total restaurants and revenues, respectively. Its primary market is Puerto Rico, where the division’s management is based. McDonald’s has been present in Puerto Rico since opening its first restaurant in San Juan in 1967. Puerto Rico represents 78.2% of the Caribbean division’s restaurants and 56.2% of the Caribbean division’s revenues. Puerto Rico is our fifth-largest market in terms of restaurants.

NOLAD

NOLAD includes three countries with 476 restaurants as of December 31, 2010 and $305.0 million in revenues in 2010, representing 27.1% and 10.1% of our total restaurants and revenues, respectively. Its primary market is Mexico, where the division’s management is based. McDonald’s has been present in Mexico since opening its first restaurant in Mexico City in 1985. Mexico represents 83.2% of NOLAD’s restaurants and 58.4% of NOLAD’s revenues, and Mexico is our second-largest market in terms of restaurants.

Our operations in Mexico differ from those in our other Territories in that the percentage of franchised restaurants is significantly higher than our systemwide average (37.9% of our restaurants in Mexico are franchised, while 26.4% of our restaurants overall are franchised) because some of McDonald’s previous joint venture partners were converted into franchisees immediately prior to the Acquisition. Since the Acquisition, we have been adjusting our business model in Mexico as several factors had significantly eroded that market’s profitability. Among them was a strategy that had focused on improving profit margins, which improved profitability in the short term but resulted in increased competition and lower traffic. In addition, the Mexican peso ’s significant devaluation in 2008 and 2009 adversely affected the financial condition of certain franchisees that had U.S. dollar-denominated debt to the point where we had to acquire 80 franchised restaurants. Additional negative events such as the global recession of 2009 and the swine flu epidemic, both of which disproportionately impacted Mexico, also temporarily reduced our sales in this market.

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SLAD

SLAD includes seven countries with 521 restaurants as of December 31, 2010 and $856.9 million in revenues in 2010, representing 29.7% and 28.4% of our total restaurants and revenues, respectively. Its primary markets are Argentina, where the division’s management is based, and Venezuela. McDonald’s has been present in Argentina since opening its first restaurant in Buenos Aires in 1986 and in Venezuela since opening its first restaurant in Caracas in 1985. As of December 31, 2010, Argentina and Venezuela, respectively, represented 37.2% and 26.5% of SLAD’s restaurants and 44.2% and 21.5% of SLAD’s revenues in 2010. Argentina and Venezuela, respectively, are our third- and fourth-largest markets in terms of restaurants.

Our operations in Argentina differ from those in our other Territories in that we own a significant number of restaurants as the majority stakeholder in various joint ventures. All of the joint ventures were in existence at the time of the Acquisition.

Property Operations

As of December 31, 2010, we owned the land for 510 of our 1,755 restaurants (totaling approximately 1.2 million square meters). We owned the buildings for all but 12 of our restaurants, all of which are under developmental licenses, whereby the licensees own or lease the land and buildings on which the restaurants are located. We lease the remaining real estate property where we operate. Accordingly, we are able to charge rent on the real estate that we own and lease to our franchisees. The rental payments generally are based on the greater of a flat fee or a percentage of sales reported by franchised restaurants. When we lease land, we match the term of our sublease to the term of the franchise. We may charge a higher rent to franchisees than that which we pay on our leases, therefore deriving additional rental income.

The selection, construction and maintenance of restaurant locations and other related real estate assets, which is a key element of our performance, is determined based on an evaluation of expected returns on investment and the most efficient allocation of our capital expenditures. In addition to our restaurant property, we own our corporate headquarters in Buenos Aires, Argentina, corporate offices, a manufacturing and logistics center, and a training center in Sao Paulo, Brazil, and distribution centers in Argentina, Chile, Mexico and Venezuela.

Supply and Distribution

Supply chain management is an important element of our success and a crucial factor in optimizing our profitability. Currently, we have an integrated and centralized supply chain management system that focuses on (i) the highest possible quality and food safety, (ii) competitive market pricing that is predictable and sustainable over time, and (iii) leveraging of local, regional and global sourcing strategies to obtain a competitive advantage. This system consists of the selection and development of suppliers that are able to comply with McDonald’s high quality standards and the establishment of the appropriate type of relationships with these suppliers. These standards, which are based on the highest industry standards like International Organization for Standardization, or ISO, standards, British Retail Consortium, or BRC, standards and others, include cleanliness, product consistency and timeliness, meeting or exceeding all local food regulations and compliance with our Hazard Analysis Critical Control Plan, or HACCP, a systematic approach to food safety that emphasizes protection within the processing facility, rather than detection, through analysis, inspection and follow-up. Due to our supply chain management and high quality standards, we believe our products have a competitive advantage because they have many attributes that make them appealing to our customers. For instance, our McNuggets are made of 100% white meat; our frying oil is 100% free of trans fatty acids; the dairy mix for our sundaes and the McFlurry and our vegetables undergo aseptic processes to rid them of bacteria; and our hamburger patties are made with 100% beef and do not contain additives.

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Pursuant to the MFAs, we purchase core products and services, such as beef, chicken, buns, produce, cheese, dairy mixes and toppings, from approved suppliers and distributors who satisfy the above requirements. If McDonald’s determines that any product or service offered by an approved supplier is not in compliance with its standards, it may terminate the supplier’s approved status. Beyond the purchase of core products and services, we have no restrictions on which suppliers or distributors we may use. We have largely continued the supply relationships that McDonald’s had established prior to the Acquisition, and we develop relationships with new suppliers in accordance with McDonald’s Supplier Quality Management System, or SQMS.

Since the process to become an approved supplier is lengthy, expensive and requires proof of compliance with McDonald’s high quality standards, we have found that oral agreements with our approved suppliers generally are sufficient to ensure a reliable supply of quality food products, and we have developed long-term relationships with many of our suppliers. In addition, we enter into written agreements with most of our suppliers regarding the cost of such goods, which can be based on pricing protocols, formula costing, benchmarking or open bidding, as appropriate. Our 25 largest suppliers account for approximately 80% of our supplies, and no single supplier or group of related suppliers account for more than 9% of our total food and paper costs. Among our main suppliers are Marfrig Alimentos S.A., McCain Foods Limited, Coca-Cola Company and Fresh Start Bakeries, Inc.

Our integrated supply chain management optimizes value as we work with suppliers to develop pricing protocols, inventory, planning and product quality. As of December 31, 2010, approximately 25% of the food products used in our restaurants were imported, primarily from countries within Latin America, while the remaining amount were locally sourced. This percentage varies among the Territories; for example, 22% of the products consumed in Mexico are imported, while 19% and 90% of the products consumed in Brazil and the Caribbean division, respectively, are imported. In addition, all of the toys distributed in our restaurants are imported from China. Certain supplies, such as beef, must often be locally sourced due to restrictions on their importation. Combined with the MFAs’ requirement to purchase certain core supplies from approved suppliers, although we maintain contingency plans to back up restaurant supplies, we may not be able to quickly find alternate or additional supplies in the event a supplier is unable to meet our orders. See “Risk Factors—Certain Factors Relating to our Business—We are dependent on oral agreements with third-party suppliers and distributors for the provision of products that are necessary for our operations.” The suppliers send all of their products to distribution centers that are in charge of transportation, warehousing, financial administration, demand and inventory planning and customer service.

The distribution centers interact directly with our Company-operated and franchised restaurants. We own and operate some of the distribution centers in the Territories, which operations and related properties we refer to as Axis, although distribution in Brazil and Puerto Rico is conducted by a third party. Axis is managed as a profit center by a dedicated management team and operates in Argentina, Chile, Colombia, Mexico and Venezuela. In addition, our supply chain management and distribution centers currently support the 123 McDonald’s-branded restaurants in Latin America and the Caribbean that are not in the Territories as well as some third parties, which helps lower our fixed costs. Axis’s main third-party customers are Sodexho, Eurest, Sadia, WalMart, Carrefour, Subway and Dairy Queen.

We recently effected a split-off of Axis to our shareholders. The split-off was effected through the redemption of 41,882,966 shares (25,129,780 class A shares and 16,753,186 class B shares). As consideration for the redemption, the Company transferred to its shareholders its equity interests in the operating subsidiaries of the Axis business totaling a net book value of $15.4 million and an equity contribution that was made to the Axis holding company amounting to $29.8 million. We expect to enter into commercial arrangements with Axis on arms-length terms so that Axis continues to provide us with distribution services in Argentina, Chile, Colombia, Mexico and Venezuela. The split-off of Axis did not have a material effect on our results of operations or financial condition.

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Supply Chain Management and Quality Assurance

All products that we sell meet McDonald’s specifications, including new products and promotions. We work with our supplies to implement key standards testing at each stage of our supply chain, including raw materials, processing and distribution. With respect to raw materials, we verify that produce suppliers undergo verification audits. All protein suppliers also undergo Animal Welfare Policy, “mad cow” disease and HACCP audits. At the processing stage, we implement a supplier quality management system that encourages continuous improvement in each key product category. We conduct seminars annually with all key suppliers on topics such as standards calibration, product sensory evaluation and best practices and all suppliers are audited annually by a third party for compliance with McDonalds’s SQMS. We measure compliance through visits to processing plants, supplier summits, regularly scheduled audits and sensory testing that is achieved through a combination of product, equipment and operational procedures. At the distribution stage, we have implemented the Distribution Quality Management Program, which includes a shelf-life management system, strict temperature controls for receiving and storage of food products, a sophisticated stock recovery program and a quality inspection program.

Our quality testing extends to restaurant operations, where we conduct restaurant improvement and food safety verification processes that allow us to track the implementation of changes in restaurant operations, new products, procedures and equipment. We participate in the restaurant operations improvement process designed by McDonald’s, under which Company-operated and franchised restaurants are visited at least three times in any 21-month cycle to identify system opportunities to continuously improve our operations. Visits are conducted by our operations consultants, who assess restaurants based on food quality, service and cleanliness. We also participate in the worldwide mystery shopper program designed by McDonald’s, where all restaurants are visited twice a month by a third-party vendor who provides us with feedback from a customer perspective. This feedback, called customer satisfaction opportunity reports, is sent to a centralized monitoring system that evaluates key operations indicators. Our multidisciplinary teams, which include members of our Supply Chain and Marketing and Operations teams, work to improve quality and efficiency at the restaurant level throughout the Territories.

Our Competition

We compete with international, national, regional and local retailers of food products. We compete on the basis of price, convenience, service, menu variety and product quality. Our competition in the broadest perspective includes restaurants, quick-service eating establishments, pizza parlors, coffee shops, street vendors, convenience food stores, delicatessens and supermarkets. For more information about our competition, see “Industry.”

Our Customers

We aim to provide our customers with safe, fresh and good-tasting food at a good value and a favorable dining experience in the family friendly environment demanded by our target demographic of young adults and families with children. Our McCafé brand extension has successfully targeted a more adult customer base.

Latin America and the Caribbean present very compelling growth prospects given their improving macroeconomic conditions, expanding buying power of the consumer sector in general and the rapidly growing QSR markets in particular. There is significant potential for disposable income expansion as regional economies grow and consumer financing alternatives expand, which generally results in increased demand for food convenience. The confluence of favorable factors throughout the region, including growth in our target demographic markets, offer an opportunity of profitable growth and the ability to serve an ever-increasing number of customers.

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Our Employees

Our employees are a crucial component of our customers’ restaurant service experience. As such, we consistently train our employees to deliver fast and friendly service through a series of training programs.

Our employees can be divided into three different categories: crew, restaurant managers and professional staff. Due to the different tasks of each of these categories of employees, turnover rates differ significantly. Crew turnover is considerably higher than turnover for managers and professional staff.

As of December 31, 2010, we had a total of approximately 86,002 employees throughout the Territories. Of this number, 84.2% were crew, 13.8% were restaurant managers and the remainder were professional staff. Approximately 15.5% of our employees were located in Brazil.

The following table illustrates the distribution of our employees by division and employee category as of December 31, 2010.


Division	Crew		Restaurant Managers		Professional Staff		Total
Brazil		33,118		5,593		434		39,145
Caribbean division		5,023		646		154		5,823
NOLAD		8,611		1,604		282		10,497
SLAD		25,701		3,983		496		30,180
Corporate and other		—		—		357		357

Total		72,453		11,826		1,723		86,002

Restaurant managers are responsible for the daily management of our restaurants. As such, we have a comprehensive training program for them that is focused on customer management practices, food preparation and other operational procedures. Standards are taught and continually reinforced through the use of such training programs. We also use performance measurements on a continual basis, both internally and externally in connection with all our restaurants. Our internal on-site visit restaurant operations improvement process evaluates operational standards, which are compared globally to assure continuous improvement. We also contract third parties, which we refer to as third-party shoppers, to visit our restaurants anonymously and report on our performance. Our external third-party shopper measurements and customer satisfaction opportunity reports help maintain our competitiveness. In addition, Hamburger University provides restaurant managers, mid-managers and owner/operators with training on best practices in different aspects of our business. In 2010, 13,865 people attended different courses or events at Hamburger University in areas such as restaurant and customer management, sales and accounting.

The role performed by our crew is of critical importance in our interactions with our customers. Employee relations are thus key to maintaining the level of motivation and enthusiasm on the part of our crew that help differentiate our restaurants from those of our competitors. In 2010, we led the “ Súper Empresas ” (Super Companies) ranking in Mexico by the Expansión/CNN magazine and the Great Place to Work Institute recognized us as being among the 50 best companies to work for in Argentina, Brazil, Colombia, Costa Rica, Panama, Peru and Uruguay. In addition, in 2009 we were recognized as one of the “ 20 Mejores Patronos ” (20 Best Employers) in Puerto Rico by Aon Hewitt, El Nuevo Día , PricewaterhouseCoopers and Gaither International.

Although we have unions in some of our most important markets, including Brazil, Argentina and Mexico, the unions do not have an active role in the restaurants. In these markets, the restaurant industry is unionized by law.

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Regulation

We are subject to various multi-jurisdictional federal, regional and local laws in the countries in which we operate affecting the operation of our business, as are our franchisees and suppliers. Each restaurant is subject to licensing and regulation by a number of governmental authorities, which include zoning, health, safety, sanitation, tax, operating, building and fire agencies in the jurisdiction in which the restaurant is located. Difficulties in obtaining, or the failure to obtain, required licenses or approvals can delay or prevent the opening of a new restaurant in a particular area. Restaurant operations are also subject to federal and local laws governing matters such as wages, working conditions and overtime. We are also subject to tariffs and regulations on imported commodities and equipment and laws regulating foreign investment.

Substantive laws that regulate the franchisor/franchisee relationship presently exist in several of the countries in which we operate, including Brazil. These laws often limit, among other things, the duration and scope of non-competition provisions, the ability of a franchisor to terminate or refuse to renew a franchise and the ability of a franchisor to designate sources of supply and regulate franchise sales communications.

We are also subject to the labor laws applicable in the countries in which we operate. The adoption of new or more stringent labor laws or regulations could result in a material liability to us. For example, a law enacted in November 2010 in Argentina requires companies to pay overtime to all employees (except directors and managers) working on weekends, and a proposed bill in Argentina would require companies to distribute 10 percent of their profits to employees. See “Risk Factors—Certain Factors Relating to Our Business—Labor shortages or increased labor costs could harm our results of operations.”

In addition, we may become subject to legislation or regulation seeking to regulate high-fat and/or high-sodium foods, particularly in Argentina, Brazil, Chile, Puerto Rico and Venezuela. Moreover, restrictions on advertising by food retailers and QSRs have been proposed in Argentina, Brazil, Chile, Colombia, Mexico, Uruguay and Venezuela, including proposals to restrict our ability to sell toys in conjunction with food. Certain jurisdictions in the United States are considering curtailing or have curtailed McDonald’s ability to sell children’s meals including toys if these meals do not meet certain nutritional criteria. Similar restrictions, if imposed in the Latin American countries where we do business, may have a negative impact on our results of operations. We will comply with any laws or regulations that may be enacted, and we can provide no assurance of the effect that any possible future laws and regulations will have on our operating results. See “Risk Factors—Certain Factors Relating to Our Industry—Restrictions on promotions and advertisements directed at families with children and regulations regarding the nutritional content of children’s meals may harm McDonald’s brand image and our results of operations.”

Environmental Issues

To the best of our knowledge, there are currently no international, federal, state or local environmental laws, rules or regulations that will materially affect our results of operations or our position with respect to our competitors. However, we can provide no assurance of the effect that any possible future environmental laws will have on our operating results.

We conduct surveys with our key suppliers in Latin America and the Caribbean to better manage our impact on the environment. We measure water consumption, energy utilization and waste production and communicate with suppliers in regards to sustainability issues such as resource use, residue disposal, energy consumption and cleaner production. This helps us identify possible actions with our suppliers to reduce our environmental impact and implement best practices across the region.

We also promote several environmentally friendly projects, including paper and waste recycling campaigns. We work with local organizations to turn cooking oil into biodiesel and we have installed solar panels and heaters in several of our restaurants in Mexico. We also participate in projects such as Earth Hour, promoted by the World Wildlife Fund, where our restaurants across the region turn off their lights for an hour to raise awareness about climate change.

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Legal Proceedings

Puerto Rican Franchisees

In January 2007, several Puerto Rican franchisees filed a lawsuit against McDonald’s and certain subsidiaries, which we purchased in the Acquisition. The lawsuit was filed before the Puerto Rico Court of First Instance in San Juan, Puerto Rico and originally sought declaratory judgment and damages in the amount of $11 million plus plaintiffs’ attorney fees. In January 2008, the plaintiffs filed an amended complaint that increased the amount of damages sought to $66.7 million plus plaintiffs’ attorneys’ fees. The complaint, as amended, requests that the court declare that the plaintiffs’ respective franchise agreements and contractual relationships with McDonald’s Corporation, which agreements and relationships were assigned or otherwise transferred to us as part of the Acquisition, are governed by the Dealers’ Act of Puerto Rico, or Law 75, a Puerto Rican law that limits the grounds under which a principal may terminate or refuse to renew a distribution contract. The complaint also seeks preliminary and permanent injunctions to restrict us from declining to renew the plaintiffs’ agreements except for just cause, and to prohibit us from opening restaurants or kiosks within a 3-mile radius of a franchisee’s restaurant. In September 2008, we filed a counter-suit requesting the termination of the franchise agreements with these franchisees due to several material breaches. On December 23, 2010, the Commissioner assigned by the Court of First Instance to this case issued a resolution holding that Law 75 applies to the parties’ commercial relationship. The Court of First Instance, however, has not determined whether it will adopt this resolution. We are still in the discovery phase of the litigation. No provision has been recorded regarding this lawsuit because we believe that a negative resolution has a low probability of occurrence.

In October and November of 2010, two bills were introduced in the Puerto Rico Legislature that seek to regulate franchise agreements. Among other goals, these bills (like Law 75 in the case of distribution agreements) limit the grounds under which a franchisor may terminate or refuse to renew a franchise agreement. The bills are in the early stages of consideration by the Legislature and no hearings or votes have been scheduled.

Retained Lawsuits and Contingent Liabilities

We have certain contingent liabilities with respect to existing or potential claims, lawsuits and other proceedings, including those involving labor, tax and other matters. As of December 31, 2010 we maintained a provision for contingencies amounting to $91.7 million ($105.7 million as of December 31, 2009), which is disclosed net of judicial deposits amounting to $27.4 million ($18.7 million as of December 31, 2009) that we were required to make in connection with the proceedings. As of December 31, 2010, the net amount of $64.3 million was disclosed as follows: $0.4 million as a current liability within “Accrued payroll and other liabilities” and $63.9 million as a non-current liability.

The provision for contingencies includes $40.4 million related to Brazilian claims ($65.1 million as of December 31, 2009). Pursuant to the Acquisition, McDonald’s indemnifies us for specific and limited claims arising from the Puerto Rican franchisee lawsuit and certain Brazilian tax and labor claims. As a result, we have recorded a non-current asset in respect of McDonald’s indemnity in our consolidated balance sheet. In 2010, we used the tax amnesty program established by Law No. 11,941 to settle, in installments, certain of these Brazilian tax claims, which accounts for much of the decrease in our provision for contingencies at December 31, 2010. See Note 17 to our consolidated financial statements.

Other Proceedings

In addition to the matters described above, we are from time to time subject to certain claims and party to certain legal proceedings incidental to the normal course of our business. In view of the inherent difficulty of predicting the outcome of legal matters, we cannot state with confidence what the eventual outcome of these pending matters will be, what the timing of the ultimate resolution of these matters will be or what the eventual loss, fines or penalties related to each pending matter may be. We believe that we have made adequate reserves

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related to the costs anticipated to be incurred in connection with these various claims and legal proceedings and believe that liabilities related to such claims and proceedings should not have, in the aggregate, a material adverse effect on our business, financial condition, or results of operations. However, in light of the uncertainties involved in these claims and proceedings, there is no assurance that the ultimate resolution of these matters will not significantly exceed the reserves currently accrued by us; as a result, the outcome of a particular matter may be material to our operating results for a particular period, depending upon, among other factors, the size of the loss or liability imposed and the level of our income for that period.

Insurance

We maintain insurance policies in accordance with the requirements of the MFAs and as appropriate beyond those requirements, to the extent we believe additional coverage is necessary. Our insurance policies include commercial general liability, workers compensation, “all risk” property and business interruption insurance, among others. See “Our Relationship with McDonald’s—Insurance.”

Charitable Activities and Social Initiatives

The McDonald’s brand is enhanced through McDonald’s and our social responsibility, including charitable activities and community involvement. The following discussion summarizes some of McDonald’s and our principal initiatives and contributions:

Employment Experience

We are an important employer in Latin America and the Caribbean, with over 86,000 employees as of December 31, 2010, and are the first employer for a significant portion of our employees. In 2009, the Great Place to Work Institute recognized us as being one of the six best companies to work for in Latin America, and we led the “ Súper Empresas ” (Super Companies) ranking by the Expansión/CNN magazine.

Community

On McHappy Day, McDonald’s restaurants around the world raise money for various children’s causes, including the Ronald McDonald House Charities Foundation that supports needy children and their families, provides funding for philanthropic non-profit associations and provides educational scholarships and research for youth development. McHappy Day has grown from being a “social marketing” campaign to becoming a community-wide effort. In 2010, McHappy Day was celebrated in all of the Territories, involving over 30,000 community volunteers and our franchisees and suppliers. Our activities this year set two McDonald’s McHappy Day records: largest amount raised by a country (Brazil) and largest amount raised by a single restaurant (Uruguay). In 2010, our McHappy Day activities raised over $11 million, a 9% increase compared to 2009.

We are actively involved with McDonald’s in numerous community development programs. As of December 31, 2010, there were 12 Ronald McDonald houses in 11 countries in Latin America and the Caribbean, six Ronald McDonald family rooms in hospitals, which allow children undergoing heart treatments and their family members to enjoy a more comfortable stay, and one Ronald McDonald Care Mobile, which was built specifically for delivering pediatric care services.

Nutrition and Well-being

As part of our commitment to offering the best nutrition and quality to our customers, we are dedicated to teaching healthy eating habits and providing reliable information to guide educated nutritional decisions. We participate in several educational, sports and well-being programs throughout Latin America and the Caribbean, promoting our brand and setting an example across the region, including sponsoring walks and races to raise funds and awareness of various health conditions.

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Environmental Responsibility

We also have several initiatives that work towards achieving a more sustainable relationship with the environment. As of December 31, 2010, we had opened three green restaurants, which are more environmentally responsible and resource-efficient throughout their life-cycle than regular restaurants. In December 2008, we opened the first green restaurant in Latin America in Bertioga on the coast of São Paulo, Brazil. This restaurant received Leadership in Energy & Environmental Design, or LEED, certification, in September 2009, becoming the first McDonald’s restaurant to be so certified. Due to Costa Rica’s reputation for environmental responsibility, we chose Costa Rica as the site for our second green restaurant. Opened in August 2009 in Lindora, Costa Rica, the restaurant was the first of its kind in Central America. In August 2010, we opened our third green restaurant in Pilar, Argentina. The know-how accumulated in the development of these restaurants is being used for new McDonald’s restaurants and the reimaging of existing ones. Our green restaurants have proven to be less expensive in the medium-term, while also being sustainable in the long term.

Sustainable Supply Chain

Upon opening a new restaurant in Cuzco, Peru, we experienced difficulties securing a sufficient supply of lettuce for this restaurant, and identified an opportunity to develop a program to meet our demand while promoting the well-being of farmers. Our Qori Chacra Project offers local farmers the opportunity to improve their crops by providing training on various methods to improve yield and distribution options. Through this project, we hope to develop a sustainable supply chain, which could ultimately be replicated in other countries with similar needs.

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MANAGEMENT

Board of Directors

Our board of directors consists of six members, one of whom is an independent director. In case of a tie vote by the board of directors, the Chairman will have the deciding vote. Our memorandum and articles of association authorize us to have eight members, and the number of authorized members may be increased or decreased by a resolution of shareholders or by a resolution of directors. We are currently recruiting additional directors to fill the two vacancies on the board of directors.

Pursuant to our articles of association, our board of directors is divided into three classes. The members of each class serve staggered, three-year terms. Upon the expiration of the term of a class of directors, directors in that class will be elected for three-year terms at the annual meeting of shareholders in the year in which their term expires. There is no distinction in the voting or other powers and authorities of directors of different classes. The classes are currently composed as follows:

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Mr. Staton and Mr. Lemonnier are Class I directors, whose term will expire at the first annual meeting of shareholders following this offering;

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Mr. Hernández-Artigas and Ms. Franqui are Class II directors, whose term will expire at the second annual meeting of shareholders following this offering; and

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Mr. Alonso and Mr. Chu are Class III directors, whose term will expire at the third annual meeting of shareholders following this offering.

Any additional directorships resulting from an increase in the number of directors and any directors elected to fill vacancies on the board will be distributed among the three classes so that, as nearly as possible, each class will consist of one third of our directors. This classification of our board of directors may have the effect of delaying or preventing changes in control of our company. Any director may be removed, but only for cause, by a resolution of shareholders or a resolution of directors. Our directors do not have a retirement age requirement under our memorandum and articles of association.

The following table presents the names of the members of our board of directors.


Name	Position	Age
Woods Staton	Chairman and CEO	61
Sergio Alonso	Chief Operating Officer	48
Germán Lemonnier	Chief Financial Officer	49
Annette Franqui	Director	48
Carlos Hernández-Artigas	Director	47
Michael Chu*	Director	62

*	Mr. Chu has consented to serve as a director effective as of the pricing of this offering.

The following is a brief summary of the business experience of our directors. Unless otherwise indicated, the current business addresses for our directors is Roque Saenz Peña 432, Olivos, Buenos Aires, Argentina (B1636 FFB) and Juncal 1408, Oficina 404, CP 11000, Montevideo, Uruguay.

Woods Staton. Mr. Staton is our CEO and Chairman of the Board and is a member of the Compensation Committee. He was McDonald’s joint venture partner in Argentina for over 20 years and served as the President of SLAD. Mr. Staton is a member of the International Advisory Board of Itaú Unibanco Holding S.A. Mr. Staton is also a member of the founding family and served as the CEO and Chairman of the board of directors of Panamerican Beverages, Inc., or Panamco, which was Coca-Cola’s largest bottler in Latin America.

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Sergio Alonso. Mr. Alonso is our Chief Operating Officer and was, prior to his appointment as such, McDonald’s Divisional President in Brazil. He graduated with a degree in Accounting from Universidad de Buenos Aires in 1986. He began his career at McDonald’s as Accounting Manager and subsequently moved to the operations area, eventually being promoted to Vice President of Operations in 6 years. From 1999 until 2003, Mr. Alonso was involved in the development of the Aroma Café brand in Argentina.

Germán Lemonnier. Mr. Lemonnier is our Chief Financial Officer and was, prior to his appointment as such, the Chief Financial Officer of SLAD. He graduated with a degree in Accounting from Universidad de Buenos Aires in 1996. He began his career at McDonald’s in 1993, as Accounting Chief of Argentina and after one year was promoted to Accounting Manager. In 1995, Mr. Lemonnier became the Finance & Administration Manager of Argentina and held the positions of Finance & Administration Director and Chief Financial Officer of Argentina from 1997 until his appointment as Chief Financial Officer of SLAD in 2005.

Annette Franqui. Ms. Franqui has been a member of our board of directors since 2007 and is a member of the Audit Committee. She graduated with a Bachelor of Science degree in Economics from the Wharton School of the University of Pennsylvania in 1984 and an MBA from the Stanford Graduate School of Business in 1986. She is also a Chartered Financial Analyst. Ms. Franqui began her career in 1986 with J.P. Morgan and joined Goldman Sachs in 1989. In 1994, she returned to J.P. Morgan where she became a Managing Director and the Head of the Latin America Research Department. Ms. Franqui joined Panamco in 2001 as Vice President of Corporate Finance and became the Chief Financial Officer in 2002. She is one of the founding partners of Forrestal Capital and is currently a board member of Wireless WERX International and Grupo Progreso.

Carlos Hernández-Artigas. Mr. Hernández-Artigas has been a member of our board of directors since 2007 and is a member of the Compensation Committee. He graduated from Universidad Panamericana, Escuela de Derecho in 1987 and University of Texas at Austin, School of Law in 1988. He received an MBA from IPADE in Mexico City in 1996. Mr. Hernández-Artigas worked as a lawyer for several years in Mexico and as a foreign attorney in Dallas, Texas and New York. He served as the General Counsel, Chief Legal Officer and Secretary of Panamco for ten years. He is one of the founding partners of Forrestal Capital and is currently a board member of Wireless WERX International.

Michael Chu. Mr. Chu has agreed to serve on our board of directors effective as of the pricing of this offering. He graduated with honors from Dartmouth College in 1968 and received an M.B.A. with highest distinction from the Harvard Business School in 1976. Mr. Chu holds an appointment as Senior Lecturer at the Harvard Business School. He is also Managing Director and co-founder of the IGNIA Fund, an investment firm based in Monterrey, Mexico, which is dedicated to investing in commercial enterprises serving low-income populations in Latin America. He was a founding partner of, and continues to serve as Senior Advisor to, Pegasus Capital, a private equity firm in Buenos Aires, with a portfolio that includes major companies and real estate developments in Argentina. From 1993 to 2000, Mr. Chu was with ACCION International, a nonprofit corporation dedicated to microfinance, where he served as President and CEO. From 1989 to 1993, Mr. Chu served as an executive and limited partner in the New York office of the private equity fund Kohlberg Kravis Roberts & Co.

Executive Officers

Our executive officers are responsible for the management and representation of our company. We have a strong centralized management team led by Mr. Staton, our CEO and Chairman of the Board, with broad experience in development, revenue, supply chain management, operations, finance, marketing, legal affairs, human resources, communications and training. Most of our executive officers have worked in the food service industry for several years. Many of the members of the management team have a long history with McDonald’s operations in Latin America and with Mr. Staton, and have worked together as a team for many years. Our executive officers were appointed by our board of directors for an indefinite term.

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The following table lists our current executive officers:


Name	Position	Initial year of Appointment
Woods Staton	Chairman and CEO		2007
Sergio Alonso	Chief Operating Officer		2007
German Lemonnier	Chief Financial Officer		2007
Juan David Bastidas	Chief Legal Counsel		2010
Marcelo Rabach	Divisional President—Brazil		2008
José Fernández	Divisional President—SLAD		2007
Nino Rotondi	Divisional President—Caribbean Division		2008
Roberto Ortiz	Divisional President—NOLAD		2007
Sebastian Magnasco	Vice President of Development		2007
Raul Mandia	Vice President of Marketing		2007
Pablo Rodriguez de la Torre	Vice President of Human Resources		2008
Flavia Vigio	Vice President of Communications		2007
Horacio Sbrolla	Vice President of Supply Chain		2007

The following is a brief summary of the business experience of our executive officers who are not also directors. Unless otherwise indicated, the current business addresses for our executive officers is Roque Saenz Peña 432, Olivos, Buenos Aires, Argentina (B1636 FFB) and Juncal 1408, Oficina 404, CP 11000, Montevideo, Uruguay.

Juan David Bastidas. Mr. Bastidas, 42, is our Chief Legal Counsel. He attended Universidad Pontificia Bolivariana in Colombia in 1989, where he received a Law Degree. In 1990, he graduated as a Business Law Specialist from the same university. He received an MBA from New York University in 1994. He has post-graduate studies in International Business (2000) from EAFIT in Colombia and Senior Management (2009) from Universidad de Los Andes in Colombia. Mr. Bastidas worked from 1994 to 1995 as an international operations lawyer for Banco Industrial Colombiano (Bancolombia). He served as General Counsel and Secretary of the board of directors of Interconexión Electrica S.A. E.S.P.–ISA from 1995 to 2010 before joining us in July 2010.

Marcelo Rabach. Mr. Rabach, 41, is our Divisional President in Brazil and was, prior to his appointment as such, McDonald’s Chief Operating Officer in Venezuela. He graduated with a degree in Business Administration from Universidad Argentina de la Empresa in 2002. He began his career at McDonald’s Argentina in 1990 and has over 17 years of line operations experience, starting as a crew employee and steadily advancing into larger operational roles. From 1999 until his appointment as McDonald’s Chief Operating Officer in Venezuela in 2005, Mr. Rabach was responsible for the operations, real estate, construction, human resources, local store marketing, and training and franchising of a region within Argentina, holding the positions of Operations Manager and Operations Director.

José Fernández. Mr. Fernández, 49, is our Divisional President of the operations in SLAD and was, prior to his appointment as such, the Managing Director of Argentina. He graduated with a degree in Mechanical Engineering from Instituto Tecnológico Buenos Aires in 1985. He began his career at McDonald’s in 1986 as Project Manager and after two years was promoted to Development Manager. He also held the positions of Development Director and Development Vice President before becoming Managing Director for Argentina.

Nino Rotondi. Mr. Rotondi, 51, is our Divisional President in the Caribbean and was, prior to his appointment as such, McDonald’s Chief Operating Officer in Brazil. He graduated with a degree in Civil Engineering from Metropolitan University, Venezuela in 1983. He began his career at McDonald’s in 1998 and held the positions of Operations Director, Managing Director and President for Venezuela and President for the Andean region.

Roberto Ortiz. Mr. Ortiz, 56, is the Company’s Divisional President in NOLAD. He is experienced in the consumer industry, having served as General Manager in Colombia for Panamco. He graduated with a degree

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in Economics from San Buenaventura University, Cali, Colombia in 1978. He has over 24 years of experience in the retail industry, beginning his career in 1978 at Coca-Cola de Colombia. In 1993, he was appointed as Operations Vice President and Executive Vice President of Panamco in Colombia.

Sebastian Magnasco. Mr. Magnasco, 42, is our Vice President of Development and served, prior to his appointment as such, in the same capacity in SLAD. He graduated with a degree in Engineering from Instituto Tecnológico Buenos Aires, in 1990. He began his career at McDonald’s in 1994 and held the positions of Real Estate & Equipment Director of Argentina and IT, Real Estate and Equipment Director of Argentina until his appointment as Vice President of Development of SLAD in 2005.

Raul Mandia. Mr. Mandia, 49, is our Vice President of Marketing and served, prior to his appointment as such, in the same capacity in SLAD. He graduated with a degree in Accounting from Northern Virginia Community College, Virginia in 1988. He began his career at McDonald’s in 1991 as Finance Manager in Uruguay. In 2000, he became Director of Operations, Learning and Development in the Latin American group of McDonald’s corporate headquarters, and in 2002 he returned to McDonald’s Uruguay as Managing Director until he was appointed as Vice President of Marketing of SLAD in 2005.

Pablo Rodriguez de la Torre. Mr. Rodriguez, 47, joined the Company in April 2008 as Vice President of Human Resources. Mr. Rodriguez started his professional career in 1985 working for the Argentinean law firm Estudio Costa & Asociados, specializing in labor law after having graduated with a degree in Law from Buenos Aires University in 1988. In 1999, Mr. Rodriguez joined Internet operator UOL International, where he held different senior positions, mainly in Human Resources, dealing with the company’s operations in the major Latin American countries, including assignments in Brazil and Mexico. In 2002, he joined Starwood Hotels & Resorts Worldwide Inc. as Vice President of Human Resources Latin America, based in Miami, where he stayed until joining Arcos Dorados.

Flavia Vigio. Ms. Vigio, 42, is our Vice President of Communications. She graduated with a degree in Journalism from Pontifícia Universidade Católica in Rio de Janeiro. She is responsible for the areas of Media and Public Relations, Government Relations, Internal Communication, Corporate Citizenship, Customer Relations and Crisis Management for the region. Prior to her appointment as such, she was responsible for communications in Brazil. At the beginning of her career, Flavia spent five years living in Milan, Italy, where she worked as a Public Relations Supervisor at Prima Classe, a leather goods retailer. She began her McDonald’s career as the Internal Communications Manager in Brazil in 2002.

Horacio Sbrolla. Mr. Sbrolla, 48, is our Vice President of Supply Chain and served, prior to his appointment as such, in the same capacity in SLAD. He graduated with a degree in Industrial Engineering from Instituto Tecnológico Buenos Aires, in 1986. He began his career at McDonald’s in 1988 as Equipment Manager of Argentina. In 2001, he became the Regional Leader for the implementation of the “ERP” solution within all Latin American markets and since 2002 was the Managing Director of Chile until his appointment as Vice President of Supply Chain of SLAD in 2005.

Committees

Audit Committee

Our audit committee consists of two directors: Mr. Chu and Ms. Franqui. Mr. Chu is independent within the meaning of the SEC and NYSE corporate governance rules. Our board of directors has determined that Mr. Chu is an “audit committee financial expert” as defined by the SEC. Within one year following the offering, we intend to have three directors on our audit committee. In accordance with our audit committee charter, the U.S. federal securities laws and NYSE listing requirements applicable to foreign private issuers, such as us, we intend to add one independent director within 90 days after the listing of our class A shares on the NYSE and another independent director within one year after the listing. Ms. Franqui will step down once we appoint another independent director to the audit committee.

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The charter of the audit committee states that the purpose of the audit committee is to assist the board of directors in its oversight of:

•

the integrity of our financial statements;

•

the annual independent audit of our financial statements, the engagement of the independent auditor and the evaluation of the qualifications, independence and performance of our independent auditor;

•

the performance of our internal audit function; and

•

our compliance with legal and regulatory requirements.

Compensation Committee

Our compensation committee will consist of Mr. Staton, Mr. Hernández-Artigas and Ms. Franqui. Pursuant to its charter, the compensation committee is responsible for, among other things:

•

approving corporate goals and objectives relevant to compensation, evaluating the performance of executives in light of such goals and objectives and recommending compensation based on such evaluation, recommending any long-term incentive component of compensation and approving the compensation of our executive officers;

•

reviewing and reporting to the board of directors on our management succession plan and on compensation for directors;

•

evaluating our compensation and benefits policies; and

•

reporting to the board periodically.

Equity Incentive Plan

We implemented a long-term incentive plan in 2008 to reward certain employees for the success of our business. In accordance with this plan, we historically granted phantom equity units, called CADs, annually to certain employees, pursuant to which such employees are entitled to receive, upon vesting, a cash payment equal to the appreciation in the fair value of the award over the base value of the award. In 2011, our Board approved the use of the Company’s market capitalization following our initial public offering as the metric used to determine the Company’s fair market value under this incentive plan in place of the existing formula used to determine the current value of the awards. The CADs vest over a five-year period, subject to continued employment with us, as follows: 40% on the second anniversary of the date of grant and 20% on each of the following three anniversaries. The right is cumulative and, once it has become exercisable, it may be exercised during a quarterly window period in whole or in part until the date of termination, which occurs at the fifth anniversary of the grant date. Any outstanding CADs at the date of termination will be automatically settled by us.

In March 2011, we adopted our Equity Incentive Plan, or 2011 Plan, to attract and retain the most highly qualified and capable professionals and to promote the success of our business. This plan replaces our 2008 long-term incentive plan discussed above, although the CADs that have already been granted will remain outstanding until their respective termination dates. Like our 2008 long-term incentive plan, the 2011 Plan will be used to reward certain employees for the success of our business through an annual award program. The 2011 Plan permits grants of awards relating to class A shares, including awards in the form of share (also referred to as stock) options, restricted shares, restricted share units, share appreciation rights, performance awards and other share-based awards as will be determined by our Board. As of the date of this prospectus, we have not granted any awards pursuant to the 2011 Plan.

We expect to make grants for 2011 to certain of our executive officers and other employees on the first trading day of our class A shares on the NYSE). The awards to be granted will be 50% in restricted shares and 50% in stock options that will vest as follows: 40% on the second anniversary of the date of grant and 20% on each of the following three anniversaries.

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In addition, on the first trading day of our class A shares on the NYSE, we expect to also grant special awards of restricted shares and stock options to certain of our executive officers and other employees under the 2011 Plan. The total amount of these special awards will be no more than 0.5% of our market capitalization (calculated by multiplying our total outstanding class A and class B shares by the closing price of our class A shares on the first trading day of our class A shares on the NYSE. The special awards will be granted 75% in restricted shares and 25% in stock options, and 33.3% will vest on each of the second, third and fourth anniversaries of the grant date. As of the date of this prospectus, assuming a market capitalization of $2.8 billion (calculated by multiplying our total outstanding class A and class B shares by the midpoint of the range set forth on the cover page of this prospectus) and 200,000,000 outstanding shares, a total of 750,000 class A shares would be issuable pursuant to these special awards.

The maximum number of shares that may be issued under the 2011 Plan, including the 2011 awards and the special awards mentioned above, will be 2.5% of our total outstanding class A and class B shares immediately following our initial public offering.

Compensation of Directors and Officers

General

We estimate that the aggregate annual total cash compensation for our 13 officers was approximately $10.5 million in 2010. Following this offering, our non-executive directors will receive annual compensation of $130,000 each, payable 50% in cash and 50% in stock options. Our directors’ compensation is determined at the general annual shareholders’ meeting.

Award Right Granted to our CEO

We entered into an agreement with our CEO in 2008, pursuant to which he is entitled to receive a cash payment equal to 1% of the fair market value of the Company upon the occurrence of certain events, including an initial public offering or a change of control. The vesting period for this award will be accelerated upon completion of our initial public offering. As of December 31, 2010, an amount of $31.8 million has already been accrued under this award, and we estimate that an amount of approximately $28.0 million (assuming a value per class A share of the Company based on the midpoint of the range set forth on the cover page of this prospectus) will be payable to our CEO upon completion of this offering.

Share Ownership by Directors and Officers

The following table presents the beneficial ownership of our shares owned by our directors and officers as of the date of this prospectus. Other than those persons listed below, none of our directors or officers beneficially own any of our shares.


Shareholder	Class A Shares		Percentage of Outstanding Class A Shares		Class B Shares		Percentage of Outstanding Class B Shares			Total Economic Interest			Total Voting Interest(1)
Los Laureles Ltd.(2)		—		—		80,000,000		100.0	%		40.0	%		76.9	%
Annette Franqui		*		*		—		—			*			*
Carlos Hernandez		*		*		—		—			*			*

*	Ms. Franqui and Mr. Hernandez beneficially own less than 1% of total number of outstanding class A shares.

(1)	Class A shares are entitled to one vote per share and class B shares are entitled to five votes per share.

(2)	Los Laureles Ltd. is beneficially owned by Mr. Staton, our Chairman and CEO. See “Principal and Selling Shareholders—Los Laureles Ltd.”

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PRINCIPAL AND SELLING SHAREHOLDERS

As of the date of this prospectus, our authorized share capital consists of 420,000,000 class A shares, no par value per share, and 80,000,000 class B shares, no par value per share. Each of our class A shares entitles its holder to one vote. Each of our class B shares entitles its holder to five votes. Los Laureles Ltd., our controlling shareholder will, immediately following completion of the offering, including its purchase of class A shares as part thereof, own 38.6% of our issued and outstanding share capital, and 75.5% of our voting power by virtue of its ownership of 100% of our class B shares. The following table presents the beneficial ownership of our shares as of the date of this prospectus:


Shareholder	Class A Shares		Percentage of Outstanding Class A Shares			Class B Shares		Percentage of Outstanding Class B Shares			Total Economic Interest			Total Voting Interest(1)
Los Laureles Ltd.(2)		—		—			80,000,000		100.0	%		40.0	%		76.9	%
Gavea Investment AD, L.P.(3)		52,241,026		43.5	%		—		—			26.1			10.0
Capital International Private Equity Fund V, L.P.(4)(5)		39,471,371		32.9			—		—			19.7			7.6
CGPE V, L.P.(4)(6)		1,355,296		1.1			—		—			0.7			0.3
DLJ South American Partners L.P.(7)(8)		16,156,923		13.5			—		—			8.1			3.1
DLJSAP Restco Co-Investments LLC(7)(9)		10,228,718		8.5			—		—			5.1			2.0
Other		546,666		0.5			—		—			0.3			0.1
Public		—		—			—		—			—			—

Total		120,000,000		100.0	%		80,000,000		100.0	%		100.0	%		100.0	%

(1)	Class A shares are entitled to one vote per share and class B shares are entitled to five votes per share.

(2)

The address of Los Laureles Ltd. is 325 Waterfront Drive, Omar Hodge Building, 2nd Floor, Wickhams Cay 1, Road Town, Tortola, British Virgin Islands. Los Laureles Ltd. is beneficially owned by Mr. Staton, our Chairman and CEO. Los Laureles Ltd. established a voting trust with respect to the voting interests in us held by Los Laureles Ltd. and has contributed its interests in Los Laureles Ltd. to a trust whose sole beneficiaries will be Mr. Staton and his descendants. See “Principal and Selling Shareholders—Los Laureles Ltd.”

(3)	The address of Gavea Investment AD, L.P. is PO Box 309, Ugland House, Grand Cayman, KY1-1104, Cayman Islands.

(4)	Capital International Private Equity Funds beneficially own 40,826,667 class A shares through its affiliates Capital International Private Equity Fund V, L.P. and CGPE V, L.P.

(5)	The address of Capital International Private Equity Fund V, L.P. is 6455 Irvine Center Drive, Irvine, California 92618.

(6)	The address of CGPE V, L.P. is 6455 Irvine Center Drive, Irvine, California 92618.

(7)	DLJ South American Partners L.L.C. beneficially owns 26,385,641 class A shares through its affiliates DLJ South American Partners L.P. and DLJSAP Restco Co-Investments LLC.

(8)	The address of DLJ South American Partners L.P. is 66 Wellington Street West, Suite 4700, Toronto, Ontario M5K 1E6.

(9)	The address of DLJSAP Restco Co-Investments LLC is c/o Corporate Service Company, 2711 Centerville Road, Suite 400, Wilmington, Delaware 19808.

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The following table presents the beneficial ownership of our shares following the offering:


			Following the Offering
Shareholder	Number of Class A Shares to be Sold in the Offering		Class A Shares		% of Outstanding Class A Shares			Class B Shares		% of Outstanding Class B Shares			Total Economic Interest			Total Voting Interest(1)
Los Laureles Ltd.		—		2,000,000		1.5	%		80,000,000		100.0	%		38.6	%		75.5	%
Gavea Investment AD, L.P.		21,866,709		30,374,317		22.9	%		—		—			14.3	%		5.7	%
Capital International Private Equity Fund V, L.P.		16,521,670		22,949,701		17.3	%		—		—			10.8	%		4.3	%
CGPE V LP		567,291		788,005		0.6	%		—		—			0.4	%		0.1	%
DLJ South American Partners LP		6,762,860		9,394,063		7.1	%		—		—			4.4	%		1.8	%
DLJSAP Restco Co-Investments LLC		4,281,470		5,947,248		4.5	%							2.8	%		1.1	%
Other		—		546,666		0.4	%		—		—			0.3	%		0.1	%
Public		—		60,461,539		45.6	%		—		—			28.5	%		11.4	%

Total		50,000,000		132,461,539		100.0	%(2)		80,000,000		100.0	%		100.0	%(2)		100.0	%

(1)	Class A shares are entitled to one vote per share and class B shares are entitled to five votes per share.

(2)	Does not sum due to rounding.

The following table presents the beneficial ownership of our shares following the offering, assuming full exercise of the overallotment options:


				Following the Offering, Assuming Full Exercise of the Overallotment Options
Shareholder	Number of Class A Shares to be Sold in the Offering, Assuming Full Exercise of the Overallotment Options			Class A Shares			% of Outstanding Class A Shares			Class B Shares		% of Outstanding Class B Shares			Total Economic Interest			Total Voting Interest(1)
Los Laureles Ltd		—			2,000,000			1.5	%		80,000,000		100.0	%		38.6	%		75.5	%
Gavea Investment AD, LP		25,964,194			26,276,832			19.8	%		—		—			12.4	%		4.9	%
Capital International Private Equity Fund V, L.P.		19,617,577			19,853,794			15.0	%		—		—			9.3	%		3.7	%
CGPE V LP		673,593			681,703			0.5	%		—		—			0.3	%		0.1	%
DLJ South American Partners LP		8,030,116			8,126,807			6.1	%		—		—			3.8	%		1.5	%
DLJSAP Restco Co-Investments LLC		5,083,752			5,144,966			3.9	%							2.4	%		1.0	%
Other		—			546,666			0.4	%		—		—			0.3	%		0.1	%
Public		—			69,830,770			52.7	%		—		—			32.9	%		13.1	%

Total		59,369,231	(2)		132,461,539	(2)		100.0	%(2)		80,000,000		100.0	%		100.0	%		100.0	%(2)

(1)	Class A shares are entitled to one vote per share and class B shares are entitled to five votes per share.

(2)	Does not sum due to rounding.

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Los Laureles Ltd.

Los Laureles Ltd. is our controlling shareholder and is beneficially owned by Mr. Staton, our Chairman and CEO. Los Laureles Ltd. currently owns 40.0% of the economic interests of Arcos Dorados and 76.9% of its voting interests. Los Laureles Ltd. has established a voting trust with respect to the voting interests in us held by Los Laureles Ltd. and has contributed its interests in Los Laureles Ltd. to a trust whose sole beneficiaries will be Mr. Staton and his descendants. Once formed, the voting trust will exercise the vote of the class B shares through a voting committee which at the outset will consist of only Mr. Staton. The decision of the voting committee must be approved by Los Laureles (PTC) Limited, a British Virgin Islands company that is a wholly-owned subsidiary of Los Laureles Limited. Mr. Staton is the sole director of Los Laureles (PTC) Limited. Without the consent of McDonald’s, Mr. Staton may add any one or more of his descendants, certain other relatives, any board member of Arcos Dorados and the chief executive officer, chief operating officer or chief financial officer of Arcos Dorados to the committee.

Following Mr. Staton’s death or during Mr. Staton’s incapacity, the voting committee will consist of (1) certain officers or directors of Arcos Dorados, (2) certain descendants of Mr. Staton or their representatives, and (3) other persons appointed by Los Laureles Ltd., subject to McDonald’s consent if such person is not one of Mr. Staton’s descendants and is not the chief executive officer, chief operating officer or chief financial officer of Arcos Dorados. For the first five years from the date of the execution of the voting trust, the officers and directors of Arcos Dorados on the voting committee will have the tie-breaking vote (if any). Thereafter, Mr. Staton’s descendants will have the tie-breaking vote.

Mr. Staton is a leading businessman and investor in Latin America. Prior to the Acquisition, Mr. Staton was McDonald’s joint venture partner in Argentina for over 20 years and served as the President of McDonald’s South Latin America Division. Mr. Staton is also a member of the founding family, and served as an employee and Chairman of the Board, of Panamco. Panamco was Coca-Cola’s largest bottler in Latin America and was, prior to its sale in May 2003, a multi-billion dollar NYSE-listed company.

Mr. Staton’s long-term relationship with McDonald’s and broad experience with major brands uniquely position him to serve as our Chairman, CEO and controlling shareholder. Moreover, over the course of his career, Mr. Staton has demonstrated the capacity to build strong teams, as evidenced during his 20-year tenure as McDonald’s joint venture partner and employee.

Gavea Investment AD, L.P.

Gavea Investment AD, L.P. is an investment vehicle managed by GIF Gestão de Investimentos e Participações Ltda, the illiquid strategies arm of the Gavea Group (“Gavea”). Gavea Investment AD, L.P. currently owns 26.1% of the economic interests of Arcos Dorados and 10.0% of its voting interests. Gavea is one of the largest investment management companies in Brazil, managing approximately $5.2 billion as of October 2010, focused on two business lines: hedge funds and private equity. In late October 2010, a majority interest in Gavea was sold to a wholly-owned subsidiary of JPMorgan Asset Management Holdings Inc., a wholly-owned subsidiary of JPMorgan Chase & Co and an affiliate of J.P. Morgan Securities LLC, an underwriter. Through this transaction, Gavea formed a strategic alliance with Highbridge Capital Management, LLC, a subsidiary of JPMorgan Asset Management Holdings Inc. Gavea was founded by Arminio Fraga, a former President of the Central Bank of Brazil, a former Managing Director for Soros Fund Management and a Visiting Assistant Professor at the Wharton School of Business at the University of Pennsylvania. He is the Chairman of the board of directors of BM&F Bovespa and a member of J.P. Morgan’s International Advisory Board and Group of Thirty and the Council on Foreign Relations. See “The Offering—Conflicts of Interest” for information regarding Gavea’s relationship with J.P. Morgan and the related requirement under FINRA Rule 5121 for a qualified independent underwriter to participate in this offering.

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Capital International Private Equity Funds

Capital International Private Equity Fund V, L.P. and CGPE V, L.P., investment funds controlled by Capital International, Inc., currently indirectly own 20.4% of the economic interests of Arcos Dorados and 7.9% of its voting interests. Capital International, Inc., the investment advisor to the Capital International Private Equity Funds, is a leading asset manager and investor in emerging market equities. Since 1992, its private equity team has invested over $2.8 billion in 74 companies that conduct business in emerging markets across Asia, Central and Eastern Europe, Latin America and the Middle East. Within Latin America, it currently has prominent private equity investments in Mexico, Argentina and Brazil.

DLJ South American Partners

DLJ South American Partners L.P. and DLJSAP Restco Co-Investments LLC, investment funds controlled by DLJ South American Partners L.L.C., currently indirectly own approximately 13.2% of the economic interests of Arcos Dorados and 5.1% of its voting interests. DLJ South American Partners L.L.C. is an independent regionally dedicated private equity fund managed by a group of Latin America-based investment professionals. Credit Suisse owns 49% of DLJ South American Partners L.L.C., which is the general partner of DLJ South American Partners L.P. and the managing member of DLJ SAP Restco Co-Investment LLC, and Credit Suisse is also a limited partner of DLJ South American Partners L.P. DLJ South American Partners L.L.C.’s portfolio of private equity investments is primarily focused in Argentina, Brazil and Chile and its principals have a long track record in private equity transactions, having invested $1.2 billion in several industries across the entire region.

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RELATED PARTY TRANSACTIONS

Letter of Credit

As security for the performance of our obligations under the MFAs, we obtained an irrevocable standby letter of credit in favor of McDonald’s in an amount of $65.0 million, issued by Credit Suisse acting as issuing bank. Credit Suisse owns 49% of the general partner and is a limited partner of DLJ South American Partners L.L.C., which is a selling shareholder in this offering and which, as of the date of this prospectus, indirectly owned 13.2% and 5.1% of our economic and voting interests, respectively. We believe that the terms of the transaction are consistent with those that could have been obtained in a comparable arm’s-length transaction with an unrelated party.

Axis Split-off

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DESCRIPTION OF SHARE CAPITAL AND MEMORANDUM AND ARTICLES OF ASSOCIATION

General

We are a British Virgin Islands company incorporated with limited liability and our affairs are governed by the provisions of our memorandum and articles of association, as amended and restated from time to time, and by the provisions of applicable British Virgin Islands law, including the BVI Business Companies Act, 2004 (the “BVI Act”).

Our company number in the British Virgin Islands is 1619553. As provided in sub-regulation 4.1 of our memorandum of association, subject to British Virgin Islands law, we have full capacity to carry on or undertake any business or activity, do any act or enter into any transaction and, for such purposes, full rights, powers and privileges. Our registered office is at Maples Corporate Services (BVI) Limited, Kingston Chambers, P.O. Box 173, Road Town, Tortola, British Virgin Islands.

The transfer agent and registrar for our class A and class B shares is Continental Stock Transfer & Trust Company, which maintains the share registrar for each class in New York, New York.

As of the date of this prospectus, our memorandum and articles of association authorize the issuance of up to 420,000,000 class A shares and 80,000,000 class B shares. As of the date of this prospectus, 120,000,000 class A shares and 80,000,000 class B shares were issued, fully paid and outstanding. Upon the completion of this offering, we will have 132,461,539 class A shares and 80,000,000 class B shares issued and outstanding.

The maximum number of shares that we are authorized to issue may be changed by resolution of shareholders amending our memorandum and articles of association. Shares may be issued from time to time only by resolution of shareholders.

We have applied to list our class A shares, on the New York Stock Exchange under the symbol “ARCO.”

Initial settlement of our class A shares will take place on the closing date of this offering through The Depository Trust Company, or DTC, in accordance with its customary settlement procedures for equity securities. Each person owning class A shares held through DTC must rely on the procedures thereof and on institutions that have accounts therewith to exercise any rights of a holder of the class A shares. Persons wishing to obtain certificates for their class A shares must make arrangements with DTC.

The following is a summary of the material provisions of our share capital and our memorandum and articles of association.

Class A Shares

As of the date of this prospectus, (i) 52,241,026 of our class A shares are owned by Gavea Investment AD, L.P. a limited partnership organized under the laws of the Cayman Islands, (ii) 40,826,667 of our class A shares are owned by investment funds controlled by Capital International, Inc., a California Corporation, and (iii) 26,385,641 of our class A shares are owned by investment funds controlled by DLJ South American Partners L.P., a limited partnership established under the laws of Ontario, Canada. Holders of our class A shares who are nonresidents of the British Virgin Islands may freely hold and vote their shares.

The following summarizes the rights of holders of our class A shares:

•

each holder of class A shares is entitled to one vote per share on all matters to be voted on by shareholders generally, including the election of directors;

•

holders of class A shares vote together with holders of class B shares;

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•

there are no cumulative voting rights;

•

the holders of our class A shares are entitled to dividends and other distributions, pari passu with our class B shares, as may be declared from time to time by our board of directors out of funds legally available for that purpose, if any, and pursuant to our memorandum and articles of association, all dividends unclaimed for three years after having been declared may be forfeited by a resolution of directors for the benefit of the Company;

•

upon our liquidation, dissolution or winding up, the holders of class A shares will be entitled to share ratably, pari passu with our class B shares, in the distribution of all of our assets remaining available for distribution after satisfaction of all our liabilities; and

•

the holders of class A shares have preemptive rights in connection with the issuance of any securities by us, except for certain issuances of securities by us, including (i) pursuant to any employee compensation plans; (ii) as consideration for (a) any merger, consolidation or purchase of assets or (b) recapitalization or reorganization; (iii) in connection with a pro rata division of shares or dividend in specie or distribution; or (iv) in a bona fide public offering that has been registered with the SEC, but they are not entitled to the benefits of any redemption or sinking fund provisions.

Class B Shares

All of our class B shares are owned by Los Laureles Ltd.. Holders of our class B shares who are nonresidents of the British Virgin Islands may freely hold and vote their shares.

The following summarizes the rights of holders of our class B shares:

•

each holder of class B shares is entitled to five votes per share on all matters to be voted on by shareholders generally, including the election of directors;

•

holders of class B shares vote together with holders of class A shares;

•

class B shares may not be listed on any U.S. or foreign national or regional securities exchange or market;

•

there are no cumulative voting rights;

•

the holders of our class B shares are entitled to dividends and other distributions, pari passu with our class A shares, as may be declared from time to time by our board of directors out of funds legally available for that purpose, if any, and pursuant to our memorandum and articles of association, all dividends unclaimed for three years after having been declared may be forfeited by a resolution of directors for the benefit of the Company;

•

upon our liquidation, dissolution or winding up, the holders of class B shares will be entitled to share ratably, pari passu with our class A shares, in the distribution of all of our assets remaining available for distribution after satisfaction of all our liabilities;

•

the holders of class B shares have preemptive rights in connection with the issuance of any securities by us, except for certain issuances of securities by us, including (i) pursuant to any employee compensation plans; (ii) as consideration for (a) any merger, consolidation or purchase of assets or (b) recapitalization or reorganization; (iii) in connection with a pro rata division of shares or dividend in specie or distribution; or (iv) in a bona fide public offering that has been registered with the SEC, but they are not entitled to the benefits of any redemption or sinking fund provisions;

•

each class B share is convertible into one class A share at the option of the holder at any time, subject to the prior written approval of McDonald’s; and

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•

each class B share will convert automatically into one class A share at such time as the holders of class B shares cease to hold, directly or indirectly, at least 20% of the aggregate number of outstanding class A and class B shares.

Limitation on Liability and Indemnification Matters

Under British Virgin Islands law, each of our directors and officers, in performing his or her functions, is required to act honestly and in good faith with a view to our best interests and exercise the care, diligence and skill that a reasonably prudent director would exercise in comparable circumstances. Our memorandum and articles of association provide that, to the fullest extent permitted by British Virgin Islands law or any other applicable laws, our directors will not be personally liable to us or our shareholders for any acts or omissions in the performance of their duties. This limitation of liability does not affect the availability of equitable remedies such as injunctive relief or rescission. These provisions will not limit the liability of directors under United States federal securities laws.

Our memorandum and articles of association provide that we shall indemnify any of our directors or anyone serving at our request as a director of another entity against all expenses, including legal fees, and against all judgments, fines and amounts paid in settlement and reasonably incurred in connection with legal, administrative or investigative proceedings or suits. We may pay any expenses, including legal fees, incurred by any such person in defending any legal, administrative or investigative proceedings in advance of the final disposition of the proceedings. If a person to be indemnified has been successful in defense of any proceedings referred to above, the director is entitled to be indemnified against all expenses, including legal fees, and against all judgments, fines and amounts paid in settlement and reasonably incurred by the director or officer in connection with the proceedings.

We may purchase and maintain insurance in relation to any of our directors, officers, employees, agents or liquidators against any liability asserted against them and incurred by them in that capacity, whether or not we have or would have had the power to indemnify them against the liability as provided in our memorandum and articles of association.

Insofar as indemnification for liabilities arising under the Securities Act may be permitted to our directors, officers or controlling persons pursuant to the foregoing provisions, we have been informed that in the opinion of the SEC, such indemnification is against public policy as expressed in the Securities Act and is therefore unenforceable as a matter of United States law.

Shareholders’ Meetings and Consents

The following summarizes certain relevant provisions of British Virgin Islands laws and our articles of association in relation to our shareholders’ meetings:

•

any director may convene meetings of shareholders at such times and in such manner and places within or outside the British Virgin Islands as the director considers necessary or desirable; provided, that at least one meeting of shareholders be held each year;

•

upon the written request of shareholders entitled to exercise 30 percent or more of the voting rights in respect of the matter for which the meeting is requested, the directors are required to convene a meeting of the shareholders. Any such request must state the proposed purpose of the meeting;

•

the director convening a meeting must give not less than ten days’ notice of a meeting of shareholders to: (i) those shareholders whose names on the date the notice is given appear as shareholders in the register of members of our company and are entitled to vote at the meeting, and (ii) the other directors;

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•

a meeting of shareholders held in contravention of the requirement to give notice is valid if shareholders holding at least 90 percent of the total voting rights on all the matters to be considered at the meeting have waived notice of the meeting and, for this purpose, the presence of a shareholder at the meeting shall constitute waiver in relation to all the shares that such shareholder holds;

•

a shareholder may be represented at a meeting of shareholders by a proxy who may speak and vote on behalf of the shareholder;

•

a meeting of shareholders is duly constituted if, at the commencement of the meeting, there are present in person or by proxy not less than 50 percent of the votes of the shares or class or series of shares entitled to vote on resolutions of shareholders to be considered at the meeting;

•

if within two hours from the time appointed for the meeting a quorum is not present, the meeting, if convened upon the requisition of shareholders, shall be dissolved; in any other case it shall be adjourned to the next business day in the jurisdiction in which the meeting was to have been held at the same time and place or to such other date, time and place as the directors may determine, and if at the adjourned meeting there are present within one hour from the time appointed for the meeting in person or by proxy not less than one third of the votes of the shares or each class or series of shares entitled to vote on the matters to be considered by the meeting, those present shall constitute a quorum but otherwise the meeting shall be dissolved. Notice of the adjourned meeting need not be given if the date, time and place of such meeting are announced at the meeting at which the adjournment is taken.;

•

a resolution of shareholders is valid (i) if approved at a duly convened and constituted meeting of shareholders by the affirmative vote of a majority of the votes of the shares entitled to vote thereon which were present at the meeting and were voted, or (ii) if it is a resolution consented to in writing by a majority of the votes of shares entitled to vote thereon; and

•

an action that may be taken by the shareholders at a meeting may also be taken by a resolution of shareholders consented to in writing by a majority of the votes of shares entitled to vote thereon, without the need for any notice, but if any resolution of shareholders is adopted otherwise than by unanimous written consent of all shareholders, a copy of such resolution shall forthwith be sent to all shareholders not consenting to such resolution.

We expect that the first meeting of shareholders following this offering will be held in 2012.

Shareholders’ Agreement

The Amended and Restated Shareholders’ Agreement dated March 14, 2011 among all of our shareholders existing prior to this offering principally includes the following provisions:

Demand Registration Rights

Gavea Investment AD, L.P. and investment funds controlled by Capital International, Inc. and DLJ South American Partners L.L.C. (through its affiliates) (together, the Minority Investors) each has the right to demand that we file a registration statement covering the offer and sale of their securities under the Securities Act for as long as each holds unregistered securities. We, however, are not obligated to effect a demand registration (1) during the period beginning on the 60th day prior to our good faith estimate of the filing date of, and ending on the 180th day after the effective date of, a public offering of our securities initiated by us; (2) with respect to each Minority Investor, if we have already effected one demand registration; or (3) if we certify that, in our good faith judgment, it would be seriously detrimental to the Company or its shareholders for a registration statement or offering document to be filed in the near future. We have the right to defer filing of a registration statement for up to 120 days under certain circumstances but we cannot exercise the deferral right more than once in any 12 month period.

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Piggyback Registration Rights

If we propose to file a registration statement for any public offering of our equity securities, we must notify each Minority Investor and offer the same an opportunity to include in such registration all or any part of its equity securities irrespective of the percentage of our total capital stock those unregistered securities represent. We must use our best efforts to cause to be registered all of the registrable securities so requested to be registered. We have the right to terminate or withdraw any registration statement initiated by us before the effective date of such registration statement.

Tag-Along Rights

In the event that Los Laureles Ltd. proposes to transfer any of its equity securities to a third party, the Minority Investors and certain other minority shareholders have the right to participate on the same terms and conditions and for the same per share consideration as Los Laureles Ltd. These tag-along rights terminate once the Minority Investors hold less than 10% in the aggregate of our capital stock.

Expenses of Registration

We will pay all expenses relating to any demand or piggyback registration other than underwriting discounts, selling commissions or transfer taxes attributable to the sale of the securities.

Indemnification

We are required to indemnify each Minority Investor and each underwriter and their respective officers, directors, employees and affiliates against any losses, claims, damages or liabilities arising in connection with the registration effected pursuant to the Minority Investors’ demand and piggyback registration rights.

Differences in Corporate Law

We were incorporated under, and are governed by, the laws of the British Virgin Islands. The corporate statutes of the State of Delaware and the British Virgin Islands in many respects are similar, and the flexibility available under British Virgin Islands law has enabled us to adopt a memorandum of association and articles of association that will provide shareholders with rights that, except as described in this prospectus, do not vary in any material respect from those they would enjoy if we were incorporated under the Delaware General Corporation Law, or Delaware corporate law. Set forth below is a summary of some of the differences between provisions of the BVI Act applicable to us and the laws application to companies incorporated in Delaware and their shareholders.

Director’s Fiduciary Duties

Under Delaware corporate law, a director of a Delaware corporation has a fiduciary duty to the corporation and its shareholders. This duty has two components: the duty of care and the duty of loyalty. The duty of care requires that a director act in good faith, with the care that an ordinarily prudent person would exercise under similar circumstances. Under this duty, a director must inform himself of, and disclose to shareholders, all material information reasonably available regarding a significant transaction. The duty of loyalty requires that a director act in a manner he reasonably believes to be in the best interests of the corporation. He must not use his corporate position for personal gain or advantage. This duty prohibits self-dealing by a director and mandates that the best interest of the corporation and its shareholders take precedence over any interest possessed by a director, officer or controlling stockholder and not shared by the shareholders generally. In general, actions of a director are presumed to have been made on an informed basis, in good faith and in the honest belief that the action taken was in the best interests of the corporation. However, this presumption may be rebutted by evidence of a breach of one of the fiduciary duties. Should such evidence be presented concerning a transaction by a director, a director must prove the procedural fairness of the transaction, and that the transaction was of fair value to the corporation.

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British Virgin Islands law provides that every director of a British Virgin Islands company in exercising his powers or performing his duties, shall act honestly and in good faith and in what the director believes to be in the best interests of the company. Additionally, the director shall exercise the care, diligence, and skill that a reasonable director would exercise in the same circumstances taking into account the nature of the company, the nature of the decision and the position of the director and his responsibilities. In addition, British Virgin Islands law provides that a director shall exercise his powers as a director for a proper purpose and shall not act, or agree to the company acting, in a manner that contravenes British Virgin Islands law or the memorandum association or articles of association of the company.

Amendment of Governing Documents

Under Delaware corporate law, with very limited exceptions, a vote of the shareholders is required to amend the certificate of incorporation. In addition, Delaware corporate law provides that shareholders have the right to amend the bylaws, and the certificate of incorporation also may confer on the directors the right to amend the bylaws. Our memorandum of association may only be amended by a resolution of shareholders, provided that any amendment of the provision related to the prohibition against listing our class B shares must be approved by not less than 50% of the votes of the class A shares entitled to vote that were present at the relevant meeting and voted. Our articles of association may also only be amended by a resolution of shareholders.

Written Consent of Directors

Under Delaware corporate law, directors may act by written consent only on the basis of a unanimous vote. Similarly, under our articles of association, a resolution of our directors in writing shall be valid only if consented to by all directors or by all members of a committee of directors, as the case may be.

Written Consent of Shareholders

Under Delaware corporate law, unless otherwise provided in the certificate of incorporation, any action to be taken at any annual or special meeting of shareholders of a corporation may be taken by written consent of the holders of outstanding stock having not less than the minimum number of votes that would be necessary to take that action at a meeting at which all shareholders entitled to vote were present and voted. As permitted by British Virgin Islands law, shareholders’ consents need only a majority of shareholders signing to take effect. Our memorandum and articles of association provide that shareholders may approve corporate matters by way of a resolution consented to at a meeting of shareholders or in writing by a majority of shareholders entitled to vote thereon.

Shareholder Proposals

Under Delaware corporate law, a shareholder has the right to put any proposal before the annual meeting of shareholders, provided it complies with the notice provisions in the governing documents. A special meeting may be called by the board of directors or any other person authorized to do so in the governing documents, but shareholders may be precluded from calling special meetings. British Virgin Islands law and our memorandum and articles of association provide that our directors shall call a meeting of the shareholders if requested in writing to do so by shareholders entitled to exercise at least 30% of the voting rights in respect of the matter for which the meeting is requested. Any such request must state the proposed purpose of the meeting.

Sale of Assets

Under Delaware corporate law, a vote of the shareholders is required to approve the sale of assets only when all or substantially all assets are being sold. In the British Virgin Islands, shareholder approval is required when more than 50% of the company’s total assets by value are being disposed of or sold if not made in the usual or regular course of the business carried out by the company. Under our memorandum and articles of association, the directors may by resolution of directors determine that any sale, transfer, lease, exchange or other disposition is in the usual or regular course of the business carried on by us and such determination is, in the absence of fraud, conclusive.

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Dissolution; Winding Up

Under Delaware corporate law, unless the board of directors approves the proposal to dissolve, dissolution must be approved in writing by shareholders holding 100% of the total voting power of the corporation. Only if the dissolution is initiated by the board of directors may it be approved by a simple majority of the corporation’s outstanding shares. Delaware corporate law allows a Delaware corporation to include in its certificate of incorporation a supermajority voting requirement in connection with dissolutions initiated by the board. As permitted by British Virgin Islands law and our memorandum and articles of association, we may be voluntarily liquidated under Part XII of the BVI Act by resolution of directors and resolution of shareholders if we have no liabilities or we are able to pay our debts as they fall due.

Redemption of Shares

Under Delaware corporate law, any stock may be made subject to redemption by the corporation at its option, at the option of the holders of that stock or upon the happening of a specified event, provided shares with full voting power remain outstanding. The stock may be made redeemable for cash, property or rights, as specified in the certificate of incorporation or in the resolution of the board of directors providing for the issue of the stock. As permitted by British Virgin Islands law and our memorandum and articles of association, shares may be repurchased, redeemed or otherwise acquired by us. However, the consent of the shareholder whose shares are to be repurchased, redeemed or otherwise acquired must be obtained, except as described under “—Compulsory Acquisition” below. Moreover, our directors must determine that immediately following the redemption or repurchase we will be able to pay our debts as they become due and that the value of our assets will exceed our liabilities.

Compulsory Acquisition

Under Delaware General Corporation Law § 253, in a process known as a “short form” merger, a corporation that owns at least 90% of the outstanding shares of each class of stock of another corporation may either merge the other corporation into itself and assume all of its obligations or merge itself into the other corporation by executing, acknowledging and filing with the Delaware Secretary of State a certificate of such ownership and merger setting forth a copy of the resolution of its board of directors authorizing such merger. If the parent corporation is a Delaware corporation that is not the surviving corporation, the merger also must be approved by a majority of the outstanding stock of the parent corporation. If the parent corporation does not own all of the stock of the subsidiary corporation immediately prior to the merger, the minority shareholders of the subsidiary corporation party to the merger may have appraisal rights as set forth in § 262 of the Delaware General Corporation Law.

Under the BVI Act, subject to any limitations in a company’s memorandum or articles, members holding 90% of the votes of the outstanding shares entitled to vote, and members holding 90% of the votes of the outstanding shares of each class of shares entitled to vote, may give a written instruction to the company directing the company to redeem the shares held by the remaining members. Upon receipt of such written instruction, the company shall redeem the shares specified in the written instruction, irrespective of whether or not the shares are by their terms redeemable. The company shall give written notice to each member whose shares are to be redeemed stating the redemption price and the manner in which the redemption is to be effected. A member whose shares are to be so redeemed is entitled to dissent from such redemption, and to be paid the fair value of his shares, as described under “—Shareholders’ Rights under British Virgin Islands Law Generally” below.

Variation of Rights of Shares

Under Delaware corporate law, a corporation may vary the rights of a class of shares with the approval of a majority of the outstanding shares of that class, unless the certificate of incorporation provides otherwise. As permitted by British Virgin Islands law and our memorandum of association, we may vary the rights attached to any class of shares only with the consent in writing of holders of not less than 50% of the issued shares of that class and of holders of not less than 50% of the issued shares of any other class which may be adversely affected by such variation.

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Removal of Directors

Under Delaware corporate law, a director of a corporation with a classified board may be removed only for cause with the approval of a majority of the outstanding shares entitled to vote, unless the certificate of incorporation provides otherwise. Our memorandum and articles of association provide that directors may be removed at any time, with or without cause, by a resolution of shareholders or a resolution of directors.

In addition, directors are subject to rotational retirement every three years. The initial terms of office of the Class I, Class II and Class III directors have been staggered over a period of three years to ensure that all directors of the company do not face reelection in the same year.

Mergers

Under Delaware corporate law, one or more constituent corporations may merge into and become part of another constituent corporation in a process known as a merger. A Delaware corporation may merge with a foreign corporation as long as the law of the foreign jurisdiction permits such a merger. To effect a merger under Delaware General Corporation Law § 251, an agreement of merger must be properly adopted and the agreement of merger or a certificate of merger must be filed with the Delaware Secretary of State. In order to be properly adopted, the agreement of merger must be adopted by the board of directors of each constituent corporation by a resolution or unanimous written consent. In addition, the agreement of merger generally must be approved at a meeting of stockholders of each constituent corporation by a majority of the outstanding stock of the corporation entitled to vote, unless the certificate of incorporation provides for a supermajority vote. In general, the surviving corporation assumes all of the assets and liabilities of the disappearing corporation or corporations as a result of the merger.

Under the BVI Act, two or more BVI companies may merge or consolidate in accordance with the statutory provisions. A merger means the merging of two or more constituent companies into one of the constituent companies, and a consolidation means the uniting of two or more constituent companies into a new company. In order to merge or consolidate, the directors of each constituent BVI company must approve a written plan of merger or consolidation which must be authorized by a resolution of shareholders. One or more BVI companies may also merge or consolidate with one or more companies incorporated under the laws of jurisdictions outside the BVI, if the merger or consolidation is permitted by the laws of the jurisdictions in which the companies incorporated outside the BVI are incorporated. In respect of such a merger or consolidation a BVI company is required to comply with the provisions of the BVI Act and a company incorporated outside the BVI is required to comply with the laws of its jurisdiction of incorporation.

Shareholders of BVI companies not otherwise entitled to vote on the merger or consolidation may still acquire the right to vote if the plan of merger or consolidation contains any provision which, if proposed as an amendment to the memorandum association or articles of association, would entitle them to vote as a class or series on the proposed amendment. In any event, all shareholders must be given a copy of the plan of merger or consolidation irrespective of whether they are entitled to vote at the meeting or consent to the written resolution to approve the plan of merger or consolidation.

Inspection of Books and Records

Under Delaware corporate law, any shareholder of a corporation may for any proper purpose inspect or make copies of the corporation’s stock ledger, list of shareholders and other books and records. Under British Virgin Islands law, members of the general public, on payment of a nominal fee, can obtain copies of the public records of a company available at the office of the British Virgin Islands Registrar of Corporate Affairs which will include the company’s certificate of incorporation, its memorandum and articles of association (with any amendments) and records of license fees paid to date and will also disclose any articles of dissolution, articles of merger and a register of charges if the company has elected to file such a register.

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A member of a company is entitled, on giving written notice to the company, to inspect:

(a)

the memorandum and articles;

(b)

the register of members;

(c)

the register of directors; and

(d)

the minutes of meetings and resolutions of members and of those classes of members of which he is a member; and to make copies of or take extracts from the documents and records referred to in (a) to (d) above. Subject to the memorandum and articles, the directors may, if they are satisfied that it would be contrary to the company’s interests to allow a member to inspect any document, or part of a document, specified in (b), (c) or (d) above, refuse to permit the member to inspect the document or limit the inspection of the document, including limiting the making of copies or the taking of extracts from the records.

Where a company fails or refuses to permit a member to inspect a document or permits a member to inspect a document subject to limitations, that member may apply to the court for an order that he should be permitted to inspect the document or to inspect the document without limitation.

A company is required to keep at the office of its registered agent the memorandum and articles of the company; the register of members maintained or a copy of the register of members; the register of directors or a copy of the register of directors; and copies of all notices and other documents filed by the company in the previous ten years.

Where a company keeps a copy of the register of members or the register of directors at the office of its registered agent, it is required to notify any changes to the originals of such registers to the registered agent, in writing, within 15 days of any change; and to provide the registered agent with a written record of the physical address of the place or places at which the original register of members or the original register of directors is kept. Where the place at which the original register of members or the original register of directors is changed, the company is required to provide the registered agent with the physical address of the new location of the records within fourteen days of the change of location.

A company is also required to keep at the office of its registered agent or at such other place or places, within or outside the British Virgin Islands, as the directors determine the minutes of meetings and resolutions of members and of classes of members; and the minutes of meetings and resolutions of directors and committees of directors. If such records are kept at a place other than at the office of the company’s registered agent, the company is required to provide the registered agent with a written record of the physical address of the place or places at which the records are kept and to notify the registered agent, within 14 days, of the physical address of any new location where such records may be kept.

Conflict of Interest

Under Delaware corporate law, a contract between a corporation and a director or officer, or between a corporation and any other organization in which a director or officer has a financial interest, is not void as long as the material facts as to the director’s or officer’s relationship or interest are disclosed or known and either a majority of the disinterested directors authorizes the contract in good faith or the shareholders vote in good faith to approve the contract. Nor will any such contract be void if it is fair to the corporation when it is authorized, approved or ratified by the board of directors, a committee or the shareholders.

The BVI Act provides that a director shall, forthwith after becoming aware that he is interested in a transaction entered into or to be entered into by the company, disclose that interest to the board of directors of the company. The failure of a director to disclose that interest does not affect the validity of a transaction entered into

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by the director or the company, so long as the director’s interest was disclosed to the board prior to the company’s entry into the transaction or was not required to be disclosed because the transaction is between the company and the director himself and is otherwise in the ordinary course of business and on usual terms and conditions. As permitted by British Virgin Islands law and our memorandum and articles of association, a director interested in a particular transaction may vote on it, attend meetings at which it is considered and sign documents on our behalf which relate to the transaction, provided that the disinterested directors consent.

Transactions with Interested Shareholders

Delaware corporate law contains a business combination statute applicable to Delaware public corporations whereby, unless the corporation has specifically elected not to be governed by that statute by amendment to its certificate of incorporation, it is prohibited from engaging in certain business combinations with an “interested shareholder” for three years following the date that the person becomes an interested shareholder. An interested shareholder generally is a person or group who or that owns or owned 15% or more of the target’s outstanding voting stock within the past three years. This has the effect of limiting the ability of a potential acquirer to make a two-tiered bid for the target in which all shareholders would not be treated equally. The statute does not apply if, among other things, prior to the date on which the shareholder becomes an interested shareholder, the board of directors approves either the business combination or the transaction that resulted in the person becoming an interested shareholder. This encourages any potential acquirer of a Delaware public corporation to negotiate the terms of any acquisition transaction with the target’s board of directors.

British Virgin Islands law has no comparable provision. As a result, we cannot avail ourselves of the types of protections afforded by the Delaware business combination statute. However, although British Virgin Islands law does not regulate transactions between a company and its significant shareholders, it does provide that these transactions must be entered into bona fide in the best interests of the company and not with the effect of constituting a fraud on the minority shareholders.

Independent Directors

There are no provisions under Delaware corporate law or under the BVI Act that require a majority of our directors to be independent.

Cumulative Voting

Under Delaware corporate law, cumulative voting for elections of directors is not permitted unless the company’s certificate of incorporation specifically provides for it. Cumulative voting potentially facilitates the representation of minority shareholders on a board of directors since it permits the minority shareholder to cast all the votes to which the shareholder is entitled on a single director, which increases the shareholder’s voting power with respect to electing such director. There are no prohibitions to cumulative voting under the laws of the British Virgin Islands, but our memorandum of association and articles of association do not provide for cumulative voting.

Shareholders’ Rights under British Virgin Islands Law Generally

The BVI Act provides for remedies which may be available to shareholders. Where a company incorporated under the BVI Act or any of its directors engages in, or proposes to engage in, conduct that contravenes the BVI Act or the company’s memorandum and articles of association, the BVI courts can issue a restraining or compliance order. Shareholders can not also bring derivative, personal and representative actions under certain circumstances. The traditional English basis for members’ remedies has also been incorporated into the BVI Act: where a shareholder of a company considers that the affairs of the company have been, are being or are likely to be conducted in a manner likely to be oppressive, unfairly discriminating or unfairly prejudicial to him, he may apply to the court for an order based on such conduct.

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Any shareholder of a company may apply to court for the appointment of a liquidator of the company and the court may appoint a liquidator of the company if it is of the opinion that it is just and equitable to do so.

The BVI Act provides that any shareholder of a company is entitled to payment of the fair value of his shares upon dissenting from any of the following: (a) a merger, if the company is a constituent company, unless the company is the surviving company and the member continues to hold the same or similar shares; (b) a consolidation, if the company is a constituent company; (c) any sale, transfer, lease, exchange or other disposition of more than 50% in value of the assets or business of the company if not made in the usual or regular course of the business carried on by the company but not including (i) a disposition pursuant to an order of the court having jurisdiction in the matter, (ii) a disposition for money on terms requiring all or substantially all net proceeds to be distributed to the shareholders in accordance with their respective interest within one year after the date of disposition, or (iii) a transfer pursuant to the power of the directors to transfer assets for the protection thereof; (d) a redemption of 10% or fewer of the issued shares of the company required by the holders of 90% or more of the shares of the company pursuant to the terms of the BVI Act; and (e) an arrangement, if permitted by the court.

Generally any other claims against a company by its shareholders must be based on the general laws of contract or tort applicable in the British Virgin Islands or their individual rights as shareholders as established by the company’s memorandum and articles of association.

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CLASS A SHARES ELIGIBLE FOR FUTURE SALE

Upon completion of this offering, we will have issued and outstanding 132,461,539 class A shares.

Lock-up Agreements

We, the selling shareholders and our executive officers and directors have agreed not to sell or transfer any class A shares or securities convertible into, exchangeable for, exercisable for, or repayable with class A shares, for 180 days after the date of this prospectus without first obtaining the written consent of Merrill Lynch, Pierce, Fenner & Smith Incorporated, J.P. Morgan Securities LLC, Morgan Stanley & Co. Incorporated and Itau BBA USA Securities Inc. Specifically, we and these other persons have agreed, with certain limited exceptions, not to directly or indirectly:

•

offer, pledge, sell or contract to sell any class A shares;

•

sell any option or contract to purchase any class A shares;

•

purchase any option or contract to sell any class A shares;

•

grant any option, right or warrant for the sale of any class A shares;

•

lend or otherwise dispose of or transfer any class A shares;

•

request or demand that we file a registration statement related to the class A shares; or

•

enter into any swap or other agreement that transfers, in whole or in part, the economic consequence of ownership of any class A shares whether any such swap or transaction is to be settled by delivery of shares or other securities, in cash or otherwise.

This lock-up provision applies to class A shares and to securities convertible into or exchangeable or exercisable for or repayable with class A shares. It also applies to class A shares owned now or acquired later by the person executing the agreement or for which the person executing the agreement later acquires the power of disposition. In the event that either (x) during the last 17 days of the lock-up period referred to above, we issue an earnings release or material news or a material event relating to us occurs or (y) prior to the expiration of the lock-up period, we announce that we will release earnings results during the 16-day period beginning on the last day of the lock-up period, the restrictions described above shall continue to apply until the expiration of the 18-day period beginning on the issuance of the earnings release or the occurrence of the material news or material event.

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TAXATION

The following summary contains a description of certain British Virgin Islands and U.S. federal income tax consequences of the acquisition, ownership and disposition of class A shares, but it does not purport to be a comprehensive description of all the tax considerations that may be relevant to a decision to purchase class A shares. The summary is based upon the tax laws of the British Virgin Islands and regulations thereunder and on the tax laws of the United States and regulations thereunder as of the date hereof, which are subject to change.

British Virgin Islands Tax Considerations

We are not liable to pay any form of taxation in the BVI and all dividends, interests, rents, royalties, compensations and other amounts paid by us to persons who are not persons resident in the BVI are exempt from all forms of taxation in the BVI and any capital gains realized with respect to any shares, debt obligations, or other securities of ours by persons who are not persons resident in the BVI are exempt from all forms of taxation in the BVI.

No estate, inheritance, succession or gift tax, rate, duty, levy or other charge is payable by persons who are not persons resident in the BVI with respect to any shares, debt obligation or other securities of ours.

Subject to the payment of stamp duty on the acquisition of property in the BVI by us (and in respect of certain transactions in respect of the shares, debt obligations or other securities of BVI incorporated companies owning land in the BVI), all instruments relating to transfers of property to or by us and all instruments relating to transactions in respect of the shares, debt obligations or other securities of ours and all instruments relating to other transactions relating to our business are exempt from payment of stamp duty in the BVI.

There are currently no withholding taxes or exchange control regulations in the BVI applicable to us or our shareholders.

Material U.S. Federal Income Tax Considerations for U.S. Holders

In the opinion of Davis Polk & Wardwell, the following summary describes the material U.S. federal income tax consequences of the acquisition, ownership and disposition of class A shares, but it does not purport to be a comprehensive description of all of the tax considerations that may be relevant to a particular person’s decision to acquire such securities. This summary applies only to U.S. Holders (as defined below) that hold class A shares as capital assets for tax purposes. In addition, it does not describe all of the tax consequences that may be relevant in light of a U.S. Holder’s particular circumstances, including alternative minimum tax consequences and tax consequences applicable to U.S. Holders subject to special rules, such as:

•

certain financial institutions;

•

dealers or traders in securities who use a mark-to-market method of tax accounting;

•

persons holding class A shares as part of a hedge, “straddle,” wash sale, conversion transaction or integrated transaction or persons entering into a constructive sale with respect to the class A shares;

•

persons whose “functional currency” for U.S. federal income tax purposes is not the U.S. dollar;

•

tax exempt entities, including “individual retirement accounts” and “Roth IRAs”;

•

entities classified as partnerships for U.S. federal income tax purposes;

•

persons that own or are deemed to own ten percent or more of our voting shares; and

•

persons holding class A shares in connection with a trade or business conducted outside the United States.

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If an entity that is classified as a partnership for U.S. federal income tax purposes holds class A shares, the U.S. federal income tax treatment of a partner will generally depend on the status of the partner and the activities of the partnership. Partnerships holding class A shares and partners in such partnerships are encouraged to consult their own tax advisers as to the particular U.S. federal income tax consequences of acquiring, holding and disposing of the class A shares.

The summary is based upon the Internal Revenue Code of 1986, as amended (the “Code”), administrative pronouncements, judicial decisions and final, temporary and proposed Treasury Regulations, all as of the date hereof, changes to any of which may affect the tax consequences described herein—possibly with retroactive effect.

A “U.S. Holder” is a holder who, for U.S. federal income tax purposes, is a beneficial owner of class A shares that is:

(1) an individual citizen or resident of the United States;

(2) a corporation, or other entity taxable as a corporation, created or organized in or under the laws of the United States, any state therein or the District of Colombia; or

(3) an estate or trust the income of which is subject to U.S. federal income taxation regardless of its source.

U.S. Holders are encouraged to consult their own tax advisers concerning the U.S. federal, state, local and foreign tax consequences of the acquisition, ownership and disposition of class A shares in their particular circumstances.

This discussion assumes that we are not, and will not become, a passive foreign investment company, as described below.

Taxation of Distributions

Distributions paid on class A shares, other than certain pro rata distributions of ordinary shares, will be treated as dividends to the extent paid out of our current or accumulated earnings and profits (as determined under U.S. federal income tax principles). Because we do not maintain calculations of our earnings and profits under U.S. federal income tax principles, we expect that distributions generally will be reported to U.S. Holders as dividends. The amount of the dividend will be treated as foreign-source dividend income to U.S. Holders and will not be eligible for the dividends-received deduction generally available to U.S. corporations under the Code. Dividends will be included in a U.S. Holder’s income on the date of the U.S. Holder’s receipt of the dividend.

Sale or Other Taxable Disposition of Class A shares

For U.S. federal income tax purposes, gain or loss realized on the sale or other taxable disposition of class A shares will be capital gain or loss, and will be long-term capital gain or loss if the U.S. Holder held the class A shares for more than one year. The amount of the gain or loss will equal the difference between the U.S. Holder’s tax basis in the class A shares disposed of and the amount realized on the disposition, in each case as determined in U.S. dollars. This gain or loss will generally be U.S.-source gain or loss for foreign tax credit purposes.

Passive Foreign Investment Company Rules

We believe that we were not a “passive foreign investment company” (a “PFIC”) for U.S. federal income tax purposes for our 2010 taxable year and we do not expect to become one in the foreseeable future. However, because the application of the regulations is not entirely clear and because PFIC status depends on the composition of a company’s income and assets and the market value of its assets from time to time, there can be no assurance that we will not be a PFIC for any taxable year.

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If we were a PFIC for any taxable year during which a U.S. Holder held class A shares, gain recognized by a U.S. Holder on a sale or other taxable disposition (including certain pledges) of the class A shares would be allocated ratably over the U.S. Holder’s holding period for the class A shares. The amounts allocated to the taxable year of the sale or other taxable disposition and to any year before we became a PFIC would be taxed as ordinary income. The amount allocated to each other taxable year would be subject to tax at the highest rate in effect for individuals or corporations, as appropriate, for that taxable year, and an interest charge would be imposed on the amount allocated to that taxable year. Further, to the extent that any distribution received by a U.S. Holder on its class A shares exceeds 125% of the average of the annual distributions on the class A shares received during the preceding three years or the U.S. Holder’s holding period, whichever is shorter, that distribution would be subject to taxation in the same manner as gain on the sale of a share of a PFIC, described immediately above. Certain elections may be available that would result in alternative treatments (such as mark-to-market treatment) of the class A shares. U.S. Holders are encouraged to consult their own tax advisers to determine whether any of these elections would be available and, if so, what the consequences of the alternative treatments would be in their particular circumstances.

Information Reporting and Backup Withholding

Payments of dividends and sales proceeds that are made within the United States or through certain U.S.-related financial intermediaries generally are subject to information reporting, and may be subject to backup withholding, unless (i) the U.S. Holder is an exempt recipient or (ii) in the case of backup withholding, the U.S. Holder provides a correct taxpayer identification number and certifies that it is not subject to backup withholding.

The amount of any backup withholding from a payment to a U.S. Holder will be allowed as a credit against the holder’s U.S. federal income tax liability and may entitle it to a refund, provided that the required information is timely furnished to the IRS.

For taxable years beginning after March 18, 2010, new legislation requires certain U.S. Holders who are individuals to report information relating to stock of a non-U.S. person, subject to certain exceptions (including an exception for stock held in custodial accounts maintained by a U.S. financial institution). U.S. Holders are encouraged to consult their own tax advisers regarding the effect, if any, of this legislation on their ownership and disposition of class A shares.

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UNDERWRITING

Merrill Lynch, Pierce, Fenner & Smith Incorporated, J.P. Morgan Securities LLC., Morgan Stanley & Co. Incorporated, Itau BBA USA Securities Inc. and Citigroup Global Markets Inc. are acting as representatives of each of the underwriters named below. Subject to the terms and conditions set forth in an underwriting agreement among us, the selling shareholders and the underwriters, we and the selling shareholders have agreed to sell to the underwriters, and each of the underwriters has agreed, severally and not jointly, to purchase from us and the selling shareholders, the number of class A shares set forth opposite its name below.


Underwriter	Number of Shares
Merrill Lynch, Pierce, Fenner & Smith Incorporated
J.P. Morgan Securities LLC.
Morgan Stanley & Co. Incorporated
Itau BBA USA Securities Inc.
Citigroup Global Markets Inc.

Total		62,461,539

Subject to the terms and conditions set forth in the underwriting agreement, the underwriters have agreed, severally and not jointly, to purchase all of the shares sold under the underwriting agreement if any of these shares are purchased. If an underwriter defaults, the underwriting agreement provides that the purchase commitments of the nondefaulting underwriters may be increased or the underwriting agreement may be terminated.

We and the selling shareholders have agreed to indemnify the underwriters against certain liabilities, including liabilities under the Securities Act, or to contribute to payments the underwriters may be required to make in respect of those liabilities.

The selling stockholders may be deemed to be “underwriters” within the meaning of the Securities Act with respect to the shares they are offering for resale.

The underwriters are offering the shares, subject to prior sale, when, as and if issued to and accepted by them, subject to approval of legal matters by their counsel, including the validity of the shares, and other conditions contained in the underwriting agreement, such as the absence of any material adverse change in our business, the receipt by the underwriters of officer’s certificates and certain certificates, letters and opinions from our local and international counsel and our independent auditors. The underwriters reserve the right to withdraw, cancel or modify offers to the public and to reject orders in whole or in part.

Mr. Staton, our Chairman, CEO and controlling shareholder, intends to purchase 2,000,000 class A shares in this offering at the public offering price. The underwriters will not receive any discounts or commissions in connection with the sale of 2,000,000 class A shares to Mr. Staton.

Commissions and Discounts

The representatives have advised us and the selling shareholders that the underwriters propose initially to offer the shares to the public at the public offering price set forth on the cover page of this prospectus and to dealers at that price less a concession not in excess of $ per share. After the initial offering, the public offering price, concession or any other term of the offering may be changed.

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The following table shows the public offering price, underwriting discount and proceeds before expenses to us and the selling shareholders. The information assumes either no exercise or full exercise by the underwriters of their overallotment option.

Per Share

Without Option

With Option

Public offering price

Underwriting discount*

Proceeds, before expenses, to us*

Proceeds, before expenses, to the selling shareholders

* The underwriters will not receive any discounts or commissions in connection with the sale of class A shares to Mr. Staton.

The expenses of the offering, not including the underwriting discount, are estimated at $4.3 million and are payable by us.

Overallotment Option

The selling shareholders have granted an option to the underwriters, exercisable for 30 days after the date of this prospectus, to purchase up to 9,369,231 additional shares at the public offering price, less the underwriting discount. The underwriters may exercise this option solely to cover any overallotments. If the underwriters exercise this option, each will be obligated, subject to conditions contained in the underwriting agreement, to purchase a number of additional shares proportionate to that underwriter’s initial amount reflected in the above table.

Reserved Shares

At our request, the underwriters have reserved for sale, at the initial public offering price, up to 5% of the shares offered by this prospectus for sale to some of our employees and other individuals. If these persons purchase reserved shares, this will reduce the number of shares available for sale to the general public. Any reserved shares that are not so purchased will be offered by the underwriters to the general public on the same terms as the other shares offered by this prospectus.

No Sales of Similar Securities

We and the selling shareholders, our executive officers and directors and our other existing security holders have agreed not to sell or transfer any class A shares or securities convertible into, exchangeable for, exercisable for, or repayable with class A shares, for 180 days after the date of this prospectus without first obtaining the written consent of Merrill Lynch, Pierce, Fenner & Smith Incorporated, J.P. Morgan Securities LLC, Morgan Stanley & Co. Incorporated and Itau BBA USA Securities Inc. Specifically, we and these other persons have agreed, with certain limited exceptions, not to directly or indirectly:

•

offer, pledge, sell or contract to sell any class A shares;

•

sell any option or contract to purchase any class A shares;

•

purchase any option or contract to sell any class A shares;

•

grant any option, right or warrant for the sale of any class A shares;

•

lend or otherwise dispose of or transfer any class A shares;

•

request or demand that we file a registration statement related to the class A shares; or

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•

New York Stock Exchange Listing

We expect the shares to be approved for listing on the New York Stock Exchange under the symbol “ARCO.” In order to meet the requirements for listing on that exchange, the underwriters have undertaken to sell a minimum number of shares to a minimum number of beneficial owners as required by that exchange.

Before this offering, there has been no public market for our class A shares. The initial public offering price will be determined through negotiations among us, the selling shareholders and the representatives. In addition to prevailing market conditions, the factors to be considered in determining the initial public offering price are

•

the valuation multiples of publicly traded companies that the representatives believe to be comparable to us,

•

our financial information,

•

the history of, and the prospects for, our company and the industry in which we compete,

•

an assessment of our management, its past and present operations, and the prospects for, and timing of, our future revenues,

•

the present state of our development, and

•

the above factors in relation to market values and various valuation measures of other companies engaged in activities similar to ours.

An active trading market for the shares may not develop. It is also possible that after the offering the shares will not trade in the public market at or above the initial public offering price.

The underwriters do not expect to sell more than 5% of the shares in the aggregate to accounts over which they exercise discretionary authority.

Price Stabilization, Short Positions and Penalty Bids

Until the distribution of the shares is completed, SEC rules may limit underwriters and selling group members from bidding for and purchasing our class A shares. However, the representatives may engage in transactions that stabilize the price of the class A shares, such as bids or purchases to peg, fix or maintain that price.

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In connection with the offering, the underwriters may purchase and sell our class A shares in the open market. These transactions may include short sales, purchases on the open market to cover positions created by short sales and stabilizing transactions. Short sales involve the sale by the underwriters of a greater number of shares than they are required to purchase in the offering. “Covered” short sales are sales made in an amount not greater than the underwriters’ overallotment option described above. The underwriters may close out any covered short position by either exercising their overallotment option or purchasing shares in the open market. In determining the source of shares to close out the covered short position, the underwriters will consider, among other things, the price of shares available for purchase in the open market as compared to the price at which they may purchase shares through the overallotment option. “Naked” short sales are sales in excess of the overallotment option. The underwriters must close out any naked short position by purchasing shares in the open market. A naked short position is more likely to be created if the underwriters are concerned that there may be downward pressure on the price of our class A shares in the open market after pricing that could adversely affect investors who purchase in the offering. Stabilizing transactions consist of various bids for or purchases of shares of class A shares made by the underwriters in the open market prior to the completion of the offering.

The underwriters may also impose a penalty bid. This occurs when a particular underwriter repays to the underwriters a portion of the underwriting discount received by it because the representatives have repurchased shares sold by or for the account of such underwriter in stabilizing or short covering transactions.

Similar to other purchase transactions, the underwriters’ purchases to cover the syndicate short sales may have the effect of raising or maintaining the market price of our class A shares or preventing or retarding a decline in the market price of our class A shares. As a result, the price of our class A shares may be higher than the price that might otherwise exist in the open market. The underwriters may conduct these transactions on the New York Stock Exchange, in the over-the-counter market or otherwise.

Neither we nor any of the underwriters make any representation or prediction as to the direction or magnitude of any effect that the transactions described above may have on the price of our class A shares. In addition, neither we nor any of the underwriters make any representation that the representatives will engage in these transactions or that these transactions, once commenced, will not be discontinued without notice.

Electronic Offer, Sale and Distribution of Shares

In connection with the offering, certain of the underwriters or securities dealers may distribute prospectuses by electronic means, such as e-mail. In addition, Merrill Lynch, Pierce, Fenner & Smith Incorporated may facilitate Internet distribution for this offering to certain of its Internet subscription customers. Merrill Lynch, Pierce, Fenner & Smith Incorporated may allocate a limited number of shares for sale to its online brokerage customers. An electronic prospectus is available on the Internet web site maintained by Merrill Lynch, Pierce, Fenner & Smith Incorporated. Other than the prospectus in electronic format, the information on the Merrill Lynch, Pierce, Fenner & Smith Incorporated web site is not part of this prospectus.

Conflicts of Interest

A wholly owned subsidiary of JPMorgan Asset Management Holdings Inc., an affiliate of J.P. Morgan Securities LLC, purchased a majority interest in 3F Administração de Recursos Ltda., the parent of GIF Gestão de Investimentos e Participações Ltda. (“GIF”). A selling shareholder, Gavea Investment AD, L.P., is an investment vehicle managed by GIF. Because J.P. Morgan Securities LLC is an underwriter, the offering will be conducted in accordance with FINRA Rule 5121. This rule requires, among other things, that a qualified independent underwriter has participated in the preparation of, and has exercised the usual standards of “due diligence” in respect to, the registration statement and this prospectus. Merrill Lynch, Pierce, Fenner & Smith Incorporated has agreed to act as qualified independent underwriter for the offering and to undertake the legal responsibilities and liabilities of an underwriter under the Securities Act of 1933, specifically including those inherent in Section 11 of the Securities Act.

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Other Relationships

Some of the underwriters and their affiliates have engaged in, and may in the future engage in, investment banking commercial banking, financial advisory, and other commercial dealings in the ordinary course of business with us or our affiliates. They have received, or may in the future receive, customary fees and commissions for these transactions.

The underwriters may enter into derivative transactions in connection with our shares, acting at the order and for the account of their clients. The underwriters may also purchase some of our shares offered hereby to hedge their risk exposure in connection with these transactions. Such transactions may have an effect on demand, price or offer terms of the offering without, however, creating an artificial demand during the offering.

In addition, in the ordinary course of their business activities, the underwriters and their affiliates may make or hold a broad array of investments and actively trade debt and equity securities (or related derivative securities) and financial instruments (including bank loans) for their own account and for the accounts of their customers. Such investments and securities activities may involve securities and/or instruments of ours or our affiliates. The underwriters and their affiliates may also make investment recommendations and/or publish or express independent research views in respect of such securities or financial instruments and may hold, or recommend to clients that they acquire, long and/or short positions in such securities and instruments.

Mr. Staton, our Chairman, CEO and controlling shareholder, is a member of the International Advisory Board of Itaú Unibanco Holding S.A., an affiliate of Itau BBA USA Securities Inc.

Notice to Prospective Investors in Argentina

The common shares are not authorized for public offering in Argentina by the Comisión Nacional de Valores pursuant to Argentine Public Offering Law No. 17,811, as amended, and they shall not be sold publicly. Therefore, any transaction carried out in Argentina must be made privately.

Notice to Prospective Investors in Brazil

For purposes of Brazilian law, this offer of securities is addressed to you personally, upon your request and for your sole benefit, and is not to be transmitted to anyone else, to be relied upon elsewhere or for any other purpose either quoted or referred to in any other public or private document or to be filed with anyone without our prior, express and written consent.

This offering has not been and will not be registered under Brazilian Federal Law No. 6385/76 or under any other Brazilian securities law. Accordingly, our shares and the offering have not been and will not be registered with the Comissão de Valores Mobilários.

Therefore, as this prospectus does not constitute or form part of any public offering to sell or solicitation of a public offering to buy any shares or assets, the offering and THE SHARES OFFERED HEREBY HAVE NOT BEEN, AND WILL NOT BE, AND MAY NOT BE OFFERED FOR SALE OR SOLD IN BRAZIL EXCEPT IN CIRCUMSTANCES WHICH DO NOT CONSTITUTE A PUBLIC OFFERING OR DISTRIBUTION UNDER BRAZILIAN LAWS AND REGULATIONS. DOCUMENTS RELATING TO THE SHARES, AS WELL AS THE INFORMATION CONTAINED THEREIN, MAY NOT BE SUPPLIED TO THE PUBLIC, AS A PUBLIC OFFERING IN BRAZIL OR BE USED IN CONNECTION WITH ANY OFFER FOR SUBSCRIPTION OR SALE OF THE SHARES TO THE PUBLIC IN BRAZIL.

Notice to Prospective Investors in the EEA

In relation to each Member State of the European Economic Area which has implemented the Prospectus Directive (each, a “Relevant Member State”) an offer to the public of any securities which are the

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subject of the offering contemplated by this prospectus may not be made in that Relevant Member State except that an offer to the public in that Relevant Member State of any shares may be made at any time under the following exemptions under the Prospectus Directive, if they have been implemented in that Relevant Member State:

(a)

to any legal entity which is a qualified investor as defined in the Prospectus Directive;

(b)

to fewer than 100 or, if the Relevant Member State has implemented the relevant provision of the 2010 PD Amending Directive, 150 natural or legal persons (other than qualified investors as defined in the Prospectus Directive) subject to obtaining the prior consent of the representatives for any such offer; or

(c)

in any other circumstances falling within Article 3(2) of the Prospectus Directive,

provided that no such offer of shares shall result in a requirement for the publication by us of a prospectus pursuant to Article 3 of the Prospectus Directive.

Any person making or intending to make any offer of securities within the EEA should only do so in circumstances in which no obligation arises for us or any of the underwriters to produce a prospectus for such offer. Neither we nor the underwriters have authorized, nor do they authorize, the making of any offer of securities through any financial intermediary, other than offers made by the underwriters which constitute the final offering of securities contemplated in this prospectus.

For the purposes of this provision, the expression an “offer to the public” in relation to any shares in any Relevant Member State means the communication in any form and by any means of sufficient information on the terms of the offer and any shares to be offered so as to enable an investor to decide to purchase any shares, as the same may be varied in that Member State by any measure implementing the Prospectus Directive in that Member State. The expression “Prospectus Directive” means Directive 2003/71/EC and amendments thereto, including the 2010 PD Amending Directive, to the extent implemented in the Relevant Member State, including any relevant implementing measure in the Relevant Member State, and the expression “2010 PD Amending Directive” means Directive 2010/73.

Each person in a Relevant Member State who receives any communication in respect of, or who acquires any securities under, the offer of securities contemplated by this prospectus will be deemed to have represented, warranted and agreed to and with us and each underwriter that:

(A)

it is a “qualified investor” within the meaning of the law in that Relevant Member State implementing Article 2(1)(e) of the Prospectus Directive; and

(B)

in the case of any securities acquired by it as a financial intermediary, as that term is used in Article 3(2) of the Prospectus Directive, (i) the securities acquired by it in the offering have not been acquired on behalf of, nor have they been acquired with a view to their offer or resale to, persons in any Relevant Member State other than “qualified investors” (as defined in the Prospectus Directive), or in circumstances in which the prior consent of the representatives has been given to the offer or resale; or (ii) where securities have been acquired by it on behalf of persons in any Relevant Member State other than qualified investors, the offer of those securities to it is not treated under the Prospectus Directive as having been made to such persons.

In addition, in the United Kingdom, this document is being distributed only to, and is directed only at, and any offer subsequently made may only be directed at persons who are “qualified investors” (as defined in the Prospectus Directive) (i) who have professional experience in matters relating to investments falling within Article 19 (5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended

(the “Order”) and/or (ii) who are high net worth companies (or persons to whom it may otherwise be lawfully

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communicated) falling within Article 49(2)(a) to (d) of the Order (all such persons together being referred to as “relevant persons”). This document must not be acted on or relied on in the United Kingdom by persons who are not relevant persons. In the United Kingdom, any investment or investment activity to which this document relates is only available to, and will be engaged in with, relevant persons.

Notice to Prospective Investors in Switzerland

This document as well as any other material relating to the securities which are the subject of the offering contemplated by this prospectus does not constitute an issue prospectus pursuant to Articles 652a and/or 1156 of the Swiss Code of Obligations. The shares will not be listed on the SIX Swiss Exchange and, therefore, the documents relating to the shares, including, but not limited to, this document, do not claim to comply with the disclosure standards of the listing rules of the SIX Swiss Exchange and corresponding prospectus schemes annexed to the listing rules of the SIX Swiss Exchange. The shares are being offered in Switzerland by way of a private placement, i.e., to a small number of selected investors only, without any public offer and only to investors who do not purchase the shares with the intention to distribute them to the public. The investors will be individually approached by the Issuer from time to time. This document as well as any other material relating to the shares is personal and confidential and does not constitute an offer to any other person. This document may only be used by those investors to whom it has been handed out in connection with the offering described herein and may neither directly nor indirectly be distributed or made available to other persons without express consent of the Issuer. It may not be used in connection with any other offer and shall in particular not be copied and/or distributed to the public in (or from) Switzerland.

Notice to Prospective Investors in the Dubai International Financial Centre

This prospectus relates to an Exempt Offer in accordance with the Offered Securities Rules of the Dubai Financial Services Authority (“DFSA”). This prospectus is intended for distribution only to persons of a type specified in the Offered Securities Rules of the DFSA. It must not be delivered to, or relied on by, any other person. The DFSA has no responsibility for reviewing or verifying any documents in connection with Exempt Offers. The DFSA has not approved this prospectus nor taken steps to verify the information set forth herein and has no responsibility for the prospectus. The securities to which this prospectus relates may be illiquid and/or subject to restrictions on their resale. Prospective purchasers of the securities offered should conduct their own due diligence on the securities. If you do not understand the contents of this prospectus you should consult an authorized financial advisor.

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EXPENSES OF THE OFFERING

We estimate that our expenses in connection with this offering, other than underwriting discounts and commissions, will be as follows:


Expenses	Amount
U.S. Securities and Exchange Commission registration fee	$	125,093
NYSE listing fee		280,000
FINRA filing fee		75,000
Printing and engraving expenses		250,000
Legal fees and expenses		2,500,000
Accounting fees and expenses		600,000
Miscellaneous costs		500,000

Total	$	4,330,093

All amounts in the table are estimates except the U.S. Securities and Exchange Commission registration fee, the NYSE listing fee and the FINRA filing fee. The Company will pay all of the expenses of this offering.

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LEGAL MATTERS

The validity of the class A shares and certain other matters of British Virgin Islands law will be passed upon for us and the selling shareholders by Maples and Calder and for the underwriters by Walkers. Certain matters of U.S. federal and New York State law will be passed upon for us by Davis Polk & Wardwell LLP, New York, New York, and for the underwriters by Milbank, Tweed, Hadley & McCloy LLP, New York, New York.

EXPERTS

The consolidated financial statements of Arcos Dorados Holdings Inc. as of December 31, 2010 and 2009 and for the years ended December 31, 2010, 2009 and 2008 appearing in this prospectus and registration statement have been audited by Pistrelli, Henry Martin y Asociados S.R.L., member firm of Ernst & Young Global, independent registered public accounting firm, as set forth in their report thereon appearing elsewhere herein, and are included in reliance upon such report given on the authority of such firm as experts in accounting and auditing.

The current address of Pistrelli, Henry Martin y Asociados S.R.L., member firm of Ernst & Young Global, is 25 de Mayo 487, Buenos Aires, Argentina.

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ENFORCEMENT OF JUDGMENTS

We are incorporated under the laws of the British Virgin Islands with limited liability. We are incorporated in the British Virgin Islands because of certain benefits associated with being a British Virgin Islands company, such as political and economic stability, an effective judicial system, a favorable tax system, the absence of exchange control or currency restrictions and the availability of professional and support services. However, the British Virgin Islands has a less developed body of securities laws as compared to the United States and provides protections for investors to a significantly lesser extent. In addition, British Virgin Islands companies may not have standing to sue before the federal courts of the United States.

A majority of our directors and officers, as well as certain of the experts named herein, reside outside of the United States. A substantial portion of our assets and several of such directors, officers and experts are located principally in Argentina, Brazil and Mexico. As a result, it may not be possible for investors to effect service of process outside Argentina, Brazil and Mexico upon such directors or officers, or to enforce against us or such parties in courts outside Argentina, Brazil and Mexico judgments predicated solely upon the civil liability provisions of the federal securities laws of the United States or other non-Argentine, Brazilian or Mexican regulations, as applicable. In addition, local counsel to the Company have advised that there is doubt as to whether the courts of Brazil, Mexico or Argentina would enforce in all respects, to the same extent and in as timely a manner as a U.S. court or non-Argentine, Brazilian or Mexican court, an original action predicated solely upon the civil liability provisions of the U.S. federal securities laws or other non-Argentine, Brazilian or Mexican regulations, as applicable; and that the enforceability in Argentine, Brazilian or Mexican courts of judgments of U.S. courts or non-Argentine, Brazilian or Mexican courts predicated upon the civil liability provisions of the U.S. federal securities laws or other non-Argentine, Brazilian or Mexican regulations, as applicable, will be subject to compliance with certain requirements under Argentine, Brazilian or Mexican law, including the condition that any such judgment does not violate Argentine, Brazilian or Mexican public policy.

We have been advised by Maples and Calder, our counsel as to British Virgin Islands law, that the United States and the British Virgin Islands do not have a treaty providing for reciprocal recognition and enforcement of judgments of courts of the United States in civil and commercial matters and that a final judgment for the payment of money rendered by any general or state court in the United States based on civil liability, whether or not predicated solely upon the U.S. federal securities laws, would not be automatically enforceable in the British Virgin Islands. We have been advised by Maples and Calder that a final and conclusive judgment obtained in U.S. federal or state courts under which a sum of money is payable (i.e., not being a sum claimed by a revenue authority for taxes or other charges of a similar nature by a governmental authority, or in respect of a fine or penalty or multiple or punitive damages) may be the subject of an action on a debt in the court of the British Virgin Islands under British Virgin Islands common law.

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WHERE YOU CAN FIND MORE INFORMATION

We have filed with the U.S. Securities and Exchange Commission a registration statement (including amendments and exhibits to the registration statement) on Form F-1 under the Securities Act. This prospectus, which is part of the registration statement, does not contain all of the information set forth in the registration statement and the exhibits and schedules to the registration statement. For further information, we refer you to the registration statement and the exhibits and schedules filed as part of the registration statement. If a document has been filed as an exhibit to the registration statement, we refer you to the copy of the document that has been filed. Each statement in this prospectus relating to a document filed as an exhibit is qualified in all respects by the filed exhibit.

Upon completion of this offering, we will become subject to the informational requirements of the Exchange Act. Accordingly, we will be required to file reports and other information with the SEC, including annual reports on Form 20-F and reports on Form 6-K. You may inspect and copy reports and other information filed with the SEC at the Public Reference Room at 100 F Street, N.E., Washington, D.C. 20549. Information on the operation of the Public Reference Room may be obtained by calling the SEC at 1-800-SEC-0330. In addition, the SEC maintains an Internet website that contains reports and other information about issuers, like us, that file electronically with the SEC. The address of that website is www.sec.gov.

As a foreign private issuer, we are exempt under the Exchange Act from, among other things, the rules prescribing the furnishing and content of proxy statements, and our executive officers, directors and principal shareholders are exempt from the reporting and short-swing profit recovery provisions contained in Section 16 of the Exchange Act. In addition, we will not be required under the Exchange Act to file periodic reports and financial statements with the SEC as frequently or as promptly as U.S. companies whose securities are registered under the Exchange Act.

We will send the transfer agent a copy of all notices of shareholders’ meetings and other reports, communications and information that are made generally available to shareholders. The transfer agent has agreed to mail to all shareholders a notice containing the information (or a summary of the information) contained in any notice of a meeting of our shareholders received by the transfer agent and will make available to all shareholders such notices and all such other reports and communications received by the transfer agent.

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I NDEX TO FINANCIAL STATEMENTS

Audited Consolidated Financial Statements—Arcos Dorados Holdings Inc.


Report of Independent Registered Public Accounting Firm			F-2
Consolidated Statements of Income and Comprehensive Income for the fiscal years ended December 31, 2010, 2009 and 2008			F-3
Consolidated Balance Sheets as of December 31, 2010 and 2009			F-4
Consolidated Statements of Cash Flows for the fiscal years ended December 31, 2010, 2009 and 2008			F-5
Consolidated Statements of Changes in Shareholders’ Equity for the fiscal years ended December 31, 2010, 2009 and 2008			F-6
Notes to the Consolidated Financial Statements for the fiscal years ended December 31, 2010, 2009 and 2008			F-7

F-1

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Shareholders of

ARCOS DORADOS HOLDINGS INC.:

We have audited the accompanying consolidated balance sheets of Arcos Dorados Holdings Inc. and subsidiaries (the “Company”) as of December 31, 2010 and 2009, and the related consolidated statements of income and comprehensive income, changes in shareholders’ equity and cash flows for each of the three years in the period ended December 31, 2010. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. We were not engaged to perform an audit of the Company’s internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of Arcos Dorados Holdings Inc. and subsidiaries as of December 31, 2010 and 2009, and the consolidated results of their operations and their cash flows for each of the three years in the period ended December 31, 2010, in conformity with U.S. generally accepted accounting principles.

Buenos Aires, Argentina

February 28, 2011, except for the effects of the stock split and for the other matters described in Notes 22, 23 and 26, as to which the date is March 25, 2011



/s/ Pistrelli, Henry Martin y Asociados S.R.L.
PISTRELLI, HENRY MARTIN Y ASOCIADOS S.R.L.
Member of Ernst & Young Global

F-2

Arcos Dorados Holdings Inc.

Consolidated Statements of Income and Comprehensive Income

For the fiscal years ended December 31, 2010, 2009 and 2008

Amounts in thousands of US dollars, except for share data and as otherwise indicated


	2010			2009			2008
REVENUES
Sales by Company-operated restaurants	$	2,894,466		$	2,536,655		$	2,480,897
Revenues from franchised restaurants		123,652			128,821			125,945

Total revenues		3,018,118			2,665,476			2,606,842

OPERATING COSTS AND EXPENSES
Company-operated restaurant expenses:
Food and paper		(1,023,464	)		(929,718	)		(902,305	)
Payroll and employee benefits		(569,084	)		(491,214	)		(461,602	)
Occupancy and other operating expenses		(765,777	)		(667,438	)		(647,152	)
Royalty fees		(140,973	)		(121,901	)		(118,980	)
Franchised restaurants—occupancy expenses		(37,634	)		(42,327	)		(42,416	)
General and administrative expenses		(254,165	)		(189,507	)		(186,098	)
Other operating expenses, net		(22,464	)		(16,562	)		(26,095	)

Total operating costs and expenses		(2,813,561	)		(2,458,667	)		(2,384,648	)

Operating income		204,557			206,809			222,194
Net interest expense		(41,613	)		(52,473	)		(26,272	)
Loss from derivative instruments		(32,809	)		(39,935	)		(2,620	)
Foreign currency exchange results		3,237			(14,098	)		(74,884	)
Other non-operating expenses, net		(23,630	)		(1,240	)		(1,934	)

Income before income taxes		109,742			99,063			116,484
Income tax expense		(3,450	)		(18,709	)		(12,067	)

Net income		106,292			80,354			104,417
Less: Net income attributable to non-controlling interests		(271	)		(332	)		(1,375	)

Net income attributable to Arcos Dorados Holdings Inc.	$	106,021		$	80,022		$	103,042

Net income	$	106,292		$	80,354		$	104,417
Other comprehensive income (loss):
Foreign currency translation (including $13,100 of income taxes in 2010)		29,927			(67,192	)		(65,720	)
Unrealized gains on cash flow hedges (net of $nil of income taxes)		—			232			—
Unrealized losses on cash flow hedges (net of $nil of income taxes)		(1,134	)		(1,128	)		(3,463	)
Realized losses on cash flow hedges (net of $nil of income taxes)		273			4,591			—

Comprehensive income		135,358			16,857			35,234
(Less) Plus: Comprehensive (income) expense attributable to non-controlling interests		(212	)		(471	)		571

Comprehensive income attributable to Arcos Dorados Holdings Inc.	$	135,146		$	16,386		$	35,805

Earnings per share information:
Basic net income per common share attributable to Arcos Dorados Holdings Inc.	$	0.44		$	0.33		$	0.43

See Notes to the Consolidated Financial Statements.

F-3

Arcos Dorados Holdings Inc.

Consolidated Balance Sheets

As of December 31, 2010 and 2009

Amounts in thousands of US dollars, except for share data and as otherwise indicated


	2010			2009
ASSETS
Current assets
Cash and cash equivalents	$	208,099		$	167,975
Accounts and notes receivable, net		79,821			62,847
Other receivables		107,061			55,819
Inventories		66,431			50,545
Prepaid expenses and other current assets		80,359			46,755
Deferred income taxes		10,584			10,070

Total current assets		552,355			394,011
Non-current assets
Miscellaneous		21,450			14,780
Collateral deposits		20,325			40,000
Property and equipment, net		911,730			785,862
Net intangible assets and goodwill		47,264			37,401
Deferred income taxes		190,764			145,782
McDonald’s Corporation’s indemnification for contingencies		40,378			65,112

Total non-current assets		1,231,911			1,088,937

Total assets	$	1,784,266		$	1,482,948

LIABILITIES AND EQUITY
Current liabilities
Accounts payable	$	186,700		$	124,560
Royalties payable to McDonald’s Corporation		16,193			10,983
Income taxes payable		33,644			20,881
Other taxes payable		91,033			58,612
Accrued payroll and other liabilities		211,231			128,478
Interest payable		8,438			8,655
Short-term debt		11,741			6,700
Current portion of long-term debt		6,206			4,346
Derivative instruments		39,962			33,595

Total current liabilities		605,148			396,810

Non-current liabilities
Accrued payroll and other liabilities		53,475			37,575
Provision for contingencies		63,940			86,931
Long-term debt, excluding current portion		451,423			454,461
Derivative instruments		54,707			52,356
Deferred income taxes		6,378			769

Total non-current liabilities		629,923			632,092

Total liabilities		1,235,071			1,028,902

Shareholders’ Equity
Class A shares of common stock; 420,000,000 shares authorized; 145,129,780 shares issued and outstanding; no par value per share		226,528			226,528
Class B shares of common stock; 80,000,000 shares authorized; 96,753,186 shares issued and outstanding; no par value per share		151,018			151,018
Additional paid-in capital		(2,468	)		(2,468	)
Retained earnings		271,387			205,366
Accumulated other comprehensive loss		(98,664	)		(127,789	)

Total Arcos Dorados Holdings Inc. shareholders’ equity		547,801			452,655
Non-controlling interests in subsidiaries		1,394			1,391

Total shareholders’ equity		549,195			454,046

Total liabilities and shareholders’ equity	$	1,784,266		$	1,482,948

See Notes to the Consolidated Financial Statements.

F-4

Arcos Dorados Holdings Inc.

Consolidated Statements of Cash Flows

For the fiscal years ended December 31, 2010, 2009 and 2008

Amounts in thousands of US dollars, except for share data and as otherwise indicated


	2010			2009			2008
Operating activities
Net income attributable to Arcos Dorados Holdings Inc	$	106,021		$	80,022		$	103,042
Adjustments to reconcile net income attributable to Arcos Dorados Holdings Inc. to cash provided by operations:
Non-cash charges and credits:
Depreciation and amortization		60,585			54,169			49,496
Loss from derivative instruments		32,809			39,935			2,620
Amortization of deferred financing costs		979			11,285			4,940
Amortization and accrual of letter of credit fees		2,633			2,127			4,116
Net income attributable to non-controlling interests		271			332			1,375
Deferred income taxes		(61,101	)		(49,830	)		(51,217	)
Foreign currency exchange results		(1,072	)		(24,501	)		46,224
Accrued compensation expense		36,551			5,247			13,902
Loss on amnesty program		25,532			—			—
Others, net		2,009			6,791			(2,113	)
Changes in working capital items:
Accounts payable		48,065			3,597			23,136
Accounts and notes receivable and other receivables		(70,762	)		(11,651	)		14,145
Inventories, prepaid and other assets		(39,742	)		20,821			(40,498	)
Income taxes payable		13,085			(12,174	)		12,048
Other taxes payable		12,134			(2,537	)		7,358
Interest payable		105			5,702			4,060
Accrued payroll and other liabilities and provision for contingencies		86,700			18,824			6,410
Others		9,074			(137	)		(681	)

Net cash provided by operating activities		263,876			148,022			198,363
Investing activities
Property and equipment expenditures		(175,669	)		(90,105	)		(148,894	)
Purchases of restaurant businesses		(504	)		(11,061	)		(18,999	)
Proceeds from sale of property and equipment		6,215			12,368			5,230
Collection of receivable with McDonald’s Corporation		—			—			15,015
Other investing activity		(8,266	)		(7,572	)		(4,518	)

Net cash used in investing activities		(178,224	)		(96,370	)		(152,166	)
Financing activities
Issuance of senior notes		—			446,112			—
Repayment of A&R Credit Agreement		—			(350,000	)		—
Payment of deferred financing costs		—			(10,826	)		(8,712	)
Dividend payments to Arcos Dorados Holdings Inc.’ shareholders		(33,400	)		—			—
Payment of derivative instruments		(37,815	)		(30,167	)		(3,567	)
Collateral deposits		25,000			(25,000	)		(15,000	)
Net short-term borrowings		3,805			(2,539	)		14,286
Other financing activities		(8,877	)		(3,208	)		(1,816	)

Net cash (used in) provided by financing activities		(51,287	)		24,372			(14,809	)
Effect of exchange rate changes on cash and cash equivalents		5,759			(14,031	)		(17,986	)

Increase in cash and cash equivalents		40,124			61,993			13,402
Cash and cash equivalents at the beginning of the year		167,975			105,982			92,580

Cash and cash equivalents at the end of the year	$	208,099		$	167,975		$	105,982

Supplemental cash flow information:
Cash paid during the year for:
Interest	$	42,034		$	26,008		$	16,694
Income tax		40,391			63,699			46,200
Non-cash transactions:
Decrease in accounts payables through a decrease in receivable from McDonald’s Corporation	$	—		$	—		$	6,872
Seller financings		2,423			9,641			—

See Notes to the Consolidated Financial Statements.

F-5

Arcos Dorados Holdings Inc.

Statements of Changes in Shareholders’ Equity

For the fiscal years ended December 31, 2010, 2009 and 2008

Amounts in thousands of US dollars, except for share data and as otherwise indicated


	Arcos Dorados Holdings Inc.’ Shareholders
	Class A shares of common stock				Class B shares of common stock				Additional paid-in capital			Retained earnings			Accumulated other comprehensive income (loss)			Total			Non- controlling interests			Total
	Number		Amount		Number		Amount		Additional paid-in capital			Retained earnings			Accumulated other comprehensive income (loss)			Total			Non- controlling interests			Total
Balances at December 31, 2007		145,129,780		226,528		96,753,186		151,018		—			22,302			3,084			402,932			4,847			407,779
Acquisition of non-controlling interests		—		—		—		—		—			—			—			—			(2,261	)		(2,261	)
Foreign currency translation		—		—		—		—		—			—			(63,774	)		(63,774	)		(1,946	)		(65,720	)
Unrealized losses on cash flow hedges		—		—		—		—		—			—			(3,463	)		(3,463	)		—			(3,463	)
Net income for the year		—		—		—		—		—			103,042			—			103,042			1,375			104,417

Balances at December 31, 2008		145,129,780		226,528		96,753,186		151,018		—			125,344			(64,153	)		438,737			2,015			440,752
Acquisition of non-controlling interests		—		—		—		—		(2,468	)		—			—			(2,468	)		(1,012	)		(3,480	)
Foreign currency translation		—		—		—		—		—			—			(67,331	)		(67,331	)		139			(67,192	)
Unrealized losses on cash flow hedges		—		—		—		—		—			—			(1,128	)		(1,128	)		—			(1,128	)
Unrealized gains on cash flow hedges		—		—		—		—		—			—			232			232			—			232
Realized losses on cash flow hedges		—		—		—		—		—			—			4,591			4,591			—			4,591
Dividends to non-controlling interests		—		—		—		—		—			—			—			—			(83	)		(83	)
Net income for the year		—		—		—		—		—			80,022			—			80,022			332			80,354

Balances at December 31, 2009		145,129,780		226,528		96,753,186		151,018		(2,468	)		205,366			(127,789	)		452,655			1,391			454,046
Foreign currency translation		—		—		—		—		—			—			29,986			29,986			(59	)		29,927
Unrealized losses on cash flow hedges		—		—		—		—		—			—			(1,134	)		(1,134	)		—			(1,134	)
Realized losses on cash flow hedges		—		—		—		—		—			—			273			273			—			273
Dividends to non-controlling interests		—		—		—		—		—			—			—			—			(209	)		(209	)
Dividends to Arcos Dorados Holdings Inc’s shareholders		—		—		—		—		—			(40,000	)		—			(40,000	)		—			(40,000	)
Net income for the year		—		—		—		—		—			106,021			—			106,021			271			106,292

Balances at December 31, 2010		145,129,780		226,528		96,753,186		151,018		(2,468	)		271,387			(98,664	)		547,801			1,394			549,195

See Notes to the Consolidated Financial Statements.

F-6

Arcos Dorados Holdings Inc.

Notes to the Consolidated Financial Statements

For the fiscal years ended December 31, 2010, 2009 and 2008

Amounts in thousands of US dollars, except for share data and as otherwise indicated

1. Organization and nature of business

Arcos Dorados Holdings Inc. (the “Company”) is a private limited liability company organized and existing under the laws of the British Virgin Islands. The Company was incorporated on December 9, 2010 in connection with the reorganization made for purposes of the offering and listing of the Company’s shares on the New York Stock Exchange. The reorganization involved the creation of Arcos Dorados Holdings Inc. as a wholly-owned subsidiary of Arcos Dorados Limited and a subsequent downstream merger, being Arcos Dorados Holdings Inc. the surviving entity. Following the merger, Arcos Dorados Holdings Inc. replaced Arcos Dorados Limited in the corporate structure. The reorganization was accounted for as a reorganization of entities under common control in a manner similar to a pooling of interest and the consolidated financial statements reflect the historical consolidated operations of Arcos Dorados Limited as if the reorganization structure had existed since it was incorporated in July 2006. The Company’s fiscal year ends on the last day of December. The Company has a 99.999% equity interest in Arcos Dorados Cooperatieve U.A., which has a 100% equity interest in Arcos Dorados B.V. (“ADBV”).

On August 3, 2007 the Company, indirectly through its wholly-owned subsidiary ADBV, entered into a Stock Purchase Agreement and Master Franchise Agreements (“MFAs”) with McDonald’s Corporation pursuant to which the Company completed the acquisition of the McDonald’s business in Latin America (“LatAm business”). See Note 4 for details. Prior to this acquisition, the Company did not carry out operations.

The Company, through ADBV’s wholly-owned and majority owned subsidiaries, operates and franchises McDonald’s restaurants in the food service industry. The Company has operations in nineteen territories as follows: Argentina, Aruba, Brazil, Chile, Colombia, Costa Rica, Curacao, Ecuador, French Guyana, Guadeloupe, Martinique, Mexico, Panama, Peru, Puerto Rico, Uruguay, the U.S. Virgin Islands of St. Croix and St. Thomas and Venezuela. All restaurants are operated either by the Company’s subsidiaries or by independent entrepreneurs under the terms of sub-franchisee agreements (franchisees).

2. Basis of presentation and principles of consolidation

The accompanying consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“US GAAP”) and include the accounts of the Company and its subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation. The Company has elected to report its consolidated financial statements in United States dollars (“$” or “US dollars”).

3. Summary of significant accounting policies

The following is a summary of significant accounting policies followed by the Company in the preparation of the consolidated financial statements.

Use of estimates

The preparation of the consolidated financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates.

F-7

Arcos Dorados Holdings Inc.

Notes to the Consolidated Financial Statements

For the fiscal years ended December 31, 2010, 2009 and 2008

Amounts in thousands of US dollars, except for share data and as otherwise indicated

3. Summary of significant accounting policies (continued)

Foreign currency translation

The financial statements of the Company’s foreign operating subsidiaries are translated in accordance with guidance in ASC Topic 830 Foreign Currency Matters. Except for the Company’s Venezuelan operations in 2010, the functional currencies of the Company’s foreign operating subsidiaries are the local currencies of the countries in which they conduct their operations. Therefore, assets and liabilities are translated into U.S. dollars at the balance sheet date exchange rates, and revenues and expenses are translated at average rates prevailing during the periods. Translation adjustments are included in the “Accumulated other comprehensive loss” component of shareholders’ equity. The Company includes foreign currency exchange results related to monetary assets and liabilities denominated in currencies other than its functional currencies in its income statement.

Effective January 1, 2010, Venezuela is considered to be highly inflationary, and as such, the financial statements of the Company’s Venezuelan subsidiaries are remeasured as if their functional currencies were the reporting currency (U.S. dollars). As a result, remeasurement gains and losses are recognized in earnings rather than in the cumulative translation adjustment, component of other comprehensive income within shareholders’ equity.

See Note 21 for additional information pertaining to the Company’s Venezuelan operations, including currency restrictions and controls existing in the country and a discussion of the exchange rate used for translation purposes.

Cash and cash equivalents

The Company considers all highly liquid investments with an original maturity of three months or less, from the date of purchase, to be cash equivalents.

Revenue recognition

The Company’s revenues consist of sales by Company-operated restaurants and revenues from restaurants operated by franchisees. Sales by Company-operated restaurants are recognized on a cash basis. The Company presents sales net of sales tax and other sales-related taxes. Revenues from restaurants operated by franchisees include rental income, initial franchise fees and royalty income. Rental income is measured on a monthly basis based on the greater of a fixed rent, computed on a straight-line basis, or a certain percentage of gross sales reported by franchisees. Initial franchise fees represent the difference between the amount the Company collects from the franchisee and the amount the Company pays to McDonald’s Corporation upon the opening of a new restaurant, which is when the Company has performed substantially all initial services required by the franchisee agreement. Royalty income represents the difference, if any, between the amount the Company collects from the franchisee and the amount the Company is required to pay to McDonald’s Corporation. Royalty income is recognized in the period earned.

Accounts and notes receivable and allowance for doubtful accounts

Accounts receivable primarily consist of royalty and rent receivables due from franchisees and credit card receivables. Accounts receivable are initially recorded at fair value and do not bear interest. Notes

F-8

Arcos Dorados Holdings Inc.

Notes to the Consolidated Financial Statements

For the fiscal years ended December 31, 2010, 2009 and 2008

Amounts in thousands of US dollars, except for share data and as otherwise indicated

3. Summary of significant accounting policies (continued)

Accounts and notes receivable and allowance for doubtful accounts (continued)

receivable relates to interest-bearing financing granted to certain franchisees in connection with the acquisition of equipment and third-party suppliers. The Company maintains an allowance for doubtful accounts in an amount that it considers sufficient to cover losses resulting from the inability of its franchisees to make required payments. In judging the adequacy of the allowance for doubtful accounts, the Company considers multiple factors including historical bad debt experience, the current economic environment and the aging of the receivables.

Other receivables

Other receivables primarily consist of value-added tax and other tax receivables (amounting to $ 76,603 and $35,127 as of December 31, 2010 and 2009, respectively) and receivables with third parties for services provided by the Company’s distribution centers (amounting to $16,110 and $12,254 as of December 31, 2010 and 2009, respectively). Other receivables are reported at the amount expected to be collected.

Inventories

Inventories are stated at the lower of cost or market, with cost being determined on a first-in, first-out basis.

Property and equipment, net

Property and equipment are stated at cost, net of accumulated depreciation. Property costs include costs of land and building for both company-operated and franchise restaurants while equipment costs primarily relate to company-operated restaurants. Cost of property and equipment acquired from McDonald’s Corporation (as part of the acquisition of LatAm business) was determined based on its estimated fair market value at the acquisition date, then partially reduced by the allocation of the negative goodwill that resulted from the purchase price allocation. Cost of property and equipment acquired or constructed after the acquisition of LatAm business in connection with the Company’s restaurant reimaging and extension program is comprised of acquisition and construction costs and capitalized internal costs. Capitalized internal costs include payroll expenses related to employees fully dedicated to restaurant construction projects and related travel expenses. Capitalized payroll costs are allocated to each new restaurant location based on the actual time spent on each project. The Company commences capitalizing costs related to construction projects when it becomes probable that the project will be developed—when the site has been identified and the related profitability assessment has been approved. Maintenance and repairs are expensed as incurred. Accumulated depreciation is calculated using the straight-line method over the following estimated useful lives: buildings—up to 40 years; leasehold improvements—the lesser of useful lives of assets or lease terms which generally include option periods; and equipment—3 to 12 years.

Intangible assets, net

Intangible assets include computer software costs, initial franchise fees and letter of credit fees.

The Company follows the provisions of ASC 350-40-30 within ASC Topic 350 Intangibles, Subtopic 40 Internal Use Software which requires the capitalization of costs incurred in connection with developing or obtaining software for internal use. These costs are amortized over a period of three years on a straight line basis.

F-9

Arcos Dorados Holdings Inc.

Notes to the Consolidated Financial Statements

For the fiscal years ended December 31, 2010, 2009 and 2008

Amounts in thousands of US dollars, except for share data and as otherwise indicated

3. Summary of significant accounting policies (continued)

Intangible assets, net (continued)

The Company is required to pay to McDonald’s Corporation an initial franchisee fee upon opening of a new restaurant. The initial franchise fee related to Company-operated restaurants is capitalized as an intangible asset and amortized on a straight-line basis over the term of the franchise (generally 20 years).

Letter of credit fees are amortized on a straight-line basis over the term of the Letter of Credit.

Impairment and disposal of long-lived assets

In accordance with the guidance within ASC 360-10-35, the Company reviews long-lived assets for impairment whenever events or changes in circumstances indicate the carrying value of the asset may not be recoverable. For purposes of reviewing assets for potential impairment, assets are grouped at a country level for each of the operating markets. The Company manages its restaurants as a group or portfolio with significant common costs and promotional activities; as such, each restaurant’s cash flows are not largely independent of the cash flows of others in a market. If an indicator of impairment exists for any grouping of assets, an estimate of undiscounted future cash flows produced by each individual restaurant within the asset grouping is compared to its carrying value. If an individual restaurant is determined to be impaired, the loss is measured by the excess of the carrying amount of the restaurant over its fair value considering its highest and best use, as determined by an estimate of discounted future cash flows or its market value. In the fourth quarter of 2010 the Company performed the impairment testing of its long-lived assets in Mexico, Puerto Rico and Peru considering the operating losses incurred in recent periods in these markets (indicator of potential impairment). As a result of this analysis, no impairment was recorded for the Company´s operations in Puerto Rico and Peru since the estimates of undiscounted future cash flows for each restaurant in these markets or the fair market value exceeded its carrying value. Regarding México, the Company recorded an impairment charge associated with certain restaurants with undiscounted future cash flows insufficient to recover their carrying value. The impairment charge was measured by the excess of the carrying amount of the restaurants over its fair value. The impairment charge totaling $4,668 is included within “Other operating expenses, net” in the consolidated statement of income. No impairments were recognized during fiscal years 2009 and 2008.

Losses on assets held for disposal are recognized when management and the Board of Directors, as required, has approved and committed to a plan to dispose of the assets, the assets are available for disposal, the disposal is probable of occurring within 12 months, and the net sales proceeds are expected to be less than the assets’ net book value. Generally, such losses relate to restaurants that have closed and ceased operations as well as restaurants that meet the criteria to be considered “held for sale” in accordance with ASC 360-10-45.

Goodwill

Goodwill represents the excess of cost over the estimated fair market value of net tangible assets and identifiable intangible assets acquired. In accordance with the guidance within ASC Topic 350 Intangibles-Goodwill and Other, goodwill is stated at cost and reviewed for impairment on an annual basis. The annual impairment test is performed during the fourth quarter of the fiscal year and compares the fair value of each reporting unit, generally based on discounted future cash flows, with its carrying amount including goodwill. If the carrying amount of the reporting unit exceeds its fair value, an impairment loss is measured as the difference

F-10

Arcos Dorados Holdings Inc.

Notes to the Consolidated Financial Statements

For the fiscal years ended December 31, 2010, 2009 and 2008

Amounts in thousands of US dollars, except for share data and as otherwise indicated

3. Summary of significant accounting policies (continued)

Goodwill (continued)

between the implied fair value of the reporting unit’s goodwill and the carrying amount of goodwill. No impairments have been recognized during fiscal years 2010, 2009 and 2008, except as mentioned in Note 4.

Advertising costs

Advertising costs are expensed as incurred. Advertising expenses related to Company-operated restaurants were $116,251, $101,389 and $97,008 in 2010, 2009 and 2008, respectively. Advertising expenses related to Franchised operations do not affect the Company’s expenses since these are recovered from franchisees. Advertising expenses related to Franchised operations were $36,355, $36,215 and $34,331 in 2010, 2009 and 2008, respectively.

Accounting for income taxes

The Company records deferred income taxes using the liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. The guidance requires companies to set up a valuation allowance for that component of net deferred tax assets which does not meet the more likely than not criterion for realization.

Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.

Share-based compensation

The Company recognizes compensation expense as services required to earn the benefits are rendered. The accrued liability is remeasured at the end of each reporting period until settlement, based on the estimated fair value of the Company.

Derivative financial instruments

The Company utilizes certain hedge instruments to manage its interest rate and foreign currency rate exposures. The counterparties to these instruments generally are major financial institutions. The Company does not hold or issue derivative instruments for trading purposes. In entering into these contracts, the Company assumes the risk that might arise from the possible inability of counterparties to meet the terms of their contracts. The Company does not expect any losses as a result of counterparty defaults. All derivatives are recognized as either assets or liabilities in the balance sheet and are measured at fair value. Additionally, the fair value adjustments will affect either stockholders’ equity as accumulated other comprehensive income (loss) or net income (loss) depending on whether the derivative instrument qualifies as a hedge for accounting purposes and, if so, the nature of the hedging activity.

F-11

Arcos Dorados Holdings Inc.

Notes to the Consolidated Financial Statements

For the fiscal years ended December 31, 2010, 2009 and 2008

Amounts in thousands of US dollars, except for share data and as otherwise indicated

3. Summary of significant accounting policies (continued)

Severance payments

Under certain laws and labor agreements of the countries in which the Company operates, the Company is required to make minimum severance payments to employees who are dismissed without cause and employees leaving its employment in certain other circumstances. The Company accrues severance costs if they relate to services already rendered, are related to rights that accumulate or vest, are probable of payment and can be reasonably estimated. Otherwise, severance payments are expensed as incurred.

Provision for contingencies

The Company accrues liabilities when it is probable that future costs will be incurred and such costs can be reasonably estimated. Such accruals are based on developments to date, the Company’s estimates of the outcomes of these matters and the Company’s lawyers’ experience in contesting, litigating and settling other matters. As the scope of the liabilities becomes better defined, there may be changes in the estimates of future costs. See Note 17 for details.

Comprehensive income

Comprehensive income includes net income as currently reported under generally accepted accounting principles and also includes the impact of other events and circumstances from non-owner sources which are recorded as a separate component of stockholders’ equity. The Company reports foreign currency translation gains and losses as well as unrealized results on cash flow hedges as components of comprehensive income.

Recent accounting pronouncements

In December 2007, the FASB issued SFAS No. 160, “Non-controlling Interest in Consolidated Financial Statement, an amendment of Accounting Research Bulletin No. 51” (Consolidation Topic of the ASC). This guidance establishes standards related to the treatment of non-controlling interests. A non-controlling interest, sometimes called minority interest, is the portion of equity in a subsidiary not attributable, directly or indirectly, to a parent. This guidance requires, among others, (a) that non-controlling interests be reported as a component of shareholders’ equity; (b) that net income attributable to the parent and to the non-controlling interests be separately identified in the consolidated statement of operations; and (c) that sufficient disclosures are provided that clearly identify and distinguish between the interest of the parent and the interests of the non-controlling owners. The objective of this guidance is to improve the relevance, comparability and transparency of the financial information that a reporting entity provides in its consolidated financial statements. Before this guidance was issued, limited instructions existed for reporting non-controlling interests. So-called minority interests were reported by the Company in its consolidated financial statements in the mezzanine section between liabilities and equity. The guidance is effective for fiscal years and interim periods within those fiscal years beginning on or after December 15, 2008. As a result, the Company adopted the required provisions on January 1, 2009. The Company retrospectively applied the presentation requirements in these financial statements, reclassifying to equity the non-controlling interests and adjusting consolidated comprehensive income to include the comprehensive income attributed to the non-controlling interests.

F-12

Arcos Dorados Holdings Inc.

Notes to the Consolidated Financial Statements

For the fiscal years ended December 31, 2010, 2009 and 2008

Amounts in thousands of US dollars, except for share data and as otherwise indicated

3. Summary of significant accounting policies (continued)

Recent accounting pronouncements (continued)

In December 2007, the FASB issued SFAS No. 141(R), “Business Combinations.” (Codified in ASC Topic 805 Business Combinations). This guidance was issued in an effort to continue the movement toward the greater use of fair values in financial reporting and increased transparency through expanded disclosures. SFAS No. 141 (R) changes how business acquisitions are accounted for and will impact financial statements at the acquisition date and in subsequent periods. Certain of these changes will introduce more volatility into earnings. The acquirer must now record all assets and liabilities of the acquired business at fair value, and related transaction and restructuring costs will be expensed rather than the previous method of being capitalized as part of the acquisition. This guidance also impacts the annual goodwill impairment test associated with acquisitions, including those that close before the effective date of the mentioned guidance. The definitions of a “business” and a “business combination” have been expanded, resulting in more transactions qualifying as business combinations. This guidance is effective for fiscal years beginning on or after December 31, 2008 and earlier adoption is prohibited. As a result, the Company adopted this guidance on January 1, 2009. The adoption did not have any impact on the Company’s consolidated financial statements.

In March 2008, the FASB issued SFAS No.161, “Disclosures about Derivative Instruments and Hedging Activities”, (codified in ASC Topic 815 Derivatives and Hedging) which amends previous guidance. Enhanced disclosures to improve financial reporting transparency are required, including disclosure about the location and amounts of derivative instruments in the financial statements, how derivative instruments are accounted for and how derivatives affect an entity’s financial position, financial performance and cash flows. A tabular format including the fair value of derivative instruments and their gains and losses, disclosure about credit risk-related derivative features and cross-referencing within the footnotes are also new requirements. This guidance is effective for financial statements issued for fiscal years beginning after November 15, 2008, with early application and comparative disclosures encouraged, but not required. The Company adopted this guidance on January 1, 2009. The adoption had no impact on the Company’s consolidated financial statements, besides the additional disclosures.

In May 2009, the FASB issued Statement of Financial Accounting Standard No. 165, “Subsequent Events” (“SFAS No.165”) (codified in ASC Topic 855-10-50). SFAS No.165 requires disclosure of the date through which an entity has evaluated subsequent events and the basis for that date. The Company adopted the guidance for fiscal year 2009. The adoption had no impact on the Company’s consolidated financial statements, besides the additional disclosure.

In September 2009, the Accounting Standards Codification (“ASC”) became the source of authoritative U.S. GAAP recognized by the Financial Accounting Standards Board (“FASB”) for nongovernmental entities, except for certain FASB Statements not yet incorporated into ASC. Rules and interpretive releases of the SEC under federal securities laws are also sources of authoritative U.S. GAAP for registrants. The authoritative guidance mentioned in these financial statements includes the applicable ASC reference.

F-13

Arcos Dorados Holdings Inc.

Notes to the Consolidated Financial Statements

For the fiscal years ended December 31, 2010, 2009 and 2008

Amounts in thousands of US dollars, except for share data and as otherwise indicated

4. Acquisition of businesses

LatAm Business

On August 3, 2007, the Company, indirectly through its wholly-owned subsidiary ADBV, entered into a Stock Purchase Agreement with McDonald’s Corporation pursuant to which the Company completed the acquisition of the McDonald’s business in Latin America for $679,357. The purchase price was comprised of (a) a base purchase price amounting to $700,000, and (b) an additional purchase price equal to the final working capital of the acquired business amounting to negative $20,643. The Company paid the base purchase price and the estimated additional purchase price at the transaction date totaling $701,244. Subsequently, the Company recorded a receivable from McDonald’s Corporation amounting to $21,887 for the difference between the final working capital and the working capital estimated at the transaction date. This receivable was collected in 2008 ($15,015 in cash and $6,872 by assignment of a receivable from suppliers). Fees and expenses associated with this acquisition amounted to $18,723. The final purchase price was $698,080.

The acquisition of the LatAm business has been accounted for by the purchase method of accounting and, accordingly, the purchase price has been allocated to the assets acquired and liabilities assumed based on the estimated fair values at the date of acquisition. When the fair value of the net assets acquired exceeded the purchase price, the resulting negative goodwill was allocated to partially reduce the fair value of the non-current assets acquired on a pro-rata basis.

In connection with this transaction, ADBV and certain subsidiaries (the “MF subsidiaries”) also entered into 20-year Master Franchise Agreements (“MFAs”) with McDonald’s Corporation which grants to the Company and its MF subsidiaries the following:

The right to own and operate, directly or indirectly, franchised restaurants in each territory;

ii.

The right and license to grant sub franchises in each territory;

iii.

The right to adopt and use, and to grant the right and license to sub franchisees to adopt and use, the system in each territory;

iv.

The right to advertise to the public that it is a franchisee of McDonald’s;

The right and license to grant sub franchises and sublicenses of each of the foregoing rights and licenses to each MF subsidiary.

The Company is required to pay to McDonald’s Corporation continuing franchise fees (Royalty fees) on a monthly basis. The amount to be paid during the first 10 years of the MFAs is equal to 5% of the US dollar equivalent of the gross product sales of each of the franchised restaurants. This percentage increases to 6% and 7% for the subsequent two 5-year periods of the agreement. Payment of monthly royalties is due on the seventh business day of the next calendar month.

Pursuant to the MFAs provisions, McDonald’s Corporation has the right to (a) terminate the MFAs, or (b) exercise a call option over the Company’s shares or any MF subsidiary, if the Company or any MF subsidiary (i) fails to comply with the McDonald’s System (as defined in the MFAs), (ii) files for bankruptcy, (iii) defaults on its financial debt payments, (iv) substantially fails to achieve targeted openings and reinvestments requirements, or (v) upon the occurrence of any other event of default as defined in the MFAs.

F-14

Arcos Dorados Holdings Inc.

Notes to the Consolidated Financial Statements

For the fiscal years ended December 31, 2010, 2009 and 2008

Amounts in thousands of US dollars, except for share data and as otherwise indicated

4. Acquisition of businesses (continued)

Other acquisitions

In 2008, the Company acquired franchise restaurants in Mexico and Brazil as well as non-controlling interests in subsidiaries located in Ecuador and Peru. In 2009, the Company acquired franchise restaurants in Mexico and St. Croix as well as non-controlling interests in subsidiaries located in Argentina and Chile. In 2010, the Company acquired franchise restaurants in México and Chile. Presented below is supplemental information about these non-significant acquisitions:


	2010			2009			2008
Acquisition of non-controlling interests:
Non-controlling interests	$	—		$	1,012		$	2,261
Goodwill(i)		—			—			1,339
Additional paid-in capital		—			2,468			—

Purchase price		—			3,480			3,600
Seller financing		—			(3,300	)		—

Purchase price paid	$	—		$	180		$	3,600


	2010			2009			2008
Purchases of restaurant businesses:
Property and equipment	$	2,016		$	13,786		$	6,878
Identifiable intangible assets		183			2,151			1,425
Goodwill		1,276			3,449			10,696
Tax credits		—			959			—
Assumed debt		—			(1,978	)		—

Purchase price		3,475			18,367			18,999
Settlement of franchise receivable		(548	)		(965	)		—
Seller financing		(2,423	)		(6,341	)		—

Purchase price paid	$	504		$	11,061		$	18,999

(i)	The Company recognized an impairment of goodwill amounting to $1,066 in fiscal year 2008.

5. Accounts and notes receivable, net

Accounts and notes receivable, net consist of the following at year end:


	2010			2009
Accounts receivable	$	77,513		$	63,048
Notes receivable		7,102			5,924
Allowance for doubtful accounts		(4,794	)		(6,125	)

	$	79,821		$	62,847

F-15

Arcos Dorados Holdings Inc.

Notes to the Consolidated Financial Statements

For the fiscal years ended December 31, 2010, 2009 and 2008

Amounts in thousands of US dollars, except for share data and as otherwise indicated

6. Prepaid expenses and other current assets

Prepaid expenses and other current assets consist of the following at year end:


	2010		2009
Prepaid expenses	$	73,468		$	35,538
Promotion items		6,891			11,217

	$	80,359		$	46,755

7. Property and equipment, net

Property and equipment, net consist of the following at year-end:


	2010			2009
Land	$	187,277		$	167,221
Buildings and leasehold improvements		532,796			454,357
Equipment		355,273			279,162

Total cost		1,075,346			900,740
Total accumulated depreciation		(163,616	)		(114,878	)

	$	911,730		$	785,862

Total depreciation expense for fiscal years 2010, 2009 and 2008 amounted to $53,845, $47,254 and $44,960, respectively.

8. Net intangible assets and goodwill

Net intangible assets and goodwill consist of the following at year-end:


	2010			2009
Intangible assets(i)
Computer software cost	$	34,769		$	22,090
Initial franchise fees		11,649			10,909
Letter of credit fees		3,025			3,025

Total cost		49,443			36,024
Total accumulated amortization		(19,720	)		(14,153	)

Subtotal	$	29,723		$	21,871

F-16

Arcos Dorados Holdings Inc.

Notes to the Consolidated Financial Statements

For the fiscal years ended December 31, 2010, 2009 and 2008

Amounts in thousands of US dollars, except for share data and as otherwise indicated

8. Net intangible assets and goodwill (continued)


	2010		2009
Goodwill (ii)
Mexico	$	8,470	$	6,770
Brazil		6,287		5,999
Ecuador		273		273
Peru		200		195
St. Croix		2,077		2,077
Chile		234		216

Subtotal	$	17,541	$	15,530

	$	47,264	$	37,401

(i)

Total amortization expense for fiscal years 2010, 2009 and 2008 amounted to $6,740, $6,915 and $4,536, respectively. The estimated aggregate amortization expense for each of the five succeeding fiscal years is as follows: $7,841 for 2011; $7,841 for 2012; $7,841 for 2013; $1,578 for 2014; $1,054 for 2015 and thereafter $3,568.

(ii)	Related to the acquisition of franchise restaurants (Mexico, Brazil, Peru and St. Croix) and non-controlling interests in subsidiaries (Ecuador and Chile).

9. Accrued payroll and other liabilities

Accrued payroll and other liabilities current consist of the following at year end:


	2010		2009
Current:
Award granted to the CEO	$	31,786	$	—
Accrued payroll		99,886		75,830
Long-term incentive plan		14,156		—
Accrued expenses		50,918		48,807
Dividends payable		6,600		—
Other liabilities		7,885		3,841

	$	211,231	$	128,478

Non-Current:
Award granted to the CEO	$	—	$	15,394
Accrued payroll		921		8,379
Long-term incentive plan		9,758		3,756
Amnesty program		33,457		—
Other liabilities		9,339		10,046

	$	53,475	$	37,575

F-17

Arcos Dorados Holdings Inc.

Notes to the Consolidated Financial Statements

For the fiscal years ended December 31, 2010, 2009 and 2008

Amounts in thousands of US dollars, except for share data and as otherwise indicated

10. Short-term debt

Short-term debt consists of the following at year-end:


	2010		2009
Bank overdrafts	$	419	$	—
Short-term loans(i)		11,322		6,700

	$	11,741	$	6,700

(i)

The 2010 balance mainly relates to the notes issued by one of the Company’s subsidiaries in Venezuela for 59 million Venezuelan bolívares fuertes, equivalent to $11,132 at December 31, 2010. The notes were issued on December 17, 2010 and mature on April 16, 2011. The notes accrue imputed interest at a monthly rate of 1.3%.

11. Long-term debt

Long-term debt consists of the following at year-end:


	2010		2009
Senior notes	$	446,596	$	446,209
Other long-term borrowings		8,654		10,299
Capital lease obligations		2,379		2,299

Total		457,629		458,807
Current portion of long-term debt	$	6,206	$	4,346

Long-term debt, excluding current portion	$	451,423	$	454,461

Senior notes

In October 2009, ADBV issued senior notes for an aggregate principal amount of $450,000 at a price of 99.136%. The senior notes mature on October 1, 2019 and bear interest of 7.5% per year. Periodic payments of principal are not required under the senior notes. Interest is paid semiannually. The gross proceeds from this issuance totaling $446,112 were partially used to repay the Credit Agreement and certain of the Company’s short-term debt. The Company incurred $8,928 of financing costs related to this issuance, which were capitalized as deferred financing costs. Interest expense related to the senior notes was $33,750 and $8,438 during fiscal year 2010 and 2009, respectively. Amortization of deferred financing costs related to the senior notes amounted to $979 and $482 for fiscal year 2010 and 2009, respectively.

The senior notes are redeemable at the option of the Company at any time at the applicable redemption prices set forth in the indenture governing the senior notes. The senior notes are fully and unconditionally guaranteed on a senior unsecured basis by the majority of the Company’s subsidiaries. The senior notes rank equally with all of the Company’s unsecured and unsubordinated indebtedness and are effectively junior to all secured indebtedness of the Company. The indenture governing the senior notes imposes certain restrictions on the Company and its subsidiaries, including some restrictions on their ability, with certain permitted exceptions, to: incur additional indebtedness, pay dividends or redeem, repurchase or retire the Company’s capital stock,

F-18

Arcos Dorados Holdings Inc.

Notes to the Consolidated Financial Statements

For the fiscal years ended December 31, 2010, 2009 and 2008

Amounts in thousands of US dollars, except for share data and as otherwise indicated

11. Long-term debt (continued)

Senior notes (continued)

make investments, create liens, create limitations on the ability of the Company’s subsidiaries to pay dividends, make loans or transfer property to the Company, engage in transactions with affiliates, sell assets including the capital stock of the subsidiaries, and consolidate merge or transfer assets.

The senior notes are listed on the Luxembourg Stock Exchange and trade on the Euro MTF Market.

Other long-term borrowings

Other long-term borrowings primarily include seller financings related to the purchase of restaurants in Mexico and non-controlling interests in Argentina totaling $7,481. Seller financings are payable in quarterly equal-installments maturing in December 2011 and January 2012, and accrue interest at an annual weighted-average interest rate of 5.8%.

Other required disclosures

At December 31, 2010, future payments related to the Company’s long-term debt are as follows:


	Principal			Interest			Total
2011	$	6,211		$	34,359		$	40,570
2012		2,540			34,049			36,589
2013		708			33,910			34,618
2014		716			33,856			34,572
2015		444			33,805			34,249
Thereafter		450,414			135,022			585,436

Total payments		461,033			305,001			766,034

Interests		—			(305,001	)		(305,001	)
Discount on senior notes		(3,404	)		—			(3,404	)

Long-term debt	$	457,629		$	—		$	457,629

12. Derivative instruments

Derivatives not designated as hedging instruments

Cross-currency interest rate swaps

As of December 31, 2007, ADBV had a cross-currency swap agreement outstanding pursuant to which the Company converted a portion of its debt under the Credit Agreement ($100 million at LIBOR plus 60 basis points) to a Brazilian reais-denominated fixed-rate debt (R$180.5 million at a fixed rate of 10.2%). This swap agreement was settled by the Company before its maturity in January 2008 for $3,567.

F-19

Arcos Dorados Holdings Inc.

Notes to the Consolidated Financial Statements

For the fiscal years ended December 31, 2010, 2009 and 2008

Amounts in thousands of US dollars, except for share data and as otherwise indicated

12. Derivative instruments (continued)

Cross-currency interest rate swaps (continued)

On November 10, 2008, and in connection with the refinancing process of the Credit Agreement, the Company committed to hedge 57% of the Company’s currency exposure from the A&R Credit Agreement related to the Company’s generation of cash flows in Brazilian reais (equivalent to $200 million). As a result:

•

In December 2008, ADBV entered into cross-currency interest rate swap agreements with Banco Santander S.A. and The Bank of Nova Scotia to convert a portion of its debt under the A&R Credit Agreement ($100 million at LIBOR) to Brazilian reais-denominated fixed-rate debt (R$237.4 million at a fixed rate of 12.14%). The notional amounts amortize over the life of the swaps, maturing on November 10, 2013.

•

In January and March 2009 ADBV entered into cross-currency interest rate swap agreements with Banco Santander S.A. to convert a portion of its debt under the A&R Credit Agreement ($100 million at LIBOR) to Brazilian reais-denominated fixed-rate debt (R$228.8 million at a fixed rate of 11.16%). The notional amounts amortize over the life of the swaps, maturing on November 10, 2013.

These swap agreements are carried at fair market value in the consolidated balance sheet with changes reported in earnings. The cross-currency swap agreements did not qualify for hedge accounting under ASC Topic 815, representing a natural hedge over a portion of the Company’s foreign currency and interest rate exposure under the A&R Credit Agreement. Changes in the fair market value attributable to changes in the current spot rates between the U.S. dollar and the Brazilian reais are offset by foreign exchange results recorded by the holding company in revaluating the Brazilian reais-denominated intercompany receivable. Changes in the fair market value attributable to changes in the Brazilian reais-forward rate curve impact the Company’s consolidated results. At December 31, 2010, the fair market values of these swap agreements totaled $90,513 payable ($83,343 payable at December 31, 2009). During 2010 and 2009, the Company made net interest payments to the counterparties totaling $37,645 and $25,584, respectively, in connection with these agreements. During fiscal years 2010, 2009 and 2008, the Company recorded net losses for $31,090, $37,327 and $2,620, respectively, within “Loss from derivative instruments” in the Company’s consolidated statement of income. In addition, in July 2009 the Company was required to make a cash deposit of $25,000 in favor of Credit Suisse as collateral for the obligations assumed under the letter of credit discussed in Note 17. This collateral deposit was collected in April 2010 as a result of the amendment of the letter of credit.

Mirror and bond swaps

On December 10, 2009, and in connection with the prepayment of the A&R Credit Agreement and the issuing of the senior notes, the Company decided to eliminate its three-month LIBOR exposure arising from the existing cross-currency interest rate swaps and also to hedge 44% of the Company’s currency exposure from the senior notes coupon payments related to the Company’s generation of cash flows in Brazilian reais (equivalent to $200 million). Therefore in December 2009:

•

ADBV entered into two opposing coupon-only cross-currency interest rate swap agreements (mirror swaps) with JP Morgan and Morgan Stanley to neutralize the floating-rate exposure under the

F-20

Arcos Dorados Holdings Inc.

Notes to the Consolidated Financial Statements

For the fiscal years ended December 31, 2010, 2009 and 2008

Amounts in thousands of US dollars, except for share data and as otherwise indicated

12. Derivative instruments (continued)

Mirror and bond swaps (continued)

existing position. Under these agreements, the Company pays three-month LIBOR and receives 2.02% in Brazilian reais over a notional of $200 million (at an exchange rate of 1.76 Brazilian reais per U.S. dollar). Payment dates, amortization schedule and maturity date were structured to mirror the existing swaps, without exchange of principal.

•

ADBV entered into two coupon-only cross-currency interest rate swap agreements (bond swaps) with JP Morgan and Morgan Stanley to convert a portion of the coupons of the senior notes denominated in U.S. Dollars ($200 million at a fixed rate of 7.50%) to Brazilian reais (at a fixed rate of 9.08% and an exchange rate of 1.76 Brazilian reais per U.S. dollar). These agreements mature on October 1, 2014 without exchange of principal.

These swap agreements do not qualify for hedge accounting under ASC Topic 815. Therefore, the agreements are carried at fair market value in the consolidated balance sheet with changes reported in earnings. At December 31, 2010, the fair market values of these swap agreements totaled $3,833 payable ($2,608 payable at December 31, 2009). During fiscal year 2010, the Company made net interest payments to the counterparties amounting to $170 in connection with these agreements. During fiscal years 2010 and 2009, the Company recognized a loss of $1,396 and $2,608, respectively, in connection with these agreements that is included within “Loss from derivative instruments” in the Company’s consolidated statement of income.

Forward contracts

On November 10, 2010, 10% of the notional amounts of the cross-currency interest rate swaps amortized (equivalent to $20 million). In order to maintain a notional amount of $200 million hedged at all times, ADBV entered into forward contracts with JPMorgan and Morgan Stanley to buy a total of $20 million in May 10, 2011 at the forward exchange rate of 1.7355 Brazilian reais per U.S. dollar. These swap agreements are carried at fair market value in the consolidated balance sheet with changes reported in earnings. At December 31, 2010, the fair market value of these derivatives totaled $323 payable.

Derivatives designated as hedging instruments

Interest rate swap

On November 10, 2008, ADBV entered into an interest rate swap agreement with Banco Santander Central Hispano S.A. to hedge a portion of the cash flows associated with the refinancing of the credit agreement (“A&R Credit Agreement”). The agreement had a total notional value of $140 million, amortizable over the life of the swap and maturing on November 10, 2013. The interest rate swap agreement effectively converted the A&R Credit Agreement, which was a floating-rate debt, to a fixed-rate debt up to the unamortized notional value of the swap by having the Company pay fixed-rate amounts in exchange for the receipt of the floating-rate interest payments. Under the terms of this agreement, a quarterly net settlement was made for the difference between the fixed rate of 2.66% and the variable rate based upon the three-month LIBOR rate on the notional amount of the interest rate swap.

F-21

Arcos Dorados Holdings Inc.

Notes to the Consolidated Financial Statements

For the fiscal years ended December 31, 2010, 2009 and 2008

Amounts in thousands of US dollars, except for share data and as otherwise indicated

12. Derivative instruments (continued)

Interest rate swap (continued)

The Company determined that its interest rate swap agreement was appropriately designated and documented as a cash flow hedge. This swap agreement was carried at fair market value in the consolidated balance sheet with unrealized gains or losses reported as a component of “Accumulated other comprehensive loss” within shareholders’ equity. As of December 31, 2008, the fair market value of this derivative instrument represented a liability of $3,455. During fiscal year 2008, the Company recorded an adjustment to interest expense for a $8 gain, recognizing the difference of $3,463 within the “Accumulated other comprehensive loss” component of shareholders’ equity. During fiscal year 2009, the Company made net interest payments to the counterparty totaling $603 and recorded an adjustment to interest expense for a $1,106 loss. Due to the repayment of the A&R Credit Agreement in October 2009, the Company settled the interest rate swap agreement for $3,980, recognizing a loss from the early settlement for $3,485 that was included as interest expense.

Forward contracts

In December 2009, the Company entered into various forward contracts maturing in 2010 to hedge a portion of the foreign exchange risk associated with the forecasted imports of Chile. Pursuant to the agreements, the Company purchased during 2010 a total amount of $8,521 at a weighted-average forward rate of 489.3 Chilean pesos per U.S. dollar.

In addition, in February 2010, the Company entered into various forward contracts maturing in 2010 to hedge a portion of the foreign exchange risk associated with the forecasted imports of Colombia and Peru. Pursuant to the agreements, the Company purchased a total amount of $9,732 at a weighted-average forward rate of 2,023.54 Colombian pesos per U.S. dollar, and a total amount of $3,052 at a weighted-average forward rate of 2.89 Peruvian soles per U.S. dollar.

In August and October 2010, the Company entered into various forward contracts maturing in 2011 to hedge a portion of the foreign exchange risk associated with the forecasted imports of Chile for fiscal year 2011. Pursuant to the agreements, during 2011 the Company will purchase a total amount of $11,878 at a weighted-average forward rate of 500.4 Chilean pesos per U.S. dollar.

The Company has designated cash flow hedges that encompass the variability of functional-currency-equivalent cash flows attributable to foreign exchange risks related to the settlement of the foreign-currency-denominated payables resulting from the forecasted purchases (hedge over 75% of the purchases in Chile and Peru for 2010, 73% of the purchases in Colombia for 2010 and over 90% of the purchases in Chile for 2011). The effect of the hedges result in fixing the cost of goods acquired (i.e. the net settlement or collection adjusts the cost of inventory paid to the suppliers). The forward contracts are carried at their fair market value in the consolidated balance sheet, with changes reported within the “Accumulated other comprehensive loss” component of shareholders’ equity. As of December 31, 2010, the fair market value of the outstanding derivatives represented a $630 net payable ($232 receivable at December 31, 2009). The Company made net payments totaling $273 as a result of the net settlements of these derivatives during fiscal year 2010. In addition, the Company recorded a $1,134 unrealized net loss within the “Accumulated other comprehensive loss” component of shareholders’ equity during fiscal year 2010.

F-22

Arcos Dorados Holdings Inc.

Notes to the Consolidated Financial Statements

For the fiscal years ended December 31, 2010, 2009 and 2008

Amounts in thousands of US dollars, except for share data and as otherwise indicated

12. Derivative instruments (continued)

Additional disclosures

The following table presents the fair values of derivative instruments included in the consolidated balance sheet as of December 31, 2010 and 2009:


	Asset (Liability) Derivatives
		Fair Value
Type of Derivative	Balance Sheet Location	2010			2009
Derivatives designated as hedging instruments under ASC Topic 815 Derivatives and Hedging
Forward contracts	Miscellaneous assets	$	—		$	232
	Accrued payroll and other liabilities		(630	)		—

		$	(630	)	$	232

Derivatives not designated as hedging instruments under ASC Topic 815 Derivatives and Hedging
Cross-currency interest rate swaps	Derivative instruments	$	(90,513	)	$	(83,343	)
Mirror swaps	Derivative instruments		3,974			(881	)
Bond swaps	Derivative instruments		(7,807	)		(1,727	)
Forwards	Derivative instruments		(323	)		—

		$	(94,669	)	$	(85,951	)

Total derivative instruments		$	(95,299	)	$	(85,719	)

The following tables present the pretax amounts affecting income and other comprehensive income for the fiscal year ended December 31, 2010 for each type of derivative relationship:


Derivatives in Cash Flow Hedging Relationships	Gain (Loss) Recognized in Accumulated OCI on Derivative (Effective Portion)			(Gain) Loss Reclassified from Accumulated OCI into Income (Effective Portion)		Gain (Loss) Recognized in Income on Derivative (Amount Excluded from Effectiveness Testing and Ineffective Portion)
Forward contracts	$	(1,134	)	$	273	$	—

Total	$	(1,134	)	$	273	$	—

F-23

Arcos Dorados Holdings Inc.

Notes to the Consolidated Financial Statements

For the fiscal years ended December 31, 2010, 2009 and 2008

Amounts in thousands of US dollars, except for share data and as otherwise indicated

12. Derivative instruments (continued)

Additional disclosures (continued)

The loss recognized in income is recorded as an adjustment to food and paper.


Derivatives Not Designated as Hedging Instruments	Gain (Loss) Recognized in Income on Derivative
Cross-currency interest rate swaps	$	(31,090	)
Mirror swaps		8,212
Bond swaps		(9,608	)
Fordwards		(323	)

Total	$	(32,809	)

The following tables present the pretax amounts affecting income and other comprehensive income for the fiscal year ended December 31, 2009 for each type of derivative relationship:


Derivatives in Cash Flow Hedging Relationships	Gain (Loss) Recognized in Accumulated OCI on Derivative (Effective Portion)		Gain (Loss) Reclassified from Accumulated OCI into Income (Effective Portion)			Gain (Loss) Recognized in Income on Derivative (Amount Excluded from Effectiveness Testing and Ineffective Portion)
Interest rate swap		—		(4,591	)		—
Forward contracts		232		—			—

Total	$	232	$	(4,591	)	$	—

The gain (loss) recognized in income is recorded as an adjustment to interest expense.


Derivatives Not Designated as Hedging Instruments	Gain (Loss) Recognized in Income on Derivative
Cross-currency interest rate swaps	$	(37,327	)
Mirror swaps		(881	)
Bond swaps		(1,727	)

Total	$	(39,935	)

The following tables present the pretax amounts affecting income and other comprehensive income for the fiscal year ended December 31, 2008 for each type of derivative relationship:


Derivatives in Cash Flow Hedging Relationships	Gain (Loss) Recognized in Accumulated OCI on Derivative (Effective Portion)			Gain (Loss) Reclassified from Accumulated OCI into Income (Effective Portion)		Gain (Loss) Recognized in Income on Derivative (Amount Excluded from Effectiveness Testing and Ineffective Portion)
Interest rate swap		(3,463	)		8		—

Total	$	(3,463	)	$	8	$	—

F-24

Arcos Dorados Holdings Inc.

Notes to the Consolidated Financial Statements

For the fiscal years ended December 31, 2010, 2009 and 2008

Amounts in thousands of US dollars, except for share data and as otherwise indicated

12. Derivative instruments (continued)

Additional disclosures (continued)

The gain (loss) reclassified from accumulated OCI into income is recorded as an adjustment to interest expense.


Derivatives Not Designated as Hedging Instruments	Gain (Loss) Recognized in Income on Derivative
Cross-currency interest rate swaps		(2,620	)

Total	$	(2,620	)

13. Operating lease agreements

At December 31, 2010, the Company was the lessee at 1,754 locations through ground leases (the Company leases the land and the Company or franchisee owns the building) and through improved leases (the Company leases land and buildings). Lease terms for most restaurants vary between 10 and 20 years and, in many cases, provide for rent escalations and renewal options, with certain leases providing purchase options. Escalations terms vary by reporting unit, with examples including fixed-rent escalations, escalations based on an inflation index, and fair value adjustments. The timing of these escalations generally ranges from annually to every five years. According to rental terms, the Company pays a monthly rental expense based on the greater of a fixed rent or a certain percentage of the Company’s gross sales. For most locations, the Company is obligated for the related occupancy costs including property taxes, insurance and maintenance. However, for franchised sites, the Company requires the franchisees to pay these costs. In addition, the Company is the lessee under non-cancelable leases covering certain offices and warehouses.

In March 2010, the Company entered into an aircraft operating lease agreement for a term of 8 years, which provides for quarterly payments of $690. The agreement includes a purchase option at the end of the lease term at fair market value and also an early purchase option at a fixed amount of $26,685 at maturity of the 24th quarterly payment. The Company was required to make a cash deposit of $5,325 as collateral for the obligations assumed under this agreement.

At December 31, 2010, future minimum payments required under existing operating leases with initial terms of one year or more are:


	Restaurants		Others		Total
2011		100,523		5,445		105,968
2012		86,740		5,176		91,916
2013		80,561		5,193		85,754
2014		73,394		5,140		78,534
2015		63,671		5,132		68,803
Thereafter		270,641		16,572		287,213

Total minimum payments	$	675,530	$	42,658	$	718,188

F-25

Arcos Dorados Holdings Inc.

Notes to the Consolidated Financial Statements

For the fiscal years ended December 31, 2010, 2009 and 2008

Amounts in thousands of US dollars, except for share data and as otherwise indicated

13. Operating lease agreements (continued)

The following table provides detail of rent expense for fiscal year 2010, 2009 and 2008:


	2010		2009		2008
Company-operated restaurants(i)	$	100,986	$	88,579	$	83,545
Franchised restaurants(ii)		34,172		33,592		34,065

Total rent expense	$	135,158	$	122,171	$	117,610

(i)	Included within the caption “Occupancy and other operating expenses” in the consolidated statement of income.

(ii)	Included within the caption “Franchised restaurants – occupancy expenses” in the consolidated statements of income.

The following table provides a breakdown detail of rent expense between minimum and contingent rentals for fiscal year 2010, 2009 and 2008:


	2010		2009		2008
Minimum rentals	$	98,307	$	82,650	$	80,809
Contingent rentals based on sales		36,851		39,521		36,801

Total rent expense	$	135,158	$	122,171	$	117,610

14. Franchise arrangements

Individual franchise arrangements generally include a lease and a license and provide for payment of initial fees as well as continuing rent and service fees (royalties) to the Company based upon a percentage of sales with minimum rent payments. The Company’s franchisees are granted the right to operate a restaurant using the McDonald’s system and, in most cases, the use of a restaurant facility, generally for a period of 20 years. Franchisees pay related occupancy costs including property taxes, insurance and maintenance. Pursuant to the MFAs, the Company pays initial fees and continuing service fees for franchised restaurants to McDonald’s Corporation. Therefore, the margin for franchised restaurants is primarily comprised of rental income net of occupancy expenses (depreciation for owned property and equipment and/or rental expense for leased properties).

Revenues from franchised restaurants for fiscal years 2010, 2009 and 2008 consisted of:


	2010		2009		2008
Rent	$	122,448	$	127,896	$	124,886
Initial fees(i)		660		419		512
Royalty fees(ii)		544		506		547

Total	$	123,652	$	128,821	$	125,945

(i)	Disclosed net of initial fees paid to McDonald’s Corporation for $595, $370 and $583 in 2010, 2009 and 2008, respectively.

(ii)	Disclosed net of royalties fees paid to McDonald’s Corporation for $49,562, $48,524 and $50,049 in 2010, 2009 and 2008, respectively.

F-26

Arcos Dorados Holdings Inc.

Notes to the Consolidated Financial Statements

For the fiscal years ended December 31, 2010, 2009 and 2008

Amounts in thousands of US dollars, except for share data and as otherwise indicated

14. Franchise arrangements (continued)

At December 31, 2010, future minimum rent payments due to the Company under existing franchised agreements are:


	Owned sites		Leased sites		Total
2011	$	6,869	$	25,386	$	32,255
2012		6,774		22,959		29,733
2013		6,741		21,929		28,670
2014		6,654		19,285		25,939
2015		6,874		18,043		24,917
Thereafter		68,144		85,070		153,214

Total	$	102,056	$	192,672	$	294,728

15. Income taxes

The Company’s operations are conducted by its foreign subsidiaries in Latin America. The foreign subsidiaries are incorporated under the laws of their respective countries and as such the Company is taxed in such foreign countries.

Statutory tax rates in the countries in which the Company operates for fiscal years 2010, 2009 and 2008 were as follows:


	2010			2009			2008
Puerto Rico		39	%		39	%		39	%
Argentina, Martinique, French Guyana, Guadeloupe, St. Croix, St. Thomas, Aruba and Curacao		35	%		35	%		35	%
Brazil and Venezuela		34	%		34	%		34	%
Colombia		33	%		33	%		33	%
Costa Rica and Peru		30	%		30	%		30	%
Panamá		27.5	%		30	%		30	%
Mexico		30	%		28	%		28	%
Uruguay and Ecuador		25	%		25	%		25	%
Chile		17	%		17	%		17	%

Income tax expense for fiscal years 2010, 2009 and 2008 consisted of the following:


	2010			2009			2008
Current income tax expense	$	64,551		$	68,539		$	63,284
Deferred income tax benefit		(61,101	)		(49,830	)		(51,217	)

Income tax expense	$	3,450		$	18,709		$	12,067

F-27

Arcos Dorados Holdings Inc.

Notes to the Consolidated Financial Statements

For the fiscal years ended December 31, 2010, 2009 and 2008

Amounts in thousands of US dollars, except for share data and as otherwise indicated

15. Income taxes (continued)

Income tax expense for fiscal years 2010, 2009 and 2008 differed from the amounts computed by applying the Company’s weighted-average statutory income tax rate to pre-tax income as a result of the following:


	2010			2009			2008
Pre-tax income	$	109,742		$	99,063		$	116,484
Weighted-average statutory income tax rate(i)		36.87	%		38.18	%		37.74	%

Income tax expense at weighted-average statutory tax rate on pre-tax income		40,462			37,822			43,961
Permanent differences :
Change in valuation allowance(ii)		(91,416	)		(29,971	)		(42,529	)
Non-deductible expenses		31,575			8,224			8,238
Withholding income taxes on intercompany transactions		8,233			—			—
Loss on amnesty program		8,681			—			—
Others		5,915			2,634			2,397

Income tax expense	$	3,450		$	18,709		$	12,067

(i)	Weighted-average statutory income tax rate is calculated based on the lump-sum of the income before taxes by country multiplied by the prevailing statutory income tax rate, divided by the consolidated income before taxes.

(ii)	After reducing acquired intangible assets as required by ASC.

The tax effects of temporary differences that give rise to the Company’s deferred tax assets and liabilities at December 31, 2010 and 2009 are presented below:


	2010			2009
Tax loss carryforwards(i)		314,057			330,361
Purchase price allocation adjustment		131,624			135,045
Other deferred tax assets(ii)		63,514			62,747
Property and equipment—difference in depreciation rates		(69,838	)		(73,703	)
Other deferred tax liabilities(iii)		(24,205	)		(591	)
Valuation allowance(iv)		(220,182	)		(298,776	)

Net deferred tax asset	$	194,970		$	155,083

F-28

Arcos Dorados Holdings Inc.

Notes to the Consolidated Financial Statements

For the fiscal years ended December 31, 2010, 2009 and 2008

Amounts in thousands of US dollars, except for share data and as otherwise indicated

15. Income taxes (continued)

(i)	As of December 31, 2010, the Company and its subsidiaries had accumulated operating tax loss carryforwards of approximately $1,088,851. These operating tax loss carryforwards expire as follows:


	2010
Fiscal year 2011		5,066
Fiscal year 2012		5,227
Fiscal year 2013		34,029
Fiscal year 2014		11,751
Fiscal year 2015		14,297
Thereafter		375,843
Without expiration terms		642,638

	$	1,088,851

(ii)	Primarily related to property and equipment, allowances and provisions.

(iii)

Primarily related to intangible assets and foreign currency exchange gains.

(iv)	In assessing the realizability of deferred income tax assets, the Company considers whether it is more likely than not that some portion or all of the deferred income tax assets will not be realized.

Balance sheet classification of deferred taxes at December 31, 2010 and 2009 is as follows: current deferred tax assets of $10,584 in 2010 and $10,070 in 2009; non-current deferred tax assets of $190,764 in 2010 and $145,782 in 2009; and non-current deferred tax liabilities of $6,378 in 2010 and $769 in 2009.

In November 2010, the Company completed the tax reorganization of its companies in Brazil that was commenced on December 29, 2008. The reorganization resulted in contribution of the shares of the Brazilian operating entities to a new holding company and generated a tax deductible goodwill amounting to $310 million. The goodwill is deductible in Brazil for income tax purposes through its amortization in a period of 60 months starting in December 2010 following the merger of the Brazilian entities. The Company did not recognize any deferred tax asset for this benefit following the exemption in ASC 740-10-25-3.e. applicable to intercompany transfers. Therefore, the tax benefit is being recognized when realized on the tax return and applied to reduce income tax expense

16. Share-based compensation

ADBV Long-Term Incentive Plan

During 2008, the Company implemented a long-term incentive plan to reward employees for increases in the fair value of the Company’s stock subsequent to the date of grant. In accordance with this plan, each year the Company grants units (called “CADs”) to certain employees, pursuant to which the employees are entitled to receive, when vested, a cash payment equal to the appreciation in fair value over the base value. The awards vest over a requisite service period of five years as follows: 40% at the second anniversary of the date of grant and 20% at each of the following three years. The exercise right is cumulative and, once such right becomes

F-29

Arcos Dorados Holdings Inc.

Notes to the Consolidated Financial Statements

For the fiscal years ended December 31, 2010, 2009 and 2008

Amounts in thousands of US dollars, except for share data and as otherwise indicated

16. Share-based compensation (continued)

ADBV Long-Term Incentive Plan (continued)

exercisable, it may be exercised in whole or in part during quarterly window periods until the date of termination, which occurs at the fifth anniversary of the date of grant. Exercisable outstanding awards at the date of termination will be automatically settled by the Company. The maximum amount authorized under this plan equals 4% of the Company’s fair market value.

The Company recognizes compensation expense related to these benefits on a straight-line basis over the requisite service period for each separately vesting portion of the award as if the award was, in substance, multiple awards. The accrued liability is remeasured at the end of each reporting period until settlement. Effective December 31, 2010 the Company changed the method of measuring its liability awards from the intrinsic value method (i.e. difference between the current fair value and the base value) to a fair value method using the Black & Scholes model. The current fair value for purposes of determining the intrinsic was based on a formula determined and approved by the Company’s Board of Directors. At December 31, 2010 the Company considered the estimated initial public offering price per class A share in determining the fair value of the awards because in 2011 the Company’s Board of Directors decided that on a going forward basis the fair value would be based on that price instead of the formula that had previously been used to value such awards. The following additional variables and assumptions have been used by the Company for purposes of measuring its liability awards at December 31, 2010:


Expected volatility(i)	28.5	%
Dividend yield	1.5	%
Risk-free interest rate	3.9	%
Expected term	last vesting date

(i)	Based on historical 1-year implied volatility of Latin American comparable companies calculated as the standard deviation on the logarithms of daily price returns, annualized by the squared root of the number of days.

F-30

Arcos Dorados Holdings Inc.

Notes to the Consolidated Financial Statements

For the fiscal years ended December 31, 2010, 2009 and 2008

Amounts in thousands of US dollars, except for share data and as otherwise indicated

16. Share-based compensation (continued)

ADBV Long-Term Incentive Plan (continued)

The following table summarizes the activity under the plan for fiscal years 2010, 2009 and 2008:


	Units			Weighted- average base value		Weighted- average fair value
Outstanding at December 31, 2007		—			—
Granted(i)		902,134			8.21
Exercised		—			—
Forfeited		—			—

Outstanding at December 31, 2008		902,134			8.21
Granted		338,609			17.32
Exercised		—			—
Forfeited		(52,764	)		8.54

Outstanding at December 31, 2009		1,187,979			10.79
Granted(ii)		684,009			11.76
Exercised(iii)		(13,607	)		8.54
Forfeited		(91,174	)		12.58

Outstanding at December 31, 2010		1,767,207			11.09		21.88

Exercisable at December 31, 2010		351,331			8.03		24.63

(i)	Comprised of 707,773 units with a base value of $8.54 and 194,361 units with a base value of $7.00. The vesting period of the latter units starts in 2007.

(ii)	Comprised of 551,565 units with a base value of $14.59 and 132,444 units with a base value of $nil.

(iii)

The total amount paid for these exercises was $97.

At December 31, 2010, the Company’s accrued liability totals $23,914, of which $8,655 relate to vested awards and $15,259 to non-vested awards. Compensation expense not yet recognized for non-vested awards totals $14,753 and is expected to be recognized in a weighted-average period of 3.7 years.

Compensation expense for fiscal years 2010, 2009 and 2008 amounted to $20,159, $913 and $2,842, respectively. Compensation expense is included within “General and administrative expenses” in the consolidated statement of income. Compensation expense for fiscal year 2010 includes an incremental expense amounting to $15,576 related to the effect of replacing the formula by the estimated initial public offering market price in determining the current value of the award.

Award Right granted to the Chief Executive Officer

In addition, during 2008 the Company granted to the Chief Executive Officer an award right pursuant to which he will be entitled to receive from the Company a lump sum amount of cash equal to 1% of the fair market value of the Company upon the occurrence of a Liquidity Event (an “Initial Public Offering” or “Change of

F-31

Arcos Dorados Holdings Inc.

Notes to the Consolidated Financial Statements

For the fiscal years ended December 31, 2010, 2009 and 2008

Amounts in thousands of US dollars, except for share data and as otherwise indicated

16. Share-based compensation (continued)

Award Right granted to the Chief Executive Officer (continued)

Control” as defined in the agreement). The award right is subject to a four-year graduated vesting period (25% per year) of continued service as from August 3, 2007.

The Company recognizes compensation expense related to this benefit on a straight-line basis over the requisite service period for each separately vesting portion of the award as if the award was, in substance, multiple awards. The accrued liability is remeasured at the end of each reporting period until settlement, based on the estimated fair value of the Company. The fair value of the Company was estimated based on a formula determined and approved by the Company’s Board of Directors. Effective December 31, 2010 the Company replaced the formula by the estimated IPO price for purposes of measuring the liability award.

At December 31, 2010, the estimated fair market value of the Company amounts to $3,300 million. Therefore, at December 31, 2010 the Company’s accrued liability totaled $31,786, of which $24,750 relate to the vested portion and $7,036 to the non-vested portion of the award. Compensation expense not yet recognized for the non-vested portion of the award totals $1,214 and will be recognized in 2011.

Compensation expense for fiscal year 2010, 2009 and 2008 amounted to $16,392, $4,334 and $11,060, respectively. Compensation expense is included within “Other operating expenses, net” in the consolidated statement of income.

17. Commitments and contingencies

Commitments

The MFAs require the Company and its MF subsidiaries, among other obligations:

(i)

to pay monthly royalties commencing at a rate of approximately 5% of gross sales of the restaurants, substantially consistent with market;

(ii)

to agree with McDonald’s on a restaurant opening plan and a reinvestment plan for each three-year period and pay an initial franchise fee for each new restaurant opened; for the three-year period commencing on January 1, 2011 the Company must reinvest an aggregate of at least $60 million per year; and open no less than 250 new restaurants;

(iii)

to commit to funding a specified Strategic Marketing Plan; and

(iv)

to own (or lease) directly or indirectly, the fee simple interest in all real property on which any franchised restaurant is located.

In addition, the Company maintains (a) a standby letter of credit with an aggregate drawing amount of $65 million, and (b) a cash deposit of $15 million in favor of McDonald’s Corporation as collateral for the obligations assumed under the MFAs. The letter of credit can be drawn and/or the cash deposit be used if certain events occur, including the failure to pay royalties. No amounts have been drawn or used at the date of issuance of these Consolidated Financial Statements.

F-32

Arcos Dorados Holdings Inc.

Notes to the Consolidated Financial Statements

For the fiscal years ended December 31, 2010, 2009 and 2008

Amounts in thousands of US dollars, except for share data and as otherwise indicated

17. Commitments and contingencies (continued)

Provision for contingencies

The Company has certain contingent liabilities with respect to existing or potential claims, lawsuits and other proceedings, including those involving labor, tax and other matters. At December 31, 2010 the Company maintains a provision for contingencies amounting to $91,720 ($105,661 at December 31, 2009), which is disclosed net of judicial deposits amounting to $27,373 ($18,730 at December 31, 2009) that the Company was required to make in connection with the proceedings. As December 31, 2010, the net amount of $64,347 is disclosed as follows: $407 as a current liability within “Accrued payroll and other liabilities” and $63,940 as a non-current liability.

Breakdown of the provision for contingencies as of December 31, 2010 and 2009 is as follows:


	2010			2009
Tax contingencies in Brazil(i)		50,648			74,091
Labor contingencies in Brazil(ii)		33,456			26,663
Other		7,616			4,907

Subtotal		91,720			105,661
Judicial deposits		(27,373	)		(18,730	)

Provision for contingencies	$	64,347		$	86,931

(i)	In 2010, mainly related to VAT special treatment for restaurants in Rio de Janeiro. In 2009, mainly related to taxes on revenues, social security taxes, deduction of royalties and social contribution tax (most of that claims were included in the amnesty program described below).

(ii)	Mainly related to dismissals in the normal course of business.

The provision for contingencies includes $40,378 related to Brazilian claims ($65,112 at December 31, 2009). Pursuant to Section 9.3 of the Stock Purchase Agreement, McDonald’s Corporation has indemnified the Company for these claims as well as for specific and limited claims arising from the Puerto Rican franchisee lawsuit. As a result, the Company has recorded a non-current asset in respect of McDonald’s Corporation’s indemnity in the consolidated balance sheet.

Regarding contingencies in Brazil, at the end of fiscal year 2010 the Company decided to take advantage of law No. 11941 that amended the federal tax legislation to permit the entering into amnesty plans to settle existing contingencies in installments with benefits derived from the waiver of fines and a portion of accrued interests. The law also allows the use of tax loss carryforwards to settle the portion of interest not waived. The Company agreed with McDonald´s Corporation to include in the amnesty plan most of the contingencies indemnified by them using tax loss carryforwards to settle the interests and receive a cash payment equal to the principal plus 50% of the interests. As a result of this agreement, the Company recorded a loss amounting to $22,476 within “Non-operating expenses” in the consolidated statement of income. The Company recorded an additional loss amounting to $3,056 within “Other operating expenses, net” in connection with contingencies not indemnified by McDonald´s Corporation. The accounting for the amnesty program included a reduction of the provision for contingencies for $76,954, an increase in “Accrued payoll and other liabilities” for the portion of cash to be paid to the fiscal authorities for $33,457, a reduction in the receivable with McDonald’s Corporation for $27,389, and a reduction of deferred tax assets related to tax loss carryforwards for $42,162.

F-33

Arcos Dorados Holdings Inc.

Notes to the Consolidated Financial Statements

For the fiscal years ended December 31, 2010, 2009 and 2008

Amounts in thousands of US dollars, except for share data and as otherwise indicated

17. Commitments and contingencies (continued)

Provision for contingencies (continued)

In January 2007, several Puerto Rican franchisees filed a lawsuit against McDonald’s Corporation and certain subsidiaries which the Company purchased during the acquisition of the LatAm business. The lawsuit originally sought declaratory judgment and damages in the amount of $11 million plus plaintiffs’ attorney fees. In January 2008, the plaintiffs filed an amended complaint that increased the amount of damages sought to $66.7 million plus plaintiffs’ attorney fees. The complaint, as amended, requests that the court declare that the plaintiffs’ respective franchise agreements and contractual relationships with McDonald’s Corporation, which agreements and relationships were assigned or otherwise transferred to the Company as part of the Acquisition of the LatAm business, are governed by the Dealers’ Act of Puerto Rico, or “Law 75”, a Puerto Rican law that limits the grounds under which a principal may refuse to renew or terminate a distribution contract. The complaint also seeks preliminary and permanent injunctions to restrict the Company from declining to renew the plaintiffs’ agreements except for just cause, and to prohibit the Company from opening restaurants or kiosks within a three-mile radius of a franchisee’s restaurant. In September 2008, the Company filed a counter-suit requesting the termination of the franchise agreements with these franchisees due to several material breaches. On December 23, 2010, the commissioner assigned by the Court of First Instance to this case issued a resolution holding that Law 75 applies to the parties’ commercial relationship. The Court of First Instance, however, has not determined whether it will adopt this resolution. The Company is currently in the discovery phase of the litigation. No provision has been recorded regarding this lawsuit since a negative resolution has a low probability of occurrence. In October and November of 2010, two bills were introduced in Puerto Rico Legislature that seek to regulate franchise agreements. Among other goals, these bills (like Law 75 in the case of distribution agreements) limit the grounds under which a franchisor may terminate or refuse to renew a franchise agreement. The bills are in the early stages of consideration by the Legislature and no hearings or votes have been scheduled.

18. Disclosures about fair value of financial instruments

As defined in ASC Topic 820 Fair Value Measurement and Disclosures, fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (exit price). The transaction is based on a hypothetical transaction in the principal or most advantageous market considered from the perspective of the market participant that holds the asset or owes the liability. The valuation techniques that can be used under this guidance are the market approach, income approach or cost approach. The market approach uses prices and other information for market transactions involving identical or comparable assets or liabilities, such as matrix pricing. The income approach uses valuation techniques to convert future amounts to a single discounted present amount based on current market conditions about those future amounts, such as present value techniques, option pricing models (e.g. Black-Scholes model) and binomial models (e.g. Monte-Carlo model). The cost approach is based on current replacement cost to replace an asset.

The Company utilizes market data or assumptions that market participants who are independent, knowledgeable and willing and able to transact would use in pricing the asset or liability, including assumptions about risk and the risks inherent in the inputs to the valuation technique. These inputs can be readily observable, market corroborated or generally unobservable. The Company attempts to utilize valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs. The Company is able to classify fair value balances based on the observance of those inputs. The guidance establishes a formal fair value

F-34

Arcos Dorados Holdings Inc.

Notes to the Consolidated Financial Statements

For the fiscal years ended December 31, 2010, 2009 and 2008

Amounts in thousands of US dollars, except for share data and as otherwise indicated

18. Disclosures about fair value of financial instruments (continued)

hierarchy based on the inputs used to measure fair value. The hierarchy gives the highest priority to level 1 measurements and the lowest priority to level 3 measurements, and accordingly, level 1 measurement should be used whenever possible.

The three levels of the fair value hierarchy as defined by the guidance are as follows:

Level 1 : Valuations utilizing quoted, unadjusted prices for identical assets or liabilities in active markets that the Company has the ability to access. This is the most reliable evidence of fair value and does not require a significant degree of judgment. Examples include exchange-traded derivatives and listed equities that are actively traded.

Level 2 : Valuations utilizing quoted prices in markets that are not considered to be active or financial instruments for which all significant inputs are observable, either directly or indirectly for substantially the full term of the asset or liability. Financial instruments that are valued using models or other valuation methodologies are included. Models used should primarily be industry-standard models that consider various assumptions and economic measures, such as interest rates, yield curves, time value, volatilities, contract terms, current market prices, credit risk or other market-corroborated inputs. Examples include most over-the-counter derivatives (non-exchange traded), physical commodities, most structured notes and municipal and corporate bonds.

Level 3 : Valuations utilizing significant unobservable inputs provides the least objective evidence of fair value and requires a significant degree of judgment. Inputs may be used with internally developed methodologies and should reflect an entity’s assumptions using the best information available about the assumptions that market participants would use in pricing an asset or liability. Examples include certain corporate loans, real-estate and private equity investments and long-dated or complex over-the-counter derivatives.

Depending on the particular asset or liability, input availability can vary depending on factors such as product type, longevity of a product in the market and other particular transaction conditions. In some cases, certain inputs used to measure fair value may be categorized into different levels of the fair value hierarchy. For disclosure purposes under this guidance, the lowest level that contains significant inputs used in valuation should be chosen. Pursuant to ASC 820-10-50, the Company has classified its assets and liabilities into these levels depending upon the data relied on to determine the fair values. The fair values of the Company’s derivatives are valued based upon quotes obtained from counterparties to the agreements and are designated as Level 2.

F-35

Arcos Dorados Holdings Inc.

Notes to the Consolidated Financial Statements

For the fiscal years ended December 31, 2010, 2009 and 2008

Amounts in thousands of US dollars, except for share data and as otherwise indicated

18. Disclosures about fair value of financial instruments (continued)

The following fair value hierarchy table presents information about the Company’s assets and liabilities measured at fair value on a recurring basis as of December 31, 2010:


	Quoted Prices in Active Markets For Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)			Significant Unobservable Inputs (Level 3)		Balance as of December 31, 2010
Assets
Cash equivalents		133,293		—			—	$	133,293

Total Assets		133,293		—			—	$	133,293

Liabilities
Cross-currency interest rate		—		(90,513	)		—	$	(90,513	)
Mirror swaps		—		3,974			—		3,974
Bond swaps		—		(7,807	)		—		(7,807	)
Forward contracts		—		(953	)		—		(953	)
Long-term incentive plan		—		(23,914	)		—		(23,914	)
Award granted to the CEO		—		(31,786	)		—		(31,786	)

Total Liability		—		(150,999	)		—	$	(150,999	)

The derivative contracts were measured based on quotes from the Company’s counterparties. Such quotes have been derived using models pricing or discounted cash analysis that incorporate observable market parameters for all significant inputs such as interest yield curves, options volatilities and currency rates and that were observable for substantially the full term of the derivative contracts.

Certain financial assets and liabilities not measured at fair value

At December 31, 2010, the fair value of the Company’s short-term and long-term debt was estimated at $518,193, compared to a carrying amount of $469,370. This fair value was estimated using various pricing models or discounted cash flow analysis that incorporated quoted market prices, and is similar to Level 2 within the valuation hierarchy. The carrying amount for both cash and equivalents and notes receivable approximates fair value.

Non-financial assets and liabilities measured at fair value on a nonrecurring basis

Certain assets and liabilities are measured at fair value on a nonrecurring basis; that is, the assets and liabilities are not measured at fair value on an ongoing basis but are subject to fair value adjustments in certain circumstances (e.g., when there is evidence of impairment). At December 31, 2010, no material fair value adjustments or fair value measurements were required for non-financial assets or liabilities, except for those required in connection with the impairment of long-lived assets recognized in México. Refer to Note 3 for more details, including inputs and valuation techniques used to measure fair value of these non-financial assets.

F-36

Arcos Dorados Holdings Inc.

Notes to the Consolidated Financial Statements

For the fiscal years ended December 31, 2010, 2009 and 2008

Amounts in thousands of US dollars, except for share data and as otherwise indicated

19. Certain risks and concentrations

The Company’s financial instruments that are exposed to concentration of credit risk primarily consist of cash and cash equivalents and accounts and notes receivables. Cash and cash equivalents are deposited with various creditworthy financial institutions, and therefore the Company believes it is not exposed to any significant credit risk related to cash and cash equivalents. Concentrations of credit risk with respect to accounts and notes receivables are generally limited due to the large number of franchisees comprising the Company’s franchise base.

All the Company’s operations are concentrated in Latin America and the Caribbean. As a result, the Company’s financial condition and results of operations depend, to a significant extent, on macroeconomic and political conditions prevailing in the region. See Note 21 for additional information pertaining to the Company’s Venezuelan operations.

20. Segment and geographic information

The Company is required to report information about operating segments in annual financial statements and interim financial reports issued to shareholders in accordance with ASC Topic 280. Operating segments are components of a company about which separate financial information is available that is regularly evaluated by the chief operating decision maker(s) in deciding how to allocate resources and assess performance. ASC Topic 280 also requires disclosures about the Company’s products and services, geographical areas and major customers.

As discussed in Note 1, the Company through its wholly-owned and majority-owned subsidiaries operates and franchises McDonald’s restaurants in the food service industry. The Company has determined that its reportable segments are those that are based on the Company’s method of internal reporting. The Company manages its business as distinct geographic segments and its operations are divided into four geographical divisions as follows: Brazil; the Caribbean division, consisting of Aruba, Curacao, French Guyana, Guadeloupe, Martinique, Puerto Rico, and the U.S. Virgin Islands of St. Croix and St. Thomas; the North Latin America division (“NOLAD”), consisting of Costa Rica, Mexico and Panama; and the South Latin America division (“SLAD”), consisting of Argentina, Chile, Colombia, Ecuador, Peru, Uruguay and Venezuela. The accounting policies of the segments are the same as those described in Note 3.

F-37

Arcos Dorados Holdings Inc.

Notes to the Consolidated Financial Statements

For the fiscal years ended December 31, 2010, 2009 and 2008

Amounts in thousands of US dollars, except for share data and as otherwise indicated

20. Segment and geographic information (continued)

The following table presents information about profit or loss and assets for each reportable segment:


	For the fiscal year ended December 31,
	2010			2009			2008
Revenues:
Brazil	$	1,595,571		$	1,200,742		$	1,237,208
Caribbean division		260,617			244,774			231,734
NOLAD		305,017			240,333			232,083
SLAD		856,913			979,627			905,817

Total revenues	$	3,018,118		$	2,665,476		$	2,606,842

Adjusted EBITDA:
Brazil	$	250,606		$	160,037		$	144,965
Caribbean division		23,556			21,167			22,013
NOLAD		15,400			3,918			15,961
SLAD		83,998			129,889			138,683

Total reportable segments		373,560			315,011			321,622
Corporate and others (i)		(74,446	)		(48,628	)		(33,648	)

Total adjusted EBITDA	$	299,114		$	266,383		$	287,974

Adjusted EBITDA reconciliation:

Total Adjusted EBITDA	$	299,114		$	266,383		$	287,974

(Less) Plus items excluded from computation that affect operating income:
Depreciation and amortization		(60,585	)		(54,169	)		(49,496	)
Compensation expense related to the award rights granted to our CEO		(16,392	)		(4,334	)		(11,060	)
Gains from sale of property and equipment		5,299			8,465			4,592
Write-offs of property and equipment		(2,635	)		(9,434	)		(5,144	)
Impairment of long-lived assets		(4,668	)		—			—
Contract termination losses		—			—			(3,606	)
Impairment of goodwill		—			(102	)		(1,066	)
Incremental compensation expense related to the long-term incentive plan		(15,576	)		—			—
Operating income		204,557			206,809			222,194

Less:
Net interest expense		(41,613	)		(52,473	)		(26,272	)
Loss from derivative instruments		(32,809	)		(39,935	)		(2,620	)
Foreign currency exchange results		3,237			(14,098	)		(74,884	)
Other non-operating expenses, net		(23,630	)		(1,240	)		(1,934	)
Income tax expense		(3,450	)		(18,709	)		(12,067	)
Net income attributable to non-controlling interests		(271	)		(332	)		(1,375	)

Net income attributable to Arcos Dorados Holdings Inc.	$	106,021		$	80,022		$	103,042

F-38

Arcos Dorados Holdings Inc.

Notes to the Consolidated Financial Statements

For the fiscal years ended December 31, 2010, 2009 and 2008

Amounts in thousands of US dollars, except for share data and as otherwise indicated

20. Segment and geographic information (continued)


	For the fiscal year ended December 31,
	2010			2009			2008
Depreciation and amortization:
Brazil	$	43,927		$	30,944		$	35,503
Caribbean division		11,733			10,658			9,889
NOLAD		23,197			20,471			20,921
SLAD		20,343			23,433			21,026

Total reportable segments		99,200			85,506			87,339
Corporate and others(i)		6,048			5,132			2,061
Purchase price allocation(ii)		(44,663	)		(36,469	)		(39,904	)

Total depreciation and amortization	$	60,585		$	54,169		$	49,496

Property and equipment expenditures:
Brazil	$	70,017		$	29,065		$	45,603
Caribbean division		10,951			7,827			13,288
NOLAD		36,832			18,589			27,010
SLAD		53,602			31,342			57,061
Others		4,267			3,282			5,932

Total property and equipment expenditures	$	175,669		$	90,105		$	148,894


	As of December 31,
	2010			2009
Total assets:
Brazil	$	1,003,970		$	908,555
Caribbean division		229,863			232,130
NOLAD		390,812			362,933
SLAD		405,641			335,617

Total reportable segments		2,030,286			1,839,235
Corporate and others(i)		222,412			206,205
Purchase price allocation(ii)		(468,432	)		(562,492	)

Total assets	$	1,784,266		$	1,482,948

(i)

Primarily relates to corporate general and administrative expenses and assets as well as the results and assets of the Company’s operating distribution centers. Corporate general and administrative expenses consist of home office support costs in areas such as facilities, finance, human resources, information technology, legal, marketing, restaurant operations, supply chain and training. Corporate assets primarily include corporate cash and cash equivalents and collateral deposits.

(ii)	Relates to the purchase price allocation adjustment made at corporate level, which reduces the total assets and the corresponding depreciation and amortization.

The Company’s revenues are derived from two sources: sales by Company-operated restaurants and revenues from restaurants operated by franchisees. See Note 3 for more details. All of the Company’s revenues are derived from foreign operations.

F-39

Arcos Dorados Holdings Inc.

Notes to the Consolidated Financial Statements

For the fiscal years ended December 31, 2010, 2009 and 2008

Amounts in thousands of US dollars, except for share data and as otherwise indicated

20. Segment and geographic information (continued)

Long-lived assets consisting of property and equipment totaled $911,730 and $785,862 at December 31, 2010 and 2009, respectively. All of the Company’s long-lived assets are related to foreign operations.

21. Venezuelan operations

The Company conducts business in Venezuela where currency restrictions exist, limiting the Company’s ability to immediately access cash through repatriations at the government’s official exchange rate. The Company’s access to these funds remains available for use within this jurisdiction and is not restricted. The official exchange rate is established by the Central Bank of Venezuela and the Venezuelan Ministry of Finance and the acquisition of foreign currency at the official exchange rate by Venezuelan companies to pay foreign debt or dividends is subject to a registration and approval process by the relevant Venezuelan authorities. Such approvals had become less forthcoming over the time, resulting in a parallel market where entities could exchange Venezuelan bolívares fuertes into U.S. dollars using a bond-based exchange process under which bonds traded in Venezuela were purchased in Venezuelan bolívares fuertes and then immediately exchanged outside Venezuela for bonds denominated in U.S. dollars at a specified, and less favorable, parallel exchange market rate.

During 2009 the Company’s access to the official exchange rate for purposes of paying imports was more limited than in 2008 as a result of an increase in restrictions and a more rigorous approval process. In addition, the Company was historically unable to access to the official exchange rate for royalty payments, being obliged to access to the parallel exchange market in order to honor its foreign debts and also to pay intercompany loans. In 2009 and 2008, the Company exchanged bonds for $37.1 million and $38.0 million, respectively, and recorded a loss of $52.5 million and $28.5 million for each year, in connection with the settlement of intercompany loans.

As discussed in Note 3, the financial statements of the Company’s foreign subsidiaries are translated in accordance with guidance in ASC Topic 830, Foreign Currency Matters. Such guidance states that the rate applicable for purposes of dividend remittances shall be used to translate foreign currency financial statements, except when unusual circumstances exist. Prior to December 31, 2009, the Company had concluded that the existence of the parallel market in Venezuela did not constitute unusual circumstances which justified the use of an exchange rate other than the official exchange rate for purposes of foreign currency translation. Therefore, the official rate of 2.15 Venezuelan bolívares Fuertes per U.S. dollar was used to translate the operations of the Company’s Venezuelan subsidiaries for fiscal year 2009. As conditions in Venezuela evolved during 2009, the Company reassessed the appropriateness of use of the official exchange rate for translation purposes. As a result, effective December 31, 2009, the Company changed the translation rate from the official exchange rate of 2.15 Venezuelan bolívares fuertes per U.S. dollar at December 31, 2009 to the parallel exchange rate of 5.97 Venezuelan bolívares fuertes per U.S. dollar. This change resulted in a $76.4 million charge recorded in the cumulative translation adjustment component of “Accumulated other comprehensive loss” within shareholders’ equity. Had the Company reported results of its Venezuelan operations for fiscal year 2009 using the weighted average parallel exchange rate of 6.16 Venezuelan bolívares fuertes per U.S. dollar instead of the 2.15 official exchange rate, the Company’s revenues, operating income and net income would have been $298.4 million, $47.5 million and $2.0 million lower, respectively.

F-40

Arcos Dorados Holdings Inc.

Notes to the Consolidated Financial Statements

For the fiscal years ended December 31, 2010, 2009 and 2008

Amounts in thousands of US dollars, except for share data and as otherwise indicated

21. Venezuelan operations (continued)

On May 17, 2010, the Venezuelan Congress modified the Foreign Exchange Crime Act. The amendments, which result in a penalty for any security transactions not carried out through the Central Bank of Venezuela, were primarily designed to increase control of debt security transactions that were used to buy and sell foreign currency that resulted in the parallel rate. As a result of this reform, the parallel exchange market prevailing in Venezuela disappeared, leaving local brokers out of this market and leaving companies without alternatives for foreign currency trade other than those approved and conducted through the Central Bank. In June, 2010, the Central Bank introduced a newly regulated foreign currency exchange system (SITME), pursuant to which companies can acquire, with certain limits, U.S. dollars at an exchange rate to be established by the Central Bank. Most of the exchanges in SITME have been executed at the exchange rate of 5.30 Venezuelan bolívares fuertes per U.S. dollar.

Since the Company had access and used the parallel exchange market to acquire U.S. dollars, the Company used the parallel exchange rate to measure transactions denominated in local currency and convert them to the U.S. dollar functional currency during the period from January 1, 2010 through May 31, 2010. The last available quotation of the parallel exchange rate before the system was cancelled was 8.10 Venezuelan bolívares fuertes per U.S. dollar. Effective June 1, 2010 the Company started to use the new regulated rate of 5.30 Venezuelan bolívares fuertes per U.S. dollar to measure transactions denominated in local currency.

As of and for the year ended December 31, 2010, revenues, operating income and net income of the Venezuelan operations were $184,657, $18,699 and $5,069 respectively.

22. Shareholders’ equity

Authorized capital

At December 31, 2010, the Company was authorized to issue a maximum of 400,000 shares, consisting of 240,000 class A shares and 160,000 class B shares with a par value of $1,000 each.

On February 22, 2011, effective as of March 8, 2011, the Company increased the maximum number of shares it is authorized to issue to an unlimited number of shares of no par value each.

On March 16, 2011, the Company limited the maximum number of shares it is authorized to issue to 500,000,000, consisting of 420,000,000 Class A shares and 80,000,000 Class B shares of no par value each. For both classes of shares, the balance sheet reflects the new capital structure.

Issued and outstanding capital

At December 31, 2006, the Company had issued and outstanding 50,000 shares, with a total par value $50. Prior to the acquisition of the LatAm business, the Company increased the number of shares it is authorized to issue from 50,000 shares to an aggregate of 400,000 shares, par value $1,000 per share, canceling the then outstanding common shares. On August 3, 2007, the Company issued 234,000 class A shares and 156,000 class B shares, with a total par value $390,000, in exchange for $377,546. The proceeds from this issuance were used to finance the acquisition of the LatAm business.

On March 14, 2011, the Company’s Board of Directors approved a 620.21-for-1.00 stock split of the outstanding shares in order to reduce the unit price per share and improve its marketability in connection

F-41

Arcos Dorados Holdings Inc.

Notes to the Consolidated Financial Statements

For the fiscal years ended December 31, 2010, 2009 and 2008

Amounts in thousands of US dollars, except for share data and as otherwise indicated

22. Shareholders’ equity (continued)

with the initial public offering. As a result of the stock split, the Company distributed 241,492,966 additional shares to its existing shareholders on a pro-rata basis. After the stock split, the issued and outstanding shares increased to 241,882,966, consisting of 145,129,780 Class A shares and 96,753,186 Class B shares with no par value. Immediately after the stock split and effective as of March 16, 2011, the Company’s Board of Directors approved the redemption of 41,882,966 shares (25,129,780 Class A shares and 16,753,186 Class B shares) in connection with the split-off of the Axis business described in Note 26. As a result, at the date of reissuance of these financial statements, the Company has 200,000,000 shares issued and outstanding with no par value, consisting of 120,000,000 Class A shares and 80,000,000 Class B shares. For both classes of shares, the balance sheet and statement of shareholders’ equity reflect the stock split retrospectively for all periods presented.

Rights, privileges and obligations

Holders of Class A shares are entitled to one vote per share and holders of Class B shares are entitled to five votes per share. Except with respect to voting, the rights, privileges and obligations of the Class A shares and Class B shares are pari passu in all respects, including with respect to dividends and rights upon liquidation of the Company.

Distribution of dividends

The Company can only make distributions to the extent that immediately following the distribution, its assets exceed its liabilities and the Company is able to pay its debts as they become due. In addition, the senior notes impose certain restrictions on the distribution of dividends as described in Note 11.

On April 16, 2010, the Company declared a dividend distribution to its shareholders amounting to $40,000 payable in cash in four installments throughout the year: $20,000 on April 30, $6,700 on June 30, $6,700 on September 30, and $6,600 on December 31.

23. Earnings per share

The Company is only required to present basic earnings per share information due to its simple capital structure. There was no potential common stock outstanding during the periods presented.

The following table sets forth the computation of basic net income per share attributable to Arcos Dorados Holdings Inc. for all periods presented after giving retrospective effect to the stock split described in Note 22:


	For the fiscal year ended December 31,
	2010		2009		2008
Net income available to common shareholders	$	106,021	$	80,022	$	103,042
Weighted-average number of shares outstanding		241,882,966		241,882,966		241,882,966

Basic net income per common share attributable to Arcos Dorados Holdings Inc.	$	0.44	$	0.33	$	0.43

The Company does not report discontinued operations for any of the periods presented.

F-42

Arcos Dorados Holdings Inc.

Notes to the Consolidated Financial Statements

For the fiscal years ended December 31, 2010, 2009 and 2008

Amounts in thousands of US dollars, except for share data and as otherwise indicated

24. Related party transactions

As discussed in Note 17, as security for the performance of the Company’s obligations under the MFAs, the Company obtained an irrevocable standby letter of credit in favor of McDonald’s Corporation in an amount of $65 million, issued by Credit Suisse acting as issuing bank. Credit Suisse owns 49% of the general partner and is a limited partner of DLJ South American Partners, which is a shareholder of the Company. The Company believes that the terms of the transaction are consistent with those that could have been obtained in a comparable arm’s-length transaction with an unrelated party.

25. Valuation and qualifying accounts

The following table presents the information required by Rule 12-09 of Regulation S-X in regards to valuation and qualifying accounts for each of the periods presented:


Description	Balance at beginning of period		Additions– charged to expenses		Deductions			Translation			Balance at end of period
Year ended December 31, 2010:
Deducted from assets accounts:
Allowance for doubtful accounts	$	6,125	$	937	$	(2,636	)	$	368		$	4,794
Valuation allowance on deferred tax assets		298,776		—		(91,416	)(i)		12,822			220,182
Reported as liabilities:
Provision for contingencies		86,931		67,074		(89,487	)(ii)		(171	)		64,347

Total	$	391,832	$	68,011	$	(183,539	)	$	13,019		$	289,323

Year ended December 31, 2009:
Deducted from assets accounts:
Allowance for doubtful accounts	$	4,787	$	1,487	$	(366	)	$	217		$	6,125
Valuation allowance on deferred tax assets		317,842		—		(29,971	)(i)		10,905			298,776
Reported as liabilities:
Provision for contingencies		84,305		1,627		(3,450	)(ii)		4,449			86,931

Total	$	406,934	$	3,114	$	(33,787	)	$	15,571		$	391,832

Year ended December 31, 2008:
Deducted from assets accounts:
Allowance for doubtful accounts	$	5,977	$	1,077	$	(1,126	)	$	(1,141	)	$	4,787
Valuation allowance on deferred tax assets		475,317		—		(42,529	)(i)		(114,946	)		317,842
Reported as liabilities:
Provision for contingencies		87,350		9,523		(10,777	)(ii)		(1,791	)		84,305

Total	$	568,644	$	10,600	$	(54,432	)	$	(117,878	)	$	406,934

(i)	Charged to income.

(ii)	Charged to the non-current asset recorded in respect of McDonald’s Corporation’s indemnity.

F-43

Arcos Dorados Holdings Inc.

Notes to the Consolidated Financial Statements

For the fiscal years ended December 31, 2010, 2009 and 2008

Amounts in thousands of US dollars, except for share data and as otherwise indicated

26. Subsequent events

On January 1, 2011, the Company paid the fourth installment of the dividend distribution amounting to $6,600 as described in Note 22.

In March 2011, the Company adopted its Equity Incentive Plan, or 2011 Plan, to attract and retain the most highly qualified and capable professionals and to promote the success of its business. This plan replaces the Company’s 2008 long-term incentive plan discussed in Note 16, although the awards that have already been granted will remain outstanding until their respective termination dates. Like the Company’s 2008 long-term incentive plan, the 2011 Plan will be used to reward certain employees for the success of the Company’s business through an annual award program. The 2011 Plan permits grants of awards relating to class A shares, including awards in the form of shares (also referred to as stock), options, restricted shares, restricted share units, share appreciation rights, performance awards and other share-based awards as will be determined by the Company’s Board of Directors. At the date of issuance of these consolidated financial statements, the Company has not granted any awards pursuant to the 2011 Plan. The Company expects to make grants for 2011 to certain of its executive officers and other employees on the first trading day of its class A shares on the New York Stock Exchange. The awards to be granted will be 50% in restricted shares and 50% in stock options that will vest as follows: 40% on the second anniversary of the date of grant and 20% on each of the following three anniversaries. In addition, on the first trading day of its class A shares on the New York Stock Exchange, the Company expects to also grant special awards of restricted shares and stock options to certain of its executive officers and other employees under the 2011 Plan. The total amount of these special awards will be no more than 0.5% of the Company’s market capitalization (calculated by multiplying its total outstanding class A and class B shares by the closing price of its class A shares on the first trading day of its class A shares on the New York Stock Exchange). The special awards will be granted 75% in restricted shares and 25% in stock options and 1/3 will vest on each of the second, third and fourth anniversaries of the grant date. The maximum number of shares that may be issued under the 2011 Plan, including the 2011 awards and the special awards mentioned above, will be 2.5% of the Company’s total outstanding class A and class B shares immediately following its initial public offering.

On March 14, 2011, effective as of March 16, 2011, the Company’s Board of Directors approved the split-off of certain subsidiaries of the Company that operate the distribution centers in Argentina, Chile, Colombia, Mexico and Venezuela (the “Axis business”). The split-off was performed through the redemption of 41,882,966 shares (25,129,780 Class A shares and 16,753,186 Class B shares). As consideration for the redemption, the Company transferred to its shareholders its equity interests in the operating subsidiaries of the Axis business totaling a net book value of $15.4 million and an equity contribution that was made to the Axis holding company amounting to $29.8 million. This transaction did not have a material impact on the Company’s consolidated financial statements.

On March 23, 2011, the Company declared a dividend of $12,500, with respect to its results of operations for fiscal year 2010, which will be paid in full on April 1, 2011.

The Company evaluated subsequent events through the date the financial statements were originally issued, which was February 28, 2011 and the date they were reissued which was March 25, 2011. There were no subsequent events that required recognition or additional disclosures.

F-44

LOGO

Through and including , 2011 (the 25th day after the date of this prospectus), all dealers effecting transactions in these securities, whether or not participating in this offering, may be required to deliver a prospectus. This is in addition to the dealers’ obligation to deliver a prospectus when acting as underwriters and with respect to their unsold allotments or subscriptions.

62,461,539 Class A Shares

LOGO

Arcos Dorados Holdings Inc.

PROSPECTUS

BofA Merrill Lynch

J.P. Morgan

Morgan Stanley

Itau BBA

Citi

, 2011

PART II

INFORMATION NOT REQUIRED IN THE PROSPECTUS

Item 6.

Indemnification of Directors and Officers

Under British Virgin Islands law, each of our directors and officers, in performing his or her functions, is required to act honestly and in good faith with a view to our best interests and exercise the care, diligence and skill that a reasonably prudent person would exercise in comparable circumstances. Our memorandum and articles of association provide that, to the fullest extent permitted by British Virgin Islands law or any other applicable laws, our directors will not be personally liable to us or our shareholders for any acts or omissions in the performance of their fiduciary duties. Such limitation of liability does not affect the availability of equitable remedies such as injunctive relief or rescission. These provisions will not limit the liability of directors under United States federal securities laws.

We may purchase and maintain insurance in relation to any of our directors or officers against any liability asserted against the directors or officers and incurred by the directors or officers in that capacity, whether or not we have or would have had the power to indemnify the directors or officers against the liability as provided in our memorandum and articles of association.

Item 7.

Recent Sales of Unregistered Securities

None.

II-1

Item 8.

Exhibits

(a)

The following documents are filed as part of this registration statement:


1.1		Form of Underwriting Agreement.

3.1		Memorandum of Association and Articles of Association.

4.1		Indenture dated October 1, 2009 among Arcos Dorados B.V., the Subsidiary Guarantors named therein and Citibank N.A., as trustee.

5.1		Opinion of Maples and Calder, British Virgin Islands counsel of Arcos Dorados, as to the validity of the class A shares.

8.1		Opinion of Maples and Calder, British Virgin Islands counsel of Arcos Dorados, as to British Virgin Islands tax matters (included in Exhibit 5.1).

9.1		Los Laureles Voting Trust.

10.1		Amended and Restated Master Franchise Agreement for McDonald’s Restaurants in All of the Territories, except Brazil.

10.2		Amendment No. 1 to the Amended and Restated Master Franchise Agreement for McDonald’s Restaurants in All of the Territories, except Brazil.

10.3		Second Amended and Restated Master Franchise Agreement for McDonald’s Restaurants in Brazil.

10.4		Amended and Restated Escrow Agreement dated October 12, 2010 among McDonald’s Latin America, LLC, LatAm, LLC, each of the Escrowed MF Subsidiaries, Arcos Dorados Restaurantes de Chile Ltda., Arcos Dorados B.V., Deutsche Bank Trust Company Americas, as collateral agent, and Citibank, N.A., as escrow agent.

10.5		Letter of Credit Reimbursement Agreement dated August 3, 2007 between Arcos Dorados B.V. and Credit Suisse, acting through its Cayman Islands Branch.

10.6		Amendment to Letter of Credit Reimbursement Agreement dated November 3, 2008 between Arcos Dorados B.V. and Credit Suisse, acting through its Cayman Islands Branch.

10.7		Second Amendment to Letter of Credit Reimbursement Agreement dated December 10, 2008 between Arcos Dorados B.V. and Credit Suisse, acting through its Cayman Islands Branch.

10.8		Third Amendment to Letter of Credit Reimbursement Agreement dated July 8, 2009 between Arcos Dorados B.V. and Credit Suisse, acting through its Cayman Islands Branch.

10.9		Fourth Amendment to Letter of Credit Reimbursement Agreement dated April 23, 2010 between Arcos Dorados B.V. and Credit Suisse AG, Cayman Islands Branch.

10.10		Amended and Restated Schedule dated as of January 12, 2009 to the ISDA Master Agreement between Banco Santander, S.A. and Arcos Dorados B.V.

10.11		Confirmation of Cross-Currency Swap between Banco Santander, S.A. and Arcos Dorados B.V. dated October 12, 2010.

10.12		Confirmation of Cross-Currency Swap between Banco Santander, S.A. and Arcos Dorados B.V. dated October 12, 2010.

10.13		Confirmation of Cross-Currency Swap between Banco Santander, S.A. and Arcos Dorados B.V. dated October 12, 2010.

10.14		ISDA Schedule to the 2002 Master Agreement dated as of December 12, 2008 between The Bank of Nova Scotia and Arcos Dorados B.V.

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10.15		Confirmation of Cross Currency Swap between The Bank of Nova Scotia and Arcos Dorados B.V. dated December 17, 2008.

10.16		ISDA Schedule to the 2002 Master Agreement dated as of December 14, 2009 between Morgan Stanley & Co. International plc and Arcos Dorados B.V.

10.17		Confirmation of Interest Rate Swap between Morgan Stanley & Co. International plc and Arcos Dorados B.V. dated December 30, 2009.

10.18		Confirmation of Interest Rate Swap between Morgan Stanley & Co. International plc and Arcos Dorados B.V. dated December 30, 2009.

10.19		ISDA Schedule to the 2002 Master Agreement dated as of December 14, 2009 between JPMorgan Chase Bank, N.A. and Arcos Dorados B.V.

10.20		Credit Support Annex to the Schedule to the Master Agreement dated as of December 14, 2009 between JPMorgan Chase Bank, N.A. and Arcos Dorados B.V.

10.21		Confirmation of Interest Rate Swap between JPMorgan Chase Bank, N.A. and Arcos Dorados B.V. dated December 21, 2009.

10.22		Confirmation of Interest Rate Swap between JPMorgan Chase Bank, N.A. and Arcos Dorados B.V. dated December 22, 2009.

10.23		Equity Incentive Plan.

10.24		Amended and Restated Shareholders’ Agreement.

21.1		List of subsidiaries.

23.1		Consent of Pistrelli, Henry Martin y Asociados S.R.L.

23.2		Consent of Maples and Calder, British Virgin Islands counsel of Arcos Dorados (included in Exhibit 5.1).

23.3		Consent of Euromonitor.

24.1		Powers of attorney (included on signature page to the registration statement).

99.1		Consent of Michael Chu.

(b)

Financial Statement Schedules

None.

Item 9.

Undertakings

The undersigned hereby undertakes:

(a) The undersigned registrant hereby undertakes to provide to the underwriter at the closing specified in the underwriting agreements, certificates in such denominations and registered in such names as required by the underwriter to permit prompt delivery to each purchaser.

(b) Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the U.S. Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer, or controlling person of

II-3

the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question of whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue.

(1) For purposes of determining any liability under the Securities Act of 1933, the information omitted from the form of prospectus filed as part of this registration statement in reliance upon Rule 430A and contained in a form of prospectus filed by the Registrant pursuant to Rule 424(b)(1) or (4) or 497(h) under the Securities Act shall be deemed to be part of this registration statement as of the time it was declared effective.

(2) For the purpose of determining any liability under the Securities Act of 1933, each post-effective amendment that contains a form of prospectus shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

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SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form F-1 and has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Buenos Aires, Argentina on March 25, 2011.


Arcos Dorados Holdings Inc.

By:	/ S / W OODS S TATON
	Name:	Woods Staton
	Title:	Chairman and Chief Executive Officer

By:	/ S / G ERMAN L EMONNIER
	Name:	German Lemonnier
	Title:	Chief Financial Officer

KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below hereby constitutes and appoints Woods Staton, German Lemonnier and Juan David Bastidas and each of them, individually, as his or her true and lawful attorneys-in-fact and agents, with full power of substitution and resubstitution, for him or her and in his or her name, place and stead in any and all capacities, in connection with this registration statement, including to sign in the name and on behalf of the undersigned, this registration statement and any and all amendments thereto, including post-effective amendments and registration statements filed pursuant to Rule 462 under the U.S. Securities Act of 1933, and to file the same, with all exhibits thereto, and other documents in connection therewith, with the U.S. Securities and Exchange Commission, granting unto such attorneys-in-fact and agents full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as he or she might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or his or her substitute, may lawfully do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Act of 1933, as amended, this registration statement has been signed by the following persons on March 25, 2011 in the capacities indicated:


Name		Title

/ S / W OODS S TATON Woods Staton		Chairman and Chief Executive Officer (principal executive officer)

/ S / G ERMAN L EMONNIER German Lemonnier		Director and Chief Financial Officer (principal financial officer and principal accounting officer)

/ S / S ERGIO A LONSO Sergio Alonso		Director

/ S / A NNETTE F RANQUI Annette Franqui		Director

/ S / C ARLOS H ERNÁNDEZ -A RTIGAS Carlos Hernández-Artigas		Director

/ S / D ONALD J. P UGLISI Donald J. Puglisi		Authorized Representative in the United States

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EXHIBIT INDEX

The following documents are filed as part of this registration statement:


1.1		Form of Underwriting Agreement.

3.1		Memorandum of Association and Articles of Association.

4.1		Indenture dated October 1, 2009 among Arcos Dorados B.V., the Subsidiary Guarantors named therein and Citibank N.A., as trustee.

5.1		Opinion of Maples and Calder, British Virgin Islands counsel of Arcos Dorados, as to the validity of the class A shares.

8.1		Opinion of Maples and Calder, British Virgin Islands counsel of Arcos Dorados, as to British Virgin Islands tax matters (included in Exhibit 5.1).

9.1		Los Laureles Voting Trust.

10.1		Amended and Restated Master Franchise Agreement for McDonald’s Restaurants in All of the Territories, except Brazil.

10.2		Amendment No. 1 to the Amended and Restated Master Franchise Agreement for McDonald’s Restaurants in All of the Territories, except Brazil.

10.3		Second Amended and Restated Master Franchise Agreement for McDonald’s Restaurants in Brazil.

10.4		Amended and Restated Escrow Agreement dated October 12, 2010 among McDonald’s Latin America, LLC, LatAm, LLC, each of the Escrowed MF Subsidiaries, Arcos Dorados Restaurantes de Chile Ltda., Arcos Dorados B.V., Deutsche Bank Trust Company Americas, as collateral agent, and Citibank, N.A., as escrow agent.

10.5		Letter of Credit Reimbursement Agreement dated August 3, 2007 between Arcos Dorados B.V. and Credit Suisse, acting through its Cayman Islands Branch.

10.6		Amendment to Letter of Credit Reimbursement Agreement dated November 3, 2008 between Arcos Dorados B.V. and Credit Suisse, acting through its Cayman Islands Branch.

10.7		Second Amendment to Letter of Credit Reimbursement Agreement dated December 10, 2008 between Arcos Dorados B.V. and Credit Suisse, acting through its Cayman Islands Branch.

10.8		Third Amendment to Letter of Credit Reimbursement Agreement dated July 8, 2009 between Arcos Dorados B.V. and Credit Suisse, acting through its Cayman Islands Branch.

10.9		Fourth Amendment to Letter of Credit Reimbursement Agreement dated April 23, 2010 between Arcos Dorados B.V. and Credit Suisse AG, Cayman Islands Branch.

10.10		Amended and Restated Schedule dated as of January 12, 2009 to the ISDA Master Agreement between Banco Santander, S.A. and Arcos Dorados B.V.

10.11		Confirmation of Cross-Currency Swap between Banco Santander, S.A. and Arcos Dorados B.V. dated October 12, 2010.

10.12		Confirmation of Cross-Currency Swap between Banco Santander, S.A. and Arcos Dorados B.V. dated October 12, 2010.

10.13		Confirmation of Cross-Currency Swap between Banco Santander, S.A. and Arcos Dorados B.V. dated October 12, 2010.

10.14		ISDA Schedule to the 2002 Master Agreement dated as of December 12, 2008 between The Bank of Nova Scotia and Arcos Dorados B.V.

10.15		Confirmation of Cross Currency Swap between The Bank of Nova Scotia and Arcos Dorados B.V. dated December 17, 2008.



10.16		ISDA Schedule to the 2002 Master Agreement dated as of December 14, 2009 between Morgan Stanley & Co. International plc and Arcos Dorados B.V.

10.17		Confirmation of Interest Rate Swap between Morgan Stanley & Co. International plc and Arcos Dorados B.V. dated December 30, 2009.

10.18		Confirmation of Interest Rate Swap between Morgan Stanley & Co. International plc and Arcos Dorados B.V. dated December 30, 2009.

10.19		ISDA Schedule to the 2002 Master Agreement dated as of December 14, 2009 between JPMorgan Chase Bank, N.A. and Arcos Dorados B.V.

10.20		Credit Support Annex to the Schedule to the Master Agreement dated as of December 14, 2009 between JPMorgan Chase Bank, N.A. and Arcos Dorados B.V.

10.21		Confirmation of Interest Rate Swap between JPMorgan Chase Bank, N.A. and Arcos Dorados B.V. dated December 21, 2009.

10.22		Confirmation of Interest Rate Swap between JPMorgan Chase Bank, N.A. and Arcos Dorados B.V. dated December 22, 2009.

10.23		Equity Incentive Plan.

10.24		Amended and Restated Shareholders’ Agreement.

21.1		List of subsidiaries.

23.1		Consent of Pistrelli, Henry Martin y Asociados S.R.L.

23.2		Consent of Maples and Calder, British Virgin Islands counsel of Arcos Dorados (included in Exhibit 5.1).

23.3		Consent of Euromonitor.

24.1		Powers of attorney (included on signature page to the registration statement).

99.1		Consent of Michael Chu.

Exhibit 1.1

ARCOS DORADOS HOLDINGS INC.

(a BVI business company)

[ — ] Shares of Class A Shares

UNDERWRITING AGREEMENT

Dated: [ — ], 2011

ARCOS DORADOS HOLDINGS INC.

(a BVI business company)

[ — ] Shares of Class A Shares

UNDERWRITING AGREEMENT

[ — ], 2011

Merrill Lynch, Pierce, Fenner & Smith Incorporated

One Bryant Park

New York, New York 10036

J.P. Morgan Securities LLC

383 Madison Avenue

New York, New York 10179

Morgan Stanley & Co. Incorporated

1585 Broadway

New York, New York 10036

Itau BBA USA Securities Inc.

767 Fifth Avenue, Suite 50-13

New York, New York 10153

Citigroup Global Markets Inc.

388 Greenwich Street

New York, New York 10013

as Representatives of the several Underwriters

Ladies and Gentlemen:

Arcos Dorados Holdings Inc., a BVI business company (the “Company”), Arcos Dorados B.V., a private limited liability company ( besloten vennootschap met beperkte aansprakelijkheid ) formed in the Netherlands, and the persons listed in Schedule B hereto (the “Selling Shareholders”), confirm their respective agreements with Merrill Lynch, Pierce, Fenner & Smith Incorporated (“Merrill Lynch”), J.P. Morgan Securities LLC (“J.P. Morgan”), Morgan Stanley & Co. Incorporated (“Morgan Stanley”), Itau BBA USA Securities Inc. (“Itau BBA”) and Citigroup Global Markets Inc. (“Citi”) and each of the other Underwriters named in Schedule A hereto (collectively, the “Underwriters,” which term shall also include any underwriter substituted as hereinafter provided in Section 10 hereof), for whom Merrill Lynch, J.P. Morgan, Morgan Stanley, Itau BBA and Citi are acting as representatives (in such capacity, the “Representatives”), with respect to (i) the sale by the Company and the Selling Shareholders, acting severally and not jointly, and the purchase by the Underwriters, acting severally and not jointly, of the respective numbers of Class A Shares, par value $[ — ] per share, of the Company (“Shares”) set forth in

Schedules A and B hereto and (ii) the grant by the Selling Shareholders, acting severally and not jointly, to the Underwriters, acting severally and not jointly, of the option described in Section 2(b) hereof to purchase all or any part of [ — ] additional Shares to cover overallotments, if any. The aforesaid [ — ] Shares (the “Initial Securities”) to be purchased by the Underwriters and all or any part of the [ — ] Shares subject to the option described in Section 2(b) hereof (the “Option Securities”) are herein called, collectively, the “Securities.”

The Company and the Selling Shareholders understand that the Underwriters propose to make a public offering of the Securities as soon as the Representatives deem advisable after this Agreement has been executed and delivered.

The Company, the Selling Shareholders and the Underwriters agree that up to [ — ] shares of the Initial Securities to be purchased by the Underwriters (the “Reserved Securities”) shall be reserved for sale by the Underwriters to certain persons designated by the Company (the “Invitees”), as part of the distribution of the Securities by the Underwriters, subject to the terms of this Agreement, the applicable rules, regulations and interpretations of the Financial Industry Regulatory Authority, Inc. (“FINRA”) and all other applicable laws, rules and regulations. The Company solely determined, without any direct or indirect participation by the Underwriters, the Invitees who will purchase Reserved Securities (including the amount to be purchased by such persons) sold by the Underwriters. To the extent that such Reserved Securities are not orally confirmed for purchase by Invitees by 8:00 A.M. (New York City time) on the first business day after the date of this Agreement, such Reserved Securities may be offered to the public as part of the public offering contemplated hereby.

The Company has filed with the Securities and Exchange Commission (the “Commission”) a registration statement on Form F-1 (No. 333- — ), including the related preliminary prospectus or prospectuses, covering the registration of the sale of the Securities under the Securities Act of 1933, as amended (the “1933 Act”). Promptly after execution and delivery of this Agreement, the Company will prepare and file a prospectus in accordance with the provisions of Rule 430A (“Rule 430A”) of the rules and regulations of the Commission under the 1933 Act (the “1933 Act Regulations”) and Rule 424(b) (“Rule 424(b)”) of the 1933 Act Regulations. The information included in such prospectus that was omitted from such registration statement at the time it became effective but that is deemed to be part of such registration statement at the time it became effective pursuant to Rule 430A(b) is herein called the “Rule 430A Information.” Such registration statement, including the amendments thereto, the exhibits thereto and any schedules thereto, at the time it became effective, and including the Rule 430A Information, is herein called the “Registration Statement.” Any registration statement filed pursuant to Rule 462(b) of the 1933 Act Regulations is herein called the “Rule 462(b) Registration Statement” and, after such filing, the term “Registration Statement” shall include the Rule 462(b) Registration Statement. Each prospectus used prior to the effectiveness of the Registration Statement, and each prospectus that omitted the Rule 430A Information that was used after such effectiveness and prior to the execution and delivery of this Agreement, is herein called a “preliminary prospectus.” The final prospectus, in the form first furnished to the Underwriters for use in connection with the offering of the Securities, is herein called the “Prospectus.” For purposes of this Agreement, all references to the Registration Statement, any preliminary prospectus, the Prospectus or any amendment or supplement to any of the foregoing shall be deemed to include the copy filed with the Commission pursuant to its Electronic Data Gathering, Analysis and Retrieval system (“EDGAR”).

As used in this Agreement:

“Applicable Time” means [ :00 P./A.M.], New York City time, on [ ] or such other time as agreed by the Company and the Representatives.

“General Disclosure Package” means any Issuer General Use Free Writing Prospectuses issued at or prior to the Applicable Time, the prospectus that is included in the Registration Statement as of the Applicable Time and the information included on Schedule C-1 hereto, all considered together.

“Issuer Free Writing Prospectus” means any “issuer free writing prospectus,” as defined in Rule 433 of the 1933 Act Regulations (“Rule 433”), including without limitation any “free writing prospectus” (as defined in Rule 405 of the 1933 Act Regulations (“Rule 405”)) relating to the Securities that is (i) required to be filed with the Commission by the Company, (ii) a “road show that is a written communication” within the meaning of Rule 433(d)(8)(i), whether or not required to be filed with the Commission, or (iii) exempt from filing with the Commission pursuant to Rule 433(d)(5)(i) because it contains a description of the Securities or of the offering that does not reflect the final terms, in each case in the form filed or required to be filed with the Commission or, if not required to be filed, in the form retained in the Company’s records pursuant to Rule 433(g).

“Issuer General Use Free Writing Prospectus” means any Issuer Free Writing Prospectus that is intended for general distribution to prospective investors (other than a “ bona fide electronic road show,” as defined in Rule 433 (the “Bona Fide Electronic Road Show”)), as evidenced by its being specified in Schedule C-2 hereto.

“Issuer Limited Use Free Writing Prospectus” means any Issuer Free Writing Prospectus that is not an Issuer General Use Free Writing Prospectus.

SECTION 1. Representations and Warranties .

(a) Representations and Warranties by the Company . Each of the Company and Arcos Dorados B.V., each with respect to itself only, represents and warrants, to each Underwriter as of the date hereof, the Applicable Time, the Closing Time (as defined below) and any Date of Delivery (as defined below), and agrees with each Underwriters, as follows:

(i) Registration Statement and Prospectuses . Each of the Registration Statement and any amendment thereto has become effective under the 1933 Act. No stop order suspending the effectiveness of the Registration Statement or any post-effective amendment thereto has been issued under the 1933 Act, no order preventing or suspending the use of any preliminary prospectus or the Prospectus has been issued and no proceedings for any of those purposes have been instituted or are pending or, to the Company’s knowledge, contemplated. The Company has complied with each request (if any) from the Commission for additional information.

Each of the Registration Statement and any post-effective amendment thereto, at the time it became effective, complied in all material respects with the requirements of the 1933 Act and the 1933 Act Regulations. Each preliminary prospectus (including the prospectus filed as part of the Registration Statement as originally filed or as part of any amendment or supplement thereto), at the time it was filed, and the Prospectus complied in all material respects with the 1933 Act and the 1933 Act Regulations. Each preliminary prospectus delivered to the Underwriters for use in connection with this offering and the Prospectus was or will be identical to the electronically transmitted copies thereof filed with the Commission pursuant to EDGAR, except to the extent permitted by Regulation S-T.

(ii) Accurate Disclosure . Neither the Registration Statement nor any amendment thereto, at its effective time, at the Closing Time or at any Date of Delivery, contained, contains

or will contain an untrue statement of a material fact or omitted, omits or will omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading. As of the Applicable Time, neither (A) the General Disclosure Package, nor (B) any individual Issuer Limited Use Free Writing Prospectus, when considered together with the General Disclosure Package[, nor (C) any materials or information provided to investors by, or with the approval of, the Company in connection with the marketing of the offering of the Securities, including any roadshow or investor presentations made to investors by the Company (whether in person or electronically) (“Marketing Materials”)] ¹ included, includes or will include an untrue statement of a material fact or omitted, omits or will omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. Neither the Prospectus nor any amendment or supplement thereto (including any prospectus wrapper), as of its issue date, at the time of any filing with the Commission pursuant to Rule 424(b), at the Closing Time or at any Date of Delivery, included, includes or will include an untrue statement of a material fact or omitted, omits or will omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading.

The representations and warranties in this subsection shall not apply to statements in or omissions from the Registration Statement (or any amendment thereto), the General Disclosure Package or the Prospectus (or any amendment or supplement thereto) made in reliance upon and in conformity with written information furnished to the Company by any Underwriter through the Representatives expressly for use therein. For purposes of this Agreement, the only information so furnished shall be [the information in the second, third and fourth paragraphs under the heading “Underwriting–Price Stabilization, Short Positions and Penalty Bids” in the Prospectus] (collectively, the “Underwriter Information”).

(iii) Issuer Free Writing Prospectuses . No Issuer Free Writing Prospectus conflicts or will conflict with the information contained in the Registration Statement or the Prospectus, and any preliminary or other prospectus deemed to be a part thereof that has not been superseded or modified. The Company has made available a Bona Fide Electronic Road Show in compliance with Rule 433(d)(8)(ii) such that no filing of any “road show” (as defined in Rule 433(h)) is required in connection with the offering of the Securities.

(iv) Company Not Ineligible Issuer . At the time of filing the Registration Statement and any post-effective amendment thereto, at the earliest time thereafter that the Company or another offering participant made a bona fide offer (within the meaning of Rule 164(h)(2) of the 1933 Act Regulations) of the Securities and at the date hereof, the Company was not and is not an “ineligible issuer,” as defined in Rule 405, without taking account of any determination by the Commission pursuant to Rule 405 that it is not necessary that the Company be considered an ineligible issuer.

(v) Capitalization . The authorized, issued and outstanding shares of the Company are as set forth in the General Disclosure Package and the Prospectus in the column entitled “Actual” under the caption “Capitalization” (except for subsequent issuances, if any, pursuant to this Agreement, pursuant to reservations, agreements or employee benefit plans referred to in the General Disclosure Package and the Prospectus or pursuant to the exercise of convertible securities or options referred to in the General Disclosure Package and the Prospectus). The outstanding shares of the Company, including the Securities to be purchased by the Underwriters from the Selling Shareholder, have been duly authorized and validly issued and are fully paid and

¹	To be confirmed whether any marketing materials will be used other than the Roadshow.

non-assessable. None of the outstanding shares of the Company, including the Securities to be purchased by the Underwriters from the Selling Shareholder, was issued in violation of the preemptive or other similar rights of any securityholder of the Company (other than any such rights which have been waived).

(vi) Good Standing of the Company . The Company has been duly incorporated, is validly existing as a limited liability company in good standing under the laws of the British Virgin Islands, has the corporate power and authority to own its property, to conduct its business as described in the General Disclosure Package and the Prospectus and to execute and deliver this Agreement, and is duly qualified to transact business and is in good standing (to the extent applicable) in each jurisdiction in which the conduct of its business or its ownership or leasing of property requires such qualification, except to the extent that the failure to be so qualified or be in good standing would not have a material adverse effect on the Company and its subsidiaries, taken as a whole.

(vii) Good Standing of Subsidiaries . Each subsidiary of the Company has been duly incorporated, is validly existing as a limited liability company or a corporation, as the case may be, in good standing (to the extent applicable) under the laws of the jurisdiction of its incorporation, has the corporate power and authority to own its property and to conduct its business as described in the General Disclosure Package and the Prospectus and is duly qualified to transact business and is in good standing in each jurisdiction in which the conduct of its business or its ownership or leasing of property requires such qualification, except to the extent that the failure to be so qualified or be in good standing would not have a material adverse effect; all of the issued shares of capital stock of each subsidiary of the Company have been duly and validly authorized and issued, are fully paid and non-assessable and are owned by the Company, free and clear of all liens, encumbrances, equities or claims, except as disclosed in the General Disclosure Package and the Prospectus. Arcos Dorados B.V. has the corporate power and authority to execute and deliver this Agreement.

(viii) Authorization of Agreement . This Agreement has been duly authorized, executed and delivered by the Company and Arcos Dorados B.V.

(ix) Authorization and Description of Securities . The Securities to be purchased by the Underwriters from the Company have been duly authorized by the Company for issuance and sale to the Underwriters and, when issued and delivered by the Company in accordance with the provisions of this Agreement and paid for by the Underwriters in accordance with the terms of this Agreement, will be validly allotted and issued, and fully paid and non-assessable. The Shares conform to all statements relating thereto contained in the General Disclosure Package and the Prospectus and such description conforms to the rights, privileges, restrictions and conditions attaching to them as provided for in the Company’s memorandum and articles of association. No holder of Securities will be subject to personal liability by reason of being such a holder.

(x) Registration Rights . There are no persons with registration rights or other similar rights (other than any such rights which have been waived) to have any securities registered for sale pursuant to the Registration Statement or otherwise registered for sale by the Company under the 1933 Act.

(xi) Noncontravention . The execution and delivery by the Company and Arcos Dorados B.V. of, and the performance by the Company and Arcos Dorados B.V. of their obligations under, this Agreement will not contravene (x) the certificate of incorporation or memorandum and articles of association (or by-laws or other constitutional documents as the case

may be) of the Company or Arcos Dorados B.V., (y) any provision of applicable law or any agreement (including the Amended and Restated Master Franchise Agreement, dated as of November 10, 2008, among McDonald’s Latin America LLC, LatAm, LLC, Arcos Dorados B.V., Arcos Dorados Cooperatieve U.A., Arcos Dorados Limited, and Los Laureles, Ltd., among others (the “MFA”), as amended by Amendment No. 1 to the MFA dated August 31, 2010 and Amendment No. 2 to the MFA dated [ ], 2011, and the Amended and Restated Master Franchise Agreement, dated as of November 10, 2008, among McDonald’s Latin America, LLC and Arcos Dourados Comercio de Alimentos Ltda. (together, the “Master Franchise Agreements”)) or other instrument binding upon the Company or any of its subsidiaries, or (z) any judgment, order or decree of any governmental body, agency or court having jurisdiction over the Company or any subsidiary, except in the case of clauses (y) and (z), where any such contravention would not, individually or in the aggregate, have a material adverse effect on the Company and its subsidiaries, taken as a whole. No consent, approval, authorization or order of, or qualification with, any governmental body or agency is required for the performance by the Company or Arcos Dorados B.V. of its obligations under this Agreement, except such as have been obtained under the U.S. federal securities laws, the securities laws of any other applicable jurisdiction, including the Blue Sky laws of the various states, or FINRA or stock exchange rules in connection with the offer and sale of the Securities and such as have been obtained under the laws and regulations of jurisdictions outside the United States in which the Reserved Securities were offered.

(xii) No Material Adverse Effect . There has not occurred any material adverse change, or any development involving a prospective material adverse change, in the condition, financial or otherwise, or in the earnings, business or operations of the Company and its subsidiaries, taken as a whole, from that set forth in the General Disclosure Package and the Prospectus.

(xiii) Absence of Proceedings . Other than proceedings accurately described in all material respects in the General Disclosure Package and the Prospectus, there are no legal or governmental proceedings pending or, to the Company’s knowledge, threatened to which the Company or any of its subsidiaries is a party or to which any of the properties of the Company or any of its subsidiaries is subject that would have a material adverse effect on the power or ability of the Company or Arcos Dorados B.V. to perform its obligations under this Agreement or to consummate the transactions contemplated by the General Disclosure Package and the Prospectus.

(xiv) Environmental Laws . The Company and its subsidiaries (A) are in compliance with any and all applicable foreign, federal, state and local laws and regulations relating to the protection of human health and safety, the environment or hazardous or toxic substances or wastes, pollutants or contaminants (“Environmental Laws”), (B) have received all permits, licenses or other approvals required of them under applicable Environmental Laws to conduct their respective businesses and (C) are in compliance with all terms and conditions of any such permit, license or approval, except where such noncompliance with Environmental Laws, failure to receive required permits, licenses or other approvals or failure to comply with the terms and conditions of such permits, licenses or approvals would not, singly or in the aggregate, have a material adverse effect on the Company and its subsidiaries, taken as a whole.

(xv) Investment Company Act . None of the Company nor Arcos Dorados B.V. is, and after giving effect to the issuance and sale of the Securities and the application of the proceeds thereof as described in the General Disclosure Package and the Prospectus will be, required to register as an “investment company” as such term is defined in the Investment Company Act of 1940, as amended (the “1940 Act”).

(xvi) Other Agreements . The Company is not a party to any contractual arrangement currently in effect relating to the offer, sale, distribution or delivery of the Securities or any other securities of the Company other than this Agreement and any other agreement entered into by the Company with any of the Underwriters.

(xvii) Title to Property . The Company and its subsidiaries have good and marketable title to all real property and good and marketable title to all personal property owned by them, which property is material to the business of the Company and its subsidiaries, taken as a whole, in each case free and clear of all liens, or encumbrances and defects, except such as are described in the General Disclosure Package and the Prospectus or such as do not materially affect the value of such property and do not interfere with the use made and proposed to be made of such property by the Company and its subsidiaries; and any real property and buildings which are material to the Company and its subsidiaries, taken as a whole, and are held under lease by the Company and its subsidiaries are held by them under valid, subsisting and enforceable leases with such exceptions as are not material and do not interfere with the use made and proposed to be made of such property and buildings by the Company and its subsidiaries, in each case except as described in the General Disclosure Package and the Prospectus.

(xviii) Possession of Intellectual Property . The Company and its subsidiaries own or possess, or can acquire on reasonable terms, all patents, patent rights, licenses, inventions, copyrights, know-how (including trade secrets and other unpatented and/or unpatentable proprietary or confidential information, systems or procedures), trademarks, service marks and trade names, which are material to the Company and its subsidiaries, taken as a whole, and are currently employed by the Company or its subsidiaries in connection with the business now operated by them, and neither the Company nor any of its subsidiaries has received any notice of any infringement of or conflict with asserted rights of others with respect to any of the foregoing which, singly or in the aggregate, if the subject of an unfavorable decision, ruling or finding, would have a material adverse effect on the Company and its subsidiaries, taken as a whole.

(xix) Absence of Labor Dispute . No material labor dispute with the employees of the Company or any of its subsidiaries exists, except as described in the General Disclosure Package and the Prospectus, or, to the Company’s knowledge, is imminent; and neither the Company nor any or its subsidiaries is aware of any existing, threatened or imminent labor disturbance by the employees of any of their principal suppliers, manufacturers or contractors that could have a material adverse effect on the Company and its subsidiaries, taken as a whole.

(xx) Insurance . The Company and each of its subsidiaries, and their respective owned and leased properties, are insured by insurers of recognized financial responsibility against such losses and risks and in such amounts as are customary in the businesses in which they are engaged.

(xxi) Possession of Licenses and Permits . The Company and its subsidiaries possess all certificates, authorizations and permits issued by the appropriate U.S. federal or state or British Virgin Islands or other non-U.S. regulatory authorities necessary to conduct their respective businesses, and neither the Company nor any of its subsidiaries has received any notice of proceedings relating to the revocation or modification of any such certificate, authorization or permit which, singly or in the aggregate, if the subject of an unfavorable decision, ruling or finding, would have a material adverse effect on the Company and its subsidiaries, taken as a whole, except as described in the General Disclosure Package and the Prospectus.

(xxii) Financial Statements; Non-GAAP Financial Measures . The audited consolidated financial statements of the Company included in the Registration Statement, the General Disclosure Package and the Prospectus (the “Consolidated Financial Statements”) were prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) consistently applied and present fairly in all material respects the financial position of the Company and its consolidated subsidiaries, as at the relevant dates, and the results of operations and changes in cash flows of the Company and its consolidated subsidiaries for the periods in respect of which they have been prepared, and non-GAAP financial information included in the Registration Statement, the General Disclosure Package or the Prospectus, if any, complies with the requirements of Regulation G of the Securities Exchange Act of 1934, as amended (the “1934 Act”) and Item 10 of Regulation S-K under the 1933 Act. The selected financial data and the summary financial information included in the Registration Statement, the General Disclosure Package and the Prospectus present fairly the information shown therein and have been compiled on a basis consistent with that of the Consolidated Financial Statements included therein. Except as included therein, no historical or pro forma financial statements or supporting schedules are required to be included in the Registration Statement, the General Disclosure Package or the Prospectus under the 1933 Act or the 1933 Act Regulations.

(xxiii) Independent Registered Public Accounting Firm . Pistrelli, Henry Martin y Asociados S.R.L., member firm of Ernst & Young Global (“Ernst & Young”), who has audited the Company’s Consolidated Financial Statements and who will deliver the letters referred to in Section 5(m), is an independent auditor with respect to the Company and its subsidiaries within the meaning of the 1933 Act and the applicable published rules and regulations thereunder.

(xxiv) Accounting Controls . The Company, each of its subsidiaries and the other entities that are consolidated in the Company’s Consolidated Financial Statements maintain a system of internal accounting controls sufficient to provide reasonable assurance that (i) transactions are executed in accordance with management’s general or specific authorizations; (ii) transactions are recorded as necessary to permit preparation of financial statements in conformity with GAAP and to maintain asset accountability; (iii) access to assets is permitted only in accordance with management’s general or specific authorization; and (iv) the recorded accountability for assets is compared with the existing assets at reasonable intervals and appropriate action is taken with respect to any differences. Except as described in the General Disclosure Package and the Prospectus, since the end of the Company’s most recent audited fiscal year, there has been (1) no material weakness in the Company’s internal control over financial reporting (whether or not remediated) and (2) no change in the Company’s internal control over financial reporting that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

(xxv) Payments in Foreign Currency . Under current laws and regulations of the British Virgin Islands, all dividends and other distributions declared and payable on the Securities in cash may be freely transferred out of the British Virgin Islands and may be paid in, or freely converted into United States dollars, in each case without there being required any consent, approval, authorization or order of, or qualification with, any court or governmental agency or body in the British Virgin Islands; and except as disclosed in the General Disclosure Package and Prospectus, all such dividends and other distributions will not be subject to withholding, value added or other taxes under the laws and regulations of the British Virgin Islands.

(xxvi) British Virgin Islands and Netherlands Taxation . There is no tax, duty, levy, impost, deduction, charge or withholding imposed by the British Virgin Islands or in the

Netherlands, as the case may be, or any political subdivision thereof or taxing authority therein in connection with the issuance, sale or delivery of the Shares to the Underwriters.

(xxvii) Payment of Taxes . The Company and each of its subsidiaries have duly filed all tax declarations and relevant submissions and paid all taxes and duties due and payable, except for any failure to file a tax declaration or pay taxes or duties due that would not, singly or in the aggregate, have a material adverse effect on the Company and its subsidiaries, taken as a whole, or that is currently being contested in good faith and as to which adequate reserves have been provided. Except as disclosed in the General Disclosure Package and the Prospectus, to the Company’s knowledge, no objections have been raised by competent tax authorities on tax declarations and submissions made by the Company and its subsidiaries in prior years that could, singly or in the aggregate, have a material adverse effect on the Company and its subsidiaries, taken as a whole.

(xxviii) Anti-Corruption Laws . Neither the Company nor any of its subsidiaries, nor any director, officer, or employee, nor, to the knowledge of the Company or Arcos Dorados B.V., any agent or representative acting on behalf of the Company or of any of its respective subsidiaries, has taken or will take any action in furtherance of an unlawful offer, payment, promise to pay, or authorization or approval of the payment or giving of money, property, gifts or anything else of value, directly or indirectly, to any “government official” (including any officer or employee of a government or government-owned or controlled entity or of a public international organization, or any person acting in an official capacity for or on behalf of any of the foregoing, or any political party or party official or candidate for political office) to influence official action or secure an improper advantage in violation of applicable law; and the Company and its subsidiaries have conducted their businesses in compliance with applicable anti-corruption laws to which they may be subject.

(xxix) Anti-Money Laundering Laws . The operations of the Company and its subsidiaries are and have been conducted at all times in material compliance with the applicable anti-money laundering statutes of the British Virgin Islands and all other jurisdictions where the Company and its subsidiaries conduct business, the rules and regulations thereunder and any related or similar rules, regulations or guidelines, issued, administered or enforced by any governmental agency (collectively, the “Anti-Money Laundering Laws”), and no action, suit or proceeding by or before any court or governmental agency, authority or body or any arbitrator involving the Company or any of its subsidiaries with respect to the Anti-Money Laundering Laws is pending or, to the best knowledge of the Company or Arcos Dorados B.V., threatened.

(xxx) OFAC . (A) The Company and Arcos Dorados B.V. represent that neither the Company nor any of its respective subsidiaries (collectively, the “Entity”) or, to the knowledge of the Entity, any director, officer, employee, agent, or representative acting on behalf of the Entity, is an individual or entity (“Person”) that is, or is owned or controlled by a Person that is the subject of any sanctions administered or enforced by, the U.S. Department of Treasury’s Office of Foreign Assets Control (“Sanctions”), nor located, organized or resident in a country or territory that is the subject of Sanctions.

(B) The Entity represents and covenants that it will not, directly or indirectly, use the proceeds of the offering, or lend, contribute or otherwise make available such proceeds to any subsidiary, joint venture partner or other Person.

(1) to fund or facilitate any activities or business of or with any Person or in any country or territory that, at the time of such funding or facilitation, is the subject of Sanctions; or

(2) in any other manner that will result in a violation of Sanctions by any Person (including any Person participating in the offering, whether as underwriter, advisor, investor or otherwise).

(xxxi) Absence of Violations and Defaults . None of the Company nor any of its subsidiaries is in violation of its respective charter, by-laws, other constitutive documents or in default (or with the giving of notice or lapse of time would be in default) under any existing obligation, agreement (including the Master Franchise Agreements), covenant or condition contained in any indenture, loan agreement, mortgage, lease or other agreement or instrument to which any of them is a party or by which any of them is bound or to which any of the properties of any of them is subject, except such defaults that would not, individually or in the aggregate, be reasonably expected to have a material adverse effect on the Company and its subsidiaries, taken as a whole.

(xxxii) Accuracy of Exhibits . There are no contracts or documents which are required to be described in the Registration Statement or to be filed as exhibits thereto which have not been so described and filed as required.

(xxxiii) Compliance with the Sarbanes-Oxley Act . The Company has taken all necessary actions to ensure that, upon the effectiveness of the Registration Statement, it will be in compliance with all provisions of the Sarbanes-Oxley Act of 2002 and all rules and regulations promulgated thereunder or implementing the provisions thereof (the “Sarbanes-Oxley Act”) that are then in effect and with which the Company is required to comply as of the effectiveness of the Registration Statement, and is actively taking steps to ensure that it will be in compliance with other provisions of the Sarbanes-Oxley Act not currently in effect, upon the effectiveness of such provisions, or which will become applicable to the Company at all times after the effectiveness of the Registration Statement.

(xxxiv) Absence of Manipulation . Neither the Company nor any affiliate of the Company has taken, directly or indirectly, any action that is designed to or that has constituted or that would reasonably be expected to cause or result in the stabilization or manipulation of the price of any security of the Company to facilitate the sale or resale of the Securities.

(xxxv) Sales of Reserved Securities . In connection with any offer and sale of Reserved Securities outside the United States, each preliminary prospectus, the Prospectus, any prospectus wrapper and any amendment or supplement thereto, at the time it was employed, complied and will comply in all material respects with any applicable laws or regulations of foreign jurisdictions. The Company has not offered, or caused the Representatives to offer, Reserved Securities to any person with the specific intent to unlawfully influence (i) a customer or supplier of the Company or any of its affiliates to alter the customer’s or supplier’s level or type of business with any such entity or (ii) a trade journalist or publication to write or publish favorable information about the Company or any of its affiliates, or their respective businesses or products.

(xxxvi) PFIC Status . After reasonable inquiry, the Company does not believe that it was a “passive foreign investment company” as defined in Section 1297 of the Internal Revenue Code of 1986, as amended, for the year ended December 31, 2010 and does not expect to be a “passive foreign investment company” in the current year or the foreseeable future.

(xxxvii) Foreign Private Issuer . The Company is a “foreign private issuer” within the meaning of Rule 405.

(xxxviii) Enforcement of Foreign Judgments . Any final judgment for a fixed or readily calculable sum of money rendered in any court of the State of New York having jurisdiction under its own domestic laws in respect of any suit, action or proceeding against the Company based upon this Agreement would be recognized and enforced against the Company by courts in the British Virgin Islands, without reexamination, review of the merits of the cause of action in respect of which the original judgment was given or relitigation of the matters adjudicated upon or payment of any stamp, registration or similar tax or duty, provided that any final and conclusive monetary judgment obtained against the Company in the courts of any country in respect of the Agreement, for a definite sum, may be treated by the courts of the British Virgin Islands as a cause of action in itself so that no retrial of the issues would be necessary, and provided that in respect of the foreign judgment: (a) the foreign court issuing the judgment had jurisdiction in the matter and the Company either submitted to such jurisdiction or was resident or carrying on business within such jurisdiction and was duly served with process; (b) the judgment given by the foreign court was not in respect of penalties, taxes, fines or similar fiscal or revenue obligations of the Company; (c) in obtaining judgment there was no fraud on the part of the person in whose favor judgment was given or on the part of the court; (d) recognition or enforcement of the judgment in the British Virgin Islands would not be contrary to public policy; and (e) the proceedings pursuant to which judgment was obtained were not contrary to natural justice. There is no enforcement treaty between the Netherlands and the State of New York or the United States of America. Consequently, a judgment of a federal court of the United States of America located in the City and County of New York, Borough of Manhattan, having jurisdiction under its own domestic laws in respect of any suit, action or proceeding against Arcos Dorados B.V. cannot be enforced in the Netherlands. In order to obtain a judgment in respect of this Agreement that can be enforced in the Netherlands against Arcos Dorados B.V., the dispute will have to be re-litigated before the competent Netherlands court. Such court will have discretion to attach such weight to any final judgment for a fixed or readily calculable sum of money rendered in any federal court of the United States of America located in the City and County of New York, Borough of Manhattan, as it deems appropriate. Given the submission by Arcos Dorados B.V. to the jurisdiction of the federal courts of the United States of America located in the City and County of New York, Borough of Manhattan, the Netherlands’ courts can be expected to give conclusive effect to a final and enforceable judgment of such court in respect of the contractual obligations of Arcos Dorados B.V. under this Agreement without re-examination or re-litigation of the substantive matters adjudicated upon. This would require (i) proper service of process, (ii) the proceedings before such court to have complied with principles of proper procedure and (iii) such judgment not being contrary to the public policy of the Netherlands.

(xxxix) Proper Form . Upon execution and delivery, this Agreement will be in proper legal form under the laws of the British Virgin Islands and the Netherlands for the enforcement hereof against the Company and Arcos Dorados B.V., and to ensure the legality, validity, enforceability, priority or admissibility in evidence of this Agreement it is not necessary that this Agreement or any other document related hereto be filed, registered or recorded with or executed or notarized before, any governmental or regulatory authority or agency of the British Virgin Islands or the Netherlands.

(xl) No License . It is not necessary under the laws of the British Virgin Islands and the Netherlands that any Underwriter be licensed, qualified or entitled to carry on business in the British Virgin Islands or the Netherlands to enable such Underwriter to enforce its respective rights under this Agreement or the performance of the terms and conditions of this Agreement

outside of the British Virgin Islands or the Netherlands, it being understood that any Underwriter that receives or transmits any Securities orders of clients based in the Netherlands or executes any Securities orders on behalf of clients based in the Netherlands must be licensed, excepted or exempt under or pursuant to applicable Netherlands’ law. The Underwriters will not be deemed resident, domiciled, to be carrying on business or subject to taxation in the British Virgin Islands or the Netherlands solely by reason of the issuance, acceptance, delivery, performance or enforcement of this Agreement.

(xli) Jurisdiction and Service of Process . The submission by the Company and Arcos Dorados B.V. in this Agreement to the exclusive jurisdiction of the federal or state courts of the United States of America located in the City and County of New York, Borough of Manhattan, constitutes a valid and legally binding obligation of the Company and service of process made in the manner set forth in this Agreement will be effective to confer valid personal jurisdiction over the Company and Arcos Dorados B.V. for purposes of proceedings in such courts under the laws of British Virgin Islands and the Netherlands, as applicable.

(xlii) Choice of Law . The choice of law of the State of New York as the governing law of this Agreement is a valid choice of law under the laws of the British Virgin Islands and the Netherlands, and (i) the courts of the British Virgin Islands will honor this choice of law and (ii) the courts of the Netherlands will honor this choice of law, subject to mandatory rules of the Netherlands and other jurisdictions which must be applied despite this choice of law and principles of public order or public policy of the Netherlands or the European Union. The Company is not aware of any reason why this Agreement and, as the case may be, the enforcement in the British Virgin Islands or the Netherlands of a judgment relating to this Agreement would be contrary to the principles of public order or public policy of British Virgin Islands, the Netherlands, or the European Union.

(xliii) Compliance with Security Regulations . The Company is in full compliance with all British Virgin Islands securities rules and regulations, except to the extent failure to comply could not result in a material adverse effect on the consummation of the transactions contemplated hereunder or on the ability of the Company to perform its obligations under or in respect of this Agreement.

(xliv) British Virgin Islands Approvals . Except as disclosed in the General Disclosure Package and the Prospectus under the headings “Description of Capital Stock and Articles of Association” and “Dividends and Dividend Policy,” the Company is not currently prohibited, directly or indirectly, under any agreement or other instrument to which it is a party or is subject or under the current laws and regulations of the British Virgin Islands from, and no approvals are required in the British Virgin Islands in order for the Company to, pay dividends, interest attributable to shareholders’ equity or other distributions declared by the Company to the holders of the Securities or make distributions or transfer any of the Company’s properties or assets to any of its subsidiaries.

(xlv) No Restrictions on Subsidiaries . Except as disclosed in the General Disclosure Package and the Prospectus, and except as would not otherwise materially restrict any subsidiary from paying dividends to the Company, no subsidiary of the Company is currently prohibited, directly or indirectly, under any agreement or other instrument to which it is a party or is subject or under the current laws and regulations of the jurisdiction of its organization, from paying any dividends to the Company, from making any other distribution on such subsidiary’s capital stock, from repaying to the Company any loans or advances to such subsidiary from the Company or

from transferring any of such subsidiary’s properties or assets to the Company or any other subsidiary of the Company.

(b) Representations and Warranties by the Selling Shareholders . Each Selling Shareholder severally and not jointly and with respect to itself only, represents and warrants to and agrees with each Underwriter that:

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

(ii) Noncontravention . The execution and delivery by such Selling Shareholder of, and the performance by such Selling Shareholder of its obligations under, this Agreement will not contravene, conflict with or constitute a breach of, or default under, whether with or without the giving of notice or passage of time or both, or result in the creation or imposition of any tax, lien, charge or encumbrance upon the Securities to be sold by such Selling Shareholder pursuant to (x) the certificate of incorporation or bylaws of such Selling Shareholder (if such Selling Shareholder is a corporation) or (y) any provision of applicable law, any agreement or other instrument binding upon such Selling Shareholder, or any judgment, order or decree of any governmental body, agency or court having jurisdiction over such Selling Shareholder, except, with respect to clause (y), for such conflicts, violations, breaches or defaults which would not reasonably be expected to have a material adverse effect on the ability of such Selling Shareholder to perform its obligations hereunder. No consent, approval, authorization or order of, or qualification, filing or registration with, any governmental body or agency is required for the performance by such Selling Shareholder of its obligations under this Agreement, or in connection with the sale and delivery of such Selling Shareholder’s Securities as contemplated hereunder and in the General Disclosure Package and the Prospectus, except (A) such as have been obtained under the U.S. federal securities laws, (B) such as may be required by the securities laws of any other applicable jurisdiction, including the Blue Sky laws of the various states, or FINRA or stock exchange rules in connection with the offer and sale of the Securities and (C) for such consents, approvals, authorizations, orders and qualifications which, if not obtained, would not reasonably be expected to have a material adverse effect on the ability of such Selling Shareholder to perform its obligations hereunder or on the sale and delivery of such Selling Shareholder’s Securities as contemplated hereunder and in the General Disclosure Package or the Prospectus.

(iii) Valid Title . Such Selling Shareholder has and at the Closing Time and at any Date of Delivery will have valid and unencumbered title to the Securities to be delivered by such Selling Shareholder at the Closing Time and at any Date of Delivery and full right, power and authority to enter into this Agreement and to sell, assign, transfer and deliver the Securities to be delivered by such Selling Shareholder at the Closing Time and at any Date of Delivery hereunder.

(iv) Delivery of Securities . Upon payment of the purchase price for the Securities to be sold by such Selling Shareholder pursuant to this Agreement, delivery of the share certificates and duly executed instruments of transfer in respect of such Securities, as directed by the Underwriters, to Cede & Co. (“Cede”) or such other nominee as may be designated by The Depository Trust Company (“DTC”) (unless delivery of such share certificates and duly executed instruments of transfer is unnecessary because such share certificates and instruments are already in the possession of Cede or such other nominee), registration of such Securities in the Company’s register of members in the name of Cede or such other nominee (unless registration of such securities is unnecessary because such securities are already registered in the name of Cede or such other nominee), and the crediting of such Securities on the books of DTC to securities accounts (within the meaning of Section 8-501(a) of the Uniform Commercial Code

then in effect in the State of New York (“UCC”)) of the Underwriters (assuming that neither DTC nor any such Underwriter has “notice of an adverse claim,” within the meaning of Section 8-105 of the UCC, to such Securities), (A) under Section 8-501 of the UCC, the Underwriters will acquire a “security entitlement” in respect of such Securities and (B) no action (whether framed in conversion, replevin, constructive trust, equitable lien, or other theory) based on any “adverse claim,” within the meaning of Section 8-102(a)(1) of the UCC, to such Securities may be asserted against the Underwriters with respect to such security entitlement; for purposes of this representation, such Selling Shareholder may assume that when such payment, delivery (if necessary) and crediting occur, (I) such Securities will have been registered in the name of Cede or another nominee designated by DTC, in each case on the Company’s register of members in accordance with its certificate of incorporation, memorandum and articles of association and applicable law, (II) DTC will be registered as a “clearing corporation,” within the meaning of Section 8-102(a)(5) of the UCC, (III) appropriate entries to the accounts of the several Underwriters on the records of DTC will have been made pursuant to the UCC, (IV) to the extent DTC, or any other securities intermediary which acts as “clearing corporation” with respect to the Securities, maintains any “financial asset” (as defined in Section 8-102(a)(9) of the UCC) in a clearing corporation pursuant to Section 8-111 of the UCC, the rules of such clearing corporation may affect the rights of DTC or such securities intermediaries and the ownership interests of the Underwriters, (V) claims of creditors of DTC or any other securities intermediary or clearing corporation may be given priority to the extent set forth in Section 8-511(b) and 8-511(c) of the UCC and (VI) if at any time DTC or other securities intermediary does not have sufficient Securities to satisfy claims of all of its entitlement holders with respect thereto, then all holders will share pro rata in the Securities then held by DTC or such securities intermediary.

(vi) No Material Adverse Effect . Such Selling Shareholder is familiar with the Registration Statement, the General Disclosure Package and the Prospectus and has no knowledge of any material fact, condition or information not disclosed in the General Disclosure Package or the Prospectus that has had, or may reasonably be expected to have, a material adverse effect on the Company and its subsidiaries, taken as a whole. Such Selling Shareholder is not prompted by any information concerning the Company or its subsidiaries which is not set forth in the General Disclosure Package to sell its Securities pursuant to this Agreement.

(vii) Absence of Manipulation . Such Selling Shareholder has not taken and will not take, directly or indirectly, any action that is designed to or that has constituted or that would reasonably be expected to cause or result in the stabilization or manipulation of the price of any security of the Company to facilitate the sale to or resale by the Underwriters of the Securities.

(viii) Accurate Disclosure . (A) The Registration Statement, when it became effective, did not contain, and, as amended or supplemented, if applicable, will not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading, (B) the General Disclosure Package, as of the Applicable Time did not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, and (C) the Prospectus as of its date does not contain, and, if applicable, any further supplements to the Prospectus, will not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided that the representations and warranties set forth in this paragraph (vii) are limited to statements or omissions made in reliance upon and in conformity with information relating to such Selling Shareholder furnished in writing by such Selling Shareholder expressly for use in the Registration

Statement, the General Disclosure Package, the Prospectus or any amendments or supplements thereto.

(ix) No Free Writing Prospectuses . Such Selling Shareholder has not prepared or had prepared on its behalf or used or referred to, any “free writing prospectus” (as defined in Rule 405), and has not distributed any written materials in connection with the offer or sale of the Securities.

(c) Officer’s Certificates . Any certificate signed by any officer of the Company or any of its subsidiaries delivered to the Representative or to counsel for the Underwriters shall be deemed a representation and warranty by the Company to each Underwriter as to the matters covered thereby; and any certificate signed by or on behalf of any Selling Shareholder as such and delivered to the Representatives or to counsel for the Underwriters pursuant to the terms of this Agreement shall be deemed a representation and warranty by such Selling Shareholder to the Underwriters as to the matters covered thereby.

SECTION 2. Sale and Delivery to Underwriters; Closing .

(a) Initial Securities . On the basis of the representations and warranties herein contained and subject to the terms and conditions herein set forth, each of the Company and each Selling Shareholder, severally and not jointly, agrees to sell to each Underwriter, severally and not jointly, and each Underwriter, severally and not jointly, agrees to purchase from the Company and each Selling Shareholder, at the price per share set forth in Schedule A, that proportion of the number of Initial Securities set forth in Schedule B opposite the name of the Company or such Selling Shareholder, as the case may be, which the number of Initial Securities set forth in Schedule A opposite the name of such Underwriter, plus any additional number of Initial Securities which such Underwriter may become obligated to purchase pursuant to the provisions of Section 10 hereof, bears to the total number of Initial Securities, subject, in each case, to such adjustments among the Underwriters as the Representatives in their sole discretion shall make to eliminate any sales or purchases of fractional shares.

(b) Option Securities . In addition, on the basis of the representations and warranties herein contained and subject to the terms and conditions herein set forth, the Selling Shareholders, acting severally and not jointly, hereby grant an option to the Underwriters, severally and not jointly, to purchase up to an additional [ — ] Shares, as set forth in Schedule B, at the price per share set forth in Schedule A, less an amount per share equal to any dividends or distributions declared by the Company and payable on the Initial Securities after the Closing Time but not payable on the Option Securities. The option hereby granted may be exercised for 30 days after the date hereof and may be exercised in whole or in part from time to time only for the purpose of covering overallotments made in connection with the offering and distribution of the Initial Securities upon notice by the Representatives to the Selling Shareholders setting forth the number of Option Securities as to which the several Underwriters are then exercising the option and the time and date of payment and delivery for such Option Securities. Any such time and date of delivery (a “Date of Delivery”) shall be determined by the Representatives, but shall not be later than seven full business days after the exercise of said option, nor in any event prior to the Closing Time, and with respect to any exercise of such option after the Closing Time, shall not be earlier than two full business days after the exercise of such option. If the option is exercised as to all or any portion of the Option Securities, each of the Underwriters, acting severally and not jointly, will purchase pro rata from each of the Selling Shareholders in proportion to the number of Option Securities set forth in Schedule B opposite the name of such Selling Shareholder that proportion of the total number of Option Securities then being purchased which the number of Initial Securities set forth in Schedule A opposite the name of such Underwriter bears to the total number of Initial Securities, subject, in each case, to such adjustments

as the Representatives in their sole discretion shall make to eliminate any sales or purchases of fractional shares.

(c) Payment . Payment of the purchase price for, and delivery of duly executed share transfer forms and the share certificates in respect of, the Initial Securities shall be made at the offices of Milbank, Tweed, Hadley & McCloy LLP, 1 Chase Manhattan Plaza, New York, New York 10005, or at such other place as shall be agreed upon by the Representatives and the Company and the Selling Shareholders, at 9:00 A.M. (New York City time) on the third (fourth, if the pricing occurs after 4:30 P.M. (New York City time) on any given day) business day after the date hereof (unless postponed in accordance with the provisions of Section 10), or such other time not later than ten business days after such date as shall be agreed upon by the Representatives and the Company and the Selling Shareholders (such time and date of payment and delivery being herein called “Closing Time”).

In addition, in the event that any or all of the Option Securities are purchased by the Underwriters, payment of the purchase price for, and delivery of duly executed share transfer forms and the share certificates in respect of, such Option Securities shall be made at the above-mentioned offices, or at such other place as shall be agreed upon by the Representatives and the Selling Shareholders, on each Date of Delivery as specified in the notice from the Representatives to the Selling Shareholders.

Payment shall be made to the Company and the Selling Shareholders by wire transfer of immediately available funds to bank accounts designated by the Company and the Selling Shareholders, as the case may be, against delivery to the Representatives for the respective accounts of the Underwriters of duly executed share transfer forms and the share certificates in respect of the Securities to be purchased by them. It is understood that each Underwriter has authorized the Representatives, for its account, to accept delivery of, receipt for, and make payment of the purchase price for, the Initial Securities and the Option Securities, if any, which it has agreed to purchase. Each of the Representatives, individually (as agreed among the Representatives) and not as representative of the Underwriters, may (but shall not be obligated to) make payment of the purchase price for the Initial Securities or the Option Securities, if any, to be purchased by any Underwriter whose funds have not been received by the Closing Time or the relevant Date of Delivery, as the case may be, but such payment shall not relieve such Underwriter from its obligations hereunder.

(d) Denominations; Registration . Certificates for the Initial Securities and the Option Securities, if any, shall be in such denominations and registered in such names as the Representatives may request in writing at least one full business day before the Closing Time or the relevant Date of Delivery, as the case may be. The certificates for the Initial Securities and the Option Securities, if any, will be made available for examination and packaging by the Representatives in The City of New York not later than 10:00 A.M. (New York City time) on the business day prior to the Closing Time or the relevant Date of Delivery, as the case may be.

(e) Appointment of Qualified Independent Underwriter . The Company and the Selling Shareholders hereby confirm their engagement of Merrill Lynch as, and Merrill Lynch hereby confirms its agreement with the Company and the Selling Shareholders to render services as, a “qualified independent underwriter” within the meaning of FINRA Rule 5121 (“Rule 5121”) with respect to the offering and sale of the Securities. Merrill Lynch, solely in its capacity as qualified independent underwriter and not otherwise, is referred to herein as the “QIU.”

(f) Offering by Underwriters. It is understood that the Underwriters propose to offer the Initial Securities for sale to the public as set forth in the Prospectus. Each member of the public who purchases Initial Securities shall be deemed, without any action having been taken by the Underwriters, to have purchased such Initial Securities pro rata between Initial Securities issued and sold by the Company,

on the one hand, and Initial Securities sold by the Selling Shareholders, on the other hand. Notwithstanding the foregoing, and for the avoidance of doubt, the foregoing sentence does not impose any obligation on the Underwriters or affect the rights or obligations of the Underwriters under this Agreement.

SECTION 3. Covenants of the Company, Arcos Dorados B.V. and the Selling Shareholders . Each of the Company, Arcos Dorados B.V. and, to the extent applicable, each Selling Shareholder covenants with each Underwriter as follows:

(a) Compliance with Securities Regulations and Commission Requests . The Company, subject to Section 3(b), will comply with the requirements of Rule 430A, and will notify the Representatives immediately, and confirm the notice in writing, (i) when any post-effective amendment to the Registration Statement shall become effective or any amendment or supplement to the Prospectus shall have been filed, (ii) of the receipt of any comments from the Commission relating to the Registration Statement, (iii) of any request by the Commission for any amendment to the Registration Statement or any amendment or supplement to the Prospectus or for additional information, (iv) of the issuance by the Commission of any stop order suspending the effectiveness of the Registration Statement or any post-effective amendment or of any order preventing or suspending the use of any preliminary prospectus or the Prospectus, or of the suspension of the qualification of the Securities for offering or sale in any jurisdiction, or of the initiation or threatening of any proceedings for any of such purposes or of any examination pursuant to Section 8(e) of the 1933 Act concerning the Registration Statement and (v) if the Company becomes the subject of a proceeding under Section 8A of the 1933 Act in connection with the offering of the Securities. The Company will effect all filings required under Rule 424(b), in the manner and within the time period required by Rule 424(b) (without reliance on Rule 424(b)(8)), and will take such steps as it deems necessary to ascertain promptly whether the form of prospectus transmitted for filing under Rule 424(b) was received for filing by the Commission and, in the event that it was not, it will promptly file such prospectus. The Company will make every reasonable effort to prevent the issuance of any stop order, prevention or suspension and, if any such order is issued, to obtain the lifting thereof as soon as possible.

(b) Continued Compliance with Securities Laws . The Company will comply with the 1933 Act and the 1933 Act Regulations so as to permit the completion of the distribution of the Securities as contemplated in this Agreement and in the General Disclosure Package and the Prospectus. If at any time when a prospectus relating to the Securities is (or, but for the exception afforded by Rule 172 of the 1933 Act Regulations (“Rule 172”), would be) required by the 1933 Act to be delivered in connection with sales of the Securities, any event shall occur or condition shall exist as a result of which it is necessary, in the opinion of counsel for the Underwriters or for the Company, to (i) amend the Registration Statement in order that the Registration Statement will not include an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading, (ii) amend or supplement the General Disclosure Package or the Prospectus in order that the General Disclosure Package or the Prospectus, as the case may be, will not include any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein not misleading in the light of the circumstances existing at the time it is delivered to a purchaser or (iii) amend the Registration Statement or amend or supplement the General Disclosure Package or the Prospectus, as the case may be, in order to comply with the requirements of the 1933 Act or the 1933 Act Regulations, the Company will promptly (A) give the Representatives notice of such event, (B) prepare any amendment or supplement as may be necessary to correct such statement or omission or to make the Registration Statement, the General Disclosure Package or the Prospectus comply with such requirements and, a reasonable amount of time prior to any proposed filing or use, furnish the Representatives with copies of any such amendment or supplement and (C) file with the Commission any such amendment or supplement, provided that the Company shall not file or use any such amendment or supplement to which

the Representatives or counsel for the Underwriters shall object, which consent shall not be unreasonably withheld, provided further that no consent will be required if, in the opinion of U.S. counsel for the Company, such amendment or supplement is required by law. The Company will furnish to the Underwriters such number of copies of such amendment or supplement as the Underwriters may reasonably request. The Company has given the Representatives notice of any filings made pursuant to the 1934 Act or 1934 Act Regulations within 48 hours prior to the Applicable Time; the Company will give the Representatives notice of its intention to make any such filing from the Applicable Time to the Closing Time and will furnish the Representatives with copies of any such documents a reasonable amount of time prior to such proposed filing, as the case may be, and will not file or use any such document to which the Representatives or counsel for the Underwriters shall reasonably object.

(c) Delivery of Registration Statements . The Company has furnished or will deliver to the Representatives and counsel for the Underwriters, without charge, copies of the Registration Statement as originally filed and each amendment thereto (including exhibits filed therewith) and copies of all consents and certificates of experts, and will also deliver to the Representatives, without charge, a conformed copy of the Registration Statement as originally filed and each amendment thereto (without exhibits) for each of the Underwriters. The copies of the Registration Statement and each amendment thereto furnished to the Underwriters will be identical to the electronically transmitted copies thereof filed with the Commission pursuant to EDGAR, except to the extent permitted by Regulation S-T.

(d) Delivery of Prospectuses . The Company has delivered to each Underwriter, without charge, as many copies of each preliminary prospectus as such Underwriter reasonably requested, and the Company hereby consents to the use of such copies for purposes permitted by the 1933 Act. The Company will furnish to each Underwriter, without charge, during the period when a prospectus relating to the Securities is (or, but for the exception afforded by Rule 172, would be) required to be delivered under the 1933 Act, such number of copies of the Prospectus (as amended or supplemented) as such Underwriter may reasonably request. The Prospectus and any amendments or supplements thereto furnished to the Underwriters will be identical to the electronically transmitted copies thereof filed with the Commission pursuant to EDGAR, except to the extent permitted by Regulation S-T.

(e) Blue Sky Qualifications . The Company will use its reasonable efforts, in cooperation with the Underwriters, to qualify the Securities for offering and sale under the applicable securities laws of such states and other jurisdictions (domestic or foreign) as the Representatives may designate and to maintain such qualifications in effect so long as required to complete the distribution of the Securities; provided, however, that the Company shall not be obligated to file any general consent to service of process or to qualify as a foreign corporation or as a dealer in securities in any jurisdiction in which it is not so qualified or to subject itself to taxation in respect of doing business in any jurisdiction in which it is not otherwise so subject.

(f) Rule 158 . The Company will timely file such reports pursuant to the 1934 Act as are necessary in order to make generally available to its securityholders as soon as practicable an earnings statement for the purposes of, and to provide to the Underwriters the benefits contemplated by, the last paragraph of Section 11(a) of the 1933 Act.

(g) Use of Proceeds . The Company will use the net proceeds received by it from the sale of the Securities in the manner specified in the General Disclosure Package and the Prospectus under “Use of Proceeds.”

(h) Listing . The Company will use its best efforts to effect and maintain the listing of the Class A Shares (including the Securities) on the New York Stock Exchange for a period of three years

from the date hereof, provided that the Company may terminate the listing with the approval of the holders of at least a majority of the Class A Shares.

(i) Restriction on Sale of Securities . During a period of 180 days from the date hereof, the Company will not, without the prior written consent of the Representatives, (i) directly or indirectly, offer, pledge, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase or otherwise transfer or dispose of any Shares or any securities convertible into or exercisable or exchangeable for Shares or file any registration statement under the 1933 Act with respect to any of the foregoing or (ii) enter into any swap or any other agreement or any transaction that transfers, in whole or in part, directly or indirectly, the economic consequence of ownership of the Shares, whether any such swap or transaction described in clause (i) or (ii) above is to be settled by delivery of Shares or such other securities, in cash or otherwise. The foregoing sentence shall not apply to (A) the Securities to be sold hereunder and (B) any restricted Shares issued or options to purchase shares granted pursuant to existing employee benefit plans of the Company referred to in the General Disclosure Package and the Prospectus. Notwithstanding the foregoing, if (1) during the last 17 days of the 180-day restricted period the Company issues an earnings release or material news or a material event relating to the Company occurs or (2) prior to the expiration of the 180-day restricted period, the Company announces that it will issue an earnings release, the restrictions imposed in this clause (i) shall continue to apply until the expiration of the 18-day period beginning on the date of the issuance of the earnings release or the occurrence of the material news or material event, unless the Representatives waive, in writing, such extension.

(j) Reporting Requirements . The Company, during the period when a Prospectus relating to the Securities is (or, but for the exception afforded by Rule 172, would be) required to be delivered under the 1933 Act, will file all documents required to be filed with the Commission pursuant to the 1934 Act within the time periods required by the 1934 Act and 1934 Act Regulations. Additionally, the Company shall report the use of proceeds from the issuance of the Securities as may be required under Rule 463 under the 1933 Act.

(k) Issuer Free Writing Prospectuses . Each of the Company and each Selling Shareholder agrees that, unless it obtains the prior written consent of the Representatives, it will not make any offer relating to the Securities that would constitute an Issuer Free Writing Prospectus or that would otherwise constitute a “free writing prospectus,” or a portion thereof, required to be filed by the Company with the Commission or retained by the Company under Rule 433; provided that the Representatives will be deemed to have consented to the Issuer Free Writing Prospectuses listed on Schedule C-2 hereto and any “road show that is a written communication” within the meaning of Rule 433(d)(8)(i) that has been reviewed by the Representatives. The Company represents that it has treated or agrees that it will treat each such free writing prospectus consented to, or deemed consented to, by the Representatives as an “issuer free writing prospectus,” as defined in Rule 433, and that it has complied and will comply with the applicable requirements of Rule 433 with respect thereto, including timely filing with the Commission where required, legending and record keeping. If at any time following issuance of an Issuer Free Writing Prospectus there occurred or occurs an event or development as a result of which such Issuer Free Writing Prospectus conflicted or would conflict with the information contained in the Registration Statement or included or would include an untrue statement of a material fact or omitted or would omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances existing at that subsequent time, not misleading, the Company will promptly notify the Representatives and will promptly amend or supplement, at its own expense, such Issuer Free Writing Prospectus to eliminate or correct such conflict, untrue statement or omission.

(l) Compliance with FINRA Rules . The Company hereby agrees that it will ensure that the Reserved Securities will be restricted as required by FINRA or the FINRA rules from sale, transfer,

assignment, pledge or hypothecation for a period of three months following the date of this Agreement. The Underwriters will notify the Company as to which persons will need to be so restricted. At the request of the Underwriters, the Company will direct the transfer agent to place a stop transfer restriction upon such securities for such period of time. Should the Company release, or seek to release, from such restrictions any of the Reserved Securities, the Company agrees to reimburse the Underwriters for any reasonable expenses (including, without limitation, legal expenses) they incur in connection with such release.

SECTION 4. Payment of Expenses .

(a) Expenses . The Company and Arcos Dorados B.V. will pay or cause to be paid all expenses incident to the performance of their obligations under this Agreement, including (i) the preparation, printing and filing of the Registration Statement (including financial statements and exhibits) as originally filed and each amendment thereto, (ii) the preparation, printing and delivery to the Underwriters of copies of each preliminary prospectus, each Issuer Free Writing Prospectus and the Prospectus and any amendments or supplements thereto and any costs associated with electronic delivery of any of the foregoing by the Underwriters to investors, (iii) the preparation, issuance and delivery of the certificates for the Securities to the Underwriters, including any stock or other transfer taxes and any stamp or other duties payable upon the sale, issuance or delivery of the Securities to the Underwriters, (iv) the fees and disbursements of the Company’s counsel, accountants and other advisors, (v) the qualification of the Securities under securities laws in accordance with the provisions of Section 3(f) hereof, including filing fees and the reasonable fees and disbursements of counsel for the Underwriters in connection therewith and in connection with the preparation of the Blue Sky Survey and any supplement thereto, (vi) the fees and expenses of any transfer agent or registrar for the Securities, (vii) the costs and expenses of the Company relating to investor presentations on any “road show” undertaken in connection with the marketing of the Securities, including without limitation, expenses associated with the production of road show slides and graphics, fees and expenses of any consultants engaged in connection with the road show presentations, travel and lodging expenses of the representatives and officers of the Company and any such consultants, and the cost of aircraft and other transportation chartered in connection with the road show, (viii) the filing fees incident to, and the reasonable fees and disbursements of counsel to the Underwriters in connection with, the review by FINRA of the terms of the sale of the Securities, (ix) the fees and expenses incurred in connection with the listing of the Securities on the New York Stock Exchange and (x) the costs and expenses (including, without limitation, any damages or other amounts payable in connection with legal or contractual liability) associated with the reforming of any contracts for sale of the Securities made by the Underwriters caused by a breach of the representation contained in the third sentence of Section 1(a)(ii) and (xi) all costs and expenses of the Underwriters, including the fees and disbursements of counsel for the Underwriters; provided that notwithstanding the foregoing, the Company shall not be required to pay, or reimburse (A) costs and expenses of the Underwriters incurred in connection with matters related to the Reserved Securities which are designated by the Company for sale to Invitees; (B) costs and expenses incurred by any of Merrill Lynch, J.P. Morgan and Morgan Stanley in connection with the road show or other out-of-pocket expenses in excess of $150,000 each; (C) any costs and expenses incurred by any of Itau BBA and Citi in connection with the road show or other out-of-pocket expenses in excess of $75,000 each; (D) the fees of Milbank, Tweed, Hadley & McCloy, special U.S. counsel for the Underwriters, and Walkers, British Virgin Islands counsel for the Underwriters, in excess of the amounts set forth in the quotes separately provided to the Company.

(b) Expenses of the Selling Shareholders . The Selling Shareholders, severally, will pay all expenses incident to the performance of their respective obligations under, and the consummation of the transactions contemplated by, this Agreement, including (i) any stamp and other duties and stock and other transfer taxes, if any, payable upon the sale of the Securities to the Underwriters and (ii) the fees and disbursements of their respective counsel and other advisors.

(c) Termination of Agreement . If this Agreement is terminated by the Representatives in accordance with the provisions of Section 5, Section 9(a)(i) or (iii) or Section 11 hereof, the Company and Arcos Dorados B.V. shall reimburse the Underwriters for all of their out-of-pocket expenses, including the reasonable fees and disbursements of counsel for the Underwriters, subject to the caps on fees, expenses and costs set forth in Section 4(a).

(d) Allocation of Expenses . The provisions of this Section shall not affect any agreement that the Company, Arcos Dorados B.V. and the Selling Shareholders may make for the sharing of such costs and expenses.

SECTION 5. Conditions of Underwriters’ Obligations . The obligations of the several Underwriters hereunder are subject to the accuracy of the representations and warranties of the Company, Arcos Dorados B.V. and the Selling Shareholders contained herein or in certificates of any officer of the Company or any of its subsidiaries or on behalf of any Selling Shareholder delivered pursuant to the provisions hereof, to the performance by the Company, Arcos Dorados B.V. and each Selling Shareholder of their respective covenants and other obligations hereunder, and to the following further conditions:

(a) Effectiveness of Registration Statement; Rule 430A Information . The Registration Statement, including any Rule 462(b) Registration Statement, has become effective and at Closing Time no stop order suspending the effectiveness of the Registration Statement or any post-effective amendment thereto has been issued under the 1933 Act, no order preventing or suspending the use of any preliminary prospectus or the Prospectus has been issued and no proceedings for any of those purposes have been instituted or are pending or, to the Company’s knowledge, contemplated; and the Company has complied with each request (if any) from the Commission for additional information. A prospectus containing the Rule 430A Information shall have been filed with the Commission in the manner and within the time frame required by Rule 424(b) without reliance on Rule 424(b)(8) or a post-effective amendment providing such information shall have been filed with, and declared effective by, the Commission in accordance with the requirements of Rule 430A.

(b) Opinion of U.S. Counsel for Company . At the Closing Time, the Representatives shall have received the favorable opinion, dated the Closing Time, of Davis Polk & Wardwell LLP, special U.S. counsel for the Company, in form and substance satisfactory to counsel for the Underwriters, together with signed or reproduced copies of such letter for each of the other Underwriters to the effect set forth in Exhibit A hereto and to such further effect as counsel to the Underwriters may reasonably request.

(c) Opinion of British Virgin Islands Counsel for the Company . At the Closing Time, the Representatives shall have received the favorable opinion, dated the Closing Time, of Maples & Calder, British Virgin Islands counsel for the Company, in form and substance satisfactory to counsel for the Underwriters, together with signed or reproduced copies of such letter for each of the other Underwriters to the effect set forth in Exhibit B hereto and to such further effect as counsel to the Underwriters may reasonably request.

(d) Opinion of Netherlands Counsel for Arcos Dorados B.V . At the Closing Time, the Representatives shall have received the favorable opinion, dated the Closing Time, of NautaDutilh New York P.C., Netherlands counsel for Arcos Dorados B.V., in form and substance satisfactory to counsel for the Underwriters, together with signed or reproduced copies of such letter for each of the other Underwriters to the effect set forth in Exhibit C hereto and to such further effect as counsel to the Underwriters may reasonably request.

(e) Opinion of U.S. Counsel for the Selling Shareholders . At the Closing Time, the Representatives shall have received the favorable opinion, dated the Closing Time, of (i) Davis Polk &

Wardwell LLP, special U.S. counsel for DLJ South American Partners L.P. and DLJSAP Restco Co-Investments LLC; (ii) Debevoise & Plimpton LLP, special U.S. counsel for Capital International Private Equity Fund V, L.P. and CGPE V, L.P.; and (iii) Clifford Chance US LLP, special U.S. counsel for Gávea Investment AD, L.P., in form and substance satisfactory to counsel for the Underwriters, together with signed or reproduced copies of such letter for each of the other Underwriters to the effect set forth in Exhibit D hereto and to such further effect as counsel to the Underwriters may reasonably request.

(f) Opinion of Local Counsel for the Selling Shareholders . At the Closing Time, the Representatives shall have received the favorable opinion, dated the Closing Time, of (i) McCarthy Tétrault LLP, Canadian counsel for DLJ South American Partners L.L.C.; (ii) Walkers, Cayman Islands counsel for Capital International Private Equity Fund V, L.P. and CGPE V, L.P.; (iii) Richards, Layton & Finger, P.A., Delaware counsel for Capital International Investments V, LLC; (iv) Maples & Calder, Cayman Islands counsel for Gávea Investment AD, L.P.; and (v) Natascha Alexandra de Oliveira Javoski, general counsel to GIF Gestão de Investimentos e Participações Ltda, in form and substance satisfactory to counsel for the Underwriters, together with signed or reproduced copies of such letter for each of the other Underwriters to the effect set forth in Exhibit E hereto and to such further effect as counsel to the Underwriters may reasonably request.

(g) Opinion of U.S. Counsel for the Underwriters . At Closing Time, the Representatives shall have received the favorable opinion, dated the Closing Time, of Milbank, Tweed, Hadley & McCloy LLP, special U.S. counsel for the Underwriters, together with signed or reproduced copies of such letter for each of the other Underwriters with respect to the matters set forth in clauses [ ], the penultimate paragraph of Exhibit A hereto, and other matters as the Representatives may require. In giving such opinion such counsel may rely, as to all matters governed by the laws of jurisdictions other than the law of the State of New York and the federal securities laws of the United States, upon the opinions of counsel satisfactory to the Representatives. Such counsel may also state that, insofar as such opinion involves factual matters, they have relied, to the extent they deem proper, upon certificates of officers and other representatives of the Company and its subsidiaries and certificates of public officials.

(h) Opinion of British Virgin Islands Counsel for the Underwriters . At the Closing Time, the Representatives shall have received the favorable opinion, dated the Closing Time, of Walkers, British Virgin Islands counsel for the Underwriters, together with signed or reproduced copies of such letter for each of the other Underwriters with respect to the matters set forth in clauses [ ], the penultimate paragraph of Exhibit B hereto, and other matters as the Representatives may require. In giving such opinion such counsel may rely, as to all matters governed by the laws of jurisdictions other than the law of the British Virgin Islands, upon the opinions of counsel satisfactory to the Representatives. Such counsel may also state that, insofar as such opinion involves factual matters, they have relied, to the extent they deem proper, upon certificates of officers and other representatives of the Company and its subsidiaries and certificates of public officials.

(i) Opinion of Local Counsel . At the Closing Time, the Representatives shall have received the favorable opinion, dated the Closing Time, of Bruchou, Fernández Madero & Lombardi, Argentine counsel, Tozzini Freire Advogados, Brazilian counsel, Ritch Mueller, S.C., Mexican counsel, O’Neill & Borges, Puerto Rican counsel, and Torres Plaz & Araujo, Venezuelan counsel, in form and substance satisfactory to counsel for the Underwriters, together with signed or reproduced copies of such letter for each of the other Underwriters substantially to the effect set forth in Exhibit F hereto and to such further effect as counsel to the Underwriters may reasonably request.

(j) No Material Adverse Change. Subsequent to the execution and delivery of this Agreement and prior to the Closing Time, there shall not have occurred any change, or any development involving a prospective change, in the condition, financial or otherwise, or in the earnings, business or

operations of the Company and its subsidiaries, taken as a whole, from that set forth in the General Disclosure Package and the Prospectus as of the date of this Agreement provided to the prospective purchasers of the Securities that, in the judgment of the Representatives, is material and adverse and that makes it, in the judgment of the Representatives, impracticable to market the Securities on the terms and in the manner contemplated in the General Disclosure Package and the Prospectus.

(k) Officers’ Certificate . The Representatives shall have received a certificate of the Chief Executive Officer or the President of the Company and of the chief financial or chief accounting officer of the Company, dated the Closing Time, to the effect set forth in Section 5(h) and to the effect that (i) the representations and warranties of the Company in this Agreement are true and correct with the same force and effect as though expressly made at and as of the Closing Time, (ii) the Company has complied with all agreements and satisfied all conditions on its part to be performed or satisfied at or prior to the Closing Time, and (iii) no stop order suspending the effectiveness of the Registration Statement under the 1933 Act has been issued, no order preventing or suspending the use of any preliminary prospectus or the Prospectus has been issued and no proceedings for any of those purposes have been instituted or are pending or, to their knowledge, contemplated.

(l) Certificate of Selling Shareholders . At the Closing Time, the Representatives shall have received a certificate of the Chief Executive Officer, the President or the Corporate Director of each Selling Shareholder and of the chief financial or chief accounting officer of each Selling Shareholder, dated the Closing Time, to the effect that (i) the representations and warranties of such Selling Shareholder in this Agreement are true and correct with the same force and effect as though expressly made at and as of the Closing Time and (ii) such Selling Shareholder has complied with all agreements and all conditions on its part to be performed under this Agreement at or prior to the Closing Time.

(m) Accountant’s Comfort Letter . At the time of the execution of this Agreement, the Representatives shall have received from Ernst & Young a letter, dated such date, in form and substance satisfactory to the Representatives, together with signed or reproduced copies of such letter for each of the other Underwriters containing statements and information of the type ordinarily included in accountants’ “comfort letters” to underwriters with respect to the financial statements and certain financial information contained in the Registration Statement, the General Disclosure Package and the Prospectus.

(n) Bring-down Comfort Letter . At the Closing Time, the Representatives shall have received from Ernst & Young a letter, dated as of the Closing Time, to the effect that they reaffirm the statements made in the letter furnished pursuant to subsection (g) of this Section, except that the specified date referred to shall be a date not more than three business days prior to the Closing Time.

(o) Approval of Listing . At the Closing Time, the Securities shall have been approved for listing on the New York Stock Exchange, subject only to official notice of issuance.

(p) No Objection . FINRA has confirmed that it has not raised any objection with respect to the fairness and reasonableness of the underwriting terms and arrangements relating to the offering of the Securities.

(q) Lock-up Agreements . At the date of this Agreement, the Representatives shall have received an agreement substantially in the form of Exhibit G hereto signed by the persons listed on Schedule D hereto.

(r) Maintenance of Rating . Since the execution of this Agreement, there shall not have been any decrease in or withdrawal of the rating of any securities of the Company or any of its subsidiaries by any “nationally recognized statistical rating organization” (as defined for purposes of Rule 436(g) under

the 1933 Act) or any notice given of any intended or potential decrease in or withdrawal of any such rating or of a possible change in any such rating that does not indicate the direction of the possible change.

(s) Conditions to Purchase of Option Securities . In the event that the Underwriters exercise their option provided in Section 2(b) hereof to purchase all or any portion of the Option Securities, the representations and warranties of the Company and the Selling Shareholders contained herein and the statements in any certificates furnished by the Company, any of its subsidiaries and the Selling Shareholders hereunder shall be true and correct as of each Date of Delivery and, at the relevant Date of Delivery, the Representatives shall have received:

(i) Officers’ Certificate . A certificate, dated such Date of Delivery, of the President or a Vice President of the Company and of the chief financial or chief accounting officer of the Company confirming that the certificate delivered at the Closing Time pursuant to Section 5(k) hereof remains true and correct as of such Date of Delivery.

(ii) Certificate of Selling Shareholders . A certificate, dated such Date of Delivery, of the President, a Vice President or the Corporate Director of each Selling Shareholder and of the chief financial or chief accounting officer of each Selling Shareholder confirming that the certificate delivered at the Closing Time pursuant to Section 5(l) remains true and correct as of such Date of Delivery.

(iii) Opinion of Counsel for Company . If requested by the Representatives, the favorable opinion of Davis Polk & Wardwell LLP, special U.S. counsel for the Company, together with the favorable opinions of Maples & Calder, British Virgin Islands counsel for the Company, each in form and substance satisfactory to counsel for the Underwriters, dated such Date of Delivery, relating to the Option Securities to be purchased on such Date of Delivery and otherwise to the same effect as the opinion required by Sections 5(b) and 5(c) hereof, respectively.

(iii) Opinion of Counsel for Arcos Dorados B.V. If requested by the Representatives, the favorable opinion of NautaDutilh New York P.C., Netherlands counsel for Arcos Dorados B.V., in form and substance satisfactory to counsel for the Underwriters, dated such Date of Delivery, relating to the Option Securities to be purchased on such Date of Delivery and otherwise to the same effect as the opinion required by Section 5(d) hereof.

(iv) Opinion of Counsel for the Selling Shareholders . If requested by the Representatives, the favorable opinion of (i) Davis Polk & Wardwell LLP, special U.S. counsel for DLJ South American Partners L.P. and DLJSAP Restco Co-Investments LLC; (ii) Debevoise & Plimpton LLP, special U.S. counsel for Capital International Private Equity Fund V, L.P. and CGPE V, L.P.; and (iii) Clifford Chance US LLP, special U.S. counsel for Gávea Investment AD, L.P., (iv) McCarthy Tétrault LLP, Canadian counsel for DLJ South American Partners L.L.C.; (v) Walkers, Cayman Islands counsel for Capital International Private Equity Fund V, L.P. and CGPE V, L.P.; (vi) Richards, Layton & Finger, P.A., Delaware counsel for Capital International Investments V, LLC; (vii) Maples & Calder, Cayman Islands counsel for Gávea Investment AD, L.P.; and (viii) Natascha Alexandra de Oliveira Javoski, general counsel to GIF Gestão de Investimentos e Participações Ltda, in form and substance satisfactory to counsel for the Underwriters, dated such Date of Delivery, relating to the Option Securities to be purchased on such Date of Delivery and otherwise to the same effect as the opinion required by Sections 5(e) and 5(f) hereof, respectively.

(v) Opinion of Counsel for Underwriters . If requested by the Representatives, the favorable opinion of Milbank, Tweed, Hadley & McCloy LLP, counsel for the Underwriters, together with the favorable opinion of Walkers, British Virgin Islands counsel for the Underwriters, dated such Date of Delivery, relating to the Option Securities to be purchased on such Date of Delivery and otherwise to the same effect as the opinion required by Sections 5(g) and 5(h) hereof, respectively.

(vi) Opinion of Local Counsel . If requested by the Representatives, the favorable opinion of Bruchou, Fernández Madero & Lombardi, Argentine counsel, Tozzini Freire Advogados, Brazilian counsel, Ritch Mueller, S.C., Mexican counsel, O’Neill & Borges, Puerto Rican counsel, and Torres Plaz & Araujo, Venezuelan counsel, each in form and substance satisfactory to counsel for the Underwriters, dated such Date of Delivery, relating to the Option Securities to be purchased on such Date of Delivery and otherwise to the same effect as the opinion required by Section 5(i) hereof.

(vii) Bring-down Comfort Letter . If requested by the Representatives, a letter from Ernst & Young, in form and substance satisfactory to the Representatives and dated such Date of Delivery, substantially in the same form and substance as the letter furnished to the Representatives pursuant to Section 5(l) hereof, except that the “specified date” in the letter furnished pursuant to this paragraph shall be a date not more than three business days prior to such Date of Delivery.

(t) Additional Documents . At the Closing Time and at each Date of Delivery (if any) counsel for the Underwriters shall have been furnished with such documents and opinions as they may require for the purpose of enabling them to pass upon the issuance and sale of the Securities as herein contemplated, or in order to evidence the accuracy of any of the representations or warranties, or the fulfillment of any of the conditions, herein contained; and all proceedings taken by the Company and the Selling Shareholders in connection with the issuance and sale of the Securities as herein contemplated shall be satisfactory in form and substance to the Representatives and counsel for the Underwriters.

(u) Termination of Agreement . If any condition specified in this Section shall not have been fulfilled when and as required to be fulfilled, this Agreement, or, in the case of any condition to the purchase of Option Securities on a Date of Delivery which is after the Closing Time, the obligations of the several Underwriters to purchase the relevant Option Securities, may be terminated by the Representatives by notice to the Company and the Selling Shareholders at any time at or prior to Closing Time or such Date of Delivery, as the case may be, and such termination shall be without liability of any party to any other party except as provided in Section 4 and except that Sections 1, 6, 7, 8, 15 and 16 shall survive any such termination and remain in full force and effect.

SECTION 6. Indemnification .

(a) Indemnification of Underwriters . The Company and Arcos Dorados B.V., jointly and severally, agree to indemnify and hold harmless each Underwriter, each person, if any, who controls any Underwriter within the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act, and its affiliates (as such term is defined in Rule 501(b) under the 1933 Act (each, an “Affiliate”)) as follows:

(i) from and against any and all losses, claims, damages and liabilities (including, without limitation, any legal or other expenses reasonably incurred in connection with defending or investigating any such action or claim), as incurred, caused by any untrue statement or alleged untrue statement of a material fact contained in the Registration Statement (or any amendment thereto), including the Rule 430A Information, or caused by any omission or alleged omission

therefrom of a material fact required to be stated therein or necessary to make the statements therein not misleading or caused by any untrue statement or alleged untrue statement of a material fact included in any preliminary prospectus, any Issuer Free Writing Prospectus or the Prospectus (or any amendment or supplement thereto), [or in any Marketing Materials,] or caused by any omission or alleged omission in any preliminary prospectus, Issuer Free Writing Prospectus or Prospectus [or in any Marketing Materials] ² ¹ of a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading;

(ii) against any and all losses, claims, damages and liabilities whatsoever, as incurred, to the extent of the aggregate amount paid in settlement of any litigation, or any investigation or proceeding by any governmental agency or body, commenced or threatened, or of any claim whatsoever based upon any such untrue statement or omission, or any such alleged untrue statement or omission; provided that (subject to Section 6(e) below) any such settlement is effected with the written consent of the Company and the Selling Shareholders;

provided, however, that this indemnity agreement shall not apply to any losses, claims, damages and liabilities that are caused by any untrue statement or omission or alleged untrue statement or omission made in the Registration Statement (or any amendment thereto) or the Prospectus (or any amendment or supplement thereto) in reliance upon and in conformity with the Underwriter Information.

(b) Indemnification of Underwriters by Selling Shareholders . Each Selling Shareholder agrees, severally and not jointly, to indemnify and hold harmless each Underwriter, each Underwriter’s affiliates (as such term is defined in Rule 405 under the 1933 Act), its directors and officers and each person, if any, who controls any Underwriter within the meaning of either Section 15 of the 1933 Act or Section 20 of the 1934 Act from and against any and all losses, claims, damages and liabilities (including, without limitation, any legal or other expenses reasonably incurred in connection with defending or investigating any such action or claim) caused by any untrue statement or alleged untrue statement of a material fact contained in the Registration Statement, the General Disclosure Package or the Prospectus or any amendment or supplement thereto, or in any Issuer Free Writing Prospectus or caused by any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, in each case to the extent, but only to the extent, that such untrue statement or alleged untrue statement or omission or alleged omission was made in the Registration Statement, the General Disclosure Package, the Prospectus or any amendment or supplement thereto or in any Issuer Free Writing Prospectus in reliance upon and in conformity with written information pertaining to such Selling Shareholder furnished to the Company by such Selling Shareholder expressly for inclusion therein. The indemnity provided by such Selling Shareholder under this Section 6(b) shall not exceed the proceeds after underwriting commissions and discounts, but before expenses, received by such Selling Shareholder from the Underwriters for the sale of its Securities in the offering.

(c) Indemnification of Company, Arcos Dorados B.V., Directors and Officers and Selling Shareholders . Each Underwriter, severally and not jointly, agrees to indemnify and hold harmless the Company and Arcos Dorados B.V., their directors, each of their officers who signed the Registration Statement, and each person, if any, who controls the Company and Arcos Dorados B.V. within the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act, and each Selling Shareholder and each person, if any, who controls any Selling Shareholder within the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act to the same extent as the indemnity contained in subsection (a) of this Section, as incurred, but only with respect to untrue statements or omissions, or alleged untrue statements or omissions, made in the Registration Statement or the Prospectus or any amendment or supplement

²¹	To be determined whether there will be any marketing materials other than the Roadshow.

thereto or in any Issuer Free Writing Prospectus in reliance upon and in conformity with the Underwriter Information.

(d) Actions against Parties; Notification . Each indemnified party shall give written notice as promptly as reasonably practicable to each indemnifying party of any action commenced against it in respect of which indemnity may be sought hereunder, but failure to so notify an indemnifying party shall not relieve such indemnifying party from any liability hereunder to the extent it is not materially prejudiced as a result thereof and in any event shall not relieve it from any liability which it may have otherwise than on account of this indemnity agreement. In the case of parties indemnified pursuant to Sections 6(a), 6(b) and 6(c) above, the indemnifying party, upon request of the indemnified party, shall retain counsel reasonably satisfactory to the indemnified party to represent the indemnified party and any others the indemnifying party may designate in such proceeding and shall pay the fees and disbursements of such counsel related to such proceeding. In any such proceeding, any indemnified party shall have the right to retain its own counsel, but the fees and expenses of such counsel shall be at the expense of such indemnified party unless (i) the indemnifying party and the indemnified party shall have mutually agreed to the retention of such counsel, (ii) the named parties to any such proceeding (including any impleaded parties) include both the indemnifying party and the indemnified party and representation of both parties by the same counsel would be inappropriate due to actual or potential differing interests between them, or (iii) the actual or potential defendants in, or targets of, any such action include both the indemnified party and the indemnifying party and the indemnified party shall have reasonably concluded that there may be legal defenses available to it and/or other indemnified parties that are different from or additional to those available to the indemnifying party. An indemnifying party may participate at its own expense in the defense of any such action; provided, however, that counsel to the indemnifying party shall not (except with the consent of the indemnified party) also be counsel to the indemnified party. It is understood that the indemnifying parties shall not, in respect of the legal expenses of any indemnified party in connection with any proceeding or related proceedings in the same jurisdiction, be liable for the fees and expenses of more than one separate firm (in addition to any local counsel) for all such indemnified parties and that all such fees and expenses shall be reimbursed as they are incurred; provided, that, if indemnity is sought pursuant to Section 6(g), then, in addition to the fees and expenses of such counsel for the indemnified parties, the indemnifying parties shall be liable for the reasonable fees and expenses of not more than one counsel (in addition to any local counsel) separate from its own counsel and that of the other indemnified parties for the QIU in its capacity as a “qualified independent underwriter” and all persons, if any, who control the QIU within the meaning of Section 15 of the 1933 Act or Section 20 of 1934 Act in connection with any one action or separate but similar or related actions in the same jurisdiction arising out of the same general allegations or circumstances if, in the reasonable judgment of the QIU, there may exist a conflict of interest between the QIU and the other indemnified parties. Any such separate counsel for the QIU and such control persons of the QIU shall be designated in writing by the QIU. No indemnifying party shall, without the prior written consent of the indemnified parties, settle or compromise or consent to the entry of any judgment with respect to any litigation, or any investigation or proceeding by any governmental agency or body, commenced or threatened, or any claim whatsoever in respect of which indemnification or contribution could be sought under this Section 6 or Section 7 hereof (whether or not the indemnified parties are actual or potential parties thereto), unless such settlement, compromise or consent (i) includes an unconditional release of each indemnified party from all liability arising out of such litigation, investigation, proceeding or claim and (ii) does not include a statement as to or an admission of fault, culpability or a failure to act by or on behalf of any indemnified party.

(e) Settlement without Consent if Failure to Reimburse . If at any time an indemnified party shall have requested an indemnifying party to reimburse the indemnified party for fees and expenses of counsel, such indemnifying party agrees that it shall be liable for any settlement of the nature contemplated by Section 6(a)(ii) or settlement of any claim in connection with any violation referred to in Section 6(f) effected without its written consent if (i) such settlement is entered into more than 45 days

after receipt by such indemnifying party of the aforesaid request and (ii) such indemnifying party shall not have reimbursed the indemnified party in accordance with such request prior to the date of such settlement.

(f) Indemnification for Reserved Securities . In connection with the offer and sale of the Reserved Securities, the Company and Arcos Dorados B.V. agree to indemnify and hold harmless the Underwriters, their Affiliates and selling agents and each person, if any, who controls any Underwriter within the meaning of either Section 15 of the 1933 Act or Section 20 of the 1934 Act, from and against any and all losses, claims, damages and liabilities (including, without limitation, any legal or other expenses reasonably incurred in connection with defending, investigating or settling any such action or claim), as incurred, (i) arising out of the violation of any applicable laws or regulations of foreign jurisdictions where Reserved Securities have been offered, (ii) caused by any untrue statement or alleged untrue statement of a material fact contained in any prospectus wrapper or other material prepared by or with the consent of the Company for distribution to Invitees in connection with the offering of the Reserved Securities or caused by any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein, not misleading, (iii) caused by the failure of any Invitee to pay for and accept delivery of Reserved Securities which have been orally confirmed for purchase by any Invitee by 8:00 A.M. (New York City time) on the first business day after the date of the Agreement or (iv) related to, or arising out of or in connection with, the offering of the Reserved Securities.

(g) Indemnification of QIU . In addition to and without limitation of the Company’s and each Selling Shareholder’s obligation to indemnify Merrill Lynch as an Underwriter, the Company and each Selling Shareholder, jointly and severally, agree to indemnify and hold harmless the QIU, its Affiliates and selling agents and each person, if any, who controls the QIU within the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act, from and against any and all losses, claims, damages and liabilities (including, without limitation, any legal or other expenses reasonably incurred in connection with defending, investigating or settling any such action or claim), incurred as a result of the QIU’s participation as a “qualified independent underwriter” within the meaning of Rule 5121 in connection with the offering of the Securities.

(h) Other Agreements with Respect to Indemnification . The provisions of this Section shall not affect any agreement among the Company, Arcos Dorados B.V. and the Selling Shareholders with respect to indemnification.

SECTION 7. Contribution . If the indemnification provided for in Section 6 hereof is unavailable to an indemnified party or insufficient in respect of any losses, claims, damages or liabilities referred to therein, then each indemnifying party, in lieu of indemnifying such indemnified party thereunder, shall contribute to the amount paid or payable by such indemnified party as a result of such losses, claims, damages or liabilities, (i) in such proportion as is appropriate to reflect the relative benefits received by the Company, Arcos Dorados B.V. and the Selling Shareholders, on the one hand, and the Underwriters, on the other hand, from the offering of the Securities pursuant to this Agreement or (ii) if the allocation provided by clause (i) is not permitted by applicable law, in such proportion as is appropriate to reflect not only the relative benefits referred to in clause (i) above but also the relative fault of the Company and the Selling Shareholders, on the one hand, and of the Underwriters, on the other hand, in connection with the statements or omissions, or in connection with any violation of the nature referred to in Section 6(f) hereof, which resulted in such losses, claims, damages or liabilities, as well as any other relevant equitable considerations.

The relative benefits received by the Company, Arcos Dorados B.V. and the Selling Shareholders, on the one hand, and the Underwriters, on the other hand, in connection with the offering of

the Securities pursuant to this Agreement shall be deemed to be in the same respective proportions as the net proceeds from the offering of the Securities pursuant to this Agreement (before deducting expenses) received by the Company, Arcos Dorados B.V. and the Selling Shareholders, on the one hand, and the total underwriting discount received by the Underwriters, on the other hand, in each case as set forth on the cover of the Prospectus, bear to the aggregate initial public offering price of the Securities as set forth on the cover of the Prospectus.

The relative fault of the Company, Arcos Dorados B.V. and the Selling Shareholders, on the one hand, and the Underwriters, on the other hand, shall be determined by reference to, among other things, whether any such untrue or alleged untrue statement of a material fact or omission or alleged omission to state a material fact relates to information supplied by the Company or the Selling Shareholders or by the Underwriters and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission or any violation of the nature referred to in Section 6(f) hereof.

The Company, Arcos Dorados B.V., the Selling Shareholders and the Underwriters agree that it would not be just and equitable if contribution pursuant to this Section 7 were determined by pro rata allocation (even if the Underwriters were treated as one entity for such purpose) or by any other method of allocation which does not take account of the equitable considerations referred to above in this Section 7. The aggregate amount of losses, claims, damages and liabilities incurred by an indemnified party and referred to above in this Section 7 shall be deemed to include, subject to the limitations set forth above, any legal or other expenses reasonably incurred by such indemnified party in connection with investigating or defending any such action or claim.

Notwithstanding the provisions of this Section 7, no Underwriter shall be required to contribute any amount in excess of the amount of underwriting commissions received by such Underwriter in connection with the Shares underwritten by it and distributed to the public that exceeds the amount of any damages that such Underwriter has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission, or alleged omission.

Notwithstanding the provisions of this Section 7, no Selling Shareholder shall be required to contribute any amount, taken together with any amount paid by such Selling Shareholder pursuant to Section 6, in excess of the proceeds after underwriting discounts and commissions, but before expenses, received by such Selling Shareholder from the Underwriters for the sale of its Securities in the offering.

No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the 1933 Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. The remedies provided in this Section 7 are not exclusive and shall not limit any rights or remedies which may otherwise be available to any indemnified party at law or in equity.

The Underwriters’ respective obligations to contribute pursuant to this Section 7 are several in proportion to the number of Initial Securities set forth opposite their respective names in Schedule A hereto and not joint. The indemnity and contribution provisions contained in Sections 6 and 7 and the representations, warranties and other statements of the Company contained in this Agreement shall remain operative and in full force and effect regardless of (i) any termination of this Agreement, (ii) any investigation made by or on behalf of any Underwriter, any person controlling any Underwriter or any affiliate of any Underwriter or by or on behalf of the Company, its officers or directors or any person controlling the Company and (iii) acceptance of and payment for any of the Securities.

The provisions of this Section shall not affect any agreement among the Company and the Selling Shareholders with respect to contribution.

SECTION 8. Representations, Warranties and Agreements to Survive . All representations, warranties and agreements contained in this Agreement or in certificates of officers of the Company, Arcos Dorados B.V. or any of its or their subsidiaries or the Selling Shareholders submitted pursuant hereto, shall remain operative and in full force and effect regardless of (i) any investigation made by or on behalf of any Underwriter or its Affiliates or selling agents, any person controlling any Underwriter, its officers or directors, any person controlling the Company, any person controlling Arcos Dorados B.V. or any person controlling any Selling Shareholder and (ii) delivery of and payment for the Securities.

SECTION 9. Termination of Agreement .

(a) Termination . The Representatives may terminate this Agreement by notice to the Company and the Selling Shareholders, if after the execution and delivery of this Agreement and prior to the Closing Time (i) trading generally shall have been suspended or materially limited on, or by, as the case may be, any of the New York Stock Exchange, the American Stock Exchange, the NASDAQ Global Market, the Chicago Board of Options Exchange, the Chicago Mercantile Exchange, the Chicago Board of Trade, the Bolsa de Valores, Mercadorias & Futuros de São Paulo , the Bolsa de Comercio de Buenos Aires , or the Bolsa Mexicana de Valores , (ii) trading of any securities of the Company shall have been suspended on any exchange or in any over-the-counter market, (iii) a material disruption in securities settlement, payment or clearance services in the United States or with respect to Clearstream or Euroclear systems in Europe shall have occurred, (iv) any moratorium on commercial banking activities shall have been declared by U.S. Federal or New York State authorities, or authorities of the British Virgin Islands, the Netherlands, Argentina, Brazil or Mexico or (v) there shall have occurred any outbreak or escalation of hostilities, or any change in financial markets, currency exchange rates or controls or any calamity or crisis that, in your judgment, is material and adverse and which, singly or together with any other event specified in this clause (v), makes it, in your judgment, impracticable or inadvisable to proceed with the offer, sale or delivery of the Securities on the terms and in the manner contemplated in the General Disclosure Package or the Prospectus.

(b) Liabilities . If this Agreement is terminated pursuant to this Section, such termination shall be without liability of any party to any other party except as provided in Section 4 hereof, and provided further that Sections 1, 6, 7, 8, 15 and 16 shall survive such termination and remain in full force and effect.

SECTION 10. Default by One or More of the Underwriters . If one or more of the Underwriters shall fail at Closing Time or a Date of Delivery to purchase the Securities which it or they are obligated to purchase under this Agreement (the “Defaulted Securities”), the Representatives shall have the right, within 24 hours thereafter, to make arrangements for one or more of the non-defaulting Underwriters, or any other underwriters, to purchase all, but not less than all, of the Defaulted Securities in such amounts as may be agreed upon and upon the terms herein set forth; if, however, the Representatives shall not have completed such arrangements within such 24-hour period, then:

(i) if the number of Defaulted Securities does not exceed 10% of the number of Securities to be purchased on such date, each of the non-defaulting Underwriters shall be obligated, severally and not jointly, to purchase the full amount thereof in the proportions that their respective underwriting obligations hereunder bear to the underwriting obligations of all non-defaulting Underwriters, or

(ii) if the number of Defaulted Securities exceeds 10% of the number of Securities to be purchased on such date, this Agreement or, with respect to any Date of Delivery which occurs after the Closing Time, the obligation of the Underwriters to purchase, and the Selling

Shareholders to sell, the Option Securities to be purchased and sold on such Date of Delivery shall terminate without liability on the part of any non-defaulting Underwriter.

No action taken pursuant to this Section shall relieve any defaulting Underwriter from liability in respect of its default.

In the event of any such default which does not result in a termination of this Agreement or, in the case of a Date of Delivery which is after the Closing Time, which does not result in a termination of the obligation of the Underwriters to purchase and the Selling Shareholders to sell the relevant Option Securities, as the case may be, either the (i) Representatives or (ii) the Company and any Selling Shareholder shall have the right to postpone Closing Time or the relevant Date of Delivery, as the case may be, for a period not exceeding seven days in order to effect any required changes in the Registration Statement, the General Disclosure Package or the Prospectus or in any other documents or arrangements. As used herein, the term “Underwriter” includes any person substituted for an Underwriter under this Section 10.

SECTION 11. Default by one or more of the Selling Shareholders or the Company . (a) If a Selling Shareholder shall fail at the Closing Time or a Date of Delivery, as the case may be, to sell and deliver the number of Securities which such Selling Shareholder is obligated to sell hereunder, and the remaining Selling Shareholders do not exercise the right hereby granted to increase, pro rata or otherwise, the number of Securities to be sold by them hereunder to the total number to be sold by all Selling Shareholders as set forth in Schedule B hereto, then the Underwriters may, at option of the Representatives, by notice from the Representatives to the Company and the non-defaulting Selling Shareholders, either (i) terminate this Agreement without any liability on the part of any non-defaulting party except that the provisions of Sections 1, 4, 6, 7, 8, 15 and 16 shall remain in full force and effect or (ii) elect to purchase the Securities which the non-defaulting Selling Shareholders and the Company have agreed to sell hereunder. No action taken pursuant to this Section 11 shall relieve any Selling Shareholder so defaulting from liability, if any, in respect of such default.

In the event of a default by any Selling Shareholder as referred to in this Section 11, each of the Representatives, the Company and the non-defaulting Selling Shareholders shall have the right to postpone the Closing Time or any Date of Delivery, as the case may be, for a period not exceeding seven days in order to effect any required change in the Registration Statement, the General Disclosure Package or the Prospectus or in any other documents or arrangements.

(b) If the Company shall fail at the Closing Time or a Date of Delivery, as the case may be, to sell the number of Securities that it is obligated to sell hereunder, then this Agreement shall terminate without any liability on the part of any nondefaulting party; provided, however, that the provisions of Sections 1, 4, 6, 7, 8, 15 and 16 shall remain in full force and effect. No action taken pursuant to this Section shall relieve the Company from liability, if any, in respect of such default.

SECTION 12. Notices . All notices and other communications hereunder shall be in writing and shall be deemed to have been duly given if mailed or transmitted by any standard form of telecommunication.

Notices to the Underwriters shall be directed to

Merrill Lynch, Pierce, Fenner & Smith Incorporated

One Bryant Park

New York, New York 10036,

Attention: Syndicate Department, with a copy to ECM and Latam Legal

Itau BBA USA Securities Inc.

767 Fifth Avenue, Suite 50-13

New York, NY 10153

Attention: Steven Hurwitz

J.P. Morgan Securities LLC

383 Madison Avenue

New York, NY 10179

Attention: Latin America Capital Markets

Morgan Stanley & Co. Incorporated

1585 Broadway

New York, New York 10036

Attention: Equity Capital Markets Syndicate Desk, with a copy to General Counsel

and

Citigroup Global Markets Inc.

388 Greenwich Street

New York, New York 10013

Attention: General Counsel

Notices to the Company shall be directed to

Arcos Dorados Holdings Inc.

Roque Saenz Peña 432, Olivos

Buenos Aires, Argentina (B1636 FFB)

Attention: German Lemonnier, Chief Financial Officer

And notices to Arcos Dorados B.V. shall be directed to

Arcos Dorados B.V.

Prins Bernhardplein 200 1097 JB

Amsterdam, The Netherlands

and notices to the Selling Shareholders shall be directed to

DLJ South American Partners L.L.C.

Bouchard 547 – 13 ^th Floor

1106 ABG – Buenos Aires, Argentina

Attention: Carlos García / Santiago Cotter

and

Capital International Private Equity Fund V, L.P.

CGPE V, L.P.

c/o Capital International, Inc.

6455 Irvine Center Drive

Irvine, CA 92618

Attention: Private Equity Accounting & Administration (C-3A)

and

Gávea Investment AD, L.P.

PO Box 309, Ugland House

Grand Cayman, KY1-1104

Cayman Islands

Attention: The Director.

SECTION 13. No Advisory or Fiduciary Relationship . Each of the Company, Arcos Dorados B.V. and each Selling Shareholder acknowledges and agrees that (a) the purchase and sale of the Securities pursuant to this Agreement, including the determination of the initial public offering price of the Securities and any related discounts and commissions, is an arm’s-length commercial transaction between the Company, Arcos Dorados B.V. and the Selling Shareholders, on the one hand, and the several Underwriters, on the other hand, (b) in connection with the offering of the Securities and the process leading thereto, each Underwriter is and has been acting solely as a principal and is not the agent or fiduciary of the Company, any of its subsidiaries or any Selling Shareholder, or its respective stockholders, creditors, employees or any other party, (c) no Underwriter has assumed or will assume an advisory or fiduciary responsibility in favor of the Company, Arcos Dorados B.V. or any Selling Shareholder with respect to the offering of the Securities or the process leading thereto (irrespective of whether such Underwriter has advised or is currently advising the Company, any of its subsidiaries or any Selling Shareholder on other matters) and no Underwriter has any obligation to the Company, Arcos Dorados B.V. or any Selling Shareholder with respect to the offering of the Securities except the obligations expressly set forth in this Agreement, (d) the Underwriters and their respective affiliates may be engaged in a broad range of transactions that involve interests that differ from those of each of the Company, Arcos Dorados B.V. and each Selling Shareholder, and (e) the Underwriters have not provided any legal, accounting, regulatory or tax advice with respect to the offering of the Securities and the Company, Arcos Dorados B.V. and each of the Selling Shareholders has consulted its own respective legal, accounting, regulatory and tax advisors to the extent it deemed appropriate.

SECTION 14. Parties . This Agreement shall each inure to the benefit of and be binding upon the Underwriters, the Company, Arcos Dorados B.V. and the Selling Shareholders and their respective successors. Nothing expressed or mentioned in this Agreement is intended or shall be construed to give any person, firm or corporation, other than the Underwriters, the Company, Arcos Dorados B.V. and the Selling Shareholders and their respective successors and the controlling persons and officers and directors referred to in Sections 6 and 7 and their heirs and legal representatives, any legal or equitable right, remedy or claim under or in respect of this Agreement or any provision herein contained. This Agreement and all conditions and provisions hereof are intended to be for the sole and exclusive benefit of the Underwriters, the Company, Arcos Dorados B.V. and the Selling Shareholders and their respective successors, and said controlling persons and officers and directors and their heirs and legal representatives, and for the benefit of no other person, firm or corporation. No purchaser of Securities from any Underwriter shall be deemed to be a successor by reason merely of such purchase.

SECTION 15. Trial by Jury . Each of the Company and Arcos Dorados B.V. (on its behalf and, to the extent permitted by applicable law, on behalf of its stockholders and affiliates), each of the Selling Shareholders and each of the Underwriters hereby irrevocably waives, to the fullest extent permitted by applicable law, any and all right to trial by jury in any legal proceeding arising out of or relating to this Agreement or the transactions contemplated hereby.

SECTION 16. GOVERNING LAW . THIS AGREEMENT AND ANY CLAIM, CONTROVERSY OR DISPUTE ARISING UNDER OR RELATED TO THIS AGREEMENT SHALL

BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF, THE STATE OF NEW YORK WITHOUT REGARD TO ITS CHOICE OF LAW PROVISIONS.

SECTION 17. Consent to Jurisdiction; Waiver of Immunity . Any legal suit, action or proceeding arising out of or based upon this Agreement or the transactions contemplated hereby (“Related Proceedings”) shall be instituted in the federal courts of the United States of America located in the City and County of New York, Borough of Manhattan, unless any such Federal court determines that it lacks jurisdiction over a Related Proceeding in which case such Related Proceeding shall be instituted in the courts of the State of New York, in each case located in the City and County of New York, Borough of Manhattan (collectively, the “Specified Courts”), and each party irrevocably submits to the exclusive jurisdiction (except for proceedings instituted in regard to the enforcement of a judgment of any such court (a “Related Judgment”), as to which such jurisdiction is non-exclusive) of such courts in any such suit, action or proceeding. Service of any process, summons, notice or document by mail to such party’s address set forth above shall be effective service of process for any suit, action or other proceeding brought in any such court. The parties irrevocably and unconditionally waive any objection to the laying of venue of any suit, action or other proceeding in the Specified Courts and irrevocably and unconditionally waive and agree not to plead or claim in any such court that any such suit, action or other proceeding brought in any such court has been brought in an inconvenient forum. DLJ South American Partners L.P. irrevocably appoints CT Corporation System, 111 Eighth Avenue, 13th Floor, New York, NY 10011, Capital International Private Equity Fund V, L.P. and CGPE V, L.P. irrevocably appoint Capital Guardian Trust Company, 630 Fifth Avenue, 36th Floor, New York, NY 10111-0121 Attn: Legal Department, Gavea Investment AD, L.P. irrevocably appoints Article 9 Agents LLC, 535 Eighth Avenue, 15 ^th Floor, New York, New York, 10018, and each other party not located in the United States irrevocably appoints National Registered Agents, Inc., 875 Avenue of the Americas, Suite 501, New York, New York 10001, as their respective agents to receive service of process or other legal summons for purposes of any such suit, action or proceeding that may be instituted in any state or federal court in the City and County of New York. With respect to any Related Proceeding, each party irrevocably waives, to the fullest extent permitted by applicable law, all immunity (whether on the basis of sovereignty or otherwise) from jurisdiction, service of process, attachment (both before and after judgment) and execution to which it might otherwise be entitled in the Specified Courts, and with respect to any Related Judgment, each party waives any such immunity in the Specified Courts or any other court of competent jurisdiction, and will not raise or claim or cause to be pleaded any such immunity at or in respect of any such Related Proceeding or Related Judgment, including, without limitation, any immunity pursuant to the United States Foreign Sovereign Immunities Act of 1976, as amended.

SECTION 18. TIME . TIME SHALL BE OF THE ESSENCE OF THIS AGREEMENT. EXCEPT AS OTHERWISE SET FORTH HEREIN, SPECIFIED TIMES OF DAY REFER TO NEW YORK CITY TIME.

SECTION 19. Partial Unenforceability . The invalidity or unenforceability of any Section, paragraph or provision of this Agreement shall not affect the validity or enforceability of any other Section, paragraph or provision hereof. If any Section, paragraph or provision of this Agreement is for any reason determined to be invalid or unenforceable, there shall be deemed to be made such minor changes (and only such minor changes) as are necessary to make it valid and enforceable.

SECTION 20. Counterparts . This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original, but all such counterparts shall together constitute one and the same Agreement.

SECTION 21. Judgment Currency . If for the purposes of obtaining judgment in any court it is necessary to convert a sum due hereunder into any currency other than United States dollars, the parties

hereto agree, to the fullest extent permitted by law, that the rate of exchange used shall be the rate at which in accordance with normal banking procedures the Underwriters could purchase United States dollars with such other currency in The City of New York on the business day preceding that on which final judgment is given. The obligation of the Company, Arcos Dorados B.V. and each Selling Shareholder with respect to any sum due from it to any Underwriter or any person controlling any Underwriter shall, notwithstanding any judgment in a currency other than United States dollars, not be discharged until the first business day following receipt by such Underwriter or controlling person of any sum in such other currency, and only to the extent that such Underwriter or controlling person may in accordance with normal banking procedures purchase United States dollars with such other currency. If the United States dollars so purchased are less than the sum originally due to such Underwriter or controlling person hereunder, each of the Company, Arcos Dorados B.V. and the Selling Shareholders agrees as a separate obligation and notwithstanding any such judgment, to indemnify such Underwriter or controlling person against such loss. If the United States dollars so purchased are greater than the sum originally due to such Underwriter or controlling person hereunder, such Underwriter or controlling person agrees to pay to the Company, Arcos Dorados B.V. or such Selling Shareholder, as applicable, an amount equal to the excess of the dollars so purchased over the sum originally due to such Underwriter or controlling person hereunder.

SECTION 22. Foreign Taxes . All payments made by the Company, Arcos Dorados B.V. or any Selling Shareholder under this Agreement, if any, will be made without withholding or deduction for or on account of any present or future taxes, duties, assessments or governmental charges of whatever nature imposed or levied by or on behalf of the British Virgin Islands, Delaware, the Netherlands or the jurisdiction of incorporation or formation of any Selling Shareholder or any political subdivision or any taxing authority thereof or therein unless the Company, Arcos Dorados B.V. or such Selling Shareholder is or becomes required by law to withhold or deduct such taxes, duties, assessments or other governmental charges. In such event, the Company, Arcos Dorados B.V. or such Selling Shareholder, severally and not jointly, will pay such additional amounts as will result, after such withholding or deduction, in the receipt by each Underwriter and each person controlling any Underwriter, as the case may be, of the amounts that would otherwise have been receivable in respect thereof, except to the extent such taxes, duties, assessments or other governmental charges are imposed or levied by reason of such Underwriter’s or controlling person’s being connected with the British Virgin Islands, Delaware, the Netherlands or the jurisdiction of incorporation or formation of any Selling Shareholder other than by reason of its being an Underwriter or a person controlling any under this Agreement.

SECTION 23. Effect of Headings . The Section headings herein are for convenience only and shall not affect the construction hereof.

If the foregoing is in accordance with your understanding of our agreement, please sign and return to the Company and the Selling Shareholders a counterpart hereof, whereupon this instrument, along with all counterparts, will become a binding agreement among the Underwriters, the Company, Arcos Dorados B.V. and the Selling Shareholders in accordance with its terms.


Very truly yours,

ARCOS DORADOS HOLDINGS INC.

By
		Title: Director

ARCOS DORADOS B.V.

By
		Title: Managing Director

By
		Title: Managing Director

(Underwriting Agreement)


DLJ SOUTH AMERICAN PARTNERS L.P.

by DLJ SOUTH AMERICAN PARTNERS LLC, its general partner

By
		Title:

DLJSAP RESTCO CO-INVESTMENTS LLC

By
		Title:

(Underwriting Agreement)


CAPITAL INTERNATIONAL PRIVATE EQUITY FUND V, L.P.

By CAPITAL INTERNATIONAL INVESTMENTS V, L.P., its general partner

By CAPITAL INTERNATIONAL INVESTMENTS V, LLC, its general partner

By
		Title:

CGPE V, L.P.

By CAPITAL INTERNATIONAL INVESTMENTS V, LLC, its general partner

By
		Title:

(Underwriting Agreement)


GAVEA INVESTMENT AD, L.P.

By GAVEA INVESTMENT GP AD LTD., its general partner

By GIF GESTÃO DE INVESTIMENTOS E PARTICIPAÇÕES LTDA, its director

By
		Title:

By
		Title:

(Underwriting Agreement)

CONFIRMED AND ACCEPTED,

as of the date first above written:

MERRILL LYNCH, PIERCE, FENNER & SMITH

INCORPORATED

J.P. MORGAN SECURITIES LLC

MORGAN STANLEY & CO. INCORPORATED

ITAU BBA USA SECURITIES, INC.

CITIGROUP GLOBAL MARKETS INC.

For themselves and as Representatives of the other Underwriters named in Schedule A hereto.


By: MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED

By
		Authorized Signatory

By: J.P. MORGAN SECURITIES LLC

By
		Authorized Signatory

By: MORGAN STANLEY & CO. INCORPORATED

By
		Authorized Signatory

By: ITAU BBA USA SECURITIES, INC.

By
		Authorized Signatory

By: CITIGROUP GLOBAL MARKETS INC.

By
		Authorized Signatory

(Underwriting Agreement)

SCHEDULE A

The initial public offering price per share for the Securities shall be $ — .

The purchase price per share for the Securities to be paid by the several Underwriters shall be $ — , being an amount equal to the initial public offering price set forth above less $ — per share, subject to adjustment in accordance with Section 2(b) for dividends or distributions declared by the Company and payable on the Initial Securities but not payable on the Option Securities.


Name of Underwriter		Number of Initial Securities
Merrill Lynch, Pierce, Fenner & Smith Incorporated
J.P. Morgan Securities LLC
Morgan Stanley & Co. Incorporated
Itau BBA USA Securities, Inc.
Citigroup Global Markets Inc.

Total

A-1

SCHEDULE B


	Number of Initial Securities to be Sold	Maximum Number of Option Securities to Be Sold
Arcos Dorados Holdings Inc.
DLJ South American Partners L.P.
DLJSAP Restco Co-Investments LLC
Capital International Private Equity Fund V, L.P.
CGPE V, L.P.
Gavea Investment AD, L.P.
Total

B-1

SCHEDULE C-1

Pricing Terms

1. The Company and the Selling Shareholders are selling [ — ] Shares.

2. The Selling Shareholders have granted an option to the Underwriters, severally and not jointly, to purchase up to an additional [ — ] Shares.

3. The initial public offering price per share for the Securities shall be $[ — ].

SCHEDULE C-2

Free Writing Prospectuses

C-1

SCHEDULE D

List of Persons and Entities Subject to Lock-up

Los Laureles Ltd.

DLJ South American Partners L.P.

DLJSAP Restco Co-Investments LLC

Capital International Private Equity Fund V, L.P.

CGPE V, L.P.

Gávea Investment AD, L.P.

Woods Staton

Sergio Alonso

Germán Lemonnier

Annette Franqui

Carlos Hernández-Artigas

Michael Chu

Juan David Bastidas

Marcelo Rabach

José Fernández

Nino Rotondi

Roberto Ortiz

Sebastian Magnasco

Raul Mandia

Pablo Rodriguez de la Torre

Flavia Vigio

Horacio Sbroll

D-1

Exhibit 3.1

BVI Co No: 1619553

LOGO

BRITISH VIRGIN ISLANDS

BVI BUSINESS COMPANIES ACT

(No. 16 of 2004)

Memorandum and Articles of Association

Arcos Dorados Holdings Inc.

Incorporated the 9 ^th day of December 2010

Amended and Restated on 13 ^th December 2010

and then further Amended and Restated on the 17 ^th day of March 2011

Maples Corporate Services (BVI) Limited

Kingston Chambers

PO Box 173

Road Town, Tortola

British Virgin Islands

TERRITORY OF THE BRITISH VIRGIN ISLANDS

THE BVI BUSINESS COMPANIES ACT, 2004

MEMORANDUM OF ASSOCIATION

Arcos Dorados Holdings Inc.

NAME

The name of the Company is Arcos Dorados Holdings Inc.

2.	STATUS

The Company is a company limited by shares.

3.	REGISTERED OFFICE AND REGISTERED AGENT

3.1.	The first registered office of the Company will be situated at Kingston Chambers, PO Box 173, Road Town, Tortola, British Virgin Islands.

3.2.	The first registered agent of the Company will be Maples Corporate Services (BVI) Limited of Kingston Chambers, PO Box 173, Road Town, Tortola, British Virgin Islands.

3.3.	The Company may by Resolution of Shareholders or by Resolution of Directors change the location of its registered office or change its registered agent.

3.4.	Any change of registered office or registered agent will take effect on the registration by the Registrar of a notice of the change filed by the existing registered agent or a legal practitioner in the British Virgin Islands acting on behalf of the Company.

4.	CAPACITY AND POWERS

4.1.	Subject to the Act and any other British Virgin Islands legislation, the Company has, irrespective of corporate benefit:

(a)

full capacity to carry on or undertake any business or activity, do any act or enter into any transaction; and

(b)

for the purposes of paragraph (a), full rights, powers and privileges.

4.2.	For the purposes of section 9(4) of the Act, the Company may not

(a)

carry on banking or trust business unless it is licensed to do so under the Banking and Trust Companies Act, 1990;

(b)

carry on business as an insurance or reinsurance company, insurance agent or insurance broker, unless it is licensed under the Insurance Act;

(c)

carry on the business of company management unless it is licensed under the Company Management Act, 1990;

(d)

carry on the business of providing the registered office or the registered agent for companies incorporated in the British Virgin Islands; or

(e)

carry on the business of mutual fund, mutual fund manager or mutual fund administrator without being licensed or recognised under the Securities and Investment Business Act, 2010.

5.	NUMBER AND CLASSES OF SHARES

5.1.	Shares in the Company may be issued in any currency.

5.2.	The Company is authorised to issue a maximum of 500,000,000 shares divided into:

(a)

420,000,000 Class A Shares with no par value per share (the “Class A Shares”); and

(b)

80,000,000 Class B Shares with no par value per share (the “Class B Shares”).

5.3.	The Company may issue fractional shares and a fractional share shall have the corresponding fractional rights, obligations and liabilities of a whole share of the same class or series of shares.

5.4.	Shares may be issued in one or more series of Shares as the Shareholders may by Resolution of Shareholders determine from time to time.

6.	RIGHTS OF SHARES

6.1.

The Class A Shares shall be entitled to one (1) vote per share and the Class B Shares shall be entitled to five (5) votes per share. Except with respect to voting, the rights, privileges and obligations of the Class A Shares and the Class B Shares shall be pari passu in all respects, including with respect to dividends and rights upon liquidation of the Company.

6.2.	Subject to Regulation 7 of the Memorandum, for purposes of Resolutions of Shareholders, Class A Shares and Class B Shares shall vote together as a single class unless otherwise required herein, by the Articles or by Applicable Law.

6.3.	Each Share carries the pre-emptive rights exercisable in accordance with Sub-Regulation 3.2 of the Articles.

6.4.	Each Class B share carries the conversion rights exercisable in accordance with Regulation 8 of the Articles.

6.5.	The Class B Shares may not be listed on any U.S. or foreign national or regional securities exchange or market.

6.6.	The Company may by Resolution of Directors redeem, purchase or otherwise acquire all or any of the Shares in the Company subject to Regulation 4 of the Articles.

7.	VARIATION OF RIGHTS

The rights attached to any class of Shares, under either the Memorandum or the Articles, may only be varied, whether or not the Company is in liquidation, with the consent in writing of or by a resolution passed at a meeting by the holders of not less than 50% of the issued Shares in that

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class and the holders of not less than 50% of the issued Shares of any other class of Shares which may be adversely affected by such variation.

8.	RIGHTS NOT VARIED BY THE ISSUE OF SHARES PARI PASSU

The rights conferred upon the holders of the Shares of any class shall not be deemed to be varied by the creation or issue of further Shares ranking pari passu therewith.

9.	REGISTERED SHARES

9.1.	The Company shall issue registered shares only.

9.2.	The Company is not authorised to issue bearer shares, convert registered shares to bearer shares or exchange registered shares for bearer shares.

10.

AMENDMENT OF MEMORANDUM AND ARTICLES

10.1.

The Company may amend the Memorandum or Articles by a Resolution of Shareholders; provided, that any amendment to Sub-Regulation 6.5 of the Memorandum must be approved by a Resolution of Shareholders of the holders of the Class A Shares.

10.2.

Any amendment of the Memorandum or Articles will take effect on the registration by the Registrar of a notice of amendment, or restated Memorandum and Articles, filed by the registered agent.

Capitalized terms used and not otherwise defined in the Memorandum have the meaning given to them in the Articles.

We, Maples Corporate Services (BVI) Limited of Kingston Chambers, PO Box 173, Road Town, Tortola, British Virgin Islands in our capacity as registered agent for the Company hereby apply to the Registrar for the incorporation of the Company this 9th day of December 2010.

Incorporator

[Signed Greg Boyd]

Greg Boyd

Authorised Signatory

Maples Corporate Services (BVI) Limited

- 3 -

TERRITORY OF THE BRITISH VIRGIN ISLANDS

THE BVI BUSINESS COMPANIES ACT, 2004

ARTICLES OF ASSOCIATION

Arcos Dorados Holdings Inc.

1.	DEFINITIONS AND INTERPRETATION

1.1.	In the Memorandum of Association and these Articles of Association, if not inconsistent with the subject or context:

“ Act ” means the BVI Business Companies Act (No. 16 of 2004), as amended, and includes the regulations made under the Act;

“ Amended and Restated Master Franchise Agreement ” means the Amended and Restated Master Franchise Agreement for McDonald’s Restaurants among McDonald’s Latin America, LLC, LatAm, LLC, each of the MF Subsidiaries, Arcos Dorados Limited, Arcos Dorados Cooperatieve U.A., Arcos Dorados B.V. and Los Laureles, Ltd., dated as of November 10, 2008, as amended on August 31, 2010 and as may be amended from time to time prior to its expiration or termination;

“ Annual General Meeting ” means the annual meeting of Shareholders at which the financial statements for the latest financial year ended are presented for approval;

“ Applicable Law ” means all applicable provisions of (i) constitutions, treaties, statutes, laws (including the common law), rules, regulations, ordinances, codes or orders of any Governmental Entity, (ii) any consents or approvals of any Governmental Entity and (iii) any orders, decisions, injunctions, judgments, awards, decrees of or agreements with any Governmental Entity;

“ Articles ” means the Articles of Association of the Company;

“ Class A Shares ” has the meaning given that term in the Memorandum;

“ Class B Shares ” has the meaning given that term in the Memorandum;

“ Class B Holder ” means any Person who holds Class B Shares;

“ Distribution ” in relation to a distribution by the Company means the direct or indirect transfer of an asset, other than Shares, to or for the benefit of the Shareholder in relation to Shares held by a Shareholder, and whether by means of a purchase of an asset, the redemption or other acquisition of Shares, a distribution of indebtedness or otherwise, and includes a dividend;

“ Director ” includes a person occupying or acting in the position of a member of the board of Directors of the Company by whatever name called;

“ Equity Securities ” means any and all Shares of the Company, securities of the Company convertible into, or exchangeable or exercisable for, such shares, and options, warrants or other rights to acquire such shares;

“ Governmental Entity ” means any federal, state, local or foreign court, legislative, executive or regulatory authority or agency;

“ McDonald’s ” means McDonald’s Latin America, LLC, a Delaware limited liability company;

“ Memorandum ” means the Memorandum of Association of the Company;

“ New Securities ” means Equity Securities of the Company other than:

(a)

Equity Securities issued to employees, officers or directors pursuant to any share options, employee share purchase, long-term incentive plan or similar equity-based plans approved by Resolution of Directors and Equity Securities issued upon exercise of such options;

(b)

Equity Securities issued as consideration for any (i) merger, consolidation or other business combination or purchase of assets involving the Company or (ii) recapitalization, reorganization, exchange or analogous actions of the Company or any of its subsidiaries;

(c)

Equity Securities issued in connection with a division of shares, dividends in specie or distributions, recapitalization or any similar event approved in accordance with the Memorandum and Articles of the Company; provided, in each case, that the event is pro rata to the ownership interests of each Shareholder; and

(d)

Equity Securities sold in a bona fide public offering registered with the U.S. Securities and Exchange Commission.

“ Person ” means any individual, corporation, limited liability company, limited or general partnership, joint venture, association, joint-stock company, trust, unincorporated organization, government or any agency or political subdivisions thereof or any group comprised of two or more of the foregoing;

“ Registrar ” means the Registrar of Corporate Affairs appointed under section 229 of the Act;

“ Regulation ” is a reference to a regulation of the Articles;

“ Resolution of Directors ” means either:

(a)

a resolution approved at a duly convened and constituted meeting of Directors of the Company or, in relation to a resolution capable of being passed by a duly authorised committee of directors, of a committee of Directors of the Company by the affirmative vote of a majority of the Directors present at the meeting who voted except that where a Director is given more than one vote, he shall be counted by the number of votes he casts for the purpose of establishing a majority; provided, that in the case of a tie, the Chairman of the Board shall have the casting vote; or

(b)

a resolution consented to in writing by all Directors or, in relation to a resolution capable of being passed by a duly authorised committee of directors, by all members of a committee of Directors of the Company, as the case may be;

- 2 -

“ Resolution of Shareholders ” means either:

a resolution approved at a duly convened and constituted meeting of the Shareholders of the Company by the affirmative vote of a majority of in excess of 50% of the votes of the Shareholders entitled to vote thereon which were present at the meeting and voted on such resolution; or

a resolution consented to in writing by a majority of the votes of Shares entitled to vote thereon;

“ Seal ” means any seal which has been duly adopted as the common seal of the Company;

“ Securities ” means Shares and debt obligations of every kind of the Company, and including without limitation options, warrants and rights to acquire Shares or debt obligations;

“ Share ” means a share issued or to be issued by the Company;

“ Shareholder ” means a Person whose name is entered in the register of members of the Company as the holder of one or more Shares or fractional Shares; and

“ Treasury Share ” means a Share that was previously issued but was repurchased, redeemed or otherwise acquired by the Company and not cancelled.

1.2.	The Act, the Memorandum or the Articles is a reference to the Act or those documents in the original form, as amended, restated or re-enacted; and the singular includes the plural and vice versa.

1.3.	Any words or expressions defined in the Act, unless the context otherwise requires, bear the same meaning in the Memorandum and Articles unless otherwise defined herein.

1.4.	Headings are inserted for convenience only and shall be disregarded in interpreting the Memorandum and Articles.

2.	REGISTERED SHARES

2.1.	Every Shareholder is entitled to a certificate signed by a Director, officer or any other person authorized by a Resolution of Directors or under the Seal specifying the number of Shares held by him and the signature of the Director and the Seal may be facsimiles.

2.2.

Any Shareholder receiving a certificate shall indemnify and hold the Company and its Directors and officers harmless from any loss or liability which it or they may incur by reason of any wrongful or fraudulent use or representation made by any such Shareholder by virtue of the possession thereof. If a certificate for Shares is worn out or lost it may be renewed on production of the worn out certificate or on satisfactory proof of its loss together with such indemnity as may be required by a Resolution of Directors.

2.3.	If several Persons are registered as joint holders of any Shares, anyone of such Persons may give an effectual receipt for any Distribution.

3.	SHARES

3.1.	Shares and other Securities may be issued at such times, to such Persons, for such consideration and on such terms as the Shareholders may by Resolution of Shareholders determine.

- 3 -

3.2.

Section 46 of the Act ( Pre-emptive rights ) does not apply to the Company; provided, that the Shareholders of the Company shall be entitled to rights to subscribe New Securities in connection with any issuance of New Securities such that New Securities shall be offered in the first instance to all the holders of outstanding Shares of any class or classes in proportion to the number of such Shares held by them respectively at a price and on other terms and conditions no less favorable than proposed to be offered to other Persons.

3.3.	A Share may be issued for consideration in any form, including money, a promissory note, or other written obligation to contribute money or property, real property, personal property (including goodwill and know-how), services rendered or a contract for future services.

3.4.	No Shares may be issued for a consideration other than money, unless a Resolution of Shareholders has been passed stating, in each case as determined by the Directors:

(a)

the amount to be credited for the issue of the Shares;

(b)

the determination of the reasonable present cash value of the non-money consideration for the issue; and

(c)

that, in the opinion of the Directors, the present cash value of the non-money consideration for the issue is not less than the amount to be credited for the issue of the Shares.

3.5.	The Company shall keep a register (the “ register of members ”) containing:

(a)

the names and addresses of the Persons who hold Shares;

(b)

the number of each class and series of Shares held by each Shareholder;

(c)

the date on which the name of each Shareholder was entered in the register of members; and

(d)

the date on which any Person ceased to be a Shareholder.

3.6.

The register of members may be in any such form as the Directors may approve, but if it is in magnetic, electronic or other data storage form, the Company must be able to produce legible evidence of its contents. Until the Directors otherwise determine, the magnetic, electronic or other data storage form shall be the original register of members.

3.7.	A Share is deemed to be issued when the name of the Shareholder is entered in the register of members.

3.8.

Notwithstanding anything in the Memorandum or Articles to the contrary, if and for so long as the Amended and Restated Master Franchise Agreement requires the holder of Class B Shares to hold at least 51 per cent of the votes of the Shares entitled to vote on Resolutions of Shareholders, the Company shall take no action that would cause or permit the holder of Class B Shares to hold less than 51 per cent of the votes of the Shares entitled to vote on Resolutions of Shareholders without the prior written approval of McDonald’s.

4.	REDEMPTION OF SHARES AND TREASURY SHARES

4.1.

The Company may purchase, redeem or otherwise acquire and hold its own Shares save that the Company may not purchase, redeem or otherwise acquire its own Shares without the consent of Shareholders whose Shares are to be purchased, redeemed or otherwise acquired unless the Company is permitted by the Act or any other provision in the Memorandum or Articles (including

- 4 -

without limitation Regulation 8) to purchase, redeem or otherwise acquire the Shares without their consent.

4.2.	The Company may only offer to acquire Shares if at the relevant time the Directors determine by Resolution of Directors that immediately after the acquisition the value of the Company’s assets will exceed its liabilities and the Company will be able to pay its debts as they fall due.

4.3.	Sections 60 ( Process for acquisition of own shares ), 61 ( Offer to one or more shareholders ) and 62 ( Shares redeemed otherwise than at the option of company ) of the Act shall not apply to the Company.

4.4.

Shares that the Company purchases, redeems or otherwise acquires pursuant to this Regulation may be cancelled or held as Treasury Shares except to the extent that such Shares are in excess of 50 percent of the issued Shares in which case they shall be cancelled but they shall be available for reissue.

4.5.	All rights and obligations attaching to a Treasury Share are suspended and shall not be exercised by the Company while it holds the Share as a Treasury Share.

4.6.	Treasury Shares may be disposed of by the Company on such terms and conditions (not otherwise inconsistent with the Memorandum and Articles) as the Company may by Resolution of Directors determine.

4.7.

Where Shares are held by another body corporate of which the Company holds, directly or indirectly, Shares having more than 50 per cent of the votes in the election of Directors of the other body corporate, all rights and obligations attaching to the Shares held by the other body corporate are suspended and shall not be exercised by the other body corporate.

5.	MORTGAGES AND CHARGES OF SHARES

5.1.	Shareholders may mortgage or charge their Shares.

5.2.	There shall be entered in the register of members at the written request of the Shareholder:

(a)

a statement that the Shares held by him are mortgaged or charged;

(b)

the name of the mortgagee or chargee; and

(c)

the date on which the particulars specified in subparagraphs (a) and (b) are entered in the register of members.

5.3.	Where particulars of a mortgage or charge are entered in the register of members, such particulars may be cancelled:

(a)

with the written consent of the named mortgagee or chargee or anyone authorised to act on his behalf; or

(b)

upon evidence satisfactory to the Directors of the discharge of the liability secured by the mortgage or charge and the issue of such indemnities as the Directors shall consider necessary or desirable.

5.4.	Whilst particulars of a mortgage or charge over Shares are entered in the register of members pursuant to this Regulation:

(a)

no transfer of any Share the subject of those particulars shall be effected;

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(b)

the Company may not purchase, redeem or otherwise acquire any such Share; and

(c)

no replacement certificate shall be issued in respect of such Shares,

without the written consent of the named mortgagee or chargee.

6.	FORFEITURE

6.1.	Shares that are not fully paid on issue are subject to the forfeiture provisions set forth in this Regulation 6 and for this purpose Shares issued for a promissory note or a contract for future services are deemed to be not fully paid.

6.2.	A written notice of call specifying the date for payment to be made shall be served on the Shareholder who defaults in making payment in respect of the Shares.

6.3.

The written notice of call referred to in Sub-Regulation 6.2 shall name a further date not earlier than the expiration of 14 days from the date of service of the notice on or before which the payment required by the notice is to be made and shall contain a statement that in the event of non-payment at or before the time named in the notice the Shares, or any of them, in respect of which payment is not made will be liable to be forfeited.

6.4.	Where a written notice of call has been issued pursuant to Sub-Regulation 6.3 and the requirements of the notice have not been complied with, the Directors may, at any time before tender of payment, forfeit and cancel the Shares to which the notice relates.

6.5.	The Company is under no obligation to refund any moneys to the Shareholder whose Shares have been cancelled pursuant to Sub-Regulation 6.4 and that Shareholder shall be discharged from any further obligation to the Company.

7.	TRANSFER OF SHARES

7.1.	Shares may be transferred by a written instrument of transfer signed by the transferor and containing the name and address of the transferee, which shall be sent to the Company for registration.

7.2.	The transfer of a Share is effective when the name of the transferee is entered on the register of members.

7.3.

The Company shall, on receipt of an instrument of transfer complying with the Articles, enter the name of the transferee of a Share in the register of members unless the Directors resolve to refuse or delay the registration of the transfer for reasons that shall be specified in a Resolution of Directors.

7.4.	The Directors may only resolve to refuse or delay the registration of transfer of any Share if the transfer would breach any of the provisions of the Act or of the Memorandum and Articles or if the Shareholder has failed to pay an amount due in respect of such Share.

7.5.	If the Directors of the Company are satisfied that an instrument of transfer relating to Shares has been signed but that the instrument has been lost or destroyed, they may resolve by Resolution of Directors:

(a)

to accept such evidence of the transfer of Shares as they consider appropriate; and

(b)

that the transferee’s name should be entered in the register of members notwithstanding the absence of the instrument of transfer.

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7.6.	Subject to the Memorandum, the personal representative of a deceased Shareholder may transfer a Share even though the personal representative is not a Shareholder at the time of the transfer.

8.	CONVERSION OF CLASS B SHARES

8.1.

Each Class B Share shall be convertible into one (1) fully paid and nonassessable Class A Share at the option of the holder of such Class B Share at any time upon written notice to the transfer agent of the Company; provided, that such conversion has been approved in writing by McDonald’s so long as the Amended and Restated Master Franchise Agreement has not expired or has not been terminated.

8.2.

Each Class B Share shall automatically, without any further action on the part of the Company, any Class B Holder or any other party (other than registration by the transfer agent pursuant to Sub-Regulation 8.4), convert into one (1) fully paid and non-assessable Class A Share at such time as the Class B Holders cease to hold, directly or indirectly, at least twenty (20) percent of the aggregate number of outstanding Shares.

8.3.

The Directors may, from time to time, establish such policies and procedures relating to the general administration of the Company’s register of members, including the issuance of share certificates, as they may deem necessary or advisable, and may request that Class B Holders furnish affidavits or other proof to the Company as they deem necessary to verify the ownership of Class B Shares. A determination by a Resolution of Directors that a conversion of Class B Shares to Class A Shares has occurred shall be conclusive.

8.4.

In the event of a conversion of Class B Shares to Class A Shares pursuant to this Regulation 8, such conversion shall take effect (a) in the event of a voluntary conversion pursuant to Sub-Regulation 8.1, at the time that the transfer agent of the Company registers the conversion in the Company’s register of members following written notice of the conversion having been provided to the transfer agent and (b) in the event of an automatic conversion of all Class B Shares pursuant to Sub-Regulation 8.2, at the time that the transfer agent of the Company registers the conversion in the Company’s register of members following the record date on which the Class B Holders own less than the requisite percentage of outstanding Shares. Upon any conversion of Class B Shares to Class A Shares, all rights of the Class B Holder shall cease and the Person or Persons in whose names or names the certificate or certificates representing the Class A Shares are to be issued shall be treated for all purposes as having become the recordholder or holders of Class A Shares. Class B Shares that are converted into Class A Shares as provided in this Regulation 8 shall be retired and cancelled and may not be reissued. All conversions of Class B Shares to Class A Shares pursuant to this Regulation 8 shall be effected by the Company by way of repurchase by the Company of the Class B Shares in consideration for the simultaneous issue of Class A Shares, credited as fully paid. For purposes of Section 63(b) of the Act, the conversion rights set out in Article 8.1 entitle the holder of such Class B Shares to have the conversion effected through a repurchase by the Company of such Class B Shares.

8.5.	The Company shall at all times reserve and keep available, solely for the purpose of issue upon conversion of the outstanding Class B Shares, such number of Class A Shares as may be required to be issued upon the conversion of all outstanding Class B Shares.

9.	MEETINGS AND CONSENTS OF SHAREHOLDERS

9.1.	The Directors of the Company may convene meetings of the Shareholders at such times and in such manner and places within or outside the British Virgin Islands as the Directors consider necessary or desirable; provided, that at least one meeting of the Shareholders be held each year.

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9.2.	Upon the written request of Shareholders entitled to exercise 30 per cent or more of the voting rights in respect of the matter for which the meeting is requested the Directors shall convene a meeting of Shareholders. Any such request must state the proposed purpose of the requested meeting.

9.3.	The Directors convening a meeting shall give not less than ten (10) days’ notice of a meeting of Shareholders to:

(a)

those Shareholders whose names on the date the notice is given appear as Shareholders in the register of members of the Company and are entitled to vote at the meeting; and

(b)

the other Directors.

9.4.

The Directors convening a meeting of Shareholders or any action by written consent may fix as the record date for determining those Shareholders that are entitled to vote at the meeting the date notice is given of the meeting, or such other date as may be specified in the notice, being a date not earlier than the date of the notice.

9.5.

A meeting of Shareholders held in contravention of the requirement to give notice is valid if Shareholders holding at least 90 per cent of the total voting rights on all the matters to be considered at the meeting have waived notice of the meeting and, for this purpose, the presence of a Shareholder at the meeting shall constitute waiver in relation to all the Shares which that Shareholder holds.

9.6.	The inadvertent failure of a Director who convenes a meeting to give notice of a meeting to a Shareholder or another Director, or the fact that a Shareholder or another Director has not received notice, does not invalidate the meeting.

9.7.	A Shareholder may be represented at a meeting of Shareholders by a proxy who may speak and vote on behalf of the Shareholder.

9.8.

The instrument appointing a proxy shall be produced at the place designated for the meeting before the time for holding the meeting at which the person named in such instrument proposes to vote. The notice of the meeting may specify an alternative or additional place or time at which the proxy shall be presented.

9.9.	The instrument appointing a proxy shall be in substantially the following form or such other form as the chairman of the meeting shall accept as properly evidencing the wishes of the Shareholder appointing the proxy.

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[ Name of Company ]

I/We being a Shareholder of the above Company HEREBY APPOINT of or failing him of to be my/our proxy to vote for me/us at the meeting of Shareholders to be held on the day of , 20 and at any adjournment thereof.

(Any restrictions on voting to be inserted here.)

Signed this day of , 20

Shareholder

9.10.

The following applies where Shares are jointly owned:

(a)

if two or more persons hold Shares jointly each of them may be present in person or by proxy at a meeting of Shareholders and may speak as a Shareholder;

(b)

if only one of the joint owners is present in person or by proxy he may vote on behalf of all joint owners; and

(c)

if two or more of the joint owners are present in person or by proxy they must vote as one.

9.11.

A meeting of Shareholders is duly constituted if, at the commencement of the meeting, there are present in person or by proxy not less than 50 per cent of the votes of the Shares entitled to vote on Resolutions of Shareholders to be considered at the meeting. A quorum may comprise a single Shareholder or proxy and then such person may pass a Resolution of Shareholders and a certificate signed by such person accompanied where such person be a proxy by a copy of the proxy instrument shall constitute a valid Resolution of Shareholders.

9.12.

If within two hours from the time appointed for the meeting a quorum is not present, the meeting, if convened upon the requisition of Shareholders, shall be dissolved; in any other case it shall stand adjourned to the next business day in the jurisdiction in which the meeting was to have been held at the same time and place or to such other date, time and place as the Directors may determine, and if at the adjourned meeting there are present within one hour from the time appointed for the meeting in person or by proxy not less than one third of the votes of the Shares of each class or series of Shares entitled to vote on the matters to be considered by the meeting, those present shall constitute a quorum but otherwise the meeting shall be dissolved. Notice of the adjourned meeting need not be given if the date, time and place of such meeting are announced at the meeting at which the adjournment is taken.

9.13.

At every meeting of Shareholders, the Chairman of the Board shall preside as chairman of the meeting. If there is no Chairman of the Board or if the Chairman of the Board is not present at the meeting, the Shareholders present shall choose one of their members to be the chairman. If the Shareholders are unable to choose a chairman for any reason, then the person representing the greatest number of voting Shares present in person or by proxy at the meeting shall preside as chairman failing which the oldest individual Shareholder or representative of a Shareholder present shall take the chair.

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9.14.

The chairman may adjourn any meeting from time to time, and from place to place, but no business shall be transacted at any adjourned meeting other than the business left unfinished at the meeting from which the adjournment took place.

9.15.

At any meeting of the Shareholders, the chairman is responsible for deciding in such manner as he considers appropriate whether any resolution proposed has been carried or not and the result of his decision shall be announced to the meeting and recorded in the minutes of the meeting. If the chairman has any doubt as to the outcome of the vote on a proposed resolution, he shall cause a poll to be taken of all votes cast upon such resolution. If the chairman fails to take a poll then any Shareholder present in person or by proxy who disputes the announcement by the chairman of the result of any vote may immediately following such announcement demand that a poll be taken and the chairman shall cause a poll to be taken. If a poll is taken at any meeting, the result shall be announced to the meeting and recorded in the minutes of the meeting.

9.16.

Subject to the specific provisions contained in this Regulation for the appointment of representatives of Persons other than individuals the right of any individual to speak for or represent a Shareholder shall be determined by the law of the jurisdiction where, and by the documents by which, the Person is constituted or derives its existence. In case of doubt, the Directors may in good faith seek legal advice from any qualified person and unless and until a court of competent jurisdiction shall otherwise rule, the Directors may rely and act upon such advice without incurring any liability to any Shareholder or the Company.

9.17.

Any Person other than an individual which is a Shareholder may by resolution of its directors or other governing body authorise such individual as it thinks fit to act as its representative at any meeting of Shareholders or of any class of Shareholders, and the individual so authorised shall be entitled to exercise the same rights on behalf of the Person which he represents as that Person could exercise if it were an individual.

9.18.

The chairman of any meeting at which a vote is cast by proxy or on behalf of any Person other than an individual may call for a notarially certified copy of such proxy or authority which shall be produced within seven (7) days of being so requested or the votes cast by such proxy or on behalf of such Person shall be disregarded.

9.19.

Directors of the Company may attend and speak at any meeting of Shareholders and at any separate meeting of the holders of any class or series of Shares.

9.20.

An action that may be taken by the Shareholders at a meeting may also be taken by a Resolution of Shareholders consented to in writing, without the need for any notice, but if any Resolution of Shareholders is adopted otherwise than by the unanimous written consent of all Shareholders, a copy of such resolution shall forthwith be sent to all Shareholders not consenting to such resolution. The consent may be in the form of counterparts, each counterpart being signed by one or more Shareholders. If the consent is in one or more counterparts, and the counterparts bear different dates, then the resolution shall take effect on the earliest date upon which Persons holding a sufficient number of votes of Shares to constitute a Resolution of Shareholders have consented to the resolution by signed counterparts.

10.

DIRECTORS

10.1.

The first Directors of the Company shall be appointed by the first registered agent; and thereafter, the Directors shall be elected by Resolution of Shareholders.

10.2.

No person shall be appointed as a Director of the Company unless he has consented in writing to act as a Director or to be nominated as a reserve Director.

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10.3.

The number of Directors shall be fixed at eight (8); and thereafter, the number of Directors as may be increased or decreased by Resolution of Shareholders or by Resolution of Directors.

10.4.

The Directors shall be divided into three classes, as nearly equal in number as possible. Directors shall be elected for a term of office expiring at the third succeeding Annual General Meeting of Shareholders after their election, or until their earlier death, resignation or removal. Notwithstanding the foregoing, each Director shall hold office until such Director’s successor shall have been duly elected and qualified or until such Director’s death, resignation or removal.

10.5.

There is no distinction in the voting or other powers and authorities of Directors of different classes; the classifications are solely for the purposes of the retirement by rotation provisions set out in Sub-Regulation 10.4. Each Director shall be designated as either a Class I, Class II or Class III Director. The Board shall from time to time by Resolution of Directors determine the respective numbers of Class I Directors, Class II Directors and Class III Directors.

10.6.

Each Class I Director shall (unless his or her office is vacated in accordance with these Articles) serve initially until the conclusion of the Annual General Meeting held in the calendar year 2012.

Each Class II Director shall (unless his or her office is vacated in accordance with these Articles) serve initially until the conclusion of the Annual General Meeting held in the calendar year 2013.

Each Class III Director shall (unless his or her office is vacated in accordance with these Articles) serve initially until the conclusion of the Annual General Meeting held in the calendar year 2014.

10.7.

Any Person designated to serve on the Board may be removed as a Director at any time, with or without cause, by Resolution of Shareholders or by Resolution of Directors.

10.8.

A Director may resign his office by giving written notice of his resignation to the Company and the resignation has effect from the date the notice is received by the Company or from such later date as may be specified in the notice. A Director shall resign forthwith as a Director if he is, or becomes, disqualified from acting as a Director under the Act.

10.9.

The Directors may at any time appoint any person to be a Director either to fill a vacancy or as an addition to the existing Directors. Where the Directors appoint a person as Director to fill a vacancy, the term shall not exceed the term that remained when the person who has ceased to be a Director ceased to hold office.

10.10.

A vacancy in relation to Directors occurs if a Director dies or otherwise ceases to hold office prior to the expiration of his term of office.

10.11.

Where the Company only has one Shareholder who is an individual and that Shareholder is also the sole Director of the Company, the sole Shareholder/Director may, by instrument in writing, nominate a person who is not disqualified from being a Director of the Company as a reserve Director of the Company to act in the place of the sole Director in the event of his death.

10.12.

The nomination of a person as a reserve Director of the Company ceases to have effect if:

(a)

before the death of the sole Shareholder/Director who nominated him,

(i)

resigns as reserve Director, or

(ii)

the sole Shareholder/Director revokes the nomination in writing; or

(b)

the sole Shareholder/Director who nominated him ceases to be able to be the sole Shareholder/Director of the Company for any reason other than his death.

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10.13.

The Company shall keep a register of directors containing:

(a)

the names and addresses of the persons who are Directors of the Company or who have been nominated as reserve Directors of the Company;

(b)

the date on which each person whose name is entered in the register was appointed as a Director, or nominated as a reserve Director, of the Company;

(c)

the date on which each person named as a Director ceased to be a Director of the Company;

(d)

the date on which the nomination of any person nominated as a reserve Director ceased to have effect; and

(e)

such other information as may be prescribed by the Act.

10.14.

The register of directors may be kept in any such form as the Directors may approve, but if it is in magnetic, electronic or other data storage form, the Company must be able to produce legible evidence of its contents. Until a Resolution of Directors determining otherwise is passed, the magnetic, electronic or other data storage shall be the original register of directors.

10.15.

The Directors may, by a Resolution of Directors, fix the emoluments of Directors with respect to services to be rendered in any capacity to the Company.

10.16.

A Director is not required to hold a Share as a qualification to office.

10.17.

Board observers shall be permitted to attend and participate, but shall not be entitled to vote, in meetings of Directors, subject to the terms and conditions, and any applicable policies and procedures, of the Company from time to time. The Company may pay for or reimburse the costs and expenses of any such Board observer’s attendance or participation, but shall not be permitted to pay emoluments with respect to any such Board observer.

11.

POWERS OF DIRECTORS

11.1.

The business and affairs of the Company shall be managed by, or under the direction or supervision of, the Directors of the Company. The Directors of the Company have all the powers necessary for managing, and for directing and supervising, the business and affairs of the Company. The Directors may pay all expenses incurred preliminary to and in connection with the incorporation of the Company and may exercise all such powers of the Company as are not by the Act or by the Memorandum or the Articles required to be exercised by the Shareholders.

11.2.

Each Director shall exercise his powers for a proper purpose and shall not act or agree to the Company acting in a manner that contravenes the Memorandum, the Articles or the Act. Each Director, in exercising his powers or performing his duties, shall act honestly and in good faith in what the Director believes to be the best interests of the Company.

11.3.

The continuing Directors may act notwithstanding any vacancy in their body.

11.4.

The Directors may by Resolution of Directors exercise all the powers of the Company to incur indebtedness, liabilities or obligations and to secure indebtedness, liabilities or obligations whether of the Company or of any third party.

11.5.

All cheques, promissory notes, drafts, bills of exchange and other negotiable instruments and all receipts for moneys paid to the Company shall be signed, drawn, accepted, endorsed or

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otherwise executed, as the case may be, in such manner as shall from time to time be determined by Resolution of Directors.

11.6.

For the purposes of Section 175 ( Disposition of assets ) of the Act, the Directors may by Resolution of Directors determine that any sale, transfer, lease, exchange or other disposition is in the usual or regular course of the business carried on by the Company and such determination is, in the absence of fraud, conclusive.

12.

PROCEEDINGS OF DIRECTORS

12.1.

Any one Director of the Company may call a meeting of the Directors by sending a written notice to each other Director.

12.2.

The Directors of the Company or any committee thereof shall hold regular meetings not less than quarterly at such times and in such manner and places within or outside the British Virgin Islands as the Directors may determine to be necessary or desirable.

12.3.

A Director is deemed to be present at a meeting of Directors if he participates by telephone or other electronic means and all Directors participating in the meeting are able to hear each other.

12.4.

A quorum for meetings of the Directors shall consist of a majority of the total number of Directors, unless there are only two Directors in which case the quorum is two. Meetings of the Board may be called by the Chairman at any time, provided that at least 72 hours’ written notice of such meeting, with an agenda specifying in reasonable detail any actions that will be considered at such meeting, has been provided to the Directors or notice thereof has been waived by each Director. Without limitation of the foregoing, the Directors shall not consider or approve any actions described in Regulation 13.2 unless the consideration of such actions was specified on the agenda included with such notice.

12.5.

If the Company has only one Director the provisions herein contained for meetings of Directors do not apply and such sole Director has full power to represent and act for the Company in all matters as are not by the Act, the Memorandum or the Articles required to be exercised by the Shareholders. In lieu of minutes of a meeting the sole Director shall record in writing and sign a note or memorandum of all matters requiring a Resolution of Directors. Such a note or memorandum constitutes sufficient evidence of such resolution for all purposes.

12.6.

At meetings of Directors at which the Chairman of the Board is present, he shall preside as chairman of the meeting. If there is no Chairman of the Board or if the Chairman of the Board is not present, the Directors present shall choose one of their members to be chairman of the meeting.

12.7.

An action that may be taken by the Directors or a committee of Directors at a meeting may also be taken by a Resolution of Directors or a resolution of a committee of Directors consented to in writing by all Directors or by all members of the committee, as the case may be, without the need for any notice. The consent may be in the form of counterparts each counterpart being signed by one or more Directors. If the consent is in one or more counterparts, and the counterparts bear different dates, then the resolution shall take effect on the date upon which the last Director has consented to the resolution by signed counterparts.

13.

COMMITTEES

13.1.

The Directors may, by Resolution of Directors, designate one or more committees, each consisting of one or more Directors, and delegate one or more of their powers, including the power to affix the Seal, to the committee.

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13.2.

The Directors have no power to delegate to a committee of Directors any of the following powers:

(a)

to designate committees of Directors;

(b)

to delegate powers to a committee of Directors;

(c)

to appoint or remove Directors;

(d)

to appoint or remove an agent;

(e)

to approve a plan of merger, consolidation or arrangement;

(f)

to make a declaration of solvency or to approve a liquidation plan, or

(g)

to make a determination that immediately after a proposed Distribution the value of the Company’s assets will exceed its liabilities and the Company will be able to pay its debts as they fall due.

13.3.

Sub-Regulation 13.2(a) and (b) do not prevent a committee of Directors, where authorised by the Resolution of Directors appointing such committee or by a subsequent Resolution of Directors, from appointing a sub-committee and delegating powers exercisable by the committee to the sub-committee.

13.4.

The meetings and proceedings of each committee of Directors consisting of two or more Directors shall be governed mutatis mutandis by the provisions of the Articles regulating the proceedings of Directors so far as the same are not superseded by any provisions in the Resolution of Directors establishing the committee.

13.5.

Where the Directors delegate their powers to a committee of Directors they remain responsible for the exercise of that power by the committee, unless they believed on reasonable grounds at all times before the exercise of the power that the committee would exercise the power in conformity with the duties imposed on Directors of the Company under the Act.

14.

APPROVALS

14.1.

Except as required by Applicable Law, all actions requiring the approval of the Directors shall be approved by a majority of the Directors present at any duly convened meeting of the Directors or by unanimous written consent of the Directors without a meeting, in each case in accordance with the provisions of Applicable Law, the Memorandum and the Articles.

15.

OFFICERS

15.1.

The Company may by Resolution of Directors appoint officers of the Company at such times as may be considered necessary or expedient. Such officers may consist of a Chairman of the Board of Directors, a president and one or more vice-presidents, secretaries and treasurers and such other officers as may from time to time be considered necessary or expedient. Any number of offices may be held by the same person.

15.2.

The officers shall perform such duties as are prescribed at the time of their appointment subject to any modification in such duties as may be prescribed thereafter by Resolution of Directors. In the absence of any specific prescription of duties it shall be the responsibility of the Chairman of the Board to preside at meetings of Directors and Shareholders, the president to manage the day to day affairs of the Company, the vice-presidents to act in order of seniority in the absence of the president but otherwise to perform such duties as may be delegated to them by the president, the secretaries to maintain the register of members, minute books and records (other than financial

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records) of the Company and to ensure compliance with all procedural requirements imposed on the Company by applicable law, and the treasurer to be responsible for the financial affairs of the Company.

15.3.

The emoluments of all officers shall be fixed by Resolution of Directors or by the Compensation Committee of the Board of Directors, as applicable.

15.4.

The officers of the Company shall hold office until their successors are duly appointed, but any officer elected or appointed by the Directors may be removed at any time, with or without cause, by Resolution of Directors. Any vacancy occurring in any office of the Company may be filled by Resolution of Directors.

15.5.

The Directors may, by a Resolution of Directors, appoint any person, including a person who is a Director, to be an agent of the Company.

15.6.

An agent of the Company shall have such powers and authority of the Directors, including the power and authority to affix the Seal, as are set forth in the Articles or in the Resolution of Directors appointing the agent, except that no agent has any power or authority with respect to the following:

(a)

to amend the Memorandum or the Articles;

(b)

to change the registered office or agent;

(c)

to designate committees of Directors;

(d)

to delegate powers to a committee of Directors;

(e)

to appoint or remove Directors;

(f)

to appoint or remove an agent;

(g)

to fix emoluments of Directors;

(h)

to approve a plan of merger, consolidation or arrangement;

(i)

to make a declaration of solvency or to approve a liquidation plan;

(j)

to make a determination that immediately after a proposed Distribution the value of the Company’s assets will exceed its liabilities and the Company will be able to pay its debts as they fall due; or

(k)

to authorise the Company to continue as a company incorporated under the laws of a jurisdiction outside the British Virgin Islands.

15.7.

The Resolution of Directors appointing an agent may authorise the agent to appoint one or more substitutes or delegates to exercise some or all of the powers conferred on the agent by the Company.

15.8.

The Directors may remove an agent appointed by the Company and may revoke or vary a power conferred on him.

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16.

CONFLICT OF INTERESTS

16.1.

A Director of the Company shall, forthwith after becoming aware of the fact that he is interested in a transaction entered into or to be entered into by the Company, disclose the interest to all other Directors of the Company.

16.2.

For the purposes of Regulation 16.1, a disclosure to all other Directors to the effect that a Director is a member, director or officer of another named entity or has a fiduciary relationship with respect to the entity or a named individual and is to be regarded as interested in any transaction which may, after the date of the entry or disclosure, be entered into with that entity or individual, is a sufficient disclosure of interest in relation to that transaction.

16.3.

With the consent of the disinterested Directors, a Director of the Company who is interested in a transaction entered into or to be entered into by the Company may:

(a)

vote on a matter relating to the transaction;

(b)

attend a meeting of Directors at which a matter relating to the transaction arises and be included among the Directors present at the meeting for the purposes of a quorum; and

(c)

sign a document on behalf of the Company, or do any other thing in his capacity as a Director, that relates to the transaction,

and, subject to compliance with the Act shall not, by reason of his office be accountable to the Company for any benefit which he derives from such transaction and no such transaction shall be liable to be avoided on the grounds of any such interest or benefit.

16.4.

A Director of the Company who is interested in a transaction entered into or to be entered into by the Company may:

(a)

abstain from voting on a matter relating to the transaction; and

(b)

decline to attend a meeting of Directors at which a matter relating to the transaction arises;

17.

INDEMNIFICATION

17.1.

A Director of the Company shall not be liable to the Company or its shareholders for monetary damages for breach of fiduciary duty as a Director to the fullest extent permitted by Applicable Law.

17.2.

The Company shall indemnify against all expenses, including legal fees, and against all judgments, fines and amounts paid in settlement and reasonably incurred in connection with legal, administrative or investigative proceedings or suits any person who:

(a)

is or was a party or is threatened to be made a party to any threatened, pending or completed proceedings or suits, whether civil, criminal, administrative or investigative, by reason of the fact that the person is or was a Director of the Company; or

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(b)

is or was, at the request of the Company, serving as a director of, or in any other capacity is or was acting for, another company or a partnership, joint venture, trust or other enterprise.

17.3.

The termination of any proceedings by any judgment, order, settlement, conviction or the entering of a nolle prosequi does not, by itself, create a presumption that the person did not act honestly and in good faith and with a view to the best interests of the Company or that the person had reasonable cause to believe that his conduct was unlawful.

17.4.

Expenses, including legal fees, incurred by a person referred to in Sub-Regulation 17.2 in defending any legal, administrative or investigative proceedings may be paid by the Company in advance of the final disposition of such proceedings.

17.5.

The indemnification and advancement of expenses provided by, or granted pursuant to, this Regulation 17 is not exclusive of any other rights to which the person seeking indemnification or advancement of expenses may be entitled under any agreement, Resolution of Shareholders, resolution of disinterested Directors or otherwise, both as acting in the person’s official capacity and as to acting in another capacity while serving as a Director of the Company.

17.6.

If a person referred to in Sub-Regulation 17.2 has been successful in defence of any proceedings referred to in Sub-Regulation 17.2, the person is entitled to be indemnified against all expenses, including legal fees, and against all judgments, fines and amounts paid in settlement and reasonably incurred by the person in connection with the proceedings.

17.7.

The right to indemnification conferred in this Regulation 17 shall be a contract right.

17.8.

The Company may purchase and maintain insurance in relation to any person who is or was a Director, officer, employee, agent or liquidator of the Company, or who at the request of the Company is or was serving as a Director, officer, employee, agent or liquidator of, or in any other capacity is or was acting for, another company or a partnership, joint venture, trust or other enterprise, against any liability asserted against the person and incurred by the person in that capacity, whether or not the Company has or would have had the power to indemnify the person against the liability as provided in the Articles.

17.9.

Neither the amendment nor repeal of this Regulation 17, nor the adoption of any provision of the Memorandum or Articles of the Company, nor, to the fullest extent permitted by Applicable Law, any modification of law, shall adversely affect any right or protection of any person granted pursuant hereto existing at, or arising out of or related to any event, act or omission that occurred prior to, the time of such amendment, repeal, adoption or modification (regardless of when any proceeding or suit (or part thereof) relating to such event, act or omission arises or is first threatened, commenced or completed).

18.

RECORDS

18.1.

The Company shall keep the following documents at the office of its registered agent:

(a)

the Memorandum and the Articles;

(b)

the register of members, or a copy of the register of members;

(c)

the register of directors, or a copy of the register of directors; and

(d)

copies of all notices and other documents filed by the Company with the Registrar in the previous 10 years.

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18.2.

Until the Directors determine otherwise by Resolution of Directors the Company shall keep the original register of members and original register of directors at the office of its registered agent.

18.3.

If the Company maintains only a copy of the register of members or a copy of the register of directors at the office of its registered agent, it shall:

(a)

within 15 days of any change in either register, notify the registered agent in writing of the change; and

(b)

provide the registered agent with a written record of the physical address of the place or places at which the original register of members or the original register of directors is kept.

18.4.

The Company shall keep the following records at the office of its registered agent or at such other place or places, within or outside the British Virgin Islands, as the Directors may determine:

(a)

minutes of meetings and Resolutions of Shareholders and classes of Shareholders; and

(b)

minutes of meetings and Resolutions of Directors and committees of Directors.

18.5.

Where any original records referred to in this Regulation are maintained other than at the office of the registered agent of the Company, and the place at which the original records is changed, the Company shall provide the registered agent with the physical address of the new location of the records of the Company within 14 days of the change of location.

18.6.

The records kept by the Company under this Regulation shall be in written form or either wholly or partly as electronic records complying with the requirements of the Electronic Transactions Act, 2001 (No. 5 of 2001), as from time to time amended or re-enacted.

19.

REGISTER OF CHARGES

The Company shall maintain at the office of its registered agent a register of charges in which there shall be entered the following particulars regarding each mortgage, charge and other encumbrance created by the Company:

(a)

the date of creation of the charge;

(b)

a short description of the liability secured by the charge;

(c)

a short description of the property charged;

(d)

the name and address of the trustee for the security or, if there is no such trustee, the name and address of the chargee;

(e)

unless the charge is a security to bearer, the name and address of the holder of the charge; and

(f)

details of any prohibition or restriction contained in the instrument creating the charge on the power of the Company to create any future charge ranking in priority to or equally with the charge.

20.

SEAL

The Company shall have a Seal an impression of which shall be kept at the office of the registered agent of the Company. The Company may have more than one Seal and references herein to the Seal shall be references to every Seal which shall have been duly adopted by

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Resolution of Directors. The Directors shall provide for the safe custody of the Seal and for an imprint thereof to be kept at the registered office. Except as otherwise expressly provided herein the Seal when affixed to any written instrument shall be witnessed and attested to by the signature of any one Director or other person so authorised from time to time by Resolution of Directors. Such authorisation may be before or after the Seal is affixed, may be general or specific and may refer to any number of sealings. The Directors may provide for a facsimile of the Seal and of the signature of any Director or authorised person which may be reproduced by printing or other means on any instrument and it shall have the same force and validity as if the Seal had been affixed to such instrument and the same had been attested to as hereinbefore described.

21.

DISTRIBUTIONS BY WAY OF DIVIDEND

21.1.

The Directors of the Company may, by Resolution of Directors, authorise a distribution by way of dividend at a time and of an amount they think fit if they are satisfied, on reasonable grounds, that, immediately after the distribution, the value of the Company’s assets will exceed its liabilities and the Company will be able to pay its debts as they fall due.

21.2.

Dividends may be paid in money, shares, or other property.

21.3.

Notice of any dividend that may have been declared shall be given to each Shareholder as specified in Sub-Regulation 21.1 and all dividends unclaimed for 3 years after having been declared may be forfeited by Resolution of Directors for the benefit of the Company.

21.4.

No dividend shall bear interest as against the Company and no dividend shall be paid on Treasury Shares.

22.

ACCOUNTS AND AUDIT; INFORMATION/ACCESS

22.1.

The Company shall keep records that are sufficient to show and explain the Company’s transactions and that will, at any time, enable the financial position of the Company to be determined with reasonable accuracy.

22.2.

The Company may by Resolution of Shareholders call for the Directors to prepare periodically and make available a profit and loss account and a balance sheet, and such other financial information regarding the business and affairs of the Company as requested by such shareholders. The profit and loss account and balance sheet, and such other financial information if applicable, shall be drawn up so as to give respectively a true and fair view of the profit and loss of the Company for a financial period and a true and fair view of the assets and liabilities of the Company as at the end of a financial period.

22.3.

The Company may by Resolution of Shareholders call for the accounts to be examined by auditors.

22.4.

The first auditors shall be appointed by Resolution of Directors; subsequent auditors shall be appointed by Resolution of Directors or the Audit Committee of the Board of Directors, as applicable, which appointment shall be ratified by Resolution of Shareholders.

22.5.

The auditors may be Shareholders, but no Director or other officer shall be eligible to be an auditor of the Company during their continuance in office.

22.6.

The remuneration of the auditors of the Company may be fixed by Resolution of Directors.

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22.7.

The auditors shall examine each profit and loss account and balance sheet required to be laid before a meeting of the Shareholders or otherwise given to Shareholders and shall state in a written report whether or not:

(a)

in their opinion the profit and loss account and balance sheet give a true and fair view respectively of the profit and loss for the period covered by the accounts, and of the assets and liabilities of the Company at the end of that period; and

(b)

all the information and explanations required by the auditors have been obtained.

22.8.

The report of the auditors shall be annexed to the accounts and shall be read at the meeting of Shareholders at which the accounts are laid before the Company or shall be otherwise given to the Shareholders.

22.9.

Every auditor of the Company shall have a right of access at all times to the books of account and vouchers of the Company, and shall be entitled to require from the Directors and officers of the Company such information and explanations as he thinks necessary for the performance of the duties of the auditors.

22.10.

The auditors of the Company shall be entitled to receive notice of, and to attend any meetings of Shareholders at which the Company’s profit and loss account and balance sheet are to be presented.

23.

NOTICES

23.1.

Any notice, information or written statement to be given by the Company to Shareholders may be given by personal service, mail or any electronic means addressed to each Shareholder at the address shown in the register of members.

23.2.

Any summons, notice, order, document, process, information or written statement to be served on the Company may be served by leaving it, or by sending it by registered mail addressed to the Company, at its registered office, or by leaving it with, or by sending it by registered mail to, the registered agent of the Company.

23.3.

Service of any summons, notice, order, document, process, information or written statement to be served on the Company may be proved by showing that the summons, notice, order, document, process, information or written statement was delivered to the registered office or the registered agent of the Company or that it was mailed in such time as to admit to its being delivered to the registered office or the registered agent of the Company in the normal course of delivery within the period prescribed for service and was correctly addressed and the postage was prepaid.

24.

VOLUNTARY LIQUIDATION

The Company may by a Resolution of Shareholders or by a Resolution of Directors appoint a voluntary liquidator.

25.

ASSIGNMENT OF RIGHTS

No right or obligation arising under these Articles of Association may be assigned by any party without the prior written consent of the other parties, except as otherwise agreed in writing among all of the Shareholders of the Company.

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26.

CONTINUATION

The Company may by Resolution of Shareholders continue as a company incorporated under the laws of a jurisdiction outside the British Virgin Islands in the manner provided under those laws.

Incorporator

[Signed Greg Boyd]

Greg Boyd

Authorised Signatory

Maples Corporate Services (BVI) Limited

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Exhibit 4.1

EXECUTION COPY

ARCOS DORADOS B.V.

as Issuer

THE SUBSIDIARY GUARANTORS

named herein

CITIBANK N.A.

as Trustee, Registrar, Paying Agent and Transfer Agent

and

DEXIA BANQUE INTERNATIONALE À LUXEMBOURG, SOCIÉTÉ ANONYME

as Luxembourg Paying Agent

INDENTURE

Dated as of October 1, 2009

7.500% SENIOR NOTES DUE 2019

TABLE OF CONTENTS


		Page

ARTICLE I
DEFINITIONS AND INCORPORATION BY REFERENCE

Section 1.1	Definitions		1
Section 1.2	Rules of Construction		34

ARTICLE II
THE NOTES

Section 2.1	Form and Dating		35
Section 2.2	Execution and Authentication		35
Section 2.3	Registrar, Transfer Agent and Paying Agent		36
Section 2.4	Paying Agent to Hold Money in Trust		37
Section 2.5	CUSIP and ISIN Numbers		38
Section 2.6	Holder Lists		38
Section 2.7	Global Note Provisions		38
Section 2.8	Legends		39
Section 2.9	Transfer and Exchange		39
Section 2.10	Mutilated, Destroyed, Lost or Stolen Notes		43
Section 2.11	Temporary Notes		43
Section 2.12	Cancellation		44
Section 2.13	Defaulted Interest		44
Section 2.14	Additional Notes		45

ARTICLE III
COVENANTS

Section 3.1	Payment of Notes		45
Section 3.2	Maintenance of Office or Agency		46
Section 3.3	Corporate Existence		46
Section 3.4	Payment of Taxes		46
Section 3.5	Further Instruments and Acts		47
Section 3.6	Waiver of Stay, Extension or Usury Laws		47
Section 3.7	Change of Control		47
Section 3.8	Limitation on Incurrence of Additional Indebtedness		48
Section 3.9	Limitation on Restricted Payments		52

TABLE OF CONTENTS

(continued)


		Page

Section 3.10	Limitation on Asset Sales		56
Section 3.11	Limitation on Designation of Unrestricted Subsidiaries		59
Section 3.12	Limitation on Dividend and Other Payment Restrictions Affecting Restricted Subsidiaries		61
Section 3.13	Limitation on Liens		63
Section 3.14	Limitation on Transactions with Affiliates		63
Section 3.15	Conduct of Business		65
Section 3.16	Reports to Holders		65
Section 3.17	Listing		66
Section 3.18	Payment of Additional Amounts		66
Section 3.19	Use of Proceeds		68
Section 3.20	Covenant Suspension		68
Section 3.21	Compliance Certificates		69

ARTICLE IV
LIMITATION ON MERGER, CONSOLIDATION AND SALE OF ASSETS

Section 4.1	Merger, Consolidation and Sale of Assets		70

ARTICLE V
REDEMPTION OF NOTES

Section 5.1	Redemption		73
Section 5.2	Election to Redeem		73
Section 5.3	Notice of Redemption		73
Section 5.4	Selection of Notes to Be Redeemed in Part		74
Section 5.5	Deposit of Redemption Price		74
Section 5.6	Notes Payable on Redemption Date		74
Section 5.7	Unredeemed Portions of Partially Redeemed Note		75

ARTICLE VI
DEFAULTS AND REMEDIES

Section 6.1	Events of Default		75
Section 6.2	Acceleration		76
Section 6.3	Other Remedies		77
Section 6.4	Waiver of Past Defaults		77

TABLE OF CONTENTS

(continued)


		Page

Section 6.5	Control by Majority		77
Section 6.6	Limitation on Suits		78
Section 6.7	Rights of Holders to Receive Payment		78
Section 6.8	Collection Suit by Trustee		78
Section 6.9	Trustee May File Proofs of Claim, etc.		79
Section 6.10	Priorities		79
Section 6.11	Undertaking for Costs		80

ARTICLE VII
TRUSTEE

Section 7.1	Duties of Trustee		80
Section 7.2	Rights of Trustee		81
Section 7.3	Individual Rights of Trustee		83
Section 7.4	Trustee’s Disclaimer		84
Section 7.5	Notice of Defaults		84
Section 7.6	Reports by Trustee to Holders		84
Section 7.7	Compensation and Indemnity		84
Section 7.8	Replacement of Trustee		85
Section 7.9	Successor Trustee by Merger		86
Section 7.10	Eligibility		86
Section 7.11	Intentionally Omitted		86
Section 7.12	Paying Agent, Registrar and Luxembourg Paying Agent		87

ARTICLE VIII
DEFEASANCE; DISCHARGE OF INDENTURE

Section 8.1	Legal Defeasance and Covenant Defeasance		87
Section 8.2	Conditions to Defeasance		88
Section 8.3	Application of Trust Money		89
Section 8.4	Repayment to Company		90
Section 8.5	Indemnity for U.S. Government Obligations		90
Section 8.6	Reinstatement		90
Section 8.7	Satisfaction and Discharge		90

iii

TABLE OF CONTENTS

(continued)


		Page

ARTICLE IX
AMENDMENTS

Section 9.1	Without Consent of Holders		91
Section 9.2	With Consent of Holders		92
Section 9.3	Revocation and Effect of Consents and Waivers		93
Section 9.4	Notation on or Exchange of Notes		93
Section 9.5	Trustee to Sign Amendments and Supplements		93

ARTICLE X
SUBSIDIARY GUARANTEES

Section 10.1	Subsidiary Guarantees		94
Section 10.2	Limitation on Liability; Termination, Release and Discharge		96
Section 10.3	Right of Contribution		97
Section 10.4	No Subrogation		97
Section 10.5	Additional Subsidiary Guarantees		97

ARTICLE XI
MISCELLANEOUS

Section 11.1	Notices		98
Section 11.2	Certificate and Opinion as to Conditions Precedent		99
Section 11.3	Statements Required in Officers’ Certificate or Opinion of Counsel		100
Section 11.4	Rules by Trustee, Paying Agent and Registrar		100
Section 11.5	Legal Holidays		100
Section 11.6	Governing Law, etc.		100
Section 11.7	No Recourse Against Others		102
Section 11.8	Successors		102
Section 11.9	Duplicate and Counterpart Originals		102
Section 11.10	Severability		102
Section 11.11	Currency Indemnity		102
Section 11.12	Table of Contents; Headings		103



EXHIBIT A		Form of Note

EXHIBIT B		Form of Certificate for Transfer to QIB

EXHIBIT C		Form of Certificate for Transfer Pursuant to Regulation S

EXHIBIT D		Form of Certificate for Transfer Pursuant to Rule 144

EXHIBIT E		Form of Supplemental Indenture for Subsidiary Guarantee

INDENTURE, dated as of October 1, 2009, between Arcos Dorados B.V., a besloten vennootschap organized and existing under the laws of the Netherlands (the “ Company ”), the Subsidiary Guarantors named herein (as defined below), Citibank, N.A., a national banking association as trustee (the “ Trustee ”), registrar (the “ Registrar ”), paying agent and transfer agent, Dexia Banque Internationale à Luxembourg, société anonyme, as Luxembourg paying agent (the “ Luxembourg Paying Agent ”).

Each party agrees as follows for the benefit of the other parties and of the Holders of the Initial Notes and any Additional Notes (in each case as defined herein):

ARTICLE I

DEFINITIONS AND INCORPORATION BY REFERENCE

Section 1.1 Definitions .

“ Accounts Receivable ” means (1) accounts receivable, (2) franchise fee payments and other revenues related to franchise agreements, (3) royalty and other similar payments made related to the use of trade names and other intellectual property, business support, training and other services and (4) revenues related to distribution and merchandising of the products of the Company and its Restricted Subsidiaries.

“ Acquired Indebtedness ” means Indebtedness of a Person or any of its Subsidiaries existing at the time such Person becomes a Restricted Subsidiary or at the time it merges or consolidates with the Company or any of its Restricted Subsidiaries or is assumed in connection with the acquisition of assets from such Person. Acquired Indebtedness will be deemed to have been Incurred at the time such Person becomes a Restricted Subsidiary or at the time it merges or consolidates with the Company or a Restricted Subsidiary or at the time such Indebtedness is assumed in connection with the acquisition of assets from such Person.

“ Additional Amounts ” has the meaning set forth under Section 3.18 .

“ Additional Note Board Resolutions ” means resolutions duly adopted by the Board of Directors of the Company and delivered to the Trustee in an Officers’ Certificate providing for the issuance of Additional Notes.

“ Additional Note Supplemental Indenture ” means a supplement to this Indenture duly executed and delivered by the Company and the Trustee pursuant to Article IX providing for the issuance of Additional Notes.

“ Additional Notes ” means any additional Notes as specified in the relevant Additional Note Board Resolutions or Additional Note Supplemental Indenture issued therefor in accordance with this Indenture.

“ Affiliate ” means, with respect to any specified Person, any other Person who directly or indirectly through one or more intermediaries controls, or is controlled by, or is under

common control with, such specified Person. Solely for purposes of this definition, the term “control” means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting securities, by contract or otherwise. For purposes of this definition, the terms “controlling,” “controlled by” and “under common control with” have correlative meanings.

“ Agent Members ” has the meaning assigned to it in Section 2.7(b).

“ Asset Acquisition ” means:

(1) an Investment by the Company or any Restricted Subsidiary in any other Person pursuant to which such Person will become a Restricted Subsidiary, or will be merged with or into the Company or any Restricted Subsidiary; or

(2) the acquisition by the Company or any Restricted Subsidiary of the assets of any Person (other than a Subsidiary of the Company) which constitute all or substantially all of the assets of such Person or comprises any division or line of business of such Person or any other properties or assets of such Person other than in the ordinary course of business; or

(3) any Revocation with respect to an Unrestricted Subsidiary.

“ Asset Sale ” means (1) any direct or indirect sale, disposition, issuance, conveyance, transfer, lease, assignment or other transfer, including, without limitation, a Sale and Leaseback Transaction (each, a “disposition”), by the Company or any Restricted Subsidiary of:

(a) any Capital Stock other than Capital Stock of the Company (other than directors’ qualifying shares and shares issued to foreign nationals to the extent required by applicable law); or

(b) any property or assets (other than cash, Cash Equivalents or Capital Stock) of the Company or any Restricted Subsidiary; and

(2) the exercise by McDonald’s of the McDonald’s Call Option in respect of any Subsidiary of the Company other than the Master Franchisee or the Brazilian Master Franchisee.

Notwithstanding the preceding, the following items will not be deemed to be Asset Sales:

(1) the disposition of all or substantially all of the assets of the Company and its Restricted Subsidiaries as permitted under Section 4.1 or any disposition which constitutes a Change of Control;

(2) the sale of property or equipment that, in the reasonable determination of the Company, has become worn out, obsolete or damaged or otherwise unused in connection with the business of the Company or any Restricted Subsidiary;

(3) sales or other dispositions of equipment, inventory, accounts receivable or other assets in the ordinary course of business;

(4) for purposes of Section 3.10 only, the making of a Restricted Payment permitted under Section 3.9 and any Permitted Investment;

(5) a disposition to the Company or a Restricted Subsidiary, including a Person that is or will become a Restricted Subsidiary immediately after the disposition;

(6) the creation of a Permitted Lien;

(7) sales of Accounts Receivable, or participations therein, and any related assets, in connection with any Permitted Receivables Financing;

(8) dispositions of receivables and related assets or interests in connection with the compromise, settlement or collection thereof in the ordinary course of business or in bankruptcy or similar proceedings and exclusive of factoring or similar arrangements;

(9) (i) the licensing or sublicensing of intellectual property or other general intangibles, including entering into cross-licensing arrangements, in the ordinary course of business and (ii) the abandonment or other disposition of intellectual property that is, in the reasonable judgment of management of the Company or the relevant Restricted Subsidiary, no longer economically convenient to maintain or useful in the conduct of the Permitted Business;

(10) any sale of Capital Stock in, or Indebtedness of other securities of, an Unrestricted Subsidiary; and

(11) any transaction or series of related transactions involving property or assets with a Fair Market Value not in excess of U.S.$3,500,000 (or the equivalent in other currencies).

“ Asset Sale Offer ” has the meaning assigned to it in Section 3.10 .

“ Asset Sale Offer Amount ” has the meaning assigned to it in Section 3.10 .

“ Asset Sale Offer Notice ” has the meaning assigned to it in Section 3.10 .

“ Asset Sale Offer Payment Date ” means a Business Day no earlier than 30 days nor later than 60 days from the date the Asset Sale Offer Notice is mailed (other than as may be required by applicable law).

“ Asset Sale Transaction ” means any Asset Sale and, whether or not constituting an Asset Sale, (1) any sale or other disposition of Capital Stock, (2) any Designation with respect to an Unrestricted Subsidiary and (3) any sale or other disposition of property or assets excluded from the definition of Asset Sale by clause (4) of that definition.

“ Authenticating Agent ” has the meaning assigned to it in Section 2.2(d).

“ Authorized Agent ” has the meaning assigned to it in Section 11.6(d).

“ Bankruptcy Law ” means Title 11, U.S. Code or any similar U.S. federal or state law or non-U.S. law for the relief of debtors.

“ Bankruptcy Law Event of Default ” means:

(1) the Company or any Restricted Subsidiary, or group of Subsidiaries that, taken together, would constitute a Significant Subsidiary, pursuant to or under or within the meaning of any Bankruptcy Law:

(a) commences a voluntary case or proceeding;

(b) consents to the making of a Bankruptcy Order in an involuntary case or proceeding or consents to the commencement of any case against it (or them);

(c) consents to the appointment of a custodian, receiver, liquidator, assignee, trustee, síndico , conciliador , sequestrator or similar official of it (or them) or for all or any substantial part of its property;

(d) makes a general assignment for the benefit of its (or their) creditors;

(e) files an answer or consent seeking reorganization or relief;

(f) admits in writing its inability to pay its (or their) debts generally; or

(g) consents to the filing of a petition in bankruptcy;

(2) a court of competent jurisdiction in any involuntary case or proceeding enters a Bankruptcy Order against the Company, or any Restricted Subsidiary, or group of Subsidiaries that, taken together, would constitute a Significant Subsidiary, or of all or any substantial part of the property of the Company, or any Restricted Subsidiary, or group of Subsidiaries that, taken together, would constitute a Significant Subsidiary, and such Bankruptcy Order remains unstayed and in effect for 60 consecutive days; or

(3) a custodian, receiver, liquidator, assignee, trustee, síndico, conciliador, sequestrator or similar official is appointed out of court with respect to the Company, or any Restricted Subsidiary, or group of Subsidiaries that, taken together, would constitute a Significant Subsidiary, or with respect to all or any substantial part of the assets or properties of the Company, or any Restricted Subsidiary, or group of Subsidiaries that, taken together, would constitute a Significant Subsidiary.

“ Bankruptcy Order ” means any court order made in a proceeding pursuant to or within the meaning of any Bankruptcy Law, containing an adjudication of bankruptcy or insolvency, or providing for liquidation, receivership, winding-up, dissolution, suspension of payments, reorganization or similar proceedings, or appointing a custodian of a debtor or of all or any substantial part of a debtor’s property, or providing for the staying, arrangement, adjustment or composition of indebtedness or other relief of a debtor.

“ Board of Directors ” means, with respect to any Person, the board of directors or similar governing body of such Person or any duly authorized committee thereof.

“ Board Resolution ” means, with respect to any Person, a copy of a resolution certified by the Secretary or an Assistant Secretary of such Person to have been duly adopted by the Board of Directors of such Person and to be in full force and effect on the date of such certification, and delivered to the Trustee.

“ Brazilian Master Franchisee ” means Arcos Dourados Comercio de Alimentos Ltda., or any successor to its rights and obligations under the Second Amended and Restated Master Franchise Agreement, dated as of November 10, 2008, among McDonald’s Latin America and Arcos Dourados Comercio de Alimentos Ltda.

“ Business Day ” means a day other than a Saturday, Sunday or any day on which banking institutions are authorized or required by law to close in New York City, United States or in the Netherlands.

“ Call Option Closing Date ” means the date on which the equity interests of the Master Franchisee or the Brazilian Master Franchisee are transferred to McDonald’s upon McDonald’s exercise of the McDonald’s Call Option and the Call Option Price in respect thereof is paid by McDonald’s to the Company.

“ Call Option Price ” means the price payable by McDonald’s to the Company upon exercise by McDonald’s of the McDonald’s Call Option in respect of the equity interests of the Master Franchisee or the Brazilian Master Franchisee.

“ Call Option Redemption Event ” means the occurrence of the Call Option Closing Date and the payment of the Call Option Price by McDonald’s to the Company, but only with respect to the Master Franchisee and/or the Brazilian Master Franchisee.

“ Capital Stock ” means, with respect to any Person, any and all shares, interests, rights to purchase, warrants, options, participations or other equivalents of or interests in (however designated and whether or not voting) of equity of such Person, including each class of Common Stock, Preferred Stock, limited liability interests or partnership interests, but excluding any debt securities convertible into such equity.

“ Capitalized Lease Obligations ” means, as to any Person, the obligations of such Person under a lease that are required to be classified and accounted for as capital lease obligations under GAAP. For purposes of this definition, the amount of such obligations at any date will be the capitalized amount of such obligations at such date, determined in accordance with GAAP.

“ Cash Equivalents ” means:

(1) U.S. dollars, or money in the local currency of any country in which the Company or any of its Restricted Subsidiaries operates;

(2) marketable direct obligations issued by, or unconditionally guaranteed by, the United States government or issued by any agency thereof and backed by the full faith and credit of the United States, in each case maturing within one year from the date of acquisition thereof;

(3) marketable direct obligations issued by any state of the United States of America or any political subdivision of any such state or any public instrumentality thereof or any country recognized by the Unites States of America maturing within one year from the date of acquisition thereof and, at the time of acquisition, having one of the three highest ratings obtainable from either S&P or Moody’s or any successor thereto;

(4) commercial paper outstanding at any time issued by any Person that is organized under the laws of the United States of America, any state thereof or any Latin American country recognized by the United States and rated P-1 or better from Moody’s or A-1 or better from S&P or, with respect to Persons organized outside of the United States, a local market credit rating at least “BBB-” (or the then equivalent grade) by S&P and the equivalent rating by Moody’s and in each case with maturities of not more than 360 days from the date of acquisition thereof;

(5) demand deposits, certificates of deposit, overnight deposits and time deposits with maturities of one year or less from the date of acquisition, bankers’ acceptances with maturities not exceeding one year and overnight bank deposits, in each case, with any commercial bank that is organized under the laws of the United States of America, any state thereof or any foreign country recognized by the United States and at the time of acquisition thereof has capital and surplus in excess of $500,000,000 (or the foreign currency equivalent thereof) and a rating of P-1 or better from Moody’s or A-1 or better from S&P or, with respect to a commercial bank organized outside of the United States, a local market credit rating of at least “BBB-” (or the then equivalent grade) by S&P and the equivalent rating by Moody’s, or with government owned financial institution that is organized under the laws of any of the countries in which the Company’s Restricted Subsidiaries conduct business;

(6) insured demand deposits made in the ordinary course of business and consistent with the Company’s or its Subsidiaries’ customary cash management policy in any domestic office of any commercial bank organized under the laws of the United States of America or any state thereof;

(7) repurchase obligations with a term of not more than 360 days for underlying securities of the types described in clauses (2), (3) and (4) above entered into with any financial institution meeting the qualifications specified in clause (5) above;

(8) substantially similar investments denominated in the currency of any jurisdiction in which the Company or any of its Restricted Subsidiaries conducts business

of issuers whose country’s credit rating is at least “BBB-” (or the then equivalent grade) by S&P and the equivalent rating by Moody’s; and

(9) investments in money market funds which invest at least 95% of their assets in securities of the types described in clauses (1) through (8) above.

“ Certificated Note ” means any Note issued in fully-registered certificated form (other than a Global Note), which shall be substantially in the form of Exhibit A , with appropriate legends as specified in Section 2.8 and Exhibit A .

“ Change of Control ” means the occurrence of one or more of the following events:

(1) The Permitted Holders cease to be the “beneficial owners” (as defined in Rules 13d-3 and 13d-5 under the Exchange Act) of 30.0% of the voting power of the Voting Stock of the Company (including any Surviving Entity), the Master Franchisee or the Brazilian Franchisee;

(2) individuals appointed by the Permitted Holders cease for any reason to constitute a majority of the members of the Board of Directors of the Company, the Master Franchisee or the Brazilian Franchisee;

(3) the sale, conveyance, assignment, transfer, lease or other disposition of all or substantially all of the assets of the Company, the Master Franchisee or the Brazilian Franchisee, determined on a consolidated basis, to any “person” (as defined in Sections 13d and 14d under the Exchange Act), whether or not otherwise in compliance with the Indenture, other than a Permitted Holder; or

(4) the approval by the holders of Capital Stock of the Company, the Master Franchisee or the Brazilian Franchisee of any plan or proposal for the liquidation or dissolution of the Company, the Master Franchisee or the Brazilian Franchisee, whether or not otherwise in compliance with the Indenture.

“ Change of Control Notice ” means notice of a Change of Control Offer made pursuant to Section 3.7 , which shall be (i) mailed first-class, postage prepaid, to each record Holder as shown on the Note Register within 30 days following the date upon which a Change of Control occurred, with a copy to the Trustee, and (ii) as long as the Notes are listed on the Luxembourg Stock Exchange for trading on the Euro MTF Market and the rules of the Euro MTF Market so require, published in a newspaper having a general circulation in Luxembourg, which notice shall govern the terms of the Change of Control Offer and shall state:

(1) that a Change of Control has occurred, the circumstances or events causing such Change of Control and that a Change of Control Offer is being made pursuant to Section 3.7 , and that all Notes that are timely tendered shall be accepted for payment;

(2) the Change of Control Payment, and the Change of Control Payment Date;

(3) that any Notes or portions thereof not tendered or accepted for payment shall continue to accrue interest;

(4) that, unless the Company defaults in the payment of the Change of Control Payment with respect thereto, all Notes or portions thereof accepted for payment pursuant to the Change of Control Offer shall cease to accrue interest from and after the Change of Control Payment Date;

(5) that any Holder electing to have any Notes or portions thereof purchased pursuant to a Change of Control Offer shall be required to tender such Notes, with the form entitled “Option of Holder to Elect Purchase” on the reverse of such Notes completed, to the Paying Agent at the address specified in the notice prior to the close of business on the third Business Day preceding the Change of Control Payment Date;

(6) that any Holder shall be entitled to withdraw such election if the Paying Agent receives, not later than the close of business on the third Business Day preceding the Change of Control Payment Date, a facsimile transmission or letter, setting forth the name of the Holder, the principal amount of Notes delivered for purchase, and a statement that such Holder is withdrawing such Holder’s election to have such Notes or portions thereof purchased pursuant to the Change of Control Offer;

(7) that any Holder electing to have Notes purchased pursuant to the Change of Control Offer must specify the principal amount that is being tendered for purchase, which principal amount must be U.S.$100,000 or an integral multiple of U.S.$1,000 in excess thereof;

(8) that any Holder of Certificated Notes whose Certificated Notes are being purchased only in part shall be issued new Certificated Notes equal in principal amount to the unpurchased portion of the Certificated Note or Notes surrendered, which unpurchased portion shall be equal in principal amount to U.S.$100,000 or an integral multiple of U.S.$1,000 in excess thereof;

(9) that the Trustee shall return to the Holder of a Global Note that is being purchased in part, such Global Note with a notation on the schedule of increases and decreases thereof adjusting the principal amount thereof to be equal to the unpurchased portion of such Global Note;

(10) that, in the event that Holders of not less than 95% of the aggregate principal amount of the Outstanding Notes accept a Change of Control Offer and the Company or a third party purchases all of the Notes held by such Holders, the Company shall have the right, upon prior notice, to redeem all of the Notes that remain outstanding in accordance with Section 3.7(d) ; and

(11) any other information necessary to enable any Holder to tender Notes and to have such Notes purchased pursuant to Section 3.7 .

“ Change of Control Offer ” has the meaning assigned to it in Section 3.7(a) .

“ Change of Control Payment ” has the meaning assigned to it in Section 3.7 .

“ Change of Control Payment Date ” means a Business Day no earlier than 30 days nor later than 60 days subsequent to the date on which the Change of Control Notice is mailed (other than as may be required by applicable law);

“ Commodity Agreement ” means, with respect to any Person, any commodity swap agreement, commodity cap agreement, commodity collar agreement, commodity or raw material futures contract or any other agreement as to which such Person is a party designed to manage commodity risk of such Person.

“ Common Stock ” means, with respect to any Person, any and all shares, interests or other participations in, and other equivalents (however designated and whether voting or non-voting) of such Person’s common equity interests, whether outstanding on the Issue Date or issued after the Issue Date, and includes, without limitation, all series and classes of such common equity interests.

“ Company ” means the party named as such in the introductory paragraph to this Indenture and its successors and assigns, including any Surviving Entity.

“ Company Order ” has the meaning assigned to it in Section 2.2(c) .

“ Consolidated Adjusted EBITDA ” means, with respect to any Person for any period, Consolidated Net Income for such Person for such period, plus the following (without duplication) to the extent deducted or added in calculating such Consolidated Net Income:

(1) Consolidated Interest Expense for such Person for such period;

(2) Consolidated Income Tax Expense for such Person for such period;

(3) Consolidated Non-cash Charges for such Person for such period;

(4) any non-operating and/or non-recurring charges, expenses or losses of such Person and its Subsidiaries (Restricted Subsidiaries in the case of the Company) for such period; and

(5) the amount of loss on any sale of Accounts Receivables and related assets to a Securitization Subsidiary in connection with a Permitted Receivables Financing;

less (x) all non-cash credits and gains increasing Consolidated Net Income for such Person for such period, (y) all cash payments made by such Person and its Subsidiaries (Restricted Subsidiaries in the case of the Company) during such period relating to non-cash charges that were added back in determining Consolidated Adjusted EBITDA in any prior period and (z) non-operating and/or non-recurring income or gains (less all fees and expenses related thereto) increasing Consolidated Net Income of such Person and its Subsidiaries (Restricted Subsidiaries in the case of the Company) for such period.

Notwithstanding the foregoing, the items specified in clauses (1) and (3) above for any Subsidiary (Restricted Subsidiary in the case of the Company) will be added to Consolidated Net Income in calculating Consolidated Adjusted EBITDA for any period:

(1) in proportion to the percentage of the total Capital Stock of such Subsidiary (Restricted Subsidiary in the case of the Company) held directly or indirectly by such Person at the date of determination; and

(2) to the extent that a corresponding amount would be permitted at the date of determination to be distributed to such Person by such Subsidiary (Restricted Subsidiary in the case of the Company) pursuant to its charter and bylaws ( estatutos sociales ) and each law, regulation, agreement or judgment applicable to such distribution.

“ Consolidated Income Tax Expense ” means, with respect to any Person for any period, the provision for federal, state, local and any other income taxes payable by such Person and its Subsidiaries (Restricted Subsidiaries in the case of the Company) for such period as determined on a consolidated basis in accordance with GAAP.

“ Consolidated Interest Expense ” means, with respect to any Person for any period, the sum (without duplication) determined on a consolidated basis in accordance with GAAP of:

(1) the aggregate of cash and non-cash interest expense of such Person and its Subsidiaries (Restricted Subsidiaries in the case of the Company) for such period determined on a consolidated basis in accordance with GAAP, including, without limitation, the following (whether or not interest expense in accordance with GAAP):

(a) any amortization or accretion of debt discount or any interest paid on Indebtedness of such Person and its Subsidiaries (Restricted Subsidiaries in the case of the Company) in the form of additional Indebtedness;

(b) any amortization of deferred financing costs;

(c) the net costs under Hedging Obligations (including amortization of fees) in respect of Indebtedness or that are otherwise treated as interest expense or equivalent under GAAP; provided that if Hedging Obligations result in net benefits rather than costs, such benefits will be credited to reduce Consolidated Interest Expense unless, pursuant to GAAP, such net benefits are otherwise reflected in Consolidated Net Income;

(d) all capitalized interest;

(e) the interest portion of any deferred payment obligation;

(f) any premiums, fees, discounts, expenses and losses on the sale of accounts receivable (and any amortization thereof) payable by the Company or any Restricted Subsidiary in connection with a Permitted Receivables Financing;

(g) commissions, discounts and other fees and charges Incurred in respect of letters of credit or bankers’ acceptances; and

(h) any interest expense on Indebtedness of another Person that is Guaranteed by such Person or one of its Subsidiaries (Restricted Subsidiaries in the case of the Company) or secured by a Lien on the assets of such Person or one of its Subsidiaries (Restricted Subsidiaries in the case of the Company), whether or not such Guarantee or Lien is called upon; and

(2) the interest component of Capitalized Lease Obligations paid, accrued and/or scheduled to be paid or accrued by such Person and its Subsidiaries (Restricted Subsidiaries in the case of the Company) during such period.

“ Consolidated Net Income ” means, with respect to any Person for any period, the aggregate net income (or loss) of such Person and its Subsidiaries (after deducting (or adding) the portion of such net income (or loss) attributable to minority interests in Subsidiaries of such Person) for such period on a consolidated basis, determined in accordance with GAAP; provided that there will be excluded therefrom to the extent reflected in such aggregate net income (loss):

(1) net after-tax gains or losses from Asset Sale Transactions or abandonments or reserves relating thereto;

(2) net after-tax items classified as extraordinary, special (reflected as a separate line item on a consolidated income statement prepared in accordance with GAAP) gains or losses or income or expense or charge including, without limitation, any severance expense, and fees, expenses or charges related to any offering of Capital Stock of the Company, any Permitted Investment, Asset Acquisition or Indebtedness permitted to be incurred under Section 3.8 ;

(3) the net income (or loss) of any Person, other than such Person and any Subsidiary of such Person (Restricted Subsidiary in the case of the Company); except that the Company’s equity in the net income of any Person will be included up to the aggregate amount of cash actually distributed by such Person during such period to the Company or a Restricted Subsidiary as a dividend or other distribution (subject, in the case of a dividend or other distribution to a Restricted Subsidiary, to the limitations contained in clause (4) below); and except further that the Company’s equity in the net loss of any Person will be included to the extent such loss have been funded with case from the Company or a Restricted Subsidiary;

(4) Solely for the purpose of determining the amount available for Restricted Payments under Section 3.9(a)(C)(1) the net income (but not loss) of any Subsidiary of such Person (Restricted Subsidiary in the case of the Company) to the extent that a corresponding amount could not be distributed to such Person at the date of determination as a result of any restriction pursuant to the constituent documents of such Subsidiary (Restricted Subsidiary in the case of the Company) or any law, regulation, agreement or judgment applicable to any such distribution;

(5) any restoration to income of any contingency reserve, except to the extent that provision for such reserve was made out of Consolidated Net Income accrued at any time following the Issue Date;

(6) any gain (or loss) from foreign exchange translation or change in net monetary position;

(7) any net gain or loss (after any offset) resulting in such period from Hedging Obligations entered into for bona fide hedging purposes and not for speculative purposes; provided that the net effect on income or loss (including in any prior periods) will be included upon any termination or early extinguishment of such Hedging Obligations, other than any Hedging Obligations with respect to Indebtedness (that is not itself a Hedging Obligation) and that are extinguished concurrently with the termination or other prepayment of such Indebtedness; and

(8) the cumulative effect of changes in accounting principles.

“ Consolidated Net Tangible Assets ” means the total consolidated assets of the Company and its Restricted Subsidiaries, as shown on the most recent balance sheet of the Company provided to the Trustee pursuant to Section 3.16 (or required to be provided thereunder), less (1) all current liabilities of the Company and its Restricted Subsidiaries after eliminating (a) all intercompany items between the Company and any Restricted Subsidiary or between Restricted Subsidiaries and (b) all current maturities of long-term Indebtedness; and (2) all goodwill, patents, tradenames, trademarks, copyrights, franchises, experimental expenses, organization expenses and any other amounts classified as intangible assets in accordance with GAAP; all calculated in accordance with GAAP and calculated on a pro forma basis to give effect to any acquisition or disposition of companies, divisions, lines of businesses or operations by the Company and its Restricted Subsidiaries subsequent to such date and on or prior to the date of determination.

“ Consolidated Non-cash Charges ” means, with respect to any Person for any period, the aggregate depreciation, amortization and other non-cash expenses or losses of such Person and its Subsidiaries (Restricted Subsidiaries in the case of the Company) for such period, determined on a consolidated basis in accordance with GAAP (excluding any such charge which constitutes an accrual of or a reserve for cash charges for any future period or the amortization of a prepaid cash expense paid in a prior period).

“ Consolidated Total Net Indebtedness ” means, with respect to any Person as of any date of determination, an amount equal to the aggregate amount (without duplication) of all Indebtedness of such Person and its Subsidiaries (Restricted Subsidiaries in the case of the Company) outstanding at such time less the sum of (without duplication) consolidated cash and Cash Equivalents and consolidated marketable securities recorded as current assets (except for any Capital Stock in any Person) in all cases determined in accordance with GAAP and as set forth in the most recent consolidated balance sheet of the Company and its Restricted Subsidiaries.

“ Corporate Trust Office ” means the principal office of the Trustee at which at any time its corporate trust business shall be administered, which office at the date hereof is located at (a) 111 Wall Street, 15th Floor, New York, NY 10005, Attention: 15th Floor Window, for Note transfer purposes and presentment of the Notes for final payment thereon, and (b) 388 Greenwich Street, 14th Floor, New York, NY 10013, Attention: Global Transaction Services—Arcos Dorados B.V., Fax 212-816-5527, for all other purposes, or such other address as the Trustee may designate from time to time by notice to the Holders and the Company, or the principal corporate trust office of any successor Trustee (or such other address as such successor Trustee may designate from time to time by notice to the Holders and the Company).

“ Covenant Defeasance ” has the meaning assigned to it in Section 8.1(c) .

“ Covenant Suspension Event ” has the meaning assigned to it in Section 3.20 .

“ Credit Agreement ” means the Amended and Restated Credit Agreement, dated as of October 22, 2008, among the Company, various lenders, Deutsche Bank Trust Company Americas, as administrative agent and collateral agent, and Santander Investment Securities Inc., as lead arranger and book runner.

“ Currency Agreement ” means, with respect to any Person, any foreign exchange contract, currency swap agreement or other similar agreement as to which such Person is a party designed solely to hedge foreign currency risk of such Person.

“ Default ” means an event or condition the occurrence of which is, or with the lapse of time or the giving of notice or both would be, an Event of Default.

“ Defaulted Interest ” has the meaning assigned to it in paragraph 1 of the Form of Reverse Side of Note contained in Exhibit A .

“ Designation ” and “ Designation Amount ” have the respective meanings assigned to them in Section 3.11 .

“ Disqualified Capital Stock ” means that portion of any Capital Stock which, by its terms (or by the terms of any security into which it is convertible or for which it is exchangeable at the option of the holder thereof), or upon the happening of any event, matures or is mandatorily redeemable, pursuant to a sinking fund obligation or otherwise, or is redeemable at the sole option of the holder thereof.

“ Distribution Compliance Period ” means, with respect to any Regulation S Global Note, the 40 consecutive days beginning on and including the later of (a) the day on which any Notes represented thereby are offered to persons other than distributors (as defined in Regulation S under the Securities Act) pursuant to Regulation S and (b) the issue date for such Notes.

“ DTC ” means The Depository Trust Company, its nominees and their respective successors and assigns, or such other depositary institution hereinafter appointed by the Company that is a clearing agency registered under the Exchange Act.

“ ECOFIN ” has the meaning assigned to it in Section 2.3(d) .

“ Equity Offering ” means an offering for cash, after the Issue Date, of Qualified Stock of the Company or of any direct or indirect parent of the Company (to the extent the proceeds thereof are contributed to the common equity of the Company).

“ Event of Default ” has the meaning assigned to it in Section 6.1 .

“ Exchange Act ” means the U.S. Securities Exchange Act of 1934, as amended, or any successor statute or statutes thereto.

“ Fair Market Value ” means, with respect to any asset, the price (after taking into account any liabilities relating to such assets) which could be negotiated in an arm’s-length free market transaction, for cash, between a willing seller and a willing and able buyer, neither of which is under any compulsion to complete the transaction; provided that the Fair Market Value of any such asset or assets will be determined conclusively by the Board of Directors of the Company acting in good faith, and will be evidenced by a Board Resolution.

“ Fitch ” means Fitch Ratings Ltd. and its successors.

“ Four-Quarter Period ” has the meaning set forth in the definition of Net Debt to EBITDA Ratio below.

“ Franchise Documents ” means the Master Franchise Agreements and any other documents pursuant to which the Company or any of its Restricted Subsidiaries has acquired the right to operate any franchised restaurant in Argentina, Aruba, Brazil, Chile, Colombia, Costa Rica, Curacao, Ecuador, French Guiana, Guadeloupe, Martinique, Mexico, Panama, Peru, Puerto Rico, Uruguay, Venezuela and the U.S. Virgin Islands of St. Thomas and St. Croix, as the same may be amended, restated, supplemented or otherwise modified from time to time.

“ GAAP ” means generally accepted accounting principles in effect in the United States.

“ Global Note ” means any Note issued in fully-registered certificated form to DTC (or its nominee), as depositary for the beneficial owners thereof, which shall be substantially in the form of Exhibit A , with appropriate legends as specified in Section 2.8 and Exhibit A .

“ Governmental Authority ” means any government, court, tribunal, arbitrator, authority, agency, commission, official or other instrumentality of any country, state, county, city or other political subdivision, having jurisdiction over the matter or matters in question.

“ Guarantee ” means any obligation, contingent or otherwise, of any Person directly or indirectly guaranteeing any Indebtedness of any other Person:

(1) to purchase or pay, or advance or supply funds for the purchase or payment of, such Indebtedness of such other Person, whether arising by virtue of partnership arrangements, or by agreement to keep-well, to purchase assets, goods,

securities or services, to take-or-pay, or to maintain financial statement conditions or otherwise; or

(2) entered into for purposes of assuring in any other manner the obligee of such Indebtedness of the payment thereof or to protect such obligee against loss in respect thereof, in whole or in part;

provided that “Guarantee” will not include endorsements for collection or deposit in the ordinary course of business. “Guarantee,” when used as a verb, has a corresponding meaning.

“ Hedging Obligations ” means the obligations of any Person pursuant to any Interest Rate Agreement, Currency Agreement or Commodity Agreement.

“ Holder ” means the Person in whose name a Note is registered in the Note Register.

“ Holdings ” means Arcos Dorados Coöperatieve U.A., a coöperatieve organized under the laws of the Netherlands.

“ Incur ” means, with respect to any Indebtedness or other obligation of any Person, to create, issue, incur (including by conversion, exchange or otherwise), assume, Guarantee or otherwise become liable in respect of such Indebtedness or other obligation on the balance sheet of such Person (and “ Incurrence ” and “ Incurred ” will have meanings correlative to the foregoing); provided that (1) any Indebtedness of a Person existing at the time such Person becomes a Restricted Subsidiary of the Company will be deemed to be Incurred by such Restricted Subsidiary at the time it becomes a Restricted Subsidiary of the Company and (2) neither the accrual of interest nor the accretion of original issue discount nor the payment of interest in the form of additional Indebtedness with the same terms and the payment of dividends on Disqualified Stock or Preferred Stock in the form of additional shares of the same class of Disqualified Stock or Preferred Stock will be considered an Incurrence of Indebtedness.

“ Indebtedness ” means, with respect to any Person, without duplication:

(1) the principal amount (or, if less, the accreted value) of all obligations of such Person for borrowed money;

(2) the principal amount (or, if less, the accreted value) of all obligations of such Person evidenced by bonds, debentures, notes or other similar instruments;

(3) all Capitalized Lease Obligations of such Person;

(4) all obligations of such Person issued or assumed as the deferred purchase price of property, all conditional sale obligations and all obligations under any title retention agreement (but excluding trade accounts payable in the ordinary course of business);

(5) all reimbursement obligations in respect of letters of credit, banker’s acceptances or similar credit transactions (except to the extent they relate to trade

payables in the ordinary course of business and such obligation is satisfied within 20 Business Days of Incurrence);

(6) the amount of all Permitted Receivables Financings of such Person;

(7) Guarantees and other contingent obligations of such Person in respect of Indebtedness referred to in clauses (1) through (6) above and clauses (9) through (11) below;

(8) all Indebtedness of any other Person of the type referred to in clauses (1) through (7) above which is secured by any Lien on any property or asset of such Person, the amount of such Indebtedness being deemed to be the lesser of the Fair Market Value of such property or asset and the amount of the Indebtedness so secured;

(9) all net obligations under Hedging Obligations of such Person (the amount of any such obligations to be equal at any time to the termination value of such agreement or arrangement giving rise to such obligation that would be payable by such Person at such time);

(10) all liabilities recorded on the balance sheet of such Person in connection with a sale or other disposition of accounts receivables and related assets; and

(11) all Disqualified Capital Stock issued by such Person with the amount of Indebtedness represented by such Disqualified Capital Stock being equal to the greater of its voluntary or involuntary liquidation preference and its maximum fixed repurchase price, but excluding accrued dividends, if any; provided that:

(a) if the Disqualified Capital Stock does not have a fixed repurchase price, such maximum fixed repurchase price will be calculated in accordance with the terms of the Disqualified Capital Stock as if the Disqualified Capital Stock were purchased on any date on which Indebtedness will be required to be determined pursuant to the Indenture; and

(b) if the maximum fixed repurchase price is based upon, or measured by, the fair market value of the Disqualified Capital Stock, the fair market value will be the Fair Market Value thereof.

The amount of Indebtedness of any Person at any date will be the outstanding balance at such date of all unconditional obligations as described above and the maximum liability, upon the occurrence of the contingency giving rise to the obligation, of any contingency obligations at such date.

“ Indenture ” means this Indenture, as amended or supplemented from time to time, including the Exhibits hereto, and any supplemental indenture hereto.

“ Independent Financial Advisor ” means an accounting firm, appraisal firm, investment banking firm or consultant of internationally recognized standing that is, in the

judgment of the Company’s Board of Directors, qualified to perform the task for which it has been engaged and which is independent in connection with the relevant transaction.

“ Initial Notes ” means any of the Company’s 7.500% Senior Notes due 2019 issued on the Issue Date, and any replacement Notes issued therefor in accordance with this Indenture.

“ Initial Purchasers ” means (i) with respect to the Initial Notes issued on the Issue Date, Morgan Stanley & Co. Incorporated, Banc of America Securities LLC, Citigroup Global Markets Inc., Banco Itaú Europa, S.A. – London Branch, Santander Investment Securities Inc., and Scotia Capital (USA) Inc. and (ii) with respect to each issuance of Additional Notes, the Persons purchasing such Additional Notes under the related purchase agreement.

“ Interest Payment Date ” means the stated due date of an installment of interest on the Notes as specified in the Form of Face of Note contained in Exhibit A .

“ Interest Rate Agreement ” means, with respect to any Person, any interest rate protection agreement (including, without limitation, interest rate swaps, caps, floors, collars, derivative instruments and similar agreements) and/or other types of hedging agreements designed solely to hedge interest rate risk of such Person.

“ Investment ” means, with respect to any Person, any:

(1) direct or indirect loan, advance or other extension of credit (including, without limitation, a Guarantee) to any other Person (other than advances or extensions of credit to customers in the ordinary course of business);

(2) capital contribution (by means of any transfer of cash or other property to others or any payment for property or services for the account or use of others) to any other Person; or

(3) any purchase or acquisition by such Person of any Capital Stock, bonds, notes, debentures or other securities or evidences of Indebtedness issued by, any other Person.

“Investment” will exclude accounts receivable or deposits arising in the ordinary course of business. “ Invest ,” “ Investing ” and “ Invested ” have corresponding meanings.

For purposes of Section 3.9 , the Company will be deemed to have made an “Investment” in an Unrestricted Subsidiary at the time of its Designation, which will be valued at the Fair Market Value of the sum of the net assets of such Unrestricted Subsidiary at the time of its Designation and the amount of any Indebtedness of such Unrestricted Subsidiary or owed to the Company or any Restricted Subsidiary immediately following such Designation. Any property transferred to or from an Unrestricted Subsidiary will be valued at its Fair Market Value at the time of such transfer. If the Company or any Restricted Subsidiary sells or otherwise disposes of any Capital Stock of a Restricted Subsidiary (including any issuance and sale of Capital Stock by a Restricted Subsidiary) such that, after giving effect to any such sale or disposition, such Restricted Subsidiary would cease to be a Subsidiary of the Company, the

Company will be deemed to have made an Investment on the date of any such sale or disposition equal to the sum of the Fair Market Value of the Capital Stock of such former Restricted Subsidiary held by the Company or any Restricted Subsidiary immediately following such sale or other disposition and the amount of any Indebtedness of such former Restricted Subsidiary Guaranteed by the Company or any Restricted Subsidiary or owed to the Company or any other Restricted Subsidiary immediately following such sale or other disposition.

“ Investment Grade Rating ” means a rating equal to or higher than (1) BBB-, in the case of S&P and Fitch, and (2) Baa3, in the case of Moody’s.

“ Issue Date ” means the date of this Indenture (being the original issue date of Notes hereunder).

“ L/C Documents ” means the Letter of Credit, the Letter of Credit Agreement, the L/C Security Documents and each other agreement, instrument or document delivered in connection with the foregoing, as the same may be amended, restated, supplemented or otherwise modified from time to time.

“ L/C Security Documents ” means the Security Agreement dated as of August 3, 2007 made by the Subsidiaries of the Company party thereto and the Pledge Agreement dated as of August 3, 2007 made by the Subsidiaries of the Company party thereto, in each case to secure the obligations under the Letter of Credit Agreement.

“ Legal Defeasance ” has the meaning assigned to it in Section 8.1(b) .

“ Legal Holiday ” has the meaning assigned to it in Section 11.5 .

“ Letter of Credit ” means the irrevocable standby letter of credit issued on August 3, 2007, for the account of the Company and the subsidiary guarantors identified thereto, for the benefit of McDonald’s Latin America, pursuant to the Letter of Credit Agreement.

“ Letter of Credit Agreement ” means the Letter of Credit Reimbursement Agreement, dated as of August 3, 2007, between the Company and Credit Suisse, Cayman Islands Branch, as issuing bank.

“ Lien ” means any lien, mortgage, deed of trust, pledge, security interest, charge or encumbrance of any kind (including any conditional sale or other title retention agreement, any lease in the nature thereof and any agreement to give any security interest); provided that the lessee in respect of a Capitalized Lease Obligation or Sale and Leaseback Transaction will be deemed to have Incurred a Lien on the property leased thereunder; provided that in no event shall an operating lease be deemed to constitute a Lien.

“ Luxembourg ” means the Grand Duchy of Luxembourg.

“ Luxembourg Paying Agent ” means the party named as such in the introductory paragraph of this Indenture until such party resigns or is removed by the Company from such role; provided that, if such party is replaced by a successor in accordance with the terms of this Indenture, “Luxembourg Paying Agent” shall thereafter mean such successor.

“ Master Franchise Agreements ” means the Amended and Restated Master Franchise Agreement, dated as of November 10, 2008, among McDonald’s Latin America, the Company and the other parties thereto, and the Second Amended and Restated Master Franchise Agreement, dated as of November 10, 2008, among McDonald’s Latin America and Arcos Dourados Comercio de Alimentos Ltda., as the same may be amended, restated, supplemented or otherwise modified from time to time.

“ Master Franchisee ” means LatAm, LLC, or any successor to its rights and obligations under the Amended and Restated Master Franchise Agreement, dated as of November 10, 2008, among McDonald’s Latin America, the Company and the other parties thereto.

“ McDonald’s ” means McDonald’s Corporation and its Subsidiaries.

“ McDonald’s Call Option ” means the “Call Option” referred to in the Master Franchise Agreements.

“ McDonald’s Deposit ” shall mean any cash and investments, in an aggregate amount not to exceed $15,000,000, serving as credit support to obligations owing by the Company and the Subsidiary Guarantors to McDonald’s Latin America under the Franchise Documents.

“ McDonald’s Deposit Pledge Agreement ” means documentation, pursuant to which a lien in favor of McDonald’s Latin America is granted over the McDonald’s Deposit (and to the extent perfection of such lien is by “control” as provided in Section 9-314 of the Uniform Commercial Code, any related control agreements in customary form providing for such perfection).

“ McDonald’s Foreign Pledge Agreements ” means, collectively, the pledge agreements listed on Schedule IV to the Credit Agreement.

“ McDonald’s Latin America ” means McDonald’s Latin America, LLC, a limited liability company organized under the laws of the State of Delaware.

“ McDonald’s Mortgage ” means any mortgages granted in favor of McDonald’s Latin America on Secured Restricted Real Estate, in each case securing obligations owing to McDonald’s Latin America under the Amended and Restated Master Franchise Agreement, dated as of November 10, 2008, among McDonald’s Latin America, the Company and the other parties thereto, in an aggregate amount not to exceed the undrawn portion of the Letter of Credit on the date of termination thereof.

“ McDonald’s Security Documents ” means the McDonald’s U.S. Stock Pledge Agreement, dated as of August 3, 2008, made by the Company and the other parties thereto in favor of McDonald’s Latin America, the McDonald’s Foreign Pledge Agreements and the McDonald’s Deposit Pledge Agreement and any other agreement, instrument or document under which any Lien is granted to secure obligations under the Franchise Documents, as the same may be amended, restated, supplemented or otherwise modified from time to time.

“ Maturity Date ” means, when used with respect to any Note, the date on which the principal of such Note becomes due and payable as therein or herein provided, whether at Stated Maturity or by declaration of acceleration, call for redemption, exercise of the repurchase right or otherwise.

“ Moody’s ” means Moody’s Investors Service, Inc., or any successor thereto.

“ Net Cash Proceeds ” means, with respect to any Asset Sale, the proceeds in the form of cash or Cash Equivalents, including payments in respect of deferred payment obligations when received in the form of cash or Cash Equivalents received by the Company or any of its Restricted Subsidiaries from such Asset Sale, net of:

(1) reasonable out-of-pocket expenses and fees relating to such Asset Sale (including, without limitation, legal, accounting and investment banking fees and sales commissions);

(2) taxes paid or payable in respect of such Asset Sale after taking into account any reduction in consolidated tax liability due to available tax credits or deductions and any tax sharing arrangements;

(3) repayment of Indebtedness secured by a Lien permitted under the Indenture that is required to be repaid in connection with such Asset Sale;

(4) all distributions and other payments required to be made to minority interest holders in Subsidiaries or joint ventures as a result of such Asset Sale; and

(5) appropriate amounts to be provided by the Company or any Restricted Subsidiary, as the case may be, as a reserve, in accordance with GAAP, against any liabilities associated with such Asset Sale and retained by the Company or any Restricted Subsidiary, as the case may be, after such Asset Sale, including, without limitation, pension and other post-employment benefit liabilities, liabilities related to environmental matters and liabilities under any indemnification obligations associated with such Asset Sale, but excluding any reserves with respect to Indebtedness.

“ Net Debt to EBITDA Ratio ” means, with respect to any Person as of any date of determination, the ratio of the aggregate amount of Consolidated Total Net Indebtedness for such Person as of such date to Consolidated Adjusted EBITDA for such Person for the four most recent full fiscal quarters for which financial statements are available ending prior to the date of such determination (the “ Four-Quarter Period ”).

For purposes of this definition, Consolidated Total Net Indebtedness and Consolidated Adjusted EBITDA will be calculated after giving effect on a pro forma basis in good faith for the period of such calculation for the following:

(1) the Incurrence, repayment or redemption of any Indebtedness (including Acquired Indebtedness) of such Person or any of its Subsidiaries (Restricted Subsidiaries in the case of the Company), and the application of the proceeds thereof, including the Incurrence of any Indebtedness (including Acquired Indebtedness), and the application of

the proceeds thereof, giving rise to the need to make such determination, occurring during such Four-Quarter Period or at any time subsequent to the last day of such Four-Quarter Period and prior to or on such date of determination, to the extent, in the case of an Incurrence, such Indebtedness is outstanding on the date of determination, as if such Incurrence, and the application of the proceeds thereof, repayment or redemption occurred on the first day of such Four-Quarter Period; and

(2) any Asset Sale Transaction or Asset Acquisition by such Person or any of its Subsidiaries (Restricted Subsidiaries in the case of the Company), including any Asset Sale or Asset Acquisition giving rise to the need to make such determination, occurring during the Four-Quarter Period or at any time subsequent to the last day of the Four-Quarter Period and prior to or on such date of determination, as if such Asset Sale Transaction or Asset Acquisition occurred on the first day of the Four-Quarter Period.

For purposes of making such pro forma computation, the amount of Indebtedness under any revolving credit facility will be computed based on:

(a) the average daily balance of such Indebtedness during such Four-Quarter Period; or

(b) if such facility was created after the end of such Four-Quarter Period, the average daily balance of such Indebtedness during the period from the date of creation of such facility to the date of such calculation,

in each case giving pro forma effect to any borrowings related to any transaction referred to in clause (2) above.

“ Non-Guarantor Restricted Subsidiary ” means (1) any Restricted Subsidiary of the Company incorporated or organized in French Guiana, Guadeloupe or Martinique, and Arcos Mendocinos S.A., a sociedad anónima organized and existing under the laws of Argentina, Arcos Cordobeses, S.A., a sociedad anónima organized and existing under the laws of Argentina, Arcos Santafesinos S.A., a sociedad anónima organized and existing under the laws of Argentina, Adcon S.A., a sociedad anónima organized and existing under the laws of Argentina, Compañía de Inversiones Inmobiliarias (C.I.I.) S.A., a sociedad anónima organized and existing under the laws of Argentina, Arcos de Viña, S.A., a sociedad anónima organized and existing under the laws of Chile, Arcos Dorados Paisas, Ltda., a sociedad limitada organized and existing under the laws of Colombia, Arcos Dorados Paisas, Ltda. & Cia. S.C.A., a sociedad en comandita de acciones organized and existing under the laws of Colombia, Operaciones Arcos Dorados de Perú, S.A., a sociedad anónima organized and existing under the laws of Peru and Bohemia Corp. S.A., a sociedad anónima organized and existing under the laws of Peru, and any subsidiary thereto, so long as such Restricted Subsidiary and any such entity is prevented by local law or the existence of minority shareholders from guaranteeing the Notes, and (2) any other Restricted Subsidiaries designated pursuant to the terms of the Indenture by the Company as a Non-Guarantor Restricted Subsidiary because such Subsidiary is prevented by local law or the existence of minority shareholders from guaranteeing the Notes; provided that in no event shall a Non-Guarantor Restricted Subsidiary be a Significant Subsidiary. For the avoidance of

doubt, all Non-Guarantor Restricted Subsidiaries shall be Restricted Subsidiaries under the Indenture.

“ Non-U.S. Person ” means a person who is not a U.S. person, as defined in Regulation S.

“ Note Custodian ” means the custodian with respect to any Global Note appointed by DTC, or any successor Person thereto, and shall initially be the Trustee.

“ Note Register ” has the meaning assigned to it in Section 2.3(a) .

“ Notes ” means, collectively, the Initial Notes and any Additional Notes issued under this Indenture.

“ Obligations ” means, with respect to any Indebtedness, any principal, interest (including, without limitation, Post-Petition Interest), premium, Additional Amounts, penalties, fees, indemnifications, reimbursements, damages, and other liabilities payable under the documentation governing such Indebtedness, including in the case of the Notes and the Subsidiary Guarantees, the Indenture.

“ Offering Memorandum ” means the Company’s offering memorandum dated September 24, 2009, used in connection with the Original Offering of Notes.

“ Officer ” means, when used in connection with any action to be taken by the Company or Subsidiary, the Chairman of the Board, the Chief Executive Officer, the Chief Operating Officer, the Chief Financial Officer, the Director of Corporate Finance, the Chief Legal Officer, the Treasurer or any Assistant Treasurer and the Secretary or any Assistant Secretary (or, in each case, the officers of the Company with equivalent positions).

“ Officers’ Certificate ” means, when used in connection with any action to be taken by the Company or Subsidiary, a certificate signed by two Officers of the Company or such Subsidiary, and delivered to the Trustee.

“ Opinion of Counsel ” means a written opinion of counsel, who may be an employee of or counsel for the Company (except as otherwise provided in this Indenture), obtained at the expense of the Company, a Surviving Entity or a Restricted Subsidiary, and who is reasonably acceptable to the Trustee.

“ Original Offering of Notes ” means the original private offering of the Initial Notes, which were issued on the Issue Date.

“ Outstanding ” means, as of the date of determination, all Notes theretofore authenticated and delivered under this Indenture, except :

(1) Notes theretofore canceled by the Trustee or delivered to the Trustee for cancellation;

(2) Notes, or portions thereof, for the payment, redemption or, in the case of an Asset Sale Offer or Change of Control Offer, purchase of, which money in the necessary amount has been theretofor deposited with the Trustee or any Paying Agent (other than the Company or an Affiliate of the Company) in trust or set aside and segregated in trust by the Company or an Affiliate of the Company (if the Company or such Affiliate of the Company is acting as Paying Agent) for the Holders of such Notes; provided that, if Notes (or portions thereof) are to be redeemed or purchased, notice of such redemption or purchase has been duly given pursuant to this Indenture or provision therefor reasonably satisfactory to the Trustee has been made;

(3) Notes which have been surrendered pursuant to Section 2.10 or in exchange for or in lieu of which other Notes have been authenticated and delivered pursuant to this Indenture, other than any such Notes in respect of which there shall have been presented to the Trustee proof satisfactory to it that such Notes are held by a protected purchaser in whose hands such Notes are valid obligations of the Company; and

(4) solely to the extent provided in Article VIII, Notes which are subject to Legal Defeasance or Covenant Defeasance as provided in Article VIII;

provided, however , that in determining whether the Holders of the requisite aggregate principal amount of the Outstanding Notes have given any request, demand, authorization, direction, notice, consent or waiver hereunder, Notes owned by the Company or any other obligor under the Notes or any Affiliate of the Company or of such other obligor shall be disregarded and deemed not to be Outstanding, except that, in determining whether the Trustee shall be protected in relying upon any such request, demand, authorization, direction, notice, consent or waiver, only Notes which a Trust Officer of the Trustee actually knows to be so owned shall be so disregarded. Notes so owned which have been pledged in good faith may be regarded as Outstanding if the pledgee establishes to the satisfaction of the Trustee the pledgee’s right so to act with respect to such Notes and that the pledgee is not the Company or any other obligor upon the Notes or any Affiliate of the Company or of such other obligor.

“ Parent ” means Arcos Dorados Limited, a company organized under the laws of the British Virgin Islands.

“ Paying Agent ” has the meaning assigned to it in Section 2.3(a) .

“ Permitted Business ” means the business or businesses conducted by the Company and its Restricted Subsidiaries as of the Issue Date and any business ancillary or complementary thereto.

“ Permitted Holders ” means (1) Woods W. Staton and any Related Party of Mr. Staton and (2) any Person both the Capital Stock and the Voting Stock of which (or in the case of a trust, the beneficial interests in which) are owned directly or indirectly 51% or more by Persons specified in clause (1).

“ Permitted Indebtedness ” has the meaning set forth under Section 3.8(b) .

“ Permitted Investments ” means:

(1) Investments by the Company or any Restricted Subsidiary in any Person that is, or that result in any Person becoming, immediately after such Investment, a Restricted Subsidiary (other than a Venezuelan Subsidiary) or constituting a merger or consolidation of such Person into the Company or with or into a Restricted Subsidiary (other than a Venezuelan Subsidiary); provided that such Person is engaged solely in a Permitted Business;

(2) Investments by any Restricted Subsidiary in the Company;

(3) Investments in cash and Cash Equivalents;

(4) Investments in existence on the Issue Date;

(5) any extension, modification or renewal of any Investments existing as of the Issue Date (but not Investments involving additional advances, contributions or other investments of cash or property or other increases thereof, other than as a result of the accrual or accretion of interest or original issue discount or payment-in-kind pursuant to the terms of such Investment as of the Issue Date);

(6) Investments permitted pursuant to Section 3.14(b)(ii) ; Section 3.14(b)(v) , Section 3.14(b)(viii) or Section 3.14(b)(x) ;

(7) Investments received as a result of the bankruptcy or reorganization of any Person or taken in settlement of or other resolution of claims or disputes, and, in each case, extensions, modifications and renewals thereof;

(8) Investments made by the Company or its Restricted Subsidiaries as a result of non-cash consideration permitted to be received in connection with an Asset Sale made in compliance with the covenant described under Section 3.10 ;

(9) Investments in the form of Hedging Obligations permitted under Section 3.8(b)(iii) ;

(10) receivables owing to the Company or any Restricted Subsidiary created or acquired in the ordinary course of business and payable or dischargeable in accordance with customary trade terms; provided that such trade terms may include such concessionary trade terms as the Company or any such Restricted Subsidiary deems reasonable under the circumstances and that are consistent with industry practice;

(11) Investments arising as a result of any Permitted Receivables Financing;

(12) any Investment acquired solely in exchange for Qualified Capital Stock of the Company;

(13) Investments by the Company or any Restricted Subsidiary (other than a Venezuelan Subsidiary) in any Venezuelan Subsidiary (A) in the form of intercompany

Indebtedness permitted under Section 3.8(b)(iv)(2) and (B) other Investments; provided that such Venezuelan Subsidiary is engaged solely in a Permitted Business and the aggregate amount of such other Investments do not exceed U.S.$25,000,000 in any fiscal year of the Company;

(14) payroll, travel, moving and other loans or advances to, or Guarantees issued to support the obligations of, officers and employees, in each case in the ordinary course of business;

(15) extensions of credit and prepayment of expenses to customers, suppliers, utility providers, licensees, franchisees and other trade creditors in the ordinary course of business consistent with past practice;

(16) any Investment in any Subsidiary or any joint venture in connection with intercompany cash management arrangements or related activities arising in the ordinary course of business consistent with past practice;

(17) Investments in the nature of deposits with respect to leases provided to third parties in the ordinary course of business;

(18) Investments in negotiable instruments received in the ordinary course and held for collection;

(19) Investments by the Company or any of its Restricted Subsidiaries, together with all other Investments pursuant to this clause (19), in an aggregate amount at the time of such Investment not to exceed the greater of U.S.$30,000,000 and 2.5% of Total Assets of the Company at the time of Investment (or the equivalent in other currencies), outstanding at any one time (with the Fair Market Value of each such Investment being measured at the time made and without giving effect to subsequent changes in value); provided that any Person in which such Investments are made is engaged solely in a Permitted Business.

“ Permitted Liens ” means any of the following Liens:

(1) (a) Liens existing on the Issue Date and any extension, renewal or replacement thereof, other than any Liens created pursuant to the Credit Agreement, and (b) Liens existing on the Issue Date created pursuant to the Credit Agreement, provided that such Liens created pursuant to the Credit Agreement must be extinguished within 30 days following the Issue Date;

(2) statutory Liens of landlords and Liens of carriers, warehousemen, mechanics, suppliers, materialmen, repairmen and other Liens imposed by law incurred in the ordinary course of business for sums not yet delinquent or being contested in good faith, if such reserve or other appropriate provision, if any, as shall be required by GAAP shall have been made in respect thereof;

(3) (a) licenses, sublicenses, leases or subleases granted by the Company or any of its Restricted Subsidiaries to other Persons not materially interfering with the

conduct of the business of the Company or any of its Restricted Subsidiaries and (b) any interest or title of a lessor, sublessor or licensor under any lease or license agreement permitted by the Indenture to which the Company or any Restricted Subsidiary is a party;

(4) Liens Incurred or deposits made in the ordinary course of business in connection with workers’ compensation, unemployment insurance and other types of social security, including any Lien securing letters of credit issued in the ordinary course of business consistent with past practice in connection therewith, or to secure the performance of tenders, statutory obligations, surety and appeal bonds, customs duties, bids, leases, government performance and return-of-money bonds and other similar obligations (exclusive of obligations for the payment of borrowed money);

(5) Liens upon specific items of inventory or other goods and proceeds of any Person securing such Person’s obligations in respect of bankers’ acceptances issued or created for the account of such Person to facilitate the purchase, shipment or storage of such inventory or other goods;

(6) Liens on patents, trademarks, service marks, trade names, copyrights, technology, know-how and processes to the extent such Liens arise from the granting of license to use such patents, trademarks, service marks, trade names, copyrights, technology, know-how and processes to any Person in the ordinary course of business of the Company or any of its Restricted Subsidiaries;

(7) Liens securing reimbursement obligations with respect to commercial letters of credit which encumber documents and other property relating to such letters of credit and products and proceeds thereof;

(8) Liens encumbering deposits made to secure obligations arising from statutory, regulatory, contractual, or warranty requirements of the Company or a Restricted Subsidiary, including rights of offset and set-off;

(9) Liens for taxes, assessments or other governmental charges not yet subject to penalties for non-payment or which are being contested in good faith by appropriate proceedings, provided that appropriate reserves required pursuant to GAAP have been made in respect thereof;

(10) encumbrances, ground leases, easements or reservations of, or rights of others for, licenses, rights of way, sewers, electric lines, telegraph and telephone lines and other similar purposes, or zoning, building codes or other restrictions (including, without limitation, minor defects or irregularities in title and similar encumbrances) as to the use of real properties or liens incidental to the conduct of the business of such Person or to the ownership of its properties which do not in the aggregate materially adversely affect the value of said properties or materially impair their use in the operation of the business of such Person;

(11) deposits in the ordinary course of business securing liability for reimbursement obligations of insurance carriers providing insurance to the Company or its Restricted Subsidiaries and any Liens thereon;

(12) judgment Liens not giving rise to an Event of Default so long as such Lien is adequately bonded and any appropriate legal proceedings which may have been duly initiated for the review of such judgment have not been finally terminated or the period within which such proceeding may be initiated has not expired;

(13) Liens arising solely by virtue of any statutory or common law provisions relating to banker’s Liens, rights of set-off or similar rights and remedies as to deposit accounts or other funds maintained with a depositary institution;

(14) Liens securing Hedging Obligations;

(15) Liens to secure any Refinancing Indebtedness which is Incurred to Refinance any Indebtedness below which has been secured by a Lien permitted under the covenant described under Section 3.13 not incurred pursuant to clause (18) or (20) and which Indebtedness has been Incurred in accordance with Section 3.8 ; provided that such new Liens:

(a) are no less favorable to the Holders of Notes and are not more favorable to the lienholders with respect to such Liens than the Liens in respect of the Indebtedness being Refinanced; and

(b) do not extend to any property or assets other than the property or assets securing the Indebtedness Refinanced by such Refinancing Indebtedness;

(16) Liens securing Indebtedness or other obligations of a Restricted Subsidiary owing to the Company or another Restricting Subsidiary and permitted to be Incurred under the Indenture;

(17) Liens securing Acquired Indebtedness Incurred in accordance with Section 3.8 not incurred in connection with, or in anticipation or contemplation of, the relevant acquisition, merger or consolidation; provided that

(a) such Liens secured such Acquired Indebtedness at the time of and prior to the Incurrence of such Acquired Indebtedness by the Company or a Restricted Subsidiary and were not granted in connection with, or in anticipation of the Incurrence of such Acquired Indebtedness by the Company or a Restricted Subsidiary; and

(b) such Liens do not extend to or cover any property of the Company or any Restricted Subsidiary other than the property that secured the Acquired Indebtedness prior to the time such Indebtedness became Acquired Indebtedness of the Company or a Restricted Subsidiary and are no more favorable to the lienholders than the Liens securing the Acquired Indebtedness prior to the Incurrence of such Acquired Indebtedness by the Company or a Restricted Subsidiary;

(18) purchase money Liens securing Purchase Money Indebtedness or Capitalized Lease Obligations Incurred to finance the acquisition or leasing of property of the Company or a Restricted Subsidiary used in a Permitted Business; provided that:

(a) the related Purchase Money Indebtedness does not exceed the cost of such property and will not be secured by any property of the Company or any Restricted Subsidiary other than the property so acquired; and

(b) the Lien securing such Indebtedness will be created within 365 days of such acquisition;

(19) Liens arising under any Permitted Receivables Financing;

(20) Liens securing an amount of Indebtedness outstanding at any one time not to exceed the greater of (a) U.S.$50,000,000 (or the equivalent in other currencies) or (b) 7.5% of Consolidated Tangible Assets;

(21) Liens on the Capital Stock of Unrestricted Subsidiaries;

(22) Liens under the L/C Documents;

(23) Liens in favor of McDonald’s Latin America created pursuant to the McDonald’s Security Documents and the McDonald’s Mortgages; and

(24) the interest of McDonald’s Latin America, as franchisor under the Franchise Documents.

“ Permitted Receivables Financing ” means any receivables financing facility or arrangement pursuant to which a Securitization Subsidiary purchases or otherwise acquires Accounts Receivable of the Company or any Restricted Subsidiaries and enters into a third party financing thereof on terms that the Board of Directors has concluded are customary and market terms fair to the Company and its Restricted Subsidiaries.

“ Person ” means an individual, partnership, limited partnership, corporation, company, limited liability company, unincorporated organization, trust or joint venture, or a governmental agency or political subdivision thereof.

“ Post-Petition Interest ” means all interest accrued or accruing after the commencement of any insolvency or liquidation proceeding (and interest that would accrue but for the commencement of any insolvency or liquidation proceeding) in accordance with and at the contract rate (including, without limitation, any rate applicable upon default) specified in the agreement or instrument creating, evidencing or governing any Indebtedness, whether or not, pursuant to applicable law or otherwise, the claim for such interest is allowed as a claim in such insolvency or liquidation proceeding.

“ Preferred Stock ” means, with respect to any Person, any Capital Stock of such Person that has preferential rights over any other Capital Stock of such Person with respect to dividends, distributions or redemptions or upon liquidation.

“ Private Placement Legend ” has the meaning assigned to it in Section 2.8(b) .

“ Purchase Money Indebtedness ” means Indebtedness Incurred for the purpose of financing all or any part of the purchase price, or other cost of construction or improvement of any property; provided that the aggregate principal amount of such Indebtedness does not exceed the lesser of the Fair Market Value of such property or such purchase price or cost, including any Refinancing of such Indebtedness that does not increase the aggregate principal amount (or accreted amount, if less) thereof as of the date of the Refinancing.

“ Qualified Capital Stock ” means any Capital Stock that is not Disqualified Capital Stock and any warrants, rights or options to purchase or acquire Capital Stock that is not Disqualified Capital Stock that are not convertible into or exchangeable into Disqualified Capital Stock.

“ QIB ” means any “qualified institutional buyer” (as defined in Rule 144A).

“ Record Date ” has the meaning assigned to it in the Form of Face of Note contained in Exhibit A .

“ Redemption Date ” means, with respect to any redemption of Notes, the date fixed for such redemption pursuant to this Indenture and the Notes.

“ Refinance ” means, in respect of any Indebtedness, to issue any Indebtedness in exchange for or to refinance, replace, defease or refund such Indebtedness in whole or in part. “Refinanced” and “Refinancing” have correlative meanings.

“ Refinancing Indebtedness ” means Indebtedness of the Company or any Restricted Subsidiary issued to Refinance any other Indebtedness of the Company or a Restricted Subsidiary so long as:

(1) the aggregate principal amount (or initial accreted value, if applicable) of such new Indebtedness as of the date of such proposed Refinancing does not exceed the aggregate principal amount (or initial accreted value, if applicable) of the Indebtedness being Refinanced (plus the amount of any premium required to be paid under the terms of the instrument governing such Indebtedness and the amount of reasonable expenses incurred by the Company in connection with such Refinancing);

(2) such new Indebtedness has:

(a) a Weighted Average Life to Maturity that is equal to or greater than the Weighted Average Life to Maturity of the Indebtedness being Refinanced; and

(b) a final maturity that is equal to or later than the final maturity of the Indebtedness being Refinanced; and

(3) if the Indebtedness being Refinanced is:

(a) Indebtedness of the Company, then such Refinancing Indebtedness will be Indebtedness of the Company;

(b) Indebtedness of a Restricted Subsidiary, then such Refinancing Indebtedness will be Indebtedness of the Company and/or such Restricted Subsidiary; and

(c) Subordinated Indebtedness, then such Refinancing Indebtedness will be subordinate to the Notes or any relevant Subsidiary Guarantee, if applicable, at least to the same extent and in the same manner as the Indebtedness being Refinanced.

“ Registrar ” has the meaning assigned to it in Section 2.3(a) .

“ Regulation S ” means Regulation S under the Securities Act or any successor regulation.

“ Regulation S Global Note ” has the meaning assigned to it in Section 2.1(e) .

“ Related Party ” means, with respect to any Person, (1) any Subsidiary, spouse, descendant or other immediate family member (which includes any child, stepchild, parent, stepparent, sibling, mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law or sister-in-law) (in the case of an individual), of such Person, (2) any estate, trust, corporation, partnership or other entity, the beneficiaries and stockholders, partners or owners of which consist solely of one or more Permitted Holders referred to in clause (1) of the definition thereof and /or such other Persons referred to in the immediately preceding clause (1), or (3) any executor, administrator, trustee, manager, director or other similar fiduciary of any Person referred to in the immediately preceding clause (2), acting solely in such capacity.

“ Restricted Payment ” has the meaning set forth under Section 3.9 .

“ Restricted Subsidiary ” means any Subsidiary of the Company which at the time of determination is not an Unrestricted Subsidiary.

“ Reversion Date ” has the meaning set forth under Section 3.20(b) .

“ Resale Restriction Termination Date ” means, for any Restricted Note (or beneficial interest therein), one year (or such other period specified in Rule 144(k)) from the Issue Date or, if any Additional Notes that are Restricted Notes have been issued before the Resale Restriction Termination Date for any Restricted Notes, from the latest such original issue date of such Additional Notes.

“ Restricted Note ” means any Initial Note (or beneficial interest therein) or any Additional Note (or beneficial interest therein), until such time as:

(1) the Resale Restriction Termination Date therefor has passed;

(2) such Note is a Regulation S Global Note and the Distribution Compliance Period therefor has terminated; or

(3) the Private Placement Legend therefor has otherwise been removed pursuant to Section 2.9(d) or, in the case of a beneficial interest in a Global Note, such beneficial interest has been exchanged for an interest in a Global Note not bearing a Private Placement Legend.

“ Revocation ” has the meaning assigned to it in Section 3.11(c) .

“ Rule 144 ” means Rule 144 under the Securities Act (or any successor rule).

“ Rule 144A ” means Rule 144A under the Securities Act (or any successor rule).

“ Rule 144A Global Note ” has the meaning assigned to it in Section 2.1(d) .

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

“ Special Record Date ” has the meaning assigned to it in Section 2.13(a) .

“ Sale and Leaseback Transaction ” means any direct or indirect arrangement with any Person or to which any such Person is a party providing for the leasing to the Company or a Restricted Subsidiary of any property, whether owned by the Company or any Restricted Subsidiary at the Issue Date or later acquired, which has been or is to be sold or transferred by the Company or such Restricted Subsidiary to such Person or to any other Person by whom funds have been or are to be advanced on the security of such Property.

“ S&P ” means Standard & Poor’s Rating Service or any successor thereto.

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

“ Secured Restricted Real Estate ” means the real estate listed on Schedule XVI to the Credit Agreement.

“ Securitization Subsidiary ” means a Subsidiary of the Company:

(1) that is designated a “Securitization Subsidiary” by the Board of Directors;

(2) that does not engage in, and whose charter prohibits it from engaging in, any activities other than Permitted Receivables Financings and any activity necessary, incidental or related thereto;

(3) no portion of the Indebtedness or any other obligation, contingent or otherwise, of which

(a) is Guaranteed by the Company or any Restricted Subsidiary of the Company,

(b) is recourse to or obligates the Company or any Restricted Subsidiary of the Company in any way, or

(c) subjects any property or asset of the Company or any Restricted Subsidiary of the Company, directly or indirectly, contingently or otherwise, to the satisfaction thereof; and

(4) with respect to which neither the Company nor any Restricted Subsidiary of the Company (other than an Unrestricted Subsidiary) has any obligation to maintain or preserve such its financial condition or cause it to achieve certain levels of operating results

other than, in respect of clauses (3) and (4), pursuant to customary representations, warranties, covenants and indemnities entered into in connection with a Permitted Receivables Financing.

“ Senior Indebtedness ” means the Notes and the Subsidiary Guarantees and any other Indebtedness of the Company or any Restricted Subsidiary that ranks equal in right of payment with the Notes or the relevant Subsidiary Guarantee, as the case may be.

“ Significant Subsidiary ” means a Restricted Subsidiary of the Company that would constitute a “Significant Subsidiary” of the Company in accordance with Rule 1-02 under Regulation S-X under the Securities Act in effect on the Issue Date.

“ Stated Maturity ” means, with respect to any security, the date specified in such security as the fixed date on which the final payment of principal of such security is due and payable, including pursuant to any mandatory redemption provision (but excluding any provision providing for the repurchase of such security at the option of the holder thereof upon the happening of any contingency unless such contingency has occurred).

“ Subordinated Indebtedness ” means, with respect to the Company or any Restricted Subsidiary, any Indebtedness of the Company or such Restricted Subsidiary, as the case may be, which is expressly subordinated in right of payment to the Notes or the relevant Subsidiary Guarantee, as the case may be.

“ Subsidiary ” means, with respect to any Person, any other Person of which such Person owns, directly or indirectly, more than 50% of the voting power of the other Person’s outstanding Voting Stock.

“ Subsidiary Guarantee ” means the unconditional guarantee, on a joint and several basis, of the full and prompt payment of all Obligations of the Company under this Indenture and the Notes, in accordance with the terms of Article X .

“ Subsidiary Guarantor ” means the Subsidiaries signatories to this Indenture on the Issue Date and any that execute Supplemental Indentures hereto after the Issue Date.

“ Surviving Entity ” has the meaning set forth under Section 4.1(a) .

“ Suspended Covenants ” has the meaning set forth under Section 3.20(a) .

“ Suspension Period ” has the meaning set forth under Section 3.20(c) .

“ Total Assets ” means the total consolidated assets of the Company and its Restricted Subsidiaries, as shown on the most recent balance sheet of the Company provided to the Trustee pursuant to Section 3.16 (or required to be provided thereunder), calculated on a pro forma basis to give effect to any acquisition or disposition of companies, divisions, lines of businesses or operations by the Company and its Restricted Subsidiaries subsequent to such date and on or prior to the date of determination.

“ Transfer Agent ” has the meaning assigned to it in Section 2.3(a) .

“ Transparency Directive ” has the meaning assigned to it in Section 3.17 .

“ Trustee ” means the party named as such in the introductory paragraph of this Indenture until a successor replaces it in accordance with the terms of this Indenture and, thereafter, means the successor.

“ Trust Officer ” means, when used with respect to the Trustee, any officer within the corporate trust department (or any successor group of the Trustee) of the Trustee, having direct responsibility for the administration of this Indenture or to whom any corporate trust matter is referred because of such person’s knowledge of and familiarity with the particular subject.

“ Unrestricted Subsidiary ” means any Subsidiary of the Company Designated as an Unrestricted Subsidiary pursuant to Section 3.11 . Any such Designation may be revoked by a Board Resolution of the Company, subject to the provisions of such covenant.

“ U.S. Government Obligations ” means direct obligations (or certificates representing an ownership interest in such obligations) of the United States of America (including any agency or instrumentality thereof) for the payment of which the full faith and credit of the United States of America is pledged and which are not callable or redeemable at the issuer’s option.

“ U.S. Dollars ” or “ U.S.$ ” means such coin or currency of the United States of America as at the time of payment shall be legal tender for the payment of public and private debts.

“ Venezuelan Subsidiary ” means any direct or indirect Subsidiary of the Company that generates more than 50% of its revenues or holds more than 50% of its total assets in Venezuela.

“ Voting Stock ” means, with respect to any Person, securities of any class of Capital Stock of such Person then outstanding and normally entitled to vote in the election of members of the Board of Directors (or equivalent governing body) of such Person. The term “normally entitled” means without regard to any contingency.

“ Weighted Average Life to Maturity ” means, when applied to any Indebtedness at any date, the number of years (calculated to the nearest one-twelfth) obtained by dividing:

(1) the then outstanding aggregate principal amount or liquidation preference, as the case may be, of such Indebtedness into

(2) the sum of the products obtained by multiplying:

(a) the amount of each then remaining installment, sinking fund, serial maturity or other required payment of principal or liquidation preference, as the case may be, including payment at final maturity, in respect thereof, by

(b) the number of years (calculated to the nearest one-twelfth) which will elapse between such date and the making of such payment.

Section 1.2 Rules of Construction . Unless the context otherwise requires:

(1) a term has the meaning assigned to it;

(2) an accounting term not otherwise defined has the meaning assigned to it in accordance with GAAP;

(3) “or” is not exclusive;

(4) “including” means including without limitation;

(5) words in the singular include the plural and words in the plural include the singular;

(6) references to the payment of principal of the Notes shall include applicable premium, if any;

(7) references to payments on the Notes shall include Additional Amounts payable on the Notes, if any;

(8) all references to Sections or Articles refer to Sections or Articles of this Indenture;

(9) references to any law are to be construed as including all statutory and regulatory provisions or rules consolidating, amending, replacing, supplementing or implementing such law; and

(10) the term “ obligor ,” when used with respect to the Notes, means the Company and any other obligor as of the date of this Indenture.

ARTICLE II

THE NOTES

Section 2.1 Form and Dating .

(a) The Initial Notes are being originally issued by the Company on the Issue Date. The Notes shall be issued in fully registered certificated global form without coupon, and in minimum denominations of U.S.$100,000 and integral multiples of U.S.$1,000 in excess thereof. The Notes and the certificate of authentication shall be substantially in the form of Exhibit A .

(b) The terms and provisions of the Notes, the form of which is in Exhibit A , shall constitute, and are hereby expressly made, a part of this Indenture, and, to the extent applicable, the Company and the Trustee, by their execution and delivery of this Indenture expressly agree to such terms and provisions and to be bound thereby. Except as otherwise expressly permitted in this Indenture, all Notes shall be identical in all respects. Notwithstanding any differences among them, all Notes issued under this Indenture shall vote and consent together on all matters as one class.

(c) The Notes may have notations, legends or endorsements as specified in Section 2.8 or as otherwise required by law, stock exchange rule or DTC rule or usage. The Company and the Trustee shall approve the form of the Notes and any notation, legend or endorsement on them. Each Note shall be dated the date of its authentication.

(d) Notes originally offered and sold to QIBs in reliance on Rule 144A shall be represented by a single permanent global certificate (which may be subdivided) without interest coupons (each, a “ Rule 144A Global Note ”).

(e) Notes originally offered and sold outside the United States of America in reliance on Regulation S shall be represented by a single permanent global certificate (which may be subdivided) without interest coupons (each, a “ Regulation S Global Note ”).

Section 2.2 Execution and Authentication .

(a) An Officer shall sign the Notes for the Company by manual or facsimile signature. If an Officer whose signature is on a Note no longer holds that office at the time the Trustee authenticates the Note, the Note shall be valid nevertheless.

(b) A Note shall not be valid until an authorized signatory of the Trustee manually authenticates the Note. The signature of the Trustee on the certificate of authentication on a Note shall be conclusive evidence that such Note has been duly and validly authenticated and issued under this Indenture.

(c) At any time and from time to time after the execution and delivery of this Indenture, the Trustee shall authenticate and make available for delivery Notes upon a written order of the Company signed by an Officer of the Company (the “ Company Order ”). A

Company Order shall specify the amount of the Notes to be authenticated and the date on which such original issue of Notes is to be authenticated.

(d) The Trustee may appoint an agent (the “ Authenticating Agent ”) reasonably acceptable to the Company to authenticate the Notes. Unless limited by the terms of such appointment, any such Authenticating Agent may authenticate Notes whenever the Trustee may do so. Each reference in this Indenture to authentication by the Trustee includes authentication by the Authenticating Agent.

(e) In case a Surviving Entity has executed an indenture supplemental hereto with the Trustee pursuant to Article IV , any of the Notes authenticated or delivered prior to such transaction may, from time to time, at the request of the Surviving Entity, be exchanged for other Notes executed in the name of the Surviving Entity with such changes in phraseology and form as may be appropriate, but otherwise identical to the Notes surrendered for such exchange and of like principal amount; and the Trustee, upon Company Order of the Surviving Entity, shall authenticate and deliver Notes as specified in such order for the purpose of such exchange. If Notes shall at any time be authenticated and delivered in any new name of a Surviving Entity pursuant to this Section 2.2 in exchange or substitution for or upon registration of transfer of any Notes, such Surviving Entity, at the option of the Holders but without expense to them, shall provide for the exchange of all Notes at the time Outstanding for Notes authenticated and delivered in such new name.

Section 2.3 Registrar, Transfer Agent and Paying Agent .

(a) The Company shall maintain an office or agency in the Borough of Manhattan, City of New York, and, as long as the Notes are listed on the Luxembourg Stock Exchange for trading on the Euro MTF Market, and the rules of such Exchange so require, in Luxembourg (which office or agency may be, in the case of presentment or surrender of the Notes for registration of transfer or for exchange and presentment for payment, the Corporate Trust Office of the Trustee or an Affiliate of the Trustee), where Notes may be presented or surrendered for registration of transfer or for exchange (the “ Registrar ” and “ Transfer Agent ,” respectively) and where Notes may be presented for payment (the “ Paying Agent ”). The Registrar shall keep a register of the Notes and of their transfer and exchange (the “ Note Register ”). The Company may have one or more co-Registrars and one or more additional paying agents or transfer agents. The terms “Paying Agent” and “Transfer Agent” include any additional paying agent and any additional transfer agent, as the case may be.

(b) The Company shall enter into an appropriate agency agreement with any Registrar, Paying Agent or co-Registrar not a party to this Indenture. The agreement shall implement the provisions of this Indenture that relate to such agent. The Company shall notify the Trustee of the name and address of each such agent. If the Company fails to maintain a Registrar or Paying Agent, the Trustee shall act as such and shall be entitled to appropriate compensation therefor pursuant to Section 7.7 . The Company may act as Paying Agent, Registrar, co-Registrar or transfer agent.

(c) The Company initially appoints the Corporate Trust Office as Registrar, Paying Agent and Transfer Agent (and the Corporate Trust Office hereby accepts such

appointment), until such time as another Person is appointed as such, and Dexia Banque Internationale à Luxembourg, société anonyme, as Luxembourg Paying Agent (and Dexia Banque Internationale à Luxembourg, société anonyme, hereby accepts such appointment), until such time as another Person is appointed as such.

(d) The Company shall, to the extent permitted by law, ensure that it maintains a Paying Agent in a Member State of the European Union that is not obliged to withhold or deduct tax pursuant to European Council Directive 2003/48/EC or any other Directive implementing the conclusions of the European Union Council of Economic and Finance (“ ECOFIN ”) council meeting of November 26-27, 2000 on the taxation of savings income or any law implementing or complying with, or introduced in order to conform to, such Directive.

(e) The Company may change the Registrar, Paying Agent and Transfer Agent without notice to Holders.

Section 2.4 Paying Agent to Hold Money in Trust . The Company shall require each Paying Agent (other than the Trustee) to agree that such Paying Agent shall hold in trust separate and apart from, and not commingle with any other properties, for the benefit of Holders or the Trustee all money held by such Paying Agent for the payment of principal of or interest on the Notes (whether such money has been distributed to it by the Company or any other obligor of the Notes) in accordance with the terms of this Indenture and shall notify the Trustee in writing of any Default by the Company or any Subsidiary Guarantor (or any other obligor on the Notes) in making any such payment. If the Company or an Affiliate of the Company or any Subsidiary Guarantor acts as Paying Agent, it shall segregate the money held by it as Paying Agent and hold it as a separate trust fund. The Company at any time may require a Paying Agent (other than the Trustee) to pay all money held by it to the Trustee and to account for any funds disbursed by such Paying Agent. The Paying Agent shall not hold any money under this Indenture in the Netherlands, nor will the Paying Agent under this Indenture be a Netherlands entity at any time. Upon complying with this Section 2.4 , the Paying Agent (if other than the Company) shall have no further liability for the money delivered to the Trustee. Upon any proceeding under any Bankruptcy Law with respect to the Company or any Affiliate of the Company or any Subsidiary Guarantor, if the Company, a Subsidiary Guarantor or such Affiliate, is then acting as Paying Agent, the Trustee shall replace the Company, such Subsidiary Guarantor or such Affiliate as Paying Agent.

The receipt by the Paying Agent or the Trustee from the Company of each payment of principal, interest and/or other amounts due in respect of the Notes in the manner specified herein and on the date on which such amount of principal, interest and/or other amounts are then due, shall satisfy the obligations of the Company herein and under the Notes to make such payment to the Holders on the due date thereof; provided, however , that the liability of any Paying Agent hereunder shall not exceed any amounts paid to it by the Company, or held by it, on behalf of the Holders under this Indenture. Notwithstanding the preceding sentence or any other provision of this Indenture to the contrary, the Company shall indemnify the Holders in the event that there is subsequent failure by the Trustee or any Paying Agent to pay any amount due in respect of the Notes in accordance with the Notes and this Indenture as shall result in the

receipt by the Holders of such amounts as would have been received by them had no such failure occurred.

Section 2.5 CUSIP and ISIN Numbers . In issuing the Notes, the Company may use CUSIP and ISIN numbers (if then generally in use) and, if so, the Trustee shall use CUSIP and ISIN numbers in notices of redemption as a convenience to Holders; provided that any such notice may state that no representation is made as to the correctness of such numbers either as printed on the Notes or as contained in any notice of a redemption and that reliance may be placed only on the other identification numbers printed on the Notes, and any such redemption shall not be affected by any defect in or omission of such numbers. The Company shall promptly notify the Trustee in writing of any initial CUSIP and/or ISIN numbers and any change in the CUSIP or ISIN numbers.

Section 2.6 Holder Lists . The Registrar shall preserve in as current a form as is reasonably practicable the most recent list available to it of the names and addresses of Holders. If the Trustee is not the Registrar, the Company shall furnish to the Trustee, in writing at least seven Business Days before each Interest Payment Date and at such other times as the Trustee may reasonably request in writing, a list in such form and as of such date as the Trustee may reasonably require of the names and addresses of Holders.

Section 2.7 Global Note Provisions .

(a) Each Global Note initially shall: (i) be registered in the name of DTC or the nominee of DTC; (ii) be delivered to the Note Custodian; and (iii) bear the appropriate legend, as set forth in Section 2.8 and Exhibit A . Any Global Note may be represented by more than one certificate. The aggregate principal amount of each Global Note may from time to time be increased or decreased by adjustments made on the records of the Note Custodian, as provided in this Indenture.

(b) Members of, or participants in, DTC (“ Agent Members ”) shall have no rights under this Indenture with respect to any Global Note held on their behalf by DTC or by the Note Custodian under such Global Note, and DTC may be treated by the Company, the Trustee, the Paying Agent and the Registrar and any of their agents as the absolute owner of such Global Note for all purposes whatsoever. Notwithstanding the foregoing, nothing herein shall prevent the Company, the Trustee, the Paying Agent or the Registrar or any of their agents from giving effect to any written certification, proxy or other authorization furnished by DTC. The registered Holder of a Global Note may grant proxies and otherwise authorize any person, including Agent Members and persons that may hold interests through Agent Members, to take any action that a Holder is entitled to take under this Indenture or the Notes.

(c) Except as provided below, owners of beneficial interests in Global Notes shall not be entitled to receive Certificated Notes. Global Notes shall be exchangeable for Certificated Notes only in the following limited circumstances:

(i) DTC notifies the Company that it is unwilling or unable to continue as depositary for such Global Note or DTC ceases to be a clearing agency registered under the Exchange Act, at a time when DTC is required to be so registered in

order to act as depositary, and in each case a successor depositary is not appointed by the Company within 90 days of such notice;

(ii) the Company executes and delivers to the Trustee and Registrar an Officers’ Certificate stating that such Global Note shall be so exchangeable; or

(iii) an Event of Default has occurred and is continuing with respect to the Notes.

In connection with the exchange of an entire Global Note for Certificated Notes pursuant to this Section 2.7(c) , such Global Note shall be deemed to be surrendered to the Trustee for cancellation, and the Company shall execute, and upon Company Order the Trustee shall authenticate and deliver, to each beneficial owner identified by DTC in exchange for its beneficial interest in such Global Note, an equal aggregate principal amount of Certificated Notes of authorized denominations.

Section 2.8 Legends .

(a) Each Global Note shall bear the legend specified therefor in Exhibit A on the face thereof.

(b) Each Restricted Note shall bear the private placement legend specified therefor in Exhibit A on the face thereof (the “ Private Placement Legend ”).

Section 2.9 Transfer and Exchange .

The following provisions shall apply with respect to any proposed transfer of an interest in a Rule 144A Global Note that is a Restricted Note:

(a) If (1) the owner of a beneficial interest in a Rule 144A Global Note wishes to transfer such interest (or portion thereof) to a Non-U.S. Person pursuant to Regulation S and (2) such Non-U.S. Person wishes to hold its interest in the Notes through a beneficial interest in the Regulation S Global Note, subject to the rules and procedures of DTC, upon receipt by the Note Custodian and Registrar of:

(i) instructions from the Holder of the Rule 144A Global Note directing the Note Custodian and Registrar to credit or cause to be credited a beneficial interest in the Regulation S Global Note equal to the principal amount of the beneficial interest in the Rule 144A Global Note to be transferred; and

(ii) a certificate in the form of Exhibit C from the transferor,

the Note Custodian and Registrar shall increase the Regulation S Global Note and decrease the Rule 144A Global Note by such amount in accordance with the foregoing.

(b) If the owner of a beneficial interest in a Regulation S Global Note wishes to transfer such interest (or any portion thereof) to a QIB pursuant to Rule 144A prior to the

expiration of the Distribution Compliance Period therefor, subject to the rules and procedures of DTC, upon receipt by the Note Custodian and Registrar of:

(i) instructions from the Holder of the Regulation S Global Note directing the Note Custodian and Registrar to credit or cause to be credited a beneficial interest in the Rule 144A Global Note equal to the principal amount of the beneficial interest in the Regulation S Global Note to be transferred; and

(ii) a certificate in the form of Exhibit B duly executed by the transferor,

the Note Custodian and Registrar shall increase the Rule 144A Global Note and decrease the Regulation S Global Note by such amount in accordance with the foregoing.

(c) Other Transfers . Any transfer of Restricted Notes not described in Section 2.9 (other than a transfer of a beneficial interest in a Global Note that does not involve an exchange of such interest for a Certificated Note or a beneficial interest in another Global Note, which must be effected in accordance with applicable law and the rules and procedures of DTC, but is not subject to any procedure required by this Indenture) shall be made only upon receipt by the Company, the Trustee and the Registrar of such Opinions of Counsel, certificates and/or other information reasonably required by and satisfactory to it in order to ensure compliance with the Securities Act or in accordance with Section 2.9(d) .

(d) Use and Removal of Private Placement Legends . Upon the registration of transfer, exchange or replacement of Notes (or beneficial interests in a Global Note) not bearing (or not required to bear upon such registration of transfer, exchange or replacement) a Private Placement Legend, the Note Custodian and Registrar shall exchange such Notes (or beneficial interests) for beneficial interests in a Global Note (or Certificated Notes if they have been issued pursuant to Section 2.7(c) ) that does not bear a Private Placement Legend. Upon the transfer, exchange or replacement of Notes (or beneficial interests in a Global Note) bearing a Private Placement Legend, the Note Custodian and Registrar shall deliver only Notes (or beneficial interests in a Global Note) that bear a Private Placement Legend unless:

(i) such Notes (or beneficial interests) are transferred pursuant to Rule 144 upon delivery to the Registrar of a certificate of the transferor in the form of Exhibit D and an Opinion of Counsel reasonably satisfactory to the Registrar;

(ii) such Notes (or beneficial interests) are transferred, replaced or exchanged after the Resale Restriction Termination Date therefor;

(iii) a transfer of such Notes is made pursuant to an effective Shelf Registration Statement, in which case the Private Placement Legend shall be removed from such Note so transferred at the request of the Holder; or

(iv) in connection with such registration of transfer, exchange or replacement the Registrar shall have received an Opinion of Counsel addressed to it, the Trustee and the Company and other evidence reasonably satisfactory to it to the effect

that neither such Private Placement Legend nor the related restrictions on transfer are required in order to maintain compliance with the provisions of the Securities Act.

The Private Placement Legend on any Note shall be removed at the request of the Holder on or after the Resale Restriction Termination Date therefor. The Holder of a Global Note may exchange an interest therein for an equivalent interest in a Global Note not bearing a Private Placement Legend (other than a Regulation S Global Note) upon transfer of such interest pursuant to any of clauses (i) through (iv) of this Section 2.9(d) .

(e) Consolidation of Global Notes . Nothing in this Indenture shall provide for the consolidation of any Notes with any other Notes unless they constitute, as determined pursuant to an Opinion of Counsel, the same classes of securities for U.S. federal income tax purposes.

(f) Retention of Documents . The Registrar shall retain copies of all letters, notices and other written communications received pursuant to this Article II . The Company shall have the right to inspect and make copies of all such letters, notices or other written communications at any reasonable time upon the giving of reasonable written notice to the Registrar.

(g) Execution, Authentication of Notes, etc.

(i) Subject to the other provisions of this Section 2.9 when Notes are presented to the Registrar or a co-Registrar with a request to register the transfer of such Notes or to exchange such Notes for an equal principal amount of Notes of other authorized denominations, the Registrar or co-Registrar shall register the transfer or make the exchange as requested if its requirements for such transaction are met; provided that any Notes presented or surrendered for registration of transfer or exchange shall be duly endorsed or accompanied by a written instrument of transfer in form satisfactory to the Company and to the Registrar or co-Registrar, duly executed by the Holder thereof or his attorney duly authorized in writing. To permit registrations of transfers and exchanges and subject to the other terms and conditions of this Article II , the Company shall execute and upon Company Order the Trustee shall authenticate Certificated Notes and Global Notes at the Registrar’s or co-Registrar’s request.

(ii) No service charge shall be made to a Holder for any registration of transfer or exchange, but the Company, the Registrar, or the Trustee may require payment of a sum sufficient to cover any transfer tax, assessment, or similar governmental charge payable in connection therewith (other than any such transfer taxes, assessments or similar governmental charges payable upon exchange or transfer pursuant to Section 3.7 or Section 3.10 ).

(iii) The Registrar or co-Registrar shall not be required to register the transfer of or exchange of any Note for a period beginning: (1) 15 days before the mailing of a notice of an offer to repurchase or redeem Notes and ending at the close of business on the day of such mailing; or (2) 15 days before an Interest Payment Date and ending on such Interest Payment Date.

(iv) Prior to the due presentation for registration of transfer of any Note, the Company, the Trustee, the Paying Agent, the Registrar or any co-Registrar may deem and treat the person in whose name a Note is registered as the absolute owner of such Note for the purpose of receiving payment of principal of and interest on such Note and for all other purposes whatsoever, whether or not such Note is overdue, and none of the Company, the Trustee, the Paying Agent, the Registrar or any co-Registrar shall be affected by notice to the contrary.

(v) All Notes issued upon any registration of transfer or exchange pursuant to the terms of this Indenture shall evidence the same debt and shall be entitled to the same benefits under this Indenture as the Notes surrendered upon such registration of transfer or exchange.

(vi) The Registrar shall be entitled to request such evidence reasonably satisfactory to it documenting the identity and/or signatures of the transferor and the transferee.

(h) No Obligation of the Trustee .

(i) The Trustee shall have no responsibility or obligation to any beneficial owner of an interest in a Global Note, a member of, or a participant in, DTC or other Person with respect to the accuracy of the records of DTC or its nominee or of any participant or member thereof, with respect to any ownership interest in the Notes or with respect to the delivery to any participant, member, beneficial owner or other Person (other than DTC) of any notice (including any notice of redemption) or the payment of any amount or delivery of any Notes (or other security or property) under or with respect to such Notes. All notices and communications to be given to the Holders and all payments to be made to Holders in respect of the Notes shall be given or made only to or upon the order of the registered Holders (which shall be DTC or its nominee in the case of a Global Note). The rights of beneficial owners in any Global Note shall be exercised only through DTC subject to the applicable rules and procedures of DTC. The Trustee may conclusively rely and shall be fully protected in conclusively relying upon information furnished by DTC with respect to its members, participants and any beneficial owners.

(ii) The Trustee shall have no obligation or duty to monitor, determine or inquire as to compliance with any restrictions on transfer or exchange imposed under this Indenture or under applicable law with respect to any transfer or exchange of any interest in any Note (including any transfers between or among DTC participants, members or beneficial owners in any Global Note) other than to require delivery of such certificates and other documentation or evidence as are expressly required by, and to do so if and when expressly required by, the express terms of this Indenture, to examine the same to determine if it substantially complies on its face as to form with the express requirements hereof, and to notify the party delivering the same if the certificate does not so comply.

Section 2.10 Mutilated, Destroyed, Lost or Stolen Notes .

(a) If a mutilated Note is surrendered to the Registrar or if the Holder of a Note claims that the Note has been lost, destroyed or wrongfully taken and if the requirements of Section 8-405 of the Uniform Commercial Code of the State of New York are met, the Company shall execute and upon Company Order the Trustee shall authenticate a replacement Note if the Holder satisfies any other reasonable requirements of the Trustee. If required by the Trustee or the Company, such Holder shall furnish an affidavit of loss and indemnity bond sufficient in the judgment of the Company and the Trustee to protect the Company, the Trustee, the Paying Agent, the Registrar and any co-Registrar from any loss that any of them may suffer if a Note is replaced, and, in the absence of notice to the Company or a Trust Officer of the Trustee that such Note has been acquired by a protected purchaser (as defined in Section 8-303 of the Uniform Commercial Code of the State of New York), the Company shall execute and upon Company Order the Trustee shall authenticate and make available for delivery, in exchange for any such mutilated Note or in lieu of any such destroyed, lost or stolen Note, a new Note of like tenor and principal amount, bearing a number not contemporaneously Outstanding.

(b) Upon the issuance of any new Note under this Section 2.10 , the Company, the Trustee and the Registrar may require the payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in relation thereto and any other expenses (including the fees and expenses of the Company’s counsel, the Trustee and its counsel) in connection therewith.

(c) In case any mutilated, destroyed or wrongfully taken Note has become or is about to become due and payable, the Company may, in its discretion, pay such Notes instead of issuing a new Note in replacement thereof.

(d) Every new Note issued pursuant to this Section 2.10 in exchange for any mutilated Note, or in lieu of any destroyed, lost or stolen Note, shall constitute an original additional contractual obligation of the Company and any other obligor upon the Notes, and shall be entitled to all benefits of this Indenture equally and proportionately with any and all other Notes duly issued hereunder.

(e) The provisions of this Section 2.10 shall be exclusive and shall be in lieu of, to the fullest extent permitted by applicable law, all other rights and remedies with respect to the replacement or payment of mutilated, destroyed, lost or stolen Notes.

Section 2.11 Temporary Notes . Until definitive Notes are ready for delivery, the Company may execute and upon Company Order the Trustee shall authenticate temporary Notes. Temporary Notes shall be substantially in the form of definitive Notes but may have variations that the Company considers appropriate for temporary Notes. Without unreasonable delay, the Company shall prepare and execute and upon Company Order the Trustee shall authenticate definitive Notes. After the preparation of definitive Notes, the temporary Notes shall be exchangeable for definitive Notes upon surrender of the temporary Notes at any office or agency maintained by the Company for that purpose and such exchange shall be without charge to the Holder. Upon surrender for cancellation of any one or more temporary Notes, the Company shall execute and upon Company Order the Trustee shall authenticate and make available for

delivery in exchange therefor one or more definitive Notes representing an equal principal amount of Notes. Until so exchanged, the Holder of temporary Notes shall in all respects be entitled to the same benefits under this Indenture as a Holder of definitive Notes.

Section 2.12 Cancellation . The Company at any time may deliver Notes to the Trustee for cancellation. The Registrar and the Paying Agent shall forward to the Trustee any Notes surrendered to them for registration of transfer, exchange or payment. The Trustee and no one else shall cancel and dispose of cancelled Notes in accordance with its customary procedures or return to the Company all Notes surrendered for registration of transfer, exchange, payment or cancellation. Subject to Section 2.10 , the Company may not issue new Notes to replace Notes it has paid or delivered to the Trustee for cancellation for any reason other than in connection with a transfer or exchange upon Company Order.

Section 2.13 Defaulted Interest . When any installment of interest becomes Defaulted Interest, such installment shall forthwith cease to be payable to the Holders in whose names the Notes were registered on the Record Date applicable to such installment of interest. Defaulted Interest (including any interest on such Defaulted Interest) may be paid by the Company, at its election, as provided in Section 2.13(a) or Section 2.13(b) .

(a) The Company may elect to make payment of any Defaulted Interest (including any interest on such Defaulted Interest) to the Holders in whose names the Notes are registered at the close of business on a special record date for the payment of such Defaulted Interest (a “ Special Record Date ”), which shall be fixed in the following manner. The Company shall notify the Trustee in writing of the amount of Defaulted Interest proposed to be paid and the date of the proposed payment, and at the same time the Company shall deposit with the Trustee an amount of money equal to the aggregate amount proposed to be paid in respect of such Defaulted Interest or shall make arrangements satisfactory to the Trustee for such deposit prior to the date of the proposed payment, such money when deposited to be held in trust for the benefit of the Holders entitled to such Defaulted Interest as provided in this Section 2.13(a) . Thereupon the Trustee shall fix a Special Record Date for the payment of such Defaulted Interest, which shall be not more than 15 calendar days and not less than ten calendar days prior to the date of the proposed payment and not less than ten calendar days after the receipt by the Trustee of the notice of the proposed payment. The Trustee shall promptly notify the Company of such Special Record Date and, in the name and at the expense of the Company, shall cause notice of the proposed payment of such Defaulted Interest and the Special Record Date therefor to be sent, first-class mail, postage prepaid, to each Holder at such Holder’s address as it appears in the registration books of the Registrar, not less than ten calendar days prior to such Special Record Date. Notice of the proposed payment of such Defaulted Interest and the Special Record Date therefor having been mailed as aforesaid, such Defaulted Interest shall be paid to the Holders in whose names the Notes are registered at the close of business on such Special Record Date and shall no longer be payable pursuant to Section 2.13(b) .

(b) Alternatively, the Company may make payment of any Defaulted Interest (including any interest on such Defaulted Interest) in any other lawful manner not inconsistent with the requirements of any securities exchange on which the Notes may be listed, and upon such notice as may be required by such exchange, if, after notice given by the Company to the

Trustee of the proposed payment pursuant to this Section 2.13(b) such manner of payment shall be deemed practicable by the Trustee.

Section 2.14 Additional Notes . The Company may, from time to time, subject to compliance with any other applicable provisions of this Indenture, without the consent of the Holders, create and issue pursuant to this Indenture Additional Notes having terms and conditions set forth in Exhibit A identical to those of the Initial Notes, except that Additional Notes:

(a) may have a different issue price, issue date and, if applicable, date from which the interest shall accrue from the Initial Notes;

(b) may have a different amount of interest payable on the first Interest Payment Date after issuance than is payable on the Initial Notes; and

(c) may have terms specified in the Additional Note Board Resolution or Additional Note Supplemental Indenture for such Additional Notes making appropriate adjustments to this Article II and Exhibit A (and related definitions) applicable to such Additional Notes in order to conform to and ensure compliance with the Securities Act (or other applicable securities laws).

ARTICLE III

COVENANTS

Section 3.1 Payment of Notes .

(a) The Company shall pay the principal of and interest (including Defaulted Interest) on the Notes in U.S. Dollars on the dates and in the manner provided in the Notes and in this Indenture. Prior to 11:00 a.m. (New York City time) on the Business Day prior to each Interest Payment Date and the Maturity Date, the Company shall deposit with the Paying Agent in immediately available funds U.S. Dollars sufficient to make cash payments due on such Interest Payment Date or Maturity Date, as the case may be. If the Company or an Affiliate of the Company is acting as Paying Agent, the Company or such Affiliate shall, prior to 11:00 a.m. (New York City time) on each Interest Payment Date and the Maturity Date, segregate and hold in trust U.S. Dollars sufficient to make cash payments due on such Interest Payment Date or Maturity Date, as the case may be. Principal and interest shall be considered paid on the date due if on such date the Trustee or the Paying Agent (other than the Company or an Affiliate of the Company) holds in accordance with this Indenture U.S. Dollars designated for and sufficient to pay all principal and interest then due and the Trustee or the Paying Agent, as the case may be, is not prohibited from paying such money to the Holders on that date pursuant to the terms of this Indenture. Notwithstanding the foregoing, the Company may elect to make the payments of interest by check mailed to the registered Holders at their registered addresses.

(b) If a Holder of Notes in an aggregate principal amount of at least U.S.$1,000,000 has given wire transfer instructions to the Company, the Company shall make all principal and interest payments on those Notes in accordance with such instructions.

(c) Notwithstanding anything to the contrary contained in this Indenture, the Company may, to the extent it is required to do so by law, deduct or withhold income or other similar taxes imposed by the United States of America from principal or interest payments hereunder.

Section 3.2 Maintenance of Office or Agency .

(a) The Company shall maintain each office or agency required under Section 2.3 where Notes may be presented or surrendered for registration of transfer or for exchange and where notices and demands to or upon the Company in respect of the Notes and this Indenture may be served. The Company shall give prompt written notice to the Trustee of the location, and any change in the location, of any such office or agency.

(b) The Company may also from time to time designate one or more other offices or agencies (in or outside of The City of New York) where the Notes may be presented or surrendered for any or all such purposes and may from time to time rescind any such designation; provided, however , that no such designation or rescission shall in any manner relieve the Company of its obligation to maintain an office or agency in The City of New York or, so long as the Notes are listed on the Luxembourg Stock Exchange for trading on the Euro MTF Market, and the rules of such Exchange so require, in Luxembourg, for such purposes. The Company shall give prompt written notice to the Trustee of any such designation or rescission and any change in the location of any such other office or agency.

Section 3.3 Corporate Existence . Subject to Article IV , the Company shall do or cause to be done all things necessary to preserve and keep in full force and effect its corporate existence.

Section 3.4 Payment of Taxes . The Company shall pay or discharge or cause to be paid or discharged, before the same shall become delinquent, all taxes, assessments and governmental charges (including stamp or other issuance or transfer taxes) or duties levied or imposed upon the Company or any Restricted Subsidiary or for which it or any of them are otherwise liable, or upon the income, profits or property of the Company or any Restricted Subsidiary, and the Company shall reimburse the Trustee and Holders for any fines, penalties or other fees they are required to pay as a result of the failure by the Company or any Restricted Subsidiary to pay or discharge any of the abovementioned taxes, assessments and government charges; provided, however , that, other than with respect to any taxes or duties described herein that would become payable by the Trustee or the Holders in the event the Company or any Restricted Subsidiary fails to pay such taxes or duties, the Company shall not be required to pay or discharge or cause to be paid or discharged any such tax, assessment or charge whose amount, applicability or validity is being contested in good faith by appropriate proceedings and for which appropriate reserves, if necessary (in the good faith judgment of management of the Company), are being maintained in accordance with GAAP or where the failure to effect such payment shall not have a material adverse effect upon the financial condition of the Company

and its Subsidiaries, taken as a whole, or on the performance of the Company’s obligations hereunder.

Section 3.5 Further Instruments and Acts . The Company and each Subsidiary Guarantor shall execute and deliver such further instruments and do such further acts as may be reasonably necessary or proper or as may be required by applicable law to carry out more effectively the purpose of this Indenture.

Section 3.6 Waiver of Stay, Extension or Usury Laws . The Company and each Subsidiary Guarantor covenants (to the fullest extent permitted by applicable law) that it shall not at any time insist upon, plead, or in any manner whatsoever claim or take the benefit or advantage of, any stay or extension law or any usury law or other law that would prohibit or forgive the Company or such Subsidiary Guarantor from paying all or any portion of the principal of or interest on the Notes as contemplated herein, wherever enacted, now or at any time hereafter in force, or which may affect the covenants or the performance of this Indenture. The Company and each Subsidiary Guarantor hereby expressly waives (to the fullest extent permitted by applicable law) all benefit or advantage of any such law, and covenants that it shall not hinder, delay or impede the execution of any power herein granted to the Trustee, but shall suffer and permit the execution of every such power as though no such law had been enacted.

Section 3.7 Change of Control .

(a) Upon the occurrence of a Change of Control, the Company shall provide a Change of Control Notice and make an offer to purchase Notes (the “ Change of Control Offer ”), pursuant to which the Company shall be required, if requested by any Holder, to purchase all or a portion (in integral multiples of U.S.$1,000, provided that the principal amount of such Holder’s Note shall not be less than U.S.$100,000) of such Holder’s Notes at a purchase price equal to 101% of the principal amount thereof, plus any accrued and unpaid interest thereon through the purchase date (the “ Change of Control Payment ”).

(b) On the Change of Control Payment Date, the Company shall, to the extent lawful:

(i) accept for payment all Notes or portions thereof properly tendered and not withdrawn pursuant to the Change of Control Offer;

(ii) deposit with the Paying Agent funds in an amount equal to the Change of Control Payment in respect of all Notes or portions thereof so tendered; and

(iii) deliver or cause to be delivered to the Trustee the Notes so accepted together with an Officers’ Certificate stating the aggregate principal amount of Notes or portions thereof being purchased by the Company.

(c) If only a portion of a Note is purchased pursuant to a Change of Control Offer, a new Note in a principal amount equal to the portion thereof not purchased shall be issued in the name of the Holder thereof upon cancellation of the original Note (or appropriate adjustments to the amount and beneficial interests in a Global Note shall be made, as

appropriate). Notes (or portions thereof) purchased pursuant to a Change of Control Offer shall be cancelled and cannot be reissued.

(d) The Company shall comply with the requirements of Rule 14e-1 under the Exchange Act and any other applicable securities laws and regulations thereunder in connection with the purchase of Notes in connection with a Change of Control Offer. To the extent that the provisions of any applicable securities laws or regulations conflict with this Section 3.7 , the Company shall comply with such securities laws and regulations and shall not be deemed to have breached its obligations under this Indenture by doing so.

(e) The Company shall not be required to make a Change of Control Offer upon a Change of Control if a third party makes the Change of Control Offer in compliance with the conditions and requirements of this Indenture and purchases all Notes validly tendered and not withdrawn under such Change of Control Offer.

(f) The provisions of this Section 3.7 shall be applicable whether or not any other provisions of this Indenture are applicable. The obligation of the Company to make an offer to purchase the Notes as a result of the occurrence of a Change of Control may be waived or modified at any time prior to the occurrence of such Change of Control with the written consent of Holders of a majority in principal amount of the Notes.

Section 3.8 Limitation on Incurrence of Additional Indebtedness .

(a) The Company will not, and will not cause or permit any of its Restricted Subsidiaries to, directly or indirectly, Incur any Indebtedness (including Acquired Indebtedness) except that the Company and its Subsidiary Guarantors may Incur Indebtedness if, at the time of and immediately after giving pro forma effect to the Incurrence thereof and the application of the net proceeds therefrom, the Net Debt to EBITDA Ratio shall not exceed 2.5 to 1.0.

(b) Notwithstanding clause (a) above, the Company and its Restricted Subsidiaries, as applicable, may, at any time, Incur the following Indebtedness (“ Permitted Indebtedness ”):

(i) Indebtedness in respect of the Notes (excluding Additional Notes) and the Subsidiary Guarantees (including any Additional Notes);

(ii) other Indebtedness of the Company and its Restricted Subsidiaries outstanding on the Issue Date, other than Indebtedness otherwise specified under any clause of this definition of Permitted Indebtedness;

(iii) Hedging Obligations entered into by the Company and its Restricted Subsidiaries for bona fide hedging purposes and not for speculative purposes;

(iv) intercompany Indebtedness between the Company and any Subsidiary Guarantors or between any Subsidiary Guarantors; provided that:

(1) in the event that at any time any such Indebtedness ceases to be held by the Company or a Subsidiary Guarantor, such Indebtedness

will be deemed to be Incurred by the Company or the relevant Subsidiary Guarantor, as the case may be, and not permitted by this clause (iv) at the time such event occurs; and

(2) if a Venezuelan Subsidiary is the obligor on such Indebtedness and the obligee is not a Venezuelan Subsidiary, such Indebtedness Incurred may not exceed U.S.$25,000,000 (net of amounts repaid) in the aggregate.

(v) intercompany Indebtedness between the Company or any Subsidiary Guarantor and any Non-Guarantor Restricted Subsidiary, except any Venezuelan Subsidiary, in an aggregate principal amount at any time outstanding not to exceed U.S.$25,000,000;

(vi) other Subordinated Indebtedness of the Company or any Subsidiary Guarantor in an aggregate principal amount at any time outstanding not to exceed U.S.$30,000,000;

(vii) Indebtedness of the Company or any of its Restricted Subsidiaries arising from the honoring by a bank or other financial institution of a check, draft or similar instrument (including daylight overdrafts paid in full by the close of business on the day such overdraft was Incurred) drawn against insufficient funds in the ordinary course of business; provided that such Indebtedness is extinguished within five Business Days of Incurrence;

(viii) Indebtedness of the Company or any of its Restricted Subsidiaries represented by letters of credit for the account of the Company or any Restricted Subsidiary, as the case may be, in order to provide security for workers’ compensation claims, payment obligations in connection with self-insurance or similar requirements in the ordinary course of business;

(ix) Indebtedness consisting of letters of credit, banker’s acceptances, performance bonds, appeal bonds, surety bonds, customs bonds and other similar bonds and reimbursement obligations Incurred by the Company or any Restricted Subsidiary in the ordinary course of business securing the performance of contractual, franchise or license obligations of the Company or any Restricted Subsidiary (in each case, other than for an obligation for borrowed money);

(x) Indebtedness of the Company or any of its Restricted Subsidiaries to the extent the net proceeds thereof are promptly used to redeem the Notes in full or deposited to defease or discharge the Notes, in each case in accordance with the Indenture;

(xi) Refinancing Indebtedness in respect of:

(1) Indebtedness (other than Indebtedness owed to the Company or any Subsidiary of the Company) Incurred pursuant to

clause (a) above (it being understood that no Indebtedness outstanding on the Issue Date is Incurred pursuant to such Section 3.8(a) ); or

(2) Indebtedness Incurred pursuant to Section 3.8(b)(i) , Section 3.8(b)(ii) (other than Indebtedness under the Credit Agreement), Section 3.8(b)(xi) and Section 3.8(b)(xv) (excluding Indebtedness owed to the Company or a Subsidiary of the Company);

(xii) Indebtedness arising from agreements of the Company or a Restricted Subsidiary providing for indemnification, adjustment of purchase price or similar obligations, in each case, incurred in connection with the disposition of any business, assets or Subsidiary, other than Guarantees of Indebtedness incurred by any Person acquiring all or any portion of such business, assets or Subsidiary for the purpose of financing such acquisition; provided that the maximum aggregate liability in respect of all such Indebtedness will at no time exceed the gross proceeds actually received by the Company and the Restricted Subsidiary in connection with such disposition;

(xiii) Indebtedness incurred pursuant to the Franchise Documents and the L/C Documents as in effect from time to time;

(xiv) the Guarantee by the Company or any Subsidiary Guarantor of Indebtedness of the Company or a Restricted Subsidiary of the Company that was permitted to be incurred by another provision of this covenant;

(xv) Acquired Indebtedness, provided that after giving effect to the Incurrence thereof, (1) the Company could incur at least $1.00 of Indebtedness under the Net Debt to EBITDA Ratio pursuant to clause Section 3.8(a) , or (2) the Net Debt to EBITDA Ratio would be no worse than such ratio immediately prior to such Incurrence;

(xvi) the Incurrence by the Company or any Subsidiary Guarantor of any Indebtedness with a maturity less than 365 days and Incurred in the ordinary course of business for working capital purposes not to exceed U.S.$50,000,000 outstanding at any one time;

(xvii) in addition to Indebtedness referred to in clauses Section 3.8(b)(i) through Section 3.8(b)(xvi) , Indebtedness of the Company or any Subsidiary Guarantor in an aggregate principal amount at any one time outstanding not to exceed U.S.$100,000,000 (or the equivalent in other currencies).

(c) Notwithstanding Section 3.8(a) above, the Company’s Non-Guarantor Restricted Subsidiaries may, at any time, Incur (i) intercompany Indebtedness as permitted under Section 3.8(b)(v) and (ii) other Indebtedness in an aggregate principal amount at any one time outstanding not to exceed U.S.$15,000,000 (or the equivalent in other currencies).

(d) For purposes of determining compliance with, and the outstanding principal amount of, any particular Indebtedness Incurred pursuant to and in compliance with this covenant:

(i) the outstanding principal amount of any item of Indebtedness will be counted only once;

(ii) in the event that an item of Indebtedness meets the criteria of Section 3.8(a) or Section 3.8(c) or more than one of the categories of Permitted Indebtedness described in clauses Section 3.8(b)(i) through Section 3.8(b)(xvii) , the Company may, in its sole discretion, divide and classify (or at any time reclassify) such item of Indebtedness in any manner that complies with this covenant;

(iii) Indebtedness permitted by this covenant need not be permitted solely by reference to one provision permitting such Indebtedness, but may be permitted in part by such provision and in part by one or more other provisions of this covenant permitting such Indebtedness;

(iv) the amount of Indebtedness issued at a price that is less than the principal amount thereof will be equal to the amount of the liability in respect thereof determined in accordance with GAAP;

(v) Guarantees of, or obligations in respect of letters of credit or similar instruments relating to, Indebtedness which is otherwise included in the determination of a particular amount of Indebtedness will not be included; and

(vi) the accrual of interest, the accretion or amortization of original issue discount, the payment of regularly scheduled interest in the form of additional Indebtedness of the same instrument or the payment of regularly scheduled dividends on Disqualified Capital Stock in the form of additional Disqualified Capital Stock with the same terms will not be deemed to be an Incurrence of Indebtedness for purposes of this covenant; provided that any such outstanding additional Indebtedness or Disqualified Capital Stock paid in respect of Indebtedness Incurred pursuant to any provision of clause (b) above will be counted as Indebtedness outstanding thereunder for purposes of any future Incurrence under such provision.

(e) For purposes of determining compliance with any U.S. dollar-denominated restriction on the Incurrence of Indebtedness, the U.S. dollar-equivalent principal amount of Indebtedness denominated in a non-U.S. currency will be calculated based on the relevant currency exchange rate in effect on the date such Indebtedness was Incurred or, in the case of revolving credit Indebtedness, first committed; provided that if such Indebtedness is Incurred to refinance other Indebtedness denominated in a non-U.S. currency, and such refinancing would cause the applicable U.S. dollar-denominated restriction to be exceeded if calculated at the relevant currency exchange rate in effect on the date of such refinancing, such U.S. dollar-denominated restriction will be deemed not to have been exceeded so long as the principal amount of such Refinancing Indebtedness does not exceed the principal amount of such Indebtedness being refinanced. The principal amount of any Indebtedness Incurred to refinance other Indebtedness, if Incurred in a different currency from the Indebtedness being refinanced, will be calculated based on the currency exchange rate applicable to the currencies in which such Refinancing Indebtedness is denominated that is in effect on the date of such refinancing.

Section 3.9 Limitation on Restricted Payments .

(a) The Company will not, and will not cause or permit any of its Restricted Subsidiaries to, directly or indirectly, take any of the following actions (each, a “ Restricted Payment ”):

(i) declare or pay any dividend or return of capital or make any distribution on or in respect of shares of Capital Stock of the Company or any Restricted Subsidiary to holders of such Capital Stock, other than:

(1) dividends or distributions payable in Qualified Capital Stock of the Company;

(2) dividends or distributions payable to the Company and/or a Restricted Subsidiary; or

(3) dividends, distributions or returns of capital made on a pro rata basis to the Company and its Restricted Subsidiaries, on the one hand, and minority holders of Capital Stock of a Restricted Subsidiary, on the other hand (or on a less than pro rata basis to any minority holder);

(ii) purchase, redeem or otherwise acquire or retire for value any Capital Stock of the Company held by Persons other than the Company or any of its Restricted Subsidiaries;

(iii) make any principal payment on, purchase, defease, redeem, prepay, decrease or otherwise acquire or retire for value, prior to any scheduled final maturity, scheduled repayment or scheduled sinking fund payment, as the case may be, any Subordinated Indebtedness; or

(iv) make any Investment (other than Permitted Investments);

if at the time of the Restricted Payment and immediately after giving pro forma effect thereto:

(A) a Default or an Event of Default has occurred and is continuing;

(B) the Company is not able to Incur at least U.S.$1.00 of additional Indebtedness pursuant to Section 3.8(a); or

(C) the aggregate amount (the amount expended for these purposes, if other than in cash, being the Fair Market Value of the relevant property) of the proposed Restricted Payment and all other Restricted Payments made subsequent to the Issue Date up to the date thereof will exceed the sum of:

(1) 50% of cumulative Consolidated Net Income of the Company or, if such cumulative Consolidated Net Income of the Company is a loss, minus 100% of the loss, accrued during the period,

treated as one accounting period, from June 30, 2009 to the end of the most recent fiscal quarter for which consolidated financial information of the Company is available; plus

(2) 100% of the aggregate net cash proceeds received by the Company from any Person from any:

(i) contribution to the Capital Stock of the Company not representing an interest in Disqualified Capital Stock or issuance and sale of Qualified Capital Stock of the Company, in each case subsequent to the Issue Date; or

(ii) issuance and sale subsequent to the Issue Date (and, in the case of Indebtedness of a Restricted Subsidiary, at such time as it was a Restricted Subsidiary) of any Indebtedness for borrowed money of the Company or any Restricted Subsidiary that has been converted into or exchanged for Qualified Capital Stock of the Company;

excluding, in each case, any net cash proceeds:

(x) received from a Subsidiary of the Company;

(y) used to acquire Capital Stock or other assets from an Affiliate of the Company; or

(z) applied in accordance with Section 3.9(b)(ii) and Section 3.9(b)(iii) ; plus

(3) an amount equal to the sum, for all Unrestricted Subsidiaries, of the following:

(iii) the cash return, and the fair market value of assets or property received, after the Issue Date, on Investments in an Unrestricted Subsidiary made after the Issue Date pursuant to this paragraph as a result of any sale, repayment, redemption, liquidating distribution or other realization (not included in Consolidated Net Income); plus

(iv) all distributions or dividends to the Company or a Restricted Subsidiary from Unrestricted Subsidiaries ( provided that such distributions or dividends shall be excluded in calculating Consolidated Net Income for purposes of Section 3.9(a)(C)(1) ; plus

(v) the portion (proportionate to the Company’s equity interest in such Subsidiary) of the Fair Market Value of the assets

less liabilities of an Unrestricted Subsidiary at the time such Unrestricted Subsidiary is designated a Restricted Subsidiary; plus

(vi) the cash return, and the fair market value of property received, after the Issue Date, on any other Investment made after the Issue Date pursuant to this paragraph, as a result of any sale, repayment, redemption, liquidating distribution or other realization (not included in Consolidated Net Income); plus

(4) U.S.$10,000,000 (or the equivalent in other currencies).

(b) Notwithstanding Section 3.9(a) , this Section 3.9 does not prohibit:

(i) the payment of any dividend within 60 days after the date of declaration of such dividend if the dividend would have been permitted on the date of declaration pursuant to Section 3.9(a) ;

(ii) the acquisition of any shares of Capital Stock of the Company,

(1) in exchange for Qualified Capital Stock of the Company; or

(2) through the application of the net cash proceeds received by the Company from a substantially concurrent sale of Qualified Capital Stock of the Company or a contribution to the equity capital of the Company not representing an interest in Disqualified Capital Stock, in each case not received from a Subsidiary of the Company;

provided , that the value of any such Qualified Capital Stock issued in exchange for such acquired Capital Stock and any such net cash proceeds will be excluded from Section 3.9(a)(C)(2) (and were not included therein at any time);

(iii) the voluntary prepayment, purchase, defeasance, redemption or other acquisition or retirement for value of any Subordinated Indebtedness solely in exchange for, or through the application of net cash proceeds of a substantially concurrent sale, other than to a Subsidiary of the Company, of:

(1) Qualified Capital Stock of the Company; or

(2) Refinancing Indebtedness for such Subordinated Indebtedness;

provided , that the value of any Qualified Capital Stock issued in exchange for Subordinated Indebtedness and any net cash proceeds referred to above shall be excluded from Section 3.9(a)(C)(2) (and were not included therein at any time);

(iv) repurchases by the Company of Capital Stock of the Company or options, warrants or other securities exercisable or convertible into Capital Stock of the Company from employees or directors of the Company or any of its Subsidiaries or their

authorized representatives upon the death, disability or termination of employment or directorship of the employees or directors, in an amount not to exceed U.S.$5,000,000 (or the equivalent in other currencies) in any calendar year and U.S.$10,000,000 (or the equivalent in other currencies) in the aggregate;

(v) the repurchase of any Subordinated Indebtedness at a purchase price not greater than 101% of the principal amount thereof in the event of (1) a change of control pursuant to a provision no more favorable to the holders thereof than Section 3.7 hereof or (2) an Asset Sale pursuant to a provision no more favorable to the holders thereof than Section 3.10 hereof; provided that, in each case, prior to the repurchase the Company has made an Offer to Purchase and repurchased all Notes issued under this Indenture that were validly tendered for payment in connection with such offer to purchase;

(vi) repurchases of Capital Stock deemed to occur upon the exercise of stock options if the Capital Stock represent all or a portion of the exercise price thereof (or related withholding taxes), and Restricted Payments by the Company to allow the payment of cash in lieu of the issuance of fractional shares upon the exercise of options or warrants or upon the conversion or exchange of Capital Stock of the Company;

(vii) if no Default or Event of Default has occurred and is continuing, the declaration and payment of dividends to holders of any class or series of Disqualified Stock of the Company or any Restricted Subsidiary or Preferred Stock of any Restricted Subsidiary issued in accordance with Section 3.8 to the extent such payment of any redemption price or liquidation value of any such Disqualified Stock or Preferred Stock is made when due in accordance with its terms;

(viii) payments to Holdings of (1) amounts necessary to pay taxes, in an amount not to exceed the amount of taxes attributable to Parent, Holdings or the Company, to the extent payable by Parent or Holdings, plus (2) up to U.S.$500,000 per fiscal year for corporate overhead expenses; and

(ix) if no Default or Event of Default has occurred and is continuing or would exist after giving pro forma effect thereto, Restricted Payments in an amount which, when taken together with all Restricted Payments made pursuant to this clause (ix), does not exceed U.S.$25,000,000 (or the equivalent in other currencies).

In determining the aggregate amount of Restricted Payments made subsequent to the Issue Date, amounts expended pursuant to Section 3.9(b)(i) (without duplication for the declaration of the relevant dividend) and Section 3.9(b)(iv) will be included in such calculation and amounts expended pursuant to Section 3.9(b)(ii) , Section 3.9(b)(iii) , Section 3.9(b)(v) , Section 3.9(b)(vi) , Section 3.9(b)(vii) , Section 3.9(b)(viii) and Section 3.9(b)(ix) will not be included in such calculation.

The amount of any Restricted Payments not in cash will be the Fair Market Value on the date of such Restricted Payment of the property, assets or securities proposed to be paid,

transferred or issued by the Company or the relevant Restricted Subsidiary, as the case may be, pursuant to such Restricted Payment.

Section 3.10 Limitation on Asset Sales .

(a) The Company will not, and will not permit any of its Restricted Subsidiaries to, consummate an Asset Sale unless:

(i) the Company or such Restricted Subsidiary, as the case may be, receives consideration at the time of such Asset Sale at least equal to the Fair Market Value of the assets sold or otherwise disposed of; and

(ii) at least 75% of the consideration received for the assets sold by the Company or the Restricted Subsidiary, as the case may be, in such Asset Sale is in the form of (1) cash or Cash Equivalents; (2) assets (other than current assets as determined in accordance with GAAP or Capital Stock) to be used by the Company or any Restricted Subsidiary in a Permitted Business; (3) Capital Stock in a Person engaged solely in a Permitted Business that will become a Restricted Subsidiary as a result of such Asset Sale or (4) a combination of cash, Cash Equivalents and such assets. For purposes of this clause (ii), the assumption by the purchasers of Indebtedness or other obligations (other than Subordinated Debt) of the Company or a Restricted Subsidiary pursuant to a customary novation agreement, and instruments or securities received from the purchasers that are promptly, but in any event within 90 days of the closing, converted by the Company or a Restricted Subsidiary to cash, to the extent of the cash actually so received, shall be considered cash received at closing.

(b) The Company or such Restricted Subsidiary, as the case may be, may apply the Net Cash Proceeds of any such Asset Sale within 365 days thereof to:

(i) repay, prepay or purchase any Senior Indebtedness of the Company or any Restricted Subsidiaries, in each case for borrowed money or constituting a Capitalized Lease Obligation and permanently reduce the commitments with respect thereto without Refinancing; or

(ii) purchase:

(1) assets (other than current assets as determined in accordance with GAAP or Capital Stock) to be used by the Company or any Restricted Subsidiary in a Permitted Business; or

(2) Capital Stock of a Person engaged solely in a Permitted Business that will become, upon purchase, a Restricted Subsidiary,

from a Person other than the Company and its Restricted Subsidiaries; or

(iii) any combination of (i) and (ii).

(c) To the extent all or a portion of the Net Cash Proceeds of any Asset Sale are not applied within the 365 days of the Asset Sale as described in Section 3.10(b)(i) , Section 3.10(b)(ii) or Section 3.10(b)(iii) , the Company will make an offer to purchase Notes (the “ Asset Sale Offer ”), at a purchase price equal to 100% of the principal amount of the Notes to be purchased, plus any accrued and unpaid interest thereon, to the purchase date (the “ Asset Sale Offer Amount ”). The Company will purchase pursuant to an Asset Sale Offer from all tendering Holders on a pro rata basis, and, at the Company’s option, on a pro rata basis with the holders of any other Senior Indebtedness with similar provisions requiring the Company to offer to purchase the other Senior Indebtedness with the proceeds of Asset Sales, that principal amount (or accreted value in the case of Indebtedness issued with original issue discount) of Notes and the other Senior Indebtedness to be purchased equal to such unapplied Net Cash Proceeds. The Company may satisfy its obligations under this Section 3.10 with respect to the Net Cash Proceeds of an Asset Sale by making an Asset Sale Offer prior to the expiration of the relevant 365-day period.

(d) The purchase of Notes pursuant to an Asset Sale Offer will occur not less than 20 Business Days following the date thereof, or any longer period as may be required by applicable law or regulation, nor more than 45 days following the 365th day following the Asset Sale. The Company may, however, defer an Asset Sale Offer until there is an aggregate amount of unapplied Net Cash Proceeds from one or more Asset Sales equal to or in excess of U.S.$100,000,000 (or the equivalent in other currencies). At that time, the entire amount of unapplied Net Cash Proceeds, and not just the amount in excess of U.S.$100,000,000 (or the equivalent in other currencies), will be applied as required pursuant to this Section 3.10 .

(e) Pending application in accordance with this Section 3.10 , Net Cash Proceeds will be applied to temporarily reduce revolving credit borrowings that can be reborrowed or Invested in Cash Equivalents.

(f) Each notice of an Asset Sale Offer (“ Asset Sale Offer Notice ”) will be mailed first class, postage prepaid, to the registered Holders no later than 20 days following the 365th day after the receipt of Net Cash Proceeds of any Asset Sale, with a copy to the Trustee, offering to purchase the Notes as described above. Each notice of an Asset Sale Offer shall state:

(i) the circumstances of the Asset Sale or Sales, the Net Cash Proceeds of which are included in the Asset Sale Offer, that an Asset Sale Offer is being made pursuant to this Section 3.10, and that all Notes that are timely tendered shall be accepted for payment;

(ii) the Asset Sale Offer Amount and the Asset Sale offer payment date, which must be at least 30 and not more than 60 days from the date the notice is mailed, other than as may be required by law (the “ Asset Sale Offer Payment Date ”);

(iii) that any Notes or portions thereof not tendered or accepted for payment shall continue to accrue interest;

(iv) that, unless the Company defaults in the payment of the Asset Sale Offer Amount with respect thereto, all Notes or portions thereof accepted for payment

pursuant to the Asset Sale Offer shall cease to accrue interest from and after the Asset Sale Offer Payment Date;

(v) that any Holder electing to have any Notes or portions thereof purchased pursuant to the Asset Sale Offer shall be required to surrender such Notes, with the form entitled “Option of Holder to Elect Purchase” on the reverse of such Notes completed, to the Paying Agent at the address specified in the notice prior to the close of business on the third Business Day preceding the Asset Sale Offer Payment Date;

(vi) that any Holder shall be entitled to withdraw such election if the Paying Agent receives, not later than the close of business on the third Business Day preceding the Asset Sale Offer Payment Date, a facsimile transmission or letter, setting forth the name of the Holder, the principal amount of Notes delivered for purchase, and a statement that such Holder is withdrawing such Holder’s election to have such Notes or portions thereof purchased pursuant to the Asset Sale Offer;

(vii) that any Holder electing to have Notes purchased pursuant to the Asset Sale Offer must specify the principal amount that is being tendered for purchase, which principal amount must be U.S.$100,000 or an integral multiple of U.S.$1,000 in excess thereof;

(viii) that any Holder of Certificated Notes whose Certificated Notes are being purchased only in part shall be issued new Certificated Notes equal in principal amount to the unpurchased portion of the Certificated Note or Notes surrendered, which unpurchased portion shall be equal in principal amount to U.S.$100,000 or an integral multiple of U.S.$1,000 in excess thereof;

(ix) that the Trustee shall return to the Holder of a Global Note that is being purchased in part, such Global Note with a notation on the schedule of increases and decreases thereof adjusting the principal amount thereof to be equal to the unpurchased portion of such Global Note; and

(x) any other information reasonably necessary to enable any Holder to tender Notes and to have such Notes purchased pursuant to this Section 3.10 .

Upon receiving notice of an Asset Sale Offer, Holders may elect to tender their Notes in whole or in part in integral multiples of U.S.$1,000 in exchange for cash; provided that the principal amount of such tendering Holder’s Note will not be less than U.S.$100,000.

(g) On the Asset Sale Offer Payment Date, the Company will, to the extent lawful:

(i) accept for payment all Notes or portions thereof properly tendered pursuant to the Asset Sale Offer;

(ii) deposit with the Paying Agent funds in an amount equal to the Asset Sale Offer Amount in respect of all Notes or portions thereof so tendered; and

(h) To the extent that Holders of Notes and holders of other Senior Indebtedness, if any, which are the subject of an Asset Sale Offer properly tender and do not withdraw Notes or the other Senior Indebtedness in an aggregate amount exceeding the amount of unapplied Net Cash Proceeds, the Company will purchase the Notes and the other Senior Indebtedness on a pro rata basis (based on amounts tendered). If only a portion of a Note is purchased pursuant to an Asset Sale Offer, a new Note in a principal amount equal to the portion thereof not purchased will be issued in the name of the Holder thereof upon cancellation of the original Note (or appropriate adjustments to the amount and beneficial interests in a Global Note will be made, as appropriate). Notes (or portions thereof) purchased pursuant to an Asset Sale Offer will be cancelled and cannot be reissued.

(i) Upon completion of an Asset Sale Offer, the amount of Net Cash Proceeds will be reset at zero. Accordingly, to the extent that the aggregate amount of Notes and other Senior Indebtedness tendered pursuant to an Asset Sale Offer is less than the aggregate amount of unapplied Net Cash Proceeds, the Company may use any remaining Net Cash Proceeds for general corporate purposes of the Company and its Restricted Subsidiaries.

(j) If at any time any non-cash consideration received by the Company or any Restricted Subsidiary, as the case may be, in connection with any Asset Sale is converted into or sold or otherwise disposed of for cash (other than interest received with respect to any non-cash consideration), the conversion or disposition will be deemed to constitute an Asset Sale hereunder and the Net Cash Proceeds thereof will be applied in accordance with this Section 3.10 within 365 days of such conversion or disposition.

(k) The Company will comply with the requirements of Rule 14e-1 under the Exchange Act and any other securities laws and regulations to the extent any such rule, laws and regulations are applicable in connection with the purchase of Notes pursuant to an Asset Sale Offer. To the extent that the provisions of any applicable securities laws or regulations conflict with this Section 3.10 , the Company will comply with these laws and regulations and will not be deemed to have breached its obligations under this Section 3.10 by doing so.

Section 3.11 Limitation on Designation of Unrestricted Subsidiaries .

(a) The Company may designate after the Issue Date any Subsidiary of the Company as an “Unrestricted Subsidiary” under the Indenture (a “ Designation ”) only if:

(i) no Default or Event of Default has occurred and is continuing at the time of or after giving effect to such Designation and any transactions between the Company or any of its Restricted Subsidiaries and such Unrestricted Subsidiary are in compliance with Section 3.14 and

(ii) the Company would be permitted to make an Investment at the time of Designation (assuming the effectiveness of such Designation and treating such

Designation as an Investment at the time of Designation) as a Restricted Payment pursuant to Section 3.9(a) in an amount (the “ Designation Amount ”) equal to the amount of the Company’s Investment in such Subsidiary on such date.

(b) Neither the Company nor any Restricted Subsidiary will at any time, except as permitted by Section 3.8 and Section 3.9 :

(i) provide credit support for, subject any of its property or assets (other than the Capital Stock of any Unrestricted Subsidiary) to the satisfaction of, or Guarantee, any Indebtedness of any Unrestricted Subsidiary (including any undertaking, agreement or instrument evidencing such Indebtedness);

(ii) be directly or indirectly liable for any Indebtedness of any Unrestricted Subsidiary; or

(iii) be directly or indirectly liable for any Indebtedness which provides that the holder thereof may (upon notice, lapse of time or both) declare a default thereon or cause the payment thereof to be accelerated or payable prior to its final scheduled maturity upon the occurrence of a default with respect to any Indebtedness of any Unrestricted Subsidiary, except for any non-recourse Guarantee given solely to support the pledge by the Company or any Restricted Subsidiary of the Capital Stock of any Unrestricted Subsidiary.

(i) no Default or Event of Default has occurred and is continuing at the time of and after giving effect to such Revocation; and

(ii) all Liens and Indebtedness of such Unrestricted Subsidiary outstanding immediately following such Revocation would, if Incurred at such time, have been permitted to be Incurred for all purposes of the Indenture.

(d) Upon a Restricted Subsidiary becoming an Unrestricted Subsidiary,

(i) all existing Investments of the Company and the Restricted Subsidiaries therein (valued at the Company’s proportional share of the fair market value of its assets less liabilities) will be deemed made at that time;

(ii) all existing Capital Stock or Indebtedness of the Company or a Restricted Subsidiary held by it will be deemed Incurred at that time, and all Liens on property of the Company or a Restricted Subsidiary held by it will be deemed incurred at that time;

(iii) all existing transactions between it and the Company or any Restricted Subsidiary will be deemed entered into at that time;

(iv) it is released at that time from its Subsidiary Guarantee, if any; and

(v) it will cease to be subject to the provisions of this Indenture as a Restricted Subsidiary.

(e) Upon an Unrestricted Subsidiary becoming, or being deemed to become, a Restricted Subsidiary,

(i) all of its Indebtedness and Disqualified or Preferred Stock will be deemed Incurred at that time for purposes of Section 3.8 ;

(ii) Investments therein previously charged under Section 3.9 will be credited thereunder;

(iii) it may be required to issue a Subsidiary Guarantee; and

(iv) it will thenceforward be subject to the provisions of this Indenture as a Restricted Subsidiary (and, if applicable, a Non-Guarantor Restricted Subsidiary).

(f) The Designation of a Subsidiary of the Company as an Unrestricted Subsidiary will be deemed to include the Designation of all of the Subsidiaries of such Subsidiary. All Designations and Revocations must be evidenced by Board Resolutions of the Company’s Board of Directors, delivered to the Trustee certifying compliance with the preceding provisions.

Section 3.12 Limitation on Dividend and Other Payment Restrictions Affecting Restricted Subsidiaries .

(a) Except as provided in Section 3.12(b) , the Company shall not, and shall not cause or permit any of its Restricted Subsidiaries to, directly or indirectly, create or otherwise cause or permit to exist or become effective any encumbrance or restriction on the ability of any Restricted Subsidiary to:

(i) pay dividends or make any other distributions on or in respect of its Capital Stock to the Company or any other Restricted Subsidiary or pay any Indebtedness owed to the Company or any other Restricted Subsidiary;

(ii) make loans or advances to, or Guarantee any Indebtedness or other obligations of, or make any Investment in, the Company or any other Restricted Subsidiary; or

(iii) transfer any of its property or assets to the Company or any other Restricted Subsidiary.

(b) Section 3.12(a) shall not apply to encumbrances or restrictions existing under or by reason of:

(i) applicable law, rule, regulation or order;

(ii) this Indenture, the Notes or the Subsidiary Guarantees;

(iii) the terms of any Indebtedness outstanding on the Issue Date, and any amendments or restatements thereof; provided that any amendment or restatement is not materially more restrictive with respect to such encumbrances or restrictions than those in existence on the Issue Date;

(iv) the Franchise Documents or the L/C Documents;

(v) the terms of any binding agreement with respect to any Restricted Subsidiary relating to its Capital Stock or assets in effect on the Issue Date, and any amendments or restatements thereof; provided that any amendment or restatement is not materially more restrictive with respect to such encumbrances or restrictions than those in existence on the Issue Date;

(vi) restrictions on the transfer of assets subject to any Permitted Lien;

(vii) customary provisions restricting the ability of any Restricted Subsidiary to undertake any action described in Section 3.12(a)(i) through Section 3.12(a)(iii) in joint venture agreements and other similar agreements entered into in the ordinary course of business and with the approval of the Company’s Board of Directors;

(viii) customary restrictions on cash or other deposits imposed by customers under contracts or other arrangements entered into or agreed to in the ordinary course of business;

(ix) customary non-assignment provisions of any license agreement or other contract and customary provisions restricting assignment or subletting in any lease governing a leasehold interest of any Restricted Subsidiary, or any customary restriction on the ability of a Restricted Subsidiary to dividend, distribute or otherwise transfer any asset that is subject to a Lien that secures Indebtedness, in each case permitted to be Incurred under this Indenture;

(x) restrictions with respect to a Restricted Subsidiary of the Company imposed pursuant to a binding agreement which has been entered into for the sale or disposition of Capital Stock or assets of such Restricted Subsidiary; provided that such restrictions apply solely to the Capital Stock or assets of such Restricted Subsidiary being sold;

(xi) customary restrictions imposed on the transfer of copyrighted or patented materials;

(xii) Purchase Money Indebtedness and Capital Lease Obligations that impose encumbrances and restrictions only on the assets so acquired or subject to lease;

(xiii) restrictions (A) with respect to any Person, or to the property or assets of any Person, at the time the Person is acquired by the Company or any Restricted Subsidiary, or (B) with respect to any Unrestricted Subsidiary at the time it is designated

or is deemed to become a Restricted Subsidiary, which encumbrances or restrictions (i) are not applicable to any other Person or the property or assets of any other Person and (ii) were not put in place in anticipation of such event and any extensions, renewals, replacements or refinancings of any of the foregoing, provided that the encumbrances and restrictions in the extension, renewal, replacement or refinancing are, taken as a whole, no less favorable in any material respect to the noteholders than the encumbrances or restrictions being extended, renewed, replaced or refinanced;

(xiv) pursuant to provisions in instruments governing other Indebtedness, Disqualified Stock or Preferred Stock of Restricted Subsidiaries permitted to be Incurred after the Issue Date pursuant to Section 3.8 ; provided that (i) such provisions are customary for instruments of such type (as determined in good faith by the Company’s Board of Directors) and (ii) the Company’s Board of Directors determines in good faith that such restrictions will not materially adversely impact the ability of the Company to make required principal and interest payments on the Notes;

(xv) customary restrictions pursuant to any Permitted Receivables Financing; and

(xvi) an agreement governing Indebtedness Incurred to Refinance the Indebtedness issued, assumed or Incurred pursuant to an agreement referred to in clauses (i)–(xvi) of this Section 3.12(b) ; provided that such Refinancing agreement is not materially more restrictive with respect to such encumbrances or restrictions than those contained in the agreement referred to in such clauses (i)–(xvi).

Section 3.13 Limitation on Liens .

The Company shall not, and shall not cause or permit any of its Restricted Subsidiaries to, directly or indirectly, Incur any Liens of any kind (except for Permitted Liens) against or upon any of their respective properties or assets, whether owned on the Issue Date or acquired after the Issue Date, or any proceeds therefrom, to secure any Indebtedness or trade payables, unless contemporaneously therewith effective provision is made to secure the Notes, the Subsidiary Guarantees and all other amounts due under the Indenture equally and ratably with such Indebtedness or other obligation (or, in the event that such Indebtedness is subordinated in right of payment to the Notes or the Subsidiary Guarantees prior to such Indebtedness or other obligation) with a Lien on the same properties and assets securing such Indebtedness or other obligation for so long as such Indebtedness or other obligation is secured by such Lien.

Section 3.14 Limitation on Transactions with Affiliates .

(a) The Company shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, enter into any transaction or series of related transactions (including, without limitation, the purchase, sale, lease or exchange of any property or the

rendering of any service) with, or for the benefit of, any of its Affiliates (each an “ Affiliate Transaction ”), unless:

(i) the terms of such Affiliate Transaction are no less favorable than those that could reasonably be expected to be obtained in a comparable transaction at such time on an arm’s-length basis from a Person that is not an Affiliate of the Company;

(ii) in the event that such Affiliate Transaction involves aggregate payments, or transfers of property or services with a Fair Market Value, in excess of U.S.$15,000,000 (or the equivalent in other currencies), the terms of such Affiliate Transaction will be set forth in an Officers’ Certificate delivered to the Trustee stating that such transaction complies with this Section 3.14(a) ;

(iii) in the event that such Affiliate Transaction involves aggregate payments, or transfers of property or services with a Fair Market Value, in excess of U.S.$20,000,000 (or the equivalent in other currencies), the terms of such Affiliate Transaction will be approved by a majority of the members of the Company’s Board of Directors (including a majority of the disinterested members thereof), the approval to be evidenced by a Board Resolution stating that the Board of Directors has determined that such transaction complies with this Section 3.14(a) ; and

(iv) in the event that such Affiliate Transaction involves aggregate payments, or transfers of property or services with a Fair Market Value, in excess of U.S.$25,000,000 (or the equivalent in other currencies), the Company will, prior to the consummation thereof, obtain a favorable opinion as to the fairness of such Affiliate Transaction to the Company and any such Restricted Subsidiary, if any, from a financial point of view from an Independent Financial Advisor and file the same with the Trustee.

(b) The provisions of this Section 3.14(a) shall not apply to:

(i) Affiliate Transactions with or among the Company and any Restricted Subsidiary or between or among Restricted Subsidiaries;

(ii) reasonable fees and compensation paid to, and any indemnity provided on behalf of, officers, directors and employees of the Company or any Restricted Subsidiary;

(iii) Affiliate Transactions undertaken pursuant to the terms of any agreement or arrangement to which the Company or any of its Restricted Subsidiaries is a party as of or on the Issue Date, as these agreements or arrangements may be amended, modified, supplemented, extended, renewed or replaced from time to time; provided that any future amendment, modification, supplement, extension, renewal or replacement entered into after the Issue Date will be permitted to the extent that its terms are not more materially disadvantageous to the Holders of the Notes than the terms of the agreements or arrangements in effect on the Issue Date;

(iv) the entering into of a customary agreement providing registration rights to the shareholders of the Company and the performance of such agreements;

(v) transactions or payments, including grants of securities, stock options and similar rights, pursuant to any employee, officer or director compensation or benefit plans or arrangements entered into in the ordinary course of business or approved by the Company’s Board of Directors in good faith;

(vi) any employment agreements entered into by the Company or any of its Restricted Subsidiaries in the ordinary course of business;

(vii) any Restricted Payments made in compliance with Section 3.9 and Permitted Investments;

(viii) sales of Accounts Receivable, or participations therein, or any related transaction, in connection with any Permitted Receivables Financing;

(ix) loans and advances to officers, directors and employees of the Company or any Restricted Subsidiary in the ordinary course of business and not exceeding U.S.$10,000,000 (or the equivalent in other currencies) outstanding at any one time; and

(x) cost-sharing arrangements among the Company and any of its Restricted and Unrestricted Subsidiaries.

Section 3.15 Conduct of Business .

The Company and its Restricted Subsidiaries will not engage in any business other than a Permitted Business.

Section 3.16 Reports to Holders .

(a) So long as any Notes are “restricted securities” within the meaning of Rule 144(a)(3) under the Securities Act, the Company will furnish to the Holders of the Notes and to prospective investors, upon their request, the information required to be delivered pursuant to Rule 144A(d)(4) under the Securities Act.

(b) The Company will furnish or cause to be furnished to the Trustee in English (for distribution only to the Holders of Notes upon their request):

(i) within 90 days after the end of the first, second and third quarters of the Company’s fiscal year (commencing with the quarter ending September 30, 2009), quarterly unaudited financial statements (consolidated) prepared in accordance with GAAP of the Company for such period; and

(ii) within 120 days after the end of the fiscal year of the Company commencing with the fiscal year ended December 31, 2009, annual audited financial statements (consolidated) prepared in accordance with GAAP of the Company for such fiscal year and a report on such annual financial statements by the Auditors.

Each such annual report will include a “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and be accompanied by an Officers’ Certificate to the effect that (A) the financial statements contained in such report fairly present, in all material respects, the consolidated financial condition of the Company and its Subsidiaries as of the date of such financial statements and the results of their operations for the period covered thereby; and (B) such financial statements have been prepared in accordance with GAAP.

(c) Delivery of such reports, information and documents to the Trustee is for informational purposes only and the Trustee’s receipt of such shall not constitute constructive notice of any information contained therein or determinable from information contained therein, including the Company’s compliance with any of its covenants hereunder (as to which the Trustee is entitled to rely exclusively on Officers’ Certificates).

Section 3.17 Listing .

(a) In the event that the Notes are listed on the Luxembourg Stock Exchange for trading on the Euro MTF Market, the Company shall use its commercially reasonable efforts to maintain such listing; provided that if, as a result of the European Union regulated market amended Directive 2001/34/EC (the “ Transparency Directive ”) or any legislation implementing the Transparency Directive or other directives or legislation, the Company could be required to publish financial information either more regularly than it otherwise would be required to or according to accounting principles which are materially different from the accounting principles which the Company would otherwise use to prepare its published financial information, the Company may delist the Notes from the Luxembourg Stock Exchange in accordance with the rules of such Exchange and seek an alternative admission to listing, trading and/or quotation for the Notes on a different section of the Luxembourg Stock Exchange or by such other listing authority, stock exchange and/or quotation system inside or outside the European Union as the Board of Directors of the Company may decide.

(b) From and after the date the Notes are listed on the Luxembourg Stock Exchange for trading on the Euro MTF Market, and so long as it is required by the rules of such Exchange, all notices to the Holders shall be published in English in accordance with Section 11.1(b) .

Section 3.18 Payment of Additional Amounts .

(a) The Company, and each Subsidiary Guarantor, shall, subject to the exceptions set forth below, pay to Holders of the Notes additional amounts (“ Additional Amounts ”) as may be necessary so that every net payment of interest (including any premium paid upon redemption of the Notes and any discount deemed interest under Netherlands law) or principal to the Holders shall not be less than the amount provided for in the Notes. The term “net payment” means the amount that the Company, any Subsidiary Guarantor or a Paying Agent pays any Holder after deducting or withholding an amount for or on account of any present or future taxes, duties, assessments or other governmental charges imposed with respect to that payment by the Netherlands or any jurisdiction where the Company or any Subsidiary Guarantor is incorporated or resident for tax purposes or from or through which any payment in respect of

the Notes is made by the paying agent or the Company, or any political subdivision thereof (a “ Relevant Jurisdiction ”), or any taxing authority of a Relevant Jurisdiction.

(b) The Company, and each Subsidiary Guarantor, shall not pay Additional Amounts to any Holder for or solely on account of any of the following:

(i) any present or future taxes, duties, assessments or other governmental charges that would not have been imposed but for any present or former connection between the Holder (or a fiduciary, settlor, beneficiary, member or shareholder of the Holder) and the Relevant Jurisdiction (other than the mere receipt of a payment or the ownership or holding of a Note);

(ii) any estate, inheritance, capital gains, excise, personal property tax, sales, transfer, gift or similar tax, assessment or other governmental charge imposed with respect to the Notes;

(iii) any taxes, duties, assessments or other governmental charges that would not have been imposed but for the failure of the Holder or any other Person to comply with any certification, identification or other reporting requirement concerning the nationality, residence, identity or connection with the Relevant Jurisdiction, for tax purposes, of the Holder or any beneficial owner of the Note if compliance is required by law, regulation or by an applicable income tax treaty to which the Relevant Jurisdiction is a party, as a precondition to exemption from, or reduction in the rate of, the tax, assessment or other governmental charge and the Company has given the Holders at least 30 days’ notice that Holders will be required to provide such certification, identification or information;

(iv) any tax, duty, assessment or other governmental charge payable otherwise than by deduction or withholding from payments on or in respect of the Notes;

(v) any present or future taxes, duties, assessments or other governmental charges with respect to a Note presented for payment, where presentation is required, more than 30 days after the date on which the payment became due and payable or the date on which payment thereof is duly provided for, whichever occurs later, except to the extent that the Holder of such Note would have been entitled to such Additional Amounts on presenting such Note for payment on any date during such 30-day period;

(vi) any withholding or deduction that is required to be made pursuant to EC Council Directive 2003/48/EC or any other Directive implementing the conclusions of the ECOFIN Council meeting of November 26-27, 2000 on the taxation of savings income, or any law implementing or complying with, or introduced in order to conform to, such Directive;

(vii) any payment on the Note to a Holder that is a fiduciary, a partnership, a limited liability company or a person other than the sole beneficial owner of any such payment, to the extent that a beneficiary or settlor with respect to such fiduciary, a member of such a partnership, an interestholder in such a limited liability

company or the beneficial owner of the payment would not have been entitled to the Additional Amounts had the beneficiary, settlor, member or beneficial owner been the Holder of the Note; or

(viii) in the case of any combination of the items listed above.

(c) Upon request, the Company or any Subsidiary Guarantor, as applicable, shall provide the Trustee with documentation reasonably satisfactory to the Trustee evidencing the payment of taxes in respect of which the Company or such Subsidiary Guarantor has paid any Additional Amount. The Company shall make copies of such documentation available to the Holders of the Notes or the relevant Paying Agent upon request.

(d) Any reference in this Indenture or the Notes to principal, premium, interest or any other amount payable in respect of the Notes by us will be deemed also to refer to any Additional Amount that may be payable with respect to that amount under the obligations referred to in this section.

(e) In the event of any merger or other transaction described and permitted under Section 4.1 , then all references to the Netherlands, Netherlands law or regulations, and Netherlands political subdivisions or taxing authorities under this Section 3.18 and under Article IV and Section 5 of Exhibit A will be deemed to also include the jurisdiction of incorporation or tax residence of the Surviving Entity, if different from the Netherlands, and any political subdivision therein or thereof, law or regulations, and any taxing authority of such other jurisdiction or any political subdivision therein or thereof, respectively.

Section 3.19 Use of Proceeds .

The Company shall use the proceeds of the sale of the Notes as set forth under “Use of Proceeds” in the Offering Memorandum to repay the U.S.$350,000,000 of outstanding Indebtedness under the Credit Agreement and shall repay the U.S.$350,000,000 of outstanding Indebtedness under the Credit Agreement within 15 days following the Issue Date.

Section 3.20 Covenant Suspension .

(a) If on any date following the Issue Date (i) the Notes have Investment Grade Ratings from at least two of Fitch, Moody’s and S&P, and (ii) no Default has occurred and is continuing under this Indenture (the occurrence of the events described in the foregoing clauses (i) and (ii) being collectively referred to as a “ Covenant Suspension Event ”), the Company and its Restricted Subsidiaries shall not be subject to the following covenants (collectively, the “ Suspended Covenants ”):

(i) Section 3.8;

(ii) Section 3.9;

(iii) Section 3.10;

(iv) Section 3.11;

(v) Section 3.12;

(vi) Section 4.1(a)(ii) ; and

(vii) Section 3.14.

(b) In the event that the Company and its Restricted Subsidiaries are not subject to the Suspended Covenants under this Indenture for any period of time as a result of the foregoing, and on any subsequent date (the “ Reversion Date ”) at least two of Fitch, Moody’s or S&P no longer rate the Notes Investment Grade, then the Company and its Restricted Subsidiaries shall thereafter again be subject to the Suspended Covenants under this Indenture.

(c) The period of time between the occurrence of a Covenant Suspension Event and the Reversion Date is referred to in this Indenture as the “ Suspension Period .” In the event of any such reinstatement, no action taken or omitted to be taken by the Company or any of its Restricted Subsidiaries prior to such reinstatement shall give rise to a Default or Event of Default under this Indenture with respect to Notes; provided that (i) with respect to Restricted Payments made after any such reinstatement, the amount of Restricted Payments made shall be calculated as though Section 3.9 had been in effect prior to, but not during, the Suspension Period, provided further that any Subsidiaries designated as Unrestricted Subsidiaries during the Suspension Period shall automatically become Restricted Subsidiaries on the Reversion Date (subject to the Company’s right to subsequently designate them as Unrestricted Subsidiaries pursuant to Section 3.11 ), and (ii) all Indebtedness Incurred, or Disqualified Capital Stock or Preferred Stock issued, during the Suspension Period shall be classified to have been Incurred or issued pursuant to Section 3.8(b)(ii) .

Section 3.21 Compliance Certificates .

(a) The Company shall deliver to the Trustee within 120 days after the end of each fiscal year of the Company an Officers’ Certificate signed by any two of its principal executive officer, its principal financial officer and its principal accounting officer stating that in the course of the performance by the signers of their duties as Officers of the Company they would normally have knowledge of any Default or Event of Default and whether or not the signers know of any Default or Event of Default that occurred during such period. If they do, the certificate shall describe the Default or Event of Default, its status and what action the Company is taking or proposes to take with respect thereto.

(b) Upon the formation, creation or acquisition of any new Restricted Subsidiary that is also a Non-Guarantor Restricted Subsidiary after the Issue Date, the Company shall deliver to the Trustee promptly an Officers’ Certificate certifying that such Subsidiary is prevented by local law or the existence of minority shareholders from guaranteeing the Notes.

(c) The Trustee shall not be obligated to monitor or confirm, on a continuing basis or otherwise, the Company’s or any other Person’s compliance with the covenants described above or with respect to any reports or other documents filed under this Indenture; provided, however , that nothing herein shall relieve the Trustee of any obligations to monitor the Company’s timely delivery of the reports and certificates described in Section 3.16 .

ARTICLE IV

LIMITATION ON MERGER, CONSOLIDATION AND SALE OF ASSETS

Section 4.1 Merger, Consolidation and Sale of Assets .

(a) The Company shall not, in a single transaction or series of related transactions, consolidate or merge with or into any Person (whether or not the Company is the surviving or continuing Person), or sell, assign, transfer, lease, convey or otherwise dispose of (or cause or permit any Restricted Subsidiary to sell, assign, transfer, lease, convey or otherwise dispose of) all or substantially all of the Company’s properties and assets (determined on a consolidated basis for the Company and its Restricted Subsidiaries), to any Person unless:

(i) either:

(1) the Company is the surviving or continuing corporation; or

(2) the Person (if other than the Company) formed by such consolidation or into which the Company is merged or the Person which acquires by sale, assignment, transfer, lease, conveyance or other disposition the properties and assets of the Company and of the Company’s Restricted Subsidiaries substantially as an entirety (the “ Surviving Entity ”):

(A) is a corporation organized and validly existing under the laws of the Netherlands or the United States of America, any State thereof or the District of Columbia; and

(B) expressly assumes, by supplemental indenture (in form and substance satisfactory to the Trustee), executed and delivered to the Trustee, the due and punctual payment of the principal of, and premium, if any, and interest on all of the Notes and the performance and observance of the covenants of the Notes and the Indenture on the part of the Company to be performed or observed;

(ii) immediately after giving effect to such transaction and the assumption contemplated by Section 4.1(a)(i)(2)(B) (including giving effect on a pro forma basis to any Indebtedness (including any Acquired Indebtedness) Incurred or anticipated to be Incurred in connection with or in respect of such transaction), the Company or such Surviving Entity, as the case may be, will be able to Incur at least U.S.$1.00 of additional Indebtedness pursuant to Section 3.8(a) or the Net Debt to EBITDA Ratio will be no worse than immediately prior to such transaction;

(iii) immediately before and immediately after giving effect to such transaction and the assumption contemplated by Section 4.1(a)(i)(2)(B) (including, without limitation, giving effect on a pro forma basis to any Indebtedness (including any

Acquired Indebtedness) Incurred or anticipated to be Incurred and any Lien granted in connection with or in respect of the transaction), no Default or Event of Default has occurred or is continuing;

(iv) each Subsidiary Guarantor has confirmed by supplemental indenture that its Subsidiary Guarantee will apply for the Obligations of the Surviving Entity in respect of the Indenture and the Notes; and

(v) if the Company is organized under the laws of the Netherlands and merges with a corporation that is (or the Surviving Entity is) organized under the laws of the United States, any State thereof or the District of Columbia, or if the Company is organized under the laws of the United States, any State thereof or the District of Columbia and merges with a corporation that is (or the Surviving Entity is) organized under the laws of the Netherlands, the Company or the Surviving Entity will have delivered to the Trustee:

(1) an Opinion of Counsel from U.S. counsel to the effect that Holders of the Notes will not recognize income, gain or loss for U.S. federal income tax purposes as a result of the transaction and will be subject to U.S. federal income tax in the same manner and on the same amounts (assuming solely for this purpose that no Additional Amounts are required to be paid on the Notes) and at the same times as would have been the case if the transaction had not occurred; and

(2) an Opinion of Counsel from Netherlands counsel to the effect that Holders of the Notes will not recognize income, gain or loss for Netherlands income tax purposes as a result of the transaction and will be subject to Netherlands income taxes in the same manner and on the same amounts (assuming solely for this purpose that no Additional Amounts are required to be paid on the Notes) and at the same times as would have been the case if the transaction had not occurred.

(vi) the Company or the Surviving Entity has delivered to the Trustee an Officers’ Certificate and an Opinion of Counsel, each stating that the consolidation, merger, sale, assignment, transfer, lease, conveyance or other disposition and, if required in connection with such transaction, the supplemental indenture, comply with the applicable provisions of the Indenture and that all conditions precedent in the Indenture relating to the transaction have been satisfied.

(b) For purposes of this Section 4.1 , the transfer (by lease, assignment, sale or otherwise, in a single transaction or series of transactions) of all or substantially all of the properties or assets of one or more Restricted Subsidiaries of the Company, the Capital Stock of which constitutes all or substantially all of the properties and assets of the Company (determined on a consolidated basis for the Company and its Restricted Subsidiaries), shall be deemed to be the transfer of all or substantially all of the properties and assets of the Company.

(c) The provisions of Section 4.1(a)(ii) and Section 4.1(a)(iii) above shall not apply to any merger or consolidation of the Company into an Affiliate of the Company incorporated solely for the purpose of reincorporating the Company in another jurisdiction so long as the Indebtedness of the Company and its Restricted Subsidiaries taken as a whole is not increased thereby.

(d) Section 4.1(a) , Section 4.1(b) and Section 4.1(c) shall not apply to (i) any transfer of assets by the Company to any Subsidiary Guarantor, (ii) any transfer of assets among Subsidiary Guarantors or (iii) any transfer of assets by a Non-Guarantor Restricted Subsidiary to (x) another Non-Guarantor Restricted Subsidiary or (y) the Company or any Subsidiary Guarantor.

(e) Upon any consolidation, combination or merger or any transfer of all or substantially all of the properties and assets of the Company and its Restricted Subsidiaries in accordance with this covenant, in which the Company is not the continuing Person, the Surviving Entity formed by such consolidation or into which the Company is merged or to which such conveyance, lease or transfer is made will succeed to, and be substituted for, and may exercise every right and power of, the Company under this Indenture and the Notes with the same effect as if such Surviving Entity had been named as such and the Company shall be relieved of its obligations under this Indenture and the Notes. For the avoidance of doubt, compliance with this Section 4.1(a) will not affect the obligations of the Company (including a Surviving Entity, if applicable) under Section 3.7 if applicable.

(f) No Subsidiary Guarantor shall consolidate with or merge with or into any Person, or sell, convey, transfer or dispose of, all or substantially all its assets as an entirety or substantially as an entirety, in one transaction or a series of related transactions, to any Person, or permit any Person to merge with or into the Subsidiary Guarantor unless:

(i) the other Person is the Company or any Restricted Subsidiary that is a Subsidiary Guarantor or becomes a Subsidiary Guarantor concurrently with the transaction; or

(ii) (1) either (x) the Subsidiary Guarantor is the continuing Person or (y) the resulting, surviving or transferee Person expressly assumes by supplemental indenture all of the obligations of the Subsidiary Guarantor under its Subsidiary Guarantee; and (2) immediately after giving effect to the transaction, no Default has occurred and is continuing; or

(iii) the transaction constitutes a sale or other disposition (including by way of consolidation or merger) of the Subsidiary Guarantor or the sale or disposition of all or substantially all the assets of the Subsidiary Guarantor (in each case other than to the Company or a Restricted Subsidiary) otherwise permitted by this Indenture.

ARTICLE V

REDEMPTION OF NOTES

Section 5.1 Redemption . The Company may or shall redeem the Notes, as a whole or from time to time in part, subject to the conditions and at the redemption prices specified in the form of Notes in Exhibit A.

Section 5.2 Election to Redeem . In the case of an optional redemption, the Company shall evidence its election to redeem any Notes pursuant to Section 5.1 by a Board Resolution.

Section 5.3 Notice of Redemption .

(a) The Company shall give or cause the Trustee to give notice of redemption, in the manner provided for in Section 11.1 , not less than 35 nor more than 60 days prior to the Redemption Date by first-class mail, postage prepaid, to each Holder of Notes to be redeemed at its registered address. If the Company itself gives the notice, it shall also deliver a copy to the Trustee.

(b) If either (i) the Company is not redeeming all Outstanding Notes, or (ii) the Company elects to have the Trustee give notice of redemption, then the Company shall deliver to the Trustee, at least 45 days prior to the Redemption Date (unless the Trustee is satisfied with a shorter period), an Officers’ Certificate requesting that the Trustee request that DTC (in the case of Global Notes) select the Notes to be redeemed or the Trustee (in the case of Certificated Notes) select the method of the selection of the Notes to be redeemed and/or give notice of redemption and setting forth the information required by Section 5.3(c) (with the exception of the identification of the particular Notes, or portions of the particular Notes, to be redeemed in the case of a partial redemption). If the Company elects to have the Trustee give notice of redemption, the Trustee shall give the notice in the name of the Company and at the Company’s expense.

(i) the Redemption Date;

(ii) the redemption price and the amount of any accrued interest payable as provided in Section 5.6 ;

(iii) whether or not the Company is redeeming all Outstanding Notes;

(iv) if the Company is not redeeming all Outstanding Notes, the aggregate principal amount of Notes that the Company is redeeming and the aggregate principal amount of Notes that shall be Outstanding after the partial redemption, as well as the identification of the particular Notes, or portions of the particular Notes, that the Company is redeeming;

(v) if the Company is redeeming only part of a Note, the notice that relates to that Note shall state that on and after the Redemption Date, upon surrender of

that Note, the Holder shall receive, without charge, a new Note or Notes of authorized denominations for the principal amount of the Note remaining unredeemed;

(vi) that on the Redemption Date the redemption price and any accrued interest payable to the Redemption Date as provided in Section 5.6 shall become due and payable in respect of each Note, or the portion of each Note, to be redeemed, and, unless the Company defaults in making the redemption payment, that interest on each Note, or the portion of each Note, to be redeemed, shall cease to accrue on and after the Redemption Date;

(vii) the place or places where a Holder must surrender the Holder’s Notes for payment of the redemption price; and

(viii) the CUSIP or ISIN number, if any, listed in the notice or printed on the Notes, and that no representation is made as to the accuracy or correctness of such CUSIP or ISIN number.

Section 5.4 Selection of Notes to Be Redeemed in Part .

(a) If fewer than all of the Notes are being redeemed, the Notes to be redeemed shall be selected by lot by DTC in the case of Notes represented by a Global Note or by the Trustee pro rata , by lot or by any other method the Trustee it its sole discretion deems fair and appropriate. The Trustee shall make the selection from the Outstanding Notes not previously called for redemption. The Trustee shall promptly notify the Company in writing of the Notes selected for redemption and, in the case of any Notes selected for partial redemption, the principal amount of the Notes to be redeemed. In the event of a partial redemption by lot, the Trustee shall select the particular Notes to be redeemed not less than 35 nor more than 60 days prior to the relevant Redemption Date from the Outstanding Notes not previously called for redemption. The Company may redeem Notes in denominations of U.S.$100,000 only in whole. The Trustee may select for redemption portions (equal to U.S.$100,000 or any integral multiple of U.S.$1,000) of the principal of Notes that have denominations larger than U.S.$100,000.

(b) For all purposes of this Indenture, unless the context otherwise requires, all provisions relating to redemption of Notes shall relate, in the case of any Note redeemed or to be redeemed only in part, to the portion of the principal amount of that Note which has been or is to be redeemed.

Section 5.5 Deposit of Redemption Price . Prior to 11:00 a.m. New York City time on the Business Day prior to the relevant Redemption Date, the Company shall deposit with the Trustee or with a Paying Agent (or, if the Company is acting as Paying Agent, segregate and hold in trust as provided in Section 2.4 ) an amount of money in immediately available funds sufficient to pay the redemption price of, and accrued interest on, all the Notes that the Company is redeeming on that date.

Section 5.6 Notes Payable on Redemption Date . If the Company, or the Trustee on behalf of the Company, gives notice of redemption in accordance with this Article V , the Notes, or the portions of Notes, called for redemption, shall, on the Redemption Date, become due and payable at the redemption price specified in the notice (together with accrued interest, if any, to

the Redemption Date), and from and after the Redemption Date (unless the Company shall default in the payment of the redemption price and accrued interest) the Notes or the portions of Notes shall cease to bear interest. Upon surrender of any Note for redemption in accordance with the notice, the Company shall pay the Notes at the redemption price, together with accrued interest, if any, to the Redemption Date. If the Company shall fail to pay any Note called for redemption upon its surrender for redemption, the principal shall, until paid, bear interest from the Redemption Date at the rate borne by the Notes.

Section 5.7 Unredeemed Portions of Partially Redeemed Note . Upon surrender of a Note that is to be redeemed in part, the Company shall execute, and the Trustee shall authenticate and make available for delivery to the Holder of the Note at the expense of the Company, a new Note or Notes, of any authorized denomination as requested by the Holder, in an aggregate principal amount equal to, and in exchange for, the unredeemed portion of the principal of the Note surrendered; provided that each new Note shall be in a principal amount of U.S.$100,000 or integral multiples of U.S.$1,000 excess thereof.

ARTICLE VI

DEFAULTS AND REMEDIES

Section 6.1 Events of Default .

(a) Each of the following is an “ Event of Default ” with respect to the Notes:

(i) default in the payment when due of the principal of or premium, if any, on (including, in each case, any related Additional Amounts) any Notes, including the failure to make a required payment to purchase Notes tendered pursuant to an optional redemption, mandatory redemption, Change of Control Offer or an Asset Sale Offer;

(ii) default for 30 days or more in the payment when due of interest (including any related Additional Amounts) on any Notes;

(iii) the failure to perform or comply with any of the provisions described under Section 4.1 ;

(iv) the failure by the Company or any Restricted Subsidiary to comply with any other covenant or agreement contained herein or in the Notes for 60 days or more after written notice to the Company from the Trustee or the Holders of at least 25% in aggregate principal amount of the Outstanding Notes;

(v) default by the Company or any Restricted Subsidiary under any Indebtedness which:

(1) is caused by a failure to pay principal of or premium, if any, or interest on such Indebtedness prior to the expiration of any

applicable grace period provided in such Indebtedness on the date of such default; or

(2) results in the acceleration of such Indebtedness prior to its Stated Maturity;

and the principal or accreted amount of Indebtedness covered by (1) or (2) at the relevant time, (i) in the case of any or all Venezuelan Subsidiaries aggregates U.S.$50,000,000 (or the equivalent in other currencies) or (ii) in the case of the Company and all other Restricted Subsidiaries (other than any and all Venezuelan Subsidiaries) aggregates U.S.$25,000,000 (or the equivalent in other currencies) or more;

(vi) failure by the Company or any of its Restricted Subsidiaries to pay one or more final judgments against any of them, (i) in the case of any and all Venezuelan Subsidiaries aggregating U.S.$50,000,000 (or the equivalent in other currencies) or (ii) in the case of the Company and all other Restricted Subsidiaries (other than any and all Venezuelan Subsidiaries) aggregating U.S.$25,000,000 (or the equivalent in other currencies) or more, which are not paid, discharged or stayed for a period of 60 days or more (to the extent not covered by a reputable and creditworthy insurance company);

(vii) either Master Franchise Agreement shall, for any reason, be terminated; provided that no Call Option Redemption Event shall have occurred;

(viii) the occurrence of a Bankruptcy Law Event of Default; or

(ix) except as permitted herein, any Subsidiary Guarantee is held to be unenforceable or invalid in a judicial proceeding or ceases for any reason to be in full force and effect or any Subsidiary Guarantor denies or disaffirms its obligations under its Subsidiary Guarantee; provided that the Subsidiary Guarantee of a Subsidiary Guarantor becoming unenforceable or invalid as a result of a change in law shall not constitute an Event of Default hereunder if the Company reclassifies such Subsidiary as a Non-Guarantor Restricted Subsidiary within 30 days of the announcement of such change in law; and provided further that it shall not be an Event of Default hereunder if a Subsidiary Guarantee of a Venezuelan Subsidiary is held to be unenforceable or invalid in a judicial proceeding or ceases for any reason to be in full force and effect as a result of a change in law in Venezuela after the Issue Date.

(b) Upon becoming aware of any Default or Event of Default, the Company shall deliver to the Trustee written notice of events which would constitute such Default or Event of Default, the status thereof and what action the Company is taking or proposes to take in respect thereof.

Section 6.2 Acceleration .

(a) If an Event of Default (other than an Event of Default specified in Section 6.1(a)(vii) or Section 6.1(a)(viii) with respect to the Company) has occurred and is continuing, the Trustee or the Holders of at least 25% in principal amount of Outstanding Notes may declare

the unpaid principal of and premium, if any, and accrued and unpaid interest on all the Notes to be immediately due and payable by notice in writing to the Company and the Trustee specifying the Event of Default and that it is a “notice of acceleration.” If an Event of Default specified in Section 6.1(a)(vii) or Section 6.1(a)(viii) occurs with respect to the Company, then the unpaid principal of and accrued and unpaid interest on all the Notes shall become immediately due and payable without any declaration or other act on the part of the Trustee or any Holder.

(b) At any time after a declaration of acceleration with respect to the Notes as described in Section 6.2(a) , the Holders of a majority in aggregate principal amount of the then Outstanding Notes may rescind and cancel such declaration and its consequences:

(i) if the rescission would not conflict with any judgment or decree;

(ii) if all existing Events of Default have been cured or waived, except nonpayment of principal or interest that has become due solely because of the acceleration;

(iii) to the extent the payment of such interest is lawful, interest on overdue installments of interest and overdue principal, which has become due otherwise than by such declaration of acceleration, has been paid; and

(iv) if the Company has paid the Trustee its compensation and reimbursed the Trustee for its expenses, disbursements and advances outstanding at that time.

No rescission shall affect any subsequent Default or impair any rights relating thereto.

Section 6.3 Other Remedies .

(a) If an Event of Default occurs and is continuing, the Trustee may pursue any available remedy to collect the payment of principal of and interest on the Notes or to enforce the performance of any provision of the Notes or this Indenture.

(b) The Trustee may maintain a proceeding even if it does not possess any of the Notes or does not produce any of them in the proceeding. A delay or omission by the Trustee or any Holder in exercising any right or remedy accruing upon an Event of Default shall not impair the right or remedy or constitute a waiver of or acquiescence in the Event of Default. No remedy is exclusive of any other remedy. All available remedies are cumulative to the extent permitted by law.

Section 6.4 Waiver of Past Defaults . Subject to Section 6.2 , the Holders of a majority in aggregate principal amount of the then Outstanding Notes may waive any existing Default or Event of Default hereunder, and its consequences, except a Default in the payment of the principal of, premium, if any, or interest on any Notes.

Section 6.5 Control by Majority . Subject to the provisions of this Indenture and applicable law, the Holders of a majority in aggregate principal amount of the then Outstanding

Notes may direct the time, method and place of conducting any proceeding for any remedy available to the Trustee or of exercising any trust or power conferred on the Trustee.

Section 6.6 Limitation on Suits .

(a) No Holder of any Notes shall have any right to institute any proceeding with respect hereto or for any remedy hereunder, unless:

(i) such Holder gives to the Trustee written notice of a continuing Event of Default;

(ii) Holders of at least 25% in aggregate principal amount of the then Outstanding Notes make a written request to pursue the remedy;

(iii) such Holders of the Notes provide to the Trustee satisfactory indemnity;

(iv) the Trustee does not comply within 60 days; and

(v) during such 60 day period the Holders of a majority in aggregate principal amount of the then Outstanding Notes do not give the Trustee a written direction which, in the opinion of the Trustee, is inconsistent with the request;

provided that a Holder of a Note may institute suit for enforcement of payment of the principal of or interest on such Note on or after the respective due dates expressed in such Note. Notwithstanding any provision of this Indenture to the contrary, no one or more of such Holders shall have any right in any manner whatever by virtue of, or by availing of, any provision of this Indenture to affect, disturb, or prejudice the rights of any other of such Holders (it being understood that the Trustee does not have an affirmative duty to ascertain whether or not such actions or forbearances are unduly prejudicial to such Holders).

Section 6.7 Rights of Holders to Receive Payment . Notwithstanding any other provision hereof (including, without limitation, Section 6.6 ), the right of any Holder to receive payment of principal of or interest on the Notes held by such Holder, on or after the respective due dates, Redemption Dates or repurchase date expressed herein or the Notes, or to bring suit for the enforcement of any such payment on or after such respective dates, shall not be impaired or affected without the consent of such Holder.

Section 6.8 Collection Suit by Trustee . If an Event of Default specified in Section 6.1(a)(i) and Section 6.1(a)(ii) occurs and is continuing, the Trustee may recover judgment in its own name and as trustee of an express trust against the Company for the whole amount then due and owing (together with applicable interest on any overdue principal and, to the extent lawful, interest on overdue interest) and the amounts provided for in Section 7.7 . Subject to all provisions hereof and applicable law, the Holders of a majority in aggregate principal amount of the then Outstanding Notes have the right to direct the time, method and place of conducting any proceeding for any remedy available to the Trustee or exercising any trust or power conferred on the Trustee.

Section 6.9 Trustee May File Proofs of Claim, etc.

(a) In case of any judicial proceeding relative to the Company (or any other obligor upon the Notes), its property or its creditors, the Trustee shall be entitled and empowered, by intervention in such proceeding or otherwise, to take any and all actions authorized under applicable law in order to have claims of the Holders and the Trustee allowed in any such proceeding. In particular, the Trustee may (irrespective of whether the principal of the Notes is then due):

(i) file such proofs of claim and other papers or documents as may be necessary or advisable in order to have the claims of the Trustee and the Holders under this Indenture and the Notes allowed in any bankruptcy, insolvency, liquidation or other judicial proceedings relative to the Company, any Subsidiary Guarantor or any Subsidiary of the Company or their respective creditors or properties; and

(ii) collect and receive any moneys or other property payable or deliverable in respect of any such claims and distribute them in accordance with this Indenture.

Any receiver, trustee, liquidator, sequestrator (or other similar official) in any such proceeding is hereby authorized by each Holder to make such payments to the Trustee and, in the event that the Trustee shall consent to the making of such payments directly to the Holders, to pay to the Trustee any amount due to it for the reasonable compensation, expenses, taxes, disbursements and advances of the Trustee, its agent and counsel, and any other amounts due to the Trustee pursuant to Section 7.7 .

(b) Nothing in this Indenture shall be deemed to authorize the Trustee to authorize or consent to or accept or adopt on behalf of any Holder any plan of reorganization, arrangement, adjustment or composition affecting the Notes or the rights of any Holder thereof, or to authorize the Trustee to vote in respect of the claim of any Holder in any such proceeding.

Section 6.10 Priorities . If the Trustee collects any money or property pursuant to this Article VI , it shall pay out the money or property in the following order:

FIRST: to the Trustee for amounts due under Section 7.7 ;

SECOND: to Holders for amounts due and unpaid on the Notes for principal and interest, ratably, without preference or priority of any kind, according to the amounts due and payable on the Notes for principal and interest, respectively; and

THIRD: to the Company or, to the extent the Trustee collects any amount pursuant to any Subsidiary Guarantee from any Subsidiary Guarantor, to such Subsidiary Guarantor.

The Trustee may, upon notice to the Company, fix a record date and payment date for any payment to Holders pursuant to this Section 6.10 .

Section 6.11 Undertaking for Costs . All parties agree, and each Holder by its acceptance of its Notes shall be deemed to have agreed, that in any suit for the enforcement of any right or remedy under this Indenture or in any suit against the Trustee for any action taken or omitted by it as Trustee, a court in its discretion may require the filing by any party litigant in the suit of an undertaking to pay the costs of the suit, and the court in its discretion may assess reasonable costs, including reasonable attorneys’ fees, against any party litigant in the suit, having due regard to the merits and good faith of the claims or defenses made by the party litigant. This Section 6.11 does not apply to a suit by the Trustee, a suit by the Company, a suit by a Holder pursuant to Section 6.7 or a suit by Holders of more than 10% in principal amount of Outstanding Notes.

ARTICLE VII

TRUSTEE

Section 7.1 Duties of Trustee .

(a) If a Default or an Event of Default has occurred and is continuing, the Trustee shall exercise the rights and powers vested in it by this Indenture and use the same degree of care and skill in its exercise thereof as a prudent person would exercise or use under the circumstances in the conduct of such person’s own affairs.

(b) Except during the continuance of a Default or an Event of Default:

(i) the Trustee undertakes to perform such duties and only such duties as are specifically set forth in this Indenture and no implied covenants or obligations shall be read into this Indenture against the Trustee; and

(ii) in the absence of bad faith on its part, the Trustee may conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon certificates or opinions furnished to the Trustee and conforming to the requirements of this Indenture. However, in the case of any such certificates or opinions, which by any provisions hereof are specifically required to be furnished to the Trustee, the Trustee shall examine such certificates and opinions to determine whether or not they conform to the requirements of this Indenture (it being understood that the Trustee need not confirm or investigate the accuracy of mathematical calculations or other facts stated therein).

(c) The Trustee may not be relieved from liability for its own negligent action, its own negligent failure to act or its own willful misconduct, except that:

(i) this Section 7.1(c) does not limit the effect of Section 7.1(b) ;

(ii) the Trustee shall not be liable for any error of judgment made in good faith by a Trust Officer unless it is proved that the Trustee was negligent in ascertaining the pertinent facts; and

(iii) the Trustee shall not be liable with respect to any action it takes or omits to take in good faith in accordance with a direction received by it pursuant to Section 6.2 , Section 6.5 or Section 6.8 or any other provision of this Indenture.

(d) The Trustee shall not be liable for interest on any money received by it except as the Trustee may agree in writing with the Company.

(e) Money held in trust by the Trustee need not be segregated from other funds except to the extent required by law.

(f) No provision hereof shall require the Trustee to expend or risk its own funds or otherwise incur any financial liability in the performance of any of its duties hereunder or in the exercise of any of its rights or powers, if it shall have reasonable grounds to believe that repayment of such funds or adequate indemnity against such risk or liability is not reasonably assured to it.

(g) Every provision of this Indenture relating to the conduct or affecting the liability of or affording protection to the Trustee shall be subject to the provisions of this Article VII .

(h) Unless otherwise specifically provided in this Indenture, any demand, request, direction or notice from the Company shall be sufficient if signed by an Officer of the Company.

(i) The Trustee shall be under no obligation to exercise any of the rights or powers vested in it by this Indenture at the request, order or direction of any of the Holders unless such Holders shall have offered to the Trustee indemnity reasonably satisfactory to it against the costs, expenses (including reasonable attorneys’ fees and expenses) and liabilities that might be incurred by it in compliance with such request or direction.

Section 7.2 Rights of Trustee .

Subject to Section 7.1 :

(a) The Trustee may conclusively rely and shall be fully protected in acting or refraining from acting upon any document, instrument, opinion, direction, order, notice or request reasonably believed by it to be genuine and to have been signed or presented by the proper Person. The Trustee need not investigate any fact or matter stated in such document, instrument, opinion, direction, order, notice or request.

(b) Before the Trustee acts or refrains from acting at the direction of the Company, it may require an Officers’ Certificate, advice of counsel and/or an Opinion of Counsel, and such Officers’ Certificate, advice and/or Opinion of Counsel shall be full and complete authorization and protection in respect of any action taken or omitted to be taken by it hereunder. The Trustee shall not be liable for any action it takes or omits to take in good faith in reliance on an Officers’ Certificate, advice of counsel and/or Opinion of Counsel.

(c) The Trustee may act through its attorneys and agents and shall not be responsible for the misconduct or negligence of any agent appointed with due care.

(d) The Trustee shall not be liable for any action it takes or omits to take in good faith which it believes to be authorized or within its rights or powers; provided , however , that the Trustee’s conduct does not constitute willful misconduct or negligence.

(e) The Trustee may consult with counsel of its selection, and the advice or opinion of counsel with respect to legal matters relating to this Indenture and the Notes shall be full and complete authorization and protection from liability in respect to any action taken, omitted or suffered by it hereunder in good faith and in accordance with the advice or opinion of such counsel.

(f) The Trustee shall not be bound to make any investigation into the facts or matters stated in any resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, bond, debenture, note, other evidence of indebtedness or other paper or document, but the Trustee, in its discretion, may make such further inquiry or investigation into such facts or matters as it may see fit, and, if the Trustee shall determine to make such further inquiry or investigation, it shall be entitled, upon notice to the Company, to examine the books, records and premises of the Company, personally or by agent or attorney at the sole cost of the Company and shall incur no liability or additional liability of any kind by reason of such inquiry or investigation.

(g) The Trustee shall not be deemed to have notice of any Default or Event of Default (other than payment default under Section 6.1(a)(i) or Section 6.1(a)(ii) ) unless a Trust Officer of the Trustee has actual knowledge thereof or unless written notice of any event which is in fact such a Default or Event of Default is received by the Trustee at the Corporate Trust Office of the Trustee, and such notice references the Notes and this Indenture. For purposes of determining the Trustee’s responsibility and liability hereunder, whenever reference is made in this Indenture to a Default or Event of Default, such reference shall be construed to refer only to such Default or Event of Default for which the Trustee is deemed to have notice pursuant to this Section 7.2(g).

(h) The rights, privileges, protections, immunities and benefits given to the Trustee, including, without limitation, its right to be indemnified, are extended to, and shall be enforceable by, the Trustee in each of its capacities hereunder, and to each agent, custodian and other Person employed to act hereunder.

(i) In no event shall the Trustee be responsible or liable for special, indirect, or consequential loss or damage of any kind whatsoever (including, without limitation, loss of profit) irrespective of whether the Trustee has been advised of the likelihood of such loss or damage and regardless of the form of action.

(j) The Trustee may request that the Company deliver an Officers’ Certificate setting forth the names of individuals and/or titles of officers authorized at such time to take specified actions pursuant to this Indenture, which Officers’ Certificate may be signed by any

person authorized to sign an Officers’ Certificate, including any person specified as so authorized in any such certificate previously delivered and not superseded.

(k) The permissive rights of the Trustee enumerated herein shall not be construed as duties.

(l) The Trustee shall not be responsible or liable for any failure or delay in the performance of its obligations under this Indenture arising out of or caused, directly or indirectly, by circumstances beyond its reasonable control, including without limitation, acts of God; earthquakes; fires; floods; wars; civil or military disturbances; sabotage; epidemics; riots; interruptions, loss or malfunctions of utilities, computer (hardware or software) or communications service, accidents; labor disputes; acts of civil or military authority or governmental actions (it being understood that the Trustee shall use its best efforts to resume performance as soon as practicable under the circumstances).

(m) The Trustee or its Affiliates are permitted to receive additional compensation that could be deemed to be in the Trustee’s economic self-interest for (i) serving as investment adviser, administrator, shareholder, servicing agent, custodian or subcustodian with respect to certain of the Cash Equivalents, (ii) using Affiliates to effect transactions in certain Cash Equivalents and (iii) effecting transactions in certain Cash Equivalents. Such compensation is not payable or reimbursable under Section 7.7 of this Indenture.

(n) The Trustee may execute any of the trusts or powers hereunder or perform any duties hereunder either directly or by or through agents or attorneys.

(o) To the extent permitted by applicable law, the Trustee shall not be required to give any bond or surety in respect of the execution of this Indenture or otherwise.

(p) To help fight the funding of terrorism and money laundering activities, the Trustee will obtain, verify, and record information that identifies individuals or entities that establish a relationship or open an account with the Trustee. The Trustee will ask for the name, address, tax identification number and other information that will allow the Trustee to identify the individual or entity who is establishing the relationship or opening the account. The Trustee may also ask for formation documents such as articles of incorporation, an offering memorandum, or other identifying documents to be provided.

(q) Notwithstanding anything to the contrary herein, any and all communications (both text and attachments) by or from the Trustee that the Trustee in its sole discretion deems to contain confidential, proprietary, and/or sensitive information and sent by electronic mail will be encrypted. The recipient of the email communication will be required to complete a one-time registration process. Information and assistance on registering and using the email encryption technology can be found at the Trustee’s secure website www.citigroup.com/citigroup/citizen/privacy/email.htm or by calling (866) 535-2504 (in the U.S.) or (904) 954-6181 at any time.

Section 7.3 Individual Rights of Trustee . The Trustee in its individual or any other capacity may become the owner or pledgee of Notes and may otherwise deal with the Company

or any of its Affiliates with the same rights it would have if it were not Trustee. Any Paying Agent, Registrar or co-Registrar may do the same with like rights. However, the Trustee must comply with Section 7.10 .

Section 7.4 Trustee’s Disclaimer . The Trustee shall not be responsible for and makes no representation as to the validity or adequacy of this Indenture or the Notes, it shall not be accountable for the Company’s use of the proceeds from the Notes, and it shall not be responsible for any statement of the Company in this Indenture or in any document issued in connection with the sale of the Notes or in the Notes other than the Trustee’s certificate of authentication, except that the Trustee represents that it is duly authorized to execute and deliver this Indenture, authenticate the Notes and perform its obligations hereunder.

Section 7.5 Notice of Defaults . If a Default occurs hereunder with respect to the Notes, the Trustee shall promptly give the Holders of the Notes notice of such Default. In addition, if a Default or Event of Default occurs and is continuing and if it is a payment default or a Trust Officer has actual knowledge thereof, or has received written notice thereof pursuant to Section 7.2(g) the Trustee shall mail to each Holder, with a copy to the Company, notice of the Default or Event of Default within 45 days after the occurrence thereof. Except in the case of a Default or Event of Default in the payment of principal of, premium, if any, or interest on any Note, the Trustee may withhold the notice if and so long as a committee of its Trust Officers in good faith determines that withholding the notice is in the interests of the Holders.

Section 7.6 Reports by Trustee to Holders . The Trustee shall notify Holders of any Defaults under this Indenture pursuant to Section 7.5 . The Company agrees to promptly notify the Trustee whenever the Notes become listed on any stock exchange and of any delisting thereof.

Section 7.7 Compensation and Indemnity .

(a) The Company shall pay to the Trustee from time to time reasonable compensation for its acceptance of this Indenture and services hereunder as the Company and the Trustee shall from time to time agree in writing. The Trustee’s compensation shall not be limited by any law on compensation of a trustee of an express trust. The Company shall reimburse the Trustee upon request for all reasonable out-of-pocket expenses incurred or made by it in connection with the performance of its duties under this Indenture, except for any such expense as may arise from the Trustee’s negligence, willful misconduct or bad faith. Such expenses shall include the reasonable fees and expenses of the Trustee’s agents and counsel.

(b) The Company shall indemnify the Trustee and its officers, directors, employees and agents against any and all loss, damage, claim, liability or expense (including reasonable attorneys’ fees and expenses) incurred by it without negligence, willful misconduct or bad faith on its part in connection with the acceptance or administration of this trust and the performance of its duties hereunder, including the costs and expenses of defending themselves (including reasonable attorney’s fees and costs) against any claim or liability related to the exercise or performance of any of their powers or duties hereunder and under any other agreement or instrument related thereto. The Trustee shall notify the Company promptly of any claim for which it may seek indemnity. Failure by the Trustee to so notify the Company shall

not relieve the Company of its obligations hereunder. The Company shall defend the claim and the Trustee may have separate counsel and the Company shall pay the reasonable fees and expenses of such counsel; provided that the Company shall not be required to pay such fees and expenses if it assumes the Trustee’s defense, and, in the reasonable judgment of outside counsel to the Trustee, there is no conflict of interest between the Company and the Trustee in connection with such defense. The Company need not pay for any settlement made without its written consent.

(c) To secure the Company’s payment obligations in this Section 7.7 , the Trustee shall have a lien prior to the Notes on all money or property held or collected by the Trustee other than money or property held in trust to pay principal of and interest on particular Notes. The Trustee’s right to receive payment of any amounts due under this Section 7.7 shall not be subordinate to any other liability or Indebtedness of the Company.

(d) The Company’s payment obligations pursuant to this Section 7.7 shall survive the discharge of this Indenture and the resignation or removal of the Trustee. When the Trustee incurs expenses after the occurrence of a Bankruptcy Law Event of Default, the expenses are intended to constitute expenses of administration under any Bankruptcy Law; provided, however , that this shall not affect the Trustee’s rights as set forth in this Section 7.7 or Section 6.10 .

Section 7.8 Replacement of Trustee .

(a) The Trustee may resign at any time by so notifying the Company. In addition, the Holders of a majority in aggregate principal amount of the then Outstanding Notes may remove the Trustee by so notifying the Trustee and may appoint a successor Trustee. Moreover, if the Trustee is no longer eligible pursuant to Section 7.10 to act as such, or does not have a combined capital and surplus of at least U.S.$50,000,000 as set forth in its most recent published annual report or does not have its corporate trust office in the City of New York, New York, any Holder may petition any court of competent jurisdiction for the removal of the Trustee and the appointment of a successor Trustee. The Company shall remove the Trustee if:

(i) the Trustee fails to comply with Section 7.10 ;

(ii) the Trustee is adjudged bankrupt or insolvent;

(iii) a receiver or other public officer takes charge of the Trustee or its property; or

(iv) the Trustee otherwise becomes incapable of acting.

(b) If the Trustee resigns or is removed by the Company or by the Holders of a majority in principal amount of the then Outstanding Notes and such Holders do not reasonably promptly appoint a successor Trustee, or if a vacancy exists in the office of the Trustee for any reason (the Trustee in such event being referred to herein as the retiring Trustee), the Company shall promptly appoint a successor Trustee.

(c) A successor Trustee shall deliver a written acceptance of its appointment to the retiring Trustee and to the Company. Thereupon the resignation or removal of the retiring Trustee shall become effective, and the successor Trustee shall have all the rights, powers and duties of the Trustee under this Indenture. The successor Trustee shall mail a notice of its succession to Holders and, so long as the Notes are listed on the Luxembourg Stock Exchange for trading on the Euro MTF Market and the rules of such Exchange so require, the successor Trustee shall also publish notice as described in Section 11.1 . The retiring Trustee shall promptly transfer all property held by it as Trustee to the successor Trustee, subject to the lien provided for in Section 7.7 .

(d) If a successor Trustee does not take office within 30 days after the retiring Trustee resigns or is removed, the retiring Trustee or the Holders of 10% in principal amount of the Outstanding Notes may petition, at the Company’s expense, any court of competent jurisdiction for the appointment of a successor Trustee.

(e) If the Trustee fails to comply with Section 7.10 , any Holder may petition any court of competent jurisdiction for the removal of the Trustee and the appointment of a successor Trustee.

(f) Notwithstanding the replacement of the Trustee pursuant to this Section 7.8 , the Company’s obligations under Section 7.7 shall continue for the benefit of the retiring Trustee.

Section 7.9 Successor Trustee by Merger .

(a) If the Trustee consolidates with, merges or converts into, or transfers all or substantially all its corporate trust business or assets to, another corporation or national banking association, the resulting, surviving or transferee corporation without any further act shall be the successor Trustee; provided that such Persons shall be otherwise qualified and eligible under this Article VII .

(b) In case at the time such successor or successors to the Trustee shall succeed to the trusts created by this Indenture, any of the Notes shall have been authenticated but not delivered, any such successor to the Trustee may adopt the certificate of authentication of any predecessor trustee, and deliver such Notes so authenticated; and in case at that time any of the Notes shall not have been authenticated, any successor to the Trustee may authenticate such Notes either in the name of any predecessor hereunder or in the name of the successor to the Trustee; and in all such cases such certificates shall have the full force which it is anywhere in the Notes or in this Indenture provided that the certificate of the Trustee shall have.

Section 7.10 Eligibility .

The Trustee shall have a combined capital and surplus of at least U.S.$50,000,000 as set forth in its most recent published annual report of condition.

Section 7.11 Intentionally Omitted .

Section 7.12 Paying Agent, Registrar and Luxembourg Paying Agent . The rights, protections and immunities granted to the Trustee under this Article VII shall apply mutatis mutandis to the Paying Agent, Registrar, any Authenticating Agent and the Luxembourg Paying Agent.

ARTICLE VIII

DEFEASANCE; DISCHARGE OF INDENTURE

Section 8.1 Legal Defeasance and Covenant Defeasance .

(a) The Company may, at its option, at any time, upon compliance with the conditions set forth in Section 8.2 , elect to have either Section 8.1(b) or Section 8.1(c) be applied to its obligations with respect to all Outstanding Notes and all obligations of the Subsidiary Guarantors under the Subsidiary Guarantees.

(b) Upon the Company’s exercise under Section 8.1(a) of the option applicable to this Section 8.1(b) , the Company shall, subject to the satisfaction of the conditions set forth in Section 8.2 , be deemed to have paid and discharged the entire indebtedness represented by the Outstanding Notes and Subsidiary Guarantees on the 91 ^st day after the deposit specified in Section 8.2(a) (hereinafter, “ Legal Defeasance ”). For this purpose, Legal Defeasance means that the Company shall be deemed to have paid and discharged the entire Indebtedness represented by the Outstanding Notes, which shall thereafter be deemed to be Outstanding only for the purposes of the sections of this Indenture referred to in clause (i) or (ii) of this Section 8.1(b) , and the Company shall have been deemed to have satisfied all their other obligations under such Notes, and hereunder (and the Trustee, on demand of and at the expense of the Company, shall execute proper instruments acknowledging the same), except for the following provisions, which shall survive until otherwise terminated or discharged hereunder:

(i) the rights of Holders to receive solely from the trust described in Section 8.2(a) below, as more fully set forth in such section, payments in respect of the principal of, premium, if any, and interest on the Notes when such payments are due,

(ii) the Company’s obligations with respect to such Notes concerning issuing temporary Notes, registration of Notes, mutilated, destroyed, lost or stolen Notes and the maintenance of an office or agency for payments,

(iii) the rights, powers, trusts, duties and immunities of the Trustee as described in Article VII and hereunder and the Company’s obligations in connection therewith, and

(iv) this Article VIII .

Subject to compliance with this Article VIII , the Company may exercise its option under this Section 8.1(b) notwithstanding the prior exercise of its option under Section 8.1(c) .

(c) Upon the Company’s exercise under Section 8.1(a) of the option applicable to this Section 8.1(c) , the Company and its Restricted Subsidiaries shall be, subject to the satisfaction of the applicable conditions set forth in Section 8.2 , released and discharged from their obligations under the covenants (including, without limitation, the obligations contained in Section 3.4 , Section 3.7 , Section 3.8 , Section 3.9 , Section 3.10 , Section 3.11 , Section 3.12 , Section 3.13 , Section 3.14 , Section 3.15 , Section 3.16 , Section 3.17 , and Section 3.21 with respect to the Outstanding Notes and the operation of Sections 6.1(a)(iv) , (v) , (vi) , (vii) , (viii) but only as it applies to any Restricted Subsidiary, and (ix) shall terminate on and after the date the conditions set forth below are satisfied (hereinafter, “ Covenant Defeasance ”), and the Notes shall thereafter be deemed not Outstanding for the purposes of any direction, waiver, consent or declaration or act of Holders (and the consequences of any thereof) in connection with such covenants, but shall continue to be Outstanding for all other purposes hereunder (it being understood that such Notes shall not be deemed Outstanding for accounting purposes). For this purpose, such Covenant Defeasance means that, with respect to the Outstanding Notes, the Company may omit to comply with and shall have no liability in respect of any term, condition or limitation set forth in any such covenant, whether directly or indirectly, by reason of any reference elsewhere herein to any such covenant or by reason of any reference in any such covenant to any other provision herein or in any other document and such omission to comply shall not constitute a Default or an Event or Default with respect to the Notes or the Subsidiary Guarantees under Section 6.1(a)(iii) , but, except as specified above, the remainder hereof and such Notes shall be unaffected thereby.

Section 8.2 Conditions to Defeasance . The Company may exercise its Legal Defeasance option or its Covenant Defeasance option only if:

(a) the Company has irrevocably deposited with the Trustee, in trust, for the benefit of the Holders cash in U.S. Dollars, U.S. Government Obligations, or a combination thereof, in such amounts as shall be sufficient without reinvestment, in the opinion of a nationally recognized firm of independent public accountants, to pay the principal of, and premium, if any, and interest on the Notes (including Additional Amounts) on the stated date for payment thereof or on the applicable redemption date, as the case may be;

(b) in the case of Legal Defeasance, the Company has delivered to the Trustee an Opinion of Counsel from a nationally recognized law firm in the U.S. reasonably acceptable to the Trustee and independent of the Company to the effect that:

(i) the Company has received from, or there has been published by, the Internal Revenue Service a ruling; or

(ii) since the Issue Date, there has been a change in the applicable U.S. federal income tax law;

in either case to the effect that, and based thereon such Opinion of Counsel shall state that, the Holders shall not recognize income, gain or loss for U.S. federal income tax purposes as a result of such Legal Defeasance and shall be subject to U.S. federal income tax on the same amounts, in the same manner and at the same times as would have been the case if such Legal Defeasance had not occurred;

(c) in the case of Covenant Defeasance, the Company has delivered to the Trustee an Opinion of Counsel from a nationally recognized law firm in the U.S. reasonably acceptable to the Trustee and independent of the Company to the effect that the Holders shall not recognize income, gain or loss for U.S. federal income tax purposes as a result of such Covenant Defeasance and shall be subject to U.S. federal income tax on the same amounts, in the same manner and at the same times as would have been the case if such Covenant Defeasance had not occurred;

(d) no Default or Event of Default has occurred and is continuing on the date of the deposit pursuant to Section 8.2(a) (except any Default or Event of Default resulting from any failure to comply with Section 3.8 as a result of the borrowing of the funds required to effect such deposit);

(e) the Company has delivered to the Trustee an Officers’ Certificate stating that such Legal Defeasance or Covenant Defeasance shall not result in a breach or violation of, or constitute a default under this Indenture or any other material agreement or instrument to which the Company or any of its Subsidiaries is a party or by which the Company or any of its Subsidiaries is bound;

(f) the Company has delivered to the Trustee an Officers’ Certificate stating that the deposit was not made by the Company with the intent of preferring the Holders over any other creditors of the Company or any Subsidiary of the Company or with the intent of defeating, hindering, delaying or defrauding any other creditors of the Company or others;

(g) the Company has delivered to the Trustee an Officers’ Certificate and an Opinion of Counsel from U.S. counsel reasonably acceptable to the Trustee and independent of the Company, each stating that all conditions precedent provided for or relating to the Legal Defeasance or the Covenant Defeasance have been complied with; and

(h) the Company has delivered to the Trustee an Opinion of Counsel from U.S. counsel reasonably acceptable to the Trustee and independent of the Company to the effect that the trust funds shall not be subject to the effect of any applicable bankruptcy, insolvency, reorganization or similar laws affecting creditors’ rights generally.

Section 8.3 Application of Trust Money . The Trustee shall hold in trust U.S. Dollars or U.S. Government Obligations deposited with it pursuant to this Article VIII . It shall apply the deposited money and the U.S. Dollars from U.S. Government Obligations, together with earnings thereon, through the Paying Agent and in accordance with this Indenture to the payment of principal of and interest on the Notes. Anything in this Article VIII to the contrary notwithstanding, the Trustee shall deliver or pay to the Company from time to time upon the Company’s request any U.S. Dollars or U.S. Government Obligations held by it as provided in this Section 8.3 which, in the opinion of a nationally recognized firm of independent public accountants expressed in a written certification thereof delivered to the Trustee, are in excess of the amount thereof that would then be required to be deposited to effect an equivalent Legal Defeasance or Covenant Defeasance.

Section 8.4 Repayment to Company .

(a) The Trustee and the Paying Agent shall promptly turn over to the Company upon request any excess money or securities held by them upon payment of all the obligations under this Indenture.

(b) Subject to any applicable abandoned property law, the Trustee and the Paying Agent shall pay to the Company upon request any money held by them for the payment of principal of or interest on the Notes that remains unclaimed for two years, and, thereafter, Holders entitled to the money must look to the Company for payment as general creditors.

Section 8.5 Indemnity for U.S. Government Obligations . The Company shall pay and shall indemnify the Trustee against any tax, fee or other charge imposed on or assessed against U.S. Government Obligations or the principal and interest received on such U.S. Government Obligations deposited with the Trustee pursuant to this Article VIII .

Section 8.6 Reinstatement . If the Trustee or Paying Agent is unable to apply any U.S. Dollars or U.S. Government Obligations in accordance with this Article VIII by reason of any legal proceeding or by reason of any order or judgment of any court or governmental authority enjoining, restraining or otherwise prohibiting such application, the obligations of the Company under this Indenture and the Notes shall be revived and reinstated as though no deposit had occurred pursuant to this Article VIII until such time as the Trustee or Paying Agent is permitted to apply all such U.S. Dollars or U.S. Government Obligations in accordance with this Article VIII ; provided, however , that, if the Company has made any payment of principal of or interest on any Notes because of the reinstatement of its obligations, the Company shall be subrogated to the rights of the Holders of such Notes to receive such payment from the U.S. Dollars or U.S. Government Obligations held by the Trustee or Paying Agent.

Section 8.7 Satisfaction and Discharge . This Indenture shall be discharged and shall cease to be of further effect (except as to surviving rights or registration of transfer or exchange of the Notes, as expressly provided for herein) as to all Outstanding Notes, and the Trustee, on written demand of and at the expense of the Company, shall execute proper instruments acknowledging satisfaction and discharge of this Indenture, when:

(a) either:

(i) all the Notes theretofor, authenticated and delivered (except lost, stolen or destroyed Notes which have been replaced or paid and Notes for whose payment money has theretofore been deposited in trust or segregated and held in trust by the Company and thereafter repaid to the Company or discharged from such trust) have been delivered to the Trustee for cancellation; or

(ii) all Notes not theretofor delivered to the Trustee for cancellation have become due and payable and the Company has irrevocably deposited or caused to be deposited with the Trustee funds or U.S. Government Obligations sufficient without reinvestment to pay and discharge the entire Indebtedness on the Notes not theretofor delivered to the Trustee for cancellation, for principal of, premium, if any, and accrued and unpaid interest on the Notes to the date of deposit (in the case of Notes that have

become due and payable) or to the maturity or Redemption Date, as the case may be, together with irrevocable instructions from the Company directing the Trustee to apply such funds to the payment;

(b) the Company has paid all other sums payable under this Indenture and the Notes by the Company; and

(c) the Company has delivered to the Trustee an Officers’ Certificate stating that all conditions precedent under this Indenture relating to the satisfaction and discharge of this Indenture have been complied with.

ARTICLE IX

AMENDMENTS

Section 9.1 Without Consent of Holders .

(a) The Company and the Trustee may amend, modify or supplement this Indenture and the Notes without notice to or consent of any Holder:

(i) to cure any ambiguity, omission, defect or inconsistency contained in this Indenture or the Notes;

(ii) to provide for the assumption by a successor Person of the obligations of the Company or a Subsidiary Guarantor under this Indenture;

(iii) to add Subsidiary Guarantees or additional Guarantees with respect to the Notes or release the Subsidiary Guarantee in accordance with the terms of this Indenture;

(iv) to secure the Notes;

(v) to add to the covenants of the Company for the benefit of the Holders or to surrender any right or power herein conferred upon the Company;

(vi) to provide for the issuance of Additional Notes in accordance with the terms hereof;

(vii) to conform the terms of this Indenture, the Subsidiary Guarantees or the Notes with the description thereof set forth in the “Description of the Notes” section of the Offering Memorandum dated September 24, 2009 relating to the Original Offering of Notes;

(viii) to evidence the replacement of the Trustee as provided for under this Indenture;

(ix) if necessary, in connection with any release of any security permitted under this Indenture;

(x) to provide for uncertificated Notes in addition to or in place of certificated Notes; or

(xi) to make any other changes which do not adversely affect the rights of any Holder in any material respect.

(b) In formulating its opinion on the foregoing, the Trustee shall be entitled to rely on such evidence as it deems appropriate, including, without limitation, solely on an Opinion of Counsel and an Officers’ Certificate.

(c) After an amendment under this Section 9.1 becomes effective, the Company shall mail to Holders a notice briefly describing such amendment. The failure to give such notice to all Holders, or any defect therein, shall not impair or affect the validity of an amendment under this Section 9.1 .

Section 9.2 With Consent of Holders .

(a) Modifications to, amendments of, and supplements to, this Indenture or the Notes not set forth under Section 9.1 may be made with the consent of the Holders of a majority in principal amount of the then Outstanding Notes issued under this Indenture, except that, without the consent of each Holder affected thereby, no amendment may:

(i) reduce the percentage of the principal amount of the Notes whose Holders must consent to an amendment, supplement or waiver;

(ii) reduce the rate of or change or have the effect of changing the time for payment of interest on any Notes;

(iii) reduce the principal of or change or have the effect of changing the fixed maturity of any Notes, or change the date on which any Notes may be subject to redemption, or reduce the redemption price therefor;

(iv) make any Notes payable in money other than that stated in the Notes;

(v) make any change in the provisions of this Indenture entitling each Holder to receive payment of principal of, premium, if any, and interest on such Notes on or after the due date thereof or to bring suit to enforce such payment, or permitting Holders of a majority in principal amount of Notes to waive Defaults or Events of Default;

(vi) amend, change or modify in any material respect any obligation of the Company to make and consummate a Change of Control Offer in respect of a Change of Control that has occurred or make and consummate an Asset Sale Offer with respect to any Asset Sale that that has been consummated;

(vii) eliminate or modify in any manner the obligations of a Restricted Subsidiary with respect to its Subsidiary Guarantee, which adversely affects Holders in any material respect, except as contemplated in this Indenture;

(viii) make any change to Section 3.18 that adversely affects the rights of any Holder or amend the terms of the Notes in a way that would result in a loss of exemption from any applicable taxes; or

(ix) make any change to the provisions of this Indenture or the Notes that adversely affects the ranking of the Notes.

Section 9.3 Revocation and Effect of Consents and Waivers .

(a) A consent to an amendment, supplement or waiver by a Holder of a Note shall bind the Holder and every subsequent Holder of that Note or portion of the Note that evidences the same debt as the consenting Holder’s Note, even if notation of the consent or waiver is not made on the Note. However, any such Holder or subsequent Holder may revoke the consent or waiver as to such Holder’s Note or portion of the Note if the Trustee receives the notice of revocation before the date the amendment, supplement or waiver becomes effective. After an amendment, supplement or waiver becomes effective, it shall bind every Holder, except as otherwise provided in this Article IX . An amendment, supplement or waiver under Section 9.2 shall become effective upon receipt by the Trustee of the requisite number of written consents under Section 9.2 .

(b) The Company may, but shall not be obligated to, fix a record date for the purpose of determining the Holders entitled to give their consent or take any other action described above or required or permitted to be taken pursuant to this Indenture. If a record date is fixed, then notwithstanding the immediately preceding paragraph, those Persons who were Holders at such record date (or their duly designated proxies), and only those Persons, shall be entitled to give such consent or to revoke any consent previously given or to take any such action, whether or not such Persons continue to be Holders after such record date. No such consent shall be valid or effective for more than 90 days after such record date.

Section 9.4 Notation on or Exchange of Notes . If an amendment or supplement changes the terms of a Note, the Trustee may require the Holder of the Note to deliver it to the Trustee. The Trustee may place an appropriate notation on the Note regarding the changed terms and return it to the Holder. Alternatively, if the Company or the Trustee so determines, the Company in exchange for the Note shall execute and upon Company Order the Trustee shall authenticate a new Note that reflects the changed terms. Failure to make the appropriate notation or to issue a new Note shall not affect the validity of such amendment or supplement.

Section 9.5 Trustee to Sign Amendments and Supplements . The Trustee shall sign any amendment or supplement authorized pursuant to this Article IX if the amendment or supplement does not adversely affect the rights, duties, liabilities or immunities of the Trustee. If it does, the Trustee may but need not sign it. In signing such amendment or supplement the Trustee shall be entitled to receive indemnity reasonably satisfactory to it and to receive, and (subject to Section 7.1 and Section 7.2 ) shall be fully protected in conclusively relying upon,

such evidence as it deems appropriate, including, without limitation, the documents required by Section 11.2 and solely on an Opinion of Counsel and Officers’ Certificate, each stating that such amendment or supplement is authorized or permitted hereby.

ARTICLE X

SUBSIDIARY GUARANTEES

Section 10.1 Subsidiary Guarantees

(a) Each Subsidiary Guarantor hereby fully and unconditionally guarantees on a general unsecured senior basis, as primary obligor and not merely as surety, jointly and severally with each other Subsidiary Guarantor, to each Holder and to the Trustee the full and punctual payment when due, whether at maturity, by acceleration, by redemption or otherwise, of the Obligations (such guaranteed Obligations, the “ Guaranteed Obligations ”). Each Subsidiary Guarantor further agrees (to the extent permitted by law) that the Obligations may be extended or renewed, in whole or in part, without notice or further assent from it, and that it will remain bound under this Article X notwithstanding any extension or renewal of any Obligation. Each Subsidiary Guarantor hereby agrees to pay, in addition to the amounts stated above, any and all expenses (including reasonable counsel fees and expenses) incurred by the Trustee or the Holders in enforcing any rights under any Subsidiary Guarantee.

(b) Each Subsidiary Guarantor waives presentment to, demand of payment from and protest to the Company of any of the Obligations and also waives notice of protest for nonpayment. Each Subsidiary Guarantor waives notice of any default under the Notes or the Obligations. The obligations of each Subsidiary Guarantor hereunder shall not be affected by (i) the failure of any Holder to assert any claim or demand or to enforce any right or remedy against the Company or any other Person under this Indenture, the Notes or any other agreement or otherwise; (ii) any extension or renewal of any thereof; (iii) any rescission, waiver, amendment or modification of any of the terms or provisions of this Indenture, the Notes or any other agreement; (iv) the release of any security held by any Holder or the Trustee for the Obligations or any of them; (v) the failure of any Holder to exercise any right or remedy against any other Subsidiary Guarantor; or (vi) any change in the ownership of the Company.

(c) Each Subsidiary Guarantor further agrees that its Subsidiary Guarantee herein constitutes a guarantee of payment when due (and not a guarantee of collection) and waives any right to require that any resort be had by any Holder to any security held for payment of the Obligations.

(d) Each of the Subsidiary Guarantors further expressly waives irrevocably and unconditionally:

Person (including any Subsidiary Guarantor or any other guarantor) before claiming from it under this Indenture;

(ii) (1) the collection benefit ( beneficio de excusión ) granted by article 2,357 of the Chilean Civil Code; (2) the division benefit ( beneficio de división ) granted in article 2,367 of the Chilean Civil Code; (3) the right to retract ( derecho de retractación ) granted in article 1,649 of the Chilean Civil Code; and, (4) any right to object to future term extensions that might be agreed to, which hereby accepts in accordance with article 2,339 of the Chilean Civil Code;

(iii) Any rights to the benefits of orden , excusión , división , quita and espera arising from Articles 2814, 2815, 2817, 2818, 2819, 2820, 2821, 2822, 2823, 2826, 2837, 2839, 2840, 2845, 2846, 2847 and any other related or applicable Articles that are not explicitly set forth herein because of the Subsidiary Guarantor’s knowledge thereof, of the Código Civil Federal of Mexico and the Código Civil of each State of the Mexican Republic and for the Federal District of Mexico;

(iv) (1) the collection benefit ( beneficio de excusión ) granted by articles 1812, 1815, 1816, 1818 of the Venezuelan Civil Code; (2) the division benefit ( beneficio de división ) granted in articles 1819 and 1820 of the Venezuelan Civil Code;

(v) Any right to which it may be entitled to have the assets of the Company or any other Person (including any Subsidiary Guarantor or any other guarantor) first be used, applied or depleted as payment of the Company’s or the Subsidiary Guarantors’ obligations hereunder, prior to any amount being claimed from or paid by any of the Subsidiary Guarantors hereunder; and

(vi) Any right to which it may be entitled to have claims hereunder divided between the Subsidiary Guarantors.

(e) The obligations of each Subsidiary Guarantor hereunder shall not be subject to any reduction, limitation, impairment or termination for any reason (other than payment of the Obligations in full), including any claim of waiver, release, surrender, alteration or compromise, and shall not be subject to any defense of setoff, counterclaim, recoupment or termination whatsoever or by reason of the invalidity, illegality or unenforceability of the Obligations or otherwise. Without limiting the generality of the foregoing, the obligations of each Subsidiary Guarantor herein shall not be discharged or impaired or otherwise affected by the failure of any Holder to assert any claim or demand or to enforce any remedy under this Indenture, the Notes or any other agreement, by any waiver or modification of any thereof, by any default, failure or delay, willful or otherwise, in the performance of the Obligations, or by any other act or thing or omission or delay to do any other act or thing which may or might in any manner or to any extent vary the risk of such Subsidiary Guarantor or would otherwise operate as a discharge of such Subsidiary Guarantor as a matter of law or equity.

(f) Each Subsidiary Guarantor further agrees that its Subsidiary Guarantee herein shall continue to be effective or be reinstated, as the case may be, if at any time payment, or any part thereof, of principal of or interest on any of the Obligations is rescinded or must

otherwise be restored by any Holder upon the bankruptcy, or reorganization of the Company or otherwise.

(g) In furtherance of the foregoing and not in limitation of any other right which any Holder has at law or in equity against each Subsidiary Guarantor by virtue hereof, upon the failure of the Company to pay any of the Obligations when and as the same shall become due, whether at maturity, by acceleration, by redemption or otherwise, each Subsidiary Guarantor hereby promises to and will, upon receipt of written demand by the Trustee, forthwith pay, or cause to be paid, in cash, to the Holders an amount equal to the sum of:

(i) the unpaid amount of such Obligations then due and owing; and

(ii) accrued and unpaid interest on such Obligations then due and owing (but only to the extent not prohibited by law).

(h) Each Subsidiary Guarantor further agrees that, as between such Subsidiary Guarantor, on the one hand, and the Holders, on the other hand:

(i) the maturity of the Obligations guaranteed hereby may be accelerated as provided in this Indenture for the purposes of its Subsidiary Guarantee herein, notwithstanding any stay, injunction or other prohibition preventing such acceleration in respect of the Obligations guaranteed hereby; and

(ii) in the event of any such declaration of acceleration of such Obligations, such Obligations (whether or not due and payable) shall forthwith become due and payable by such Subsidiary Guarantor for the purposes of its Subsidiary Guarantee.

Section 10.2 Limitation on Liability; Termination, Release and Discharge .

(a) The obligations of each Subsidiary Guarantor hereunder shall be limited to the maximum amount as shall, after giving effect to all other contingent and fixed liabilities of such Subsidiary Guarantor and after giving effect to any collections from or payments made by or on behalf of any other Subsidiary Guarantor in respect of the obligations of such other Subsidiary Guarantor under its Subsidiary Guarantee or pursuant to its contribution obligations under this Indenture, result in the Obligations not constituting a fraudulent conveyance, fraudulent transfer or similar illegal transfer under applicable law.

(b) Each Subsidiary Guarantor shall be released and relieved of its obligations under its Subsidiary Guarantee in the event that:

(i) there is a Legal Defeasance or a Covenant Defeasance of the Notes pursuant to Article VIII ;

(ii) there is a sale or other disposition (including through a consolidation or merger) of Capital Stock of such Subsidiary Guarantor following which such Subsidiary Guarantor is no longer a direct or indirect Subsidiary of the Company;

(iii) there is a sale of all or substantially all of the assets of such Subsidiary Guarantor (including by way of merger, stock purchase, asset sale or otherwise) to a Person that is not (either before or after giving effect to such transaction) the Company or a Subsidiary Guarantor;

(iv) such Subsidiary Guarantor is designated as an Unrestricted Subsidiary in accordance with Section 3.11 ; or

(v) in the case of any Subsidiary Guarantor other than a Significant Subsidiary, such Subsidiary shall become prevented from guaranteeing the Notes by local law or the acquisition of minority interests therein by any minority shareholders;

provided , in each case, such transactions are carried out pursuant to and in accordance with all applicable covenants and provisions hereof.

Section 10.3 Right of Contribution . Each Subsidiary Guarantor that makes a payment or distribution under a Subsidiary Guarantee will be entitled to a contribution from each other Subsidiary Guarantor in a pro rata amount, based on the net assets of each Subsidiary Guarantor determined in accordance with GAAP. The provisions of this Section 10.3 shall in no respect limit the obligations and liabilities of each Subsidiary Guarantor to the Trustee and the Holders and each Subsidiary Guarantor shall remain liable to the Trustee and the Holders for the full amount guaranteed by such Subsidiary Guarantor hereunder.

Section 10.4 No Subrogation . Each Subsidiary Guarantor agrees that it shall not be entitled to any right of subrogation in respect of any Guaranteed Obligations until payment in full in cash or Cash Equivalents of all Obligations. If any amount shall be paid to any Subsidiary Guarantor on account of such subrogation rights at any time when all of the Obligations shall not have been paid in full in cash or Cash Equivalents, such amount shall be held by such Subsidiary Guarantor in trust for the Trustee and the Holders, segregated from other funds of such Subsidiary Guarantor, and shall, forthwith upon receipt by such Subsidiary Guarantor, be turned over to the Trustee in the exact form received by such Subsidiary Guarantor (duly endorsed by such Subsidiary Guarantor to the Trustee, if required), to be applied against the Obligations.

Section 10.5 Additional Subsidiary Guarantees .

(a) The Company covenants and agrees that, at any time after the date hereof any of the Company’s Subsidiaries that is not at such time a Subsidiary Guarantor becomes a Restricted Subsidiary (including upon a Revocation of the Designation of a Subsidiary as an Unrestricted Subsidiary) and is not prevented from becoming a Subsidiary Guarantor because of local laws or the existence of minority shareholders, or that at any time after the date hereof any of the Company’s Restricted Subsidiaries that had been prevented from becoming a Subsidiary Guarantor because of local laws or the existence of minority shareholders (a “ Non-Guarantor Restricted Subsidiary ”) is no longer prevented from becoming a Subsidiary Guarantor because of local laws or the existence of minority shareholders, the Company shall, after becoming aware of such event, (i) promptly notify the Trustee in writing of such event and (ii) cause such Restricted Subsidiary (an “ Additional Subsidiary Guarantor ”) concurrently to become a Subsidiary Guarantor on a general unsecured senior basis (promptly following the determination in accordance with the terms of this Indenture that such Subsidiary is a Restricted Subsidiary) by

executing a supplemental indenture substantially in the form of Exhibit E hereto and providing the Trustee with an Officers’ Certificate and to comply in all respects with the provisions of this Indenture and the Notes, as applicable; provided , however , that each Additional Subsidiary Guarantor will be automatically and unconditionally released and discharged from its obligations under such additional note guarantee (“ Additional Note Guarantee ”) only in accordance with Section 10.2 ; and provided further that no Officers’ Certificate shall be required solely pursuant to this Section 10.5(a) on the Issue Date.

(b) The Company shall notify, in accordance with Section 11.1 , the Holders of any execution of a supplemental indenture pursuant to and in accordance with Section 10.5(a) ; provided that no notice shall be required solely pursuant to this Section 10.5(b) as a result of the execution of any supplemental indenture pursuant to and in accordance with Section 10.5(a) on the Issue Date.

(c) To the extent otherwise permitted under this Indenture, the Company may form, create or acquire new Restricted Subsidiaries that may also be Non-Guarantor Restricted Subsidiaries, to the extent they are prevented from local law or the existence of minority shareholders from guaranteeing the Notes; provided that the Company provides the Trustee with an Officer’s Certificate certifying that such subsidiary is prevented by local law or the existence of minority shareholders from guaranteeing the Notes.

ARTICLE XI

MISCELLANEOUS

Section 11.1 Notices .

(a) Any notice or communication shall be in writing and delivered in Person, by telecopy or mailed by first-class mail, postage prepaid, addressed as follows:

if to the Company or any Subsidiary Guarantor:

Arcos Dorados N.V.

Naritaweg 165, 1043 BW Amsterdam, The Netherlands

Attention: Chief Financial Officer

Fax No.: +31 (0) 20-572-2650

if to the Trustee:

Citibank, N.A.

388 Greenwich Street, 14th Floor, New York, New York 10013

Attention: Global Transaction Services, Arcos Dorados

Fax No.: +1 212-816-5527

if to the Luxembourg Paying Agent:

Dexia Banque Internationale à Luxembourg

69 route d’Esch, L-1470 Luxembourg

Attention: Transaction Execution Group

Fax No.: + 352-4590-4227

The Company or the Trustee by notice to the other may designate additional or different addresses for subsequent notices or communications.

(b) From and after the date the Notes are listed on the Luxembourg Stock Exchange for trading on the Euro MTF Market, and so long as required by the rules of such Exchange, all notices to Holders of Notes shall be published in English:

(i) in a leading newspaper having a general circulation in Luxembourg; or

(ii) if such Luxembourg publication is not practicable, in one other leading English language newspaper being published on each day in morning editions, whether or not it shall be published in Saturday, Sunday or holiday editions.

In lieu of the foregoing, the Company may publish notices to Holders of Notes via the website of the Luxembourg Stock Exchange at www.bourse.lu; provided that such method of publication satisfies the rules of such Exchange.

(c) Notices shall be deemed to have been given on the date of mailing or of publication as aforesaid in Section 11.1(b) or, if published on different dates, on the date of the first such publication. In addition, notices shall be delivered to Holders of Notes at their registered addresses.

(d) Any notice or communication mailed to a registered Holder shall be mailed to the Holder at the Holder’s address as it appears on the registration books of the Registrar and shall be sufficiently given if so mailed within the time prescribed.

(e) Failure to mail a notice or communication to a Holder or any defect in it shall not affect its sufficiency with respect to other Holders. If a notice or communication is mailed in the manner provided above, it is duly given, whether or not the addressee receives it.

Section 11.2 Certificate and Opinion as to Conditions Precedent . Upon any request or application by the Company to the Trustee to take or refrain from taking any action under this Indenture, the Company shall furnish to the Trustee:

(a) an Officers’ Certificate in form and substance reasonably satisfactory to the Trustee stating that, in the opinion of the signers, all conditions precedent, if any, provided for in this Indenture relating to the proposed action have been complied with; and

(b) an Opinion of Counsel in form and substance reasonably satisfactory to the Trustee stating that, in the opinion of such counsel, all such conditions precedent have been complied with.

Section 11.3 Statements Required in Officers’ Certificate or Opinion of Counsel . Each certificate or opinion, including each Officers’ Certificate or Opinion of Counsel with respect to compliance with a covenant or condition provided for in this Indenture shall include:

(a) a statement that the individual making such certificate or opinion has read such covenant or condition;

(b) a brief statement as to the nature and scope of the examination or investigation upon which the statements or opinions contained in such certificate or opinion are based;

(c) a statement that, in the opinion of such individual, he has made such examination or investigation as is necessary to enable him to express an informed opinion as to whether or not such covenant or condition has been complied with; and

(d) a statement as to whether or not, in the opinion of such individual, such covenant or condition has been complied with.

In giving an Opinion of Counsel, counsel may rely as to factual matters on an Officers’ Certificate or on certificates of public officials.

Section 11.4 Rules by Trustee, Paying Agent and Registrar . The Trustee may make reasonable rules for action by, or a meeting of, Holders. The Registrar and the Paying Agent may make reasonable rules for their functions.

Section 11.5 Legal Holidays . A “ Legal Holiday ” is a Saturday, a Sunday or other day on which commercial banking institutions are authorized or required to be closed in New York City, United States or in the Netherlands. If a payment date is a Legal Holiday, payment shall be made on the next succeeding day that is not a Legal Holiday, and no interest shall accrue for the intervening period. If a regular record date is a Legal Holiday, the record date shall not be affected.

Section 11.6 Governing Law, etc.

(a) THIS INDENTURE AND THE NOTES SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.

(b) EACH OF PARTIES HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING AS BETWEEN THE COMPANY AND THE TRUSTEE (BUT NOT THE HOLDERS OF THE NOTES) ARISING OUT OF OR RELATING TO THIS INDENTURE OR THE NOTES OR THE TRANSACTIONS CONTEMPLATED HEREBY.

100

(i) agrees that any suit, action or proceeding against it arising out of or relating to this Indenture or the Notes, as the case may be, may be instituted in any U.S. federal or New York state court sitting in The City of New York, New York,

(ii) irrevocably submits to the jurisdiction of such courts in any suit, action or proceeding,

(iii) waives, to the fullest extent permitted by applicable law, any objection which it may now or hereafter have to the laying of venue of any such suit, action or proceeding, any claim that any suit, action or proceeding in such a court has been brought in an inconvenient forum and any right to the jurisdiction of any other courts to which it may be entitled on account of place of residence or domicile, and

(iv) agrees that final judgment in any such suit, action or proceeding brought in such a court shall be conclusive and binding may be enforced in the courts of the jurisdiction of which it is subject by a suit upon judgment.

(d) The Company and each of the Subsidiary Guarantors has appointed National Registered Agents, Inc. with offices currently at 875 Avenue of the Americas, Suite 501, New York, New York 10001, as its authorized agent (the “ Authorized Agent ”) upon whom all writs, process and summonses may be served in any suit, action or proceeding arising out of or based upon this Indenture or the Notes which may be instituted in any New York state or U.S. federal court in The City of New York, New York. The Company and each of the Subsidiary Guarantors represents and warrants that the Authorized Agent has accepted such appointment and has agreed to act as said agent for service of process, and the Company and each Subsidiary Guarantor agree to take any and all action, including the filing of any and all documents, that may be necessary to continue each such appointment in full force and effect as aforesaid so long as the Notes remain outstanding. The Company and each Subsidiary Guarantor agree that the appointment of the Authorized Agent shall be irrevocable so long as any of the Notes remain outstanding or until the irrevocable appointment by the Company and each Subsidiary Guarantor of a successor agent in The City of New York, New York as their authorized agent for such purpose and the acceptance of such appointment by such successor. Service of process upon the Authorized Agent shall be deemed, in every respect, effective service of process upon the Company and any Subsidiary Guarantor.

(e) To the extent that the Company or any Subsidiary Guarantor has or hereafter may acquire any immunity (sovereign or otherwise) from any legal action, suit or proceeding, from jurisdiction of any court or from set-off or any legal process (whether service or notice, attachment in aid or otherwise) with respect to itself or any of its property, the Company and each of the Subsidiary Guarantors hereby irrevocably waives and agrees not to plead or claim such immunity in respect of its obligations under this Indenture or the Notes.

(f) Nothing in this Section 11.6 shall affect the right of the Trustee or any Holder of the Notes to serve process in any other manner permitted by law.

101

Section 11.7 No Recourse Against Others . No past, present or future incorporator, director, officer, employee, shareholder or controlling person, as such, of the Company or any Subsidiary Guarantor shall have any liability for any obligations of the Company under the Notes, this Indenture or any Subsidiary Guarantee or for any claims based on, in respect of or by reason of such obligations or their creation. By accepting a Note, each Holder shall waive and release all such liability. The waiver and release shall be part of the consideration for issuance of the Notes.

Section 11.8 Successors . All agreements of the Company or any Subsidiary Guarantor in this Indenture and the Notes shall bind its respective successors. All agreements of the Trustee in this Indenture shall bind its successors.

Section 11.9 Duplicate and Counterpart Originals . The parties may sign any number of copies of this Indenture. One signed copy is enough to prove this Indenture. This Indenture may be executed in any number of counterparts, each of which so executed shall be an original, but all of them together represent the same agreement. This Indenture may also be executed in Argentina via the exchange of an offer letter and an acceptance letter, and delivery of such letters shall be effective as delivery of an executed counterpart of this Indenture.

Section 11.10 Severability . In case any provision in this Indenture or in the Notes shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby.

Section 11.11 Currency Indemnity .

(a) U.S. Dollars is the sole currency of account and payment for all sums payable by the Company and any Subsidiary Guarantor, under or in connection with the Notes, this Indenture or any Subsidiary Guarantee. Any amount received or recovered in currency other than U.S. Dollars (whether as a result of, or of the enforcement of, a judgment or order of a court of any jurisdiction, in the winding-up or dissolution of the Company, any Subsidiary or otherwise) by the Trustee, a Paying Agent or any Holder of the Notes in respect of any sum expressed to be due to it from the Company and any Subsidiary Guarantor shall only constitute a discharge of it under the Notes, this Indenture and such Subsidiary Guarantee only to the extent of the U.S. Dollars amount which the recipient is able to purchase with the amount so received or recovered in that other currency on the date of that receipt or recovery (or, if it is not practicable to make that purchase on that date, on the first date on which it is practicable to do so). If that U.S. Dollars amount is less than the U.S. Dollars amount expressed to be due to the recipient under the Notes, this Indenture, or the Subsidiary Guarantee, the Company and any Subsidiary Guarantor shall indemnify the recipient against any loss sustained by it in making any such purchase. In any event, the Company or relevant Subsidiary Guarantor shall indemnify the Holder against the cost of making any purchase of U.S. Dollars. For the purposes of this Section 11.11 , it shall be sufficient for the Trustee, Paying Agent and/or Holder of a Note to certify in a satisfactory manner that it would have suffered a loss had an actual purchase of U.S. Dollars been made with the amount received in that other currency on the date of receipt or recovery (or, if a purchase of U.S. Dollars on such date had not been practicable, on the first date on which it would have been practicable) and that the change of the purchase date was needed.

102

(b) The indemnities of the Company and any Subsidiary Guarantor contained in this Section 11.11 , to the extent permitted by law: (i) constitute a separate and independent obligation from the other obligations of the Company and the Restricted Subsidiaries under this Indenture and the Notes; (ii) shall give rise to a separate and independent cause of action against the Company; (iii) shall apply irrespective of any indulgence granted by any Holder of the Notes from time to time; (iv) shall continue in full force and effect notwithstanding any other judgment, order, claim or proof for a liquidated amount in respect of any sum due under the Notes; and (v) shall survive the termination of this Indenture.

Section 11.12 Table of Contents; Headings . The table of contents and headings of the Articles and Sections of this Indenture have been inserted for convenience of reference only, are not intended to be considered a part hereof and shall not modify or restrict any of the terms or provisions hereof.

103

IN WITNESS WHEREOF, the parties have caused this Indenture to be duly executed as of the date first written above.


ARCOS DORADOS B.V.

By:	/s/ Diego Maria Pace
	Name:	Diego Maria Pace
	Title:	Authorized Signatory


STATE OF NEW YORK		)
		)
COUNTY OF NEW YORK		)

On this 1st day of October, 2009, before me, a notary public within and for said county, personally appeared Diego Maria Pace to me personally known who being duly sworn, did say that he is the Authorized Signatory of Arcos Dorados B.V., one of the persons described in and which executed the foregoing instrument, and acknowledges said instrument to be the free act and deed of said persons.


By:		/s/ Lourdes Chicon
Title:		Notary Public, State of New York
No. 01CH6069119
Qualified in New York County
Commission Expires November 12, 2010

[Notary Seal]


ARCOS DORADOS ARUBA N.V.

By:	/s/ Diego Maria Pace
	Name:	Diego Maria Pace
	Title:	Authorized Signatory


STATE OF NEW YORK		)
		)
COUNTY OF NEW YORK		)

On this 1st day of October, 2009, before me, a notary public within and for said county, personally appeared Diego Maria Pace to me personally known who being duly sworn, did say that he is the Authorized Signatory of Arcos Dorados Aruba N.V., one of the persons described in and which executed the foregoing instrument, and acknowledges said instrument to be the free act and deed of said persons.


By:		/s/ Lourdes Chicon
Title:		Notary Public, State of New York
No. 01CH6069119
Qualified in New York County
Commission Expires November 12, 2010

[Notary Seal]


ARCOS DOURADOS PARTICIPAÇÕES LTDA.

By:	/s/ Diego Maria Pace
	Name:	Diego Maria Pace
	Title:	Authorized Signatory


STATE OF NEW YORK		)
		)
COUNTY OF NEW YORK		)

On this 1st day of October, 2009, before me, a notary public within and for said county, personally appeared Diego Maria Pace to me personally known who being duly sworn, did say that he is the Authorized Signatory of Arcos Dourados Participações Ltda., one of the persons described in and which executed the foregoing instrument, and acknowledges said instrument to be the free act and deed of said persons.


By:		/s/ Lourdes Chicon
Title:		Notary Public, State of New York
No. 01CH6069119
Qualified in New York County
Commission Expires November 12, 2010

[Notary Seal]


ARCOS DOURADOS COMERCIO DE ALIMENTOS, LTDA.

By:	/s/ Diego Maria Pace
	Name:	Diego Maria Pace
	Title:	Authorized Signatory


STATE OF NEW YORK		)
		)
COUNTY OF NEW YORK		)

On this 1st day of October, 2009, before me, a notary public within and for said county, personally appeared Diego Maria Pace to me personally known who being duly sworn, did say that he is the Authorized Signatory of Arcos Dourados Comercio de Alimentos, Ltda., one of the persons described in and which executed the foregoing instrument, and acknowledges said instrument to be the free act and deed of said persons.


By:		/s/ Lourdes Chicon
Title:		Notary Public, State of New York
No. 01CH6069119
Qualified in New York County
Commission Expires November 12, 2010

[Notary Seal]


ARRAS COMERCIO DE ALIMENTOS, LTDA.

By:	/s/ Diego Maria Pace
	Name:	Diego Maria Pace
	Title:	Authorized Signatory


STATE OF NEW YORK		)
		)
COUNTY OF NEW YORK		)

On this 1st day of October, 2009, before me, a notary public within and for said county, personally appeared Diego Maria Pace to me personally known who being duly sworn, did say that he is the Authorized Signatory of Arras Comercio de Alimentos, Ltda., one of the persons described in and which executed the foregoing instrument, and acknowledges said instrument to be the free act and deed of said persons.


By:		/s/ Lourdes Chicon
Title:		Notary Public, State of New York
No. 01CH6069119
Qualified in New York County
Commission Expires November 12, 2010

[Notary Seal]


ARCOS DOURADOS RESTAURANTES, LTDA.

By:	/s/ Diego Maria Pace
	Name:	Diego Maria Pace
	Title:	Authorized Signatory


STATE OF NEW YORK		)
		)
COUNTY OF NEW YORK		)

On this 1st day of October, 2009, before me, a notary public within and for said county, personally appeared Diego Maria Pace to me personally known who being duly sworn, did say that he is the Authorized Signatory of Arcos Dourados Restaurantes, Ltda., one of the persons described in and which executed the foregoing instrument, and acknowledges said instrument to be the free act and deed of said persons.


By:		/s/ Lourdes Chicon
Title:		Notary Public, State of New York
No. 01CH6069119
Qualified in New York County
Commission Expires November 12, 2010

[Notary Seal]


ARCOS DORADOS RESTAURANTES DE CHILE, LTDA.

By:	/s/ Diego Maria Pace
	Name:	Diego Maria Pace
	Title:	Authorized Signatory


STATE OF NEW YORK		)
		)
COUNTY OF NEW YORK		)

On this 1st day of October, 2009, before me, a notary public within and for said county, personally appeared Diego Maria Pace to me personally known who being duly sworn, did say that he is the Authorized Signatory of Arcos Dorados Restaurantes de Chile, Ltda., one of the persons described in and which executed the foregoing instrument, and acknowledges said instrument to be the free act and deed of said persons.


By:		/s/ Lourdes Chicon
Title:		Notary Public, State of New York
No. 01CH6069119
Qualified in New York County
Commission Expires November 12, 2010

[Notary Seal]


AXIS LOGISTICA DE CHILE LTDA.

By:	/s/ Diego Maria Pace
	Name:	Diego Maria Pace
	Title:	Authorized Signatory


STATE OF NEW YORK		)
		)
COUNTY OF NEW YORK		)

On this 1st day of October, 2009, before me, a notary public within and for said county, personally appeared Diego Maria Pace to me personally known who being duly sworn, did say that he is the Authorized Signatory of Axis Logistica de Chile Ltda., one of the persons described in and which executed the foregoing instrument, and acknowledges said instrument to be the free act and deed of said persons.


By:		/s/ Lourdes Chicon
Title:		Notary Public, State of New York
No. 01CH6069119
Qualified in New York County
Commission Expires November 12, 2010

[Notary Seal]


INVERSIONES AXIS LTDA.

By:	/s/ Diego Maria Pace
	Name:	Diego Maria Pace
	Title:	Authorized Signatory


STATE OF NEW YORK		)
		)
COUNTY OF NEW YORK		)

On this 1st day of October, 2009, before me, a notary public within and for said county, personally appeared Diego Maria Pace to me personally known who being duly sworn, did say that he is the Authorized Signatory of Inversiones Axis Ltda., one of the persons described in and which executed the foregoing instrument, and acknowledges said instrument to be the free act and deed of said persons.


By:		/s/ Lourdes Chicon
Title:		Notary Public, State of New York
No. 01CH6069119
Qualified in New York County
Commission Expires November 12, 2010

[Notary Seal]


FRANCHISE SYSTEM DE COLOMBIA, LTDA.

By:	/s/ Diego Maria Pace
	Name:	Diego Maria Pace
	Title:	Authorized Signatory


STATE OF NEW YORK		)
		)
COUNTY OF NEW YORK		)

On this 1st day of October, 2009, before me, a notary public within and for said county, personally appeared Diego Maria Pace to me personally known who being duly sworn, did say that he is the Authorized Signatory of Franchise System de Colombia, Ltda., one of the persons described in and which executed the foregoing instrument, and acknowledges said instrument to be the free act and deed of said persons.


By:		/s/ Lourdes Chicon
Title:		Notary Public, State of New York
No. 01CH6069119
Qualified in New York County
Commission Expires November 12, 2010

[Notary Seal]


ARCOS DORADOS COLOMBIA, S.A.

By:	/s/ Diego Maria Pace
	Name:	Diego Maria Pace
	Title:	Authorized Signatory


STATE OF NEW YORK		)
		)
COUNTY OF NEW YORK		)

On this 1st day of October, 2009, before me, a notary public within and for said county, personally appeared Diego Maria Pace to me personally known who being duly sworn, did say that he is the Authorized Signatory of Arcos Dorados Colombia, S.A., one of the persons described in and which executed the foregoing instrument, and acknowledges said instrument to be the free act and deed of said persons.


By:		/s/ Lourdes Chicon
Title:		Notary Public, State of New York
No. 01CH6069119
Qualified in New York County
Commission Expires November 12, 2010

[Notary Seal]


ARCOS UNIDOS LTDA.

By:	/s/ Diego Maria Pace
	Name:	Diego Maria Pace
	Title:	Authorized Signatory


STATE OF NEW YORK		)
		)
COUNTY OF NEW YORK		)

On this 1st day of October, 2009, before me, a notary public within and for said county, personally appeared Diego Maria Pace to me personally known who being duly sworn, did say that he is the Authorized Signatory of Arcos Unidos Ltda., one of the persons described in and which executed the foregoing instrument, and acknowledges said instrument to be the free act and deed of said persons.


By:		/s/ Lourdes Chicon
Title:		Notary Public, State of New York
No. 01CH6069119
Qualified in New York County
Commission Expires November 12, 2010

[Notary Seal]


ARCOS UNIDOS, LTDA. Y COMPAÑÍA S.C.A.

By:	/s/ Diego Maria Pace
	Name:	Diego Maria Pace
	Title:	Authorized Signatory


STATE OF NEW YORK		)
		)
COUNTY OF NEW YORK		)

On this 1st day of October, 2009, before me, a notary public within and for said county, personally appeared Diego Maria Pace to me personally known who being duly sworn, did say that he is the Authorized Signatory of Arcos Unidos, Ltda. y Compañía S.C.A., one of the persons described in and which executed the foregoing instrument, and acknowledges said instrument to be the free act and deed of said persons.


By:		/s/ Lourdes Chicon
Title:		Notary Public, State of New York
No. 01CH6069119
Qualified in New York County
Commission Expires November 12, 2010

[Notary Seal]


HAMBURGUE S.A.S.

By:	/s/ Diego Maria Pace
	Name:	Diego Maria Pace
	Title:	Authorized Signatory


STATE OF NEW YORK		)
		)
COUNTY OF NEW YORK		)

On this 1st day of October, 2009, before me, a notary public within and for said county, personally appeared Diego Maria Pace to me personally known who being duly sworn, did say that he is the Authorized Signatory of Hamburgue S.A.S., one of the persons described in and which executed the foregoing instrument, and acknowledges said instrument to be the free act and deed of said persons.


By:		/s/ Lourdes Chicon
Title:		Notary Public, State of New York
No. 01CH6069119
Qualified in New York County
Commission Expires November 12, 2010

[Notary Seal]


ARCOS DORADOS COSTA RICA ADCR, S.A.

By:	/s/ Diego Maria Pace
	Name:	Diego Maria Pace
	Title:	Authorized Signatory


STATE OF NEW YORK		)
		)
COUNTY OF NEW YORK		)

On this 1st day of October, 2009, before me, a notary public within and for said county, personally appeared Diego Maria Pace to me personally known who being duly sworn, did say that he is the Authorized Signatory of Arcos Dorados Costa Rica ADCR, S.A., one of the persons described in and which executed the foregoing instrument, and acknowledges said instrument to be the free act and deed of said persons.


By:		/s/ Lourdes Chicon
Title:		Notary Public, State of New York
No. 01CH6069119
Qualified in New York County
Commission Expires November 12, 2010

[Notary Seal]


GOLDEN ARCH DEVELOPMENT CORPORATION

By:	/s/ Diego Maria Pace
	Name:	Diego Maria Pace
	Title:	Authorized Signatory


STATE OF NEW YORK		)
		)
COUNTY OF NEW YORK		)

On this 1st day of October, 2009, before me, a notary public within and for said county, personally appeared Diego Maria Pace to me personally known who being duly sworn, did say that he is the Authorized Signatory of Golden Arch Development Corporation, one of the persons described in and which executed the foregoing instrument, and acknowledges said instrument to be the free act and deed of said persons.


By:		/s/ Lourdes Chicon
Title:		Notary Public, State of New York
No. 01CH6069119
Qualified in New York County
Commission Expires November 12, 2010

[Notary Seal]


LATAM, LLC

By:	/s/ Diego Maria Pace
	Name:	Diego Maria Pace
	Title:	Authorized Signatory


STATE OF NEW YORK		)
		)
COUNTY OF NEW YORK		)

On this 1st day of October, 2009, before me, a notary public within and for said county, personally appeared Diego Maria Pace to me personally known who being duly sworn, did say that he is the Authorized Signatory of LatAm, LLC, one of the persons described in and which executed the foregoing instrument, and acknowledges said instrument to be the free act and deed of said persons.


By:		/s/ Lourdes Chicon
Title:		Notary Public, State of New York
No. 01CH6069119
Qualified in New York County
Commission Expires November 12, 2010

[Notary Seal]


ARCOS DORADOS CARIBBEAN DEVELOPMENT CORPORATION

By:	/s/ Diego Maria Pace
	Name:	Diego Maria Pace
	Title:	Authorized Signatory


STATE OF NEW YORK		)
		)
COUNTY OF NEW YORK		)

On this 1st day of October, 2009, before me, a notary public within and for said county, personally appeared Diego Maria Pace to me personally known who being duly sworn, did say that he is the Authorized Signatory of Arcos Dorados Caribbean Development Corporation, one of the persons described in and which executed the foregoing instrument, and acknowledges said instrument to be the free act and deed of said persons.


By:		/s/ Lourdes Chicon
Title:		Notary Public, State of New York
No. 01CH6069119
Qualified in New York County
Commission Expires November 12, 2010

[Notary Seal]


ADMINISTRATIVE DEVELOPMENT COMPANY

By:	/s/ Diego Maria Pace
	Name:	Diego Maria Pace
	Title:	Authorized Signatory


STATE OF NEW YORK		)
		)
COUNTY OF NEW YORK		)

On this 1st day of October, 2009, before me, a notary public within and for said county, personally appeared Diego Maria Pace to me personally known who being duly sworn, did say that he is the Authorized Signatory of Administrative Development Company, one of the persons described in and which executed the foregoing instrument, and acknowledges said instrument to be the free act and deed of said persons.


By:		/s/ Lourdes Chicon
Title:		Notary Public, State of New York
No. 01CH6069119
Qualified in New York County
Commission Expires November 12, 2010

[Notary Seal]


LOGISTICS AND MANUFACTURING LOMA CO.

By:	/s/ Diego Maria Pace
	Name:	Diego Maria Pace
	Title:	Authorized Signatory


STATE OF NEW YORK		)
		)
COUNTY OF NEW YORK		)

On this 1st day of October, 2009, before me, a notary public within and for said county, personally appeared Diego Maria Pace to me personally known who being duly sworn, did say that he is the Authorized Signatory of Logistics and Manufacturing LOMA Co., one of the persons described in and which executed the foregoing instrument, and acknowledges said instrument to be the free act and deed of said persons.


By:		/s/ Lourdes Chicon
Title:		Notary Public, State of New York
No. 01CH6069119
Qualified in New York County
Commission Expires November 12, 2010

[Notary Seal]


MANAGEMENT OPERATIONS COMPANY

By:	/s/ Diego Maria Pace
	Name:	Diego Maria Pace
	Title:	Authorized Signatory


STATE OF NEW YORK		)
		)
COUNTY OF NEW YORK		)

On this 1st day of October, 2009, before me, a notary public within and for said county, personally appeared Diego Maria Pace to me personally known who being duly sworn, did say that he is the Authorized Signatory of Management Operations Company, one of the persons described in and which executed the foregoing instrument, and acknowledges said instrument to be the free act and deed of said persons.


By:		/s/ Lourdes Chicon
Title:		Notary Public, State of New York
No. 01CH6069119
Qualified in New York County
Commission Expires November 12, 2010

[Notary Seal]


RESTAURANT REALTY OF MEXICO, INC.

By:	/s/ Diego Maria Pace
	Name:	Diego Maria Pace
	Title:	Authorized Signatory


STATE OF NEW YORK		)
		)
COUNTY OF NEW YORK		)

On this 1st day of October, 2009, before me, a notary public within and for said county, personally appeared Diego Maria Pace to me personally known who being duly sworn, did say that he is the Authorized Signatory of Restaurant Realty of Mexico, Inc., one of the persons described in and which executed the foregoing instrument, and acknowledges said instrument to be the free act and deed of said persons.


By:		/s/ Lourdes Chicon
Title:		Notary Public, State of New York
No. 01CH6069119
Qualified in New York County
Commission Expires November 12, 2010

[Notary Seal]


ARCGOLD DEL ECUADOR S.A.

By:	/s/ Diego Maria Pace
	Name:	Diego Maria Pace
	Title:	Authorized Signatory


STATE OF NEW YORK		)
		)
COUNTY OF NEW YORK		)

On this 1st day of October, 2009, before me, a notary public within and for said county, personally appeared Diego Maria Pace to me personally known who being duly sworn, did say that he is the Authorized Signatory of Arcgold del Ecuador S.A., one of the persons described in and which executed the foregoing instrument, and acknowledges said instrument to be the free act and deed of said persons.


By:		/s/ Lourdes Chicon
Title:		Notary Public, State of New York
No. 01CH6069119
Qualified in New York County
Commission Expires November 12, 2010

[Notary Seal]


ARCOS DORADOS CURAÇAO N.V.

By:	/s/ Diego Maria Pace
	Name:	Diego Maria Pace
	Title:	Authorized Signatory


STATE OF NEW YORK		)
		)
COUNTY OF NEW YORK		)

On this 1st day of October, 2009, before me, a notary public within and for said county, personally appeared Diego Maria Pace to me personally known who being duly sworn, did say that he is the Authorized Signatory of Arcos Dorados Curaçao N.V., one of the persons described in and which executed the foregoing instrument, and acknowledges said instrument to be the free act and deed of said persons.


By:		/s/ Lourdes Chicon
Title:		Notary Public, State of New York
No. 01CH6069119
Qualified in New York County
Commission Expires November 12, 2010

[Notary Seal]


ARCOS DORADOS PANAMÁ, S.A.

By:	/s/ Diego Maria Pace
	Name:	Diego Maria Pace
	Title:	Authorized Signatory


STATE OF NEW YORK		)
		)
COUNTY OF NEW YORK		)

On this 1st day of October, 2009, before me, a notary public within and for said county, personally appeared Diego Maria Pace to me personally known who being duly sworn, did say that he is the Authorized Signatory of Arcos Dorados Panamá, S.A., one of the persons described in and which executed the foregoing instrument, and acknowledges said instrument to be the free act and deed of said persons.


By:		/s/ Lourdes Chicon
Title:		Notary Public, State of New York
No. 01CH6069119
Qualified in New York County
Commission Expires November 12, 2010

[Notary Seal]


SISTEMAS CENTRAL AMÉRICA, S.A.

By:	/s/ Diego Maria Pace
	Name:	Diego Maria Pace
	Title:	Authorized Signatory


STATE OF NEW YORK		)
		)
COUNTY OF NEW YORK		)

On this 1st day of October, 2009, before me, a notary public within and for said county, personally appeared Diego Maria Pace to me personally known who being duly sworn, did say that he is the Authorized Signatory of Sistemas Central América, S.A., one of the persons described in and which executed the foregoing instrument, and acknowledges said instrument to be the free act and deed of said persons.


By:		/s/ Lourdes Chicon
Title:		Notary Public, State of New York
No. 01CH6069119
Qualified in New York County
Commission Expires November 12, 2010

[Notary Seal]


ARCOS BRAPA, S.A.

By:	/s/ Diego Maria Pace
	Name:	Diego Maria Pace
	Title:	Authorized Signatory


STATE OF NEW YORK		)
		)
COUNTY OF NEW YORK		)

On this 1st day of October, 2009, before me, a notary public within and for said county, personally appeared Diego Maria Pace to me personally known who being duly sworn, did say that he is the Authorized Signatory of Arcos Brapa, S.A., one of the persons described in and which executed the foregoing instrument, and acknowledges said instrument to be the free act and deed of said persons.


By:		/s/ Lourdes Chicon
Title:		Notary Public, State of New York
No. 01CH6069119
Qualified in New York County
Commission Expires November 12, 2010

[Notary Seal]


ARCOS DORADOS PUERTO RICO, INC.

By:	/s/ Diego Maria Pace
	Name:	Diego Maria Pace
	Title:	Authorized Signatory


STATE OF NEW YORK		)
		)
COUNTY OF NEW YORK		)

On this 1st day of October, 2009, before me, a notary public within and for said county, personally appeared Diego Maria Pace to me personally known who being duly sworn, did say that he is the Authorized Signatory of Arcos Dorados Puerto Rico, Inc., one of the persons described in and which executed the foregoing instrument, and acknowledges said instrument to be the free act and deed of said persons.


By:		/s/ Lourdes Chicon
Title:		Notary Public, State of New York
No. 01CH6069119
Qualified in New York County
Commission Expires November 12, 2010

[Notary Seal]


ARCOS DEL SUR S.R.L.

By:	/s/ Diego Maria Pace
	Name:	Diego Maria Pace
	Title:	Authorized Signatory


STATE OF NEW YORK		)
		)
COUNTY OF NEW YORK		)

On this 1st day of October, 2009, before me, a notary public within and for said county, personally appeared Diego Maria Pace to me personally known who being duly sworn, did say that he is the Authorized Signatory of Arcos del Sur S.R.L., one of the persons described in and which executed the foregoing instrument, and acknowledges said instrument to be the free act and deed of said persons.


By:		/s/ Lourdes Chicon
Title:		Notary Public, State of New York
No. 01CH6069119
Qualified in New York County
Commission Expires November 12, 2010

[Notary Seal]


ADUY S.A.

By:	/s/ Diego Maria Pace
	Name:	Diego Maria Pace
	Title:	Authorized Signatory


STATE OF NEW YORK		)
		)
COUNTY OF NEW YORK		)

On this 1st day of October, 2009, before me, a notary public within and for said county, personally appeared Diego Maria Pace to me personally known who being duly sworn, did say that he is the Authorized Signatory of ADUY S.A., one of the persons described in and which executed the foregoing instrument, and acknowledges said instrument to be the free act and deed of said persons.


By:		/s/ Lourdes Chicon
Title:		Notary Public, State of New York
No. 01CH6069119
Qualified in New York County
Commission Expires November 12, 2010

[Notary Seal]


GAUCHITO DE ORO S.A.

By:	/s/ Diego Maria Pace
	Name:	Diego Maria Pace
	Title:	Authorized Signatory


STATE OF NEW YORK		)
		)
COUNTY OF NEW YORK		)

On this 1st day of October, 2009, before me, a notary public within and for said county, personally appeared Diego Maria Pace to me personally known who being duly sworn, did say that he is the Authorized Signatory of Gauchito de Oro S.A., one of the persons described in and which executed the foregoing instrument, and acknowledges said instrument to be the free act and deed of said persons.


By:		/s/ Lourdes Chicon
Title:		Notary Public, State of New York
No. 01CH6069119
Qualified in New York County
Commission Expires November 12, 2010

[Notary Seal]


ARCOS DORADOS USVI, INC.

By:	/s/ Diego Maria Pace
	Name:	Diego Maria Pace
	Title:	Authorized Signatory


STATE OF NEW YORK		)
		)
COUNTY OF NEW YORK		)

On this 1st day of October, 2009, before me, a notary public within and for said county, personally appeared Diego Maria Pace to me personally known who being duly sworn, did say that he is the Authorized Signatory of Arcos Dorados USVI, Inc., one of the persons described in and which executed the foregoing instrument, and acknowledges said instrument to be the free act and deed of said persons.


By:		/s/ Lourdes Chicon
Title:		Notary Public, State of New York
No. 01CH6069119
Qualified in New York County
Commission Expires November 12, 2010

[Notary Seal]


ALIMENTOS ARCOS DORADOS DE VENEZUELA, C.A.

By:	/s/ Diego Maria Pace
	Name:	Diego Maria Pace
	Title:	Authorized Signatory


STATE OF NEW YORK		)
		)
COUNTY OF NEW YORK		)

On this 1st day of October, 2009, before me, a notary public within and for said county, personally appeared Diego Maria Pace to me personally known who being duly sworn, did say that he is the Authorized Signatory of Alimentos Arcos Dorados de Venezuela, C.A., one of the persons described in and which executed the foregoing instrument, and acknowledges said instrument to be the free act and deed of said persons.


By:		/s/ Lourdes Chicon
Title:		Notary Public, State of New York
No. 01CH6069119
Qualified in New York County
Commission Expires November 12, 2010

[Notary Seal]


COMPAÑIA OPERATIVA DE ALIMENTOS COR, C.A.

By:	/s/ Diego Maria Pace
	Name:	Diego Maria Pace
	Title:	Authorized Signatory


STATE OF NEW YORK		)
		)
COUNTY OF NEW YORK		)

On this 1st day of October, 2009, before me, a notary public within and for said county, personally appeared Diego Maria Pace to me personally known who being duly sworn, did say that he is the Authorized Signatory of Compañia Operativa de Alimentos COR, C.A., one of the persons described in and which executed the foregoing instrument, and acknowledges said instrument to be the free act and deed of said persons.


By:		/s/ Lourdes Chicon
Title:		Notary Public, State of New York
No. 01CH6069119
Qualified in New York County
Commission Expires November 12, 2010

[Notary Seal]


GERENCIA OPERATIVA ARC, C.A.

By:	/s/ Diego Maria Pace
	Name:	Diego Maria Pace
	Title:	Authorized Signatory


STATE OF NEW YORK		)
		)
COUNTY OF NEW YORK		)

On this 1st day of October, 2009, before me, a notary public within and for said county, personally appeared Diego Maria Pace to me personally known who being duly sworn, did say that he is the Authorized Signatory of Gerencia Operativa ARC, C.A., one of the persons described in and which executed the foregoing instrument, and acknowledges said instrument to be the free act and deed of said persons.


By:		/s/ Lourdes Chicon
Title:		Notary Public, State of New York
No. 01CH6069119
Qualified in New York County
Commission Expires November 12, 2010

[Notary Seal]


ALIMENTOS ARCOS DORADOS MARGARITA, C.A.

By:	/s/ Diego Maria Pace
	Name:	Diego Maria Pace
	Title:	Authorized Signatory


STATE OF NEW YORK		)
		)
COUNTY OF NEW YORK		)

On this 1st day of October, 2009, before me, a notary public within and for said county, personally appeared Diego Maria Pace to me personally known who being duly sworn, did say that he is the Authorized Signatory of Alimentos Arcos Dorados Margarita, C.A., one of the persons described in and which executed the foregoing instrument, and acknowledges said instrument to be the free act and deed of said persons.


By:		/s/ Lourdes Chicon
Title:		Notary Public, State of New York
No. 01CH6069119
Qualified in New York County
Commission Expires November 12, 2010

[Notary Seal]


ALIMENTOS ARCOS DORADOS PUNTO FIJO, C.A.

By:	/s/ Diego Maria Pace
	Name:	Diego Maria Pace
	Title:	Authorized Signatory


STATE OF NEW YORK		)
		)
COUNTY OF NEW YORK		)

On this 1st day of October, 2009, before me, a notary public within and for said county, personally appeared Diego Maria Pace to me personally known who being duly sworn, did say that he is the Authorized Signatory of Alimentos Arcos Dorados Punto Fijo, C.A., one of the persons described in and which executed the foregoing instrument, and acknowledges said instrument to be the free act and deed of said persons.


By:		/s/ Lourdes Chicon
Title:		Notary Public, State of New York
No. 01CH6069119
Qualified in New York County
Commission Expires November 12, 2010

[Notary Seal]


LOGISTICA DE VENEZUELA LOMA, C.A.

By:	/s/ Diego Maria Pace
	Name:	Diego Maria Pace
	Title:	Authorized Signatory


STATE OF NEW YORK		)
		)
COUNTY OF NEW YORK		)

On this 1st day of October, 2009, before me, a notary public within and for said county, personally appeared Diego Maria Pace to me personally known who being duly sworn, did say that he is the Authorized Signatory of Logistica de Venezuela LOMA, C.A., one of the persons described in and which executed the foregoing instrument, and acknowledges said instrument to be the free act and deed of said persons.


By:		/s/ Lourdes Chicon
Title:		Notary Public, State of New York
No. 01CH6069119
Qualified in New York County
Commission Expires November 12, 2010

[Notary Seal]


COMPLEJO AGROPECUARIO CARNICO (CARNICOS), C.A.

By:	/s/ Diego Maria Pace
	Name:	Diego Maria Pace
	Title:	Authorized Signatory


STATE OF NEW YORK		)
		)
COUNTY OF NEW YORK		)

On this 1st day of October, 2009, before me, a notary public within and for said county, personally appeared Diego Maria Pace to me personally known who being duly sworn, did say that he is the Authorized Signatory of Complejo Agropecuario Carnico (Carnicos), C.A., one of the persons described in and which executed the foregoing instrument, and acknowledges said instrument to be the free act and deed of said persons.


By:		/s/ Lourdes Chicon
Title:		Notary Public, State of New York
No. 01CH6069119
Qualified in New York County
Commission Expires November 12, 2010

[Notary Seal]


ARCOS SERCAL INMOBILIARIA, S. DE R.L. DE C.V.

By:	/s/ Germán Lemmonier
	Name:	Germán Lemmonier
	Title:	Authorized Signatory
	Firma(s) certificada(s) en el sello de Cert. Firma Nº F005469391 Bs.As, 30-09-2009



				/s/ Patricio Segundo Sala
		[Seal]		Escribano Patricio Segundo Sala Matricula 4897

On this 1st day of October, 2009, before me, a notary public within and for said county, personally appeared Germán Lemmonier to me personally known who being duly sworn, did say that he is the Authorized Signatory of Arcos SerCal Inmobiliaria, S. de R.L. de C.V., one of the persons described in and which executed the foregoing instrument, and acknowledges said instrument to be the free act and deed of said persons.


By:
Title:		Notary Public
No.
Qualified in
Commission Expires



				/s/ Patricio Segundo Sala
		[Seal]		Escribano Patricio Segundo Sala Matricula 4897


[Seal]		ACTA DE CERTIFICACIÓN DE FIRMAS		[Seal]

F 005469391

Buenos Aires, 30 de septiembre de 2009. En mi carácter de escribano

Adscripto al Registro Notarial 1977 de Capital Federal----------------

CERTIFICO: Que la/s Firma que obra/n en el

documento que adjunto a esta foja, cuyo requerimiento de certificación

formaliza simultáneamente por ACTA número 051 del LIBRO

número 16 es/son puesta/s en mi presencia por la/s personas

cuyo/s nombre/s y documento/s de identidad se menciona/n a continuación [illegible]

la justificación de sus identidad. Alejandro Germán Lemmonier, con D.N.I.

14.941.255, quien actúa por sus propios derechos.- Se justifica la identidad del

firmante en los términos del inciso a) del artículo 1 002 del Código Civil.- Se deja

constancia que el documento se encuentra en idioma extranjero, sin consignar lugar

y fecha de suscripción. – El documento original se encuentra certificado en foja de

certificación F005469391 y documento de igual tenor en foja anexo F001268529.



				/s/ Patricio Segundo Sala
		[Seal]		Escribano Patricio Segundo Sala Matricula 4897


ARCOS SERCAL SERVICIOS, S.A. DE C.V.

By:	/s/ Germán Lemmonier
	Name:	Germán Lemmonier
	Title:	Authorized Signatory
	Firma(s) certificada(s) en el sello de C.F. Anexo Nº F001268529 Bs.As, 30-09-2009

/s/ Patricio Segundo Sala

[Seal]

Escribano

Patricio Segundo Sala

Matricula 4897

On this 1st day of October, 2009, before me, a notary public within and for said county, personally appeared Germán Lemmonier to me personally known who being duly sworn, did say that he is the Authorized Signatory of Arcos SerCal Servicios, S.A. de C.V., one of the persons described in and which executed the foregoing instrument, and acknowledges said instrument to be the free act and deed of said persons.


By:
Title:		Notary Public
No.
Qualified in Commission Expires



				/s/ Patricio Segundo Sala
		[Seal]		Escribano Patricio Segundo Sala Matricula 4897


[Seal]		ACTA DE CERTIFICACIÓN DE FIRMAS		[Seal]

F 001268529

ANEXO

Buenos Aires, 30 de septiembre de 2009. En mi carácter de escribano

Adscripto al Registro Notarial 1977 de Capital Federal----------------

CERTIFICO: Que la/s Firma que obra/n en el

documento que adjunto a esta foja, cuyo requerimiento de certificación

formaliza simultáneamente por ACTA número 051 del LIBRO

número 16 es/son puesta/s en mi presencia por la/s personas

cuyo/s nombre/s y documento/s de identidad se menciona/n a continuación [illegible]

la justificación de sus identidad. Alejandro Germán Lemmonier, con D.N.I.

14.941.255, quien actúa por sus propios derechos.- Se justifica la identidad del

firmante en los términos del inciso a) del artículo 1 002 del Código Civil.- Se deja

constancia que el documento se encuentra en idioma extranjero, sin consignar lugar

y fecha de suscripción. – El documento original se encuentra certificado en foja de

certificación F005469391 y documento de igual tenor en foja anexo F001268529.



				/s/ Patricio Segundo Sala
		[Seal]		Escribano Patricio Segundo Sala Matricula 4897


SERVICIOS ALIMENTOS CENTRALIZADOS DE MEXICO, S. DE R.L. DE C.V.

By:	/s/ Anabell Gonzalez Nava
	Name:	Anabell Gonzalez Nava
	Title:	Authorized Signatory

By:	/s/ Manuel Ceppi
	Name:	Manuel Ceppi
	Title:	Authorized Signatory


PROVEEDORA SISTEMATIZADA, S.A. DE C.V.

By:	/s/ Anabell Gonzalez Nava
	Name:	Anabell Gonzalez Nava
	Title:	Authorized Signatory

By:	/s/ Manuel Ceppi
	Name:	Manuel Ceppi
	Title:	Authorized Signatory


CENTRO ESPECIALIZADO DE NEGOCIOS INTERNACIONALES, S. DE R.L. DE C.V.

By:	/s/ Anabell Gonzalez Nava
	Name:	Anabell Gonzalez Nava
	Title:	Authorized Signatory

By:	/s/ Manuel Ceppi
	Name:	Manuel Ceppi
	Title:	Authorized Signatory


ALIMENTOS CENTRALIZADOS DE MEXICO, S. DE R.L. DE C.V.

By:	/s/ Anabell Gonzalez Nava
	Name:	Anabell Gonzalez Nava
	Title:	Authorized Signatory

By:	/s/ Manuel Ceppi
	Name:	Manuel Ceppi
	Title:	Authorized Signatory


CITIBANK, N.A., as Trustee, Registrar, Paying Agent and Transfer Agent

By:	/s/ John Hannon
	Name:	John Hannon
	Title:	Vice President


STATE OF NEW YORK		)
		)
COUNTY OF NEW YORK		)

On this 1st day of October, 2009, before me, a notary public within and for said county, personally appeared John Hannon to me personally known who being duly sworn, did say that he/she is a Vice president of Citibank, N.A., one of the persons described in and which executed the foregoing instrument, and acknowledges said instrument to be the free act and deed of said persons.


By:		Zenaida Santiago
Title:		Notary Public, State of New York

No. 015A6152564

Qualified in Kings County

Commission Expires 9.18.2010

[Notary Seal]

Solely for the purposes of accepting the appointment of Luxembourg Paying Agent together with the rights, protections and immunities granted to the Trustee under Article VII , which shall apply mutatis mutandis to the Luxembourg Paying Agent:

Dexia Banque Internationale à Luxembourg, société anonyme

as Luxembourg Paying Agent


By:	/s/ Jean-Jacques Kinnen		/s/ Biagio Grasso
	Name:	Jean-Jacques Kinnen	Biagio Grasso
	Title:	Senior Manager

The undersigned Henri HELLINCKX notary public residing in Luxembourg hereby certifies the authenticity of the signature(s) apposed hereabove Luxembourg, the 2 ^nd of October 2009

[Notary Seal]

EXHIBIT A

EXTRACTS OF THE BY-LAWS OF

CITIBANK, N.A.

“ARTICLE VII

Section 3. Authentication and Signature of Instruments. All authentications or certificates by the Association, as Trustee under any mortgage, deed of trust or other instruments securing bonds, debentures, notes, or other obligations of any corporation, and all certificates as Registrar or Transfer Agent and all certificates of deposit for stocks and bonds, and interim certificates and trust certificates, may be signed or countersigned in behalf of the Association by the Chairman, the President, any Vice Chairman/Sector Executive, any Senior Executive Vice President, any Group Executive/Executive Vice President, any Senior Vice President, the Secretary, any Vice President or anyone holding a position equivalent to the foregoing pursuant to provisions of these By-Laws, any Assistant Vice President, any Manager, any Senior Trust Officer, any Assistant Manager, any Trust Officer, or any officer with rank equivalent to any of the foregoing as may be designated by the Secretary, or by any other person appointed for that purpose by the Board of Directors or pursuant to these By-Laws. Any such signature or countersignature may by manual or facsimile.”

“ARTICLE X

Section 2. Execution of Instruments. All agreements, indentures, mortgages, deeds, conveyances, transfers, certificates, declarations, receipts, discharges, releases, satisfactions, settlements, petitions, schedules, accounts, affidavits, bonds, undertakings, proxies and other instruments or documents, may be signed, executed, acknowledged. verified, delivered or accepted in behalf of the Association by the Chairman, the President, or any Vice Chairman/Sector Executive, or any Senior Executive Vice President, or any Executive Vice President/Group Executive, or the Chairman Credit Policy Committee, or the Chairman Economic Policy Committee, or any Senior Vice President, or the Secretary, or the Chief Auditor, or any Vice President, or any Deputy Chief Auditor, or anyone holding a position equivalent to the foregoing pursuant to provisions to these By-Laws, or, if in connection with the exercise of any of the fiduciary powers of the Association, by any of said officers or by any Senior Trust Officer. Any such instruments may also be executed, acknowledged, verified, delivered or accepted in behalf of the Association in such other manner any by such other officers as the Board of Directors may from time to time direct. The Provisions of this Section 2 are supplementary to any other provisions of these By-Laws.”

EXHIBIT A

FORM OF NOTE

THIS IS A GLOBAL NOTE WITHIN THE MEANING OF THE INDENTURE REFERRED TO HEREINAFTER.

UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (“DTC”), NEW YORK, NEW YORK, TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

TRANSFERS OF THIS GLOBAL NOTE SHALL BE LIMITED TO TRANSFERS IN WHOLE, BUT NOT IN PART, TO NOMINEES OF DTC OR TO A SUCCESSOR THEREOF OR SUCH SUCCESSOR’S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL NOTE SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN THE INDENTURE REFERRED TO ON THE REVERSE HEREOF.

Include the following Private Placement Legend on all Restricted Notes:

“THIS NOTE HAS NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR ANY STATE SECURITIES LAWS. THE HOLDER HEREOF, BY PURCHASING THIS NOTE, AGREES FOR THE BENEFIT OF ARCOS DORADOS B.V. (THE “COMPANY”) THAT THIS NOTE OR ANY INTEREST OR PARTICIPATION HEREIN MAY BE OFFERED, RESOLD, PLEDGED OR OTHERWISE TRANSFERRED ONLY (1) TO THE COMPANY, (2) SO LONG AS THIS NOTE IS ELIGIBLE FOR RESALE PURSUANT TO RULE 144A UNDER THE SECURITIES ACT (“RULE 144A”), TO A PERSON WHO THE SELLER REASONABLY BELIEVES IS A “QUALIFIED INSTITUTIONAL BUYER” (AS DEFINED IN RULE 144A) IN ACCORDANCE WITH RULE 144A, (3) IN AN OFFSHORE TRANSACTION IN ACCORDANCE WITH RULE 903 OR RULE 904 OF REGULATION S UNDER THE SECURITIES ACT, (4) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT AFFORDED BY RULE 144 UNDER THE SECURITIES ACT (IF AVAILABLE) OR (5) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, AND IN EACH OF SUCH CASES IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR OTHER APPLICABLE JURISDICTION. THE HOLDER HEREOF, BY PURCHASING THIS NOTE, REPRESENTS AND AGREES THAT IT SHALL NOTIFY ANY

A-1

PURCHASER OF THIS NOTE FROM IT OF THE RESALE RESTRICTIONS REFERRED TO ABOVE.

THE FOREGOING LEGEND MAY BE REMOVED FROM THIS NOTE ON SATISFACTION OF THE CONDITIONS SPECIFIED IN THE INDENTURE REFERRED TO HEREIN.”

Include the following Private Placement Legend on all Regulation S Global Notes:

“THIS NOTE HAS NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR ANY STATE SECURITIES LAWS. THE HOLDER HEREOF, BY PURCHASING THIS NOTE, AGREES THAT NEITHER THIS NOTE NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE OFFERED, RESOLD, PLEDGED OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, SUCH REGISTRATION AND IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY OTHER APPLICABLE JURISDICTION.

THE FOREGOING LEGEND MAY BE REMOVED FROM THIS NOTE AFTER 40 DAYS BEGINNING ON AND INCLUDING THE LATER OF (A) THE DATE ON WHICH THE NOTES ARE OFFERED TO PERSONS OTHER THAN DISTRIBUTORS (AS DEFINED IN REGULATION S UNDER THE SECURITIES ACT) AND (B) THE ORIGINAL ISSUE DATE OF THE NOTES.”

A-2

FORM OF FACE OF NOTE

ARCOS DORADOS B.V.

7.500% SENIOR NOTES DUE 2019


No. [ ]		Principal Amount U.S.$[ ]


		[If the Note is a Global Note include the following two lines: as revised by the Schedule of Increases and Decreases in Global Note attached hereto]

				[If the Note is a Global
				Rule 144A Note, insert:
				CUSIP NO. 03965T AA1
				ISIN NO. US03965TAA16
				COMMON CODE 045543773]

				[If the Note is a Global
				Regulation S Note, insert:
				CUSIP NO. P04568 AA2
				ISIN NO. USP04568AA23
				COMMON CODE 045543781]

Arcos Dorados B.V., a private limited liability company ( besloten vennootschap) formed in the Netherlands, promises to pay to Cede & Co., the nominee for The Depository Trust Company, or registered assigns, the principal sum of [ ] U.S. Dollars [ If the Note is a Global Note, add the following , as revised by the Schedule of Increases and Decreases in Global Note attached hereto], on October 1, 2019.


Interest Rate:		7.500%

Interest Payment Dates:		April 1 and October 1 of each year, commencing on April 1, 2010

Record Dates:		March 15 and September 15

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Additional provisions of this Note are set forth on the other side of this Note.


ARCOS DORADOS B.V.

By:
		Name: Title:


TRUSTEE’S CERTIFICATE OF AUTHENTICATION

Citibank, N.A., as Trustee, certifies that this is one of the Notes referred to in the Indenture.

By:
	Authorized Signatory	Date:

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FORM OF REVERSE SIDE OF NOTE

Interest

Arcos Dorados B.V., a private limited liability company ( besloten vennootschap ) formed in the Netherlands (and its successors and assigns under the Indenture hereinafter referred to, the “ Company ”), promises to pay interest on the principal amount of this Note at the rate per annum shown above.

The Company shall pay interest semi-annually in arrears on each Interest Payment Date of each year, commencing on April 1, 2010. Interest on the Notes shall accrue from the most recent date to which interest has been paid on the Notes or, if no interest has been paid, from October 1, 2009. The Company shall pay interest on overdue principal (plus interest on such interest to the extent lawful), at the rate borne by the Notes to the extent lawful. Interest shall be computed on the basis of a 360-day year of twelve 30-day months.

The Company shall pay interest (including post-petition interest in any proceeding under any Bankruptcy Law) on overdue principal and, to the extent such payments are lawful, interest on overdue installments of interest (“ Defaulted Interest ”) without regard to any applicable grace periods at the interest rate shown on this Note, as provided in the Indenture.

All payments made by the Company in respect of the Notes shall be made free and clear of and without deduction or withholding for or on account of any present or future taxes, duties, assessments or other governmental charges imposed or levied by or on behalf of the Netherlands or any jurisdiction where the Company or any Subsidiary Guarantor is incorporated or resident for tax purposes or from or through which any payment in respect of the Notes is made by the paying agent or the Company, or any political subdivision thereof (a “ Relevant Jurisdiction ”), or any taxing authority of a Relevant Jurisdiction, unless such withholding or deduction is required by law or by the interpretation or administration thereof. In that event, the Company shall pay to each Holder of the Notes Additional Amounts as provided in the Indenture subject to the limitations set forth in the Indenture.

2.	Method of Payment

Prior to 11:00 a.m. (New York City time) on the Business Day prior to the date on which any principal of or interest on any Note is due and payable, the Company shall irrevocably deposit with the Trustee or the Paying Agent money sufficient to pay such principal and/or interest. The Company shall pay interest (except Defaulted Interest) to the Persons who are registered Holders of Notes at the close of business on the Record Date preceding the Interest Payment Date even if Notes are canceled, repurchased or redeemed after the Record Date and on or before the relevant Interest Payment Date. Holders must surrender Notes to a Paying Agent to collect principal payments. The Company shall pay principal and interest in U.S. Dollars.

Payments in respect of Notes represented by a Global Note (including principal and interest) shall be made by the transfer of immediately available funds to the accounts specified by DTC. The Company shall make all payments in respect of a Certificated Note (including principal and interest) by mailing a check to the registered address of each Holder thereof; provided , however , that payments on the Notes may also be made, in the case of a

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Holder of at least U.S.$1,000,000 aggregate principal amount of Notes, by wire transfer to a U.S. dollar account maintained by the payee with a bank in the United States if such Holder elects payment by wire transfer by giving written notice to the Trustee or the Paying Agent to such effect designating such account.

3.	Paying Agent and Registrar

Initially, Citibank, N.A. (the “ Trustee ”), shall act as Trustee, Paying Agent and Registrar. The Company may appoint and change any Paying Agent, Registrar or co-Registrar without notice to any Holder. The Company may act as Paying Agent, Registrar or co-Registrar.

Indenture

The Company originally issued the Notes under an Indenture, dated as of October 1, 2009 (as it may be amended or supplemented from time to time in accordance with the terms thereof, the “ Indenture ”), between the Company and the Trustee. The terms of the Notes include those stated in the Indenture. Capitalized terms used herein and not defined herein have the meanings ascribed thereto in the Indenture. The Notes are subject to all such terms, and Holders are referred to the Indenture for a statement of those terms. Each Holder by accepting a Note, agrees to be bound by all of the terms and provisions of the Indenture, as amended or supplemented from time to time.

The Notes are senior unsecured obligations of the Company. Subject to the conditions set forth in the Indenture and without the consent of the Holders, the Company may issue Additional Notes. All Notes shall be treated as a single class of securities under the Indenture.

The Indenture imposes certain limitations, subject to certain exceptions, on, among other things, the ability of the Company and its Subsidiaries to Incur Additional Indebtedness, make Restricted Payments, incur Liens, make Asset Sales, enter into transactions with Affiliates, or consolidate or merge or transfer or convey all or substantially all of the Company’s and its Subsidiaries’ assets.

5.	Optional Redemption

(a) Optional Redemption with a Make-Whole Premium . The Company shall have the right, at its option, to redeem the Notes, in whole but not in part, at any time prior to October 1, 2014 at a redemption price equal to 100% of the principal amount of such Notes plus, the greater of (1) 1% of the then outstanding principal amount of the Notes, and (2) the excess of: (a) the present value (as determined by the Independent Investment Banker) at such redemption date of (i) the redemption price of the Notes at October 1, 2014 (such redemption price being set forth in the table below in 5.b) plus (ii) all required interest payments thereon through October 1, 2014 (excluding accrued but unpaid interest to the redemption date), discounted to the redemption date on a semi-annual basis (assuming a 360-day year consisting of twelve 30-day months) at the Treasury Rate plus 50 basis points, over (b) the then outstanding principal amount of the Notes (the “ Make-Whole Amount ”), plus in each case any accrued and unpaid interest on the principal amount of the Notes to the date of redemption.

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“ Treasury Rate ” means, with respect to any redemption date, the rate per annum equal to the semi-annual equivalent yield to maturity or interpolated maturity (on a day count basis) of the Comparable Treasury Issue, assuming a price for the Comparable Treasury Issue (expressed as a percentage of its principal amount) equal to the Comparable Treasury Price for such redemption date.

“ Comparable Treasury Issue ” means the United States Treasury security or securities selected by an Independent Investment Banker as having an actual or interpolated maturity comparable to the remaining term of the Notes to be redeemed that would be utilized, at the time of selection and in accordance with customary financial practice, in pricing new issues of corporate debt securities of a comparable maturity to the remaining term of such Notes.

“ Independent Investment Banker ” means one of the Reference Treasury Dealers appointed by the Company.

“ Comparable Treasury Price ” means, with respect to any redemption date (1) the average of the Reference Treasury Dealer Quotations for such redemption date, after excluding the highest and lowest such Reference Treasury Dealer Quotation or (2) if the Independent Investment Banker obtains fewer than four such Reference Treasury Dealer Quotations, the average of all such quotations.

“ Reference Treasury Dealer ” means Banc of America Securities LLC and Morgan Stanley & Co. Incorporated or their affiliates which are primary United States government securities dealers and not less than two other leading primary United States government securities dealers in New York City reasonably designated by the Company; provided that if any of the foregoing cease to be a primary United States government securities dealer in New York City (a “ Primary Treasury Dealer ”), the Company shall substitute therefor another Primary Treasury Dealer.

“ Reference Treasury Dealer Quotation ” means, with respect to each Reference Treasury Dealer and any redemption date, the average, as determined by the Independent Investment Banker, of the bid and asked price for the Comparable Treasury Issue (expressed in each case as a percentage of its principal amount) quoted in writing to the Independent Investment Banker by such Reference Treasury Dealer at 3:30 pm New York time on the third Business Day preceding such redemption date.

(b) Optional Redemption Without a Make-Whole Premium . At any time and from time to time on or after October 1, 2014, the Company may, at its option, redeem all or part of the Notes upon not less than 30 nor more than 60 days’ prior notice to the Holders of the Notes, at the redemption prices, expressed as percentages of principal amount, set forth below, plus accrued and unpaid interest thereon, if any, to the applicable redemption date, if redeemed during the 12 month period beginning on October 1 of the years indicated below:


Year	Percentage
2014		103.750	%
2015		102.500	%
2016		101.250	%
and after		100	%

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(c) Optional Redemption With Proceeds of Equity Offerings . At any time, prior to or on October 1, 2012, the Company may, at its option, on one or more occasions, redeem up to 35% of the aggregate principal amount of Notes (including any Additional Notes) at a redemption price of 107.50% of the principal amount thereof, plus accrued and unpaid interest to the redemption date, with the net cash proceeds of one or more Equity Offerings; provided that:

(i)

Notes in an aggregate principal amount equal to at least 65% of the aggregate principal amount of Notes issued on the first Issue Date remain outstanding immediately after the occurrence of such redemption; and

(ii)

the redemption must occur within 90 days of the date of the closing of such Equity Offering.

(d) Optional Redemption Upon Tax Event. If the Company determines that, as a result of any amendment to, or change in, the laws (or any rules or regulations thereunder) of any Relevant Jurisdiction, any taxing authority thereof or therein affecting taxation, or any amendment to or change in an official interpretation or application of such laws, rules or regulations, which amendment to or change of such laws, rules or regulations becomes effective or, in the case of a change in official interpretation or application, is announced on or after the date of the Offering Memorandum (or on or after the date a Surviving Entity assumes the obligations under the Notes, in the case of a Surviving Entity with a different Relevant Jurisdiction than the Company), the Company (or a Subsidiary Guarantor) would be obligated, to pay any Additional Amounts, provided that the Company, in its business judgment, determines that such obligation cannot be avoided by the Company taking reasonable measures available to it, then, at the Company’s option, all, but not less than all, of the Notes may be redeemed at any time at a redemption price equal to 100% of the outstanding principal amount, plus any accrued and unpaid interest to the redemption date due thereon up to but not including the date of redemption; provided that (1) no notice of redemption for tax reasons may be given earlier than 90 days prior to the earliest date on which the Company (or a Subsidiary Guarantor) would be obligated to pay these Additional Amounts if a payment on the Notes were then due, and (2) at the time such notice of redemption is given such obligation to pay such Additional Amounts remains in effect.

Prior to the publication of any notice of redemption pursuant to this provision, the Company will deliver to the Trustee:

(i)

an Officers’ Certificate stating that the Company is entitled to effect the redemption and setting forth a statement of facts showing that the conditions precedent to the Company’s right to redeem have occurred; and

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(ii)

an Opinion of Counsel from legal counsel in a Relevant Jurisdiction (which may be the Company’s counsel) of recognized standing to the effect that the Company has or will become obligated to pay such Additional Amounts as a result of such change or amendment.

This notice, once delivered by the Company to the Trustee, will be irrevocable.

The Company shall give notice of any redemption at least 30 days but not more than 60 days before the redemption date to the Trustee, which shall, in turn, provide notice to Holders of Notes as set forth below.

(e) Optional Redemption Procedures. If fewer than all of the Notes are being redeemed, the Notes to be redeemed shall be selected by lot by DTC in the case of Notes represented by a Global Note or by the Trustee pro rata , by lot or by any other method the Trustee it its sole discretion deems fair and appropriate. No Notes of a principal amount of U.S.$100,000 or less may be redeemed in part and Notes of a principal amount in excess of U.S.$100,000 may be redeemed in part in multiples of U.S.$1,000 only. Upon surrender of any Note redeemed in part, the holder will receive a new Note equal in principal amount to the unredeemed portion of the surrendered note. Once notice of redemption is sent to the holders, Notes called for redemption become due and payable at the redemption price on the redemption date, and, commencing on the redemption date, Notes redeemed will cease to accrue interest.

Notice of any redemption shall be mailed by first-class mail, postage prepaid, at least 35 but not more than 60 days before the redemption date to Holders of Notes to be redeemed at their respective registered addresses. If Notes are to be redeemed in part only, the notice of redemption shall state the portion of the principal amount thereof to be redeemed. For so long as the Notes are listed on the Luxembourg Stock Exchange for trading on the Euro MTF Market, and the rules of such Exchange require, the Company shall cause notices of redemption to also be published as provided under Section 10.1 of the Indenture. A new Note in a principal amount equal to the unredeemed portion thereof, if any, shall be issued in the name of the Holder thereof upon cancellation of the original Note (or appropriate adjustments to the amount and beneficial interests in a Global Note shall be made, as appropriate).

Notes called for redemption shall become due on the date fixed for redemption. The Company shall pay the redemption price for any Note together with accrued and unpaid interest thereon through the date of redemption. On and after the redemption date, interest shall cease to accrue on Notes or portions thereof called for redemption as long as the Company has deposited with the Paying Agent funds in satisfaction of the applicable redemption price pursuant to the Indenture. Upon redemption of any Notes by the Company, such redeemed Notes shall be cancelled.

6.	Mandatory Repurchase Provisions

(a) Mandatory Redemption upon Exercise of Call Option . No later than 5 Business Days following the date upon which the Call Option Redemption Event occurs, the Company will provide the Trustee with a notice to redeem all of the Notes at a purchase price equal to 101% of the principal amount thereof, plus any accrued and unpaid interest thereon through the date of redemption (the “ Call Option Exercise Payment ”). For the avoidance of

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doubt, a Call Option Redemption Event will only occur in connection with the exercise by McDonald’s of the McDonald’s Call Option under the Master Franchise Agreements with respect to the Master Franchisee or the Brazilian Master Franchisee. An exercise by McDonald’s of the McDonald’s Call Option with respect to any other Subsidiary of the Company shall not be treated as a Call Option Redemption Event, but will instead be treated as an Asset Sale subject to the limitations set forth in Section 3.10 of the Indenture. Notes subject to mandatory redemption following a Call Option Redemption Event will become due on the earlier of the date fixed for redemption or the 30th day following the Call Option Redemption Event. On and after the redemption date, interest will cease to accrue on the Notes as long as the Company has deposited with the Paying Agent funds in an amount equal to the Call Option Exercise Payment. Upon redemption of the Notes by the Company, the redeemed Notes will be cancelled. For so long as the Notes are listed on the Luxembourg Stock Exchange for trading on the Euro MTF Market and the rules of the exchange so require, the Company will cause notices of redemption to also be published as described in the Indenture.

(b) Change Of Control Offer . Upon the occurrence of a Change of Control, each Holder of Notes shall have the right to require that the Company purchase all or a portion (in integral multiples of U.S.$1,000, provided that the principal amount of such Holder’s Note will not be less than U.S.$100,000) of the Holder’s Notes at a purchase price equal to 101% of the principal amount thereof, plus accrued and unpaid interest through the date of purchase. Within 30 days following the date upon which the Change of Control occurred, the Company must make a Change of Control Offer pursuant to a Change of Control Notice and, so long as the Notes are listed on the Luxembourg Stock Exchange for trading on the Euro MTF Market, and the rules of such Exchange so require, publish the Change of Control Offer in a newspaper having general circulation in Luxembourg or, if such Luxembourg publication is not practicable, in one other leading English language newspaper. As more fully described in the Indenture, the Change of Control Notice shall state, among other things, the Change of Control Payment Date, which must be no earlier than 30 days nor later than 60 days from the date the notice is mailed, other than as may be required by applicable law.

(c) Asset Sale Offer . The Indenture imposes certain limitations on the ability of the Company and its Restricted Subsidiaries to make Asset Sales. In the event the proceeds from a permitted Asset Sale exceed certain amounts and are not applied as specified in the Indenture, the Company shall be required to make an Asset Sale Offer to purchase to the extent of such remaining proceeds each Holder’s Notes together with holders of certain other Indebtedness at 100% of the principal of and accrued and unpaid interest (if any) to the Asset Sale Offer Payment Date, as more fully set forth in the Indenture.

7.	Denominations; Transfer; Exchange

The Notes are in fully registered form without coupons, and only in minimum denominations of U.S.$100,000 and integral multiples of U.S.$1,000 in excess thereof. A Holder may transfer or exchange Notes in accordance with the Indenture. The Registrar may require a Holder, among other things, to furnish appropriate endorsements or transfer documents and to pay any taxes and fees required by law or permitted by the Indenture. The Registrar shall be entitled to request such evidence reasonably satisfactory to it documenting the identity and/or signatures of the transferor and the transferee. The Registrar need not register the transfer of or exchange (i) any Notes selected for redemption (except, in the case of a Note to be redeemed in

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part, the portion of the Note not to be redeemed) for a period beginning 15 days before the mailing of a notice of Notes to be redeemed and ending on the date of such mailing or (ii) any Notes for a period beginning 15 days before an interest payment date and ending on such interest payment date.

8.	Persons Deemed Owners

The registered holder of this Note shall be treated as the owner of it for all purposes.

9.	Unclaimed Money

If money for the payment of principal or interest remains unclaimed for two years, the Trustee or Paying Agent shall pay the money back to the Company at its request unless an abandoned property law designates another Person. After any such payment, Holders entitled to the money must look only to the Company and not to the Trustee for payment.

10.	Discharge Prior to Redemption or Maturity

Subject to certain conditions set forth in the Indenture, the Company at any time may terminate some or all of its obligations under the Notes and the Indenture if the Company deposits with the Trustee U.S. Dollars or U.S. Government Obligations for the payment of principal of and interest on the Notes to redemption or maturity, as the case may be.

11.	Amendment, Waiver

(a) Subject to certain exceptions set forth in the Indenture, without the consent of any Holder, the Company and the Trustee may, among other things, amend or supplement the Indenture or the Notes to cure any ambiguity, omission, defect or inconsistency; to provide for the assumption by a successor Person of the obligations of the Company under the Indenture; provided, however , that the designation is in accord with the applicable provisions of the Indenture; to add Subsidiary Guarantees or additional Guarantees with respect to the Notes or release a Subsidiary Guarantee in accordance with the terms of the Indenture; to secure the Notes; to add to the covenants of the Company for the benefit of the Holders or to surrender any right or power herein conferred upon the Company; to provide for the issuance of Additional Notes; to conform the text of the Indenture, the Subsidiary Guarantees or the Notes to any provision of the Offering Memorandum; to evidence the replacement of the Trustee as provided for under the Indenture; if necessary, in connection with any release of any security permitted under the Indenture; to provide for uncertificated Notes in addition to or in place of certificated Notes; or to make any other changes which do not adversely affect the rights of any of the Holders in any material respect.

(b) Subject to certain exceptions set forth in the Indenture, (i) the Indenture or the Notes may be amended or supplemented with the written consent of the Holders of at least a majority in principal amount of the then Outstanding Notes and (ii) any Default or Event of Default under the Indenture (except a Default in the payment of the principal of, premium, if any, or interest on any Notes) may be waived with the written consent of the Holders of a majority in aggregate principal amount of the then Outstanding Notes. However, without the

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consent of each Holder affected thereby, no amendment may, among other things, reduce the percentage of the principal amount of the Notes whose Holders must consent to an amendment, supplement or waiver; reduce the rate of or change or have the effect of changing the time for payment of interest on any Notes; reduce the principal of or change or have the effect of changing the fixed maturity of any Notes, or change the date on which any Notes may be subject to redemption, or reduce the redemption price therefor; make any Notes payable in money other than that stated in the Notes; make any change in the provisions of the Indenture entitling each Holder to receive payment of principal of, premium, if any, and interest on the Notes on or after the due date thereof or to bring suit to enforce such payment, or permitting Holders of a majority in principal amount of Notes to waive Defaults or Events of Default; amend, change or modify in any material respect the obligation of the Company to make and consummate a Change of Control Offer in respect of a Change of Control that has occurred or make and consummate an Asset Sale Offer with respect to any Asset Sale that has been consummated; eliminate or modify in any manner a Restricted Subsidiary’s obligations with respect to its Subsidiary Guarantee which adversely affects Holders in any material respect, except as contemplated in the Indenture; make any change in the Additional Amounts provisions of the Indenture that adversely affects the rights of any Holder or amend the terms of the Notes in a way that would result in a loss of exemption from any applicable taxes; or make any change to the provisions of this Indenture or the Notes that adversely affects the ranking of the Notes.

12.	Defaults and Remedies

If an Event of Default occurs and is continuing, the Trustee or the Holders of at least 25% in aggregate principal amount of the then Outstanding Notes may declare all the Notes to be due and payable immediately. Certain events of bankruptcy or insolvency are Events of Default, which shall result in the Notes being due and payable immediately upon the occurrence of such Events of Default.

Holders may not enforce the Indenture or the Notes except as provided in the Indenture. The Trustee may refuse to enforce the Indenture or the Notes unless it receives indemnity or security reasonably satisfactory to it. Subject to certain limitations, Holders of a majority in aggregate principal amount of the Outstanding Notes may direct the Trustee in its exercise of any trust or power. The Trustee may withhold from Holders notice of any continuing Default or Event of Default (except a Default or Event of Default in payment of principal or interest) if it determines that withholding notice is in their interest.

13.	Trustee Dealings with the Company

Subject to certain limitations set forth in the Indenture, the Trustee under the Indenture, in its individual or any other capacity, may become the owner or pledgee of Notes and may otherwise deal with and collect obligations owed to it by the Company or its Affiliates and may otherwise deal with the Company or its Affiliates with the same rights it would have if it were not Trustee.

14.	No Recourse Against Others

No past, present or future incorporator, director, officer, employee, shareholder or controlling person, as such, of the Company or any Subsidiary Guarantor, shall have any liability

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for any obligations of the Company under the Notes, the Indenture or a Subsidiary Guarantee or for any claims based on, in respect of or by reason of such obligations or their creation. By accepting a Note, each Holder waives and releases all such liability. The waiver and release are part of the consideration for issuance of the Notes.

15.	Authentication

This Note shall not be valid until an authorized signatory of the Trustee (or an authenticating agent acting on its behalf) manually signs the certificate of authentication on the other side of this Note.

16.	Abbreviations

Customary abbreviations may be used in the name of a Holder or an assignee, such as TEN COM (=tenants in common), TEN ENT (=tenants by the entirety), JT TEN (=joint tenants with rights of survivorship and not as tenants in common), CUST (=custodian) and U/G/M/A (=Uniform Gift to Minors Act).

17.	CUSIP or ISIN Numbers

Pursuant to a recommendation promulgated by the Committee on Uniform Security Identification Procedures the Company has caused CUSIP or ISIN numbers to be printed on the Notes and has directed the Trustee to use CUSIP or ISIN numbers in notices of redemption as a convenience to Holders. No representation is made as to the accuracy of such numbers either as printed on the Notes or as contained in any notice of redemption and reliance may be placed only on the other identification numbers placed thereon.

18.	Governing Law

This Note shall be governed by, and construed in accordance with, the laws of the State of New York.

19.	Currency of Account; Conversion of Currency .

U.S. Dollars is the sole currency of account and payment for all sums payable by the Company or any Subsidiary Guarantor under or in connection with the Notes, any Subsidiary Guarantee or the Indenture. The Company and any Subsidiary Guarantor shall indemnify the Holders as provided in respect of the conversion of currency relating to the Notes, any Subsidiary Guarantee and the Indenture.

20.	Agent for Service; Submission to Jurisdiction; Waiver of Immunities .

The parties hereto have agreed that any suit, action or proceeding arising out of or based upon the Indenture or the Notes may be instituted in any New York state or U.S. federal court in The City of New York, New York. The parties hereto have irrevocably submitted to the jurisdiction of such courts for such purpose and waived, to the fullest extent permitted by law, trial by jury, any objection they may now or hereafter have to the laying of venue of any such proceeding, and any claim they may now or hereafter have that any proceeding in any such court is brought in an inconvenient forum and any right to the jurisdiction of any other courts to which

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any of them may be entitled, on account of place of residence or domicile. The Company has appointed National Registered Agents, Inc. with offices currently at 875 Avenue of the Americas, Suite 501, New York, New York 10001, as its authorized agent upon whom all writs, process and summonses may be served in any suit, action or proceeding arising out of or based upon the Indenture or the Notes which may be instituted in any New York state or U.S. federal court in The City of New York, New York. To the extent that the Company has or hereafter may acquire any immunity (sovereign or otherwise) from any legal action, suit or proceeding, from jurisdiction of any court or from set-off or any legal process (whether service or notice, attachment in aid or otherwise) with respect to it or any of their property, the Company has irrevocably waived and agreed not to plead or claim such immunity in respect of its obligations under the Indenture or the Notes.

Nothing in the preceding paragraph shall affect the right of the Trustee or any Holder of the Notes to serve process in any other manner permitted by law.

The Company shall furnish to any Holder upon written request and without charge to the Holder a copy of the Indenture which has in it the text of this Note in larger type. Requests may be made to:

Arcos Dorados B.V.

Naritaweg 165

1043 BW Amsterdam

The Netherlands

Attention: Chief Financial Officer

Fax No.: +31 (0) 20-572-2650

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ASSIGNMENT FORM

To assign this Note, fill in the form below:

(I) or (we) assign and transfer this Note to:

(Print or type assignee’s name, address and zip code)

(Insert assignee’s Social Security or Tax I.D. Number)

and irrevocably appoint to transfer this Note on the books of the Company. The agent may substitute another to act for him.


Date:						Your Signature:
						(Sign exactly as your name appears on the other side of this Note.)


Signature Guarantee:
		(Signature must be guaranteed)

The signature(s) should be guaranteed by an eligible guarantor institution (banks, stockbrokers, savings and loan associations and credit unions with membership in an approved signature guarantee medallion program), pursuant to Exchange Act Rule 17Ad-15.

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[To be attached to Global Notes only]

SCHEDULE OF INCREASES OR DECREASES IN GLOBAL NOTE

The following increases or decreases in this Global Note have been made:


Date of Exchange		Amount of decrease in Principal Amount of this Global Note		Amount of increase in Principal Amount of this Global Note		Principal Amount of this Global Note following such decrease or increase		Signature of authorized signatory of Trustee or Note Custodian

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OPTION OF HOLDER TO ELECT PURCHASE

If you want to elect to have this Note purchased by the Company pursuant to Section 3.7 or Section 3.10 of the Indenture, check either box:


		¨		¨

		Section 3.7		Section 3.10

If you want to elect to have only part of this Note purchased by the Company pursuant to Section 3.7 or Section 3.10 of the Indenture, state the principal amount (which must be an integral multiple of U.S.$100,000) that you want to have purchased by the Company: U.S.$


Date:		Your Signature (Sign exactly as your name appears on the other side of the Note)

Tax Identification No.:

Signature Guarantee:
		(Signature must be guaranteed)

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EXHIBIT B

FORM OF CERTIFICATE FOR TRANSFER TO QIB

[Date]

Citibank, N.A.

111 Wall Street, 15th Floor Window

New York, New York 10005

Attention: 15th Floor Window

Re:

7.500% Senior Notes due 2019 (the “ Notes ”)

of Arcos Dorados B.V. (the “ Company ”)

Ladies and Gentlemen:

Reference is hereby made to the Indenture, dated as of October 1, 2009 (as amended and supplemented from time to time, the “ Indenture ”), between the Company and Citibank, N.A., as Trustee. Capitalized terms used but not defined herein shall have the meanings given them in the Indenture.

This letter relates to U.S.$ aggregate principal amount of Notes [ in the case of a transfer of an interest in a Regulation S Global Note: which represents an interest in a Regulation S Global Note] beneficially owned by the undersigned (the “ Transferor ”) to effect the transfer of such Notes in exchange for an equivalent beneficial interest in the Rule 144A Global Note.

In connection with such request, and with respect to such Notes, the Transferor does hereby certify that such Notes are being transferred in accordance with Rule 144A under the U.S. Securities Act of 1933, as amended (“ Rule 144A ”), to a transferee that the Transferor reasonably believes is purchasing the Notes for its own account or an account with respect to which the transferee exercises sole investment discretion, and the transferee, as well as any such account, is a “qualified institutional buyer” within the meaning of Rule 144A, in a transaction meeting the requirements of Rule 144A and in accordance with applicable securities laws of any state of the United States or any other jurisdiction.

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You and the Company are entitled to rely upon this letter and are irrevocably authorized to produce this letter or a copy hereof to any interested party in any administrative or legal proceedings or official inquiry with respect to the matters covered hereby.


Very truly yours,

[Name of Transferor]

By:


Authorized Signature

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EXHIBIT C

FORM OF CERTIFICATE FOR TRANSFER

PURSUANT TO REGULATION S

[Date]

Citibank, N.A.

111 Wall Street, 15th Floor Window

New York, New York 10005

Attention: 15th Floor Window

Re:

7.500% Senior Notes due 2019 (the “ Notes ”)

of Arcos Dorados B.V. (the “ Company ”)

Ladies and Gentlemen:

In connection with our proposed sale of U.S.$ aggregate principal amount of the Notes [ in the case of a transfer of an interest in a 144A Global Note: , which represent an interest in a 144A Global Note] beneficially owned by the undersigned (“ Transferor ”), we confirm that such sale has been effected pursuant to and in accordance with Regulation S under the U.S. Securities Act of 1933, as amended (the “ Securities Act ”), and, accordingly, we represent that:

(a) the offer of the Notes was not made to a person in the United States;

(b) either (i) at the time the buy order was originated, the transferee was outside the United States or we and any person acting on our behalf reasonably believed that the transferee was outside the United States or (ii) the transaction was executed in, on or through the facilities of a designated off-shore securities market and neither we nor any person acting on our behalf knows that the transaction has been pre-arranged with a buyer in the United States;

(c) no directed selling efforts have been made in the United States in contravention of the requirements of Rule 903(b) or Rule 904(b) of Regulation S, as applicable;

(d) the transaction is not part of a plan or scheme to evade the registration requirements of the Securities Act; and

C-1

(e) we are the beneficial owner of the principal amount of Notes being transferred.

In addition, if the sale is made during a Distribution Compliance Period and the provisions of Rule 904(b)(1) or Rule 904(b)(2) of Regulation S are applicable thereto, we confirm that such sale has been made in accordance with the applicable provisions of Rule 904(b)(1) or Rule 904(b)(2), as the case may be.


Very truly yours,

[Name of Transferor]

By:


Authorized Signature

C-2

EXHIBIT D

FORM OF CERTIFICATE FOR TRANSFER

PURSUANT TO RULE 144

[Date]

Citibank, N.A.

111 Wall Street, 15th Floor Window

New York, New York 10005

Attention: 15th Floor Window

Re:

7.500% Senior Notes due 2019 (the “ Notes ”)

of Arcos Dorados B.V. (the “ Company ”)

Ladies and Gentlemen:


Very truly yours,

[Name of Transferor]

By:


Authorized Signature

D-1

EXHIBIT E

FORM OF SUPPLEMENTAL INDENTURE

FOR SUBSIDIARY GUARANTEE

This Supplemental Indenture, dated as of [ ] (this “ Supplemental Indenture ”), among [ name of Restricted Subsidiary ], a [ ] [corporation][limited liability company] (the “ Additional Subsidiary Guarantor ”), Arcos Dorados B.V., a private limited liability company ( besloten vennootschap ) formed in the Netherlands (together with its successors and assigns, the “ Company ”) and Citibank, N.A., as Trustee under the Indenture referred to below.

W I T N E S S E T H:

WHEREAS, the Company, the Trustee and the Subsidiary Guarantors named therein (each a “ Subsidiary Guarantor ” and together the “ Subsidiary Guarantors ”) have heretofore executed and delivered an Indenture, dated as of October 1, 2009 (as amended, supplemented, waived or otherwise modified, the “ Indenture ”), providing for the issuance of 7.500% Senior Notes due 2019 of the Company (the “ Notes ”); and

WHEREAS, pursuant to Section 9.1 of the Indenture, the Trustee and the Company are authorized to execute and deliver this Supplemental Indenture to supplement the Indenture, without the consent of any Holder;

NOW, THEREFORE, in consideration of the foregoing and for other good and valuable consideration, the receipt of which is hereby acknowledged, the Additional Subsidiary Guarantor, the Company and the Trustee mutually covenant and agree for the equal and ratable benefit of the holders of the Notes as follows:

ARTICLE I

DEFINITIONS

Section 1.1. Defined Terms . Unless otherwise defined in this Supplemental Indenture, terms defined in the Indenture are used herein as therein defined.

ARTICLE II

AGREEMENT TO BE BOUND; GUARANTEE

Section 2.1. Agreement to be Bound . The Additional Subsidiary Guarantor hereby becomes a party to the Indenture as a Subsidiary Guarantor and as such shall have all of the rights and be subject to all of the obligations and agreements of a Subsidiary Guarantor under the Indenture. The Additional Subsidiary Guarantor hereby agrees to be bound by all of the provisions of the Indenture applicable to a Subsidiary Guarantor and to perform all of the obligations and agreements of a Subsidiary Guarantor under the Indenture.

F-1

Section 2.2. Subsidiary Guarantees .

(a) The Additional Subsidiary Guarantor hereby fully and unconditionally guarantees on a general unsecured senior basis, as primary obligor and not merely as surety, jointly and severally with each other Subsidiary Guarantor, to each Holder and to the Trustee the full and punctual payment when due, whether at maturity, by acceleration, by redemption or otherwise, of the Obligations (such guaranteed Obligations, the “ Guaranteed Obligations ”). The Additional Subsidiary Guarantor further agrees (to the extent permitted by law) that the Obligations may be extended or renewed, in whole or in part, without notice or further assent from it, and that it will remain bound under this Agreement notwithstanding any extension or renewal of any Obligation. The Additional Subsidiary Guarantor hereby agrees to pay, in addition to the amounts stated above, any and all expenses (including reasonable counsel fees and expenses) incurred by the Trustee or the Holders in enforcing any rights under any Subsidiary Guarantee.

(b) The Additional Subsidiary Guarantor waives presentment to, demand of payment from and protest to the Company of any of the Obligations and also waives notice of protest for nonpayment. The Additional Subsidiary Guarantor waives notice of any default under the Notes or the Obligations. The obligations of the Additional Subsidiary Guarantor hereunder shall not be affected by (i) the failure of any Holder to assert any claim or demand or to enforce any right or remedy against the Company or any other Person under the Indenture, the Notes or any other agreement or otherwise; (ii) any extension or renewal of any thereof; (iii) any rescission, waiver, amendment or modification of any of the terms or provisions of the Indenture, the Notes or any other agreement; (iv) the release of any security held by any Holder or the Trustee for the Obligations or any of them; (v) the failure of any Holder to exercise any right or remedy against any other Subsidiary Guarantor; or (vi) any change in the ownership of the Company.

(c) The Additional Subsidiary Guarantor further agrees that its Subsidiary Guarantee herein constitutes a guarantee of payment when due (and not a guarantee of collection) and waives any right to require that any resort be had by any Holder to any security held for payment of the Obligations.

(d) The Additional Subsidiary Guarantors further expressly waives irrevocably and unconditionally:

(i) Any right it may have to first require any Holder to proceed against, initiate any actions before a court of law or any other judge or authority, or enforce any other rights or security or claim payment from the Company or any other Person (including any Subsidiary Guarantor or any other guarantor) before claiming from it under this Indenture;

(ii) Any rights and benefits set forth in the following provisions of Argentine law: Articles 480, 481 and 482 of the Argentine Commercial Code and Articles 1990, 2020 and 2021 (other than with respect to defenses or motions based on documented payment ( pago ), reduction ( quita ), extension ( espera ) or release or remission ( remisión ), 2012, 2013 and 2024 ( beneficios de excusión y división ), 2025, 2026, 2029, 2043, 2046 and 2050 of the Argentine Civil Code;

F-2

(iii) (1) the collection benefit ( beneficio de excusión ) granted by article 2,357 of the Chilean Civil Code; (2) the division benefit ( beneficio de división ) granted in article 2,367 of the Chilean Civil Code; (3) the right to retract ( derecho de retractación ) granted in article 1,649 of the Chilean Civil Code; and, (4) any right to object to future term extensions that might be agreed to, which hereby accepts in accordance with article 2,339 of the Chilean Civil Code;

(iv) Any rights to the benefits of orden , excusión , división , quita and espera arising from Articles 2814, 2815, 2817, 2818, 2819, 2820, 2821, 2822, 2823, 2826, 2837, 2839, 2840, 2845, 2846, 2847 and any other related or applicable Articles that are not explicitly set forth herein because of the Additional Subsidiary Guarantor’s knowledge thereof, of the Código Civil Federal of Mexico and the Código Civil of each State of the Mexican Republic and for the Federal District of Mexico;

(v) (1) the collection benefit ( beneficio de excusión ) granted by articles 1812, 1815, 1816, 1818 of the Venezuelan Civil Code; (2) the division benefit ( beneficio de división ) granted in articles 1819 and 1820 of the Venezuelan Civil Code;

(vi) Any right to which it may be entitled to have the assets of the Company or any other Person (including any Subsidiary Guarantor or any other guarantor) first be used, applied or depleted as payment of the Company’s or the Additional Subsidiary Guarantors’ obligations hereunder, prior to any amount being claimed from or paid by the Additional Subsidiary Guarantors hereunder; and

(vii) Any right to which it may be entitled to have claims hereunder divided among the Subsidiary Guarantors and the Additional Subsidiary Guarantor.

(e) The obligations of the Additional Subsidiary Guarantor hereunder shall not be subject to any reduction, limitation, impairment or termination for any reason (other than payment of the Obligations in full), including any claim of waiver, release, surrender, alteration or compromise, and shall not be subject to any defense of setoff, counterclaim, recoupment or termination whatsoever or by reason of the invalidity, illegality or unenforceability of the Obligations or otherwise. Without limiting the generality of the foregoing, the obligations of the Additional Subsidiary Guarantor herein shall not be discharged or impaired or otherwise affected by the failure of any Holder to assert any claim or demand or to enforce any remedy under the Indenture, the Notes or any other agreement, by any waiver or modification of any thereof, by any default, failure or delay, willful or otherwise, in the performance of the Obligations, or by any other act or thing or omission or delay to do any other act or thing which may or might in any manner or to any extent vary the risk of the Additional Subsidiary Guarantor or would otherwise operate as a discharge of the Additional Subsidiary Guarantor as a matter of law or equity.

(f) The Additional Subsidiary Guarantor further agrees that its Subsidiary Guarantee herein shall continue to be effective or be reinstated, as the case may be, if at any time payment, or any part thereof, of principal of or interest on any of the Obligations is rescinded or must otherwise be restored by any Holder upon the bankruptcy, or reorganization of the Company or otherwise.

F-3

(g) In furtherance of the foregoing and not in limitation of any other right which any Holder has at law or in equity against the Additional Subsidiary Guarantor by virtue hereof, upon the failure of the Company to pay any of the Obligations when and as the same shall become due, whether at maturity, by acceleration, by redemption or otherwise, the Additional Subsidiary Guarantor hereby promises to and will, upon receipt of written demand by the Trustee, forthwith pay, or cause to be paid, in cash, to the Holders an amount equal to the sum of:

(i) the unpaid amount of such Obligations then due and owing; and

(ii) accrued and unpaid interest on such Obligations then due and owing (but only to the extent not prohibited by law).

(h) The Additional Subsidiary Guarantor further agrees that, as between the Additional Subsidiary Guarantor, on the one hand, and the Holders, on the other hand:

(i) the maturity of the Obligations guaranteed hereby may be accelerated as provided in the Indenture for the purposes of its Subsidiary Guarantee herein, notwithstanding any stay, injunction or other prohibition preventing such acceleration in respect of the Obligations guaranteed hereby; and

(ii) in the event of any such declaration of acceleration of such Obligations, such Obligations (whether or not due and payable) shall forthwith become due and payable by the Additional Subsidiary Guarantor for the purposes of its Subsidiary Guarantee.

Section 2.3 Limitation on Liability; Termination, Release and Discharge .

(a) The obligations of the Additional Subsidiary Guarantor hereunder shall be limited to the maximum amount as shall, after giving effect to all other contingent and fixed liabilities of the Additional Subsidiary Guarantor and after giving effect to any collections from or payments made by or on behalf of any other Subsidiary Guarantor in respect of the obligations of such other Subsidiary Guarantor under its Subsidiary Guarantee or pursuant to its contribution obligations under the Indenture, result in the Obligations not constituting a fraudulent conveyance, fraudulent transfer or similar illegal transfer under applicable law.

(b) The Additional Subsidiary Guarantor shall be released and relieved of its obligations under its Subsidiary Guarantee (except with respect to Obligations that by their terms survive) in the event that:

(i) there is a Legal Defeasance or a Covenant Defeasance of the Notes pursuant to the Indenture;

(ii) there is a sale or other disposition (including through a consolidation or merger) of Capital Stock of the Additional Subsidiary Guarantor following which the Additional Subsidiary Guarantor is no longer a direct or indirect Subsidiary of the Company;

F-4

(iii) there is a sale of all or substantially all of the assets of the Additional Subsidiary Guarantor (including by way of merger, stock purchase, asset sale or otherwise) to a Person that is not (either before or after giving effect to such transaction) the Company or a Subsidiary Guarantor;

(iv) the Additional Subsidiary Guarantor is designated as an Unrestricted Subsidiary in accordance with the Indenture; or

(v) in the case that the Additional Subsidiary Guarantor is not a Significant Subsidiary, the Additional Subsidiary Guarantor shall become prevented from guaranteeing the Notes by local law or the acquisition of minority interests therein by any minority shareholders;

provided , in each case, such transactions are carried out pursuant to and in accordance with all applicable covenants and provisions thereof.

Section 2.4 Right of Contribution . If the Additional Subsidiary Guarantor makes a payment or distribution under its Subsidiary Guarantee, it will be entitled to a contribution from each other Subsidiary Guarantor in a pro rata amount, based on the net assets of each Subsidiary Guarantor and the Additional Subsidiary Guarantor determined in accordance with GAAP. The provisions of this Section 2. 4 and Section 10.3 of the Indenture shall in no respect limit the obligations and liabilities of the Additional Subsidiary Guarantor to the Trustee and the Holders and the Additional Subsidiary Guarantor shall remain liable to the Trustee and the Holders for the full amount guaranteed by the Additional Subsidiary Guarantor hereunder.

Section 2.5 No Subrogation . The Additional Subsidiary Guarantor agrees that it shall not be entitled to any right of subrogation in respect of any Guaranteed Obligations until payment in full in cash or Cash Equivalents of all Obligations. If any amount shall be paid to the Additional Subsidiary Guarantor on account of such subrogation rights at any time when all of the Obligations shall not have been paid in full in cash or Cash Equivalents, such amount shall be held by the Additional Subsidiary Guarantor in trust for the Trustee and the Holders, segregated from other funds of the Additional Subsidiary Guarantor, and shall, forthwith upon receipt by the Additional Subsidiary Guarantor, be turned over to the Trustee in the exact form received by the Additional Subsidiary Guarantor (duly endorsed by the Additional Subsidiary Guarantor to the Trustee, if required), to be applied against the Obligations.

ARTICLE III

MISCELLANEOUS

Section 3.1. Notices . Any notice or communication delivered to the Company under the provisions of the Indenture shall constitute notice to the Additional Subsidiary Guarantor.

Section 3.2. Parties . Nothing expressed or mentioned herein is intended or shall be construed to give any Person, firm or corporation, other than the Holders and the Trustee, any legal or equitable right, remedy or claim under or in respect of this Supplemental Indenture or the Indenture or any provision herein or therein contained.

F-5

Section 3.3. Governing Law, etc . This Supplemental Indenture shall be governed by the provisions set forth in Section 11.6 of the Indenture.

Section 3.4. Severability . In case any provision in this Supplemental Indenture shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby and such provision shall be ineffective only to the extent of such invalidity, illegality or unenforceability.

Section 3.5. Ratification of Indenture; Supplemental Indenture Part of Indenture . Except as expressly amended hereby, the Indenture is in all respects ratified and confirmed and all the terms, conditions and provisions thereof shall remain in full force and effect. This Supplemental Indenture shall form a part of the Indenture for all purposes, and every holder of Notes heretofore or hereafter authenticated and delivered shall be bound hereby. The Trustee makes no representation or warranty as to the validity or sufficiency of this Supplemental Indenture.

Section 3.6. Duplicate and Counterpart Originals . The parties may sign any number of copies of this Supplemental Indenture. One signed copy is enough to prove this Supplemental Indenture. This Supplemental Indenture may be executed in any number of counterparts, each of which so executed shall be an original, but all of them together represent the same agreement.

Section 3.7. Headings . The headings of the Articles and Sections in this Supplemental Indenture have been inserted for convenience of reference only, are not intended to be considered as a part hereof and shall not modify or restrict any of the terms or provisions hereof.

Section 3.8. The Trustee . The recitals in this Supplemental Indenture are made by the Company and the Additional Subsidiary Guarantor only and not by the Trustee, and all of the provisions contained in the Original Indenture in respect of the rights, privileges, immunities, powers and duties of the Trustee shall be applicable in respect of this Supplemental Indenture as fully and with like effect as if set forth herein in full. The Trustee makes no representations or warranties as to the correctness of the recitals contained herein, which shall be taken as statements of the Company, or the validity or sufficiency of this Supplemental Indenture and the Trustee shall not be accountable or responsible for or with respect to nor shall the Trustee have any responsibility for provisions thereof. The Trustee represents that it is duly authorized to execute and deliver this Supplemental Indenture and perform its obligations hereunder.

F-6

IN WITNESS WHEREOF, the parties hereto have caused this Supplemental Indenture to be duly executed as of the date first above written.


ARCOS DORADOS B.V.

By:
		Name:
		Title:

F-7


STATE OF NEW YORK		)
		)
COUNTY OF NEW YORK		)

On this day of before me, a notary public within and for said county, personally appeared to me personally known who being duly sworn, did say that he/she is the of Arcos Dorados B.V., one of the persons described in and which executed the foregoing instrument, and acknowledges said instrument to be the free act and deed of said persons.


By:
Title:		Notary Public, State of New York

No.

Qualified in

Commission Expires

F-8


[ NAME OF SUBSIDIARY GUARANTOR ], as Additional Subsidiary Guarantor

By:
		Name:
		Title:

F-9


STATE OF NEW YORK		)
		)
COUNTY OF NEW YORK		)

On this day of , before me, a notary public within and for said county, personally appeared to me personally known who being duly sworn, did say that he/she is the of [ Name of Additional Subsidiary Guarantor ], one of the persons described in and which executed the foregoing instrument, and acknowledges said instrument to be the free act and deed of said persons.


By:
Title:		Notary Public, State of New York
No.
Qualified in
Commission Expires

F-10


CITIBANK, N.A., as Trustee

By:
		Name:
		Title:

F-11


STATE OF NEW YORK		)
		)
COUNTY OF NEW YORK		)

On this day of , before me, a notary public within and for said county, personally appeared to me personally known who being duly sworn, did say that he/she is the of Citibank, N.A., one of the persons described in and which executed the foregoing instrument, and acknowledges said instrument to be the free act and deed of said persons.


By:
Title:		Notary Public, State of New York
No.
Qualified in
Commission Expires

F-12

Exhibit 5.1

LOGO


Our Ref:		GAB/661537.001
Direct:		+1 284 852 3047
E-mail:		greg.boyd@maplesandcalder.com

The Company (as defined below)

24 March 2011

Dear Sirs

Arcos Dorados Holdings Inc. (the “Company”)

We are lawyers licensed and qualified to practice law in the British Virgin Islands. We have been asked to provide this legal opinion in connection with the issuance of the following securities, as registered under the United States Securities Act of 1933, as amended, pursuant to the registration statement, as amended, on Form F-1, provided to us as filed by the Company with the United States Securities and Exchange Commission (the “ Registration Statement ”):

(a)

up to a total of 62,461,539 Class A Shares, with no par value per share (the “ Initial Shares ”); and

(b)

up to a total of 9,369,231 Class A Shares, with no par value per share issuable pursuant to an option granted in favour of the underwriter (the “ Option Shares ”) under the Underwriting Agreement (as defined below).

2	DOCUMENTS REVIEWED

We have reviewed originals, copies, drafts or conformed copies of the following documents:

2.1	The unanimous written resolutions of the board of directors of the Company dated 14 October 2010 (the “ Resolutions ”).

2.2	A registered agent’s certificate dated 24 March 2011, issued by Maples Corporate Services (BVI) Limited, the Company’s registered agent (the “ Registered Agent’s Certificate ”).

2.3	The public records of the Company on file and available for public inspection at the Registry of Corporate Affairs in the British Virgin Islands (the “ Registry of Corporate Affairs ”) on 24 March 2010 including:

(a)

the Company’s Certificate of Incorporation; and

(b)

the Company’s amended and restated Memorandum and Articles of Association registered at the Registry of Corporate Affairs on 17 March 2011.

2.4	A Certificate of Good Standing issued by the Registrar of Companies (the “ Certificate of Good Standing ”).

2.5	The Registration Statement.

2.6	The underwriting agreement to be made between the Company and Merrill Lynch, Pierce, Fenner & Smith Incorporated, J.P. Morgan Securities LLC, Morgan Stanley & Co. Incorporated, and Itau BBA USA Securities Inc. as representatives of several underwriters (the “ Underwriting Agreement ”).

3	ASSUMPTIONS

In giving this opinion we have assumed (without further verification) the completeness and accuracy of the Registered Agent’s Certificate. We have also relied upon the following assumptions, which we have not independently verified:

3.1	Copy documents, conformed copies or drafts of documents provided to us are true and complete copies of, or in the final forms of, the originals.

3.2	All signatures, initials and seals are genuine.

3.3	The accuracy and completeness of all factual representations expressed in or implied by the documents we have examined.

3.4	There is nothing under any law (other than the law of the British Virgin Islands) which would or might affect the opinions hereinafter appearing.

3.5

That all public records of the Company which we have examined are accurate and that the information disclosed by the searches which we conducted against the Company at the Registry of Corporate Affairs is true and complete and that such information has not since then been altered and that such searches did not fail to disclose any information which had been delivered for registration but did not appear on the public records at the date of our searches.

4	OPINIONS

Based upon, and subject to, the foregoing assumptions and the qualifications set out below, and having regard to such legal considerations as we deem relevant, we are of the opinion that:

4.1

The Company is a company limited by shares duly incorporated under the BVI Business Companies Act, 2004 (the “ Act ”), in good standing at the Registry of Corporate Affairs and validly existing under the laws of the British Virgin Islands, and possesses the capacity to sue and be sued in its own name.

4.2	The Company is authorised to issue a maximum of 420,000,000 Class A Shares with no par value of which 120,000,000 are in issue and outstanding, and 80,000,000 Class B Shares with no par value of which 80,000,000 are in issue and outstanding.

4.3

The Initial Shares and the Option Shares to be issued in accordance with the Registration Statement, when issued in accordance with their governing instruments and the Company’s memorandum and articles of association, and in the manner described in the Registration Statement, will be duly authorised, validly issued, fully paid and non assessable.

4.4

The statements under the heading “Description of Share Capital and Memorandum and Articles of Association” of the Registration Statement insofar and to the extent that they constitute a summary or description of the laws and regulations of the British Virgin Islands and a summary of the terms of the share capital and the memorandum and articles of association of the Company are true and correct in all respects and nothing has been omitted from such statements which would make them misleading in any material respect.

4.5	The statements under the caption “Taxation” in the Registration Statement, to the extent that they constitute statements of British Virgin Islands law, are accurate in all material respects.

5	QUALIFICATIONS

The opinions expressed above are subject to the following qualifications:

5.1	To maintain the Company in good standing under the laws of the British Virgin Islands, annual filing fees must be paid to the Registry of Corporate Affairs.

5.2	The obligations of the Company may be subject to restrictions pursuant to United Nations sanctions as implemented under the laws of the British Virgin Islands.

5.3

We reserve our opinion as to the extent to which the courts of the British Virgin Islands would, in the event of any relevant illegality, sever the offending provisions and enforce the remainder of the transaction of which such provisions form a part, notwithstanding any express provisions in this regard.

5.4

This opinion is confined to and given on the basis of the laws of the British Virgin Islands at the date hereof and as currently applied by the courts of the British Virgin Islands. We have not investigated and we do not express or imply nor are we qualified to express or imply any opinion on the laws of any other jurisdiction.

5.5

In this opinion “non-assessable” means that the holders of fully paid shares in the Company have no liability to the Company, as shareholder, except for any liability expressly provided for in the memorandum or articles of association of the Company and any liability to repay a distribution under the Act.

6	CONSENTS

In connection with the above opinion, we hereby consent:

6.1	To the use of our name in the Registration Statement and all amendments thereto under the caption “Legal Matters”; and

6.2	To the filing of this opinion as an exhibit to the Registration Statement.

This opinion is limited to the matters detailed herein and is not to be read as an opinion with respect to any other matter.

Yours faithfully

/s/ Maples and Calder

Maples and Calder

Exhibit 9.1

Date: March 23, 2011

The Los Laureles Voting Trust

Los Laureles, Ltd.

(Settlor)

Arias Fabrega & Fabrega Trust Co. (BVI) Limited

(Voting Trustee)

Voting Trust Instrument

This VOTING TRUST INSTRUMENT (“this Instrument”) is made on this 23rd day of March, 2011 by and between Los Laureles, Ltd., a British Virgin Islands company (the “Settlor”), and Arias Fabrega & Fabrega Trust Co. (BVI) Limited, as voting trustee (in such capacity and with its successor(s) being hereinafter referred to as the “Voting Trustee”) of the voting trust created hereunder (the “Voting Trust”).

RECITALS

(A)

WHEREAS, Arcos Dorados Holdings Inc., a company incorporated under the BVI Business Companies Act, 2004 of the Laws of the British Virgin Islands (No. 16 of 2004) (“Arcos Dorados Holdings”) has issued Class B shares with no par value (“Class B Shares”), and the Settlor currently owns 80,000,000 Class B Shares;

(B)	WHEREAS, Arcos Dorados Holdings intends to conduct an initial public offering (“IPO”) of its Class A shares (“Class A Shares”) within twelve (12) months from the date hereof;

(C)	WHEREAS, the Voting Trust is being formed in order to (inter alia) secure the continuity and stability of the policies and management of Arcos Dorados Holdings following the IPO;

(D)	WHEREAS, in connection with the creation of the Voting Trust, the Settlor has transferred or deposited or will transfer and deposit with the Voting Trustee 80,000,000 Class B Shares (the “Initial Trust Fund”) to be held upon the trusts hereinafter expressed;

(E)

WHEREAS, McDonald’s Latin America, LLC, a Delaware limited liability company (“McDonald’s”), the Settlor, Arcos Dorados Holdings, Arcos Dorados Cooperatieve U.A., a cooperative organized under the laws of the Netherlands, Arcos Dorados B.V., a company organized under the laws of the Netherlands and the other parties thereto have entered into an Amended and Restated Master Franchise Agreement dated as of November 10, 2008, as amended from time to time (the “Master Franchise Agreement”);

(F)	WHEREAS, pursuant to Section 21.8.1 of the Master Franchise Agreement, an IPO of Arcos Dorados Holdings can only be effected if a voting trust agreement relating to the Settlor’s Class B Shares shall be created and settled by the Settlor; and

(G)	WHEREAS, the Voting Trustee has consented to act as trustee for the purposes herein provided.

OPERATIVE

1.	Declaration of Trust, Additional Property and Name.

1.1

The Voting Trustee shall during the Trust Period hold the Trust Fund and the income thereof upon the trusts, with the powers and subject to the provisions of this Instrument.

1.2

The Voting Trustee shall accept as additions to the Trust Fund additional Class B Shares to be held by the Voting Trustee subject to the powers and provisions of this Instrument.

1.3

This Instrument shall be known as “The Los Laureles Voting Trust” or such other name as the Voting Trustee may from time to time determine.

2.	Trust Period. The Trust Period means the period ending on the earlier of:

2.1

the last day of the period of 100 years commencing on the date hereof, which period and no other shall be the perpetuity period applicable to each trust created hereunder;

2.2

the expiration of twelve (12) months from the date hereof (“IPO Period”) if and provided that the IPO has not occurred or been completed during the IPO Period;

2.3

such date not being earlier than 1 May 2011 on which the Trust Fund ceases (for whatever reason) to comprise of any Class B Shares; or

2.4

such date as Los Laureles (PTC) Limited (the “PTC Co”) may, with the prior or simultaneous written consent of McDonald’s, at any time specify by deed (not being a date earlier than the date of such deed or later than a date previously specified).

3.	Dividends and Distributions.

3.1

Cash Dividends. The Settlor shall be entitled during the Trust Period to receive from time to time payments equal to all cash dividends received by the Voting Trustee in relation to the Qualifying Class B Shares, less such charges and expenses as are herein authorized to be deducted therefrom and less any income tax or other taxes required by law to be deducted therefrom. The Voting Trustee, instead of itself receiving and distributing any such cash dividends, may instruct Arcos Dorados Holdings to pay the amount of any such dividends directly to the Settlor.

3.2

Stock Dividends; etc. The Voting Trustee, or any custodian on behalf of the Voting Trustee, shall receive and hold, subject and upon the terms of this Instrument, any

Class B Shares issued in relation to the Qualifying Class B Shares by reason of any merger, amalgamation, capital reorganization, stock dividend, stock split, combination or the like; provided, however, that in the event Arcos Dorados Holdings issues, distributes or otherwise transfers any nonvoting securities, Class A Shares and/or other property in relation to the Qualifying Class B Shares, such securities, Class A Shares or other property as the case may be shall be paid and/or transferred to the Settlor in same manner and to the same extent as if such securities, Class A Shares and/or other property were deemed to be cash dividends within the terms of Clause 3.1 above. The Voting Trustee, instead of itself receiving and distributing any such securities, Class A Shares or other property, may instruct Arcos Dorados Holdings to issue, distribute or otherwise transfer any of such securities, Class A Shares or other property directly to the Settlor.

3.3

Appointment of Qualifying Class B Shares and Proceeds From the Sale Thereof.

(a)

The Voting Trustee may, with the prior or simultaneous written consent of McDonald’s, distribute free of trust to the Settlor such part or all of the Qualifying Class B Shares as the Voting Trustee may in its absolute discretion at any time or times during the Trust Period appoint.

(b)

Where, pursuant to and in accordance with Clause 6.1 below, part but not all of the Qualifying Class B Shares are sold or otherwise converted to cash, the net proceeds from such sale or conversion (“Capital Proceeds”) shall be paid and/or transferred to the Settlor (if then in existence) in the same manner and to the same extent as if such Capital Proceeds were deemed to be cash dividends within the terms of Clause 3.1 above.

3.4

Distribution Upon Termination. At the expiration of the Trust Period (“Trigger Date”), the Voting Trustee shall deliver to the Settlor (if the Settlor is then in existence) all Qualifying Class B Shares (if any) and any other property then comprised within the Trust Fund and shall, prior to such delivery, hold the same in trust for the Settlor absolutely provided that the Settlor is then in existence, and if the Settlor is not then in existence, then the Voting Trustee shall deliver all Qualifying Class B Shares (if any) and any other property then comprised in the Trust Fund to Woods Staton and, shall prior to such delivery, hold the same upon trust absolutely for Woods Staton provided always that he is then alive.

3.5

Ultimate Default Trust. If and to the extent that the prior trusts shall fail or determine, the capital and income of the Trust Fund shall, from the end of the Trust Period, be held upon trust absolutely for

such charities and in such shares as the Voting Trustee shall determine.

4.	Accounting and Reports.

4.1

The Voting Trustee shall (i) maintain or cause to be maintained the books of the Voting Trust on a calendar year basis on the cash method of accounting or in accordance with the International Financial Reporting Standards, promulgated by the International Accounting Standards Board, UK GAAP, US GAAP, Canadian GAAP or such other recognized international accounting standards as may be approved by the PTC Co and (ii) deliver to the PTC Co, within sixty (60) days of a written request, a copy of the annual financial statements of the Voting Trust requested by the PTC Co.

4.2

The Voting Trustee shall have the power to employ and pay at the expense of the capital or income of the Trust Fund a Qualified Accountant to prepare, in accordance with Clause 4.1 above, the financial accounts and statements of the Voting Trust.

Powers of Voting Trustee – Class B Shares. Subject to Clause 8 below, the Voting Trustee shall have the full and unqualified right and power during the Trust Period to vote and to execute consents with respect to the Qualifying Class B Shares at every annual and special meeting of the shareholders of Arcos Dorados Holdings and shall have full and complete authority to vote upon any and all questions arising at any such meetings.

6.	Administrative Powers.

6.1

The Voting Trustee shall not sell, transfer or otherwise dispose of any Qualifying Class B Shares without the prior or simultaneous written consent of McDonald’s. For the purposes of this Clause 6, “dispose” includes the exercise of voting powers leading, or capable of leading, to the liquidation of Arcos Dorados Holdings or the cancellation of any Qualifying Class B Shares or any rights attaching to them or the creation of any legal or equitable interest in any Qualifying Class B Shares.

6.2

Subject and without prejudice to Clauses 5 and 6.1 hereof and any of the other provisions hereof (and in particular provisions hereof which confer particular

powers on particular persons and require particular consents to be obtained before particular powers are exercised), paragraphs 1, 2 and 4 of the Second Schedule to the Trustee Act (other than paragraphs 4(a), (d), (o), (q)(i), (r) and (v)) shall be incorporated into this Instrument and in those paragraphs “Trust Fund” and “Trustees” shall be have the same meanings as in this Instrument save that references to “Trustees” shall be construed as references to the “Voting Trustee”.

6.3

The Voting Trustee shall be under no obligation to maintain a balance between competing interests of any beneficiaries under the Voting Trust and, subject to Clause 8 below and except as otherwise expressly provided in this Instrument to the contrary, no such beneficiaries shall be entitled:

(a)

to compel the sale or other realization of any property or investments not producing income; or

(b)

to require the declaration or distribution of any dividend by any company in which the Trust Fund or any part thereof may be invested; or

(c)

to require the Voting Trustee to exercise any powers it may have of compelling or preventing a distribution; or

(d)

to require the investment of any part of the Trust Fund in property or investments which produce income.

7.	Voting Trustee.

7.1

The Voting Trustee may be removed at any time with or without cause by a written notice, signed by Woods Staton while he is alive and not Incapable and after the death of Woods Staton and during such time or times that he is Incapable, by the PTC Co, served on the Voting Trustee; provided, however, that no Voting Trustee may be removed without the prior or simultaneous written consent of McDonald’s, which consent shall not be unreasonably withheld. Such removal shall become effective upon the appointment of a successor trustee in accordance with Clause 7.3 or Clause 7.4 hereof.

7.2

The Voting Trustee may resign at any time upon giving sixty (60) days prior written notice of such resignation to Arcos Dorados Holdings, the PTC Co and McDonald’s. Such resignation shall become effective upon the appointment of a successor trustee in accordance with Clause 7.3 or Clause 7.4 below and thereafter all powers, rights and obligations of the resigning Voting Trustee under this Instrument shall cease and terminate. Such sixty (60) day notice period may be reduced with the written consent of the resigning Voting Trustee, the PTC Co and McDonald’s.

7.3

In the event that the office of voting trustee of the Voting Trust becomes vacant or the Voting Trustee is sought to be removed in accordance with Clause 7.1 above or the Voting Trustee wishes to retire in accordance with Clause 7.2 above, a new or additional Voting Trustee (as the case may be) may be appointed by Woods Staton while he is alive and not Incapable, and after the death of Woods Staton and during such time or times that he is Incapable, by the PTC Co; provided, however, that any such new Voting Trustee may be appointed only with the prior or simultaneous written consent of McDonald’s.

7.4

Where a notice of removal has been given under Clause 7.1 above (a “Removal Notice”) or where the Voting Trustee has given notice of its wish to retire in accordance with Clause 7.2 above (a “Retirement Notice”), and no successor trustee has been appointed (for whatever reason) prior to the end of the applicable Appointment Period, the Voting Trustee may then by deed appoint a person (of its own selection) as successor trustee in place of the Voting Trustee.

7.5.

The Voting Trustee shall be entitled to remuneration for its services and reimbursement for its expenses on such terms as are agreed from time to time, in writing, between the Voting Trustee and the Settlor, whilst in existence and thereafter the PTC Co and subject to any such agreement in accordance with its published terms and conditions for trust business in force from time to time, or if there are no such published terms and conditions then to a reasonable fee and reimbursement for reasonable expenses. All fees and expenses of the Voting Trustee shall be paid by the Settlor and may (in default) be deducted from the Trust Fund.

7.6

The Voting Trustee (and to the extent permitted by law, the directors or other officers and employees of the Voting Trustee) shall not be liable for any loss to the Trust Fund or its income unless caused by actual fraud of the Voting Trustee or any such other persons aforesaid.

7.7

Without prejudice to any entitlement under the general law, the Voting Trustee may upon ceasing to be trustee or upon distribution of assets forming part or all of the Trust Fund withhold such assets as it shall in good faith consider necessary in respect of any liability which is properly chargeable against the Trust Fund or the income thereof and to which it may by virtue of acting or having acted as trustee hereof be or become subject.

8.	Voting Committee

8.1

Subject to Clause 8.11 below, the Voting Committee established pursuant to this Instrument shall direct the Voting Trustee how to exercise with respect to the Qualifying Class B Shares all voting rights and powers attendant thereto, including,

but not limited to, the right to assent or consent with respect thereto, and to take part in and consent to any corporate or shareholder action of any kind whatsoever (“Voting Direction”).

8.2

(a)

For purposes of this Clause 8, during the lifetime of Woods Staton while he is not Incapable, the term “Voting Committee” means Woods Staton and such other person or persons as Woods Staton may from time to time revocably or irrevocably appoint; provided, however, that a new or additional member of the Voting Committee may be appointed by Woods Staton only with the prior or simultaneous written consent of McDonald’s unless such new or additional member is a Woods Family Member or is a member of Senior Management.

(b)

For purposes of this Clause 8, after the death of Woods Staton or during such time or times that Woods Staton is Incapable, the term “Voting Committee” means, subject to Clause 8.4 below, a committee consisting of the following persons:

(1)

Francisco Alberto Staton;

(2)

Alicia Maria Staton;

(3)

Lauren Theresa Staton; provided, however, that until Lauren Theresa Staton attains the age of thirty (30) years, Erica Mabel Estefania Roberts de Staton shall act on behalf of Lauren Theresa Staton; provided, further, that if Erica Mabel Estefania Roberts de Staton dies or becomes Incapable before Lauren Theresa Staton attains the age of thirty (30) years, then:

Those of Francis Alberto Staton and Alicia Maria Staton who are then living and not Incapable shall unanimously elect the person (other than Lauren Theresa Staton) to act on behalf of Lauren Theresa Staton until such time that Lauren Theresa Staton attains the age of eighteen (18) years; and

After Lauren Theresa Staton has attained the age of eighteen (18) years but before she has attained the age of thirty (30) years, those of Lauren Theresa Staton, Francis Alberto Staton and Alicia Maria Staton who are then living and not Incapable shall unanimously elect the person (other than Lauren Theresa Staton) to act on behalf of Lauren Theresa Staton until she attains the age of thirty (30) years;

AND, for the avoidance of doubt:

The persons for the time being having the power to elect the person to act on behalf of Lauren Theresa Staton may, at any time and from time to time, remove such person so elected and appoint a new person (other than Lauren Theresa Staton) to act on behalf of Lauren Theresa Staton; and

If the persons having the power to elect the person to act on behalf of Lauren Theresa Staton cannot reach a unanimous agreement, then Lauren Theresa Staton shall not be treated as a member of the Voting Committee until the earlier of (a) when she attains the age of thirty (30) years and (b) when a person to act on behalf of Lauren Theresa Staton is appointed by unanimous agreement by the persons having the power to elect such person;

(4)

Sergio Alonso;

(5)

Carlos Hernandez Artigas;

(6)

Annette Franqui; and

(7)

such other persons appointed pursuant to Clause 8.3 below as a member of the Voting Committee.

8.3

Notwithstanding any provision herein to the contrary, no less than half of the members of the Voting Committee shall be members of Senior Management except that Woods Staton may be the sole member of the Voting Committee while he is alive and not Incapable. The Voting Committee shall always consist of at least one (1) member while Woods Staton is alive and not Incapable. After the death of Woods Staton and also while Woods Staton is Incapable, the Voting Committee shall always consist of at least six (6) members. The Voting Committee shall always act by majority vote, except that (a) if there is a deadlock on any decision to be made by the Voting Committee during Woods Staton’s lifetime, then Woods Staton shall make the decision and (b) if there is a deadlock on any decision after the death of Woods Staton or while he is Incapable, then (i) during the Follow On Period, the Voting Committee members who are Senior Management shall make the decision by a majority vote and (ii) after the expiration of the Follow On Period, the Woods Family Members who are then serving as a member of the Voting Committee shall make the decision unanimously or if they cannot reach a unanimous decision then by a majority vote by them with the prior or simultaneous written consent of the Protector. In the event that the Voting Committee consists of less than six (6) members after the death of Woods Staton or while he is Incapable, then the PTC Co shall appoint enough members to the Voting Committee so that there are not less than six (6) individuals then serving on the Voting Committee; provided, however,

that any new or additional member of the Voting Committee may be appointed by the PTC Co only with the prior or simultaneous written consent of McDonald’s unless such new or additional member is a Woods Family Member or is a member of Senior Management. After the death of Woods Staton and also while Woods Staton is Incapable, the PTC Co may at any time appoint a new or additional member or new or additional members to the Voting Committee; provided, however, that any new or additional member or new or additional members (as the case may be) of the Voting Committee may be appointed by the PTC Co only with the prior or simultaneous written consent of McDonald’s unless such new or additional member is a Woods Family Member or is a member of Senior Management. Appointments of new or additional members of the Voting Committee shall become effective upon written acceptance thereof by the person or persons appointed being given to the Voting Trustee.

8.4

While Woods Staton is alive and not Incapable, Woods Staton may at any time and from time to time remove any member of the Voting Committee for any reason whatsoever and may for any reason whatsoever declare that any of the persons referred to in Clause 8.2(b) above shall be ineligible to be appointed as members of the Voting Committee upon or after his death or while he is Incapable (and may for any reasons whatsoever revoke such declaration). References in this Clause 8.4 to a member of the Voting Committee shall for these purposes be deemed to include references to a person acting on behalf of Lauren Theresa Staton.

8.5

A member of the Voting Committee may at any time resign his position as a member of the Voting Committee by providing written notice to that effect to the Voting Trustee and each other member of the Voting Committee. A member of the Voting Committee shall be deemed to have resigned his position as a member of the Voting Committee upon his death or Incapacity.

8.6

Each member of the Voting Committee may act as a director or officer of Arcos Dorados Holdings, and he or any company which he may be a member of or any corporation in which he may be a shareholder, director or officer, may contract with Arcos Dorados Holdings, or may be monetarily interested in any transaction to which Arcos Dorados Holdings may be a party, or in which it may in any way be interested, as though he were not a member of the Voting Committee. Each member of the Voting Committee may, for his personal account or otherwise, either acquire from or sell to Arcos Dorados Holdings or any stockholder thereof shares of stock or other securities of Arcos Dorados Holdings to the same extent as though he were not a member of the Voting Committee.

8.7

No member of the Voting Committee shall be liable for any loss to the Trust Fund or the income thereof howsoever arising unless caused by his own actual fraud. Any person who is appointed a Voting Committee member shall be entitled to be indemnified (both during and after the time he was a member) out of the Trust

Fund and the income thereof in respect of all actions, costs, claims, damages, demands, expenses and liabilities whatsoever, howsoever and whenever arising by virtue or in consequence of (i) such person being or having been appointed a member of the Voting Committee or (ii) without prejudice to the foregoing anything done or omitted to be done by such person in the course of that appointment, unless caused by the actual fraud of such person.

8.8

Arcos Dorados Holdings and its officers, directors, and employees may conclusively presume the validity of any act or activity of the Voting Committee in connection with the Qualifying Class B Shares.

8.9

The Voting Committee may employ counsel and incur other reasonable expenses deemed necessary by the Voting Committee for the proper discharge of their duties and any such expenses shall be payable by and deductible from the Trust Fund or the income thereof.

8.10

Each of the members of the Voting Committee who acts as a member of the Voting Committee in the course of being engaged in a business or profession shall be entitled to reasonable remuneration for its services acting as a member of the Voting Committee and to reimbursement for its reasonable expenses incurred in connection with acting as member of the Voting Committee. Any such remunerations and expenses shall be paid by and deductible from the Trust Fund or the income thereof.

8.11

The exercise by the Voting Committee of their powers to issue a Voting Direction pursuant to and in accordance with Clause 8 hereof shall be subject to the prior or simultaneous written consent of the PTC Co.

9.	Voting Committee Directions.

9.1

The Voting Trustee shall comply with every Voting Direction issued and made by the Voting Committee pursuant to and in accordance with Clause 8 hereof.

9.2

For the avoidance of doubt, where and for so long as the Voting Committee is properly constituted in accordance with Clause 8 hereof, the Voting Trustee shall not exercise any powers in respect of the Qualifying Class B Shares otherwise than in compliance with a Voting Direction issued and made pursuant to and in accordance with Clause 8 hereof.

9.3

The Voting Trustee shall be under no duty to solicit a Voting Direction or to keep under review any Voting Direction previously made with a view to considering whether a further Voting Direction might be desirable.

9.4

Without prejudice to Clause 7.6 hereof, the Voting Trustee shall not be liable for any loss to the Trust Fund or the income thereof resulting directly or indirectly from compliance with any Voting Direction.

9.5

For the avoidance of doubt and without prejudice to Clauses 7.6 and 9.4 hereof, the Voting Trustee may, in all respects, rely upon and act in accordance with every Voting Direction, without further inquiry (whether as to the identity of any person or persons issuing such a Voting Direction or the correctness or completeness of any such Voting Direction).

10.

Notices. Any notice required hereunder to be given to any person shall be deemed delivered if delivered personally or mailed, postage prepaid, to such person. The Voting Trustee shall promptly deliver or cause to be delivered to the PTC Co all notices, statements, correspondence or information received by the Voting Trustee as registered holder of the Qualifying Class B Shares. Every notice so given shall be effective whether or not received, upon five (5) days after delivery or mailing of the same.

11.	Severability. In the event that any term or provision of this Instrument is deemed invalid or unenforceable by a court of competent jurisdiction, then the remaining terms and conditions hereof shall not be effected thereby.

12.	Governing Law .

12.1

Subject to Clause 12.2 hereof this Instrument is established under and shall be governed in all respects by the law of the British Virgin Islands (which shall be the proper law of the Voting Trust) and the courts thereof shall be the forum for the administration of the Voting Trust and shall have complete and exclusive jurisdiction as to all matters arising under or in connection with the Voting Trust.

12.2

The Voting Trustee may at any time by deed declare that from such date as may be specified in such deed:

(a)

this Instrument shall be governed in all respects by the law of the jurisdiction specified in the deed (which law shall become the proper law of the Voting Trust); and

(b)

the courts of that jurisdiction shall be the forum for the administration of the Voting Trust and shall have complete and exclusive jurisdiction as to all matters arising under or in connection with the Voting Trust;

provided that no declaration shall be made pursuant to the above provisions of this Clause 12.2 without the prior or simultaneous written consent of the PTC Co and McDonald’s.

13.

Counterparts. This Instrument may be executed in any number of counterparts and any party hereto may execute any such counterpart, each of which when executed and delivered shall be deemed to be an original and all of which counterparts taken together shall constitute but one and the same instrument.

14.	Amendments. The Voting Trustee, the PTC Co and McDonald’s may, acting jointly and together, by deed amend, vary, add or delete any of the provisions of this Instrument.

15.	Certain Defined Terms. The following terms, when used in this Instrument, shall have the following meanings:

“Appointment Period” means a period of 45 days commencing on the date of any Removal Notice or a period of 75 days commencing on the date of any Retirement Notice (as the case may be).

“Follow On Period” means a period of five years (5) commencing on the date of this Instrument.

“Incapable” means if (i) a court of competent jurisdiction determines that the person whose incapacity is being judged is incapable, by reason of mental disorder, of managing and administering his property and affairs (or the equivalent, applying the relevant test in that jurisdiction); (ii) two (2) doctors of medicine licensed to practice in either the country in which the person whose incapacity is being judged is then living or any state of the United States or in the District of Columbia, preferably but not necessarily one of whom shall be the personal physician of the person whose incapacity is being judged or a physician certified in the specialty most closely associated with the alleged incapacity, notify the Voting Trustee in writing that they each have examined the person whose incapacity is being judged, and that such person is incapable, by reason of mental disorder, of managing and administering his property and affairs; or (iii) the Voting Trustee has otherwise determined in good faith that the person whose incapacity is being judged is unable to exercise freely any of the powers provided to such person under this Instrument because of any physical or mental illness of or incapacity of or physical injury to the person whose incapacity is being judged, or because the person whose incapacity is being judged is incarcerated or is being held hostage or is the victim of extortion or blackmail or is otherwise in any way compelled to act under duress of any kind by whomever or whatever entity imposed; and, any such incapacity shall be deemed to exist until proven otherwise to the satisfaction of the Voting Trustee (which may not be unreasonably withheld). The terms “Incapacity” and “Incapacitated” shall have a corresponding meaning to the term “Incapable”.

“Qualified Accountant” means a member of:

(a)

the Institute of Chartered Accountants in England and Wales;

(b)

the Association of Chartered Certified Accountants;

(c)

the Canadian Institute of Chartered Accountants;

(d)

the American Institute of Certified Public Accountants; or

(e)

such other professional body as may be approved by the PTC Co.

“Qualifying Class B Shares” means all Class B Shares for the time being comprised in the Trust Fund.

“Senior Management” means (i) each director of Arcos Dorados Holdings that is not a Woods Family Member (ii) the chief executive officer of Arcos Dorados Holdings, (iii) the chief financial officer of Arcos Dorados Holdings, (iv) the chief operating officer of Arcos Dorados Holdings and (v) such other employees of Arcos Dorados Holdings that McDonald’s may at any time in writing appoint provided that such appointment shall not take effect until both the Voting Trustee and the PTC Co have been given written notice thereof.

“Trust Fund” means the Initial Trust Fund, all property at any time added thereto (whether by further settlement of property accepted by the Voting Trustee) and all property from time to time representing the same.

“Trustee Act” means the Trustee Act Chapter 303 of the Laws of the Virgin Islands Revised Edition 1991.

“Woods Family Member” means, with respect to Woods Staton:

(a)

his spouse;

(b)

each of his children and remoter issue and their spouses;

(c)

each of his parents;

(d)

each of his brothers and sisters (if any);

(e)

each of his spouse’s children and remoter issue (if not comprised in a prior class);

(f)

each of his spouse’s parents;

(g)

each of his spouse’s brothers and sisters (if any).

16.

Miscellaneous Definitions and Interpretations. Words denoting the singular shall include the plural and vice versa. Words denoting any gender shall include both other genders. References herein to “person” mean any legal person, including, but not limited to, any individual or body corporate. References herein to a person’s “issue” mean that person’s children and remoter issue (whether or not then living), including those who are legitimate, legitimated or adopted but not including illegitimate children or illegitimate remoter issue or those who claim through illegitimate children or illegitimate remoter issue. References

herein to “company” mean any body, incorporated or established in any part of the world, which has a legal existence independent of that of its members.

17.

Powers.

17.1

For the avoidance of doubt, McDonald’s powers under this Deed are personal and may be exercised by them in their own interest and for their own benefit.

17.2

For the avoidance of doubt, the powers of the Voting Committee are fiduciary and shall be exercised solely in the interests of the beneficiaries of the Voting Trust.

17.3

The powers of the PTC Co are fiduciary to the extent that all the powers which have been conferred on it by this Instrument other than those conferred by Clause 8.11 hereof shall be exercised in the best interests of the beneficiaries of the Voting Trust and for the avoidance of doubt the powers which have been conferred upon it by Clause 8.11 hereof shall be exercised in good faith.

17.4

The PTC Co may at any time or times by deed restrict in any manner the future exercise of the powers conferred on it by Clause 8.11. Without prejudice to the foregoing, any restriction may apply generally or to a limited extent and may be permanent or applicable only during a limited period.

17.5

Without prejudice to Clause 17.4, the provisions of Clauses 18.10, 18.11 and 18.17 below shall apply to the PTC Co in like manner as the same apply to the Protector so that references therein to the Protector shall, for these purposes, be construed as references to the PTC Co.

17.6

The PTC Co and, to the extent permitted by law, its directors and officers shall, in the absence of its or their own wilful and individual fraud or dishonesty, be exonerated and held harmless for any liability whatsoever in relation to the exercise or omission to exercise the powers conferred upon the PTC Co hereby. For the avoidance of doubt, but without prejudice to the forgoing provisions of this Clause 17.6, this Clause 17.6 shall not exonerate the PTC Co against any liability to McDonald’s arising by contract or other express agreement executed by it and McDonald’s.

18.	Protector. For purposes of this Agreement, the “Protector” means the person or persons who for the time being are serving as a protector under this Clause 18.

18.1

The initial protectors shall be Carlos Hernandez Artigas and Annette Franqui.

18.2

Upon each protector taking office he shall nominate one or more persons to act as his successor, and at any time or times while the nominating protector is serving as

a protector, such nomination may be revoked, in which case the nominating protector shall nominate one or more persons to act as his successor. The acceptance of the nomination of a successor protector or the revocation of any such nomination shall in each case take effect only upon receipt of written notice of such event by the Voting Trustee and all protectors other than the nominating protector.

18.3

Woods Staton may by deed delivered to the Protector and to the Voting Trustee remove any Protector or successor Protector and may (but shall not be bound) by the same deed appoint a new Protector or Protectors or successor Protector(s).

18.4

Woods Staton may by deed delivered to the Protector and to the Voting Trustee appoint a new or additional Protector or Protectors up to any number, subject to any limit imposed by law.

18.5

A protector may at any time resign his office by providing written notice to the Voting Trustee and Woods Staton, and such resignation shall be effective upon the date specified in said written notice, or if no such date is specified therein, then such resignation shall be effective upon such date said written notice is received by both the Voting Trustee and Woods Staton.

18.6

Such person as shall have been nominated to act as a successor protector shall succeed to the office of protector upon the resignation of his predecessor taking effect or upon the occurrence of such other event or the expiration of such period (if any) as may have been specified in his nomination as a successor protector.

18.7

If, after the death of Woods Staton or while Woods Staton is Incapable, there is no Protector for thirty (30) consecutive days, the PTC Co may forthwith appoint a new successor protector. The PTC Co may by deed delivered to the Protector and to the Voting Trustee remove any Protector who was appointed by the PTC Co and may (but shall not be bound) by the same deed appoint a new Protector.

18.8

No Voting Trustee may become a protector or be appointed a protector or nominated as a successor protector. Any nomination of a successor protector shall be treated as revoked if the successor protector is appointed as a Voting Trustee.

18.9

If there shall at any time be no protector, this Instrument shall, during such time as there shall be no Protector (but not further or otherwise), be read and construed as if all references to the requirement for the consent or agreement of the Protector and to the exercise by the Protector of any power were omitted from this Instrument.

18.10

The Protector may, at any time or times by deed revocable or irrevocable, release, extinguish or restrict any or all of the powers conferred upon him by the terms of this Instrument.

18.11

Any written consents of the Protector required under the terms of this Instrument may be given either specifically in relation to any particular matter or by a general written consent referring to one or more matters. Any requirement as to prior written consent shall be satisfied by a written consent given simultaneously. Any written recommendations of the Protector required under the terms of this Instrument may be given either specifically in relation to any particular matter or by a general written recommendation referring to one or more matters.

18.12

The Protector shall not owe any fiduciary duty towards, nor be accountable to the beneficiaries or the Voting Trustee for any act of omission or commission of the Protector in relation to the powers given to him by this Instrument. The Protector shall, in the absence of his own gross negligence, fraud, dishonesty or wilful default be free from any liability whatsoever in relation to such powers. The office of protector shall be personal and the powers of the Protector shall not be capable of being exercised by any guardian, conservator or personal representative.

18.13

The Protector shall be entitled to reimbursement of all proper expenses incurred by him in relation to the performance of his powers and duties hereunder and to reimbursement of any expenses incurred by him in the prosecution or defense of any legal proceedings arising in connection with the exercise or non-exercise of his powers and duties hereunder, provided that any claim for reimbursement shall be received by the Voting Trustee within one (1) year of the expenses being incurred.

18.14

If there is more than one protector serving at the same time, the protectors shall act by a clear majority so that if reduced to two (2) protectors they shall act unanimously or if reduced to one (1) that protector shall act alone.

18.15

On every change in the Protector a memorandum shall be endorsed on or permanently attached to this Instrument stating the name of the protector for the time being and shall be signed by the person so named and any person dealing herewith shall be entitled to rely upon such memorandum (or the latest of such memoranda if more than one) as sufficient evidence that the person or persons named therein is or are the duly constituted protector or protectors hereof for the time being.

18.16

A person either nominated to be a protector or currently serving as a protector shall be deemed to have refused such nomination or be deemed to have resigned, as the case may be:

(a)

if the person is an individual, then upon his death or while he is Incapable or when he is declared bankrupt (or the equivalent thereof), whichever shall occur first; or

(b)

if the person is not an individual, then upon its liquidation or dissolution whether compulsory or voluntary (except a voluntary liquidation merely for the purpose of amalgamation or reconstruction) or when it is declared bankrupt (or the equivalent thereof), whichever shall occur first.

18.17

Notwithstanding any provision herein to the contrary, the Voting Trustee shall provide to the Protector such information concerning this Instrument, including, but not limited to, trust documents and accounts, as the Protector may reasonably request in order to carry out the Protector’s functions under this Instrument.

IN WITNESS WHEREOF the parties have executed this document as their deed and have delivered it on the day and year first above written.

THE COMMON SEAL of

Los Laureles, Ltd.

was hereunto affixed in the

presence of:


Witness:		/s/ Feliciano Ortiz-Director
		Los Laureles, Ltd., a British Virgin Islands company

Signature	/s/ Natasha Haines	By:	Feliciano Ortiz-Director

Name	Natasha Haines	Title:	Servco Limited-Director

THE COMMON SEAL of

Arias Fabrega & Fabrega Trust Co. (BVI) Limited

was hereunto affixed in the

presence of:

Witness:


Witness:		/s/ Rosa Restrepo
		Arias Fabrega & Fabrega Trust Co. (BVI) Limited, a British Virgin Islands company

Signature	/s/ Ailyn Gonzalez	By:	Rosa Restrepo

Name	Ailyn Gonzalez	Title:	Director

Exhibit 10.1

Execution Copy

AMENDED AND RESTATED

MASTER FRANCHISE AGREEMENT

FOR

McDONALD’S RESTAURANTS

AMONG

McDonald’s Latin America, LLC,

LatAm, LLC,

Each of the MF Subsidiaries,

Arcos Dorados Limited,

Arcos Dorados Cooperatieve U.A.,

Arcos Dorados B.V. and

Los Laureles, Ltd.

Dated as of November 10, 2008

TABLE OF CONTENTS


1.	Definitions and Interpretation		8

	1.1	Definitions	8

	1.2	Interpretation	8

2.	Nature and Scope of Agreement		9

	2.1	The System	9

	2.2	Master Franchisee Rights are Personal	9

	2.3	Intent	10

3.	Grant of Rights		10

	3.1	Master Franchisee Rights	10

	3.2	MF Subsidiary Rights	10

	3.3	Certain Matters Relating to McCafes and Satellites	11

	3.4	Exclusivity	11

	3.5	Reservation of Rights	11

	3.6	No Grant; No Authority	12

	3.7	Certain Matters Relating to Brazil	12

	3.8	Cooperation	12

4.	Term and Renewal of Agreement		13

	4.1	Term	13

	4.2	Renewal	13

	4.3	Renewal Procedures	13

5.	Franchise and Related Fees		14

	5.1	Initial Franchise Fees	14

	5.2	Continuing Franchise Fees	16

	5.3	Transfer Fees	17



	5.4	Summary of Fees Payable	18

6.	Representations and Warranties		18

	6.1	Organization and Qualification	18

	6.2	Capitalization	18

	6.3	No Conflict	19

	6.4	Governmental Consents and Approvals	19

	6.5	Anti-Terrorism; Compliance with Applicable Law	20

	6.6	Litigation	20

	6.7	No Resale	20

	6.8	Information	20

	6.9	Disclosure Document	20

	6.10	MF Subsidiaries	20

	6.11	Escrowed Shares; Trusts	21

	6.12	Shareholders Agreements	21

7.	Certain Obligations of the Owner Entities, Master Franchisee and Master Franchisee Parties		21

	7.1	Core Documents	21

	7.2	No Other Business or Funded Debt; Separateness	22

	7.3	Senior Management	23

	7.4	Managing Directors	24

	7.5	Certain Actions with Respect to Franchised Restaurants	24

	7.6	Closings	25

	7.7	Related Party Transactions	25

	7.8	Compliance with Law; Notices and Pleadings	25

	7.9	Letter of Credit and Prepaid Amount	25

	7.10	Consular Services	29

	7.11	Insurance	29



	7.12	Required Technology and Related Equipment	30

	7.13	Financial Covenants		31

	7.14	Real Estate		31

	7.15	Anti-Terrorism; Anti-Corruption		32

	7.16	PCI Compliance		33

	7.17	Charitable Activities		33

	7.18	Escrowed Shares; Trust Agreements; Pledge Arrangements		33

	7.19	Compliance Certificate; Notice		34

	7.20	LC Collateral Pool		35

8.	Obligations of Beneficial Owner and Owner			36

	8.1	Obligations of Owner		36

	8.2	Obligations of Beneficial Owner		36

9.	Suppliers			36

	9.1	Restricted Supplier Period; Supplier Criteria		36

	9.2	Other Products and Services		37

	9.3	Global Suppliers		37

	9.4	Master Franchisee Party as Approved Supplier or Distributor		37

	9.5	McDonald’s Rights to Add or Terminate Approved Supplier		37

10.	McDonald’s General Services			38

	10.1	Communications; Visits; Additional Services		38

	10.2	Operations Manuals		38

	10.3	Relationship Committee		38

11.	Certain Matters Relating to Franchisees			39

	11.1	New Franchisees; Transfers		39

	11.2	Franchise Agreements		39

	11.3	Actions with Respect to Franchisees		40

12.	Training			40

iii



	12.1	Training Provided by McDonald’s	40

	12.2	Training Provided by Master Franchisee	41

	12.3	Certain Training Facilities	41

13.	Business Plans		41

	13.1	Initial Business Plans	41

	13.2	Subsequent Business Plans	42

14.	Advertising, Marketing and Promotion Materials and Activities; Packaging		43

	14.1	Strategic Marketing Plan	43

	14.2	Global Marketing Activities	44

	14.3	Premiums	44

	14.4	Competitive Market Data	45

15.	Intellectual Property		45

	15.1	Rights	45

	15.2	Intellectual Property Standards	45

	15.3	Specimens	45

	15.4	Ownership	46

	15.5	No Assignment	46

	15.6	Defense of Rights	46

	15.7	Registration	47

	15.8	Intellectual Property Created by Master Franchisee and its Franchisees	47

	15.9	Trademarks	47

	15.10	Copyrights	48

	15.11	Trade secrets	49

	15.12	Names	49

16.	Reports		49

	16.1	Generally	49



	16.2	Financial Accounting; Record Keeping; Internal Controls	50

	16.3	Standard Reporting Package	50

17.	Inspections and Audits		52

	17.1	Inspections of Business Operations	52

	17.2	Inspections and Audits of Books and Records	52

18.	Confidential Information/Exclusive Dealing by Master Franchisee		53

	18.1	Confidential Information	53

	18.2	Competitive Businesses	53

19.	Relationship of the Parties		54

	19.1	Relationship of Parties	54

	19.2	No Implied Employment Relationship	55

20.	Indemnification; No Liability		55

	20.1	Master Franchisee Indemnifies McDonald’s	55

	20.2	Rights and Responsibilities of Indemnitor and Indemnitee	56

	20.3	McDonald’s as Indemnitee	56

	20.4	No Liability	56

21.	Transfer; Right of First Refusal; IPO		57

	21.1	Transfer of Rights by McDonald’s	57

	21.2	Transfer of Rights by Master Franchisee, any Owner Entity or Beneficial Owner	57

	21.3	Certain Conditions to the Transfer of Restricted Interests by any Owner Entity, Master Franchisee or any of its Subsidiaries	59

	21.4	Right of First Refusal	59

	21.5	[Intentionally Omitted.]	60

	21.6	Call Option	60

	21.7	Calculation of Call Option Price	63

	21.8	IPO	68

	21.9	Right to Exercise Call Option; Damages on Failure to Complete	68



22.	Material Breaches and Remedies		69

	22.1	Material Breaches by Master Franchisee	69

	22.2	Material Breaches	69

	22.3	Remedies	72

	22.4	Mitigation	73

	22.5	Automatic Termination	73

23.	Rights and Obligations Upon Termination or Expiration of the Master Franchise		73

	23.1	Termination or Expiration of this Agreement	73

	23.2	Responsibilities of Master Franchisee Parties upon Termination	74

	23.3	Transition Services	75

	23.4	Right to Hire Former Employees	76

24.	General Provisions		76

	24.1	Effective Date	76

	24.2	Payments	76

	24.3	Priority of Payments; Set-Off Rights	78

	24.4	Severability	78

	24.5	Approvals and Consents of McDonald’s	78

	24.6	Waiver	79

	24.7	Benefits of this Agreement	79

	24.8	Counterparts	79

	24.9	Specific Performance	79

	24.10	Notices	79

	24.11	Survival	80

	24.12	No Third Party Beneficiaries	80

	24.13	Language	81

	24.14	Criminal or Civil Penalties	81



25.	Governing Law and Arbitration		81

	25.1	Governing Law	81

	25.2	International Arbitration	81

	25.3	Limitations	84

	25.4	SPECIAL DAMAGES	84

26.	Acknowledgements		84

	26.1	Evaluation and Advice	85

	26.2	Independent Investigation	85

	26.3	No Broker	85

27.	Entire Agreement/Amendments		85

	27.1	Entire Agreement	85

	27.2	Amendments	86

	* * *		86


EXHIBITS

1		MF Subsidiaries

2		Definitions

3		Owner Entity Information

4		Renewal Criteria

5		Shareholders Agreement

6		Senior Management

7		Insurance

8		Supplier Criteria

9		Franchisee Approval Process

10		Form of Franchise Agreement

11		Business Plans

12		Intellectual Property

13		Standard Reporting Package

vii


14		Restricted Real Estate

15		Transfer Criteria

16		Form of Transfer Instruction

17		Form of Negative Equity Election

18		Form of Default Exercise Notice

19		Form of Non-Default Exercise Notice

20		Form of Settlement Notice

21		Form of Disputed Amounts Settlement Notice

22		Form of FMV Review Notice

23		Form of Disputed Amounts Notice

24		IPO Criteria

25		Selected Competitive Businesses

26		Summary of Fees Payable

viii

AMENDED AND RESTATED

MASTER FRANCHISE AGREEMENT

FOR

McDONALD’S RESTAURANTS

THIS AMENDED AND RESTATED MASTER FRANCHISE AGREEMENT FOR McDONALD’S RESTAURANTS, (together with all Schedules and Exhibits hereto, the “ Agreement ”), dated as of November 10, 2008, among McDonald’s Latin America, LLC, a limited liability company organized under the laws of the State of Delaware with its principal office at Oak Brook, Illinois (“ McDonald’s ”), LatAm, LLC, a limited liability company organized under the laws of the State of Delaware with its principal office at Miami, Florida (“ Master Franchisee ”), each of the MF Subsidiaries (as defined below), organized in the jurisdiction, and with its respective principal office at the location, set forth herein, Arcos Dorados B.V., a company organized under the laws of the Netherlands with its principal office at Amsterdam, The Netherlands (“ Owner ”), Arcos Dorados Cooperatieve U.A., a cooperative organized under the laws of the Netherlands with its principal office at Amsterdam, The Netherlands (“ Dutch Coop ”), Arcos Dorados Limited, a company organized and existing under the International Business Companies Ordinance, 1984 of the British Virgin Islands with its principal office at Tortola, British Virgin Islands (“ Parent ” and, together with Owner and Dutch Coop, the “ Owner Entities ”), and, solely for purposes of Sections 6.1, 6.11, 6.12, 7.1, 7.8, 7.9, 7.18, 8.2, 18.2, 19.2, 21.2, 21.4, 21.6.5, 21.6.9, 21.8, 21.9, 22, 24.4, 24.9, 24.10, 25, 26 and 27, Los Laureles, Ltd., a company organized and existing under the International Business Companies Ordinance, 1984 of the British Virgin Islands with its principal office at Tortola, British Virgin Islands (“ Beneficial Owner ” and, together with each Owner Entity, McDonald’s, Master Franchisee and the MF Subsidiaries, the “ Parties ”).

WHEREAS, the Master Franchise Agreement was entered into among the Parties on August 3, 2007 (the “ Original MFA ”);

WHEREAS, the Parties have determined that certain amendments to the Original MFA are necessary to clarify the Parties’ obligations thereunder;

NOW, THEREFORE, the Original MFA is amended and restated to read in its entirety as follows:

1. Definitions and Interpretation

1.1 Definitions . Defined terms in this Agreement, which may be identified by the capitalization of the first letter of each principal word thereof, have the meanings assigned to them in Exhibit 2 .

1.2 Interpretation . In this Agreement, except to the extent that the context otherwise requires:

1.2.1 The Table of Contents and headings are for convenience of reference only and shall not affect the interpretation of this Agreement;

1.2.2 Defined terms include the plural as well as the singular and vice versa;

1.2.3 Words importing gender include all genders;

1.2.4 References to Sections, clauses, Schedules and Exhibits are references to Sections and clauses of, Schedules and Exhibits to, this Agreement;

1.2.5 References to any document or agreement, including this Agreement, shall be deemed to include references to such document or agreement as amended, restated, supplemented or replaced from time to time in accordance with its terms and (where applicable) subject to compliance with the requirements set forth herein; and

1.2.6 References to any Party or Person include its successors and permitted assigns.

2. Nature and Scope of Agreement

2.1 The System . McDonald’s and its Affiliates operate a restaurant system (the “ System ”), which is a comprehensive system for the ongoing development, operation and maintenance of McDonald’s Restaurants, and includes the Intellectual Property and other proprietary rights and processes, including the designs and color schemes for restaurant buildings, signs, equipment layouts, formulas and specifications for certain food products, including food and beverage products designated by McDonald’s as permissible to be served and sold in McDonald’s Restaurants, methods of inventory, operation, control, bookkeeping and accounting, and manuals covering business practices and policies that form part of the Standards. McDonald’s and its Affiliates may add elements to, or modify, alter or delete elements from, the System in their sole discretion from time to time. McDonald’s Restaurants have been developed for the retailing of a limited menu of uniform and quality food products, emphasizing prompt and courteous service in a clean, wholesome atmosphere that is intended to be attractive to children and families. The System is operated and advertised widely within the United States of America and in many foreign countries. McDonald’s and its Affiliates hold, directly or indirectly, all rights to authorize the adoption and use of the System. The foundation of the System is compliance with the Standards by McDonald’s franchisees, including each of the Master Franchisee Parties and the Franchisees, and compliance with the Standards provides the basis for the valuable goodwill and wide acceptance of the System. Such compliance by each of the Master Franchisee Parties and the Franchisees, the accountability of each of the Master Franchisee Parties for its performance hereunder and the establishment and maintenance by Master Franchisee of a close working relationship with McDonald’s in the operation of the Master Franchise Business together constitute the essence of this Agreement. Without limiting McDonald’s rights hereunder, McDonald’s will consider Master Franchisee’s recommendations regarding regional tastes and preferences and will work with Master Franchisee to accommodate such tastes and preferences to the extent that McDonald’s reasonably determines, in its sole discretion, that such actions are consistent with the System.

2.2 Master Franchisee Rights are Personal . Master Franchisee acknowledges that the Master Franchisee Rights (as defined below) are being granted based upon the special relationship of trust and confidence that McDonald’s and certain of its Affiliates have developed and enjoy with Woods W. Staton, who controls, directly or indirectly, the Master Franchisee Parties, the Owner Entities and Beneficial Owner. This special

relationship is based upon Mr. Staton’s reputation and character and his demonstrated skills, ability, knowledge and experience related to the management and operation of McDonald’s Restaurants, as well as his thorough understanding of the importance of the Intellectual Property and the Standards to McDonald’s and its Affiliates. The Parties acknowledge that the Master Franchisee Rights are granted to the Master Franchisee Parties only and to no other Person and may not, except as expressly permitted by this Agreement, be Transferred to any other Person by assignment, will or operation of Applicable Law.

2.3 Intent . This Agreement shall be interpreted to give effect to the intent of the Parties stated in this Section so that the Master Franchise Business and any Franchised Restaurants shall be operated at all times in conformity and strict compliance with the System.

3. Grant of Rights

3.1 Master Franchisee Rights . Subject to the terms and conditions of this Agreement, including all rights reserved to McDonald’s hereunder, McDonald’s grants to Master Franchisee the following rights (collectively, the “ Master Franchisee Rights ”):

3.1.1 The right to own and operate, directly or indirectly, Franchised Restaurants in each Territory other than Brazil;

3.1.2 The right and license to grant franchises with respect to Franchised Restaurants to Franchisees in each Territory other than Brazil in accordance with the Franchisee Approval Process and the applicable Franchise Agreement, it being understood and agreed that any Franchisee may establish and operate only one Franchised Restaurant per each Franchise Agreement; provided that a Franchise Agreement relating to Franchised Restaurants owned and operated by any Master Franchisee Party may relate to more than one Franchised Restaurant;

3.1.3 The right to adopt and use, and to grant the right and license to Franchisees to adopt and use, the System in the Franchised Restaurants in each Territory other than Brazil;

3.1.4 The right to advertise to the public that it is a franchisee of McDonald’s; and

3.1.5 The right and license to grant franchises and sublicenses of each of the foregoing rights and licenses to each MF Subsidiary other than Arcos Dourados Comercio de Alimentos, Ltda. (f/k/a “McDonald’s Comercio de Alimentos, Ltda.”, it being understood that any such grant by Master Franchisee to an MF Subsidiary shall be wholly derivative of the grant of rights by McDonald’s to Master Franchisee under this Agreement and shall not convey any other right not specifically granted hereunder.

3.2 MF Subsidiary Rights . Subject to the terms and conditions of this Agreement, including all rights reserved to McDonald’s hereunder, Master Franchisee grants to each MF Subsidiary the following rights (collectively, the “ MF Subsidiary Rights ”), it being understood that each such grant, other than the grant to Arcos Dourados

Comercio de Alimentos, Ltda., is wholly derivative of the grant of rights to Master Franchisee set forth in Section 3.1 and conveys no other right not specifically granted to Master Franchisee in such Section:

3.2.1 The right to own and operate, directly or indirectly, Franchised Restaurants in its respective Territory;

3.2.2 The right and license to grant franchises with respect to Franchised Restaurants to Franchisees in its respective Territory in accordance with the Franchisee Approval Process and the applicable Franchise Agreement, it being understood and agreed that any Franchisee may establish and operate only one Franchised Restaurant per each Franchise Agreement; provided that a Franchise Agreement relating to Franchised Restaurants owned and operated by any Master Franchisee Party may relate to more than one Franchised Restaurant;

3.2.3 The right to adopt and use, and to grant the right and license to Franchisees to adopt and use, the System in the Franchised Restaurants in its respective Territory; and

3.2.4 The right to advertise to the public that it is a franchisee of McDonald’s.

3.3 Certain Matters Relating to McCafes and Satellites .

3.3.1 Master Franchisee acknowledges and agrees that it has no right or license to use or sublicense any Freestanding McCafe, other than the Initial Freestanding McCafes, and that its rights with respect to the “McCafe” brand are limited to the operation of Incorporated McCafes and the Initial Freestanding McCafes subject to the conditions set forth in this Agreement.

3.3.2 Each proposed designation by Master Franchisee of a McDonald’s Restaurant as a Satellite shall be subject to the consent of McDonald’s to such designation prior to (a) the opening of such proposed Satellite; (b) the acquisition by Master Franchisee or any Subsidiary, directly or indirectly, of the fee simple interest (or the local equivalent) in, or entrance into of a lease (or the local equivalent) directly or indirectly from the owner of such interest, the real property on which such Satellite is to be located; (c) the incurrence of any other contractual obligation relating to such proposed Satellite; or (d) the request of any permit, authorization, consent or approval from any Governmental Authority relating to such proposed Satellite.

3.4 Exclusivity . Subject to Sections 22 and 23, McDonald’s shall not at any time during the Term applicable in any Territory (a) operate, directly or indirectly, any McDonald’s Restaurant in such Territory; (b) grant to any other Person any right to own and/or operate any McDonald’s Restaurant in such Territory; or (c) grant the right or license to grant franchises to any other Person to operate any McDonald’s Restaurant in such Territory.

3.5 Reservation of Rights . McDonald’s, on behalf of itself and its Affiliates, reserves all rights not specifically granted to Master Franchisee under this Agreement, including the right, directly or indirectly, to:

3.5.1 Use and sublicense the Intellectual Property in each Territory for all other purposes and means of distribution, including retail licensing, catalogs, Ronald McDonald House Charities, other charities, grocery, packaged foods, public and corporate relations materials and activities and Internet marketing and distribution;

3.5.2 Sell, promote or license the sale of products or services under the Intellectual Property, including through electronic communications or the use of the Internet; and

3.5.3 Use the Intellectual Property in connection with all other activities not prohibited by this Agreement.

3.6 No Grant; No Authority . For the avoidance of doubt, no grant of any Master Franchisee Rights or MF Subsidiary Rights is made to any Owner Entity. Neither any Owner Entity nor any Master Franchisee Party shall make any agreement, guaranty or representation on behalf of McDonald’s or any of its Affiliates.

3.7 Certain Matters Relating to Brazil .

3.7.1 Each Party hereto acknowledges that McDonald’s and Arcos Dourados Comercio de Alimentos, Ltda. have entered into a second amended and restated master franchise agreement dated as of November 10, 2008 with respect to Brazil (the “ Brazil MFA ”) pursuant to which McDonald’s has granted to Arcos Dourados Comercio de Alimentos, Ltda. the MF Subsidiary Rights in exchange for the payment of Continuing Franchise Fees and other amounts as and when specified in the Brazil MFA.

3.7.2 Each Party hereto agrees that, if any provision of this Agreement conflicts with any provision of the Brazil MFA, then the terms of this Agreement shall prevail, and each of the Owner Entities, Master Franchisee and Arcos Dourados Comercio de Alimentos, Ltda. shall take all actions necessary or desirable (or will cooperate with McDonald’s in taking such actions), to ensure that at all times the Brazil MFA is not inconsistent with any provision of this Agreement.

3.7.3 Each of McDonald’s and Arcos Dourados Comercio de Alimentos, Ltda. acknowledges and agrees that (a) the Renewal Criteria and the other terms, conditions and procedures set forth in Sections 4.2 and 4.3 shall serve as the renewal criteria and the other terms, conditions and procedures for purposes of Section 4 of the Brazil MFA; (b) the Franchisee Approval Process set forth herein shall serve as the franchisee approval process for purposes of Section 6.3.1 of the Brazil MFA; and (c) the New Franchise Agreement shall serve as the form of franchise agreement for purposes of Section 6.4.2 of the Brazil MFA.

3.8 Cooperation . The Parties shall cooperate to execute and deliver such agreements or other documents they may mutually deem appropriate in order to effectuate the grant of MF Subsidiary Rights to each of the MF Subsidiaries; provided , however , that each such agreement and other document shall be consistent this

Agreement and agree that, in the case of any ambiguity or inconsistency, the provisions of this Agreement shall govern and control.

4. Term and Renewal of Agreement

4.1 Term . Unless terminated pursuant to Sections 22 or 23, the initial term of this Agreement shall commence on August 3, 2007 and shall extend until (a) August 2, 2027 (the “ Regular Term ”) for each of Argentina, Aruba, Brazil, Chile, Colombia, Costa Rica, Curaçao, Ecuador, Mexico, Panama, Peru, Puerto Rico, Uruguay, Venezuela and the U.S. Virgin Islands of St. Thomas and St. Croix; and (b) August 2, 2017 (the “ French Term ” and together with the Regular Term, the “ Terms ”) for French Guiana, Guadeloupe and Martinique, subject to the renewal rights set forth below.

4.2 Renewal . McDonald’s shall have the right, in its reasonable business judgment based on the renewal criteria set forth in Exhibit 4 (the “ Renewal Criteria ”), to grant Master Franchisee an option to extend this Agreement for all Territories for an additional ten years after the expiration of the Regular Term (the “ Renewal Option ”) as provided in this Section. Master Franchisee shall have the right, in its sole discretion, to extend this Agreement with respect to French Guiana, Guadeloupe and Martinique for an additional ten years after the expiration of the French Term by written notice to McDonald’s given not less than one year prior to the expiration of the French Term; provided that if this option is exercised, Master Franchisee must exercise it with respect to all three Territories. The Renewal Option shall not apply to any Territory as to which the Master Franchisee Rights shall have been terminated.

4.3 Renewal Procedures .

4.3.1 McDonald’s shall determine whether to grant Master Franchisee a Renewal Option based on the Renewal Criteria and shall provide to Master Franchisee a written notice thereof (a “ Renewal Notice ”) not earlier than August 3, 2020 nor later than August 3, 2024. The Renewal Notice shall set forth the terms of the Renewal Option, or, in the event McDonald’s elects not to grant a Renewal Option, the material terms on which McDonald’s would be willing to approve a Transfer of the Master Franchise Business as permitted by Section 4.3.2. Master Franchisee shall advise McDonald’s of its intent to exercise or not to exercise any Renewal Option not more than 60 days following the date of such Renewal Notice.

4.3.2 If either (a) McDonald’s elects not to grant a Renewal Option; or (b) Master Franchisee elects not to exercise the Renewal Option, then Master Franchisee shall have the right, subject to Sections 21.2, 21.4 and 22.3 to solicit any Person for purposes of consummating a Transfer of the Master Franchise Business during the three-year period commencing on the date of the Renewal Notice (the “ Solicitation Period ”), on and subject to the terms and conditions set forth by McDonald’s in the Renewal Notice. During the Solicitation Period, McDonald’s shall cooperate with Master Franchisee to consummate any proposed Transfer to a Transferee approved by McDonald’s.

4.3.3 If Master Franchisee exercises the Renewal Option, then Master Franchisee and McDonald’s shall cooperate and use their best efforts to consummate an amendment and restatement of this Agreement to reflect the

terms of the renewal as specified in the Renewal Notice, which may include amended terms relating to Initial Franchise Fees, Continuing Franchise Fees and any other matter as McDonald’s may determine in its sole discretion.

5. Franchise and Related Fees

5.1 Initial Franchise Fees .

5.1.1 Unless otherwise agreed by McDonald’s, in connection with the opening of any new Master Franchisee Restaurant on or after August 3, 2007, an initial franchise fee (the “ Initial MFR Fee ”) shall be paid by Master Franchisee to McDonald’s in an amount equal to, in the case of any Franchised Restaurant other than a Satellite, $2,250, and, in the case of any Satellite, $1,125, multiplied by , in each case, the lesser of (a) 20; or (b) the number of years remaining in the Term applicable in such Territory (with any partial remaining year rounded up to one full year) (such number of years, the “ MFR Term ”). If on the expiration of any MFR Term, Master Franchisee desires to keep operating such Master Franchisee Restaurant, then Master Franchisee shall pay to McDonald’s an additional Initial MFR Fee in connection with such Master Franchisee Restaurant. Below is an example of the calculation of an Initial MFR Fee, which is for illustrative purposes only and shall in no event be deemed to conflict with any other provision of this Section.

Example : If the expiration of the applicable Term is August 2, 2027 and Master Franchisee opens a new Master Franchisee Restaurant that is not a Satellite on July 1, 2009, then Franchisee shall pay to Master Franchisee an Initial Franchisee Fee in an amount equal to $42,750 (or $2,250 * 19) and Master Franchisee shall pay to McDonald’s an amount equal to $42,750, regardless of whether such amount is received by Master Franchisee from the applicable Franchisee. If such Master Franchisee Restaurant were a Satellite, then Master Franchisee shall pay to McDonald’s an amount equal to $21,375.

5.1.2 Subject to Section 5.1.4(b) and unless otherwise agreed by McDonald’s, for each Franchise Agreement (or agreement to extend the term of any Franchise Agreement) entered into by Master Franchisee or any of its Subsdiaries with a Franchisee (other than Master Franchisee or any MF Subsidiary) on or after August 3, 2007, Master Franchisee shall require the applicable Franchisee to pay to Master Franchisee an initial franchise fee (the “ Initial SFR Fee ” and, together with the Initial MFR Fees, the “ Initial Franchise Fees ”) in an amount equal to, in the case of any Franchised Restaurant other than a Satellite, $2,250, and, in the case of any Satellite, $1,125, multiplied by , in each case, the greater of (a) the number of years remaining in the Term applicable in the Territory in which the Franchise Agreement (or agreement to extend the term of the Franchise Agreement) has been executed; or (b) the number of years included in the term of such Franchise Agreement (or agreement to extend the term of the Franchise Agreement), in each case, with any partial remaining year rounded up to one full year. Master Franchisee shall pay to McDonald’s 50% of the amount of each Initial SFR Fee, regardless of whether received by Master Franchisee from the applicable Franchisee. Below is an example of the

calculation of an Initial SFR Fee, which is for illustrative purposes only and shall in no event be deemed to conflict with any other provision of this Section.

Example : If the expiration of the applicable Term is August 2, 2027 and Master Franchisee enters into a new Franchise Agreement (or agreement to extend the term of any Franchise Agreement) with a Franchisee on July 1, 2009 in respect of a Franchised Restaurant that is not a Satellite for a 20-year term, then Franchisee shall pay an Initial Franchisee Fee in an amount equal to $45,000 (or $2,250 *20) and Master Franchisee shall pay to McDonald’s an amount equal to $22,500, regardless of whether such amount is received by Master Franchisee from the applicable Franchisee. If such Franchised Restaurant were a Satellite, then Master Franchisee shall pay to McDonald’s an amount equal to $11,250.

5.1.3 With respect to any new Master Franchisee Restaurant, each Initial Franchise Fee shall be payable on or prior to the date of the opening of such new Master Franchisee Restaurant. With respect to a Franchised Restaurant that is not a Master Franchisee Restaurant, the Initial Franchise Fee shall be payable upon the earlier of (a) the payment of the Continuing Franchise Fees in the calendar month in which the Initial Franchise Fee is payable; or (b) the opening of such Franchised Restaurant.

5.1.4

(a) Master Franchisee shall not be required to pay the Initial Franchise Fee with respect to any Franchised Restaurant that Relocates, unless the term of the applicable Franchise Agreement is extended in connection with such Relocation, in which case the Initial Franchise Fee shall be equal to, in the case of any Franchised Restaurant other than a Satellite, $2,250, and, in the case of any Satellite, $1,125, multiplied by , in each case, the number of years of such extension (with any partial remaining year rounded up to one full year).

(b) If a Franchisee enters into a Franchise Agreement (or agreement to extend the term of any Franchise Agreement) in connection with (i) the acquisition of a Franchised Restaurant from Master Franchisee; or (ii) the exercise of an option to acquire a Franchised Restaurant included as a term of a Business Facilities Lease entered into with Master Franchisee, then Franchisee shall only be required to pay the Initial Franchise Fee in respect of the years of such Franchise Agreement that extend beyond the Term applicable in such Territory. Below is an example of the calculation of an Initial SFR Fee, which is for illustrative purposes only and shall in no event be deemed to conflict with any other provision of this Section.

Example : If the expiration of the applicable Term is August 2, 2027 and Master Franchisee sells a Master Franchisee Restaurant to a Franchisee and, in connection therewith, enters into a new Franchise Agreement with respect to such Franchised Restaurant that expires on June 2, 2029, then Franchisee shall pay an Initial

Franchisee Fee in an amount equal to $4,500 (or $2,250 *2) and Master Franchisee shall pay to McDonald’s an amount equal to $2,250.

5.2 Continuing Franchise Fees .

5.2.1 Subject to Sections 5.2.2, 5.2.3 and 5.2.4 and except as otherwise provided in this Agreement, Master Franchisee shall pay to McDonald’s aggregate continuing franchise fees (“ Continuing Franchise Fees ”) with respect to each calendar month (or ratable portion thereof, including in the case of any Franchised Restaurant subject to an Approved Closing during such calendar month) during the applicable Term in an amount equal to 7% of the U.S. Dollar equivalent of the Gross Sales of each of the Franchised Restaurants in the Territories for such calendar month (or such ratable portion thereof), minus any applicable Brand Building Adjustment (the “ Regular Royalty ”). Master Franchisee shall cause Continuing Franchise Fees attributable to any Brand Building Adjustment to be applied promptly to such activities as Master Franchisee may determine in its sole discretion to promote and enhance the System and the Franchised Restaurants and the goodwill and reputation associated with the Intellectual Property in the Territories.

5.2.2 Notwithstanding Section 5.2.1, in the case of any Existing Franchise Agreement that provides for a Royalty at a rate less than the Regular Royalty (the “ Existing Royalty ”), Master Franchisee shall, for so long as such Existing Franchise Agreement remains in effect, pay to McDonald’s Continuing Franchise Fees with respect to the related Franchised Restaurant equal to the Existing Royalty.

5.2.3 In the case of any Franchise Agreement that relates to a Franchised Restaurant that (a) is not a Master Franchisee Restaurant, (b) is not located in Puerto Rico; and (c) is either (i) entered into after the date hereof; or (ii) is transferred by a Master Franchisee Party to a Franchisee in a Conventional Franchising Transaction, Master Franchisee shall pay to McDonald’s Continuing Franchise Fees during the stated term and any extension of such Franchise Agreement (but only during the Term) in an amount equal to 5% of the U.S. Dollar equivalent of the Gross Sales of such Franchised Restaurant (the “ New Franchisee Royalty ”).

5.2.4 In the case of any Franchise Agreement that relates to a Franchised Restaurant that (a) is not a Master Franchisee Restaurant, (b) is located in Puerto Rico; and (c) is either (i) entered into after the date hereof; or (ii) transferred by a Master Franchisee Party to a Franchisee in a Conventional Franchising Transaction, Master Franchisee shall pay to McDonald’s Continuing Franchise Fees during the stated term and any extension of such Franchise Agreement (but only during the Term) in an amount equal to 4.5% of the U.S. Dollar equivalent of the Gross Sales of such Franchised Restaurant (the “ Puerto Rican Royalty ”).

5.2.5 If at any time during the Regular Term there occurs any voluntary, involuntary, direct or indirect sale, assignment, transfer or other

disposition of a Franchised Restaurant by a Franchisee to a Master Franchisee Party, then from and after the date of such transfer or disposition Master Franchisee shall pay to McDonald’s Continuing Franchise Fees with respect to such Franchised Restaurant equal to the Regular Royalty.

5.2.6 If at any time during the Regular Term, McDonald’s increases the International Franchisee Royalty, then from and after the date of such increase, the New Franchise Royalty and the Puerto Rican Royalty shall each be increased to the extent of the increase of the International Franchisee Royalty.

5.2.7 Each Master Franchisee Party agrees that it shall not charge any Franchisee a Royalty in excess of the International Franchisee Royalty.

5.2.8 If any Franchised Restaurant fails to report or generate Gross Sales with respect to any calendar month (or a ratable portion thereof) otherwise than as a result of an Approved Closing, then Gross Sales for such Franchised Restaurant with respect to such calendar month (or such ratable portion thereof) shall be deemed to be equal to the average monthly Gross Sales (or comparable ratable portion thereof) reported by such Franchised Restaurant within the 12-month period ending immediately preceding the calendar month in which such failure to report or generate occurred; provided , however , that if such failure to report or generate is attributable to Force Majeure, no Continuing Franchise Fees with respect to the affected Franchised Restaurant shall be so payable for any calendar month (or such ratable portion thereof) following the first date on which any event constituting such Force Majeure shall have occurred and during which such event of Force Majeure continues.

5.2.9 Continuing Franchise Fees with respect to any calendar month shall be payable by Master Franchisee to McDonald’s no later than the seventh Business Day of the next succeeding calendar month.

5.2.10 Each MF Subsidiary agrees that, in exchange for the grant of MF Subsidiary Rights to the MF Subsidiary pursuant to Sections 3.1 and 3.2, it shall pay directly to McDonald’s its allocable share of the Initial Franchise Fees and Continuing Franchise Fees owed by Master Franchisee to McDonald’s.

5.2.11 Each MF Subsidiary agrees that it shall be jointly and severally obligated with Master Franchisee for the payment of Initial Franchisee Fees and Continuing Franchise Fees.

5.3 Transfer Fees . In the event of any voluntary, involuntary, direct or indirect sale, assignment, transfer or other disposition of a Franchised Restaurant by Master Franchisee, any of its Subsidiaries or any Franchisee, Master Franchisee shall charge a transfer fee of not less than $10,000 per Franchised Restaurant and shall remit to McDonald’s at the same time that it makes payment of the Continuing Franchise Fees in the calendar month in which the transfer fee is payable, an amount equal to 50% of the amount of each such fee so charged; provided , however , that no such fee shall be charged (a) by Master Franchisee or any of its Subsidiaries to any other Subsidiary of Master Franchisee; (b) in the event of any such sale, assignment, transfer or other disposition by a Franchisee to any of its Affiliates; or (c) in the event of the exercise of an option to

acquire a Franchised Restaurant included as a term of a Business Facilities Lease entered into with Master Franchisee. Below is an example of the calculation of a transfer fee, which is for illustrative purposes only and shall in no event be deemed to conflict with any other provision of this Section.

Example : If a Franchisee in Puerto Rico sells her Franchised Restaurant to the Master Franchisee, 50% of the transfer fee shall be payable to McDonald’s. In addition, as from the date of the transfer, the Royalty payable by the Master Franchisee would increase from the then-prevailing Puerto Rican Royalty to the then-prevailing Regular Royalty.

5.4 Summary of Fees Payable . Exhibit 26 summarizes the fees payable pursuant to this Section. The summary is for convenience of reference only and shall in no event be deemed to conflict with any other provision of this Section.

6. Representations and Warranties

On and as of August 3, 2007 and the date hereof (except with respect (a) to such representations and warranties that are expressly made as of another date, which representations and warranties shall be made as of such other date; and (b) with respect to Section 6.8, which representation is only made as of August 3, 2007), Beneficial Owner, each Owner Entity, Master Franchisee, and, with respect to Section 6.10, each MF Subsidiary, jointly and severally represent and warrant to McDonald’s as follows:

6.1 Organization and Qualification . Each of Beneficial Owner, Parent, Dutch Coop, Owner and Master Franchisee is duly organized, validly existing and in good standing under the laws of its jurisdiction of formation and has all requisite power and authority to enter into this Agreement, to carry out its obligations hereunder and to consummate the transactions contemplated by this Agreement. Each of Beneficial Owner, Parent, Dutch Coop, Owner and Master Franchisee is duly licensed or qualified to do business and is in good standing in each jurisdiction in which the properties owned or leased by it or the operation of the Master Franchise Business and any other business conducted by Beneficial Owner, Parent, Dutch Coop, Owner or Master Franchisee makes such licensing or qualification necessary, except to the extent that the failure to be so licensed or qualified or in good standing would not adversely affect the ability of Beneficial Owner, Parent, Dutch Coop, Owner or Master Franchisee to carry out their respective obligations under or consummate the transactions contemplated by this Agreement. The execution and delivery of this Agreement by Beneficial Owner, Parent, Dutch Coop, Owner and Master Franchisee, the performance by Beneficial Owner, Parent, Dutch Coop, Owner and Master Franchisee of their respective obligations hereunder and the consummation of the transactions contemplated by this Agreement have been duly authorized by all requisite action on the part of Beneficial Owner, Parent, Dutch Coop, Owner, Master Franchisee and the holders of their respective Equity Interests, as applicable. Beneficial Owner, Parent, Dutch Coop, Owner and Master Franchisee have provided to McDonald’s true and complete copies of their respective constituent documents.

6.2 Capitalization .

6.2.1 Parent is the record and beneficial owner of 100% of the Equity Interests of Dutch Coop. The Equity Interests of Dutch Coop and the certificate

representing such Equity Interests are owned and held by Parent, free and clear of all Encumbrances, are duly authorized, validly issued, fully paid and nonassessable and have not been issued in violation of preemptive or similar rights. No Person other than Parent holds or has a right to receive Equity Interests of Dutch Coop or any other instrument representing Equity Interests of Dutch Coop. The information with respect to Parent set forth in Exhibit 3 is correct.

6.2.2 Dutch Coop is the record and beneficial owner of 100% of the Equity Interests of Owner. The Equity Interests of Owner and the certificate representing such Equity Interests are owned and held by Dutch Coop, free and clear of all Encumbrances, are duly authorized, validly issued, fully paid and nonassessable and have not been issued in violation of preemptive or similar rights. No Person other than Dutch Coop holds or has a right to receive Equity Interests of Owner or any other instrument representing Equity Interests of Owner. The information with respect to Dutch Coop set forth in Exhibit 3 is correct.

6.2.3 Owner is the record and beneficial owner of 100% of the Equity Interests of Master Franchisee. The Equity Interests of Master Franchisee and the certificate representing such Equity Interests are owned and held by Owner, free and clear of all Encumbrances, are duly authorized, validly issued, fully paid and nonassessable and have not been issued in violation of preemptive or similar rights. No Person other than Owner holds or has a right to receive Equity Interests of Master Franchisee or any other instrument representing Equity Interests of Master Franchisee. The information with respect to Owner set forth in Exhibit 3 is correct.

6.3 No Conflict . This Agreement has been duly executed and delivered by each Owner Entity and Master Franchisee and, assuming due and valid authorization, execution and delivery hereof by each other Party hereto, constitutes the legal, valid and binding instrument of each Owner Entity and Master Franchisee, enforceable against each of them in accordance with its terms, except (a) as limited by applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance and other similar laws of general application affecting enforcement of creditors’ rights generally; and (b) to the extent that any remedy of specific performance or injunctive or other forms of equitable relief may be subject to equitable defenses and would be subject to the discretion of the court before which any proceeding therefor may be brought.

6.4 Governmental Consents and Approvals . None of the execution, delivery or performance of this Agreement by any Owner Entity or Master Franchisee or the consummation of the transactions contemplated by this Agreement (a) violates, conflicts with or will result in any breach of any provision of the constituent documents of any Owner Entity or Master Franchisee, as applicable; (b) requires any filing with, obtaining any permit, authorization, consent or approval from, or providing any notification to, any Governmental Authority, except those contemplated or required by this Agreement; (c) will result in a violation or breach of, or, with or without due notice or lapse of time or both, constitute a default or give rise to any right of termination, cancellation or acceleration under, any of the terms, conditions or provisions of any note, bond, mortgage, indenture, lease, license, contract, agreement or other instrument or obligation to which any Owner Entity or Master Franchisee is a party or by which any of its

respective properties or Assets may be bound or affected; or (d) violates any Applicable Law, except, in the case of each of the foregoing clauses, such violations, breaches or defaults that would not, individually or in the aggregate, have a material adverse effect on the ability of any Owner Entity or Master Franchisee to execute, deliver or perform this Agreement or consummate the transactions contemplated hereby.

6.5 Anti-Terrorism; Compliance with Applicable Law . None of the property or interests of any Owner Entity or Master Franchisee is subject to being “blocked” under any Anti-Terrorism Laws. Neither such Party, nor any of its respective funding sources (including any legal or beneficial owner of any Equity Interest in any Owner Entity or Master Franchisee) or Related Parties is or has ever been a terrorist or suspected terrorist within the meaning of the Anti-Terrorism Laws or identified by name or address on any Terrorist List. Each of Parent, Dutch Coop, Owner and Master Franchisee are in compliance with Applicable Law, including all such Anti-Terrorism Laws.

6.6 Litigation . There are no Actions by or against any Owner Entity or Master Franchisee that could adversely affect the legality, validity or binding effect of this Agreement or the performance by any Owner Entity or Master Franchisee of any of their respective obligations hereunder or the consummation of any of the transactions contemplated hereby.

6.7 No Resale . Except as expressly provided in this Agreement, Master Franchisee is acquiring the Master Franchisee Rights for Master Franchisee’s own account for purposes of operating the Master Franchise Business, including Franchised Restaurants, and of entering into Franchise Agreements, and not for purposes of the resale or redistribution of the Master Franchisee Rights or any other speculative purpose. Master Franchisee owns all of the interest in the franchise granted hereunder.

6.8 Information . All material information requested by McDonald’s and provided by any Owner Entity or Master Franchisee to induce McDonald’s to enter into this Agreement was true and complete in all material respects on and as of the date such information was provided and is true and complete in all material respects on and as of the date hereof.

6.9 Disclosure Document . Each Owner Entity and Master Franchisee has received, reviewed and understood the disclosure document provided to it by McDonald’s as required by Applicable Law in Brazil, French Guiana, Mexico, Guadeloupe and Martinique and has waived, to the extent permissible under Applicable Law, any right to receive such documents in a language other than English and to receive such documents in advance of November 10, 2008. Each Owner Entity and Master Franchisee acknowledge and agree that no such disclosure document is required by Applicable Law in any other Territory.

6.10 MF Subsidiaries . The execution and delivery of this Agreement by each MF Subsidiary, the performance by each MF Subsidiary of its respective obligations hereunder and the consummation of the transactions contemplated by this Agreement have been duly authorized by all requisite action on the part of each MF Subsidiary. This Agreement has been duly executed and delivered by each MF Subsidiary and, assuming due and valid authorization, execution and delivery hereof by each other Party hereto, constitutes the legal, valid and binding instrument of such MF Subsidiary, enforceable against such MF Subsidiary in accordance with its terms, except (a) as limited by

applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance and other similar laws of general application affecting enforcement of creditors’ rights generally; and (b) to the extent that any remedy of specific performance or injunctive or other forms of equitable relief may be subject to equitable defenses and would be subject to the discretion of the court before which any proceeding therefor may be brought.

6.11 Escrowed Shares; Trusts . The Certificated Equity Interests of Master Franchisee and each Escrowed MF Subsidiary delivered as of August 3, 2007 to Escrow Agent by Owner, Master Franchisee and each other registered owner of an MF Subsidiary constitute all of the Equity Interests of Master Franchisee and each Escrowed MF Subsidiary (other than any Escrowed MF Subsidiary that has issued Dematerialized Equity Interests) issued and outstanding on August 3, 2007. The Certificated Equity Interests of each Non-Escrowed MF Subsidiary delivered as of August 3, 2007 to the applicable Trustee by Master Franchisee and each of the registered owners of the Non-Escrowed MF Subsidiaries constitute all of the Equity Interests of each Non-Escrowed MF Subsidiary (other than any Non-Escrowed MF Subsidiary that has issued Dematerialized Equity Interests) issued and outstanding on August 3, 2007. Master Franchisee and each other registered owner of an Escrowed MF Subsidiary that has issued Dematerialized Equity Interests as of August 3, 2007 have delivered Escrowed Constituent Documents to Escrow Agent for each such Escrowed MF Subsidiary. The Escrowed Constituent Documents of each Escrowed MF Subsidiary that has issued Dematerialized Equity Interests by Master Franchisee and each other registered owner of an Escrowed MF Subsidiary that has issued Dematerialized Equity Interests constitute all of the Equity Interests issued and outstanding on August 3, 2007 of each Escrowed MF Subsidiary that has issued Dematerialized Equity Interests.

6.12 Shareholders Agreements . There are no shareholders agreements, voting trusts or other similar agreements to which Beneficial Owner is a party with respect to the Voting Interests of any Owner Entity or Master Franchisee other than the Shareholders Agreement, the Intercreditor Agreement and the Creditor Security Documents.

7. Certain Obligations of the Owner Entities, Master Franchisee and Master Franchisee Parties

7.1 Core Documents .

7.1.1 Without the prior consent of McDonald’s and except as otherwise permitted by this Agreement, none of Beneficial Owner, any Owner Entity, Master Franchisee or any Escrowed MF Subsidiary shall amend its Constituent Documents in a manner that would violate, or result in a breach of any covenant contained in, this Agreement or any Related Agreement, or that would be materially adverse to the interests of McDonald’s without the consent of McDonald’s.

7.1.2 Beneficial Owner has delivered to McDonald’s an executed shareholders agreement in the form of Exhibit 5 (the “ Shareholders Agreement ”). Beneficial Owner agrees not to enter into any shareholders agreement, voting trust or other similar agreement with respect to the Voting Interests of any Owner Entity or Master Franchisee other than the Shareholders Agreement, the Intercreditor Agreement and the Creditor Security Documents. Beneficial Owner

shall not consent to, or enter any amendment, waiver or modification of the Shareholders Agreement that would violate, or result in a breach of any covenant contained in, this Agreement or any Related Agreement, or that would be materially adverse to the interests of McDonald’s, unless McDonald’s shall have received not less than 10 days’ written notice of such amendment, together with the text thereof, and shall have consented thereto.

7.1.3 Beneficial Owner has delivered to McDonald’s the Credit Agreement, the initial Letter of Credit and all related financing or security documents entered into by any Owner Entity or Master Franchisee Party to finance the transactions contemplated by the Purchase Agreement or to support the Letter of Credit (the “ Financing Agreements ”). None of Beneficial Owner, any Owner Entity or any Master Franchisee Party shall (a) consent to, or enter any material amendment, waiver or modification of the terms and conditions related to the Collateral in any Financing Agreement, unless McDonald’s shall have received prior written notice of such amendment, together with the text thereof, and shall have consented thereto; provided , however , that if such material amendment, waiver or modification relates to Creditor Collateral, such consent shall not be unreasonably withheld by McDonald’s; or (b) incur Indebtedness secured by any Collateral (whether to Refinance Indebtedness under the Financing Agreements or otherwise) unless McDonald’s shall have received prior written notice of such incurrence, together with the definitive agreements evidencing such Indebtedness and shall have consented to any provisions of such agreements related to the Collateral, it being understood that (i) a condition to such consent shall be a requirement that the exercise of any remedies in respect of Liens relating to the Collateral in respect of such Indebtedness (or any related amount) be subject to the Intercreditor Agreement, the Escrow Agreement and the Trust Agreements; and (ii) if such Indebtedness is secured solely by any Creditor Collateral, such consent shall not be unreasonably withheld by McDonald’s.

7.2 No Other Business or Funded Debt; Separateness . Without the prior consent of McDonald’s, such consent not to be unreasonably withheld:

7.2.1 No Owner Entity or any Master Franchisee Party shall, directly or indirectly, enter into any other QSR Business or any business other than the Master Franchise Business, whether or not related to the Master Franchise Business.

7.2.2 No Owner Entity shall incur any Funded Debt or engage in a business other than holding Equity Interests of another Owner Entity or Master Franchisee other than Indebtedness contemplated by the Financing Agreements and any Refinancing thereof.

7.2.3 No Owner Entity shall:

(a) Institute proceedings to have such Owner Entity be adjudicated bankrupt or insolvent;

(b) Consent to the institution of bankruptcy or insolvency proceedings against such Owner Entity;

(c) File a petition seeking, or consent to, a reorganization or relief with respect to such Owner Entity under any Applicable Law relating to bankruptcy;

(d) Consent to the appointment of a receiver, liquidator, assignee, trustee, sequestrator (or other similar official) of such Owner Entity or a substantial part of its property;

(e) Make any assignment for the benefit of creditors of such Owner Entity;

(f) Admit in writing such Owner Entity’s inability to pay its debts generally as they become due; or

(g) Take action in furtherance of any of the foregoing.

7.2.4 Each Owner Entity shall:

(a) Maintain separate books, records and bank accounts;

(b) Hold itself out as a separate legal entity; and

7.3 Senior Management .

7.3.1 Each of the Parties acknowledges and agrees that the Intellectual Property has significant value to McDonald’s, its Affiliates, the Master Franchisee Business and the System.

7.3.2 In order to safeguard the value of the Intellectual Property, McDonald’s shall be entitled to approve the appointment of (a) the chief executive officer (or similar designation) having overall responsibility for the Master Franchise Business in the Territories (the “ Chief Executive Officer ”); and (b) the chief operating officer (or similar designation) having overall responsibility for the administration of the operation of the Master Franchise Business in the Territories (the “ Chief Operating Officer ”), each of whom shall be nominated by Master Franchisee. The initial Chief Executive Officer and the initial Chief Operating Officer are specified in Exhibit 6 .

7.3.3 In the event Master Franchisee wishes to appoint a new Chief Executive Officer or Chief Operating Officer, Master Franchisee shall submit to McDonald’s the name of the proposed successor, together with information in support of the candidacy, including a résumé for the candidate detailing his qualifications and experience and such other information as McDonald’s may reasonably request. McDonald’s shall be entitled to approve such candidate (such approval not to be unreasonably withheld) and shall notify Master Franchisee of

its decision with respect to a candidate within 30 Business Days of its receipt of Master Franchisee’s submission. The candidate shall also be made available for interviews by McDonald’s at its offices in Oak Brook, Illinois. Master Franchisee may appoint an interim Chief Executive Officer or Chief Operating Officer during the pendency of McDonald’s review of successor candidates, but in no event for a period in excess of six months from the termination of the predecessor officer. If, at the expiration of such six-month period, Master Franchisee and McDonald’s shall have failed to agree on a successor officer, McDonald’s shall be entitled to designate in its sole discretion a Person to hold the applicable office pending Master Franchisee’s submission of information relating to a further candidate and McDonald’s approval thereof, and Master Franchisee agrees to take such action as shall be necessary to cause such Person to be so appointed. All salary, benefits and incentives of such Person (including relocation expenses for such Person and his immediate family) shall be for the sole account of Master Franchisee.

7.3.4 Master Franchisee shall cause each of the Chief Executive Officer and the Chief Operating Officer to devote his full-time and best efforts to the operations of the Master Franchise Business in the Territories and to promote and enhance the operation of the System and the Franchised Restaurants and the goodwill and reputation associated with the Intellectual Property.

7.4 Managing Directors . Master Franchisee shall appoint and maintain with respect to each Territory or any group of Territories, a managing director (or similar officer) with overall responsibility for the conduct of the Master Franchise Business in such Territory or group of Territories (each, a “ Managing Director ”). Each Managing Director shall be a permanent resident of one of the Territories for which he has responsibility. Master Franchisee shall cause each Managing Director to devote his full-time and best efforts to the operation of the Master Franchise Business in the applicable Territory and to cooperate with his counterparts in other Territories as appropriate to promote and enhance the operation of the System and the Franchised Restaurants and the goodwill and reputation associated with the Intellectual Property.

7.5 Certain Actions with Respect to Franchised Restaurants . Master Franchisee shall, at its sole expense:

(a) With respect to any new Master Franchisee Restaurant, either (i) enter into a New Franchise Agreement in connection with such Master Franchisee Restaurant; or (ii) amend Exhibit 2 to the master franchise agreement between the Master Franchisee and the applicable MF Subsidiary in the Territory in which such new Master Franchisee Restaurant has been opened to document such opening and deliver a copy of such amended Exhibit 2 to McDonald’s no later than 60 days following the end of the calendar year in which the Master Franchisee Restaurants were opened and the relevant amendments to Exhibit 2 occurred (or should have occurred);

(b) Cause each Franchised Restaurant to comply with the System and not to engage in activity that may conflict with, or otherwise be detrimental to, the System;

(c) Ensure that each Franchised Restaurant is subject to a Customer Service Program that meets or exceeds the applicable Standards;

(d) Monitor continuously and measure with reasonable frequency the compliance by each Franchised Restaurant with the QSC Standards using a system for evaluating restaurant performance that meets or exceeds the applicable Standards; and

(e) Adopt and implement procedures for identifying all Confidential Information as such and for controlling the distribution, reproduction and collection of Confidential Information to and from Franchisees and employees of the Franchised Restaurants, and for preventing each Franchisee and / or its employees from further disseminating such Confidential Information. Master Franchisee shall promptly notify McDonald’s in the event any Confidential Information is lost, stolen, released or unaccounted for by it or any of its Subsidiaries or Franchisees. Master Franchisee shall advise McDonald’s as to the steps being taken by Master Franchisee and/or such Franchisee to recover such Confidential Information and shall take such steps as McDonald’s may direct.

7.6 Closings . Master Franchisee shall not, and shall not permit any of its Subsidiaries or Franchisees to, close any Franchised Restaurant except pursuant to an Approved Closing.

7.7 Related Party Transactions . Except as expressly permitted by this Agreement, Master Franchisee shall not, and shall not permit any of its Subsidiaries to, directly or indirectly, enter into or permit to exist any transaction (including any purchase, sale, lease or exchange of any property or the rendering of any service) with any Related Party of Master Franchisee otherwise than on an arm’s-length basis.

7.8 Compliance with Law: Notices and Pleadings

7.8.1 Beneficial Owner, each Owner Entity and Master Franchisee shall, and Master Franchisee shall cause each of its Subsidiaries to, comply with Applicable Law.

7.8.2 Beneficial Owner, each Owner Entity and Master Franchisee shall promptly provide McDonald’s with copies of any Notices received by any Master Franchisee Party, any Owner Entity or any Related Party of any of them relating to this Agreement, the Master Franchise Business, any Franchisee, any Managing Director, any Franchised Restaurant or any Related Agreement.

7.9 Letter of Credit and Prepaid Amount .

7.9.1 Subject to Section 7.9.4, as security for the performance of Master Franchisee’s and its Subsidiaries’ obligations hereunder, Master Franchisee shall, at its sole expense, obtain, deliver to McDonald’s and maintain throughout the Regular Term one or more standby letters of credit issued in favor of McDonald’s by a Qualified Bank with an aggregate amount available for

drawing thereunder of $80,000,000 and otherwise on terms and conditions (including the terms and conditions of any related reimbursement or similar agreement between any LC Bank and any Master Franchisee Party) acceptable to McDonald’s (as reissued from time to time, the “ Letters of Credit ”). McDonald’s may, in its sole discretion and at Master Franchisee’s sole expense, cause the Letters of Credit to be confirmed by any Qualified Bank in the United States of America. Master Franchisee shall, at its sole expense, cause any Letter of Credit to be reissued by a Qualified Bank no later than 60 days prior to the expiration date of such Letter of Credit, effective as of the expiration of the predecessor Letter of Credit. Each Letter of Credit shall provide that it shall not expire prior to the date that is 30 Business Days following the Effective Termination, unless earlier terminated by the beneficiary, the account party with the consent of the beneficiary or at its stated expiration.

7.9.2 The Parties agree that in certain cases, the failure of Beneficial Owner, any Owner Entity, Master Franchisee or the MF Subsidiaries to comply with their respective obligations hereunder may cause immediate and substantial damage to the interests of McDonald’s and its Affiliates in this Agreement. To compensate McDonald’s for such damage, the Parties have agreed that McDonald’s shall be entitled, but not obligated, to draw on the Letters of Credit (or any one of them in whole or in part) as and to the extent provided below (each such amount, an “ LC Payable ”) on the occurrence of the following events (each, an “ LC Trigger Event ”):

(a) The failure of McDonald’s to receive when due any amount required to be paid by any Owner Entity, Master Franchisee or any MF Subsidiary to McDonald’s under this Agreement within 10 days after the date such payment is due (exclusive of any other grace period hereunder), in which event McDonald’s shall be entitled to draw an aggregate amount under the Letters of Credit equal to the amount of such overdue payment, plus interest thereon to but excluding the date of draw as provided in Section 24.2.3;

(b) The Transfer of any interest in any Restricted Real Estate made in violation of Section 7.14.3, in which event McDonald’s shall be entitled to draw an aggregate amount under the Letters of Credit equal to the purchase price paid (whether in cash or property) for such Restricted Real Estate in connection with such Transfer (or, if greater, the fair market value of such property, as estimated by McDonald’s in the exercise of its reasonable judgment);

(c) The failure by Beneficial Owner, any Owner Entity, Master Franchisee or any MF Subsidiary to comply with any final award of the ICC pursuant to Section 25.2 in accordance with the terms thereof, in which event McDonald’s shall be entitled to draw an aggregate amount under the Letters of Credit equal to (i) the amount of such award, if a monetary award: or (ii) the aggregate amount available under all Letters of Credit, if a non-monetary award;

(d) Any action, plan or arrangement by Beneficial Owner, any Owner Entity, Master Franchisee or any MF Subsidiary taken or made with a view to avoiding or delaying their respective participation in arbitral proceedings instituted under Section 25.2 or with a view to obstructing or circumventing the operation of such Section or any proceeding thereunder, including through the institution of proceedings before any court or other body asserting the invalidity or unenforceability of such Section or any of its terms, in which event McDonald’s shall be entitled to draw the aggregate amount available under all Letters of Credit;

(e) During the period following the Effective Termination and on or prior to the third full Business Day preceding the LC Expiration Date, the failure by McDonald’s to have received, as security for the performance by each Owner Entity, Beneficial Owner and each Master Franchisee Party of its respective payment obligations following such Effective Termination up to an amount equal to the amount available for drawing under the Letter of Credit on such third full Business Day, a continuing perfected first priority Lien, evidenced by documents that are satisfactory in form and scope to McDonald’s in its reasonable judgment, in all of Master Franchisee’s right, title and interest in, to and under the Secured Restricted Real Estate, in which event McDonald’s shall be entitled to draw an aggregate amount under the Letters of Credit equal to the aggregate appraised value of the Secured Restricted Real Estate with respect to which McDonald’s does not have a continuing first priority perfected security interest as of such date, as set forth in the most recent appraisal thereof made pursuant to Section 16.3.4; provided , however , that McDonald’s shall not be entitled to enforce its rights as a secured party with respect to such Secured Restricted Real Estate unless, and solely to the extent that, any Owner Entity, Beneficial Owner or any Master Franchisee Party shall have failed to satisfy any such obligation as and when the same shall become due; and

(f) The failure by Master Franchisee (i) to cause any Letter of Credit to be reissued by a Qualified Bank in the full amount required hereunder regardless of any prior draw thereunder no later than 60 days prior to the stated expiration date of such Letter of Credit; or (ii) to restore the aggregate amount available under all Letters of Credit to be (A) at any time during the Regular Term (other than during the Prepaid Amount Period), $80,000,000; and (B) at any time during the Prepaid Amount Period, no less than $65,000,000 (or, if the Prepaid Amount is less than $15,000,000, such greater amount such that the sum of the Prepaid Amount and the aggregate amount available under the Letters of Credit is equal to $80,000,000) within 30 days following any draw under any such Letter of Credit, in which event McDonald’s shall be entitled to draw the aggregate amount available under all Letters of Credit.

7.9.3 McDonald’s certification to the applicable LC Bank that any of the foregoing drawing events has occurred shall be conclusive and binding on the applicable LC Bank as evidence of McDonald’s entitlement to draw on such

Letter of Credit. No draw by McDonald’s under any Letter of Credit shall (a) constitute an admission by McDonald’s of the occurrence or continuance of any Material Breach, the amount of damage incurred by McDonald’s as a result of the occurrence of any of the foregoing events, or a waiver of any other right or remedy to which McDonald’s may be entitled under this Agreement or Applicable Law; or (b) impair in any respect whatsoever McDonald’s rights to require each Master Franchisee Party to comply with its respective obligations under Sections 23.2 and 23.3 on any termination of this Agreement with respect to any Territory (other than any payment obligations satisfied by a draw on any Letter of Credit).

7.9.4 Until November 9, 2013 (the “ Prepaid Amount Period ”), Master Franchisee shall not be obligated to obtain, deliver to McDonald’s and maintain Letters of Credit with an aggregate amount available for drawing thereunder of $80,000,000, provided that Master Franchisee shall (a) obtain, deliver to McDonald’s and maintain Letters of Credit with an aggregate amount available for drawing thereunder of $65,000,000 at all times during the Prepaid Amount Period; and (b) make and maintain a deposit with McDonald’s of $15,000,000 with respect to Master Franchisee’s obligations under the MFA, as such obligations may become due and payable under the MFA (such amount as it may be reduced from time to time following the application of an LC Payable, the “ Prepaid Amount ”).

(a) Transfers of funds payable to McDonald’s with respect to the Prepaid Amount shall be made by wire transfer to such account as McDonald’s may specify in writing to Master Franchisee.

(b) Master Franchisee agrees that (i) it shall have no right or entitlement to the Prepaid Amount or any proceeds thereof, except as expressly set forth herein; (ii) McDonald’s shall have no obligation to (and for the avoidance of doubt, Master Franchisee acknowledges that McDonald’s shall not) segregate the Prepaid Amount from its other funds and securities or otherwise hold such Prepaid Amount for the account or the benefit of any Person other than itself; and (iii) McDonald’s may invest the Prepaid Amount if and to the extent it deems appropriate and in such funds or securities as it may determine in its sole discretion.

(c) In the event of an LC Trigger Event during the Prepaid Amount Period, the related LC Payable shall be satisfied, first, to the extent of the Prepaid Amount and, second, to the extent the LC Payable has not been paid in full after the application of the Prepaid Amount set forth above, the Letter of Credit, until such LC Payable is paid in full.

(d) McDonald’s shall notify Master Franchisee within five Business Days of any application of the Prepaid Amount, and Master Franchisee shall prepay such additional amount as may be necessary to restore the Prepaid Amount to $15,000,000 within five Business Days of the date of McDonald’s notice.

(e) Commencing November 10, 2008 and continuing until the end of the Prepaid Amount Period, interest on the balance from time to time of the Prepaid Amount shall be payable, in arrears, on the 10 ^th day of each November, February, May and August of each year, subject to adjustment in accordance with the Following Business Day Convention (each such date being referred to herein as a “ Interest Payment Date ” and each period of time for which interest is payable on a Interest Payment Date (being a period from, and including, the immediately preceding Interest Payment Date to, but excluding, the next succeeding Interest Payment Date) being referred to herein as a “ Interest Payment Period ”, except that the first Interest Payment Period shall be the period from, and including, November 10, 2008 to, but excluding, the first Interest Payment Date, and the last Interest Payment Period shall be the period from, and including, the Interest Payment Date immediately preceding the expiration of the Prepaid Amount Period, but excluding, November 9, 2013, subject to adjustment in accordance with the Following Business Day Convention) in an amount equal to the product of (i) the average daily balance of the Prepaid Amount during the applicable Interest Payment Period; multiplied by (ii) the applicable ROI. McDonald’s determination of the interest payable pursuant to this Section shall be conclusive and binding in the absence of manifest error. Interest shall be payable within ten Business Days following each Interest Payment Date in same day funds to the account designated by Master Franchisee in writing to McDonald’s for such purpose.

(f) McDonald’s shall refund to Master Franchisee the Prepaid Amount (or corresponding portion thereof) plus accrued but unpaid interest to but excluding the date of refund upon either (i) the expiration of the Prepaid Amount Period and the receipt by McDonald’s of a Letter of Credit in an aggregate amount equal to the Prepaid Amount; or (ii) upon 30 Business Days written notice to McDonald’s and receipt by McDonald’s of one or more additional Letters of Credit, an increase by Master Franchisee of the aggregate amount available for drawing under the Letters of Credit.

7.10 Consular Services . At McDonald’s request, Master Franchisee shall assist McDonald’s in obtaining any visas, work permits or other approvals needed to allow McDonald’s personnel or consultants to provide services, inspections or audits in any Territory.

7.11 Insurance .

7.11.1 Throughout the Term applicable in any Territory, Master Franchisee shall acquire and continuously maintain at its sole expense (a) all insurance policies required by any Site Agreement, Franchise Agreement or other contract or arrangement relating to the Master Franchise Business in such Territory; and (b) insurance policies with respect to each Master Franchisee Party in such Territory providing the following coverage with insurance companies rated at least A VIII or the equivalent, in the most recent edition of A.M. Best’s Insurance Guide: (i) commercial general liability coverage providing coverage

for operations, personal injury liability, advertising liability, contractual liability, contractor’s protective liability, property damage liability, U.S. jurisdictional coverage, terrorism and products liability coverage; (ii) advertiser’s professional errors and omissions liability insurance coverage; (iii) workers compensation insurance with statutory limits of coverage and employers liability insurance; (iv) comprehensive automobile liability insurance covering the use and maintenance of owned, not-owned, hired and rented vehicles and including coverage for bodily injury and third party property damage; (v) umbrella liability insurance in excess of the policies described in clauses (b) (i), (ii) and (iv) of this Section; (vi) “all risk” property insurance, including coverage with respect to damages resulting from earthquake, flood, named windstorm or terrorism; (vii) business interruption insurance; (viii) unemployment compensation insurance coverage; (ix) cyber liability insurance; and (x) crime coverage.

7.11.2 Master Franchisee shall cause (a) this Agreement to be specifically listed as an “insured contract” (or any comparable term used in such policy) and the coverage to be provided thereunder to be primary and not contributory with respect to any other insurance available to McDonald’s or any of its Affiliates; and (b) such policy to provide coverage for McDonald’s, its Affiliates and all of their respective stockholders, directors, officers, employees as named insureds under each of the policies specified in Section 7.11.1. No such policy shall exclude coverage from claims made between co-insureds solely on the basis of the parties’ designation as named insureds. The policy shall be specifically endorsed to provide that the coverages will be primary and that any other insurance carried by any named insured, including McDonald’s, shall be excess and non-contributory”.

7.11.3 Coverage limits under the insurance policies specified in Section 7.11.1 shall cover such risks and be provided in amounts no less than those specified in Exhibit 7 ; provided , however , that McDonald’s may at any time direct Master Franchisee to acquire different or additional insurance coverage limits (including such as may result from inflation, the identification of new risks, changes in Applicable Law or standards of liability, trends in litigation awards or other circumstances deemed relevant by McDonald’s in its sole discretion). Policy deductibles shall not exceed $500,000, without prior approval of McDonald’s. All such insurance policies shall provide that coverage thereunder shall not be canceled, non-renewed or materially changed without at least 30 days’ prior notice to McDonald’s. Master Franchisee shall provide McDonald’s upon its request with an electronic image of any of the insurance policies required hereunder.

7.12 Required Technology and Related Equipment .

7.12.1 To the fullest extent permitted by Applicable Law, McDonald’s shall have the right to specify the technology and related equipment to be used by Master Franchisee and its Franchisees in the operation of the Franchised Restaurants, including all software, hardware and similar items. Master Franchisee and its Franchisees shall not use any technology, software, hardware or equipment in such operations that has not been approved by McDonald’s.

7.12.2 To the fullest extent permitted by Applicable Law, McDonald’s may modify its Standards applicable to technology and related equipment from time to time, and Master Franchisee shall purchase for use in Master Franchisee Restaurants any new or modified technology, software, hardware, equipment or other similar items necessary to comply with such modified Standards. In connection with the applicable Reinvestment Plan, McDonald’s and Master Franchisee shall cooperate in determining a schedule for the implementation among Franchised Restaurants of any new or modified technology, software, hardware or other items specified in this Section that is at least comparable to McDonald’s plans for McDonald’s Restaurants in the United States of America and taking into consideration the other matters provided for in such Reinvestment Plan, the age and viability of the existing items, the relative Gross Sales of such Franchised Restaurants and such other factors as are appropriate to promote and enhance the operation of the System and the Franchised Restaurants.

7.12.3 McDonald’s and its Affiliates have developed proprietary software, technology and / or equipment, including the Tango and the Latin American Data Warehouse, which are owned by McDonald’s or its Affiliates. Certain of such developed proprietary software, technology and / or equipment shall be licensed to the Master Franchisee Parties for their use. The Master Franchisee Parties shall execute, deliver and comply with any license relating to the foregoing or other agreement that McDonald’s or any such Affiliate may require in connection therewith and shall promptly pay any related fees and costs specified therein as and when they are due and payable.

7.13 Financial Covenants . Master Franchisee shall comply with the following financial covenants at all times during the Regular Term.

7.13.1 Master Franchisee shall maintain a Fixed Charge Coverage Ratio at least equal to 1.25.

7.13.2 Master Franchisee shall maintain a Leverage Ratio not in excess of (a) 5.5, from August 3, 2007 to August 2,2009; (b) 5.25, from August 3, 2009 to August 2, 2010; (c) 5.0, from August 3, 2010 to August 2, 2011; (d) 4.75, from August 3, 2011 to August 2, 2012; and (e) 4.5, thereafter.

7.14 Real Estate .

7.14.1 Subject to Section 7.14.4, Master Franchisee shall own, directly or indirectly, the fee simple interest (or the local equivalent) in, or lease (or the local equivalent) directly or indirectly from the owner of such interest, all real property on which any Franchised Restaurant is located.

7.14.2 If Master Franchisee shall no longer be entitled to the exclusive exploitation of the Master Franchisee Rights in any Territory as a result of a termination pursuant to Section 22.3.1(b), then McDonald’s shall be entitled to develop Real Estate within any such Territory for use by Master Franchisee, its Franchisees or any other Person and charge Master Franchisee, its Franchisees or any other Person, as the case may be, fees with respect to the use of such Real

Estate that are established in accordance with McDonald’s policies in effect from time to time and that take into account local market conditions.

7.14.3 Except as permitted by Sections 7.9(e) and 7.20, Master Franchisee shall not otherwise Transfer any of its right, title or interest in any Restricted Real Estate without McDonald’s prior consent, which consent may be withheld in its sole discretion.

7.14.4 Master Franchisee shall at all times during the Regular Term cause (a) no more than 50% by number of the Franchised Restaurants (excluding Satellites) in all Territories to be owned, operated or managed by Franchisees who are not Master Franchisee Parties; (b) no more than 50% by number of the Franchised Restaurants (excluding Satellites) in any Territory to be located on Real Estate that is owned, held or leased by Franchisees who are not Master Franchisee Parties; and (c) no more than 10% by number of the Franchised Restaurants (excluding Satellites) in all Territories to be located on Real Estate so owned, leased or held by Franchisees who are not Master Franchisee Parties.

7 .15 Anti-Terrorism; Anti-Corruption .

7.15.1 Master Franchisee shall implement, and it and its Subsidiaries shall comply with, anti-money laundering policies and procedures that incorporate “know-your-customer” verification programs and such other provisions as may be required by Applicable Law.

7.15.2 Master Franchisee shall implement procedures to confirm, and shall confirm, that (a) none of Master Franchisee, any Person that is at any time a legal or beneficial owner of any Equity Interest in Master Franchisee or that provides funding to Master Franchisee or any of its Subsidiaries or any landlord under any Site Agreement is identified by name or address on any Terrorist List or is a Related Party of any Person so identified; and (b) none of the property or interests of Master Franchisee or its Subsidiaries is subject to being “blocked” under any Anti-Terrorism Laws.

7.15.3 Master Franchisee shall (a) deliver to McDonald’s on January 1 of each year an annual certification to the effect that it has complied with the requirements set forth in Sections 7.15.1 and 7.15.2; and (b) notify McDonald’s within five Business Days upon becoming aware of any violation of such requirements or of information to the effect that any Person whose status is subject to confirmation pursuant to Section 7.15.2 is identified on any Terrorist List, any list maintained by OFAC or to being “blocked” under any Anti-Terrorism Laws, in which event Master Franchisee shall, and shall cause its Related Parties to, cooperate with McDonald’s in an appropriate resolution of such matter, including the disposition of any affected Master Franchise Business and any discussions with or actions required by any applicable Governmental Authority.

7.15.4 In accordance with Applicable Law in each Territory and the United States of America, none of any Master Franchisee Party or any of its respective Affiliates, principals, partners, officers, directors, managers,

employees, agents or any other persons working on their behalf, shall offer, pay, give, promise to payor give, or authorize the payment or gift of money or anything of value to any officer or employee of, or any Person acting in an official capacity on behalf of, the Governmental Authority of any Territory, or any political party or official thereof or while knowing that all or a portion of such money or thing of value will be offered, given or promised, directly or indirectly, to any official, for the purpose of (a) influencing any action or decision of such official in his or its official capacity; (b) inducing such official to do or omit to do any act in violation of his or its lawful duty; or (c) inducing such official to use his or its influence with any Governmental Authority to affect or influence any act or decision of such Governmental Authority in order to obtain certain business for or with, or direct business to, any person, including any Party or any of their Related Parties.

7.16 PCI Compliance . Master Franchisee Party shall, and shall cause its MF Subsidiaries and Franchisees to ensure that each Franchised Restaurant that accepts any cashless payments (including credit and / or debit cards), adheres to the then current PCI (Payment Card Industry) Standards or any equivalent thereof or any substitute therefore. Any costs associated with an audit or to gain compliance with these standards shall be borne by Master Franchisee. Master Franchisee shall, and shall cause its MF Subsidiaries and Franchisees to, provide McDonald’s with evidence of such compliance at McDonald’s request and provide, or make available, to McDonald’s copies of any audit, scanning results or related documents relating to such compliance. Master Franchisee shall notify McDonald’s if it suspects or has been notified by any third party of a possible security breach related to the cashless system (or related cashless data) used in any Franchised Restaurant.

7.17 Charitable Activities . McDonald’s and its Subsidiaries have sponsored and promoted various charitable activities throughout the Territories, including the Ronald McDonald Houses, Ronald McDonald Rooms at hospitals and other care facilities and Ronald McDonald care mobiles. Master Franchisee shall fulfill any obligations under sponsorships existing as of August 3, 2007 and thereafter shall take appropriate account of other Ronald McDonald charitable activities and sponsorship opportunities and support them to the extent commercially reasonable in light of the performance of the Master Franchisee Business; provided , however , that in no event shall Master Franchisee discontinue support for any material Ronald McDonald charitable activity that is being supported by McDonald’s and its Subsidiaries in the Territories as of August 3, 2007 without previously discussing this decision with the Relationship Committee.

7.18 Escrowed Shares; Trust Agreements; Pledge Arrangements .

7.18.1 Subject to Section 21, each Owner Entity, Master Franchisee and each other registered owner of any Escrowed MF Subsidiary shall (a) promptly deliver, or cause to be delivered, to Escrow Agent any Certificated Equity Interests of Master Franchisee and each Escrowed MF Subsidiary issued by any of them subsequent to August 3, 2007, together with any applicable Local Stock Power and / or applicable Local Voting Power; and (b) execute and deliver a pledge agreement and such other documents as and to the extent required by the applicable MFA Document and otherwise containing such terms as may be reasonably satisfactory to McDonald’s.

7.18.2 Subject to Section 21, Master Franchisee and each other registered owner of any Non-Escrowed MF Subsidiary shall duly endorse in favor of, and promptly deliver, or cause to be delivered, to the applicable Trustee any Certificated Equity Interests of each Non-Escrowed MF Subsidiary issued by any of them subsequent to August 3, 2007 in accordance with the terms of the Trust Agreements.

7.18.3 Subject to Section 21, Owner, Master Franchisee and each other registered owner of any Escrowed MF Subsidiary that issues Dematerialized Equity Interests subsequent to August 3, 2007 shall (a) promptly deposit Escrowed Constituent Documents of such Escrowed MF Subsidiary with Escrow Agent, together with any applicable Local Stock Power and/or applicable Local Voting Power; and (b) execute and deliver a pledge agreement as and to the extent required by the applicable MFA Document and otherwise containing such terms as may be reasonably satisfactory to McDonald’s.

7.18.4 Subject to Section 21, Master Franchisee and each other registered owner of any Non-Escrowed MF Subsidiary shall cause the assignment of any Dematerialized Equity Interests issued by any Person subsequent to August 3, 2007 to the applicable Trustee to be approved, and shall register the applicable Trustee as the owner of such Dematerialized Equity Interests, in accordance with the terms of the Trust Agreements.

7.18.5 To the fullest extent permitted by Applicable Law, Owner, Master Franchisee and each other registered owner of any Escrowed MF Subsidiary shall use commercially reasonable efforts to cause any Escrowed MF Subsidiary to issue its Equity Interests in the form of Certificated Equity Interests.

7.18.6 If any Person is deemed to be an MF Subsidiary pursuant to Section 21.2.2 and such Person is not organized in Mexico or Costa Rica, then the owner of such Person shall, as a condition precedent to the Transfer, (a) if the Equity Interests of such Person are Certificated Equity Interests, deliver such Certificated Equity Interests to Escrow Agent; and (b) if the Equity Interests of such Person are Dematerialized Equity Interests, deliver Escrowed Constituent Documents of such Person to Escrow Agent. If any Person agrees to be deemed an MF Subsidiary pursuant to Section 21.2.2 and such Person is organized in Mexico or Costa Rica, then the owner of such Person shall, as a condition precedent to the Transfer, (x) if the Equity Interests of such Person are Certificated Equity Interests, duly endorse in favor of, and deliver such Certificated Equity Interests to, the applicable Trustee, and cause the applicable Trustee to be registered as the owner of such Certificated Equity Interests, in accordance with the terms of the applicable Trust Agreement; and (y) if the Equity Interests of such Person are Dematerialized Equity Interests, cause the assignment of such Dematerialized Equity Interests to the applicable Trustee to be approved, and to register the applicable Trustee as the owner of such Dematerialized Equity Interests, in accordance with the terms of the applicable Trust Agreement.

7.19 Compliance Certificate; Notice .

7.19.1 Master Franchisee shall deliver to McDonald’s within 45 days after the end of each fiscal year a certificate from its Chief Executive Officer and its Chief Operating Officer stating whether or not, after due inquiry, the signers know of any Material Breach, or any event that with notice or passage of time (or both) would constitute a Material Breach. If they do know of any such Material Breach or event, the certificate shall provide a description thereof, including its status.

7.19.2 Master Franchisee shall deliver to McDonald’s within 90 days after the end of each fiscal quarter, and within 120 days after the end of each fiscal year, a certificate from its Chief Executive Officer and its chief financial officer demonstrating in reasonable detail compliance at the end of such quarter with each of the covenants set forth in Section 7.13.

7.19.3 Promptly upon any officer of Master Franchisee obtaining knowledge of a Material Breach or any event that with notice or passage of time (or both) would constitute a Material Breach, Master Franchisee shall give notice thereof to McDonald’s and provide such other information as may be reasonably available to it to enable McDonald’s to evaluate such Material Breach or event.

7.20 LC Collateral Pool .

7.20.1 As security for the performance of the obligations of each of the Owner Entities, Beneficial Owner and each Master Franchisee Party hereunder following the Effective Termination, Master Franchisee has taken all steps necessary to grant to McDonald’s a continuing perfected first priority Lien in all of its right, title and interest in, to and under the Secured Restricted Real Estate (the “ LC Collateral Pool ”); provided , however , that the LC Collateral Pool shall secure such obligations up to an amount equal to the aggregate amount available for drawing under the Letters of Credit as in effect on the third full Business Day prior to the Effective Termination. All documentation relating to such Lien or the LC Collateral Pool shall be in form and scope acceptable to McDonald’s in its reasonable judgment. The Parties acknowledge that (a) such documentation shall provide for foreclosure by judicial sale or other similar process under Applicable Law whereby collateral is sold on an arm’s length basis and the proceeds of such sale are first paid to lienholders and any remainder is paid to the debtor; and (b) no such documentation will provide for strict foreclosure or other similar process under Applicable Law whereby a lienholder obtains title to collateral immediately following a default by the debtor (or following the expiration of any required cure period).

7.20.2 Master Franchisee shall take all such action as may be necessary or desirable, including as directed by McDonald’s, to maintain the first priority perfected status of the Lien created pursuant to Section 7.20.1 until such time as each Owner Entity, Beneficial Owner and each Master Franchisee Party shall have satisfied all of its respective obligations hereunder, including any post-termination obligations under Section 23 and the payment of any arbitral award or other judgment against such Person relating to matters arising out of this Agreement; provided , however , that if no arbitration under Section 25.2 is pending against any of the foregoing Persons on the second anniversary of the

Effective Termination, the Lien created pursuant to Section 7.20.1 shall terminate on such second anniversary date.

8. Obligations of Beneficial Owner and Owner.

8.1 Obligations of Owner . All interests of Owner, whether direct or indirect, in any Franchised Restaurant or any other McDonald’s-related business in the Territories shall be held by Owner through Master Franchisee. Master Franchisee shall own, directly or indirectly, 100% of the Equity Interests of each of its Subsidiaries (other than any directors’ qualifying shares and joint ventures existing on August 3, 2007) and shall not enter into any partnership, joint venture or similar arrangement, except with the prior consent of McDonald’s.

8.2 Obligations of Beneficial Owner . Beneficial Owner shall at all times during the Regular Term own directly not less than 40% of the aggregate Economic Interests and 51% of the aggregate Voting Interests of Parent and indirectly not less than 40% of the aggregate Economic Interests and 51% of the aggregate Voting Interests of Master Franchisee; provided ; however , that Beneficial Owner shall not be deemed to be in breach of this Section if in the event of an IPO the Economic Interests of Beneficial Owner in Parent (and consequently of Master Franchisee) are diluted to less than 40%. Notwithstanding the foregoing, if Beneficial Owner would, after giving effect to an IPO, retain less than 30% of the aggregate Economic Interests of Parent, Beneficial Owner must subscribe to a number of additional Economic Interests of Parent in such IPO such that, after giving effect to such IPO, Beneficial Owner would own directly not less than 30% of the aggregate Economic Interests of Parent. Notwithstanding anything to the contrary herein, and regardless of any IPO or subsequent equity issuances, Beneficial Owners shall at all times maintain direct ownership of not less than 51% of the aggregate Voting Interests of Parent and maintain indirect ownership of not less than 51% of the aggregate Voting Interests of Master Franchisee.

9. Suppliers

9.1 Restricted Supplier Period; Supplier Criteria .

9.1.1 To the fullest extent permitted by Applicable Law, during the applicable Restricted Supplier Period, Master Franchisee and each Franchised Restaurant shall (a) acquire and use exclusively the products and services of those vendors and Distributors that as of August 3, 2007 supply any Restricted Product (the “ Existing Suppliers ”); and (b) comply with all related protocols or other requirements of each applicable Existing Supplier, unless otherwise mutually agreed in writing between Master Franchisee and such Existing Supplier; provided , however , that if Master Franchisee or any Franchisee is unable to procure products or services from any Existing Supplier because (i) Master Franchisee or such Franchisee is unable to procure a sufficient quantity of products or services at competitive prices from Existing Suppliers; or (ii) the quality of products or services provided by such Existing Supplier has deteriorated below the applicable QSC Standards or other applicable Standards and no other Existing Supplier in the Territory is able to provide such products or services as and to the extent required, then Master Franchisee may, after providing McDonald’s with documentation evidencing the circumstances

described in clause (i) or (ii) above, request that McDonald’s designate or approve as promptly as practicable one or more other vendors to provide such products or services. If, during such Restricted Supplier Period, a new product is introduced or there is an innovation to an existing product that, in either case, would be a Restricted Product, Master Franchisee may request that McDonald’s approve a vendor of such product identified by Master Franchisee that complies with the supplier criteria set forth in Exhibit 8 (the “ Supplier Criteria ”) or any other criteria reasonably suggested by McDonald’s.

9.1.2 After the expiration of the applicable Restricted Supplier Period, Master Franchisee and any Franchised Restaurant shall be entitled to use and acquire from vendors that are not Existing Suppliers (a “ New Supplier ” and, together with Existing Suppliers, the “ Approved Suppliers ”) Restricted Products; provided that each such vendor (a) meets the Supplier Criteria; and (b) is approved by McDonald’s. Master Franchisee shall identify and pre-approve each New Supplier at its sole expense and shall reimburse McDonald’s for any expense it incurs in connection with the approval of any vendor.

9.2 Other Products and Services . If a product or service is not a Restricted Product, then Master Franchisee and any Franchised Restaurant may acquire and use such product from any vendor or Distributor if and so long as such product or service complies with the Standards.

9.3 Global Suppliers . If McDonald’s or any of its Affiliates enters into any global supply arrangement with any supplier or other vendor for any products or services (a “ Global Supplier ”), it shall notify Master Franchisee and, if Master Franchisee so requests, shall provide Master Franchisee with information regarding such global supply arrangement, including contact information. At the option and upon request of Master Franchisee, McDonald’s shall cooperate in facilitating an agreement between Master Franchisee and such Global Supplier; provided , however , that such cooperation shall be conditioned upon (a) a commitment by Master Franchisee or any applicable Franchisee to acquire and use such products and services for a period of not less than two years and exclusively in all Franchised Restaurants; (b) the compliance by the Master Franchisee Parties or such Franchisee with all related protocols or other requirements of such Global Supplier; and (c) the compliance by the Master Franchisee Parties with all of the terms and conditions of this Agreement.

9.4 Master Franchisee Party as Approved Supplier or Distributor . If Master Franchisee or any of its Related Parties is also an Approved Supplier or a Distributor, then it shall provide products and services to Franchised Restaurants operated by unaffiliated Franchisees in any Territory on pricing and other economic terms (including rebates) that are no less favorable than those offered by such Person to Master Franchisee Restaurants in such Territory.

9.5 McDonald’s Rights to Add or Terminate Approved Supplier . If McDonald’s determines that any product or service offered by any Approved Supplier is not in compliance with the applicable Standards, then McDonald’s shall have the right to terminate such Approved Supplier with respect to such product or service. In such event, Master Franchisee shall, and shall cause its Subsidiaries and (to the extent permitted by the relevant Franchise Agreement) Franchisees to, as promptly as reasonably practicable

cease doing business with the applicable vendor or Distributor and, at McDonald’s request, return or destroy all non-complying products held in inventory. McDonald’s may designate any other vendor of Distributor as an Approved Supplier with respect to such product or service.

10. McDonald’s General Services

10.1 Communications; Visits; Additional Services . McDonald’s shall advise and consult with Master Franchisee periodically in connection with the operation of the Master Franchise Business and the Franchised Restaurants and, upon Master Franchisee’s written request, at other reasonable times during normal business hours in the applicable Territory. McDonald’s shall communicate to Master Franchisee know-how, new developments, techniques and improvements in areas of restaurant management, food preparation and service that are pertinent to the operation of a McDonald’s Restaurant. These communications shall be in the form that McDonald’s, in its sole discretion, deems to be most appropriate in the circumstances and may be accomplished through, among other means, visits made by McDonald’s employees, through printed and filmed reports, seminars and / or newsletter mailings or through electronic communications, including e-mail. McDonald’s or one of its Affiliates shall also make available to Master Franchisee, as determined by McDonald’s in its sole discretion, such additional services, facilities, rights and privileges relating to the operation of McDonald’s Restaurants outside the United States of America that McDonald’s makes generally available from time to time to its franchisees.

10.2 Operations Manuals . The Operations Manuals contain Standards for the System and other information applicable to Master Franchisee’s and its Franchisee’s obligations under this Agreement, and McDonald’s may at any time amend or supplement the Operations Manuals in its sole discretion and without notice to any other Party. Master Franchisee shall comply with the Operations Manuals, as so amended or supplemented. Master Franchisee may translate the Operations Manuals or applicable portions thereof into the local language of each Territory at its sole expense, and McDonald’s shall own all rights in each such translation, which shall thereafter constitute Copyrights. If any translation of the Operations Manuals or any portion thereof is available to McDonald’s, McDonald’s shall use its reasonable efforts to provide access thereto to Master Franchisee and its Franchisees. In the event of any dispute as to the contents of the Operations Manuals or the substance or interpretation of any provision thereof, the terms of the master copy of the Operations Manuals (English language version) maintained by McDonald’s at its principal place of business shall be controlling.

10.3 Relationship Committee . Master Franchisee and McDonald’s shall establish a committee consisting of two employees from each such Party who are officers of and designated by such Party and whose principal responsibilities include the business functions related to this Agreement (the “ Relationship Committee ”), to discuss issues related to the management and operation of the Master Franchise Business and Franchised Restaurants, address specific operational issues, provide recommendations, advice and assistance, discuss and agree upon the Business Plan, seek and provide approvals and consents hereunder, and otherwise to facilitate the performance by all Parties of their respective obligations and exercise of their respective rights hereunder. Among the issues to be addressed by the Relationship Committee shall be any suggestions by Master Franchisee to McDonald’s of initiatives to adapt the System to

local customs, tastes and preferences in the Territories. In addition, McDonald’s shall provide Master Franchisee with reasonable access to appropriate technology and systems personnel of McDonald’s for purposes of discussing current and proposed technology implementation and operational issues hereunder, and otherwise providing reasonable levels of assistance to Master Franchisee Parties with respect to the software and technology required hereunder for use in connection with the Master Franchise Business or the Franchised Restaurants. Throughout the Regular Term, the Relationship Committee shall meet by telephone or in person at such reasonable intervals as agreed upon by the Parties, and shall meet quarterly in Oak Brook, Illinois or such other time and place as is agreed by the Parties. McDonald’s and Master Franchisee shall each be responsible for their own costs and expenses, including any travel expenses, incurred with respect to the Relationship Committee.

11. Certain Matters Relating to Franchisees

11.1 New Franchisees; Transfers .

11.1.1 Master Franchisee may enter into or renew a Franchise Agreement with, or Transfer any Franchise Agreement to, any Person, provided that (a) such Person is an Existing Franchisee or such Person (including, in the case of any renewal of a Franchise Agreement, the applicable Franchisee) is pre-approved by Master Franchisee (a “ New Franchisee ” and together with the Existing Franchisees, the “ Franchisees ”) in accordance with a franchisee approval process approved by McDonald’s and that contains the elements specified in Exhibit 9 (the “ Franchisee Approval Process ”); (b) in the case of any Existing Franchisee, such Existing Franchisee is in compliance with each of its Franchise Agreements; and (c) the entry into such Franchise Agreement is not inconsistent with the applicable Business Plan.

11.1.2 Promptly following its pre-approval of a Franchisee, Master Franchisee shall provide McDonald’s with the following: (a) the full legal name of the Franchisee and each Person that has any direct or indirect Equity Interest in such Franchisee; (b) an electronic image of the related Franchise Agreement; and (c) such other information as McDonald’s may request from time to time.

11.2 Franchise Agreements .

11.2.1 In no event shall the term of any Franchise Agreement exceed the Term applicable in the Territory in which such Franchise Agreement is executed, or extend more than 10 years beyond such Term.

11.2.2 Any Franchise Agreement, including any amendment or renewal thereof, entered into with respect to a New Franchisee shall be substantially in the form set forth in Exhibit 10 (each, a “ New Franchise Agreement ” and together with the Existing Franchise Agreement, the “ Franchise Agreements ”) and shall, in each case, contain any provision marked with “***” in Exhibit 10 .

11.2.3 If Master Franchisee or any Franchisee seeks to (a) amend any Existing Franchise Agreement (x) that relates to a Franchised Restaurant that is not a Master Franchisee Restaurant, then Master Franchisee shall use its best efforts to cause such amendment to reflect the asterisked terms specified in the

form of the New Franchise Agreement to the extent not already reflected therein; or (y) that relates to a Franchised Restaurant that is a Master Franchisee Restaurant, then Master Franchisee shall not amend the Existing Franchise Agreement without the prior consent of McDonald’s; or (b) renew any Franchise Agreement, then (x) Master Franchisee shall effect such renewal only by entering into a New Franchise Agreement with the applicable Franchisee; and (y) shall charge a Royalty that is not less than the rate then applicable hereunder for purposes of calculating Continuing Franchisee Fees.

11.2.4 Master Franchisee shall only enter into a Franchise Agreement with a Franchisee for a particular Franchised Restaurant in a particular Territory. Master Franchisee shall not enter into a Franchise Agreement or any other agreement or understanding in respect of franchise rights, whether express or implied, that would grant it rights with respect to an entire Territory or any region or sub-division thereof, nor shall Master Franchisee enter into a Franchise Agreement if, after giving effect to such Franchise Agreement, such Person would be the sole Franchisee with respect to any Territory or subdivision thereof.

11.2.5 Master Franchisee shall provide to each Franchisee any disclosure document or other information required to be so delivered under Applicable Law in connection with the entry into a Franchise Agreement or otherwise.

11.2.6 No Franchise Agreement shall be extended without the prior consent of McDonald’s.

11.3 Actions with Respect to Franchisees . Master Franchisee shall, at its sole expense:

11.3.1 Cause each Franchise Agreement to be timely registered with any appropriate Governmental Authority as and to the extent required by Applicable Law.

11.3.2 Take all actions necessary to enforce each Franchise Agreement strictly in accordance with its terms and to ensure each Franchisee is in compliance with the System.

11.3.3 In addition to services under the Training Program, provide reasonable levels of assistance to each Franchisee and to the Restaurant Managers to promote and enhance the operation of the System and the Franchised Restaurants and the goodwill or reputation associated with the Trademarks and other Intellectual Property.

12. Training

12.1 Training Provided by McDonald’s . Each of the following employees of Master Franchisee shall be deemed to be a key employee (a “ Key Employee ”): (a) each Managing Director; (b) the Chief Executive Officer; (c) the Chief Operations Officer; (d) the chief financial officer; (e) the director of human resources; (f) the director of training; (g) the chief of development; (h) the chief of franchising; (i) the chief of marketing; and (j) any other employee as may from time to time be designated by McDonald’s as a Key

Employee. Each Key Employee shall undergo training that is comparable in all material respects to training provided to employees of McDonald’s having comparable positions, tenure and responsibilities. Such training shall be provided by McDonald’s or one of its Affiliates at a location of McDonald’s selection and shall be provided free of charge; provided that McDonald’s shall have no obligation whatsoever for any salaries, wages, benefits payable to any Key Employee, or for any travel and living expenses (including local transportation costs) incurred by such Key Employee, during the period of such training. If and to the extent McDonald’s produces new training materials for its employees generally, McDonald’s shall make such materials available to Master Franchisee upon written request.

12.2 Training Provided by Master Franchisee . Master Franchisee shall provide initial and ongoing training (including “refresher” training at reasonable intervals) for all personnel of Master Franchisee, its Subsidiaries and Franchisees and the Franchised Restaurants, other than Key Employees, that is consistent with the Global Training Standards (the “ Training Program ”). Master Franchisee may charge fees to attend the Training Program but any such fees must be consistent, on a pro rata basis, with the fees charged to students attending training seminars at Hamburger University in São Paulo, Brazil. The Training Program shall be deemed property of McDonald’s as a “work made for hire” and shall constitute a Copyright hereunder.

12.3 Certain Training Facilities . Pursuant to the Hamburger University License Agreement, McDonald’s has, among other things, licensed Master Franchisee to use the “Hamburger University” mark subject to the terms and conditions set forth therein. If Master Franchisee elects to provide all or any component of the Training Program through any other dedicated institution, it shall so advise McDonald’s and provide McDonald’s with such information regarding such institution as McDonald’s may request. Master Franchisee shall not be entitled to create or use any such facility or to use the “Hamburger University” mark (or any mark confusingly similar thereto) in the name of such institution, without the prior consent of McDonald’s and the entry into of a license agreement containing certification requirements and other terms and conditions identical in all material respects to the Hamburger University License Agreement.

13. Business Plans

13.1 Initial Business Plans . McDonald’s and Master Franchisee have agreed upon (a) a Restaurant Opening Plan and Reinvestment Plan for the initial three years of the applicable Term; and (b) a Strategic Marketing Plan with respect to each Territory for the initial 18 months of the applicable Term in such Territory, copies of which are attached hereto as Exhibit 11 . For the avoidance of doubt, Satellites may not be counted as part of the openings required under the any Restaurant Opening Plan. By February 3, 2008, Master Franchisee shall submit to McDonald’s for its review and approval a proposed initial Franchising Plan, which Franchising Plan shall specify that in each year of such Franchising Plan no more than 50% by number of the Franchised Restaurants (excluding Satellites) are owned, operated or managed by Franchisees who are not Master Franchisee Parties and otherwise comply with the restrictions set forth in Section 7.14.4. Such Franchising Plan shall have a term of three years, or such lesser period as McDonald’s may approve. Master Franchisee shall implement each such Component Plan in accordance with its terms; provided , however , that Master Franchisee may propose, subject to McDonald’s prior written consent (such consent not be unreasonably

withheld), amendments to any such Component Plan to adapt to changes in economic or political conditions.

13.2 Subsequent Business Plans .

13.2.1 On or prior to the third anniversary of the applicable Term and each third anniversary thereafter, McDonald’s and Master Franchisee shall mutually agree upon a subsequent Restaurant Opening Plan and Reinvestment Plan. Not later than six months prior to the expiration of Restaurant Opening Plan or Reinvestment Plan, Master Franchisee shall prepare and present to McDonald’s a proposed successor Restaurant Opening Plan and Reinvestment Plan. McDonald’s and Master Franchisee shall negotiate in good faith to finalize the terms thereof, including its effective date. Each Restaurant Opening Plan and Reinvestment Plan shall have a term of three calendar years or such other period as McDonald’s may approve.

13.2.2 On or prior to the eighteenth month anniversary of the applicable Term and each eighteenth month anniversary thereafter, McDonald’s and Master Franchisee shall mutually agree upon a subsequent Strategic Marketing Plan. Not later than six months prior to the expiration of Strategic Marketing Plan, Master Franchisee shall prepare and present to McDonald’s a proposed successor Strategic Marketing Plan. McDonald’s and Master Franchisee shall negotiate in good faith to finalize the terms thereof, including its effective date. Each Strategic Marketing Plan shall have a term of eighteen months or such other period as McDonald’s may approve.

13.2.3 Master Franchisee shall submit to McDonald’s for its review and approval a proposed successor Franchising Plan, not later than six months prior to the expiration of the predecessor Franchising Plan. Each Franchising Plan shall have a term of three years, or such other period as McDonald’s may approve and shall specify that in each year of such Franchising Plan no more than 50% by number of the Franchised Restaurants (excluding Satellites) are owned, operated or managed by Franchisees who are not Master Franchisee Parties and otherwise comply with the restrictions set forth in Section 7.14.4.

13.2.4 If McDonald’s and Master Franchisee fail to reach agreement with respect to the terms of (a) the successor Restaurant Opening Plan prior to the expiration of the initial Restaurant Opening Plan, then during the three-year period commencing on the expiration of such initial Restaurant Opening Plan, Master Franchisee shall open 210 Franchised Restaurants that are not Satellites (the “ Base Plan ”); or (b) any other Restaurant Opening Plan prior to the expiration of the immediately preceding Restaurant Opening Plan, then during the three-year period commencing on the expiration of such preceding Restaurant Opening Plan, Master Franchisee shall open a number of Franchised Restaurants equal to the product of (i) the Base Plan Index, multiplied by (ii) 110%. Any openings of Franchised Restaurants in the preceding Restaurant Opening Plan in excess of the Targeted Openings of such Plan shall be credited against the number of Franchised Restaurants that Master Franchisee shall be required to open pursuant to the preceding sentence.

13.2.5 If McDonald’s and Master Franchisee fail to reach agreement with respect to the terms of any subsequent Reinvestment Plan prior to the expiration of the then-applicable Reinvestment Plan, then Master Franchisee shall, in each year after the expiration of such Reinvestment Plan pending effectiveness of the subsequent Reinvestment Plan, reinvest in the applicable Territory reinvestment amounts that are, in the aggregate and in U.S. Dollar terms, at least 20% greater than the targeted reinvestment amounts included in the preceding Reinvestment Plan.

13.2.6 Each subsequent Component Plan and Strategic Marketing Plan shall be in form and scope substantially similar to the applicable initial Component Plan or Strategic Marketing Plan, as the case may be. Master Franchisee shall implement each such subsequent Component Plan and Strategic Marketing Plan in accordance with its terms; provided , however , that Master Franchisee may propose, subject to McDonald’s prior written consent (such consent not be unreasonably withheld), amendments to any such Component Plan or Strategic Marketing Plan to adapt to changes in economic or political conditions.

14. Advertising, Marketing and Promotion Materials and Activities; Packaging

14.1 Strategic Marketing Plan .

14.1.1 Master Franchisee shall create, develop, prepare, coordinate and implement a Strategic Marketing Plan with respect to each Territory.

14.1.2 Each Strategic Marketing Plan shall obligate Master Franchisee to aggregate expenditures to implement the Strategic Marketing Plan in an amount not less than 5% of Gross Sales of all Franchised Restaurants in the Territories (the “ Mandatory Marketing Commitment ”); provided , however , that such amount shall be reduced for any Franchised Restaurant subject to an Existing Franchise Agreement to the extent such Existing Franchise Agreement requires lesser expenditures for such purposes. Master Franchisee shall be entitled to cause Franchisees to contribute to expenditures contemplated by the Strategic Marketing Plan no less than 5% of Gross Sales of their respective Franchised Restaurants, but in no event in excess of the commitment specified in any Existing Franchise Agreement in the case of any Existing Franchisee.

14.1.3 Master Franchisee shall develop, create, produce, manufacture, print, distribute, broadcast, publish and display Materials and conduct related advertising, promotional and marketing activities in connection with each Strategic Marketing Plan. All Materials and related advertising, promotional and marketing activities shall (a) be accurate, factually correct and not misleading; (b) be brand-enhancing and consistent with McDonald’s Corporation’s brand image so as not to diminish in any way the goodwill or reputation associated with the Intellectual Property; and (c) conform to Applicable Law, the Standards and the highest standards of ethical advertising and marketing. In order to protect the goodwill and integrity associated with the Intellectual Property and McDonald’s Corporation’s brand image, McDonald’s reserves the right to review and approve such Materials and related advertising, promotional and marketing activities in

advance. If McDonald’s fails to grant any such approval within ten Business Days of its receipt of such submission, such submission shall be deemed to be disapproved. McDonald’s may at any time direct Master Franchisee or any of its Subsidiaries or Franchisees to cease the use, distribution, publishing, display and/or broadcast of any Materials, any element or portion of a Strategic Marketing Plan or any related advertising, marketing or promotion activities determined by McDonald’s in its reasonable discretion to be inconsistent with the Standards or otherwise detrimental to McDonald’s Corporation’s brand image, and Master Franchisee shall take all steps necessary to comply with such direction at it sole expense.

14.2 Global Marketing Activities .

14.2.1 Master Franchisee acknowledges and agrees that McDonald’s and its Affiliates may enter into agreements relating to global, regional and other advertising, promotional and marketing alliances intended for the benefit of the System as determined by McDonald’s and its Affiliates in their discretion and may establish programs to fund activities undertaken by such alliances. Master Franchisee authorizes McDonald’s and its designees to negotiate such agreements on its behalf and agrees to be bound by and comply with such agreements and to deliver the types and levels of promotional support in connection with such alliances as directed by McDonald’s from time to time. Master Franchisee shall pay to McDonald’s in respect of the funding of such alliances an amount up to 0.2% of Gross Sales of all Franchised Restaurants in the Territories. Amounts contributed pursuant to this Section shall be credited against the Mandatory Marketing Commitment for the Territories.

14.2.2 Master Franchisee acknowledges and agrees that McDonald’s and its Affiliates may enter into agreements relating to global, regional and other marketing programs intended for the benefit of the System as determined by McDonald’s and its Affiliates in their discretion, including various “Happy Meal” programs. Master Franchisee authorizes McDonald’s and its designees to negotiate such agreements on behalf of Master Franchisee and its Subsidiaries and agrees to be bound by and comply with such agreements and to deliver the types and levels of promotional support in connection with such programs as directed by McDonald’s from time to time.

14.2.3 Master Franchisee acknowledges that, prior to August 3, 2007, McDonald’s or its Affiliates may have entered into agreements with respect to future marketing programs to take place in one or more Territories and Master Franchisee agrees to be bound by and comply with such agreements, provided that McDonald’s shall have notified Master Franchisee thereof prior to August 3, 2007.

14.3 Premiums . Master Franchisee shall ensure that all premiums, including “Happy Meal” premiums, self-liquidating premiums and premiums for profit, to be distributed, sold or promoted in connection with the Franchised Restaurants comply with Applicable Law and the Standards and shall be brand-enhancing and consistent with McDonald’s Corporation’s brand image so as not to diminish in any way the goodwill or reputation associated with the Intellectual Property, and shall be tested and approved in

advance by a safety-testing lab approved by McDonald’s in accordance with the schedule and frequency determined by such safety-testing lab, at Master Franchisee’s sole expense. All premiums relating to global marketing activities referred to in Section 14.2 shall also be subject to McDonald’s prior approval.

14.4 Competitive Market Data . Master Franchisee shall at its sole expense participate in quarterly industry surveys or compilations of competitive market data (such as “Fast Track”) as and when directed by McDonald’s at Master Franchisee’s sole expense and promptly provide the results of such surveys to McDonald’s.

15. Intellectual Property

15.1 Rights . Master Franchisee’s right to use the Intellectual Property is derived solely from this Agreement. McDonald’s owns or has the right to license the Intellectual Property and all goodwill associated with the Intellectual Property. Subject to the limitations set forth in this Agreement, including strict compliance with conditions set forth in this Section 15, McDonald’s grants to Master Franchisee the non-exclusive right to use, and to sublicense its Franchisees to use, the Intellectual Property solely in connection with the development, ownership, operation, promotion and management of the Franchised Restaurants in each Territory as specified in Exhibit 12 , and to engage in related advertising, promotional and marketing programs and activities.

15.2 Intellectual Property Standards . Development, ownership, operation, promotion, management and sublicensing of the Franchised Restaurants and all uses of the Intellectual Property by Master Franchisee and its Franchisees shall meet or exceed the applicable Standards and shall comply with Applicable Law. Master Franchisee shall use, affix and otherwise display, and shall require its Franchisees to use, affix and otherwise display the Intellectual Property strictly in conformity with the Standards, together with applicable trademark, patent and / or copyright designations / markings (including any legends designating McDonald’s or its licensor as owner of the Intellectual Property and proper patent markings on any applicable Patents and related materials and equipment), as it may be directed by McDonald’s from time to time in its sole discretion, and with any other specifications as McDonald’s may prescribe from time to time to promote and foster the goodwill represented by the Intellectual Property and the System or otherwise to protect or perfect McDonald’s and / or its licensor’s interests in the Intellectual Property. Master Franchisee shall and shall cause its Franchisees to immediately cease or modify any use of the Intellectual Property that is not in compliance with Applicable Law or the Standards or as otherwise instructed by McDonald’s, at Master Franchisee’s sole expense. Master Franchisee shall and shall cause its Franchisees to comply with all Standards applicable to advertising, promotions and creative review. Master Franchisee shall permit and shall requires its Franchisees to permit inspection by McDonald’s, at reasonable intervals during normal business hours, for the purpose of monitoring the use of the Intellectual Property by Master Franchisee and its Franchisees and verifying the presence of appropriate control measures with respect to compliance with the Standards.

15.3 Specimens . At McDonald’s request, Master Franchisee shall submit specimens of all signage, uniforms, packaging, Materials, stationary, business cards and other materials displaying, using or bearing the Intellectual Property or relating to the Franchised Restaurants to McDonald’s, at Master Franchisee’s sole expense, for

McDonald’s review and approval prior to Master Franchisee’s or any Franchisee’s manufacture, printing, production, use, display, broadcast, distribution or sale of any of the foregoing and in accordance with procedures established by McDonald’s for such purposes from time to time. If McDonald’s fails to grant any required approval within ten Business Days of such submission, the submission shall be deemed to be disapproved.

15.4 Ownership . Master Franchisee acknowledges and agrees and shall require its Franchisees to acknowledge and agree that the Intellectual Property and all rights therein and the goodwill pertaining thereto in each Territory belong to McDonald’s (or its licensor) and that all uses of the Intellectual Property in each Territory shall inure to and be for the benefit of McDonald’s (or its licensor). Master Franchisee and its Franchisees shall not directly or indirectly, (a) attack or impair the title of McDonald’s (or its licensor) to the Intellectual Property, the validity of this Agreement, or any of the registrations for or applications to register the Intellectual Property filed by or on behalf of McDonald’s (or its licensor); or (b) file any application to register or record any of the Intellectual Property, in whole or in part, or any other name, trademark or service mark relating to the Franchised Restaurants or that is identical or otherwise confusingly similar to or that might be dilutive of the Intellectual Property, including any trademark or service mark that uses “Mc” or “Mac”, anywhere in the world, unless requested by McDonald’s to do so and, in such event, subject to McDonald’s specific direction and written request.

15.5 No Assignment . Nothing contained in this Agreement shall be construed as an assignment to Master Franchisee or any other Person of any right, title or interest in or to the Intellectual Property, it being understood and acknowledged by Master Franchisee that all use thereof in any Territory shall inure exclusively to and be for the benefit of McDonald’s (or its licensor), and Master Franchisee shall cause its Franchisees to acknowledge and agree that all use of the Intellectual Property shall inure exclusively to and be for the benefit of McDonald’s (or its licensor). Upon McDonald’s request, Master Franchisee shall execute and deliver and shall require its Franchisees to execute and deliver such documents as McDonald’s may deem necessary or desirable to use the Intellectual Property in conformity with Applicable Law or to protect the interests of McDonald’s and / or its licensor with respect thereto, including documents to record Master Franchisee and / or any Franchisee as users of the Intellectual Property or to protect the interests of McDonald’s and / or its licensor in the Intellectual Property.

15.6 Defense of Rights . Master Franchisee shall cooperate with McDonald’s for purposes of securing, preserving, protecting and defending McDonald’s (or its licensor’s) rights in and to the Intellectual Property and for purposes of securing, preserving, protecting and defending the rights granted to Master Franchisee hereunder as determined by McDonald’s in its discretion and at Master Franchisee’s sole expense, unless otherwise expressly agreed in writing by McDonald’s. Such cooperation shall include the filing, prosecuting and processing of any trademark, service mark or copyright application or registration, or other filings, and the recording of this Agreement and/or any Franchise Agreement with any appropriate Governmental Authority, all as may be requested by McDonald’s. Master Franchisee shall immediately notify McDonald’s of any objection to the use by Master Franchisee or any Franchisee of any Intellectual Property or of any suspected infringement or imitation by others of any Intellectual Property that may come to the attention of Master Franchisee or any Franchisee. McDonald’s shall have sole discretion to control all challenges to the

Intellectual Property, including the right to determine whether or not any formal legal action shall be taken on account of any alleged infringement or imitation (though nothing in this Agreement shall be construed as imposing an obligation on McDonald’s to take any such action) and Master Franchisee shall render all assistance as McDonald’s may request in connection therewith. McDonald’s may in its discretion bring and prosecute any claim or cause of action in its own name and join Master Franchisee or any applicable Franchisee as a party thereto, or require Master Franchisee to file an action in its own name to protect the Intellectual Property, subject to McDonald’s direction. Master Franchisee and its Franchisees shall not institute any action for infringement of the Intellectual Property, except to the extent that McDonald’s may so direct Master Franchisee and then solely in accordance with such direction.

15.7 Registration . Master Franchisee shall cooperate with McDonald’s in (a) registering this Agreement or a summary version thereof with any applicable Governmental Authority within any Territory to the extent required or desirable to fully protect McDonald’s rights in the Intellectual Property under Applicable Law; (b) maintaining or perfecting such registration; and (c) canceling such registration upon termination or expiration of this Agreement. McDonald’s is authorized by Master Franchisee to cancel the registration of this Agreement with any applicable Governmental Authority within any Territory upon termination or expiration of this Agreement, for any reason, independent of any action executed by Master Franchisee before such Governmental Authorities. Master Franchisee shall execute on behalf of itself and its Franchisees and deliver such documentation as may be necessary or desirable in connection with the foregoing, including any power of attorney as may be required by Applicable Law. Master Franchisee shall bear all costs that may be incurred by McDonald’s or its representatives in registering, perfecting, maintaining and canceling the registration of this Agreement as aforesaid.

15.8 Intellectual Property Created by Master Franchisee and its Franchisees . To the extent permitted by Applicable Law, all ideas, concepts, techniques and materials relating to the System, the Intellectual Property and / or the Franchised Restaurants, any enhancements, improvements and / or derivative works of any of the foregoing, and any trademarks or service marks that are created by Master Franchisee, any of its Subsidiaries or Franchisees or any of their respective employees or agents (the “ Developed IP ”) shall be immediately disclosed to McDonald’s and shall be deemed property of McDonald’s as “works made for hire” and shall constitute Intellectual Property hereunder. To the extent that such Developed IP is not “works for hire,” Master Franchisee shall, and shall cause such other Person to, immediately assign and does assign, all rights therein, including moral rights, to McDonald’s. The assignors of the Developed IP shall execute and deliver any documents requested by McDonald’s to confirm such assignment. None of Master Franchisee or any of its Subsidiaries or Franchisees is authorized to use, sell, distribute or license any products or materials incorporating the Intellectual Property outside of the operation of the Franchised Restaurants without McDonald’s prior consent. None of Master Franchisee or any of its Subsidiaries or Franchisees shall file, or suffer to be filed, any applications to register any Intellectual Property including, for the avoidance of doubt, any Developed IP, without McDonald’s prior consent.

15.9 Trademarks .

15.9.1 None of Master Franchisee or any of its Subsidiaries or Franchisees shall adopt or use any new “Mc” or “Mac” trademarks or service marks, or any other trademarks (including without limitation product names, slogans and logos), service marks or domain names in connection with the Franchised Restaurants, without McDonald’s prior consent.

15.9.2 None of Master Franchisee or any of its Subsidiaries or Franchisees shall use the Trademarks (or any component thereof):

(a) In conjunction with its corporate, business, trade or legal name;

(b) In conjunction with any prefix, suffix or other modifying terms;

(d) As part of any domain name, electronic address, electronic mail address, Internet home page, intranet, extranet or Website; or

(e) In any manner not expressly authorized by this Agreement.

15.9.3 If so requested by McDonald’s in writing, Master Franchisee shall identify itself as the independent owner of its business, give notices of trademark and service mark registrations in the manner McDonald’s specifies, obtain such fictitious or assumed name registrations as may be required under Applicable Law to distinguish itself from McDonald’s and its Affiliates, and provide evidence of Master Franchisee’s use of the Trademarks, both in form and content.

15.9.4 McDonald’s shall have the right to modify or discontinue the use by McDonald’s, Master Franchisee or any of its Subsidiaries or any Franchisee of any Trademark or the specifications for use of any Trademark, or to require Master Franchisee or any of its Subsidiaries or any Franchisee to commence use of new or substitute Trademarks. Master Franchisee shall, and shall require each of its Subsidiaries and each Franchisee to, promptly comply with any such changes at Master Franchisee’s or Franchisee’s sole expense. McDonald’s shall not have any obligation to reimburse Master Franchisee or any Franchisee for any expenditures made by Master Franchisee or any Franchisee to modify or discontinue the use of any Trademark or to adopt additional or substitute trademarks, including any expenditures relating to any Franchised Restaurant or to advertising, promotional materials or signage.

15.9.5 Master Franchisee shall not permit any Approved Supplier to use its relationship with the System to promote such Approved Supplier’s business to the public or to include McDonald’s name / logo or the Trademarks in the Approved Supplier’s published client lists or marketing materials relating to such Approved Supplier’s products or services without McDonald’s prior consent.

15.10 Copyrights .

15.10.1 To the extent permitted by Applicable Law, if Master Franchisee or any Franchisee creates any adaptations or derivative works based upon or incorporating any of the Copyrights, Master Franchisee shall, and shall cause each such other Person to, assign to McDonald’s all right, title and interest that any of them may have or acquire in such adaptations and derivative work and waive any moral rights that have or may accrue to them. Each such adaptation or derivative work shall constitute Copyrights hereunder.

15.10.2 McDonald’s authorizes Master Franchisee to translate the Copyrights into foreign languages necessary in order to use the Copyrights pursuant to the Master Franchisee Rights. Master Franchisee represents and warrants that any such translation shall be accurate and complete. Master Franchisee acknowledges and agrees that any translation of the Copyrights shall be McDonald’s sole and exclusive property, and Master Franchisee assigns to McDonald’s all right, title and interest in each such translation. Any such translation shall constitute Copyrights hereunder. McDonald’s is expressly authorized by Master Franchisee to register such translation in its own name or in the name of any Affiliate of McDonald’s, with any applicable Governmental Authority within any Territory. Master Franchisee acknowledges that, in case of termination or expiration of this Agreement, McDonald’s may authorize the use of such translation to any third party in its sole discretion. Master Franchisee and Franchisees shall modify or discontinue use of Copyrights or adopt and use new, revised or additional Copyrights if instructed to do so by McDonald’s, at Master Franchisee’s and Franchisees’ sole expense.

15.11 Trade Secrets . Master Franchisee acknowledges that the Trade Secrets constitute McDonald’s valuable confidential and proprietary information. Master Franchisee shall and shall require its Franchisees to take all commercially reasonable steps to protect the confidentiality of the Trade Secrets and to prevent the unauthorized disclosure of the Trade Secrets, including employing the practices and procedures that it uses to protect its own trade secrets and other confidential or proprietary information. Master Franchisee shall restrict disclosure of the Trade Secrets to its employees, agents, Franchisees and other authorized Persons on a need-to-know basis and only after such Persons have been informed of, and are subject to obligations in writing to maintain, the Trade Secrets’ confidentiality. Master Franchisee shall not use, disclose or reproduce, or authorize any other Person to use, disclose or reproduce, the Trade Secrets for any reason or purpose except in connection with the operation of the Franchised Restaurants.

15.12 Names . Notwithstanding anything to the contrary in this Agreement, Master Franchisee may continue to use any legal name or “operating as” name that includes any Intellectual Property that may imply ownership by an Affiliate or Subsidiary of McDonald’s Corporation, including “Arcos Dorados”.

16. Reports

16.1 Generally .

16.1.1 Master Franchise shall maintain such books and records as may be appropriate to evidence the performance of its obligations hereunder, including the books and records specifically required by this Section.

16.1.2 Master Franchisee shall maintain during the applicable Term and for a period of not less than six years from the dates of their preparation all books, records and accounts relating to Master Franchisee and its Subsidiaries, the Master Franchise Business and the Master Franchisee Restaurants. All such books, records and accounts shall be maintained at the principal office of Master Franchisee or at such other location as shall be notified to McDonald’s on request.

16.2 Financial Accounting; Record Keeping; Internal Controls .

16.2.1 Master Franchisee shall at its sole expense make and keep books, records and accounts that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of Assets of Master Franchisee and its consolidated Subsidiaries and shall maintain a system of internal accounting controls sufficient to provide reasonable assurance that (a) transactions are executed in accordance with management’s general or specific authorization; (b) transactions are recorded as necessary to permit preparation of financial statements in conformity with GAAP, consistently applied from period to period, and requirements prescribed from time to time by McDonald’s, and to maintain accountability for such Assets; (c) access to such Assets is permitted only in accordance with management’s general or specific authorization; and (d) the recorded accountability for such Assets is compared with existing Assets at reasonable intervals and appropriate action is taken with respect to any differences. McDonald’s shall have the right at all times to access and obtain any information required to be delivered to it by Master Franchisee hereunder directly from such financial accounting and record keeping systems, and to the extent McDonald’s cannot or does not do so, Master Franchisee shall transmit all information requested by McDonald’s to McDonald’s or its designee at the times and in the manner specified by McDonald’s.

16.2.2 Without limiting the generality of Section 16.2.1, Master Franchisee shall maintain (a) a “data warehouse” containing Gross Sales data; and (b) copies of (i) all applications, approvals, registrations or approvals required to be filed with or obtained from any Governmental Authority; (ii) documentation submitted in connection with the GROIP; (iii) a log book and summary of all complaints received pursuant to the Customer Service Program and the results of any “mystery shop” programs; (iv) documentation submitted by potential suppliers pursuant to the supplier approval process; (v) documentation submitted by potential franchisees pursuant to the Franchisee Approval Process; (vi) inspection forms and reports for Franchised Restaurants; and (vii) documentation related to the design and testing of the system of internal accounting controls implemented as required by Section 16.2.1.

16.3 Standard Reporting Package . Master Franchisee shall continue to furnish to McDonald’s in the English language the package of financial and performance review reports furnished by McDonald’s Restaurants as of August 3, 2007, which reports are substantially in the forms attached as Exhibit 13 and include the reports described below (as such package may be amended by McDonald’s from time to time, the “ Standard Reporting Package ”), each of which shall be true and complete in all respects and certified by the chief financial officer of Master Franchisee:

16.3.1 Concurrently with the payment of Continuing Franchise Fees, an operations report with respect to each Territory detailing for the applicable Franchised Restaurants (a) Gross Sales; and (b) guest counts for each such Franchised Restaurant for the prior calendar month;

16.3.2 Within 90 days following the end of each fiscal quarter of Master Franchisee, true and complete copies of the consolidated balance sheet of Master Franchisee as of the last day of such fiscal quarter and the related consolidated statements of income, retained earnings, shareholders’ equity, cash flows and debt summaries of Master Franchisee for such fiscal quarter, together with all related notes and schedules thereto, prepared in accordance with GAAP (except as noted therein);

16.3.3 Within 90 days following the end of Master Franchisee’s fiscal year (which fiscal year shall be a calendar year), a summary by Franchised Restaurant of the previous year’s capital expenditures related to the Restaurant Opening Plan and the Reinvestment Plan (with capital expenditures related to Reinvestment to be segregated between investments related to maintenance of Franchised Restaurants and those related to reimaging of Franchised Restaurants).

16.3.4 Within 120 days following August 3, 2007, and thereafter with 90 days following the end of Master Franchisee’s fiscal year or at such other time as McDonald’s may reasonably request (or in no event shall more than one such appraisal per year be at the expense of Master Franchisee), an appraisal as of a recent date of the LC Collateral Pool conducted by one or more independent appraisers selected by Master Franchisee.

16.3.5 Within 120 days following the end of Master Franchisee’s fiscal year, true and complete copies of the audited consolidated balance sheet of Master Franchisee as of the last day of such fiscal year and the related audited consolidated statements of income, retained earnings, cash flows and debt summaries of Master Franchisee for such fiscal year, together with all related notes and schedules thereto prepared in accordance with GAAP (except as noted therein), accompanied by the unqualified report thereon of Master Franchisee’s independent certified public accountants;

16.3.6 Within 120 days following the end of Master Franchisee’s fiscal year, a detailed schedule of the Contingencies of Master Franchisees and its Subsidiaries, segmented on a Territory-by-Territory basis as of the last day of such fiscal year, prepared in accordance with U.S. GAAP by Master Franchisee’s independent certified public accountants;

16.3.7 Within ten days following McDonald’s request therefor, copies of any business license applications, tax returns (including any amendments thereto) that Master Franchisee has filed or proposes to file with applicable tax or other Governmental Authorities in each Territory reflecting sales and / or income of one or more Franchised Restaurants; and

16.3.8 Such other reports at such times and in such form as McDonald’s may from time to time require by written notice to Master Franchisee, which

reports may include, among other things, information regarding drive-thru sales, restaurant customer service times, labor costs and compliance with the QSC Standards.

17. Inspections and Audits

17.1 Inspections of Business Operations . McDonald’s shall be entitled at any time during normal business hours and without prior notice to any Master Franchisee Party, to inspect the Master Franchise Business, including any MF Subsidiary and the Franchised Restaurants, and to interview employees of the Master Franchisee Party and Franchised Restaurant personnel, monitor and test the equipment and products in the Franchised Restaurants, observe, photograph and videotape the Franchised Restaurant, remove samples from the Franchised Restaurants, review all uses of the Intellectual Property, inspect and, to the fullest extent permitted by Applicable Law, copy all records, tax returns and other financial information of Master Franchisee or Franchisee, ensure that advertising expenditures are being made, and remove copies of records. Master Franchisee shall cooperate fully with McDonald’s during any such inspection.

17.2 Inspections and Audits of Books and Records . McDonald’s shall be entitled at any time during normal business hours and without prior notice to Master Franchisee, to inspect and audit, or cause to be inspected and audited, the business records, bookkeeping and accounting records, business license applications, sales and income tax (if any) records and returns, the data warehouse and records required to be maintained pursuant to Section 16 and other records of Master Franchisee Parties and the books and records of any individual, corporation, partnership or other entity that owns an interest in any of the Master Franchisee Parties. Master Franchisee shall cooperate fully with McDonald’s representatives and independent accountants hired to conduct any inspection or audit. If such records and information are in the possession of a third party, Master Franchisee shall either obtain such records or information itself or shall obtain the authorization from each such third party to allow McDonald’s to perform the inspection and audit at such third party’s location. If any inspection or audit discloses an understatement of the Gross Sales of the Franchised Restaurants, then McDonald’s may, at its option, require Master Franchisee to pay to it, within 15 days after receipt of the inspection or audit report, Continuing Franchise Fees and all other sums due on the amount of such understatement, plus a late charge (at the date and on the terms provided in Section 24.2) from the date originally due through and including the date of payment. Further, if such inspection or audit is made necessary by Master Franchisee’s failure to furnish reports, supporting records, other information or financial statements as required by this Agreement, or to furnish such reports, records, information or financial statements on a timely basis, or if an understatement of Gross Sales resulting from the failure to transmit or report for the period of any audit is determined by any such audit or inspection to be greater than 2%, McDonald’s may, at its option, require Master Franchisee to reimburse McDonald’s for the cost of the inspection or audit, including the charges of McDonald’s employees or attorneys and independent accountants, and the travel expenses, room and board and applicable per diem charges for such Persons. The foregoing remedies shall be in addition to McDonald’s other rights and remedies under this Agreement or Applicable Law.

18. Confidential Information/Exclusive Dealing by Master Franchisee

18.1 Confidential Information .

18.1.1 McDonald’s and its Affiliates possess, or there may be created hereunder, certain confidential and proprietary information and trade secrets, consisting of (a) methods, procedures and techniques for locating, designing, developing, constructing, decorating and equipping Franchised Restaurants; (b) techniques for advertising, marketing, pricing and soliciting the products of the Franchised Restaurants; (c) marketing and advertising programs, calendars and plans; (d) methods, standards, specifications and procedures for operation of a Franchised Restaurant, including the Standards; (e) sales management techniques, information management techniques, business technology and information management technology; (f) the Intellectual Property to the extent not in the public domain; and (g) all other information relating to the business and operation of the System, including the Training Program and the Operations Manuals (collectively, the “ Confidential Information ”). No Master Franchisee Party shall acquire any interest in the Confidential Information hereunder except to the extent of the Master Franchisee Rights granted to Master Franchisee during the applicable Term, and the use or duplication of the Confidential Information in any other business or capacity shall constitute an unfair method of competition with McDonald’s, its Affiliates and McDonald’s other franchisees.

18.1.2 McDonald’s shall disclose Confidential Information to the Master Franchisee Parties solely on the condition that each of them agrees, and each does agree, that it (a) shall not use the Confidential Information in any other business or capacity; (b) shall maintain the absolute confidentiality of the Confidential Information during and after the applicable Term; (c) shall not make unauthorized copies of any Confidential Information; (d) shall adopt and implement all reasonable procedures to prevent unauthorized use or disclosure of Confidential Information, including such procedures as McDonald’s prescribes from time to time; and (e) shall not distribute, sell, trade or otherwise profit from any Confidential Information except as expressly authorized by this Agreement. Each Master Franchisee Party shall inform its respective employees and any other Person having access to any Confidential Information about its status as such and, if so requested by McDonald’s, such employees and other Persons shall execute confidentiality agreements in a form acceptable to McDonald’s and naming McDonald’s as a third party beneficiary of such agreements with an independent right to enforce the same.

18.2 Competitive Businesses .

18.2.1 Each of the Master Franchisee Parties, Beneficial Owner and each Owner Entity acknowledges that McDonald’s would be unable to protect the Confidential Information and the free exchange of ideas among its franchisees if such franchisees, any entity or person having a controlling interest in a franchisee or any Related Party having an active participation in a franchisee ( e.g. , as an officer, director or general manager) were permitted to engage in, own, operate, franchise or perform services for Competitive Businesses. Accordingly, to the fullest extent permitted by Applicable Law, none of the

Master Franchisee Parties, any of their respective Related Parties having an active participation in the Master Franchise Business ( e.g. , as an officer, director or general manager), Beneficial Owner or any Owner Entity shall, without the prior consent of McDonald’s:

(a) During the applicable Term and for a period of two years thereafter, directly or indirectly:

(1) Engage in (including through consulting, financing, employment or supply arrangements) or have any ownership interest in or provide any other assistance to any Competitive Business; or

(2) Have any ownership interest in or provide any financial or other assistance to any entity that grants or proposes to grant franchises or licenses or establishes or proposes to establish joint ventures for operation of any Competitive Business; or

(3) Perform services as a director, officer, manager, employee, consultant, representative, agent or in any other capacity for any Competitive Business; or

(4) Perform services as a director, officer, manager, employee, consultant, representative, agent or otherwise for a business that grants or proposes to grant franchises or licenses or establishes or proposes to establish joint ventures for operation of any Competitive Business; or

(5) Solicit for purposes of employment any officer of McDonald’s Corporation or McDonald’s who is then employed by, or who has within the last six months been employed as an officer by, McDonald’s Corporation, McDonald’s or any of their respective Affiliates; or

(6) Divert customers to another food-related business; or

(b) During the applicable Term and thereafter, directly or indirectly, duplicate the System (or any component thereof, including through sales, use, display or distribution of McDonald’s products, “Happy Meal” premiums or McDonald’s crew uniforms or programs, as set forth in the Business Plans) at another restaurant or business or for any other purpose.

19. Relationship of the Parties

19.1 Relationship of Parties . The Parties shall be independent contractors. This Agreement shall not create any fiduciary relationship between McDonald’s, on the one hand, and any Master Franchisee Party, on the other hand. Nothing in this Agreement is intended to make any Master Franchisee Party a general or special agent, legal representative, subsidiary, joint venturer, partner, employee or servant of McDonald’s.

No Master Franchisee Party shall represent that it has any relationship with McDonald’s other than as expressly permitted by this Agreement. McDonald’s shall not be obligated by or have any liability under any agreement, representation or warranty made by any Master Franchisee Party. McDonald’s shall not be obligated for any damages to any Person or property directly or indirectly arising out of the Master Franchise Business, whether or not caused by the negligent or willful action or failure to act of any Master Franchisee Party or any of its respective Affiliates. McDonald’s shall have no liability for any sales, service, value-added, use, excise, gross receipts, property, workers’ compensation, unemployment compensation, withholding or other taxes, whether levied upon any Master Franchisee Party or its respective Assets or income, or upon McDonald’s in connection with services performed or business conducted by any of them. Withholding taxes when required by Applicable Law and payment of all such taxes shall be the sole responsibility of the applicable Master Franchisee Party as required by Applicable Law.

19.2 No Implied Employment Relationship . This Agreement shall not create any employment relationship between McDonald’s, on the one hand, and Master Franchisee, any MF Subsidiary, any Owner Entity or Beneficial Owner, on the other hand, or their personnel, employees or any independent contractor hired by any of them. Master Franchisee, the MF Subsidiaries, each Owner Entity and Beneficial Owner assume all obligations and responsibilities with respect to their respective employees under local labor or social security laws and all other Applicable Law.

20. Indemnification; No Liability

20.1 Master Franchisee Indemnifies McDonald’s . Master Franchisee agrees to defend, indemnify and hold harmless McDonald’s, its Affiliates and all of their respective stockholders, directors, officers, employees, agents, attorneys-in-fact and representatives, consultants, independent contractors, designees, successors and assigns, and each such Person’s Related Parties and representatives (the “ McDonald’s Indemnified Parties ”), from and against any and all Losses and Expenses arising out of or relating any act or omission of Beneficial Owner, any Owner Entity, any Master Franchisee Party or any Franchisee in connection with the Master Franchise Business or any Franchised Restaurant, including:

20.1.1 Any Claim by any third party;

20.1.2 Any breach, violation or failure of any such Person to perform or comply with of any of their respective representations, warranties or obligations arising out of or relating to this Agreement or any Franchise Agreement (including the failure to comply with any applicable Standards);

20.1.3 Any negligence, recklessness, misconduct or criminal act by any such Person or any of its Related Parties or their respective employees or personnel;

20.1.4 The infringement or other violation of any patent, trademark, copyright or other proprietary rights of any third party, or the right of privacy or right of publicity, or the laws of unfair competition, in connection with this Agreement; provided that none of any Owner Entity or any Master Franchisee

Party shall be responsible for any such infringement or other violation to the extent that it involves the use of Intellectual Property as authorized by McDonald’s;

20.1.5 The death of or injury to any person, damage to any property, or any other damage, loss or injury, by whomsoever suffered, resulting or claimed to result, in whole or in part, from any latent or patent defect in connection with the operation of the Master Franchise Business or any Franchised Restaurant, including improper construction and / or design, or any claim of strict liability (or like theory of law) tort relating the operation of the Master Franchise Business or any Franchised Restaurant;

20.1.6 Any voluntary or mandatory recall of products that is due to a breach or violation by Master Franchisee, any of its Affiliates and / or its Approved Suppliers of any of their obligations hereunder, any deviation from any applicable Standards or specifications by Master Franchisee, any of its Affiliates and / or any of its Approved Suppliers, or any failure by Master Franchisee, any of its Affiliates and / or its Approved Suppliers to perform services and / or provide products in accordance with the terms of this Agreement; and

20.1.7 Any failure to warn or inadequate warnings and / or instructions relating to any products.

20.2 Rights and Responsibilities of Indemnitor and Indemnitee . In the event of any Claim or allegation entitling any Party to indemnification by another Party hereunder, or in the event that any Party discovers facts that will likely give rise to a claim for indemnification hereunder, the Party entitled to indemnification hereunder (the “ Indemnitee ”) shall promptly notify the Party obligated to provide such indemnification (the “ Indemnitor ”) of same in writing giving reasonable detail of the Claim, allegation or discovered facts (provided that the Indemnitee’s delay in furnishing notice of claims to Indemnitor shall not discharge the Indemnitor from its indemnification obligation hereunder, except to the extent such delay results in actual prejudice to Indemnitor or its inability to effectively defend the Claims or allegations).

20.3 McDonald’s as Indemnitee . With respect to any Claims or allegations for which Master Franchisee is obligated to indemnify McDonald’s pursuant to the terms of this Agreement, McDonald’s reserves the right to determine whether Master Franchisee or McDonald’s shall assume the defense of such Claims or allegations, and in either case, to employ counsel selected by McDonald’s in its discretion, and to control the defense and settlement of any such Claims or allegations, acting reasonably and in accordance with good faith business judgment with respect thereto, at Master Franchisee’s expense and without relieving Master Franchisee of any of its obligations hereunder. The rights of McDonald’s Indemnified Parties under this Agreement are in no way contingent upon or limited by McDonald’s Indemnified Parties seeking to recover or recovering from third parties or otherwise mitigating their losses.

20.4 No Liability . Except as expressly provided in this Agreement, neither McDonald’s nor any of its Related Parties assumes any direct or indirect liability or obligation to any Owner Entity or any Master Franchisee Party with respect to the Master Franchise Business and neither McDonald’s nor any such Related Party shall have any

liability to any Owner Entity or any Master Franchisee Party for damages of any kind, whether direct, consequential or otherwise incident to the conduct of the Master Franchisee Business, any Franchisee or any Franchised Restaurant.

21. Transfer; Right of First Refusal; IPO

21.1 Transfer of Rights by McDonald’s . McDonald’s may directly or indirectly Transfer all or any part of this Agreement, or all or any of its rights or obligations herein, to any Person as long as such Person expressly assumes and agrees to perform McDonald’s obligations under this Agreement. No such Transfer shall release any Owner Entity or any Master Franchisee Party from its respective obligations under this Agreement or any MFA Document, except to the extent expressly agreed by McDonald’s.

21.2 Transfer of Rights by Master Franchisee, any Owner Entity or Beneficial Owner .

21.2.1 Neither this Agreement nor any of their rights and obligations under this Agreement may be Transferred by Beneficial Owner, any Owner Entity, Master Franchisee or any MF Subsidiary without McDonald’s prior consent.

21.2.2 Except as otherwise expressly permitted by Section 21.2.3, 21.2.4, 21.2.6 or 21.8, no direct or indirect Equity Interests in Beneficial Owner, any Owner Entity, Master Franchisee or any of Master Franchisee’s Subsidiaries (and no significant portion of the Assets thereof) (collectively, the “ Restricted Interests ”) may be Transferred, in one or a series of related transactions, without McDonald’s prior consent, which consent may be withheld by McDonald’s in its sole discretion, to any Person including Master Franchisee or any direct or indirect wholly owned Subsidiary of Master Franchisee (such Person, a “ Proposed Transferee ”); provided , however , that if Master Franchisee wishes to Transfer Equity Interests in, or all or substantially all of the Assets of, any Subsidiary to any other wholly-owned Subsidiary of Master Franchisee, the consent of McDonald’s shall not be unreasonably withheld; provided further , that, with respect to the Transfer of Equity Interests in (or all or substantially all of the Assets of) any MF Subsidiary, Master Franchisee shall cause the Transferee, as a condition precedent to such Transfer, to (a) (i) if the Equity Interests were issued by an Escrowed MF Subsidiary, deliver its Equity Interests for deposit with Escrow Agent subject to the Escrow Agreement; or (ii) if the Equity Interests were issued by a Non-Escrowed MF Subsidiary, deliver its Equity Interests for deposit with applicable Trustee subject to the Trust Agreements; and (b) execute and deliver to McDonald’s an instrument of accession, in form and scope satisfactory to McDonald’s, in which such Transferee agrees to be deemed an MF Subsidiary for all purposes of this Agreement and to observe and be bound by all provisions of this Agreement and any other applicable Related Agreement.

21.2.3 Any Financial Investor may (a) at any time, without McDonald’s consent, Transfer collectively up to 20% of the Equity Interests of Parent to any one or more Persons that complies with the transfer criteria set forth in Exhibit 15 in any transaction; (b) after an IPO, the remaining Equity Interests of Parent in a

sale into the public market (other than pre-arranged block trades); provided , however , pursuant to clause (a), that, in each case, no such Transfer (i) shall be a Transfer of Equity Interests representing, convertible into, or exchangeable or exerciseable for, Equity Interests that represent, more than 20% of the aggregate economic or voting rights of the issued and outstanding Equity Interests from time to time of Parent; or (ii) may be accompanied by the grant of any management, governance or similar rights whatsoever with respect to Parent (other than voting rights incident to the class to which such Equity Interests pertain under the relevant constituent documents of Parent) or any “demand” rights to require Parent to register exclusively such Equity Interests for public sale in any jurisdiction whatsoever.

21.2.4 Any Financial Investor in Parent may at any time, without McDonald’s consent, Transfer any Equity Interests of Parent to any other Financial Investor or to Beneficial Owner. Any Financial Investor may, with the consent of McDonald’s (which consent shall not be unreasonably withheld), transfer Equity Interests to any private investment fund managed by (a) a wholly owned subsidiary of any of (i) The Capital Group; (ii) DLJ South American Partners LLC; or (iii) Gávea Investimentos, Ltda.; or (b) any special purpose vehicle wholly owned by one or more of any such funds, provided that the conditions precedent or subsequent to any such Transfer set forth in the Financial Investors Agreement are satisfied or waived by McDonald’s.

21.2.5 Master Franchisee shall notify McDonald’s of each proposed direct or indirect Transfer of any Equity Interest in (or all or substantially all of the Assets of) any Owner Entity, Master Franchisee or any of its Subsidiaries. The Transfer of any Equity Interests in Parent or any of its Subsidiaries in any manner otherwise than in the IPO shall be subject to the condition that the Transferee thereunder agrees to restrictions on Transfer, the Call Option and other limitations, including any obligation to deliver Equity Interests to Escrow Agent subject to the Escrow Agreement or the applicable Trustee subject to the Trust Agreements, as the case may be, that are identical in all material respects to those restrictions and limitations that were applicable to the Transferor, and no such Transfer may be consummated in the absence of a written agreement by the Transferee acknowledging and agreeing to such restrictions and other limitations. The Transfer of any Equity Interests in Parent shall be subject to the condition that the Transferee thereunder agrees to restrictions on Transfer that are identical in all material respects to those restrictions and limitations that were applicable to the Transferor, and no such Transfer may be consummated in the absence of a written agreement by the Transferee acknowledging and agreeing to such restrictions and other limitations.

21.2.6 In the event any Equity Interests in Parent are Transferred, whether by operation of law, testamentary disposition or otherwise, upon Woods W. Staton’s death or permanent incapacity, then each recipient of such Equity Interests in Parent (“ Beneficiaries ”) shall be deemed to agree to observe and be bound by all provisions of this Agreement (for the avoidance of doubt, including the next succeeding sentence) and any other applicable Related Agreement by which Beneficial Owner was bound or to which any of Beneficial Owner’s assets was subject. Beneficiaries shall execute and deliver such additional documents

and take such further action as may be necessary or desirable under all Applicable Law to evidence the foregoing accession to this Agreement and each applicable Related Agreement.

21.2.7 Any Transfer of an Equity Interest in any of any Owner Entity, Master Franchisee or any of its Subsidiaries that requires the prior consent of McDonald’s under this Agreement and is made without such consent shall convey no right to or interest in such Equity Interest and shall be void ab initio .

21.2.8 Master Franchisee shall deliver to Escrow Agent a written instruction substantially in the form of Exhibit 16 (each, a “ Transfer Instruction ”) in connection with any Transfer.

21.3 Certain Conditions to the Transfer of Restricted Interests by any Owner Entity, Master Franchisee or any of its Subsidiaries . Any proposed Transfer of Restricted Interests having a fair market value as of the proposed effective date of such Transfer of at least equal to $500,000 is subject to the satisfaction or waiver by McDonald’s of each of the following conditions on or prior to such effective date:

21.3.1 Any Owner Entity or Master Franchisee, as the case may be, shall have paid to McDonald’s all amounts due but unpaid hereunder or under any Related Agreement; and

21.3.2 If such Transfer relates to the Equity Interests in any MF Subsidiary or MF Subsidiaries with respect to one or more Territories, Master Franchisee and Owner shall have executed and delivered to McDonald’s a general release, in form and scope satisfactory to McDonald’s, of any and all claims in such Territories against McDonald’s, its Affiliates and their respective officers, directors, employees and agents.

21.4 Right of First Refusal .

21.4.1 If Beneficial Owner or any Financial Investor (the “ RFR Seller ”) proposes to Transfer an Equity Interest in Parent to any Person other than a direct or indirect wholly owned Subsidiary of Parent or pursuant to Section 21.2.3 or 21.2.4, and McDonald’s consents to such Transfer, an RFR Seller may effect such Transfer, provided that the RFR Seller shall first give McDonald’s a right with respect to the Equity Interest in Parent to be Transferred (the “ Offered Interest ”) to substitute itself for the Proposed Transferee in the transaction in accordance with this Section.

21.4.2 If an RFR Seller has received a bona fide , arm’s-length, executed, written, binding offer for the Offered Interest which it is willing to accept, such RFR Seller shall give notice to McDonald’s of the proposed sale and of the terms and conditions of such offer, including a copy of the offer, the identity of the Proposed Transferee, the consideration offered, the date on which the sale is proposed to be made, which shall not be earlier than 90 days and not later than 120 days from the date of such notice, any proposed ancillary agreements, along with such other information as may reasonably be required by McDonald’s to evaluate the offer and the Proposed Transferee.

21.4.3 Thereafter, McDonald’s shall have the right, by notice to the RFR Seller within 60 days after receipt of such notice of proposed Transfer and all the information that McDonald’s requested to evaluate the offer and the Proposed Transferee pursuant to Section 21.4.2, to elect to purchase all of the Offered Interest for the consideration offered and in accordance with the other terms and conditions of such offer; provided that McDonald’s shall have the right to substitute cash for any alternative form of consideration contemplated by the proposed Transfer.

21.4.4 If McDonald’s elects not to purchase all of the Offered Interest, the RFR Seller may proceed to complete the Transfer to the Proposed Transferee in accordance with such offer not later than 180 days after the notice thereof given to McDonald’s. If the proposed Transfer is not completed by that date or if the terms of such Transfer of the Offered Interest are amended in any material respect, the provisions of this Section shall again apply and no Transfer may be made in reliance upon this Section without again complying with its provisions.

21.5 [Intentionally Omitted.]

21.6 Call Option .

21.6.1 McDonald’s (in its own name, or through a nominee) shall have the right from time to time to purchase (a) upon expiration of the Solicitation Period (i) prior to an IPO, all, but not less than all, of the fully diluted Equity Interests of Master Franchisee owned or held, directly or indirectly, by Owner and any Equity Interest Transferred pursuant to Section 21.2.3; or (ii) after an IPO, all, but not less than all, of the fully diluted Equity Interests of Parent owned or held, directly or indirectly, by any Non-Public Shareholder; (b) upon the occurrence of a Material Breach either (i) (A) prior to an IPO, all, but not less than all, of the fully diluted Equity Interests of Master Franchisee owned or held, directly or indirectly, by Owner and any Equity Interest Transferred pursuant to Section 21.2.3; or (B) after an IPO, all, but not less than all, of the fully diluted Equity Interests of Parent owned or held, directly or indirectly, by any Non-Public Shareholder; or (ii) all, but not less than all, of the Equity Interests of any MF Subsidiary operating (or licensing the operation of) Franchised Restaurants in any Territory affected by such Material Breach or to which such Material Breach may be attributable, in either case directly or indirectly, by McDonald’s in its sole discretion, as set forth in Section 22.3.1; or (c) during the period of 12 full months (the “ Sale Period ”) following the earlier of (i) the eighteenth month anniversary of the death or permanent incapacity of Woods W. Staton; (ii) the receipt by McDonald’s of notice from the Beneficiaries that such Beneficiaries have elected to have the Sale Period commence as of a date specified in such notice, which date shall be after the receipt of such notice, (A) prior to an IPO, all, but not less than all, of the fully diluted Equity Interests of Master Franchisee owned or held, directly or indirectly, by Owner and any Equity Interest Transferred pursuant to Section 21.2.3; or (B) after an IPO, all, but not less than all, of the fully diluted Equity Interests of Parent owned or held, directly or indirectly, by any Non-Public Shareholder (each, a “ Call Option ”).

21.6.2 The purchase price payable by McDonald’s pursuant to an exercise of the Call Option (the “ Call Option Price ”) shall be equal to

(a) The Fair Market Value of the Subject Business, multiplied by (i) in the event the Call Option is exercised pursuant to Section 21.6.1(a) or (c), 100%; or (ii) in the event the Call Option is exercised pursuant to Section 21.6.1(b), 80%; less

(b) The sum of (i) Funded Debt less Cash, in each case attributable to the Subject Business; and (ii) Contingencies attributable to the Subject Business, in each case, as determined by Master Franchisee’s independent certified public accountants as of the Fair Market Value Date or the Adjusted Fair Market Value Date, as the case may be, and, if applicable, as subsequently adjusted as of the Option Closing Date pursuant to Section 21.7.2;

provided , however , that if the Call Option Price (i) refers to any MF Subsidiary or Territory; and (ii) results in a negative number, then Master Franchisee shall either (A) assume all of the Funded Debt (less Cash determined as of the Exercise Date or, if subsequently adjusted pursuant to Section 21.7.2, the Option Closing Date) and Contingencies attributable to the Subject Business and execute a general release in favor of McDonald’s and in form and scope acceptable to McDonald’s, relieving McDonald’s of any obligations with respect thereto; or (B) pay to McDonald’s the absolute value of such amount, in each case on or prior to the Option Closing Date. Master Franchisee shall deliver a notice, which notice shall be substantially in the form of Exhibit 17 , to the Collateral Agent and McDonald’s specifying whether it has elected (a) the alternative described in clause (A) of the preceding sentence (a “ Debt Assumption Election ”); or (b) the alternative described in clause (B) of the preceding sentence (a “ Payment Election ”).

21.6.3 McDonald’s may exercise a Call Option by giving written notice thereof to Master Franchisee and Owner. If McDonald’s is exercising the Call Option pursuant to (a) Section 21.6.1(b), McDonald’s shall deliver to the Persons set forth therein a written notice substantially in the form of Exhibit 18 (the “ Default Exercise Notice ”); or (b) Section 21.6.1(a) or 21.6.1(c), McDonald’s shall deliver such written notice substantially in the form of Exhibit 19 (the “ Non-Default Exercise Notice ”, together with the Default Exercise Notice, the “ Exercise Notices ” and the date of delivery of any Exercise Notice, the “ Exercise Date ”).

21.6.4 As promptly as practicable after the Fair Market Value Date or the Adjusted Fair Market Value Date, as the case may be, McDonald’s shall deliver a written notice to Escrow Agent or the applicable Trustee, as the case may be, with a copy to Master Franchisee and Owner, substantially in the form of Exhibit 20 (the “ Settlement Notice ”), pursuant to which it shall (a) notify Escrow Agent or the applicable Trustee, as the case may be, of (i) the anticipated Option Closing Date; (ii) the Call Option Price; (iii) any Disputed Amounts; and (iv) the amount of the Lender Payable; (b) instruct Escrow Agent or the applicable

Trustee, as the case may be, (i) to deliver the relevant Equity Interests to McDonald’s on the Option Closing Date and register McDonald’s (or its nominee) as the registered owner of such Equity Interests and (ii) to segregate any Disputed Amounts from the Call Option Price and deposit such Disputed Amounts in an escrow account pending resolution thereof; and (c) certify to Escrow Agent or the applicable Trustee, as the case may be, that (i) there is no Dispute under this Agreement regarding McDonald’s right to exercise the Call Option, which Dispute (A) was raised in good faith and in accordance with the arbitral procedures under Section 25.2 no later than the one month anniversary of the Exercise Date relating to such Call Option; and (B) has been actively pursued by Master Franchisee, but which respect thereto no final judgment has been awarded (an “ Unresolved Dispute ”), in each case against delivery by McDonald’s of the Call Option Price, and (ii) McDonald’s has received all approvals, licenses and authorizations from all Governmental Authorities in connection with the Transfer of the Subject Business, which, in each case, is necessary for the Closing, or, in its sole discretion, elected to proceed to closing without such approvals, licenses and authorizations. The date on which the Settlement Notice is delivered is referred to as the “ Settlement Notice Date ”.

21.6.5 The “ Option Closing Date ” shall occur on the fifth Business Day after the Settlement Notice Date. At the reasonable request of McDonald’s and without further consideration, Beneficial Owner, each Owner Entity and each Master Franchisee Party shall execute and deliver such additional documents and take such further action as may be necessary or desirable under all Applicable Law to consummate and make effective, in the most expeditious manner practicable, the Transfer of the Subject Business, free and clear of any Encumbrances.

21.6.6 On the Option Closing Date, Escrow Agent or the applicable Trustee, as the case may be, shall, upon payment of the Call Option Price and subject to the right of McDonald’s to escrow Disputed Amounts, Transfer and deliver to McDonald’s, and McDonald’s shall purchase, acquire, accept and take assignment and delivery of, from Escrow Agent or the applicable Trustee, as the case may be, all of the right, title and interest in the Equity Interests relating to the Subject Business.

21.6.7 Payments (if any) by McDonald’s to Escrow Agent or the applicable Trustee, as the case may be, of the full amount of the Call Option Price shall constitute full payment of the Equity Interests subject to the Call Option and such Equity Interests shall be immediately and irrevocably Transferred to McDonald’s at the time of such payment.

21.6.8 If McDonald’s disputes the amount of any of Funded Debt, Cash or Contingencies pursuant to Section 21.7.2, then as promptly as practicable following the settlement of such dispute in accordance with the procedures set forth under Section 21.7.2, McDonald’s shall deliver to Escrow Agent or the applicable Trustee, as the case may be, a written notice substantially in the form of Exhibit 21 (the “ Disputed Amounts Settlement Notice ”) instructing Escrow Agent or the applicable Trustee, as the case may be, to release from escrow the relevant amounts to it or to Master Franchisee or Owner, as the case may be.

21.6.9 From and after the occurrence and during the continuance of any Material Breach, Beneficial Owner, any Owner Entity or any Master Franchisee Party, as applicable, shall (a) cause the Subject Business to operate its business in the ordinary course consistent with past practice; (b) not sell any significant portion of the Subject Business’ Assets in one transaction or a related series of transactions; (c) not permit the Subject Business to create, incur or assume any additional Funded Debt; (d) cause the Subject Business to pay or otherwise satisfy (except if being contested in good faith and subject to any applicable grace period) all other Indebtedness and liabilities (including taxes and trade payables) of the Subject Business as and when the same shall become due and payable on a basis consistent with past practice; (e) not permit the Subject Business to securitize any of its receivables; (f) not take any action for purposes of liquidation of the Subject Business, making any general assignment for the benefit of the Subject Business’ creditors, making a voluntary filing of a petition in commercial insolvency (including a concurso mercantil ) or consenting to the filing of any other proceeding for the appointment of a receiver, a conciliator or an auditor of such entity or other custodian or similar official for all or any portion of the business or Assets thereof; (g) remain subject to the terms of this Agreement; or (h) cause the Subject Business not to declare or pay any distribution or dividend to holders of Equity Interests in the Subject Business.

21.7 Calculation of Call Option Price .

21.7.1 Fair Market Value . McDonald’s and Master Franchisee agree to create and maintain at all times an agreed list (the “ FMV Institution List ”) of internationally recognized investment banks from which investment banks shall be selected for purposes of determining the Fair Market Value.

(a) McDonald’s and Master Franchisee agree that, in the case of any determination of the Fair Market Value, (i) each of McDonald’s and Master Franchisee shall pay the fees and expenses of any institution it selects from the FMV Institution List; and (ii) each of McDonald’s and Master Franchisee shall share equally the fees and expenses of any institution selected from the FMV Institution List to render a Secondary Valuation.

(b) The Fair Market Value shall be calculated as the amount in U.S. Dollars that, as of the Exercise Date, would be received for the Subject Business in an arm’s-length transaction between a willing buyer and willing seller, taking into account the benefits provided by this Agreement, determined as follows:

(1) McDonald’s and Master Franchisee shall each select a financial institution from the FMV Institution List. These two institutions shall make their respective determinations of the fair market valuation of the Subject Business (each, a “ Primary Valuation ”) and submit them to McDonald’s and Master Franchisee within 45 days of the delivery of the Exercise Notice. Each Primary Valuation shall set forth a single determination of the value of the Subject Business and not a range thereof. If the

Primary Valuations differ by an amount which is less than 10% of the lower Primary Valuation, the Fair Market Value shall be the average of such Primary Valuations. If either McDonald’s or Master Franchisee fails to timely appoint a financial institution from the FMV Institution List, or if a selected institution fails to deliver a Primary Valuation before the end of the 45-day period, then the Fair Market Value shall be equal to the Primary Valuation that was timely delivered.

(2) If the Primary Valuations differ by an amount which is greater than 10% of the lower Primary Valuation, McDonald’s and Master Franchisee shall, jointly, select a third institution from the FMV Institution List. (If McDonald’s and Master Franchisee cannot agree on a third institution within ten days after the date on which the Primary Valuations were delivered, then McDonald’s and Master Franchisee shall meet at 10 a.m. (New York Time) on the 55 ^th day following the date of the Exercise Notice at McDonald’s offices in Oak Brook, Illinois, and select an institution from the FMV Institution List at random by drawing from a hat.) The selected institution shall then make its own determination, which shall be calculated without reference to or reliance on the Primary Valuations, of the Fair Market Value (the “ Secondary Valuation ”) and deliver it to the parties within 45 days. The Secondary Valuation shall set forth a single determination of the value of the Fair Market Value and not a range thereof. The Primary Valuation that is closest to the Secondary Valuation shall become the Fair Market Value; provided , however , that if the Secondary Valuation is the arithmetic mean of the Primary Valuations, then the Secondary Valuation shall become the Fair Market Value.

(c) The date on which the Fair Market Value is determined pursuant to this Section is referred to as the “ Fair Market Value Date ”.

(d) If the Settlement Notice Date has not occurred prior to the one hundred twentieth calendar day after the Fair Market Value Date, then McDonald’s or, if the Settlement Notice Date has not occurred due to a failure to receive an approval, license or authorization from any Governmental Authority either Master Franchisee or McDonald’s may, prior to delivering a Settlement Notice with respect to the applicable Subject Business, request that the Fair Market Value of such Subject Business be reviewed by delivering to the other Parties a fair market value review notice in the form of Exhibit 22 (the “ FMV Review Notice ”), provided that no party may deliver such a notice if the delay in the Settlement Notice Date results from a failure of such party to take such actions as may be necessary to timely obtain such approval, license or authorization.

(1) The Fair Market Value review shall be conducted by the same institutions that conducted the initial Primary

Valuations of such Fair Market Value pursuant to Section 21.7.l(b). Each of these two institutions shall make a new Primary Valuation and submit them to McDonald’s and Master Franchisee within 20 days of the delivery of the FMV Review Notice. Each Primary Valuation shall set forth a single determination of the value of the Subject Business and not a range thereof. If the Primary Valuations differ by an amount which is less than 10% of the lower Primary Valuation, the Adjusted Fair Market Value shall be the average of such Primary Valuations. If either McDonald’s or Master Franchisee fails, if required, to timely appoint a replacement financial institution from the FMV Institution List, or if a selected institution fails to deliver a Primary Valuation before the end of the 20-day period, then the Adjusted Fair Market Value shall be equal to the Primary Valuation that was timely delivered.

(2) If the Primary Valuations differ by an amount which is greater than 10% of the lower Primary Valuation, McDonald’s and Master Franchisee shall, jointly, select a third institution from the FMV Institution List. (If McDonald’s and Master Franchisee cannot agree on a third institution within ten days after the date on which the Primary Valuations were delivered, then McDonald’s and Master Franchisee shall meet at 10 a.m. (New York Time) on the 25 ^th day following the date of the Exercise Notice at McDonald’s offices in Oak Brook, Illinois, and select an institution from the FMV Institution List at random by drawing from a hat.) The selected institution shall then make a Secondary Valuation and deliver it to the parties within 25 days. The Secondary Valuation shall set forth a single determination of the value of the Adjusted Fair Market Value and not a range thereof. The Primary Valuation that is closest to the Secondary Valuation shall become the replacement Fair Market Value (such new amount, the “ Adjusted Fair Market Value ”); provided , however , that if the Secondary Valuation is the arithmetic mean of the Primary Valuations, then the Secondary Valuation shall become the Adjusted Fair Market Value.

(e) The date on which the Adjusted Fair Market Value is determined pursuant to this Section is referred to as the “Adjusted Fair Market Value Date”.

(f) Each of McDonald’s and Master Franchisee agrees to cooperate in good faith with any institution selected to conduct the Primary Valuations or Secondary Valuation and shall provide such institutions with access to any and all information and/or personnel requested by such institution in connection with the determination of the Fair Market Value and/or the Adjusted Fair Market Value. Such requests may include, among other things, requests for financial projections,

budget proposals, management presentations, accounting books and records and explanations by management with respect thereto.

21.7.2 Funded Debt; Cash; Contingencies .

(a) Within ten Business Days after the Fair Market Value Date or Adjusted Fair Market Value Date, as the case may be, Master Franchisee shall deliver to McDonald’s an unaudited condensed consolidated balance sheet for the Subject Business as of the Fair Market Value Date or Adjusted Fair Market Value Date, as the case may be (the “ Subject Business Balance Sheet Date ”, that sets forth on the face thereof or in the notes thereto the Funded Debt, Cash and Contingencies of the Subject Business, as determined by Master Franchisee’s independent certified public accountants (the “ Subject Business Balance Sheet ”). If Master Franchisee fails to deliver a Subject Business Balance Sheet, then McDonald’s shall make a good faith estimate of the Subject Business Balance Sheet, which shall be definitive and binding unless subsequently adjusted pursuant to Section 21.7.2(b). Master Franchisee shall cooperate in good faith with McDonald’s and provide McDonald’s and its representatives and advisors with full access to any and all information and/or personnel requested by any of them in connection therewith. Such requests may include, among other things, accounting books and records and explanations by management with respect to McDonald’s review or preparation of the Subject Business Balance Sheet. McDonald’s shall also have the right, in its sole discretion, to request another Subject Business Balance Sheet be delivered as of a date of its election if within sixty calendar days after the Fair Market Value Date or Adjusted Fair Market Value Date, as the case may be, the Option Closing Date has not occurred.

(b) If either (i) McDonald’s disagrees with the determinations of Funded Debt, Cash and Contingencies; or (ii) reasonably believes that the amount of Funded Debt, Cash or Contingencies has materially changed or will materially change between the Subject Business Balance Sheet Date and the Option Closing Date, then McDonald’s shall have the right to notify Escrow Agent within 10 Business Days after receiving the Subject Business Balance Sheet by delivering a notice in the form of Exhibit 23 (the “ Disputed Amounts Notice ”) in which it shall notify the other Parties of any disputed amounts (the “ Disputed Amounts ”).

(1) In the event of a dispute, McDonald’s shall select an accounting firm that has not served as Master Franchisee’s independent certified public accountants in either of the last two completed fiscal years (such a firm, a “ Disqualified Firm ”). This institution shall determine the value of the Funded Debt and/or Cash and/or Contingencies of the Subject Business as of the Option Closing Date and shall submit it to McDonald’s and Master Franchisee within 30 days of the Option Closing Date (such calculation, along with the calculation performed by the

Master Franchisee’s independent certified public accountants pursuant to Section 21. 7.2(a), the “ Primary Calculations ”).

(2) Each Primary Calculation shall set forth a single determination of the value of the Funded Debt and/or Cash and/or Contingencies of the Subject Business as of the Option Closing Date, as the case may be, and not a range thereof. If the Primary Calculations differ by an amount which is less than 10% of the lower Primary Calculation, the final value of the Funded Debt and/or Cash or Contingencies, as the case may be, shall be the average of such Primary Calculations. If McDonald’s fails to timely appoint an accounting firm or if Master Franchisee’s independent certified public accountants or McDonald’s accounting firm fails to deliver a Primary Calculation before the end of the 30-day period, then the value of the Funded Debt and/or Cash and/or Contingencies of the Subject Business, as the case may be, shall be equal to the Primary Calculation that was timely delivered.

(3) If the Primary Calculations differ by an amount which is greater than 10% of the lower Primary Calculation, McDonald’s and Master Franchisee shall jointly select a third accounting firm, which shall not be a Disqualified Firm. (If McDonald’s and Master Franchisee cannot agree on a third accounting firm within ten days after the date on which the Primary Calculations were delivered, then McDonald’s and Master Franchisee shall meet at 10 a.m. (New York Time) on the fortieth day following the date of the Fair Market Value Date or the Adjusted Fair Market Value Date, as the case may be, at McDonald’s offices in Oak Brook, Illinois, and select an accounting firm from the list of registered public accounting firms maintained by the Public Company Accounting Oversight Board (other than any Disqualified Firm) at random by drawing from a hat.) The selected accounting firm shall then make its own determination, which shall be calculated without reference to or reliance on the Primary Calculations, of the value of the Funded Debt and/or Cash and/or Contingencies of the Subject Business, as the case may be (the “ Secondary Calculation ”) and deliver it to the parties within 30 days. The Secondary Calculation shall set forth a single determination of the value of the Funded Debt and/or Cash and/or Contingencies of the Subject Business, as the case may be, and not a range thereof. The Primary Calculation that is closest to the Secondary Calculation shall become the value of the Funded Debt and/or Cash and/or Contingencies of the Subject Business, as the case may be; provided , however , that if the Secondary Calculation is the arithmetic mean of the Primary Calculations, then the Secondary Calculation shall become the value of the Funded Debt and/or Cash and/or Contingencies of the Subject Business, as the case may be.

(c) Each of McDonald’s and Master Franchisee agrees to cooperate in good faith with any accounting firm selected to conduct the Primary Calculation or Secondary Calculation and shall provide such institutions with access to any and all information and/or personnel requested by such institution in connection with the determination of the value of the Funded Debt and/or Cash and/or Contingencies of the Subject Business, as the case may be. Such requests may include, among other things, requests for financial projections, budget proposals, management presentations, accounting books and records and explanations by management with respect thereto.

21.8 IPO . At any time after August 3, 2011, if Master Franchisee shall have satisfied each of the criteria specified in Exhibit 24 , after consulting with an internationally recognized investment banking firm acceptable to McDonald’s, Beneficial Owner and the Financial Investors may effect an IPO with respect to no more than 60% of the Economic Interests of Parent; provided , however , that (a) at least 33% of all proceeds received in respect of Equity Interests sold in such IPO shall be received by Master Franchisee or reinvested in the Master Franchise Business; (b) either (i) Beneficial Owner; or (ii) if McDonald’s owns any Equity Interests, the group comprised of Beneficial Owner and McDonald’s shall, after giving effect to the IPO, retain at least 51% of the Voting Interests of Parent; and (c) such IPO does not result in the imposition of obligations on McDonald’s or its Affiliates in addition to those contemplated by this Agreement or additional obligations upon the exercise of McDonald’s rights hereunder, including obligations imposed in connection with the with the listing on a national securities exchange or registration with any Governmental Authority. In connection with the IPO, Parent shall grant, or cause to be granted, registration rights to McDonald’s with respect to any Equity Interests of a class offered in the IPO owned by McDonald’s, which shall be customary in form and scope, to registration rights granted in similar transactions. McDonald’s shall have the right to review all documentation relating to the IPO, at Parent’s sole expense, and Parent shall use its best efforts to incorporate any comments McDonald’s may have with respect to any of such documentation. In no event shall Beneficial Owner, any Financial Investor or Parent effect an IPO or other distribution of Equity Interests of any of Parent’s direct or indirect Subsidiaries; provided ; however , that Beneficial Owner and Financial Investors may, with the written consent of McDonald’s, such consent not to be unreasonably withheld, effect an IPO of their indirect Economic Interests in a Subsidiary other than Parent, Master Franchisee or a Subsidiary of Master Franchisee, subject to mutually satisfactory agreements with respect to the amendment of this Agreement and any relevant Related Agreements.

21.9 Right to Exercise Call Option; Damages on Failure to Complete . McDonald’s right to exercise the Call Option shall not be affected by the occurrence of any event described in Section 22.2.3. If Beneficial Owner, any Owner Entity or any Master Franchisee Party fails to perform its obligations in respect of the Call Option such that McDonald’s does not receive all of the right, title and interest in the Equity Interests relating to the Subject Business free and clear of all Liens (if applicable as set forth in the Escrow Agreement) hereunder or under the Escrow Agreement, or upon the occurrence of any event described in Section 22.2.3, McDonald’s shall have the right upon notice to Beneficial Owner, any Owner Entity or the relevant Master Franchisee Party, as applicable, to cancel the Call Option without cost or penalty to McDonald’s. Upon any such cancellation, or otherwise in the event that McDonald’s is not permitted to exercise

the Call Option or upon exercise does not receive all of the right, title and interest in the Subject Business, in addition to its other rights hereunder or under any other MFA Document, McDonald’s shall (acting reasonably and in good faith) determine and be entitled to damages from Beneficial Owner, any Owner Entity and the Master Franchisee Parties, jointly and severally, of McDonald’s total damages and costs arising from its loss of bargain represented by this Agreement, including among other damages the loss of revenues attributable to this Agreement. The Parties agree that such damages and costs recoverable by McDonald’s shall in no event be less than the aggregate amount of Continuing Franchise Fees paid or payable by the Master Franchisee Parties hereunder for the most recently completed 12-month period ending on the date of such cancellation, multiplied by the number of years left in the Regular Term, plus damages attributable to loss of goodwill associated with the Intellectual Property and any additional amounts that would be invested in or otherwise spent by McDonald’s to replicate the Subject Business that should have been delivered to McDonald’s pursuant to such Call Option.

22. Material Breaches and Remedies

22.1 Material Breaches by Master Franchisee . Master Franchisee shall be considered to be in default of its obligations under this Agreement upon the occurrence and during the continuance of any Material Breach.

22.2 Material Breaches . Each of the following events is a “ Material Breach ” hereunder:

22.2.1 The material breach by Beneficial Owner, any Owner Entity, Master Franchisee, any MF Subsidiary of any of their respective (a) representations or warranties or (b) obligations, including compliance with the System, under this Agreement relating to or otherwise in connection with any aspect of the Master Franchise Business, the Franchised Restaurants or any other matter in or affecting anyone or more Territories; provided , in the case of the foregoing clause (b), that Master Franchisee has failed to cure such material breach within 30 days after receipt of notice thereof from McDonald’s;

22.2.2 The failure by Master Franchisee, Owner or any MF Subsidiary to comply with any of its respective obligations contained in Section 7.15;

22.2.3 To the fullest extent permitted by Applicable Law, the insolvency or making of a general assignment for the benefit of creditors of any Owner Entity, Master Franchisee or an MF Subsidiary; the voluntary filing by any Owner Entity, Master Franchisee or an MF Subsidiary of a petition in commercial insolvency (including a concurso mercantil ); the filing by any other Person of such a petition against any Owner Entity, Master Franchisee or an MF Subsidiary, which is not dismissed within 60 Business Days after the filing date; the adjudication of any Owner Entity, Master Franchisee or an MF Subsidiary as bankrupt or insolvent; the filing by or with the consent of any Owner Entity, Master Franchisee or an MF Subsidiary of any other proceeding for the appointment of a receiver, a conciliator or an auditor of any Owner Entity, Master Franchisee or an MF Subsidiary or other custodian or similar official for the business or Assets of any Owner Entity, Master Franchisee or an MF Subsidiary, or any part thereof; the appointment by any court of competent

jurisdiction of a receiver, a conciliator or an auditor or other custodian (permanent or temporary) of Assets of any Owner Entity, Master Franchisee or an MF Subsidiary, or any part thereof; or the institution of proceedings for a composition with creditors under Applicable Law of any Territory by or against any Owner Entity, Master Franchisee or an MF Subsidiary;

22.2.4 The conviction of Beneficial Owner, any Owner Entity, Master Franchisee or an MF Subsidiary or any agents or employees by a court of competent jurisdiction, or pleading no contest by such Person to, (a) a crime or offense that is punishable by incarceration for more than one year or a felony; or (b) a crime or offense or the indictment on charges thereof that, in the determination of McDonald’s, is likely to adversely affect the reputation of such Person, any Franchised Restaurant, McDonald’s or any of its Affiliates or the Trademarks, or otherwise adversely affect the System, McDonald’s Restaurants or the goodwill associated with the Trademarks;

22.2.5 The participation by Master Franchisee or any of its Subsidiaries in any fraudulent or dishonest activity that is material to the Master Franchise Business in any Territory or the failure by Master Franchisee to report to McDonald’s any such fraudulent or dishonest activity by any of the employees or agents of Master Franchisee or any of its Subsidiaries, including the concealment of revenues or the provision of false or misleading financial information;

22.2.6 The entry of any judgment against any Owner Entity, Master Franchisee or any MF Subsidiary in excess of $1,000,000, or the failure to pay any creditor, including any Approved Supplier, Distributor or Governmental Authority, any amount as and when due and payable, that is not duly paid or otherwise discharged within 30 days, unless such judgment is being contested on appeal in good faith by any Owner Entity or Master Franchisee;

22.2.7 The default by any Owner Entity, Master Franchisee or any MF Subsidiary under the Financing Agreements (or any Refinancing thereof) and the continuation of such default beyond any applicable cure period set forth in any such Financing Agreement (or Refinancing), which default shall be deemed to materially and adversely affect each of the Territories if it (a) was caused by any Owner Entity or Master Franchisee; or (b) was caused by any MF Subsidiary organized in a Major Territory and shall have resulted in or formed the basis of the acceleration of all amounts then due and payable under any such Financing Agreement (or Refinancing);

22.2.8 The engagement by Master Franchisee or any of its Affiliates or any Managing Director in any Territory or Territories in public conduct that reflects materially and unfavorably upon the operation of McDonald’s Restaurants, the System or the goodwill associated with the Intellectual Property, and the failure of Master Franchisee to cease such conduct within five days after receipt of notice thereof from McDonald’s; provided that engagement in legitimate political activity (including testifying, lobbying, or otherwise attempting to influence legislation to the extent not in violation of the U.S. Foreign Corrupt Practices Act or similar anti-corruption or money laundering law applicable in any Territory) shall not be grounds for termination;

22.2.9 The engagement by Master Franchisee or any of its Affiliates or any Managing Director in any Territory or Territories in an act constituting gross negligence, recklessness or intentional or willful misconduct relating to the conduct of the Master Franchisee Business that, in the determination of McDonald’s, is likely to materially adversely affect the reputation of McDonald’s or any of its Affiliates or the Trademarks, or otherwise materially adversely affect the System, McDonald’s Restaurants or the goodwill associated with the Trademarks; provided that engagement in legitimate political activity (including testifying, lobbying, or otherwise attempting to influence legislation to the extent not in violation of the U.S. Foreign Corrupt Practices Act or similar anti-corruption or money laundering law applicable in any Territory) shall not be grounds for termination;

22.2.10 The failure by Master Franchisee to comply with any provision of this Agreement other than those defined as a Material Breach more than once in any period of 12 consecutive months; provided that (i) promptly following any such breach by Master Franchisee, McDonald’s shall notify Master Franchisee in writing that the first breach (as contemplated by this Section) has occurred, and (ii) thereafter, a Material Breach shall have occurred only to the extent that Master Franchisee (x) commits a subsequent breach within the 12-month period following the date of such initial notice and (y) fails to cure such breach within 30 days after McDonald’s delivers to Master Franchisee a notice referencing this Section;

22.2.11 The failure by Master Franchisee to achieve (a) at least 80% of the Targeted Openings during anyone calendar year of any Restaurant Opening Plan; or (b) at least 90% of the Targeted Openings during the three-calendar year term of any Restaurant Opening Plan;

22.2.12 The failure by Master Franchisee to comply with at least 80% of the U.S. Dollar funding requirements of any Reinvestment Plan with respect to any Territory as and when such Reinvestment Plan is required to be implemented for a period of one year after notice thereof has been given to Master Franchisee;

22.2.13 The failure by any Owner Entity, Master Franchisee or any MF Subsidiary to pay any amount required to be paid to McDonald’s under this Agreement (including overdue interest thereon as provided in Section 24.2.3) that in the aggregate exceeds $80,000,000;

22.2.14 The failure by Master Franchisee (a) to cause any Letter of Credit to be reissued by a Qualified Bank no later than 60 days prior to the expiration date of such Letter of Credit; (b) to restore the aggregate amount available under the Letters of Credit to (i) at any time during the Regular Term (other than during the Prepaid Amount Period), $80,000,000; and (ii) at any time during the Prepaid Amount Period, no less than $65,000,000 (or, if the Prepaid Amount is less than $15,000,000, such greater amount such that the sum of the Prepaid Amount and the aggregate amount available under the Letters of Credit is equal to $80,000,000) within 30 days following any draw thereunder; or (c) to fail to pay any amount to McDonald’s pursuant to Section 7.9.4(d) when due and payable;

22.2.15 The failure, if any amount is payable pursuant to Section 21.6.2, by Master Franchisee to either (i) assume all of the Funded Debt (less Cash determined as of the Exercise Date or, if subsequently adjusted pursuant to Section 21.7.2, the Option Closing Date) and Contingencies attributable to the Subject Business and execute a general release in favor of McDonald’s and in form and scope acceptable to McDonald’s, relieving McDonald’s of any obligations with respect thereto; or (ii) pay to McDonald’s any amounts payable on any Option Closing Date (without regard to any notice or cure period that may otherwise apply under this Agreement);

22.2.16 The material breach by Brazilian Master Franchisee of any of its obligations, including compliance with the System, under the Brazil MFA relating to or otherwise in connection with any aspect of the Brazilian Master Franchise Business (as defined in the Brazil MFA), the Franchised Restaurants or any other matter in or affecting Brazil if Brazilian Master Franchisee shall have failed to cure such material breach within 30 days after its receipt of notice thereof from McDonald’s;

22.2.17 The material breach by any Owner Entity or any Master Franchisee Party of its representations, warranties or obligations under any MFA Document (other than this Agreement) if such Owner Entity or Master Franchisee Party shall have failed to cure such material breach within 30 days after its receipt of notice thereof from McDonald’s; or

22.2.18 The entry into any agreement (including any unsecured or secured debt facility, indenture or other instrument or agreement) by Beneficial Owner, any Owner Entity, Master Franchisee or any Subsidiary that is materially adverse to any of McDonald’s rights (a) under the Call Option; or (b) in respect of the Intellectual Property.

22.3 Remedies .

22.3.1 Upon the occurrence and during the continuance of a Material Breach, McDonald’s, at its option, may take anyone or more of the following actions:

(a) In the case of any Material Breach, other than any Material Breach specified in Section 22.2.11(a):

(i) Terminate this Agreement, in whole or, in McDonald’s sole discretion, with respect to any one or more Territories identified by McDonald’s as being affected by such Material Breach or to which such Material Breach may be attributable, directly or indirectly; or

(ii) Subject to Section 22.3.1(b), exercise the Call Option with respect to all of the Territories, or in McDonald’s sole discretion, with respect to one or more Territories identified by McDonald’s as being affected by such Material Breach or to

which such Material Breach may be attributable, in either case directly or indirectly;

provided , however , that if the initial Material Breach relates to any one or more Territories other than a Major Territory and is not a Material Breach specified in Section 22.2.11(a), McDonald’s shall only be entitled to exercise the Call Option with respect to such Territory or Territories.

(b) Solely in the case of any Material Breach specified in Sections 22.2.11(a), terminate the exclusive right of Master Franchisee to exploit the Master Franchisee Rights granted in Section 3 with respect to each affected Territory.

22.4 Mitigation . McDonald’s shall have the right, but not the obligation, to take such action as it may deem necessary or appropriate to cure or remediate any Material Breach, but no such action, cure or remediation shall constitute a waiver of any of McDonald’s rights or remedies hereunder or under Applicable Law with respect to such Material Breach. Any such actions taken by McDonald’s shall be at the sole expense of Master Franchisee.

22.5 Automatic Termination . Upon the occurrence of a Material Breach specified in Section 22.2.3, this Agreement shall terminate without the need for any Party to take any further action.

23. Rights and Obligations Upon Termination or Expiration of the Master Franchise

23.1 Termination or Expiration of this Agreement . If this Agreement expires or terminates according to its terms, then:

23.1.1 McDonald’s shall have the right, but not the obligation, to acquire all, but not less than all, of the Equity Interests in Master Franchisee at Fair Market Value; provided ; however , that if this Agreement terminates with respect to French Guiana, Guadeloupe and Martinique upon the expiration of the French Term, then McDonald’s shall have the right, but not the obligation, to acquire all, but not less than all, of the applicable Equity Interests of the MF Subsidiaries in French Guiana, Guadeloupe, Martinique at Fair Market Value.

23.1.2 Master Franchisee shall pay to McDonald’s and its Affiliates, within ten Business Days following the effective date of the termination or expiration of this Agreement, or such later date that the amounts due are determined as provided in this Agreement any amounts owed to McDonald’s or any of its Affiliates which are then unpaid and any late charges with respect thereto.

23.1.3 If McDonald’s does not exercise its right to acquire all of the Equity Interests in Master Franchisee pursuant to Section 23.1.1, then McDonald’s shall execute and deliver all necessary documents and instruments and perform any additional acts that McDonald’s determines to be necessary or appropriate to confirm the continuing rights to the Intellectual Property and

otherwise of any Franchisee under a Franchise Agreement the term of which extends beyond the applicable Term.

23.2 Responsibilities of Master Franchisee Parties upon Termination . Upon termination or expiration of this Agreement with respect to any Territory, the Master Franchise Parties shall, with respect to the affected Territory:

23.2.1 Not directly or indirectly at any time or in any manner identify themselves or any business as a current franchisee or licensee of, or as otherwise associated with McDonald’s or any of its Affiliates, or use any Intellectual Property or any colorable imitation thereof in any manner or for any purpose, or utilize for any purpose any trade name, trade or service mark or other commercial symbol that suggests or indicates a connection or association with McDonald’s or any of its Affiliates;

23.2.2 Unless McDonald’s is entitled to and does exercise its right to acquire the Equity Interests in Master Franchisee or any Equity Interest in any MF Subsidiary, within five Business Days remove all signs, structures, elements or designs incorporating or containing any Intellectual Property, and return to McDonald’s or destroy all items, forms and materials containing any Intellectual Property or otherwise identifying or relating to a Franchised Restaurant and to comply fully with all Standards applicable to the closing or transfer of a McDonald’s Restaurant;

23.2.3 Within five Business Days, take such action as may be required to cancel all fictitious or assumed name or equivalent registrations relating to Master Franchise Parties’ use of any Intellectual Property;

23.2.4 Not sell any McDonald’s branded product or service or product or service identified as part of the System;

23.2.5 If applicable, notify all search engines of the termination of Master Franchisee’s right to use domain names incorporating or relating to the Intellectual Property and / or the Franchised Restaurants and Transfer (or cause to be Transferred) any domain name registrations within each Territory to McDonald’s or any other Person designated by McDonald’s;

23.2.6 Not sell any equipment covered by Patents to any third party unless authorized in writing by McDonald’s and to comply with McDonald’s directions regarding the disposition of such equipment at Master Franchisee’s sole expense;

23.2.7 Furnish to McDonald’s, within 30 Business Days after the effective date of termination or expiration, evidence satisfactory to McDonald’s of Master Franchisee’s compliance with the foregoing obligations;

23.2.8 Immediately cease to use any of the Confidential Information which has been disclosed to, or otherwise learned or acquired by Master Franchisee or any Master Franchisee Party and, no later than three Business Days after termination or expiration, return to McDonald’s all copies of all Operations

Manuals and all materials containing Confidential Information which have been loaned or made available hereunder; and

23.2.9 Within 30 Business Days, take such action as may be required to Transfer any MF Subsidiary that was organized in such Territory or held Assets or Real Estate related to the operations of such Territory to a Person that is not a Subsidiary of Master Franchisee.

23.3 Transition Services . If a Call Option is exercised pursuant to Section 21.6.1 with respect to any or all Territories, then:

23.3.1 McDonald’s shall be entitled immediately to assume the operation of any or all affected Franchised Restaurants;

23.3.2 Master Franchisee shall, and shall cause its Related Parties to, cooperate with McDonald’s in connection with the receipt of any approval from any Governmental Authority required to ensure the continuous operation of such Franchised Restaurants; and

23.3.3 Master Franchisee shall provide, and shall cause each of its Related Parties to, provide to McDonald’s any services required to ensure the continuous operation of such Franchised Restaurants (the “ Services ”), in accordance with the procedures and standards set forth below:

(a) McDonald’s and Master Franchisee shall each nominate a representative to act as the “primary contact person” with respect to the performance of the Services (each, a “ Service Coordinator ”). Unless otherwise agreed upon by the Parties, all communications relating to the Services shall be directed to the Service Coordinators.

(b) Master Franchisee shall (and shall cause any Person performing services on its behalf to) use best efforts, skill and judgment in providing the Services.

(c) Master Franchisee shall, and shall cause its Related Parties to, reasonably cooperate with McDonald’s in all matters relating to the provision of the Services and perform all obligations hereunder in good faith and in accordance with principles of fair dealing and refrain from any willful or intentional misconduct, gross negligence or violation of Applicable Law.

(d) Master Franchisee shall use its best efforts to cause any third party whose actions are necessary to the provision of the Services to cooperate with McDonald’s in connection therewith.

(e) McDonald’s shall use commercially reasonable efforts to (i) provide information and documentation necessary for Master Franchisee to perform the Services; (ii) make available, as reasonably requested by Master Franchisee, sufficient resources; and (iii) make or provide timely decisions, approvals and acceptances in order that Master Franchisee may perform the Services in a timely and efficient manner.

(f) Master Franchisee shall follow, and shall cause its Related Parties to follow, any Standards of McDonald’s applicable to the Services.

(g) In consideration for the Services, McDonald’s shall pay to Master Franchisee all direct costs of Master Franchisee in providing the Services, including any reasonable and documented out-of-pocket expenses.

23.4 Right to Hire Former Employees . McDonald’s shall be entitled to interview, solicit and / or hire any former employee of any Franchised Restaurant that are no longer being operated by Master Franchisee or a Franchisee.

24. General Provisions

24.1 Effective Date . The Original MFA became effective on August 3, 2007. This Agreement shall become effective as of the date hereof.

24.2 Payments .

24.2.1 Master Franchisee’s obligation to pay any fee or make any payment to McDonald’s at the times and in the manner required under this Agreement shall in no event be conditioned upon receipt by Master Franchisee of any amount from any Franchisee.

24.2.2 Master Franchisee shall at all times participate in an automatic debit/credit transfer program as specified by McDonald’s from time to time for the payment of all amounts due to McDonald’s hereunder. Master Franchisee shall execute and deliver to McDonald’s such documents and instruments as may be necessary to establish and maintain such an automatic debit/credit transfer program.

24.2.3 Amounts payable by Master Franchisee hereunder shall be paid in U.S. Dollars and shall be due and payable on the dates specified herein. If any payment required hereunder is not made when due, Master Franchisee shall, to the fullest extent permitted by Applicable Law, pay to McDonald’s interest on the past due amount from and including the due date for such payment to, but excluding, the date of actual payment thereof at a per annum rate equal to the highest rate allowed by Applicable Law or, if there is no maximum rate permitted by Applicable Law, then 15%. Such interest will be calculated on the basis of monthly compounding and the actual number of days elapsed, divided by 365. This late charge shall be in addition to any other remedy available to McDonald’s hereunder or under Applicable Law. Master Franchisee acknowledges that nothing contained in this Section shall constitute an agreement by McDonald’s to accept any overdue payment or a commitment by McDonald’s to extend credit to, or otherwise finance, Master Franchisee’s operation of the Master Franchise Business.

24.2.4 Except for Continuing Franchise Fees, the calculation of U.S. Dollar equivalents for any amount payable hereunder on any day shall be made using (a) on the spot rate of exchange for settlement on such date as reported in

The Wall Street Journal , Eastern Edition, as the New York foreign exchange selling rate applying to trading among banks in amounts of $1,000,000 or more, or, if not so reported; or (b) the arithmetic average of the day’s spread for settlement on such date as reported in the Financial Times , London Edition. In the case of Continuing Franchise Fees, the calculation of the amounts payable shall be based on the arithmetic average of the exchange rates determined in accordance with the preceding sentence of each day on which such exchange rates are published in the respective calendar month for which such Continuing Franchise Fees are owed.

24.2.5 The U.S. Dollar is the sole currency of account and payment for all amounts payable by any Party to McDonald’s hereunder, including damages. Any amount received or recovered in currency other than U.S. Dollars (whether as a result of, or of the enforcement of, a judgment or order of a court of any jurisdiction or otherwise) shall only constitute a discharge of the relevant Party to the extent of the U.S. Dollars that McDonald’s is able to purchase with the amount so received or recovered in that other currency on the date of that receipt or recovery (or, if it is not practicable to make that purchase on that date, on the first date on which it is practicable to do so). If that U.S. Dollar amount is less than the amount expressed to be due to McDonald’s, Master Franchisee, each MF Subsidiary and Owner shall jointly and severally indemnify and hold harmless McDonald’s against any loss or cost sustained by it in making any such purchase. For the purposes of this Section, it shall be sufficient for McDonald’s to certify that it would have suffered a loss had an actual purchase of U.S. Dollars been made with the amount so received in that other currency on the date of receipt or recovery (or, if a purchase of U.S. Dollars on such date had not been practicable, on the first date on which it would have been practicable). If any Master Franchisee Party is unable to pay Continuing Franchise Fees in U.S. Dollars as result of the imposition of any exchange controls by any Governmental Authority, then Master Franchisee or another Master Franchisee Party shall make such payments on its behalf as and when such payment is due and payable.

24.2.6 Except to the extent provided in this Section, amounts payable by any Master Franchisee Party to McDonald’s hereunder shall be made without withholding or deduction for or on account of any present or future taxes, duties, assessments, fees or other governmental charges imposed or levied by or on behalf of any jurisdiction within the Territories or any political subdivision or taxing authority thereof or therein (“ Local Taxes ”), except that each Master Franchisee Party shall withhold and pay by their due date all Local Taxes, if any, which are required to be withheld and paid by the Master Franchisee Party under the Applicable Law of any Territory from which payment is made by the Master Franchisee Party to McDonald’s under this Agreement. If any Local Taxes withheld by any Master Franchisee Party or otherwise imposed on McDonald’s in respect of such a payment are not creditable by McDonald’s for U.S. federal income tax purposes (including as a result of McDonald’s not being treated as the recipient and beneficial owner of the related income for Local Tax purposes, or otherwise not being treated as the taxpayer with respect to such Local Taxes for U.S. foreign tax credit purposes), such Master Franchisee Party will pay to McDonald’s such additional amounts as may be necessary to ensure that any net payment received by McDonald’s after such withholding or other payment of

Local Taxes is equal to the amount that McDonald’s would have received had no such withholding or other payment been required. The Master Franchisee Parties and Owner shall be jointly and severally liable for the obligation to pay any amounts owed under the preceding sentence. The Master Franchisee Parties and Owner shall, jointly and severally, indemnify and hold McDonald’s and its Affiliates harmless against any penalties, interest or expenses incurred by or assessed against McDonald’s or its Affiliates as a result of the failure by any Master Franchisee Party to withhold Local Taxes or to pay the Local Taxes by their due date to the appropriate taxing authority.

24.3 Priority of Payments; Set-Off Rights . McDonald’s shall be entitled to apply any payment from any Master Franchisee Party in such order as McDonald’s may determine in its sole discretion to any amount due but unpaid by any other Master Franchisee Party. No Master Franchisee Party shall have any right to any set-off, counterclaim, recoupment, defense or other claim, right or action whatsoever against McDonald’s or any of its Affiliates.

24.4 Severability . The provisions of this Agreement shall at all times be construed, interpreted and applied to preserve and maintain the Parties’ intention to effect a unitary and indivisible transaction covering a single legal and economic transaction that is personal to the Master Franchisee Parties. For purposes of any Transfer, assumption, rejection or rescission of this Agreement, this Agreement constitutes one indivisible and non-severable agreement dealing with and covering a single legal and economic transaction which may be transferred, assumed, assigned, rejected or rescinded (as applicable) only as a whole with respect to all (and not less than all) of the obligations covered under this Agreement; provided, however, that nothing herein shall constitute an admission by McDonald’s that any such Transfer, assumption, rejection or rescission (as applicable) is permissible under applicable law or this Agreement or shall constitute a waiver of any provision of this Agreement, including without limitation, Section 21.2. To the extent consistent with the foregoing, if any provision of this Agreement is invalid, inoperative or unenforceable for any reason, such circumstances shall not have the effect of rendering such provision invalid, inoperative or unenforceable in any other case or circumstance, or of rendering any other provision hereof invalid, inoperative, or unenforceable to any extent whatsoever. If any provision of this Agreement is held to be invalid, inoperative or unenforceable for any reason, such provision shall be severed only with respect to such Territory and shall not have the effect of rendering such provision invalid, inoperative or unenforceable in any other Territory, case or circumstance, or of rendering any other provision hereof invalid, inoperative, or unenforceable to any extent whatsoever in any other Territory.

24.5 Approvals and Consents of McDonald’s . Unless a different standard is expressly required in this Agreement, whenever in this Agreement any action is subject to McDonald’s prior approval or consent, such approval or consent may be granted or denied in McDonald’s in the exercise of its discretion or business judgment based on its assessment of the overall best interest of the System and / or franchise program. Master Franchisee shall make a timely written request for any such approval or consent, and each such approval or consent shall be evidenced by a writing signed by an officer of McDonald’s. Any approval or consent may be subject to such conditions as McDonald’s deems appropriate or be granted on a “test” or temporary basis.

24.6 Waiver . No Party to this Agreement may (a) extend the time for the performance of any of the obligations or other acts of any other Party; or (b) waive compliance with any of the agreements of the other Party or conditions to such Party’s obligations contained herein, except to the extent such extension or waiver is set forth in an instrument in writing signed by the Party to be bound thereby. Any waiver of any term or condition shall not be construed as a waiver of any subsequent Material Breach or a subsequent waiver of the same term or condition, or a waiver of any other term or condition of this Agreement. The failure of any Party hereto to assert any of its rights hereunder shall not constitute a waiver of any of such rights. All rights and remedies existing under this Agreement are cumulative with, and not exclusive of, any rights or remedies otherwise available under this Agreement or under Applicable Law. The assertion or employment of any right or remedy hereunder, or otherwise, shall not prevent the concurrent assertion or employment of any other appropriate right or remedy.

24.7 Benefits of this Agreement . This Agreement is binding upon the Parties hereto and their respective executors, administrators, heirs, permitted Transferees and successors in interest. This Agreement shall inure to the benefit of any permitted Transferee, to McDonald’s, its Affiliate and licensors as provided in Sections 15 and 21 and to the McDonald’s Indemnified Parties. McDonald’s Corporation shall be an intended third party beneficiary of each obligation owed to McDonald’s by any Master Franchisee Party under this Agreement.

24.8 Counterparts . This Agreement may be executed and delivered in one or more counterparts, and by the different Parties hereto in separate counterparts, each of which when executed shall be deemed to be an original and all of which taken together shall constitute one and the same agreement.

24.9 Specific Performance . Beneficial Owner and each Master Franchisee Party acknowledges and agrees that any violation of Section 7, 8, 11, 15, 16, 18 or 21 would cause McDonald’s irreparable injury for which damages may not be adequate, and that McDonald’s shall be entitled to injunctive relief, preventive measures or any remedy as may be available, whether judicially or extra-judicially, and including specifically such relief as may be provided by a court of competent jurisdiction or any other Governmental Authority in the exercise of its powers, in order to enforce the obligations established therein and / or to restrain any actual or threatened conduct of any Party in violation of any such Section.

24.10 Notices . Any and all notices required or permitted under this Agreement shall be in writing and shall be personally delivered, sent via an internationally recognized overnight delivery service, or sent by facsimile or electronic transmission (with a confirming copy sent by international air mail) to the following respective addresses or facsimile number or e-mail address unless and until a different address or facsimile number has been designated by written notice to each other Party:


If to McDonald’s:		McDonald’s Latin America, LLC
		One McDonald’s Plaza
		Oak Brook, Illinois 60523 U.S.A.
		Attention: General Counsel of the Americas
		Telephone: (630) 623-6255
		Fax: (630) 623-7012


		with a copy to:

		McDonald’s Corporation
		2915 Jorie Boulevard
		Oak Brook, Illinois 60523 U.S.A.
		Attention: General Counsel
		Telephone: (630) 623-3373
		Fax: (630) 623-0497

If to an MF Subsidiary:		As specified in Exhibit 1

If to Master Franchisee, Owner Entities or Beneficial Owner:

		c/o Forrestal Capital Limited Company
		1221 Brickell Avenue #1170
		Miami, Florida 33131
		Attention: Carlos Hernandez
		Telephone: (305) 961-2840
		Fax: (305) 961-2844

		with a copy to:

		Greenberg Traurig, P.A.
		1221 Brickell Avenue
		Miami, Florida 33131
		Attention: Patricia Menendez Cambo
		Telephone: (305) 579-0766
		Fax: (305) 579-0717

Notices shall be addressed to the Party to be notified at its most current business address or telecopy number or e-mail address of which the notifying Party has been notified. Any notice shall be deemed to have been given at the earlier of receipt, or the next Business Day after sending by facsimile, electronic transmission or overnight delivery service. “ Business Day ”, for purposes of this Section, shall mean a day other than a Saturday, Sunday or other day on which commercial banking institutions are authorized or required by law to close in the Territory in which the intended recipient of the notice has its address or, in the case of McDonald’s, the State of Illinois, United States of America.

24.11 Survival . The obligations of Master Franchisee to pay any amount due to McDonald’s hereunder and the obligations contained in Sections 5, 7.9 (solely to the extent provided therein), 7.14, 15, 16, 17, 18, 20, 23 and 25 shall survive expiration or termination of this Agreement.

24.12 No Third Party Beneficiaries . Except as otherwise expressly provided herein, nothing in this Agreement is intended, nor shall be deemed, to confer any rights or remedies upon any Person not a party hereto. McDonald’s does not warrant that such obligations have been imposed on or implemented by or on any other McDonald’s franchisee or any McDonald’s Restaurant.

24.13 Language . This Agreement is entered into in the English language. If a translation of this Agreement into any other language be required or desired for any reason, it is understood that in all matters involving interpretations of this Agreement, the English text shall control.

24.14 Criminal or Civil Penalties . No Party shall engage in any activity that would expose any other Party to a risk of criminal or civil penalties under Applicable Law.

25. Governing Law and Arbitration

25.1 Governing Law . This Agreement shall be governed by the substantive laws of the State of Illinois, United States of America, without giving effect to principles of conflicts of laws. To the extent that it may be applicable, the Parties agree to exclude the application of the United Nations Convention on Contracts for the International Sale of Goods.

25.2 International Arbitration .

25.2.1 The Parties agree that any dispute, controversy or claim arising out of, relating to or in connection with this Agreement, including, without limitation, any dispute regarding its validity or termination, or the performance or breach thereof (each a “ Dispute ”), shall be finally settled by binding international arbitration in Chicago, Illinois, before a tribunal of three arbitrators (the “ Tribunal ”). The arbitration shall be administered by the International Court of Arbitration of the International Chamber of Commerce (the “ ICC ”) in accordance with the ICC Rules of Arbitration (the “ ICC Rules ”) as in effect at the time of the arbitration, except as they may be modified herein or by agreement of the Parties. The place of arbitration shall be Chicago, Illinois. Notwithstanding anything to the contrary in this Agreement, the arbitration provisions set forth in this Agreement, and any arbitration conducted thereunder, shall be governed exclusively by the Federal Arbitration Act, Title 9 United States Code to the exclusion of any state or municipal law of arbitration.

25.2.2 The arbitration shall be conducted in the English language. Notwithstanding the foregoing, any Arbitrating Party may submit testimony or documentary evidence in any other language; provided that the Arbitrating Party submitting such evidence, at its own cost, also furnishes to the other Arbitrating Party or Arbitrating Parties, as applicable, a translation of such testimony or evidence into the English language.

25.2.3 In the event that there are two Parties to the Dispute, each Party to the arbitration (each an “ Arbitrating Party ”) shall nominate one arbitrator, obtain its nominee’s acceptance of such nomination, and deliver written notification of such nomination and acceptance to the other Arbitrating Party and the ICC within 30 days after delivery of the request for arbitration. In the event an Arbitrating Party fails to nominate an arbitrator or deliver notification of such nomination to the other Arbitrating Party and the ICC within this time period, upon request of either Arbitrating Party, such arbitrator shall instead be appointed by the ICC within 30 days of receiving such request. The Arbitrating Parties shall use reasonable best efforts to agree upon a third arbitrator within 40 days after

delivery of the request for arbitration. If the Arbitrating Parties are unable to agree upon a third arbitrator within this time period, then the two arbitrators appointed in accordance with the above provisions shall nominate the third arbitrator and notify the Arbitrating Parties and the ICC in writing of such nomination within 15 days of their appointment. If the first two appointed arbitrators fail to nominate a third arbitrator or notify the Arbitrating Parties and the ICC of that nomination within this time period, then, upon request of either Arbitrating Party, the third arbitrator shall be appointed by the ICC within 15 days of receiving such request. The third arbitrator shall serve as chairman of the Tribunal.

25.2.4 In the event that there are more than two Arbitrating Parties:

(a) The Arbitrating Parties shall in good faith attempt to group themselves into a “ Petitioning Party ” and a “ Defending Party ” for purposes of selecting arbitrators, it being understood that Arbitrating Parties that are Affiliates shall always be in the same group.

(b) Each of the Petitioning Party and the Defending Party shall nominate one arbitrator, obtain its nominee’s acceptance of such nomination, and deliver written notification of such nomination and acceptance to the Arbitrating Parties and the ICC within 30 days after delivery of the request for arbitration.

(c) The Arbitrating Parties shall use reasonable best efforts to agree upon a third arbitrator within 40 days after delivery of the request for arbitration. In the event that the Arbitrating Parties are unable to agree upon a third arbitrator within this time period, then the two arbitrators appointed in accordance with clause (b) above shall nominate the third arbitrator and notify the Arbitrating Parties and the ICC in writing of such nomination within 15 days of their appointment. If the first two appointed arbitrators fail to nominate a third arbitrator or notify the Arbitrating Parties and the ICC of that nomination within this time period, then, upon request of any Arbitrating Party, the third arbitrator shall be appointed by the ICC within 15 days of receiving such request. The third arbitrator shall serve as chairman of the Tribunal.

(d) If it shall not be possible to form a Petitioning Party or a Defending Party, as the case may be, or if the Petitioning Party or the Defending Party, as the case may be, fails to select an arbitrator in accordance with clause (b), then, in accordance with Article 10(2) of the ICC Rules, the ICC may appoint each member of the Tribunal and shall designate one of them to act as chairman.

25.2.5 Each member of the Tribunal shall be a lawyer licensed to practice in a state of the United States of America and shall be fluent in the English language.

25.2.6 Each Party agrees that it will provide discovery consistent with the United States Federal Rules of Civil Procedure, including but not limited to depositions upon oral examination and responses to written interrogatories.

25.2.7 The Parties agree to submit to (i) the exclusive personal jurisdiction of the state and federal courts sitting in Chicago, Illinois for the purposes of (A) enforcing this agreement to arbitrate; and (B) applying to a judicial authority for interim or conservatory measures in accordance with Article 23(2) of the ICC Rules; and (ii) the non-exclusive jurisdiction of such courts for purposes of obtaining judgment upon the award rendered by the Tribunal.

25.2.8 The Parties that are not organized in the United States consent to the service of process for the purposes of clause (i) of Section 25.2.7 by appointing CT Corporation, which maintains an office at 208 South LaSalle Street, Suite 814; Chicago, Illinois, as its agent to receive service of process or other legal summons. Each of the Parties further consents to the service of process irrevocably for the purposes of clause (i) of Section 25.2.7 by the mailing of copies thereof by registered or certified mail, postage prepaid, return receipt requested, to each such party at its address as provided in Section 24.10. Nothing in this Section shall affect the right of any Party to serve legal process in any other manner permitted by Applicable Law.

25.2.9 In accordance with Article 23(2) of the ICC Rules, the Parties may apply to the competent judicial authority specified in Section 25.2.7 for interim or conservatory measures. The application of a Party to such judicial authority for such interim or conservatory measures shall not be deemed a waiver of this agreement to arbitrate.

25.2.10 The award of the Tribunal shall be promptly performed or paid (as the case may be), free and clear of any tax and deduction, and any costs, fees and taxes incident to enforcing the award shall, to the fullest extent permitted by law, be charged against the Arbitrating Party resisting such enforcement. McDonald’s may request that an award be paid in Equity Interests of Master Franchisee, in which case the Party against which the award is entered shall cause the transfer of such Equity Interests to which McDonald’s is entitled based on the fair market value of the Equity Interests as determined by the Tribunal and Master Franchisee shall register such transfer in its books; provided that McDonald’s shall first provide written notice of such election to Master Franchisee and permit Master Franchisee a period of not less than 30 days in which to elect to pay the award in cash rather than issue Equity Interests to McDonald’s. Any award shall include interest from the date of any damages incurred, and from the date of the award until paid in full, at a rate to be fixed by the Tribunal.

25.2.11 The Parties waive to the fullest extent permitted by law any rights to appeal to, or to seek review of the award of the Tribunal by, any court.

25.2.12 When a party to a Related Agreement submits a Request for Arbitration (as defined in the ICC Rules) in connection with a legal relationship in respect of which arbitration proceedings between the parties to the same or

another Related Agreement are already pending under the ICC Rules (an “ Already Pending Proceeding ”), any party to such Related Agreement may request that the claims contained in the Request for Arbitration (the “ New Claims ”) be included in the Already Pending Proceeding. If a party to a Related Agreement makes such a request before the Terms of Reference (as defined in the ICC Rules) have been signed or approved by the ICC in the Already Pending Proceeding, pursuant to Article 4(6) of the ICC Rules, the ICC shall determine whether to include the New Claims in the Already Pending Proceeding. If a party to a Related Agreement makes such a request after the Terms of Reference in the Already Pending Proceeding have been signed or approved by the ICC, pursuant to Article 19 of the ICC Rules, the Tribunal in the Already Pending Proceeding shall determine whether to include the New Claims in the Already Pending Proceeding. For the avoidance of doubt, two or more arbitration proceedings may be consolidated in accordance with this Section under Articles 4(6) or 19 of the ICC Rules, even if the parties to such arbitration proceedings are not identical.

25.2.13 Except as may be required by Applicable Law or court order, the Parties agree to maintain confidentiality as to all aspects of any arbitration, including its existence and results, except that nothing herein shall prevent any Party from disclosing information regarding such arbitration for purposes of the proceedings described in clause (i) of Section 25.2.7. The Parties further agree to obtain the arbitrators’ agreement to preserve the confidentiality of any arbitration.

25.2.14 The Parties expressly declare that they have jointly decided to enter into this arbitration covenant freely and voluntarily in order to have the benefit of an alternative dispute resolution method.

25.3 Limitations . Except for claims arising from Master Franchisee’s non-payment or underpayment of amounts due to McDonald’s or any of its Affiliates, any Dispute arising out of or relating to this Agreement or any Related Agreement or the relationship of the Parties hereto shall be barred unless an arbitration proceeding is commenced within two years from the date the complaining Party knew or should have known of the facts giving rise to such Claim.

25.4 SPECIAL DAMAGES . EXCEPT WITH RESPECT TO MASTER FRANCHISEE’S OBLIGATION TO INDEMNIFY THE INDEMNIFIED PARTIES PURSUANT TO SECTION 20 AND CLAIMS MCDONALD’S BRINGS AGAINST ANY OTHER PARTY FOR ITS UNAUTHORIZED USE OF THE TRADEMARKS OR ANY OTHER INTELLECTUAL PROPERTY OR ANY UNAUTHORIZED USE OR DISCLOSURE OF ANY CONFIDENTIAL INFORMATION, MCDONALD’S AND EACH OTHER PARTY WAIVE TO THE FULLEST EXTENT PERMITTED BY LAW ANY RIGHT TO OR CLAIM FOR ANY PUNITIVE, MORAL, EXEMPLARY OR ANY SIMILAR DAMAGES AGAINST THE OTHER AND AGREE THAT, IN THE EVENT OF A DISPUTE BETWEEN OR AMONG THE PARTIES, ANY PARTY MAKING A CLAIM WILL BE LIMITED TO EQUITABLE RELIEF AND TO RECOVERY OF ANY ACTUAL DAMAGES IT SUSTAINS.

26. Acknowledgements

26.1 Evaluation and Advice . Master Franchisee, each MF Subsidiary, each Owner Entity and Beneficial Owner acknowledge that each has read this Agreement, that each has had the opportunity to evaluate this Agreement and be advised by its counsel and financial, tax and business advisors with respect to its rights and obligations hereunder and the scope, cost and risk of the undertaking contemplated by this Agreement. Master Franchisee, the MF Subsidiaries, each Owner Entity and Beneficial Owner understand and accept the terms, conditions and covenants contained in this Agreement as being reasonably necessary to maintain McDonald’s high standards of quality and service and the uniformity of those standards at all Franchised Restaurants in order to protect and preserve the goodwill or reputation of the System and the Trademarks.

26.2 Independent Investigation . Master Franchisee, each MF Subsidiary, each Owner Entity and Beneficial Owner acknowledge that each of them has conducted an independent investigation of the business venture contemplated by this Agreement. Master Franchisee, each MF Subsidiary, each Owner Entity and Beneficial Owner recognize that this venture involves business risks and that the success of the venture is largely dependent upon their respective business abilities. McDonald’s expressly disclaims the making of, and Master Franchisee, each MF Subsidiary, each Owner Entity and Beneficial Owner acknowledge that none of them has received or relied upon, any guaranty, express or implied, as to the revenues, profits or success of the business venture. Master Franchisee, each MF Subsidiary, each Owner Entity and Beneficial Owner acknowledge that none of them has received or relied on any representations by McDonald’s, any of its Affiliates or their respective officers, directors, employees or agents, except as expressly set forth herein or in the Purchase Agreement. Each Party acknowledges that in all dealings with respect to this Agreement and the Related Agreements, such Party’s officers, directors, employees and agents act only in a representative capacity and not in an individual capacity.

26.3 No Broker . Master Franchisee and each Owner Entity acknowledge that neither of them has used a broker to acquire the Master Franchisee Rights or the Master Franchise Business.

27. Entire Agreement/Amendments

27.1 Entire Agreement . Each of the Parties hereto acknowledges and warrants to each other that such Party wishes to have all terms of such Party’s business relationship defined in this Agreement and the Related Agreements. None of the Parties wishes to enter into a business relationship with any of the other Parties in which any terms or obligations are the subject of alleged oral statements or in which oral statements serve as the basis for creating rights or obligations different than or supplementary to the rights and obligations set forth herein. Accordingly, each Party agrees that this Agreement and the Related Agreements and any other instrument executed contemporaneously and in connection herewith, supersede and cancel any prior and / or contemporaneous discussions (whether described as presentations, inducements, promises agreements or any other term) between McDonald’s or anyone acting on its behalf, on the one hand, and Master Franchisee, any MF Subsidiary, each Owner Entity, Beneficial Owner or anyone acting on its or their behalf, on the other hand, which might be taken to constitute agreements, representations, inducements, promises or understandings (or any equivalent to such terms) with respect to the relationship between

the Parties, and each Party agrees that they have placed, and will place, no reliance on any such discussions. Without limiting the generality of the foregoing, the Parties acknowledge and agree that no future franchise rights or offer of franchise rights have been promised by McDonald’s to Master Franchisee, any MF Subsidiary, each Owner Entity or Beneficial Owner, and no such franchise rights or offer of franchise rights shall come into existence, except by means of a separate writing, executed by an officer of McDonald’s or other Person granting such rights.

27.2 Amendments . Except as otherwise expressly permitted by this Agreement, no change, modification, amendment or waiver of any of the provisions of this Agreement shall be effective and binding upon any Party, including by custom, usage of trade, or course of dealing or performance, unless it is in writing, specifically identified as an amendment hereto and signed by authorized representatives of each of the Parties.

* * *

IN WITNESS WHEREOF , the Parties hereto have duly executed and delivered this Agreement on the day and year first above written.


McDonald’s:			Master Franchisee:

M C D ONALD ’ S L ATIN A MERICA , LLC			L ATAM , LLC

By	/s/ Maria Leggett		By
	Name:	Maria Leggett		Name:
	Title:	Latin America General Counsel & Assistant Secretary		Title:

Owner:			Dutch Coop:

A RCOS D ORADOS B.V.			A RCOS D ORADOS C OOPERATIEVE U.A.

By			By
	Name:			Name:
	Title:			Title:

Parent:			Beneficial Owner:

A RCOS D ORADOS L IMITED			L OS L AURELES , L TD .

By			By
	Name:			Name:
	Title:			Title:

M ASTER F RANCHISE A GREEMENT

IN WITNESS WHEREOF , the Parties hereto have duly executed and delivered this Agreement on the day and year first above written.


McDonald’s:		Master Franchisee:

M C D ONALD ’ S L ATIN A MERICA , LLC		L ATAM , LLC

By		By	(illegible signature)
	Name:		Name:
	Title:		Title:

Owner:		Dutch Coop:

A RCOS D ORADOS B.V.		A RCOS D ORADOS C OOPERATIEVE U.A.

By		By
	Name:		Name:
	Title:		Title:

Parent:		Beneficial Owner:

A RCOS D ORADOS L IMITED		L OS L AURELES , L TD .

By		By
	Name:		Name:
	Title:		Title:

M ASTER F RANCHISE A GREEMENT

IN WITNESS WHEREOF , the Parties hereto have duly executed and delivered this Agreement on the day and year first above written.

McDonald’s:

Master Franchisee:

M C D ONALD ’ S L ATIN A MERICA , LLC

L ATAM , LLC

Name:

Title:

Owner:

Dutch Coop:

A RCOS D ORADOS B.V.

A RCOS D ORADOS C OOPERATIEVE U.A.

/s/ (illegible signature)

Name:

Title:

Trust International Management (T.I.M.) B.V. Managing Director

Title:

Trust International Management (T.I.M.) B.V. Managing Director

Parent:

Beneficial Owner:

A RCOS D ORADOS L IMITED

L OS L AURELES , L TD .

Name:

Title:

M ASTER F RANCHISE A GREEMENT

IN WITNESS WHEREOF , the Parties hereto have duly executed and delivered this Agreement on the day and year first above written.


McDonald’s:		Master Franchisee:

M C D ONALD ’ S L ATIN A MERICA , LLC		L ATAM , LLC

By		By
	Name:		Name:
	Title:		Title:

Owner:		Dutch Coop:

A RCOS D ORADOS B.V.		A RCOS D ORADOS C OOPERATIEVE U.A.

By		By
	Name:		Name:
	Title:		Title:

Parent:		Beneficial Owner:

A RCOS D ORADOS L IMITED		L OS L AURELES , L TD .

By	/s/ Woods Staton	By	/s/ Woods Staton
	Name:		Name:
	Title:		Title:

M ASTER F RANCHISE A GREEMENT


A RCOS D ORADOS A RGENTINA S.A.

By		(illegible signature)
		Name:
		Title:

C OMPAÑIA D E I NVERSIONES I NMOBILIARIAS (C.I.I.) S.A.

By		(illegible signature)
		Name:
		Title:

A RCOS D OURADOS C OMERCIO DE A LIMENTOS L TDA . ( FORMERLY KNOWN AS “M C D ONALD ’ S C OMERCIO DE A LIMENTOS LTDA .”)

By		(illegible signature)
		Name:
		Title:

A RRAS C OMERCIO D E A LIMENTOS L TDA .

By		(illegible signature)
		Name:
		Title:

A RCOS D ORADOS R ESTAURANTES DE C HILE , L TDA . ( FORMERLY KNOWN AS “M C D ONALD ’ S DE C HILE L IMITADA ”)

By		(illegible signature)
		Name:
		Title:

M ASTER F RANCHISE A GREEMENT


A RCOS D ORADOS C ARIBBEAN D EVELOPMENT C ORP . ( FORMERLY KNOWN AS “M C D ONALD ’ S C ARIBBEAN D EVELOPMENT C ORPORATION ”)

By		(illegible signature)
		Name:
		Title:

R ESTAURANT R EALTY OF M EXICO , I NC .

By		(illegible signature)
		Name:
		Title:

G OLDEN A RCH D EVELOPMENT C ORPORATION

By		(illegible signature)
		Name:
		Title:

A DMINISTRATIVE D EVELOPMENT C OMPANY

By		(illegible signature)
		Name:
		Title:

L OGISTICS AND M ANUFACTURING LOMA C O .

By		(illegible signature)
		Name:
		Title:

M ANAGEMENT O PERATIONS C OMPANY

By		(illegible signature)
		Name:
		Title:

F RANCHISE S YSTEM DE C OLOMBIA L TDA .

By		(illegible signature)
		Name:
		Title:

M ASTER F RANCHISE A GREEMENT


A RCOS D ORADOS C OLOMBIA L TDA . Y C OMPAÑIA S OCIEDAD EN C OMANDITA POR A CCIONES ( FORMERLY KNOWN AS “F RANCHISE S YSTEM D E C OLOMBIA L TDA . Y C OMPAÑIA S OCIEDAD EN C OMANDITA POR A CCIONES ”)

By		(illegible signature)
		Name:
		Title:

A RCOS D ORADOS DE A LIMENTOS DE C OSTA R ICA ADCR, S.A. ( FORMERLY KNOWN AS “R ÁPIDO S ERVICIO DE A LIMENTOS DE C OSTA R ICA , S.A.”)

By		(illegible signature)
		Name:
		Title:

A RCGOLD DEL E CUADOR S.A.

By		(illegible signature)
		Name:
		Title:

A RCOS D ORADOS C URAÇAO N.V. ( FORMERLY KNOWN A S M C D ONALD ’ S S T . M ARTEEN AND C URACAO , N.V.”)

By		(illegible signature)
		Name:
		Title:

M ASTER F RANCHISE A GREEMENT


A RCOS D ORADOS A RUBA N.V. ( FORMERLY KNOWN AS “M C D ONALD ’ S A RUBA , N.V.”)

By		(illegible signature)
		Name:
		Title:

R ESTAURANT S YSTEM OF F RENCH G UIANA

By		(illegible signature)
		Name:
		Title:

R ESTAURANT S YSTEM OF G UADELOUPE

By		(illegible signature)
		Name:
		Title:

R ESTAURANT S YSTEM OF M ARTINIQUE

By		(illegible signature)
		Name:
		Title:

A RCOS S ER C AL C ORPORATIVO , S. DE R.L. DE C.V. ( FORMERLY KNOWN AS “M C D ONALD ’ S C ORPORATIVO M ÉXICO , S. DE R.L. DE C.V.”)

By		(illegible signature)
		Name:
		Title:

M ASTER F RANCHISE A GREEMENT


A RCOS S ER C AL D E M EXICO , S.A. DE C.V. ( FORMERLY KNOWN AS “M C D ONALD ’ S M ÉXICO R.L. DE C.V.”)

By		(illegible signature)
		Name:
		Title:

A LIMENTOS C ENTRALIZADOS DE M ÉXICO S. DE R.L. DE C.V.

By		(illegible signature)
		Name:
		Title:

S ERVICIOS A LIMENTOS C ENTRALIZADOS DE M ÉXICO , S. DE R.L. DE C.V.

By		(illegible signature)
		Name:
		Title:

A RCOS S ERCAL I NMOBILIARIA , S. DE R.L. DE C.V. ( FORMERLY KNOWN AS “MDC I NMOBILIARIA DE M EXICO , S. DE R.L. DE C.V.”)

By		(illegible signature)
		Name:
		Title:

A RCOS D ORADOS P ANAMÁ , S.A. ( FORMERLY KNOWN AS “M C D ONALD ’ S S ISTEMAS DE P ANAMA , S.A.)

By		(illegible signature)
		Name:
		Title:

S ISTEMAS M C O P C O P ANAMÁ , S.A.

By		(illegible signature)
		Name:
		Title:

M ASTER F RANCHISE A GREEMENT


E L D ORADO -M AC , S.A.

By		(illegible signature)
		Name:
		Title:

O PERACIONES A RCOS D ORADOS DE P ERU S.A.

By		(illegible signature)
		Name:
		Title:

A RCOS D ORADOS P UERTO R ICO , I NC . ( FORMERLY KNOWN AS “M C D ONALD ’ S S YSTEM DE P UERTO R ICO , I NC .”)

By		(illegible signature)
		Name:
		Title:

G AUCHITO DE O RO S.A.

By		(illegible signature)
		Name:
		Title:

A RCOS DEL S UR S.R.L.

By		(illegible signature)
		Name:
		Title:

A LIMENTOS A RCOS D ORADOS DE V ENEZUELA , C.A.

By		(illegible signature)
		Name:
		Title:

M ASTER F RANCHISE A GREEMENT


C OMPAÑIA O PERATIVA DE A LIMENTOS COR, C.A.

By		(illegible signature)
		Name:
		Title:

G ERENCIA O PERATIVA ARC, C.A.

By		(illegible signature)
		Name:
		Title:

M ASTER F RANCHISE A GREEMENT

EXHIBIT 1

MF SUBSIDIARIES

1.	Arcos Dorados Argentina S.A. (formerly known as “Arcos Dorados S.A.”), a sociedad anónima (corporation) formed under the laws of Argentina with its principal office at Maipu 1210, 5 ^th Floor, City of Buenos Aires, Argentina.

2.	Compañia de Inversiones (C.I.I.) Inmobiliarias S.A., a sociedad anónima (corporation) formed under the laws of Argentina with its principal office at Maipú 1210, 5 ^th Floor, City of Buenos Aires, Argentina.

3.	Arcos Dourados Comercio de Alimentos Ltda. (formerly known as “McDonald’s Comercio de Alimentos Ltda.”), a sociedade (company) formed under the laws of Brazil with its principal office at Alameda Amazonas 253, Alphaville Industrial, City of Barueri, State of São Paulo, Brazil.

4.	Arras Comercio de Alimentos Ltda., a sociedade (company) formed under the laws of Brazil with its principal office at Alameda Amazonas 113, 2 ^nd floor, Alphaville Industrial, City of Barueri, State of São Paulo, Brazil.

5.	Arcos Dorados Restaurantes de Chile Ltda. (formerly known as “McDonald’s de Chile Limitada”), a limited liability company, formed under the laws of Chile, with its principal office at Apoquindo No. 4499, Piso 5, Santiago, Chile.

6.	Arcos Dorados Caribbean Development Corporation (formerly known as “McDonald’s Caribbean Development Corporation”), a corporation formed under the laws of Delaware with its principal office at 2711 Centerville Road, Suite 400, Wilmington, Delaware 19808, USA.

7.	Franchise System de Colombia Ltda., a sociedad comercial (company) formed under the laws of Colombia with its principal office at Avenida Suba No. 108-58, Torre A, 6 ^th Floor, Bogotá, Colombia.

Arcos Dorados Colombia Ltda. y Compañia Sociedad en Comandita por Acciones (formerly known as “Franchise System de Colombia Ltda. y Compañia Sociedad en Comandita por Acciones”), a sociedad comercial (company) formed under the laws of Colombia with its principal office at Avenida Suba No. 108-58, Torre A, 6 ^th Floor, Bogotá, Colombia.

9.	Rápido Servicio de Alimentos de Costa Rica, S.A., a sociedad anónima (corporation) formed under the laws of Costa Rica with its principal office at Urbanización Tournón, Edificio Facio & Cañas, Frente al parqueo del Centro Comercial El Pueblo, San José, Costa Rica.

10.	Arcgold del Ecuador S.A., a sociedad anónima (corporation) formed under the laws of Ecuador with its principal office at Avenida República de El Salvador 1082, Edificio Mansión Blanca, Quito, Ecuador.

Exh. 1-1

11.	Restaurant System of Guadeloupe, a société par actions simplifiée (simplified joint-stock company) formed under the laws of France with its principal office at Immeuble Caribex, route du Raizet 97139, Abymes Cedex, Guadeloupe.

12.	Restaurant System of Martinique, a société par actions simplifiée (simplified joint-stock company) formed under the laws of France with its principal office at Centre d’affaires Valmeniére, Bâtiment B – Immeuble AXA, 97200 Fort-De-France, Martinique.

13.

MDC Inmobiliaria de Mexico, S. de R.L. de C.V., a sociedad de responsabilidad limitada de Capital Variable (variable capital limited liability company), formed under the laws of Mexico, with its principal office at Conjunto Plaza Marine, Antonio Dovali Jaime No. 75 -3er Piso, Col. Lomas de Santa Fe, Delegación Alvaro Obregon, México, D.F., C.P. 01219 Mexico.

14.	Restaurant Realty of Mexico, Inc., a corporation formed under the laws of Delaware, not formally registered as a branch in Mexico, with its principal office at Prentice-Hall Corporation System, Inc., 2711 Centerville Road, Suite 400, Wilmington, Delaware 19808.

15.

Arcos Dorados Corporativo Mexico, S. de R.L. de C.V. (formerly known as “McDonald’s Corporativo Mexico, S. de R.L. de C.V.”), a sociedad de responsabilidad limitada de Capital Variable (variable capital limited liability company), formed under the laws of Mexico, with its principal office at Conjunto Plaza Marine, Antonio Dovali Jaime No. 75-3er Piso, Col. Lomas de Santa Fe, Delegación Alvaro Obregon, Mexico, D.F., C.P. 01219 Mexico.

16.

Arcos Dorados Mexico, S.A. de C.V. (formerly known as “McDonald’s Mexico, S.A. de C.V.”), a sociedad anonima de capital variable (variable capital corporation), formed under the laws of Mexico, with its principal office at Conjunto Plaza Marine, Antonio Dovali Jaime No. 75-3er Piso, Col. Lomas de Santa Fe, Delegación Alvaro Obregon, México, D.F., C.P. 01219 Mexico.

17.

Alimentos Centralizados de Mexico S. de R.L. de C.V., a sociedad de responsabilidad limitada de Capital Variable (variable capital limited liability company), formed under the laws of Mexico, with its principal office at Conjunto Plaza Marine, Antonio Dovali Jaime No. 75 -3er Piso, Col. Lomas de Santa Fe, Delegación Alvaro Obregon, México, D.F., C.P. 01219 Mexico.

18.

Servicios Alimentos Centralizados de Mexico, S. de R.L. de C.V., a sociedad de responsabilidad limitada de Capital Variable (variable capital limited liability company), formed under the laws of Mexico, with its principal office at Con junto Plaza Marine, Antonio Dovali Jaime No. 75-3er Piso, Col. Lomas de Santa Fe, Delegación Alvaro Obregon, México, D.F., C.P. 01219 Mexico.

19.	Arcos Dorados Panamá, S.A. (formerly known as “McDonald’s Panama, S.A.”), a sociedad anónima (corporation), formed under the laws of Panama, with its principal office at Alfaro, Ferrer & Ramirez, AFRA Tower, Samuel Lewis Avenue and 54 ^th Street, Obarrio District, Panama City, Panama.

Exh. 1-2

20.	Sistemas McOpCo Panama, S.A., a sociedad anónima (corporation), formed under the laws of Panama, with its principal office at Alfaro, Ferrer & Ramirez, AFRA Tower, Samuel Lewis Avenue and 54 ^th Street, Obarrio District, Panama City, Panama.

21.	El Dorado-Mac, S.A., a sociedad anónima (corporation), formed under the laws of Panama, with its principal office at Alfaro, Ferrer & Ramirez, AFRA Tower, Samuel Lewis Avenue and 54 ^th Street, Obarrio District, Panama City, Panama.

22.	Operaciones Arcos Dorados de Peru S.A., a sociedad anónima (corporation), formed under the laws of Peru, with its principal office at Avenida Angamos Oeste No. 1200, Miraflores, Lima, Peru.

23.

Arcos Dorados System de Puerto Rico, Inc. (formerly known as “McDonald’s System de Puerto Rico, Inc.”), a company formed under the laws of the Commonwealth of Puerto Rico, with its principal office at The Prentice Hall Corporation System, Inc. c/o FGR Corporate Services, Inc., BBV Tower, 8 ^th Floor, 254 Muñoz Rivera Avenue, San Juan, Puerto Rico 00918.

24.	Golden Arch Development Corporation, a company formed under the laws of the State of Delaware, with its principal office at Prentice-Hall Corporation System, Inc., 2711 Centerville Road, Ste. 400, Wilmington, Delaware 19808.

25.	Gauchito de Oro S.A., a sociedad anónima (corporation) formed under the laws of Uruguay, with its principal office at Cerrito 415, Piso 5, 11000 Montevideo, Uruguay.

26.	Arcos del Sur S.R.L., a sociedad de responsabilidad limitada (limited liability company) formed under the laws of the duty free trade zone in Uruguay, Cerrito 414, Piso 5, 11000 Montevideo, Uruguay.

27.	Administrative Development Company, a company formed under the laws of the State of Delaware, with its principal office at Prentice-Hall Corporation System, Inc., 2711 Centerville Road, Ste. 400, Wilmington, Delaware 19808.

28.	Alimentos Arcos Dorados de Venezuela, C.A., compañia anónima (company) formed under the laws of Venezuela, with its principal office at Avenida Francisco Solano López con Calle Negrin, Centro Empresarial Sabana Grande, Piso 19, Caracas 1050, Venezuela.

29.	Compania Operativa de Alimentos COR, C.A., compañia anónima (company) formed under the laws of Venezuela, with its principal office at Torre Empresarial Sabana Grande, Piso 19, Avenida Francisco Solano, Caracas 1010, Venezuela.

30.	Gerencia Operativa ARC, C.A., compañia anónima (company) formed under the laws of Venezuela, with its principal office at Avenida Venezuela, Torre America, PH-B, Bello Monte, Caracas, Venezuela.

31.	Logistics and Manufacturing LOMA Co. formed under the laws of the State of Delaware, with its principal office at Prentice-Hall Corporation System, Inc., 2711 Centerville Road, Suite 400, Wilmington, Delaware 19808.

Exh. 1-3

32.	Management Operations Company, a company formed under the laws of the State of Delaware, with its principal office at Prentice-Hall Corporation System, Inc., 2711 Centerville Road, Ste. 400, Wilmington, Delaware 19808.

33.	Arcos Dorados Aruba N.V. (formerly known as “McDonald’s Aruba N.V.”), a company formed under the laws of Aruba, with its principal office at Beatrixstraat 36.Aruba.

34.	Restaurant System of French Guiana, a company formed under the laws of France, with its principal office at Rond Point Mirza, Route de la Madeleine, 97300 Cayenne, French Guiana.

35.	Arcos Dorados Curacao N.V. (formerly known as “McDonald’s St. Maarten and Curacao N.V.”), a company formed under the laws of the Netherlands Antilles, with its principal office at Frontstreet #78, Philipsburg, St. Maarten.

Exh. 1-4

EXHIBIT 2

DEFINITIONS

The following terms, when used in this Agreement, shall have the following meanings:

“ Action ” means any Claim, action, suit, demand, Order, consent, arbitration, inquiry, proceeding or investigation by or before any Governmental Authority or any other Person.

“ Adjusted Fair Market Value ” has the meaning set forth in Section 21.7.1(d)

“ Adjusted Fair Market Value Date ” has the meaning set forth in Section 21.7.1(e).

“ Affiliate ” means, with respect to any specified Person, any other Person that directly, or indirectly through one or more intermediaries, Controls, is Controlled by, or is under Common Control with, such specified Person.

“ Agreement ” has the meaning set forth in the preamble.

“ Already Pending Proceeding ” has the meaning set forth in Section 25.2.12.

“ Anti-Terrorism Laws ” means Executive Order 13224 issued by the President of the United States of America (or any successor Order), the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act (USA PATRIOT Act) of 2001 (or any successor legislation) and all other present and future federal, state and local laws, ordinances, regulations, policies, lists, Orders and any other requirements of any Governmental Authority addressing or in any way relating to terrorist acts and acts of war.

“ Applicable Law ” means all existing and future laws, including Anti-Terrorism Laws, rules, regulations, statutes, treaties, codes, ordinances, permits, certificates, Orders, decrees, licenses and concessions of, or any interpretation of any of the foregoing by, any Governmental Authority, including OFAC.

“ Approved Closing ” means any proposed closing of a Franchised Restaurant that (a) has been approved by McDonald’s, such approval not to be unreasonably withheld, it being understood that (i) whether a closing is reasonable shall be determined by McDonald’s in light of the use of the related Real Estate in the operation of a McDonald’s Restaurant, without regard to any other potential use of such Real Estate; and (ii) a failure by McDonald’s to approve any closing shall not be deemed to be unreasonable if McDonald’s reasonably believes that such closing is proposed in contemplation of or in connection with the Transfer or use of the related Real Estate (or any related Site Agreement) to or in connection with a Competitive Business; (b) is the result of a condemnation of the related premises by a Governmental Authority; or (c) is the result of the opening within the same trading area of a Franchised Restaurant having comparable Gross Sales and menu scope.

“ Approved Supplier ” has the meaning set forth in Section 9.1.2.

Exh. 2-1

“ Arbitrating Party ” has the meaning set forth in Section 25.2.3.

“ Assets ” means any right or interest in or to property of any kind whatsoever, whether real, personal or mixed and whether tangible or intangible, including Capital Stock.

“ Attributable Indebtedness ” means, on any date, (a) in respect of any Capital Lease of any Person, the capitalized amount thereof that would appear on a balance sheet of such Person prepared as of such date in accordance with GAAP, and (b) in respect of any Synthetic Lease Obligation, the capitalized amount of the remaining lease payments under the relevant lease that would appear on a balance sheet of such Person prepared as of such date in accordance with GAAP if such lease were accounted for as a Capital Lease.

“ Base Plan ” shall have the meaning set forth in Section 13.2.4.

“ Base Plan Index ” means the number of Franchised Restaurants (excluding Satellites) required to be opened in the (i) Base Plan, multiplied by (ii) 110% for each three-year period commencing on the expiration of the second Restaurant Opening Plan and ending on the date of the expiration of the preceding Restaurant Opening Plan.

“ Beneficial Owner ” shall have the meaning set forth in the preamble.

“ Beneficiaries ” shall have the meaning set forth in Section 21.2.6.

“ Brand Building Adjustment ” means with respect to any calendar month for which Continuing Franchise Fees are payable during the period (a) from August 3, 2007 to August 2, 2017, an amount equal to 2% of the U.S. Dollar equivalent of the Gross Sales for such calendar month; and (b) from August 3, 2017 to August 2, 2022, an amount equal to 1% of the U.S. Dollar equivalent of the Gross Sales for such calendar month.

“ Brazil MFA ” shall have the meaning set forth in Section 3.7.1.

“ Business Day ” means a day other than a Saturday, Sunday or other day on which commercial banking institutions are authorized or required by law to close in the State of Illinois.

“ Business Facilities Lease ” means a lease agreement related to the business and equipment of a McDonald’s Restaurant entered into between Master Franchisee and a Franchisee.

“ Business Plan ” means a comprehensive operating plan with respect to each Territory comprising the Component Plans and the Strategic Marketing Plan and such other information as McDonald’s may require from time to time.

“ Call Option ” has the meaning set forth in Section 21.6.1.

“ Call Option Price ” has the meaning set forth in Section 21.6.2.

Exh. 2-2

“ Capital Lease ” means, as of any date of determination, any lease of property, real or personal, the obligations of the lessee in respect of which are required to be capitalized on the balance sheet of the lessee in accordance with GAAP.

“ Capital Stock ” means, with respect to any Person as of any date of determination, any and all shares, interests, participations or other equivalents (however designated, whether voting or non-voting) of capital stock, partnership interests (whether general or limited), membership interests or equivalent ownership interests in or issued by such Person.

“ Cash ” means (a) cash; (b) any evidence of Indebtedness with a maturity of 365 days or less issued or directly and fully guaranteed or insured by the United States of America or any agency or instrumentality thereof (provided that the full faith and credit of the United States of America is pledged in support thereof); ( c) deposits, certificates of deposit, Eurodollar time deposits and bankers’ acceptances with a maturity of 180 days or less and overnight bank deposits of any financial institution that is organized under the laws of the United States of America or any state thereof, and which bank or trust company has capital, surplus and undivided profits aggregating in excess of $50,000,000 (to the extent non-U.S. Dollar denominated, the U.S. Dollar equivalent of such amount), and, in the case of any financial institution organized under the laws of the United States, has outstanding debt which is rated “A” (or such similar equivalent rating) or higher by at least one nationally recognized statistical rating organization (as defined in Rule 436 under the U.S. Securities Act of 1933, as amended); (c) commercial paper with a maturity of 365 days or less issued by a corporation that is not an Affiliate of Master Franchisee and is organized under the laws of any state of the United States of America or the District of Columbia and rated at least A-1 by Standard & Poor’s or at least P-1 by Moody’s; and (e) investments in money market funds all of the assets of which consist of securities of the type described in one or more of the foregoing clauses (b) through (d).

“ Certificated Equity Interests ” means the certificates evidencing all Equity Interests issued in certificated form by Master Franchisee and each Escrowed MF Subsidiary.

“ Chief Executive Officer ” has the meaning set forth in Section 7.3.2.

“ Chief Operating Officer ” has the meaning set forth in Section 7.3.2.

“ Claim ” means any allegation or demand from any Person.

“ Closing Date ” means the closing date pursuant to the Purchase Agreement.

“ Collateral ” has the meaning set forth in the Intercreditor Agreement.

“ Collateral Agent ” means Deutsche Bank Trust Company Americas and its successors in interest, in its capacity as collateral agent under the Credit Agreement, the Escrow Agreement and the Intercreditor Agreement.

“ Competitive Business ” means any Person engaged in a QSR Business or any Person operating under the marks or trade names listed in Exhibit 25 as amended by McDonald’s from time to time.

Exh. 2-3

“ Component Plan ” means, with respect to the Business Plan for each Territory, the related Restaurant Opening Plan, Reinvestment Plan and Franchising Plan.

“ Confidential Information ” has the meaning set forth in Section 18.1.1.

“ Contingencies ” means, as of any date of determination with respect to any Person and its consolidated Subsidiaries, the aggregate amount of contingent liabilities of such Person and its consolidated Subsidiaries, as determined in accordance with Statement of Financial Accounting Standards No. 5 and Interpretation No. 47, Accounting for Conditional Asset Retirement Obligations (FIN 47), which construes Statement of Financial Accounting Standards No. 143 (or any successor standard or interpretation with respect to any of the foregoing).

“ Continuing Franchise Fees ” has the meaning set forth in Section 5.2.1.

“ Constituent Documents ” means, with respect to any Person other than an individual, the charter and by-laws of a corporation; the statement of qualification and the limited liability partnership agreement of a limited liability partnership; the certificate of limited partnership and limited partnership agreement of a limited partnership; or the comparable documents of a Person organized in other form under Applicable Law.

“ Control ” means, with respect to the relationship between or among two or more Persons, the possession, directly or indirectly or as trustee or executor, of the power to direct or cause the direction of the affairs or management of a Person, whether through the ownership of voting securities, as trustee or executor, by contract or otherwise, including the ownership, directly or indirectly, of securities having the power to elect a majority of the board of directors or similar body governing the affairs of such Person, and the terms “ Controlled by ” and “ under Common Control with ” have correlative meanings.

“ Conventional Franchising Transaction ” means the opening of a Franchised Restaurant by a Franchisee or the voluntary, involuntary, direct or indirect sale, assignment, transfer or other disposition of a Franchised Restaurant to a Franchisee that has each of the following characteristics: (i) the Master Franchisee owns, directly or indirectly, the fee simple interest (or the local equivalent) in, or leases (or the local equivalent) directly or indirectly from the owner of such interest, all real property on which such Franchised Restaurant is located; (ii) Master Franchisee, directly or indirectly, has made or will make material investments in the real property on which such Franchised Restaurant is located; and (iii) the Franchisee has made or will make material investments in such Franchised Restaurant.

“ Copyrights ” means, collectively, the copyrights, copyrighted works and copyrighted materials owned, directly or indirectly, or hereafter acquired or licensed by McDonald’s relating to the development, ownership, operation, promotion and management of the Franchised Restaurants, including advertising materials, marketing materials, promotional materials, software, manuals and training materials.

“ Costa Rican Trust Agreement ” means the trust agreement, dated as of August 3, 2007, by and among McDonald’s, Master Franchisee and the Costa Rican Trustee

Exh. 2-4

pursuant to which the Equity Interests of Rápido Servicio de Alimentos de Costa Rica, S.A. are held in trust.

“ Costa Rican Trustee ” means Banco Improsa, S.A., as trustee and its successors in. interest, as trustee under the Costa Rican Trust Agreement.

“ Credit Agreement ” means the Credit Agreement, dated as of August 2, 2007, by and among Owner, Collateral Agent, Santander Investment Securities Inc and the other financial institutions parties thereto.

“ Creditor Security Documents ” means any Security Document and any L/C Security Document, each as defined in the Credit Agreement.

“ Creditor Collateral ” has the meaning set forth in the Intercreditor Agreement.

“ Customer Service Program ” means a program for measuring customer satisfaction implemented through the use of one or more of the following (or similar) means: (a) a customer satisfaction hotline; (b) customer surveys; and (c) “mystery shop” visits.

“ Debt Assumption Election ” has the meaning set forth in Section 21.6.2.

“ Default Exercise Notice ” has the meaning set forth in Section 21.6.3.

“ Defending Party ” has the meaning set forth in Section 25.2.4(a).

“ Dematerialized Equity Interests ” means each Escrowed Constituent Document of any Escrowed MF Subsidiary that does not issue Equity Interests in certificated form.

“ Developed IP ” has the meaning set forth in Section 15.8.

“ Dispute ” has the meaning set forth in Section 25.2.1.

“ Disputed Amounts ” has the meaning set forth in Section 21.7.2(b).

“ Disputed Amounts Notice ” has the meaning set forth in Section 21.7.2(b).

“ Disputed Amounts Settlement Notice ” has the meaning set forth in Section 21.6.8.

“ Disqualified Firm ” has the meaning set forth in Section 21.7.2(b)(1).

“ Distributor ” means any Person that distributes products and services to Franchised Restaurants or that arranges for such distribution.

“ Dutch Coop ” has the meaning set forth in the preamble.

“ EBIT ” means, for any period with respect to any Person and its consolidated Subsidiaries, an amount equal to Net Income for such period, plus (a) the following to the extent deducted in calculating such Net Income: (i) Interest Expense for such period; (ii) federal, state, local and foreign income taxes payable for such period; and (iii) losses from the sale of fixed assets not in the ordinary course of business and other

Exh. 2-5

extraordinary or nonrecurring items; minus (b) to the extent added in calculating such Net Income, Interest Income, gains from the sale of fixed assets not in the ordinary course of business and other extraordinary or nonrecurring items.

“ EBITDA ” means, for any period with respect to any Person and its consolidated Subsidiaries, an amount equal to EBIT for such period, plus , to the extent deducted in calculating Net Income for such period, depreciation and amortization, as calculated in accordance with GAAP. For the avoidance of doubt, it is understood that for purposes of calculating the Leverage Ratio, any payment related to Capital Leases or Synthetic Leases shall be considered as an expense in determining the relevant EBITDA.

“ EBITDAR ” means, for any period with respect to any Person and its consolidated Subsidiaries, an amount equal to EBITDA for such period, plus , to the extent deducted in calculating Net Income for such period, Capital Leases and Synthetic Lease Obligations for such period.

“ Economic Interests ” shall mean, with respect to any Person, any Equity Interests of any class entitled to participate in the economic benefits of the operations of such Person or otherwise entitled to dividends or distributions of such Person’s income.

“ Effective Termination ” means the termination by McDonald’s of the Master Franchisee Rights with respect to all Territories then subject to this Agreement and the Brazil MFA, which shall be deemed to have occurred on the earlier of (a) the date set forth in a written notice which, notice shall be reasonably satisfactory in form and scope to McDonald’s to give effect to the provisions hereof, delivered by Master Franchisee to McDonald’s acknowledging such termination with respect to all such Territories; provided that (i) such written notice shall serve only as evidence of Master Franchisee’s agreement that the grant of Master Franchisee Rights is of no further force or effect and that all Master Franchisee Parties must cease all exercise of Master Franchisee Rights as and in the manner contemplated by this Agreement; and (ii) such written notice or the absence thereof shall not be in derogation of the rights of Master Franchisee to assert the wrongfulness of such termination or the rights of McDonald’s to take all appropriate action to enforce its termination of the Master Franchisee Rights; and (b) the last date on which a final non-appealable judgment is rendered with respect to (i) the termination date of this Agreement with respect to all Territories; and (ii) the amount of damages awarded to McDonald’s in connection therewith.

“ Encumbrance ” means any and all liens, encumbrances, charges, security interests, options, claims, mortgages, pledges, proxies, voting trusts or agreements, obligations, reversions, reverters, restrictive covenants, conditions, understandings or arrangements or other restrictions of any kind whatsoever, including any restriction on the title, transfer, use, voting receipt of income or other exercise of any attributes of ownership of any kind whatsoever.

“ Equity Interest ” means, with respect to any Person, (a) all of the shares of Capital Stock of such Person; (b) all warrants, options or other rights for the purchase or acquisition from such Person of shares of Capital Stock of such Person; (c) all securities convertible into or exchangeable for shares of Capital Stock of such Person or warrants, rights or options for the purchase or acquisition of such securities; and (d) all other

Exh. 2-6

ownership or profit interests in such Person (including partnership, member or trust interests), whether voting or non-voting.

“ ERISA ” means the U.S. Employee Retirement Income Security Act of 1974, as amended.

“ Escrow Agent ” means Citibank, N.A. and its successors in interest, as escrow agent under the Escrow Agreement.

“ Escrow Agreement ” means the Escrow Agreement entered into among McDonald’s, Master Franchisee, each Owner Entity, Escrow Agent, Collateral Agent and the other parties named therein, dated as of August 3, 2007, as amended.

“ Escrowed Constituent Documents ” has the meaning set forth in the Escrow Agreement.

“ Escrowed MF Subsidiary ” means each MF Subsidiary other than any MF Subsidiary organized in Mexico, French Guiana, Guadeloupe or Martinique.

“ Exercise Date ” has the meaning set forth in Section 21.6.3.

“ Exercise Notice ” has the meaning set forth in Section 21.6.3.

“ Existing Franchisee ” means a Person that operates one or more McDonald’s Restaurants under an Existing Franchise Agreement

“ Existing Franchise Agreement ” means a franchise agreement between a Master Franchisee Party and a Franchisee in effect on and as of August 3, 2007, exclusive of any renewal or amendment thereof.

“ Existing Master Franchisee Restaurant ” means a Master Franchisee Restaurant In operation as of August 3, 2007.

“ Existing Royalty ” has the meaning set forth in Section 5.2.2.

“ Existing Suppliers ” has the meaning set forth in Section 9.1.1.

“ Fair Market Value ” means, with respect to a Subject Business, the fair market value thereof (including for the avoidance of doubt all Real Estate thereof) determined in accordance with Section 21.7.1, without taking into account Funded Debt, Cash or Contingencies attributable to such Subject Business.

“ Fair Market Value Date ” has the meaning set forth in Section 21.7.1(c).

“ Financial Investor ” means each of (a) Capital International Private Equity Fund V, L.P., a Cayman Island limited partnership; (b) CGPE V, L.P., a Cayman Island limited partnership; (c) Gávea Investment AD, L.P., a limited partnership organized under the laws of the Cayman Islands; (d) DLJ South American Partners L.P., a limited partnership established under the laws of Ontario, Canada; and (e) DLJ Restco Co-Investments L.P., a limited partnership established under the laws of Ontario, Canada.

Exh. 2-7

“ Financial Investors’ Agreement ” means the financial investors’ agreement, dated as of August 3, 2007, by and among McDonald’s and the Financial Investors.

“ Financing Agreements ” has the meaning set forth in Section 7.1.3.

“ Fixed Charge Coverage Ratio ” means, with respect to any Person as of any date of detennination, the ratio of (a) the sum of (i) EBITDAR, less (ii) distributions and dividends of such Person and its consolidated Subsidiaries, in each case for the period of four consecutive fiscal quarters ending on such date of determination, to (b) the sum of (i) Principal and Interest Expense, plus (ii) Capital Leases and Synthetic Lease Obligations of such Person and its consolidated Subsidiaries, in each case for the period of four consecutive fiscal quarters ending on such date of determination.

“ FMV Institution List ” has the meaning set forth in Section 21.7.1.

“ FMV Review Notice ” has the meaning set forth in Section 21.7.1(d).

“ Following Business Day Convention ” means, with respect to any day that is not a Business Day, the first following day that is a Business Day.

“ Force Majeure ” means wars or acts of war, the outbreak of hostilities (regardless of whether war is declared), rebellions, revolutions and civil commotions.

“ Franchise Agreement ” has the meaning set forth in 11.2.2.

“ Franchised Restaurant ” means a McDonald’s Restaurant, including any related Incorporated McCafe and each Initial Freestanding McCafe and each Satellite, to be developed, owned, operated or managed by Master Franchisee and / or its Franchisees in accordance with and subject to the terms of this Agreement and any applicable Franchise Agreement.

“ Franchisee ” has the meaning set forth in 11.1.1.

“ Franchisee Approval Process ” has the meaning set forth in 11.1.1.

“ Franchising Plan ” means, with respect to the Business Plan for any Territory, the plan specifying the initiative to be undertaken with Franchisees in such Territory during a specified period.

“ Franchising Principles, Policies and Guidelines ” means the principles, policies and guidelines of McDonald’s and its Affiliates with respect to the grant of franchises for McDonald’s Restaurants, McCafes and other McDonald’s-branded points of distribution, as amended by McDonald’s from time to time.

“ French Term ” has the meaning set forth in Section 4.1.

“ Freestanding McCafe ” means any McCafe other than an Incorporated McCafe.

“ Funded Debt ” means, as of any date of determination with respect to any Person and its consolidated Subsidiaries, all of the following (without duplication), determined in accordance with GAAP:

Exh. 2-8

(a) obligations for borrowed money and all obligations evidenced by bonds, debentures, notes, loan agreements or other similar instruments;

(b) any direct or contingent obligations arising under standby or commercial letters of credit (excluding the Letter of Credit), banker’s acceptances, bank guaranties, surety bonds and similar instruments;

(d) net obligations of such Person under any Swap Contract; and

(e) indebtedness (excluding prepaid interest thereon) secured by a Lien on property owned or being purchased by such Person (including indebtedness arising under conditional sales or other title retention agreements), whether or not such indebtedness shall have been assumed by such Person or is limited in recourse.

“ GAAP ” means (a) in the case of Master Franchisee, generally accepted accounting principles in the United States of America; and (b) with respect to any other Person, generally accepted accounting principles in the jurisdiction in which such Person is domiciled, in each case as in effect from time to time.

“ Global Supplier ” has the meaning set forth in Section 9.3.

“ Global Training Standards ” means the global training standards to be adopted by McDonald’s pursuant to the Global Training Alignment strategy, as amended from time to time.

“ Governmental Authority ” means, in any applicable Territory or other jurisdiction, any federal, provincial, state, territorial or local government, any governmental, regulatory or administrative authority, agency or commission or any court or tribunal or arbitral body.

“ GROIP ” means the McDonald’s Global Restaurant Operation Improvement Process as in effect as of August 3, 2007, as it may be replaced or amended by McDonald’s from time to time.

“ Gross Sales ” means, with respect to any or all of the Franchised Restaurants as the context may require, all revenues of Master Franchisee or any Franchisee, as applicable, attributable to sales by such Franchised Restaurants, whether such sales be evidenced by check, cash, credit, charge account, debit card, exchange, gift cards and certificates or otherwise, and shall include the amounts received from the sale of goods, wares, and merchandise, food, beverages and tangible property of every kind and nature, promotional or otherwise, and for services performed from or at such Franchised Restaurants, together with the amount of all orders taken or received at the Franchised Restaurants, whether such orders be filled from the Franchised Restaurants or elsewhere. Gross Sales with respect to any Franchised Restaurant shall not include sales of merchandise for which cash has been refunded, provided that such sales shall have previously been included in such Gross Sales. There shall be deducted from Gross Sales with respect to any Franchised Restaurant the price of merchandise returned by customers for exchange, provided that such returned merchandise shall have been previously included in Gross Sales, and provided further that the sales price of merchandise

Exh. 2-9

delivered to the customer in exchange shall be included in such Gross Sales. Gross Sales with respect to any Franchised Restaurant shall not include the amount of any sales, service, value-added or other similar taxes imposed by any local, foreign, federal, state, municipal, or other Governmental Authority that are actually collected from customers and paid by Master Franchisee or the applicable Franchisee to such Governmental Authority. Each charge or sale upon credit shall be treated as a sale for the full price in the month during which such charge or sale shall be made, irrespective of the time when Master Franchisee or the applicable Franchisee shall receive payment (whether full or partial) therefor.

“ Guarantv Obligation ” means, as to any Person, any (a) obligation, contingent or otherwise, of such Person guaranteeing or having the economic effect of guaranteeing any Indebtedness or other obligation payable or performable by another Person (the “primary obligor”) in any manner, whether directly or indirectly, and including any obligation of such Person, direct or indirect, (i) to purchase or pay (or advance or supply funds for the purchase or payment of) such Indebtedness or other obligation, (ii) to purchase or lease property, securities or services for the purpose of assuring the obligee in respect of such Indebtedness or other obligation of the payment or performance of such Indebtedness or other obligation, (iii) to maintain working capital, equity capital or any other financial statement condition or liquidity or level of income or cash flow of the primary obligor so as to enable the primary obligor to pay such Indebtedness or other obligation, or (iv) entered into for the purpose of assuring in any other manner the obligee in respect of such Indebtedness or other obligation of the payment or performance thereof or to protect such obligee against loss in respect thereof (in whole or in part), or (b) any Lien on any assets of such Person securing any Indebtedness or other obligation of any other Person, whether or not such Indebtedness or other obligation is assumed by such Person. The amount of any Guaranty Obligation shall be deemed to be an amount equal to the stated or determinable amount of the related primary obligation, or portion thereof, in respect of which such Guaranty Obligation is made or, if not stated or determinable, the maximum reasonably anticipated liability in respect thereof as determined by the guaranteeing Person in good faith. The term “Guarantee” as a verb has a corresponding meaning.

“ Hamburger University License Agreement ” means the license agreement, dated as of August 3, 2007, with respect to certain matters relating to the operation of Hamburger University (São Paolo).

“ ICC ” has the meaning set forth in Section 25.2.1.

“ ICC Rules ” has the meaning set forth in Section 25.2.1.

“ Incorporated McCafe ” means a McCafe that is fully incorporated within the premises of a McDonald’s Restaurant.

“ Indebtedness ” means, as to any Person at a particular time, without duplication, all of the following, whether or not included as indebtedness or liabilities in accordance with GAAP:

Exh. 2-10

(a) all obligations of such Person for borrowed money and all obligations of such Person evidenced by bonds, debentures, notes, loan agreements or other similar instruments;

(b) all direct or contingent obligations of such Person arising under letters of credit (including standby and commercial but, in the case of Master Franchisee, excluding the Letter of Credit except to the extent of any drawn amount), banker’s acceptances, bank guaranties, surety bonds and similar instruments;

(d) indebtedness (excluding prepaid interest thereon) secured by a Lien on property owned or being purchased by such Person (including indebtedness arising under conditional sales or other title retention agreements), whether or not such indebtedness shall have been assumed by such Person or is limited in recourse;

(e) Attributable Indebtedness in respect of Capital Leases and Synthetic Lease Obligations;

(f) Off-Balance Sheet Liabilities;

(g) obligations in respect of Redeemable Stock of such Person;

(h) any Receivables Facility Attributed Indebtedness;

(i) any “withdrawal liability” of such Person as such term is defined under Part I of Subtitle E of Title IV of ERISA; and

(j) all Guaranty Obligations of such Person in respect of any of the foregoing.

“ Indemnitee ” has the meaning set forth in Section 20.2.

“ Indemnitor ” has the meaning set forth in Section 20.2.

“ Initial MFR Fee ” has the meaning set forth in Section 5.1.1.

“ Initial SFR Fee ” has the meaning set forth in Section 5.1.2.

“ Initial Franchise Fees ” has the meaning set forth in Section 5.1.2.

“ Initial Freestanding McCafes ” means each Freestanding McCafe owned by Master Franchisee on the Closing Date.

“ Intellectual Property ” means, collectively, the Copyrights, Patents, Trademarks, Trade Secrets and any Developed IP.

Exh. 2-11

“ Intercreditor Agreement ” means the Intercreditor Agreement, dated as of August 3, 2007, by and among the McDonald’s, Owner, the Collateral Agent and the other Persons party thereto.

“ Interest Expense ” means, with respect to any Person and its consolidated Subsidiaries for any period, total interest expense, whether paid or accrued (including the interest component of Capital Leases and Synthetic Lease Obligations), including all commissions, discounts and other fees and charges owed with respect to letters of credit and net costs under interest rate contracts and foreign exchange contracts, amortization of discount, but excluding interest expense not payable in cash (including interest accruing on deferred compensation obligations) other than amortization of discount, all as determined in accordance with GAAP.

“ Interest Income ” means, with respect to any Person and its consolidated Subsidiaries for any period, interest income, whether paid or accrued, all as determined in accordance with GAAP.

“ Interest Payment Date ” has the meaning set forth in Section 7.9.4(e).

“ Interest Payment Period ” has the meaning set forth in Section 7.9.4(e).

“ IPO ” means an initial public offering of the Equity Interests of Parent then owned by Beneficial Owner and Financial Investors, directly or indirectly, resulting in gross proceeds of not less than $150,000,000 and effected in conjunction with the listing of such Equity Interests on a nationally-recognized securities exchange in any of Brazil, Mexico, the United Kingdom or the United States of America.

“ Key Employee ” has the meaning set forth in Section 12.1.

“ LC Bank ” means Credit Suisse Cayman Islands Branch, and its successors in interest, or any other issuer of a Letter of Credit.

“ LC Collateral Pool ” has the meaning set forth in Section 7.20.1.

“ LC Expiration Date ” shall mean the stated expiration date of any Letter of Credit.

“ LC Payable ” has the meaning set forth in Section 7.9.2.

“ LC Trigger Event ” has the meaning set forth in Section 7.9.2.

“ Lender Payable ” shall have the meaning set forth in the Intercreditor Agreement.

“ Letter of Credit ” has the meaning set forth in Section 7.9.1.

“ Leverage Ratio ” means, as of any date of determination with respect to Master Franchisee, the ratio of (a) Rent-Adjusted Debt to (b) EBITDAR for four fiscal quarters most recently ended.

“ Lien ” means any mortgage, pledge, hypothecation, assignment, deposit arrangement, encumbrance, lien (statutory or other), charge, or preference, priority or other security interest or preferential arrangement of any kind or nature whatsoever

Exh. 2-12

(including any conditional sale or other title retention agreement, and any financing lease having substantially the same economic effect as any of the foregoing).

“ Local Stock Power ” has the meaning set forth in the Escrow Agreement.

“ Local Taxes ” has the meaning set forth in Section 24.2.6.

“ Local Voting Power ” has the meaning set forth in the Escrow Agreement.

“ Losses and Expenses ” means, without limitation, all damages, losses, fines, charges, costs, expenses, lost profits, attorneys’ or experts’ fees, court costs, settlement amounts, judgments and other reasonable costs and expenses of investigating, defending or countering any third-party claim; compensation for damages to McDonald’s reputation or goodwill; costs of or resulting from delays, financing, costs of advertising materials and media time and / or space, and costs of changing, substituting or replacing the same; and any and all expenses of recalls, refunds, compensation, public notices and such other amounts incurred.

“ Major Territory ” means, as of any date of determination, any Territory in which at least 100 Franchised Restaurants are then in operation.

“ Managing Director ” has the meaning set forth in Section 7.4.

“ Mandatory Marketing Commitment ” has the meaning set forth in Section 14.1.2.

“ Master Agreement ” has the meaning set forth in the definition of Swap Contract.

“ Master Franchisee ” has the meaning set forth in the preamble.

“ Master Franchise Business ” means the business operated, directly or indirectly, by Master Franchisee hereunder and pursuant to the Master Franchisee Rights, including all Assets used therein.

“ Master Franchisee Parties ” means Master Franchisee and each of the MF Subsidiaries.

“ Master Franchisee Restaurant ” means a Franchised Restaurant owned and operated by any Master Franchisee Party.

“ Master Franchisee Rights ” has the meaning set forth in Section 3.1.

“ Material Breach ” has the meaning set forth in Section 22.2.

“ Materials ” means advertising, marketing and promotional materials, including without limitation television, radio, newspaper and print advertising, packaging, premiums, brochures, outdoor advertising, direct mail, coupons and point of sale materials.

“ McCafe ” means a McCafe-branded point of distribution offering a limited menu of pastries, coffee, tea and other beverages and operated under the System and the Trademarks.

Exh. 2-13

“ McDonald’s ” has the meaning set forth in the preamble.

“ McDonald’s Indemnified Parties ” has the meaning set forth in Section 20.1.

“ McDonald’s Restaurant ” means any McDonald’s-branded restaurant operated under the System.

“ McDonald’s Security Agreements ” means each of (a) the Trust Agreements; (b) the Second Lien Brazilian Quota Pledge Agreement, dated as of August 3, 2007, among McDonald’s Latin America, LLC, Master Franchisee, McDonald’s Carribean Development Corporation and Arcos Dorados B.V.; (c) McDonald’s Contrato de Prenda Abierta Sobre Acciones en Colombia, dated as of August 3, 2007, among Master Franchisee, McDonald’s Caribbean Development Corporation and McDonald’s; (d) McDonald’s Contrato de Prenda Abierta Sobre Cuotas en Colombia, dated as of August 3, 2007, among Master Franchisee, McDonald’s Caribbean Development Corporation and McDonald’s; (e) McDonald’s Deed of Pledge of Shares, dated as of August 3, 2007 among Master Franchisee, McDonald’s and McDonald’s St. Maarten and Curacao N.V.; (f) Second Lien Ecuadorian Stock Pledge Agreement, dated as of August 3, 2007, by and between Master Franchisee and McDonald’s.; (g) McDonald’s Panamanian Stock Pledge Agreement, dated as of August 3, 2007, among Master Franchisee, Eduardo de Alba and McDonald’s; (h) Constitución y Preconstitución de Garantía Mobiliaria Sobre Acciones, dated as of August 3, 2007, among Master Franchisee, McDonald’s and Operaciones Arcos Dorados de Peru S.A.; (i) Ratification to McDonald’s U.S. Stock Pledge Agreement, dated as of August 3, 2007, among Master Franchisee, McDonald’s and the other parties thereto; (j) McDonald’s Uruguay Social Quotas Pledge Agreement, dated as of August 3, 2007, among Master Franchisee, McDonald’s Caribbean Development Corporation, McDonald’s and Arcos del Sur S. RL.; (k) McDonald’s Uruguay Stock Pledge Agreement, dated as of August 3, 2007, among Master Franchisee, McDonald’s Caribbean Development Corporation, McDonald’s and Arcos del Sur S.RL.; (l) McDonald’s Deed of Pledge of Shares, dated as of August 3, 2007 among Master Franchisee, McDonald’s and McDonald’s Aruba N.V.; (m) the Venezuelan Share Pledge Agreement, dated as of August 3, 2007 between Master Franchisee, Management Operations Company and Deutsche Bank Trust Company Americas; (n) Los Contratos de Prenda de Acciones y Cesión Fiduciaria con Fines de Garantia, dated as of August 3, 2007, among Master Franchisee, Arcos Dorados S.A., McDonald’s, Deutsche Bank Trust Company Americas and the other parties thereto; and (o) McDonald’s U.S. Stock Pledge Agreement, dated as of August 3, 2007, among McDonald’s, Arcos Dorados B.V., Master Franchisee and the other parties thereto.

“ Mexican MF Subsidiaries ” means each of MDC Inmobiliaria de Mexico, S. de RL. de C.V., McDonald’s Corporativo de Mexico, S. de R.L. de C.V., McDonald’s Mexico, S.A. de C.V., Alimentos Centralizados de Mexico S. de R.L. de D.V. and Servicios Alimentos Centralizados de Mexico S. de R.L. de D.V.

“ Mexican Trust Agreement I ” means the trust agreement, dated as of August 3, 2007, by and among McDonald’s, Master Franchisee and Mexican Trustee pursuant to which certain of the Equity Interests of the Mexican MF Subsidiaries are held in trust.

“ Mexican Trust Agreement II ” means the trust agreement, dated as of August 3, 2007, by and among McDonald’s, McDonald’s Caribbean Development Corporation and

Exh. 2-14

Mexican Trustee pursuant to which certain of the Equity Interests of the Mexican MF Subsidiaries are held in trust.

“ Mexican Trustee ” means Banamex División Fiduciaria, as trustee and its successors in interest, as trustee under each of the Mexican Trust Agreements.

“ MFA Document ” has the meaning specified in the Intercreditor Agreement.

“ MFR Term ” has the meaning set forth in Section 5.1.1.

“ MF Subsidiaries ” means each of the Subsidiaries of Master Franchisee listed in Exhibit 1 and each other Subsidiary of Master Franchisee that (i) owns and operates a Franchised Restaurant; (ii) licenses or sub-licenses others to own or operate a Franchised Restaurant; or (iii) owns or leases real estate related to the Master Franchise Business and, in each case, becomes a Party hereto pursuant to Section 21.2.2; provided ; however , that solely for purposes of Section 3.1.5, 3.2, 3.7 and 5.2.4, the Restaurant System of Guadeloupe and the Restaurant System of Martinique shall not be deemed to be MF Subsidiaries.

“ MF Subsidiary Rights ” has the meaning set forth in Section 3.2.

“ Net Income ” means, for any period with respect to any Person and its consolidated Subsidiaries, the net income of such Person and its consolidated Subsidiaries (whether positive or negative), all as determined in accordance with GAAP.

“ New Claims ” has the meaning set forth in Section 25.2.12.

“ New Franchise Agreement ” has the meaning set forth in Section 11.2.2.

“ New Franchisee Royalty ” has the meaning set forth in Section 5.2.3.

“ New Franchisees ” has the meaning set forth in Section 11.1.1.

“ New Supplier ” has the meaning set forth in Section 9.1.2.

“ Non-Default Exercise Notice ” has the meaning set forth in Section 21.6.3.

“ Non-Escrowed MF Subsidiaries ” means each of the Mexican MF Subsidiaries, Rápido Servicio de Alimentos de Costa Rica, S.A. and each other MF Subsidiary organizad under Mexican or Costa Rican law.

“ Non-Public Shareholder ” shall mean Beneficial Owner, each Financial Investor and each other Person that acquires in any manner beneficial ownership of any Transferred Equity Interests in Parent other than pursuant to an IPO or pursuant to sale subsequent to an IPO into the public markets, other than a block trade.

“ Notices ” means (a) any pleading or other court paper or arbitration demand that (i) names McDonald’s or any of its Affiliates as a party; (ii) is issued in connection with a criminal investigation or subpoena of Master Franchisee, any of its Subsidiaries or Related Parties that arises out of or relates to the Master Franchise Business; and (b) any notice issued by any Governmental Authority relating to a health or safety matter if such

Exh. 2-15

notice relates to one or more incidents that, individually or in the aggregate, involves damages, fines or other penalties in excess of $50,000.

“ OFAC ” means the U.S. Treasury Department’s Office of Foreign Asset Control.

“ Off-Balance Sheet Liabilities ” means, with respect to any Person and its consolidated Subsidiaries as of any date of determination, without duplication and to the extent not included as a liability on the consolidated balance sheet of such Person in accordance with GAAP: (a) with respect to any asset securitization transaction (including any accounts receivable purchase facility) (i) the unrecovered investment of purchasers or transferees of Assets so transferred; and (ii) any other payment, recourse, repurchase, hold harmless, indemnity or similar obligation of such Person or any of its Subsidiaries in respect of Assets transferred or payments made in respect thereof, other than limited recourse provisions that are customary for transactions of such type and that neither (x) have the effect of limiting the loss or credit risk of such purchasers or transferees with respect to payment or performance by the obligors of the Assets so transferred; nor (y) impair the characterization of the transaction as a true sale under Applicable Law (including applicable bankruptcy laws); (b) the monetary obligations under any financing lease or so-called “synthetic,” tax retention or off-balance sheet lease transaction which, upon the application of any Applicable Law to such Person or any of such Subsidiaries, would be characterized as indebtedness; (c) the monetary obligations under any sale and leaseback transaction which does not create a liability on the consolidated balance sheet of such Person and such Subsidiaries; or (d) any other monetary obligation arising with respect to any other transaction which (i) upon the application of any Applicable Law to such Person or any of such Subsidiaries, would be characterized as indebtedness; or (ii) is the functional equivalent of or takes the place of borrowing but which does not constitute a liability on the consolidated balance sheet of such Person and such Subsidiaries (for purposes of this clause (d), any transaction structured to provide tax deductibility as interest expense of any dividend, coupon or other periodic payment will be deemed to be the functional equivalent of a borrowing).

“ Offered Interest ” has the meaning set forth in Section 21.4.1.

“ Operations Manuals ” means the various operations and procedures manuals and business manuals (as such manuals may be amended and supplemented by McDonald’s from time to time) owned by McDonald’s and provided to Master Franchisee and its Franchisees, regardless of the form or medium in which they may be provided and including all translations made or obtained by Master Franchisee, which contain suggested and mandatory standards, specifications and procedures and information relative to the System, certain obligations of Master Franchisee and its Franchisees, and the operation of each Franchised Restaurant.

“ Option Closing Date ” has the meaning set forth in Section 21.6.5.

“ Order ” means the entry in any judicial or administrative proceeding brought under Applicable Law by any Person of any permanent or preliminary injunction or other judgment, order or decree.

“ Original MFA ” has the meaning set forth in the preamble.

Exh. 2-16

“ Owner ” has the meaning set forth in the preamble.

“ Owner Entities ” has the meaning set forth in the preamble.

“ Parent ” has the meaning set forth in the preamble.

“ Parties ” has the meaning set forth in the preamble.

“ Patents ” means, collectively, any and all patents now or hereafter owned, used, acquired or registered by McDonald’s or licensed to McDonald’s by one of its Affiliates.

“ Payment Election ” has the meaning set forth in Section 21.6.2.

“ Person ” means any individual, partnership, firm, limited liability company, corporation, association, joint venture, trust, unincorporated organization or other entity, in each case whether or not having separate legal personality.

“ Petitioning Party ” has the meaning set forth in Section 25.2.4(a).

“ Prepaid Amount ” has the meaning set forth in Section 7.9.4.

“ Prepaid Amount Period ” has the meaning set forth in Section 7.9.4.

“ Primary Calculations ” has the meaning set forth in Section 21.7.2(b)(1).

“ Primary Valuation ” has the meaning set forth in Section 21.7.1(b)(1).

“ Principal ” means, with respect to any Person with respect to any period, total payments of principal on its Funded Debt made by such Person and its consolidated Subsidiaries.

“ Proposed Transferee ” has the meaning set forth in Section 21.2.2.

“ Puerto Rican Royalty ” has the meaning set forth in Section 5.2.4.

“ Purchase Agreement ” means the Purchase Agreement, dated as of March 28, 2007, as amended by Amendment No. 1 to the Purchase Agreement, dated as of August 3, 2007, pursuant to which McDonald’s and certain of its Affiliates desire to sell, and Owner desires to purchase, 100% of the Equity Interests of Master Franchisee, Arcos Dourados Comercio de Alimentos, Ltda., McDonald’s Sistemas de Panama, S.A., McDonald’s Sistemas McOpCo Panama, S.A. and El Dorado-Mac, S.A.

“ QSC Standards ” means the standards for quality, service and cleanliness established by McDonald’s from time to time and memorialized in the Standards, as amended by McDonald’s from time to time.

“ QSR Business ” means any Person operating restaurants or other points of distribution in the “quick-service” segment of the restaurant industry.

“ Qualified Bank ” means any commercial banking institution that (a) has long term unsecured debt credit ratings issued by Moody’s Investors Service, Inc. of at least A and by Standard & Poor’s Rating Services of at least A; (b) has a capital and surplus of

Exh. 2-17

not less than $500,000,000; and (c) is organized and chartered to do business in a country which is a full member of the Organization for Economic Cooperation and Development.

“ Real Estate ” means any leasehold, free-hold or other property interest in real estate or any part thereof, including improvements thereon.

“ Receivables Facility Attributed Indebtedness ” means the amount of obligations outstanding under a receivables purchase facility on any date of determination that would be characterized as principal if such facility were structured as a secured lending transaction other than a purchase.

“ Redeemable Stock ” means any Capital Stock of Master Franchisee or any of its Subsidiaries which is (a) mandatorily redeemable, (b) redeemable at the option of the holder thereof or (c) convertible into Indebtedness of Master Franchisee or any of its Subsidiaries.

“ Refinance ” means, in respect of any Indebtedness, to refinance, extend, renew, defease, amend, modify, supplement, restructure, replace, refund or repay, or to issue other indebtedness, in exchange or replacement for, such indebtedness. “ Refinanced ” and “ Refinancing ” shall have correlative meanings.

“ Regular Royalty ” has the meaning set forth in Section 5.2.1.

“ Regular Term ” has the meaning set forth in Section 4.1.

“ Reinvestment Plan ” means, with respect to the Business Plan for any Territory, the plan specifying the number of restaurants to be remodeled or upgraded in such Territory during a specified period and the extent of such remodel or upgrade.

“ Related Agreement ” means each agreement related to this Agreement, including the Hamburger University License Agreement, the Purchase Agreement, the Financial Investors’ Agreement, the Escrow Agreement, the Trust Agreements, the Brazil MFA, the McDonald’s Security Agreements, the Intercreditor Agreement and each Franchise Agreement and any lease agreements relating to property leased by McDonald’s or any of its Affiliates to Master Franchisee or any of its Subsidiaries.

“ Relationship Committee ” has the meaning set forth in Section 10.3.

“ Related Party ” means:

(a) with respect to any natural Person,

(i) any of such Person’s parents, siblings, children and spouse, the parents, siblings and children of such Person’s spouse, and the spouses of such Person’s children (“ Relatives ”);

(ii) any other Person with respect to which such Person or any of his Relatives serves as a director, officer, partner, member or in a similar function;

Exh. 2-18

(iii) any entity in which such Person or any of his Relatives, individually or collectively, owns or controls, directly or indirectly, 5% or more of the Equity Interests; and

(iv) any trust or estate in which such Person or any of his Relatives has a substantial interest or serves as a trustee or in a similar capacity;

(b) with respect to any other Person,

(i) any Person that directly or indirectly owns or controls 5% or more of the Equity Interests of such Person and the Related Parties of such Person;

(ii) any other Person in which such Person owns 5% or more of the Equity Interests;

(iii) any director, officer, partner, member or similar representative of such Person or any of its Related Parties; and

(iv) any Affiliate of such Person.

“ Relatives ” has the meaning set forth in the definition of “ Related Party .”

“ Relocation ” means the process whereby a Franchised Restaurant is closed pursuant to an Approved Closing and is reconstructed in the same trading area to serve the same customer base, it being understood that the Relocated Franchised Restaurant mayor may not be adjacent to the original site but, if adjacent, shall not use any portion of the original premises. “ Relocate ” and “ Relocated ” have correlative meanings.

“ Renewal Criteria ” has the meaning set forth in Section 4.2.

“ Renewal Notice ” has the meaning set forth in Section 4.3.1.

“ Renewal Option ” has the meaning set forth in Section 4.2.

“ Rent-Adjusted Debt ” means, for any period with respect to any Person and its consolidated Subsidiaries, the sum of (a) the aggregate amount of Funded Debt of such Person and its consolidated Subsidiaries; plus (b) the Attributable Indebtedness in respect of Capital Leases and Synthetic Lease Obligations.

“ Restaurant Manager ” means the individual having primary day-to-day responsibility for the operations of any Franchised Restaurant.

“ Restaurant Opening Plan ” means the plan specifying the number and type of new Franchised Restaurants to be opened in the Territories during a specified period; provided , however , that if no plan is then in effect, then the plan shall be deemed to specify the Targeted Openings with respect to the Territories.

“ Restricted Interests ” has the meaning set forth in Section 21.2.2.

“ Restricted Product ” means each bakery, protein, potato-based, liquid, condiment, packaging and beverage product, or distribution service, used to prepare or provide any

Exh. 2-19

“core” or “branded product” offered by Franchised Restaurants, as such “core” or “branded products” may be designated by McDonald’s from time to time.

“ Restricted Real Estate ” means the Real Estate identified in Exhibit 14 .

“ Restricted Supplier Period ” means a period (a) ending August 2, 2008 for all Existing Suppliers other than OSI Industries Inc.; or (b) ending August 2, 2012 for OSI Industries Inc. Notwithstanding the foregoing, after August 3, 2010, Master Franchisee may request that McDonald’s approve a replacement supplier for OSI Industries Inc., such approval by McDonald’s not to be unreasonably withheld.

“ RFR Seller ” has the meaning set forth in Section 21.4.1.

“ ROI ” means, for any Interest Payment Period, the weighted average return on investment, expressed as a percentage, earned by McDonald’s Corporation on the investment of its cash and cash equivalents during such Interest Payment Period as determined by McDonald’s Corporation (each such determination to be conclusive in the absence of manifest error).

“ Royalty ” means, with respect to any Franchise Agreement, the aggregate of all franchise, service and license fees payable by the relevant Franchisee thereunder, expressed as a percentage of Gross Sales.

“ Sale Period ” has the meaning set forth in Section 21.6.1.

“ Satellite ” means a McDonald’s-branded point of distribution operated under the System and the Trademarks that (a) has one or more of the following characteristics: (i) such point of distribution’s operations are contingent upon the provision of services by another Franchised Restaurant in the same trading area; (ii) such point of distribution offers a limited menu of products; (iii) such point of distribution is operated from a location that is approximately 30% of the size (in terms of square feet) of the average size of a Franchised Restaurant that is not a Satellite or a McCafe in the relevant Territory; (iv) such point of distribution generates Gross Sales that are approximately 50% of the Gross Sales of a Franchised Restaurant that is not a Satellite or a McCafe in the relevant Territory; or (v) such point of distribution is located within a Wal-Mart-branded retail location; and (b) has been expressly designated as a “Satellite” by McDonald’s.

“ Secondary Calculation ” has the meaning set forth in Section 21.7.2(b)(3).

“ Secondary Valuation ” has the meaning set forth in Section 21.7.1(b)(2).

“ Secured Restricted Real Estate ” means the Restricted Real Estate other than any Restricted Real Estate located in Brazil, Mexico or Puerto Rico.

“ Service Coordinator ” has the meaning set forth in Section 23.3.3(a).

“ Services ” has the meaning set forth in Section 23.3.3.

“ Settlement Notice ” has the meaning set forth in Section 21.6.4.

“ Settlement Notice Date ” has the meaning set forth in Section 21.6.4.

Exh. 2-20

“ Shareholders Agreement ” has the meaning set forth in Section 7.1.2.

“ Site Agreement ” means any agreement of any nature whatsoever relating to the premise on which any Franchised Restaurant is located, including any real estate mortgage, lease, construction contract or similar agreement.

“ Solicitation Period ” has the meaning set forth in Section 4.3.2.

“ Standard Reporting Package ” has the meaning set forth in Section 16.3.

“ Standards ” means all standards, policies, guidelines and codes of conduct of whatever type used in the operation of the System, and ensuring quality control, including with respect to the Operations Manuals, QSC Standards, specifications with respect to customer service, product content and delivery, supplier standards, equipment, building layout and design standards, hours of operation, marketing and advertising policies, strategies and standards, protocols for conducting games, sweepstakes or contests, Golden Arches Code, Golden Arches Code Policies and Standards, packaging and creative standards and frameworks, trademark clearance procedures, McDonald’s Corporation Standards of Business Conduct, McDonald’s Code of Conduct for Suppliers, McDonald’s Corporation Worldwide Restaurant Development: Restaurant Reinvestment Guide, GROIP, McDonald’s safety standards and procedures, safety testing standards and the Global Training Standards, in each case as such standards, policies, strategies, protocols or codes may be amended from time to time by McDonald’s in its sole discretion.

“ Strategic Marketing Plan ” means, with respect to the Business Plan for any Territory, the related comprehensive advertising, promotion and marketing program for such Territory during a specified period that addresses, without limitation, advertising, promotion and marketing strategies and activities, related Materials, in-store advertising and promotions, games/sweepstakes/contests, media strategies and the costs and fees expected to be incurred in connection with such Materials and activities, the purpose of which is to enhance and promote the McDonald’s brand and System and to maximize consumer recognition of the Intellectual Property and patronage of the Franchised Restaurants in such Territory.

“ Subject Business ” means the Equity Interests to be acquired by McDonald’s as a result of the exercise of a Call Option, which, in the event McDonald’s determines to acquire (a) all of the fully diluted Equity Interests of Master Franchisee owned or held, directly or indirectly, by Owner and any Equity Interests Transferred pursuant to Section 21.2.3, shall be all such Equity Interests of the Master Franchisee; or (b) one or more, but not all, of the Territories, shall be all of the Equity Interests of each MF Subsidiary operating (or licensing the operation of) Franchised Restaurants in such Territory or Territories.

“ Subject Business Balance Sheet ” has the meaning set forth in Section 21.7.2(a).

“ Subject Business Balance Sheet Date ” has the meaning set forth in Section 21.7.2(a).

Exh. 2-21

“ Subsidiary ” means, as to any Person, any other Person (a) of which such Person directly or indirectly owns, securities or other equity interests representing 50% or more of the aggregate voting power; or (b) of which such Person possesses the right to elect 50% or more of the directors or Persons holding similar positions.

“ Supplier Criteria ” has the meaning set forth in Section 9.1.1.

“ Swap Contract ” means (a) any and all rate swap transactions, basis swaps, credit derivative transactions, forward rate transactions, commodity swaps, commodity options, forward commodity contracts, equity or equity index swaps or options, bond or bond price or bond index swaps or options or forward bond or forward bond price or forward bond index transactions, interest rate options, forward foreign exchange transactions, cap transactions, floor transactions, collar transactions, currency swap transactions, cross-currency rate swap transactions, currency options, spot contracts, or any other similar transactions or any combination of any of the foregoing (including any options to enter into any of the foregoing), whether or not any such transaction is governed by or subject to any master agreement; and (b) any and all transactions of any kind, and the related confirmations, which are subject to the terms and conditions of, or governed by, any form of master agreement published by the International Swaps and Derivatives Association, Inc., any International Foreign Exchange Master Agreement, or any other master agreement (any such master agreement, together with any related schedules, a “ Master Agreement ”), including any such obligations or liabilities under any Master Agreement.

“ Synthetic Lease Obligation ” means, without duplication, the monetary obligation of a Person under (a) operating leases; (b) a so-called synthetic, off-balance sheet or tax retention lease; or (c) any agreement for the use or possession of property creating obligations that do not appear on the balance sheet of such Person but which, upon the insolvency or bankruptcy of such Person, would be characterized as the Indebtedness of such Person (without regard to accounting treatment).

“ System ” has the meaning set forth in Section 2.1.

“ Tango ” means the common electronic data center used to host a single financial and warehouse system for the Territories, which includes three primary components: (a) Oracle financial services systems; (b) the Tango warehouse; and (c) Cerg Finance treasury systems.

“ Targeted Openings ” means, as of any date of determination with respect to the Territories:

(a) if a Restaurant Opening Plan is then in effect, for the period covered by such Plan, the number of Franchised Restaurants (excluding Satellites) required to be opened by Master Franchisee in the Territories in such year pursuant to such Plan; and

(b) if no Restaurant Opening Plan is then in effect, for the three-year period commencing on the expiration of the predecessor Plan, the number of Franchised Restaurants (excluding Satellites) equal to the quotient resulting from (i) the number of Franchised Restaurants (excluding Satellites) to be opened in such Territories for such three-year period pursuant to Section 13.2.4, divided by (ii) three, with any fractional Franchised Restaurant rounded to the nearest whole number.

Exh. 2-22

“ Terms ” has the meaning set forth in Section 4.1.

“ Terms of Reference ” has the meaning set forth in Section 25.2.12.

“ Territory ” means each of Argentina, Aruba, Brazil, Chile, Colombia, Costa Rica, Curaçao, Ecuador, French Guiana, Guadeloupe, Martinique, Mexico, Panama, Peru, Puerto Rico, Uruguay, Venezuela and the U.S. Virgin Islands of St. Thomas and St. Croix. “ Territories ” has a correlative meaning.

“ Terrorist Lists ” means all lists of known or suspected terrorists or terrorist organizations published by any U.S. Government Authority, including OFAC, that administers and enforces economic and trade sanctions, including against targeted non-U.S. countries, terrorism sponsoring organizations and international narcotics traffickers.

“ Trademarks ” means, collectively, those trademarks, service marks, logos, designs, trade dress and domain names set forth in Exhibit 12 , attached hereto and incorporated by reference herein, as such Exhibit may be amended from time to time by agreement of the Parties, and such other trademarks, service marks, logos, designs, trade dress and domain names as may be agreed upon by the Parties from time to time relating to the development, ownership, operation, promotion and management of the Franchised Restaurants.

“ Trade Secrets ” means, collectively, the trade secrets and proprietary know-how owned or acquired by McDonald’s or licensed to McDonald’s by one of its Affiliates relating to the development, ownership, operation, promotion and management of McDonald’s Restaurants (including the Franchised Restaurants), including all processes, systems, marketing calendars, operations manuals and procedures (including the Operations Manual), other manuals containing applicable policies and procedures, supplier lists, data, studies, analyses, technology, inventions, recipes, standards and specifications.

“ Training Program ” has the meaning set forth in Section 12.2.

“ Transfer ” means the voluntary, involuntary, direct or indirect sale, assignment, transfer, issuance, donation or other disposition or Encumbrance (whether in one or more transactions). “ Transferred ” and “ Transferee ” have correlative meanings.

“ Transfer Instruction ” has the meaning set forth in Section 21.2.8.

“ Tribunal ” has the meaning set forth in Section 25.2.1.

“ Trust Agreements ” means each of Mexican Trust Agreement I, Mexican Trust Agreement II and the Costa Rican Trust Agreement.

“ Trustees ” means each of the Mexican Trustee and the Costa Rican Trustee.

“ Unresolved Dispute ” has the meaning set forth in Section 21.6.4.

“ U.S. Dollar ” or “ $ ”means the lawful currency of the United States of America.

Exh. 2-23

“ Voting Interests ” shall mean, with respect to any Person, any Equity Interests of any class then entitled to vote in the election of directors (or similar officials) or any other shareholder’s meeting of such Person.

Exh. 2-24

EXHIBIT 3

OWNER ENTITY INFORMATION


Parent :	Arcos Dorados Ltd., formerly known as RestCo Iberoamericana Ltd., a British Virgin Islands a company organized and existing under the International Business Companies Ordinance, 1984 of the British Virgin Islands with its principal office at c/o Forrestal Capital Limited Company, 1221 Brickell Avenue, 11th Floor, Miami, Florida 33131.

	The shareholders of Parent are as follows:

	Los Laureles, Ltd.	40.0%
	Capital International Private Equity Fund V, L.P.	19.49%
	CGPE V, L.P.	0.93%
	Gávea Investment AD, L.P.	26.12%
	DLJ South American Partners L.P.	8.03%
	DLJSAP Restco Co-Investments LLC	5.11%
	Marlies Capital LLC	0.137%
	AVF LLC	0.137%

Dutch Coop :	Arcos Dorados Cooperatieve V.A., formerly known as RestCo Iberoamericana Cooperatieve V.A., a cooperative organized under the laws of the Netherlands with its principal office at Naritaweg 165, Telestone 8, 1043 BW Amsterdam, The Netherlands.

	The issued and outstanding equity interests of Dutch Coop are owned beneficially and of record 99.9% by Parent and 0.01% by Woods W. Staton.

Owner :	Arcos Dorados B.V., formerly known as RestCo. Iberoamericana B.V., a company organized under the laws of the Netherlands with its principal office at Naritaweg 165, Telestone 8, 1043 BW Amsterdam, The Netherlands.

	All of issued and outstanding equity interests of Owner are owned beneficially and of record by Dutch Coop.

Exh. 3-1

EXHIBIT 4

RENEWAL CRITERIA

Owner, Master Franchisee and the MF Subsidiaries shall be in substantial compliance with all terms and conditions of this Agreement and, as applicable:

•

Shall have substantially complied with the Franchisee Approval Process.

•

Shall have consistently and fairly enforced the terms and conditions of each Franchise Agreement and taken all appropriate action to cause any Franchisee that has consistently failed to comply with its obligations under its Franchise Agreement to cease to be a Franchisee.

•

Shall have paid any Initial Franchise Fee or any Continuing Franchise Fee as and when any such fee is due and payable during the five-year period preceding the date on which McDonald’s determines whether to grant Master Franchisee a Renewal Option.

•

Each Key Employee shall have successfully completed the training required by Section 12.1.

•

Shall have maintained the Letter of Credit in accordance with Section 7.9 of this Agreement and no demands upon such Letters of Credit by McDonald’s shall have been made.

•

Shall have complied with all financial covenants set forth in Section 7.13 of this Agreement.

•

Shall have substantially complied with each Strategic Marketing Plan.

•

Shall have complied with Section 16 of this Agreement.

•

Except in accordance with Section 21.2.2, shall not have Transferred any Restricted MF Interests.

In addition, Master Franchisee shall have met the following criteria:

•

Ninety percent of all Franchised Restaurants in each Territory shall have met or exceeded the then-prevailing global standards of McDonald’s Corporation for evaluating the operational performance of McDonald’s Restaurants as it pertains to QSC Standards during the 18-month period preceding the date on which McDonald’s determines whether to grant Master Franchisee a Renewal Option.

•

Ninety percent of all Franchised Restaurants in each Territory shall have met or exceeded the then-prevailing global standards of McDonald’s Corporation for independently measuring customer satisfaction, as determined by a vendor that has been approved by McDonald’s Corporation.

Exh. 4-1

•

Ninety percent of the Master Franchisee Restaurants in each Territory shall be managed by an employee who has successfully completed the “Restaurant Operations Leadership Program” or any successor training program.

•

Ninety percent of the Master Franchisee Restaurants in each Territory shall have each shift managed by a shift manager that is fully trained and certified in accordance with the Standards.

•

Ninety percent of the Targeted Openings during the three-calendar year term of any Restaurant Opening Plan shall have been achieved.

•

Ninety percent of the targeted reinvestment as set forth in the Reinvestment Plan shall have occurred during the term of each such Reinvestment Plan.

•

The Managing Directors of each of Mexico, Brazil, Puerto Rico, Argentina, Colombia and Venezuela shall have lived in the respective Territories for the five-year period preceding the date on which McDonald’s determines whether to grant Master Franchisee a Renewal Option and each such Managing Director shall have devoted full time and best efforts to the Master Franchisee Business during such period.

•

Master Franchisee shall have maintained positive business relations with its Franchisees in each Territory. Compliance with this provision shall be determined by considering the following:

•

the results of owner/operator surveys;

•

Gross Sales and guest counts at Franchised Restaurants operated by Franchisees compared to Master Franchisee Restaurants; and

•

The absence of organizations of Franchisees that challenge the Master Franchisee in a non-cooperative manner.

Exh. 4-2

EXHIBIT 6

SENIOR MANAGEMENT

Chief Executive Officer = Woods White Staton

Chief Operation Officer = Sergio Alonso

Exh. 6-1

EXHIBIT 7

INSURANCE

1. All obligatory insurance with respect to employees and Employers Liability with the limits of $1,000,000 or the compulsory requirement, whichever amount is greater

2. Commercial general liability insurance coverage written on an occurrence form with a per location policy limit of $5,000,000.

3. Business auto liability with a combined bodily injury and property damage $1,000,000 single limit per accident or compulsory requirement whatever is greater.

4. Umbrella and / or excess liability insurance with minimum coverage limits of $150,000,000. This coverage shall be excess over (a), (b) and (c) above as well as excess of all liability coverage listed in Section 7.10.

5. All risk property insurance written on a replacement cost basis.

6. Twelve-month business interruption minimum coverage limit.

7. Cyber liability coverage $10,000,000 limit.

8. Crime insurance coverage $25,000,000

Exh. 7-1

EXHIBIT 8

SUPPLIER CRITERIA

GLOBAL SUPPLIER EXPECTATIONS:

SUPPLIER OUALITY MANAGEMENT SYSTEM

BY MCDONALD’S WORLDWIDE QUALITY SYSTEMS

MCDONALD’S SUPPLIER QUALITY MANAGEMENT SYSTEM

LOGO

Exh. 8-1

McDonald’s Supplier Quality Management System

Scope

McDonald’s takes great pride in serving its customers around the world every day with safe and quality (see 7.18) products. The ability of McDonald’s suppliers to consistently deliver safe and quality products that meet our requirements, as well as all applicable laws and regulations (see 7.1), is of critical importance to the continued success of the McDonald’s System. This document is intended to identify McDonald’s expectations with respect to our suppliers’ quality (including food safety) management systems (see 7.19). These expectations focus primarily on the results that must be achieved and are not designed to be prescriptive. McDonald’s reserves the right to periodically update these expectations. McDonald’s suppliers shall proactively work with McDonald’s to enhance customer satisfaction through continuous improvement (see 7.3).

This document is not intended to replace or supercede any terms and conditions of the Business Relationship/Confidentiality Agreement (“BRCA”) previously entered into between McDonald’s and its respective suppliers. Accordingly, to the extent any of the expectations identified in this document contradict or conflict with the terms and conditions of the BRCA, the terms and conditions of the BRCA shall supercede and control. Further, McDonald’s suppliers worldwide must comply at all times with McDonald’s Code of Conduct. Suppliers are responsible for all costs and expenses they may incur in complying with these expectations. Compliance with these expectations does not guarantee approved supplier status or any business relationship with McDonald’s.

2.	Quality management system

2.1 General requirements

Suppliers shall establish; implement; document; and maintain a quality management system (including food safety) and continually improve the effectiveness. Suppliers shall:

a)	identify the processes (see 7.16) needed for the quality management system,

b)	determine the flow and interaction of these processes,

c)	establish the proper measurements needed to demonstrate the effectiveness of these processes,

d)	ensure adequate resources are available to support the operation,

e)	take all necessary actions to deliver products that meet McDonald’s requirements (see 7.13) as well as comply with all applicable laws and regulations, and

f)	have processes in place to ensure continuous product quality improvement.

2.2 Documentation requirements

2.2.1 General

The quality management system (including food safety) documentation maintained by the supplier shall include:

a)	written statements of food safety and quality policies (see 7.7) as well as food safety and quality objectives (see 7.6),

Exh. 8-2

b)	a quality manual with written procedures (see 7.15) and methods which include those required by McDonald’s and applicable laws and regulations,

c)	documents needed by the supplier to ensure the effective planning, operation and control of its processes,

d)	a name of the designated person (or a team) who is responsible to approve any changes to the appropriate documents, and

e)	any additional records required by McDonald’s.

2.2.2 Document control

All necessary documents needed to demonstrate the quality management system shall be current. These records shall be available at any time for review at McDonald’s request. Procedures shall be established to define the controls needed:

a)	to review and update as necessary and re-approve documents,

b)	to ensure that relevant versions of applicable documents are available at points of use,

c)	to ensure that documents are current, and remain legible,

d)	to prevent the unintended use of obsolete documents, and

e)	to apply suitable identification to documents if they are retained for any purpose.

2.2.3 Control of records

Records shall be established and maintained to provide evidence of conformity to requirements and of the effective operation of the quality management system. Records shall remain legible, readily identifiable and retrievable. A documented procedure shall be established to define the controls needed for the identification, storage, protection, retrieval, retention time and disposition of records.

2.3 Regulatory considerations

Suppliers shall be in compliance with all applicable laws and regulations relative to food products where they are manufactured and delivered. Suppliers are also required to comply with all applicable religious certification requirements for specific products or regions of the world.

Suppliers shall follow a documented process and procedure to provide accurate product information for nutrition labeling, including food allergens and religious declarations.

2.3.1 Management of the regulatory process

a)	Supplier management shall ensure that employees are trained to manage the regulatory inspection process.

b)	McDonald’s must be notified immediately if the released product is not in regulatory compliance.

c)	At a minimum, companion samples shall be taken when any samples of a product are taken by government officials or other official agencies. Further discussion with McDonald’s must take place prior to any further testing on the companion samples.

d)	A copy of any documents given to government authorities concerning a McDonald’s product shall be promptly communicated to and made available to McDonald’s as appropriate.

Exh. 8-3

3 Management responsibility

3.1 Management commitment

Supplier management shall provide evidence of its commitment to the development and implementation of the quality management system (including food safety) and continually improving its effectiveness by:

a)	communicating to all employees about the importance of meeting their own company’s as well as McDonald’s requirements,

b)	establishing food safety and quality policies,

c)	establishing measurable food safety and quality objectives at relevant functions and levels within the company,

d)	conducting management reviews,

e)	ensuring the availability of resources, and

f)	ensuring compliance with quality and food safety policies and procedures.

3.2 Food safety and quality policies

Both food safety and quality policies shall be documented and communicated to all levels within the company. Supplier management shall ensure that both food safety and quality policies:

a)	are in alignment with the vision of the company,

b)	include a commitment to comply with appropriate requirements and continually improve the effectiveness of the quality management system (including food safety),

c)	provide a framework for establishing and reviewing food safety and quality objectives,

d)	are communicated and understood at all levels of the company, and

e)	are reviewed and updated periodically (at least annually) for continuing suitability.

3.3 Quality management system planning

Supplier management shall ensure that:

a)	the planning of the quality management system (including food safety) is carried out in order to meet the requirements given in 3.1, as well as the food safety and quality objectives, and

b)	the integrity of the quality management systems is maintained when changes occur within the company.

3.4 Responsibility, authority and communication

Supplier management shall ensure that responsibilities and levels of authority are defined and communicated within the company. Supplier management shall also ensure that appropriate communication processes are established within the company and that communication takes place regarding the effectiveness of the quality management system.

3.5 Provision of resources

Supplier management shall provide adequate resources to:

a)	implement and maintain the quality management system and continually improve its effectiveness,

Exh. 8-4

b)	identify the necessary skills and competencies for all of its employees with functions having an impact on delivering quality products to McDonald’s restaurants,

c)	provide resources needed for employee training, and

d)	meet all of McDonald’s relevant requirements.

3.6 Management review

Supplier management shall review the company’s quality management system at planned intervals (at least annually) to ensure its continuing suitability, adequacy and effectiveness. This review shall include an assessment of opportunities for improvement and the need for changes to the quality management system.

3.6.1 Review input

The input to the management review shall include information on:

a)	audit results,

b)	McDonald’s feedback (includes complaint or comments from the restaurants and customers),

c)	process performance and product conformity,

d)	status of preventive and corrective actions,

e)	follow-up actions from previous management reviews,

f)	changes that could affect the quality management system, and

g)	recommendations for improvement.

3.6.2 Review output

The output from the management review shall include the meeting notes and any decisions and actions related to:

a)	improvement of the effectiveness of the quality management system and its processes,

b)	improvement of product quality related to McDonald’s requirements, and

c)	resource needs.

4. Crisis management

4.1 General

Suppliers must have a documented crisis (see 7.4) management plan. The plan must reflect the current state of policies and procedures. All contact information must be current and a process shall be in place to test the effectiveness of the plan. McDonald’s shall be contacted in the event any crises impact McDonald’s or any of its restaurants directly or indirectly. Prior to any public communication, McDonald’s must be involved in the preparation and approval of any messages that are communicated to the public, media or regulators relating to any crises that potentially impact the McDonald’s System.

4.2 Key elements of a crisis management plan

The following elements must be included in the crisis management plan:

Exh. 8-5

a)	current and documented contingency plans, including alternative product sourcing,

b)	current emergency contact lists,

c)	implementation requirements for individuals/departments involved in crisis management,

d)	checklist of required activities,

e)	appointed spokesperson,

f)	a designated person to lead the effort,

g)	root cause analysis after the crisis with corrective actions, and

h)	mock exercises to assess the adequacy and efficiency of the plan.

5. Quality product realization

5.1 General

Suppliers shall plan and develop the processes needed for delivering safe and quality products to McDonald’s restaurants. Suppliers shall be able to demonstrate the following:

a)	meeting the requirements on fundamentals (see 5.2),

b)	establishing, implementing and maintaining an adequate quality management system (including food safety), and

c)	meeting McDonald’s Food Product Specifications (see 7.12),

5.2 Fundamentals

All plant employees, visitors, and contractors shall comply with Good Manufacturing Practice (GMP, see 7.9) requirements as set forth by all applicable laws and regulations, the supplier and McDonald’s. Buildings, grounds, equipment and processes shall also meet GMP requirements.

5.2.1 Employee training

Documented procedures shall be established to identify training needs for all employees at the facility, including appropriate training materials and methods for new and existing employees. Training records must be maintained for review at any time by McDonald’s.

5.2.2 Facility and grounds

Facilities shall be of adequate design and construction to assure production of safe and quality products. Facilities must be maintained, clean and in good repair. Building exteriors must be protected from pest entry. Grounds shall be maintained in a condition that protects against the contamination of food or facility. Grounds shall be adequately pitched to avoid standing water.

5.2.3 Facility security

Suppliers shall establish facility security measures to prevent harm to products and processes. These measures shall be based on an appropriate risk assessment. Key elements of the facility security shall include:

a)	procedures to ensure controls are in place for all entrances to the facility,

Exh. 8-6

b)	procedures for employee background reviews,

c)	procedures to prevent unauthorized access to sensitive process control areas such as air flow, water systems, gas, electric, chemical storage, etc.,

d)	procedures to verify the credentials and identification of visitors, contractors and regulators,

e)	procedures for shipping and receiving,

f)	procedures for mail handling,

g)	security of external vessels (flour silos, water tanks, oil tanks, etc.), and

h)	action plans to initiate if security is compromised.

5.2.4 Work environment

Suppliers shall determine and manage the work environment needed to produce safe and quality products while keeping employees safe. Processes and procedures must be established to provide safe and healthy working conditions for all employees.

5.2.5 Equipment and utensils

Equipment used in the manufacturing of food must be of good sanitary design and shall permit adequate maintenance and cleaning to protect the food product from contamination. Equipment must be in good repair to assure that production of product meets food safety and quality requirements. A preventive maintenance (PM) program (7.17) must be in place to prevent personnel injuries, to guard against equipment failures, to maintain production efficiencies, to prevent potential foreign material contamination and to produce quality product. The PM program must be documented and audited internally on a predetermined regular basis for compliance.

Procedures shall be in place to ensure that equipment (such as thermometers, meters, scales, etc.) used to monitor, measure or weigh is in agreement with specifications and records are maintained for performance and calibration.

All utensils and containers (totes, tubs, barrels, etc.) must be of adequate sanitary design and in good repair at all times.

5.2.6 Pest management

Each food manufacturing facility shall implement an integrated pest management program to prevent and eliminate pests (including rodents, insects, birds, etc.). Such program shall include procedures for detecting the presence of pests and corrective action steps such as fogging, product isolation, cleaning, etc. to eliminate the presence of pests.

5.2.7 Contractors

Suppliers shall ensure that all contractors are given proper GMP and facility training as applicable to ensure compliance with all regulatory and company requirements. Such training shall occur prior to entry into the facility as appropriate. Contractors must be monitored for compliance to all plant rules, including, but not limited to, hygiene practices. A contract describing the specific services must be available and kept on file.

5.2.8 Water, air and gas quality

Exh. 8-7

The quality of water, ice, steam and gases that come in contact with food product must be suitable for intended use at the facility. All food contact water is determined to be from a potable source. Air filtration shall be considered based on the nature of process and product.

5.2.9 Good hygiene practices

Suppliers must have processes and procedures in place to ensure the implementation of employee hygiene practices. Such practices shall result in the sanitary handling and delivery of safe and quality products to McDonald’s restaurants. The Codex Alimentarius Commission’s recommendation on food hygiene shall be followed.

Health screening procedures shall be in place for new and existing employees where permitted. Processes and procedures for managing employee illnesses and communicable diseases shall be established, documented, and communicated within the company appropriately.

All persons, including, but not limited to, employees, visitors, contractors and delivery persons entering the manufacturing areas must comply with the requirements of Good Hygiene Practice.

5.2.10 Cleaning and sanitation

A documented cleaning and sanitation program must be in place. The program must meet the applicable laws and regulations. Such program shall be implemented effectively to ensure the cleanliness of the food handling equipment, utensils and the facility. Food Hygiene Principles recommended by the Codex Alimentarius Commission shall be followed.

Each facility shall establish written Sanitation Standard Operating Procedures (SSOPs) for dismantling, cleaning, sanitizing, sequencing, and re-assembling equipment, including C.O.P. (Clean-Out-of-Place) and C.I.P. (Clean-In-Place). A sampling program shall be established to monitor the effectiveness of the cleaning and sanitation processes, particularly on product contact surfaces. The program must be designed to aggressively search for areas needing improvement.

Each facility shall establish an environmental monitoring program designed to reduce or eliminate food safety hazards (see 7.8).

Each facility shall perform pre-operation inspections and establish corrective actions to address any deficiencies.

Each facility shall implement and maintain a documented master cleaning schedule to ensure that the facility (including equipment, walls, ceilings, overhead piping, air ducts, storage racks, containers, light fixtures, flour bins, etc.) is cleaned on a regular basis. The detailed schedule shall be internally audited periodically for its maintenance and effectiveness.

5.2.11 Foreign material control

Exh. 8-8

All necessary steps shall be taken to prohibit the introduction of foreign material into the product. Procedures for the prevention of any potential contamination must be established. Appropriate control system must be in place to remove product if it is identified as defective.

5.2.12 Chemical control

All chemicals used at the facility must be in compliance with all applicable laws and regulations. Each facility shall establish a written chemical approval program, inclusive of chemicals for pest control, cleaning, and maintenance. Such program must be periodically audited for effectiveness. Information about the chemicals (for example, Material Safety Data Sheet) must be available at all times.

5.2.13 Good laboratory practices

Supplier laboratories shall use approved official test methods or established methods that have been validated. Necessary control measures must be in place to ensure accurate and precise test results. All test methods must be documented and followed. Laboratory equipment and instruments shall receive scheduled maintenance and calibration.

Controls must be in place to prevent any potential contamination of product by laboratory personnel and chemicals.

As appropriate, laboratories shall participate in an external proficiency sample program.

5.2.14 Material handling, storage and transport

Suppliers shall establish processes and procedures for the protection of food and food ingredients from contamination by pests, food safety hazards or other objectionable substances during the handling, storage, and transport (including receiving and shipping). Reasonable care shall be taken to prevent deterioration and spoilage through appropriate measures that may include maintaining required temperatures, humidity, and/or other controls.

Suppliers shall adhere to “First-Manufactured/First-to-Expire, First-Out” inventory management rules and be able to demonstrate compliance to this requirement.

5.2.15 Traceability

Processes and procedures must be in place to ensure that all ingredients and the finished product can be traced throughout their entire history. All coding information must be legible. All McDonald’s requirements on coding, labeling, and graphics must be met.

Procedures for product recovery must be established. It shall identify the steps, personnel, and necessary communication plans for rapid and effective product recovery execution. Product recovery must account for the following:

• Rework

• Work-in-process materials

• Shared systems

• Samples

• Material returned to the supplier

Exh. 8-9


• Batch systems • Continuous processes • Product on hold • Product destroyed • Product in transit		• Product sold through alternate channels • Donated product • Materials that are topped off • Partially used materials

Traced product/materials shall be accounted for by:


• Lot number • Amount produced • Amount shipped • Amount of waste		• Location of material • Date produced • Date shipped to restaurants or distribution centers / warehouses

Supplier must be able to locate 100% of any given finished product within three hours. Facilities shall conduct mock recovery exercises at least twice a year, which shall include raw material and packaging (packaging that is in direct contact with the product) tracking.

5.2.16 Holding product for non-conformance

Suppliers shall have documented procedures and controls to prevent the shipment of nonconforming products. Written procedures must be established to ensure that any non-conforming product is segregated from the acceptable product and not shipped. Hold events shall be properly documented and effectively communicated to ensure that the unacceptable product(s) does not enter the McDonald’s distribution network. Procedures shall be in place to monitor, track, and dispose of such product(s). Suppliers must implement corrective actions to eliminate the cause of non-conformities in order to prevent recurrence.

Supplier’s personnel shall be designated with the appropriate authority to manage non-conforming products for hold, release, retest, rework or disposition. Disposal of finished packaged products must conform to McDonald’s disposal procedures.

McDonald’s shall be immediately notified of any product shipped to the McDonald’s System that was inadvertently released from the hold.

5.3 Food safety system

A food safety system shall be in place for protecting the food supply from biological, chemical and physical hazards to prevent contamination that may occur during all stages of food production to the point of consumption. Suppliers shall be able to demonstrate the effectiveness of the food safety system.

5.3.1 HACCP system

Prior to the application of HACCP (see 7.10), suppliers shall implement the fundamental food hygiene requirements (see 5.2.9). A written HACCP plan must be established for each product according to the seven principles under the Codex Alimentarius Commission’s recommendation. The HACCP plan shall be validated and implemented at

Exh. 8-10

all facilities. The HACCP plan shall also be verified at least annually and proper revisions must be made and documented as product or processes change.

5.3.2 Testing

5.3.2.1 General

Suppliers shall ensure that food and food ingredients comply with the microbiological, chemical, and physical criteria set by McDonald’s and meet applicable laws and regulations. Suppliers shall have a full understanding of the microbiological, chemical, and physical characteristics of the product throughout shelf life.

Microbiological profiling (see 7.14) of the processing plant shall be conducted where appropriate. An environmental sampling program shall be in place for the appropriate indicator organisms and/or pathogens, where appropriate.

The results of microbiological profiling and an environmental sampling program shall be used to further improve the safety and quality of the product.

5.3.2.2 Product testing and sampling

Suppliers shall perform microbiological, chemical, and physical testing as appropriate to meet McDonald’s requirements and applicable laws and regulations. Specific sampling plans shall be established. All methods and laboratories used shall meet McDonald’s requirements (see 5.2.13).

5.3.3 Food allergens and sensitivities

All ingredients known for causing food allergies and/or sensitivities in a product must be clearly identified and communicated to McDonald’s.

An allergen assessment shall be conducted as part of the HACCP plan development. Sources of allergens (raw materials/ingredients, processing steps, processing aids, rework, manufacturing carryover) shall be identified. Suppliers must be aware of the potential for allergen cross-contamination from manufacturing and handling activities at the raw material supplier’s sites.

Procedures must be in place to prevent any potential cross-contamination at the manufacturing facilities (see 5.2). The following are some key considerations for managing food allergens:

•

Staff shall be appropriately trained

•

Equipment shall be suitable

•

Cleaning procedures shall be adequate

•

Potential allergen cross-contamination situations shall be managed

•

Segregation of food ingredients that contain allergens during storage and processing

•

Hand washing procedures shall be implemented

•

Clothing requirements shall be appropriate

•

Re-work shall be managed appropriately

•

Waste shall be appropriately controlled

Exh. 8-11

•

Tools used for maintenance shall be properly managed or cleaned

Allergen control programs shall be monitored and reviewed to ensure their effectiveness. Customer complaints shall be investigated and changes made where necessary.

5.4 McDonald’s product requirements

5.4.1 Vendor requirements

Suppliers are responsible for ensuring that all of their vendors (who supply raw materials and primary packaging) comply with the suppliers’ requirements and all applicable laws and regulations. Suppliers shall have a process in place to periodically review and assess quality management systems implemented by their vendors.

5.4.1.1 Verification of conformity to raw material specification

All raw materials shall have written specifications. Appropriate processes and procedures shall be established and implemented to verify the consistency of the raw materials according to the specifications.

5.4.2 McDonald’s product specification

McDonald’s product specifications shall be agreed upon and signed by supplier and McDonald’s in a separate Food Product Specification document. Appropriate processes and procedures shall be established and implemented to demonstrate that product specifications are met.

5.4.3 Sensory attributes and evaluations

Suppliers shall understand the “critical to product quality attributes” for each product they produce and how it contributes to the McDonald’s Gold Sensory Standard. Process shall be in place to understand the product performance at McDonald’s restaurant. Suppliers shall follow McDonald’s guides on sensory evaluation and establish product evaluation schedules. Processes and procedures shall be established and implemented to demonstrate that McDonald’s requirements on product sensory attributes are met.

5.4.4 Process validation and capability

Each facility shall establish the parameters within which the production line is expected to operate. Process control and monitoring activities shall be established to document the plant’s ability to produce products within the established parameters.

Processing parameters or in-process measurements shall be established, validated, and verified at a determined frequency to meet all appropriate requirements. Adequate statistical process control shall be implemented where applicable to improve product consistency, reduce process variation and improve overall capability of the process.

6. Verification and continuous improvement

6.1 Customer satisfaction

Exh. 8-12

Suppliers shall have processes and procedures for measuring customer (including McDonald’s staff, distribution centers, and restaurants, etc.) satisfaction. Results shall be used to improve product quality and service.

6.1.1 Management of restaurant customer complaints

Suppliers shall have processes and procedures in place to manage customer complaints by working with McDonald’s. Processes shall be established to analyze customer complaints and to identify improvement opportunities.

6.2 Verification of the quality system

Suppliers shall establish and implement a process for the verification (see 7.21) of the quality management system periodically (at least annually) and ensure continuous improvement.

6.2.1 Verification planning

A planning process shall be established to define the purpose, methods, frequencies, and responsibilities for the verification activities.

6.2.2 Types of verification

6.2.2.1 Routine inspection

Suppliers shall conduct routine inspection by the appropriate personnel to ensure standard operation procedures and processes are followed. Records shall be maintained of non-conformance, corrective actions, and process improvement steps.

6.2.2.2 Internal audit

Suppliers shall conduct internal audits (see 7.11) at planned intervals (at least once a year) to determine whether the quality management system is in compliance with:

a)	the requirements established by the company, and

b)	the requirements stated in this document.

6.2.2.3 External audit

Suppliers shall have external audit (see 7.5) conducted periodically. The external audit shall be in alignment with McDonald’s expectations.

6.2.3 Evaluation of verification results

A process shall be established to objectively evaluate the results of planned verifications. The verification results shall be documented and communicated to the personnel having the appropriate responsibility to take actions. Records on corrective actions taken must be maintained for future reference (see 2.2.3).

6.2.4 Continuous improvement

Exh. 8-13

Supplier shall establish processes to continually improve the effectiveness of its quality management system. Proper measurements shall be established to demonstrate the results.

Glossary

7.1 Applicable laws and regulations

All laws and regulations, which may be amended from time to time, in which supplier’s products are produced, delivered and/or consumed.

7.2 Audit

Systematic, independent and documented process for obtaining audit evidence and evaluating such evidence objectively to determine the extent to which audit criteria are fulfilled.

7.3 Continuous improvement

Recurring activity to increase the ability to fulfill requirements. The process of establishing objectives and finding opportunities for improvement is a continual process through the use of audit findings and audit conclusions, analysis of data, management reviews, or other means and generally leads to corrective action or preventative action.

7.4 Crisis

Incident or event that may have negative impact on McDonald’s business.

7.5 External audits

Audits include second- or third party audits. Second-party audits are conducted by parties having an interest in the organization, such as customers and corporate personnel, or by other persons on their behalf. Third party audits are conducted by external, independent auditing organizations.

7.6 Food safety and quality objectives

Objectives that are food safety and quality related. The objectives are based on the organization’s food safety and quality policies. They are specified for relevant functions and levels in the organization, and their achievement needs to be measurable.

7.7 Food safety and quality policies

Overall intentions and direction of an organization related to food safety and quality as formally expressed by top management. Food safety and quality policies provide a framework for the setting of food safety and quality objectives. The quality policy shall include an updated organizational chart.

7.8 Food safety hazards

Biological, chemical or physical agents in food, or condition of food, with the potential to cause an adverse health effect. Food safety hazards include allergens.

Exh. 8-14

7.9 Good manufacturing practices (GMP)

Related to the manufacturing, processing, and storing of food materials that assure the food materials are safe for human consumption and have been prepared, packed and stored under sanitary conditions.

7.10 HACCP

Hazard Analysis Critical Control Point, a broadly recognized preventive and systematic approach for the identification, evaluation and control of food safety hazards.

7.11 Internal audits

Audits conducted by or on behalf of, the organization itself for management review and other internal purposes.

7.12 McDonald’s Food Product Specification

Document that states the McDonald’s requirements with prescribed limits or characteristics to which a product or service must conform.

7.13 McDonald’s requirements

Documents or procedures generated by McDonald’s. McDonald’s Food Product Specification is an example, it has the details for a given product.

7.14 Microbiological profiling

Use an appropriate microbiological sampling and testing plan to understand the presence of interested microorganisms at the manufacture facility.

7.15 Procedure

Specified way to carry out an activity or process. Procedures can be documented or not. When a procedure is documented, the term “written procedure” is frequently used. The document that contains a procedure can be called a “procedure document”.

7.16 Process

Set of interrelated or interacting activities that transform inputs into outputs. Processes in an organization are generally planned and carried out under controlled conditions to add value.

7.17 Program

A locally designed set of procedures or processes which meet specific requirements.

7.18 Quality

Exh. 8-15

Quality consists of those product features that meet the needs of customers. It is a degree to which a set of inherent characteristics fulfils requirements. Food safety is an integral part of the quality.

7.19 Quality management system

A management system that directs and controls an organization with regard to quality and food safety, including the establishment of quality and food safety policies and objectives, planning, control, and continuous improvement. A management system approach encourages an organization to analyze customer requirements, define the processes that contribute to the achievement of a product that is acceptable to the customer, and keep these processes under control.

7.20 Standard

Something established for use as a rule or basis of comparison in measuring or judging quality, content, extent, and value.

7.21 Verification

Confirmation, through the provision of objective evidence, that specified requirements have been fulfilled.

Exh. 8-16

EXHIBIT 9

FRANCHISEE APPROVAL PROCESS

Master Franchisee must have the following infrastructure in place and shall incorporate the following elements in the Franchisee Approval Process with respect to the approval of New Franchisees and determinations about growth with a Franchisee (“growth”) or to extend the term of a Franchise Agreement (“rewrite”). McDonald’s reserves the right to amend this list on reasonable notice to Master Franchisee if, in McDonald’s reasonable judgment, other elements must be addressed in the Franchisee Approval Process.

Master Franchisee must communicate with Franchisees on a periodic basis about their performance. A Franchisee should be notified by Master Franchisee as soon as it becomes apparent that such Franchisee is not meeting any of the Standards.

McDonald’s encourages Master Franchisee to have an “open door” policy and to discuss any concerns the Franchisees may have. The Franchisee would have the ability to talk to / address concerns with the highest levels of Master Franchisee’s management.

New Franchisee Requirements

•

Up Front Investment – Candidate must have the ability to invest 50% of the cost to open or purchase the Franchised Restaurant.

•

Integrity and Character – Candidate must demonstrate basic honesty and Master Franchisee must undertake appropriate procedures to evidence Candidate’s good character ( e.g. , background check, inquiries within local business community), subject to Applicable Law.

•

Entrepreneurial Spirit – Candidate must demonstrate, by experience and background, that he is innovative and has a strong desire to succeed.

•

Prior Business Experience – Candidate must have (i) owned his own business; or (ii) led multiple departments in a business located within the applicable local market and, if he was employed by any entity, he must have a record of promotion through successive ranks of the hierarchy of that firm or organization.

•

Prior Success – Candidate must demonstrate successful ownership or management of a multi-unit business.

•

Commitment – Candidate must be willing to devote his full time and best efforts to the Franchised Restaurant as an “on-premises” franchisee.

•

Good Financial Statement Comprehension – Candidate must demonstrate, by experience, education or background, an understanding of financial concepts (including financial controls) and his ability to apply those concepts to maximize business performance.

•

Good Financials – Candidate must have earned his capital and have managed its growth.

Exh. 9-1

Franchisees Eligible For Growth / Rewrite

•

Compliance – Franchisee must be in compliance with each of his Franchise Agreements.

•

Operations – Franchisee must be operating each Franchised Restaurant in a manner that consistently meets or exceeds the Standards as demonstrated by results of a grading system, the Customer Service Program and inspections and audits by Master Franchisee, as required by the System. Franchisee is operating each Franchised Restaurant in accordance with the Standards and the Franchise Agreement.

•

Financial – Franchisee must be (i) operating a financially viable Franchised Restaurant business and meeting all financial obligations; (ii) building that business by maximizing the sales potential of the Franchised Restaurant; and (iii) investing on a timely basis and in accordance with the Franchise Agreement to improve the Franchised Restaurant’s competitive position in the marketplace. Among the elements that must be considered in this respect are:

•

Is Franchisee’s Franchised Restaurant business financially viable ( e.g. , it generates adequate cash flow and positive working capital and incorporates a reasonable debt level).

•

Franchisee pays Master Franchisee and other creditors of the business on time.

•

Franchisee regularly submits financial statements and other reports to the Master Franchisee when due.

•

Franchisee reinvests in each of his Franchised Restaurants so that they are competitive in the marketplace and he is in compliance with applicable requirements under the Franchise Agreement.

•

People – Franchisee must demonstrate that he is recruiting, developing, training and retaining qualified personnel to operate and build his Franchised Restaurant business, including by having at least one Hamburger University graduate employed in each Franchised Restaurant. Measurement tools and guidelines for these purposes include:

•

Franchisee must have an adequate number of certified shift managers for each Franchised Restaurant.

•

Franchisee must have an effective crew training program.

•

Franchisee must have an effective Customer Service Program.

•

Customer Satisfaction – Franchisee must have demonstrated his ability to consistently improve customer satisfaction in each restaurant. Measurement tools and guidelines for these purposes include:

Exh. 9-2

•

Comparable sales and guest counts as compared to the market and competitors index.

•

Staffing sufficient across all shifts to maximize sales.

•

Number and nature of customer complaints, including feedback received through the Customer Service Program, which shall be compared to other Franchised Restaurants in the Territory where such Franchised Restaurant is located.

•

Franchisee’s initiation and maintenance of a customer recovery program and the success of the program.

•

Passing scores on the compliance system.

•

Operator Involvement – Franchisee must be operating great restaurants through his personal ongoing and constructive involvement. Franchisee must have positive involvement with fellow Franchisees and otherwise interacts with other Franchisees. Measurement tools and guidelines include:

•

Franchisee devotes full time and best efforts to his Franchised Restaurant business, including exhibiting personal management and leadership in the restaurant business generally.

•

The degree to which Franchisee participates in advertising co-ops, if those opportunities exist.

•

Franchisee actively participates in and supports social responsibility efforts such as the local Ronald McDonald House Charities organization or other institutions that support the disadvantaged and organizations devoted to the care and development of children and the care of the elderly.

•

In order for a Franchisee to be eligible for Growth and Rewrite, they should, at a minimum, meet all of the Standards set forth above. The Master Franchisee must communicate with the Franchisees on a periodic basis so that the Franchisee knows whether he is eligible for Growth and Rewrite. A Franchisee should be notified as soon as it becomes apparent that the organization is not meeting any of the Standards.

Disputes with Franchisees

McDonald’s encourages the Master Franchisee to have an “open door” policy and to discuss any concerns the Franchisees may have. The Franchisee must have the ability to talk to/address concerns with the highest levels of Master Franchisee’s management.

Infrastructure to Support the Franchising Function

Master Franchisee must establish the infrastructure to support a franchising system. This must include at a minimum:

Exh. 9-3

•

Home Office Franchising Department – Master Franchisee must have experienced staff to support its franchising obligations. This department is responsible for the following areas:

•

Strategy – Policies and Procedures – Master Franchisee shall develop Master Franchisee’s Franchising Principles, Policies and Guidelines and ensure that they are consistently applied; modify the Franchising Principles, Policies and Guidelines as trends may change; and work with the Franchisees (or representatives thereof) to address strategic franchising issues and share best practices.

•

Advice and Counsel – Master Franchisee shall provide advice, counsel and education of appropriate personnel of Master Franchisee and Franchisees about Franchising Principles, Policies and Guidelines and other procedures and franchising issues.

•

Transaction Advice – Master Franchisee shall provide advice and counsel on specific ownership change transactions to the appropriate personnel of Master Franchisee, as well as to Franchisees.

•

Processing – Master Franchisee shall coordinate with all appropriate personnel on all ownership change transactions and prepare related documents; prepare and register any offering circulars or other disclosure documents required by Applicable Law; educate the market franchising personnel on franchising procedures (both internal and those required by Applicable Law); enforce franchising procedures to ensure compliance with Applicable Law; maintain records of restaurant ownership and franchise terms and report and analyze franchising activity.

•

Field Franchising – Master Franchisee shall drive the franchising function in the market and assist and advise field personnel in all aspects of franchising, including the formulation and accomplishment of Master Franchisee’s long-term franchising plan.

•

Franchising Council – Maintaining a good working relationship between Master Franchisee and Franchisees is of paramount importance. In order to foster this relationship, a Franchising Council should be formed. The mission of the Council is to address strategic, systemic franchising issues and to provide a vehicle for interaction between and among field and home office franchising personnel. The Council should conduct business at regularly scheduled meetings. This provides a forum to exchange best bets; review and update Franchising Principles, Policies and Guidelines; and to discuss current trends.

Franchising Framework and Foundation

Master Franchisee must establish a franchising framework to support its franchising function. This must include, at a minimum:

Exh. 9-4

•

Franchising Standards – Franchising Standards define the key elements that are the basis for consistency in the operation of the business and for continuous improvement. Franchising Standards cover:

•

The minimum frequency for conducting business reviews at which eligibility for growth and rewrite will be communicated.

•

The minimum frequency for grading restaurants.

•

The minimum standards of eligibility for growth and rewrite.

•

Franchising Principles, Policies and Guidelines – This is the foundation on which Master Franchisee’s relationship with Franchisees will be built. It establishes Master Franchisee’s expectations of Franchisees and is the basis for making franchising decisions. Adherence to the Principles, Policies and Guidelines ensure that Master Franchisee operates as one franchising company. Consistent application of the Principles, Polices and Guidelines, with thoughtful exceptions, will help Master Franchisee deal fairly with Franchisees. The Franchising Principles, Policies and Guidelines should cover:

•

The Franchise Agreement

•

Ownership by Franchisees

•

Rewrite

•

Rents and Fees

•

Franchisee candidates

•

Training Program – All new Franchisees must complete the Training Program. At a minimum, the Training Program must cover materials set forth in the “Restaurant Management Curriculum” (as defined by McDonald’s from time to time) and hands-on training and self-directed learning which takes place at a McDonald’s Restaurant and is monitored by an employee of Master Franchisee.

Exh. 9-5

EXHIBIT 10

FORM OF SUBFRANCHISE AGREEMENT

Exh. 10-1

EXHIBIT 11

BUSINESS PLANS

A. Reinvestment Plan by Territory

Reinvestment Plan


	Full Yr 1		Full Yr 2		Full Yr 3
Brazil	$	17,622,000	$	17,889,000	$	18,245,000
Mexico	$	5,562,500	$	6,230,000	$	7,031,000
Argentina	$	7,342,500	$	7,387,000	$	7,476,000
Venezuela	$	3,871,500	$	4,005,000	$	4,183,000
Puerto Rico	$	2,981,500	$	3,026,000	$	3,115,000
Colombia	$	1,112,500	$	1,246,000	$	1,424,000
*Main Territories*	$	38,492,500	$	39,783,000	$	41,474,000

Chile	$	1,869,000	$	1,958,000	$	2,091,500
Uruguay	$	979,000	$	979,000	$	979,000
Peru	$	801,000	$	845,500	$	890,000
Ecuador	$	534,000	$	578,500	$	623,000
*Rest of Slad*	$	4,183,000	$	4,361,000	$	4,583,500

Martinique	$	311,500	$	356,000	$	356,000
Virgin Islands	$	133,500	$	133,500	$	133,500
Guadeloupe	$	311,500	$	356,000	$	356,000
Costa Rica	$	1,201,500	$	1,290,500	$	1,424,500
Panama	$	1,023,500	$	1,112,500	$	1,246,000
French Guinea	$	0	$	0	$	0
Curacao	$	0	$	0	$	0
Aruba / St Thomas	$	0	$	0	$	0
*Caribbean / Central America*	$	2,981,500	$	3,248,500	$	3,516,000

Total Reinvestment Amount	$	45,657,000	$	47,392,500	$	49,573,500

Exh. 11-1

B. Restaurant Opening Plan

Restaurant Opening Plan


	18 Month half 07-full 08		2009		2010

Total Openings		43		54		63

Exh. 11-2

EXHIBIT 12

INTELLECTUAL PROPERTY

Exh. 12-1

EXHIBIT 13

STANDARD REPORTING PACKAGE


Item	Contents	Level to Provide	How to Send	Due Date
Daily Gross Sales and Guest Counts	Daily Gross Sales and guest counts.	Territory	Provide weekly. E-mail to Latin America financial group at McDonald’s Corporation.	2 ^nd day following end of week

Monthly Store Form	Information on previous month new Franchised Restaurant openings, closings and ownership changes.	Franchised Restaurant	Standard form. Attached to Corp Controller Group Webpage.	The 2 ^nd Business Day prior to the end of each month.

Monthly Gross Sales and Guest Count File	Total Gross Sales (in local currency) and guest counts for the previous month.	Franchised Restaurant	Load standard format CSV file to Corp Controller Group Webpage.	2 ^nd Business Day

Monthly Trial Balance	Detailed line item amounts for balance sheet, income statement, general & administrative expenses and profit and loss statements along with standard statistical information as requested.	Territory	Standard format and form of transmission (either e-mail or other electronic transmission).	10 ^th Business Day of each month for the income statement and 15 ^th Business Day of each month for the balance sheet.

Cash Flow	Cash flow statement.	Territory	Standard format and form of transmission (either e-mail or other electronic transmission).	10 ^th Business Day of each month.

Monthly Product Mix	Product mix report including units sold and sales by menu item.	Territory	E-mail to Latin America financial group at McDonald’s	10 ^th Business Day

Exh. 13-1


			Corporation.

Monthly Continuing Franchisee Fee Payment Pre-advice Form	Gross Sales (in local currency), Continuing Franchise Fee rate, withholding tax, and the spot exchange rate.	Territory	Standard form. E-mailed to Treasury Department and Latin America financial group at McDonald’s Corporation.	10 ^th Business Day

Monthly DL projection File	Current year projections by month for total Gross Sales, Continuing Franchise Fees, Initial Franchisee Fee income, comparable sales, comparable guest counts and restaurant openings and closings.	Territory	Load standard format CSV file to Corp Controller Group Webpage	Date varies each month approx. 12 ^th or 13 ^th Business Day

Standard Annual Plan	Plan information by month including, but not limited to, total Gross Sales, Continuing Franchise Fees, Initial Franchise Fee income, comparable Gross Sales, comparable guest counts and Franchised Restaurant openings and closings.	Territory	File created in CSV format and loaded successfully through Corp Controller Group Webpage along with any presentation materials to Latin America financial group at McDonald’s Corporation.	Date varies each year approx. “October 16 ^th ”

Year end Package #1	Details on the number of Franchised Restaurants by restaurant type, ownership type and real estate interest.	Territory	Standard package will be provided by Corp Controller Group. Attach completed package to Corp Controller Group Webpage	Date varies each year approx. “January 16 ^th ”

Franchised Restaurant Results	Income Statement detail for each Franchised Restaurant and Balance Sheet	Franchised Restaurant	Standard format will be provided. E-mailed to Latin America financial group at	Following end of each quarter on the 60 ^th day

Exh. 13-2


	detail for all Franchised Restaurants		McDonald’s Corporation.

Store Results	Previous month year-to-date Profit and Loss, Balance Sheet and Income Statement detail for all Franchised Restaurants	Franchised Restaurant	Standard format will be provided. E-mailed to Latin America financial group at McDonald’s Corporation.	10 ^th Business Day

Exh. 13-3

EXHIBIT 14

RESTRICTED REAL ESTATE

Country
Code

Property
Number

Name

City

Province

Address

Parcel Size
(sq. mn.)

Building
Size (sq.
m.)

Property

Type

MEX

Insurgentes Parque

México D.F.

Insurgentes Sur No.1122 Col. Del Valle CP 03100 México D.F

6,122

542

Free

Standing

MEX

Polanco

México D.F.

Blvd. Manuel Ávila Camacho No. 137 Col. Los Morales Polanco 11510 México, D.F.

5,944

1,331

Free Standing

ARG

Nuñez

Buenos Aires

Capital

Libertador 7112

2,955

676

Stand alone

MEX

Insurgentes Tlalpan

México D.F.

Av. Insurgentes Sur No. 4222.Col. La Joya C.P 14000 México D. F.

4,377

889

Free Standing

CHILE

KENNEDY

Santiago

Kennedy 5055

5,002

862

Stand alone

La Castellana

Caracas

Av Eugenio Mendoza con 2da Transversal, frente a la Plaza La Castellana.

2,449

1,096

Stand alone

MEX

Municipio Libre

México D,F.

Municipio Libre No. 320 Col.Sta. Cruz Atoyac C.P 03310 Méx. D.F

5,016

750

Free Standing

ARG

Florida

Buenos Aires

Capital

Florida 568

886

2,207

Street retail

MEX

Pedregal

México D.F.

Periférico Sur No. 4090 Col. Jardines del Pedregal Del. Álvaro Obregón CP 01900 México, D.F.

4,250

870

Free Standing

BRZ

ASA NORTE EIXINHO

–

SHC/N ENTREQUADRA,

6,800

242

Stand Alone

Exh. 14-1

208/209

MEX

Aeropuerto

México D.F.

Nte. 25 No 302 Esq. Blvd. Puerto Aéreo Col. Moctezuma la. Sección CP 15500 Méx. D.F

5,015

750

Free Standing

COL

CIUDAD SALITRE

BOGOTA

Carrera 68B No. 40A-30

4,127

551

Stand alone

MEX

Garza Sada (Mty)

Monterrey

Av. Eugenia Garza Sada No. 3276 Sur Col. Altavista 64840 Monterrey, N.L

5,225

624

Free Standing

BRZ

HENRIQUE SCHAUMANN

Cerqueira Cesar

AV. HENRIQUE SCHAUMANN, 80/124

1,500

700

Stand Alone

BRZ

Rio Branco 4

Centro

AV. RIO BRANCO, 4

1,970

358

Street Retail

COL

ANDINO

BOGOTA

Carrera. 11 No. 82-02 L 355

N/a

424

Shopping mall

MEX

Arboledas

México D.F.

Autopista México -Qtro. No. 3150 Col. Fracc. Ind. Tlaxcoapan Valle Dorado CP 54030 Tlalnepantla, Edo. De Méx.

5,395

720

Free Standing

ARG

Cabildo y F. Lacroze

Buenos Aires

Capital

Av. Cabildo 756

1,546

447

Stand alone

ARG

Florida

Buenos Aires

Capital

Florida 281

445

1,107

Street retail

MEX

Periferico Iman

México D.F.

Anillo Periférico Sur No. 5120 Col. Unidad Habitacional Villa Panamericana Del. Coyoacán CP 04719 México D.F.

3,264

460

Free Standing

MEX

Mariana Otero

Guadalajara

Av, Mariano Otero No. 269l Col. Residential, Victoria C.P 45050 Zapopan, Jal.

4,353

1,241

Free Standing

MEX

Cancún Nichupte

Cancun

Av. Nichupte lote 5 Mza 3 SM 17 Col. Las Luciérnagas Zona Centro C.P 775000 Cancun, Q.

3,511

510

Free Standing

Exh. 14-2

Roo

MEX

140

Cancún Nichupte +

Cancún Nichupte

Av. Nichupte lote 5 Mza 3 SM 17 Col. Las Luciérnagas Zona Centro C.P 775000 Cancun, Q. Roo

7,329

Vacant Land

BRZ

111

SHOPPING CENTER MORUMBI

Vila Gertrudes

AV. ROQUE PETRONI JR., 1089

1,217

594

Shopping Center

BRZ

GUARULHOS

Macedo

AV. PAULO FACCINI, 1070

6,840

657

Street Retail

Exh. 14-3

EXHIBIT 15

TRANSFER CRITERIA

No Transfer may be made to any Person as to which there has occurred (i) the entry of charges, a plea of guilty or nolo contendere , indictment or a judgment of conviction of such Person by any U.S. domestic, foreign or military court of competent jurisdiction with respect to the commission or alleged commission by such Person or by any Affiliate thereof of any felony (or comparable degree of criminal culpability) or with respect to any other crime, regardless of status or denomination, involving investments or an investment-related business, or any fraud, false statements or omissions, wrongful taking of property, bribery, perjury, forgery, counterfeiting, extortion or moral turpitude, or any conspiracy to commit any of the foregoing; (ii) the institution of any proceedings or the entry of any order or injunction by any regulatory authority having jurisdiction over such Person or its property, whether U.S. or non-U.S., asserting the violation of any law, rule or regulation or the making of any false or misleading statement or omission; or (iii) the denial, suspension or revocation by any regulatory authority, whether U.S. or non-U.S., of such Person’s license to conduct any business requiring such license by such Person.

Exh. 15-1

EXHIBIT 16

FORM OF TRANSFER INSTRUCTION

[Date]

Citibank Agency & Trust

Citibank, N.A.

388 Greenwich Street, 14th Floor

New York, New York 10013

Attention: Fernando Moreyra

Telephone: (212) 816-5740

Fax: (212) 657-2762

Re: Transfer Instruction

Ladies and Gentlemen:

Reference is made to (i) the Amended and Restated Master Franchise Agreement, dated as of [ ],2008 (the “ MFA ”), among McDonald’s, Master Franchisee and the other parties named therein; and (ii) the Escrow Agreement, dated as of August 3, 2007, as amended (the “ Escrow Agreement ”), among McDonald’s, Master Franchisee, Escrow Agent and the other parties named therein. Terms used and not otherwise defined herein shall have the meaning given to them in the MFA or the Escrow Agreement, as the case may be.

Master Franchisee hereby certifies that it has executed and delivered to McDonald’s and Escrow Agent an instrument of accession, in form and scope satisfactory to McDonald’s, in which [Transferee] has agreed [ if a Subsidiary of Master Franchisee : to be deemed an MF Subsidiary for all purposes of the MFA and] to observe and be bound by all provisions of the MFA and each other applicable Related Agreement.

Master Franchisee hereby certifies that McDonald’s has consented to the transfer or such consent is not required pursuant to Section [specify] of the MFA.

Escrow Agent is hereby instructed to deliver Equity Interests of [specify Person] to [Transferee].


LATAM, LLC

By
		Name:
		Title:

Exh. 16-1


Acknowledged and Agreed by: McDONALD’S LATIN AMERICA, LLC

By:
		Name:
		Title:

Exh. 16-2

EXHIBIT 17

FORM OF NEGATIVE EQUITY ELECTION

[Date]

McDonald’s Latin America, LLC

One McDonald’s Plaza

Oak Brook, Illinois 60523 U.S.A.

Attention: General Counsel of the Americas

Deutsche Bank Trust Company Americas

60 Wall Street

New York, NY 10005

Attention: Trust & Securities Services

Re:

Negative Equity Election

Ladies and Gentlemen:

Reference is made to the Amended and Restated Master Franchise Agreement, dated as of [ ], 2008 (the “ MFA ”), among McDonald’s, Master Franchisee and the other Parties named therein. Terms used and not otherwise defined herein shall have the meaning given to them in the MFA

We have been informed that the Call Option Price in respect to [Subject Business] is U.S.$ [ ]. As this is a negative number, pursuant to Section 21.6.2 of the MFA we hereby inform you that we shall make the following election:

¨ a Debt Assumption Election; or

¨ a Payment Election.


LATAM, LLC

By
		Name:
		Title:

Exh. 17-1

EXHIBIT 18

FORM OF DEFAULT EXERCISE NOTICE

[Date]

LatAm, LLC

Arcos Dorados B.V.

c/o Forrestal Capital Limited Company

1221 Brickell Avenue #1170

Miami, Florida 33131

Attention: Carlos Hernandez

Telephone: (305) 961-2840

Fax: (305) 961-2844

cc:

Citibank Agency & Trust

Citibank, N.A.

388 Greenwich Street, 14th Floor

New York, New York 10013

Attention: Fernando Moreyra

Telephone: (212) 816-5740

Fax: (212) 657-2762

Re:

Default Exercise Notice

Ladies and Gentlemen:

Reference is made to the Amended and Restated Master Franchise Agreement, dated as of [ ], 2008 (the “ MFA ”) among McDonald’s, Master Franchisee and the other parties named therein. Terms used and not otherwise defined herein shall have the meaning given to them in the MFA.

McDonald’s hereby exercises the Call Option in accordance with Section 21.6.1(b) of the MFA to purchase from [Shareholders] all of the Equity Interests of [names of relevant Persons].


McDONALD’S LATIN AMERICA, LLC

By
		Name:
		Title:

Exh. 18-1

EXHIBIT 19

FORM OF NON-DEFAULT EXERCISE NOTICE

[Date]

LatAm, LLC

Arcos Dorados B.V.

c/o Forrestal Capital Limited Company

1221 Brickell Avenue #1170

Miami, Florida 33131

Attention: Carlos Hernandez

cc:

[Citibank Agency & Trust

Citibank, N.A.

388 Greenwich Street, 14th Floor

New York, New York 10013]

Attention: Fernando Moreyra]

[Banco Nacional de México, S.A.

integrante del Grupo Financiero Banamex

División Fiduciaria

Bosque de Duraznos 75 P.H.

Bosques de las Lomas

C.P. 05500, México, D.F.

Attention: Omar González Peñaloza and/or Emilio Fragoso García]

Re:

Non-Default Exercise Notice

Ladies and Gentlemen:

McDonald’s hereby exercises a Call Option in accordance with Section 21.6.1 [(a)][(c)] of the MFA to purchase from [Shareholder] all of the Equity Interests of [names of relevant Persons].


McDONALD’S LATIN AMERICA, LLC

By
		Name:
		Title:

Exh. 19-1

EXHIBIT 20

FORM OF SETTLEMENT NOTICE

[Date]

Citibank, N.A.

388 Greenwich Street

14 ^th Floor

New York, New York 10013

Attention: Fernando Moreyra

Telephone: (212) 816-5740

Fax: (212) 657-2762

cc:

LatAm, LLC

Arcos Dorados B.V.

c/o Forrestal Capital Limited Company

1221 Brickell Avenue #1170

Miami, Florida 33131

Attention: Carlos Hernandez

Telephone: (305) 961-2840

Fax: (305) 961-2844

Re:	Settlement Notice

Ladies and Gentlemen:

Reference is made to (i) the Amended and Restated Master Franchise Agreement, dated as of [ ], 2008 (the “ MFA ”), among McDonald’s, Master Franchisee and the other parties named therein; and (ii) the Escrow Agreement, dated as of August 3, 2007, as amended (the “ Escrow Agreement ”), among McDonald’s, Master Franchisee, Escrow Agent and the other parties named therein. Terms used and not otherwise defined herein shall have the meaning given to them in the MFA or the Escrow Agreement, as the case may be.

McDonald’s hereby certifies that as of the date hereof there is no Unresolved Dispute and it has received any approval from, or made any filing with, any applicable Governmental Authority in connection with the Transfer of the Subject Business, which, in each case, is necessary for the Closing, or has waived the condition for such approval or filing.

You are hereby instructed as follows:

The Option Closing Date shall be [date].

The Call Option Price (without giving effect to any reduction thereto due to the Lender Payable set forth below) to be delivered by McDonald’s is $[amount]. [There is a good faith dispute relating to Disputed Amounts in the amount of $[amount]].

Exh. 20-1

On the Option Closing Date, against payment of the Call Option Price set forth in paragraph 1 above by McDonald’s, Escrow Agent shall take the following actions:

[ if LatAm, LLC or MCDC ] (i) Register or cause its agent to register McDonald’s as the owner of the Equity Interests of each Person referred to in paragraph 3(b) below in the share registry of the applicable Person; (ii) issue, to the extent permitted by Applicable Law, certificates evidencing such Equity Interests in the name of McDonald’s; and (iii) against McDonald’s receipt therefor, deliver to McDonald’s such share registry.

[ If any Person other than LatAm, LLC or MCDC ] Direct each Person referred to in paragraph 3(b) below in writing, with a copy to McDonald’s, to register McDonald’s as the owner of the relevant Equity Interests of such Persons in the books and records of the applicable Person and issue, to the extent permitted by Applicable Law, certificates evidencing such Equity Interests in the name of McDonald’s.

Deliver to McDonald’s all Escrowed Equity Interests held by Escrow Agent subject to the Escrow Agreement with respect to each of the following Persons:

[list relevant Escrowed MF Subsidiaries]

Segregate any Disputed Amounts referred to in paragraph 2 above and deposit them into the applicable Escrow Account as required by the Escrow Agreement.

Deliver to Collateral Agent the Call Option Price set forth in numbered paragraph 2 above by wire transfer to Collateral Agent’s account specified in the Escrow Agreement.


McDONALD’S LATIN AMERICA, LLC

By
		Name:
		Title:

Exh. 20-2

EXHIBIT 21

FORM OF DISPUTED AMOUNTS SETTLEMENT NOTICE

[Date]

Citibank, N.A.

388 Greenwich Street

14 ^t ^h Floor

New York, New York 10013

Attention: Fernando Moreyra

Telephone: (212) 816-5740

Fax: (212) 657-2762

Re:	Disputed Amounts Settlement Notice

Ladies and Gentlemen:

Reference is made to (i) the Amended and Restated Master Franchise Agreement, dated as of [ ], 2008 (the “ MFA ”), among McDonald’s, Master Franchisee and the other parties named therein; and (ii) the Escrow Agreement, dated as of August 3, 2007, as amended (the “ Escrow Agreement ”), among McDonald’s, Master Franchisee, the Escrow Agent and the other parties named therein. Terms used and not otherwise defmed herein shall have the meaning given to them in the MFA or the Escrow Agreement, as the case may be.

Reference is made to the Settlement Notice, dated [date], in which McDonald’s certified to you that there was a good faith dispute relating to Disputed Amounts and notified you of the amount of such Disputed Amounts. You are hereby notified that the dispute has been resolved, and you are instructed to release out of the applicable Escrow Account and pay $[amount] to [name] and $[amount] to [name] by wire transfer of immediately available funds to their respective accounts specified in the Escrow Agreement.


McDONALD’S LATIN AMERICA, LLC		LATAM, LLC

By		By
	Name:		Name:
	Title:		Title:

Exh. 21-1

EXHIBIT 22

FORM OF FMV REVIEW NOTICE

[Date]

LatAm, LLC

Arcos Dorados B.V.

c/o Forrestal Capital Limited Company

1221 Brickell Avenue #1170

Miami, Florida 33131

Attention: Carlos Hernandez

Re:

FMV Review Notice

Ladies and Gentlemen:

Reference is made to the Amended and Restated Master Franchise Agreement dated as of [date], 2008, (the “ MFA ”), among McDonald’s, Master Franchisee and the other Parties named therein. Terms used and not otherwise defined herein shall have the meaning given to them in the MFA.

You are hereby notified that, pursuant to Section 21.7.1(d) of the MFA, we are exercising our right to require the FMV of the Subject Business identified in the Settlement Notice dated [date] to be reviewed as provided in the MFA.


McDONALD’S LATIN AMERICA, LLC

By:
		Name:
		Title:

Exh. 22-1

EXHIBIT 23

FORM OF DISPUTED AMOUNTS NOTICE

[Date]

Citibank Agency & Trust

Citibank, N.A.

388 Greenwich Street, 14th Floor

New York, New York 10013

Attention: Fernando Moreyra

[Banco Nacional de México, S.A.

integrante del Grupo Financiero Banamex

División Fiduciaria

Bosque de Duraznos 75 P.H.

Bosques de las Lomas

C.P. 05500, México, D.F.

Attention: Omar Gonzalez Peñaloza and/or Emilio Fragoso García]

Re:

Disputed Amounts Notice

Ladies and Gentlemen:

Reference is made to the Subject Business Balance Sheet Date dated [date]. You are hereby notified that McDonald’s in good faith:

¨ disagrees with the determinations of Funded Debt, Cash and Contingencies; or

¨ reasonably believes that the amount of Funded Debt, Cash or Contingencies has materially changed or will materially change between the Subject Business Balance Sheet Date and the Option Closing Date.

As a result thereof, McDonald’s hereby notifies you that $[amount] are Disputed Amounts.


McDONALD’S LATIN AMERICA, LLC

By:
		Name:
		Title:

Exh. 23-1

EXHIBIT 24

IPO CRITERIA

Master Franchisee shall:

•

Not be in Material Breach of the Agreement at any time in the last twenty-four months;

•

Have achieved at least 95% of the Targeted Openings during the prior two calendar years of each Restaurant Opening Plan; and

•

Have entered into employment agreements with each of the CEO, CFO and COO on customary terms and conditions and with a minimum term of two years.

Exh. 24-1

EXHIBIT 25

SELECTED COMPETITIVE BUSINESSES

Without limitation, Competitive Businesses include the following restaurants chains and any direct or indirect holding company relating to any of them. McDonald’s reserves the right to amend this list on reasonable notice to Master Franchisee if, in McDonald’s reasonable judgment, other companies qualify as operating a “QSR Business.”

7-Eleven

Arby’s

Baskin Robbins

Bob’s

Burger King

Carl’s Jr.

Chick-fil-A

Church’s

Domino’s

Dunkin’ Donuts

El Pollo Loco

Häagen-Dazs

Habib’s

Hardee’s

In-N-Out Burger

Jack-in-the-Box

KFC

Little Caesars

Papa John’s

Pollo Tropical

Pollo Campero

Pizza Hut

Popeye’s Chicken

Starbucks

Subway Sandwiches

Taco Bell

TCBY Yogurt

Wendy’s

Exh. 25-1

EXHIBIT 26

SUMMARY OF FEES PAYABLE

A. Initial Franchise Fees


	Transaction	Amount of Fee Payable to McDonald’s	Timing of Payment of Fee

A.	Master Franchisee or any of its Subsidiaries opens a new Master Franchisee Restaurant that is not a Satellite.	$2,250 multiplied by the lesser of (a) 20; or (b) the number of years remaining in the Term applicable in such Territory (with any partial remaining year rounded up to one full year)	Payable on or prior to the date of the opening of the new Master Franchisee Restaurant.

B.	Master Franchisee or any of its Subsidiaries opens a new Master Franchisee Restaurant that is a Satellite.	$1,125 multiplied by the lesser of (a) 20; or (b) the number of years remaining in the Term applicable in such Territory (with any partial remaining year rounded up to one full year)	See A above.

Exh. 26-1


C.	Master Franchisee or any of its Subsidiaries enters into a Franchise Agreement with a Franchisee in respect of a new Franchised Restaurant that is not a Satellite.	50% of the product of $2,250 multiplied by the greater of (a) the number of years remaining in the Term applicable in the Territory in which the Franchise Agreement has been executed; or (b) the number of years included in the term of such Franchise Agreement, in each case, with any partial remaining year rounded up to one full year	With respect to any new Master Franchisee Restaurant, each Initial Franchise Fee shall be payable on or prior to the date of the opening of such new Master Franchisee Restaurant. With respect to Franchised Restaurant that is not a Master Franchisee Restaurant, the Initial Franchise Fee shall be payable upon the earlier of (a) the execution of the applicable Franchise Agreement (or agreement to extend such Franchise Agreement); or (b) the opening of such Franchised Restaurant.

D.	Master Franchisee or any of its Subsidiaries enters into a Franchise Agreement with a Franchisee in respect of a new Franchised Restaurant that is a Satellite.	50% of the product of $1,125 multiplied by the greater of (a) the number of years remaining in the Term applicable in the Territory in which the Franchise Agreement has been executed; or (b) the number of years included in the term of such Franchise Agreement, in each case, with any partial remaining year rounded up to one full year	See C above.

Exh. 26-2


E.	Any Franchised Restaurant Relocates and the term of the applicable Franchise Agreement is not extended in connection with such Relocation.	No fee is payable.	N/A

F.	Any agreement to extend the term of any Franchise Agreement set forth in C and D above.	Initial Franchisee Fees shall be calculated over the term of the extension in the same manner as the Initial Franchisee Fee calculated for the original term in C and D, respectively.	Payable on or prior to the date of execution of the agreement to extend the applicable Franchise Agreement.

Exh. 26-3

B. Continuing Franchise Fees


	Transaction	Royalty Rate	Timing of Payment of Fee

A.	Master Franchisee or any of its Subsidiaries opens a new Master Franchisee Restaurant.	Regular Royalty, which is equal to 7% minus any applicable Brand Building Adjustment.	Continuing Franchise Fees with respect to any calendar month are payable by Master Franchisee to McDonald’s no later than the seventh Business Day of the next succeeding calendar month.

B.	A Franchisee continues to operate a Franchised Restaurant pursuant to an Existing Franchise Agreement that provides for a Royalty at a rate less than the Regular Royalty.	Existing Royalty	See A above.

C.	Master Franchisee or any of its Subsidiaries enters into a Franchise Agreement with a Franchisee in respect of a new Franchised Restaurant in a Territory other than Puerto Rico.	New Franchisee Royalty, which is equal to 5%, as adjusted by the International Franchisee Royalty.	See A above.

D.	Master Franchisee or any of its Subsidiaries enters into a Franchise Agreement with a Franchisee in respect of a new Franchised Restaurant in Puerto Rico.	Puerto Rican Royalty, which is equal to 4.5%, as adjusted by the International Franchisee Royalty.	See A above.

Exh. 26-4

C. Transfer Fees


A.	Any voluntary, involuntary, direct or indirect sale, assignment, transfer or other disposition of a Franchised Restaurant by Master Franchisee, any of its Subsidiaries or any Franchisee.	50% of any transfer fee charged, which shall in no event be less than $10,000 per Franchised Restaurant.	On or prior to the effective date of such transfer.

B.	Any voluntary, involuntary, direct or indirect sale, assignment, transfer or other disposition of a Franchised Restaurant by Master Franchisee or any of its Subsidiaries to any other Subsidiary of Master Franchisee.	No fee is payable.	N/A

C.	Any voluntary, involuntary, direct or indirect sale, assignment, transfer or other disposition of a Franchised Restaurant by a Franchisee to any its Affiliates.	No fee is payable.	N/A

Exh. 26-5

Exhibit 10.2

Execution Copy

AMENDMENT NO. 1 TO THE

AMENDED AND RESTATED

MASTER FRANCHISE AGREEMENT

FOR

McDONALD’S RESTAURANTS

THIS AMENDMENT NO. 1 TO THE AMENDED AND RESTATED MASTER FRANCHISE AGREEMENT FOR McDONALD’S RESTAURANTS, dated as of August 31, 2010 among McDonald’s Latin America, LLC, a limited liability company organized under the laws of the State of Delaware with its principal office at Oak Brook, Illinois (“ McDonald’s ”), LatAm, LLC a limited liability company organized under the laws of the State of Delaware with its principal office at Miami, Florida (“ Master Franchisee ”), each of the MF Subsidiaries (as defined in the MFA (as defined below)), Arcos Dorados B.V., a company organized under the laws of the Netherlands with its principal office at Amsterdam, The Netherlands (“ Owner ”), Arcos Dorados Cooperatieve U.A., a cooperative organized under the laws of the Netherlands with its principal office at Amsterdam, The Netherlands (“ Dutch Coop ”), Arcos Dorados Limited, a company organized and existing under the International Business Companies Ordinance, 1984 of the British Virgin Islands with its principal office at Tortola, British Virgin Islands (“ Parent ” and, together with Owner and Dutch Coop, the “ Owner Entities ”), and Los Laureles, Ltd., a company organized and existing under the International Business Companies Ordinance, 1984 of the British Virgin Islands with its principal office at Tortola, British Virgin Islands (“ Beneficial Owner ” and, together with each Owner Entity, McDonald’s Master Franchisee and the MF Subsidiaries, the “ Parties ”). Capitalized terms used but not otherwise defined herein have the meanings ascribed to such terms in the MFA (defined below).

WHEREAS, the Parties are party to an Amended and Restated Master Franchise Agreement for McDonald’s Restaurants, dated as of November 10, 2008 (the “ MFA ”); and

WHEREAS, the Parties have determined that certain amendments to the MFA are necessary.

NOW, THEREFORE, in consideration of the mutual covenants and undertakings contained herein, and subject to and on the terms and conditions herein set forth, the Parties hereto agree as follows:

1.	Amendments .

A. Financial Covenants . Section 7.13 of the MFA shall be amended and restated in its entirety to read as follows:

“Section 7.13 Financial Covenants . Master Franchisee shall comply with the following financial covenants at all times during the Regular Term.

7.13.1 Master Franchisee shall maintain a Fixed Charge Coverage Ratio at least equal to (a) 1.25, from August 31, 2010 through the fiscal quarter ended September 30, 2011; and (b) 1.50, commencing with the fiscal quarter ended December 31, 2011 and thereafter.

7.13.2 Master Franchisee shall maintain a Leverage Ratio not in excess of (a) 5.0, from August 31, 2010 through the fiscal quarter ended June 30, 2011; (c) 4.75, for the fiscal quarter ended September 30, 2011; and (c) 4.25, commencing with the fiscal quarter ended December 31, 2011 and thereafter.”

B. Reinvestment . Section 13.2.5 of the MFA shall be amended and restated in its entirety to read as follows:

“13.2.5. As part of the Reinvestment Plan with respect o the three-year period commencing on January 1, 2011, Master Franchisee shall reinvest an aggregate of at least U.S.$60,000,000 per year in the applicable Territories. For the avoidance of doubt, no reinvestment made pursuant to the reinvestment plan described in Section 21.8.1 shall be credited towards or reduce the reinvestments required by Master Franchisee under any Reinvestment Plan. If McDonald’s and Master Franchisee fail to reach agreement with respect to the terms of any subsequent Reinvestment Plan prior to the expiration of the then-applicable Reinvestment Plan, then Master Franchisee shall, in each year after the expiration of such Reinvestment Plan pending effectiveness of the subsequent Reinvestment Plan, reinvest in the applicable Territory reinvestment amounts that are, in the aggregate and in U.S. Dollar terms, at least 20% greater than the targeted reinvestment amounts included in the preceding Reinvestment Plan.”

C. Securities Offerings : Section 21.8 of the MFS shall be amended and restated in its entirety to read as follows:

“21.8 Securities Offerings .

21.8.1 IPO . At any time after July 1, 2010, if Master Franchisee shall have satisfied each of the criteria specified in Exhibit 24 , after consulting with an internationally recognized investment banking firm acceptable to McDonald’s, Beneficial Owner and the Financial Investors may effect an IPO with respect to no more than 60% of the Economic Interests of Parent; provided , however , that (a) at least $150,000,000 or all proceeds received in respect of Equity Interests sold in such IP shall be received, directly or indirectly, by Parent and reinvested in the Master Franchise Business in accordance with a reinvestment plan that McDonald’s and Master Franchisee shall mutually agree upon in writing in advance of the 30 ^th day prior to the consummation of such IPO, which reinvestment shall be incremental to reinvestment required pursuant to Sections 13.2.1, 13.2.4 and 13.2.5 and shall not be credited towards or reduce Master Franchisee’s obligations under those provisions; (b) either (i) Beneficial Owner or (ii) if McDonald’s owns any Equity Interests, the group comprised of Beneficial Owner and McDonald’s shall, after giving effect to the IPO, retain at least 51% of the Voting Interests of Parent; and (c) such IPO does not result in the imposition of obligations on McDonald’s or its Affiliates in addition to those contemplated by this Agreement or additional obligations upon the exercise of McDonald’s rights hereunder, including obligations imposed in connection with the listing on a national securities exchange or registration with any Governmental Authority. In connection with the IPO, Parent shall grant

or cause to be granted, registration rights to McDonald’s with respect to any Equity Interests of a class offered in the IPO owned by McDonald’s, which shall be customary in form and scope, to registration rights granted in similar transactions. In no event shall Beneficial Owner, any Financial Investor or Parent effect an IPO or other distribution of Equity Interests of any of Parent’s direct or indirect Subsidiaries; provided , however , that Beneficial Owner and Financial Investors may, with the written consent of McDonald’s, such consent not to be unreasonably withheld, effect an IPO of their indirect Economic Interests in a Subsidiary other than Parent, Master Franchisee or a Subsidiary of Master Franchisee, subject to mutually satisfactory agreements with respect to the amendment of this Agreement and any relevant Related Agreements.”

21.8.2 In connection with any IPO or other public or private offering of Securities by Parent or any of its Subsidiaries or any Master Franchisee Party (a “ Securities Offering ”):

(a) McDonald’s shall have the right to review all documentation (including any Offering Document) relating to such Securities Offering reasonably in advance of such Securities Offering, at Parent’s sole expense, and Parent shall use its best efforts to incorporate any comments McDonald’s may have with respect to any of such documentation.

(b) Master Franchisee shall cause the issue of such Securities Offering to include a disclaimer substantially similar to the following in any Offering Document relating to such Securities Offering:

“This is an offering by [ insert name of issuer ] and not by McDonald’s Corporation or any of its affiliates. McDonald’s Corporation and its affiliates make no representation or warranty, express or implied, for or in respect of the information contained herein.”

(c) None of Parent or any of its Subsidiaries or any Master Franchisee Party shall use (i) the McDonald’s “golden arches” design or any design incorporating the McDonald’s “golden arches” design; (ii) the phrase “I’m lovin’ it”: or (iii) the McDonald’s name on any Securities issued in any Securities Offering or any Offering Document other than any use of the McDonald’s name in connection with a description of the rights obtained under this Agreement.”

D. Indemnification . A new Section 20.1.8 to the MFA shall be inserted and shall read as follows:

“20.1.8 Any and all Losses and Expenses arising out of or based upon (i) any untrue or alleged untrue statement of a material fact contained in any Offering Document; (ii) any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading; or (iii) any actions or proceedings in respect of the foregoing that is pending or threatened against a McDonald’s Indemnified Party or in which a McDonald’s Indemnified Party participates, whether or not such McDonald’s Indemnified Party’s participation in such action or proceeding is as a party to such action or proceeding (it being understood that any indemnification pursuant to this Section 20.1.8 shall be jointly and severally provided by each issuing entity or guarantor).”

E. Definitions .

1. Exhibit 2 of the MFA shall be amended to include the following definitions:

“ Offering Document ” means a preliminary prospectus or prospectus (including any supplement), any offering circular or comparable document or any other document used in connection with a Securities Offering in any jurisdiction or produced by or on behalf of the Parent or any of its Subsidiaries including, without limitation, any road show or similar presentation and any reports or other documents.

“ Securities ” means any stock, shares, partnership interests, voting trust certificates, certificates of interest or participation in any profit sharing agreement or arrangement, bonds, debentures, options, warrants, notes, or other evidences of indebtedness, secured or unsecured, convertible, subordinated or otherwise or in general any instruments commonly known as “securities” or any certificates of interest, shares or participations in temporary or interim certificates for the purchase or acquisition of, or any right to subscribe to, purchase or acquire, any of the foregoing.

“ Securities Offering ” has the meaning set forth in Section 21.8.2.

F. Exhibit 24 . Exhibit 24 of the MFA shall be amended and restated in its entirety in the form attached as Annex A hereto.

II.	Miscellaneous

A. Ratification and Confirmation of the MFA; No Other Changes . Except as modified by this Amendment, the MFA is hereby ratified and confirmed in all respects. Nothing herein shall be deemed to alter, vary or otherwise affect the terms, conditions and provisions of the Purchase Agreement, other than as contemplated herein.

B. Miscellaneous . Section 25 of the MFA shall be incorporated by reference herein as set forth in its entirety in this Amendment.

C. Governing Law . This Amendment shall be governed by the laws of the State of Illinois, United States of America.

* *

IN WITNESS WHEREOF , the Parties hereto have duly executed and delivered this Amendment on the day and year first above written.


McDonald’s: M C D ONALD ’ S L ATIN A MERICA , LLC		Master Franchisee: L AT A M , LLC

By:	/s/ JC Gonzalez-Mendez	By:	/s/ Woods Staton
	Name: JC Gonzalez-Mendez		Name:
	Title: Presidente		Title:


Owner: A RCOS D ORADOS B.V.		Dutch Coop: A RCOS D ORADOS COOPERATIEVE U.A.

By:	/s/ Woods Staton	By:	/s/ Woods Staton
	Name:		Name:
	Title:		Title:


Parent: A RCOS D ORADOS L IMITED		Beneficial Owner: L OS L AURELES , L TD .

By:	/s/ Woods Staton	By:	/s/ Woods Staton
	Name:		Name:
	Title:		Title:


A RCOS D ORADOS A RGENTINA S.A.		C OMPAŃIA DE I NVERSIONES I NMOBILIARIAS (C.I.I.) S.A.

By:	/s/ Woods Staton	By:	/s/ Woods Staton
	Name:		Name:
	Title:		Title:


A RCOS D OURADOS C OMERCIO DE A LIMENTOS L TDA .		A RRAS C OMERCIO DE A LIMENTOS L TDA .

By:	/s/ Woods Staton	By:	/s/ Woods Staton
	Name:		Name:
	Title:		Title:


A RCOS D OURADOS P ARTCIPAÇÕES L TDA .		A RCOS D ORADOS USVI, I NC .

By:	/s/ Woods Staton	By:	/s/ Woods Staton
	Name:		Name:
	Title:		Title:


A RCOS D E V IÑA S.A.		A RCOS DORADOS C ARIBBEAN D EVELOPMENT C ORP .

By:	/s/ Woods Staton	By:	/s/ Woods Staton
	Name:		Name:
	Title:		Title:


A RCOS D OURADOS R ESTAURANTES DE C HILE , L TDA .		A RCOS D ORADOS P AISAS , L TDA . & C IA . S.C.A.

By:	/s/ Woods Staton	By:	/s/ Woods Staton
	Name:		Name:
	Title:		Title:


H AMBURGUE S.A.S.		A RCOS D ORADOS DE C OLOMBIA S.A.

By:	/s/ Woods Staton	By:	/s/ Woods Staton
	Name:		Name:
	Title:		Title:


A RCOS D ORADOS DE C OSTA R ICA (ADCR), S.A.		A RCGOLD DEL E CUADOR S.A.

By:	/s/ Woods Staton	By:	/s/ Woods Staton
	Name:		Name:
	Title:		Title:


A RCOS S ERCAL S ERVICIOS , S.A. DE C.V.		[R EMAINDER OF P AGE I NTENTIONALLY L EFT B LANK ]

By:	/s/ Woods Staton
	Name:
	Title:


A RCOS D ORADOS G UADELOUPE		A RCOS D ORADOS M ARTINIQUE

By:	/s/ Woods Staton	By:	/s/ Woods Staton
	Name:		Name:
	Title:		Title:


A RCOS S ER C AL I NMOBILIARIA , S. DE R.L. DE C.V.		R ESTAURANT R EALTY OF M EXICO , I NC .

By:	/s/ Woods Staton	By:	/s/ Woods Staton
	Name:		Name:
	Title:		Title:


A LIMENTOS C ENTRALIZADOS DE M EXICO S. DE R.L. DE C.V.		S ERVICIOS A LIMENTOS C ENTRALIZADOS DE M EXICO , S. DE R.L. DE C.V.

By:	/s/ Woods Staton	By:	/s/ Woods Staton
	Name:		Name:
	Title:		Title:


A RCOS D ORADOS P ANAMA , S.A.		S ISTEMAS M C O P C O P ANAMA , S.A.

By:	/s/ Woods Staton	By:	/s/ Woods Staton
	Name:		Name:
	Title:		Title:


E L D ORADO -M AC , S.A.		O PERACIONES A RCOS D ORADOS DE P ERU S.A.

By:	/s/ Woods Staton	By:	/s/ Woods Staton
	Name:		Name:
	Title:		Title:


A RCOS D ORADOS P UERTO R ICO , I NC .		G OLDEN A RCH D EVELOPMENT C ORPORATION

By:	/s/ Woods Staton	By:	/s/ Woods Staton
	Name:		Name:
	Title:		Title:


G ALCHELO DE O RO S.A.		A RCOS DEL S UR S.R.L.

By:	/s/ Woods Staton	By:	/s/ Woods Staton
	Name:		Name:
	Title:		Title:


A DMINISTRATIVE D EVELOPMENT C OMPANY		A LIMENTOS A RCOS D ORADOS DE V ENEZUELA , C.A.

By:	/s/ Woods Staton	By:	/s/ Woods Staton
	Name:		Name:
	Title:		Title:


C OMPANIA O PERATIVA DE A LIMENTOS COR, C.A.		G ERENCIA O PERATIVA ARC, C.A.

By:	/s/ Woods Staton	By:	/s/ Woods Staton
	Name:		Name:
	Title:		Title:


L OGISTICS AND M ANUFACTURING LOMA C O .		M ANAGEMENT O PERATION C OMPANY

By:	/s/ Woods Staton	By:	/s/ Woods Staton
	Name:		Name:
	Title:		Title:


A RCOS D ORADOS C URACAO N.V.		A RCOS D ORADOS F RENCH G UIANA

By:	/s/ Woods Staton	By:	/s/ Woods Staton
	Name:		Name:
	Title:		Title:

A RCOS D ORADOS A RUBA N.V.

By:	/s/ Woods Staton
	Name:
	Title:

Annex A

EXHIBIT 24

IPO CRITERIA

Master Franchisee shall:

•

Not be in Material Breach of the Agreement at any time in the last twenty-four months.

•

Have achieved at least 95% of the Targeted Openings during the prior two calendar years of each Restaurant Opening Plan; and

•

Have entered into employment agreements with each of the CEO, CFO and COO on customary terms and conditions and with a minimum term of two years.

•

Have entered into a voting trust agreement relating to the 51% of the aggregate Voting Interests of Parent owned by Beneficial Owner in a form acceptable to McDonald’s.

•

Have demonstrated to the reasonable satisfaction of McDonald’s that (a) Parent and its Subsidiaries have and will continuously maintain controls and other procedures (including internal control over financial reporting) designed to ensure that information required to be disclosed by Parent as a public company is recorded, processed, summarized and reported within the time period required by applicable Law; and (b) the legal, finance and investor relations functions of Parent are staffed appropriately to meet its disclosure and other corporate governance obligations as a public company.

Master Franchisee shall in advance of the 30 ^th day prior to the date on which the first public filing with respect to such IPO is made with any Governmental Authority:

•

Have provided MeDonald’s with final drafts of the proposed employment agreements with each of the CEO, CFO and COO.

•

Have provided McDonald’s with a draft of the voting trust agreement relating to the 51% of the aggregate Voting Interests of Parent owned by Beneficial Owner.

•

Have provided McDonald’s with written description of Parent’s proposed plan for maintaining controls and other procedures (including internal control over financial reporting) designed to ensure that information required to be disclosed by Parent as a public company is recorded, processed, summarized and reported within the time period required by applicable Law.

Exhibit 10.3

Execution Copy

SECOND AMENDED AND RESTATED

MASTER FRANCHISE AGREEMENT

THIS SECOND AMENDED AND RESTATED MASTER FRANCHISE AGREEMENT (together with all Exhibits hereto, the “ Agreement ”), dated as of November 10, 2008, among McDONALD’S LATIN AMERICA, LLC, a limited liability company organized under the laws of the State of Delaware with its principal office at Oak Brook, Illinois (“ Franchisor ” or “ McDonald’s ”), and ARCOS DOURADOS COMERCIO DE ALIMENTOS LTDA., a company formed pursuant to the laws of Brazil with its principal office at São Paulo, Brazil (“ Brazilian Master Franchisee ” and, together with the Franchisor, the “ Parties ”).

WHEREAS, the Parties hereto entered into the Amended and Restated Master Franchise Agreement on August 3, 2007 (the “ A&R MFA ”);

WHEREAS, the Parties have determined that certain amendments to the A&R MFA are necessary to clarify the Parties’ obligations thereunder;

NOW, THEREFORE, in consideration of the promises and mutual covenants and agreements set forth herein, the Parties agree as follows:

1. Definitions and Interpretation

1.1 Definitions . Defined terms in this Agreement, which may be identified by the capitalization of the first letter of each principal word thereof, have the meanings assigned to them in Exhibit 1 .

1.2 Interpretation . In this Agreement, except to the extent that the context otherwise requires:

1.2.1 The Table of Contents and headings are for convenience of reference only and shall not affect the interpretation of this Agreement;

1.2.2 Defined terms include the plural as well as the singular and vice versa;

1.23 Words importing gender include all genders;

1.2.4 References to Sections, clauses, Schedules and Exhibits are references to Sections and clauses of, Schedules and Exhibits to, this Agreement;

with its terms and (where applicable) subject to compliance with the requirements set forth herein; and

1.2.6 References to any Party or Person include its successors and permitted assigns.

2. Nature and Scope of Agreement

2.1 The System . McDonald’s and its Affiliates operate a restaurant system (the “ System ”), which is a comprehensive system for the ongoing development, operation and maintenance of McDonald’s Restaurants, and includes the Intellectual Property and other proprietary rights and processes, including the designs and color schemes for restaurant buildings, signs, equipment layouts, formulas and specifications for certain food products, including food and beverage products designated by McDonald’s as permissible to be served and sold in McDonald’s Restaurants, methods of inventory, operation, control, bookkeeping and accounting, and manuals covering business practices and policies that form part of the Standards. McDonald’s and its Affiliates may add elements to or modify, alter or delete elements from, the System in their sole discretion from time to time. McDonald’s Restaurants have been developed for the retailing of a limited menu of uniform and quality food products, emphasizing prompt and courteous service in a clean, wholesome atmosphere that is intended to be attractive to children and families. The System is operated and advertised widely within the United States of America and in many foreign countries. McDonald’s and its Affiliates hold, directly or indirectly, all rights to authorize the adoption and use of the System. The foundation of the System is compliance with the Standards by McDonald’s franchisees, including the Brazilian Master Franchisee and the Franchisees, and compliance with the Standards provides the basis for the valuable goodwill and wide acceptance of the System. Such compliance by the Brazilian Master Franchisee and the Franchisees, the accountability of Brazilian Master Franchisee for its performance hereunder and the establishment and maintenance by Brazilian Master Franchisee of a close working relationship with McDonald’s in the operation of the Brazilian Franchise Business together constitute the essence of this Agreement.

2.2 Brazilian Master Franchisee Rights are Personal to Brazilian Master Franchisee . Brazilian Master Franchisee acknowledges that the Brazilian Master Franchisee Rights are being granted based upon the special relationship of trust and confidence that McDonald’s and certain of its Affiliates have developed and enjoy with the Person who Controls Los Laureles (the “ Principal ”), which controls, directly or indirectly, the Brazilian Master Franchisee. The special relationship that McDonald’s has developed with the Principal is based upon the Principal’s reputation and character and the Principal’s demonstrated skills, ability, knowledge and experience related to the management and operation of McDonald’s Restaurants, as well as the Principal’s thorough understanding of the

importance of the Intellectual Property and the Standards to McDonald’s and its Affiliates. The Parties acknowledge that the Brazilian Master Franchise Rights are granted to the Brazilian Master Franchisee only and to no other Person and may not, except as otherwise set forth in this Agreement, be Transferred to any other Person by assignment, will or operation of Applicable Law.

2.3 Intent . This Agreement shall be interpreted to give effect to the intent of the Parties stated in this Section so that the Brazilian Master Franchise Business and any Franchised Restaurants shall be operated at all times in conformity and strict compliance with the System.

2.4 Restatement of Agreement .

2.4.1 The Parties agree that this Agreement shall supersede in all respects the A&R MFA and that, as of the date of execution of this Second Agreement, the provisions of the A&R MFA shall cease to be of further force and effect.

3. Grant of Rights

3.1 Brazilian Master Franchisee Rights . Subject to the terms and conditions of this Agreement, including all rights reserved to McDonald’s hereunder, McDonald’s grants to Brazilian Master Franchisee the following rights (collectively, the “ Brazilian Master Franchisee Rights ”):

3.1.1 The right to own and operate, directly or indirectly, Franchised Restaurants in Brazil;

3.1.2 The right and license to grant franchises with respect to Franchised Restaurants to Franchisees in Brazil in accordance with the franchisee approval process and the applicable Franchise Agreement, it being understood and agreed that any Franchisee may establish and operate only one Franchised Restaurant per each Franchise Agreement;

3.1.3 The right to adopt and use, and to grant the right and license to Franchisees to adopt and use, the System in the Franchised Restaurants in Brazil; and

3.1.4 The right to advertise to the public that it is a franchisee of McDonald’s.

3.2 Certain Matters Relating to McCafes and Satellites .

3.2.1 Brazilian Master Franchisee acknowledges and agrees that it has no right or license to use or sublicense any Freestanding McCafe, other than the Initial Freestanding McCafes, and that its rights with respect

to the “McCafe” brand are limited to the operation of Incorporated McCafes and the Initial Freestanding McCafes subject to the conditions set forth in this Agreement.

3.2.2 Each proposed designation by Brazilian Master Franchisee of a McDonald’s Restaurant as a Satellite shall be subject to the consent of McDonald’s to such designation prior to (a) the opening of such proposed Satellite; (b) the acquisition by Brazilian Master Franchisee or any Subsidiary, directly or indirectly, of the fee simple interest (or the local equivalent) in, or entrance into of a lease (or the local equivalent) directly or indirectly from the owner of such interest, the real property on which such Satellite is to be located; (c) the incurrence of any other contractual obligation relating to such proposed Satellite; or (d) the request of any permit, authorization, consent or approval from any Governmental Authority relating to such proposed Satellite.

3.3 Exclusivity . McDonald’s shall not at any time during the Term (a) operate, directly or indirectly, any McDonald’s Restaurant in Brazil; (b) grant to any other Person any right to own and/or operate any McDonald’s Restaurant in Brazil; or (c) grant the right or license to grant franchises to any other Person to operate any McDonald’s Restaurant in Brazil.

3.3 Reservation of Rights . McDonald’s, on behalf of itself and its Affiliates, reserves all rights not specifically granted to Brazilian Master Franchisee under this Agreement, including the right, directly or indirectly, to:

3.5.1 Use and sublicense the Intellectual Property in Brazil for all other purposes and means of distribution, including retail licensing, catalogs, Ronald McDonald House Charities, other charities, grocery, packaged foods, public and corporate relations materials and activities and Internet marketing and distribution;

3.5.2 Sell, promote or license the sale of products or services under the Intellectual Property, including through electronic communications or the use of the Internet; and

3.5.3 Use the Intellectual Property in connection with all other activities not prohibited by this Agreement.

4. Term of Agreement

4.1 Term . Unless terminated pursuant to Sections 12, the initial term of this Agreement shall commence on August 3, 2007 and shall extend until August 2, 2027 (the “ Term ”). McDonald’s shall have the right, in its reasonable business judgment based on renewal criteria, and other terms, conditions and

procedures to be agreed upon between the Parties, to grant Brazilian Master Franchisee an option to extend this Agreement for an additional ten years after the expiration of the Term.

5. Franchise and Related Fees

5.1 Initial Franchise Fees .

5.1.1 Unless otherwise agreed by McDonald’s, in connection with the opening of any new Brazilian Master Franchisee Restaurant on or after August 3, 2007, an initial franchise fee (the “ Initial BMFR Fee ”) shall be paid by Brazilian Master Franchisee to McDonald’s in an amount equal to, in the case of any Franchised Restaurant other than a Satellite, $2,250, and, in the case of any Satellite, $1,125, multiplied by , in each case, the lesser of (a) 20; or (b) the number of years remaining in the Term (with any partial remaining year rounded up to one full year) (such number of years, the “ BMFR Term ”). If on the expiration of the BMFR term, Brazilian Master Franchisee desires to keep operating such Brazilian Master Franchisee Restaurant, then Brazilian Master Franchisee shall pay to McDonald’s an additional Initial BMFR Fee in connection with such Master Franchisee Restaurant.

5.1.2 Subject to Section 5.1.4(b) and unless otherwise agreed by McDonald’s, for each Franchise Agreement (or agreement to extend the term of any Franchise Agreement) entered into by Brazilian Master Franchisee or any of its Subsidiaries with a Franchisee (other than Brazilian Master Franchisee or of its Subsidiaries) on or after August 3, 2007, Brazilian Master Franchisee shall require the applicable Franchisee to pay to Brazilian Master Franchisee an initial franchise fee (the “Initial SFR Fee” and, together with the Initial BMFR Fees, the “Initial Franchise Fees”) in an amount equal to, in the case of any Franchised Restaurant other than a Satellite, $2,250, and, in the case of any Satellite, $1,125, multiplied by , in each case, the greater of (a) the number of years remaining in the Term; or (b) the number of years included in the term of such Franchise Agreement (or agreement to extend the term of the Franchise Agreement), in each case, with any partial remaining year rounded up to one full year. Brazilian Master Franchisee shall pay to McDonald’s 50% of the amount of each Initial SFR Fee, regardless of whether received by Brazilian Master Franchisee from the applicable Franchisee.

5.1.3 With respect to any new Brazilian Master Franchisee Restaurant, each Initial Franchise Fee shall be payable on or prior to the date of the opening of such new Brazilian Master Franchisee Restaurant. With respect to a Franchised Restaurant that is not a Brazilian Master

Franchisee Restaurant, the Initial Franchise Fee shall be payable upon the earlier of (a) the payment of the Continuing Franchise Fees in the calendar month in which the Initial Franchise Fee is payable; or (b) the opening of such Franchised Restaurant.

5.1.4

(a) Brazilian Master Franchisee shall not be required to pay the Initial Franchise Fee with respect to any Franchised Restaurant that Relocates, unless the term of the applicable Franchise Agreement is extended in connection with such Relocation, in which case the Initial Franchise Fee shall be equal to, in the case of any Franchised Restaurant other than a Satellite, $2,250, and, in the case of any Satellite, $1,125, multiplied by , in each case, the number of years of such extension (with any partial remaining year rounded up to one full year).

(b) If a Franchisee enters into a Franchise Agreement (or agreement to extend the term of any Franchise Agreement) in connection with (i) the acquisition of a Franchised Restaurant from Brazil Master Franchisee; or (ii) the exercise of an option to acquire a Franchised Restaurant included as a term of a Business Facilities Lease entered into with Brazil Master Franchisee, then Franchisee shall only be required to pay the Initial Franchise Fee in respect of the years of such Franchise Agreement that extend beyond the Term.

5.2 Continuing Franchise Fees .

5.2.1 Subject to Sections 5.2.2, 5.2.3 and 5.2.4 and except as otherwise provided in this Agreement, Brazilian Master Franchisee shall pay to McDonald’s aggregate continuing franchise fees (“ Continuing Franchise Fees ”) with respect to each calendar month (or ratable portion thereof, including in the case of any Franchised Restaurant subject to an Approved Closing during such calendar month) during the applicable Term in an amount equal to 7% of the U.S. Dollar equivalent of the Gross Sales of each of the Franchised Restaurants in Brazil for such calendar month (or such ratable portion thereof), minus any applicable Brand Building Adjustment (the “ Regular Royalty ”).

5.2.2 Notwithstanding Section 5.2.1, in the case of any Existing Franchise Agreement that provides for a Royalty at a rate less than the Regular Royalty (the “ Existing Royalty ”), Brazilian Master Franchisee shall, for so long as such Existing Franchise Agreement remains in effect,

pay to McDonald’s Continuing Franchise Fees with respect to the related Franchised Restaurant equal to the Existing Royalty.

5.2.3 In the case of any Franchise Agreement that relates to a Franchised Restaurant that (a) is not a Brazilian Master Franchisee Restaurant, and (b) is either (i) entered into after the date hereof; or (ii) is transferred by Brazilian Master Franchisee to a Franchisee in a Conventional Franchising Transaction, Brazilian Master Franchisee shall pay to McDonald’s Continuing Franchise Fees during the stated term and any extension of such Franchise Agreement (but only during the Term) in an amount equal to 5% of the U.S. Dollar equivalent of the Gross Sales of such Franchised Restaurant (the “ New Franchisee Royalty ”).

5.2.4 If at any time during the Term there occurs any voluntary, involuntary, direct or indirect sale, assignment, transfer or other disposition of a Franchised Restaurant by a Franchisee to Brazilian Master Franchisee, then from and after the date of such transfer or disposition Brazilian Master Franchisee shall pay to McDonald’s Continuing Franchise Fees with respect to such Franchised Restaurant equal to the Regular Royalty.

5.2.5 If at any time during the Term, McDonald’s increases the International Franchisee Royalty, then from and after the date of such increase, the New Franchise Royalty shall be increased to the extent of the increase of the International Franchisee Royalty.

5.2.6 Brazilian Master Franchisee shall not charge any Franchisee a Royalty in excess of the International Franchisee Royalty.

5.2.7 If any Franchised Restaurant fails to report or generate Gross Sales with respect to any calendar month (or a ratable portion thereof) otherwise than as a result of an Approved Closing, then Gross Sales for such Franchised Restaurant with respect to such calendar month (or such ratable portion thereof) shall be deemed to be equal to the average monthly Gross Sales (or comparable ratable portion thereof) reported by such Franchised Restaurant within the 12-month period ending immediately preceding the calendar month in which such failure to report or generate occurred; provided , however that if such failure to report or generate is attributable to Force Majeure, no Continuing Franchise Fees with respect to the affected Franchised Restaurant shall be so payable for any calendar month (or such ratable portion thereof) following the first date on which any event constituting such Force Majeure shall have occurred and during which such event of Force Majeure continues.

5.2.8 Continuing Franchise Fees with respect to any calendar month shall be payable by Brazilian Master Franchisee to McDonald’s no later than the seventh Business Day of the next succeeding calendar month.

5.3 Transfer Fees . In the event of any voluntary, involuntary, direct or indirect sale, assignment, transfer or other disposition of a Franchised Restaurant by Brazilian Master Franchisee, any of its Subsidiaries or any Franchisee, Brazilian Master Franchisee shall charge a transfer fee of not less than $10,000 per Franchised Restaurant and shall remit to McDonald’s at the same time that it makes payment of the Continuing Franchise Fees in the calendar month in which the transfer fee is payable, an amount equal to 50% of the amount of each such fee so charged; provided , however , that no such fee shall be charged (a) by Brazilian Master Franchisee or any of its Subsidiaries to any other Subsidiary of Brazilian Master Franchisee; (b) in the event of any such sale, assignment, transfer or other disposition by a Franchisee to any of its Affiliates; or (c) in the event of the exercise of an option to acquire a Franchised Restaurant included as a term of a Business Facilities Lease entered into with Master Franchisee.

6. Certain Obligations of the Brazilian Master Franchisee

6.1 Certain Actions with Respect to Franchised Restaurants . Brazilian Master Franchisee shall, at its sole expense:

6.1.1 Cause each Brazilian Master Franchisee Restaurant to comply with the terms and conditions of the New Franchise Agreement.

6.1.2 Cause each Franchised Restaurant to comply with the System and not to engage in activity that may conflict with, or otherwise be detrimental to, the System.

6.1.3 Ensure that each Franchised Restaurant is subject to a Customer Service Program that meets or exceeds the applicable Standards.

6.1.4 Monitor continuously and measure with reasonable frequency the compliance by each Franchised Restaurant with the QSC Standards using a system for evaluating restaurant performance that meets or exceeds the applicable Standards.

6.2 Closings . Brazilian Master Franchisee shall not, and shall not permit any of its Subsidiaries or Franchisees to, close any Franchised Restaurant except pursuant to an Approved Closing.

6.3 New Franchisees; Transfers .

6.3.1 Brazilian Master Franchisee may enter into or renew a Franchise Agreement with, or Transfer any Franchise Agreement to, any

Person, provided that (a) such Person is an Existing Franchisee or such Person (including, in the case of any renewal of a Franchise Agreement, the applicable Franchisee) is pre-approved by Brazilian Master Franchisee (a “ New Franchisee ” and together with the Existing Franchisees, the “ Franchisees ”) in accordance with a franchisee approval process on terms, conditions and procedures to be agreed upon between the Parties; (b) in the case of any Existing Franchisee, such Existing Franchisee is in compliance with each of its Franchise Agreements; and (c) the entry into such Franchise Agreement is not inconsistent with the applicable business plan to be agreed upon between the Parties.

6.3.2 Promptly following its pre-approval of a Franchisee, Brazilian Master Franchisee shall provide McDonald’s with the following: (a) the full legal name of the Franchisee and each Person that has any direct or indirect Equity Interest in such Franchisee; (b) an electronic image of the related Franchise Agreement; and (c) such other information as McDonald’s may request from time to time.

6.4 Franchise Agreements.

6.4.1 In no event shall the term of any Franchise Agreement exceed the Term, or extend more than 10 years beyond the Term.

6.4.2 Any Franchise Agreement, including any amendment or renewal thereof, entered into with respect to a New Franchisee shall be substantially in a form to be agreed upon between the Parties (each, a “ New Franchise Agreement ” and together with the Existing Franchise Agreement, the “ Franchise Agreements ”).

6.4.3 If Brazilian Master Franchisee or any Franchisee seeks to (a) amend any Existing Franchise Agreement (x) that relates to a Franchised Restaurant that is not a Brazilian Master Franchisee Restaurant, then Brazilian Master Franchisee shall use its best efforts to cause such amendment to reflect the asterisked terms specified in the form of New Franchise Agreement to the extent not already reflected therein; or (y) that relates to a Franchised Restaurant that is a Brazilian Master Franchisee Restaurant, then Brazilian Master Franchisee shall not amend the Existing Franchise Agreement without the prior consent of McDonald’s; or (b) renew any Franchise Agreement, then (x) Brazilian Master Franchisee shall effect such renewal only by entering into a New Franchise Agreement with the applicable Franchisee; and (y) shall charge a Royalty that is not less than the rate then applicable hereunder for purposes of calculating Continuing Franchisee Fees.

6.4.4 Brazilian Master Franchisee shall only enter into a Franchise Agreement with a Franchisee for a particular Franchised Restaurant in Brazil. Brazilian Master Franchisee shall not enter into a Franchise Agreement or any other agreement or understanding in respect of franchise rights, whether express or implied, that would grant it rights with respect to any region or sub-division of Brazil, nor shall Brazilian Master Franchisee enter into a Franchise Agreement if, after giving effect to such Franchise Agreement, such Person would be the sole Franchisee with respect to Brazil or any subdivision thereof.

6.4.5 Brazilian Master Franchisee shall provide to each Franchisee any disclosure document or other information required to be so delivered under Applicable Law in connection with the entry into a Franchise Agreement or otherwise.

6.5 Actions with Respect to Franchisees . Brazilian Master Franchisee shall, at its sole expense:

6.5.1 Cause each Franchise Agreement to be timely registered with any appropriate Governmental Authority as and to the extent required by Applicable Law.

6.5.2 Take all actions necessary to enforce each Franchise Agreement strictly in accordance with its terms and to ensure each Franchisee is in compliance with the System.

6.5.3 Provide reasonable levels of assistance to each Franchisee and to the Restaurant Managers to promote and enhance the operation of the System and the Franchised Restaurants and the goodwill or reputation associated with the Trademarks and other Intellectual Property.

6.6 Strategic Marketing Plan . Brazilian Master Franchisee has developed a strategic marketing plan that obligates Brazilian Master Franchisee to aggregate expenditures to implement such strategic marketing plan in an amount not less than 5% of Gross Sales of all Franchised Restaurants in Brazil (the “ Mandatory Marketing Commitment ”); provided , however , that such amount shall be reduced for any Franchised Restaurant subject to an Existing Franchise Agreement to the extent such Existing Franchise Agreement requires lesser expenditures for such purposes. Brazilian Master Franchisee shall be entitled to cause Franchisees to contribute to expenditures contemplated by such strategic marketing plan no less than 5% of Gross Sales of their respective Franchised Restaurants, but in no event in excess of the commitment specified in any Existing Franchise Agreement in the case of any Existing Franchisee. For the avoidance of doubt, the Mandatory Marketing Commitment is payable in respect of any Gross Sales after August 3, 2007.

6.7 Global Marketing . Brazilian Master Franchisee acknowledges and agrees that McDonald’s and its Affiliates may enter into agreements relating to global, regional and other advertising, promotional and marketing alliances intended for the benefit of the System as determined by McDonald’s and its Affiliates in their discretion and may establish programs to fund activities undertaken by such alliances. Brazilian Master Franchisee authorizes McDonald’s and its designees to negotiate such agreements on its behalf and agrees to be bound by and comply with such agreements and to deliver the types and levels of promotional support in connection with such alliances as directed by McDonald’s from time to time. Brazilian Master Franchisee shall pay to McDonald’s in respect of the funding of such alliances an amount up to 0.2% of Gross Sales of all Franchised Restaurants in Brazil. Amounts contributed pursuant to this Section shall be credited against the Mandatory Marketing Commitment.

7. Intellectual Property

7.1 Rights . Brazilian Master Franchisee’s right to use the Intellectual Property is derived solely from this Agreement. McDonald’s owns or has the right to license the Intellectual Property and all goodwill associated with the Intellectual Property. Subject to the limitations set forth in this Agreement, including strict compliance with conditions set forth in this Section, McDonald’s grants to Brazilian Master Franchisee the non-exclusive right to use, and to sublicense its Franchisees to use, the Intellectual Property solely in connection with the development, ownership, operation, promotion and management of the Franchised Restaurants in Brazil as specified in Exhibit 2 , and to engage in related advertising, promotional and marketing programs and activities.

7.2 Intellectual Property Standards . Development, ownership, operation, promotion, management and sublicensing of the Franchised Restaurants and all uses of the Intellectual Property by Brazilian Master Franchisee and its Franchisees shall meet or exceed the applicable Standards and shall comply with Applicable Law. Brazilian Master Franchisee shall use, affix and otherwise display, and shall require its Franchisees to use, affix and otherwise display the Intellectual Property strictly in conformity with the Standards, together with applicable trademark, patent and / or copyright designations / markings (including any legends designating McDonald’s or its licensor as owner of the Intellectual Property and proper patent markings on any applicable Patents and related materials and equipment), as it may be directed by McDonald’s from time to time in its sole discretion, and with any other specifications as McDonald’s may prescribe from time to time to promote and foster the goodwill represented by the Intellectual Property and the System or otherwise to protect or perfect McDonald’s and / or its licensor’s interests in the Intellectual Property. Brazilian Master Franchisee shall and shall cause its Franchisees to immediately cease or modify any use of the Intellectual Property that is not in compliance with Applicable Law or the Standards or as otherwise instructed by McDonald’s, at

Brazilian Master Franchisee’s sole expense. Brazilian Master Franchisee shall and shall cause its Franchisees to comply with all Standards applicable to advertising, promotions and creative review. Brazilian Master Franchisee shall permit and shall requires its Franchisees to permit inspection by McDonald’s, at reasonable intervals during normal business hours, for the purpose of monitoring the use of the Intellectual Property by Brazilian Master Franchisee and its Franchisees and verifying the presence of appropriate control measures with respect to compliance with the Standards.

7.3 Specimens . At McDonald’s request, Brazilian Master Franchisee shall submit specimens of all signage, uniforms, packaging, Materials, stationary, business cards and other materials displaying, using or bearing the Intellectual Property or relating to the Franchised Restaurants to McDonald’s, at Brazilian Master Franchisee’s sole expense, for McDonald’s review and approval prior to Brazilian Master Franchisee’s or any Franchisee’s manufacture, printing, production, use, display, broadcast, distribution or sale of any of the foregoing and in accordance with procedures established by McDonald’s for such purposes from time to time. If McDonald’s fails to grant any required approval within ten Business Days of such submission, the submission shall be deemed to be disapproved.

7.4 Ownership . Brazilian Master Franchisee acknowledges and agrees and shall require its Franchisees to acknowledge and agree that the Intellectual Property and all rights therein and the goodwill pertaining thereto in Brazil belong to McDonald’s (or its licensor) and that all uses of the Intellectual Property in Brazil shall inure to and be for the benefit of McDonald’s (or its licensor). Brazilian Master Franchisee and its Franchisees shall not directly or indirectly, (a) attack or impair the title of McDonald’s (or its licensor) to the Intellectual Property, the validity of this Agreement, or any of the registrations for or applications to register the Intellectual Property filed by or on behalf of McDonald’s (or its licensor); or (b) file any application to register or record any of the Intellectual Property, in whole or in part, or any other name, trademark or service mark relating to the Franchised Restaurants or that is identical or otherwise confusingly similar to or that might be dilutive of the Intellectual Property, including any trademark or service mark that uses “Mc” or “Mac”, anywhere in the world, unless requested by McDonald’s to do so and, in such event, subject to McDonald’s specific direction and written request.

7.5 No Assignment . Nothing contained in this Agreement shall be construed as an assignment to Brazilian Master Franchisee or any other Person of any right, title or interest in or to the Intellectual Property, it being understood and acknowledged by Brazilian Master Franchisee that all use thereof in Brazil shall inure exclusively to and be for the benefit of McDonald’s (or its licensor), and Brazilian Master Franchisee shall cause its Franchisees to acknowledge and agree that all use of the Intellectual Property shall inure exclusively to and be for the

benefit of McDonald’s (or its licensor). Upon McDonald’s request, Brazilian Master Franchisee shall execute and deliver and shall require its Franchisees to execute and deliver such documents as McDonald’s may deem necessary or desirable to use the Intellectual Property in conformity with Applicable Law or to protect the interests of McDonald’s and / or its licensor with respect thereto, including documents to record Brazilian Master Franchisee and / or any Franchisee as users of the Intellectual Property or to protect the interests of McDonald’s and / or its licensor in the Intellectual Property,

7.6 Defense of Rights . Brazilian Master Franchisee shall cooperate with McDonald’s for purposes of securing, preserving, protecting and defending McDonald’s (or its licensor’s) rights in and to the Intellectual Property and for purposes of securing, preserving, protecting and defending the rights granted to Brazilian Master Franchisee hereunder as determined by McDonald’s in its discretion and at Brazilian Master Franchisee’s sole expense, unless otherwise expressly agreed in writing by McDonald’s. Such cooperation shall include the filing, prosecuting and processing of any trademark, service mark or copyright application or registration, or other filings, and the recording of this Agreement and/or any Franchise Agreement with any appropriate Governmental Authority, all as may be requested by McDonald’s. Brazilian Master Franchisee shall immediately notify McDonald’s of any objection to the use by Brazilian Master Franchisee or any Franchisee of any Intellectual Property or of any suspected infringement or imitation by others of any Intellectual Property that may come to the attention of Brazilian Master Franchisee or any Franchisee. McDonald’s shall have sole discretion to control all challenges to the Intellectual Property, including the right to determine whether or not any formal legal action shall be taken on account of any alleged infringement or imitation (though nothing in this Agreement shall be construed as imposing an obligation on McDonald’s to take any such action) and Brazilian Master Franchisee shall render all assistance as McDonald’s may request in connection therewith. McDonald’s may in its discretion bring and prosecute any claim or cause of action in its own name and join Brazilian Master Franchisee or any applicable Franchisee as a party thereto, or require Brazilian Master Franchisee to file an action in its own name to protect the Intellectual Property, subject to McDonald’s direction. Brazilian Master Franchisee and its Franchisees shall not institute any action for infringement of the Intellectual Property, except to the extent that McDonald’s may so direct Brazilian Master Franchisee and then solely in accordance with such direction.

7.7 Registration . Brazilian Master Franchisee shall cooperate with McDonald’s in (a) registering this Agreement or a summary version thereof with any applicable Governmental Authority within Brazil to the extent required or desirable to fully protect McDonald’s rights in the Intellectual Property under Applicable Law; (b) maintaining or perfecting such registration; and (c) canceling such registration upon termination or expiration of this Agreement. McDonald’s is authorized by Brazilian Master Franchisee to cancel the registration of this

Agreement with any applicable Governmental Authority within Brazil upon termination or expiration of this Agreement, for any reason, independent of any action executed by Brazilian Master Franchisee before such Governmental Authorities. Brazilian Master Franchisee shall execute on behalf of itself and its Franchisees and deliver such documentation as may be necessary or desirable in connection with the foregoing, including any power of attorney as may be required by Applicable Law. Brazilian Master Franchisee shall bear all costs that may be incurred by McDonald’s or its representatives in registering, perfecting, maintaining and canceling the registration of this Agreement as aforesaid.

7.8 Intellectual Property Created by Brazilian Master Franchisee and its Franchisees . To the extent permitted by Applicable Law, all ideas, concepts, techniques and materials relating to the System, the Intellectual Property and / or the Franchised Restaurants, any enhancements, improvements and / or derivative works of any of the foregoing, and any trademarks or service marks that are created by Brazilian Master Franchisee, any of its Subsidiaries or Franchisees or any of their respective employees or agents (the “ Developed IP ”) shall be immediately disclosed to McDonald’s and shall be deemed property of McDonald’s as “works made for hire” and shall constitute Intellectual Property hereunder. To the extent that such Developed IP is not “works for hire,” Brazilian Master Franchisee shall, and shall cause such other Person to, immediately assign and does assign, all rights therein, including moral rights, to McDonald’s. The assignors of the Developed IP shall execute and deliver any documents requested by McDonald’s to confirm such assignment. None of Brazilian Master Franchisee or any of its Subsidiaries or Franchisees is authorized to use, sell, distribute or license any products or materials incorporating the Intellectual Property outside of the operation of the Franchised Restaurants without McDonald’s prior consent. None of Brazilian Master Franchisee or any of its Subsidiaries or Franchisees shall file, or suffer to be filed, any applications to register any Intellectual Property including, for the avoidance of doubt, any Developed IP, without McDonald’s prior consent.

7.9 Trademarks .

7.9.1 None of Brazilian Master Franchisee or any of its Subsidiaries or Franchisees shall adopt or use any new “Mc” or “Mac” trademarks or service marks, or any other trademarks (including without limitation product names, slogans and logos), service marks or domain names in connection with the Franchised Restaurants, without McDonald’s prior consent.

7.9.2 None of Brazilian Master Franchisee or any of its Subsidiaries or Franchisees shall use the Trademarks (or any component thereof):

(a) In conjunction with its corporate, business, trade or legal name;

(b) In conjunction with any prefix, suffix or other modifying terms;

(d) As part of any domain name, electronic address, electronic mail address, Internet home page, intranet, extranet or Website; or

(e) In any manner not expressly authorized by this Agreement.

7.9.3 If so requested by McDonald’s in writing, Brazilian Master Franchisee shall identify itself as the independent owner of its business, give notices of trademark and service mark registrations in the manner McDonald’s specifies, obtain such fictitious or assumed name registrations as may be required under Applicable Law to distinguish itself from McDonald’s and its Affiliates, and provide evidence of Brazilian Master Franchisee’s use of the Trademarks, both in form and content.

7.9.4 McDonald’s shall have the right to modify or discontinue the use by McDonald’s, Brazilian Master Franchisee or any of its Subsidiaries or any Franchise of any Trademark or the specifications for use of any Trademark, or to require Brazilian Master Franchisee or any of its Subsidiaries or any Franchisee to commence use of new or substitute Trademarks. Brazilian Master Franchisee shall, and shall require each of its Subsidiaries and each Franchisee to promptly comply with any such changes at Brazilian Master Franchisee’s or Franchisee’s sole expense. McDonald’s shall not have any obligation to reimburse Brazilian Master Franchisee or any Franchisee for any expenditures made by Brazilian Master Franchisee or any Franchisee to modify or discontinue the use of any Trademark or to adopt additional or substitute trademarks, including any expenditures relating to any Franchised Restaurant or to advertising, promotional materials or signage.

7.10 Copyrights .

7.10.1 To the extent permitted by Applicable Law, if Brazilian Master Franchisee or any Franchisee creates any adaptations or derivative works based upon or incorporating any of the Copyrights, Brazilian Master Franchisee shall, and shall cause each such other Person to, assign to McDonald’s all right, title and interest that any of them may have or acquire in such adaptations and derivative work and waive any moral

rights that have or may accrue to them. Each such adaptation or derivative work shall constitute Copyrights hereunder.

7.10.2 McDonald’s authorizes Brazilian Master Franchisee to translate the Copyrights into foreign languages necessary in order to use the Copyrights pursuant to the Brazilian Master Franchisee Rights. Brazilian Master Franchisee represents and warrants that any such translation shall be accurate and complete. Brazilian Master Franchisee acknowledges and agrees that any translation of the Copyrights shall be McDonald’s sole and exclusive property, and Brazilian Master Franchisee assigns to McDonald’s all right. title and interest in each such translation. Any such translation shall constitute Copyrights hereunder. McDonald’s is expressly authorized by Brazilian Master Franchisee to register such translation in its own name or in the name of any Affiliate of McDonald’s, with any applicable Governmental Authority within Brazil. Brazilian Master Franchisee acknowledges that, in case of termination or expiration of this Agreement, McDonald’s may authorize the use of such translation to any third party in its sole discretion. Brazilian Master Franchisee and Franchisees shall modify or discontinue use of Copyrights or adopt and use new, revised or additional Copyrights if instructed to do so by McDonald’s, at Brazilian Master Franchisee’s and Franchisees’ sole expense,

7.11 Trade Secrets . Brazilian Master Franchisee acknowledges that the Trade Secrets constitute McDonald’s valuable confidential and proprietary information. Brazilian Master Franchisee shall and shall require its Franchisees to take all commercially reasonable steps to protect the confidentiality of the Trade Secrets and to prevent the unauthorized disclosure of the Trade Secrets, including employing the practices and procedures that it uses to protect its own trade secrets and other confidential or proprietary information. Brazilian Master Franchisee shall restrict disclosure of the Trade Secrets to its employees, agents, Franchisees and other authorized Persons on a need-to-know basis and only after such Persons have been informed of, and are subject to obligations in writing to maintain, the Trade Secrets’ confidentiality. Brazilian Master Franchisee shall not use, disclose or reproduce, or authorize any other Person to use, disclose or reproduce, the Trade Secrets for any reason or purpose except in connection with the operation of the Franchised Restaurants.

7.12 Names . Notwithstanding anything to the contrary in this Agreement and its status as a non-Affiliate of McDonald’s Corporation, Brazilian Master Franchisee may continue to use any legal name or “operating as” name that includes any Intellectual Property that may imply ownership by an Affiliate or Subsidiary of McDonald’s Corporation, including “Arcos Dourados.”

8. Relationship of the Parties

8.1 Relationship of Parties . The Parties shall be independent contractors. This Agreement shall not create any fiduciary relationship between McDonald’s, on the one hand, and Brazilian Master Franchisee, on the other hand. Nothing in this Agreement is intended to make Brazilian Master Franchisee a general or special agent, legal representative, subsidiary, joint venturer, partner, employee or servant of McDonald’s. Brazilian Master Franchisee shall not represent that it has any relationship with McDonald’s other than as expressly permitted by this Agreement. McDonald’s shall not be obligated by or have any liability under any agreement, representation or warranty made by Brazilian Master Franchisee. McDonald’s shall not be obligated for any damages to any Person or property directly or indirectly arising out of the Brazilian Franchise Business, whether or not caused by the negligent or willful action or failure to act of Brazilian Master Franchisee or any of its respective Affiliates. McDonald’s shall have no liability for any sales, service, value-added, use, excise, gross receipts, property, workers’ compensation, unemployment compensation, withholding or other taxes, whether levied upon Brazilian Master Franchisee or its respective Assets or income, or upon McDonald’s in connection with services performed or business conducted by any of them. Withholding taxes when required by Applicable Law and payment of all such taxes shall be the sole responsibility of Brazilian Master Franchisee as required by Applicable Law.

8.2 No Implied Employment Relationship . This Agreement shall not create any employment relationship between McDonald’s, on the one hand, and Brazilian Master Franchisee, on the other hand, or their personnel, employees or any independent contractor hired by any of them. Brazilian Master Franchisee assumes all obligations and responsibilities with respect to its employees under labor or social security laws in Brazil and all other Applicable Law.

9. Indemnification; No Liability

9.1 Brazilian Master Franchisee Indemnifies McDonald’s . Brazilian Master Franchisee agrees to defend, indemnify and hold harmless McDonald’s, its Affiliates and all of their respective stockholders, directors, officers, employees, agents, attorneys-in-fact and representatives, consultants, independent contractors, designees, successors and assigns, and each such Person’s Related Parties and representatives (the “ McDonald’s Indemnified Parties ”), from and against any and all Losses and Expenses arising out of or relating any act or omission of Brazilian Master Franchisee or any Franchisee in connection with the Brazilian Franchise Business or any Franchised Restaurant, including:

9.1.1 Any Claim by any third party;

9.1.2 Any breach, violation or failure of any such Person to perform or comply with of any of their respective representations, warranties or obligations arising out of or relating to this Agreement or

any Franchise Agreement (including the failure to comply with any applicable Standards);

9.1.3 Any negligence, recklessness, misconduct or criminal act by any such Person or any of its Related Parties or their respective employees or personnel;

9.1.4 The infringement or other violation of any patent, trademark, copyright or other proprietary rights of any third party, or the right of privacy or right of publicity, or the laws of unfair competition, in connection with this Agreement; provided that Brazilian Master Franchisee shall not be responsible for any such infringement or other violation to the extent that it involves the use of Intellectual Property as authorized by McDonald’s;

9.1.5 The death of or injury to any person, damage to any property, or any other damage, loss or injury, by whomsoever suffered, resulting or claimed to result, in whole or in part, from any latent or patent defect in connection with the operation of the Brazilian Franchise Business or any Franchised Restaurant, including improper construction and / or design, or any claim of strict liability (or like theory of law) tort relating the operation of the Brazilian Franchise Business or any Franchised Restaurant;

9.1.6 Any voluntary or mandatory recall of products that is due to a breach or violation by Brazilian Master Franchisee or any of its Affiliates of any of their obligations hereunder, any deviation from any applicable Standards or specifications by Brazilian Master Franchisee or any of its Affiliates, or any failure by Brazilian Master Franchisee or any of its Affiliates to perform services and / or provide products in accordance with the terms of this Agreement; and

9.1.7 Any failure to warn or inadequate warnings and / or instructions relating to any products.

9.2 Rights and Responsibilities of Indemnitor and Indemnitee . In the event of any Claim or allegation entitling any McDonald’s Indemnified Party to indemnification by another Party hereunder, or in the event that any Party discovers facts that will likely give rise to a claim for indemnification hereunder, the McDonald’s Indemnified Party entitled to indemnification hereunder (the “ Indemnitee ”) shall promptly notify the Party obligated to provide such indemnification (the “ Indemnitor ”) of same in writing giving reasonable detail of the Claim, allegation or discovered facts (provided that the Indemnitee’s delay in furnishing notice of claims to Indemnitor shall not discharge the Indemnitor from its indemnification obligation hereunder, except to the extent such delay results in

actual prejudice to Indemnitor or its inability to effectively defend the Claims or allegations).

9.3 McDonald’s as Indemnitee . With respect to any Claims or allegations for which Brazilian Master Franchisee is obligated to indemnify McDonald’s pursuant to the terms of this Agreement, McDonald’s reserves the right to determine whether Brazilian Master Franchisee or McDonald’s shall assume the defense of such Claims or allegations, and in either case, to employ counsel selected by McDonald’s in its discretion, and to control the defense and settlement of any such Claims or allegations, acting reasonably and in accordance with good faith business judgment with respect thereto, at Brazilian Master Franchisee’s expense and without relieving Brazilian Master Franchisee of any of its obligations hereunder. The rights of McDonald’s Indemnified Parties under this Agreement are in no way contingent upon or limited by McDonald’s Indemnified Parties seeking to recover or recovering from third parties or otherwise mitigating their losses.

9.4 No Liability . Except as expressly provided in this Agreement, neither McDonald’s nor any of its Related Parties assumes any direct or indirect liability or obligation to any Brazilian Master Franchisee with respect to the Brazilian Franchise Business and neither McDonald’s nor any such Related Party shall have any liability to Brazilian Master Franchisee for damages of any kind, whether direct, consequential or otherwise incident to the conduct of the Brazilian Master Franchise Business, any Franchisee or any Franchised Restaurant.

10. Transfer

10.1 Transfer of Rights by McDonald’s . McDonald’s may directly or indirectly Transfer all or any part of this Agreement, or all or any of its rights or obligations herein, to any Person as long as such Person expressly assumes and agrees to perform McDonald’s obligations under this Agreement. No such Transfer shall release Brazilian Master Franchisee from its obligations under this Agreement.

10.2 Transfer of Rights by Brazilian Master Franchisee . Neither this Agreement nor any of their rights and obligations under this Agreement may be Transferred by Brazilian Master Franchisee without McDonald’s prior consent.

11. Material Breaches and Remedies

11.1 Material Breaches by Brazilian Master Franchisee . Brazilian Master Franchisee shall be considered to be in default of its obligations under this Agreement upon the occurrence and during the continuance of any Material Breach.

11.2 Material Breaches . Each of the following events is a “ Material Breach ” hereunder:

11.2.1 The material breach by Brazilian Master Franchisee of any of its obligations, including compliance with the System, under this Agreement relating to or otherwise in connection with any aspect of the Brazilian Master Franchise Business, the Franchised Restaurants or any other matter in or affecting Brazil; provided , that Brazilian Master Franchisee has failed to cure such material breach within 30 days after receipt of notice thereof from McDonald’s;

11.2.2 To the fullest extent permitted by Applicable Law, the insolvency or making of a general assignment for the benefit of creditors of Brazilian Master Franchisee; the voluntary filing by Brazilian Master Franchisee of a petition in commercial insolvency (including a concurso mercantil ); the filing by any other Person of such a petition against Brazilian Master Franchisee, which is not dismissed within 60 Business Days after the filing date; the adjudication of Brazilian Master Franchisee as bankrupt or insolvent; the filing by or with the consent of Brazilian Master Franchisee of any other proceeding for the appointment of a receiver, a conciliator or an auditor of Brazilian Master Franchisee or other custodian or similar official for the business or Assets of Brazilian Master Franchisee or any part thereof; the appointment by any court of competent jurisdiction of a receiver, a conciliator or an auditor or other custodian (permanent or temporary) of Assets of Brazilian Master Franchisee, or any part thereof; or the institution of proceedings for a composition with creditors under Applicable Law of Brazil by or against Brazilian Master Franchisee;

11.2.3 The conviction of Brazilian Master Franchisee or any agents or employees by a court of competent jurisdiction, or pleading no contest by such Person to, (a) a crime or offense that is punishable by incarceration for more than one year or a felony; or (b) a crime or offense or the indictment on charges thereof that, in the determination of McDonald’s, is likely to adversely affect the reputation of such Person, any Franchised Restaurant, McDonald’s or any of its Affiliates or the Trademarks, or otherwise adversely affect the System, McDonald’s Restaurants or the goodwill associated with the Trademarks;

11.2.4 The participation by Brazilian Master Franchisee or any of its Subsidiaries in any fraudulent or dishonest activity that is material to the Brazilian Master Franchise Business in Brazil or the failure by Brazilian Master Franchisee to report to McDonald’s any such fraudulent or dishonest activity by any of the employees or agents of Brazilian

Master Franchisee or any of its Subsidiaries, including the concealment of revenues or the provision of false or misleading financial information.

11.2.5 The entry of any judgment against Brazilian Master Franchisee in excess of $1,000,000, or the failure to pay any creditor, any Distributor or Governmental Authority, any amount as and when due and payable, that is not duly paid or otherwise discharged within 30 days, unless such judgment is being contested on appeal in good faith by Brazilian Master Franchisee;

11.2.6 The engagement by Brazilian Master Franchisee or any of its Affiliates in Brazil in public conduct that reflects materially and unfavorably upon the operation of McDonald’s Restaurants, the System or the goodwill associated with the Intellectual Property, and the failure of Brazilian Master Franchisee to cease such conduct within five days after receipt of notice thereof from McDonald’s; provided , that engagement in legitimate political activity (including testifying, lobbying, or otherwise attempting to influence legislation to the extent not in violation of the U.S. Foreign Corrupt Practices Act or similar anti-corruption or money laundering law applicable in Brazil) shall not be grounds for termination;

11.2.7 The engagement by Brazilian Master Franchisee or any of its Affiliates in Brazil in an act constituting gross negligence, recklessness or intentional or willful misconduct relating to the conduct of the Brazilian Master Franchise Business that, in the determination of McDonald’s, is likely to materially adversely affect the reputation of McDonald’s or any of its Affiliates or the Trademarks, or otherwise materially adversely affect the System, McDonald’s Restaurants or the goodwill associated with the Trademarks; provided that engagement in legitimate political activity (including testifying, lobbying, or otherwise attempting to influence legislation to the extent not in violation of the U.S. Foreign Corrupt Practices Act or similar anti-corruption or money laundering law applicable in Brazil) shall not be grounds for termination;

11.2.8 The failure by Brazilian Master Franchisee to comply with any provision of this Agreement other than those defined as a Material Breach more than once in any period of 12 consecutive months; provided , that (i) promptly following any such breach by Brazilian Master Franchisee, McDonald’s shall notify Brazilian Master Franchisee in writing that the first breach (as contemplated by this Section) has occurred, and (ii) thereafter, a Material Breach shall have occurred only to the extent that Brazilian Master Franchisee (x) commits a subsequent breach within the 12-month period following the date of such initial notice and (y) fails to cure such breach within 30 days after McDonald’s delivers to Brazilian Master Franchisee a notice referencing this Section;

11.2.9 The failure by Brazilian Master Franchisee to pay any amount required to be paid to McDonald’s under this Agreement (including overdue interest thereon as provided in Section 14.1.3) that in the aggregate exceeds $80,000,000;

12. Remedies

12.1 Discretionary Termination . Upon the occurrence and during the continuance of a Material Breach, McDonald’s, at its sole discretion, may terminate this Agreement.

12.2 Mitigation . McDonald’s shall have the right, but not the obligation, to take such action as it may deem necessary or appropriate to cure or remediate any Material Breach, but no such action, cure or remediation shall constitute a waiver of any of McDonald’s rights or remedies hereunder or under Applicable Law with respect to such Material Breach. Any such actions taken by McDonald’s shall be at the sole expense of Brazilian Master Franchisee.

12.3 Automatic Termination . Upon the occurrence of a Material Breach specified in Section 11.2.2 this Agreement shall terminate without the need for any Party to take any further action.

13. Rights and Obligations Upon Termination or Expiration of the Master Franchise According to its Terms

13.1 Termination or Expiration of this Agreement . If the Agreement expires or terminates according to its terms, then:

13.1.1 McDonald’s shall have the right, but not the obligation, to acquire all, but not less than all, of the Equity Interests in Brazilian Master Franchisee at fair market value, as determined in accordance with terms to be agreed upon between the Parties.

13.1.2 Brazilian Master Franchisee shall pay to McDonald’s and its Affiliates, within ten Business Days following the effective date of the termination or expiration of this Agreement, or such later date that the amounts due are determined as provided in this Agreement any amounts owed to McDonald’s or any of its Affiliates which are then unpaid and any late charges with respect thereto.

13.1.3 In the event McDonald’s does not exercise its right to acquire all of the Equity Interests in Brazilian Master Franchisee pursuant to Section 13.1.1, then McDonald’s shall execute and deliver all necessary documents and instruments and perform any additional acts that McDonald’s determines to be necessary or appropriate to confirm the

continuing rights to the Intellectual Property and otherwise of any Franchisee under a Franchise Agreement the term of which extends beyond the applicable Term.

13.2. Responsibilities of Brazilian Master Franchisee upon Termination or Expiration . Upon termination or expiration of this Agreement, the Brazilian Master Franchisee shall:

13.2.1 Not directly or indirectly at any time or in any manner identify itself or any business as a current Brazilian Master Franchisee or licensee of, or as otherwise associated with McDonald’s or any of its Affiliates, or use any Intellectual Property or any colorable imitation thereof in any manner or for any purpose, or utilize for any purpose any trade name, trade or service mark or other commercial symbol that suggests or indicates a connection or association with McDonald’s or any of its Affiliates.

13.2.2 Unless McDonald’s is entitled to and does exercise its right to acquire the Equity Interests in Brazilian Master Franchisee, within five Business Days remove all signs, structures, elements or designs incorporating or containing any Intellectual Property, and return to McDonald’s or destroy all items, forms and materials containing any Intellectual Property or otherwise identifying or relating to a Franchised Restaurant and to comply fully with all Standards applicable to the closing or transfer of a McDonald’s Restaurant;

13.2.3 Within five Business Days, take such action as may be required to cancel all fictitious or assumed name or equivalent registrations relating to Brazilian Master Franchisee’s use of any Intellectual Property;

13.2.4 Not sell any McDonald’s branded product or service identified as part of the System;

13.2.5 If applicable, notify all search engines of the termination of Brazilian Master Franchisee’s right to use domain names incorporating or relating to the Intellectual Property and / or the Franchised Restaurants and Transfer (or cause to be Transferred) any domain name registrations within Brazil to McDonald’s or any other Person designated by McDonald’s;

13.2.6 Not sell any equipment covered by Patents to any third party unless authorized in writing by McDonald’s and to comply with McDonald’s directions regarding the disposition of such equipment at Brazilian Master Franchisee’s sole expense;

13.2.7 Furnish to McDonald’s, within 30 Business Days after the effective date of termination or expiration, evidence satisfactory to McDonald’s of Brazilian Master Franchisee’s compliance with the foregoing obligations; and

13.2.8 Immediately cease to use any of the Confidential Information which has been disclosed to, or otherwise learned or acquired by Brazilian Master Franchisee and, no later than three Business Days after termination or expiration, return to McDonald’s all copies of all Operations Manuals and all materials containing Confidential Information which have been loaned or made available hereunder.

13.3 Right to Hire Former Employees . McDonald’s shall be entitled to interview, solicit and / or hire any former employee of any Franchised Restaurant that are no longer being operated by Brazilian Master Franchisee or a Franchisee.

14. General Provisions

14.1 Effective Date . This Agreement shall become effective on the first date on which each of Brazilian Master Franchisee and McDonald’s shall have received all other consents and approvals required to be obtained in order for this Agreement to be the valid, binding and enforceable instrument of such Party (such date, the “Effective Date”).

14.2 Payments .

14.2.1 Brazilian Master Franchisee’s obligation to pay any fee or make any payment to McDonald’s at the times and in the manner required under this Agreement shall in no event be conditioned upon receipt by Brazilian Master Franchisee of any amount from any Franchisee.

14.2.2 Brazilian Master Franchisee shall at all times participate in an automatic debit/credit transfer program as specified by McDonald’s from time to time for the payment of all amounts due to McDonald’s hereunder. Brazilian Master Franchisee shall execute and deliver to McDonald’s such documents and instruments as may be necessary to establish and maintain such an automatic debit/credit transfer program.

14.2.3 Amounts payable by Brazilian Master Franchisee hereunder shall be paid in U.S. Dollars and shall be due and payable on the dates specified herein. If any payment required hereunder is not made when due, Brazilian Master Franchisee shall, to the fullest extent permitted by Applicable Law, pay to McDonald’s interest on the past due amount from and including the due date for such payment to, but excluding, the date of actual payment thereof at a per annum rate equal to

the highest rate allowed by Applicable Law or, if there is no maximum rate permitted by Applicable Law, then 15%. Such interest will be calculated on the basis of monthly compounding and the actual number of days elapsed, divided by 365. This late charge shall be in addition to any other remedy available to McDonald’s hereunder or under Applicable Law. Brazilian Master Franchisee acknowledges that nothing contained in this Section shall constitute an agreement by McDonald’s to accept any overdue payment or a commitment by McDonald’s to extend credit to, or otherwise finance, Brazilian Master Franchisee’s operation of the Brazilian Master Franchise Business.

14.2.4 Except for Continuing Franchise Fees, the calculation of U.S. Dollar equivalents for any amount payable hereunder on any day shall be made using (a) on the spot rate of exchange for settlement on such date as reported in The Wall Street Journal , Eastern Edition, as the New York foreign exchange selling rate applying to trading among banks in amounts of $1,000,000 or more, or, if not so reported; or (b) the arithmetic average of the day’s spread for settlement on such date as reported in the Financial Times , London Edition. In the case of Continuing Franchise Fees, the calculation of the amounts payable shall be based on the arithmetic average of the exchange rates determined in accordance with the preceding sentence of each day on which such exchange rates are published in the respective calendar month for which such Continuing Franchise Fees are owed.

14.2.5 The U.S. Dollar is the sole currency of account and payment for all amounts payable by any Brazilian Master Franchisee to McDonald’s hereunder, including damages. Any amount received or recovered in currency other than U.S. Dollars (whether as a result of or of the enforcement of, a judgment or order of a court of any jurisdiction or otherwise) shall only constitute a discharge of Brazilian Master Franchisee to the extent of the U.S. Dollars that McDonald’s is able to purchase with the amount so received or recovered in that other currency on the date of that receipt or recovery (or, if it is not practicable to make that purchase on that date, on the first date on which it is practicable to do so). If that U.S. Dollar amount is less than the amount expressed to be due to McDonald’s, Brazilian Master Franchisee shall indemnify and hold harmless McDonald’s against any loss or cost sustained by it in making any such purchase. For the purposes of this Section, it shall be sufficient for McDonald’s to certify that it would have suffered a loss had an actual purchase of U.S. Dollars been made with the amount so received in that other currency on the date of receipt or recovery (or, if a purchase of U.S. Dollars on such date had not been practicable, on the first date on which it would have been practicable). If Brazilian Master Franchisee is unable to pay Continuing Franchise Fees in U.S. Dollars as result of the imposition

of any exchange controls by any Governmental Authority, then Brazilian Master Franchisee shall make such payments on its behalf as and when such payment is due and payable.

14.2.6 Except to the extent provided in this Section, amounts payable by Brazilian Master Franchisee to McDonald’s hereunder shall be made without withholding or deduction for or on account of any present or future taxes, duties, assessments, fees or other governmental charges imposed or levied by or on behalf of any jurisdiction within Brazil or any political subdivision or taxing authority thereof or therein (“ Local Taxes ”), except that Brazilian Master Franchisee shall withhold and pay by their due date all Local Taxes, if any, which are required to be withheld and paid by the Brazilian Master Franchisee under the Applicable Law of Brazil by the Brazilian Master Franchisee to McDonald’s under this Agreement. If any Local Taxes withheld by Brazilian Master Franchisee or otherwise imposed on McDonald’s in respect of such a payment are not creditable by McDonald’s for U.S. federal income tax purposes (including as a result of McDonald’s not being treated as the recipient and beneficial owner of the related income for Local Tax purposes, or otherwise not being treated as the taxpayer with respect to such Local Taxes for U.S. foreign tax credit purposes), Brazilian Master Franchisee will pay to McDonald’s such additional amounts as may be necessary to ensure that any net payment received by McDonald’s after such withholding or other payment of Local Taxes is equal to the amount that McDonald’s would have received had no such withholding or other payment been required. Brazilian Master Franchisee shall indemnify and hold McDonald’s and its Affiliates harmless against any penalties, interest or expenses incurred by or assessed against McDonald’s or its Affiliates as a result of the failure by any Brazilian Master Franchisee to withhold Local Taxes or to pay the Local Taxes by their due date to the appropriate taxing authority.

14.3 Set-Off Rights . Brazilian Master Franchisee shall not have any right to any set-off, counterclaim, recoupment, defense or other claim, right or action whatsoever against McDonald’s or any of its Affiliates.

14.4 Severability . If any provision of this Agreement is invalid, inoperative or unenforceable for any reason, such circumstances shall not have the effect of rendering such provision invalid, inoperative or unenforceable in any other case or circumstance, or of rendering any other provision hereof invalid, inoperative, or unenforceable to any extent whatsoever.

14.5 Approvals and Consents of McDonald’s . Unless a different standard is expressly required in this Agreement, whenever in this Agreement any action is subject to McDonald’s prior approval or consent, such approval or consent may be granted or denied by McDonald’s in the exercise of its discretion

or business judgment based on its assessment of the overall best interest of the System and / or franchise program. Brazilian Master Franchisee shall make a timely written request for any such approval or consent, and each such approval or consent shall be evidenced by a writing signed by an officer of McDonald’s. Any approval or consent may be subject to such conditions as McDonald’s deems appropriate or be granted on a “test” or temporary basis.

14.6 Waiver . No Party to this Agreement may (a) extend the time for the performance of any of the obligations or other acts of any other Party; or (b) waive compliance with any of the agreements of the other Party or conditions to such Party’s obligations contained herein, except to the extent such extension or waiver is set forth in an instrument in writing signed by the Party to be bound thereby. Any waiver of any term or condition shall not be construed as a waiver of any subsequent breach or a subsequent waiver of the same term or condition, or a waiver of any other term or condition of this Agreement. The failure of any Party hereto to assert any of its rights hereunder shall not constitute a waiver of any of such rights. All rights and remedies existing under this Agreement are cumulative with, and not exclusive of any rights or remedies otherwise available under this Agreement or under Applicable Law. The assertion or employment of any right or remedy hereunder, or otherwise, shall not prevent the concurrent assertion or employment of any other appropriate right or remedy.

14.7 Benefits of this Agreement . This Agreement is binding upon the Parties hereto and their respective executors, administrators, heirs, permitted Transferees and successors in interest. This Agreement shall inure to the benefit of any permitted Transferee, to McDonald’s, its Affiliate and licensors as provided in Sections 7 and 10 and to the McDonald’s Indemnified Parties. McDonald’s Corporation shall be an intended third party beneficiary of each obligation owed to McDonald’s by Brazilian Master Franchisee under this Agreement.

14.8 Counterparts . This Agreement may be executed and delivered in one or more counterparts, and by the different Parties hereto in separate counterparts, each of which when executed shall be deemed to be an original and all of which taken together shall constitute one and the same agreement.

14.9 Specific Performance . Brazilian Master Franchisee acknowledges and agrees that any violation of Section 7 or Section 10 would cause McDonald’s irreparable injury for which damages may not be adequate, and that McDonald’s shall be entitled to injunctive relief, preventive measures or any remedy as may be available, whether judicially or extra-judicially, and including specifically such relief as may be provided by a court of competent jurisdiction or any other Governmental Authority in the exercise of its powers, in order to enforce the obligations established therein and/or to restrain any actual or threatened conduct of any Party in violation of any such Section.

14.10 Notices . Any and all notices required or permitted under this Agreement shall be in writing and shall be personally delivered, sent via an internationally recognized overnight delivery service, or sent by facsimile or electronic transmission (with a confirming copy sent by international air mail) to the following respective addresses or facsimile number or e-mail address unless and until a different address or facsimile number has been designated by written notice to each other Party:


		If to McDonald’s:		McDonald’s Latin America, LLC
				One McDonald’s Plaza
				Oak Brook, Illinois 60523 U.S.A. Attention: General Counsel of the Americas

		With a copy to:		McDonald’s Corporation
				2915 Jorie Boulevard
				Oak Brook, Illinois 60523 U.S.A.
				Attention: General Counsel

		If to Brazilian Master Franchisee:		Arcos Dourados Comercio de Alimentos Ltda. Alameda Amazonas, 253 Barueri, São Paulo

				Brazil 06454-070

Notices shall be addressed to the Party to be notified at its most current business address or telecopy number or e-mail address of which the notifying Party has been notified. Any notice shall be deemed to have been given at the earlier of receipt, or the next Business Day after sending by facsimile, electronic transmission or overnight delivery service. “ Business Day ”, for purposes of this Section, shall mean a day other than a Saturday, Sunday or other day on which commercial banking institutions are authorized or required by law to close in Brazil or, in the case of McDonald’s, the State of Illinois, United States of America.

14.11 Survival . The obligations of Brazilian Master Franchisee to pay any amount due to McDonald’s hereunder and the obligations contained in Sections 5, 9 and I4 shall survive expiration or termination of this Agreement.

14.12 No Third Party Beneficiaries . Except as otherwise expressly provided herein, nothing in this Agreement is intended, nor shall be deemed, to confer any rights or remedies upon any Person not a party hereto. McDonald’s does not warrant that such obligations have been imposed on or implemented by or on any other McDonald’s franchisee or any McDonald’s Restaurant.

14.13 Language . This Agreement is entered into in the English language. If a translation of this Agreement into any other language be required or desired for any reason, it is understood that in all matters involving interpretations of this Agreement, the English text shall control.

14.14 Criminal or Civil Penalties . No Party shall engage in any activity that would expose any other Party to a risk of criminal or civil penalties under Applicable Law.

15. Governing Law and Arbitration

15.1 Governing Law . This Agreement shall be governed by the substantive laws of the State of Illinois, United States of America, without giving effect to principles of conflicts of laws. To the extent that it may be applicable, the Parties agree to exclude the application of the United Nations Convention on Contracts for the International Sale of Goods.

15.2 International Arbitration .

15.2.1 The Parties agree that any dispute, controversy or claim arising out of, relating to or in connection. with this Agreement, including, without limitation, any dispute regarding its validity or termination, or the performance or breach thereof (each a “ Dispute ”), shall be finally settled by binding international arbitration in Chicago, Illinois, before a tribunal of three arbitrators (the “ Tribunal ”). The arbitration shall be administered by the International Court of Arbitration of the International Chamber of Commerce (the “ ICC ”) in accordance with the ICC Rules of Arbitration (the “ ICC Rules ”) as in effect at the time of the arbitration, except as they may be modified herein or by agreement of the Parties. The place of arbitration shall be Chicago, Illinois. Notwithstanding anything to the contrary in this Agreement, the arbitration provisions set forth in this Agreement, and any arbitration conducted thereunder, shall be governed exclusively by the Federal Arbitration Act, Title 9 United States Code to the exclusion of any state or municipal law of arbitration.

15.2.2 The arbitration shall be conducted in the English language. Notwithstanding the foregoing, any Arbitrating Party may submit testimony or documentary evidence in any other language; provided that the Arbitrating Party submitting such evidence, at its own cost, also furnishes to the other Arbitrating Party or Arbitrating Parties, as applicable, a translation of such testimony or evidence into the English language.

15.2.3 In the event that there are two Parties to the Dispute, each Party to the arbitration (each an “ Arbitrating Party ”) shall nominate one arbitrator, obtain its nominee’s acceptance of such nomination, and deliver

written notification of such nomination and acceptance to the other Arbitrating Party and the ICC within 30 days after delivery of the request for arbitration. In the event an Arbitrating Party fails to nominate an arbitrator or deliver notification of such nomination to the other Arbitrating Party and the ICC within this time period, upon request of either Arbitrating Party, such arbitrator shall instead be appointed by the ICC within 30 days of receiving such request. The Arbitrating Parties shall use reasonable best efforts to agree upon a third arbitrator within 40 days after delivery of the request for arbitration. If the Arbitrating Parties are unable to agree upon a third arbitrator within this time period, then the two arbitrators appointed in accordance with the above provisions shall nominate the third arbitrator and notify the Arbitrating Parties and the ICC in writing of such nomination within 15 days of their appointment. If the first two appointed arbitrators fail to nominate a third arbitrator or notify the Arbitrating Parties and the ICC of that nomination within this time period, then, upon request of either Arbitrating Party, the third arbitrator shall be appointed by the ICC within 15 days of receiving such request. The third arbitrator shall serve as chairman of the Tribunal.

15.2.4 In the event that there are more than two Arbitrating Parties:

receiving such request. The third arbitrator shall serve as chairman of the Tribunal.

15.2.5 Each member of the Tribunal shall be a lawyer licensed to practice in a state of the United States of America and shall be fluent in the English language.

15.2.6 Each Party agrees that it will provide discovery consistent with the United States Federal Rules of Civil Procedure, including but not limited to depositions upon oral examination and responses to written interrogatories.

15.2.7 The Parties agree to submit to (i) the exclusive personal jurisdiction of the state and federal courts sitting in Chicago, Illinois for the purposes of (A) enforcing this agreement to arbitrate; and (B) applying to a judicial authority for interim or conservatory measures in accordance with Article 23(2) of the ICC Rules; and to (ii) the non-exclusive jurisdiction of such courts for purposes of obtaining judgment upon the award rendered by the Tribunal.

15.2.8 The Parties consent to the service of process for the purposes of clause (i) of Section 15.2.7 by appointing CT Corporation, which maintains an office at 208 South LaSalle Street, Suite 814; Chicago, Illinois, as its agent to receive service of process or other legal summons. Each of the Parties further consents to the service of process irrevocably for the purposes of clause (i) of Section 15.2.7 by the mailing of copies thereof by registered or certified mail, postage prepaid, return receipt requested, to each such party at its address as provided in Section 14.10. Nothing in this Section shall affect the right of any Party to serve legal process in any other manner permitted by Applicable Law.

15.2.9 In accordance with Article 23(2) of the ICC Rules, the Parties may apply to the competent judicial authority specified in Section 15.2,7 for interim or conservatory measures. The application of a Party to such judicial authority for such interim or conservatory measures shall not be deemed a waiver of this agreement to arbitrate.

15.2.10 The award of the Tribunal shall be promptly performed or paid (as the case may be), free and clear of any tax and deduction, and any costs, fees and taxes incident to enforcing the award shall, to the fullest extent permitted by law, be charged against the Arbitrating Party resisting such enforcement. McDonald’s may request that an award be paid in Equity Interests of Brazilian Master Franchisee, in which case the Party against which the award is entered shall cause the transfer of such Equity Interests to which McDonald’s is entitled based on the fair market value of the Equity Interests as determined by the Tribunal and Brazilian Master Franchisee shall register such transfer in its books; provided , that McDonald’s shall first provide written notice of such election to Brazilian Master Franchisee and permit Brazilian Master Franchisee a period of not less than 30 days in which to elect to pay the award in cash rather than issue Equity Interests to McDonald’s. Any award shall include interest from the date of any damages incurred, and from the date of the award until paid in full, at a rate to be fixed by the Tribunal.

15.2.11 The Parties waive to the fullest extent permitted by law any rights to appeal to, or to seek review of the award of the Tribunal by, any court.

15.2.12 Except as may be required by Applicable Law or court order, the Parties agree to maintain confidentiality as to all aspects of any arbitration, including its existence and results, except that nothing herein shall prevent any Party from disclosing information regarding such arbitration for purposes of the proceedings described in clause (i) of Section 15.2.7. The Parties further agree to obtain the arbitrators’ agreement to preserve the confidentiality of any arbitration.

15.2.13 The Parties expressly declare that they have jointly decided to enter into this arbitration covenant freely and voluntarily in order to have the benefit of an alternative dispute resolution method.

15.3 Limitations . Except for claims arising from Brazilian Master Franchisee’s non-payment or underpayment of amounts due to McDonald’s or any of its Affiliates, any Dispute arising out of or relating to this Agreement or the relationship of the Parties hereto shall be barred unless an arbitration proceeding is commenced within two years from the date the complaining Party knew or should have known of the facts giving rise to such Claim.

15.4 SPECIAL DAMAGES . EXCEPT WITH RESPECT TO BRAZILIAN MASTER FRANCHISEE’S OBLIGATION TO INDEMNIFY THE INDEMNIFIED PARTIES PURSUANT TO SECTION 9 AND CLAIMS MCDONALD’S BRINGS AGAINST ANY OTHER PARTY FOR ITS UNAUTHORIZED USE OF THE TRADEMARKS OR ANY OTHER

INTELLECTUAL PROPERTY OR ANY UNAUTHORIZED USE OR DISCLOSURE OF ANY CONFIDENTIAL INFORMATION, MCDONALD’S AND EACH OTHER PARTY WAIVE TO THE FULLEST EXTENT PERMITTED BY LAW ANY RIGHT TO OR CLAIM FOR ANY PUNITIVE, MORAL, EXEMPLARY OR ANY SIMILAR DAMAGES AGAINST THE OTHER AND AGREE THAT, IN THE EVENT OF A DISPUTE BETWEEN OR AMONG THE PARTIES, ANY PARTY MAKING A CLAIM WILL BE LIMITED TO EQUITABLE RELIEF AND TO RECOVERY OF ANY ACTUAL DAMAGES IT SUSTAINS,

16. Acknowledgements

16.1 Evaluation and Advice . Brazilian Master Franchisee acknowledges that it has read this Agreement, that it has had the opportunity to evaluate this Agreement and be advised by its counsel and financial, tax and business advisors with respect to its rights and obligations hereunder and the scope, cost and risk of the undertaking contemplated by this Agreement. Brazilian Master Franchisee understands and accepts the terms, conditions and covenants contained in this Agreement as being reasonably necessary to maintain McDonald’s high standards of quality and service and the uniformity of those standards at all Franchised Restaurants in order to protect and preserve the goodwill or reputation of the System and the Trademarks.

16.2 Independent Investigation . Brazilian Master Franchisee acknowledges that it has conducted an independent investigation of the business venture contemplated by this Agreement. Brazilian Master Franchisee recognizes that this venture involves business risks and that the success of the venture is largely dependent upon their respective business abilities. McDonald’s expressly disclaims the making of and Brazilian Master Franchisee acknowledges that it has not received or relied upon, any guaranty, express or implied, as to the revenues, profits or success of the business venture. Brazilian Master Franchisee acknowledges that it has not received or relied on any representations by McDonald’s, any of its Affiliates or their respective officers, directors, employees or agents, except as expressly set forth herein. Each Party acknowledges that in all dealings with respect to this Agreement, such Party’s officers, directors, employees and agents act only in a representative capacity and not in an individual capacity.

16.3 No Broker . Brazilian Master Franchisee acknowledges it did not use a broker to acquire the Brazilian Master Franchisee Rights or the Brazilian Franchise Business.

17. Amendments

17.1 Amendments . Except as otherwise expressly permitted by this Agreement, no change, modification, amendment or waiver of any of the provisions of this Agreement shall be effective and binding upon any Party, including by custom, usage of trade, or course of dealing or performance, unless it is in writing, specifically identified as an amendment hereto and signed by authorized representatives of each of the Parties.

[STATE OF ILLINOIS SEAL]

State of Illinois

Executive Department

[notary stamp]


UNITED STATES OF AMERICA	)
	)	SS
STATE OF ILLINOIS	)

CERTIFICATE OF AUTHORITY

I, JESSE WHITE, Secretary of State of the State of Illinois, certify that

DIANE M. GAITAN

the person named in the seal and signature on the attached document, is a

NOTARY PUBLIC

for the State of Illinois and was authorized to act as such at the time of the document’s notarization.

To verify this Certificate of Authority for a Notorial Act, I have affixed my signature and seal of office JANUARY 9, 2009.

/s/ Jesse White

Secretary of State

State of Illinois

[STATE OF ILLINOIS SEAL]

IN WITNESS WHEREOF, the Parties hereto have duly executed and delivered this Agreement on the day and year first above written,


McDonald’s:		Brazilian Master Franchisee:

M C D ONALD ’ S L ATIN A MERICA , LLC		A RCOS D OURADOS C OMÉRCIO D E A LIMENTOS L TDA .

By:	/s/ Manuel Favela	By:	/s/ Marcelo Rabach
	Name: Manuel Favela		Name: Marcelo Rabach
	Title: Latin America Vice President – Chief Financial Officer		Title: Director Presidente

		W ITNESS

		By:	/s/ Lorrie Loehman
			Name: Lorrie Loehman

Subscribed and sworn to before me this 10 day of November 2008.

		W ITNESS

By:	/s/ Diane M. Gaitan	By:	/s/ Carrie L. Cozzi
	Notary Public		Name: Carrie L. Cozzi

	[notary seal]		[notary seal]

EXHIBIT 1

DEFINITIONS

The following terms, when used in this Agreement, shall have the following meanings:

“ A&R MFA ” has the meaning set forth in the preamble.

“ Agreement ” has the meaning set forth in the preamble.

“ Anti-Terrorism Laws ” means Executive Order 13224 issued by the President of the United States or America (or any successor Order), the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act (USA PATRIOT Act) of 2001 (or any successor legislation) and all other present and future federal, state and local laws, ordinances, regulations, policies, lists, Orders and any other requirements of any Governmental Authority addressing or in any way relating to terrorist acts and acts or war.

“ Arbitrating Party ” has the meaning set forth in Section 152.3.

Exh. 1-1

“ Assets ” means any right or interest in or to property of any kind whatsoever, whether real, personal or mixed and whether tangible or intangible, including Capital Stock.

“ BMFR Term ” has the meaning set forth in Section 5.1.1.

“ Brazilian Franchise Business ” means the business operated, directly or indirectly, by Brazilian Master Franchisee hereunder and pursuant to the Brazilian Master Franchisee Rights, including all Assets used therein.

“ Brazilian Master Franchisee ” has the meaning set forth in the preamble.

“ Brazilian Master Franchisee Restaurant ” means a Franchised Restaurant owned and operated by Brazilian Master Franchisee.

“ Brazilian Master Franchisee Rights ” has the meaning set forth in Section 3.1.

“ Business Day ” means a day other than a Saturday, Sunday or other day on which commercial banking institutions are authorized or required by law to close in the State of Illinois.

“ Business Facilities Lease ” means a lease agreement related to the business and equipment of a McDonald’s Restaurant entered into between Brazilian Master Franchisee and a Franchisee.

“ Claim ” means any allegation or demand from any Person.

“ Competitive Business ” means any Person engaged in a QSR Business or any Person operating under the list of marks or trade names provided by McDonald’s on the date hereof, which list may be amended by McDonald’s from time to time.

Exh. 1-2

“ Confidential Information ” means certain confidential and proprietary information and trade secrets that McDonald’s and its Affiliates possess or that may be created hereunder, consisting of (a) methods, procedures and techniques for locating, designing, developing, constructing, decorating and equipping Franchised Restaurants; (b) techniques for advertising, marketing, pricing and soliciting the products of the Franchised Restaurants; (c) marketing and advertising programs, calendars and plans; (d) methods, standards, specifications and procedures for operation of a Franchised Restaurant, including the Standards; (e) sales management techniques, information management techniques, business technology and information management technology; (f) the Intellectual Property to the extent not in the public domain; and (g) all other information relating to the business and operation of the System.

“ Continuing Franchise Fees ” has the meaning set forth in Section 5.2.1.

“ Control ” means, with respect to the relationship between or among two or more Persons, the possession, directly or indirectly or as trustee or executor, of the power to direct or cause the direction of the affairs or management of a Person, whether through the ownership of voting securities, as trustee or executor, by contract or otherwise, including the ownership, directly or indirectly, of securities having the power to elect a majority of the board of directors or similar body governing the affairs of such Person, and the terms “ Controlled by ” and “under Common Control with ” have correlative meanings

“ Conventional Franchising Transaction ” means the opening of a Franchised Restaurant by a Franchisee or the voluntary, involuntary, direct or indirect sale, assignment, transfer or other disposition of a Franchised Restaurant to a Franchisee that has each of the following characteristics: (i) the Brazilian Master Franchisee owns, directly or indirectly, the fee simple interest (or the local equivalent) in, or leases (or the local equivalent) directly or indirectly from the owner of such interest, all real property on which such Franchised Restaurant is located; (ii) Brazilian Master Franchisee, directly or indirectly, has made or will make material investments in the real property on which such Franchised Restaurant is located; and (iii) the Franchisee has made or will make material investments in such Franchised Restaurant.

“ Customer Service Program ” means a program for measuring customer satisfaction implemented through the use of one or more of the following (or

Exh. 1-3

similar) means: (a) a customer satisfaction hotline; (b) customer surveys; and (c) “mystery shop” visits.

“ Defending Party ” has the meaning set forth in Section 15.2.4(a).

“ Developed IP ” has the meaning set forth in Section 7.8.

“ Dispute ” has the meaning set forth in Section 15.2.1.

“ Distributor ” means any Person that distributes products and services to Franchised Restaurants or that arranges for such distribution.

“ Effective Date ” has the meaning set forth in Section 14.1.

“ Existing Brazilian Master Franchisee Restauran t” means a Brazilian Master Franchisee Restaurant in operation as of the date hereof.

“ Existing Franchisee ” means a Person that operates one or more McDonald’s Restaurants under an Existing Franchise Agreement

“ Existing Franchise Agreement ” means a Franchise Agreement in effect on and as of August 3, 2007, exclusive of any renewal or amendment thereof.

“ Existing Royalty ” has the meaning set forth in Section 5.2.2.

“ Force Majeure ” means wars or acts of war, the outbreak of hostilities (regardless of whether war is declared), rebellions, revolutions and civil commotions.

“ Franchise Agreement ” has the meaning set forth in Section 6.4.2.

Exh. 1-4

“ Franchisees ” has the meaning set forth in Section 6.3.1.

“ Franchised Restaurant ” means a McDonald’s Restaurant, including any related Incorporated McCafe and each Initial Freestanding McCafe and each Satellite, to be developed, owned, operated or managed by Brazilian Master Franchisee and / or its Franchisees in accordance with and subject to the terms of this Agreement and any applicable Franchise Agreement.

“ Franchisor ” has the meaning set forth in the preamble.

“ Freestanding McCafe ” means any McCafe other than an Incorporated McCafe.

“ Global Training Standards ” means the global training standards to be adopted by McDonald’s pursuant to the Global Training Alignment strategy, as amended from time to time.

“ Governmental Authority ” means any federal, provincial, state, territorial or local government, any governmental, regulatory or administrative authority, agency or commission or any court or tribunal or arbitral body in Brazil.

“ GROIP ” means the McDonald’s Global Restaurant Operation Improvement Process as in effect as of August 3, 2007, as it may be replaced or amended by McDonald’s from time to time.

“ Gross Sales ” means, with respect to any or all of the Franchised Restaurants as the context may require, all revenues of Brazilian Master Franchisee or any Franchisee, as applicable, attributable to sales by such Franchised Restaurants, whether such sales be evidenced by check, cash, credit, charge account, debit card, exchange, gift cards and certificates or otherwise, and shall include the amounts received from the sale of goods, wares, and merchandise, food, beverages and tangible property of every kind and nature, promotional or otherwise, and for services performed from or at such Franchised Restaurants, together with the amount of all orders taken or received at the Franchised Restaurants, whether such orders be filled from the Franchised Restaurants or elsewhere. Gross Sales with respect to any Franchised Restaurant shall not include sales of merchandise for which cash has been refunded, provided that such sales shall have previously been included in such Gross Sales. There shall be deducted from Gross Sales with respect to any Franchised Restaurant the price of merchandise returned by customers for exchange, provided that such returned merchandise shall have been previously included in Gross Sales, and provided further that the sales price of merchandise delivered to the customer in exchange shall be included in such Gross Sales. Gross Sales with respect to any Franchised Restaurant shall not include the amount of any sales, service, value-added or other similar taxes imposed by any local, foreign, federal, state,

Exh. 1-5

municipal, or other Governmental Authority that are actually collected from customers and paid by Brazilian Master Franchisee or the applicable Franchisee to such Governmental Authority, Each charge or sale upon credit shall be treated as a sale for the full price in the month during which such charge or sale shall be made, irrespective of the time when Brazilian Master Franchisee or the applicable Franchisee shall receive payment (whether full or partial) therefor.

“ ICC ” has the meaning set forth in Section 15.2.1.

“ ICC Rules ” has the meaning set forth in Section 15.2.1.

“ Incorporated McCafe ” means a McCafe that is fully incorporated within the premises of a McDonald’s Restaurant.

“ Indemnitee ” has the meaning set forth in Section 9.2.

“ Indemnitor ” has the meaning set forth in Section 9.2.

“ Initial BMFR Fee ” has the meaning set forth in Section 5.1.1.

“ Initial SFR Fee ” has the meaning set forth in Section 5.1.2.

“ Initial Franchise Fees ” has the meaning set forth in Section 5.1.2.

“ International Franchisee Royalty ” means, as of the date of any determination, the continuing franchisee fee royalty rate applicable to the majority of McDonald’s Restaurants operated by franchisees outside of Argentina, Aruba, Brazil, Chile, Colombia, Costa Rica, Curacao, Ecuador, French Guiana, Guadeloupe, Martinique, Mexico, Panama, Peru, Puerto Rico, the United States of America, Uruguay, Venezuela and the U.S. Virgin Islands of St. Thomas and St. Croix.

“ Initial Freestanding McCafes ” means each Freestanding McCafe owned by Brazilian Master Franchisee on the Closing Date.

“ Intellectual Property ” means, collectively, the Copyrights, Patents, Trademarks, Trade Secrets and any Developed IP.

“ Local Taxes ” has the meaning set forth in Section 14.2.6.

Exh. 1-6

changing, substituting or replacing the same; and any and all expenses of recalls, refunds, compensation, public notices and such other amounts incurred.

“ Mandatory Marketing Commitment ” has the meaning set forth in Section 6.6.

“ Material Breach ” has the meaning set forth in Section 11.2.

“ McCafe ” means a McCafe-branded point of distribution offering a limited menu of pastries, coffee, tea and other beverages and operated under the System and the Trademarks.

“ McDonald’s ” has the meaning set forth in the preamble.

“ McDonald’s Indemnified Parties ” has the meaning set forth in Section 9.1.

“ McDonald’s Restaurant ” means any McDonald’s-branded restaurant operated under the System.

“ New Franchisee Royalty ” has the meaning set forth in Section 5.2.3.

“ New Franchise Agreement ” has the meaning set forth in Section 6.4.2.

“ New Franchisees ” has the meaning set forth in Section 6.3.1.

“ Operations Manuals ” means the various operations and procedures manuals and business manuals (as such manuals may be amended and supplemented by McDonald’s from time to time) owned by McDonald’s and provided to Brazilian Master Franchisee and its Franchisees, regardless of the form or medium in which they may be provided and including all translations made or obtained by Brazilian Master Franchisee, which contain suggested and mandatory standards, specifications and procedures and information relative to the System, certain obligations of Brazilian Master Franchisee and its Franchisees, and the operation of each Franchised Restaurant.

“ OFAC ” means the U.S. Treasury Department’s Office of Foreign Asset Control.

Exh. 1-7

“ Order ” means the entry in any judicial or administrative proceeding brought under Applicable Law by any Person of any permanent or preliminary injunction or other judgment, order or decree.

“ Parties ” has the meaning set forth in the preamble.

“ Patents ” means, collectively, any and all patents now or hereafter owned, used, acquired or registered by McDonald’s or licensed to McDonald’s by one of its Affiliates.

“ Petitioning Party ” has the meaning set forth in Section 15.2.4(a).

“ Principal ” has the meaning set forth in Section 2.2.

“ QSR Standards ” means the standards for quality, service and cleanliness established by McDonald’s from time to time and memorialized in the Standards, as amended by McDonald’s from time to time.

“ QSR Business ” means any Person operating restaurants or other points of distribution in the “quick-service” segment of the restaurant industry.

“ Real Estate ” means any leasehold, free-hold or other property interest in real estate or any part thereof, including improvements thereon.

“ Regular Royalty ” has the meaning set forth in Section 5.2.1.

“ Related Party ” means:

(a) with respect to any natural Person,

(i) any of such Person’s parents, siblings, children and spouse, the parents, siblings and children of such Person’s spouse, and the spouses of such Person’s children (“ Relatives ”);

(ii) any other Person with respect to which such Person or any of his Relatives serves as a director, officer, partner, member or in a similar function;

(iii) any entity in which such Person or any of his Relatives, individually or collectively, owns or controls, directly or indirectly, 5% or more of the Equity Interests; and

Exh. 1-8

(iv) any trust or estate in which such Person or any of his Relatives has a substantial interest or serves as a trustee or in a similar capacity;

(b) with respect to any other Person,

(i) any Person that directly or indirectly owns or controls 5% or more of the Equity Interests of such Person and the Related Parties of such Person;

(ii) any other Person in which such Person owns 5% or more of the Equity Interests;

(iii) any director, officer, partner, member or similar representative of such Person or any of its Related Parties; and

(iv) any Affiliate of such Person.

“ Relatives ” has the meaning set forth in the definition of “ Related Party .”

“ Relocation ” means the process whereby a Franchised Restaurant is closed pursuant to an Approved Closing and is reconstructed in the same trading area to serve the same customer base, it being understood that the Relocated Franchised Restaurant may or may not be adjacent to the original site but, if adjacent, shall not use any portion of the original premises. “ Relocate ” and “ Relocated ” have correlative meanings.

“ Restaurant Manager ” means the individual having primary day-to-day responsibility for the operations of any Franchised Restaurant.

“ Satellite ” means a McDonald’s-branded point of distribution operated under the System and the Trademarks that (a) has one or more of the following characteristics: (i) such point of distribution’s operations are contingent upon the provision of services by another Franchised Restaurant in the same trading area; (ii) such point of distribution offers a limited menu of products; (iii) such point of distribution is operated from a location that is approximately 30% of the size (in terms of square feet) of the average size of a Franchised Restaurant that is not a Satellite or a McCafe in Brazil; (iv) such point of distribution generates Gross Sales that are approximately 50% of the Gross Sales of a Franchised Restaurant that is not a Satellite or a McCafe in Brazil; or (v) such point of distribution is located within a Wal-Mart-branded retail location; and (b) has been expressly designated as a “Satellite” by McDonald’s.

Exh. 1-9

“ System ” has the meaning set forth in Section 2.1.

“ Term ” has the meaning set forth in Section 4.1.

“ Trademarks ” means, collectively, those trademarks, service marks, logos, designs, trade dress and domain names set forth in Exhibit 2 , attached hereto and incorporated by reference herein, as such Exhibit may be amended from time to time by agreement of the Parties, and such other trademarks, service marks, logos, designs, trade dress and domain names as may be agreed upon by the Parties from time to time relating to the development, ownership, operation, promotion and management of the Franchised Restaurants.

Exh. 1-10

“ Tribunal ” has the meaning set forth in Section 15.2.1.

“ U.S. Dollar ” or “ $ ” means the lawful currency of the United States of America.

Exh. 1-11

The trademarks listed in this chart are licensed pursuant to the terms and conditions of the applicable

agreement for use only in Brazil .


*Country*	*Trademark*	*Reg*	*Classes and Goods/Services*	*Owner Name*
Brazil	(BIRDIE THE EARLY BIRD DESIGN)	820982881	42 Int. DESIGN SERVICES OF RESTAURANTS, ESTABLISHMENTS AND SIMILAR FACILITIES.	McDonald’s Intl. Property Co. Ltd.

Brazil	(BIRDIE THE EARLY BIRD DESIGN)	820982903	41 Int. SERVICES OF TRAINING OF PERSONS IN THE MANAGEMENT AND OPERATION OF RESTAURANTS AND OF ESTABLISHMENT AND SIMILAR FACILITIES.	McDonald’s Intl. Property Co. Ltd.

Brazil	(CAPTAIN AND MATEY)	816820066	38.60 Brazil FOOD SERVICES.	McDonald’s Intl. Property Co. Ltd.

Brazil	(GOLDEN ARCHES LOGO)	006348785	38.60 Brazil FOOD SERVICES.	McDonald’s Intl. Property Co. Ltd.

Brazil	(GOLDEN ARCHES INTERNET LOGO)	822889234	42 Int. SERVICES RENDERED OR ASSOCIATED WITH OPERATING AND FRANCHISING RESTAURANTS AND OTHER ESTABLISHMENTS OR FACILITIES ENGAGED IN PROVIDING FOOD AND DRINK PREPARED FOR CONSUMPTION; PREPARATION AND SALE OF CARRY-OUT FOODS; THE DESIGNING OF RESTAURANTS, ESTABLISHMENTS AND FACILITIES; TRAINING OF PERSONS IN THE MANAGEMENT AND OPERATION OF SUCH RESTAURANTS, ESTABLISHMENTS AND FACILITIES; PROVIDING COMPUTERS AND ACCESS TO ON-LINE SERVICES, GAMES AND WEBSITE FOR EDUCATIONAL USES AND ENTERTAINMENT.	McDonald’s Intl. Property Co. Ltd.

Brazil	APPLE PIE TREE (APPLE PIE TREE DESIGN)	816290628	38.60 Brazil FOOD SERVICES.	McDonald’s Intl. Property Co. Ltd.

Brazil	AUTOMAC	811482278	38.60 Brazil RESTAURANT SERVICES.	McDonald’s Intl. Property Co. Ltd.

The trademarks listed in this chart are licensed pursuant to the terms and conditions of the applicable

agreement for use only in Brazil .


*Country*	*Trademark*	*Reg*	*Classes and Goods/Services*	*Owner Name*
Brazil	BIG MAC	720122449	30 Int. EDIBLE SANDWICHES, MEAT SANDWICHES. PORK SANDWICHES, FISH SANDWICHES, CHICKEN SANDWICHES, BISCUITS, BREAD, CAKES, COOKIES, OAT PASTRIES INCLUDED IN THIS CLASS.	McDonald’s Intl. Property Co. Ltd.

Brazil	BIG MAC	770222633	29 Int. MEAT, POULTRY AND EGGS FOR FOOD, AS LONG AS INCLUDED IN THIS CLASS.	McDonald’s Intl. Property Co. Ltd.

Brazil	BIG MAC	790027305	42 Int. FOOD SERVICES.	McDonald’s Intl. Property Co. Ltd.

Brazil	BIG MAC (BIG MAC DESIGN)	790202239	42 Int. FOOD SERVICES.	McDonald’s Intl. Property Co. Ltd.

Brazil	BIRDIE THE EARLY BIRD (BIRDIE THE EARLY BIRD DESIGN)	814380727	42 Int. FOOD SERVICES.	McDonald’s Intl. Property Co. Ltd.

Brazil	CALDO & FREDDO	200073176	30 Int. CHOCOLATE.	McDonald’s Intl. Property Co. Ltd.

Brazil	CALDO & FREDDO	822005069	29 Int. FRUITS AND DESSERTS [SWEETS] INCLUDED IN THIS CLASS.	McDonald’s Intl. Property Co. Ltd.

Brazil	CHICKEN MCNUGGETS (STYLIZED)	814067867	29.10 Brazil MEAT, POULTRY AND EGGS FOR FOOD.	McDonald’s Intl. Property Co. Ltd.

Brazil	CHICKEN NUGGETS	812650719	29.10, 29.30, 29.40 Brazil MEAT, POULTRY AND EGGS FOR FOOD, FRUITS, GREENS, VEGETABLES, AND CEREALS; FATS AND EDIBLE OILS.	McDonald’s Intl. Property Co. Ltd.

Brazil	EGG MCMUFFIN	790202182	29 Int. MEAT, POULTRY, AND EGGS FOR FOOD.	McDonald’s Intl. Property Co. Ltd.

The trademarks listed in this chart are licensed pursuant to the terms and conditions of the applicable

agreement for use only in Brazil .


*Country*	*Trademark*	*Reg*	*Classes and Goods/Services*	*Owner Name*
Brazil	EGG MCMUFFIN	823780481	30 Int. EDIBLE SANDWICHES, MEAT SANDWICHES, PORK SANDWICHES, FISH SANDWICHES, CHICKEN SANDWICHES, BISCUITS, BREAD, CAKES, COOKIES. CHOCOLATE, COFFEE, COFFEE SUBSTITUTES, TEA, MUSTARD, OATMEAL, PASTRIES, SAUCES, SEASONINGS, SUGAR, KIBBE.	McDonald’s Intl. Property Co. Ltd.

Brazil	FRY GIRLS (FRY GIRLS DESIGN)	816290644	38.60 Brazil FOOD SERVICES.	McDonald’s Intl. Property Co. Ltd.

Brazil	FRY GUYS (FRY GUYS DESIGN)	816290652	38.60 Brazil FOOD SERVICES.	McDonald’s Intl. Property Co. Ltd.

Brazil	GRIMACE (GRIMACE DESIGN)	007186185	42 Int. FOOD SERVICES	McDonald’s Intl. Property Co. Ltd.

Brazil	HAMBURGLAR (HAMBURGLAR DESIGN)	007186177	42 Int. FOOD SERVICES.	McDonald’s Intl. Property Co. Ltd.

Brazil	HAPPY MEAL	817634240	28.10 Brazil GAMES, TOYS AND PASTIMES.	McDonald’s Intl. Property Co. Ltd.

Brazil	JA JA MUNDO (HA HA WORLD)	827917589	41 Int. EDUCATION AND ENTERTAINMENT SERVICES.	McDonald’s Intl. Property Co. Ltd.

Brazil	MAC FRIES	007186150	29 Int. FRUITS, COOKED VEGETABLES, FATS AND EDIBLE OILS.	McDonald’s Intl. Property Co. Ltd.

Brazil	MAC TONIGHT (MAC TONIGHT DESIGN)	814183492	38.60 Brazil FOOD SERVICES INCLUDING RESTAURANT SERVICES.	McDonald’s Intl. Property Co. Ltd.

Brazil	MACFRIES	811764435	38.60 Brazil FOOD SERVICES.	McDonald’s Intl. Property Co. Ltd.

Brazil	MAYOR MCCHEESE	007186169	38.60 Brazil	McDonald’s Intl. Property Co. Ltd.

The trademarks listed in this chart are licensed pursuant to the terms and conditions of the applicable

agreement for use only in Brazil .


*Country*	*Trademark*	*Reg*	*Classes and Goods/Services*	*Owner Name*
	(MAYOR MCCHEESE DESIGN)		FOOD SERVICES.

Brazil	MC	814928854	38.60 Brazil FOOD SERVICES.	McDonald’s Intl. Property Co. Ltd.

Brazil	MCBACON	817137289	32.10 Brazil HAMBURGER SANDWICHES WITH LETTUCE, TOMATOES AND BACON.	McDonald’s Intl. Property Co. Ltd.

Brazil	MCBUONO	821663607	30 Int. EDIBLE SANDWICHES, MEAT SANDWICHES, PORK SANDWICHES, FISH SANDWICHES, CHICKEN SANDWICHES, BISCUITS, BREAD, CAKES INCLUDED IN THIS CLASS, COOKIES, PASTRIES.	McDonald’s Intl. Property Co. Ltd.

Brazil	MCCAFE	822466996	42 Int. OPERATING AND FRANCHISING RESTAURANTS AND OTHER ESTABLISHMENTS OR FACILITIES ENGAGED IN PROVIDING FOOD AND DRINK PREPARED FOR CONSUMPTION; PREPARATION AND SALE OF CARRY-OUT FOODS; THE DESIGNING OF RESTAURANTS, ESTABLISHMENTS AND FACILITIES.	McDonald’s Intl. Property Co. Ltd.

Brazil	MCCHICKEN	800356160	32.10 Brazil BISCUITS, BREADS, SANDWICHES AND PASTRIES.	McDonald’s Intl. Property Co. Ltd.

Brazil	MCCHICKEN	811764427	38.60 Brazil FOOD SERVICES.	McDonald’s Intl. Property Co. Ltd.

Brazil	MCCHICKEN (STYLIZED)	800366301	30 Int., CHICKEN SANDWICHES.	McDonald’s Intl. Property Co. Ltd.

Brazil	MCCOOKIES	815502168	32.10 Brazil DOUGHS IN GENERAL.	McDonald’s Intl. Property Co. Ltd.

The trademarks listed in this chart are licensed pursuant to the terms and conditions of the applicable

agreement for use only in Brazil .


*Country*	*Trademark*	*Reg*	*Classes and Goods/Services*	*Owner Name*
Brazil	MCCRISPY	821297920	29.10, 29.20, 29.30 Brazil FOOD PREPARED FROM MEAT, PORK, FISH AND POULTRY; EGGS, PICKLES.	McDonald’s Intl. Property Co. Ltd.

Brazil	MCDIA FELIZ (MCHAPPY DAY)	816290695	38.60 Brazil FOOD SERVICES.	McDonald’s Intl. Property Co. Ltd.

Brazil	MCDOG	824913086	43 Int. RESTAURANT SERVICES.	McDonald’s Intl. Property Co. Ltd.

Brazil	MCDOG	824913078	30 Int. HOT DOGS.	McDonald’s Intl. Property Co. Ltd.

Brazil	MCDONALDLAND	816290687	38.60 Brazil FOOD SERVICES.	McDonald’s Intl. Property Co. Ltd.

Brazil	MCDONALDS (GOLDEN ARCHES LOGO)	816364559	28.10 Brazil GAMES, TOYS AND PASTIMES.	McDonald’s Intl. Property Co. Ltd.

Brazil	MCDONALDS (GOLDEN ARCHES LOGO)	006310729	38.60 Brazil FOOD SERVICES.	McDonald’s Intl. Property Co. Ltd.

Brazil	MCDONALDS (GOLDEN ARCHES LOGO)	006772986	29.10, 29.20, 29.50 Brazil MEAT, POULTRY AND EGGS FOR FOOD, FISH AND OTHER SEAFOOD AND CONDIMENTS, SPICES AND FOOD ESSENCES.	McDonald’s Intl. Property Co. Ltd.

Brazil	MCDONALDS (STYLIZED)	006789277	35.10, 35.20, 35.30 Brazil BEVERAGES IN GENERAL; SUBSTANCES FOR PREPARATION OF BEVERAGES IN GENERAL ICE AND SUBSTANCES FOR FREEZING.	McDonald’s Intl. Property Co. Ltd.

Brazil	MCDONALDS (STYLIZED)	006789250	33.10, 33.20 Brazil SWEETS AND POWDERS FOR THE PREPARATION OF SWEETS IN GENERAL; SUGAR AND SWEETENERS IN GENERAL.	McDonald’s Intl. Property Co. Ltd.

Brazil	MCDONALDS (STYLIZED)	006789234	31,10, 31,20, 31.30 Brazil DAIRY PRODUCTS IN GENERAL; MARGARINE;	McDonald’s Intl. Property Co. Ltd.

The trademarks listed in this chart are licensed pursuant to the terms and conditions of the applicable

agreement for use only in Brazil .


*Country*	*Trademark*	*Reg*	*Classes and Goods/Services*	*Owner Name*
			SOY MILK.

Brazil	MCDONALDS (STYLIZED)	006772994	30.10, 3020 Brazil COFFEE; HERBS FOR INFUSION.	McDonald’s Intl. Property Co. Ltd.

Brazil	MCDONALDS (STYLIZED)	006310710	38.60 Brazil FOOD SERVICES.	McDonald’s Intl. Property Co. Ltd.

Brazil	MCDONALDS (STYLIZED)	006772978	29.10, 29.20, 29.50 Brazil MEAT, POULTRY AND EGGS FOR FOOD, FISH AND OTHER SEAFOOD AND CONDIMENTS, SPICES AND FOOD ESSENCES.	McDonald’s Intl. Property Co. Ltd.

Brazil	MCDONALDS (STYLIZED)	006060994	43 Int. PUBS, RESTAURANTS, SNACK BARS, DRIVE-IN PUBS AND RESTAURANTS AND CORRELATED SERVICES.	McDonald’s Intl. Property Co. Ltd.

Brazil	MCDONALDS (STYLIZED)	006840418	32.10, 32.20 Brazil DOUGHS IN GENERAL FLOUR AND LEAVENING IN GENERAL.	McDonald’s Intl. Property Co. Ltd.

Brazil	MCDONALDS (WITHIN GOLDEN ARCHES LOGO)	006840426	32.10, 32.20 Brazil DOUGHS IN GENERAL FLOUR AND LEAVING IN GENERAL.	McDonald’s Intl. Property Co. Ltd.

Brazil	MCDONALDS (WITHIN GOLDEN ARCHES LOGO)	006773001	30.10, 30.20 Brazil COFFEE; HERBS FOR INFUSION.	McDonald’s Intl. Property Co. Ltd.

Brazil	MCDONALDS (WITHIN GOLDEN ARCHES LOGO)	006789269	33.10, 33.20 Brazil SWEETS AND POWDERS FOR THE PREPARATION OF SWEETS IN GENERAL; SUGAR AND SWEETENERS IN GENERAL.	McDonald’s Intl. Property Co. Ltd.

Brazil	MCDONALDS (WITHIN GOLDEN ARCHES LOGO)	006789285	35.10, 35.20, 35.30 Brazil BEVERAGES IN GENERAL; SUBSTANCES FOR PREPARATION OF BEVERAGES IN GENERAL; ICE AND SUBSTANCES FOR FREEZING.	McDonald’s Intl. Property Co. Ltd.

The trademarks listed in this chart are licensed pursuant to the terms and conditions of the applicable

agreement for use only in Brazil .


*Country*	*Trademark*	*Reg*	*Classes and Goods/Services*	*Owner Name*
Brazil	MCDONALDS (WITHIN GOLDEN ARCHES LOGO)	006789242	31.10, 31.20, 31.30 Brazil DAIRY PRODUCTS IN GENERAL; MARGARINE; SOY MILK.	McDonald’s Intl. Property Co. Ltd.

Brazil	MCDONALDS (WITHIN GOLDEN ARCHES LOGO)	816294712	25.10, 25.20, 25.30 Brazil CLOTHES AND CLOTHING ACCESSORIES FOR COMMON USE; CLOTHES AND CLOTHING ACCESSORIES FOR THE PRACTICE OF SPORTS AND FOR PROFESSIONAL USE.	McDonald’s Intl. Property Co. Ltd.

Brazil	MCDONALDS EXPRESS (WITHIN GOLDEN ARCHES LOGO)	818889861	38.60 Brazil SERVICES RENDERED OR ASSOCIATED WITH OPERATING AND FRANCHISING OF RESTAURANTS AND OTHER ESTABLISHMENTS OR FACILITIES ENGAGED IN PROVIDING FOOD AND DRINK PREPARED FOR CONSUMPTION; PREPARING AND SALE OF CARRY-OUT FOODS.	McDonald’s Intl. Property Co. Ltd.

Brazil	MCDONALDS MCEXPRESSO (WITHIN GOLDEN ARCHES LOGO) IN COLOR	819433837	38.60 Brazil FOOD SERVICES, PARTICULARLY OPERATING AND FRANCHISING OF RESTAURANTS AND OTHER ESTABLISHMENTS OR FACILITIES ENGAGED IN PROVIDING FOOD AND DRINK PREPARED FOR CONSUMPTION; PREPARING AND SALE OF CARRY-OUT FOODS.	McDonald’s Intl. Property Co. Ltd.

Brazil	MCDUPLO (DOUBLE)	823663582	30 Int. EDIBLE SANDWICHES, MEAT SANDWICHES, PORK SANDWICHES, FISH SANDWICHES, CHICKEN SANDWICHES, BISCUITS, BREAD, CAKES, COOKIES, CHOCOLATE, COFFEE, COFFEE SUBSTITUTES, TEA, MUSTARD, OATMEAL, PASTRIES, SAUCES, SEASONINGS, SUGAR.	McDonald’s Intl. Property Co. Ltd.

Brazil	MCENTREGA (MCDELIVERY)	816410771	38.20, 38.60 Brazil RESTAURANT SERVICES, FOOD DELIVERY	McDonald’s Intl. Property Co. Ltd.

The trademarks listed in this chart are licensed pursuant to the terms and conditions of the applicable

agreement for use only in Brazil .


*Country*	*Trademark*	*Reg*	*Classes and Goods/Services*	*Owner Name*
			SERVICES.

Brazil	MCEXPRESS	816641358	38.60 Brazil FOOD SERVICES.	McDonald’s Intl. Property Co. Ltd.

Brazil	MCEXPRESSO	818889870	38.60 Brazil SERVICES RENDERED OR ASSOCIATED WITH OPERATING AND FRANCHISING OF RESTAURANTS AND OTHER ESTABLISHMENTS OR FACILITIES ENGAGED IN PROVIDING FOOD AND DRINK PREPARED FOR CONSUMPTION; PREPARING AND SALE OF CARRY-OUT FOODS.	McDonald’s Intl. Property Co. Ltd.

Brazil	MCFEAST	790202174	29 Int. EGGS FOR FOOD, FOWLS, POULTRY, MEAT, MEAT BALLS. MEAT CAKE, FISH AND OTHER SEAFOOD, FISH OVARY PREPARED FOR CONSUMPTION, FRUITS PULP, FROZEN FRUITS, CANNED FRUITS, VEGETABLES AS LONG AS INCLUDED IN THIS CLASS.	McDonald’s Intl. Property Co. Ltd.

Brazil	MCFEAST	810617404	32.10 Int. SANDWICHES.	McDonald’s Intl. Property Co. Ltd.

Brazil	MCFESTA (STYLIZED)	819489271	38.60 Brazil FOOD SERVICES, INCLUDED SERVICES RENDERED OR ASSOCIATED WITH OPERATING AND FRANCHISING OF RESTAURANTS AND OTHER ESTABLISHMENTS OR FACILITIES ENGAGED IN PROVIDING FOOD AND DRINK PREPARED FOR CONSUMPTION; PREPARING AND SALE OF CARRY-OUT FOODS.	McDonald’s Intl. Property Co. Ltd.

Brazil	MCFISH	815483724	29.20 Brazil FISH AND OTHER SEAFOOD.	McDonald’s Intl. Property Co. Ltd.

Brazil	MCFISH	815483848	32.10 Brazil DOUGH IN GENERAL; INCLUDING ALL TYPE OF	McDonald’s Intl. Property Co. Ltd.

The trademarks listed in this chart are licensed pursuant to the terms and conditions of the applicable

agreement for use only in Brazil .


*Country*	*Trademark*	*Reg*	*Classes and Goods/Services*	*Owner Name*
			SANDWICHES, BISCUITS, BREADS, CAKES AND OTHERS.

Brazil	MCFLURRY	823525384	29 Int. MEAT, PORK, FISH AND POULTRY, PRESERVED AND COOKED FRUITS AND VEGETABLES, EGGS, CHEESE, MILK PREPARATIONS, PICKLES.	McDonald’s Intl. Property Co. Ltd.

Brazil	MCFRITAS (FRIED)	819909025	29.30 Brazil FRIED POTATOES.	McDonald’s Intl. Property Co. Ltd.

Brazil	MCFRUIT	815698607	35.10, 35.20 Brazil BEVERAGES, SYRUPS AND CONCENTRATED JUICES; SUBSTANCES FOR PREPARATION OF BEVERAGES IN GENERAL.	McDonald’s Intl. Property Co. Ltd.

Brazil	MCGOURMET	828548595	43 Int. RESTAURANT SERVICES.	McDonald’s Intl. Property Co. Ltd.

Brazil	MCHAPPY DAY	819489280	41.60, 41.70 Brazil SPORT SERVICES, NON-PROFIT SPORTING, RECREATIONAL, SOCIAL AND CULTURAL SERVICES, COMMUNITY, PHILANTHROPIC AND BENEFICENT SERVICES.	McDonald’s Intl. Property Co. Ltd.

Brazil	MCINTERNET	823386112	42 Int. OPERATING AND FRANCHISING RESTAURANTS AND OTHER ESTABLISHMENTS OR FACILITIES ENGAGED IN PROVIDING FOOD AND DRINK PREPARED FOR CONSUMPTION; PREPARATION AND SALE OF CARRY-OUT FOODS; THE DESIGNING OF SUCH RESTAURANTS, ESTABLISHMENTS AND FACILITIES.	McDonald’s Intl. Property Co. Ltd.

Brazil	MCLANCHE	816024162	35.10 Brazil NON- ALCOHOLIC BEVERAGES.	McDonald’s Intl. Property Co. Ltd.

Brazil	MCLANCHE	816024154	32.10, 32.20 Brazil	McDonald’s Intl. Property Co. Ltd.

The trademarks listed in this chart are licensed pursuant to the terms and conditions of the applicable

agreement for use only in Brazil .


*Country*	*Trademark*	*Reg*	*Classes and Goods/Services*	*Owner Name*
			DOUGHS IN GENERAL; FLOUR AND LEAVENING IN GENERAL.

Brazil	MCLANCHE	816024146	29 10, 2920, 29.30 Brazil MEAT, POULTRY AND EGGS FOR FOOD, FISH AND OTHER SEAFOOD; FRUITS, GREENS, VEGETABLES AND CEREALS.	McDonald’s Intl. Property Co. Ltd.

Brazil	MCLANCHE FELIZ	811327876	38.60 Brazil RESTAURANT SERVICES.	McDonald’s Intl. Property Co. Ltd.

Brazil	MCLINK	823386120	42 Int. OPERATING AND FRANCHISING RESTAURANTS AND OTHER ESTABLISHMENTS OR FACILITIES ENGAGED IN PROVIDING FOOD AND DRINK PREPARED FOR CONSUMPTION; PREPARATION AND SALE OF CARRY-OUT FOODS; THE DESIGNING OF SUCH RESTAURANTS, ESTABLISHMENTS AND FACILITIES.	McDonald’s Intl. Property Co. Ltd.

Brazil	MCMAX	822469251	30 Int. EDIBLE SANDWICHES, MEAT SANDWICHES, PORK SANDWICHES, FISH SANDWICHES, CHICKEN SANDWICHES, BISCUITS, BREAD, CAKES, COOKIES, CHOCOLATE, COFFEE, COFFEE SUBSTITUTES, TEA, MUSTARD, OATMEAL, SAUCES, SEASONINGS, SUGAR.	McDonald’s Intl. Property Co. Ltd.

Brazil	MCMELT	815142900	30 Int. FOOD DOUGHS IN GENERAL (INCLUDED IN THIS CLASS).	McDonald’s Intl. Property Co. Ltd.

Brazil	MCMENU	824743563	43 Int. OPERATING RESTAURANTS AND OTHER ESTABLISHMENTS OR FACILITIES ENGAGED IN PROVIDING FOOD AND DRINK PREPARED FOR CONSUMPTION; SERVICES RENDERED OR	McDonald’s Intl. Property Co. Ltd.

The trademarks listed in this chart are licensed pursuant to the terms and conditions of the applicable

agreement for use only in Brazil .


*Country*	*Trademark*	*Reg*	*Classes and Goods/Services*	*Owner Name*
			ASSOCIATED WITH PREPARATION AND SALE OF CARRY-OUT FOODS.

Brazil	MCMIX	820351091	29 Int. MILK, MILK PREPARATIONS.	McDonald’s Intl. Property Co. Ltd.

Brazil	MCMOVEL	822467160	35 Int. OPERATING AND FRANCHISING RESTAURANTS AND OTHER ESTABLISHMENTS OR FACILITIES ENGAGED IN PROVIDING FOOD AND DRINK PREPARED FOR CONSUMPTION.	McDonald’s Intl. Property Co. Ltd.

Brazil	MCMOVEL	828060037	43 Int. FOOD SERVICES, INCLUDING PREPARATION AND SALE OF CARRY-OUT FOODS.	McDonald’s Intl. Property Co. Ltd.

Brazil	MCNIGHT (MCNIGHT DESIGN)	823480151	42 Int. PREPARATION AND SALE OF CARRY-OUT FOODS; OPERATING RESTAURANTS [FOOD]; THE DESIGNING OF SUCH RESTAURANTS, ESTABLISHMENTS AND FACILITIES.	McDonald’s Intl. Property Co. Ltd.

Brazil	MCNUGGETS	827998287	29 Int. FOOD PREPARED FROM MEAT, PORK, FISH AND POULTRY PRODUCTS.	McDonald’s Intl. Property Co. Ltd.

Brazil	MCOFERTAS (OFFERS)	818010061	38.60 Brazil FOOD SERVICES.	McDonald’s Intl. Property Co. Ltd.

Brazil	MCRAPIDAO	816664633	38.60 Brazil FOOD SERVICES.	McDonald’s Intl. Property Co. Ltd.

Brazil	MCREFEICAO (MEAL)	818010070	38.60 Brazil FOOD SERVICES.	McDonald’s Intl. Property Co. Ltd.

Brazil	MCRIB	810771837	32.10 Brazil EDIBLE SANDWICHES, PORK SANDWICHES. BISCUITS, BREAD, CAKES, COOKIES. PASTRIES.	McDonald’s Intl. Property Co. Ltd.

The trademarks listed in this chart are licensed pursuant to the terms and conditions of the applicable

agreement for use only in Brazil .


*Country*	*Trademark*	*Reg*	*Classes and Goods/Services*	*Owner Name*
Brazil	MCSALAD (STYLIZED)	812212657	32.10 Brazil DOUGHS IN GENERAL.	McDonald’s Intl. Property Co. Ltd.

Brazil	MCSALAD (STYLIZED)	812235240	42 Int. FOOD SERVICES.	McDonald’s Intl. Property Co. Ltd.

Brazil	MCSHAKE	819485632	29 Int. MILK SHAKE, MILK, CHEESE.	McDonald’s Intl. Property Co. Ltd.

Brazil	MCSNACK (STYLIZED)	817937293	38.60 Brazil FOOD SERVICES.	McDonald’s Intl. Property Co. Ltd.

Brazil	MCSPECIAL (STYLIZED)	818279400	38.60 Brazil 38-60: FOOD SERVICES.	McDonald’s Intl. Property Co. Ltd.

Brazil	MCSTRADA	815694008	38.60 Brazil FOOD SERVICES.	McDonald’s Intl. Property Co. Ltd.

Brazil	MCTOUR (STYLIZED)	819875886	38.60 Brazil SERVICES RENDERED OR ASSOCIATED WITH OPERATING AND FRANCHISING OF RESTAURANTS AND OTHER ESTABLISHMENTS OR FACILITIES ENGAGED IN PROVIDING FOOD AND DRINK PREPARED FOR CONSUMPTION; PREPARING AND SALE OF CARRY-OUT FOODS.	McDonald’s Intl. Property Co. Ltd.

Brazil	MCTRIO	815968418	29.10. 29.20. 29.30 Brazil MEAT, POULTRY AND EGGS FOR FOOD, FISH AND OTHER SEAFOOD: FRUITS, GREENS, VEGETABLES AND CEREALS.	McDonald’s Intl. Property Co. Ltd.

Brazil	MCTRIO	815968426	32.10, 32.20 Brazil DOUGH IN GENERAL; FLOUR AND LEAVING IN GENERAL.	McDonald’s Intl. Property Co. Ltd.

Brazil	MCTRIO	815968434	35.10, 35.20 Brazil BEVERAGES, SYRUPS AND CONCENTRATED JUICES; SUBSTANCES FOR PREPARATION OF BEVERAGES IN GENERAL.	McDonald’s Intl. Property Co. Ltd.

The trademarks listed in this chart are licensed pursuant to the terms and conditions of the applicable

agreement for use only in Brazil .


*Country*	*Trademark*	*Reg*	*Classes and Goods/Services*	*Owner Name*
Brazil	MCXSALADA	823643271	30 Int. EDIBLE SANDWICHES, MEAT SANDWICHES, PORK SANDWICHES, FISH SANDWICHES, CHICKEN SANDWICHES, BISCUITS, BREAD, CAKES, COOKIES, CHOCOLATE, COFFEE, COFFEE SUBSTITUTES, TEA, MUSTARD, OATMEAL, PASTRIES, SAUCES, SEASONINGS, SUGAR.	McDonald’s Intl. Property Co. Ltd.

Brazil	PAPABURGER (HAMBURGLAR DESIGN)	814380670	38.60 Brazil FOOD SERVICES.	McDonald’s Intl. Property Co. Ltd.

Brazil	PREFEITO MCCHEESE (MAYOR MCCHEESE AND DESIGN)	814380662	38.60 Brazil FOOD SERVICES.	McDonald’s Intl. Property Co. Ltd.

Brazil	PROFESSOR (PROFESSOR DESIGN)	814380719	42 Int. FOOD SERVICES.	McDonald’s Intl. Property Co. Ltd.

Brazil	PROFESSOR (PROFESSOR DESIGN)	816290660	38.60 Brazil FOOD SERVICES.	McDonald’s Intl. Property Co. Ltd.

Brazil	QUARTERAO (QUARTER POUNDER)	006993885	32.10, 32.20 Brazil DOUGHS IN GENERAL FLOUR AND LEAVENING.	McDonald’s Intl. Property Co. Ltd.

Brazil	QUARTERAO (QUARTER POUNDER)	006993877	29.10, 29.20, 29.50 Brazil MEAT, POULTRY AND EGGS FOR FOOD, FISH AND OTHER SEAFOOD AND CONDIMENTS, SPICES AND FOOD ESSENCES.	McDonald’s Intl. Property Co. Ltd.

Brazil	RONALD MCDONALD	006773079	35.10, 35.20, 35.30 Brazil BEVERAGES, SYRUPS AND CONCENTRATED JUICES; SUBSTANCES FOR PREPARATION OF BEVERAGES IN GENERAL ICE AND SUBSTANCES FOR FREEZING.	McDonald’s Intl. Property Co. Ltd.

Brazil	RONALD MCDONALD (RONALD MCDONALD	006773044	29.10, 29.20, 29.50 Brazil MEAT, POULTRY AND EGGS FOR FOOD, FISH	McDonald’s Intl. Property Co. Ltd.

The trademarks listed in this chart are licensed pursuant to the terms and conditions of the applicable

agreement for use only in Brazil .


*Country*	*Trademark*	*Reg*	*Classes and Goods/Services*	*Owner Name*
	FULL FIGURE DESIGN)		AND OTHER SEAFOOD AND CONDIMENTS, SPICES. AND FOOD ESSENCES.

Brazil	RONALD MCDONALD (RONALD MCDONALD FULL FIGURE DESIGN)	006773087	35.10, 35.20, 35.30 Brazil BEVERAGES, SYRUPS AND CONCENTRATED JUICES; SUBSTANCES FOR PREPARATION OF BEVERAGES IN GENERAL ICE AND SUBSTANCES FOR FREEZING.	McDonald’s Intl. Property Co. Ltd.

Brazil	RONALD MCDONALD (RONALD MCDONALD FULL FIGURE DESIGN)	006773060	32.10, 32.20 Brazil DOUGHS IN GENERAL FLOUR AND LEAVENING IN GENERAL.	McDonald’s Intl. Property Co. Ltd.

Brazil	RONALD MCDONALD (STYLIZED)	811148947	38.60 Brazil FOOD SERVICES.	McDonald’s Intl. Property Co. Ltd.

Brazil	RONALD MCDONALD (STYLIZED)	006773036	29.10, 29.20, 29.50 Brazil MEAT, POULTRY AND EGGS FOR FOOD, FISH AND OTHER SEAFOOD AND CONDIMENTS, SPICES, AND FOOD ESSENCES.	McDonald’s Intl. Property Co. Ltd.

Brazil	RONALD MCDONALD (STYLIZED)	006773052	32.10, 32.20 Brazil DOUGHS IN GENERAL FLOUR AND LEAVENING IN GENERAL.	McDonald’s Intl. Property Co. Ltd.

Brazil	RONALD MCDONALD (STYLIZED)	006460313	38.60 Brazil FOOD SERVICES.	McDonald’s Intl. Property Co. Ltd.

Brazil	RONALDS PLACE	817137360	38.60 FOOD SERVICES.	McDonald’s Intl. Property Co. Ltd.

Brazil	RONALDS PLACE	817700501	41.20 Brazil PLAYGROUND SERVICES FOR CHILDREN.	McDonald’s Intl. Property Co. Ltd.

Brazil	RONALDS PLACE (SITS WITH OPEN ARMS)	819433853	41.20 Brazil ENTERTAINMENT SERVICES, PARTICULARLY FACILITIES PROVIDING CHILDREN’S PLAYGROUND FACILITIES FOR RECREATION ACTIVITIES.	McDonald’s Intl. Property Co. Ltd.

The trademarks listed in this chart are licensed pursuant to the terms and conditions of the applicable

agreement for use only in Brazil .


*Country*	*Trademark*	*Reg*	*Classes and Goods/Services*	*Owner Name*
Brazil	SHAKY (GRIMACE DESIGN)	814380689	43 Int. FOOD SERVICES.	McDonald’s Intl. Property Co. Ltd.

Brazil	SPEEDEE (SPEEDEE DESIGN)	820982857	42 Int. DESIGN SERVICES OF RESTAURANTS, ESTABLISHMENTS AND SIMILAR FACILITIES.	McDonald’s Intl. Property Co. Ltd.

Brazil	SPEEDEE (SPEEDEE DESIGN)	820982873	41 Int. SERVICES OF TRAINING OF PERSONS IN THE MANAGEMENT AND OPERATION OF RESTAURANTS AND ESTABLISHMENTS AND SIMILAR FACILITIES.	McDonald’s Intl. Property Co. Ltd.

Brazil	WALK THRU MCDONALDS (GOLDEN ARCHES LOGO WITHIN A	819433845	38.60 Brazil FOOD SERVICES, PARTICULARLY RESTAURANTS AND OTHER ESTABLISHMENTS OR FACILITIES ENGAGED IN PROVIDING FOOD AND DRINK PREPARED FOR CONSUMPTION; PREPARING AND SALE OF CARRY-OUT FOODS.	McDonald’s Intl. Property Co. Ltd.

Brazil	YOUR PAL, RONALD MCDONALD	006348793	38.60 Brazil FOOD SERVICES.	McDonald’s Intl. Property Co. Ltd.

Brazil	YOUR PAL, RONALD MCDONALD AND DESIGN	006348807	38.60 Brazil FOOD SERVICES.	McDonald’s Intl. Property Co. Ltd.

Exhibit 10.4

EXECUTION VERSION

AMENDED AND RESTATED ESCROW AGREEMENT

THIS AMENDED AND RESTATED ESCROW AGREEMENT (together with all Exhibits hereto, the “ Agreement ”), dated as of October 12, 2010, among McDonald’s Latin America, LLC, a limited liability company organized under the laws of the State of Delaware with its principal office at Oak Brook, Illinois (“ McDonald’s ”), LatAm, LLC, a limited liability company organized under the laws of the State of Delaware with its principal office at Miami, Florida (“ Master Franchisee ”), each of the Escrowed MF Subsidiaries, organized in the jurisdictions, and with their respective principal offices at the location, specified in Exhibit 1 hereto (the “ Escrowed MF Subsidiaries ”), Arcos Dorados Restaurantes de Chile Ltda., a company organized under the laws of Chile (“ Arcos de Chile ”), Arcos Dorados B.V., a company organized under the laws of the Netherlands with its principal office at Amsterdam, The Netherlands (“Owner”), Deutsche Bank Trust Company Americas, as collateral agent under the Secured Credit Documents (the “ Collateral Agent ”), and Citibank, N.A., as escrow agent hereunder (the “ Escrow Agent ” and, together with McDonald’s, Master Franchisee, the Escrowed MF Subsidiaries, Arcos de Chile, Owner and Collateral Agent, the “ Parties ”).

WHEREAS, McDonald’s and Owner entered into the Purchase Agreement, dated as of March 28, 2007, as amended pursuant to Amendment No. 1 to the Purchase Agreement, dated as of August 3, 2007 (the “ Purchase Agreement ”), pursuant to which McDonald’s and certain of its affiliates sold, and Owner purchased, 100% of the Equity Interests of Master Franchisee, McDonald’s Comercio de Alimentos, Ltda., McDonald’s Sistemas de Panama, S.A., McDonald’s Sistemas McOpCo Panama, S.A. and El Dorado Mac, S.A.

WHEREAS, McDonald’s, Owner, Arcos Dorados Cooperatieve U.A. (“ Dutch Coop ”), Arcos Dorados Limited (“ Parent ” and, together with Owner and Dutch Coop, the “ Owner Entities ”), Los Laureles, Ltd. (“ Beneficial Owner ”), Master Franchisee and the MF Subsidiaries entered into a Master Franchise Agreement, dated as of August 3, 2007, as amended and restated pursuant to the Amended and Restated Master Franchise Agreement, dated as of November 10, 2008 (the “ MFA ”), under which Beneficial Owner, each of the Owner Entities, Master Franchisee and each other registered owner of an MF Subsidiary from time to time (the “ Call Option Grantors ”) grant McDonald’s a Call Option with respect to the Equity Interests of each of the Owner Entities, Master Franchisee and each MF Subsidiary, exercisable at the times, for the prices and in the manner specified in the MFA;

WHEREAS, Owner, as borrower, together with various financial institutions from time to time party thereto, as lenders (the “ Lenders ”), Deutsche Bank Trust Company Americas, as administrative agent (the “ Administrative Agent ”), and Santander Investment Securities, Inc., as lead arranger (the “ Lead Arranger ”), entered into an Amended and Restated Credit Agreement, dated as of October 22, 2008 (as further amended, modified, restated and/or supplemented from time to time, the “ Credit Agreement ”);

WHEREAS, in order to hedge against adverse fluctuations in the floating interest rate applicable to the loans under the Credit Agreement, which might have impaired the Owner’s ability to service its interest expense thereunder, the Owner entered into: (i) a Confirmation, dated as of January 13, 2009, supplementing the ISDA 2002 Master Agreement, dated as of August 1, 2007, between Banco Santander S.A. and the Owner; and (ii) a Confirmation, dated as of January 28, 2009, (relating to the transaction closed on December 2, 2008), supplementing the ISDA 2002 Master Agreement, dated as of December 12, 2008, as modified by the Schedule, dated as of December 12, 2008, between The Bank of Nova Scotia and the Owner (the transactions referred to in items (i) and (ii) of this recital, collectively, the “ Interest Rate Swaps ” and the Owner’s counterparties thereunder, collectively, the “ Interest Rate Swap Creditors ”);

WHEREAS, in order to hedge against adverse fluctuations in the exchange rate between Dollars and Brazilian reais, which might have impaired its ability to service its and certain of its Subsidiaries’ Dollar-denominated obligations under the Credit Agreement and related documents (collectively, the “ Credit Documents ”), the Owner entered into: (i) three Confirmations, dated as of February 5, 2009 (relating to a transaction closed on December 17, 2008), dated as of February 5, 2009 (relating to a transaction closed on January 6, 2009) and dated as of March 5, 2009 (relating to a transaction closed on March 5, 2009), supplementing the ISDA 2002 Master Agreement, dated as of August 1, 2007, as modified by the Amended and Restated Schedule, dated as of January 12, 2009, between Banco Santander S.A. and the Owner; and (ii) a Confirmation, dated as of December 31, 2008 (relating to a transaction closed on December 17, 2008), supplementing the ISDA 2002 Master Agreement, dated as of December 12, 2008, as modified by the Schedule, dated as of December 12, 2008, between The Bank of Nova Scotia and the Owner (the transactions referred to in items (i) and (ii) of this recital, collectively, the “ Cross-Currency Swaps ” and the Owner’s counterparties thereunder, collectively, the “ Other Creditors ”);

WHEREAS, in order to secure their obligations under the Credit Documents, the Interest Rate Swaps and the Cross-Currency Swaps, the Owner and certain of its Subsidiaries executed and delivered an Amended and Restated Security Agreement, dated as of November 10, 2008, in favor of the Collateral Agent for the benefit of the Secured Creditors, the Interest Rate Swap Creditors and the Bank Creditors;

WHEREAS, as security for the performance by the Owner and the Grantors of their obligations under the Cross-Currency Swaps and the Call Options, as applicable, the Owner and the Grantors have granted to the Collateral Agent, for the benefit of the Secured Creditors and McDonald’s, a security interest in the Common Collateral;

WHEREAS, the MFA requires that (a) all certificates evidencing Equity Interests (“ Certificated Equity Interests ”) of Master Franchisee or any Escrowed MF Subsidiary be delivered by the record owner thereof (the “ Escrowing Shareholders ”) to Escrow Agent and held in escrow by Escrow Agent in accordance with the terms and conditions of this Agreement; and (b) each Escrowed Constituent Document of any Escrowed MF Subsidiary (such Escrowed Constituent Documents together with the Certificated Equity Interests, the “ Escrowed Equity Interests ”) that issues Dematerialized Equity Interests be deposited by

the applicable Escrowing Shareholder with Escrow Agent;

WHEREAS, the Common Collateral Documents provide that Escrow Agent hold the Common Collateral in its possession or control (or in the possession or control of its agents or bailees) on behalf of the Secured Creditors and McDonald’s solely for the purpose of perfecting the security interests granted under the Common Collateral Documents under the terms of this Agreement;

WHEREAS, to set forth their rights, remedies and obligations with respect to the Escrowed Equity Interests upon a default under the MFA or the Secured Credit Documents, McDonald’s, the Owner, the Collateral Agent and the other parties named therein have entered into the Amended and Restated Intercreditor Agreement.

WHEREAS, the Owner has repaid in full all obligations owing under the Credit Agreement out of the proceeds of a Dollar-denominated fixed rate debt security issuance and, in connection therewith, terminated the Interest Rate Swaps and repaid in full all obligations owing thereunder, but maintained the Cross-Currency Swaps outstanding as a bona fide hedge against certain other outstanding Dollar obligations; and

WHEREAS, the Parties wish to amend and restate the Prior Agreement in order to reflect the transactions referred to in the immediately preceding recital.

NOW, THEREFORE, in consideration of the mutual covenants contained herein and other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the Parties agree as follows:

1. Definitions and Interpretation

Definitions . Defined terms in this Agreement, which may be identified by the capitalization of the first letter of each principal word thereof, have the meanings assigned to them in Exhibit 2 . Notwithstanding anything herein to the contrary, the amendment of any other document or agreement, including the amendment of any defined term thereunder, shall have no effect on the duties or obligations of Escrow Agent hereunder, including in connection with the definition of any defined term hereunder defined by reference to such other document or agreement unless prior written notice of such amendment has been provided to Escrow Agent, and if such amendment has an adverse effect on Escrow Agent, unless the prior written consent of Escrow Agent has been obtained.

1.1 Interpretation . In this Agreement, except to the extent that the context otherwise requires:

1.1.1 The headings are for convenience of reference only and shall not affect the interpretation of this Agreement;

1.1.2 Defined terms include the plural as well as the singular and vice versa;

1.1.3 Words importing gender include all genders;

1.1.4 References to Sections, clauses and Exhibits are references to Sections and clauses of and Exhibits to, this Agreement;

1.1.5 References to any document or agreement, including this Agreement, shall be deemed to include references to such document or agreement as amended, restated, supplemented or replaced from time to time in accordance with its terms and (where applicable) subject to compliance with the requirements set forth herein; and

1.1.6 References to any Party include its successors and permitted assigns.

2. Appointment of Escrow Agent; Registrar, Transfer Agent and Custodial Services

2.1 Appointment of Escrow Agent . McDonald’s, Beneficial Owner, each Owner Entity, Master Franchisee, each Escrowed MF Subsidiary, and Collateral Agent each confirms and ratifies its nomination, constitution and appointment of Citibank, N.A. as Escrow Agent, subject to the terms, conditions and instructions contained in this Agreement, to act as escrow agent and hold the Escrowed Property in escrow hereunder.

2.2 Agreement of Escrow Agent . Citibank, N.A. hereby acknowledges its appointment as Escrow Agent and agrees to act as escrow agent in accordance with the terms, conditions and instructions contained in this Agreement.

2.3 Registrar and Transfer Agent; Custodian .

2.3.1 Each of Master Franchisee and Arcos Dorados Caribbean Development Corp., a company previously known as McDonald’s Caribbean Development Corporation (“ ADCDC ”) has engaged Citibank, N.A. to act as registrar and transfer agent with respect to the Equity Interests of Master Franchisee and ADCDC pursuant to the terms of a Transfer Agency Agreement, dated as of August 3, 2007, among Citibank, N.A., McDonald’s and each of Master Franchisee and ADCDC. Each of Master Franchisee and ADCDC acknowledges and agrees that Citibank, N.A. may name Computershare, Inc. (or any affiliate thereof) to act on its behalf in providing any or all registrar or transfer agent services.

2.3.2 Arcos Dorados Panama, S.A. (previously known as McDonald’s Sistemas de Panama, S.A.), Sistemas McOpCo Panama, S.A., Arcos Dorados Puerto Rico, Inc. (previously known as McDonald’s System de Puerto Rico, Inc.), Gauchito de Oro S.A., Arcos del Sur, S.R.L., Alimentos Arcos Dorados de Venezuela, C.A., Compañia Operativa de Alimentos COR, C.A., Gerencia Operativa ARC, C.A. and each other Escrowed MF Subsidiary from time to time party to this Agreement and organized in Panama, Puerto Rico, Uruguay or Venezuela has appointed Citibank, N.A. as custodian to hold and safe keep the share registry book for the Equity Interests of each such Person. Citibank, N.A. has

engaged one or more Persons to act as custodian for the register of Equity Interests of any Escrowed MF Subsidiary organized in Panama, Puerto Rico, Uruguay and Venezuela and the registry book with respect to such Equity Interests. Such Persons shall be Affiliates of Citibank, N.A. or Persons otherwise reasonably satisfactory to the Parties. Upon delivery of each such share registry book, the relevant custodian appointed by Citibank, N.A. pursuant to this Section shall provide a receipt therefor to the relevant Escrowed MF Subsidiary.

2.4 Special Provisions for Arcos de Chile .

2.4.1 Appointment of Escrow Agent . Arcos de Chile hereby confirms and ratifies its nomination, constitution and appointment of Citibank, N.A. as Escrow Agent, subject to the terms, conditions and instructions contained in this Agreement, to act as escrow agent and hold powers of attorney in the form attached hereto as Exhibit 3 (each, a “ Chilean POA ”).

2.4.2 Powers of Attorney . Each shareholder of Arcos de Chile has granted and delivered to Escrow Agent a Chilean POA. The Chilean POAs grant to the Escrow Agent the ability to change each and every one of the attorneys-in-fact of Arcos de Chile.

2.4.3 Escrowed Property . Each Chilean POA shall be deemed to be Escrowed Property for all purposes set forth in Sections 2.4 and 5.1.5.

3. Escrowed Equity Interests

3.1 Deposit of Escrowed Equity Interests .

3.1.1 Subject to Section 3.2, with respect to any Escrowed MF Subsidiary owned by it, each Escrowing Shareholder has delivered to Escrow Agent either (a) the Certificated Equity Interests, together with the applicable Local Stock Power and Local Voting Power, of such Escrowed MF Subsidiary; or (b) all of the Escrowed Constituent Documents, together with the applicable Local Stock Power and Local Voting Power, of such Escrowed MF Subsidiary. Escrow Agent acknowledges to each Escrowing Shareholder its receipt of such Escrowed Equity Interests and the related Local Stock Powers and Local Voting Powers. The current Escrowing Shareholders and the Escrowed Equity Interests are set forth in Exhibit 4 .

3.1.2 Subject to the terms, conditions and instructions contained in this Agreement, Escrow Agent shall accept and hold as Escrowed Equity Interests hereunder all Escrowed Equity Interests of Master Franchisee and any Escrowed MF Subsidiary delivered to Escrow Agent at any time or from time to time by any Escrowing Shareholder during the term of this Agreement. Equity Interests so delivered shall be accompanied by an applicable Local Stock Power, Local Voting Power and otherwise in the form required hereunder. Escrow Agent shall promptly acknowledge after receipt in writing its receipt of any such Escrowed Equity Interests, Local Stock Powers and Local Voting Powers to the applicable

Escrowing Shareholder, with a copy to McDonald’s and, if such Escrowed Equity Interests, Local Stock Powers and Local Voting Powers are with respect to a Secured Credit Grantor, to the Collateral Agent.

3.2 All Equity Interests ; Certificated Form . Each of Master Franchisee and the Escrowed MF Subsidiaries represents that the Certificated Equity Interests and the Dematerialized Equity Interests in respect of which Escrowed Constituent Documents have been delivered hereunder by the applicable Escrowing Shareholder shall constitute at all times all of its issued and outstanding Equity Interests and, to the fullest extent permitted by Applicable Law, agrees that it shall at all times require that Equity Interests issuable by it be issued exclusively in certificated form.

3.3 Bailee for Perfection .

3.3.1 Escrow Agent agrees to acquire and acknowledges it holds or is the registered owner of the Escrowed Equity Interests and other Escrowed Property in its possession or control (or in the possession or control of its agents or bailees) on behalf of the Collateral Agent (but solely with respect to the Escrowed Equity Interests and other Escrowed Property of a Secured Credit Grantor), the Other Creditors and McDonald’s solely for the purpose of perfecting the security interest granted under the Common Collateral Documents and the MFA and to facilitate the transactions contemplated by the MFA and the Amended and Restated Intercreditor Agreement, subject to the terms and conditions of this Section 3.3.

3.3.2 Escrow Agent shall have no obligation whatsoever to the Collateral Agent, the Other Creditors and McDonald’s to assure that the Escrowed Property is genuine or owned by any of the Grantors or to preserve rights or benefits of any Person, except as expressly set forth in this Section 3.3. The duties or responsibilities of Escrow Agent under this Section 3.3 shall be limited solely to holding or standing as the registered owner of the Escrowed Property as bailee in accordance with this Section 3.3.

3.3.3 Escrow Agent acting pursuant to this Section shall not have by reason of any Common Collateral Document, this Agreement or any other document, a fiduciary relationship in respect of the Other Creditors, Collateral Agent, McDonald’s or any other Person.

4. Escrow Accounts; Investment and Transfer of Escrowed Property

4.1 Maintenance of Accounts . Escrow Agent shall at all times maintain one or more non-interest bearing accounts (each, an “ Escrow Account ”) into which it shall, as soon as practicable upon its receipt thereof, deposit and hold hereunder (a) all dividends and distributions with respect to any Escrowed Equity Interests received by Escrow Agent pursuant to Section 5.2.2 hereof; and (b) any Disputed Amounts (all such property, plus all Escrowed Equity Interests, Local Stock Powers and Local Voting Powers, the “ Escrowed Property ”). Disputed Amounts, the amount of which shall be indicated to Escrow Agent by McDonald’s in a Settlement Notice, shall be deposited in an Escrow Account denominated

as such and segregated from all other Escrowed Property hereunder. Dividends or distributions with respect to Escrowed Equity Interests in the form of Equity Interests shall be deposited by the relevant Escrowing Shareholder, accompanied by an applicable Local Stock Power, Local Voting Power and otherwise in the form required hereunder.

4.2 Requirement to Invest Cash .

4.2.1 Escrow Agent shall invest all cash deposited into any Escrow Account, including Disputed Amounts, in Permitted Investments pursuant to and as directed in writing by Master Franchisee; provided that following any notice from Collateral Agent that an Event of Default shall have occurred and be continuing, the Escrow Agent shall follow solely the instructions of Collateral Agent, acting on behalf of the Secured Creditors, until Collateral Agent notifies the Escrow Agent otherwise, except to the extent that such cash is required to be distributed pursuant to Section 5.2 hereunder. Escrow Agent shall invest cash on the date of deposit, provided that such cash is received on or before 11:00 a.m. (E.S.T.). Any cash received by Escrow Agent after 11:00 a.m. (E.S.T.) shall be treated as if received on the following Business Day.

4.2.2 Any investment direction contained herein may be executed through an affiliated broker dealer of Escrow Agent and will be entitled to usual and customary fees. Neither Citigroup, Inc., nor any of its affiliates assumes any duty or liability for monitoring the investment rating of any investment made hereunder.

4.2.3 Escrow Agent shall not be liable for the investment or reinvestment of any Escrowed Property, or any liquidation of such investment or reinvestment, executed in accordance with the terms of this Agreement, including any liability for any delays (not resulting from its gross negligence, bad faith or willful misconduct as adjudicated by a court of competent jurisdiction) in the investment or reinvestment of the Escrowed Property, any loss of interest incident to any such delays or any loss or penalty as a result of the liquidation of any investment before its stated maturity date.

4.3 Transfer of Escrowed Property . Escrow Agent shall transfer the Escrowed Property strictly in accordance with each Excluded Subsidiary Transfer Instruction (but only as to Excluded Subsidiaries), Restricted Subsidiary Transfer Instruction (but only as to Restricted Subsidiaries), Settlement Notice or Secured Creditor Release Notice received by it hereunder or as otherwise as expressly provided herein.

5. Voting; Dividends and Distributions

5.1 Voting of Escrowed MF Subsidiaries .

5.1.1 To the fullest extent permitted by Applicable Law, each Escrowing Shareholder irrevocably grants its proxy or power of attorney, as the case may be, in accordance with the applicable Local Voting Power with respect to the Equity Interests of each Escrowed MF Subsidiary owned by such Escrowing

Shareholder. Each Escrowing Shareholder hereby affirms that (a) the applicable Local Voting Power is given in connection with, and in consideration of, the execution of the MFA and the Secured Credit Documents and to secure the performance of (i) its obligation to deliver Escrowed Equity Interests as and when required under the MFA and (ii) the Secured Credit Obligations; and (b) such Local Voting Power is coupled with an interest and, subject to Applicable Law, may under no circumstances be revoked Each Escrowing Shareholder hereby ratifies and confirms all that Escrow Agent may lawfully do or cause to be done by virtue of the applicable Local Voting Power upon receipt by Escrow Agent of a Default Exercise Notice or a Secured Creditor Release Notice delivered in accordance with this Agreement. If for any reason under Applicable Law, any Local Voting Power cannot be granted, is held to be unenforceable or to be revocable, then the applicable Escrowing Shareholder shall promptly take all action necessary or desirable to cause the applicable Escrowed Equity Interests to be voted as required by this Agreement. No Escrowed MF Subsidiary that is not a Restricted Subsidiary shall revoke, amend or modify any Local Voting Power without the consent of McDonald’s. No Escrowed MF Subsidiary that is a Restricted Subsidiary shall revoke, amend or modify any Local Voting Power without the consent of McDonald’s and the Collateral Agent.

5.1.2 Prior to Escrow Agent’s receipt of a Default Exercise Notice, with respect to any Escrowed Equity Interests, or a Secured Creditor Release Notice, with respect to any Escrowed Equity Interests of any Secured Credit Grantor, each Escrowing Shareholder shall be entitled to vote such Escrowed Equity Interests in its sole discretion; provided that no Escrowing Shareholder shall vote such Escrowed Equity Interests in a manner that would violate or result in a breach of any covenant contained in any MFA Document, any Common Collateral Document or any Secured Credit Document. If any action approved by such vote results in a breach of any covenant contained in any MFA Document, any Common Collateral Document or any Secured Credit Document at the time such vote is taken or effectuated, then such vote shall be null and void ab initio. Following Escrow Agent’s receipt of a Default Exercise Notice or a Secured Creditor Release Notice, Escrow Agent shall not vote such Escrowed Equity Interests until it receives either a McDonald’s Voting Notice or a Secured Creditor Voting Notice in accordance with the terms of Sections 5.1.3 or 5.1.4. In no event shall an Escrowing Shareholder be permitted to vote any Escrowed Equity Interests relating to any Subject Business specified in any Default Exercise Notice or Secured Creditor Release Notice previously received by Escrow Agent unless such Default Exercise Notice or Secured Creditor Release Notice has been revoked or rescinded in writing by McDonald’s or the Collateral Agent, as the case may be.

5.1.3 From and after Escrow Agent’s receipt of a notice in the form of Exhibit 5 (a “ McDonald’s Voting Notice ”) with respect to the Escrowed Equity Interests relating to any Subject Business specified in any Default Exercise Notice previously received by Escrow Agent that has not been revoked or rescinded in writing by McDonald’s, Escrow Agent shall solely accept written instructions, as to the voting of the Escrowed Equity Interests, given by McDonald’s in accordance

with this Agreement, and shall vote, or cause to be voted, such Escrowed Equity Interests in accordance with such written instructions timely received from McDonald’s.

5.1.4 If no McDonald’s Voting Notice has been received by Escrow Agent and remains in effect with respect to any Escrowed Equity Interests of any Secured Credit Grantor, then from and after Escrow Agent’s receipt of a notice in the form of Exhibit 6 (a “ Secured Creditor Voting Notice ”), Escrow Agent shall solely accept written instructions, as to the voting of the Escrowed Equity Interests of any Secured Credit Grantor, given by the Collateral Agent in accordance with this Agreement, and shall vote, or cause to be voted, such Escrowed Equity Interests of any Secured Credit Grantor in accordance with such written instructions timely received from the Collateral Agent. The Escrow Agent shall not take any action set forth in any Secured Creditor Voting Notice if such Secured Creditor Voting Notice includes instructions with respect to the Escrowed Equity Interests of any Excluded Subsidiary. If a McDonald’s Voting Notice is received by Escrow Agent with respect to such Escrowed Equity Interests of any Secured Credit Grantor following its receipt of a Secured Creditor Voting Notice, Escrow Agent shall cease to accept any instruction whatsoever with respect to the voting of such Escrowed Equity Interests from Collateral Agent and shall thereafter solely accept written instructions with respect thereto given by McDonald’s in accordance with this Agreement.

5.1.5 Exercise of Chilean POA . The Escrow Agent shall utilize and shall be required to utilize the Chilean POAs only to take the corporate actions required to change each attorney-in-fact (or authorized person) of Arcos de Chile and only upon written instructions from McDonald’s to that effect. McDonald’s agrees to only provide written instructions to the Escrow Agent with respect to the Chilean POAs if a Default Exercise Notice with respect to Arcos de Chile has been received by the Escrow Agent. Escrow Agent agrees to treat instructions received by McDonald’s in the same manner and in the same priority as if such instructions had been issued pursuant to Section 5.1.3.

5.2 Dividends and Distributions on Escrowed Equity Interests .

5.2.1 Prior to Escrow Agent’s receipt of a Default Exercise Notice with respect to any Escrowed Equity Interests, all cash dividends with respect to the Escrowed Equity Interests shall be distributed by the Escrowed MF Subsidiary that issued such cash dividend directly to the Escrowing Shareholder that deposited the Escrowed Equity Interests of such Escrowed MF Subsidiary with Escrow Agent, as set forth in Exhibit 4 ; provided however , that any dividends, distributions or other payments with respect to any Escrowed Equity Interests in the form of Equity Interests of Master Franchisee or any MF Subsidiary or any other property (other than cash dividends) shall be promptly deposited with Escrow Agent by the applicable Escrowing Shareholder as required by Section 3. All dividends, distributions or other payments that are received by any Escrowing Shareholder contrary to the provisions of this Section 5.2.1 shall be paid over in the same form

as so received (with any necessary endorsement) to Escrow Agent and shall be segregated from other property or funds of such Escrowing Shareholder.

5.2.2 From and after Escrow Agent’s receipt of a Default Exercise Notice with respect to the Escrowed Equity Interests relating to any Subject Business specified in such Default Exercise Notice, all dividends, distributions and other payments made with respect to such Escrowed Equity Interests shall be deposited with Escrow Agent and invested as provided in Section 4.2. On the fifth Business Day of each month following any month in which any such dividends or distributions were deposited with Escrow Agent, Escrow Agent shall distribute the same as follows:

FIRST, to Escrow Agent to the extent of any fees and disbursements of Escrow Agent due but unpaid;

SECOND, to Collateral Agent to be applied in accordance with Section 5 of the Collateral Agency Agreement, as specified by Collateral Agent in a written notice to Escrow Agent received by Escrow Agent not less than three Business Days prior to the date on which such distribution is to be made; and

THIRD, to the Escrowing Shareholder who owns the relevant Escrowed Equity Interests subject to such dividend or distribution.

Notwithstanding anything herein to the contrary, Escrow Agent shall have no duty or obligation to ensure that any amounts so distributed to any other Party are utilized for the purposes set forth in this Section 5.2.2.

6. Notices

6.1 Settlement Notice . Upon receipt of a Settlement Notice, Escrow Agent shall as soon as practicable take the actions set forth in such Settlement Notice. McDonald’s and Escrow Agent shall consult in advance of the delivery of any Settlement Notice by McDonald’s with respect to the administrative procedures to be undertaken by Escrow Agent upon settlement of the relevant Call Option, which administrative procedures shall be identified in a writing executed by McDonald’s and Escrow Agent not later than the date which is 10 Business Days prior to the Option Closing Date to be specified in such Settlement Notice. As promptly as practicable following the date hereof, McDonald’s shall deliver to Escrow Agent a preliminary indication of such administrative procedures pursuant to a side letter between McDonald’s and Escrow Agent, dated as of the date hereof. The Parties hereby acknowledge and agree that the provisions of this Agreement pertain to the rights, obligations and performance of Escrow Agent under the side letter and any other writing with respect to such administrative procedures.

6.2 Disputed Amounts Settlement Notice . Upon receipt of a Disputed Amounts Settlement Notice, Escrow Agent shall as soon as practicable take the actions set forth in such Disputed Amounts Settlement Notice.

6.3 Secured Creditor Release Notice . Upon receipt of a Secured Creditor Release Notice, Escrow Agent shall as soon as practicable take the actions set forth in such Secured Creditor Release Notice. The Collateral Agent shall complete and deliver to Escrow Agent a completed Enforcement Notice in form ready for execution by Escrow Agent once Escrow Agent is directed to deliver an Enforcement Notice upon receipt of a Secured Creditor Release Notice.

6.4 Intercreditor Compliance Notice . Upon receipt of an Intercreditor Compliance Notice, Escrow Agent shall as soon as practicable take the actions set forth in such Intercreditor Compliance Notice.

7. Termination

7.1 Term . This Agreement shall terminate upon the later of the termination of the MFA with respect to all Territories and the distribution of all Escrowed Property hereunder; provided, however, that in no event shall this Agreement terminate until all of the Escrowed Property hereunder has been distributed. McDonald’s shall provide Escrow Agent with written notice of the termination of the MFA.

7.2 Release of Collateral Agent . Upon the termination of the Secured Credit Documents and the repayment of all of the Secured Credit Obligations thereunder, the Collateral Agent shall be automatically released from its obligations under this Agreement, and the Parties agree to take such actions as may be reasonably requested by Collateral Agent to evidence such release. Collateral Agent shall provide Escrow Agent with written notice of the termination of the Secured Credit Documents and the repayment of all of the Secured Credit Obligations thereunder.

8. Escrow Agent

8.1 Eligibility . Escrow Agent shall at all times be a corporation organized and doing business under, or licensed to do business pursuant to, the laws of the United States (including any State thereof or the District of Columbia), having a combined capital and surplus of at least $500,000,000 (or its equivalent in another currency) and subject to supervision or examination by U.S. governmental authorities. If at any time Escrow Agent shall cease to be eligible in accordance with the provisions of this subsection, then it shall resign immediately in the manner and with the effect hereinafter specified.

8.2 Care . Escrow Agent shall not be under any duty to accord Escrowed Property any greater degree of care than it accords its own similar property and shall not be required to invest any funds held hereunder except as expressly required by this Agreement.

8.3 Duties . This Agreement expressly sets forth all the duties and obligations of Escrow Agent with respect to the subject matters hereof. No implied duties or obligations shall be read into this Agreement against Escrow Agent. Escrow Agent shall not be bound by or responsible for the provisions of any agreement among the other Parties except this Agreement or for determining or compelling compliance therewith. Escrow Agent may delegate any or all of its obligations hereunder to Affiliates or agents of Escrow Agent, provided that Escrow Agent selects such agent with reasonable care. Escrow Agent

shall not be required to expend or risk any of its own funds or otherwise incur any financial or other liability in the performance of any of its duties hereunder. Escrow Agent shall not be obligated to take any legal or other action hereunder which might in its judgment involve or cause it to incur any expense or liability unless it shall have been furnished with acceptable indemnification.

8.4 Reliance . Subject to the other provisions of this Agreement, Escrow Agent shall be entitled to rely upon any order, judgment, certification, demand, notice, instrument, instruction, certification, consent, authorization, receipt, power or attorney or other writing delivered to it hereunder without being required to determine the authenticity or validity thereof or the correctness of any fact stated therein or the propriety or validity or the service thereof or the jurisdiction of the court issuing any judgment or order. Escrow Agent may act in reliance upon any instrument or signature reasonably believed by it to be genuine and may assume that any Person purporting to give receipt or advice or make any statement or execute any document in connection with the provisions hereof has been duly authorized to do so. Notwithstanding anything herein to the contrary, in the event that Escrow Agent receives a notice, instruction or other writing under the terms of this Agreement that includes a reference to or description of any of the terms of, the facts under or a condition set forth in any other agreement, Escrow Agent shall be fully protected in acting upon and shall be entitled to conclusively rely upon any such reference or description or satisfaction of any condition set forth in any such notice, instruction or other writing.

8.5 Taxes; Reporting .

8.5.1 Escrow Agent does not have any interest in the Escrowed Property deposited hereunder but is serving as escrow agent only. Each Party receiving Escrowed Property shall pay or reimburse Escrow Agent upon request for any transfer or other taxes incurred in connection with the release and delivery thereof to such Party and shall indemnify and hold Escrow Agent harmless from any transfer or other taxes that Escrow Agent is or may be obligated to pay in connection therewith. The Parties agree that, to the extent applicable, they shall treat for all relevant tax purposes (a) any income earned on the funds in any Escrow Account attributable to the investment of dividends, as taxable to the respective Escrowing Shareholder, to be reported on a Form 1099 B, if applicable, in relation to principal, on a Form 1099 INT, in the case of interest earned, or on a Form 1099 DIV for dividends earned, in the case of money market investments or any other applicable forms required under U.S. law; and (b) any other income as taxable to Owner.

8.5.2 To facilitate Escrow Agent’s (a) disbursement of Escrowed Property from the Escrow Account hereunder; and (b) compliance with the applicable legal requirements relating to the withholding of taxes, each Party (other than McDonald’s and the Collateral Agent), including each Escrowing Shareholder, shall provide Escrow Agent as soon as practicable after the date hereof, with all forms, documents or certificates Escrow Agent requests for purposes of withholding of taxes or complying with applicable tax laws, including an

appropriately completed IRS Form W-8BEN or Form W-9, setting forth each Party’s respective tax identification number. In the event a payee is not a Party to this Agreement, the Parties (other than Escrow Agent and the Collateral Agent) shall provide Escrow Agent with a duly completed and properly executed Form W-9 (or Form W-8 BEN, in case of a non-U.S. entity) for such payee prior to payment being made. The Parties acknowledge that, in the event tax identification numbers are not certified to Escrow Agent, the Internal Revenue Code of 1986, as amended, may require withholding of a portion of any interest or other income earned on the investment of the Escrowed Property.

8.5.3 Citigroup, Inc., its affiliates, and its employees are not in the business of providing tax or legal advice to any taxpayer outside of Citigroup, Inc. and its affiliates. This Agreement and any amendments or attachments are not intended or written to be used, and cannot be used or relied upon, by any such taxpayer or for the purpose of avoiding tax penalties. Any such taxpayer should seek advice based on the taxpayer’s particular circumstances from an independent tax advisor.

8.5.4 The Parties acknowledge and agree that Escrow Agent shall be responsible for income reporting only with respect to income earned on investment of funds that are a part of the Escrowed Property and is not responsible for any other reporting. Within 30 days following the end of each calendar year for which this Agreement is in effect or during which the termination of the Escrow Account occurs, Escrow Agent will provide each Escrowing Shareholder or any other appropriate Party with a statement setting forth the amount of interest or other earnings accrued on the investment of funds that are part of the Escrowed Property for the calendar year (or, if the Escrow Account is terminated during the relevant calendar year, from the beginning of the calendar year to the date of such termination).

8.6 No Representation . Escrow Agent makes no representation as to the validity, value, genuineness or the collectability of any security, perfection or other document, instrument or property held by it hereunder.

8.7 No Advice . Escrow Agent shall not be required to advise any Party as to the wisdom in taking or refraining from any action with respect to any security or other document, instrument or property held by it hereunder.

8.8 Resignation; Replacement . Escrow Agent (and any successor Escrow Agent) may at any time resign as such by delivering the Escrowed Property to any successor Escrow Agent designated by McDonald’s and Collateral Agent in writing, with the consent of Master Franchisee (which consent shall not be unreasonably withheld or delayed) as to the designation of such successor Escrow Agent, or to any court of competent jurisdiction, whereupon Escrow Agent shall be discharged of and from any and all further obligations arising in connection with this Agreement. The resignation of Escrow Agent shall take effect on the earlier of (a) the appointment of a successor Escrow Agent (including a court of competent jurisdiction); or (b) the day which is 60 Business

Days after the date of delivery of its written notice of resignation to the other Parties. If at that time Escrow Agent has not received a designation of a successor Escrow Agent, Escrow Agent’s sole responsibility shall be to safe keep the Escrowed Property until receipt of a designation of successor Escrow Agent or a joint written disposition instruction by McDonald’s, Collateral Agent and Master Franchisee or a final nonappealable order of a court of competent jurisdiction (accompanied by a certificate from McDonald’s and Collateral Agent to the effect that such judgment is nonappealable). Upon receipt of notice of the identity of the successor escrow agent, Escrow Agent shall either deliver the Escrowed Property then held hereunder to the successor escrow agent, less Escrow Agent’s fees, costs, expenses and the value of other obligations owed to Escrow Agent hereunder, or hold such Escrowed Property (or any portion thereof) pending distribution, until all such fees, costs and expenses or the value of other obligations are paid to it.

8.9 Removal of Escrow Agent . Escrow Agent may be removed at any time by mutual agreement of McDonald’s, Collateral Agent and Master Franchisee by giving not less than 30 days’ prior written notice to Escrow Agent. Prior to the expiration of such 30-day period, McDonald’s, Collateral Agent and Master Franchisee shall designate, by mutual consent, a successor escrow agent. If at that time Escrow Agent has not received a designation of a successor Escrow Agent, Escrow Agent’s sole responsibility shall be to safe keep the Escrowed Property until receipt of a designation of successor Escrow Agent or a joint written disposition instruction by McDonald’s, Collateral Agent and Master Franchisee or a final nonappealable order of a court of competent jurisdiction (accompanied by a certificate from McDonald’s to the effect that such judgment is nonappealable). Upon receipt of notice of the identity of the successor escrow agent, Escrow Agent shall either deliver the Escrowed Property then held hereunder to the successor escrow agent, less Escrow Agent’s fees, costs, expenses and the value of other obligations owed to Escrow Agent hereunder, or hold such Escrowed Property (or any portion thereof) pending distribution, until all such fees, costs and expenses or the value of other obligations are paid to it. Upon delivery of the Escrowed Property to the successor escrow agent, Escrow Agent shall have no further duties, responsibilities or obligations hereunder.

8.10 Successors and Assigns . No Person shall be recognized by Escrow Agent as a successor or assignee of McDonald’s, Master Franchisee, Beneficial Owner, any Owner Entity or Collateral Agent until there shall be presented to Escrow Agent a written certificate of McDonald’s, Master Franchisee, Beneficial Owner, any Owner Entity or Collateral Agent, as the case may be, as to such succession or assignment.

8.11 No Liability . Escrow Agent shall not be liable or responsible for any act it may do or omit to do, except for its gross negligence, bad faith or willful misconduct. Escrow Agent may consult with counsel and shall be fully protected with respect to any action taken or omitted by it in good faith on such advice of counsel. Notwithstanding any other provision of this Agreement, Escrow Agent shall not be liable (i) for any indirect, incidental, consequential, punitive or special losses or damages, regardless of the form of action and whether or not any such losses or damages were foreseeable or contemplated; or (ii) for the investment or reinvestment of any Escrowed Property or for any liquidation of such investment or reinvestment, executed in accordance with the terms of this Agreement,

including any liability for any delays (in each case, not resulting from its gross negligence, bad faith or willful misconduct as adjudicated by a court of competent jurisdiction) in the investment or reinvestment of the Escrowed Property, any loss of interest incident to any such delays or any loss or penalty as a result of the liquidation of any investment before its stated maturity date.

8.12 Indemnification . McDonald’s and Owner agree, jointly and severally, to indemnify fully Escrow Agent and its employees, officers and directors (each, an “ Indemnified Party ”) for, hold each Indemnified Party harmless from, and defend each Indemnified Party against, any and all claims, losses, actions, liabilities, costs, damages and expenses of any nature incurred by such Indemnified Party arising out of or in connection with this Agreement or with the administration of its duties hereunder, including attorney’s fees, tax liabilities (other than income tax liabilities associated with Escrow Agent’s fees), any liabilities or damages that may result from any inaccuracy or misrepresentation made in any tax certification provided to Escrow Agent, and other costs and expenses of defending or preparing to defend against any claim of liability, except to the extent such loss, liability, damage, cost and expense shall be caused by the Indemnified Party’s own gross negligence, bad faith or willful misconduct.

8.13 Compensation and Reimbursement of Escrow Agent . For services rendered under this Agreement, Escrow Agent shall be entitled to fees and expense reimbursement from McDonald’s as specified in the separate fee agreement relating to this Agreement between Escrow Agent and McDonald’s. In the event that such fees or expenses, or any other obligations owed to Escrow Agent (or its counsel) are not paid to Escrow Agent within 30 calendar days following the presentment of an invoice for the payment of such fees and expenses or the demand for such payment, then Escrow Agent may, without further action or notice, pay such fees from the Escrowed Property; provided, however, that if any such fees or expenses are paid from the Escrowed Property (or any Escrowed Property is retained by the Escrow Agent pursuant to the immediately succeeding sentence or Section 8.8 and McDonald’s is notified of such retention and the reason therefor), then McDonald’s shall pay to the order of Collateral Agent in immediately available funds in Dollars an amount equal to such fees or expenses (or Escrowed Property withheld by the Escrow Agent), which amount shall be in full satisfaction of such fees or expenses payable to the Escrow Agent. Escrow Agent may in its sole discretion withhold from any distribution of the Escrowed Property an amount of such distribution it reasonably believes would, upon sale or liquidation, produce proceeds equal to any unpaid amounts to which the Escrow Agent is entitled to hereunder.

8.14 Ambiguity . In the event of any disagreement among any of the Parties (other than Escrow Agent) to this Agreement, or between any of them and any other Person, resulting in adverse claims or demands being made with respect to the subject matter of this Agreement, which is not expressly dealt with herein, or in the event that Escrow Agent, in good faith, is in doubt as to any action it should take hereunder, Escrow Agent may, at its option, refuse to comply with any claims or demands and refuse to take any other action hereunder, so long as such disagreement continues or such doubt exists, and in any such event, Escrow Agent shall not be liable in any way or to any Person for its failure or refusal to act, and Escrow Agent shall be entitled to continue to so refuse to act

and refrain from acting until (a) the rights of all parties having or claiming an interest in the Escrowed Property or any Escrow Account shall have been fully and finally adjudicated by a court of competent jurisdiction, or all differences and doubts shall have been resolved by agreement among all of such Parties; and (b) Escrow Agent shall, in the case of adjudication by a court of competent jurisdiction, have received a final order, judgment or decree by such court of competent jurisdiction, which order, judgment or decree is not subject to appeal, and in the case of resolution of differences and doubts by agreement, have received a notice in writing signed by an Authorized Person (as defined below) of each of such Parties setting forth in detail the agreement. Escrow Agent shall have the option, after 30 calendar days’ notice to the other Parties of its intention to do so, to file an action in interpleader requiring such other Parties to answer and litigate any claims and rights among themselves. The costs and expenses (including reasonable attorneys’ fees and expenses) incurred by Escrow Agent in connection with such proceeding shall be paid by McDonald’s. The rights of Escrow Agent under this Section 8.14 are cumulative of all other rights which it may have by law or otherwise.

9. General Provisions

9.1 Effective Date . This Agreement shall become effective on the date hereof (the “ Effective Date ”).

9.2 Severability . If any provision of this Agreement is invalid, inoperative or unenforceable for any reason, such circumstances shall not have the effect of rendering such provision invalid, inoperative or unenforceable in any other case or circumstance, or of rendering any other provision hereof invalid, inoperative, or unenforceable to any extent whatsoever.

9.3 Waiver . No Party may (a) extend the time for the performance of any of the obligations or other acts of any other Party; or (b) waive compliance with any of the agreements of the other Party or conditions to such Party’s obligations contained herein, except to the extent such extension or waiver is set forth in an instrument in writing signed by the Party to be bound thereby. Any waiver of any term or condition hereunder shall not be construed as a subsequent waiver of the same term or condition or any other term or condition of this Agreement. The failure of any Party to assert any of its rights hereunder shall not constitute a waiver of any of such rights. All rights and remedies existing under this Agreement are cumulative with, and not exclusive of, any rights or remedies otherwise available under this Agreement or under Applicable Law. The assertion or employment of any right or remedy hereunder, or otherwise, shall not prevent the concurrent assertion or employment of any other appropriate right or remedy.

9.4 Benefits of this Agreement .

9.4.1 This Agreement is binding upon the Parties and their respective executors, administrators, permitted transferees and successors in interest. McDonald’s Corporation shall be an intended third party beneficiary of each obligation owed to McDonald’s by any Party under this Agreement and each Secured Creditor shall be an intended third party beneficiary of each obligation

owed to Collateral Agent by any Party under this Agreement. Except as aforesaid, nothing in this Agreement is intended, nor shall be deemed, to confer any rights or remedies upon any other Person not a party hereto. No Party may assign any of its rights or obligations under this Agreement without the prior written consent of the other Parties, except that (a) Escrow Agent may retain the agents specified in Section 2.3 and may resign upon the terms described in this Agreement; and (b) Collateral Agent may resign or be replaced in accordance with the terms of the Secured Credit Documents.

9.4.2 Any corporation into which any Escrow Agent may be merged or converted or with which it may be consolidated, or any corporation resulting from any merger, conversion or consolidation to which Escrow Agent will be a party, or any corporation succeeding to the business of Escrow Agent will be the successor of Escrow Agent hereunder without the execution or filing of any paper with any Party or any further act on the part of any of the Parties except where an instrument of transfer or assignment is required by law to effect such succession, anything herein to the contrary notwithstanding.

9.5 Counterparts . This Agreement may be executed and delivered in one or more counterparts, and by the different Parties in separate counterparts, each of which when executed shall be deemed to be an original and all of which taken together shall constitute one and the same agreement.

9.6 Notices . Any and all notices required or permitted under this Agreement shall be in writing, in English, and shall be personally delivered, sent via an internationally recognized overnight delivery service, or sent by facsimile (with a confirming copy sent by international air mail) to the following respective addresses or facsimile number unless and until a different address or facsimile number has been designated by written notice to the other Party:


If to McDonald’s:		McDonald’s Latin America, LLC One McDonald’s Plaza Oak Brook, Illinois 60523 U.S.A. Attention: General Counsel of the Americas Telephone: (630) 623-6255 Fax: (630) 623-7012

With a copy to:		McDonald’s Corporation 2915 Jorie Boulevard Oak Brook, Illinois 60523 U.S.A. Attention: General Counsel Telephone: (630) 623-3373 Fax: (630) 623-0497

If to an Escrowed MF Subsidiary:

		c/o Forrestal Capital Limited Company


		1221 Brickell Avenue #1170 Miami, Florida 33131 Attention: Carlos Hernandez Telephone: (305) 961-2840 Fax: (305) 961-2844

With a copy to:		Greenberg Traurig, P.A. 1221 Brickell Avenue Miami, Florida 33131 Attention: Patricia Menendez Cambo Telephone: (305) 579-0766 Fax: (305) 579-0717

If to Master Franchisee or Beneficial Owner:

		c/o Forrestal Capital Limited Company 1221 Brickell Avenue #1170 Miami, Florida 33131 Attention: Carlos Hernandez Telephone: (305) 961-2840 Fax: (305) 961-2844

		with a copy to:

		Greenberg Traurig, P.A. 1221 Brickell Avenue Miami, Florida 33131 Attention: Patricia Menendez Cambo Telephone: (305) 579-0766 Fax: (305) 579-0717

If to any Owner Entity:		Arcos Dorados Limited c/o Forrestal Capital Limited Company 1221 Brickell Avenue #1170 Miami, Florida 33131 Attention: Carlos Hernandez Telephone: (305) 961-2840 Fax: (305) 961-2844

		with a copy to:

		Greenberg Traurig, P.A. 1221 Brickell Avenue Miami, Florida 33131 Attention: Patricia Menendez Cambo Telephone: (305) 579-0766 Fax: (305) 579-0717


If to Collateral Agent:		Deutsche Bank Trust Company Americas 60 Wall Street New York, New York 10005 Attention: Trust & Securities Services Telephone: (212) 250-7727 Fax: (732) 578-4636

If to Escrow Agent:		Citibank, N.A. 388 Greenwich Street 14 ^th Floor New York, New York 10013 Attention: Marie Ladolcetta Telephone: (212) 816-6086 Fax: (212) 657-2762

Notices shall be addressed to the Party to be notified at the address or telecopy number set forth above. Any notice shall be deemed to have been given at the earlier of receipt, or the next Business Day after sending by facsimile, electronic transmission or overnight delivery service. “ Business Day ”, for purposes of this Section, shall mean a day other than a Saturday, Sunday or other day on which commercial banking institutions are authorized or required by law to close in the Territory in which the intended recipient of the notice has its address or (i) in the case of McDonald’s, the State of Illinois, United States of America; and (ii) in the case of Collateral Agent, the State of New York, United States of America. Notwithstanding anything herein to the contrary, notice to Escrow Agent shall only be deemed given upon actual receipt by Escrow Agent. In the case of a conflict between any instruction or order originated by McDonald’s and any other Person other than a court of competent jurisdiction, the instruction or order originated by McDonald’s shall prevail. Notwithstanding anything herein to the contrary, Escrow Agent may rely and act upon any instruction or order received hereunder from any other Party unless and until Escrow Agent receives a contradictory instruction or order from McDonald’s.

9.7 Payments . Any and all cash payments made by Escrow Agent pursuant to this Agreement shall be made by wire transfer of immediately available funds in Dollars to accounts to be established by the relevant Parties promptly following receipt by the Escrow Agent of a Default Exercise Notice with respect to any Escrowed Equity Interest, including any accounts required by Applicable Law to transfer cash payments from any Escrowed MF Subsidiary organized in Brazil.

9.8 Survival . The obligations contained in Sections 8.5, 8.11, 8.12, 8.13, 10 and this Section 9 shall survive expiration or termination of this Agreement and the resignation or removal of Escrow Agent.

9.9 Language . This Agreement is entered into in the English language. If a translation of this Agreement into any other language is required or desired for any reason, it is understood that in all matters involving interpretations of this Agreement, the English text shall control.

9.10 Criminal or Civil Penalties . No Party shall engage in any activity that would knowingly expose any other Party to a risk of criminal or civil penalties under Applicable Law.

9.11 Amendments . Except as otherwise expressly permitted by this Agreement, no change, modification, amendment or waiver of any of the provisions of this Agreement shall be effective and binding upon any Party, including by custom, usage of trade, or course of dealing or performance, unless it is in writing, specifically identified as an amendment hereto and signed by authorized representatives of each of the Parties; provided, however, that each Party agrees that any Person who executes and delivers to McDonald’s, Collateral Agent and Escrow Agent an instrument of accession, in which such Person agrees to be deemed an Escrowed MF Subsidiary for all purposes of this Agreement shall be deemed to be a Party to this Agreement.

9.12 Force Majeure . Notwithstanding anything contained in this Agreement to the contrary, Escrow Agent shall not incur any liability for not performing any act or fulfilling any obligation hereunder by reason of any occurrence beyond its control (including, without limitation, any provision of any present or future law or regulation or any act of any Governmental Authority, any act of God or war or terrorism, or the unavailability of the Federal Reserve Bank wire services or any electronic communication facility).

9.13 Instructions; Verification; Communications .

9.13.1 All instructions required under this Agreement shall be delivered to Escrow Agent in writing, in English, in facsimile form and, if so requested by Escrow Agent, an original, executed by an Authorized Person of each of the other Parties or an entity acting on its behalf. The identity of such Authorized Persons, as well as their specimen signatures, title, telephone number and e-mail address, shall be delivered to Escrow Agent in the list of authorized signers form as set forth on Schedule A , Schedule B and Schedule C and shall remain in effect until the applicable Party, or an entity acting on its behalf, notifies Escrow Agent of any change thereto (the Person(s) so designated from time to time, the “ Authorized Persons ”). Escrow Agent and the other Parties agree that the above constitutes a commercially reasonable security procedure and further agree to comply with any direction or instruction (other than those contained herein or delivered in accordance with this Agreement) from any Party.

9.13.2 In the event funds transfer instructions are given (other than in writing at the time of execution of this Agreement), whether in writing, by telecopier, or otherwise, such funds transfer instructions should contain a selected test word also evidenced on Schedule A . Test words must contain at least eight alphanumeric characters, established at document execution and changed each time Schedule A is updated in accordance with Section 9.13.1. In addition or in lieu of test words, Escrow Agent is authorized to seek confirmation of such instructions by telephone call back to the applicable Person(s) specified to Escrow Agent from time to time by an Authorized Person and Escrow Agent may rely upon the

confirmations of anyone purporting to be the Person(s) so designated. To ensure the accuracy of the instructions it receives, Escrow Agent may record such call backs. If Escrow Agent is unable to verify the instruction, or is not satisfied in its sole discretion with the verification it receives, it will not execute the instruction until all issues have been resolved to its satisfaction. The Persons and telephone numbers for call backs may be changed only in writing, signed by an Authorized Person, actually received and acknowledged by Escrow Agent. The Parties acknowledge that these security procedures for funds transfers are commercially reasonable.

9.13.3 To help the U.S. government fight the funding of terrorism and money laundering activities, Federal law requires all financial institutions to obtain, verify, and record information that identifies each Person who opens an account. When an account is opened, Escrow Agent will ask for information that will allow Escrow Agent to identify relevant parties. The other Parties hereby acknowledge such information disclosure requirements and agree to comply with all such information disclosure requests from time to time from Escrow Agent. Notwithstanding anything to the contrary herein, any and all email communications (both text and attachments) by or from Escrow Agent that Escrow Agent deems to contain confidential, proprietary and/or sensitive information shall be encrypted. The recipient (the “ Email Recipient ”) of the encrypted email communication will be required to complete a registration process. Instructions on how to register and/or retrieve an encrypted message will be included in the first secure email sent by Escrow Agent to the Email Recipient. Additional information and assistance on using the encryption technology can be found at Citibank’s Secure Email website at www.citigroup.com/citigroup/citizen/privacy/email.htm or by calling (866) 535-2504 (in the U.S.) or (904) 954-6181.

9.14 Use of Name . Except for documentation requested or required by any Governmental Authority, no printed or other material in any language, including prospectuses, notices, reports, and promotional material which mentions “ Citibank ”, or “ Citigroup ” or “ Citi ” by name or the rights, powers, or duties of Escrow Agent under this Agreement shall be issued by any other Party, or on such Party’s behalf, without the prior written consent of Escrow Agent.

10. Governing Law; Arbitration for Certain Designated Matters; Submission to Jurisdiction.

10.1 Governing Law . This Agreement and the rights and obligations of the parties hereunder shall be construed and enforced in accordance with, and governed by, the law of the State of New York without giving effect to its principles or rules of conflicts of laws to the extent that the same are not mandatorily applicable by statute and by the application of the laws of another jurisdiction would be required thereby.

10.2 International Arbitration .

10.2.1 The Parties (other than Escrow Agent and Collateral Agent) agree that any dispute, controversy or claim arising out of, relating to or in connection

with a Designated Matter (each a “ Dispute ”), shall be finally settled by binding international arbitration in New York, New York, before a tribunal of three arbitrators (the “ Tribunal ”). The arbitration shall be administered by the International Court of Arbitration of the International Chamber of Commerce (the “ ICC ”) in accordance with the ICC Rules of Arbitration (the “ ICC Rules ”) as in effect at the time of the arbitration, except as they may be modified herein or by agreement of the Parties (other than Escrow Agent and Collateral Agent). The place of arbitration shall be New York City, New York. Notwithstanding anything to the contrary in this Agreement, the arbitration provisions set forth in this Agreement, and any arbitration conducted thereunder, shall be governed exclusively by the Federal Arbitration Act, Title 9 United States Code to the exclusion of any state or municipal law of arbitration.

10.2.2 The arbitration shall be conducted in the English language. Notwithstanding the foregoing, any Arbitrating Party may submit testimony or documentary evidence in any other language; provided that the Arbitrating Party submitting such evidence, at its own cost, also furnishes to the other Arbitrating Party or Arbitrating Parties, as applicable, a translation of such testimony or evidence into the English language.

10.2.3 In the event that there are two Parties to the Dispute, each Party to the arbitration (each an “ Arbitrating Party ”) shall nominate one arbitrator, obtain its nominee’s acceptance of such nomination, and deliver written notification of such nomination and acceptance to the other Arbitrating Party and the ICC within 30 days after delivery of the request for arbitration. In the event an Arbitrating Party fails to nominate an arbitrator or deliver notification of such nomination to the other Arbitrating Party and the ICC within this time period, upon request of either Arbitrating Party, such arbitrator shall instead be appointed by the ICC within 30 days of receiving such request. The Arbitrating Parties shall use reasonable best efforts to agree upon a third arbitrator within 40 days after delivery of the request for arbitration. If the Arbitrating Parties are unable to agree upon a third arbitrator within this time period, then the two arbitrators appointed in accordance with the above provisions shall nominate the third arbitrator and notify the Arbitrating Parties and the ICC in writing of such nomination within 15 days of their appointment. If the first two appointed arbitrators fail to nominate a third arbitrator or notify the Arbitrating Parties and the ICC of that nomination within this time period, then, upon request of either Arbitrating Party, the third arbitrator shall be appointed by the ICC within 15 days of receiving such request. The third arbitrator shall serve as chairman of the Tribunal.

10.2.4 In the event that there are more than two Arbitrating Parties:

10.2.5 Each member of the Tribunal shall be a lawyer licensed to practice in a state of the United States of America and shall be fluent in the English language.

10.2.6 Each Party (other than Escrow Agent and Collateral Agent) agrees that it will provide discovery consistent with the United States Federal Rules of Civil Procedure, including but not limited to depositions upon oral examination and responses to written interrogatories.

10.2.7 The Parties (other than Escrow Agent and Collateral Agent) agree to submit to (i) the exclusive personal jurisdiction of the state and federal courts sitting in New York City, New York for the purposes of (A) enforcing this agreement to arbitrate; and (B) applying to a judicial authority for interim or conservatory measures in accordance with Article 23(2) of the ICC Rules; and (ii) the non-exclusive jurisdiction of such courts for purposes of obtaining judgment upon the award rendered by the Tribunal.

10.2.8 Each of Owner Entities and the Escrowed MF Subsidiaries consent to the service of process for the purposes of clause (i) of Section 10.2.7 by appointing CT Corporation System, which maintains an office at 111 Eighth

Avenue, New York, NY 10011, as its agent to receive service of process or other legal summons. Each of the Parties (other than Escrow Agent and Collateral Agent) further consents to the service of process irrevocably for the purposes of clause (i) of Section 10.2.7 by the mailing of copies thereof by registered or certified mail, postage prepaid, return receipt requested, to each such Party at its address as provided in Section 9.6. Nothing in this Section shall affect the right of any Party to serve legal process in any other manner permitted by Applicable Law.

10.2.9 In accordance with Article 23(2) of the ICC Rules, the Parties (other than Escrow Agent and Collateral Agent) may apply to the competent judicial authority specified in Section 10.2.7 for interim or conservatory measures. The application of a Party to such judicial authority for such interim or conservatory measures shall not be deemed a waiver of this agreement to arbitrate.

10.2.10 The award of the Tribunal shall be promptly performed or paid (as the case may be), free and clear of any tax and deduction, and any costs, fees and taxes incident to enforcing the award shall, to the fullest extent permitted by law, be charged against the Arbitrating Party resisting such enforcement. McDonald’s may request that an award be paid in Equity Interests of Master Franchisee, in which case the Party against which the award is entered shall cause the transfer of such Equity Interests to which McDonald’s is entitled based on the fair market value of the Equity Interests as determined by the Tribunal and Master Franchisee shall register such transfer in its books. Any award shall include interest from the date of any damages incurred, and from the date of the award until paid in full, at a rate to be fixed by the Tribunal.

10.2.11 The Parties (other than Escrow Agent and Collateral Agent) waive to the fullest extent permitted by law any rights to appeal to, or to seek review of the award of the Tribunal by, any court.

10.2.12 When a Party (other than Escrow Agent and Collateral Agent) to a Related Agreement submits a Request for Arbitration (as defined in the ICC Rules) in connection with a legal relationship in respect of which arbitration proceedings between the Parties (other than Escrow Agent and Collateral Agent) to the same or another Related Agreement are already pending under the ICC Rules (an “ Already Pending Proceeding ”), any party to such Related Agreement may request that the claims contained in the Request for Arbitration (the “ New Claims ”) be included in the Already Pending Proceeding. If a party to a Related Agreement makes such a request before the Terms of Reference (as defined in the ICC Rules) have been signed or approved by the ICC in the Already Pending Proceeding, pursuant to Article 4(6) of the ICC Rules, the ICC shall determine whether to include the New Claims in the Already Pending Proceeding. If a party to a Related Agreement makes such a request after the Terms of Reference in the Already Pending Proceeding have been signed or approved by the ICC, pursuant to Article 19 of the ICC Rules, the Tribunal in the Already Pending Proceeding shall determine whether to include the New Claims in the Already Pending Proceeding. For the avoidance of doubt, two or more arbitration proceedings may be

consolidated in accordance with this Section 10.2.12 under Articles 4(6) or 19 of the ICC Rules, even if the parties to such arbitration proceedings are not identical.

10.2.13 Except as may be required by Applicable Law or court order, the Parties (other than Escrow Agent and Collateral Agent) agree to maintain confidentiality as to all aspects of any arbitration, including its existence and results, except that nothing herein shall prevent any Party from disclosing information regarding such arbitration for purposes of the proceedings described in clause (i) of Section 10.2.7. The Parties (other than Escrow Agent and Collateral Agent) further agree to obtain the arbitrators’ agreement to preserve the confidentiality of any arbitration.

10.2.14 The Parties (other than Escrow Agent and Collateral Agent) expressly declare that they have jointly decided to enter into this arbitration covenant freely and voluntarily in order to have the benefit of an alternative dispute resolution method.

10.3 Limitations . Any Dispute arising out of or relating to a Designated Matter or any Related Agreement or the relationship of the Parties (other than Escrow Agent and Collateral Agent) hereto shall be barred unless an arbitration proceeding is commenced within two years from the date the complaining Party (other than Escrow Agent and Collateral Agent) knew or should have known of the facts giving rise to such Dispute.

10.4 JURISDICTION; VENUE; WAIVER OF JURY TRIAL .

10.4.1 ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OTHER THAN WITH RESPECT TO A DESIGNATED MATTER (WHICH SHALL BE SUBJECT TO THE PROVISIONS OF SECTION 10.2) MAY BE BROUGHT IN THE COURTS OF THE STATE OF NEW YORK OR OF THE UNITED STATES FOR THE SOUTHERN DISTRICT OF NEW YORK, IN EACH CASE WHICH ARE LOCATED IN THE COUNTY OF NEW YORK, AND, BY EXECUTION AND DELIVERY OF THIS AGREEMENT, EACH PARTY HEREBY IRREVOCABLY ACCEPTS FOR ITSELF AND IN RESPECT OF ITS PROPERTY, GENERALLY AND UNCONDITIONALLY, THE NON-EXCLUSIVE JURISDICTION OF THE AFORESAID COURTS. EACH PARTY HEREBY FURTHER IRREVOCABLY WAIVES ANY CLAIM THAT ANY SUCH COURT LACKS PERSONAL JURISDICTION OVER SUCH PARTY, AND AGREES NOT TO PLEAD OR CLAIM IN ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT BROUGHT IN ANY OF THE AFORESAID COURTS THAT ANY SUCH COURT LACKS PERSONAL JURISDICTION OVER SUCH PARTY. EACH PARTY FURTHER IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS OUT OF ANY OF THE AFOREMENTIONED COURTS IN ANY SUCH ACTION OR PROCEEDING BY THE MAILING OF COPIES THEREOF BY REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, TO ANY SUCH PARTY AT ITS ADDRESS FOR NOTICES AS PROVIDED IN SECTION 9.6, SUCH SERVICE TO BECOME EFFECTIVE 30 DAYS AFTER

SUCH MAILING. EACH PARTY HEREBY IRREVOCABLY WAIVES ANY OBJECTION TO SUCH SERVICE OF PROCESS AND FURTHER IRREVOCABLY WAIVES AND AGREES NOT TO PLEAD OR CLAIM IN ANY ACTION OR PROCEEDING COMMENCED HEREUNDER THAT SUCH SERVICE OF PROCESS WAS IN ANY WAY INVALID OR INEFFECTIVE. NOTHING HEREIN SHALL AFFECT THE RIGHT OF ANY PARTY TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY APPLICABLE LAW OR, SUBJECT TO SECTION 10.2, TO COMMENCE LEGAL PROCEEDINGS OR OTHERWISE PROCEED AGAINST ANY PARTY IN ANY OTHER JURISDICTION.

10.4.2 EACH PARTY HEREBY IRREVOCABLY WAIVES ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY OF THE AFORESAID ACTIONS OR PROCEEDINGS ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT BROUGHT IN THE COURTS REFERRED TO IN CLAUSE 10.4.1 ABOVE AND HEREBY FURTHER IRREVOCABLY WAIVES AND AGREES NOT TO PLEAD OR CLAIM IN ANY SUCH COURT THAT ANY SUCH ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.

10.4.3 EACH OF THE PARTIES HEREBY IRREVOCABLY WAIVES ALL RIGHT TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.

10.4.4 THE PARTIES IRREVOCABLY AND UNCONDITIONALLY WAIVE, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, AND AGREE NOT TO PLEAD OR CLAIM, ANY RIGHT OF IMMUNITY FROM LEGAL ACTION, SUIT OR PROCEEDING, FROM SETOFF OR COUNTERCLAIM, FROM THE JURISDICTION OF ANY COURT, FROM SERVICE OF PROCESS, FROM ATTACHMENT UPON OR PRIOR TO JUDGMENT, FROM ATTACHMENT IN AID OF EXECUTION OR JUDGMENT, FROM EXECUTION OF JUDGMENT, OR FROM ANY OTHER LEGAL PROCESS OR PROCEEDING FOR THE GIVING OF ANY RELIEF OR FOR THE ENFORCEMENT OF ANY JUDGMENT, AND CONSENTS TO SUCH RELIEF AND ENFORCEMENT AGAINST IT, ITS ASSETS AND ITS REVENUES IN ANY JURISDICTION, IN EACH CASE WITH RESPECT TO ANY MATTER ARISING OUT OF, OR IN CONNECTION WITH, THIS AGREEMENT.

10.5 SPECIAL DAMAGES . EACH PARTY WAIVES TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW ANY RIGHT TO OR CLAIM FOR ANY PUNITIVE, MORAL, EXEMPLARY OR ANY SIMILAR DAMAGES AGAINST THE OTHER PARTIES HERETO AND AGREES THAT, IN THE EVENT OF A DISPUTE BETWEEN OR AMONG THE PARTIES, ANY PARTY MAKING A CLAIM WILL BE LIMITED TO EQUITABLE RELIEF AND TO RECOVERY OF ANY

ACTUAL DAMAGES IT SUSTAINS.

IN WITNESS WHEREOF , the Parties have duly executed and delivered this Agreement on the day and year first above written.

McDonald’s:

M C D ONALD ’ S L ATIN A MERICA , LLC

Master Franchisee:

L AT A M , LLC

By:

/s/ JC Gonzalez-Mendez

By:

Name:

JC Gonzalez-Mendez

Name:

Title:

Latin America Senior VP – President Latin America

Title:

Owner:

A RCOS D ORADOS B.V.

Escrow Agent:

C ITIBANK , N.A.

By:

/s/

By:

Name:

Title:

Collateral Agent (formerly Administrative Agent:

D EUTSCHE B ANK T RUST C OMPANY A MERICAS

By:

Name:

Title:

By:

Name:

Title:

IN WITNESS WHEREOF , the Parties have duly executed and delivered this Agreement on the day and year first above written.

McDonald’s:

M C D ONALD ’ S L ATIN A MERICA , LLC

Master Franchisee:

L AT A M , LLC

By:

/s/ Diego Pace

Name:

Title:

Owner:

A RCOS D ORADOS B.V.

Escrow Agent:

C ITIBANK , N.A.

By:

/s/ Diego Pace

By:

Name:

Title:

Collateral Agent (formerly Administrative Agent:

D EUTSCHE B ANK T RUST C OMPANY A MERICAS

By:

Name:

Title:

By:

Name:

Title:

IN WITNESS WHEREOF , the Parties have duly executed and delivered this Agreement on the day and year first above written.

McDonald’s:

M C D ONALD ’ S L ATIN A MERICA , LLC

Master Franchisee:

L AT A M , LLC

By:

Name:

Title:

Owner:

A RCOS D ORADOS B.V.

Escrow Agent:

C ITIBANK , N.A.

By:

/s/

By:

/s/ Marie Ladolcetta

Name:

Marie Ladolcetta

Title:

Vice President

Collateral Agent (formerly Administrative Agent:

D EUTSCHE B ANK T RUST C OMPANY A MERICAS

By:

Name:

Title:

By:

Name:

Title:

IN WITNESS WHEREOF , the Parties have duly executed and delivered this Agreement on the day and year first above written.

McDonald’s:

M C D ONALD ’ S L ATIN A MERICA , LLC

Master Franchisee:

L AT A M , LLC

By:

Name:

Title:

Owner:

A RCOS D ORADOS B.V.

Escrow Agent:

C ITIBANK , N.A.

By:

/s/

By:

Name:

Title:

Collateral Agent (formerly Administrative Agent:

D EUTSCHE B ANK T RUST C OMPANY A MERICAS

By:

/s/ Wanda Camacho

Name:

Wanda Camacho

Title:

Vice President

By:

/s/ Yana Kislenko

Name:

Yana Kislenko

Title:

Assistant Vice President


A RCOS D ORADOS C ARIBBEAN D EVELOPMENT C ORP . R ESTAURANT R EALTY O F M EXICO , I NC . G OLDEN A RCH D EVELOPMENT C ORPORATION L OGISTICS AND M ANUFACTURING LOMA C O . A DMINISTRATIVE D EVELOPMENT C OMPANY M ANAGEMENT O PERATIONS C OMPANY A RCOS D ORADOS A RGENTINA , S.A. A RCOS D ORADOS A RUBA N.V. A RRAS C OMMERCIO DE A LIMENTOS L TDA . A RCOS D OURADOS C OMMERCIO DE A LIMENTOS L TDA . A RCOS D OURADOS P ARTICIPAÇÕES L TDA . A RCOS D ORADOS R ESTAURANTES DE C HILE , L TDA . A RCOS D ORADOS C OLOMBIA S.A. H AMBURGUE S.A.S. A RCOS D ORADOS C URAÇAO N.V. A RCGOLD DEL E CUADOR S.A. A RCOS D ORADOS P ANAMÀ , S.A. S ISTEMAS M C O P C O P ANAMÀ , S.A. O PERACIONES A RCOS D ORADOS DE P ERU S.A. A RCOS D ORADOS P UERTO R ICO , I NC . A RCOS DEL S UR S.R.L. G AUCHITO DE O RO S.A. A LIMENTOS A RCOS D ORADOS DE V ENEZUELA , C.A. A LIMENTOS L ATINOAMERICANOS V ENEZUELA ALV, C.A. C OMPAÑÍA O PERATIVE DE A LIMENTOS COR, C.A. G ERENCIA O PERATIVE ARC, C.A.

By:	/s/ German Lemonnier
	Name:	German Lemonnier
	Title:	Attorney in fact

EXHIBIT 1

ESCROWED MF SUBSIDIARIES

1.	Arcos Dorados Argentina S.A. (formerly known as Arcos Dorados S.A.), a sociedad anónima (corporation) formed under the laws of Argentina with its principal office at Maipú 1210, 5th Floor, City of Buenos Aires, Argentina.

2.	Arcos Dourados Comercio de Alimentos Ltda., a sociedade (company) formed under the laws of Brazil with its principal office at Alameda Amazonas 253, Alphaville Industrial, City of Barueri, State of São Paulo, Brazil.

3.	Arras Comercio de Alimentos Ltda., a sociedade (company) formed under the laws of Brazil with its principal office at Alameda Amazonas 113, 2nd floor, Alphaville Industrial, City of Barueri, State of São Paulo, Brazil.

4.	Arcos Dourados Participações Ltda., a sociedade (company) formed under the laws of Brazil with its principal office at Alameda Amazonas 113, 2nd floor, Alphaville Industrial, City of Barueri, State of São Paulo, Brazil.

5.	Arcos Dorados Restaurantes de Chile, Ltda., a sociedad limitada (company) formed under the laws of Chile with its principal office at Av. Kennedy No. 5454, piso 16, Vitacura, Santiago, Chile.

6.	Arcos Dorados Caribbean Development Corp. (formerly known as McDonald’s Caribbean Development Corporation), a corporation formed under the laws of Delaware with its principal office at 2711 Centerville Road, Suite 400, Wilmington, Delaware 19808, USA.

7.	Arcos Dorados Colombia S.A. (formerly known as Franchise System de Colombia Ltda. y Compañía Sociedad en Comandita Por Acciones), a sociedad anónima (company) formed under the laws of Colombia with its principal office at Avenida Suba No. 108-58, Torre A, 6 ^th Floor, Bogotá, Colombia.

8.	Hamburgue S.A.S., a sociedad anónima simplificada (company) formed under the laws of Colombia with its principal office at Avenida Suba No. 108-58, Torre A, 6 ^th Floor, Bogotá, Colombia. ¹

9.	Arcgold del Ecuador S.A., a sociedad anónima (corporation) formed under the laws

As of the date hereof, the Escrow Agent does not have in its possession any Escrowed Property for this Escrowed MF Subsidiary. Pursuant to the terms of that certain letter agreement of even date herewith by and among Master Franchisee, the Collateral Agent and McDonald’s, Master Franchisee shall deliver, or cause to be delivered, to the Escrow Agent all Escrowed Property for this Escrowed MF Subsidiary as promptly as practicable and in no event later than 10 Business Days following the preparation and execution of such Escrowed Property, the Secured Creditor Foreign Pledge Agreement and the McDonald’s Foreign Pledge Agreement. The Escrow Agent shall not have any obligation to bring any action to enforce any obligation under the aforementioned letter agreement.

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of Ecuador with its principal office at Avenida República de El Salvador 1082, Edificio Mansión Blanca, Quito, Ecuador.

10.	Arcos Dorados Panamá, S.A., a sociedad anónima (formerly known as McDonald’s Sistemas de Panamá, S.A.) (corporation), formed under the laws of Panama, with its principal office at Alfaro, Ferrer & Ramirez, AFRA Tower, Samuel Lewis Avenue and 54th Street, Obarrio District, Panama City, Panama.

11.	Sistemas McOpCo Panama, S.A., a sociedad anónima (corporation), formed under the laws of Panama, with its principal office at Alfaro, Ferrer & Ramirez, AFRA Tower, Samuel Lewis Avenue and 54th Street, Obarrio District, Panama City, Panama.

12.	Operaciones Arcos Dorados de Peru S.A., a sociedad anónima (corporation), formed under the laws of Peru, with its principal office at Avenida Angamos Oeste No. 1200, Miraflores, Lima, Peru.

13.

Arcos Dorados Puerto Rico, Inc. (formerly known as McDonald’s System de Puerto Rico, Inc.), a company formed under the laws of the Commonwealth of Puerto Rico, with its principal office at The Prentice Hall Corporation System, Inc. c/o FGR Corporate Services, Inc., BBV Tower, 8th Floor, 254 Muñoz Rivera Avenue, San Juan, Puerto Rico 00918.

14.	Golden Arch Development Corporation, a company formed under the laws of the State of Delaware, with its principal office at Prentice-Hall Corporation System, Inc., 2711 Centerville Road, Ste. 400, Wilmington, Delaware 19808.

15.	Gauchito de Oro S.A., a sociedad anónima (corporation) formed under the laws of Uruguay, with its principal office at Cerrito 415, Piso 5, 11000 Montevideo, Uruguay.

16.	Arcos del Sur S.R.L., a sociedad de responsabilidad limitada (limited liability company) formed under the laws of the duty free trade zone in Uruguay, Cerrito 414, Piso 5, 11000 Montevideo, Uruguay.

17.	Administrative Development Company, a company formed under the laws of the State of Delaware, with its principal office at Prentice-Hall Corporation System, Inc., 2711 Centerville Road, Ste. 400, Wilmington, Delaware 19808.

18.	Alimentos Arcos Dorados de Venezuela, C.A., compañía anónima (company) formed under the laws of Venezuela, with its principal office at Avenida Francisco Solano López con Calle Negrin, Centro Empresarial Sabana Grande, Piso 19, Caracas 1050, Venezuela.

19.	Alimentos Latinoamericanos Venezuela ALV, C.A., compañía anónima (company) formed under the laws of Venezuela, with its principal office at Avenida Francisco Solano López con Calle Negrin, Centro Empresarial Sabana Grande, Piso 19, Caracas

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1050, Venezuela. ²

20.	Compañia Operativa de Alimentos COR, C.A., compañía anónima (company) formed under the laws of Venezuela, with its principal office at Torre Empresarial Sabana Grande, Piso 19, Avenida Francisco Solano, Caracas 1010, Venezuela.

21.	Gerencia Operativa ARC, C.A., compañía anónima (company) formed under the laws of Venezuela, with its principal office at Avenida Venezuela, Torre America, PH-B, Bello Monte, Caracas, Venezuela.

22.	Logistics and Manufacturing LOMA Co., a company formed under the laws of the State of Delaware, with its principal office at Prentice-Hall Corporation System, Inc., 2711 Centerville Road, Suite 400, Wilmington, Delaware 19808.

23.	Management Operations Company, a company formed under the laws of the State of Delaware, with its principal office at Prentice-Hall Corporation System, Inc., 2711 Centerville Road, Ste. 400, Wilmington, Delaware 19808.

24.	Arcos Dorados Curaçao N.V. (formerly known as McDonald’s St. Marteen and Curaçao, N.V.), a company formed under the laws of Curaçao, with its principal office at Frontstreet #78, Philipsburg, St. Maarten.

25.	Arcos Dorados Aruba N.V. (formerly known as McDonald’s Aruba, N.V.), a company formed under the laws of Aruba, with its principal office at Beatrixstraat #36, Aruba.

26.	Restaurant Realty of Mexico, Inc., a company formed under the laws of the State of Delaware, with its principal office at Prentice-Hall Corporation System, Inc., 2711 Centerville Road, Ste. 400, Wilmington, Delaware 19808.

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EXHIBIT 2

DEFINITIONS

The following terms, when used in this Agreement, shall have the following meanings:

“ ADCDC ” has the meaning set forth in Section 2.3.1.

“ Administrative Agent ” has the meaning set forth in the recitals.

“ Affiliate ” has the meaning set forth in the MFA.

“ Amended and Restated Intercreditor Agreement ” means the Second Amended and Restated Intercreditor Agreement, dated as of October 12, 2010, among the Collateral Agent, McDonald’s and the Grantors.

“ Applicable Law ” has the meaning set forth in the MFA.

“ Arcos de Chile ” has the meaning set forth in the preamble.

“ Agreement ” has the meaning set forth in the preamble.

“ Already Pending Proceeding ” has the meaning set forth in Section 10.2.12.

“ Arbitrating Party ” has the meaning set forth in Section 10.2.3.

“ Aruban Subsidiaries ” shall mean any Subsidiary of the Owner incorporated or organized in Aruba.

“ Authorized Person ” has the meaning set forth in Section 9.13.1.

“ Bank Creditors ” means, collectively, the Lead Arranger, the Lenders and the Administrative Agent.

“ Beneficial Owner ” has the meaning set forth in the recitals.

“ Business Day ” means a day other than a Saturday, Sunday or other day on which commercial banking institutions are authorized or required by law to close in the State of New York.

“ Call Option ” has the meaning set forth in the MFA.

“ Call Option Grantors ” has the meaning set forth in the recitals.

“ Certificated Equity Interests ” has the meaning set forth in the recitals.

“ Chilean POA ” has the meaning set forth in Section 2.4.1.

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“ Chilean Subsidiaries ” shall mean any Subsidiary of the Owner incorporated or organized in Chile.

“ Collateral Agency Agreement ” means the Intercreditor and Collateral Agency Agreement, dated as of October 12, 2010, among the Collateral Agent, the Other Creditors and the Owner.

“ Collateral Agent ” has the meaning set forth in the preamble.

“ Common Collateral ” has the meaning set forth in the Amended and Restated Intercreditor Agreement.

“ Common Collateral Documents ” has the meaning set forth in the Amended and Restated Intercreditor Agreement.

“ Costa Rican Subsidiaries ” shall mean any Subsidiary of the Owner incorporated or organized in Costa Rica.

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

“ Credit Documents ” has the meaning set forth in the recitals.

“ Cross-Currency Swaps ” has the meaning set forth in recitals.

“ Curaçao Subsidiaries ” shall mean any Subsidiary of the Owner incorporated or organized in Curaçao.

“ Default Exercise Notice ” means a notice substantially in the form of Exhibit 11 .

“ Defending Party ” has the meaning set forth in Section 10.2.4(a).

“ Dematerialized Equity Interests ” has the meaning set forth in the MFA.

“ Designated Matter ” means any matter, the resolution of which is based upon the interpretation of any provision of the MFA. It is expressly understood and agreed that any questions regarding the validity, binding effect or enforceability of this Agreement or the propriety of any Secured Creditor Release Notice or any other notice hereunder shall not constitute Designated Matters.

“ Dispute ” has the meaning set forth in Section 10.2.1.

“ Disputed Amounts ” has the meaning set forth in the MFA.

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“ Disputed Amounts Settlement Notice ” means a notice, substantially in the form of Exhibit 8 .

“ Dollars ” and the sign “ $ ” shall each mean freely transferable lawful money of the United States.

“ Dutch Coop ” has the meaning set forth in the recitals.

“ Effective Date ” has the meaning set forth in Section 9.1.

“ Email Recipient ” has the meaning set forth in Section 9.13.3.

“ Enforcement Notice ” means, with respect to any Common Collateral Document, a notice substantially in the form attached as Exhibit 14 .

“ Equity Interests ” has the meaning set forth in the MFA.

“ Escrow Account ” has the meaning set forth in Section 4.1.

“ Escrow Agent ” has the meaning set forth in the preamble.

“ Escrowed Constituent Documents ” means a draft amendment to the Constituent Documents of those certain Escrowed MF Subsidiaries, each as set forth in Exhibit 4 , along with executed powers of attorney from each registered owner of each such Escrowed MF Subsidiary that authorize the execution of such draft amendment, which documents shall be substantially in the form of the Exhibit set forth across from the name of each such Escrowed MF Subsidiary in Exhibit 4 , in each case with such amendments as may be necessary under Applicable Law as may from time to time be necessary to make such powers of attorney enforceable, as well as Escrowed Constituent Documents to be deposited with Escrow Agent after the date of this Agreement pursuant to the terms of this Agreement.

“ Escrowed Equity Interests ” has the meaning set forth in the recitals.

“ Escrowed MF Subsidiary ” has the meaning set forth in the preamble.

“ Escrowed Property ” has the meaning set forth in Section 4.1.

“ Escrowing Shareholders ” has the meaning set forth in the recitals.

“ Excluded Subsidiaries ” shall mean (i) the Aruban Subsidiaries, the Chilean Subsidiaries, the Costa Rican Subsidiaries, the French Guiana Subsidiaries, the Guadeloupe Subsidiaries, the Martinique Subsidiaries, the Curaçao Subsidiaries, the Panamanian Subsidiaries, the Peruvian Subsidiaries, the Trinidad and Tobago Subsidiaries, the Uruguayan Subsidiaries, Arcos Mendocinos S.A., a sociedad anónima organized and existing under the laws of Argentina, Arcos Cordobeses, S.A., a sociedad anónima organized and existing under the laws of Argentina, Arcos Santafesinos S.A., a sociedad anónima organized and existing under the laws of Argentina, Arcos Dorados Paisas, Ltda.,

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a sociedad limitada organized and existing under the laws of Colombia, Arcos Dorados Paisas, Ltda. & Cia. S.C.A., a sociedad en comandita de acciones organized and existing under the laws of Colombia, Axis B.V., a private company with limited liability (besloten vennootschap met beperkte aansprakelijkheid) organized and existing under the laws of The Netherlands, Axis Logística, S.A., a sociedad anónima organized and existing under the laws of Argentina, Axis Logística S.A.S., a sociedad anónima simplificada organized and existing under the laws of Colombia, Alimentos Centralizados de México, S. de R.L. de C.V., a sociedad de responsabilidad limitada de capital variable organized and existing under the laws of Mexico, Servicios Alimentos Centralizados de México, S. de R.L. de C.V., a sociedad de responsabilidad limitada de capital variable organized and existing under the laws of Mexico, Proveedora Sistematizada, S.A. de C.V., a sociedad anónima de capital variable organized and existing under the laws of Mexico, Centro Especializado de Negocios Internacionales, S. de R.L. de C.V., a sociedad de responsabilidad limitada de capital variable organized and existing under the laws of Mexico, Logística de Venezuela LOMA, C.A., a compañía anónima organized and existing under the laws of Venezuela, Complejo Agropecuario Cárnico (Cárnicos), C.A., a compañía anónima organized and existing under the laws of Venezuela, and (ii) any Subsidiary of the Owner created after the date hereof that is designated in accordance with Section 2.7 of the Secured Creditor Security Agreement as an “Excluded Subsidiary” by the Owner; provided that, after the date hereof, any Excluded Subsidiary may, upon the Owner’s taking the actions required under Section 2.7 of the Secured Creditor Security Agreement, become a Restricted Subsidiary (whereupon it shall cease to constitute an Excluded Subsidiary). Notwithstanding anything to the contrary set forth in the Agreement, the Escrow Agent shall treat each Escrowed MF Subsidiary as a Restricted Subsidiary unless (x) that Escrowed MF Subsidiary is listed in (i) above as an Excluded Subsidiary (and none of the Owner, McDonald’s, the Master Franchisee or the Collateral Agent has given written notice to the Escrow Agent that such Excluded Subsidiary has been designated as a Restricted Subsidiary pursuant to Section 2.7 of the Secured Creditor Security Agreement), or (y) the Owner has given written notice to the Escrow Agent (duly acknowledged by McDonald’s, the Master Franchisee and the Collateral Agent) that such Escrowed MF Subsidiary has been designated by the Owner as an Excluded Subsidiary in accordance with Section 2.7 of the Secured Creditor Security Agreement.

“ Excluded Subsidiary Transfer Instruction ” means a notice with respect to the transfer of Escrowed Property of an Escrowed MF Subsidiary that is an Excluded Subsidiary, substantially in the form of Exhibit 10 .

“ Event of Default ” has the meaning set forth in the Amended and Restated Intercreditor Agreement.

“ French Guiana Subsidiaries ” shall mean any Subsidiary of the Owner incorporated or organized in French Guiana.

“ Governmental Authority ” has the meaning set forth in the MFA.

“ Grantors ” means, collectively, the Call Option Grantors and the Secured Credit Grantors.

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“ Guadeloupe Subsidiaries ” shall mean any Subsidiary of the Owner incorporated or organized in Guadeloupe.

“ ICC ” has the meaning set forth in Section 10.2.1.

“ ICC Rules ” has the meaning set forth in Section 10.2.1.

“ Indemnified Party ” has the meaning set forth in Section 8.12.

“ Intercreditor Compliance Notice ” means a notice, substantially in the form of Exhibit 13 .

“ Interest Rate Swaps ” has the meaning set forth in the recitals.

“ Interest Rate Swap Creditors ” has the meaning set forth in the recitals.

“ Lead Arranger ” has the meaning set forth in the recitals.

“ Lenders ” has the meaning set forth in the recitals.

“ Local Stock Power ” means, with respect to an Escrowed MF Subsidiary, a stock power executed by the Escrowing Shareholder that is the registered owner of such Escrowed MF Subsidiary in blank, which stock power shall be substantially in the form of the Exhibit set forth across from the name of such Escrowed MF Subsidiary in Exhibit 4 , in each case with such amendments as may be necessary under Applicable Law as may from time to time be necessary to make such stock power enforceable.

“ Local Voting Power ” means, with respect to an Escrowed MF Subsidiary, a proxy or power of attorney executed by the Escrowing Shareholder that is the registered owner of such Escrowed MF Subsidiary, which proxy or power of attorney, as the case may be, shall be substantially in the form of the Exhibit set forth across from the name of such Escrowed MF Subsidiary in Exhibit 4 , in each case with such amendments as may be necessary under Applicable Law as may from time to time be necessary to make such proxy or power of attorney, as the case may be, enforceable.

“ Martinique Subsidiaries ” shall mean any Subsidiary of the Owner incorporated or organized in Martinique.

“ Master Franchisee ” has the meaning set forth in the preamble.

“ McDonald’s ” has the meaning set forth in the preamble.

“ McDonald’s Foreign Pledge Agreements ” has the meaning set forth in the Amended and Restated Intercreditor Agreement.

“ McDonald’s Voting Notice ” has the meaning set forth in Section 5.1.3.

“ MF Subsidiary ” has the meaning set forth in the MFA.

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“ MFA ” has the meaning set forth in the recitals.

“ MFA Document ” means the MFA and any Related Agreement.

“ New Claims ” has the meaning set forth in Section 10.2.12.

“ Option Closing Date ” has the meaning set forth in the MFA.

“ Other Creditors ” has the meaning set forth in recitals.

“ Owner ” has the meaning set forth in the preamble.

“ Owner Entities ” has the meaning set forth in the recitals.

“ Panamanian Subsidiaries ” shall mean any Subsidiary of the Owner incorporated or organized in Panama.

“ Parent ” has the meaning set forth in the recitals.

“ Parties ” has the meaning set forth in the preamble.

“ Permitted Investments ” means (a) money market funds registered under the Investment Company Act of 1940, as amended, the portfolio of which is limited to the investments described in clauses (b) through (e) of this definition; (b) obligations of or guaranteed by the United States of America or any agency thereof, either outright or in connection with repurchase agreements covering such obligations; (c) obligations of or guaranteed by any state or political subdivision of the United States of America with a maturity six months or less; (d) interest bearing certificates of deposit or bankers’ acceptances issued by any other U.S. national or state-chartered bank having capital and surplus of at least $1,000,000,000 with an investment term of six months or less; and (e) commercial paper with a maturity of no more than thirty days rated at least P-1 by Moody’s Investor Service, Inc. and A-1 by Standard & Poor’s Corporation; and (f) any combination of the foregoing.

“ Person ” has the meaning set forth in the MFA.

“ Peruvian Subsidiaries ” shall mean any Subsidiary of the Owner incorporated or organized in Peru.

“ Petitioning Party ” has the meaning set forth in Section 10.2.4(a).

“ Prior Agreement ” means the Escrow Agreement, dated as of August 3, 2007, among McDonald’s, Master Franchisee, the Escrowed MF Subsidiaries, the Escrow Agent, the Collateral Agent and the other parties named therein, as amended by the Amendment to Escrow Agreement, dated as of April 29, 2008, among McDonald’s, Master Franchisee, the Escrowed MF Subsidiaries party thereto, the Escrow Agent, the Collateral Agent and the other parties named therein, and as further amended by the Second Amendment to Escrow Agreement, dated as of November 10, 2008, among McDonald’s, Master

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Franchisee, the Escrowed MF Subsidiaries party thereto, the Escrow Agent, the Collateral Agent and the other parties named therein.

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

“ Related Agreement ” has the meaning set forth in the MFA.

“ Restricted Subsidiary ” shall mean each Subsidiary of the Owner other than the Excluded Subsidiaries.

“ Restricted Subsidiary Transfer Instruction ” means a notice with respect to the transfer of Escrowed Property of an Escrowed MF Subsidiary that is a Restricted Subsidiary, substantially in the form of Exhibit 11 .

“ Secured Credit Documents ” means the Cross-Currency Swaps, the Subsidiary Guaranty, the Secured Creditor U.S. Security Documents, the Secured Creditor Foreign Pledge Agreements and each of the other agreements, documents and instruments providing for or evidencing any other Secured Credit Obligation and any other document or instrument executed or delivered at any time in connection with any Secured Credit Obligation (including any intercreditor or joinder agreement among holders of Secured Credit Obligations), to the extent such are effective at the relevant time, as each may be amended, modified, restated, supplemented and/or replaced from time to time in accordance with the terms hereof and thereof.

“ Secured Credit Grantors ” means, collectively, the registered owners of the MF Subsidiaries in all Territories, other than the MF Subsidiaries that are Excluded Subsidiaries.

“ Secured Credit Obligations ” means the “Obligations”, as defined in the Secured Creditor U.S. Stock Pledge Agreement.

“ Secured Creditor Foreign Pledge Agreements ” has the meaning set forth in the Amended and Restated Intercreditor Agreement.

“ Secured Creditor Release Notice ” means a notice relating to all or any portion of the Common Collateral, substantially in the form of Exhibit 9 .

“ Secured Creditor Security Agreement ” means the Second Amended and Restated Security Agreement, dated as of October 12, 2010, among Owner, certain subsidiaries of Owner and the Collateral Agent.

“ Secured Creditor Voting Notice ” has the meaning set forth in Section 5.1.4.

“ Secured Creditor U.S. Intercompany Note Pledge Agreement ” means the Second Amended and Restated U.S. Intercompany Note Pledge Agreement, dated as of October 12, 2010, among Owner, certain subsidiaries of Owner and the Collateral Agent.

“ Secured Creditor U.S. Security Documents ” means the Secured Creditor Security

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Agreement, Secured Creditor U.S. Stock Pledge Agreement, the Secured Creditor U.S. Intercompany Note Pledge Agreement and any additional documents or instruments executed and delivered in connection with or pursuant to the requirements of any of the foregoing, in each case as modified, supplemented or amended from time to time.

“ Secured Creditor U.S. Stock Pledge Agreement ” means the Second Amended and Restated U.S. Stock Pledge Agreement, dated as of October 12, 2010, among Owner, certain subsidiaries of Owner and the Collateral Agent.

“ Secured Creditors ” means, collectively, the Collateral Agent and the Other Creditors.

“ Settlement Notice ” means a notice, substantially in the form of Exhibit 7 .

“ Subject Business ” has the meaning set forth in the MFA.

“ Subsidiary ” has the meaning set forth in the MFA.

“ Subsidiary Guaranty ” has the meaning set forth in the Secured Creditor Security Agreement.

“ Territory ” has the meaning set forth in the MFA.

“ Tribunal ” has the meaning set forth in Section 10.2.1.

“ Trinidad and Tobago Subsidiaries ” shall mean any Subsidiary of the Owner incorporated or organized in Republic of Trinidad and Tobago.

“ Uruguayan Subsidiaries ” shall mean any Subsidiary of the Owner incorporated or organized in Uruguay.

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EXHIBIT 3

CHILEAN POA

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IVAN TORREALBA ACEVEDO

NOTARIO PUBLICO

HUERFANOS 979 OF. 501 SANTIAGO


A.T.	REPERTORIO Nº 14.831.08	2.

M.:220076

PROTOCOLIZACION PODER ESPECIAL

DEUTSCHE BANK TRUST COMPANY AMERICAS AS ADMINISTRATIVE

AGENT

EYZAGUIRRE BAEZA, JOSE MARIA Y OTROS

Protocolización de poder especial, legalizado en el ConsuladoGeneral de Chile en Nueva York y debidamente legalizado en el Ministerio de Relaciones Exteriores de Chile con esta fecha, de DEUTSCHE BANK TRUST COMPANY AMERICAS AS ADMINISTRATIVE AGENT a los señores JOSE MARIA EYZAGUIRRE BAEZA, RODRIGO OCHAGAVIA RUIZ-TAGLE, MATIAS DE MARCHENA VICUÑA, NICOLAS LUCO ILLANES, JORGE MARTÍN DIAZ Y FELIPE LARRAIN TEJEDA, solicitada por el abogado don Felipe Larrain Tejeda, documento que consta de 7 páginas y se agrega al final de mis Registros Públicosdel mes en curso, bajo el numero OCHENTA Y NUEVE.

Santiago, 10 de noviembre de 2008

IVAN TORREALBA ACEVEDO

NOTARIO PUBLICO

[SEAL]

[STAMP]

United States of America

State of New York

Lorraine Cortéz Vazquez

Secretary of State and Custodian of the Great Seal Thereof

It is hereby certified, that Norman Goodman was Clerk of the County of New York in the State of New York and Clerk of the Supreme Court therein, being a Court of Record, on the day of the date of the annexed certificate, and duly authorized to grant same; that the seal affixed to said certificate is the seal of said County and Court; that the attestation thereof of said Clerk is in due form and executed by the proper officer; and that full faith and credit may and ought to be given to said Clerk’s official acts.


[STAMP]	In Testimony Whereof, the Great Seal of the State is hereunto affixed Witness my hand at the city of New York this 03rd day of November Two Thousand and Eight
		*Lorraine Cortéz Vazquez* *Secretary of State*
		/s/ James Bizzarri James Bizzarri Special Deputy Secretary of State

10633209A

03835595 RSL (REV:2/6/96)

[STAMP]

[STAMP] PODER ESPECIAL

********

DEUTSCHE BANK TRUST

COMPANY AMERICAS COMO

AGENTE ADMINISTRATIVO

JOSÉ MARÍA EYZAGUIRRE BAEZA

Y OTROS

En La ciudad de New York, Estado de New York, Estados Unidos, el 16 de Octubre de 2008, ante mí, Annie Jaghatspanyan, Notario Público del Estado de New York, comparecen:

Doña Wanda Camacho, en representación de Deutsche Bank Trust Company Americas (en adelante, e1 “ Mandante ”, una institución financiera organizada y existente bajo las leyes de New York, en su ca1idad de Agente Administrativo de los bancos individualizados en el Contrato de Crédito, (según dicho término se define mas adelante) (en adelante, conjuntamente, los “ Acreedores ”, quien expone lo siguiente:

PRIMERO: Los Acreedores, el Mandante en su calidad de Agente Administrativo de los Acreedores, y Arcos Dorados, B.V., como deudor (en adelante, el ‘ Deudor ”), entre otros, han suscrito un convenio denominado Credit Agreement, fechado el 2 de Agosto de 2007 (en adelante, el “ Contrato de Crédito Existente ”), en virtud del cual. y bajo los términos y

PODER ESPECIAL

********

DEUTSCHE BANK TRUST

COMPANY AMERICAS AS

ADMINISTRATIVE AGENT

JOSÉ MARÍA EYZAGUIRRE BAEZA

ET AL

In the City of New York, New York, United States of America, this 16 day of October, 2008, before me, Annie Jaghatspanyan, Notary Public in and to the State of New York, personally appears:

Mrs. Wanda Camacho, on behalf of Deutsche Bank Trust Company Americas (hereinafter, the “ Principal ”), a banking corporation, duly incorporated and existing under the laws of New York, as Administrative Agent on behalf of the banks party to the Credit Agreement (as such term is defined below), (hereinafter collectively the “Lendees”, who states:

FIRST: The Lenders, the Principal as Administrative Agent for the Lenders, and Arcos Dorados, B.V. as borrower (hereinafter. the “ Borrower ”), have executed an agreement named Credit Agreement, dated as of August 2 ^nd , 2007, (hereinafter, the “ Existing Credit Agreement ”) by means of which, the Lenders subject to the terms set forth in

[SEAL]

[STAMP]

condiciones que en él se señalan, los Acreedores otorgaron al Deudor préstamos en dolares de los Estados Unidos de América por una cantidad total de capital de 350.000.000 dólares. Como resultado de las negociaciones de refinanciamiento. el Contrato de Crédito Existente ha sido modificado, para cuyos efectos, el Deudor, el Mandante, los Acreedores y Santander Investment Securities Inc. suscribieron con fecha 22 de Octubre de 2008 el Amended and Restated Credit Agreement (en adelante, el “ Contrato de Crédito ”). En conformidad a los términos y condiciones mencionadas y contenidas en dicho Contrato de Crédito, las partes acordaron modificaciones a los términos y condiciones del Contrato de Crédito Existente.

SEGUNDO: Con el propósito de satisfacer los objetivos de los acuerdos contenidos en el Contrato de Crédito y en los demás Documentos de Crédito (según ellos se definen en el Contrato de Crédito), y dar efecto en Chile y en cualquier otra jurisdicción que corresponda a las estipulaciones de dicho acuerdo sobre constitución, modificación y término de garantías, el Mandante en su ca1idad de Agente de los Acreedores y en representación de estos, otorga por el presente instrumento un poder especial a, los abogados de Claro y Cía. que se indican a continuaci6n señores: Jose María Eyzaguirre Baeza, Rodrigo Ochagavía Ruíz-Tagle, Matías de Marchena Vicuña, Nicolás Luco Illanes, Jorge Martín Díaz aad Felipe Larraín Tejeda , todos domiciliados en Santiago. Chile (en adelante, los “ Mandatarios ’”), para que actuando conjuntamente dos cualesquiera de ellos, y en la representación que invisten, y sin que signifique limitación a 1a amplitud del

the Existing Credit Agreement, made loans to the Borrower in an aggregate principal amount of 350,000,000 dollars of the United States of America. As a result of refinancing negotiations, the Existing Credit Agreement has been amended for which purposes the Borrower, the Principal, the Lenders and Santander Investment Securities Inc. executed, on October 22, 2008 an Amended and Restated Credit Agreement (hereinafter, the “Credit Agreement”). Pursuant to the Credit Agreement, the parties agreed as to amendments to the terms and conditions of the Existing Credit Agreement.

SECOND : In order to satisfy all the purposes of the agreements contained in the Credit Agreement and to give effect thereto in Chile, and in any other relevant jurisdiction, to all the provisions of such agreements relating to the creation and amendments of all security interests, the Principal, as Administrative Agent on behalf of the Lenders, hereby grants a limited power-of-attorney to the following lawyers of Claro y Cía. Messrs. Jose María Eyzaguirre Baeza, Rodrigo Ochagavía Ruíz-Tagle, Matías de Marchena Vicuña, Nicolás Luco Illanes, Jorge Martín Díaz aad Felipe Larraín Tejeda , all domiciled in Santiago, Chile (hereinafter, the “ Agents ”), so acting any two of them jointly, in said capacity, and without limiting the extent of this special power of attorney, the Agents are authorized to amend the pledges or other security interest (hereinafter the “ Security Interests ”) that the Borrower,

[SEAL]

[STAMP]

presente poder especial, los Mandatarios se encuentran facultados pam acordar cualquier modificación de prendas u otra garantía (en adelante, las “ Garantías ”) que el Deudor y/o cualquier otro individuo o persona indica otorgue con el propósito de modificar las prendas u otras garantías otorgadas en favor de los acreedores en conformidad a los términos del Contrato de Crédito Existente con el objeto de garantizar el cumplimiento de las obligaciones del Deudor bajo el Contrato de Crédito y los demás Documentos de Crédito.

TERCERO: Los Mandatarios estarán asimismo facultados pam modificar, rectificar, ratificar, complementar y alzar, las Garantías, de conformidad al Contrato de Crédito, así como también, ejecutar todos los actos y realizar todos aquellos procedimientos que puedan ser necesarios o convenientes a fin de satisfacer los objetivos de este mandato, y especialmente para rea1izar, obtener o autorizar las inscripciones y anotaciones marginales relativas a la constitución, rectificación, modificación, alzamiento y/o cancelación de las prendas y prohibiciones en los conservadores y registros competentes, públicos o privados, en Chile, según corresponda incluyéndose todas aquellas rectificaciones, aclaraciones o complementaciones que sean necesarias o requeridas para tales propósitos. Los Mandatarios estarán facultados para autocontratar.

and/or any other entity, shall execute with the purpose of amending the pledges or other security interests granted in favor of the Lenders pursuant to the terms of the Existing Credit Agreement in order to secure the fidfil1ment of the obligations assumed by the Borrower or that may be assumed in the future under the Credit Agreement and the other Security Documents.

THIRD: The Agents will be also empowered to amend, modify, rectify, ratify, supplement and release the Security Interests, in accordance with the Credit Agreement, and to take such other actions and perform all the necessary acts as may be necessary or convenient to satisfy the purposes of this power of attorney, and specifically to cause, obtain or authorize the registrations and marginal annotations regarding the amendment, rectification, release and/or cancellation of the pledges, prohibitions and liens in the competent public or private registries in Chile or any other relevant jurisdiction, including amendments, clarifications or supplements required or needed for such purposes. In the execution of the powers granted hereto, the Agents will also be empowered to self-contract.

/s/ Wanda Camacho

pp. DEUTSCHE BANK TRUST COMPANY AMERICAS

Nombre/Name: Wanda Camacho

Cargo/Title: Vice President

[STAMP]

Name Executive Officer: Wanda Camacho

Position: Vice President

On behalf of: Deutsche Bank Trust Company Americas

The Notary Public authorizing this instrument, certifies that she has seen the documents that evidence that Deutsche Bank Trust Company Americas, is a company organized and existing under the laws of the State of New York, United States of America, and that it is in good standing, and certifies also that she has seen the documents that evidence that the person appearing herein is officer of Deutsche Bank Trust Company Americas duly empowered to execute and deliver this Power of Attorney on behalf of Deutsche Bank Trust Company Americas.

Nombre Compareciente: Wanda Camacho

Cargo: Vice President

p.p.: Deutsche Bank Trust Company Americas

El Notario Público que autoriza este documento, certifica que ha tenido a la vista los instrumentos que acreditan que Deutsche Bank Trust Company Americas, es una sociedad constituida y existente en conformidad a las leyes del Estado de Nueva York, Estados Unidos de América, y que se encuentra en vigencia, y certifica asimismo que ha tenido a la vista los instrumentos que acreditan que el compareciente es apoderado de Deutsche Bank Trust Company Americas, investido de suficiente autoridad para otorgar este Mandato en nombre y representación de Deutsche Bank Trust Company Americas.

/s/ Wanda Camacho

Signature/Firma

Deutsche Bank Trust Company Americas

[COUNTY CLERK NEW YORK COUNTY STAMP]

/s/ Annie Jaghatspanyan


State of New York
County of New York		670910

I, NORMAN GOODMAN, County Clerk and Clerk of the Supreme Court of the State of New York, in and for the County of New York, a Court of Record, having by law a seal, DO HEREBY CERTIFY pursuant to the Executive Law of the State of New York, that Annie Jaghatspanyan whose name is subscribed to the annexed affidavit, deposition, certificate of acknowledgment of proof, was at the time of taking the same a NOTARY PUBLIC in and for the State of New York duly commissioned, sworn and qualified to act as such; that pursuant to law, a commission or a certificate of his official character, with his autograph signature has been filed in my office; that at the time of taking such proof; acknowledgment or oath, he was duly authorized to take the same; that I am well acquainted with the hand writing of such NOTARY PUBLIC or have compared the signature on the annexed instrument with his autograph deposited in my office, and I believe that such signature is genuine.

IN WITNESS WHEREOF, I have hereunto set my hand affixed my official seal this NOV 03 2008 Fee paid $3.00

/s/ Norman Goodman

County Clerk and Clerk of the Supreme Court, New York County

EXHIBIT 4

CURRENT ESCROWING SHAREHOLDER,

CERTIFICATED EQUITY INTERESTS AND

ESCROWED CONSTITUENT DOCUMENTS


Escrowing Shareholder(s)	Certificated Equity Interests or Escrowed Constituent Documents	Local Stock Power / Escrowed Constituent Documents	Local Voting Power
Arcos Dorados B.V.	100% of the Equity Interests of LatAm, LLC	Annex A	Annex B

LatAm, LLC and Woods Staton	100% of the Equity Interests of Arcos Dorados Argentina S.A. (formerly known as Arcos Dorados S.A.)	Annex C	Annex D

Arcos Dourados Participações Ltda. and Arcos Dorados Caribbean Development Corp.	The Escrowed Constituent Documents of Arcos Dourados Comercio de Alimentos Ltda.	Annex G	Annex H

Arcos Dorados B.V., LatAm, LLC and Arcos Dorados Caribbean Development Corp.	The Escrowed Constituent Documents of Arcos Dourados Participações Ltda.	Annex I	Annex J

Arcos Dourados Participações Ltda. and Arcos Dorados Caribbean Development Corp.	The Escrowed Constituent Documents of Arras Comercio de Alimentos Ltda.	Annex K	Annex L

LatAm, LLC and Arcos Dorados Caribbean Development Corp.	The Escrowed Constituent Documents of Arcos Dorados Restaurantes de Chile Ltda.	Annex M	Annex N

LatAm, LLC, Arcos Dorados Caribbean Development Corp., Luis Perez, Carlos Urrutia and Carlos Umana	100% of the Equity Interests of Arcos Dorados Colombia S.A. (formerly known as Franchise System de Colombia Ltda. y Compañía Sociedad en Comandita Por Acciones)	Annex O	Annex P

LatAm, LLC	100% of the Equity Interests	Annex Q	Annex R

4:1


Escrowing Shareholder(s)	Certificated Equity Interests or Escrowed Constituent Documents	Local Stock Power / Escrowed Constituent Documents	Local Voting Power
	of Hamburgue S.A.S. ³

LatAm, LLC	100% of the Equity Interests of Arcos Dorados Aruba N.V. (formerly known as McDonald’s Aruba, N.V.)	Annex S	Annex T

LatAm, LLC	100% of the Equity Interests of Arcos Dorados Curaçao N.V. (formerly known as McDonald’s St. Marteen and Curaçao, N.V.)	Annex U	Annex V

LatAm, LLC and Arcos Dorados Caribbean Development Corp.	100% of the Equity Interests of Arcgold del Ecuador S.A.	Annex W	Annex X

Arcos Dorados B.V.	100% of the Equity Interests of Arcos Dorados Panamá, S.A. (formerly known as McDonald’s Sistemas de Panamá, S.A.)	Annex Y	Annex Z

Eduardo de Alba	100% of the Equity Interests of Sistemas McOpCo Panamá, S.A.	Annex AC	Annex AD

LatAm, LLC	100% of the Equity Interests of Operaciones Arcos Dorados de Perú S.A.	Annex AE	Annex AF

LatAm, LLC	100% of the Equity Interests of Arcos Dorados Puerto	Annex AG	Annex AH

4:2


Escrowing Shareholder(s)	Certificated Equity Interests or Escrowed Constituent Documents	Local Stock Power / Escrowed Constituent Documents	Local Voting Power
	Rico, Inc. (formerly known as McDonald’s System de Puerto Rico, Inc.)

LatAm, LLC	100% of the Equity Interests of Gauchito de Oro, S.A.	Annex AI	Annex AJ

LatAm, LLC and Arcos Dorados Caribbean Development Corp.	The Escrowed Constituent Documents of Arcos del Sur S.R.L.	Annex AK	Annex AL

LatAm, LLC	100% of the Equity Interests of Alimentos Arcos Dorados de Venezuela, C.A.	Annex AM	Annex AN

Management Operations Company	100% of the Equity Interests of Compañía Operativa de Alimentos COR, C.A.	Annex AO	Annex AP

Administrative Development Company	100% of the Equity Interests of Gerencia Operativa ARC, C.A.	Annex AQ	Annex AR

LatAm, LLC	100% of the Equity Interests of Arcos Dorados Caribbean Development Corp. (formerly known as McDonald’s Caribbean Development Corporation)	Annex AS	Annex AT

LatAm, LLC	100% of the Equity Interests of Administrative Development Company	Annex AU	Annex AV

LatAm, LLC	100% of the Equity Interests of Golden Arch Development Corporation	Annex AW	Annex AX

Administrative Development Company	100% of the Equity Interests of Logistics and Manufacturing LOMA Co.	Annex AY	Annex AZ

4:3


Escrowing Shareholder(s)	Certificated Equity Interests or Escrowed Constituent Documents	Local Stock Power / Escrowed Constituent Documents	Local Voting Power
LatAm, LLC	100% of the Equity Interests of Management Operations Company	Annex BA	Annex BB

LatAm, LLC	100% of the Equity Interests of Restaurant Realty of Mexico, Inc.	Annex BC	Annex BD

Arcos Dorados B.V.	100% of the Equity Interests of Alimentos Latinoamericanos Venezuela ALV, C.A. ⁴	Annex BE	Annex BF

⁴

4:4

EXHIBIT 5

FORM OF McDONALD’S VOTING NOTICE

[Date]

Citibank, N.A.

388 Greenwich Street

14 ^th Floor

New York, New York 10013

Attention: Marie Ladolcetta

Telephone: (212) 816-6086

Fax: (212) 657-2762

cc:

LatAm, LLC

Arcos Dorados B.V.

Naritaweg 165

Amsterdam

1043 BW

The Netherlands

Telephone: 011-5411-4711-2639

Fax: 011-5411-4711-2094 (int. 2639)

Attention: Juan David Bastidas

Re:

McDonald’s Voting Notice

Ladies and Gentlemen:

Reference is made to (i) the Master Franchise Agreement, dated as of August 3, 2007, as amended and restated pursuant to the Amended and Restated Master Franchise Agreement, dated as of November 10, 2008 (the “ MFA ”), among McDonald’s, Master Franchisee, each of the MF Subsidiaries and Owner; and (ii) the Amended and Restated Escrow Agreement, dated as of October 12, 2010 (the “ Escrow Agreement ”), among the Escrow Agent, McDonald’s, Master Franchisee, the Escrowed MF Subsidiaries party thereto, Arcos de Chile, the Owner and the Collateral Agent. Terms used and not otherwise defined herein shall have the meaning given to them in the MFA or the Escrow Agreement, as the case may be.

McDonald’s hereby notifies you that it has exercised a Call Option pursuant to the Default Exercise Notice dated [date], a copy of which is attached hereto, and on the one month anniversary of the exercise thereof there is no Unresolved Dispute.

Escrow Agent is hereby instructed to solely accept written instructions from McDonald’s with regards to the voting of the following Escrowed Equity Interests in accordance with Section 5.1.3 of the Escrow Agreement:

5:1

[List Escrowed Equity Interests]


McDONALD’S LATIN AMERICA, LLC

By:
		Name:
		Title:

5:2

EXHIBIT 6

FORM OF SECURED CREDITOR VOTING NOTICE

[Date]

Citibank, N.A.

388 Greenwich Street

14 ^th Floor

New York, New York 10013

Attention: Marie Ladolcetta

Telephone: (212) 816-6086

Fax: (212) 657-2762

cc:

LatAm, LLC

Arcos Dorados B.V.

Naritaweg 165

Amsterdam

1043 BW

The Netherlands

Telephone: + 31 (0) 20 521 4887

Fax: + 31 (0) 20 521 4888

Re:	Secured Creditor Voting Notice

Ladies and Gentlemen:

Reference is made to (i) the Master Franchise Agreement, dated as of August 3, 2007, as amended and restated pursuant to the Amended and Restated Master Franchise Agreement, dated as of November 10, 2008 (the “ MFA ”), among McDonald’s, Master Franchisee and the other parties named therein; and (ii) the Amended and Restated Escrow Agreement, dated as of October 12, 2010 (the “Escrow Agreement”), among the Escrow Agent, McDonald’s, Master Franchisee, the Escrowed MF Subsidiaries party thereto, Arcos de Chile, the Owner and the Collateral Agent. Terms used and not otherwise defined herein shall have the meaning given to them in the MFA or the Escrow Agreement, as the case may be.

Collateral Agent hereby notifies you that an Event of Default (as defined in the Amended and Restated Intercreditor Agreement) has occurred and is continuing.

Escrow Agent is hereby instructed to solely accept written instructions from Collateral Agent with regards to the voting of the Escrowed Equity Interests of the following Secured Credit Grantor(s), subject to and in accordance with Section 5.1.4 of the Escrow Agreement:

6:1

[List Escrowed Equity Interests]


[Collateral Agent], solely in its capacity as Collateral Agent

By:
		Name:
		Title:

6:2

EXHIBIT 7

FORM OF SETTLEMENT NOTICE

[Date]

Citibank, N.A.

388 Greenwich Street

14 ^th Floor

New York, New York 10013

Attention: Marie Ladolcetta

Telephone: (212) 816-6086

Fax: (212) 657-2762

cc:

LatAm, LLC

Arcos Dorados B.V.

Naritaweg 165

Amsterdam

1043 BW

The Netherlands

Telephone: + 31 (0) 20 521 4887

Fax: + 31 (0) 20 521 4888

Re: Settlement Notice

Ladies and Gentlemen:

Reference is made to (i) the Master Franchise Agreement, dated as of August 3, 2007, as amended and restated pursuant to the Amended and Restated Master Franchise Agreement, dated as of November 10, 2008 (the “ MFA ”), among McDonald’s, Master Franchisee and the other parties named therein; and (ii) the Amended and Restated Escrow Agreement, dated as of October 12, 2010 (the “ Escrow Agreement ”), among the Escrow Agent, McDonald’s, Master Franchisee, the Escrowed MF Subsidiaries party thereto, Arcos de Chile, the Owner and the Collateral Agent. Terms used and not otherwise defined herein shall have the meaning given to them in the MFA or the Escrow Agreement, as the case may be.

You are hereby instructed as follows:

The Option Closing Date shall be [date].

7:1

On the Option Closing Date, against payment of the Call Option Price set forth in paragraph 1 above by McDonald’s, Escrow Agent shall take the following actions:

Deliver to McDonald’s all Escrowed Equity Interests held by Escrow Agent subject to the Escrow Agreement with respect to each of the following Persons:

[list relevant Escrowed MF Subsidiaries]

Segregate any Disputed Amounts referred to in paragraph 2 above and deposit them into the applicable Escrow Account as required by the Escrow Agreement.

Deliver to Collateral Agent the Call Option Price set forth in numbered paragraph 2 above by wire transfer to Collateral Agent’s account specified in the Escrow Agreement.


McDONALD’S LATIN AMERICA, LLC

By:
		Name:
		Title:

7:2

EXHIBIT 8

FORM OF DISPUTED AMOUNTS SETTLEMENT NOTICE

[Date]

Citibank, N.A.

388 Greenwich Street

14 ^th Floor

New York, New York 10013

Attention: Marie Ladolcetta

Telephone: (212) 816-6086

Fax: (212) 657-2762

Re: Disputed Amounts Settlement Notice

Ladies and Gentlemen:

Reference is made to (i) the Master Franchise Agreement, dated as of August 3, 2007, as amended and restated pursuant to the Amended and Restated Master Franchise Agreement, dated as of November 10, 2008 (the “ MFA ”), among McDonald’s, Master Franchisee and the other parties named therein; and (ii) the Amended and Restated Escrow Agreement, dated as of October 12, 2010 (the “ Escrow Agreement ”), among the Escrow Agent, McDonald’s, Master Franchisee, the Escrowed MF Subsidiaries party thereto, Arcos de Chile, the Owner and the Collateral Agent. Terms used and not otherwise defined herein shall have the meaning given to them in the MFA or the Escrow Agreement, as the case may be.


McDONALD’S LATIN AMERICA, LLC		LATAM, LLC

By:		By:
	Name:		Name:
	Title:		Title:

8:1

EXHIBIT 9

FORM OF SECURED CREDITOR RELEASE NOTICE

[Date]

Citibank, N.A.

388 Greenwich Street

14 ^th Floor

New York, New York 10013

Attention: Marie Ladolcetta

Telephone: (212) 816-6086

Fax: (212) 657-2762

cc:

McDonald’s Latin America, LLC

One McDonald’s Plaza

Oak Brook, Illinois 60523 U.S.A.

Attention: General Counsel of the Americas

Telephone: (630) 623-6255

Fax: (630) 623-7012

LatAm, LLC

Arcos Dorados B.V.

Naritaweg 165

Amsterdam

1043 BW

The Netherlands

Telephone: + 31 (0) 20 521 4887

Fax: + 31 (0) 20 521 4888

Re: Secured Creditor Release Notice

Ladies and Gentlemen:

Reference is made to (i) the Second Amended and Restated Intercreditor Agreement, dated as of October 12, 2010, among the Collateral Agent, McDonald’s and the Grantors (the “ Amended and Restated Intercreditor Agreement ”); and (ii) the Amended and Restated Escrow Agreement, dated as of October 12, 2010 (the “ Escrow Agreement ”), among the Escrow Agent, McDonald’s, Master Franchisee, the Escrowed MF Subsidiaries party thereto, Arcos de Chile, the Owner and the Collateral Agent. Terms used and not otherwise defined herein shall have the meaning given to them in the Amended and Restated Intercreditor Agreement or the Escrow Agreement, as the case may be.

Collateral Agent hereby certifies, as of the date hereof, that the Standstill Period has expired and Escrow Agent is hereby instructed to forward a copy of the executed

9:1

Enforcement Notice, upon receipt by Escrow Agent, to [specify].

As a result of the foregoing, Escrow Agent is hereby instructed to as soon as practicable take the following actions:

[ if LatAm, LLC or MCDC ] Remove or cause its agent to remove any notation in the books and records of the Persons referred to in paragraph (b) below with respect to the Escrow Agreement and issue certificates, to the extent permitted by Applicable Law, evidencing the Equity Interests of such Persons.

[ If any Person other than LatAm, LLC or MCDC ] Direct each Person referred to in paragraph (b) below in writing, with a copy to the Collateral Agent, to remove any notation in the books and records of the Persons referred to in paragraph (b) below with respect to the Escrow Agreement and issue certificates, to the extent permitted by Applicable Law, evidencing the Equity Interests of such Persons.

Deliver to Collateral Agent all Escrowed Equity Interests of the Secured Credit Grantors held by Escrow Agent subject to the Escrow Agreement with respect to the following Persons:

[list relevant Escrowed MF Subsidiaries]

Deliver to Collateral Agent any amounts on deposit in the Escrow Account(s) established with respect to such Escrowed MF Subsidiary(ies) which are Secured Credit Grantors listed in (a) above by wire transfer to Collateral Agent’s account specified in the Escrow Agreement.

Execute and deliver the final Enforcement Notice provided by the Collateral Agent to the Persons indicated therein. The Collateral Agent hereby instructs Escrow Agent (i) to notify Pledgee (as defined in the Enforcement Notice) that it may proceed with the enforcement of the pledge granted pursuant to the Pledge Agreement (as defined in the Enforcement Notice); and (ii) to acknowledge that the Enforcement Notice provided by the Collateral Agent is the notice required under Section [specify] of the Pledge Agreement and that no further action, notice or authorization is required for Pledgee to enforce the pledge granted pursuant to the Pledge Agreement.


Deutsche Bank Trust Company Americas, solely in its capacity as Collateral Agent

By:
		Name:
		Title:

9:2

EXHIBIT 10

FORM OF EXCLUDED SUBSIDIARY TRANSFER INSTRUCTION

[Date]

Citibank Agency & Trust

Citibank, N.A.

388 Greenwich Street, 14th Floor

New York, New York 10013

Attention: Marie Ladolcetta

Telephone: (212) 816-6086

Fax: (212) 657-2762

Re: Excluded Subsidiary Transfer Instruction

Ladies and Gentlemen:

Reference is made to (i) the Master Franchise Agreement, dated as of August 3, 2007, as amended and restated pursuant to the Amended and Restated Master Franchise Agreement, dated as of November 10, 2008 (the “ MFA ”), among McDonald’s, Master Franchisee and the other parties named therein; and (ii) the Amended and Restated Escrow Agreement, dated as of October 12, 2010 (the “ Escrow Agreement ”), among the Escrow Agent, McDonald’s, Master Franchisee, the Escrowed MF Subsidiaries party thereto, Arcos de Chile, the Owner and the Collateral Agent. Terms used and not otherwise defined herein shall have the meaning given to them in the MFA or the Escrow Agreement, as the case may be.

Master Franchisee hereby certifies that McDonald’s has consented to the transfer or such consent is not required pursuant to Section [specify] of the MFA.

Escrow Agent is hereby instructed to deliver Equity Interests of [specify Person] to [Transferee].


LATAM, LLC

By:
		Name:
		Title:

Acknowledged and Agreed by:

10:1


McDONALD’S LATIN AMERICA, LLC

By:
		Name:
		Title:

10:2

EXHIBIT 11

FORM OF RESTRICTED SUBSIDIARY TRANSFER INSTRUCTION

[Date]

Citibank Agency & Trust

Citibank, N.A.

388 Greenwich Street, 14th Floor

New York, New York 10013

Attention: Marie Ladolcetta

Telephone: (212) 816-6086

Fax: (212) 657-2762

Re: Restricted Subsidiary Transfer Instruction

Ladies and Gentlemen:

Reference is made to (i) the Master Franchise Agreement, dated as of August 3, 2007, as amended and restated pursuant to the Amended and Restated Master Franchise Agreement, dated as of November 10, 2008 (the “ MFA ”), among McDonald’s, Master Franchisee and the other parties named therein; and (ii) the Amended and Restated Escrow Agreement, dated as of October 12, 2010 (the “ Escrow Agreement ”), among the Escrow Agent, McDonald’s, Master Franchisee, the Escrowed MF Subsidiaries party thereto, Arcos de Chile, the Owner and the Collateral Agent. Terms used and not otherwise defined herein shall have the meaning given to them in the MFA or the Escrow Agreement, as the case may be.

Master Franchisee hereby certifies that McDonald’s has consented to the transfer or such consent is not required pursuant to Section [specify] of the MFA.

Escrow Agent is hereby instructed to deliver Equity Interests of [specify Person] to [Transferee].


LATAM, LLC

By:
		Name:
		Title:

Acknowledged and Agreed by:

11:1


McDONALD’S LATIN AMERICA, LLC

By:
		Name:
		Title:

Acknowledged and Agreed by:


DEUTSCHE BANK TRUST COMPANY AMERICAS, as Collateral Agent

By:
		Name:
		Title:

By:
		Name:
		Title:

11:2

EXHIBIT 12

FORM OF DEFAULT EXERCISE NOTICE

[Date]

LatAm, LLC

Arcos Dorados B.V.

Naritaweg 165

Amsterdam

1043 BW

The Netherlands

Telephone: + 31 (0) 20 521 4887

Fax: + 31 (0) 20 521 4888

cc:

Citibank Agency & Trust

Citibank, N.A.

388 Greenwich Street, 14th Floor

New York, New York 10013

Attention: Marie Ladolcetta

Telephone: (212) 816-6086

Fax: (212) 657-2762

Re:

Default Exercise Notice

Ladies and Gentlemen:

Reference is made to the Master Franchise Agreement, dated as of August 3, 2007, as amended and restated pursuant to the Amended and Restated Master Franchise Agreement, dated as of November 10, 2008 (the “ MFA ”), among McDonald’s, Master Franchisee and the other parties named therein. Terms used and not otherwise defined herein shall have the meaning given to them in the MFA.

McDonald’s hereby exercises the Call Option in accordance with Section 21.6.1(b) of the MFA to purchase from [Shareholders] all of the Equity Interests of [names of relevant Persons].


McDONALD’S LATIN AMERICA, LLC

By:
		Name:
		Title:

12:1

EXHIBIT 13

FORM OF INTERCREDITOR COMPLIANCE NOTICE

[Date]

Citibank Agency & Trust

Citibank, N.A.

388 Greenwich Street, 14th Floor

New York, New York 10013

Attention: Marie Ladolcetta

Telephone: (212) 816-6086

Fax: (212) 657-2762

cc:

LatAm, LLC

Arcos Dorados B.V.

Naritaweg 165

Amsterdam

1043 BW

The Netherlands

Telephone: + 31 (0) 20 521 4887

Fax: + 31 (0) 20 521 4888

Deutsche Bank Trust Company Americas, as

Collateral Agent

60 Wall Street

New York, New York 10005

Attention: Trust & Securities Services – Project Finance Manager

Telephone: (212) 250-7727

Fax: (732) 578-4636

Re:

Intercreditor Compliance Notice

Ladies and Gentlemen:

Reference is made to the Second Amended and Restated Intercreditor Agreement, dated as of October 12, 2010, among the Collateral Agent, McDonald’s and the Grantors (the “ Amended and Restated Intercreditor Agreement ”); and (ii) the Amended and Restated Escrow Agreement, dated as of October 12, 2010 (the “Escrow Agreement”), among the Escrow Agent, McDonald’s, Master Franchisee, the Escrowed MF Subsidiaries party thereto, Arcos de Chile, the Owner and the Collateral Agent. Terms used and not otherwise defined herein shall have the meaning given to them in the Amended and Restated Intercreditor Agreement or the Escrow Agreement, as the case may be.

McDonald’s hereby notifies the Escrow Agent that the Standstill Period has expired

13:1

with respect to the Equity Interests of the following Secured Credit Grantor(s): . As a result, the Escrow Agent is authorized and directed to execute and to deliver any Enforcement Notice provided to Escrow Agent by Deutsche Bank Trust Company Americas, as collateral agent, to the Persons indicated therein and required pursuant to the terms of any Common Collateral Agreement to permit the exercise by Deutsche Bank Trust Company Americas, as collateral agent, of any rights or remedies under such Common Collateral Agreement with respect to such Equity Interests.


McDONALD’S LATIN AMERICA, LLC

By:
		Name:
		Title:

13:2

EXHIBIT 14

FORM OF ENFORCEMENT NOTICE

[Date]

Deutsche Bank Trust Company Americas, as

Collateral Agent

60 Wall Street

New York, NY 10005

Attention: Trust & Securities Services – Project Finance Manager

Telephone: (212) 250-7727

Fax: (732) 578-4636

cc:

LatAm, LLC

Arcos Dorados B.V.

Naritaweg 165

Amsterdam

1043 BW

The Netherlands

Telephone: + 31 (0) 20 521 4887

Fax: + 31 (0) 20 521 4888

[Name of Second Pledgor, if any]

Pursuant to Section [specify] of the [specify applicable Common Collateral Document] (“ Pledge Agreement ”), dated as of [date], between [specify applicable pledgor/s] (“ Pledgor ”), [specify applicable MF Subsidiary] and [Deutsche Bank Trust Company Americas] [specify other party, if any, identified as pledgee under applicable Common Collateral Document] (“ Pledgee[s] ”), Citibank, N.A., solely in its capacity as Escrow Agent (the “ Escrow Agent ”), acting on the instructions of Deutsche Bank Trust Company Americas, as collateral agent (the “ Collateral Agent ”), hereby notifies Pledgee that Pledgee may proceed with the enforcement of the pledge granted pursuant to the Pledge Agreement.

The Escrow Agent has been instructed by Collateral Agent that this is the notice required under Section [specify] of the Pledge Agreement and that no further action, notice or authorization is required for Pledgee to enforce the pledge granted pursuant to the Pledge Agreement.

Issued in [place] this [date] day of [specify month and year].

14:1


CITIBANK, N.A., solely in its capacity as Escrow Agent

By:
		Name:
		Title:

14:2

Annex A

SECURITY POWER

FOR VALUE RECEIVED, Arcos Dorados B.V. (the “ Assignor ”) does hereby sell, assign and transfer unto McDonald’s Latin America, LLC all of its right, title and interest in the following securities (the “ Securities ”) issued by LatAm, LLC (the “ Issuer ”):

100% of the limited liability company interests of the Issuer

represented by Membership Certificate Number

Assignor does hereby irrevocably constitute and appoint Citibank, N.A. its attorney-in-fact to transfer the said Securities on the books of said Company as of the date hereof, with full power of substitution in the premises, hereby ratifying and confirming all that said attorney shall lawfully do by virtue hereof.


Dated:		,


Arcos Dorados B.V.

By:
		Name:
		Title:

Annex B

IRREVOCABLE PROXY

Arcos Dorados B.V. hereby irrevocably appoints Citibank, N.A. (the “ Escrow Agent ”), pursuant to the provisions of the Amended and Restated Escrow Agreement, dated as of October 12, 2010 (the “ Escrow Agreement ”), among the Escrow Agent, McDonald’s, Master Franchisee, the Escrowed MF Subsidiaries party thereto, Arcos de Chile, the Owner and the Collateral Agent, the proxy and attorney-in-fact of Arcos Dorados B.V., with full power of substitution, to attend any meeting (whether annual or special or both) of members of LatAm, LLC (the “ Company ”) on behalf of the undersigned and to vote, or to execute and deliver written consents or otherwise act with respect to, all limited liability company interests of the Company, now owned or hereafter acquired by the undersigned as fully, to the same extent and with the same effect as Arcos Dorados B.V. might or could do under the Constituent Documents of the Company or pursuant to the provisions of the Delaware Limited Liability Company Act, as amended, in each case, subject to and in accordance with the terms of the Escrow Agreement. Terms used and not otherwise defined herein shall have the meaning given to them in the Escrow Agreement. This proxy is given for sufficient and adequate consideration, and, as such, is coupled with an interest sufficient in law to support an irrevocable power.

This proxy may be exercised by the Escrow Agent during the period beginning on the date hereof and ending on the earlier to occur of (a) the termination of the Escrow Agreement; and (b) the registration of McDonald’s Latin America, LLC (or its designee) as the owner of the limited liability company interests of the Company owned by Arcos Dorados B.V.

All authority herein conferred or agreed to be conferred shall survive the dissolution or liquidation of Arcos Dorados B.V. Arcos Dorados B.V. shall not give any subsequent proxy (and such proxy, if given, will be deemed not to be effective), with respect to any of the limited liability company interests to which this proxy relates, that purports to grant authority within the scope of the authority hereby conferred, except on the express condition that this proxy shall have terminated in accordance with its terms. This proxy shall be governed by the laws of the State of New York

Dated this [ ] day of October, 2010


Arcos Dorados B.V.

By:
		Name:
		Title:

Annex W

STOCK POWER

FOR VALUE RECEIVED, LatAm, LLC (the “ Assignor ”) does hereby sell, assign and transfer unto McDonald’s Latin America, LLC all of its right, title and interest in the following securities (the “ Securities ”) issued by Golden Arch Development Corporation (the “ Issuer ”):

[ ] shares of common stock, par value $[0.01] per share, of the Issuer,

represented by Certificate No. [ ]


Dated:		,


LatAm, LLC

By:
		Name:
		Title:

Annex AI

STOCK POWER

FOR VALUE RECEIVED, LatAm, LLC (the “ Assignor ”) does hereby sell, assign and transfer unto McDonald’s Latin America, LLC all of its right, title and interest in the following securities (the “ Securities ”) issued by McDonald’s Caribbean Development Corporation (the “ Issuer ”):

[ ] shares of common stock, par value $[0.01] per share, of the Issuer,

represented by Certificate No. [ ]


Dated:		,


LatAm, LLC

By:
		Name:
		Title:

Annex AK

STOCK POWER

FOR VALUE RECEIVED, LatAm, LLC (the “ Assignor ”) does hereby sell, assign and transfer unto McDonald’s Latin America, LLC all of its right, title and interest in the following securities (the “ Securities ”) issued by McDonald’s System de Puerto Rico, Inc. (the “ Issuer ”):

[ ] shares of common stock, par value $[0.01] per share, of the Issuer,

represented by Certificate No. [ ]


Dated:		,


LatAm, LLC

By:
		Name:
		Title:

Annex AP

STOCK POWER

FOR VALUE RECEIVED, LatAm, LLC (the “ Assignor ”) does hereby sell, assign and transfer unto McDonald’s Latin America, LLC all of its right, title and interest in the following securities (the “ Securities ”) issued by Logistics and Manufacturing LOMA Co. (the “ Issuer ”):

[ ] shares of common stock, par value $[0.01] per share, of the Issuer,

represented by Certificate No. [ ]


Dated:		,


LatAm, LLC

By:
		Name:
		Title:

SCHEDULE A

AUTHORIZED LIST OF SIGNERS

OR OFFICER’S CERTIFICATE

LatAm, LLC

c/o Forrestal Capital Limited Company

1221 Brickell Avenue #1170

Miami, Florida 33131

Attention: Carlos Hernandez

Telephone: (305) 961-2840

Fax: (305) 961-2844


						Specimen Signature

Name
Title
Phone
E-mail Address

Name
Title
Phone
E-mail Address

Name
Title
Phone
E-mail Address

TEST WORD

Test Words must contain at least 8 alphanumeric characters, and should be established at document execution and changed each time the List of Authorized Signers/Approvers is updated. All instructions should clearly display the Test Word, which may be used in lieu of a callback to confirm the authenticity of the instruction. However, Citi reserves the right to perform the callback in addition to the Test Word if circumstances warrant.

SCHEDULE B

AUTHORIZED LIST OF SIGNERS

OR OFFICER’S CERTIFICATE

Deutsche Bank Trust Company Americas

60 Wall Street

New York, New York 10005

Attention: Trust & Securities Services

Telephone: (212) 250-7727

Fax: (732) 578-4636


						Specimen Signature

Name
Title
Phone
E-mail Address

Name
Title
Phone
E-mail Address

Name
Title
Phone
E-mail Address

TEST WORD

SCHEDULE C

AUTHORIZED LIST OF SIGNERS

OR OFFICER’S CERTIFICATE

McDonald’s Latin America, LLC

One McDonald’s Plaza

Oak Brook, Illinois 60523 U.S.A.

Attention: General Counsel of the Americas

Telephone: (630) 623-6255

Fax: (630) 623-7012


						Specimen Signature

Name
Title
Phone
E-mail Address

Name
Title
Phone
E-mail Address

Name
Title
Phone
E-mail Address

TEST WORD

Exhibit 10.5

Execution Copy

IRREVOCABLE STANDBY LETTER OF CREDIT # TS-07004119

LETTER OF CREDIT REIMBURSEMENT AGREEMENT

between

ARCOS DORADOS B.V.

and

CREDIT SUISSE,

acting through its CAYMAN ISLANDS BRANCH

dated as of

August 3, 2007

TABLE OF CONTENTS


	Page
Section 1. Definitions		1
Section 2. Issuance of the Letter of Credit		6
Section 3. Reimbursement and Fees; Additional Reimbursement Security		6
Section 4. Cancellation of the Letter of Credit		10
Section 5. Expenses		10
Section 6. Increased Costs; Break Funding Payments		11
Section 7. Taxes		12
Section 8. Bank Not Liable for Obligations of Beneficiary		12
Section 9. Recourse		13
Section 10. Conditions Precedent		13
Section 11. Obligations Absolute		18
Section 12. Representations and Warranties		18
Section 13. Affirmative Covenants		25
Section 14. Negative Covenants		29
Section 15. Events of Default		31
Section 16. Amendments, Etc.		32
Section 17. Notices		32
Section 18. No Waiver; Remedies Cumulative		33
Section 19. Indemnification		33
Section 20. Continuing Obligation		34
Section 21. Letter of Credit Transfer or Extension; Termination; Related Matters		34
Section 22. Liability of the Bank		34
Section 23. Limitation of Liability		35
Section 24. Severability		35
Section 25. Governing Law		35
Section 26. Counterparts		35
Section 27. Currency		35
Section 28. Headings		35
Section 29. No Assignment Without Consent		35
Section 30. Jurisdiction; Venue; Waiver of Jury Trial		36
Section 31. Process Agent		36
Section 32. Judgment Currency		37
Section 33. Confidentiality		37
Section 34. Patriot Act		38


EXHIBIT A		Form of Letter of Credit
EXHIBIT B		Form of Subsidiary Guaranty
EXHIBIT C		Forms of Opinions of Counsel
EXHIBIT D		Form of Security Agreement
EXHIBIT E		Form of U.S. Intercompany Note Pledge Agreement
EXHIBIT F		Form of U.S. Stock Pledge Agreement

SCHEDULE I		Proper Legal Form

LETTER OF CREDIT REIMBURSEMENT AGREEMENT, dated as of August 3, 2007 (as amended, restated or otherwise modified from time to time, this “ Agreement ”), between ARCOS DORADOS B.V., a private company With limited liability ( besloten vennootschap met beperkte aansprakelijkheid ) organized under the laws of The Netherlands (together with its successors and assigns, the “ Obligor ”), and CREDIT SUISSE, acting through its CAYMAN ISLANDS BRANCH (together with its branches, agencies, successors and assigns, the “ Bank ”).

PRELIMINARY STATEMENTS

A. Pursuant to the Purchase Agreement, the Obligor has agreed to acquire all of the issued and outstanding Capital Stock of the Companies.

B. Pursuant to the Master Franchise Agreement, the Obligor and/or certain Subsidiaries of the Obligor have agreed to acquire the right to operate the Franchised Restaurants in the Territories.

C. Pursuant to the Purchase Agreement and the Master Franchise Agreement, the payment of certain amounts by the Obligor and/or certain Subsidiaries of the Obligor under the Master franchise Agreement is to be supported by an irrevocable standby letter of credit to be issued by the Bank for the account of the Obligor and for the benefit of the Beneficiary (as defined below).

NOW. THEREFORE, in consideration of the premises and in order to induce the Bank to issue the Letter of Credit, the parties hereto agree as follows:

Section 1. Definitions . Capitalized terms used and not otherwise defined herein shall have the definitions assigned in the Credit Agreement. dated as of August 2, 2007 as in effect on the date hereof (the “ Credit Agreement ”). among the Obligor, as borrower, the various lenders party thereto, Deutsche Bank Trust Company Americas, as administrative agent (in such capacity, together with its successors and assigns in such capacity, the “ Administrative Agent ”), and collateral agent, and Santander Investment Securities Inc., as lead arranger and book runner, as the Credit Agreement is in effect as of the date hereof (and regardless of whether the Credit Agreement is hereafter terminated or discharged). In this Agreement and any other document that references this Agreement, the following capitalized terms shall have the respective meanings assigned below (each such meaning to be equally applicable to the singular and plural forms of the respective terms so defined):

“ Allocated Headquarters Costs ” means, with respect to any Territory for any period, the product of ( x ) the Total Headquarters Costs for such period, multiplied by ( y ) a fraction, expressed as a decimal to the nearest one-thousandth, the numerator of which is the portion of the systemwide sales (as set forth in the consolidated financial statements of the Obligor and its consolidated Subsidiaries) of the Obligor and its Subsidiaries for such period attributable to the Subsidiaries incorporated or organized (or operating exclusively or holding assets) in such Territory and the denominator of which is the total the systemwide sales of the Obligor and its Subsidiaries for such period.

“ Applicable Margin ” means 4.5% per annum , provided that, from and after the occurrence of a Local Take-out Event, Applicable Margin shall mean 5.0% per annum .

“ Authorized Officer ” means any of the chief executive officer, president, chief financial officer, general counsel, treasurer, director, vice president, assistant vice president, managing member, manager and any officer with equivalent authority.

“ Average Daily Stated Amount ” means, for any period,

ADSA = [SA ₁ + SA ₂ + … + SA _d ] / [DiP]

where

“ SA ₁ ” means the Stated Amount as of the first day of the relevant period;

“ SA _d ” means the Stated Amount as of last day of the relevant period; and

“ DiP ” means number of days in the relevant period.

“ Bank’s Presentation Office ” means ( i ) One Madison Avenue, 2nd Floor, New York, NY 10010. Attention: Trade Finance/Services Department, or ( ii ) such other branch or office of the Bank which may be designated by the Bank by written notice to the Beneficiary.

“ Bank ” has the meaning assigned to it in the preamble to this Agreement.

“ Beneficiary ” bas the meaning assigned to it in the Letter of Credit.

“ Business Day ” means any day except Saturday, Sunday and any day which shall be in New York. New York, a legal holiday or a day on which banking institutions are authorized or required by law or other government action to close.

“ Closing Date ” has the meaning assigned to it in Section 2.

“ Collateral ” shall mean all property (whether real or personal) with respect to which any security interests have been granted (or purported to be granted) pursuant to the U.S. Intercompany Note Pledge Agreement, the U.S. Stock Pledge Agreement Collateral and the Security Agreement.

“ Collateral Agent ” shall mean Deutsche Bank Trust Company Americas, as collateral agent.

“ Credit Agreement ” has the meaning assigned to it in the Preliminary Statements.

“ Event of Default ” has the meaning assigned to it in Section 15.

“ Expiration Date ” has the meaning assigned to it in the Letter of Credit.

“ Fee Increase Event ” means any default of the Obligor in the performance of any of the covenants set forth in Section 13(a)(i), (a)(ii), (b), (c), (d) or (e) that shall continue unremedied for a period of 30 days from the occurrence of such default.

“ Fee Letter ” has the meaning assigned to it in Section 3(b)(i).

“ Fees ” has the meaning assigned to it in Section 3(b).

“ Foreclosure Leverage Ratio ” has the meaning assigned to it in Section 3(e).

“ Initial Hedging Agreement ” means the 2002 ISDA Master Agreement, Schedule and Confirmation, each dated as of August 3, 2007, between Banco Santander Central Hispano and Arcos Dorados B.V. related to the hedging of the foreign exchange currency risk of the Obligor under the Credit Agreement, as amended, supplemented, extended or otherwise modified from time to time.

“ Interest Role ” means U.S. Dollar LIBOR plus the Applicable Margin.

“ Lender U.S. Intercompany Note Pledge Agreement ” has the meaning assigned to the term “U.S. Intercompany Note Pledge Agreement” in the Credit Agreement.

“ Lender Security Agreement ” has the meaning assigned to the term “Security Agreement” in the Credit Agreement.

“ Lender U.S. Stock Pledge Agreement ” has the meaning assigned to the term “U.S. Stock Pledge Agreement” in the Credit Agreement.

“ Letter of Credit ” means the Irrevocable Standby Letter Of Credit No. TS-07004119, issued by the Bank.

“ Letter of Credit Fee ” has the meaning assigned to it in Section 3(b)(ii).

“ Leverage Ratio Test Period ” means a period of four consecutive fiscal quarters of the Obligor (taken as one accounting period for which financial statements have or are required to be delivered pursuant to Section 13(a)), provided that ( i ) no Leverage Ratio Test Period shall commence prior to July 1, 2007, and each Leverage Ratio Test Period ending on or prior to June 30, 2008, shall commence on July 1, 2007, and ( ii ) the results for each Leverage Ratio Test Period ending on or prior to March 31, 2008, shall be adjusted to obtain a result comparable to a result for four full fiscal quarters as follows: ( x ) any income statement items used in calculations for the Leverage Ratio Test Period ending September 30, 2007, shall be multiplied by four; ( y ) any income statement items used in calculations for the Leverage Ratio Test Period ending December 31, 2007, shall be multiplied by two; and ( z ) any income statement items used in calculations for the Leverage Ratio Test Period ending March 31, 2008, shall be multiplied by four-thirds.

“ Local Take-Out Event ” means the repayment in whole or in part of the indebtedness incurred by the Obligor under the Credit Agreement through a Refinancing.

“ Master Franchise Agreement ” or “ MFA ” means the Master Franchise Agreement for McDonald’ s Restaurants, dated as of August 3, 2007, among McDonald’s Latin America, LLC, LatAm, LLC, each of the MF Subsidiaries, Arcos Dorados Limited, Arcos Dorados Cooperatieve U.A., Arcos Dorados B.V. and Los Laureles, Ltd., as amended, modified or supplemented from time to time in accordance with such agreement and this Agreement.

“ Material Adverse Effect ” shall mean any material adverse effect on ( i ) the business, condition (financial or otherwise), operations, performance or properties of the Obligor or the Obligor and its Subsidiaries, taken as a whole, ( ii ) the rights or remedies of the Bank hereunder or under any other Related Document or ( iii ) the ability of any Credit Party to perform its obligations hereunder or under any other Related Document.

“ MF Subsidiaries ” has the meaning assigned to it in the Master Franchise Agreement.

“ Obligor ” has the meaning assigned to it in the preamble to this Agreement.

“ Original Stated Amount ” means U.S.$80,000,000.

“ Related Documents ” means, collectively, this Agreement, the Letter of Credit, the Fee Letter, the Security Agreement, the Subsidiary Guaranties, the McDonald’s Intercreditor Agreement, the L/C Intercreditor Agreement, the U.S. Stock Pledge Agreement and the U.S. Intercompany Note Pledge Agreement.

“ Security Agreement ” has the meaning assigned to it in Section 10(k).

“ Secured Hedging Agreements ” has the meaning assigned to it in the Lender Security Agreement.

“ Solvent ,” when used with respect to any Person or group of Persons, on a consolidated basis, means that, as of any date of determination, ( a ) the assets of such Person(s) would, as of such date, ( x ) be sufficient to satisfy the liabilities of such Person(s), if such assets were attached upon failure to pay such liabilities when due and ( y ) be sufficient to satisfy a final judgment in respect of the liabilities of such Person(s) if such assets were attached as a means of foreclosure of a final judgment, ( b ) such Person(s) has not made a general assignment for the benefit of creditors, requested that it/they be declared bankrupt or initiated a suspension of payments proceeding, and ( c ) such Person(s) will be able to pay its/their debts as they mature. For purposes of this definition, ( i ) “debt” means liability on a “claim” and ( ii ) “claim” means any ( x ) right to payment, whether or not such a right is reduced to judgment, liquidated, unliquidated, fixed, contingent, matured, unmatured, disputed, undisputed, legal, equitable, secured or unsecured, or ( y ) right to an equitable remedy for breach of performance if such breach gives rise to a right to payment, whether or not such right to an equitable remedy is reduced to judgment, fixed, contingent, matured or unmatured, disputed, undisputed, secured or unsecured.

“ Stated Amount ” has the meaning assigned to it in the Letter of Credit.

“ Subsidiary Guaranty ” shall have the meaning assigned to it in Section 10(j).

“ Total Headquarters Costs ” means, for any period, the aggregate sum of ( i ) Caribbean headquarters and general & administrative costs, plus ( ii ) Central American headquarters and general & administrative costs, plus ( iii ) overall company headquarters and general & administrative costs, without duplication, in each case as set forth in the consolidated financial statements of the Obligor and its consolidated Subsidiaries for such period.

“ Total Pro Forma EBITDA ” means, with respect to the Obligor and its Subsidiaries on a consolidated basis for any period, Adjusted Consolidated EBITDA for such period (excluding, for purposes of this definition, ( i ) the portion of Adjusted Consolidated EBITDA attributable to any Territory (other than Territories in which any Subsidiary guaranties the obligations of the Obligor hereunder), if the Subsidiary Guaranties of the Subsidiaries incorporated or organized (or operating primarily or holding assets primarily for use) in such Territory are to be released in accordance with the Credit Agreement, the L/C Intercreditor Agreement and the McDonald’s Intercreditor Agreement upon the occurrence of the relevant Refinancing, but, for the avoidance of doubt, not excluding the portion of Adjusted Consolidated EBITDA attributable to Excluded Subsidiaries, and ( ii ) Allocated Headquarter Costs attributable to each Territory excluded in accordance with clause (i) above).

“ Total Pro Forma Leverage Ratio ” means, as of any determination date, the ratio of ( i ) the sum of Consolidated Indebtedness on such date (excluding, for purposes of this definition, the portion of Consolidated Indebtedness attributable to any Territory (other than Territories in which any Subsidiary guaranties the obligations of the Obligor hereunder), if the Subsidiary Guaranties of the Subsidiaries incorporated or organized (or operating primarily or holding assets primarily for use) in such Territory are to be released in accordance with the Credit Agreement, the L/C Intercreditor Agreement and the McDonald’s Intercreditor Agreement upon the occurrence of the relevant Refinancing) plus (if and to the extent that such amount is not included in Consolidated Indebtedness) the Original Stated Amount to ( ii ) Total Pro Forma EBITDA for the Leverage Ratio Test Period ending on or immediately prior to such date.

“ Transfer ” has the meaning assigned to it in the Master Franchise Agreement.

“ U.S. Dollar LIBOR ” means, for any period, the rate per annum which appears on the relevant page (currently BBAM) of the Bloomberg Professional service (or, if not available, on the relevant page of any service as may be nominated by the British Bankers’ Association as the information vendor for the purpose of displaying British Bankers’ Association Interest Settlement Rates for Dollar deposits) as London interbank offered rate for deposits in Dollars with maturities equal to 30 days ( provided that, if such page is not available or if no such rate is quoted for the relevant Interest Period, then “ U.S. Dollar LIBOR” shall mean the arithmetic mean of the offered quotation of two or more reference banks selected by the Bank from among major banks in the London interbank market for Dollar deposits of amounts comparable to the Stated Amount for which an interest rate is then being determined with maturities comparable to 30 days (in each such case, rounded upward to the next whole multiple of 1/16th of 1%)), determined as of 11:00 A.M. (London time) on the second Business Day prior to the first day of such period.

“ U.S. Intercompany Note Pledge Agreement ” has the meaning assigned to it in Section 10(1).

“ U.S. Intercompany Note Pledge Agreement Collateral ” shall mean all “Creditor Collateral” as defined in the U.S. Intercompany Note Pledge Agreement.

“ U.S. Stock Pledge Agreement ” has the meaning assigned to it in Section 10(l).

“ U.S. Stock Pledge Agreement Collateral ” shall mean all “Pledge Collateral” as defined in the U.S. Stock Pledge Agreement.

“ Venezuela EBITDA ” means, with respect to the Venezuelan Subsidiaries on a consolidated basis for any period, the portion of the amount equal to ( x ) Adjusted Consolidated EBITDA for such period attributable to Venezuelan Subsidiaries minus ( y ) Allocated Headquarters Costs attributable to Venezuela.

Section 2. Issuance of the Letter of Credit . Subject to the conditions set forth in Section 10, the Bank agrees to issue on August 3, 2007 (the “ Closing Date ”), the Letter of Credit in an Original Stated Amount equal to U.S.$80,000,000.

Section 3. Reimbursement and Fees; Additional Reimbursement Security .

(a) The Obligor agrees to pay to the Bank ( A ) immediately following any payment by the Bank with respect to a drawing under the Letter of Credit, the amount of such payment, and ( B ) interest on any portion of such amount remaining unpaid by the Obligor under this Section 3(a) for each day unpaid, from the date such amount becomes payable until such amount is paid in full (after as well as before judgment), payable on demand, at a rate per annum equal to the Interest Rate then in effect. Any reimbursement obligation or interest accrued and payable pursuant to Section 3(a) and not paid within 30 Business Days after the date of the draw giving rise to such reimbursement obligation shall accrue interest from the date that is 30 Business Days after the date of such draw until such amount is paid in full (after as well as before judgment), at a rate per annum equal to the Interest Rate then in effect plus 2.00%.

(b) The Obligor agrees to pay the Bank the following fees (the “ Fees ”):

(i) the fees set forth in the Fee Letter Agreement, dated on or about the date hereof (the “ Fee Letter ”). between the Obligor and the Bank; and

(ii) a letter of credit fee (the “ Letter of Credit Fee ”), payable on each Quarterly Payment Date in respect of the Average Daily Stated Amount for the quarterly period ending on such Quarterly Payment Date (and, in the event of the expiration of the Letter of Credit or the cancellation of the Letter of Credit in accordance with Section 4 on a date that is not a Quarterly Payment Date, on the Expiration Date or the effective date of such cancellation, as applicable, in respect of ( 1 ) the Average Daily Stated Amount for the period ending on such date, multiplied by ( 2 ) a fraction. expressed as a decimal to the nearest one-thousandth, the numerator of which is the number of calendar days elapsed from the day after the immediately-preceding Quarterly Payment Date through such date and the denominator of which is 90), at a rate equal to

( x ) 3.00% per annum , if either ( A ) no Local Take-Out Event has occurred on or prior to such Quarterly Payment Date or ( B ) if a Local Take-Out Event has occurred, ( i ) the Total Pro Forma Leverage Ratio as of such Quarterly Payment Date is less than 3.0:1.0 and ( ii ) the Venezuela EBITDA as of such Quarterly Payment Date is less than the product of ( a ) Total Pro Forma EBITDA as of such Quarterly Payment Date and ( b ) 0.4, and

(y) 3.25% per annum , if ( A ) a Local Take-Out Event has occurred on or prior to such Quarterly Payment Date and ( B ) either ( x ) the Total Pro Forma Leverage Ratio as of such Quarterly Payment Date is greater than 3.0:1.0 or ( y ) the Venezuela EBITDA as of such Quarterly Payment Date is greater than the product of ( 1 ) Total Pro Forma EBITDA and ( 2 ) 0.4,

provided that the Letter of Credit Fee shall be increased in accordance with the following clauses (A), (B) and (C) (it being understood, for the avoidance of doubt, that the amount of any such increase shall be payable on the Quarterly Payment Date following the delivery of written notice of such increase by the Bank):

(A) if the Obligor shall deliver a consolidated balance sheet and related consolidated statements of income and retained earnings and statements of cash flow of the Obligor and its consolidated Subsidiaries, in accordance with Sections 13(a)(i) or 13(a)(ii) (collectively, the “ Financial Statements ”), and the Leverage Ratio calculated pursuant to such Financial Statements is greater than 3.5:1.0, then, commencing on the date of such delivery until the Obligor shall have delivered Financial Statements, the Leverage Ratio calculated pursuant to which is equal to or less than 3.5:1.0, the Letter of Credit Fee shall be increased automatically as set forth below in the column headed “Letter of Credit Fee,” as applicable:


LEVERAGE RATIO		LETTER OF CREDIT FEE

Greater than 3.5:1.0 but less than or equal to 3.75:1.0		stated Letter of Credit Fee increased by 0.25% per annum

Greater than 3.75:1.0 but less than or equal to 4.00:1.0		stated Letter of Credit Fee increased by 0.50% per annum

Greater than 4.00:1.0 but less than or equal to 4.50:1.0		stated Letter of Credit Fee increased by 1.00% per annum

Greater than 4.50:1.0 but less than or equal to 5.00:1.0		stated Letter of Credit Fee increased by 1.50% per annum

Greater than 5.00:1.0		stated Letter of Credit Fee increased by 2.00% per annum

(B) upon the occurrence and during the continuance of an Event of Default (other than (x) an Event of Default under Section 15(c) arising from a default in respect of Section 14(c) ( Leverage Ratio )) or (y) an Event of Default under Section 15(h), the Letter of Credit Fee shall be increased automatically by 1.00% per annum (for the avoidance of doubt, an Event of Default shall not be deemed to have occurred hereunder until the relevant cure period shall have expired); and

(C) upon the occurrence and during the continuance of a Fee Increase Event (for the avoidance of doubt, a Fee Increase Event shall not be deemed to have occurred hereunder until the cure period contemplated in the definition of such term shall have expired), the Letter of Credit Fee shall be increased automatically by 0.50% per annum , provided that ( A ) in the event that a Fee Increase Event resulting from a default in the performance of any covenant set forth in Sections 13(a)(i) or 13(a)(ii) has not been cured within 30 days after the occurrence of such Fee Increase Event, the Letter of Credit Fee shall be increased automatically by 0.75% per annum , and ( B ) in the event that a Fee Increase Event resulting from a default in the performance of any covenant set forth in Sections 13(a)(i) or 13(a)(ii) has not been cured within 60 days after the occurrence of such Fee Increase Event, the Letter of Credit Fee shall be increased automatically by 1.00% per annum ,

provided that, notwithstanding anything to the contrary set forth in the foregoing, in no event shall the Letter of Credit Fee at any time exceed by more than 2.00% per annum

the level stated in either ( i ) clause (x) of this Section 3(b)(ii), or ( ii ) clause (y) of this Section 3(b)(ii), as applicable.

For purposes of the foregoing, ( i ) the Leverage Ratio shall be determined as of the end of each fiscal quarter of the Obligor’s fiscal year, based upon the Financial Statements in respect of such period, and ( ii ) each change in the Letter of Credit Fee resulting from a change in the Leverage Ratio shall be effective during the period commencing on and including the date of delivery to the Bank of the Financial Statements indicating such change and ending on the date immediately preceding the effective date of the next such change.

(c) Interest and Fees payable hereunder shall be computed on the basis of a 360-day year for the actual number of days elapsed.

(d) All payments by the Obligor to the Bank hereunder and under any other Related Documents shall be made free and clear of set-off or counterclaim in lawful currency of the United States and in immediately available funds at the Bank’s Presentation Office. Whenever any payment hereunder shall be due on a day that is not an Business Day, the date for payment thereof shall be extended to the next succeeding Business Day, and interest thereon shall be payable for such extended time, provided that if any such date on which a payment is due is a day which is not an Business Day but is a day of the month after which no further Business Day occurs in such month, then the date on which such payment is due shall be the next preceding Business Day.

(e) In the event that

( x ) the Collateral Agent shall consummate, or cause to be consummated, the sale in foreclosure of a material portion of the Equity Interests of any Subsidiary incorporated or organized (or operating primarily or holding assets primarily for use) in a Major Territory in which security interests are purported to be created under, any of the Foreign Pledge Agreements or the U.S. Pledge Agreement, as applicable, and

( y ) the ratio of ( i ) the sum of ( A ) Consolidated Indebtedness after giving effect to such sale in foreclosure (excluding, for purposes of this provision, the portion of Consolidated Indebtedness attributable to Subsidiaries the Equity Interests of which have been sold in foreclosure, if and to the extent that neither the Obligor nor any other Subsidiary is directly or indirectly liable for such Indebtedness or has any obligation in respect of such Indebtedness) plus ( B ) (if and to the extent that such amount is not included in Consolidated Indebtedness) the Stated Amount to ( ii ) Adjusted Consolidated EBITDA after giving effect to such sale in foreclosure (excluding, for purposes of this provision, the portion of Adjusted Consolidated EBITDA attributable to Subsidiaries the Equity Interests of which have been sold in foreclosure) (such ratio, the “ Foreclosure Leverage Ratio ”) for the Leverage Ratio Test Period ending on or immediately prior to such date is greater than 3.5:1.0,

then, within 10 Business Days after such sale in foreclosure, the Obligor shall deliver to a collateral agent and create and perfect a first-priority security interest, on terms and conditions reasonably acceptable to the Bank, additional security for the reimbursement and other payment obligations of the Obligor under this Agreement and the other Related Documents. in the form of cash or cash equivalents reasonably acceptable to the Bank, in an amount equal to the product of:

(A) the difference, expressed as a decimal to the nearest one-thousandth, of ( i ) the Foreclosure Leverage Ratio (calculated in accordance with this Section 3(e)(i)) minus ( ii ) 3.5:1.0,

multiplied by

(B) Adjusted Consolidated EBITDA after giving effect to such sale in foreclosure (excluding, for purposes of this provision, the portion of Adjusted Consolidated EBITDA attributable to Subsidiaries the Equity Interests of which have been sold in foreclosure), as calculated in accordance with clause (y) above.

provided that the agreement(s) governing such additional security shall provide for the release of the unapplied collateral to the Obligor upon the first to occur of ( x ) the cure or waiver of all Events of Default hereunder, ( y ) the Expiration Date and ( z ) the subsequent delivery by the Obligor of Financial Statements, the Leverage Ratio calculated pursuant to which is equal to or less than 3.5:1.0.

Section 4. Cancellation of the Letter of Credit . The Letter of Credit shall be cancelled, and shall terminate, and the Obligor shall provide the Bank written notice of such cancellation and shall promptly pay the Bank any cancellation fee due in respect of such cancellation in accordance with the Fee Letter, upon the occurrence of the Expiration Date.

(a) Optional Cancellation . The Obligor may cancel the Letter of Credit, by written notice to the Bank, countersigned by an Authorized Officer of the Beneficiary and shall concurrently with such cancellation, pay the Bank any cancellation fee due in respect of such cancellation in accordance with the Fee Letter, provided that the original of such Letter of Credit must accompany such written notice, and provided further that the Obligor may not deliver such a notice for effect as of any date prior to the third anniversary of the Closing Date other than with the written consent of the Bank, which consent may be granted or withheld by the Bank in its sole discretion.

Section 5. Expenses . The Obligor agrees to pay or cause to be paid to the Bank, (i) on or prior to the Closing Date, all reasonable and documented fees and expenses of each legal counsel to the Bank specified in clauses (ix) through (xiv) of Section 10(d) incurred in connection with this Agreement and the Related Documents and (ii) on each Quarterly Payment Date and on the Expiration Date, an amount equal to the Bank’s reasonable and documented aggregate expenses (including reasonable attorneys’ fees and disbursements) incurred prior to such date, and with respect to which a reasonably detailed invoice specifying such expenses has been delivered to the Obligor at least 5 Business Days prior to the relevant payment date, in connection with ( i ) all expenses incurred in connection with the enforcement or preservation of the Bank’s rights

hereunder or under any of the Related Documents or to respond to any notice of forgery, fraud, abuse or illegality in connection with this Agreement or any other Related Document (including active defense by the Bank in any action in which an injunction is sought or obtained against presentation or honor) and ( ii ) any stamp taxes, recording taxes, or similar taxes or fees payable in connection with the Letter of Credit or any other Related Document.

Section 6. Increased Costs; Break Funding Payments.

(a) If the Bank determines in good faith that the introduction or effectiveness of, or any change in, any treaty, international agreement, law, rule or regulation or compliance with any directive, guideline or request from any central bank or other governmental or quasi-governmental authority (whether or not having the force of law), or any change in generally accepted accounting principles or in the Bank’s accounting for the Letter of Credit (including changing the capital adequacy conversion factor), or any change in the interpretation of any of the foregoing, except, in each case, with respect to Taxes or Excluded Taxes, ( i ) affects or would affect the amount of capital, insurance or reserves (including special deposits or similar requirements) required or expected to be maintained by the Bank or any corporation controlling the Bank or otherwise increases the costs of, or reduces the amount received or receivable by, the Bank or any corporation controlling the Bank, and the Bank determines in good faith that the amount of such capital, insurance or reserve (including any special deposit or similar requirement) or other increased cost (including any tax or insurance premium) or reduction, as the case may be, is increased by or based upon the existence of this Agreement, the Letter of Credit or any other Related Document or ( ii ) imposes, modifies or deems applicable any reserve (including without limitation any reserve imposed by the Board of Governors of the Federal Reserve System), special deposit or similar requirement against assets of, deposits with or for the account of, or credit extended by the Bank with respect to letters of credit, or imposes on the Bank any other condition affecting this Agreement or the Letters of Credit, and the Bank determines in good faith that the result of any of the foregoing is to increase the cost to, or to impose a cost on, the Bank of issuing or maintaining the Letter of Credit or of making any payment or disbursement under the Letter of Credit, or to reduce the amount of any sum received or receivable by the Bank under this Agreement, then the Obligor shall pay the Bank on demand from time to time additional amounts sufficient in the Bank’s good faith judgment to compensate for the increase or reduction, as the case may be, provided that such additional amount shall be payable only if the Bank requires other similarly situated borrowers or obligors to pay comparable amounts and the Bank uses averaging and attribution methods that are reasonable. Determinations and statements of the Bank pursuant to this Section 6 shall be made in good faith and shall be conclusive absent demonstrable error, and the provisions of this Section 6 shall survive termination of this Agreement.

(b) In the event the Obligor makes any payment required pursuant to Section 3(a) other than on the last day of a Reference Period, then , in any such event, the Obligor shall compensate the Bank for any loss, cost and expense attributable thereto. Without limiting the effect of the preceding sentence, the loss to the Bank attributable to any such event may include an amount determined by the Bank to be equal to the excess, if any, of:

(i) the amount of interest that the Bank would pay for a deposit equal to the amount of the applicable drawing for the period from the date of such payment for such drawing if the interest rate payable on such deposit were equal to U.S. LIBOR for such period; over

(ii) the amount of interest that the Bank would earn on such drawing amount for such period if the Bank were to invest such principal amount for such period at the interest rate that would be bid by the Bank (or an Affiliate of the Bank) for U.S. Dollar deposits from other banks in the London interbank eurodollar market at the commencement of such period.

(c) A certificate of the Bank setting out ( i ) any amount or amounts that the Bank is entitled to receive pursuant to Section 6(b) and ( ii ) in reasonable detail how such amount or amounts were calculated, which description shall in no event contain any disclosure of matters deemed by the Bank in good faith to be confidential or proprietary, shall be delivered to the Obligor and shall be conclusive absent manifest error. The Obligor shall pay the Bank the amount shown as due on any such certificate within ten days after receipt thereof.

Section 7. Taxes . All payments to the Bank hereunder and under any Related Document shall be made free and clear of and without deduction for any present or future taxes, fees, duties, levies, imposts, deductions, charges or withholdings, and all related liabilities, excluding income, franchise, branch profits and similar taxes imposed by the jurisdiction of the Bank’s head office or the office issuing the Letter of Credit or any of its political subdivisions (“ Excluded Taxes ”; all non-excluded taxes. levies, imposts, deductions, charges, withholdings and related liabilities are called “ Taxes ”). If any Taxes shall be required to be withheld or deducted from any sum payable under this Agreement or under any Related Document, then: ( i ) the sum payable under this Agreement or under any Related Document shall be increased so that after making all required deductions the Bank receives an amount equal to the sum the Bank would have received had no such withholdings or deductions been required; ( ii ) the Obligor shall be responsible for payment of the amount to the relevant taxing authority; ( iii ) the Obligor shall promptly forward to the Bank an official receipt or other documentation satisfactory to the Bank evidencing such payment to such authority; and ( iv ) the Obligor shall indemnify the Bank on demand for any Taxes paid by the Bank and any liability (including penalties, interest and expenses) arising from its payment or in respect of such Taxes, whether or not such Taxes were correctly or legally asserted. Moreover, if any Taxes are directly asserted against the Bank or on any payment received by the Bank hereunder or under any Related Document, the Bank may pay such Taxes and the Obligor will promptly pay such additional amount (including any penalty, interest or expense) as is necessary in order that the net amount received by the Bank after the payment of such Taxes (including any Taxes on such additional amount) shall equal the amount the Bank would have received had no such Taxes been asserted. The Bank shall file any certificate or document or furnish to the Obligor any information, in each case, as reasonably requested by the Obligor that may be necessary to establish any available exemption from, or reduction in the amount of, any Taxes.

Section 8. Bank Not Liable for Obligations of Beneficiary . The Bank shall not be in any way responsible for performance by the Beneficiary of any of its obligations to the Obligor.

Section 9. Recourse . Notwithstanding anything to the contrary contained in this Agreement or the Security Agreement or any Related Document, the Bank agrees that neither it nor any Person acting on its behalf may assert any claim or cause of action for payment of any of the obligations of the Obligor hereunder, under the Security Agreement or any other Related Document against any manager, officer, director, agent or other representative, stockholder, equity holder, or member (whether direct or indirect), successor or assign of the Obligor (each, a “ Pledgor Party ”) or any manager, officer, director, agent, other representative, stockholder, equity holder, member (whether direct or indirect), successor or assign of any Pledgor Party.

Section 10. Conditions Precedent . The obligation of the Bank to issue the Letter of Credit on the Closing Date is subject to the satisfaction of the following conditions:

(a) Related Documents; Effective Date . Each of this Agreement and each other Related Document shall have been executed and delivered by the parties thereto and the Effective Date shall have occurred in accordance with the terms of the Credit Agreement.

(b) No Default; Representations and Warranties . As of the date of issuance of the Letter of Credit and after giving effect thereto, ( i ) no default or event of default shall have occurred and be continuing under this Agreement or any Related Document, ( ii ) the representations made by the Seller (as such term is defined in the Purchase Agreement) in the Purchase Agreement, but only to the extent that the Obligor has the right to terminate its obligations under the Purchase Agreement as a result of breach of such representations and ( iii ) the representations made by the Obligor in Sections 12(a), (b), (c)(i), (d), (g), (h), (i), (j), (m), (n), (o), (p) and (q), and ( iv ) solely with respect to the Obligor, Holdings and Parent, Sections 12(c)(ii), (c)(iii), (c)(iv), (g)(ii), (g)(iii), (l) and (r), shall be true and correct in all material respects on and as of the Closing Date with the same effect as though such representations and warranties had been made on and as of such date (it being understood and agreed that any representation or warranty which by its terms is made as of a specified date shall be required to be true and correct in all material respects only as of such specified date), provided that any representation and warranty that is qualified as to “materiality,” “Material Adverse Effect” or similar language shall be true and correct (after giving effect to any qualification therein) in all respects on such respective dates.

(c) Officer’s Certificate . The Bank shall have received a certificate from the Obligor, dated the Closing Date and signed on behalf of the Obligor by an Authorized Officer of the Obligor, substantially in the form of Exhibit E to the Credit Agreement with appropriate insertions, together with copies of the certificate or articles of incorporation and by-laws (or other equivalent organizational documents), as applicable, of the Obligor and the resolutions of the Obligor referred to in such certificate.

(d) Opinions of Counsel . The Bank shall have received original counterparts of each of the following legal opinions, which legal opinions shall be dated as of the Closing Date and addressed to each Secured Creditor (including without limitation the Bank), which shall be in form and substance reasonably satisfactory to the Bank:

(i) a legal opinion of Debevoise & Plimpton LLP, special New York counsel to the Credit Parties, substantially in the form of Exhibit C-1;

(ii) a legal opinion of Pérez Alati, Grondona. Benites, Arnsten & Martinez, special Argentine counsel to the Credit Parties, substantially in the form of Exhibit C-2;

(iii) a legal opinion of Greenberg Traurig LLC, special Delaware counsel to the Credit Parties, substantially in the form of Exhibit C-3;

(iv) a legal opinion of Greenberg Traurig LLC, special District of Columbia counsel to the Credit Parties, substantially in the form of Exhibit C-4;

(v) a legal opinion of Greenberg Traurig LLC, special Aruban, Dutch and Netherlands Antilles counsel to the Credit Parties, substantially in the form of Exhibit C-5;

(vi) a legal opinion of Tozzini Freire Advogados, special Brazilian counsel to the Credit Parties, substantially in the form of Exhibit C-6;

(vii) a legal opinion of Mijares, Angoitia, Cortes y Fuentes, special Mexican counsel to the Credit Parties, substantially in the form of Exhibit C-7;

(viii) a legal opinion of Fiddler, Gonzalez & Rodriguez, special Puerto Rican counsel to the Credit Parties, substantially in the form of Exhibit C-8;

(ix) a legal opinion of Hoet Pelaez Castillo & Duque, special Venezuelan counsel to the Credit Parties, substantially in the form of Exhibit C-9;

(x) a legal opinion of Skadden Arps, Slate Meagher & Flom LLP, special New York counsel to the Bank, substantially in the form of Exhibit C-10;

(xi) a legal opinion of Loyens & Loeff, special Aruban, Dutch and Netherlands Antilles counsel to the Bank, substantially in the form of Exhibit C-11;

(xii) a legal opinion of Bruchou, Fernández Madero & Lombardi, special Argentine counsel to the Bank, substantially in the form of Exhibit C-12;

(xiii) a legal opinion of Demarest e Almeida Advogados, special Brazilian counsel to the Bank, substantially in the form of Exhibit C-13;

(xiv) a legal opinion of Galicia y Robles, S.C., special Mexican counsel to the Bank, substantially in the form of Exhibit C-14;

(xv) a legal opinion of O’Neill & Borges, special Puerto Rican counsel to the Bank, substantially in the form of Exhibit C-15; and

(xvi) a legal opinion of Torres, Plaz & Araujo, special Venezuelan counsel to the Bank, substantially in the form of Exhibit C-16.

(e) Approvals . All necessary governmental (domestic and foreign) and third party approvals and/or consents in connection with the Transaction, the other transactions

contemplated hereby, by the Related Documents and by the Credit Documents shall have been obtained and remain in full force and effect, and all applicable waiting periods with respect thereto shall have expired without any action being taken by any competent authority which restrains, prevents or imposes materially adverse conditions upon the consummation of the Transaction, the other transactions contemplated hereby and by the Related Documents and the granting of Liens under the Credit Documents, the Related Documents or otherwise referred to herein or therein. All corporate and legal proceedings and all instruments and agreements in connection with the transactions contemplated by this Agreement shall be reasonably satisfactory in form and substance to the Bank.

(f) Consummation of the Transactions .

(i) On or prior to the Closing Date, the Equity Financing shall have been consummated in accordance with the Equity Financing Documents and all applicable Laws and ( A ) the Parent shall have received cash proceeds in an amount at least equal to the Minimum Equity Financing Amount, in the form of a capital contribution by the Sponsors and then immediately used all such cash proceeds to make a capital contribution to the Obligor and ( B ) the Obligor shall have utilized (and caused its Subsidiaries to utilize) the Minimum Equity Financing Amount received by it as provided in the preceding clause (A) to make payments owing in connection with the Transactions prior to, or concurrently with, the utilization by the Obligor of any proceeds of Loans for such purpose.

(ii) On or prior to the Closing Date, ( A ) the Acquisition shall have been consummated in accordance with ( x ) the terms and conditions of the Acquisition Documents therefor (without any waiver by the Obligor or its Subsidiaries of any conditions precedent to their obligations thereunder) and ( y ) all applicable Laws and ( B ) after giving effect thereto, ( x ) the Permitted Holder shall be the controlling shareholder of the Obligor and its Subsidiaries and ( y ) the management and corporate and capital structure of the Obligor and its Subsidiaries (including without limitation the Companies) and any Equity Financing Documents (including shareholders’ agreements) related thereto shall be reasonably satisfactory to the Bank.

(iii) On or prior to the Closing Date, the Lenders shall have made the Loans to the Obligor under the Credit Agreement in the aggregate amount of U.S.$350,000,000 and the Obligor shall have used such proceeds as required in the Credit Agreement.

(iv) After giving effect to the consummation of the Transaction, there shall not exist ( i ) any Indebtedness (other than (x) the Obligations and (y) Indebtedness permitted under Section 8.04(ii) or (iii) of the Credit Agreement) of any of the Obligor and its Subsidiaries or ( ii ) any Liens (other than Permitted Liens) on any Equity Interests, property or assets of any of the Obligor and its Subsidiaries.

(g) Delivery of Documents . On the Closing Date, ( i ) the Bank shall have received true and correct copies of the Credit Documents, all Equity Financing Documents, the Master Franchise Agreement, all Acquisition Documents (with those Acquisition Documents which were executed on or before March 28, 2007 (together with the exhibits and schedules thereto to

the extent finalized on or prior to such date) to be in the form so executed (and finalized)), all other Related Documents, the Lender U.S. Intercompany Note Pledge Agreement, the Lender U.S. Stock Pledge Agreement, the Lender Security Agreement and the McDonald’s U.S. Stock Pledge Agreement, in each case certified as such by an Authorized Officer of the Obligor, ( ii ) all the Related Documents and all terms and conditions thereof shall be in form and substance reasonably satisfactory to the Bank and ( iii ) all such Documents shall be in full force and effect.

(h) Intercreditor Agreements . The Bank shall have received the L/C Intercreditor Agreement and the McDonald’s Intercreditor Agreement, in each case duly executed by each of the parties thereto.

(i) No Acquisition Material Adverse Effect . Since November 30, 2006, no Acquisition Material Adverse Effect shall have occurred.

(j) Subsidiary Guaranties . Each Subsidiary of the Obligor (other than the Excluded Subsidiaries) shall have duly authorized, executed and delivered a Subsidiary Guaranty, substantially in the form of Exhibit B (each, as amended, modified and/or supplemented from time to time, a “ Subsidiary Guaranty ”), and each Subsidiary Guaranty shall be in full force and effect.

(k) Security Agreements . The Obligor shall have duly authorized, executed and delivered the Security Agreement in the form of Exhibit D (as amended, modified and/or supplemented from time to time, the “ Security Agreement ”) covering all of the Obligor’s Security Agreement Collateral, together with:

(i) proper financing statements (Form UCC-1 or the equivalent) in form appropriate for filing under the UCC or other appropriate filing offices of each jurisdiction specified in Schedule VI to the Credit Agreement;

(ii) certified copies of requests for information or copies (Form UCC-11), or equivalent reports as of a recent date, listing all effective financing statements that name the Obligor or any of its Subsidiaries as debtor and that are filed in the jurisdictions referred to in clause (i) above and in such other jurisdictions in which Collateral is located on the Closing Date, together with copies of such other financing statements that name the Obligor or any of its Subsidiaries as debtor (none of which shall cover any of the Collateral except ( x ) to the extent evidencing Liens created pursuant to the Lender Security Agreement or ( y ) those in respect of which the Collateral Agent shall have received termination statements (Form UCC-3) or such other termination statements as shall be required by local Law fully executed for filing); and

(iii) evidence that all other actions necessary or, in the reasonable opinion of the Collateral Agent, desirable to perfect and protect the security interests purported to be created by the Security Agreement have been taken, and the Security Agreement shall be in full force and effect.

(l) U.S. Pledge Agreements . On the Closing Date, each Credit Party shall have duly authorized, executed and delivered ( i ) the U.S. Intercompany Note Pledge Agreement in the

Form of Exhibit E (as amended, modified and/or supplemented from time to time, the “ U.S. Intercompany Note Pledge Agreement ”), and shall have delivered to the Collateral Agent, as pledgee thereunder, all of the U.S. Intercompany Note Pledge Agreement Collateral, if any, referred to therein and then owned by such Credit Party, together with all Intercompany Notes endorsed in blank, along with evidence that all other actions necessary or, in the reasonable opinion of the Collateral Agent, desirable, to perfect the security interests purported to be created by the U.S. Intercompany Note Pledge Agreement have been taken, and the U.S. Intercompany Pledge Agreement shall be in full force and effect and ( ii ) the U.S. Stock Pledge Agreement in the Form of Exhibit F (as amended, modified and/or supplemented from time to time, the “ U.S. Stock Pledge Agreement ”), and shall have delivered to the Collateral Agent, as pledgee thereunder, all of the U.S. Stock Pledge Agreement Collateral, if any, referred to therein and then owned by such Credit Party, together with executed and undated endorsements for transfer in the case of Equity Interests constituting certificated U.S. Stock Pledge Agreement Collateral, along with evidence that all other actions necessary or, in the reasonable opinion of the Collateral Agent, desirable, to perfect the security interests purported to be created by the U.S. Stock Pledge Agreement have been taken, and the U.S. Stock Pledge Agreement shall be in full force and effect.

(m) Financial Statements; Projections . The Bank shall have received true and correct copies of ( i ) the Unaudited Company Financial Statements, ( ii ) the Unaudited Existing Territory Financial Statements of each Existing Territory and ( iii ) the Projections referred to in Section 6.05(b) of the Credit Agreement.

(n) Solvency Certificate . The Bank shall have received a solvency certificate, substantially in the form of Exhibit K to the Credit Agreement, dated the Closing Date and duly executed by the chief financial officer of the Obligor.

(o) Compliance Matters . At least five Business Days prior to the Closing Date, the Bank shall have received all documentation and other information required by regulatory authorities under applicable “know your customer” and anti-money laundering Laws, including without limitation the USA PATRIOT ACT (Title III of Pub. L. 107-56 (signed into law October 26, 2001), as amended).

(p) Fees, etc . The Obligor shall have paid to the Bank all Fees, costs, expenses (including without limitation reasonable legal fees and expenses) and other compensation contemplated herein, to the extent then due and payable hereunder.

(q) Application . The Bank shall have received a completed letter of credit application, no less than two Business Days prior to the Closing Date and dated as of the date of delivery thereof. which application shall ( i ) include, without limitation, the name, address, telephone and facsimile numbers and contact person for the Beneficiary and delivery instructions for the Letter of Credit, ( ii ) attach thereto the form of the Letter of Credit and ( iii ) be duly executed by the Obligor.

(r) Appointment of Process Agent . The Bank shall have received a letter from the Process Agent indicating its consent to its appointment by the Obligor as its agent to receive service of process as specified in Section 30 of this Agreement.

Section 11. Obligations Absolute. The obligations of the Obligor under this Agreement shall be absolute, unconditional and irrevocable, and shall be discharged strictly in accordance with the terms of each such agreement, under all circumstances whatsoever, including without limitation the following circumstances:

(i) any lack of validity or enforceability of any of the Related Documents or any other agreement or instrument relating thereto;

(ii) any amendment or waiver of or any consent to departure from all or any of the provisions of the Security Agreement or any of the other Related Documents;

(iii) the existence of any claim, setoff, defense or other right which the Obligor may have at any time against any Beneficiary, the Bank (other than the defense of payment to the Bank in accordance with the terms of this Agreement) or any other person or entity, whether in connection with this Agreement, the other Related Documents or any unrelated transaction;

(iv) any statement or any other document presented under the Letter of Credit proving to be forged, fraudulent, invalid or insufficient in any respect or any statement therein being untrue or inaccurate in any respect whatsoever;

(v) payment by the Bank under the Letter of Credit against presentation of a demand or certificate that does not comply with the terms of such Letter of Credit, provided that neither the Bank’s determination that documents presented under such Letter of Credit comply with the terms thereof, nor such payment, shall have constituted gross negligence or willful misconduct of the Bank or failure to comply with the relevant standard of care prescribed by the UCC; and

(vi) any other act or omission to act or delay of any kind by the Bank or any other Person or any other event or circumstance whatsoever that might, but for the provisions of this Section, constitute a legal or equitable discharge of or defense to the Obligor’s obligations hereunder.

Section 12. Representations and Warranties . In order to induce the Bank to issue the Letter of credit in accordance with this Agreement, the Obligor makes the following representations and warranties, in each case as of the Closing Date, all of which shall survive the execution and delivery of this Agreement (it being understood and agreed that any representation or warranty which by its terms is made as of a specified date shall be required to be true and correct only as of such specified date).

(a) Company Status . Each of the Credit Parties and Holdings ( i ) is a duly organized and validly existing company in good standing under the laws of the jurisdiction of its organization, ( ii ) has the company power and authority to own its property and assets and to transact the business in which it is engaged and presently proposes to engage and ( iii ) is duly qualified and is authorized to do business and is in good standing in each jurisdiction where the ownership, leasing or operation of its property or the conduct of its business requires such

qualifications except for failures to be so qualified or authorized which, either individually or in the aggregate, could not reasonably be expected to have a Material Adverse Effect.

(b) Power and Authority . Each of the Credit Parties and Holdings has the company or partnership power and authority to execute, deliver and perform the terms and provisions of each of the Documents to which it is party and has taken all necessary company or partnership action to authorize the execution, delivery and performance by it of each of such Documents. Each of the Credit Parties, Holdings and Parent has duly executed and delivered each of the Documents to which it is party, and each of such Documents constitutes its legal, valid and binding obligation enforceable in accordance with its terms, except to the extent that the enforceability thereof may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or other similar Laws generally affecting creditors’ rights and by equitable principles (regardless of whether enforcement is sought in equity or at law).

(c) No Violation . Neither the execution, delivery or performance by any of Holdings, Parent and any Credit Party of the Related Documents to which it is a party, nor compliance by it with the terms and provisions thereof, ( i ) will violate any applicable Law or any order, writ, injunction or decree of any Governmental Authority, except, with respect to any Subsidiary of the Obligor, to the extent such violations could not, individually or in the aggregate, be reasonably expected to have a Material Adverse Effect, ( ii ) will conflict with or result in any breach of any of the terms, covenants, conditions or provisions of, or constitute a default under any indenture, mortgage, deed of trust, credit agreement or loan agreement, or any other material agreement, contract or instrument, in each case to which any of Holdings, Parent and any Credit Party or any of its Subsidiaries is a party or by which it or any of its property or assets is bound or to which it may be subject, except for such conflicts, breaches or defaults as could not, in the aggregate, reasonably be expected to have a Material Adverse Effect, ( iii ) will result in the creation or imposition of (or the obligation to create or impose) any Lien (other than Permitted Liens) upon any of the property or assets of any of Holdings, Parent and any Credit Party or any of its Subsidiaries pursuant to the terms of any indenture, mortgage, deed of trust, credit agreement or loan agreement, or any other material agreement, contract or instrument, in each case to which any of Holdings, Parent and any Credit Party or any of its Subsidiaries is a party or by which it or any of its property or assets is bound or to which it may be subject or ( iv ) will violate any provision of the certificate or articles of incorporation, certificate of formation, limited liability company agreement or by-laws (or equivalent organizational documents), as applicable, of any of Holdings, Parent and any Credit Party or any of its Subsidiaries.

(d) Approvals . No order, consent, approval, license, authorization or validation of, or filing, recording or registration with (except for those that have otherwise been obtained or made on or prior to the Closing Date and which remain in full force and effect on the Closing Date), or exemption by, any Governmental Authority is required to be obtained or made by, or on behalf of, any Credit Party, Holdings or Parent to authorize, or is required to be obtained or made by, or on behalf of, any Credit Party, Holdings or Parent in connection with, ( i ) the execution, delivery and performance of any Document or ( ii ) the legality, validity, binding effect or enforceability of any Document, except ( x ) orders, consents, approvals, licenses, authorizations, validations, filings, recordings, registrations and exceptions the failure to obtain of which would not reasonably be expected to give rise to a Material Adverse Effect and ( y ) the filings referred to in

Section 12(j), and all applicable waiting periods with respect thereto shall have expired without any action being taken by any competent authority which restrains, prevents or imposes materially adverse conditions upon the consummation of the Transaction or the other transactions contemplated by the Documents or otherwise referred to herein or therein.

(e) Financial Condition; Undisclosed Liabilities .

(i) On and as of the Closing Date, and after giving effect to the Transaction and to all Indebtedness (including the Loans and the issuance of the Letter of Credit) being incurred or assumed and Liens created by the Credit Parties in connection therewith, the Credit Parties, on a consolidated basis, shall be Solvent.

(ii) The Projections delivered to the Bank prior to the Closing Date have been prepared in good faith and are based on assumptions believed by the Obligor to be reasonable at the time of delivery, and there are no statements or conclusions in the Projections which are based upon or include information known to the Obligor to be misleading in any material respect or which fail to take into account material information known to the Obligor regarding the matters reported therein. On the Closing Date, the Obligor believes that the Projections are reasonable and attainable, it being recognized by the Bank, however, that projections as to future events are not to be viewed as facts and that the actual results during the period or periods covered by the Projections may differ materially from the projected results included in such Projections.

(f) Compliance with Employee Benefit Plans .

(i) Neither the Obligor nor any ERISA Affiliate has ever maintained or contributed to, or had any obligation to contribute to (or borne any liability with respect to) any Plan that is subject to Section 412 of the Code or Section 302 or Title IV of ERISA, a “ multiple employer plan” (within the meaning of the Code or ERISA) or any “multiemployer plan” (as defined in Section 4001(a)(3) of ERISA), except to the extent that the same could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. Schedule VII to the Credit Agreement sets forth each Plan as of the Closing Date; each Plan (and each related trust, insurance contract or fund) is in compliance with its terms and with all applicable laws, including without limitation ERISA and the Code, except to the extent that any such noncompliance could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect; each Plan (and each related trust, if any) which is intended to be qualified under Section 401(a) of the Code has received a favorable determination letter from the IRS to the effect that it meets the requirements of Sections 401(a) and 501(a) of the Code, except where the failure to be so qualified could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect; all contributions required to be made with respect to a Plan have been timely made or have been reflected on the most recent consolidated balance sheet filed prior to the date hereof or accrued in the accounting records of the Obligor and its Subsidiaries, except where the failure to do so could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect; neither the Obligor nor any ERISA Affiliate has incurred any liability (including any indirect, contingent or secondary liability) to or on account of any Plan pursuant to

Section 409, 502(i) or 502(l) of ERISA or Section 401(a)(29), 4971 or 4975 of the Code or expects to incur any such liability under any of the foregoing sections with respect to any Plan, which in any such case could, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect; no condition exists which presents a risk to the Obligor or any ERISA Affiliate of incurring a liability to or on account of a Plan pursuant to the foregoing provisions of ERISA and the Code, which in any such case could, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect; no action, suit, proceeding, hearing, audit or investigation with respect to the administration, operation or the investment of assets of any Plan (other than routine claims for benefits) is pending, expected or threatened, which in any such case could, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect; there has been no violation of the applicable requirements of Section 404 or 405 of ERISA or the exclusive benefit rule under Section 401(a) of the Code by any fiduciary or disqualified person with respect to any Plan for which the Obligor or any ERISA Affiliate may be directly or indirectly liable, except for any such violation which in any such case could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect; neither the Obligor or any ERISA Affiliate has filed, or is considering filing, an application under the IRS Employee Plans Compliance Resolution System or the Department of Labor’s Voluntary Fiduciary Correction Program with respect to any Plan, which filing in any such case could, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect; each group health plan (as defined in Section 607(1) of ERISA or Section 4980B(g)(2) of the Code) which covers or has covered employees or former employees of the Obligor or any ERISA Affiliate has at all times been operated in compliance with the provisions of Part 6 of subtitle B of Title I of ERISA and Section 49808 of the Code, except for such noncompliance as could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect; each group health plan (as defined in 45 Code of Federal Regulations Section 160.103) which covers or has covered employees or former employees of the Obligor or any ERISA Affiliate has at all times been operated in compliance with the provisions of the Health Insurance Portability and Accountability Act of 1996 and the regulations promulgated thereunder, except where the failure to do so could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect; and the Obligor and each ERISA Affiliate may cease contributions to or terminate any employee benefit plan maintained by any of them without incurring any liability which could, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.

(ii) Each Foreign Pension Plan has been maintained in substantial compliance with its terms and with the requirements of any and all applicable Laws and has been maintained, where required, in good standing with applicable regulatory authorities. All contributions required to be made with respect to a Foreign Pension Plan have been timely made. Neither the Obligor nor any ERISA Affiliate has incurred any material obligation in connection with the termination of or withdrawal from any Foreign Pension Plan. To the knowledge of the Obligor, each Plan and Foreign Pension Plan that is a defined benefit pension plan that is required to be funded complies in all respects with such applicable funding requirements, except for any failure to so comply that could not,

individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.

(iii) Each of the Obligor and each ERISA Affiliate is in substantial compliance with its respective obligations relating to social security, pension and retirement, and worker’s housing statutory obligations as well as to all employee benefit plans established, maintained or contributed to by it and does not have outstanding any liabilities with respect to any such employee benefit plans, except for such liabilities as could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.

(g) Litigation . Except as disclosed in Schedule VIII to the Credit Agreement, there are no actions, suits or proceedings pending or, to the knowledge of the Obligor, threatened in writing, ( i ) with respect to the Transaction or any Document entered into contemporaneously with the consummation of the Transaction, ( ii ) with respect to any Document (other than those referred to in clause (i)) to which the Obligor or any of its Subsidiaries is a party or ( iii ) that have had, or could reasonably be expected to have, either individually or in the aggregate, a Material Adverse Effect.

(h) Consummation of the Equity Financing, Consummation of the Acquisition .

(i) The Equity Financing has been consummated and the Obligor has received cash proceeds in an amount at least equal to the Minimum Equity Financing Amount in the form of a capital contribution by the Sponsors to the Obligor in accordance with the Equity Financing Documents and all applicable Laws.

(ii) The Acquisition has been consummated in accordance with the terms and conditions of the Acquisition Documents and all applicable Laws (without any waiver by the Obligor or its subsidiaries of any conditions precedent to their obligations thereunder which have not been consented to by the Required Lenders).

(i) True and Complete Disclosure . All factual information (taken as a whole) furnished by or on behalf of the Obligor and the Subsidiary Guarantors in writing to the Bank (including without limitation all information contained in the Documents) for purposes of or in connection with this Agreement, the other Related Documents or any transaction contemplated herein or therein is, and all other such factual information (taken as a whole) hereafter furnished by or on behalf of the Obligor in writing to the Bank, in each case to the best of the Obligor’s knowledge, will be, true and accurate in all material respects on the date as of which such information is dated or certified and not incomplete by omitting to state any fact necessary to make such information (taken as a whole) not misleading in any material respect at such time in light of the circumstances under which such information was provided, it being understood and agreed that for purposes of this section, such factual information shall not include the Projections or information of a general economic or industry nature.

(j) Security Documents .

(i) The provisions of the Security Agreement are effective to create in favor of the Collateral Agent for the benefit of the Bank a legal, valid and enforceable security interest in all right, title and interest of the Credit Parties in the Security Agreement Collateral described therein, and the Collateral Agent, for the benefit of the Bank, has a fully perfected security interest in all right, title and interest in all of the Security Agreement Collateral described therein, subject to no other Liens other than the Liens purported to be created pursuant to the Lender Security Agreement.

(ii) Upon ( i ) the delivery to, and continuous possession by, the Collateral Agent (or the Escrow Agent acting as bailee thereof) of all applicable Instruments, Chattel Paper and Documents in which a security interest is perfected by possession and ( ii ) the due filing of the financing statements referred to in Section 10(k) in the appropriate filing offices indicated in Schedule VI of the Credit Agreement, the security interests created under the U.S. Intercompany Note Pledge Agreement in favor of the Collateral Agent, as pledgee, for the benefit of the Bank, constitute perfected security interests in the U.S. Intercompany Note Pledge Agreement Collateral described in the U.S. Intercompany Note Pledge Agreement, subject to no security interests of any other Person, other than Liens in favor of the Secured Parties created pursuant to the Lender U.S. Intercompany Note Pledge Agreement). Except as set forth in the immediately preceding sentence, no filings or recordings are required in order to maintain the perfection or priority of the security interests created in the U.S. Intercompany Note Pledge Agreement Collateral under the U.S. Intercompany Note Pledge Agreement.

(iii) Upon ( i ) the delivery to, and continuous possession by, the Collateral Agent (or the Escrow Agent acting as bailee thereof) of all applicable Equity Interests represented by certificated securities and ( ii ) the due filing of the financing statements referred to in Section 10(k) in the appropriate filing offices indicated in Schedule VI of the Credit Agreement, the security interests created under the U.S. Stock Pledge Agreement in favor of the Collateral Agent, as pledgee, for the benefit of the Bank, constitute perfected security interests in the U.S. Stock Pledge Agreement Collateral described in the U.S. Stock Pledge Agreement, subject to no security interests of any other Person, other than ( x ) Liens in favor of McDonald’s created pursuant to the McDonald’s U.S. Stock Pledge Agreement and the Master Franchise Agreement and ( y ) Liens in favor of the Secured Parties created pursuant to the Lender U.S. Stock Pledge Agreement. Except as set forth in the immediately preceding sentence, no filings or recordings are required in order to maintain the perfection or priority of the security interests created in the U.S. Stock Pledge Agreement Collateral under the U.S. Stock Pledge Agreement.

(k) Capitalization . On the Closing Date, the authorized Capital Stock of (i) the Obligor (the “ Obligor Common Stock ”) consists of 1,000 shares of common stock, €100 par value per share, 200 of which shares are issued and outstanding and owned by Holdings, (ii) Holdings consists of cooperative interests, all of which are issued and outstanding and 99.9% of which are owned by the Parent and 0.01% of which are owned by the Permitted Holder and (iii)

Parent consists of 400,000 shares of common stock, $1,000 par value per share, 390,000 of which shares are issued and outstanding and owned by the Sponsors. All such outstanding shares have been duly and validly issued, are fully paid and non-assessable and have been issued free of preemptive rights. On the Closing Date, the Obligor does not have outstanding any securities convertible into or exchangeable for its Capital Stock or outstanding any rights to subscribe for or to purchase, or any options for the purchase of, or any agreement providing for the issuance (contingent or otherwise) of, or any calls, commitments or claims of any character relating to, its Capital Stock or any stock appreciation or similar rights, except for the McDonald’s Call Option.

(l) Subsidiaries . On and as of the Closing Date, the Obligor has no Subsidiaries other than those Subsidiaries listed on Schedule IX to the Credit Agreement. Schedule IX to the Credit Agreement sets forth, as of the Closing Date, the percentage ownership (direct and indirect) of the Obligor in each class of Capital Stock or other Equity Interests of each of its Subsidiaries and also identifies the direct owner thereof. On the Closing Date, all outstanding Capital Stock of each Subsidiary of the Obligor have been duly and validly issued, are fully paid and non-assessable and have been issued free of preemptive rights. On the Closing Date, no Subsidiary of the Obligor has outstanding any securities convertible into or exchangeable for its Capital Stock or outstanding any right to subscribe for or to purchase, or any options or warrants for the purchase of, or any agreement providing for the issuance (contingent or otherwise) of or any calls, commitments or claims of any character relating to, its Capital Stock or any stock appreciation or similar rights, except ( i ) the McDonald’s Call Option and ( ii ) as assigned to it in Schedule X to the Credit Agreement.

(m) Compliance with Statutes, etc .

(i) Each of the Obligor and each of its Subsidiaries is in compliance with all applicable statutes, regulations and orders of, and all applicable restrictions imposed by, all Governmental Authorities in respect of the conduct of its business and the ownership of its property (including without limitation applicable statutes, regulations, orders and restrictions relating to environmental standards and controls), except such noncompliances as could not, either individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.

(ii) Each of the Obligor and its Subsidiaries is in compliance with all applicable Environmental Laws, except such non-compliance as could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. The Obligor has obtained all permits which are required under applicable Environmental Laws in connection with the business or operations of the Obligor and each of such permits is in full force and effect and the Obligor is in compliance with the requirements of any permits issued under such Environmental Laws, except such permits the failure to obtain, maintain effective or comply with could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.

(n) Investment Company Act . Neither the Obligor nor any of its Subsidiaries is an “investment company” or a company “controlled” by an “investment company,” within the meaning of the Investment Company Act of 1940, as amended.

(o) Indebtedness . Schedule XI to the Credit Agreement sets forth a list of all Indebtedness (including Contingent Obligations) of the Obligor and its Subsidiaries as of the Closing Date and which is to remain outstanding after giving effect to the Transaction (excluding the Loans), in each case showing the aggregate principal amount thereof and the name of the respective borrower and any Credit Party or any of its Subsidiaries which directly or indirectly guarantees such debt.

(p) Pari Passu Ranking . The obligations of the Obligor hereunder constitute direct, unconditional and unsubordinated Indebtedness of the Obligor that rank at least pari passu in right of payment with all other present and future unsubordinated Indebtedness of the Obligor.

(q) Form of Documentation . Except as set forth in Schedule I, each of the Related Documents is in proper legal form under the Laws of each of the jurisdictions comprising the Territory for the enforcement thereof under such Laws.

(r) Secured Hedging Agreements . None of the Obligor or any of its Subsidiaries is a party to, or has entered into any Secured Hedging Agreements other than the Initial Hedging Agreement.

(s) No Default . No event has occurred and is continuing which constitutes a Default or an Event of Default.

(t) No Immunity . Neither the Obligor, nor any other Credit Party, nor Holdings, nor any of their respective properties or revenues has any right of immunity on the grounds of sovereignty or otherwise from jurisdiction of any court or from setoff or any legal process (whether through service or notice, attachment prior to judgment, attachment in aid of execution, execution or otherwise) under the applicable Laws of any jurisdiction. The execution and delivery of the Documents to which they are a party by the Obligor and the other Credit Parties and the performance by them of their obligations thereunder constitute commercial transactions.

Section 13. Affirmative Covenants . The Obligor hereby covenants and agrees that on and after the Closing Date and until the Expiration Date and obligations of the Obligor incurred hereunder are paid in full:

(a) Financial Statements and Information . The Obligor will furnish to the Bank, either electronically or in hard copies:

(i) Annual Financial Statements . As soon as available and in any event within 120 days after the close of each fiscal year of the Obligor ending after the Closing Date, the consolidated balance sheet of the Obligor and its consolidated Subsidiaries as at the end of such fiscal year and the related consolidated statements of income and retained earnings and statements of cash flows for such fiscal year, certified by Ernst & Young or other independent certified public accountants of recognized international standing to the effect that such financial statements have been prepared in accordance with U.S. GAAP and fairly present in all material respects the financial condition of the Obligor and its consolidated Subsidiaries as of the dates indicated and the results of their operations and cash flows.

(ii) Quarterly Financial Statements. As soon as available and in any event within 90 days after the close of each quarterly accounting period ending after the Closing Date in each fiscal year of the Obligor, the consolidated balance sheet of the Obligor and its consolidated Subsidiaries as at the end of such quarterly accounting periods and the related consolidated statements of income and retained earnings and statement of cash flows, prepared in accordance with U.S. GAAP and fairly representing in all material respects the financial condition of the Obligor and its consolidated Subsidiaries as of the dates indicated and the results of its operations and changes in its cash flows for the periods indicated, subject to normal year-end audit adjustments and the absence of footnotes.

(iii) Officer’s Certificates . Promptly, and in any event within three Business Days after the Obligor delivers the same to the Beneficiary, copies of all certificates that the Obligor may deliver to the Beneficiary in accordance with Section 7.19 ( Compliance Certificate; Notice ) of the Master Franchise Agreement.

(iv) Notices of Event of Default or Fee Increase Event, Document Compliance and Litigation . Promptly, and in any event within three Business Days after any Authorized Officer of the Obligor or any Subsidiary Guarantor obtains knowledge thereof, notice of ( i ) the occurrence of any event which constitutes an Event of Default or Fee Increase Event hereunder, ( ii ) the occurrence of any Effective Termination or an automatic termination pursuant to Section 22.5 of the Master Franchise Agreement has occurred and the date of such occurrence and ( iii ) any notice of any Claim (including, without limitation, any Environmental Claim) pending or threatened in writing ( x ) against the Obligor, the Parent, Holdings or any of the Subsidiary Guarantors that is a party to the Master Franchise Agreement, which Claim(s), either individually or in the aggregate, has had, or could reasonably be expected to have, a Material Adverse Effect or ( y ) with respect to this Agreement or the Master Franchise Agreement, which could reasonably be expected to result in the exercise of any remedies under, or termination of, this Agreement or the Master Franchise Agreement.

(v) Environmental Matters . Promptly, and in any event within three Business Days after the Obligor delivers the same to the Beneficiary under the Master Franchise Agreement, notice of any pending or threatened in writing Environmental Claim against the Obligor or any of its Subsidiaries.

(vi) Post-Closing Approvals . Promptly, and in any event within three Business Days after the Obligor delivers the same to the Lead Arranger, copies of all orders, consents or approvals, or confirmations of filings, recordings or registrations with, or exemption by any Governmental Authority, delivered to the Lead Arranger under the Credit Agreement.

(b) Refinancing; Other Indebtedness .

(i) In connection with any Refinancing, the Obligor shall use commercially reasonable efforts to negotiate the most favorable limitations (in light of then-current market conditions) on the ability of the issuer of the Indebtedness incurred in the

Refinancing to declare dividends and other distributions in respect of its equity interests as are then customarily available in financings of equivalent type and size by similar borrowers.

(ii) The Obligor shall ensure that the terms of any Indebtedness incurred by any Subsidiary of the Obligor at any date after the Closing Date (other than Indebtedness incurred in connection with a Refinancing) do not limit or restrict dividends and other distributions in respect of such Subsidiary’s equity interests by the Obligor and its Affiliates or that the Bank shall have a direct contractual claim against such Subsidiary’s assets and revenues that ranks pari passu with such Indebtedness.

(c) Master Franchise Agreement . The Obligor shall use its commercially reasonable efforts to ensure it and its Affiliates retain their respective material rights under the Master Franchise Agreement, taken as a whole.

(d) Existence; Franchises . The Obligor will, and will cause each of its Subsidiaries to, do or cause to be done, all things necessary to preserve and keep in full force and effect its existence and its material rights, franchises, licenses, permits, copyrights, trademarks and patents, provided , however , that nothing in this provision shall ( i ) prevent the withdrawal by the Obligor or any of its Subsidiaries of its qualification as a foreign company in any jurisdiction if such withdrawal could not, either individually or in the aggregate, reasonably be expected to have a Material Adverse Effect, ( ii ) require the Obligor or any of its Subsidiaries to preserve or keep in full force and effect any right, franchises, license, permits, copyrights, trademarks or patents, if the failure to do so could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect or ( iii ) prevent any transaction permitted pursuant to Section 8.02 of the Credit Agreement.

(e) Compliance with Statutes, etc. The Obligor will, and will cause each of its Subsidiaries to, comply with all applicable Laws of, and all applicable restrictions imposed by, all Governmental Authorities in respect of the conduct of its business and the ownership of its property (including applicable Environmental Laws), except such noncompliances as could not, either individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.

(f) Books, Records and Inspections . The Obligor will keep proper books of record and accounts in which full, true and correct entries in conformity with Applicable GAAP and all requirements of Law shall be made of all dealings and transactions in relation to its business and activities. The Obligor will permit officers and designated representatives of the Bank from time to time to visit and inspect, under guidance of representatives of the Obligor, any of the properties of the Obligor, and to examine the books of account and records of the Obligor and discuss the affairs, finances and accounts of the Obligor with, and be advised as to the same by, its and their officers and independent accountants, all upon reasonable prior notice and at such reasonable times as the Bank may reasonably request.

(g) Performance of Obligations. The Obligor will perform all of its obligations under the terms of each mortgage, indenture, security agreement, loan agreement or credit agreement and each other agreement, contract or instrument by which it is bound (including, without limitation, (x) all obligations under Franchise Documents and (y) all claims of materialmen or

warehousemen which, if unpaid, might by operation of Law give rise to a Lien), except to the extent that the failure to permit such obligations ( i ) could not reasonably be expected to have a Material Adverse Effect or ( ii ) with respect to the payment, observance or performance of any Indebtedness (other than the obligations of the Obligor hereunder), would not give rise to an Event of Default.

(h) Payment of Taxes . The Obligor will pay and discharge all taxes, assessments and governmental charges or levies imposed upon it or upon its income or profits or upon any properties belonging to it, prior to the date on which penalties attach thereto, and all lawful claims, provided that the Obligor shall not be required to pay any such tax, assessment, charge, levy or claim to the extent that ( x ) the validity or amount thereof is being contested in good faith by appropriate proceedings diligently pursued, ( y ) the Obligor has maintained on its books adequate reserves with respect thereto in accordance with Applicable GAAP and ( z ) the failure to make payment pending such contest would not reasonably be expected to result in a Material Adverse Effect.

(i) Pari Passu Ranking . The Obligor will cause its obligations hereunder to rank at least pari passu in right of payment with all of its other present and future unsubordinated Indebtedness, it being understood, for the avoidance of doubt, that subject to Section 14(e), the incurrence of Indebtedness (including without limitation the Indebtedness incurred under the Credit Agreement) secured by security interests in collateral other than the collateral in which security interests are purported to be created by the Security Agreement, the U.S. Pledge Agreements and the Foreign Pledge Agreements shall not be deemed to constitute a violation of this Section 13(i).

(j) End of Fiscal Years; Fiscal Quarters . The Obligor will cause ( i ) its and each of its Subsidiaries’ fiscal years to end on December 31 of each calendar year and ( ii ) its and each of its Subsidiaries’ fiscal quarters to end on March 31, June 30, September 30 and December 31 of each calendar year.

(k) Post Closing Financial Statements . Promptly, and in any event within three Business Days after the Obligor delivers the same to the Lead Arranger, and in no event later than 150 days after the Closing Date, the Obligor will furnish to the Bank ( i ) the Audited Borrower Financial Statements and ( ii ) the Audited Existing Territory Financial Statements for Argentina, Brazil, Mexico, Puerto Rico and Venezuela.

(l) Maintenance of Property; Insurance . The Obligor will, and will cause each of the MF Subsidiaries that is a Subsidiary Guarantor, to ( i ) keep all property necessary to the business of the Obligor and such MF Subsidiaries in good working order and condition, ordinary wear and tear excepted, except to the extent that the failure to do so could not reasonably be expected to have a Material Adverse Effect, and ( ii ) maintain with financially sound and reputable insurance companies insurance on all such property and against all such risks as is consistent and in accordance with industry practice for companies similarly situated owning similar properties and engaged in similar businesses as the Obligor and such MF Subsidiaries, except to the extent that the failure to do so could not reasonably be expected to have a Material Adverse Effect.

(m) Intercompany Debt . The Obligor shall, and shall cause LatAm LLC to, evidence each Intercompany Loan to be evidenced by an Intercompany Note (except Registered Intercompany Notes and to the extent otherwise permitted by the Credit Agreement) and to be duly pledged in first priority to the Collateral Agent pursuant to the U.S. Intercompany Note Pledge Agreement or in a manner otherwise acceptable to the Collateral Agent.

(n) Secured Restricted Real Estate . Within 180 days following the Effective Date (as such term is defined in the MFA), the Obligor shall grant, and shall cause each of its Subsidiaries to grant, an irrevocable power of attorney in favor of the Bank on terms and scope reasonably satisfactory to the Bank, authorizing the Bank or its designees to take such actions on behalf of the Obligor and its Subsidiaries as may be required or advisable for the Obligor and its Subsidiaries to comply with Section 7.20 of the MFA and thereafter to maintain a continuing perfected first priority Lien in favor of McDonald’s in all of its right, title and interest in, to and under the Secured Real Estate (as such term is defined in the MFA). At all times following the 180-day period following the Effective Date, the Obligor and its Subsidiaries shall maintain and preserve a continuing perfected first priority Lien in favor of McDonald’s in all of its right, title and interest in, to and under the Secured Real Estate (as such term is defined in the MFA).

(o) Secured Hedging Agreements . The Obligor shall not, and shall not permit any of its Subsidiaries to, enter into any Secured Hedging Agreement (other than the Initial Hedging Agreement) granting a security interest on any asset or property that constitutes collateral under any of the Related Documents.

(p) Further Assurances . The Obligor agrees that it shall take, and shall cause each Grantor (as defined in the McDonald’s Intercreditor Agreement) to take, such further action and execute and deliver such additional documents and instruments (in recordable form, if requested) as the Administrative Agent, the Bank or McDonald’s, as applicable, may reasonably request to effectuate the terms of this Agreement or the McDonald’s Intercreditor Agreement.

Section 14. Negative Covenants . The Obligor hereby covenants and agrees that on and after the Closing Date and until the Expiration Date and obligations of the Obligor incurred hereunder are paid in full:

(a) Financial Condition . The Obligor shall not permit the Obligor and its Subsidiaries, on a consolidated basis, to cease to be Solvent at any time.

(b) Modifications of Master Franchise Agreement . The Obligor will not (i) cause or permit any direct or indirect Transfer, in whole or in part, of the Master Franchise Agreement and (ii) amend, modify, change or waive any term or provision of the Master Franchise Agreement without the consent of the Bank, unless such amendment, modification, change or other action contemplated by this Section 14(b) could not reasonably be expected to be adverse in any material respect to the interests of the Bank (it being understood that any amendment, modification or waiver to the Master Franchise Agreement that makes the terms of the Master Franchise Agreement less restrictive to, or burdensome on, the Applicant shall be deemed not adverse to the interests of the Bank in any material respect).

(c) Leverage Ratio . The Obligor shall not ( i ) permit the Leverage Ratio for any Test Period ending on the last day of a fiscal quarter of the Obligor to be greater than 4.0:1.0 and ( ii ) take, or permit any Credit Party to take, any action at any time that would result in a failure by the Obligor to comply with the preceding clause (i) if such action were in effect on the last day of a Test Period.

(d) Limitation on Guaranties . The Obligor shall not assume or otherwise become liable for any Contingent Obligation with respect to any Subsidiary, if and to the extent that such assumption or other liability would cause the aggregate amount of such Contingent Obligations of the Obligor with respect to its Subsidiaries to exceed U.S.$10,000,000 (or its equivalent in any other currency) at any time.

(e) No Debt Assumption Election . The Obligor shall not, without the prior consent of the Bank, take or cause to be taken any action to make a “ Debt Assumption Election” (as that term is defined in the Master Franchise Agreement) under Section 21.6.2 ( Call Option ) of the Master Franchise Agreement.

(f) Limitation on Certain Amendments . The Obligor shall not. without the prior written consent of the Bank, amend, supplement or otherwise modify, or permit the amendment, supplement, or other modification of, any provision of (x) the Credit Agreement if the effect of such amendment, supplement or other modification would be to (i) (A) increase the principal amount of the indebtedness outstanding under the Credit Agreement to an amount in excess of $375,000,000, (B) increase any interest rate margin on the loans under the Credit Agreement by more than 300 basis points (3.00%) (other than by operation of a step-up in rate as a result of the passage of time or the imposition of a default rate of interest, as such step-up or default rate of interest exists in the Credit Agreement as of the date hereof), or (C) change the ‘base’ rate to which any such interest rate margin applies, (ii) extend the final maturity of the loans under the Credit Agreement by more than twelve months or (iii) impose on the Obligor any representations, warranties, covenants, events of default or remedies that are more restrictive or burdensome to the Obligor in any material respect than the terms and provisions of the Credit Agreement as in effect on the date of this Agreement, or alter any definitions to effect any of the foregoing; provided that nothing contained in this Section 14(f) shall be construed to require the consent of the Bank to any waiver by the lenders under the Credit Agreement of any default or event of default under the Credit Agreement or other term, provision or condition contained in the Credit Agreement or of any of the rights and remedies of the lenders thereunder, and (y) any of the Lender Security Agreement, the Lender U.S. Stock Pledge Agreement, the McDonald’s U.S. Stock Pledge Agreement and the Lender U.S. Intercompany Note Pledge Agreement if such amendment, supplement, or modification would be materially adverse to the ‘interests of the Bank or would result in any obligation or liability (other than those secured thereby on the Closing Date) to be secured by the assets and properties which constitute collateral under any of the foregoing.

(g) Limitation on Certain Actions Relating to the Credit Agreement . The Obligor shall not consent pursuant to the Credit Agreement to the assignment or other transfer of loans thereunder (x) to any Person if, after giving effect to such assignment or transfer, any Person would hold a greater principal amount of loans under the Credit Agreement than the aggregate

principal amount of loans then held by Banco Santander Central Hispano, S.A. and its Affiliates or (y) to any Person other than a financial institution or commercial bank engaged in the business of making loans in the ordinary course of its business or the Affiliates of any such institution or bank.

Section 15. Events of Default . The occurrence of any of the following events shall be an “Event of Default” hereunder:

(a) any reimbursement obligation or interest accrued and payable pursuant to Section 3(a) this Agreement shall not be paid within 30 Business Days after the date of the draw giving rise to such reimbursement obligation; or

(b) any other amount payable under this Agreement or under any Related Document shall not be paid when due and payable and such nonpayment default shall not be cured within 30 Business Days; or

(d) the filing by Obligor of a petition or answer or consent seeking relief under Title II of the United States Code, as now or hereafter in effect, or the initiation of a similar or comparable proceeding under any other applicable federal or state bankruptcy, insolvency or other similar law, or the consent by Obligor to the institution of proceedings under such Title 11 or a similar or comparable proceeding under any such other law or to the filing of any such petition or to the appointment of a receiver, liquidator, assignee, trustee, custodian, sequestrator (or other similar official) with respect to Obligor or any part of its property, or the making by Obligor of any assignment for the benefit of creditors, or the failure of Obligor generally to pay its debts as they become due, or the taking of corporate or other action to authorize any of the foregoing; or

(e) the entry of a decree or order by a court having jurisdiction for relief in respect of Obligor under Title 11 of the United States Code, as now or hereafter in effect, or any similar or comparable action of any court having jurisdiction under any other applicable federal or state bankruptcy, insolvency or other similar law, or appointing a receiver, liquidator, assignee, trustee, sequestrator (or other similar official) of Obligor or any part of its properties, or ordering the winding-up or the liquidation of the affairs of Obligor; or

(f) a proceeding or case shall be commenced, without the application or consent of the Obligor in any court of competent jurisdiction, seeking ( i ) the Obligor’s liquidation, dissolution, arrangement or winding up, or the composition or readjustment of its debts, ( ii ) the appointment of a receiver, custodian, trustee, examiner, liquidator or the like of the Obligor or of all or substantially all of its property or assets, or ( iii ) similar relief in respect of the Obligor under any Law relating to bankruptcy, insolvency, winding-up, or composition or adjustment of debts, and such proceeding or case shall continue undismissed, or any order, judgment or decree approving or ordering any of the foregoing shall be entered and continue unstayed and in effect, for a period of 45 days; or

(g) the occurrence and continuance of a Material Breach (as such term is defined in the Master Franchise Agreement) under the Master Franchise Agreement, which Material Breach shall continue for 90 days from the date such Material Breach first occurred and shall not have been waived; or

(h) the occurrence and continuance of a Material Breach (as such term is defined in the Master Franchise Agreement) under the Master Franchise Agreement, which Material Breach shall continue for 90 days from the date such Material Breach first occurred, without giving effect to any waiver or modification of, or amendment or supplement to, the Master Franchise Agreement which has the effect, directly or indirectly, of waiving or curing such Material Breach; or

(i) the failure by the Master Franchisee (as such term is defined in the Master Franchise Agreement) to comply with any of its obligations under Section 7.20 of the Master Franchise Agreement.

Section 16. Amendments, Etc. No amendment of any provision of this Agreement shall in any case be effective unless the same shall be in writing and signed by the parties hereto. No waiver of any provision of this Agreement, or consent to any departure by the Obligor therefrom, shall in any case be effective unless the same shall be in writing and signed by the Bank, and then such waiver or consent shall be effective only in the specific instance and for the specific purpose for which given.

Section 17. Notices. Except as otherwise expressly provided herein, all notices, consents, approvals, certifications and other communications provided for herein shall be in writing (the terms “in writing” or “written”, as used herein with respect to such communications, include reference to communications that are telecopied, sent by overnight courier or messenger) and telecopied or sent by recognized overnight courier or messenger service, or by registered or certified U.S. mail, return receipt requested, to the intended recipient at the address or telecopy number assigned to it in the Credit Agreement, or as to the Beneficiary, McDonald’s Latin America, LLC, c/o McDonald’s Corporation, 2915 Jorie Boulevard, Oak Brook, IL 60523, facsimile: (630) 623-5211, Attention: Treasurer McDonald’s Corporation with a copy to McDonald’s Corporation, 2915 Jorie Boulevard, Oak Brook, IL 60523, facsimile: (630) 6237012, Attention: General Counsel (or such other address as the initial Beneficiary may notify the Bank in writing from time to time), or as to any other Person, at such address and telecopy number as shall be designated by such Person in a notice to the party sending such communication. Each such notice, request or other communication shall be effective ( i ) if given by registered or certified mail, 72 hours after such communication is deposited in the mails with all necessary postage prepaid, addressed as aforesaid or ( ii ) if given by any other means, when delivered at the address specified in this Section, provided that notices given by telecopier or other facsimile transmission shall not be effective until received. All notices provided by the Bank to the Obligor hereunder shall also be provided to each Beneficiary. Any such address, telecopy number or other information with respect to any of the foregoing Persons may be changed at any time by written notice to the parties to this Agreement given in accordance with the provisions of this Section 17.

Section 18. No Waiver; Remedies Cumulative. No failure on the part of the Bank to exercise, and no delay in exercising, any right hereunder shall operate as a waiver thereof; nor shall any single or partial exercise of any right hereunder preclude any other further exercise thereof or the exercise of any other right. The remedies herein provided are cumulative and not exclusive of any remedies provided by law.

Section 19. Indemnification. The Obligor agrees to indemnify and hold harmless the Bank and its directors, officers, affiliates, employees, attorneys and agents (collectively, the “ Indemnified Parties ”) from and against any and all actions, causes of action, claims, suits, proceedings, judgments, damages, losses, costs, expenses (including fees and disbursements of counsel, expert witness fees and other dispute resolution expenses) and other liabilities whatsoever (collectively, the “ Indemnified Liabilities ”) which the Indemnified Parties may incur (or which may be claimed against any Indemnified Party by any person or entity whatsoever and without regard to whether the applicable Indemnified Party is a party to any proceeding out of which such indemnified amounts arise) by reason of or in connection with

(a) the execution, delivery, transfer or assignment of proceeds of, or payment or failure to pay under, the Letter of Credit, any pre-advice of the issuance of the Letter of Credit or any transaction(s) underlying the Letter of Credit,

(b) the execution, delivery, amendment, administration or enforcement of this Agreement or any other Related Document, including without limitation any violation or breach by the Obligor of this Agreement or any other Related Document to which it is a party, or the occurrence of any Event of Default,

(c) any payment or action taken or omitted to be taken in connection with the Letter of Credit, this Agreement or any Related Document (including any action to ( i ) restrain any presentation, ( ii ) compel or restrain any payment or the taking of any other action under the Letter of Credit, ( iii ) obtain damages for wrongful dishonor or honor of the Letter of Credit or for breach of any other duty arising out of or related to the Letter of Credit, ( iv ) compel or restrain the taking of any action under this Agreement or any other Related Document or ( v ) obtain similar relief (including by way of interpleader, declaratory judgment, attachment or otherwise), regardless of who the prevailing party is in any such action),

(d) the enforcement of this Agreement or any other Related Document or any rights Or remedies under or in connection with this Agreement, the Letter of Credit or any other Related Document, or

(e) any act or omission, whether rightful or wrongful, of any present or future de jure or de facto government or governmental authority (including with respect to any document or property received under this Agreement, the Letter of Credit or any other Related Document) or any other cause beyond the Bank’s control,

provided that the Obligor shall not be required to indemnify any Indemnified Party for any Indemnified Liabilities to the extent arising from ( A ) the willful misconduct or gross negligence of any Indemnified Party or ( B ) the Bank’s wrongful and willful failure to pay under the Letter

of Credit Caller the presentation to it by the Beneficiary of a demand and cenificate strictly complying with the terms and conditions of such Letter of Credit.

If and to the extent the foregoing undertaking may be unenforceable for any reason, the Obligor agrees to make the maximum contribution to the payment of each of the Indemnified Liabilities which is permitted under applicable law.

Nothing in this Section 19 is intended to limit the reimbursement obligation of the Obligor hereunder. If any action shall be brought against any of the Indemnified Parties in respect of which indemnity may be sought against the Obligor, such Indemnified Party shall promptly notify the Obligor in writing. The Indemnified Parties shall not settle any such action in a manner that constitutes an express admission of liability by the Obligor without consent of the Obligor.

The obligations of the Obligor under this Section 19 shall survive the Expiration Date, the occurrence of any Event of Default and any remedies taken by the Bank in connection therewith (including without limitation any foreclosure on the Collateral), the expiration or termination of, or any payment under, the Letter of Credit, the termination of the Security Agreement, any termination of the security interests create under the Security Agreement, and any payment, distribution, return, reversion, release, substitution or discharge of all or any portion of the Collateral held thereunder.

Section 20. Continuing Obligation . This Agreement is a continuing obligation and shall be binding upon and inure to the benefit of and be enforceable by the Bank and Obligor.

Section 21. Letter of Credit Transfer or Extension; Termination; Related Matters . The Letter of Credit shall automatically terminate at the Expiration Date thereof unless it shall have been previously terminated according to the provisions of this Agreement and the Letter of Credit. Not less than 60 days prior to the Expiration Date, the Obligor may request the Bank to extend the Expiration Date in accordance with the provisions hereof, and, if so requested the Bank shall have the right (but not the obligation) to extend the Expiration Date (as previously so extended, if applicable) for the Letter of Credit for one or more additional periods acceptable to the Bank and the Obligor commencing at the applicable Expiration Date for the Letter of Credit. If the Bank elects to exercise its right to so extend the Expiration Date for the Letter of Credit it will give prompt written notice amending such Letter of Credit to reflect such election to ( i ) the Obligor and ( ii ) the Beneficiary at such address as shall have been specified to the Bank by the Beneficiary in accordance with Section 17 hereof, whereupon the Expiration Date of the Letter of Credit shall be so extended. No amendment to the Letter of Credit extending the Expiration Date thereof pursuant to this Section 21 shall amend or waive any other provision of the Letter of Credit unless such amendment or waiver is agreed to by the Obligor.

Section 22. Liability of the Bank . Neither the Bank nor any of its officers, directors, employees or agents shall be liable or responsible to the Obligor for ( A ) the use which may be made of the Letter of Credit or any acts or omissions of any Beneficiary in connection therewith; ( B ) the validity, sufficiency or genuineness of documents, even if such documents should in fact prove to be in any or all respects invalid, insufficient, fraudulent or forged; ( C ) payments by the Bank against presentation of documents which do not comply strictly with the terms and

conditions of the Letter of Credit, including failure of any documents to bear any reference or adequate reference to the Letter of Credit; or ( D ) any other circumstances whatsoever in making or failing to make payment under the Letter of Credit, except only that the Obligor shall have a claim against the Bank, and the Bank shall be liable to the Obligor to the extent, but only to the extent, of any direct and actual (as opposed to indirect, consequential, special or punitive) damages suffered by the Obligor which the Obligor proves were caused by ( i ) the Bank’s willful misconduct or gross negligence in honoring documents presented under the Letter of Credit which do not at least substantially comply with the terms of such Letter of Credit (but only if there shall have been a wrongful payment as a result thereof, or ( ii ) the Bank’s wrongful and willful failure to pay under the Letter of Credit after the presentation to it by the Beneficiary of the Letter of Credit and a demand and certificate strictly complying with the terms and conditions of the Letter of Credit. None of the Bank’s rights or obligations hereunder or under any other Related Documents shall be affected by any acts or omissions of any Beneficiary.

Section 23. Limitation of Liability. No party to this Agreement shall be liable to any other party for any lost profits, diminution in value, incidental, consequential, special, exemplary or punitive damages.

Section 24. Severability. Any provision of this Agreement which is prohibited, unenforceable or not authorized in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition, unenforceability or non-authorization without invalidating the remaining provisions hereof or affecting the validity, enforceability or legality of such provision in any other jurisdiction.

Section 25. Governing Law. This Agreement shall be governed by, and construed and enforced in accordance with, the law of the State of New York.

Section 26. Counterparts. This Agreement may be signed in any number of counterparts, each of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument.

Section 27. Currency. With respect to any monetary amount in a currency other than Dollars, such amount shall be deemed the Dollar equivalent thereof determined by the amount of Dollars obtained at the time of determination by converting the foreign currency involved in such computation into Dollars at the spot rate for the purchase of Dollars with the applicable foreign currency as quoted on the Reuters 3000 Xtra or Bloomberg systems (or their respective successors) at approximately 11:00 a.m. (New York time) on the date not more than two Business Days prior to such determination.

Section 28. Headings. Section headings in this Agreement are included herein for convenience of reference only and shall not constitute a part of this Agreement for any other purpose.

Section 29. No Assignment Without Consent. Without limiting the transfer provisions of the Letter of Credit, neither the Bank nor the Obligor shall assign or otherwise transfer any of its rights or obligations hereunder without the written consent of the other party, and any purported assignment or transfer without such consent shall be void and without effect; provided however

that (i) the Bank may assign its rights and obligations hereunder, if so long as no Event of Default under Sections 15(a), (d) or (e) is not then existing, the Obligor provides its prior written consent to such assignment (which consent shall not be unreasonably withheld, conditioned or delayed by the Obligor) and (ii) if an Event of Default under Sections 15(a), (d) or (e) is then existing, the Bank may assign its right and obligations hereunder and no consent therefor from the Obligor shall be required. In the case of the first such assignment (other than an assignment permitted pursuant to clause (ii) above), prior to such assignment the Obligor and the Bank shall have entered into amendments to this Agreement reasonably satisfactory to each of the Obligor and the Bank to accommodate the accession of additional Persons hereunder, through, among other things, the appointment of Credit Suisse or an Affiliate thereof (or any other Person reasonably acceptable to the Obligor) as administrative agent or representative of all “Banks” hereunder. Upon an assignment permitted pursuant to clause (ii) above, the Obligor and the Bank will endeavor to enter into amendments to this Agreement reasonably satisfactory to each of the Obligor and the Bank to accommodate the accession of additional Persons hereunder, through, among other things, the appointment of Credit Suisse or an Affiliate thereof (or any other Person reasonably acceptable to the Obligor) as administrative agent or representative of all “Banks” hereunder.

Section 30. Jurisdiction; Venue; Waiver of Jury Trial.

(a) Each of the Obligor and the Bank submits to the nonexclusive jurisdiction of any state or federal count located in the Borough of Manhattan, City of New York, State of New York, for itself and its property and agrees that any such court shall be a proper forum for any such action or suit. Service of process in any legal action or proceeding arising out of or in connection with this Agreement or the Letter of Credit may be made upon any party hereto by mailing a copy of the summons to such party either at the address set forth herein or at such party’s last address appearing in the Bank’s records.

(b) EACH OF THE OBLIGOR AND THE BANK WAIVES ( i ) THE RIGHT TO A TRIAL BY JURY IN RESPECT OF ANY LEGAL ACTION OR PROCEEDING IN WHICH THE BANK AND THE OBLIGOR ARE PARTIES (WHETHER OR NOT THE ONLY PARTIES) ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT OR THE LETTER OF CREDIT, AND ( ii ) THE RIGHT TO INTERPOSE ANY CLAIM, SETOFF OR COUNTERCLAIM OF ANY NATURE OR DESCRIPTION.

Section 31. Process Agent. The Obligor hereby agrees that service of all writs, process and summonses in any such suit, action or proceeding brought in the State of New York may be made upon CT Corporation, presently located at 111 Eighth Avenue, New York, New York 10011, United States, and the Obligor hereby confirms and agrees that the Process Agent has been duly appointed as its agent and true and lawful attorney in fact in its name, place and stead to accept such service of any and all such writs, process and summonses, and agrees that the failure of the Process Agent to give any notice of any such service of process to the Obligor shall not impair or affect the validity of such service or of any judgment based thereon. The Obligor covenants and agrees to continue its appointment of the Process Agent (or such other process agent satisfactory to the Bank) during all periods prior to the Expiration Date. The Obligor hereby further irrevocably consents to the service of process in any suit, action or proceeding in

such courts by the mailing thereof by the Bank by registered or certified mail, postage prepaid, at its address set forth in Section 17.

Section 32. Judgment Currency. The Obligations of the Obligor hereunder and under the Related Documents to make payments in Dollars shall not be discharged or satisfied by any tender or recovery pursuant to any judgment expressed in or converted into any currency other than Dollars, except to the extent that such tender or recovery results in the effective receipt by the Bank of the full amount of Dollars expressed to be payable to the Bank under this Agreement or any of the Related Documents. The Obligor agrees to indemnify the Bank against any loss incurred by the Bank as a result of any judgment or order being given or made for the payment of any amount due hereunder or under any of the Related Documents which is expressed and paid in a coin or currency other than Dollars (such other coin or currency, the “ Judgment Currency ”) and as a result of any variation between (a) the rate of exchange at which the Dollar amount is converted into the Judgment Currency for the purposes of such judgment or order, and (b) the rate of exchange at which the Bank is able to purchase Dollars with the amount of Judgment Currency actually received by the Bank. The foregoing indemnity shall, to the extent permitted by applicable Law, constitute a separate and independent obligation of the Obligor, shall continue in full force and effect notwithstanding any such judgment or order as aforesaid, and shall not be affected by judgment being obtained for any other sums due under this Agreement or under any of the Related Documents. The term “rate of exchange” shall include any premiums and costs payable in connection with the purchase of, or conversion into, the relevant currency.

Section 33. Confidentiality.

(a) Subject to the provisions of clause (b) of this Section 33, the Bank agrees that it will not disclose without the prior consent of the Obligor (other than to its employees, auditors, advisors or counselor to another entity if in its sole discretion determines that any such party should have access to such information, provided such Persons shall be subject to the provisions of this Section 33 to the same extent as the Bank) any information with respect to the Obligor or any of its Subsidiaries which is now or in the future furnished by the Obligor or any of its Affiliates pursuant to this Agreement or any other Related Document, provided that the Bank may disclose any such information (i) as has become generally available to the public other than by virtue of a breach of this Section 33(a) by the Bank, (ii) as may be required or appropriate in any report, statement or testimony submitted to any municipal, state or Federal regulatory body having or claiming to have jurisdiction over the Bank or to the Federal Reserve Board or the Federal Deposit Insurance Corporation or similar organizations (whether in the United States or elsewhere) or their successors, (iii) as may be required or appropriate in respect to any summons or subpoena or in connection with any Claim, (iv) in order to comply with any Law applicable to the Bank, (v) to the Collateral Agent, (vi) to any direct or indirect contractual counterparty in any swap, hedge or similar agreement (or to any such contractual counterparty’s professional advisor), so long as such contractual counterparty (or such professional advisor) agrees to be bound by the provisions of this Section 33 and (vii) to any prospective or actual transferee or participant in connection with any contemplated transfer or participation of any right under this Agreement or any interest therein by the Bank, so long as such prospective transferee agrees to be bound by the confidentiality provisions contained in this Section 33.

(b) The Obligor hereby acknowledges and agrees that the Bank may share with any of its affiliates, and such affiliates may share with the Bank, any information related to the Obligor or any of its Subsidiaries (including, without limitation, any non-public customer information regarding the creditworthiness of the Obligor and its Subsidiaries), provided such Persons shall be subject to the provisions of this Section 33 to the same extent as the Bank.

Section 34. Patriot Act. The Bank hereby notifies the Obligor that to the extent the Bank is or becomes subject to the USA PATRIOT ACT (Title III of Pub. L. 107-56 (signed into law October 26, 2001)) (the “ Act ” ) pursuant to the requirements of the Act, it is required to obtain, verity and record information that identifies the Obligor and the other Credit Parties and other information that will allow the Bank to identify the Obligor and the other Credit Parties in accordance with the Act.

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed and delivered as of the date first above written.


ARCOS DORADOS B.V.

By:		/s/ Annette Franqui
		Name:
		Title:


CREDIT SUISSE, acting through its CAYMAN ISLANDS BRANCH

By:	/s/ Emiliano Filippi
	Name:	Emiliano Filippi
	Title:	Managing Director

By:	/s/ Andreas Schenk Caviezel
	Name:	Andreas Schenk Caviezel
	Title:	Director

Exhibit 10.6

EXECUTION COPY

AMENDMENT TO LETTER OF CREDIT REIMBURSEMENT AGREEMENT

AMENDMENT TO LETTER OF CREDIT REIMBURSEMENT AGREEMENT , dated as of November 3, 2008 (this “ Amendment ”), between ARCOS DORADOS B.V., a private company with limited liability ( besloten vennootschap met beperkte aansprakelijkheid ) organized under the laws of The Netherlands (together with its successors and assigns, the “ Obligor ”) and CREDIT SUISSE, acting through its CAYMAN ISLANDS BRANCH (together with its branches, agencies, successors and assigns, the “Bank”).

Recitals

A. WHEREAS , the Obligor and Bank are parties to that certain Letter of Credit Reimbursement Agreement, dated as of August 3, 2007 (as amended, amended and restated, supplemented, restated or otherwise modified from time to time, the “ Letter of Credit Agreement ”); and

B. WHEREAS , the Obligor and the Bank have agreed to amend certain provisions of the Letter of Credit Agreement in the manner, and subject to the terms and conditions, provided for herein;

NOW, THEREFORE , in consideration of the foregoing, the premises and the agreements, provisions and covenants contained in this Amendment and other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the parties hereto, intending to be legally bound, agree as follows:

Section 1. Defined Terms . Capitalized terms used, but not defined herein, have the meanings assigned to such terms in the Letter of Credit Agreement.

Section 2. Amendments .

Section 2.1. Section 1 (Definitions) . Section 1 of the Letter of Credit is hereby amended by:

(a) deleting the first paragraph thereof in its entirety and replacing it with the following:

“Capitalized terms used and not otherwise defined herein shall have the definitions assigned in the Amended and Restated Credit Agreement, dated as of October 22, 2008 (the “ Credit Agreement ”), among the Obligor, as borrower, the various lenders party thereto and Deutsche Bank Trust Company Americas, as administrative agent (in such capacity, together with its successors and assigns in such capacity, the “ Administrative Agent ”) and as collateral agent, as the Credit Agreement is in effect on the Amendment Effective Date (as such

term is defined in the Credit Agreement) (and regardless of whether the Credit Agreement is hereafter terminated or discharged). In this Agreement and any other document that references this Agreement, the following capitalized terms shall have the respective meanings assigned below (each such meaning to be equally applicable to the singular and plural forms of the respective terms so defined):”

(b) deleting the definition of “Allocated Headquarters Costs” in its entirety.

““ Applicable Margin ” means 4.5% per annum .”

(d) deleting the definition of “ Collateral ” in its entirety and replacing it with the following:

““ Collateral ” means all property (whether real or personal) with respect to which any security interests have been granted (or purported to be granted) pursuant to the U.S. Intercompany Note Pledge Agreement and the Security Agreement, including, without limitation, all U.S. Intercompany Note Pledge Agreement Collateral and all Security Agreement Collateral.”

(e) deleting the definition of “Collateral Agent” in its entirety and replacing it with the following:

““ Collateral Agent ” shall mean Deutsche Bank Trust Company Americas. as collateral agent, together with its successors and assigns in such capacity.”

(f) adding in the corresponding alphabetical order the following definition to “Consolidated Indebtedness”:

““ Consolidated Indebtedness ” shall mean, at any time, the sum of (without duplication) (i) all Indebtedness of the Obligor and its Subsidiaries (on a consolidated basis) as would be required to be reflected as debt or Capitalized Lease Obligations on the liability side of a consolidated balance sheet of the Obligor and its Subsidiaries in accordance with U.S. GAAP, (ii) all Indebtedness of the Obligor and its Subsidiaries of the type described in clauses (ii), (vii) and (viii) of the definition of Indebtedness and (iii) all Contingent Obligations of the Obligor and its Subsidiaries in respect of Indebtedness of any third Person of the type referred to in preceding clauses (i) and (ii); provided that (x) the aggregate amount available to be drawn (i.e., unfunded amounts) under all letters of credit, bankers’ acceptances, bank guaranties, surety bonds and similar obligations issued for the account of the Obligor or any of its Subsidiaries (but excluding, for avoidance of doubt, all unpaid drawings or other matured monetary obligations owing in respect of such letters of credit, bankers’ acceptances, bank guaranties, surety bonds and similar obligations) shall not be included in any determination of “Consolidated Indebtedness” and (y) the amount of Indebtedness in respect of the Interest Rate Protection Agreements and Other Hedging Agreements shall be at any time the unrealized net loss position, if any, of the Obligor and/or its Subsidiaries thereunder on a marked-to-market basis determined no more than one month prior to such time.”

(g) adding in the corresponding alphabetical order the following definition of “Delivery Amount”:

““ Delivery Amount ” means, on any Valuation Date, (a) if there is any amount in Dollars posted as Hedging Collateral on such Valuation Date, the positive difference between the Hedging Collateral Amount and the Total Collateralized Amount and (b) if there is no amount in Dollars posted as Hedging Collateral on such Valuation Date, the Hedging Collateral Amount.”

(h) adding in the corresponding alphabetical order the following definition of “Election Notice”;

““ Election Notice ” has the meaning assigned to it in Section 21(c).”

(i) adding in the corresponding alphabetical order the following definition of “Hedge Termination Value”:

““ Hedge Termination Value ” means, in respect of the Secured Hedging Agreements, after taking into account the effect of any legally enforceable netting agreement relating to the Secured Hedging Agreements, (a) for any date on or after the date the Secured Hedging Agreements have been closed out and termination values determined in accordance therewith, such termination values, if positive, payable by the Obligor and its Subsidiaries and (b) for any date prior to the date referenced in clause (a), the amounts determined by the Bank or any Affiliate thereof in good faith as the mark-to-market values for the Secured Hedging Agreements using one or more mid-market or other readily available quotation provided by the Bank or any Affiliate thereof, if positive, payable by the Obligor and its Subsidiaries.”

(j) adding in the corresponding alphabetical order the following definition of “Hedging Agreements”:

““ Hedging Agreements ” means, collectively, the Initial Hedging Agreement and the Refinancing Hedging Agreement.”

(k) adding in the corresponding alphabetical order the following definition of “Hedging Collateral”:

““ Hedging Collateral ” has the meaning assigned to it in Section 13(q).”

(l) adding in the corresponding alphabetical order the following definition of “Hedging Collateral Amount”:

““ Hedging Collateral Amount ” means, on any Valuation Date, an amount equal to the positive difference, if any, between the sum of the Hedge Termination Values of the Secured Hedging Agreements on such Valuation Date and $15,000,000.”

(m) adding in the corresponding alphabetical order the following definition of “Hedging Event”:

““ Hedging Event ” has the meaning assigned to it in Section 13(q).”

(n) deleting the definition of “Letter of Credit” in its entirety and replacing it with the following:

““ Letter of Credit ” means the Irrevocable Standby Letter of Credit No. TS-07004845, issued by the Bank, as amended, amended and restated, supplemented, replaced or otherwise modified from time to time.”

(o) adding in the corresponding alphabetical order the following definition of “Leverage Ratio”:

““ Leverage Ratio ” means, as of the last day or any Leverage Ratio Test Period, the ratio of (i) Consolidated Indebtedness on such date to (ii) Adjusted Consolidated EBITDA for such Leverage Ratio Test Period.”

(p) adding “been” after “financial statements have” in the first sentence of the definition of Leverage Ratio Test Period”.

(q) adding in the corresponding alphabetical order the following definition of “Liquidity Premium”:

““ Liquidity Premium ” means 1.50% per annum.”

(r) deleting the definition of “Local Take-Out Event” in its entirety,

(s) adding in the corresponding alphabetical order the following definition of “Non-Extension Notice”:

““ Non-Extension Notice ” has the meaning assigned to it in Section 21(b),”

(t) deleting the definition of “Original Stated Amount” in its entirety and replacing it with the following:

““ Original Stated Amount ” means $65,000,000.”

(u) adding in the corresponding alphabetical order the following definition of “Reference Period”:

““ Reference Period ” means (i) initially, the period commencing on the date on which the Bank makes a payment with respect to a drawing under the Letter of Credit and ending on the numerically corresponding day one month thereafter and (ii) thereafter, each period commencing on the last day of the immediately preceding Reference Period and ending on the numerically corresponding day one month thereafter; provided , however , that (A) if a Reference Period would end on a day other than a Business Day, such Reference Period shall be extended to the next succeeding Business Day, unless such next succeeding Business Day would fall in the next calendar month, in which case such Reference Period shall end on the immediately preceding Business Day, (B) in no case shall any Reference Period end after the Expiration Date and (C) any Reference Period that begins on the last day of a calendar month (or a day for which

there is no numerically corresponding day in the calendar month at the end of such Reference Period) shall end on the last Business Day of a calendar month.”

(v) adding in the corresponding alphabetical order the following definition of “Refinancing Hedging Agreements”:

““ Refinancing Hedging Agreements ” means, collectively. the 2002 ISDA Master Agreements, Schedules and Confirmations, to be entered into between one or more financial institutions and the Obligor; provided , that each such Refinancing Hedging Agreement shall terminate on or prior to November 10, 2013; provided , further , that the aggregate notional amount under the Refinancing Hedging Agreements shall not exceed $350,000,000.”

(w) deleting “, U.S. Stock Pledge Agreement” in the definition of “Related Documents”.

(x) adding in the corresponding alphabetical order the following definition of “Return Amount”:

““ Return Amount ” means, on any Valuation Date, the positive difference between the Total Collateralized Amount and the Hedging Collateral Amount.”

(y) adding in the corresponding alphabetical order the following definition of “Return Rate”:

““ Return Rate ” means the USD-Federal Funds-H.15.”

(z) adding in the corresponding alphabetical order the following definition of “Return Rate Applicable Margin”:

“ Return Rate Applicable Margin ” means 3.5% per annum .”

(aa) adding in the corresponding alphabetical order the following definition of “Security Agreement Collateral”:

““ Security Agreement Collateral ” means all “Creditor Collateral” as such term is defined in the Security Agreement.”

(bb) adding in the corresponding alphabetical order the following definition of “Settlement Day”:

““ Settlement Day ” means (a) with respect to a transfer of cash in Dollars by the Bank to the Obligor, the second Business Day after the date of demand of such transfer, and (b) with respect to a transfer of cash in Dollars by the Obligor to the Bank, the fifth Business Day after the date of demand of such transfer.”

(cc) adding in the corresponding alphabetical order the following definition of “Subsidiary Guarantor”:

““ Subsidiary Guarantor ” means each Subsidiary of the Obligor which executes and delivers a counterpart or joinder to the Subsidiary Guaranty,”

(dd) adding in the corresponding alphabetical order the following definition of “Total Collateralized Amount”:

““ Total Collateralized Amount ” means, on any Valuation Date, the aggregate amount of cash in Dollars posted as Hedging Collateral on such Valuation Date pursuant to Section 13(q).”

(ee) deleting the definition of “Total Headquarters Costs” in its entirety.

(ff) deleting the definition of “Total Pro Forma EBITDA” in its entirety and replacing it with the following:

““ Total Pro Forma EBITDA ” means, with respect to the Obligor and its Subsidiaries on a consolidated basis for any period, Adjusted Consolidated EBITDA for such period.”

(gg) deleting the definition of “Total Pro Forma Leverage Ratio” in its entirety and replacing it with the following;

““ Total Pro Forma Leverage Ratio ” means, as of any determination date, the ratio of ( i ) the sum of Consolidated Indebtedness as of such date plus (if and to the extent that such amount is not included in Consolidated Indebtedness) the Original Stated Amount to ( ii ) Total Pro Forma EBITDA for the Leverage Ratio Test Period ending on or immediately prior to such date.”

(hh) adding in the corresponding alphabetical order the following definition of “USD-Federal Funds-H.15”:

““ USD-Federal Funds-H.15 ” means, for any calculation date, the rate set forth in H.15(519) for that calculation day under the caption “ EFFECT ,” as such rate is displayed on the Reuters Screen FEDFUNDS1 Page. If, by 5:00 p.m., New York City time, on such calculation date, such rate for such calculation date does not appear on the Reuters Screen FEDFUNDS1 Page or is not yet published in H.15(519), the rate for such calculation date will be the rate set forth in H.15 Daily Update, or such other recognized electronic source used for the purpose of displaying such rate, for that day opposite the caption “ Federal funds (effective) ”. If, by 5:00 p.m., New York City time, on the day that is one Business Day following the calculation date, such rate for such calculation date does not appear on the Reuters Screen FEDFUNDS1 Page or is not yet published in H.15(519), H.15 Daily Update or another recognized electronic source, the rate for such calculation date will be the rate for the first preceding Business Day for which such rate is set forth in H.15(519) opposite the caption “ Federal funds (effective) ,” as such rate is displayed on the Reuters Screen FEDFUNDS1 Page.”

(ii) adding in the corresponding alphabetical order the following definition of “Valuation Date”:

““ Valuation Date ” means any Business Day.”

(jj) deleting the definition of “Venezuela EBITDA” in its entirety.

Section 2.2. Section 2 (Issuing of Letter of Credit) . Section 2 of the Letter of Credit Agreement is hereby amended by deleting such section in its entirety and replacing it with the following:

“[Reserved.]”

Section 2.3. Section 3 (Reimbursement and Fees: Additional Reimbursement Security) . Section 3 of the Letter of Credit is hereby amended as follows:

(a) Section 3(a)(B) of the Letter of Credit Agreement is hereby amended by adding at the end of such section ‘“plus the Liquidity Premium”.

(b) Section 3(b)(i) of the Letter of Credit Agreement is hereby amended by deleting such section in its entirety and replacing it with the following:

“the fees set forth in the Fee Letter, dated on or about November 10, 2008 (the “ Fee Letter ”), between the Obligor and the Bank; and”.

(c) Section 3(b)(ii)(2) of the Letter of Credit Agreement is hereby amended by deleting such section in its entirety and replacing it with the following:

“a fraction, expressed as a decimal to the nearest one-thousandth, the numerator of which is the number of calendar days elapsed from the day after the immediately-preceding Quarterly Payment Date through such date and the denominator of which is 90), at a rate equal to 3,25% per annum ,”

(d) The second proviso to Section 3(b)(ii) of the Letter of Credit Agreement is hereby amended by deleting such section in its entirety and replacing it with the following:

“ provided that, notwithstanding anything to the contrary set forth in the foregoing, in no event shall the Letter of Credit Fee at any time exceed by more than 2.00% per annum the level stated in Section 3(b)(ii).”

(e) Section 3(e)(x) of the Letter of Credit Agreement is hereby amended by replacing “U.S. Pledge Agreement” with “Lender U.S. Stock Pledge Agreement”.

Section 2.4. Section 4 (Cancellation of the Letter of Credit) . Section 4 of the Letter of Credit is hereby amended by deleting such section in its entirety and replacing it with the following:

“Section 4. Cancellation of the Letter of Credit .

(a) Cancellation on Expiration Date . The Letter of Credit shall be cancelled. and shall terminate, and the Obligor shall provide the Bank written notice of such cancellation and

shall promptly pay the Bank any cancellation fee due in respect of such cancellation in accordance with the Fee Letter, upon the occurrence of the Expiration Date.

(b) Optional Cancellation . The Obligor may cancel the Letter of Credit, by written notice to the Bank, countersigned by an Authorized Officer of the Beneficiary, provided that concurrently with such cancellation, the Obligor shall pay the Bank any cancellation fee due in respect of such cancellation in accordance with the Fee Letter, provided further that the original of such Letter of Credit must accompany such written notice, and provided further that the Obligor shall only have the right to cancel the Letter of Credit without the prior written consent from the Bank at any time during the period commencing on the day falling two years prior to the End Date and ending on the day immediately preceding the End Date.”

Section 2.5. Section 13 (Affirmative Covenants) . Section 13 of the Letter of Credit is hereby amended as follows:

(a) Section 13(a)(ii) of the Letter of Credit Agreement is hereby amended by replacing “after the close of each quarterly accounting period” with “after the close of each of the first three quarterly accounting periods”.

(b) Section 13(b) of the Letter of Credit Agreement is hereby amended by deleting “Refinancing;” in the heading thereof.

(c) Section 13(b)(i) of the Letter of Credit Agreement is hereby amended by deleting such section in its entirety and replacing it with the following:

“[Reserved.]”

(d) Section 13(b)(ii) of the Letter of Credit Agreement is hereby amended by deleting “(other than Indebtedness incurred in connection with a Refinancing)”.

(e) Section 13(i) of the Letter of Credit Agreement is hereby amended by replacing “, the U.S. Pledge Agreement Agreements and the Foreign Pledge Agreements” with “and the U.S. Intercompany Note Pledge Agreement”.

(f) Section 13(o) of the Letter of Credit is hereby amended by deleting such section in its entirety and replacing it with the following:

“(o) Secured Hedging Agreements .

(i) The Obligor shall not, and shall not permit any of its Subsidiaries to, enter into any Secured Hedging Agreement (other than the Hedging Agreements) granting a security interest (irrespective of the priority thereof) on any asset or property that constitutes collateral for the obligations of the Obligor under any of the Related Documents.

(ii) The Obligor shall not amend, modify, change or waive any term or provision of any Secured Hedging Agreement without the prior written consent of the Bank.

(g) Section 13 of the Letter of Credit is hereby amended by adding the following clause (q):

“(q) Additional Collateral . If the Bank (x) determines, on any Valuation Date, that as of such Valuation Date, the Hedge Termination Value under Secured Hedging Agreements entered into by the Obligor and such Subsidiaries exceeds $16,000,000 (the “ Hedging Event ”); and (y) gives written notice the Obligor of the Hedging Event (including calculations in reasonable detail with respect thereto), then, within 10 Business Days after the receipt by the Obligor of such notice, the Obligor shall, or shall cause any of its affiliates to, transfer to an account in Dollars in the City of New York with the Bank or another financial institution acceptable to the Bank, subject to a first-priority fully perfected security interest in favor of the Bank, on terms and conditions reasonably acceptable to the Bank, as additional security for the reimbursement and other obligations of the Obligor under this Agreement and the other Related Documents (the “ Hedging Collateral ”), an amount in Dollars equal to the Delivery Amount on such Valuation Date; provided , however , that:

(i) following the initial posting of Hedging Collateral and upon demand made by the Bank on any Valuation Date if the Hedging Collateral Amount exceeds the sum of (x) the Total Collateralized Amount, if any, and (y) $1,000,000, the Obligor shall post additional Hedging Collateral in an amount in Dollars at least equal to the applicable Delivery Amount;

(ii) following the posting of any Hedging Collateral and upon demand made by the Obligor on any Valuation Date (A) if the Total Collateralized Amount exceeds the sum of (x) the Hedging Collateral Amount and (y) $1,000,000, the Bank shall cause a release of the applicable Return Amount or (B) if the Hedge Termination Value under the Secured Hedging Agreements is less than $15,000,000, the Bank shall cause a release of the Total Collateralized Amount;

(iii) following the posting of any Hedging Collateral and for so long as any Hedging Collateral is posted, the Bank shall pay to the Obligor interest in respect of such Hedging Collateral for each day during the period commencing on and including the date of posting of such Hedging Collateral to but excluding the date such Hedging Collateral is released to the Obligor at a rate per annum equal to the Return Rate plus the Return Rate Applicable Margin. Accrued interest pursuant to this clause (iii) shall be payable on the last Business Day of March, June, September and December of each calendar year and on the applicable Settlement Date;

(iv) all transfers of Hedging Collateral, as applicable, pursuant to this Section 13(q) shall be made in accordance with the instruction of the Bank or the Obligor, as applicable, and shall be made by transfer into one or more bank accounts specified by the recipient of such transfer;

(v) if a demand for the transfer of Hedging Collateral is received by 12:00 p.m., New York City time, on a Business Day, then the relevant transfer will be made not later than the close of business on the Settlement Day relating to the date such demand is received; if a demand is received after 12:00 p.m., New York City time, then the relevant transfer will be made not later than the close of business on the Settlement Day relating to the day after the date such demand is received; and

(vi) in no event shall the Obligor be required to post or maintain more than $25,000,000 in Hedging Collateral at any time.”

(h) Section 13 of the Letter of Credit is hereby amended by adding the following clause (r):

“(r) Refinancing Hedging Agreements . The Obligor shall have delivered to the Bank a true, correct and complete copy of each Refinancing Hedging Agreement on or prior to December 10, 2008, duly authorized, executed and delivered by each party thereto.”

Section 2.6. Section 14 (Negative Covenants) . Section 14(g) of the Letter of Credit Agreement is hereby amended by deleting such section in its entirety and replacing it with the following:

“(g) Limitation on Certain Actions Relating to the Credit Agreement . The Obligor shall not consent pursuant to the Credit Agreement to any assignment or other transfer of loans under the Credit Agreement to any Person other than to a financial institution or commercial bank engaged in the business of making loans in the ordinary course of its business or any Affiliates thereof.”

Section 2.7. Section 15 (Event of Default) . Section 15(c) of the Letter of Credit Agreement is hereby amended by adding at the end of such section “and Sections 13(q) and 13(r)”.

Section 2.8. Section 21 (Letter of Credit Transfer or Extension; Termination; Related Matters) . Section 21 of the Letter of Credit Agreement is hereby amended by deleting such section in its entirety and replacing it with the following.

“Section 21. Letter of Credit Transfer or Extension; Termination; Related Matters .

(a) The Letter of Credit shall automatically terminate at the Expiration Date thereof unless it shall have been previously terminated according to the provisions of this Agreement and the Letter of Credit. Not less than 60 days prior to the Expiration Date, the Obligor may request the Bank to extend the Expiration Date in accordance with the provisions hereof, and, if so requested the Bank shall have the right (but not the obligation) to extend the Expiration Date (as previously so extended, if applicable) for the Letter of Credit for one or more additional periods acceptable to the Bank and the Obligor commencing at the applicable Expiration Date for the Letter of Credit. If the Bank elects to exercise its right to so extend the Expiration Date for the Letter of Credit it will give prompt written notice amending such Letter of Credit to reflect such election to ( i ) the Obligor and ( ii ) the Beneficiary at such address as

shall have been specified to the Bank by the Beneficiary in accordance with Section 17 hereof, whereupon the Expiration Date of the Letter of Credit shall be so extended. No amendment to the Letter of Credit extending the Expiration Date thereof pursuant to this Section 21 shall amend or waive any other provision of the Letter of Credit unless such amendment or waiver is agreed to by the Obligor.

(b) The Obligor shall have the right, but not the obligation, to instruct the Bank to give notice to the Beneficiary pursuant to the proviso to the definition of “End Date” electing not to have the Letter of Credit automatically renewed by any additional period, by giving a written notice thereof (the “ Non-Extension Notice ”) to the Bank at least 45 days prior to any anniversary of the Issuance Date.

(c) Upon the receipt by the Bank of the Non-Extension Notice, the Bank shall deliver to the Beneficiary a notice (with a copy to the Obligor) at least 30 days prior to the relevant anniversary of the Issuance Date electing not to have the Letter of Credit automatically renewed by any additional period pursuant to the provisions of the Letter of Credit (the “ Election Notice ”).

(d) If following receipt by the Bank of a Non-Extension Notice pursuant to clause (b) above, the Bank fails to deliver to the Beneficiary the Election Notice at least 30 days prior to the relevant anniversary of the Issuance Date, then the Obligor shall not have the obligation to pay to the Bank any Letter of Credit Fee accrued or to accrue from the period commencing two years prior to the date that would have been otherwise the End Date if the Election Notice had been delivered by the Bank to the Beneficiary and ending on the Expiration Date.”

Section 3. Effectiveness . This Amendment shall become effective on the date (in any event no later than November 10, 2008) on which each of the following conditions precedent shall have been satisfied (the day on which all such conditions are satisfied, the “ Amendment Effective Date ”):

Section 3.1. Executed Amendment . The Bank shall have received counterparts of this Amendment, satisfactory in form and substance to the Bank and the Obligor, duly executed and delivered by each of the parties hereto.

Section 3.2. Credit Agreement . (i) The Bank shall have received a true, correct and complete copy of the Credit Agreement, duly executed and delivered by each of the parties thereto, and the Credit Agreement shall be in full force and effect; (ii) no provision of the Credit Agreement has been amended, supplemented or modified in any respect; (iii) no default, event of default or similar event has occurred and is continuing under the Credit Agreement; and (iv) all conditions to the effectiveness of the Credit Agreement shall have been satisfied in full.

Section 3.3. Master Franchise Agreement . (i) The Bank shall have received a true, correct and complete copy of the Master Franchise Agreement, duly executed and delivered by each of the parties thereto, and the Master Franchise Agreement shall be in full force and effect; (ii) no provision of the Master Franchise Agreement has been

amended, supplemented or modified in any respect; provided , however , that within the period commencing on the Amendment Effective Date and ending 30 days thereafter, the parties to the Master Franchise Agreement may enter into an amendment to the Master Franchise Agreement but only to the extent the provisions thereof (x) are substantially the same as those contemplated by the term sheet attached as Exhibit A , (y) could not reasonably be expected to be adverse in any material respect to the interests of the Bank under the Related Documents, and (z) do not amend, replace or otherwise modify Section 7.9.2 of the Master Franchise Agreement, except for the replacement of “$80,000,000” in clause (f)(ii) thereof with “$65,000,000,” and (iii) no default, event of default, breach (including, but not limited to, a “Material Breach” (as such term is defined in the Master Franchise Agreement)) or any event that with notice, lapse of time or both would result in a breach or similar event, has occurred and is continuing under the Master Franchise Agreement.

Section 3.4. No Default; Representations and Warranties . On and as of the Amendment Effective Date, (i) there shall exist no Default or Event of Default and (ii) all representations and warranties contained herein shall be true and correct in all material respects with the same effect as though such representations and warranties had been made on and as of such date (it being understood and agreed that any representation or warranty which by its terms is made as of a specified date shall be required to be true and correct in all material respects only as of such specified date), provided that any representation and warranty that is qualified as to “materiality,” “Material Adverse Effect” or similar language shall be true and correct (after giving effect to any qualification therein) in all respects on such respective dates.

Section 3.5. Officer’s Certificate . On the Amendment Effective Date, the Bank shall have received:

(a) a certificate from the Obligor, dated as of the Amendment Effective Date, signed by an Authorized Officer of the Obligor, substantially in the form of Exhibit B with appropriate insertions, together with true and correct copies of (i) the deed of incorporation, the articles of association and an extract from the trade register of the Amsterdam Chamber of Commerce of the Obligor, (ii) the resolutions or other authorizations of the Obligor referred to in such certificate, (iii) verification of incumbency, (iv) all Franchise Documents, (v) all Credit Documents, (vii) the Initial Hedging Agreement and (viii) all other documentation referred to in such certificate;

(b) a certificate from each Subsidiary Guarantor, dated as of the Amendment Effective Date, signed by an Authorized Officer of such Subsidiary Guarantor and attested to by the secretary, any assistant secretary or any other Person authorized to attest to such certificate pursuant to the organizational documents of such Subsidiary Guarantor, substantially in the form of Exhibit C with appropriate insertions, together with true and correct copies of (i) the certificate or articles of incorporation and by-laws (or other equivalent organizational documents), as applicable, of such Subsidiary Guarantor, (ii) the resolutions of such Subsidiary Guarantor referred to in such certificate, (iii) verification of incumbency and (iv) all other documentation referred to in such certificate.

Section 3.6 Opinions of Counsel . On the Amendment Effective Date, the Bank shall have received original counterparts of the following legal opinions addressed to the Bank and the Collateral Agent, dated as of the Amendment Effective Date, in the English language, and each of which shall be reasonably satisfactory to the Bank and its counsel:

(a) a legal opinion of Debevoise & Plimpton LLP, special New York counsel to the Obligor and the Subsidiary Guarantors, substantially in the form of Exhibit D-1 ;

(b) a legal opinion of Richards, Layton & Finger, P.A., special Delaware counsel to the Obligor and the Subsidiary Guarantors, substantially in the form of Exhibit D-2 ;

(c) a legal opinion of Tozzini Freire Advogados, special Brazilian counsel to the Obligor and the Subsidiary Guarantors, substantially in the form of Exhibit D-3 ;

(d) a legal opinion of Bruchou, Fernandez, Madero, Lombardi & Mitrani, special Argentine counsel to the Obligor and the Subsidiary Guarantors, substantially in the form of Exhibit D-4 ;

(e) a legal opinion of Nauta Dutilh, special Aruban, Dutch and Netherlands Antilles counsel to the Obligor and the Subsidiary Guarantors, substantially in the form of Exhibit D-5 :

(f) a legal opinion of Ritch Mueller, S.C., special Mexican counsel to the Obligor and the Subsidiary Guarantors, substantially in the form of Exhibit D-6 ;

(g) a legal opinion of O’Neill & Borges, special Puerto Rican counsel to the Obligor and the Subsidiary Guarantors, substantially in the form of Exhibit D-7 ;

(h) a legal opinion of Torres Plaz & Araujo, special Venezuelan counsel to the Obligor and the Subsidiary Guarantors, substantially in the form of Exhibit D-8; and

(i) a legal opinion of Skadden, Alps, Slate, Meagher & Flom LLP, special New York counsel to the Bank, covering such matters relating to the transactions contemplated hereby as the Bank may reasonably request.

Section 3.7. Approvals . On the Amendment Effective Date, all necessary governmental (domestic and foreign) and third party approvals and/or consents in connection with the transactions contemplated hereby and the granting of Liens under the Related Documents shall have been obtained and remain in full force and effect.

Section 3.8. No Material Adverse Effect . Since December 31, 2007, no Material Adverse Effect shall have occurred.

Section 3.9. L/C Intercreditor Agreement . On the Amendment Effective Date, the Bank shall have received a true, correct and complete copy of the Amendment to L/C Intercreditor Agreement (the “ L/C Intercreditor Agreement Amendment ”), dated as of such date, substantially in the form of Exhibit E , duly executed and delivered by each of

the parties thereto, and the L/C Intercreditor Agreement as amended by the L/C Intercreditor Agreement Amendment shall be in full force and effect.

Section 3.10. McDonald’s Intercreditor Agreement . On the Amendment Effective Date, the Bank shall have received a true, correct and complete copy of the Amended and Restated Intercreditor Agreement (the “ McDonald’s Intercreditor Agreement ”), dated as of such date, substantially in the form of Exhibit F , duly executed and delivered by each of the parties thereto, and the McDonald’s Intercreditor Agreement shall be in full force and effect.

Section 3.11. Subsidiary Guaranty . On the Amendment Effective Date, the Bank shall have received a true, correct and complete copy of the Amendment to Subsidiary Guaranty (the “ Subsidiary Guaranty Amendment ”), dated as of such date, substantially in the form of Exhibit G , duly authorized, executed and delivered by each Subsidiary Guarantor, and the Subsidiary Guaranty as amended by the Subsidiary Guaranty Amendment shall be in full force and effect.

Section 3.12. Security Agreement . On the Amendment Effective Date, the Bank shall have received a true, correct and complete copy of the Amendment to Security Agreement (the “ Security Agreement Amendment ”), dated as of such date, substantially in the form of Exhibit H , duly authorized, executed and delivered by each Assignor (as defined therein) and the Collateral Agent, together with all Security Agreement Collateral, if any, refined to therein and then owned by such Assignor and not previously delivered to the Collateral Agent, along with evidence that all other actions necessary or, in the reasonable opinion of the Collateral Agent, desirable, to perfect the Lien purported to be created by the Security Agreement have been taken, and the Security Agreement as amended by the Security Agreement Amendment shall be in full force and effect.

Section 3.13. U.S. Intercompany Note Pledge Agreement . On the Amendment Effective Date, the Bank shall have received a true, correct and complete copy of the Amendment to U.S. Intercompany Note Pledge Agreement (the “ U.S. Intercompany Note Pledge Agreement Amendment ”), dated as of such date, substantially in the form of Exhibit I , duly authorized, executed and delivered by each Pledgor (as defined therein) and the Collateral Agent, together with all U.S. Intercompany Note Pledge Agreement Collateral, if any, referred to therein and then owned by such Pledgor and not previously delivered to the Collateral Agent, along with evidence that all other actions necessary or, in the reasonable opinion of the Collateral Agent, desirable, to perfect the Lien purported to be created by the U.S. Intercompany Note Pledge Agreement have been taken, and the U.S. Intercompany Note Pledge Agreement as amended by the U.S. Intercompany Note Pledge Agreement Amendment shall be in full force and effect.

Section 3.14. Fee Letter . On the Amendment Effective Date, the Bank shall have received a true, correct and complete copy of the Fee Letter, dated as of such date, substantially in the form of Exhibit J , duly executed and delivered by each of the parties thereto, and the Fee Letter shall be in full force and effect.

Section 3.15. Escrow Agreement . On the Amendment Effective Date, the Bank shall have received a true, correct and complete copy of the Amendment to Escrow Agreement (the “ Escrow Agreement Amendment ,” and together with the L/C Intercreditor Agreement Amendment, the McDonald’s Intercreditor Agreement, the Subsidiary Guaranty Amendment, the Security Agreement Amendment, the U.S. Intercompany Note Pledge Agreement Amendment and the Fee Letter, the “ Transaction Documents ”), dated as of such date, substantially in the form of Exhibit K , duly authorized, executed and delivered by each party thereto, and the Escrow Agreement as amended by the Escrow Agreement Amendment shall be in full force and effect.

Section 3.16. Termination Agreements . On the Amendment Effective Date, the Bank shall have received a true, correct and complete copy of (i) the Termination Agreement with respect to the Participation Agreement, dated September 7, 2007, between the Bank and The Bank of Nova Scotia – International Banking Entity, dated as of such date, duly authorized, executed and delivered by each party thereto, (ii) the Termination Agreement with respect to the Participation Agreement, dated September 5, 2007, between the Bank and Standard Bank Plc, dated as of such date, duly authorized, executed and delivered by each party thereto and (iii) the Termination Agreement with respect to the Participation Agreement, dated September 5, 2007, between the Bank and Banco Santander, S.A., acting through its New York Branch, dated as of such date, duly authorized, executed and delivered by each party thereto.

Section 3.17. Original Letter of Credit . On or prior to the Amendment Effective Date, the Bank shall have received from McDonald’s the Irrevocable Standby Letter of Credit No. TS-07004119, issued by the Bank on August 3, 2007, marked “cancelled”.

Section 3.18. Consent Letter . The Bank shall have received a letter, in form und substance reasonably satisfactory to the Bank, from the Process Agent for the Obligor and each Subsidiary Guarantor indicating its consent to its appointment by the Obligor and each Subsidiary Guarantor as its agent to receive service of process as specified in Section 31 of the Letter of Credit Agreement and agreeing to act as such Process Agent and to forward all process received by it as such Process Agent to the Obligor and the Subsidiary Guarantors for a term ending one year beyond the Expiration Date, subject only to the Process Agent’s receipt of its annual fees for such appointment for each year beyond the first year following the Amendment Effective Date.

Section 3.19. Financial Statements . On or prior to the Amendment Effective Date, the Bank shall have received true and correct copies of (i) the pro forma consolidated profit and loss statements of the Obligor and its Subsidiaries for the 12 months ended December 31, 2007; (ii) the consolidated balance sheet of the Obligor and its consolidated Subsidiaries as at the end of its fiscal year ended December 31, 2007 and the related consolidated statements of income and retained earnings and statements of cash flows for such fiscal year, certified by independent certified public accountants of recognized international standing (without a “going concern” or like qualification or exception and without any qualification or exception as to the scope of such audit) to the effect that such financial statements have been prepared in accordance with U.S. GAAP

and fairly present in all material respects the financial condition of the Obligor and its consolidated Subsidiaries as of the dates indicated and the results of their operations and cash flows; (iii) the unaudited consolidated balance sheet of the Obligor and its consolidated Subsidiaries as at the end of the fiscal quarter ended June 30, 2008 and the related consolidated statements of income and retained earnings and statement of cash flows, prepared in accordance with U.S. GAAP and fairly representing in all material respects the financial condition of the Obligor and its consolidated Subsidiaries as of the dates indicated and the results of its operations and changes in its cash flows for the periods indicated, subject to normal year-end audit adjustments and the absence of footnotes; and (iv) the combined/consolidated balance sheet of the Subsidiaries of the Obligor in each Major Territory (in respect of such country) as at the end of the fiscal year ended December 31, 2007 and the related combined/consolidated statements of income and retained earnings and statements of cash flows for such fiscal year, certified by independent certified public accountants of recognized international standing to the effect that such financial statements have been prepared in accordance with Applicable GAAP and fairly present in all material respects the financial condition of such Subsidiaries (in respect of such country) as of the dates indicated and the results of their operations and cash flows.

Section 3.20. Payment of Outstanding Obligations . On the Amendment Effective Date, the Obligor shall have paid to the Bank all costs, fees (including, without limitation, all Fees) and expenses (including, without limitation, reasonable and documented legal fees and expenses) and other compensation contemplated herein and in the Fee Letter, to the extent then due and payable.

Section 4. Letter of Credit .

Section 4.1. Subject to the satisfaction of the conditions set forth in Section 3, on the Amendment Effective Date the Bank shall issue and deliver to McDonald’s (with a copy to the Obligor) an Irrevocable Standby Letter of Credit, in a stated amount of $65,000,000, substantially in the form of Exhibit L (the “ Letter of Credit ”).

Section 4.2. Upon the issuance and delivery of the Letter of Credit pursuant to Section 4.1, all references to the “Letter of Credit” in the Related Documents shall be deemed references to the Letter of Credit.

Section 5. Representations . The Obligor hereby represents and warrants to the Bank, as of the date hereof and as of the Amendment Effective Date, as follows:

Section 5.1. Power and Authority . Each of the Obligor and each Subsidiary Guarantor has the company or partnership power and authority to execute, deliver and perform the terms and provisions of each Transaction Document to which it is a party and has taken all necessary company or partnership action to authorize the execution, delivery and performance by it of each such Transaction Document. Each of the Obligor and each Subsidiary Guarantor has duly executed and delivered each Transaction Document to which it is a party, and each such Transaction Document constitutes its legal, valid and binding obligation enforceable in accordance with its terms, except to the extent that the

enforceability thereof may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or other similar Laws generally affecting creditors’ rights and by equitable principles (regardless of whether enforcement is sought in equity or at law).

Section 5.2. No Violation . Neither the execution, delivery or performance by the Obligor or any Subsidiary Guarantor of any Transaction Document to which it is a party, nor compliance by it with the terms and provisions thereof, ( i ) will violate any applicable Law or any order, writ, injunction or decree of any Governmental Authority, except, with respect to any Subsidiary of the Obligor, to the extent such violations could not, individually or in the aggregate, be reasonably expected to have a Material Adverse Effect, ( ii ) will conflict with or result in any breach of any of the terms, covenants, conditions or provisions of, or constitute a default under any indenture, mortgage, deed of trust, credit agreement or loan agreement, or any other material agreement, contract or instrument, in each case to which the Obligor or any Subsidiary Guarantor is a party or by which it or any of its property or assets is bound or to which it may be subject, except for such conflicts, breaches or defaults as could not, in the aggregate, reasonably be expected to have a Material Adverse Effect, ( iii ) will result in the creation or imposition of (or the obligation to create or impose) any Lien (other than Permitted Liens) upon any of the property or assets of the Obligor or any Subsidiary Guarantor pursuant to the terms of any indenture, mortgage, deed of trust, credit agreement or loan agreement, or any other material agreement, contract or instrument, in each case to which the Obligor or any Subsidiary Guarantor is a party or by which it or any of its property or assets is bound or to which it may be subject or ( iv ) will violate any provision of the certificate or articles of incorporation, certificate of formation, limited liability company agreement or by-laws (or equivalent organizational documents), as applicable, of the Obligor or any Subsidiary Guarantor.

Section 5.3. Approvals . No order, consent, approval, license, authorization or validation of, or filing, recording or registration with (except for those that have otherwise been obtained or made on or prior to the Amendment Effective Date and which remain in full force and effect on the Amendment Effective Date), or exemption by, any Governmental Authority is required to be obtained or made by, or on behalf of, the Obligor or any Subsidiary Guarantor to authorize, or is required to be obtained or made by, or on behalf of, the Obligor or any Subsidiary Guarantor in connection with, ( i ) the execution, delivery and performance of any Transaction Document or ( ii ) the legality, validity, binding effect or enforceability of any Transaction Document, except orders, consents, approvals, licenses, authorizations, validations, filings, recordings, registrations and exceptions the failure to obtain of which would not reasonably be expected to give rise to a Material Adverse Effect.

Section 5.4. Master Franchise Agreement . No default, event of default, breach (including, but not limited to, a “Material Breach” (as such term is defined in the Master Franchise Agreement)) or any event that with notice, lapse of time or both would result in a breach or similar event, has occurred and is continuing under the Master Franchise Agreement.

Section 5.5. Other Representations . Each of the Obligor and each Subsidiary Guarantor represents and warrants, for the benefit of the Bank, that each representation and warranty listed in Section 6.01 and Sections 6.05 through 6.19 of the Credit Agreement is true and correct.

Section 6. Acknowledgement by the Bank. The Bank hereby acknowledges and consents to the execution and delivery by the Borrower of the Credit Agreement on the date hereof and by the Borrower and the Subsidiary Guarantors (as defined in the Credit Agreement) of the other Credit Documents on the Amendment Effective Date.

Section 7. Effect on the Letter of Credit Agreement . Except as expressly set forth herein, the Bank agrees to no amendment and grants no waiver or consent with respect to the Letter of Credit Agreement or any other Related Documents, and the Letter of Credit Agreement and the other Related Documents remain in full force and effect and are hereby ratified and confirmed. The Bank’s agreeing to the amendments and waivers contained herein do not and shall not create (nor shall the Obligor rely upon the existence of or claim or assert that there exists) any obligation of the Bank to consider or to agree to any further amendments or waivers to any Related Document. In the event that the Bank subsequently agrees to consider any further amendment or waiver to any Related Document, neither the amendments and waivers contained herein nor any other conduct of the Bank shall be of any force or effect on the Bank’s consideration or decision with respect to any such amendment or waiver, and the Bank shall have no further obligation whatsoever to consider or to agree to any such amendment or waiver. The Bank expressly reserves the right to require strict compliance with the terms of the Letter of Credit Agreement as it has been amended by this Amendment in all respects. The amendments and waivers agreed to herein shall not constitute a course of dealing at variance with the Letter of Credit Agreement so as to require further notice by the Bank to require strict compliance with the terms of the Letter of Credit Agreement and the other Related Documents in the future. The parties hereto acknowledge and agree that this Amendment shall be deemed to be a Related Document.

Section 8. Rule of Construction . From and after the Amendment Effective Date, the terms “Agreement,” “this Agreement,” “herein,” “hereinafter,” “hereto,” “hereof” and words of similar import, as used in the Letter of Credit Agreement, shall, unless the context otherwise requires, refer to the Letter of Credit Agreement, as amended by this Amendment.

Section 9. Severability . Any provision of this Amendment which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.

Section 10. Governing Law . This Amendment shall be governed by, and construed and enforced in accordance with, the law of the State of New York.

Section 11. Jurisdiction; Venue; Waiver of Jury Trial; .

Section 11.1. Each of the Obligor and the Bank submits to the nonexclusive jurisdiction of any state or federal court located in the Borough of Manhattan, City of New York, State of New York, for itself and its property and agrees that any such court shall be a proper forum for any action or suit with respect to this Amendment. Service of process in any legal action or proceeding arising out of or in connection with this Amendment may be made upon any party hereto by mailing a copy of the summons to such party either at the address set forth herein or at such party’s last address appearing in the Bank’s records.

Section 11.2. EACH OF THE OBLIGOR AND THE BANK WAIVES ( i ) THE RIGHT TO A TRIAL BY JURY IN RESPECT OF ANY LEGAL ACTION OR PROCEEDING IN WHICH THE BANK AND THE OBLIGOR ARE PARTIES (WHETHER OR NOT THE ONLY PARTIES) ARISING OUT OF OR IN CONNECTION WITH THIS AMENDMENT, AND ( ii ) THE RIGHT TO INTERPOSE ANY CLAIM, SETOFF OR COUNTERCLAIM OF ANY NATURE OR DESCRIPTION.

Section 12. Counterparts . This Amendment may be executed in several counterparts and by each party hereto on a separate counterpart, each of which when so executed and delivered shall be an original and all of which together shall constitute one instrument.

Section 13. Amendments; Waivers . None of the terms or provisions of this Amendment may be waived, amended, supplemented or otherwise modified, except by a written instrument executed by the Obligor and the Bank.

Section 14. Headings . Section headings in this Amendment are included herein for convenience of reference only and shall not constitute a part of this Amendment for any other purpose.

Section 15. Notices . All notices under this Amendment shall be given in accordance with Section 17 of the Letter of Credit Agreement.

[ The remainder of this page has been left intentionally blank ]

IN WITNESS WHEREOF, the parties hereto have executed this Amendment as of the date first above written.


ARCOS DORADOS B.V., as Obligor

By:		/s/(illegible signature)
		Name:
		Title:


CREDIT SUISSE, acting through its CAYMAN ISLANDS BRANCH

By:	/s/ Matias Einaudi
	Name:	Matias Einaudi
	Title:	Director

By:	/s/ Andreas Schenk Caviezel
	Name:	Andreas Schenk Caviezel
	Title:	Managing Director

Exhibit 10.7

EXECUTION COPY

SECOND AMENDMENT TO LETTER OF CREDIT REIMBURSEMENT

AGREEMENT

SECOND AMENDMENT TO LETTER OF CREDIT REIMBURSEMENT AGREEMENT , dated as of December 10, 2008 (this “ Amendment ”), between ARCOS DORADOS B.V., a private company with limited liability ( besloten vennootschap met beperkte aansprakelijkheid ) organized under the laws of The Netherlands (together with its successors and assigns, the “ Obligor ”) and CREDIT SUISSE, acting through its CAYMAN ISLANDS BRANCH (together with its branches, agencies, successors and assigns, the “ Bank ”).

Recitals

A. WHEREAS , the Obligor and the Bank are parties to that certain Letter of Credit Reimbursement Agreement, dated as of August 3, 2007 (as amended, amended and restated, supplemented, restated or otherwise modified from time to time, the “ Letter of Credit Agreement ”); and

B. WHEREAS , the Obligor and the Bank have agreed to amend certain provisions of the Letter of Credit Agreement in the manner, and subject to the terms and conditions, provided for herein;

Section 1. Defined Terms . Capitalized terms used, but not defined herein, have the meanings assigned to such terms in the Letter of Credit Agreement.

Section 2. Amendments .

Section 2.1. Section 1 (Definitions) . Section 1 of the Letter of Credit Agreement is hereby amended by deleting the definition of “Refinancing Hedging Agreements” in its entirety and replacing it with the following:

“ Refinancing Hedging Agreements ” means any foreign exchange contracts, currency swap agreements, commodity agreements or other similar arrangements, or arrangements designed to protect against fluctuations in currency values or commodity prices, other than the Initial Hedging Agreement.”

Section 2.2. Section 13 (Affirmative Covenants) . Section 13 of the Letter of Credit Agreement is hereby amended as follows:

(a) Section 13(o)(i) of the Letter of Credit Agreement is hereby amended by deleting such section in its entirety and replacing it with the following:

“(i) The Obligor shall not, and shall not permit any of its Subsidiaries to, enter into any Secured Hedging Agreement (other than the Hedging Agreements; provided , that (i) each Refinancing Hedging Agreement which is a Secured Hedging Agreement shall (x) be entered into prior to or on March 10, 2009 and (y) terminate on or prior to November 10, 2013 and (ii) the aggregate notional amount under the Refinancing Hedging Agreements which are Secured Hedging Agreements shall not exceed at any time $350,000,000) granting a security interest (irrespective of the priority thereof) on any asset or property that constitutes collateral for the obligations of the Obligor under any of the Related Documents.”

(b) Section 13(r) of the Letter of Credit Agreement is hereby amended by deleting it in its entirety and replacing it with the following:

“(r) Refinancing Hedging Agreements . The Obligor shall have delivered to the Bank a true, correct and complete copy of each Refinancing Hedging Agreement which is a Secured Hedging Agreement within 5 Business Days following the execution and delivery of each such Refinancing Hedging Agreement, duly authorized, executed and delivered by each party thereto.”

Section 3. Effectiveness . This Amendment shall become effective immediately upon the execution hereof (in one or more counterparts) by the Bank and the Obligor.

Section 4. Effect on the Letter of Credit Agreement . Except as expressly set forth herein, the Bank agrees to no amendment and grants no waiver or consent with respect to the Letter of Credit Agreement or any other Related Document, and the Letter of Credit Agreement and the other Related Documents remain in full force and effect and are hereby ratified and confirmed. The Bank’s agreeing to the amendments and waivers contained herein do not and shall not create (nor shall the Obligor rely upon the existence of or claim or assert that there exists) any obligation of the Bank to consider or to agree to any further amendments or waivers to any Related Document. In the event that the Bank subsequently agrees to consider any further amendment or waiver to any Related Document, neither the amendments and waivers contained herein nor any other conduct of the Bank shall be of any force or effect on the Bank’s consideration or decision with respect to any such amendment or waiver, and the Bank shall have no further obligation whatsoever to consider or to agree to any such amendment

or waiver. The Bank expressly reserves the right to require strict compliance with the terms of the Letter of Credit Agreement as it has been amended by this Amendment in all respects. The amendments and waivers agreed to herein shall not constitute a course of dealing at variance with the Letter of Credit Agreement so as to require further notice by the Bank to require strict compliance with the terms of the Letter of Credit Agreement and the other Related Documents in the future. The parties hereto acknowledge and agree that this Amendment shall be deemed to be a Related Document.

Section 5. Rule of Construction . From and after the date hereof, the terms “Agreement,” “this Agreement,” “herein,” “hereinafter,” “hereto,” “hereof” and words of similar import, as used in the Letter of Credit Agreement, shall, unless the context otherwise requires, refer to the Letter of Credit Agreement, as amended by this Amendment.

Section 6. Severability . Any provision of this Amendment which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.

Section 7. Governing Law . This Amendment shall be governed by, and construed and enforced in accordance with, the law of the State of New York.

Section 8. Jurisdiction; Venue; Waiver of Jury Trial .

Section 8.1. Each of the Obligor and the Bank submits to the nonexclusive jurisdiction of any state or federal court located in the Borough of Manhattan, City of New York, State of New York, for itself and its property and agrees that any such court shall be a proper forum for any action or suit with respect to this Amendment. Service of process in any legal action or proceeding arising out of or in connection with this Amendment may be made upon any party hereto by mailing a copy of the summons to such party either at the address set forth herein or at such parry’s last address appearing in the Bank’s records.

Section 8.2. EACH OF THE OBLIGOR AND THE BANK WAIVES (i) THE RIGHT TO A TRIAL BY JURY IN RESPECT OF ANY LEGAL ACTION OR PROCEEDING IN WHICH THE BANK AND THE OBLIGOR ARE PARTIES (WHETHER OR NOT THE ONLY PARTIES) ARISING OUT OF OR IN CONNECTION WITH THIS AMENDMENT, AND (ii) THE RIGHT TO INTERPOSE ANY CLAIM, SETOFF OR COUNTERCLAIM OF ANY NATURE OR DESCRIPTION.

Section 9. Counterparts . This Amendment may be executed in several counterparts and by each party hereto on a separate counterpart, each of which when so executed and delivered shall be an original, and all of which together shall constitute one instrument.

Section 10. Amendments; Waivers . None of the terms or provisions of this Amendment may be waived, amended, supplemented or otherwise modified, except by a written instrument executed by the Obligor and the Bank.

Section 11. Headings . Section headings in this Amendment are included herein for convenience of reference only and shall not constitute a part of this Amendment for any other purpose.

Section 12. Notices . All notices under this Amendment shall be given in accordance with Section 17 of the Letter of Credit Agreement.

[ The remainder of this page has been left intentionally blank ]

IN WITNESS WHEREOF, the parties hereto have executed this Amendment as of the date first above written.


ARCOS DORADOS B.V., as Obligor

By:		(illegible signature)
		Name:
		Title:

[Signature Page to Second Amendment to Letter of Credit Reimbursement Agreement]


CREDIT SUISSE, acting through its CAYMAN ISLANDS BRANCH

By:		/s/ Matias Einaudi
		Name: Matias Einaudi
		Title: Director

By:		/s/ Oscar F. Estupiñan
		Name: Oscar F. Estupiñan
		Title: Director

[Signature Page to Second Amendment to Letter of Credit Reimbursement Agreement]

Exhibit 10.8

EXECUTION COPY

THIRD AMENDMENT TO LETTER OF

CREDIT REIMBURSEMENT AGREEMENT

THIRD AMENDMENT TO LETTER OF CREDIT REIMBURSEMENT AGREEMENT, dated as of July 8, 2009 (this “ Amendment ”), between ARCOS DORADOS B.V., a private company with limited liability (besloten vennootschap met beperkte aansprakelijkheid) organized under the laws of The Netherlands (together with its successors and assigns, the “ Obligor ”) and CREDIT SUISSE, acting through its CAYMAN ISLANDS BRANCH (together with its branches, agencies, successors and assigns, the “ Bank ”). Capitalized terms used but not defined herein shall have the meaning assigned to such terms in the LOCRA (as defined below),

RECITALS

A. WHEREAS, the Obligor and the Bank are parties to that certain Letter of Credit Reimbursement Agreement, dated as of August 3, 2007 (as amended by the Amendment to Letter of Credit Reimbursement Agreement, dated as of November 3, 2008 and the Second Amendment to Letter of Credit Reimbursement Agreement, dated as of December 10, 2008, the “ LOCRA ”); and

B. WHEREAS, the Obligor and the Bank have agreed to amend certain provisions of the LOCRA in the manner, and subject to the terms and conditions, provided for herein.

NOW, THEREFORE, in consideration of the foregoing, the premises and the agreements, provisions and covenants contained in this Amendment and other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the parties hereto, intending to be legally bound, agree as follows:

Section 1 Amendment to Section 1.1 of the LOCRA . Section 1.1 of the LOCRA is hereby amended by:

(a) deleting the definition of “Return Rate Applicable Margin” in its entirety,

(b) replacing the definition of “Return Rate” in its entirety with the following:

““ Return Rate ” means a rate per annum equal to 3.50%.”

with the following:

““ Total Collateralized Amount ” means, on any Valuation Date, the sum of (i) the aggregate amount of cash in Dollars on deposit in the Collection Account on such Valuation Date and (ii) the Closing Price of all investments credited to the Collection Account as of such Valuation Date (or, if such Valuation Date is not a Trading Day on the Trading Day immediately preceding such Valuation Date), provided that for purposes of this definition the term “investments” shall only include approved investments of the type and category permitted by the Bank pursuant to the definitive documentation establishing the Collection Account.”

(d) adding the definition of the following terms in the corresponding alphabetical order:

““ Closing Price ” means, on any Trading Day, with respect to the price of a publicly traded security, the last reported sales price regular way or, in case no such reported sale takes place on such Trading Day, the average of the reported closing bid and asked prices regular way, on the principal U.S. securities exchange on which such securities are listed or admitted to trading (determined by trading volume on such Trading Day) or, if not listed or admitted to trading on any U.S. securities exchange, on the National Association of Securities Dealers Automated Quotations National Market System, or if such securities are not listed or admitted to trading on any U.S. securities exchange or quoted on such National Market System, the average of the closing bid and asked prices in the over-the-counter market or otherwise as reasonably determined by the Bank”

““ Collection Account ” means an account of the Obligor established pursuant to, and subject to the security interest specified in, Section 13(q ).”

““ Trading Day ” means each Monday, Tuesday, Wednesday, Thursday and Friday, other than a day on which securities are not traded on the applicable securities exchange or in the applicable securities market.”

Section 2 Amendment to Section 13(q) of the LOCRA . Section 13(q) of the LOCRA is hereby amended by:

(a) deleting “ plus the Return Rate Applicable Margin ” in clause (iii) thereof; and

(b) adding the following at the end of clause (iii) thereof:

“The Obligor may invest the Hedging Collateral posted to the Collection Account in any kind of investments permitted by the Bank in its sole discretion in the definitive documentation establishing the Collection Account, it being understood that the type and categories of such permitted investments shall in no event be less favorable to the Obligor than those constituting Approved Investments (as such term is defined in the Account Security and Control Agreement, dated as of July 8, 2009 (as amended, modified or otherwise supplemented from time to time, the “ Existing Control Agreement ”), among the Bank, as secured party, the Obligor and Deutsche Bank Trust Company Americas, as securities intermediary). The Obligor shall be entitled to receive all income, interest or capital gains with respect to any such investments or amounts on deposit in the Collection Account, in each case, in excess of the amounts required to be posted as Hedging Collateral pursuant to Section 13(q ), subject to terms and conditions to be agreed upon by the Bank and the Obligor, but in no event less favorable to the Obligor than those terms and conditions set forth in the Existing Control Agreement; provided , however , that, for the avoidance of doubt, no interest shall accrue and be payable by the Bank pursuant to this clause (iii) in respect of any amounts on deposit in, or assets credited to, the Collection Account on any day constituting income, interests or capital gains derived from investments made with the amounts on deposit in the Collection Account in excess of the amount required to be on deposit on such day in the Collection Account pursuant to Section 13(q ).”

Section 3 Effect on the LOCRA . Except as expressly set forth herein, the Bank agrees to no amendment and grants no waiver or consent with respect to the LOCRA or any other Related Document, and the LOCRA and the other Related Documents remain in full force and effect and are hereby ratified and confirmed. The Bank’s agreeing to the amendments contained herein do not and shall not create (nor shall the Obligor rely upon the existence of or claim or assert that there exists) any obligation of the Bank to consider or to agree to any further amendments or waivers to any Related Document. In the event that the Bank subsequently agrees to consider any further amendment or waiver to any Related Document, neither the amendments contained herein nor any other conduct of the Bank shall be of any force or effect on the Bank’s consideration or decision with respect to any such amendment or waiver, and the Bank shall have no further obligation whatsoever to consider or to agree to any such amendment or waiver. The Bank expressly reserves the right to require strict compliance with the terms of the LOCRA as it has been amended by this Amendment in all respects. The amendments and waivers agreed to herein shall not constitute a course of dealing at variance with the LOCRA so as to require further notice by the Bank to require strict compliance with the terms of the LOCRA and the other Related Documents in the future. The parties hereto acknowledge and agree that this Amendment

shall be deemed to be a Related Document.

Section 4 Rules of Construction . From and after the Amendment Effective Date, the terms “Agreement,” “this Agreement,” “herein,” “hereinafter,” “hereto,” “hereof” and words of similar import, as used in the LOCRA, shall, unless the context otherwise requires, refer to the LOCRA, as amended by this Amendment.

Section 5 Severability . Any provision of this Amendment which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.

Section 6 Governing Law . This Amendment shall be governed by, and construed and enforced in accordance with, the law of the State of New York.

Section 7 Jurisdiction; Venue; Waiver of Jury Trial; Etc .

Each of the Obligor and the Bank submits to the nonexclusive jurisdiction of any state or federal court located in the Borough of Manhattan, City of New York, State of New York, for itself and its property and agrees that any such court shall be a proper forum for any action or suit with respect to this Amendment. Service of process in any legal action or proceeding arising out of or in connection with this Amendment may be made upon any party hereto by mailing a copy of the summons to such party either at the address set forth herein or at such party’s last address appearing in the Bank’s records.

EACH OF THE OBLIGOR AND THE BANK WAIVES (i) THE RIGHT TO A TRIAL BY JURY IN RESPECT OF ANY LEGAL ACTION OR PROCEEDING IN WHICH THE BANK AND THE OBLIGOR ARE PARTIES (WHETHER OR NOT THE ONLY PARTIES) ARISING OUT OF OR IN CONNECTION WITH THIS AMENDMENT, AND (ii) THE RIGHT TO INTERPOSE ANY CLAIM, SETOFF OR COUNTERCLAIM OF ANY NATURE OR DESCRIPTION.

Section 8 Counterparts . This Amendment may be executed in several counterparts and by each party hereto on a separate counterpart, each of which when so executed and delivered shall be an original, and all of which together shall constitute one instrument. Delivery of an executed counterpart of a signature page to this Amendment by telecopy, facsimile or electronic transmission shall be effective as delivery of a manually executed counterpart of this Amendment.

Section 9 Amendments; Waivers . None of the terms or provisions of

this Amendment may be waived, amended, supplemented or otherwise modified, except by a written instrument executed by the Obligor and the Bank.

Section 10 Headings . Section headings in this Amendment are included herein for convenience of reference only and shall not constitute a part of this Amendment for any other purpose.

Section 11 Notices . All notices under this Amendment shall be given in accordance with Section 17 of the LOCRA.

[The remainder of this page has been left intentionally blank]

IN WITNESS WHEREOF, the parties hereto have executed this Amendment as of the date first above written.


ARCOS DORADOS B.V., as Obligor

By:	/s/ Alejandro Germán Lemonnier
	Name:	Alejandro Germán Lemonnier
	Title:	CFO

[Signature Page]

[Third Amendment to Letter of Credit Reimbursement Agreement]


CREDIT SUISSE, acting through its CAYMAN ISLANDS BRANCH, as the Bank

By:	/s/ Oscar F. Estupiñán
	Name:	Oscar F. Estupiñán
	Title:	Director

By:	/s/ Andreas Schenk Caviezel
	Name:	Andreas Schenk Caviezel
	Title:	Managing Director

[Signature Page]

[Third Amendment to Letter of Credit Reimbursement Agreement]

Exhibit 10.9

FOURTH AMENDMENT TO LETTER OF

CREDIT REIMBURSEMENT AGREEMENT

FOURTH AMENDMENT TO LETTER OF CREDIT REIMBURSEMENT AGREEMENT, dated as of April 23, 2010 (this “ Amendment ”), between ARCOS DORADOS B.V., a private company with limited liability ( besloten vennootschap met beperkte aansprakelijkheid ) organized under the laws of The Netherlands (together with its successors and assigns, the “ Obligor ”) and CREDIT SUISSE AG, CAYMAN ISLANDS BRANCH (formerly known as CREDIT SUISSE, acting through its CAYMAN ISLANDS BRANCH) (together with its branches, agencies, successors and assigns, the “Bank”). Capitalized terms used but not defined herein shall have the meaning assigned to such terms in the LOCRA (as defined below).

RECITALS

A. WHEREAS, the Obligor and the Bank are parties to that certain Letter of Credit Reimbursement Agreement, dated as of August 3, 2007 (as amended by the Amendment to Letter of Credit Reimbursement Agreement, dated as of November 3, 2008, the Second Amendment to Letter of Credit Reimbursement Agreement, dated as of December 10, 2008 and the Third Amendment to Letter of Credit Reimbursement Agreement, dated as of July 8, 2009, the “ LOCRA ”);

B. WHEREAS, the Obligor, the Bank and Deutsche Bank Trust Americas, in its capacity as securities intermediary (in such capacity, the “ Securities Intermediary ”), are parties to that certain Account Security and Control Agreement, dated as of July 8, 2009); and

C. WHEREAS, the Obligor and the Bank have agreed to amend certain provisions of the LOCRA in the manner, and subject to the terms and conditions, provided for herein.

ARTICLE I

CONDITIONS TO EFFECTIVENESS

Section 1.1 Amendment to Section 1.1 of the LOCRA . Section 1.1 of the LOCRA is hereby amended by:

(a) deleting the definitions of “Collection Account,” “Closing Price,” “Delivery Amount,” “Hedge Termination Value,” “Hedging Collateral,” “Hedging Collateral Amount,” “Hedging Event,” “Return Amount,” “Return Rate,” “Settlement Day,” “Total Collateralized Amount,” “Trading Day” and “Valuation Date,” each in its entirety; and

(b) adding the following definitions in the corresponding alphabetical order:

““End Date” shall have the meaning assigned to this term in the Letter of Credit.”

““Issuance Date” shall have the meaning assigned to this term in the Letter of Credit.”

Section 1.2 Amendment to Section 3(b)(i) of the LOCRA . Section 3(b)(i) of the LOCRA is hereby amended by adding replacing “(the “Fee Letter”)” with “(as amended from time to time, the “Fee Letter”)” .

Section 1.3 Amendment to Section 13(g) of the LOCRA . Section 13(q) of the LOCRA is hereby amended by deleting such section in its entirety and replacing it with the following:

“[Reserved]”

ARTICLE II

CONDITIONS TO EFFECTIVENESS

Section 2.1 Conditions to Effectiveness . This Amendment shall become effective on the date on which each of the following conditions precedent has been satisfied in a manner reasonably satisfactory to the Bank (but, in any event, by no later than April 26, 2010) (such date, the “ Amendment Effective Date ”):

(c) Execution of Amendment . The Bank shall have received a true, correct and complete copy of this Amendment duly executed and delivered by a duly authorized officer of the Obligor, and this Amendment shall be in full force and effect.

(d) Representations and Warranties . Each of the representations and warranties of the Obligor set out in the Related Documents shall be true and correct on and as of the Amendment Effective Date.

(e) Fees . The Bank shall have received (i) a true, correct and complete copy of the Amendment to the Fee Letter in substance and form satisfactory to the Bank, duly executed and delivered by a duly authorized officer of the Obligor, and the Fee Letter (as so amended) shall be in full force and effect; and (ii) payment in full by the Obligor of all fees and expenses of the Bank payable by the Obligor, including reimbursement or payment of all fees, charges and disbursements of counsel to the Bank in New York.

(f) Termination of Existing Control Agreement . The Securities Intermediary shall have received a true, correct and complete copy of a letter agreement substantially in the form of Exhibit A hereto, duly executed and delivered by a duly authorized officer of the Bank and acknowledged by both a duly authorized officer of the Obligor and a duly authorized officer of the Securities Intermediary.

ARTICLE III

MISCELLANEOUS

Section 3.1 Effect on the LOCRA . Except as expressly set forth herein, the Bank agrees to no amendment and grants no waiver or consent with respect to the LOCRA or any other Related Document, and the LOCRA and the other Related Documents remain in full force and effect and are hereby ratified and confirmed. The Bank’s agreeing to the amendments contained herein do not and shall not create (nor shall the Obligor rely upon the existence of or claim or assert that there exists) any obligation of the Bank to consider or to agree to any further amendments or waivers to any Related Document. In the event that the Bank subsequently agrees to consider any further amendment or waiver to any Related Document, neither the amendments contained herein nor any other conduct of the Bank shall be of any force or effect on the Bank’s consideration or decision with respect to any such amendment or waiver, and the Bank shall have no further obligation whatsoever to consider or to agree to any such amendment or waiver. The Bank expressly reserves the right to require strict compliance with the terms of the LOCRA as it has been amended by this Amendment in all respects. The amendments and waivers agreed to herein shall not constitute a course of dealing at variance with the LOCRA so as to require further notice by the Bank to require strict compliance with the terms of the LOCRA and the other Related Documents in the future. The parties hereto acknowledge and agree that this Amendment shall be deemed to be a Related Document.

Section 3.2 Rules of Construction . From and after the Amendment Effective Date, the terms “Agreement,” “this Agreement,” “herein,” “hereinafter,” “hereto,” “hereof” and words of similar import, as used in the LOCRA, shall, unless the context otherwise requires, refer to the LOCRA, as amended by this Amendment.

Section 3.3 Severability . Any provision of this Amendment which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.

Section 3.4 Governing Law . This Amendment shall be governed by, and construed and enforced in accordance with, the law of the State of New York.

Section 3.5 Jurisdiction; Venue; Waiver of July Trial: Etc .

(a) Each of the Obligor and the Bank submits to the nonexclusive jurisdiction of any state or federal court located in the Borough of Manhattan, City of New York, State of New York, for itself and its property and agrees that any such court shall be a proper forum for any action or suit with respect to this Amendment. Service of process in any legal action or proceeding arising out of or in connection with this Amendment may be made upon the Obligor by mailing a copy of the summons to the Obligor either at the address set forth in Section 3.9 or at the Obligor’s last address appearing in the Bank’s records.

(b) EACH OF THE OBLIGOR AND THE BANK WAIVES (i) THE RIGHT TO A TRIAL BY JURY IN RESPECT OF ANY LEGAL ACTION OR PROCEEDING IN WHICH THE BANK AND THE OBLIGOR ARE PARTIES (WHETHER OR NOT THE ONLY PARTIES) ARISING OUT OF OR IN CONNECTION WITH THIS AMENDMENT, AND (ii) THE RIGHT TO INTERPOSE ANY CLAIM, SETOFF OR COUNTERCLAIM OF ANY NATURE OR DESCRIPTION.

Section 3.6 Counterparts . This Amendment may be executed in several counterparts and by each party hereto on a separate counterpart, each of which when so executed and delivered shall be an original, and all of which together shall constitute one instrument. Delivery of an executed counterpart of a signature page to this Amendment by telecopy, facsimile or electronic transmission shall be effective as delivery of a manually executed counterpart of this Amendment.

Section 3.7 Amendments; Waivers . None of the terms or provisions of this Amendment may be waived, amended, supplemented or otherwise modified, except by a written instrument executed by the Obligor and the Bank.

Section 3.8 Headings . Section headings in this Amendment are included herein for convenience of reference only and shall not constitute a part of this Amendment for any other purpose.

Section 3.9 Notices . All notices under this Amendment shall be given in accordance with Section 17 of the LOCRA.

[The remainder of this page has been left intentionally blank]

IN WITNESS WHEREOF. the parties hereto have executed this Fourth Amendment to Letter of Credit Reimbursement Agreement as of the date first above written.


ARCOS DORADOS B.V., as Obligor

By:		/s/ Miguel Sanchez de Bustamante
		Name: Miguel Sanchez de Bustamante
		Title: Corporate Finance Director

[Signature Page]

[Fourth Amendment to Letter of Credit Reimbursement Agreement]


CREDIT SUISSE AG, CAYMAN ISLANDS BRANCH

By:	/s/ Martin Cameo
	Name:	Martin Cameo
	Title:	Director

By:	/s/ Andreas Schenk Caviezel
	Name:	Andreas Schenk Caviezel
	Title:	Managing Director

EXHIBIT A

[LETTERHEAD OF CREDIT SUISSE AG, CAYMAN ISLANDS BRANCH]

April 23, 2010

Deutsche Bank Trust Company Americas

60 Wall Street, MS NYC60-2710

New York, NY 10005-2858

Attn: Luigi Sacramone

Re: Cancellation of Account Security and Control Agreement, account number S45182

To Whom It May Concern:

Reference is made to that certain Account Security and Control Agreement dated July 8, 2009 (the “ Account Control Agreement ”) among Arcos Dorados B.V. (the “ Obligor ”), Credit Suisse AG, Cayman Islands Branch (formerly known as Credit Suisse, acting through its Cayman Islands Branch) (the “ Secured Party ” or the “ Bank ”) and Deutsche Bank Trust Company Americas (the “ Securities Intermediary ”) entered into pursuant to Section 13(q) of that certain Letter of Credit Reimbursement Agreement dated as of August 3, 2007 (as amended from time to time, the “ LOCRA ”) between the Obligor and the Bank, under which the Obligor is required to post Hedging Collateral upon the occurrence of a Hedging Event. Capitalized terms used but not defined herein shall have the meaning assigned to such terms in the LOCRA.

This is to advise you that pursuant to an amendment to the LOCRA, dated April 23, 2010, entered into between the Obligor and the Bank (the “ Amendment to LOCRA ”), the Obligor is no longer required to post Hedging Collateral and, as a result thereof, the undersigned hereby releases the Secured Party’s security interest in the above referenced account (the “ Account ”), titled Arcos CS Acc. Sec and Cntl Agreement.

Accordingly, and notwithstanding anything to the contrary in Section 9.11 (Termination) of the Account Control Agreement, the Secured party hereby terminates the Account Control Agreement effective as of the Amendment Effective Date (as defined in the Amendment to LOCRA), except with respect to those obligations of the Obligor that survive the termination thereof other than any obligation under Section 9.11 (Termination) of the Account Control Agreement to transfer the Account to a different “securities intermediary” or enter into, execute and deliver an agreement substantially in the form of the Account Control Agreement with such different “securities intermediary.” Accordingly, you may remove any notation in your records indicating the interest of the Secured party in the Account and follow any further instructions of the Obligor regarding the Account.

This letter agreement shall be governed by, and construed and enforced in accordance with, the laws of the State of New York.

This letter agreement may be executed in counterparts (and by different parties hereto on different counterparts), each of which shall constitute an original, but all of which when taken together shall constitute a single contract. Delivery of an executed counterpart of a signature page to this letter agreement by telecopy, facsimile or electronic transmission shall be effective as delivery of a manually executed counterpart of this letter agreement.

IN WITNESS WHEREOF, the parties hereto have duly executed this letter agreement as of the date first above written.


CREDIT SUISSE AG, CAYMAN ISLANDS BRANCH, as Secured Party

By:
Name:
Title:

By:
Name:
Title:

Acknowledged by: ARCOS DORADOS B.V., as Obligor

By:
Name:
Title:

Acknowledged by: DEUTSCHE BANK TRUST COMPANY AMERICAS, as Securities Intermediary

By:
Name:
Title:

Exhibit 10.10

[ISDA Logo]

International Swap Dealers Association, Inc.

AMENDED AND RESTATED

SCHEDULE

dated as of January 12, 2009

to the

ISDA 2002 Master Agreement


BANCO SANTANDER, S.A.,	and	ARCOS DORADOS B.V.,
a bank organized under the laws of Spain		a corporation organized under the laws of
		The Kingdom of Netherlands
(“Party A”)		(“Party B”)

dated as of August 1, 2007

between

Party A and Party B are parties to the ISDA 2002 Master Agreement, dated as of August 1, 2007 (the “Agreement”) and desire to amend the Schedule to the Agreement as set forth herein (terms used but not otherwise defined herein have the respective meanings given to them in the Agreement). In consideration of the premises, the mutual agreements hereinafter set forth and for other valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Party A and Party B hereby agree that the Schedule is hereby amended and restated in its entirety to read as follows:

Part 1. Termination Provisions.

(a)	“ Specified Entity ” means with respect to Party A for the purpose of:

Section 5(a)(v): Not applicable

Section 5(a)(vi): Not applicable

Section 5(a)(vii): Not applicable

Section 5(b)(v): Not applicable

and with respect to Party B for the purpose of:

Section 5(a)(v): Not applicable

Section 5(a)(vi): Not applicable

Section 5(a)(vii): Not applicable

Section 5(b)(v): Not applicable

(b)	“ Specified Transaction ” will have the meaning specified in Section 14 of this Agreement.

(c)	The “ Cross Default ” provisions of Section 5(a)(vi) of this Agreement will apply to both parties.

If such provisions apply:-

“ Specified Indebtedness ” means any obligation (whether present or future, contingent or otherwise, as principal or surety or otherwise) in respect of borrowed money, other than indebtedness in relation to bank deposits received in the normal course of business.

“ Threshold Amount ” means, in respect of Party A, 3% of shareholders’ equity of Party A as reported in its most recent audited financial statements, and, in respect of Party B, USD 5,000,000 (or the equivalent thereof).

(d)	The “ Credit Event Upon Merger ” provisions of Section 5(b)(v) will apply to Party A and will apply to Party B.

(e)

The “ Automatic Early Termination ” provisions of Section 6(a)(iv) will not apply to Party A or to Party B, provided , however , that with respect to a party, where the Event of Default specified in Section 5(a)(vii)(1), (3), (4), (5), (6) or, to the extent analogous thereto, (8) is governed by a system of law which does not permit termination to take place after the occurrence of the relevant Event of Default, then the Automatic Early Termination provisions of Section 6(a) will apply.

(f)	“ Termination Currency ” means United States Dollars.

(g)	Additional Termination Event will apply. The Additional Termination Events (if any) in respect of any Transaction will be as specified in the Confirmation which expressly relates to such Transaction.

Part 2. Tax Representations.

(a)	Payer Representations . For the purpose of Section 3(e) of this Agreement, Party A will make the following representations and Party B will make the following representations, if any:

It is not required by any applicable law, as modified by the practice of any relevant governmental revenue authority, of any Relevant Jurisdiction to make any deduction or withholding for or on account of any Tax from any payment (other than interest under Section 9(h) of this Agreement) to be made by it to the other party under this Agreement. In making this representation, it may rely on: (i) the accuracy of any representations made by the other party pursuant to Section 3(f) of this Agreement, (ii) the satisfaction of the agreement contained in Sections 4(a)(i) or (iii) of this Agreement and the accuracy and effectiveness of any document provided by the other party pursuant to Sections 4(a)(i) or (iii) of this Agreement, and (iii) the satisfaction of the agreement of the other party contained in Section 4(d) of this Agreement, provided that it shall not be a breach of this representation where reliance is placed on clause (ii) and the other party does not deliver a form or document under Section 4(a)(iii) of this Agreement by reason of material prejudice to its legal or commercial position.

(b)	*Party A Payee Tax Representations* . For the purpose of Section 3(f), Party A makes the following representation:

(i)

with respect to payments made to Party A when it has entered into a Transaction through an Office located outside the United States:

It is a public limited company organized under the laws of Spain that is the beneficial owner of all payments made to it under this Agreement and it is a “non-US branch” of a “foreign person” as such terms are used in U.S. Treasury Regulation Sections 1.1441-4(a)(3)(ii) and 1.6041-4(a)(4).

(ii)

with respect to payments made to Party A when it has entered into a Transaction through an Office located in the United States:

It is a public limited company organized under the laws of Spain that is the beneficial owner of all payments made to it under this Agreement and each payment received or to he received by it in connection with this Agreement will be effectively connected with its conduct of a trade or business in the United States.

(c)	*Party B Payee Tax Representations* . For the purpose of Section 3(f), Party B makes the following representation:

It is a “foreign person” and a “non-U.S. branch (or office) of a foreign person” in each case within the meaning, respectively, of Sections 1.6041-4(a)(4) and 1.1441-4(a)(3)(ii) of the United States Treasury Regulations.

Part 3. Agreement to Deliver Documents.

For the purpose of Section 4(a)(i) and (ii) of this Agreement, each party agrees to deliver the following documents, as applicable:

(a)	Tax forms, documents or certificates to be delivered are:


Party required to deliver document	Form/Document/Certificate	Date by which to be delivered
Party A	Any form or document accurately completed and in a manner reasonably satisfactory to the other party that may be required or reasonably requested in order to allow the other party to make a payment under a Transaction without any deduction or withholding for or on account of any Tax or with deduction or withholding at a reduced rate, including, without limitation, with respect to transactions described in Part 2(b)(i) above, U.S. Internal Revenue Service Form W-BEN (or any successor form thereto), and with respect to transactions described in Part 2(b)(ii) above, an executed United States Internal Revenue Service Form W-8ECI (or any successor thereto).	(i) Upon execution of this Agreement, (ii) thereafter promptly upon reasonable demand by the other party, and (iii) if such form or document was previously delivered an has become obsolete or incorrect, promptly upon learning that such form or document previously delivered by Party A has become obsolete or incorrect.
Party B	Any form or document accurately completed and in a manner reasonably satisfactory to the other party that may be required or reasonably requested in order to allow the other parry to make a payment under a Transaction without any deduction or withholding for or on account of any Tax or with deduction or withholding at a reduced rate, including, without limitation, an executed United States Internal Revenue Service Form W-8BEN (or any successor thereto).	(i) Upon execution of this Agreement, (ii) thereafter promptly upon reasonable demand by the other party, and (iii) if such Form was previously delivered and has become obsolete or incorrect, promptly upon learning that such Form previously delivered by Party B has become obsolete or incorrect.

(b)	Other documents to be delivered are:


Party Required to Deliver Document	Form/Document/Certificate	Date by which to be delivered	Covered by Section 3(d) Representation
Party B	A copy of the annual report of Party B containing audited financial statements for the most recently ended financial year prepared in accordance with generally accepted accounting principles in the United States of America.	Upon request and as soon as available and in any event within 120 days after the fiscal year of Party B.	Yes
Party B	A copy of the quarterly report of Party B containing unaudited financial statements for the most recently ended financial quarter prepared in accordance with generally accepted accounting principles in the United States of America.	Upon request and as soon as available and in any event within 90 days after the end of each of the first three fiscal quarters of each fiscal year of Party B.	Yes
Party B	Copies of the executed Credit Support Documents.	Upon execution of this Agreement.	Yes
Party A and Party B	Evidence reasonably satisfactory to the other party as to the names, true signatures and authority of the signatories of the party to execute this Agreement or any Confirmation and the Credit Support Documents.	Upon execution of this Agreement and thereafter upon request.	Yes
Party B	Certificate and Articles of Incorporation, or equivalent documents.	Upon execution of this Agreement.	Yes


Party B	Legal opinion acceptable to Party A.	Upon execution of this Agreement.	No
Party A and Party B	Such other documents as the other party may reasonably request.	Promptly upon request.	No

Part 4. Miscellaneous.

(a)	Addresses for Notices . For the purpose of Section 12(a) of this Agreement:

Address for notices or communications to Party A:


Banco Santander, S.A., Madrid
Address: Ciudad Grupo Santander
Edificio Marisma: planta baja
Attn.:		Swaps Administration
Telex:		42362 /45928 BADER E
Swift:		BDERESMM
Fax:		(3491) 357.12.32
Tel.:		(3491) 289.31.16

For all purposes and with respect to Transactions through that Office:

Banco Santander, S.A., New York Branch
Address:		45 East 53rd Street, New York, N.Y. 10022
Attn.:		Swaps Department
Telex:		BANSAN 662480 UW
Swift:		BDERUS33
Fax:		(1212) 350 3535
Tel.:		(1212) 350 3500

Only with respect to Transactions through that Office:

London Branch
Address:		Banco Santander House, 100 Ludgate Hill, London EC4M 7NJ
Attn:		Swaps Department
Telex:		8812851 BADER G
Swift:		BDERGB2L
Fax:		(0207) 332 7803
Tel.:		(0207) 332 7766


Address for notices or communications to Party B:

Arcos Dorados S.A.
Address:		Roque Saenz Peña 432 (B1636FFB) – Olivos – Buenos Aires – Argentina
Tel.:		(5411) 4711-2000

Attn.:		Miguel Sanchez de Bustamante
e-mail:		miguel.sanchez@ar.mcd.com
Fax:		(5411) 4711-2094 (#2045)
Tel.:		(5411) 4711-2045
Attn.:		Matias Klein
e-mail:		matias.klein@ar.mcd.com
Fax:		(5411) 4711-2094 (#2546)
Tel.:		(5411) 4711-2456

Attn.:		German Lemonnier
e-mail:		german.lemonnier@ar.mcd.com
Fax:		(5411) 4711-2094 (#2059)
Tel.:		(5411) 4711-2059

(b)	Process Agent . For the purpose of Section 113(c) of this Agreement:

Each party agrees that service upon its Process Agent by prepaid, registered, first class Unites States mail, return receipt requested, or by prepaid express courier service, return receipt requested, will constitute effective service upon it.


Party A appoints as its Process Agent:		Its New York Branch located at 45 East 53rd Street New York, NY 10022

Party B appoints as its Process Agent:		CT Corporation Systems 111 Eighth Avenue New York, New York 10011

(c)	Offices . The provisions of Section 10(a) of this Agreement will apply.

(d)	Multibranch Party . For the purpose of Section 10(b) of this Agreement:

Party A is a Multibranch Party and may act through the following Offices: Madrid, London and New York.

Party B is not a Multibranch Party and will act through the following Office: The home office of Party B.

(e)	Calculation Agent . The Calculation Agent will be Party A; provided, however , that it an Event of Default in respect of Party A occurs and is continuing, the Calculation Agent will be a third party financial institution agreed to by Party A and Party B.

(f)	“ Credit Support Document ” means with respect to Party A: Not Applicable.

“ Credit Support Document ” means with respect to Party B: In respect of any Transaction, as specified in the Confirmation of that Transaction.

(g)	“ Credit Support Provider ” means with respect to Party A: Not Applicable.

“ Credit Support Provider ” means with respect to Party B: In respect of any Transaction, as specified in the Confirmation of that Transaction.

(h)	Governing Law . This agreement will be governed by and construed in accordance with the laws of the State of New York without reference to choice of law doctrine except for 5-1401 of the New York General Obligations law.

(I)	Waiver of Jury Trial . TO THE EXTENT PERMITTED BY APPLICABLE LAW, EACH PARTY WAIVES ITS RESPECTIVE RIGHT TO ANY JURY TRIAL WITH RESPECT TO ANY LEGAL PROCEEDING ARISING UNDER OR IN CONNECTION WITH THIS AGREEMENT, ANY CREDIT SUPPORT DOCUMENT AS IT RELATES TO THIS AGREEMENT OR ANY TRANSACTION.

(j)	Netting of Payments . For the purpose of Section 2(c) of this Agreement “Multiple Transaction Payment Netting” will not apply.

(k)	“ Affiliate ” will have the meaning specified in Section 14 of this Agreement.

(l)	No Agency . The provisions of Section 3(g) of this Agreement will apply.

(m)	Additional Representations . Additional Representations will apply. For the purpose of Section 3 of this Agreement, each of the following will constitute an Additional Representation:

(i) Relationship between Parties . Each party will be deemed to represent to the other party on the date on which it enters into a Transaction that:

(1) Non-Reliance . In connection with this Agreement, any Credit Support Document to which it is a party, each Transaction, and any other documentation relating to this Agreement to which it is a party or that it is required by this Agreement to deliver:

(A) it is not relying upon any representations (whether written or oral) of the other party other than the representations expressly set forth in this Agreement, such Credit Support Document and in any Confirmation;

(B) it has consulted with its own legal, regulatory, tax, business, investment, financial and accounting advisors to the extent it has deemed necessary, and it has made its own investment, hedging and trading decisions (including decisions regarding the suitability of any Transaction pursuant to this Agreement) based upon its own judgment and upon any advice from such advisors as it has deemed necessary and not upon any view expressed by the other party;

(C) it has a full understanding of all the terms, conditions and risks (economic and otherwise) of the Agreement and each Transaction and is capable of assuming and willing to assume (financially and otherwise) those risks;

(D) the other party is not acting as a fiduciary or financial, investment or commodity trading advisor for it, it being understood that it is not relying on any unique or special expertise of the other party and it is not in any special relationship of trust or confidence with respect to the other party;

(E) it is acting for its own account, and it has made its own independent decisions to enter into that Transaction and as to whether that Transaction is appropriate or proper for it based upon its own judgment and upon advice from such advisers as it has deemed necessary. It is not relying on any communication (written or oral) of the other party as investment advice or as a recommendation to enter into that Transaction; it being understood that information and explanations related to the terms and conditions of a Transaction will not be considered investment advice or a recommendation to enter into that Transaction. No communication (written or oral) received from the other

party shall be deemed to be an assurance or guarantee as to the expected results of that Transaction; and

(2) Assessment and Understanding . It is capable of assessing the merits of and understanding (on its own behalf or through independent professional advice), and understands and accepts, the terms, conditions and risks of that Transaction. It is also capable of assuming, and assumes, the risks of that Transaction; and

(3) Status of Parties . Each party is not acting as a fiduciary for or an advisor to the other party with respect to that Transaction.

(ii) Eligible Contract Participant . Each party represents to the other party on and as of the date hereof and at all times until the termination of this Agreement that it is an “eligible contract participant” within the meaning of Section 1a(12) of the Commodity Exchange Act, as amended by the Commodity Futures Modernization Act of 2006.

(iii) ERISA . Each party represents to the other party on and as of the date hereof and at all times until the termination of this Agreement that with respect to each source of funds to be used by it to enter into any and all Transactions (each such source being referred to herein as a “Source”), the Source is not the assets of any “plan” (as such term is defined in Section 4975 of the Internal Revenue Code of 1986, as amended (the “Code”)) subject to Section 4975 of the Code or any “employee benefit plan” (as such term is defined in Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended (“ER1SA”)) subject to Title 1 of ER1SA, or otherwise out of “plan assets” within the meaning of United States Department of Labor regulation § 2510.3-101, 29 CFR § 2510-3-101.

(iv) Bona Fide Hedging Transactions . Party B represents that this Agreement and each Transaction hereunder is a transaction entered into in the ordinary course of business for the purpose of protecting against fluctuations in interest rates and/or foreign exchange rates and not for the purpose of speculation.

Part 5. Other Provisions.

(a)

ISDA Definitions . Any capitalized terms used herein and not otherwise defined herein will have the respective meanings ascribed to them in the 2006 ISDA Definitions (the “2006 Definitions”) and the 1998 ISDA FX and Currency Option Definitions (the “FX Definitions”), (each as published by the International Swaps and Derivatives Association, Inc., each as amended, modified, supplemented and restated from time to time,

collectively, the “ISDA Definitions”), which are incorporated into this Agreement. In the event of any inconsistency between the 2006 Definitions and the FX Definitions, the FX Definitions will prevail.

(b)

Change of Account . Section 2(b) of this Agreement is amended by the addition of the following at the end thereof: “ provided that , if any new account of one party is not in the same jurisdiction as the original account, the other party shall not be obliged to pay, for tax reasons, any greater amount and shall not receive any lesser amount as a result of such change than would have been the case if such change had not taken place.”

(c)	Modified Representation . For purposes of Section 3(d) of this Agreement, the following shall be added, immediately prior to the period at the end thereof:

“; provided that, in the case of financial statements delivered by Party A or Party B, such financial statements fairly present the financial position of the relevant entity to which they relate as at the date of such financial statements”.

(d)

Escrow . If either party in its reasonable judgment determines at any time that there has been a material adverse change that is likely to affect the other party’s ability to perform its ensuing obligation in connection with a Transaction or Transactions involving payments due from each of the parties on the same day in different currencies, the party that has formed that judgment may notify the other party that the payments due on that day in connection with that Transaction or those Transactions are to be made in escrow, to a major commercial bank selected by the party in good faith and that has offices in the cities in which both payments are to be made. If such an election is made, each party shall make the payment due from it on the day by deposit into escrow to that escrow agent, for value on that day, with irrevocable instruction (i) to release the payment to the intended payee upon receipt by the escrow agent of the required counter payment due from the payee on the same day in connection with that Transaction accompanied by irrevocable instructions to the same effect, or (ii) if the required deposit in escrow of the counter payment due is not so made on the same day, for value on that day, to return the payment deposited in escrow to the party that made the escrow deposit. The party that elects to have payments made in escrow shall pay the cost of the escrow arrangements and shall cause those arrangements to provide that the intended recipient of the payment due to be deposited first shall be entitled to interest on the deposited payment for each day in the period of its deposit at the rate offered by the escrow agent for that date for overnight deposits in the relevant currency in the office where it holds that deposited payment (such rate offered at 11:00 a.m. local time on that day) if that

payment is not released by 5:00 p.m. local time on the date it is deposited for any reason other than the intended recipient’s failure to make the escrow deposit it is required to make hereunder in a timely fashion.

(e)

Consent to Recording . The parties agree (i) that each may electronically record all telephone conversations between the trading, marketing, and other relevant personnel of the parties in connection with this Agreement, or any Transaction or potential Transaction; (ii) to obtain any necessary consent of and give any necessary notice or such recording to its relevant personnel and (iii) that any such recordings may be submitted in evidence to any court or in any proceeding for the purpose of establishing any matters pertinent to any Transaction.

(f)

Illegality . For purposes of Section 5(b)(i) of this Agreement, the obligation of either party to comply with any official directive issued or given by any government agency or authority with competent jurisdiction which has the result referred to in such Section 5(b)(i) will be deemed to be an “Illegality”.

(g)

Confirmations . On or promptly following the Trade Date of a Transaction. Party A will send in writing to Party B by facsimile and email a Confirmation. Upon receipt thereof, Party B shall examine the terms of each Confirmation sent by Party A, and unless Party B objects to the terms within three (3) Local Business Days after receipt of that Confirmation, those terms shall be deemed accepted and correct absent manifest error, in which case that Confirmation will be sufficient to form a binding supplement to this Agreement.

(h)

Limitation of Rate . Notwithstanding any provision to the contrary contained in this Agreement, in no event shall the Default Rate, Non-default Rate, or Termination Rate exceed the maximum non-usurious interest rate, if any, that at any time or from time to time may be contracted for, taken, reserved, charged, or received on the subject indebtedness under the law applicable to such party.

PART 6. FOREIGN EXCHANGE AND CURRENCY OPTIONS TRANSACTIONS

(a)

Each such FX Transaction and Currency Option Transaction shall be a Transaction, and the documents and other confirming evidence (including electronic messages on an electronic messaging service) exchanged between the parties confirming such FX Transaction or Currency Option Transaction shall each be a Confirmation (even where not so specified therein), for the purposes of this Agreement.

(b)

Payment Instructions . All payments to be made in respect of FX Transactions and Currency Option Transactions shall be made in accordance with standing payment instructions provided by the parties (or as otherwise specified in a Confirmation). Any such instructions from a party must be received no later than one Business Day prior to the Value Date or Premium Payment Date (as the case may be) for such Transaction and otherwise be in conformity with standard inter-dealer market practice regarding foreign currency delivery.

(c)	Currency Option Transaction Discharge and Termination .

(i)

Automatic Discharge and Termination of Offsetting Options. Unless otherwise agreed, any Call Option or any Put Option written by a party will automatically be terminated and discharged, in whole or in part, as applicable, against a Call Option or a Put Option, respectively, written by the other party, such termination and discharge to occur automatically upon the payment in full of the last Premium payable in respect of such Currency Option Transactions; provided that such termination and discharge may only occur in respect of Currency Option Transactions:

(1) each being with respect to the same Put Currency and the same Call Currency;

(2) each having the same Expiration Date and Expiration Time;

(3) each being of the same style, i.e. either both being American Style Options or both being European Style Options;

(4) each having the same Strike Price;

(5) neither of which shall have been exercised by delivery of a Notice of Exercise;

remaining portion of the Currency Option Transaction which is partially discharged and terminated shall continue to be a Currency Option Transaction for all purposes of this Agreement. This provision shall apply notwithstanding that either party (i) may fail to send out a Confirmation in respect of any such discharge and termination, or (ii) may fail to make changes in any of its books as a result of any such discharge and termination.

(ii)

Additional Definitions

(1)

“Call Option” means a Currency Option Transaction entitling, but not obligating, the Buyer to purchase from the Seller at the Strike Price a specified quantity of the Call Currency.

(2)

“Put Option” means a Currency Option Transaction entitling, but not obligating, the Buyer to sell to the Seller at the Strike Price a specified quantity of the Put Currency.

(d) Amendments to the FX and Currency Option Definitions . The following amendments are made to the FX and Currency Option Definitions:

(i)

Section 3.5(g) of the FX and Currency Option Definitions is amended by the deletion of the word “facsimile” in the third line thereof.

(ii)

Section 3.4 of the FX and Currency Option Definitions is hereby amended by the addition of the following as new Sections 3.4(c) and (d) of the FX and Currency Option Definitions:

“(c)

Unless otherwise agreed in writing by the parties, the Premium related to a Currency Option Transaction shall be paid on its Premium Payment Date in immediately available funds.

(d)

incurred in connection with such unpaid or late Premium or void Currency Option Transaction, including, without limitation, interest on such Premium from and including the Premium Payment Date to but excluding the date of actual payment in the same currency as such Premium at the Default Rate and any other losses, costs or expenses incurred by the Seller in connection with such terminated Currency Option Transaction, for the cost of its funding, or the loss incurred as a result of terminating, liquidating, obtaining or re-establishing a delta hedge or related trading position with respect to such Currency Option Transaction.”

[SIGNATURES ON FOLLOWING PAGE]

IN WITNESS WHEREOF, the parties have executed this Schedule as of the date specified on the first page hereof.


	BANCO SANTANDER, S.A.,

/s/ M ^a Carmen López Hervás		/s/ Tomás Mazuecos Abengozar
M ^a Carmen López Hervás	By:	Tomás Mazuecos Abengozar
Banco Santander, S.A.		Name:	Tomás Mazuecos Abengozar Banco Santander, S.A.
Authorized signature		Title:	Authorized signature
Firma autorizada			Firma autorizada


	ARCOS DORADOS B.V.

	By:	(illegible signature)
		Name:
		Title:

Exhibit 10.11


Date:		October 12, 2010

To:		ARCOS DORADOS BV
		c/o Arcos Dorados Argentina S.A.
		Attn: Miguel Sanchez de Bustamante; Diego Pace; Julieta Nalband
		Roque Saenz Peña 432
		Olivos - Buenos Aires
		Argentina - B 1636FFB

Subject:		NON-DELIVERABLE CROSS CURRENCY SWAP TRANSACTION

Ref Number:

Dear Sirs,

The purpose of this letter agreement (this “ Confirmation ”) is to confirm the terms and conditions of the transaction entered into between us on the Trade Date specified below (the “ Transaction ”).

The definitions and provisions contained in the 2006 ISDA Definitions (the “ 2006 Definitions ”) and the 1998 ISDA FX and Currency Option Definitions and Annex A to the 1998 FX and Currency Options Definitions, as amended (the “ FX Definitions ”), each as published by the International Swaps and Derivatives Association, Inc., and the Agreement (as defined below) are incorporated into this Confirmation.

In the event of any inconsistency between the definitions and provisions in this Confirmation, the definitions and provisions in the Agreement, the definitions and provisions in the FX Definitions, and/ or the definitions and provisions in the 2006 Definitions, they will prevail in this order respectively.

This Confirmation constitutes a “Confirmation” as referred to in, and supplements, forms part of and is subject to, the ISDA 2002 Master Agreement dated as of August 1, 2007, as amended and supplemented from time to time (the “ Agreement ”), between Arcos Dorados BV (“ Party B ”) and Banco Santander, S.A. (“ Party A ”). All provisions contained in the Agreement govern this Confirmation except as expressly modified below.

1.	Terms and conditions of the Transaction.

A. General Terms: The terms and conditions of the particular Transaction to which this Confirmation relates are as follows:


Part I. Transaction Terms:

Trade Date:		December 17, 2008.

Effective Date:		December 17, 2008.

Termination Date:		November 10, 2013, subject to adjustment in accordance with the Modified Following Business Day Convention.

Reset Dates:		First day of each Floating Rate Payer Calculation Period.

Initial Calculation Period Reset Date:		November 10, 2008.

Exchange Rate at Trade Date:		BRL/USD 2.3570.

Fixed Amounts:

Fixed Rate Payer:		Party B.

Fixed Rate Payer Notional Amount:		The “BRL Notional Amount” as specified in Annex A, and as adjusted from time to time pursuant to Paragraph 1(B) of this Confirmation.

Fixed Rate:		12.19% per annum.

Fixed Rate Payer Payment Dates:		Each Period End Date set forth on Annex A and the Termination Date, subject to adjustment in accordance with the Modified Following Business Day Convention.

Fixed Rate Day Count Fraction:		Actual/360.

Floating Amounts:

Floating Rate Payer:		Party A.

Floating Rate Payer Notional Amount:		The “USD Notional Amount” as specified in Annex A, and as adjusted from time to time pursuant to Paragraph 1(B) of this Confirmation.

Floating Rate Option:		USD-LIBOR-BBA.

Designated Maturity:		3 months.

Floating Rate for Initial		2.69875%. For the avoidance of doubt, the first Calculation Period will mean the period

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Calculation Period:		from, and including, November 10, 2008, to, but excluding, May 10, 2009.

Floating Rate Payer Payment Dates:		Each Period End Date set forth on Annex A and the Termination Date, subject to adjustment in accordance with the Modified Following Business Day Convention.

Floating Rate Day Count Fraction:		Actual/360.

Principal Exchange

Initial Exchange:		None.

Interim Exchanges:

Interim Exchange Dates:		Each Exchange Date as shown in Annex B, subject to adjustment in accordance with the Modified Following Business Day Convention.

Party A Interim Exchange Amount:		The “USD Amortization Amount” as specified in Annex B, and as adjusted from time to time pursuant to Paragraph 1(B) of this Confirmation.

Party B Interim Exchange Amount:		The “BRL Amortization Amount” as specified in Annex B, and as adjusted from time to time pursuant to Paragraph 1(B) of this Confirmation.

Final Exchange:

Final Exchange Date:		The Termination Date, subject to adjustment in accordance with the Modified Following Business Day Convention.

Party A Final Exchange Amount:		The “USD Notional Amount” as specified in Annex A, and as adjusted from time to time pursuant to Paragraph 1(B) of this Confirmation.

Party B Final Exchange Amount:		The “BRL Notional Amount” as specified in Annex A, and as adjusted from time to time pursuant to Paragraph 1(B) of this Confirmation.

Part II. Settlement Provisions:

Settlement:		Non-deliverable, with the effect that any

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		Reference Currency amounts payable hereunder on a Settlement Date shall be converted into Settlement Currency amounts by reference to the Settlement Rate Option on the applicable Valuation Date. All payments (including exchanges) hereunder shall be made in the Settlement Currency.

Settlement Rate Option:		BRL PTAX (BRL09).

Reference Currency:		BRL.

Settlement Currency:		USD.

Valuation Date:		Two business days prior to each Settlement Date (“ Scheduled Valuation Date ”), subject to adjustment in accordance with the Preceding Business Day Convention, or in the event of an Unscheduled Holiday, subject to adjustment in accordance with the Following Business Day Convention.

Settlement Date:		Each Fixed Rate Payer Payment Date and/or Exchange Date, subject to adjustment if the Scheduled Valuation Date is adjusted in accordance with the Following Business Day Convention or if Valuation Postponement applies, and in each such case, the Settlement Date shall be as soon as practicable, but in no event later than two Business Days after the date on which the Spot Rate is determined.

DISRUPTION EVENTS:

Price Source Disruption:		Applicable.

Price Materiality:		Applicable.

Primary Rate:		BRL 09.

Secondary Rate:		EMTA BRL Industry Survey Rate (BRL 12), or EMTA BRL Indicative Survey Rate (BRL 13), as the case may be.

Price Materiality Percentage:		3%, provided however, that if there are insufficient responses on the Valuation Date to the EMTA BRL Industry Survey or the EMTA BRL Indicative Survey, as the case may be, the Price Materiality Percentage will also be deemed to have been met.

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DISRUPTION FALLBACKS:

1. First Fallback Reference Price:		EMTA BRL Industry Survey Rate (BRL 12).

2. Valuation Postponement

3. Second Fallback Reference Price:		EMTA BRL Indicative Survey Rate (BRL 13).

4. Calculation Agent Determination of Settlement Rate

Part III. Other Terms:

Unscheduled Holiday		“ Unscheduled Holiday ” means that a day is not a Business Day and the market was not aware of such fact (by means of a public announcement or by reference to other publicly available information) until a time later than 9:00 a.m. local time in the Principal Financial Center(s) of the Reference Currency two Business Days prior to the Scheduled Valuation Date.

“Deferral Period” for Unscheduled Holiday		In the event the Scheduled Valuation Date becomes subject to the Following Business Day Convention, and if the Valuation Date has not occurred on or before the 30th consecutive day after the Scheduled Valuation Date (any such period being a “ Deferral Period ”), then the next day after the Deferral Period that would have been a Business Day but for the Unscheduled Holiday, shall be deemed to be the Valuation Date.

Valuation Postponement for Price Source Disruption:		“ Valuation Postponement ” means, for purposes of obtaining a Settlement Rate, that the Spot Rate will be determined on the Business Day first succeeding the day on which the Price Source Disruption ceases to exist, unless the Price Source Disruption continues to exist (measured from the date that, but for the occurrence of the Price Source Disruption, would have been the Valuation Date) for a consecutive number of calendar days equal to the Maximum Days of Postponement. In such event, the Spot Rate will be determined on the next Business Day

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		after the Maximum Days of Postponement in accordance with the next applicable Disruption Fallback.

Cumulative Events:		Notwithstanding anything herein to the contrary, in no event shall the total number of consecutive calendar days during which either (i) valuation is deferred due to an Unscheduled Holiday, or (ii) a Valuation Postponement shall occur (or any combination of (i) and (ii)), exceed 30 consecutive calendar days in the aggregate. Accordingly, (x) if, upon the lapse of any such 30 day period, an Unscheduled Holiday shall have occurred or be continuing on the day following such period, then such day shall be deemed to be a Valuation Date, and (y) if, upon the lapse of any such 30 day period, a Price Source Disruption shall have occurred or be continuing on the day following such period, then Valuation Postponement shall not apply and the Spot Rate shall be determined in accordance with the next Disruption Fallback.

Maximum Days of Postponement:		Thirty (30) calendar days.

Relevant Cities for Business Day for Valuation Date:		Sao Paulo, New York and London.

Relevant Cities for Business Day for Settlement Date:		Sao Paulo, New York and London.

Calculation Agent:		Party A.

B. Partial Early Termination

(a)

Unless (i) an Event of Default under the Agreement as amended by this Confirmation has occurred in respect of Party B or (ii) Party A has designated an Early Termination Date, Party B may, at its option, terminate a portion (a “ Partially Terminated Transactio n”) of the Transaction (each, a “ Partial Early Termination ”) by written notice to Party A.

(b)

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Annex B consistently with that reduction of the Notional Amounts, to reflect such reduction in the Notional Amounts, and shall distribute a new Annex A and a new Annex B as so revised to Party A and Party B.

(c)

For purposes of the Agreement and the Transaction to which this Confirmation relates, the effect of a Partial Early Termination shall be as follows: the Transaction shall be deemed and treated for all purposes to have been divided into two separate Transactions, as if the parties, instead of initially entering into the Transaction, had instead entered into two separate Transactions; the terms of each of such two deemed Transactions shall be identical to the Transaction, except for the Notional Amounts and the Amortization Amounts thereof, and such two deemed Transactions shall have new Notional Amounts, which, when taken together, shall result in the same Notional Amounts as the Notional Amounts of the Transaction immediately prior to the Partial Early Termination, and new Amortization Amounts, which, when taken together, shall result in the same Amortization Amounts as the Amortization Amounts of the Transaction immediately prior to the Partial Early Termination; and one of which deemed Transactions (the “ Terminated Portion ”) shall have the Notional Amounts and the Amortization Amounts corresponding to the reduction designated for such Partially Terminated Transaction in the notice of Partial Early Termination issued by Party B pursuant to Paragraph 1(B)(a). The Terminated Portion shall be deemed to have terminated on the Local Business Day specified by Party B which date so designated by Party B shall not be a day earlier than the day such notice is effective (such date being referred to herein as the “ Partial Early Termination Date ”), with the same effect as though a Termination Event had occurred hereunder with the Affected Party being Party B for purposes of determining payments upon early termination, with the Early Termination Date being the Partial Early Termination Date, and with such Terminated Portion being treated for this purpose only as an Affected Transaction. The obligations of each party to make payments pursuant to the Agreement to the other party with respect to the Terminated Portions that would, but for such Partial Early Termination Date, occur after such Partial Early Termination Date, will terminate after the Partial Early Termination Date. Partial Early Termination shall not, however, constitute a Termination Event under the Agreement with respect to the non-terminated portion of Partially Terminated Transactions, and the occurrence of a Partial Early Termination shall have no effect on the non-terminated portions of Partially Terminated Transactions or on Transactions other than Partially Terminated Transactions, all of which shall continue in full force and effect without regard to any such Partial Early Termination.

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C. Documents to be delivered:

Each party shall deliver to the other, at the time of its execution of this Confirmation, evidence of the corporate authority, specimen signature and incumbency of each person who is executing the Confirmation on the party’s behalf, unless such evidence has previously been supplied and remains true and in effect.

D. Office and Address for notices in connection with the Transaction:


a) Party A:	BANCO SANTANDER, S.A. Parque Empresarial la Finca Edificio 10, planta baja Pozuelo de Alarcon 28223 Madrid
	Email:	Incomingdocgroup@gruposantander.com
	Fax:	011-34-91-257-0466

b) Party B:	ARCOS DORADOS BV c/o Arcos Dorados Argentina S.A. Roque Saenz Pena 432 Olivos - Buenos Aires Argentina - B1636FFB
	Tel:	011-54-11-4711-2000
	Fax:	011-54-11-4711-2236
	Attn:	Miguel Sanchez de Bustamante; Diego Pace; Julieta Nalband

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E. Payment Instructions for Party A:


Bank Name:		CITIBANK, NEW YORK
		Swift (CITIUS33)
		F/O Banco Santander S.A., Madrid
		(BSCHESMM)
		A/C No. 10 936 195

F. Payment Instructions for Party B:


Bank Name:		JPMorgan Private Bank
Bank Address:		345 Park Avenue, 5th Floor
		New York, NY 10154-1002
ABA No.:		021-000-021
For Credit to Account #:		739577034
Beneficiary:		Arcos Dorados B.V.

2.	Amendments to the Agreement Applicable to the Transaction:

For purposes of the Transaction to which this Confirmation relates, the following modifications to the Schedule shall apply:

(a)

The “ Credit Support Default ” provisions of Section 5(a)(iii) are hereby amended by inserting, in the fifth line of clause (2) thereof, immediately before the word “prior”, the words “or upon the Security Documents ceasing to be in full force and effect, or ceasing to give the Collateral Agent, for the benefit of Party A and the other Secured Creditors (as defined in each of the Security Documents), liens, rights, powers and privileges purported to be created thereby (including, without limitation, a perfected security interest in, and lien on, all of the Collateral (except to the extent any part thereof is released from such lien in accordance with the provisions of the Security Documents), in favor of the Collateral Agent, superior to and prior to the rights of all third persons, and subject to no other liens other than Permitted Liens (as defined in the U.S. Security Documents), in each case”.

(b)	Threshold Amount. “Threshold Amount” for the purposes of the “Cross Default” provision of Section 5(a)(vi) shall be, in respect of Party B, USD 10,000,000.

(c)	Additional Event of Default. It will be an Event of Default in respect of Party B under the Agreement if an “Event of Default” occurs under any of the Security Documents.

(d)	Additional Documents to be Delivered. For purposes of Section 4(a)(ii) of the Agreement, Party B agrees to deliver to Party A all financial information, if any,

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as Party B delivers or is required to deliver pursuant to the Subsidiary Guaranty and the Security Documents.

(e)	Additional Termination Event will apply. The following will constitute an Additional Termination Event:

If the Transaction in whole or in part shall at any time cease to constitute a bona fide hedge of Specified Indebtedness of Party B denominated in USD or shall otherwise be maintained for speculative purposes.

For purposes of the Additional Termination Event above, Party B will be the sole Affected Party.

(f)	“ Credit Support Document ” means with respect to Party A: Not Applicable.

“ Credit Support Document ” means with respect to Party B: The Security Documents and the Subsidiary Guaranty.

(g)	“ Credit Support Provider ” means with respect to Party A: Not Applicable,

“ Credit Support Provider ” means with respect to Party B: The Guarantors (as defined in the Subsidiary Guaranty).

(h)

Collateral Security. Party B acknowledges and agrees that all of its obligations under this Confirmation (and the Agreement in respect of the Transaction to which this Confirmation relates) (whether present, future, contingent or otherwise) shall be guarantied under the Subsidiary Guaranty and shall be secured by, and have the benefit of, any security from time to time granted by Party B to Party A or any of the other Secured Creditors (as defined in any of the Security Documents) with respect to the Obligations (as defined in the Security Documents) or to any agent acting on behalf of Party A or any of the other Secured Creditors (whether before or after the date hereof). Party B undertakes to and agrees with Party A to enter into, execute and deliver all such additional agreements, documents, instruments and other assurances and to do such acts and things as Party A may reasonably require in order to give effect to the foregoing.

(i)

Transfer. Notwithstanding anything to the contrary in Section 7 of the Agreement, Party A may, with the consent of Party B (which consent shall not be unreasonably withheld or delayed, provided that (x) if Party B does not respond within 2 Business Days after notice of any such proposed transfer or assignment from Party A, such consent shall be deemed to have been given and (y) so long as either an Event of Default with respect to which Party B is the Defaulting Party or a Termination Event with respect to which Party B is an Affected Party has occurred and is continuing at the time of the transfer or assignment or if the transferee or assignee is an Affiliate of Party A or in the circumstances described

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in Sections 7(a) and 7(b) of the Agreement, Party B shall be deemed to have given its consent and no actual specific written consent shall be required), transfer or assign the Transaction to which this Confirmation relates and the rights and obligations of Party A under the Agreement and the Credit Support Documents to the extent they relate to the Transaction to which this Confirmation relates to one or more assignees (each, a “ Transferee ”); provided that, in the event of an assignment or transfer by Party A without the express consent of Party B (other than an assignment or transfer of the type described in Section 7(a) or 7(b) of the Agreement, in which case the following provisions shall not apply, but without prejudice to any other right or remedy under the Agreement); (i) Party B will not, as a result of such transfer, be required to pay to the Transferee an amount in respect of an Indemnifiable Tax under Section 2(d)(i)(4) under the Transferee Agreement (as defined below) greater than the amount in respect of which Party B would have been required to pay to Party A in the absence of such transfer; (ii) Party B will not receive any payment under the Transferee Agreement from which an amount is required to be, as a result of such transfer, withheld or deducted on account of a Tax with respect to which no additional amount is required to be paid by the Transferee under Section 2(d)(i)(4) of the Transferee Agreement (other than by reason of Section 2(d)(i)(4)(A) or (B) thereof); (iii) at the time of the assignment, if Party B and the Transferee have not entered into a master agreement in the form of the Agreement, this Confirmation shall evidence a complete binding agreement between them as to the terms of the Transaction to which this Confirmation relates, and Party B and the Transferee shall use all reasonable efforts promptly to negotiate, execute and deliver an agreement in the form of the ISDA 2002 Master Agreement (the “ ISDA Form ”), with such modifications as they shall in good faith agree (the “ Transferee Agreement ”); upon the execution and delivery of the Transferee Agreement, this Confirmation will supplement, form a part of and be subject to that agreement; until the execution and delivery of the Transferee Agreement, this Confirmation, together with all other documents referring to the ISDA Form confirming transactions entered into between Party B and the Transferee, shall supplement, form a part of, and be subject to an agreement in the form of the ISDA Form as if they had executed an agreement in such form (but without any Schedule except for the election of the laws of the State of New York as the governing law and USD as the Termination Currency) on the date in which the assignment is effective between Party B and the Transferee; in the event of any inconsistency between the provisions of that agreement and this Confirmation, this Confirmation will prevail for the purpose of the Transaction; (iv) neither an Event of Default with respect to which Party A is the Defaulting Party nor a Termination Event with respect to which Party A is an Affected Party has occurred and is continuing at the time of the assignment, and neither an Event of Default nor a Termination Event shall occur as a result of the assignment; (v) it will not become, and there is not a substantial likelihood that it will become, unlawful for either party to perform any obligation under the Transferee Agreement as a result of such

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assignment; and (vi) Party A provides to Party B written notice of such assignment reasonably in advance of the assignment specifying the date of such assignment. Unless Party B is notified in writing to the contrary, from and after such date specified for an assignment that complies with the foregoing, Party B may treat the Transferee as Party A for all purposes.

(j)	Definitions.

Section 14 of the Agreement is hereby amended by inserting the following in alphabetical order:

“ Amortization Amounts ” means, as applicable, in respect of the Transaction to which this Confirmation relates, the amounts specified in Annex B as the applicable BRL Amortization Amount and USD Amortization Amount, in effect from time to time in this Confirmation.

“ Collateral ” means and includes (i) all “Collateral” as defined in the U.S. Security Documents and (ii) all property transferred in trust for the collateral benefit of the Collateral Agent and/or the other secured creditors named therein, or over which the Collateral Agent and/or the other secured creditors named therein have been granted a lien or other security interest (however denominated under applicable law), pursuant to the Foreign Pledge Agreements.

“ Collateral Agent ” means Deutsche Bank Trust Company Americas, in its capacity as collateral agent for the benefit of Party A and certain other secured creditors under the Subsidiary Guaranty and the Security Documents, and any successor thereto in such capacity.

“ Foreign Pledge Agreements ” means and includes, collectively, the agreements, contracts and instruments set forth on Annex C, and any additional documents or instruments executed and delivered in connection therewith or pursuant to the requirements of any of the foregoing, in each case as modified, supplemented or amended from time to time,

“ Notional Amounts ” means, as applicable, in respect of the Transaction to which this Confirmation relates, the amounts specified in Annex A as the applicable BRL Notional Amount and USD Notional Amount, in effect from time to time in this Confirmation.

“ Security Documents ” means and includes each of the U.S. Security Documents and the Foreign Pledge Agreements.

“ Subsidiary Guaranty ” means the Second Amended and Restated Subsidiary Guaranty, dated as of October 12, 2010, made by certain subsidiaries of Party B

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in favor of the Collateral Agent, as modified, supplemented or amended from time to time.

“ U.S. Security Documents ” means and includes each of (i) the Second Amended and Restated Security Agreement, dated as of October 12, 2010, among Party B, certain subsidiaries of Party B and the Collateral Agent, (ii) the Second Amended and Restated U.S. Stock Pledge Agreement, dated as of October 12, 2010, among Party B, certain subsidiaries of Party B and the Collateral Agent, (iii) the Second Amended and Restated U.S. Intercompany Note Pledge Agreement, dated as of October 12, 2010, among Party B, certain subsidiaries of Party B and the Collateral Agent and (iv) any additional documents or instruments executed and delivered in connection with or pursuant to the requirements of any of the foregoing, in each case as modified, supplemented or amended from time to time.

(k)	Additional Representations.

For purposes of Section 3 of the Agreement, the following shall constitute Additional Representations:

(A) Bona Fide Hedging Transactions. Party B represents that this Agreement and each Transaction hereunder is a hedging transaction entered into in the ordinary course of business and not entered into for the purposes of speculation.

(B) No Fiduciary Relationship. Each party has entered into the Transaction solely in reliance on its own judgment. Neither party has any fiduciary obligation to the other party relating to the Transaction. In addition, neither party has held itself out as advertising, or has held out any of its employees or agents as having the authority to advise, the other party as to whether or not the other party should enter into the Transaction, any subsequent actions relating to the Transaction or any other matters relating to the Transaction. Neither party shall have any responsibility or liability whatsoever in respect of any advise given, or views expressed, by it or any of such persons to the other party relating to the Transaction, whether or not such advice is given or such views are expressed at the request of the other party.

(l)

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Amended and Restated Confirmation dated as of October 12, 2010 (relating to the transaction closed on January 6, 2009), in each case supplementing the Agreement and (iii) the then current notional amounts in BRL under the transaction documented under the Confirmation, dated as of December 31, 2008 (relating to the transaction closed on December 17, 2008), supplementing the ISDA 2002 Master Agreement, dated as of December 12, 2008, as modified by the Schedule, dated as of December 12, 2008, between The Bank of Nova Scotia and Party B or (y) change the currency thereof from Brazilian Reais) remains in effect, the Agreement and each Transaction thereunder shall constitute a bona fide hedging transaction of Specified Indebtedness of Party B denominated in US Dollars entered into in the ordinary course of Party B’s business and not entered into or maintained for the purposes of speculation.

Please confirm that the foregoing correctly sets for the terms of our agreement with respect to the Transaction by signing in the space provided below and sending a copy of the executed confirmation to Banco Santander, S.A.

[SIGNATURES ON FOLLOWING PAGE]

-15-


Yours sincerely,

Banco Santander, SA.

By:		/s/ Miguel Ángel Martínez Villegas
		Name: Miguel Ángel Martínez Villegas
		Title: Banco Santander, S.A. Authorized signature Firma autorizada

By:		/s/ Fernando Fernández Fernández
		Name: Fernando Fernández Fernández
		Title: Banco Santander, S.A. Authorized signature Firma autorizada

Accepted and agreed as of the date first above written:


ARCOS DORADOS B.V.

By:
		Name:
		Title:


Yours sincerely,

Banco Santander, SA.

By:
		Name:
		Title:

By:
		Name:
		Title:

Accepted and agreed as of the date first above written:


ARCOS DORADOS B.V.

By:		/s/ Diego Pace
		Name:
		Title:

-17-

ANNEX A


Reset Dates	Period End Dates	USD Notional Amount		BRL Notional Amount

November 10, 2008	May 10, 2009		50,000,000		117,850,000

May 10, 2009	August 10, 2009		50,000,000		117,850,000

August 10, 2009	November 10, 2009		50,000,000		117,850,000

November 10, 2009	February 10, 2010		50,000,000		117,850,000

February 10, 2010	May 10, 2010		50,000,000		117,850,000

May 10, 2010	August 10, 2010		50,000,000		117,850,000

August 10, 2010	November 10, 2010		50,000,000		117,850,000

November 10, 2010	February 10, 2011		45,000,000		106,065,000

February 10, 2011	May 10, 2011		45,000,000		106,065,000

May 10, 2011	August 10, 2011		40,000,000		94,280,000

August 10, 2011	November 10, 2011		40,000,000		94,280,000

November 10, 2011	February 10, 2012		35,000,000		82,495,000

February 10, 2012	May 10, 2012		35,000,000		82,495,000

May 10, 2012	August 10, 2012		30,000,000		70,710,000

August 10, 2012	November 10, 2012		30,000,000		70,710,000

November 10, 2012	February 10, 2013		25,000,000		58,925,000

February 10, 2013	May 10, 2013		25,000,000		58,925,000

May 10, 2013	August 10, 2013		12,500,000		29,462,500

August 10, 2013	November 10, 2013		12,500,000		29,462,500

-18-

ANNEX B


Exchange Date	USD Amortization Amount		BRL Amortization Amount

May 10, 2009		0		0

August 10, 2009		0		0

November 10, 2009		0		0

February 10, 2010		0		0

May 10, 2010		0		0

August 10, 2010		0		0

November 10, 2010		5,000,000		11,785,000

February 10, 2011		0		0

May 10, 2011		5,000,000		11,785,000

August 10, 2011		0		0

November 10, 2011		5,000,000		11,785,000

February 10, 2012		0		0

May 10, 2012		5,000,000		11,785,000

August 10, 2012		0		0

November 10, 2012		5,000,000		11,785,000

February 10, 2013		0		0

May 10, 2013		12,500,000		29,462,500

August 10, 2013		0		0

-19-

ANNEX C

1.	Argentine Pledge Agreements

Contrato de Prenda de Acciones y Cesión Fiduciaria Con Fines de Garantia, among Arcos Dorados Argentina S.A., LatAm and Woods White Staton Welten dated August 3, 2007, as amended from time to time.

2.	Brazilian Pledge Agreements

First Lien Brazilian Quota Pledge Agreement, dated August 3, 2007, among the Collateral Agent, as pledgee, the Company, LatAm, ADCDC, Arcos Dourados Comercio de Alimentos Ltda. and Arras Comercio de Alimentos Ltda.

First Amendment to First Lien Brazilian Quota Pledge Agreement, dated November 10, 2008, among the Collateral Agent, as pledgee, the Company, LatAm, ADCDC, Arcos Dourados Comercio de Alimentos Ltda. and Arras Comercio de Alimentos Ltda.

Second Amendment to the First Lien Brazilian Quota Pledge Agreement, dated December 28, 2008, among the Collateral Agent, as pledgee, the Company, LatAm, ADCDC, Arcos Dourados Comercio de Alimentos Ltda. and Arras Comercio de Alimentos Ltda.

Third Amendment to the First Lien Brazilian Quota Pledge Agreement, dated April 17, 2009, among the Collateral Agent, as pledgee, the Company, LatAm, ADCDC and Arcos Dourados Participações.

Fourth Amendment to the First Lien Brazilian Quota Pledge Agreement, dated December 23, 2009, among the Collateral Agent, as pledgee, the Company, LatAm, ADCDC and Arcos Dourados Participações Ltda.

Additional First Lien Brazilian Quota Pledge Agreement, dated December 29, 2008, among the Collateral Agent, as pledgee, the Company, LatAm, ADCDC, Arcos Dourados Participações, Arcos Dourados Comercio de Alimentos Ltda. and Arras.

First Amendment to the Additional First Lien Brazilian Quota Pledge Agreement, dated April 17, 2009, among the Collateral Agent, as pledgee, the Company, LatAm, ADCDC, Arcos Dourados Participações, Arcos Dourados Comercio de Alimentos Ltda. and Arras Comercio de Alimentos Ltda.

Second Amendment to the Additional First Lien Brazilian Quota Pledge Agreement, dated December 23, 2009, among the Collateral Agent, as pledgee, the Company, LatAm, ADCDC, Arcos Dourados Participações,

-20-

Arcos Dourados Comercio de Alimentos Ltda. and Arras Comercio de Alimentos Ltda.

3.	Colombian Pledge Agreements

Foreign Pledge Agreement, dated August 3, 2007, constituting, in favor of the Lenders, a pledge over the equity interests in Areas Dorados Colombia S.A., as amended from time to time.

4.	Ecuadorian Pledge Agreement

Amended and Restated First Lien Ecuadorian Stock Pledge Agreement, dated November 10, 2008, as amended from time to time.

5.	Mexican Trust Agreement

Contrato de Fideicomiso Irrevocable, Traslativo de Domino, de Garantia y Administración, No. 15468-5, dated August 3, 2007, among LatAm, McDonald’s, the Collateral Agent and Mexican Trustee, as amended from time to time.

Contrato de Fideicomiso Irrevocable, Traslativo de Domino, de Garantia y Administración, No. 15469-3, dated August 3, 2007, among ADCDC, McDonald’s, the Collateral Agent and Mexican Trustee, as amended from time to time.

6.	Puerto Rican Pledge Ratification

Amended and Restated Ratification to U.S. Stock Pledge Agreement, dated October 22, 2008, between LatAm and the Collateral Agent, as amended from time to time.

7.	Venezuelan Pledge Agreements

Acknowledgement to the Venezuelan Share Pledge Agreement, dated as of October 22, 2008, among the Collateral Agent, LatAm, Administrative Development Company and Management Operations Company, as amended from time to time.

-21-

Exhibit 10.12

Date: October 12, 2010

To:	ARCOS DORADOS BV

c/o Arcos Dorados Argentina S.A.

Attn: Miguel Sanchez de Bustamante; Diego Pace; Julieta Nalband

Roque Saenz Peña 432

Olivos - Buenos Aires

Argentina - B1636FFB

Subject: NON-DELIVERABLE CROSS CURRENCY SWAP TRANSACTION

Ref Number:

Dear Sirs,

Terms and conditions of the Transaction.

A. General Terms : The terms and conditions of the particular Transaction to which this Confirmation relates are as follows:

Part I. Transaction Terms:


Trade Date:		January 6, 2009.

Effective Date:		January 6, 2009.

Termination Date:		November 10, 2013, subject to adjustment in accordance with the Modified Following Business Day Convention.

Reset Dates:		First day of each Floating Rate Payer Calculation Period.

Initial Calculation Period Reset Date:		November 10, 2008.

Exchange Rate at Trade Date:		BRL/USD 2.1990.

Fixed Amounts:

Fixed Rate Payer:		Party B.

Fixed Rate Payer Notional Amount:		The “BRL Notional Amount” as specified in Annex A, and as adjusted from time to time pursuant to Paragraph 1(B) of this Confirmation.

Fixed Rate:		11.55% per annum.

Fixed Rate Payer Payment Dates:		Each Period End Date set forth on Annex A and the Termination Date, subject to adjustment in accordance with the Modified Following Business Day Convention.

Fixed Rate Day Count Fraction:		Actual/360.

Floating Amounts:

Floating Rate Payer:		Party A.

Floating Rate Payer Notional Amount:		The “USD Notional Amount” as specified in Annex A, and as adjusted from time to time pursuant to Paragraph 1(B) of this Confirmation.


Floating Rate Option:		USD-LIBOR-BBA.

Designated Maturity:		3 months.

Floating Rate for Initial Calculation Period:		2.69875%. For the avoidance of doubt, the first Calculation Period will mean the period from, and including, November 10, 2008, to, but excluding, May 10, 2009.

Floating Rate Payer Payment Dates:		Each Period End Date set forth on Annex A and the Termination Date, subject to adjustment in accordance with the Modified Following Business Day Convention,

Floating Rate Day Count		Actual/360.

Fraction:

Principal Exchange

Initial Exchange:		None.

Interim Exchanges:

Interim Exchange Dates:		Each Exchange Date as shown in Annex B, subject to adjustment in accordance with the Modified Following Business Day Convention.

Party A Interim Exchange Amount:		The “USD Amortization Amount” as specified in Annex B, and as adjusted from time to time pursuant to Paragraph 1(B) of this Confirmation.

Party B Interim Exchange Amount:		The “BRL Amortization Amount” as specified in Annex B, and as adjusted from time to time pursuant to Paragraph 1(B) of this Confirmation.



Final Exchange:

Final Exchange Date:		The Termination Date, subject to adjustment in accordance with the Modified Following Business Day Convention

Party A Final Exchange		The “USD Notional Amount” as specified in Annex A, and as adjusted from time to time


Amount:		pursuant to Paragraph 1(B) of this Confirmation.

Party B Final Exchange Amount:		The “BRL Notional Amount” as specified in Annex A, and as adjusted from time to time pursuant to Paragraph 1(B) of this Confirmation.

Part II. Settlement Provisions:

Settlement:		Non-deliverable, with the effect that any Reference Currency amounts payable hereunder on a Settlement Date shall be converted into Settlement Currency amounts by reference to the Settlement Rate Option on the applicable Valuation Date. All payments (including exchanges) hereunder shall be made in the Settlement Currency.

Settlement Rate Option:		BRL PTAX (BRL09).

Reference Currency:		BRL.

Settlement Currency:		USD.

Valuation Date:		Two business days prior to each Settlement Date (“ Scheduled Valuation Date ”), subject to adjustment in accordance with the Preceding Business Day Convention, or in the event of an Unscheduled Holiday, subject to adjustment in accordance with the Following Business Day Convention.

Settlement Date:		Each Fixed Rate Payer Payment Date and/or Exchange Date, subject to adjustment if the Scheduled Valuation Date is adjusted in accordance with the Following Business Day Convention or if Valuation Postponement applies, and in each such case, the Settlement Date shall be as soon as practicable, but in no event later than two Business Days after the date on which the Spot Rate is determined.

DISRUPTION EVENTS:


Price Source Disruption:		Applicable.

Price Materiality:		Applicable.

Primary Rate:		BRL 09.

Secondary Rate:		EMTA BRL Industry Survey Rate (BRL 12), or EMTA BRL Indicative Survey Rate (BRL 13), as the case may be.

Price Materiality Percentage:		3%, provided however, that if there are insufficient responses on the Valuation Date to the EMTA BRL Industry Survey or the EMTA BRL Indicative Survey, as the case may be, the Price Materiality Percentage will also be deemed to have been met.

DISRUPTION FALLBACKS:

1. First Fallback Reference Price:		EMTA BRL Industry Survey Rate (BRL 12).

2. Valuation Postponement

3. Second Fallback Reference Price:		MTA BRL Indicative Survey Rate (BRL 13).

4. Calculation Agent Determination of Settlement Rate

Part III. Other Terms:

Unscheduled Holiday		“ Unscheduled Holiday ” means that a day is not a Business Day and the market was not aware of such fact (by means of a public announcement or by reference to other publicly available information) until a time later than 9:00 a.m. local time in the Principal Financial Center(s) of the Reference Currency two Business Days prior to the Scheduled Valuation Date.

“Deferral Period” for Unscheduled Holiday		In the event the Scheduled Valuation Date becomes subject to the Following Business Day Convention, and if the Valuation Date has not occurred on or before the 30 ^th consecutive day after the Scheduled Valuation Date (any


		such period being a “Deferral Period”), then the next day after the Deferral Period that would have been a Business Day but for the Unscheduled Holiday, shall be deemed to be the Valuation Date,

Valuation Postponement for Price Source Disruption:		“ Valuation Postponement ” means, for purposes of obtaining a Settlement Rate, that the Spot Rate will be determined on the Business Day first succeeding the day on which the Price Source Disruption ceases to exist, unless the Price Source Disruption continues to exist (measured from the date that, but for the occurrence of the Price Source Disruption, would have been the Valuation Date) for a consecutive number of calendar days equal to the Maximum Days of Postponement. In such event, the Spot Rate will be determined on the next Business Day after the Maximum Days of Postponement in accordance with the next applicable Disruption Fallback.

Cumulative Events:		Notwithstanding anything herein to the contrary, in no event shall the total number of consecutive calendar days during which either (i) valuation is deferred due to an Unscheduled Holiday, or (ii) a Valuation Postponement shall occur (or any combination of (i) and (ii)), exceed 30 consecutive calendar days in the aggregate. Accordingly, (x) if, upon the lapse of any such 30 day period, an Unscheduled Holiday shall have occurred or be continuing on the day following such period, then such day shall be deemed to be a Valuation Date, and (y) if, upon the lapse of any such 30 day period, a Price Source Disruption shall have occurred or be continuing on the day following such period, then Valuation Postponement shall not apply and the Spot Rate shall be determined in accordance with the next Disruption Fallback.


Maximum Days of Postponement:		Thirty (30) calendar days.

Relevant Cities for Business Day for Valuation Date:		Sao Paulo, New York and London.

Relevant Cities for Business Day for
Settlement Date:		Sao Paulo, New York and London.

Calculation Agent:		Party A.

B. Partial Early Termination

(a)

Unless (i) an Event of Default under the Agreement as amended by this Confirmation has occurred in respect of Party B or (ii) Party A has designated an Early Termination Date, Party B may, at its option, terminate a portion (a “ Partially Terminated Transaction ”) of the Transaction (each, a “ Partial Early Termination ”) by written notice to Party A.

(b)

After giving effect to any Partial Early Termination, the Calculation Agent shall reduce all subsequent amortizations of the Notional Amounts shown in Annex A on a pro rata basis (based upon the then remaining Notional Amounts) and shall also reduce the Amortization Amounts shown in Annex B consistently with that reduction of the Notional Amounts, to reflect such reduction in the Notional Amounts, and shall distribute a new Annex A and a new Annex B as so revised to Party A and Party B.

(c)

Termination; and one of which deemed Transactions (the “ Terminated Portion ”) shall have the Notional Amounts and the Amortization Amounts corresponding to the reduction designated for such Partially Terminated Transaction in the notice of Partial Early Termination issued by Party B pursuant to Paragraph 1(B)(a). The Terminated Portion shall be deemed to have terminated on the Local Business Day specified by Party B which date so designated by Party B shall not be a day earlier than the day such notice is effective (such date being referred to herein as the “ Partial Early Termination Date ”), with the same effect as though a Termination Event had occurred hereunder with the Affected Party being Party B for purposes of determining payments upon early termination, with the Early Termination Date being the Partial Early Termination Date, and with such Terminated Portion being treated for this purpose only as an Affected Transaction. The obligations of each party to make payments pursuant to the Agreement to the other party with respect to the Terminated Portions that would, but for such Partial Early Termination Date, occur after such Partial Early Termination Date, will terminate after the Partial Early Termination Date. Partial Early Termination shall not, however, constitute a Termination Event under the Agreement with respect to the non-terminated portion of Partially Terminated Transactions, and the occurrence of a Partial Early Termination shall have no effect on the non-terminated portions of Partially Terminated Transactions or on Transactions other than Partially Terminated Transactions, all of which shall continue in full force and effect without regard to any such Partial Early Termination.

C. Documents to be delivered:

D. Office and Address for notices in connection with the Transaction:


a)	Party A:	BANCO SANTANDER, S.A. Parque Empresarial la Finca Edificio 10, planta baja
		Pozuelo de Alarcon 28223 Madrid
		Email:	Incomingdocgroup@gruposantander.com
		Fax:	011-34-91-257-0466


b)	Party B:	ARCOS DORADOS BV Arcos Dorados Argentina S.A. Roque Saenz Peña 432
		Olivos - Buenos Aires Argentina - B1636FFB
		Tel:	011-54-11-4711-2000
		Fax:	011-54-11-4711-2236
		Attn:	Miguel Sanchez de Bustamante; Diego Pace; Julieta Nalband

E. Payment Instructions for Party A:

Bank Name:

CITIBANK, NEW YORK

Swift (CITIUS33)

F/O Banco Santander S.A., Madrid (BSCHESMM)

A/C No. 10 936 195

F. Payment Instructions for Party B:


		Bank Name:		JPMorgan Private Bank
		Bank Address:		345 Park Avenue, 5th Floor
				New York, NY 10154-1002
		ABA No.:		021-000-021
		For Credit to Account #:		739577034
		Beneficiary:		Arcos Dorados B.V.

2.	Amendments to the Agreement Applicable to the Transaction:

For purposes of the Transaction to which this Confirmation relates, the following modifications to the Schedule shall apply:

(a)

The “ Credit Support Default ” provisions of Section 5(a)(iii) are hereby amended by inserting, in the fifth line of clause (2) thereof, immediately before the word “prior”, the words “or upon the Security Documents ceasing to be in full force and effect, or ceasing to give the Collateral Agent, for the benefit of Party A and the other Secured Creditors (as defined in each of the Security Documents), liens, rights, powers and privileges purported to be created thereby (including, without limitation, a perfected security interest in, and lien on, all of the Collateral (except to the extent any part thereof is released from such lien in accordance with the provisions of the Security Documents), in favor of the Collateral Agent, superior to and prior to the rights of all third persons and subject to no other liens other than Permitted Liens (as defined in the U.S. Security Documents), in each case”.

(b)

Threshold Amount . “Threshold Amount” for the purposes of the “Cross Default” provision of Section 5(a)(vi) shall be, in respect of Party B, USD 10,000,000.

(c)

Additional Event of Default . It will be an Event of Default in respect of Party B under the Agreement if an “Event of Default” occurs under any of the Security Documents.

(d)

Additional Documents to be Delivered . For purposes of Section 4(a)(ii) of the Agreement, Party B agrees to deliver to Party A all financial information, if any, as Party B delivers or is required to deliver pursuant to the Subsidiary Guaranty and the Security Documents.

(e)

Additional Termination Event will apply. The following will constitute an Additional Termination Event:

For purposes of the Additional Termination Event above, Party B will be the sole Affected Party.

(f)

“ Credit Support Document ” means with respect to Party A: Not Applicable.

“ Credit Support Document ” means with respect to Party B: The Security Documents and the Subsidiary Guaranty.

(g)

“ Credit Support Provider ” means with respect to Party A: Not Applicable.

“ Credit Support Provider ” means with respect to Party B: The Guarantors (as defined in the Subsidiary Guaranty).

(h)

acting on behalf of Party A or any of the other Secured Creditors (whether before or after the date hereof). Party B undertakes to and agrees with Party A to enter into, execute and deliver all such additional agreements, documents, instruments and other assurances and to do such acts and things as Party A may reasonably require in order to give effect to the foregoing.

(i)

Transfer . Notwithstanding anything to the contrary in Section 7 of the Agreement, Party A may, with the consent of Party B (which consent shall not be unreasonably withheld or delayed, provided that (x) if Party B does not respond within 2 Business Days after notice of any such proposed transfer or assignment from Party A, such consent shall be deemed to have been given and (y) so long as either an Event of Default with respect to which Party B is the Defaulting Party or a Termination Event with respect to which Party B is an Affected Party has occurred and is continuing at the time of the transfer or assignment or if the transferee or assignee is an Affiliate of Party A or in the circumstances described in Sections 7(a) and 7(b) of the Agreement, Party B shall be deemed to have given its consent and no actual specific written consent shall be required), transfer or assign the Transaction to which this Confirmation relates and the rights and obligations of Party A under the Agreement and the Credit Support Documents to the extent they relate to the Transaction to which this Confirmation relates to one or more assignees (each, a “ Transferee ”); provided that, in the event of an assignment or transfer by Party A without the express consent of Party B (other than an assignment or transfer of the type described in Section 7(a) or 7(b) of the Agreement, in which case the following provisions shall not apply, but without prejudice to any other right or remedy under the Agreement): (i) Party B will not, as a result of such transfer, be required to pay to the Transferee an amount in respect of an Indemnifiable Tax under Section 2(d)(i)(4) under the Transferee Agreement (as defined below) greater than the amount in respect of which Party B would have been required to pay to Party A in the absence of such transfer; (ii) Party B will not receive any payment under the Transferee Agreement from which an amount is required to be, as a result of such transfer, withheld or deducted on account of a Tax with respect to which no additional amount is required to be paid by the Transferee under Section 2(d)(i)(4) of the Transferee Agreement (other than by reason of Section 2(d)(i)(4)(A) or (B) thereof); (iii) at the time of the assignment, if Party B and the Transferee have not entered into a master agreement in the form of the Agreement, this Confirmation shall

evidence a complete binding agreement between them as to the terms of the Transaction to which this Confirmation relates, and Party B and the Transferee shall use all reasonable efforts promptly to negotiate, execute and deliver an agreement in the form of the ISDA 2002 Master Agreement (the “ ISDA Form ”), with such modifications as they shall in good faith agree (the “ Transferee Agreement ”); upon the execution and delivery of the Transferee Agreement, this Confirmation will supplement, form a part of, and be subject to that agreement; until the execution and delivery of the Transferee Agreement, this Confirmation, together with all other documents referring to the ISDA Form confirming transactions entered into between Party B and the Transferee, shall supplement, form a part of, and be subject to an agreement in the form of the ISDA Form as if they had executed an agreement in such form (but without any Schedule except for the election of the laws of the State of New York as the governing law and USD as the Termination Currency) on the date in which the assignment is effective between Party B and the Transferee; in the event of any inconsistency between the provisions of that agreement and this Confirmation, this Confirmation will prevail for the purpose of the Transaction; (iv) neither an Event of Default with respect to which Party A is the Defaulting Party nor a Termination Event with respect to which Party A is an Affected Party has occurred and is continuing at the time of the assignment, and neither an Event of Default nor a Termination Event shall occur as a result of the assignment; (v) it will not become, and there is not a substantial likelihood that it will become, unlawful for either party to perform any obligation under the Transferee Agreement as a result of such assignment; and (vi) Party A provides to Party B written notice of such assignment reasonably in advance of the assignment specifying the date of such assignment. Unless Party B is notified in writing to the contrary, from and after such date specified for an assignment that complies with the foregoing, Party B may treat the Transferee as Party A for all purposes.

(j)

Definitions.

Section 14 of the Agreement is hereby amended by inserting the following in alphabetical order:

“ Foreign Pledge Agreements ” means and includes , collectively, the agreements, contracts and instruments set forth on Annex C, and any additional documents or instruments executed and delivered in connection therewith or pursuant to the requirements of any of the foregoing, in each case as modified, supplemented or amended from time to time.

“ Security Documents ” means and includes each of the U.S. Security Documents and the Foreign Pledge Agreements.

“ Subsidiary Guaranty ” means the Second Amended and Restated Subsidiary Guaranty, dated as of October 12, 2010, made by certain subsidiaries of Party B in favor of the Collateral Agent, as modified, supplemented or amended from time to time.

“ U.S. Security Documents ” means and includes each of (i) the Second Amended and Restated Security Agreement, dated as of October 12, 2010, among Party B, certain subsidiaries of Party B and the Collateral Agent, (ii) the. Second Amended and Restated U.S. Stock Pledge Agreement, dated as of October 12, 2010, among Party B, certain subsidiaries of Party B and the Collateral Agent, (iii) the Second Amended and Restated U.S. Intercompany Note Pledge Agreement, dated as of October 12, 2010, among Party B, certain subsidiaries of Party B and the Collateral Agent and (iv) any additional documents or instruments executed and

delivered in connection with or pursuant to the requirements of any of the foregoing, in each case as modified, supplemented or amended from time to time.

(k)

Additional Representations.

For purposes of Section 3 of the Agreement, the following shall constitute Additional Representations:

(A) Bona Fide Hedging Transactions . Party B represents that this Agreement and each Transaction hereunder is a hedging transaction entered into in the ordinary course of business and not entered into for the purposes of speculation.

(B) No Fiduciary Relationship . Each party has entered into the Transaction solely in reliance on its own judgment. Neither party has any fiduciary obligation to the other party relating to the Transaction. In addition, neither party has held itself out as advertising, or has held out any of its employees or agents as having the authority to advise, the other party as to whether or not the other party should enter into the Transaction, any subsequent actions relating to the Transaction or any other matters relating to the Transaction. Neither party shall have any responsibility or liability whatsoever in respect of any advise given, or views expressed, by it or any of such persons to the other party relating to the Transaction, whether or not such advice is given or such views are expressed at the request of the other party.

(l)

2008 (relating to the transaction closed on December 17, 2008), supplementing the ISDA 2002 Master Agreement, dated as of December 12, 2008, as modified by the Schedule, dated as of December 12, 2008, between The Bank of Nova Scotia and Party B or (y) change the currency thereof from Brazilian Reais) remains in effect, the Agreement and each Transaction thereunder shall constitute a bona fide hedging transaction of Specified Indebtedness of Party B denominated in US Dollars entered into in the ordinary course of Party B’s business and not entered into or maintained for the purposes of speculation.

[SIGNATURES ON FOLLOWING PAGE]


Yours sincerely,

Banco Santander, S.A.

By:	/s/ Miguel Angel Martínez Villegas
	Name:	Miguel Angel Martínez Villegas
	Title:	Banco Santander, S.A. Authorized signature Firma autorizada

By:	/s/ Fernando Fernández Fernández
	Name:	Fernando Fernández Fernández
	Title:	Banco Santander, S.A. Authorized signature Firma autorizada

Accepted and agreed as of the date first above written:


ARCOS DORADOS B.V.

By:
		Name:
		Title:


Yours sincerely,

Banco Santander, S.A.

By:
		Name:
		Title:

By:
		Name:
		Title:

Accepted and agreed as of the date first above written:


ARCOS DORADOS B.V.

By:		/s/ Diego Pace
		Name:
		Title:

ANNEX A


Reset Dates	Period End Dates	USD Notional Amount		BRL Notional Amount
November 10, 2008	May 10, 2009		50,000,000		109,950,000
May 10, 2009	August 10, 2009		50,000,000		109,950,000
August 10, 2009	November 10, 2009		50,000,000		109,950,000
November 10, 2009	February 10, 2010		50,000,000		109,950,000
February 10, 2010	May 10, 2010		50,000,000		109,950,000
May 10, 2010	August 10, 2010		50,000,000		109,950,000
August 10, 2010	November 10, 2010		50,000,000		109,950,000
November 10, 2010	February 10, 2011		45,000,000		98,955,000
February 10, 2011	May 10, 2011		45,000,000		98,955,000
May 10, 2011	August 10, 2011		40,000,000		87,960,000
August 10, 2011	November 10, 2011		40,000,000		87,960,000
November 10, 2011	February 10, 2012		35,000,000		76,965,000
February 10, 2012	May 10, 2012		35,000,000		76,965,000
May 10, 2012	August 10, 2012		30,000,000		65,970,000
August 10, 2012	November 10, 2012		30,000,000		65,970,000
November 10, 2012	February 10, 2013		25,000,000		54,975,000
February 10, 2013	May 10, 2013		25,000,000		54,975,000
May 10, 2013	August 10, 2013		12,500,000		27,487,500
August 10, 2013	November 10, 2013		12,500,000		27,487,500

ANNEX B


Exchange Date	USD Amortization Amount		BRL Amortization Amount
May 10, 2009		0		0
August 10, 2009		0		0
November 10, 2009		0		0
February 10, 2010		0		0
May 10, 2010		0		0
August 10, 2010		0		0
November 10, 2010		5,000,000		10,995,000
February 10, 2011		0		0
May 10, 2011		5,000,000		10,995,000
August 10, 2011		0		0
November 10, 2011		5,000,000		10,995,000
February 10, 2012		0		0
May 10, 2012		5,000,000		10,995,000
August 10, 2012		0		0
November 10, 2012		5,000,000		10,995,000
February 10, 2013		0		0
May 10, 2013		12,500,000		27,487,500
August 10, 2013		0		0

ANNEX C

1.	Argentine Pledge Agreements

Contrato de Prenda de Acciones y Cesión Fiduciaria Con Fines de Garantía, among Arcos Dorados Argentina S.A., LatAm and Woods White Staton Welten dated August 3, 2007, as amended from time to time.

2.	Brazilian Pledge Agreements

Third Amendment to the First Lien Brazilian Quota Pledge Agreement, dated April 17, 2009, among the Collateral Agent, as pledgee, the Company, LatAm, ADCDC and Arcos Dourados Participações.

3.	Colombian Pledge Agreements

Foreign Pledge Agreement, dated August 3, 2007, constituting, in favor of the Lenders, a pledge over the equity interests in Arcos Dorados Colombia S.A., as amended from time to time.

4.	Ecuadorian Pledge Agreement

Amended and Restated First Lien Ecuadorian Stock Pledge Agreement, dated November 10, 2008, as amended from time to time.

5.	Mexican Trust Agreement

Contrato de Fideicomiso Irrevocable, Traslativo de Dominio, de Garantia y Administración, No. 15468-5, dated August 3, 2007, among LatAm, McDonald’s, the Collateral Agent and Mexican Trustee, as amended from time to time.

Contrato de Fideicomiso Irrevocable, Traslativo de Dominio, de Garantia y Administración, No. 15469-3, dated August 3, 2007, among ADCDC, McDonald’s, the Collateral Agent and Mexican Trustee, as amended from time to time.

6.	Puerto Rican Pledge Ratification

Amended and Restated Ratification to U.S. Stock Pledge Agreement, dated October 22, 2008, between LatAm and the Collateral Agent, as amended from time to time.

7.	Venezuelan Pledge Agreements

Exhibit 10.13


Date:		October 12, 2010

To:		ARCOS DORADOS BV c/o Arcos Dorados Argentina S.A. Attn: Miguel Sanchez de Bustamante; Diego Pace; Julieta Nalband Roque Saenz Peña 432 Olivos - Buenos Aires Argentina - B1636FFB

Subject:		NON-DELIVERABLE CROSS CURRENCY SWAP TRANSACTION

Ref Number:

Dear Sirs,

In the event of any inconsistency between the definitions and provisions in this Confirmation, the definitions and provisions in the Agreement, the definitions and provisions in the FX Definitions, and/or the definitions and provisions in the 2006 Definitions, they will prevail in this order respectively.

1. Terms and conditions of the Transaction.

A. General Terms: The terms and conditions of the particular Transaction to which this Confirmation relates are as follows:

Part I. Transaction Terms:


Trade Date:		March 5, 2009.

Effective Date:		March 5, 2009.

Termination Date:		November 12, 2013, subject to adjustment in accordance with the Modified Following Business Day Convention.

Reset Dates:		First day of each Floating Rate Payer Calculation Period.

Initial Calculation Period Reset Date:		November 10, 2008.

Exchange Rate at Trade Date:		BRL/USD 2.3780.

Fixed Amounts:

Fixed Rate Payer:		Party B.

Fixed Rate Payer Notional Amount:		The “BRL Notional Amount” as specified in Annex A, and as adjusted from time to time pursuant to Paragraph 1(B) of this Confirmation.

Fixed Rate:		10.80% per annum.

Fixed Rate Payer Payment Dates:		Each Period End Date set forth on Annex A and the Termination Date, subject to adjustment in accordance with the Modified Following Business Day Convention.

Fixed Rate Day Count Fraction:		Actual/360.

Floating Amounts:

Floating Rate Payer:		Party A.

Floating Rate Payer Notional Amount:		The “USD Notional Amount” as specified in Annex A, and as adjusted from time to time pursuant to Paragraph 1(B) of this Confirmation.

Floating Rate Option:		USD-LIBOR-BBA.

Designated Maturity:		3 months.

Floating Rate for Initial Calculation Period:		1.28375%. For the avoidance of doubt, the first Calculation Period will mean the period from,

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		and including, November 10, 2008, to, but excluding, May 10, 2009.

Floating Rate Payer Payment Dates:		Each Period End Date set forth on Annex A and the Termination Date, subject to adjustment in accordance with the Modified Following Business Day Convention.

Floating Rate Day Count Fraction:		Actual/360.

Principal Exchange

Initial Exchange:		None.

Interim Exchanges:

Interim Exchange Dates:		Each Exchange Date as shown in Annex B, subject to adjustment in accordance with the Modified Following Business Day Convention.

Party A Interim Exchange Amount:		The “USD Amortization Amount” as specified in Annex B, and as adjusted from time to time pursuant to Paragraph l(B) of this Confirmation.

Party B Interim Exchange Amount:		The “BRL Amortization Amount” as specified in Annex B, and as adjusted from time to time pursuant to Paragraph l(B) of this Confirmation.

Final Exchange:

Final Exchange Date:		The Termination Date, subject to adjustment in accordance with the Modified Following Business Day Convention

Party A Final Exchange Amount:		The “USD Notional Amount” as specified in Annex A, and as adjusted from time to time pursuant to Paragraph l(B) of this Confirmation.

Party B Final Exchange Amount:		The “BRL Notional Amount” as specified in Annex A, and as adjusted from time to time pursuant to Paragraph l(B) of this Confirmation.

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Part II. Settlement Provisions:
Settlement:		Non-deliverable, with the effect that any Reference Currency amounts payable hereunder on a Settlement Date shall be converted into Settlement Currency amounts by reference to the Settlement Rate Option on the applicable Valuation Date. All payments (including exchanges) hereunder shall be made in the Settlement Currency.

Settlement Rate Option:		BRL PTAX (BRL09).

Reference Currency:		BRL.

Settlement Currency:		USD.

Valuation Date:		Two business days prior to each Settlement Date (“ Scheduled Valuation Date ”), subject to adjustment in accordance with the Preceding Business Day Convention, or in the event of an Unscheduled Holiday, subject to adjustment in accordance with the Following Business Day Convention.

Settlement Date:		Each Fixed Rate Payer Payment Date and/or Exchange Date, subject to adjustment if the Scheduled Valuation Date is adjusted in accordance with the Following Business Day Convention or if Valuation Postponement applies, and in each such case, the Settlement Date shall be as soon as practicable, but in no event later than two Business Days after the date on which the Spot Rate is determined.

DISRUPTION EVENTS:

Price Source Disruption:		Applicable.

Price Materiality:		Applicable.

Primary Rate:		BRL 09.

Secondary Rate:		EMTA BRL Industry Survey Rate (BRL 12), or EMTA BRL Indicative Survey Rate (BRL 13), as the case may be.

Price Materiality Percentage:		3%, provided however, that if there are insufficient responses on the Valuation Date to the EMTA BRL Industry Survey or the EMTA BRL Indicative Survey, as the case may be, the Price Materiality Percentage will also be deemed to have been met.

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DISRUPTION FALLBACKS:

1. First Fallback Reference Price:		EMTA BRL Industry Survey Rate (BRL 12).

2. Valuation Postponement

3. Second Fallback Reference Price:		EMTA BRL Indicative Survey Rate (BRL 13).

4. Calculation Agent Determination of Settlement Rate
Part III. Other Terms:
Unscheduled Holiday		“ Unscheduled Holiday ” means that a day is not a Business Day and the market was not aware of such fact (by means of a public announcement or by reference to other publicly available information) until a time later than 9:00 a.m. local time in the Principal Financial Center(s) of the Reference Currency two Business Days prior to the Scheduled Valuation Date.

“Deferral Period” for Unscheduled Holiday		In the event the Scheduled Valuation Date becomes subject to the Following Business Day Convention, and if the Valuation Date has not occurred on or before the 30th consecutive day after the Scheduled Valuation Date (any such period being a “ Deferral Period ”), then the next day after the Deferral Period that would have been a Business Day but for the Unscheduled Holiday, shall be deemed to be the Valuation Date.

Valuation Postponement for Price Source Disruption:		“ Valuation Postponement ” means, for purposes of obtaining a Settlement Rate, that the Spot Rate will be determined on the Business Day first succeeding the day on which the Price Source Disruption ceases to exist, unless the Price Source Disruption continues to exist (measured from the date that, but for the occurrence of the Price Source Disruption, would have been the Valuation Date) for a consecutive number of calendar days equal to the Maximum Days, of Postponement. In such event, the Spot Rate will be determined on the next Business Day after the Maximum Days of Postponement in accordance with the next applicable Disruption Fallback.

Cumulative Events:		Notwithstanding anything herein to the contrary, in no event shall the total number of consecutive calendar days during which either (i) valuation is deferred due to an Unscheduled Holiday, or (ii) a Valuation Postponement shall

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		occur (or any combination of (i) and (ii)), exceed 30 consecutive calendar days in the aggregate. Accordingly, (x) if, upon the lapse of any such 30 day period, an Unscheduled Holiday shall have occurred or be continuing on the day following such period, then such day shall be deemed to be a Valuation Date, and (y) if, upon the lapse of any such 30 day period, a Price Source Disruption shall have occurred or be continuing on the day following such period, then Valuation Postponement shall not apply and the Spot Rate shall be determined in accordance with the next Disruption Fallback.

Maximum Days of Postponement:		Thirty (30) calendar days.

Relevant Cities for Business Day for Valuation Date:		Sao Paulo, New York and London.

Relevant Cities for Business Day for Settlement Date:		Sao Paulo, New York and London.

Calculation Agent:		Party A.

B. Partial Early Termination

(a)

Unless (i) an Event of Default under the Agreement as amended by this Confirmation has occurred in respect of Party B or (ii) Party A has designated an Early Termination Date, Party B may, at its option, terminate a portion (a “ Partially Terminated Transaction ”) of the Transaction (each, a “ Partial Early Termination ”) by written notice to Party A.

(b)

(c)

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Transactions (the “ Terminated Portion ”) shall have the Notional Amounts and the Amortization Amounts corresponding to the reduction designated for such Partially Terminated Transaction in the notice of Partial Early Termination issued by Party B pursuant to Paragraph l(B)(a). The Terminated Portion shall be deemed to have terminated on the Local Business Day specified by Party B which date so designated by Party B shall not be a day earlier than the day such notice is effective (such date being referred to herein as the “ Partial Early Termination Date ”), with the same effect as though a Termination Event had occurred hereunder with the Affected Party being Party B for purposes of determining payments upon early termination, with the Early Termination Date being the Partial Early Termination Date, and with such Terminated Portion being treated for this purpose only as an Affected Transaction. The obligations of each party to make payments pursuant to the Agreement to the other party with respect to the Terminated Portions that would, but for such Partial Early Termination Date, occur after such Partial Early Termination Date, will terminate after the Partial Early Termination Date. Partial Early Termination shall not, however, constitute a Termination Event under the Agreement with respect to the non-terminated portion of Partially Terminated Transactions, and the occurrence of a Partial Early Termination shall have no effect on the non-terminated portions of Partially Terminated Transactions or on Transactions other than Partially Terminated Transactions, all of which shall continue in full force and effect without regard to any such Partial Early Termination.

C. Documents to be delivered:

D. Office and Address for notices in connection with the Transaction:


a) Party A:		BANCO SANTANDER, S.A. Parque Empresarial la Finca Edificio 10, planta baja Pozuelo de Alarcon 28223 Madrid Email: Incomingdocgroup@gruposantander.com Fax: 011-34-91-257-0466

b) Party B:		ARCOS DORADOS BV c/o Arcos Dorados Argentina S.A. Roque Saenz Peña 432 Olivos -Buenos Aires Argentina -B1636FFB Tel: 011-54-11-4711-2000 Fax: 011-54-11-4711-2236 Attn: Miguel Sanchez de Bustamante; Diego Pace; Julieta Nalband

E. Payment Instructions for Party A:

Bank Name:

CITIBANK, NEW YORK

Swift (CITIUS33)

F/O Banco Santander SA., Madrid

-7-

(BSCHESMM)

A/C No. 10 936 195

F. Payment Instructions for Party B:


Bank Name:		JPMorgan Private Bank
Bank Address:		345 Park Avenue, 5th Floor
		New York, NY 10154-1002
ABA No.:		021-000-021
For Credit to Account #:		739577034
Beneficiary:		Arcos Dorados B.V.

2. Amendments to the Agreement Applicable to the Transaction:

For purposes of the Transaction to which this Confirmation relates, the following modifications to the Schedule shall apply:

(a)

(b)	Threshold Amount . “Threshold Amount” for the purposes of the “Cross Default” provision of Section 5(a)(vi) shall be, in respect of Party B, USD 10,000,000.

(c)	Additional Event of Default . It will be an Event of Default in respect of Party B under the Agreement if an “Event of Default” occurs under any of the Security Documents.

(d)	Additional Documents to be Delivered . For purposes of Section 4(a)(ii) of the Agreement, Party B agrees to deliver to Party A all financial information, if any, as Party B delivers or is required to deliver pursuant to the Subsidiary Guaranty and the Security Documents.

(e)	Additional Termination Event will apply. The following will constitute an Additional Termination Event:

For purposes of the Additional Termination Event above, Party B will be the sole Affected Party.

(f)	“ Credit Support Document ” means with respect to Party A: Not Applicable.

“ Credit Support Document ” means with respect to Party B: The Security Documents and the Subsidiary Guaranty.

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(g)	“ Credit Support Provider ” means with respect to Party A: Not Applicable.

“ Credit Support Provider ” means with respect to Party B: The Guarantors (as defined in the Subsidiary Guaranty).

(h)

Collateral Security . Party B acknowledges and agrees that all of its obligations under this Confirmation (and the Agreement in respect of the Transaction to which this Confirmation relates) (whether present, future, contingent or otherwise) shall be guarantied under the Subsidiary Guaranty and shall be secured by, and have the benefit of, any security from time to time granted by Party B to Party A or any of the other Secured Creditors (as defined in any of the Security Documents) with respect to the Obligations (as defined in the Security Documents) or to any agent acting on behalf of Party A or any of the other Secured Creditors (whether before or after the date hereof). Party B undertakes to and agrees with Party A to enter into, execute and deliver all such additional agreements, documents, instruments and other assurances and to do such acts and things as Party A may reasonably require in order to give effect to the foregoing.

(i)

Transfer . Notwithstanding anything to the contrary in Section 7 of the Agreement, Party A may, with the consent of Party B (which consent shall not be unreasonably withheld or delayed, provided that (x) if Party B does not respond within 2 Business Days after notice of any such proposed transfer or assignment from Party A, such consent shall be deemed to have been given and (y) so long as either an Event of Default with respect to which Party B is the Defaulting Party or a Termination Event with respect to which Party B is an Affected Party has occurred and is continuing at the time of the transfer or assignment or if the transferee or assignee is an Affiliate of Party A or in the circumstances described in Sections 7(a) and 7(b) of the Agreement, Party B shall be deemed to have given its consent and no actual specific written consent shall be required), transfer or assign the Transaction to which this Confirmation relates and the rights and obligations of Party A under the Agreement and the Credit Support Documents to the extent they relate to the Transaction to which this Confirmation relates to one or more assignees (each, a “ Transferee ”); provided that, in the event of an assignment or transfer by Party A without the express consent of Party B (other than an assignment or transfer of the type described in Section 7(a) or 7(b) of the Agreement, in which case the following provisions shall not apply, but without prejudice to any other right or remedy under the Agreement): (i) Party B will not, as a result of such transfer, be required to pay to the Transferee an amount in respect of an Indenmifiable Tax under Section 2(d)(i)(4) under the Transferee Agreement (as defined below) greater than the amount in respect of which Party B would have been required to pay to Party A in the absence of such transfer; (ii) Party B will not receive any payment under the Transferee Agreement from which an amount is required to be, as a result of such transfer, withheld or deducted on account of a Tax with respect to which no additional amount is required to be paid by the Transferee under Section 2(d)(i)(4) of the Transferee Agreement (other than by reason of Section 2(d)(i)(4)(A) or (B) thereof); (iii) at the time of the assignment, if Party B and the Transferee have not entered into a master agreement in the form of the Agreement, this Confirmation shall evidence a complete binding agreement between them as to the terms of the Transaction to which this Confirmation relates, and Party B and the Transferee shall use all reasonable efforts promptly to negotiate, execute and deliver an agreement in the form of the ISDA 2002 Master Agreement (the “ ISDA Form ”), with such modifications as they shall in good faith agree (the “ Transferee Agreement ”); upon the execution and delivery of the Transferee Agreement, this Confirmation will supplement, form a part of, and be subject to that agreement; until the execution and delivery of the Transferee Agreement, this Confirmation, together with all other documents referring to the ISDA Form confirming transactions entered into between Party B and the Transferee, shall supplement, form a part of, and be subject to an agreement in the form of the ISDA Form as if they had executed an agreement in such form (but without any Schedule

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except for the election of the laws of the State of New York as the governing law and USD as the Termination Currency) on the date in which the assignment is effective between Party B and the Transferee; in the event of any inconsistency between the provisions of that agreement and this Confirmation, this Confirmation will prevail for the purpose of the Transaction; (iv) neither an Event of Default with respect to which Party A is the Defaulting Party nor a Termination Event with respect to which Party A is an Affected Party has occurred and is continuing at the time of the assignment, and neither an Event of Default nor a Termination Event shall occur as a result of the assignment; (v) it will not become, and there is not a substantial likelihood that it will become, unlawful for either party to perform any obligation under the Transferee Agreement as a result of such assignment; and (vi) Party A provides to Party B written notice of such assignment reasonably in advance of the assignment specifying the date of such assignment. Unless Party B is notified in writing to the contrary, from and after such date specified for an assignment that complies with the foregoing, Party B may treat the Transferee as Party A for all purposes.

(j)	Definitions .

Section 14 of the Agreement is hereby amended by inserting the following in alphabetical order:

“ Security Documents ” means and includes each of the U.S. Security Documents and the Foreign Pledge Agreements.

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(k)

Additional Representations.

For purposes of Section 3 of the Agreement, the following shall constitute Additional Representations:

(l)

Party A agrees that for so long as the capital reduction (which generated receivables denominated in BRL owing from such Brazilian subsidiaries to Party B) among Party B and certain of its subsidiaries in Brazil perfected on December 30, 2008 (in the form heretofore provided by Party B to Party A, as the same may be modified from time to time, provided that no such modification shall, without the consent of Party A, (x) reduce the principal amount thereof to an amount less than the sum of (i) the then current BRL Notional Amount of the Transaction, (ii) the sum of the then current notional amounts in BRL under the transactions documented under the Amended and Restated Confirmation dated as of October 12, 2010 (relating to the transaction closed on January 6, 2009) and the Amended and Restated Confirmation dated as of October 12, 2010 (relating to the transaction closed on March 5, 2009), in each case supplementing the Agreement and (iii) the then current notional amounts in BRL under the transaction documented under the Confirmation, dated as of December 31, 2008 (relating to the transaction closed on December 17, 2008), supplementing the ISDA 2002 Master Agreement, dated as of December 12, 2008, as modified by the Schedule, dated as of December 12, 2008, between The Bank of Nova Scotia and Party B or (y) change the currency thereof from Brazilian Reais) remains in effect, the Agreement and each Transaction thereunder shall constitute a bona fide hedging transaction of Specified Indebtedness of Party B denominated in US Dollars entered into in the ordinary course of Party B’s business and not entered into or maintained for the purposes of speculation.

[SIGNATURES ON FOLLOWING PAGE]

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Yours sincerely,

Banco Santander, S.A.

By
		Name:
		Title:

By
		Name:
		Title:

Accepted and agreed as of the date first above written:


ARCOS DORADOS B.V.

By		/s/ Diego Pace
		Name:
		Title:

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Yours sincerely,

Banco Santander, S.A.

By		/s/ Miguel Angel Martínez Villegas
		Name: Miguel Angel Martínez Villegas
		Title: Banco Santander, S.A. Authorized signature Firma autorizada

By		/s/ Fernando Fernández Fernández
		Name: Fernando Fernández Fernández
		Title: Banco Santander, S.A. Authorized signature Firma autorizada

Accepted and agreed as of the date first above written:


ARCOS DORADOS B.V.

By
		Name:
		Title:

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ANNEX A


Reset Dates	Period End Dates	USD Notional Amount		BRL Notional Amount

November 10, 2008	May 10, 2009		50,000,000		118,900,000
May 10, 2009	August 10, 2009		50,000,000		118,900,000
August 10, 2009	November 10, 2009		50,000,000		118,900,000
November 10, 2009	February 10, 2010		50,000,000		118,900,000
February 10, 2010	May 10, 2010		50,000,000		118,900,000
May 10, 2010	August 10, 2010		50,000,000		118,900,000
August 10, 2010	November 10, 2010		50,000,000		118,900,000
November 10, 2010	February 10, 2011		45,000,000		107,010,000
February 10, 2011	May 10, 2011		45,000,000		107,010,000
May 10, 2011	August 10, 2011		40,000,000		95,120,000
August 10, 2011	November 10, 2011		40,000,000		95,120,000
November 10, 2011	February 10, 2012		35,000,000		83,230,000
February 10, 2012	May 10, 2012		35,000,000		83,230,000
May 10, 2012	August 10, 2012		30,000,000		71,340,000
August 10, 2012	November 10, 2012		30,000,000		71,340,000
November 10, 2012	February 10, 2013		25,000,000		59,450,000
February 10, 2013	May 10, 2013		25,000,000		59,450,000
May 10, 2013	August 10, 2013		12,500,000		29,725,500
August 10, 2013	November 10, 2013		12,500,000		29,725,500

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ANNEX B


Exchange Date	USD Amortization Amount		BRL Amortization Amount

May 10, 2009		0		0
August 10, 2009		0		0
November 10, 2009		0		0
February 10, 2010		0		0
May 10, 2010		0		0
August 10, 2010		0		0
November 10, 2010		5,000,000		11,890,000
February 10, 2011		0		0
May 10, 2011		5,000,000		11,890,000
August 10, 2011		0		0
November 10, 2011		5,000,000		11,890,000
February 10, 2012		0		0
May 10, 2012		5,000,000		11,890,000
August 10, 2012		0		0
November 10, 2012		5,000,000		11,890,000
February 10, 2013		0		0
May 10, 2013		12,500,000		29,725,000
August 10, 2013		0		0
November 10, 2013		12,500,000		29,725,000

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ANNEX C

1.	Argentine Pledge Agreements

Contrato de Prenda de Acciones y Cesión Fiduciaria Con Fines de Garantía, among Arcos Dorados Argentina S.A., LatAm and Woods White Staton Welten dated August 3, 2007, as amended from time to time.

2.	Brazilian Pledge Agreements

Third Amendment to the First Lien Brazilian Quota Pledge Agreement, dated April 17, 2009, among the Collateral Agent, as pledgee, the Company, LatAm, ADCDC and Arcos Dourados Participações.

3.	Colombian Pledge Agreements

Foreign Pledge Agreement, dated August 3, 2007, constituting, in favor of the Lenders, a pledge over the equity interests in Arcos Dorados Colombia S.A., as amended from time to time.

-16-

4.	Ecuadorian Pledge Agreement

Amended and Restated First Lien Ecuadorian Stock Pledge Agreement, dated November 10, 2008, as amended from time to time.

5.	Mexican Trust Agreement

Contrato de Fideicomiso Irrevocable, Traslativo de Dominio, de Garantia y Administración, No. 15469-3, dated August 3,2007, among ADCDC, McDonald’s, the Collateral Agent and Mexican Trustee, as amended from time to time.

6.	Puerto Rican Pledge Ratification

Amended and Restated Ratification to U.S. Stock Pledge Agreement, dated October 22, 2008, between LatAm and the Collateral Agent, as amended from time to time.

7.	Venezuelan Pledge Agreements

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Exhibit 10.14

ISDA _®

International Swaps and Derivatives Association, Inc.

SCHEDULE

to the

2002 Master Agreement

dated as of December 12, 2008

between

THE BANK OF NOVA SCOTIA

(“Party A”)

and

ARCOS DORADOS B.V.

(“Party B”)

Part 1. Termination Provisions.

(a)	“ Specified Entity ” means in relation to Party A for the purpose of:-

Section 5(a)(v), Not Applicable

Section 5(a)(vi), Not Applicable

Section 5(a)(vii), Not Applicable

Section 5(b)(v), Not Applicable

and in relation to Party B for the purpose of:-

Section 5(a)(v), Not Applicable

Section 5(a)(vi), Not Applicable

Section 5(a)(vii), Not Applicable

Section 5(b)(v), Not Applicable

(b)	“ Specified Transaction ” will have the meaning specified in Section 14.

(c)	The “ Cross Default ” provisions of Section 5(a)(vi) will apply to Party A and Party B.

“ Specified Indebtedness ” will have the meaning specified in Section 14, except that such term shall not include obligations in respect of deposits received in the ordinary course of a party’s banking business.

“ Threshold Amount ” means in relation to Party A, an amount equal to 5% of the total shareholders’ equity of Party A as specified from time to time in the most recently

published audited financial statements of Party A or its equivalent in any other currency and, in relation to Party B, USD 10,000,000 or its equivalent in any other currency.

(d)	The “ Credit Event Upon Merger ” provisions of Section 5(b)(v) will apply to Party A and Party B.

(e)

Automatic Early Termination. The “Automatic Early Termination” provision of Section 6(a) will not apply to Party A or Party B, provided, however, that if at any time an Event of Default specified in Section 5(a)(vii) (1), (3), (4), (5), (6) or, to the extent analogous thereto, (8), with respect to a party has occurred and is then continuing, and any court, tribunal or regulatory authority with competent jurisdiction acting pursuant to any bankruptcy or insolvency law or other similar law affecting such party makes an order which has or purports to have the effect of prohibiting the other party from designating an Early Termination Date in respect of all outstanding Transactions at any time after such Event of Default has occurred and is then continuing, in accordance with Section 6(a), the “Automatic Early Termination” provision of 6(a) will apply to such party.

(f)

“ Termination Currency ” means the currency selected by the party which is not the Defaulting Party or the Affected Party, as the case may be, or where there is more than one Affected Party the currency agreed by Party A and Party B. If the currency selected is not freely available, or where there are two Affected Parties and Party A and Party B cannot agree on a Termination Currency, the Termination Currency shall be United States Dollars.

Part 2. Tax Representations.

(a)	Payer Tax Representations. For the purpose of Section 3(e), Party A and Party B will make the following representation:-

It is not required by any applicable law, as modified by the practice of any relevant governmental revenue authority, of any Relevant Jurisdiction to make any deduction or withholding for or on account of any Tax from any payment (other than interest under Section 9(h) of this Agreement) to be made by it to the other party under this Agreement. In making this representation, it may rely on (i) the accuracy of any representations made by the other party pursuant to Section 3(f) of this Agreement, (ii) the satisfaction of the agreement contained in Section 4(a)(i) or 4(a)(iii) of this Agreement and the accuracy and effectiveness of any document provided by the other party pursuant to Section 4(a)(i) or 4(a)(iii) of this Agreement and (iii) the satisfaction of the agreement of the other party contained in Section 4(d) of this Agreement, except that it will not be a breach of this representation where reliance is placed on clause (ii) above and the other party does not deliver a form or document under Section 4(a)(iii) by reason of material prejudice to its legal or commercial position.

(b)	Payee Representation. For the purpose of Section 3(f) of this Agreement, each of Party

A and Party B will make no representations

Part 3. Agreement to Deliver Documents.

For the purpose of Sections 4(a)(i) and 4(a)(ii), each party agrees to deliver the following documents, as applicable:

(a)	Tax forms, documents or certificates to be delivered are:-


Party required to deliver document	Form/Document/Certificate	Date by which to be delivered
Party A and Party B	Any form or document that may be required or reasonably requested in order to allow such other party or its Credit Support Provider to make a payment under this Agreement or any applicable Credit Support Document without any deduction or withholding for or on account of any tax or with such deduction or withholding at a reduced rate.	As soon as reasonably practicable after reasonable demand by the other party in accordance with Section 4(a)(iii)

(b)	Other documents to be delivered are:-


Party required to deliver document	Form/Document/ Certificate	Date by which to be delivered	Covered by Section 3(d) Representation
Party A	Incumbency certificate	Upon the execution and delivery of this Agreement and, if requested in respect of a Transaction, upon the execution and delivery of the applicable Confirmation	Yes
Party B	Certified copies of: (i) resolutions of Party B’s board of directors authorizing the execution, delivery and performance of this Agreement and authorizing Party B to enter into Transactions hereunder; and (ii) evidence showing the authority and genuine signature of the signatory of Party B who executes this Agreement and any Confirmation.	Upon the execution and delivery of this Agreement and, if requested in respect of a Transaction, upon the execution and delivery of the applicable Confirmation	Yes

Part 4. Miscellaneous.

(a)	Addresses for Notices. For the purpose of Section 12(a):-

Addresses for notices or communications to Party A:-

Notices or communications to Party A in respect of a particular Transaction shall be directed to the address, facsimile or contact reflected in the Confirmation for that Transaction, and any notices in respect of Sections 5, 6, 9(b) or 13(c) of this Agreement to Party A’s Toronto Office as follows:


Address:		The Bank of Nova Scotia 40 King Street West, Scotia Plaza, 8 ^th Floor Toronto, Ontario, Canada M5H 1H1
Attention:		Global Markets Documentation
Facsimile No.:		(416) 866-7767
Telephone No.:		(416) 866-6613

Address for notices or communications to Party B:-


Address:		Arcos Dorados B.V. C/C Arcos Dorados Argentina S.A. Roque Saenz Peña 432 - Olivos - Buenos Aires Argentina - B1636FFB
Attention:		Miguel Sanchez de Bustamante / Diego Pace / Julieta Nalband
Facsimile No.:		(54-11) 4711-2236
Telephone No.:		(54-11) 4711-2000

(b)	Process Agent. For the purpose of Section 13(c) of this Agreement:

Party A appoints as its Process Agent: Vice President, US Regional Head of Operations, The Bank of Nova Scotia, 1 Liberty Plaza, 165 Broadway, 26th Floor, New York, New York 10006 U.S.A.

Party B appoints as its Process Agent: Not Applicable

(c)	Offices. The provisions of Section 10(a) will apply to this Agreement.

(d)	Multibranch Party. For the purpose of Section 10(b) of this Agreement:

Party A is a Multibranch Party and may act through its Toronto Office and its New York Agency, or any other Office as specified in a relevant Confirmation as agreed to between the parties.

Party B is not a Multibranch Party.

(e)

Calculation Agent. The Calculation Agent is Party A, unless otherwise specified in a Confirmation in relation to the relevant Transaction provided that if an Event of Default or a Termination Event has occurred and is continuing in respect to Party A, the Calculation Agent shall be a party designated by Party B.

(f)	Credit Support Document. Details of any Credit Support Document:-

In relation to Party B:- shall mean the Security Documents as defined in the Credit Agreement and the Subsidiary Guaranty as defined in the Credit Agreement.

(g)	Credit Support Provider. Credit Support Provider means:-

In relation to Party B:- shall mean the Subsidiary Guarantors as defined in the Credit Agreement

(h)	Governing Law. This Agreement will be governed by and construed in accordance with the laws of the State of New York (without reference to the choice of law doctrine).

(i)	Netting of Payments. “Multiple Transaction Payment Netting” will apply for the purpose of Section 2(c) of this Agreement to all Transactions, starting from the date of this Agreement.

(j)	“ Specified Entity ” will have the meaning specified in Section 14.

(k)	Absence of Litigation. For the purpose of Section 3(c):-

“Specified Entity” means in relation to Party A, none

“Specified Entity” means in relation to Party B, none

(1)	No Agency. The provisions of Section 3(g) will apply to this Agreement.

(m)

Additional Representation will apply. For the purpose of Section 3 of this Agreement, the following will constitute Additional Representations and each party will be deemed to represent to the other party on the date on which it enters into a Transaction that (absent a written agreement between the parties that expressly imposes affirmative obligations to the contrary for that Transaction):

(A)

Non-Reliance. It is acting for its own account, and it has made its own independent decisions to enter into that Transaction and as to whether that

Transaction is appropriate or proper for it based upon its own judgment and upon advice from such advisers as it has deemed necessary. It is not relying on any communication (written or oral) of the other party as investment advice or as a recommendation to enter into that Transaction, it being understood that information and explanations related to the terms and conditions of a Transaction shall not be considered investment advice or a recommendation to enter into that Transaction. No communication (written or oral) received from the other party shall be deemed to be an assurance or guarantee as to the expected results of that Transaction.

(B)

Assessment and Understanding. It is capable of assessing the merits of and understanding (on its own behalf or through independent professional advice), and understands and accepts, the terms, conditions and risks of that Transaction. It is also capable of assuming, and assumes, the risks of that Transaction.

(C)

Status of Parties. The other party is not acting as a fiduciary for or an adviser to it in respect of that Transaction.”

(D)

Line of Business. It has entered into this Agreement and each Transaction in conjunction with its line of business (including financial intermediation services) or the financing of its business.

(n)

Recording of Conversations. Each party (i) consents to the recording of telephone conversations between the trading, marketing and other relevant personnel of the parties in connection with this Agreement or any potential Transaction, (ii) agrees to obtain any necessary consent of, and give any necessary notice of such recording to, its relevant personnel and (iii) agrees, to the extent permitted by applicable law, that the recordings may be submitted in evidence in any Proceedings.

Part 5. Other Provisions.

(a)

ISDA Definitions. Reference is hereby made to the 2000 ISDA Definitions (the “ 2000 Definitions ”) and the 1998 FX and Currency Option Definitions (the “ FX Definitions ”) (collectively the “ USDA Definitions ”) each as published by the International Swaps and Derivatives Association, Inc., which are hereby incorporated by reference herein. Any terms used and not otherwise defined herein, which are contained in the 2000 Definitions shall have the meaning set forth therein. In the event of any inconsistency between the 2000 Definitions and the FX Definitions, the FX Definitions shall prevail with respect to an FX Transaction or a Currency Option Transaction. In the event of any inconsistency between the provisions of this Agreement and the 2000 Definitions, the provisions of this Agreement shall prevail. For the purpose of this Agreement, the expression “Swap Transaction” as used in the 2000 Definitions shall be read to mean “Transactions”.

(b)	Waiver of Jury Trial. To the extent permitted by applicable law, each party waives any right it may have to a trial by jury in respect of any Proceedings relating to this Agreement or any Transaction.

(c)

Equivalency Clause. For the purpose of disclosure pursuant to the Interest Act (Canada), the yearly rate of interest to which any rate of interest payable under this Agreement that is calculated on any basis other than a full calendar year is equivalent may be determined by multiplying such rate by a fraction the numerator of which is the actual number of days in the calendar year in which such yearly rate of interest is to be ascertained and the denominator of which is the number of days comprising such other basis.

(d)	Illegality. For the purpose of Section 5(b)(i), the obligation of a party to comply with any directive issued or given by any government agency or authority with competent jurisdiction which has the result referred to in Section 5(b)(i) will be deemed to be an “Illegality”.

(e)

2002 Master Agreement Protocol. The parties agree that the definitions and provisions contained in Annexes 1 to 18 of the 2002 Master Agreement Protocol published by the International Swaps and Derivatives Association, Inc. on July 15 ^th , 2003 are incorporated into and apply to this Agreement. References in those definitions and provisions to any “ISDA Master Agreement” will be deemed to be references to this Agreement.

(f)

Confirmation Procedures. Upon receipt thereof, Party B shall examine the terms of each Confirmation sent by Party A, and unless Party B objects to the terms within three General Business Days after receipt of that Confirmation, those terms shall be deemed accepted and correct absent manifest error, in which case that Confirmation will be sufficient to form a binding supplement to this Agreement notwithstanding Section 8(e)(ii) of this Agreement.

(g)

Scope of Agreement. Notwithstanding anything contained in this Agreement to the contrary, any transaction which may otherwise constitute a “Specified Transaction” for the purposes of this Agreement which has been or will be entered into between the parties shall constitute a “Transaction” which is subject to, governed by and construed in accordance with the terms of this Agreement, unless the Confirmation with respect to a Transaction entered into after the execution of this Agreement expressly provides otherwise. The documents and other confirming evidence (including electronic messages on an electronic messaging service) exchanged between the parties confirming such Transaction shall be a Confirmation (even where not so specified) for the purposes of this Agreement.

For the purpose of this clause, “ transaction ” means a transaction between the parties, whether entered into before, on or after the commencement of this Agreement, of the nature of a “ Specified Transaction ” as defined in Section 14 of this Agreement, excluding repurchase transaction, reverse repurchase transaction, buy/sell-back transaction, securities lending transaction or any similar transaction, unless the parties specify otherwise.

(h)

“ Credit Agreement ” means the Amended and Restated Credit Agreement, dated as of October 22nd, 2008, by and among Party B as Borrower and Party A as Joint Book Runner, Various Lenders and Deutsche Bank Trust Company Americas as Administrative Agent and Collateral Agent as may be amended, restated, supplemented, modified, waived or replaced (including any successor agreement) from time to time (the “Credit Agreement”).”

Part 6. FX Transactions and Currency Option Transactions

1.	Definitions. For purposes of this Part 6,

“Currency Obligation” means the undertaking of a party hereto pursuant to an FX Transaction or a validly exercised or deemed exercised Currency Option Transaction to deliver an amount of currency, including any obligations to deliver an amount of currency arising from the netting of two or more Currency Obligations as contemplated by Section 2 of this Part 6.

Novation Netting of Deliverable FX Transactions and Exercised Currency Option Transactions. Unless otherwise agreed to by the parties hereto, if the parties enter into a Deliverable FX Transaction through a pair of Offices or if a Currency Option Transaction entered into by the parties through a pair of Offices is validly exercised or deemed exercised, in each case, giving rise to Currency Obligations for the same Settlement Date and in the same currency as then existing Currency Obligations between the same pair of Offices, then immediately upon entering into such Deliverable FX Transaction or the exercise or deemed exercise of such Currency Option Transaction, each such Currency Obligation shall automatically and without further action be individually cancelled and simultaneously replaced through novation by a new Currency Obligation for such Settlement Date determined as follows: the amounts in such currency that would otherwise have been deliverable by each party hereto on such Settlement Date shall be aggregated and the party with the larger aggregate amount shall have a new Currency Obligation to deliver to the other party the amount by which its aggregate amount exceeds the other party’s aggregate amount, provided that if the aggregate amounts are equal, no new Currency Obligation shall arise.

Settlement Netting of Currency Obligations. Notwithstanding Part 4(i), “Multiple Transactions Payment Netting” will apply for the purpose of Section 2(c) of this Agreement to FX Transactions and exercised or deemed exercised Currency Option Transactions and, instead, if on any Settlement Date, more than one delivery of a particular currency is to be made between a pair of Offices in respect of Currency Obligations arising pursuant to FX Transactions and validly exercised or deemed exercised Currency Option Transactions (but excluding, in respect of Currency Option Transactions, Premium payments and amounts arising in connection with Section 5 of this Part 6), then, on such date, each party shall aggregate the amounts of such currency deliverable by it and only the difference between these aggregate amounts shall be delivered by the party owing the larger aggregate amount to the other party and, if the aggregate amounts are equal, no delivery of the currency shall be made.

Discharge and Termination of Currency Option Transactions. Unless otherwise agreed to by the parties hereto, any Call Option or Put Option in respect of which a party hereto is the Seller will automatically be terminated and discharged, in whole or in part, as applicable, against a Call Option or Put Option, respectively, in respect of which the other party hereto is the Seller, such termination and discharge to occur automatically upon the payment in full of the last Premium payable in respect of such Currency Option Transactions; provided that such termination and discharge may only occur in respect of Currency Option Transactions:

(a)

each being with respect to the same Put Currency and the same Call Currency;

(b)

each having the same Expiration Date and Expiration Time;

(c)

each being of the same style, i.e., either both being American style options or both being European style options;

(d)

each having the same Strike Price;

(e)

neither of which shall have been exercised by delivery of a Notice of Exercise;

(f)

which are entered into by the same Offices of both the Buyer and Seller respectively; and

(g)

which are otherwise identical in terms that are material for purposes of netting and discharge.

Upon the occurrence of such termination and discharge, neither party shall have any further obligation to the other party in respect of the relevant Currency Option Transactions or, as the ease may be, parts thereof so terminated and discharged. In the case of a partial termination and discharge (i.e., where the relevant Currency Option Transactions are for different amounts of the Currency Pair), the remaining portion of the Currency Option Transaction which is partially discharged and terminated shall continue to be a Currency Option Transaction for all purposes of this Agreement including this Section 4 of this Part 6.

Netting of Premiums. Unless otherwise agreed, if on any Premium Payment Date, Premiums would otherwise be payable hereunder in the same currency between the same Offices of the parties, then, on such date, each party’s obligation to make payment of any such Premium will be automatically satisfied and discharged and, each party shall aggregate the Premium(s) that would otherwise have been payable by it and only the difference between the aggregate Premium(s) shall be payable by the party owing the larger aggregate Premium(s) to the other party, and, if the aggregate Premium(s) are equal, no payment shall be made.

6.	Terms Relating to the Payment of Premiums.

(a)

Payment of Premium. Unless otherwise agreed in writing by the parties hereto, the Buyer shall be obligated to pay the Premium related to a Currency Option no later than its Premium Payment Date.

(b)

Late Payment or non-Payment of Premium. In addition to any other rights or remedies provided by this Agreement, if a Premium is not received on the Premium Payment Date, the Seller of the relevant Currency Option Transaction may elect to (a) accept a late payment of such Premium; (b) give written notice of such non-payment and, if such payment shall not be received on or before the second Local Business Day following the date on which such notice became effective in accordance with Section 12, treat the related Currency Option Transaction as void; or (c) give written notice of such non-payment and, if such payment shall not be received on or before the second Local Business Day following the date on which such notice became effective in accordance with Section 12, treat such non-payment as an Event of Default under Section 5(a)(i). If the Seller elects to act under clause (a) of the preceding sentence, the Buyer of the relevant Currency Option Transaction shall pay interest on such Premium in the same currency as such Premium from the day such Premium was due until the day paid at the Default Rate. If the Seller elects to act under clause (b) above, the Buyer shall pay all out-of-pocket costs and actual damages incurred in connection with such unpaid or late Premium or void Currency Option Transaction, including without limitation, interest on such Premium in the same currency as such Premium at the then prevailing market rate and any other costs or expenses incurred by the Seller in covering its obligations (including, without limitation, a delta hedge) with respect to such Currency Option Transaction.

7.	Amendment to FX Definitions. Section 3.5(g) of the FX Definitions is amended by the deletion of the word “facsimile” in the fourth line thereof.

IN WITNESS WHEREOF, the parties have executed this Schedule by their duly authorized representative(s) as of the date hereof.


THE BANK OF NOVA SCOTIA			ARCOS DORADOS B.V.

By:	/s/ Debbie Ramkerrysingh		By:	(illegible signature)
	Name:	Debbie Ramkerrysingh		Name:
	Title:	Director		Title:
		The Bank of Nova Scotia
	Auth. No. R105

			By:
				Name:
				Title:

Exhibit 10.15

THE BANK OF NOVA SCOTIA

Global Wholesale Services

Derivative Products

44 King Street West

Central Mail Room

Toronto, Ontario, M5H 1H1

December 17, 2008

Amended December 31, 2008


To:		ARCOS DORADOS BV

Attention:		Miguel Sanchez, Corporate Finance Director

Facsimile no.:		541147112094

Dear Sirs:


Re: Cross Currency Swap Transaction		Reference ID: C13657

This Confirmation supersedes and replaces all prior communication between the parties hereto with respect to the Transaction described below.

The purpose of this letter agreement (this “Confirmation”) is to confirm the terms and conditions of the Transaction entered into between us on the Trade Date specified below.

This Confirmation is subject to and incorporates the definitions contained in Section 14 of the form of the 1992 ISDA Master Agreement (Multicurrency – Cross Border), as published by the International Swaps and Derivatives Association, Inc., but without any Schedule or other modification thereto, as published by ISDA (the “ISDA Agreement”) and in the 1998 FX and Currency Option Definitions, as published by the International Swaps and Derivatives Association, Inc., the Emerging Markets Traders Associations and the Foreign Exchange Committee (the “FX Definitions”, and together with the Swap Definitions, the “Definitions”), are incorporated into this Confirmation. In the event of any inconsistency between the ISDA Agreement and the FX Definitions, the FX Definitions will govern. In the event of any inconsistency between either set of Definitions and this Confirmation, this Confirmation will govern.

This Confirmation agreement constitutes a “Confirmation” as referred to in and supplements forms part of and is subject to, the ISDA Master Agreement dated as of December 12, 2008, as amended and supplemented from time to time (the “Agreement”), between THE BANK OF NOVA SCOTIA (“Party A”) and ARCOS DORADOS BV (“Party B”). All provisions contained in the Agreement govern this Confirmation except as expressly modified below.

2.	The terms of the particular Swap Transaction to which this Confirmation relates are as follows:


Trade Date:		December 17, 2008

Effective Date:		November 10, 2008

Termination Date:		November 10, 2013, subject to adjustment in accordance with the Modified Following Business Day Convention.


Fixed Amounts:

Initial Fixed Amount:		BRL 119,500,000.00

Fixed Rate Payer:		Party B

Fixed Rate Payer Currency Amount:		Refer to attached Notional Amount Schedule “B”

Fixed Rate Payer Payment Dates:		The 10th of each February, May, August, November commencing on May 11, 2009 to and including the Termination Date, subject to adjustment in accordance with the Modified Following Business Day Convention

Fixed Rate Period End Dates:		The 10th of each February, May, August, November commencing on May 11, 2009 to and including the Termination Date with the Modified Following Business Day Convention

Fixed Rate:		12.1%

Fixed Rate Day Count Fraction:		Actual/360


Business Days for Fixed Rate Payments:		New York, Sao Paolo and London

Business Day Convention:		Modified Following Business Day Convention

Initial Floating Amount:

Floating Amounts:		USD 50,000,000.00

Floating Rate Payer:		Party A

Floating Rate Payer Currency Amount:		Refer to attached Notional Amount Schedule “A”

Floating Rate Payer Payment Dates:		The 10th of each February, May, August, November commencing on May 11, 2009 to and including the Termination Date, subject to adjustment in accordance with the Modified Following Business Day Convention

Floating Rate Period End Dates:		The 10th of each February, May, August, November commencing on May 11, 2009 to and including the Termination Date with the Modified Following Business Day Convention

Floating Rate for the Initial Calculation Period:		2.69875% for the period November 10, 2008 to May 11, 2009

Floating Rate Option:		USD-LIBOR-BBA

Designated Maturity:		3-month

Spread:		Not Applicable

Floating Rate Day Count Fraction:		Actual/360

Reset Dates:		First day or each Floating Rate Payer Calculation Period

Method of Averaging:		Inapplicable


Compounding:		Inapplicable

Compounding Dates:		Inapplicable

Business Days for Floating Rate Payments:		New York, Sao Paolo and London

Business Day Convention:		Modified Following Business Day Convention


Principal Exchange

Initial Exchange:		None

Interim Exchanges:		Interim Exchanges Dates: Each period end date as shown in the Notional Amount Schedule “A” and “B” Party A Interim Exchange Amount: The USD Amortization Amount as shown in Notional Amount Schedule “A” Party B Interim Exchange Amount: The BRL Amortization Amount as shown in Notional Amount Schedule “B”

Final Exchange

Final Exchange Date:		November 12, 2013, subject to adjustment in accordance with the Modified Following Business Day Convention

Party A

Final Exchange Amount:		USD 12,500,000.00

Party B

Final Exchange Amount:		BRL 29,875,000.00

Settlement Terms

Settlement:		Non-Deliverable, with the effect that any Reference Currency amounts payable



		hereunder on a Payment Date shall be converted into Settlement Currency amounts by reference to the Settlement Rate Option on the Valuation Date. The obligations of the parties to pay the Fixed Amount or the Floating Amount, as the case may be, shall be replaced by an obligation of one party to pay the Settlement Amount in the Settlement Currency in accordance with the provisions of this Confirmation. The Settlement Amount shall be determined by the Calculation Agent on the Valuation Date as follows: (Fixed Rate Amount/Settlement Rate)-Floating Rate Amount If the Settlement Amount is a positive number, the Fixed Rate Payer shall pay the Settlement Amount to the Floating Rate Payer on the Payment Date. If the Settlement Amount is a negative number, the Floating Rate Payer shall pay the absolute value of the Settlement Amount to the Fixed Rate Payer on the Payment Date.

Settlement Currency:		USD
Reference Currency:		BRL
Business Days Applicable to Valuation Date for BRL		Brazil Business Day and Business Day In the event the Scheduled Valuation Date becomes subject to the Modified Following Business Day Convention, and if the Valuation Date has not occurred on or before the 30 ^th consecutive day after the Scheduled Valuation Date (any such period being a “Deferral Period”), then the next day after the Deferral Period that would have been a Brazil Business Day and Business Day but for the Unscheduled Holiday, shall be deemed to be the Valuation Date.


Settlement Rate
Settlement Rate Option:		BRL09(PTAX)

Disruption Event and Fallback:		1) Price Source Disruption 2) Price Materiality

Event Currency:		Brazil Real

Calculation Agent		Applicable
Determination of
Disruption Event:

Price Materiality:

Terms Applicable to Price Materiality:

Primary Rate:		BRL09(PTAX)

Secondary Rate:		BRL12 or BRL13 (as the case may be)

Price Materiality Percentage:		3%, provided however, that if there are insufficient responses on the Valuation Date to the EMTA BRL Industry Survey or the EMTA BRL Indicative Survey, as the case may be, the Price Materiality Percentage will also be deemed to have been met.

Cumulative Events:		Notwithstanding anything herein to the contrary, in no event shall the total number of consecutive calendar days exceed 30 consecutive calendar days in the aggregate. Accordingly, (x) if, upon the lapse of any such 30 day period, an Unscheduled Holiday shall have occurred or be continuing on the day following such period, then such day shall be deemed to be a Valuation Date, and (y) if, upon the lapse of any such 30 day period, a Price Source Disruption shall have occurred or be continuing on the day following such period, then Valuation Postponement shall not apply and the Spot Rate shall be determined in accordance with the next


		Disruption Fallback.

Disruption Fallback:		Fallback Reference Price

Alternative Settlement Rate Option:		1. BRL12 2. Valuation Postponement for Price Source Disruption. 3. BRL13 4. Calculation Agent Determination of Settlement Rate

Valuation Postponement for Price Source Disruption:		Maximum Number of Days for Postponement – 30 Days Valuation Postponement” means, for purposes of obtaining a Settlement Rate, that Spot Rate will be determined on the day that is a Brazil Business Day and Business Day first succeeding the day on which the Price Source Disruption ceases to exist, unless the Price Source Disruption continues to exist (measured from the date, that, but for the occurrence of the Price Source Disruption, would have been the Valuation Date) for a consecutive number of calendar days equal to the Maximum Days of Postponement. In such event, the Spot Rate will be determined on the next business day that is a Brazil Business Day and Business after the Maximum Days of Postponement in accordance with the next applicable Disruption Fallback.

Quoting Dealer Disclaimer:		The parties acknowledge that one or both parties to this Transaction acting directly or through a branch or an affiliate may be requested to provide a quotation or quotations from time to time for the purpose of determining the EMTA BRL Industry Survey Rate or the EMTA BRL Indicative Survey Rate and such quotation may effect, materially or otherwise, the settlement of the Transaction.


Calculation Agent:		The Bank Of Nova Scotia

Non-Reliance:		Each party represents to the other party that it is acting for its own account, and has made its own independent decisions to enter into this Transaction and as to whether this Transaction is appropriate or proper for it based on its own judgment and upon advice from such advisors as it has deemed necessary. It is not relying on any communication (written or oral) of the other party as investment advice or as a recommendation to enter into this Transaction, it being understood that information and explanations related to the terms and conditions of this Transaction shall not be considered investment advice or a recommendation to enter into this Transaction. No communication (written or oral) received from the other party shall be deemed to be an assurance or guarantee as to the expected results of this Transaction.

OTHER TERMS:

“Unscheduled Holiday”: “Unscheduled Holiday” means, that a day is not a Business Day and the market was not aware of such fact (by means of a public announcement or by reference to other publicly available information) until a time later than 9:00 a.m. local time in the Principal Financial Center(s) of the Reference Currency two Business Days prior to the Scheduled Valuation Date.

“Settlement Date”: “Settlement Date” means, in respect of a Transaction, the date (a) specified as the Settlement Date or the Payment Date, as the case may be, or otherwise determined as provided in the related Confirmation, or (b) determined in accordance with Section 5.2(c)(x)(A) or Section 5.2(c)(Xi), subject to adjustment in accordance with the Following Business Day Convention unless other Business Day Convention is specified to be applicable to that Settlement Date.

“Valuation Date”: “Valuation Date” means, each date (i) specified as the Valuation Date or otherwise determined as provided in the related Confirmation, or (ii) determined in accordance with Section 5.1(d)(vi) or Section 5.2(c)(x)(a),

which is a day in respect of which a Spot Rate is to be determined for a purpose of determining the Settlement Rate, subject to adjustment in accordance with the Preceding Business Day Convention unless another Business Day Convention is specified to be applicable to that Valuation Date. Unless otherwise specified in the related Confirmation, the Valuation Date will be, (i) in respect of an FX Transaction, two Business Days prior to the Settlement Date and (ii) in respect of a Currency Option Transaction, the Exercise Date.

Offices:

(a)

For purpose of this Transaction, the Office of Party A is Toronto, Ontario.

(b)

For purpose of this Transaction, the Office of Party B is Olivos, Argentina.

4.	Account Details:


Payments to Party A:

Accounts for Payment in USD		BANK OF NOVA SCOTIA NEW YORK UNITED STATES A/C: 602736 Swift Code: NOSCUS33 Favour: BANK OF NOVA SCOTIA TORONTO CA

Payments to Party A:

Accounts for Payment in BRL		Inapplicable

Payments to Party B

Accounts for Payment in USD		Bank Name: JPMorgan Private Bank Bank Address: 345 Park Avenue, 5th Floor New York, NY 10154-1002 ABA No.: 021-000-021 For Credit to Account # 739577034 Beneficiary: Arco Dorados B.V.


Payments to Party B

Accounts for Payment in BRL		Inapplicable

The parties hereto agree that this Confirmation, whether received in original or facsimile form, may be executed in counterparts, which execution may be effected by means of facsimile transmission. Where execution is effected by means of facsimile transmission, the parties agree that the sender’s signature as printed by the recipient’s facsimile machine shall be deemed to be the sender’s original signature.

Please confirm that the foregoing correctly sets forth the terms of our agreement by executing a copy of this Confirmation and returned it to us by facsimile, Attention: GWS Derivative Product Confirmations, Telephone: (416) 866-5415/3622, Facsimile: (416)933-2291.

Yours sincerely,

THE BANK OF NOVA SCOTIA


/s/ Armando Dela Rosa
Armando Dela Rosa
Confirmation Officer		/s/ Lorraine D’Costa
Authorized Signature D0402		Lorraine D’Costa Senior Assistant Manager Authorized Signature D0369

Confirmed as of the date first written:


ARCOS DORADOS BV

(illegible signature)
By:		By:
Name:		Name:
Title:		Title:

Notional Amount Schedule “A”


Dates	Outstanding Notional Amounts

November 10, 2008	USD	50,000,000.00
May 11, 2009	USD	50,000,000.00
August 10, 2009	USD	50,000,000.00
November 10, 2009	USD	50,000,000.00
February 10, 2010	USD	50,000,000.00
May 10, 2010	USD	50,000,000.00
August 10, 2010	USD	50,000,000.00
November 10, 2010	USD	45,000,000.00
February 10, 2011	USD	45,000,000.00
May 10, 2011	USD	40,000,000.00
August 10, 2011	USD	40,000,000.00
November 10, 2011	USD	35,000,000.00
February 10, 2012	USD	35,000,000.00
May 10, 2012	USD	30,000,000.00
August 10, 2012	USD	30,000,000.00
November 13, 2012	USD	25,000,000.00
February 13, 2013	USD	25,000,000.00
May 10, 2013	USD	12,500,000.00
August 12, 2013	USD	12,500,000.00
November 12, 2013	USD	0.00

Notional Amount Schedule “B”


Dates	Outstanding Notional Amounts

November 10, 2008	BRL	119,500,000.00
May 11, 2009	BRL	119,500,000.00
August 10, 2009	BRL	119,500,000.00
November 10, 2009	BRL	119,500,000.00
February 10, 2010	BRL	119,500,000.00
May 10, 2010	BRL	119,500,000.00
August 10, 2010	BRL	119,500,000.00
November 10, 2010	BRL	107,550,000.00
February 10, 2011	BRL	107,550,000.00
May 10, 2011	BRL	95,600,000.00
August 10, 2011	BRL	95,600,000.00
November 10, 2011	BRL	83,650,000.00
February 10, 2012	BRL	83,650,000.00


May 10, 2012	BRL	71,700,000.00
August 10, 2012	BRL	71,700,000.00
November 13, 2012	BRL	59,750,000.00
February 13, 2013	BRL	59,750,000.00
May 10, 2013	BRL	29,875,000.00
August 12, 2013	BRL	29,875,000.00
November 12, 2013	BRL	0.00

Exhibit 10.16

ISDA ®

International Swaps and Derivatives Association, Inc.

SCHEDULE

to the

2002 Master Agreement

dated as of December 14, 2009

between

MORGAN STANLEY & CO. INTERNATIONAL PLC

(“Party A”)

and

ARCOS DORADOS B.V.

(“Party B”)

Part 1. Termination Provisions .

(a)	“ Specified Entity ” means in relation to Party A for the purpose of:

Section 5(a)(v), Affiliates

Section 5(a)(vi), Not Applicable

Section 5(a)(vii), Not Applicable

Section 5(b)(v), Not Applicable

and in relation to Party B for the purpose of:

Section 5(a)(v), Not Applicable

Section 5(a)(vi), Not Applicable

Section 5(a)(vii), Not Applicable

Section 5(b)(v), Not Applicable

(b)	“ Specified Transaction ” will have the meaning specified in Section 14.

(c)	The “ Cross Default ” provisions of Section 5(a)(vi) will apply to Party A and Party B.

“ Specified Indebtedness ” will have the meaning specified in Section 14.

“ Threshold Amount ” means in relation to Party A, an amount equal to 3% of the total shareholders’ equity of Party A as specified from time to time in the most recently published audited financial statements of Party A or its equivalent in any other currency and, in relation to Party B, USD 25,000,000 or its equivalent in any other currency.

(d)	The “ Bankruptcy ” provisions of Section 5(a)(vii) will apply to Party A and will apply to Party B; provided that such provisions shall be amended by deleting “15” and substituting “30” in clauses (4)(B) and (7) thereof.

(e)	The “ Credit Event Upon Merger ” provisions of Section 5(b)(v) will apply to Party A and Party B.

(f)

The “ Automatic Early Termination ” provision of Section 6(a)(iv) will not apply to Party A or to Party B; provided, however , that with respect to a party, where the Event of Default specified in Section 5(a)(vii)(1), (3), (4), (5), (6) or, to the extent analogous thereto, (8) is governed by a system of law which does not permit termination to take place after the occurrence of the relevant Event of Default, then the Automatic Early Termination provisions of Section 6(a) will apply.

(g)	“ Termination Currency ” means United States Dollars.

Part 2. Tax Representations .

(a)	Payer Tax Representations . For the purpose of Section 3(e), Party A and Party B will make the following representation:-

It is not required by any applicable law, as modified by the practice of any relevant governmental revenue authority, of any Relevant Jurisdiction to make any deduction or withholding for or on account of any Tax from any payment (other than interest under Section 9(h) of this Agreement) to be made by it to the other party under this Agreement. In making this representation, it may rely on (i) the accuracy of any representations made by the other party pursuant to Section 3(f) of this Agreement, (ii) the satisfaction of the agreement contained in Section 4(a)(i) or 4(a)(iii) of this Agreement and the accuracy and effectiveness of any document provided by the other party pursuant to Section 4(a)(i) or 4(a)(iii) of this Agreement and (iii) the satisfaction of the agreement of the other party contained in Section 4(d) of this Agreement, except that it will not be a breach of this representation where reliance is placed on clause (ii) above and the other party does not deliver a form or document under Section 4(a)(iii) by reason of material prejudice to its legal or commercial position.

(b)	Party A Payee Representation . For the purpose of Section 3(f) of this Agreement, Party A makes the following representation:

It is a “non-U.S. branch of a foreign person” within the meaning of Section 1.1441-4(a)(3)(ii) of the United States Treasury Regulations and a “foreign person” within the meaning of Section 1.6041-4(a)(4) of the United States Treasury Regulations.

(c)	Party B Payee Representation . For the purpose of Section 3(f) of this Agreement, Party B makes the following representations:

It is not (1) a bank that has entered into this Agreement in the ordinary course of its trade or business of making loans, as described in Section 881(c)(3)(A) of the Internal Revenue Code of 1986, as amended (the “Code”), (2) a 10-percent shareholder of Party A within the meaning of Code Section 871(h)(3)(B), or (3) a controlled foreign corporation related to Party A within the meaning of Code Section 881(c)(3)(C).

Part 3. Agreement to Deliver Documents .

For the purpose of Sections 4(a)(i) and 4(a)(ii), each party agrees to deliver the following documents, as applicable:-

(a)	Tax forms, documents or certificates to be delivered are:- None

(b)	Other documents to be delivered are:


Party required to Deliver document	Form/Document/ Certificate	Date by which to be delivered	Covered by Section 3(d) Representation

Party A and Party B	Either (i) a signature booklet containing a secretary’s certificate and resolutions (“authorizing resolutions”) or (ii) other authority documentation, in either case, which (x) authorizes the party to enter into derivatives transactions of the type contemplated by the parties and (y) is reasonably satisfactory in form and substance to the other party.	The earlier of (i) the fifth Local Business Day after the trade date of the first Transaction and (ii) upon execution of this Agreement and as deemed necessary for any further documentation.	Yes

Party A and Party B	Certified copies of documents evidencing each party’s capacity to execute this Agreement, each Confirmation and any Credit Support Document (if applicable) and to perform its obligations hereunder and thereunder.	Upon the execution of this Agreement, and, with respect to a Confirmation, upon the other party’s request.	Yes

Party A and Party B	A copy of the annual report of such party (in the case of Party A, in respect of Morgan Stanley) containing audited consolidated financial statements for each such fiscal year, certified by independent certified public accountants and prepared in accordance with generally accepted accounting principles in the country in which such party is organized.	As soon as practicable after the execution of this Agreement and also within 120 calendar days after the end of each fiscal year while there are any obligations outstanding under this Agreement.	Yes

Party A and Party B	A duly executed copy of the Credit Support Documents specified in Part 4 of this Schedule.	As soon as practicable after the execution of this Agreement and promptly after execution of any additional Subsidiary Guarantees (as defined in the Indenture dated as of October 1, 2009 (the	No


Party required to Deliver document	Form/Document/ Certificate	Date by which to be delivered	Covered by Section 3(d) Representation

		“ Indenture ”) among Arcos Dorados B.V., as issuer, the Subsidiary Guarantors, Citibank N.A., as trustee, registrar, paying agent and transfer agent, and Dexia Banque Internationale A Luxembourg, Societe Anonyme, as Luxembourg paying agent).

Part 4. Miscellaneous .

(a)	Addresses for Notices . For the purpose of Section 12(a) of this Agreement:

Addresses for notice or communications to Party A:

For notices or communications with respect to Sections 5 or 6 only:


Address:		25 Cabot Square / Canary Wharf London E14 4QA England
Attention:		Close-out Notices
With a mandatory copy to :
Facsimile No.:		+1 212 507 4622

For notices or communications with respect to all purposes other than Sections 5 or 6:


Address:		25 Cabot Square / Canary Wharf London E14 4QA England
Attention:		Miscellaneous Notices
Facsimile No.:		+1 212 404 9899

Address for notices or communications to Party B:


Address:		Arcos Dorados B.V. C/C Arcos Dorados Argentina S.A. Roque Saenz Peña 432 - Olivos - Buenos Aires Argentina - B1636FFB

Attention:		Miguel Sanchez de Bustamante / Diego Pace / Julieta Nalband
Facsimile No.:		(54-11) 4711-2236
Telephone No.:		(54-11) 4711-2000

(b)	Process Agent . For the purpose of Section 13(c) of this Agreement:

Party A appoints as its Process Agent:

MORGAN STANLEY CAPITAL SERVICES INC.

1585 Broadway

New York, New York 10036-8293

Attention: CHIEF LEGAL OFFICER

Party B appoints as its Process Agent:

National Registered Agents, Inc. with offices currently at 875 Avenue of the

Americas, Suite 501,

New York, New York 10001

(c)	Offices . The provisions of Section 10(a) will apply to this Agreement.

(d)	Multibranch Party . For the purpose of Section 10(b) of this Agreement:

Party A is not a Multibranch Party.

Party B is not a Multibranch Party.

(e)	Calculation Agent . The Calculation Agent is Party A unless (i) otherwise specified in a Confirmation in relation to the relevant Transaction, or (ii) Party A is a Defaulting Party or Affected Party, in which case the Calculation Agent shall be Party B.

(f)	Credit Support Document . Details of any Credit Support Document:

In relation to Party A: The guarantee of Morgan Stanley, a Delaware Company.

In relation to Party B: The Subsidiary Guarantees.

(g)	Credit Support Provider . Credit Support Provider means:

In relation to Party A: Morgan Stanley.

In relation to Party B: The Subsidiary Guarantors (as defined in the Indenture).

(h)

Local Business Day . Notwithstanding anything to the contrary in the definition of Local Business Day in Section 14 of this Agreement, the parties hereby agree that for all purposes hereunder a Local Business Day shall occur only on a General Business Day in both New York, New York and Buenos Aires, Argentina.

(i)

Governing Law . This Agreement and all matters arising out of or in any way connected thereto will be governed by and construed in accordance with the laws of the State of New York (without reference to the choice of law doctrine). Section 13(b) is amended by: (1) deleting “non-” from the second line of clause (i); and (2) deleting the final paragraph.

(j)	Netting of Payments . “Multiple Transaction Payment Netting” will apply for the purpose of Section 2(c) of this Agreement to all Transactions, starting from the date of this Agreement.

(k)	Absence of Litigation . For the purpose of Section 3(c):

“Specified Entity” means in relation to Party A, Affiliates.

“Specified Entity” means in relation to Party B, Affiliates.

(l)	“Affiliate” has the meaning specified in Section 14 of this Agreement, but excludes Morgan Stanley Derivative Products Inc.

(m)	No Agency . The provisions of Section 3(g) will apply to this Agreement.

(n)

Non-Reliance . It is acting for its own account, and it has made its own independent decisions to enter into that Transaction and as to whether that Transaction is appropriate or proper for it based upon its own judgment and upon advice from such advisers as it has deemed necessary. It is not relying on any communication (written or oral) of the other party as investment advice or as a recommendation to enter into that Transaction, it being understood that information and explanations related to the terms and conditions of a Transaction shall not be considered investment advice or a recommendation to enter into that Transaction. No communication (written or oral) received from the other party shall be deemed to be an assurance or guarantee as to the expected results of that Transaction.

Assessment and Understanding . It is capable of assessing the merits of and understanding (on its own behalf or through independent professional advice), and understands and accepts, the terms, conditions and risks of that Transaction. It is also capable of assuming, and assumes, the risks of that Transaction.

Status of Parties . The other party is not acting as a fiduciary for or an adviser to it in respect of that Transaction.”

(o)

Recording of Conversations . Each party (i) consents to the recording of telephone conversations between the trading, marketing and other relevant personnel of the parties in connection with this Agreement or any potential Transaction, (ii) agrees to obtain any necessary consent of, and give any necessary notice of such recording to, its relevant personnel and (iii) agrees, to the extent permitted by applicable law, that the recordings may be submitted in evidence in any Proceedings.

(p)	*Pari Passu* . All payment and delivery obligations of each party under this Agreement will rank at least pari passu in all respects with all of that party’s other unsecured and unsubordinated obligations (except for those which are mandatorily preferred by the operation of law).

Part	5. Other Provisions .

(a)

ISDA Definitions . Reference is hereby made to the 2006 ISDA Definitions (the “ 2006 Definitions ”) and the 1998 FX and Currency Option Definitions (the “ FX Definitions ”) (collectively the “ ISDA Definitions ”) each as published by the International Swaps and Derivatives Association, Inc., which are hereby incorporated by reference herein. Any terms used and not otherwise defined herein, which are contained in the 2006 Definitions

shall have the meaning set forth therein. In the event of any inconsistency between the 2006 Definitions and the FX Definitions, the FX Definitions shall prevail with respect to an FX Transaction or a Currency Option Transaction. In the event of any inconsistency between the provisions of this Agreement and the 2006 Definitions, the provisions of this Agreement shall prevail. For the purpose of this Agreement, the expression “Swap Transaction” as used in the 2006 Definitions shall be read to mean “Transactions”.

(b)	Waiver of Jury Trial . To the extent permitted by applicable law, each party waives any right it may have to a trial by jury in respect of any Proceedings relating to this Agreement or any Transaction.

(c)	Illegality . For the purpose of Section 5(b)(i), the obligation of a party to comply with any directive issued or given by any government agency or authority with competent jurisdiction which has the result referred to in Section 5(b)(i) will be deemed to be an “Illegality”.

(d)

2002 Master Agreement Protocol . The parties agree that the definitions and provisions contained in Annexes 1 to 18 of the 2002 Master Agreement Protocol published by the International Swaps and Derivatives Association, Inc. on July 15 ^th , 2003 (the “2002 Protocol” ) are incorporated into and apply to this Agreement. As used in this Agreement (including in all Confirmations related to it), any reference to any ISDA Definitions Booklet and/or Credit Support Provisions shall mean that ISDA Definitions Booklet and/or those Credit Support Provisions as deemed amended in accordance with the terms of the 2002 Protocol.

(e)

Confirmation Procedures . On or promptly following the Trade Date of a Transaction, Party A will send in writing to Party B by facsimile and email a Confirmation. Party B agrees to respond to such Confirmation within three (3) Local Business Days after receipt of that Confirmation, either by confirming agreement thereto or requesting a correction of any error(s) contained therein. Failure by Party B to respond within such period shall not affect the validity or enforceability of such Transaction.

(f)

Scope of Agreement . Notwithstanding anything contained in this Agreement to the contrary, any transaction which may otherwise constitute a “Specified Transaction” (other than a repurchase transaction, reverse repurchase transaction, buy/sell-back transaction or securities lending transaction) for the purposes of this Agreement which has been or will be entered into between the parties shall constitute a “Transaction” which is subject to, governed by and construed in accordance with the terms of this Agreement, unless the Confirmation with respect to a Transaction entered into after the execution of this Agreement expressly provides otherwise.

Part 6. FX Transactions and Currency Option Transactions

(a)

Confirmations . Any FX Transaction or Currency Option Transaction into which the parties may before the date of this Agreement have entered, or may in the future enter, where the relevant Confirmation on its face does not expressly exclude the application of this Agreement, shall (to the extent not otherwise provided for in this Agreement) be subject to, governed by and construed in accordance with this Agreement (in substitution for any existing terms, if any, whether express or implied). Each such FX Transaction and Currency Option Transaction shall be a Transaction, and the documents and other confirming evidence (including electronic messages on an electronic messaging service) exchanged between the parties confirming such FX Transaction or Currency Option Transaction shall each be a Confirmation (even where not so specified therein), for the purposes of this Agreement.

(b)	Payment Instructions . All payments to be made in respect of FX Transactions and Currency Option Transactions shall be made in accordance with standing payment instructions provided by the parties (or as otherwise specified in a Confirmation).

(c)	Currency Option Transaction Discharge and Termination .

(i)

Automatic Discharge and Termination of Offsetting Options. Unless otherwise agreed, any Call or any Put written by a party will automatically be terminated and discharged, in whole or in part, as applicable, against a Call or a Put, respectively, written by the other party, such termination and discharge to occur automatically upon the payment in full of the last Premium payable in respect of such Currency Option Transactions; provided that such termination and discharge may only occur in respect of Currency Option Transactions:

(a) each being with respect to the same Put Currency and the same Call Currency;

(b) each having the same Expiration Date and Expiration Time;

(d) each having the same Strike Price;

(e) neither of which shall have been exercised by delivery of a Notice of Exercise;

(f) which are otherwise identical in terms that are material for the purposes of offset and discharge;

and, upon occurrence of such termination and discharge, neither party shall have any further obligation to the other party in respect of the relevant Currency Option Transactions or, as the case may be, parts thereof so terminated and discharged. In the case of a partial termination and discharge (i.e. where the relevant Currency Option Transactions are for different amounts of the Currency Pair), the remaining portion of the Currency Option Transaction which is partially discharged and terminated shall continue to be a Currency Option Transaction for all purposes of this Agreement. This provision shall apply notwithstanding that either party (i) may fail to send out a Confirmation in respect of any such discharge and termination, or (ii) may fail to make changes in any of its books as a result of any such discharge and termination.

(d)

Netting of Payments . Notwithstanding Part 4(j) of this Schedule to this Agreement, “Multiple Transaction Payment Netting” will apply for the purpose of Section 2(c) of this Agreement to all Transactions under this Agreement, provided , however , that (i) obligations to make payments pursuant to FX Transactions shall only be netted, satisfied and discharged against obligations to make payments arising out of the same or other FX Transactions and obligations to make payments pursuant to Currency Option Transactions shall only be netted, satisfied and discharged against obligations to make payments arising out of the same or other Currency Option Transactions and (ii) Premiums in respect of Currency Option Transactions shall be netted, satisfied and discharged only against other Premiums in respect of Currency Option Transactions. The Calculation Agent shall notify the parties of the amounts of any such netted payments (which notice may be by telephone).

(e)	Amendments to the FX and Currency Option Definitions . The following amendments are made to the FX and Currency Option Definitions:

(i)

Section 3.4 of the FX and Currency Option Definitions is hereby amended by the addition of the following as new Sections 3.4(c) and (d) of the FX and Currency Option Definitions:

“(c)

Unless otherwise agreed in writing by the parties, the Premium related to a Currency Option Transaction shall be paid on its Premium Payment Date in immediately available funds.

(d)

If any Premium is not received on the Premium Payment Date, the Seller may elect: (i) to accept a late payment of such Premium; (ii) to give written notice of such non-payment and, if such payment shall not be received within three (3) Local Business Days of such notice, treat the related Currency Option Transaction as void; or (iii) to give written notice of such non-payment and, if such payment shall not be not received within three (3) Local Business Days, treat such non-payment as an Event of Default under Section 5(a)(i) of this Agreement. If the Seller elects to act under either clause (i) or (ii) of the preceding sentence, the Buyer shall pay all out-of-pocket costs and actual damages incurred in connection with such unpaid or late Premium or void Currency Option Transaction, including, without limitation, interest on such Premium from and including the Premium Payment Date to but excluding the date of actual payment in the same currency as such Premium at the Default Rate and any other losses, costs or expenses incurred by the Seller in connection with such terminated Currency Option Transaction, for the cost of its funding, or the loss incurred as a result of terminating, liquidating, obtaining or re-establishing a delta hedge or related trading position with respect to such Currency Option Transaction,”

IN WITNESS WHEREOF , the parties have executed this Schedule by their duly authorized representative(s) as of the date hereof.



MORGAN STANLEY & CO. INTERNATIONAL PLC		ARCOS DORADOS B.V.

By:	/s/ Barbara De Calonje	By:	/s/ Miguel Sanchez de Bustamante
	Name: Barbara De Calonje		Name: Miguel Sanchez de Bustamante
	Title: Authorised Signatory		Title: Corporate Finance Director

		By:	/s/ Diego Pace
			Name: Diego Pace
			Title: Corporate Finance Manager

Exhibit 10.17

LOGO


Date:	30 December 2009

To:	Areas Dorados B.V.	From:	Morgan Stanley & Co. International Plc

	Account Number: 0617SAV70		20, Cabot Square Canary Wharf London E14 4QW

Attn:	Julieta Nalband	Contact:	Baltimore Derivative Dealer Services Group

Email:	julieta.nalband@ar.mcd.com	Fax:	212 404 4762

Tel:		Tel:	212 761 2630

Re: Non-Deliverable Interest Rate Swap MSIL Ref. YRZQC

The purpose of this letter agreement is to set forth the terms and conditions of the Transaction entered into between us on the Trade Date referred to below. This letter constitutes a “Confirmation” as referred to in the Agreement specified below.

The definitions and provisions contained in the 2006 ISDA Definitions (the “2006 Definitions”), as published by the International Swaps and Derivatives Association, Inc. (“ISDA”), and the 1998 FX and Currency Option Definitions (the “FX Definitions”) as published by ISDA, the Emerging Markets Traders Association and The Foreign Exchange Committee (together, the “Definitions”) are incorporated into this Confirmation. In the event of any inconsistency between the 2006 Definitions and the FX Definitions, the 2006 Definitions shall govern, except that the FX Definitions shall govern for the purposes of the Settlement Provisions set out below. In the event of any inconsistency between the Definitions and this Confirmation, this Confirmation will govern. References herein to a “Transaction” shall be deemed to be references to a “Swap Transaction” for the purposes of the 2006 Definitions.

1. This Confirmation supplements, forms a part of, and is subject to, the Master Agreement dated as of 14 December 2009, as amended and supplemented from time to time (the “Agreement”), between you and us. All provisions contained in the Agreement shall govern this Confirmation except as expressly modified below.

2. The terms of the particular Transaction to which this Confirmation relates are as follows:


General Terms:

Party A:		Morgan Stanley & Co. International Plc

Party A Credit Support:		As per the Agreement

Party B:		Arcos Dorados B.V.

Trade Date:		15 December 2009

Effective Date:		10 November 2009

Termination Date:		10 November 2013, subject to adjustment in accordance with the Modified Following Business Day Convention.

Floating Amounts:

Floating Rate Payer:		Party B

Floating Rate Paver Currency Amount:		USD 100,000,000, amortizing according to Schedule I

Schedule I

The dates below are from and including, to but excluding, and are subject to No Adjustment.


From	To	Amount in USD
10 November 2009	10 February 2010		100,000,000
10 February 2010	10 May 2010		100,000,000
10 May 2010	10 August 2010		100,000,000
10 August 2010	10 November 2010		100,000,000
10 November 2010	10 February 2011		90,000,000
10 February 2011	10 May 2011		90,000,000
10 May 2011	10 August 2011		80,000,000
10 August 2011	10 November 2011		80,000,000
10 November 2011	10 February 2012		70,000,000
10 February 2012	10 May 2012		70,000,000
10 May 2012	10 August 2012		60,000,000
10 August 2012	10 November 2012		60,000,000
10 November 2012	10 February 2013		50,000,000
10 February 2013	10 May 2013		50,000,000
10 May 2013	10 August 2013		25,000,000
10 August 2013	10 November 2013		25,000,000


Floating Rate Payment Dates:		On 10 February. 10 May, 10 August and 10 November in each year, from and including 10 February 2010 to and including 10 November 2013, subject to adjustment in accordance with the Modified Following Business Day Convention with No Adjustment to Period End Dates

Floating Rate for initial Calculation Period:		0.274060 %

Floating Rate Option:		USD-LIBOR-BRA

Designated Maturity:		3 months

Reset Date:		The first day of each Calculation Period

Floating Rate Day Count Fraction:		Actual/360

Fixed Amounts:

Fixed Rate Payer:		Party A

Fixed Rate Payer Currency Amount:		BRL 176,000,000, amortizing according to Schedule II below

Schedule II

The dates below are from and including, to but excluding, and are subject to No Adjustment.


From	To	Amount in BRL
10 November 2009	10 February 2010		176,000,000
10 February 2010	10 May 2010		176,000,000
10 May 2010	10 August 2010		176,000,000
10 August 2010	10 November 2010		176,000,000
10 November 2010	10 February 2011		158,400,000
10 February 2011	10 May 2011		158,400,000
10 May 2011	10 August 2011		140,800,000
10 August 2011	10 November 2011		140,800,000
10 November 2011	10 February 2012		123,200,000


10 February 2012	10 May 2012	123,200,000
10 May 2012	10 August 2012	105,600,000
I0 August 2012	10 November 2012	105,600,000
10 November 2012	10 February 2013	88,000,000
10 February 2013	10 May 2013	88,000,000
10 May 2013	10 August 2013	44,000,000
10 August 2013	10 November 2013	44,000,000


Fixed Rate:		2.02 %

Fixed Rate Payment Dates:		On 10 February, 10 May, 10 August and 10 November in each year, from and including 10 February 2010 to and including 10 November 2013, subject to adjustment in accordance with the Modified Following Business Day Convention with No Adjustment to Period End Dates

Fixed Rate Day Count Fraction:		Actual/360

Fixed Amounts:		On each Fixed Rate Payer Payment Date, the Fixed Amounts shall be determined in accordance with the following formula: Fixed Amounts = (Fixed Rate Payer Currency Amount x Fixed Rate x Fixed Rate Day Count Fraction) Fixed Amounts in BRL shall be converted into USD in accordance with the Settlement Provisions below.

Settlement Provisions:

Settlement:		Non-Deliverable, with the effect that any Reference Currency amounts payable hereunder on a Payment Date shall be converted into Settlement Currency amounts by reference to the Settlement Rate Option on each Valuation Date. The obligations of the parties to pay the Fixed Amounts or the Floating Amounts, as the case may be, shall be replaced by an obligation of one party to pay the Settlement Amount in accordance with the provisions of this Confirmation. The Settlement Amount shall be determined on the Valuation Date by the Calculation Agent as follows:



		If the Settlement Amount is a positive number, the Floating Rate Payer shall pay the Settlement Amount to the Fixed Rate Payer on the respective Payment Date. If the Settlement Amount is a negative number, the Fixed Rate Payer shall pay the absolute value of the Settlement Amount to the Floating Rate Payer on the respective Payment Date.

Reference Currency:		BRL

Settlement Currency:		USD

Settlement Rate Option:		BRL PTAX (BRL09)


Valuation Date:		Two Business Days prior to each Fixed Rate Payment Date (each a “Scheduled Valuation Date”), subject to adjustment in accordance with the Preceding Business Day Convention; provided, however, that the adjustment shall be made in accordance with the Following Business Day Convention in the event of an Unscheduled Holiday. Notwithstanding the foregoing, if the parties have specified a Scheduled Valuation Date that falls on a date that, as at the Trade Date, is not a scheduled Business Day in New York, no adjustment shall be made on account of the fact that such date is not a Business Day in New York.

Disruption Events and Fallbacks:

Disruption Events:

Price Source Disruption:		Applicable

Price Materiality:		Applicable

Primary Rate:		BRL PTAX (BRL09)

Secondary Rate:		EMTA BRL Industry Survey Rate (BRL12), or EMTA BRL Indicative Survey Rate (BRL13), as the case may be.

Price Materiality Percentage:		3%, provided, however, that if there are insufficient responses on the Valuation Date to the EMTA BRL Industry Survey or the EMTA BRL Indicative Survey, as the case may be, the Price Materiality Percentage will also be deemed to have been met.

Disruption Fallbacks:

First Fallback Reference Price:		EMTA BRL Industry Survey Rate (BRL12)

Valuation Postponement

Second Fallback Reference Price:		EMTA BRL Indicative Survey Rate (BRL13)

Calculation Agent Determination of Settlement Rate

Other Terms:

Unscheduled Holiday:		“Unscheduled Holiday” means that a day is not a Business Day and the market was not aware of such fact (by means of a public announcement or by reference to other publicly available information) until a time later than 9:00 am local time in the Principal Financial Center(s) of the Reference Currency two Business Days prior to the Scheduled Valuation Date.

Deferral Period for Unscheduled Holiday:		In the event the Scheduled Valuation Date becomes subject to the Following Business Day Convention, and if the Valuation Date has not occurred on or before the 30th consecutive day after the Scheduled Valuation Date (any such period being a “Deferral Period”), then the next day after the Deferral Period that would have been a Business Day but for the Unscheduled Holiday, shall he deemed to be the Valuation Date.


Valuation Postponement for Price Source Disruption:		“Valuation Postponement” means, for purposes of obtaining a Settlement Rate, that the Spot Rate will be determined on the Business Day first succeeding the day on which the Price Source Disruption ceases to exist, unless the Price Source Disruption continues to exist (measured from the date, that, but for the occurrence of the Price Source Disruption, would have been the Valuation Date) for a consecutive number of calendar days equal to the Maximum Days of Postponement. In such event, the Spot Rate will he determined on the next Business Day after the Maximum Days of Postponement in accordance with the next applicable Disruption Fallback.

Cumulative Events:		Notwithstanding anything herein to the contrary, in no event shall the total number of consecutive calendar days during which either (i) valuation is deterred due to an Unscheduled Holiday, or (ii) a Valuation Postponement shall occur (or any combination of (i) and (ii)), exceed 30 consecutive calendar days in the aggregate. Accordingly, (x) if, upon the lapse of any such 30 day period, an Unscheduled Holiday shall have occurred or be continuing on the day following such period, then such days shall he deemed to be a Valuation Date, and (y) if, upon the lapse of any such 30 day period, a Price Source Disruption shall have occurred or be continuing on the day following such period, then Valuation Postponement shall not apply and the Spot Rate shall be determined in accordance with the next Disruption Fallback.

Maximum Days of Postponement:		Thirty (30) calendar days

Business Days Applicable to the Valuation Date (as defined in the FX Definitions):		Any of Rio de Janeiro, São Paulo or Brasilia and New York City

Business Days Applicable to the Floating Amounts & Fixed Amounts (as defined in the 2006 Definitions):		Rio de Janeiro, Sao Paulo or Brasilia

Business Days applicable to the Payment Date (as defined in the 2006 Definitions):		Any of Rio de Janeiro, São Paulo or Brasilia, and New York City, provided however, that in the event of an Unscheduled Holiday following the Trade Date, then New York only.

Calculation Agent:		Party A

3. Offices:


a) The Office of Party A for the Transaction is:		New York

b) The Office of Party B for the Transaction is:		Please advise

4. Each party will be deemed to represent to the other party that (absent a written agreement between the parties that expressly imposes affirmative obligations to the contrary for this Transaction):

Non-Reliance. It is acting for its own account, and has made its own independent decisions to enter into this Transaction and as to whether this Transaction is appropriate or proper for it based upon its own judgment and upon advice from such advisers as it has deemed necessary. It is not relying on any communication (written or oral) of the other party as investment advice or as a recommendation to enter into this Transaction; it being understood that information and explanations related to the terms and conditions or this Transaction shall not be considered investment advice or a recommendation to enter into

this Transaction. No communication (written or oral) received from the other party shall be deemed to be an assurance or guarantee as to the expected results of this Transaction.

Assessment and Understanding. It is capable of assessing the merits of and understanding (on its own behalf or through independent professional advice), and understands and accepts, the terms, conditions and risks of this Transaction. It is also capable of assuming, and assumes, the risks of this Transaction.

c)	Status of Parties. The other party is not acting as a fiduciary for or an advisor to it in respect of this Transaction.

5. Account Details


Payments to Party A:	To be provided
Payments to Party B:	Please Provide
Documentation Contacts:	Interbank Clients:
	Hotline:	+1 410-534-1593
	Facsimile:	+1 212-404-4762
	Email:
	Derivative.Confirms.Americas@morganstanley.com
Operations Contact:	Telephone:	212 761-4662
	Facsimile:	212 404-4726

Please confirm that the foregoing correctly sets forth the terms of our agreement MSCS Ref. YRZQC by executing this Confirmation and returning it to us.

Best regards,


MORGAN STANLEY & CO. INTERNATIONAL PLC.

By:	/s/ Iwona Szmidt
	Name:	Iwona Szmidt
	Title:	Vice President

Acknowledged and agreed as of the date first written above:


ARCOS DORADOS B.V.

By:	/s/ Diego Pace
	Name:	Diego Pace
	Title:	Corporate Finance Manager

MORGAN STANLEY & CO. INTERNATIONAL PLC is authorised and regulated by the Financial Services Authority.

Our charges may comprise commission as notified to you from rune to time and/or mark-up or mark-down. We may share charges with our Associated Firms or other third parties or receive remuneration from them in respect of transactions carried our with or for you or we may be acting on both sides of the transaction. We or our Associate may pass on part of our or their charges to a third party as a reward for introducing your business to us or them. Details of any such arrangements will be made available to you upon written request. Time of execution is available on request.

Exhibit 10.18

LOGO


Date:	30 December 2009

To:	Arcos Dorados B.V.	From:	Morgan Stanley & Co. International Plc

	Account Number: 0617SAV70		20, Cabot Square Canary Wharf London E14 4QW

Attn:	Julieta Nalband	Contact:	Baltimore Derivative Dealer Services Group

Email	julieta.nalband@ar.mcd.com	Fax:	212 404 4762

Tel:		Tel:	212 761 2630

Re: Non-Deliverable Interest Rate Swap MSIL Ref. YRZQA

2. The terms of the particular Transaction to which this Confirmation relates are as follows:

General Terms:


Party A:		Morgan Stanley & Co. International Plc

Party A Credit Support:		As per the Agreement

Party B:		Arcos Dorados B.V.

Trade Date:		15 December 2009

Effective Date:		1 October 2009

Termination Date:		1 October 2014

Fixed Amounts I:

Fixed Rate I Payer:		Party A

Fixed Rate I Payer Currency Amount:		USD 100,000,000

Fixed Rate I:		7.50000%


Fixed Rate I Payment Dates:		On 1 April and 1 October in each year, from and including 1 April 2010 to and including 1 October 2014, subject to adjustment in accordance with the Modified Following Business Day Convention with No Adjustment to Period End Dates

Fixed Rate I Day Count Fraction:		30/360

Fixed Amounts II:

Fixed Rate II Payer:		Party B

Fixed Rate II Payer Currency Amount:		BRL 176,000,000

Fixed Rate II:		9.08000%

Fixed Rate II Payment Dates:		On 1 April and 1 October in each year, from and including 1 April 2010 to and including 1 October 2014, subject to adjustment in accordance with the Modified Following Business Day Convention with No Adjustment to Period End Dates

Fixed Rate II Day Count Fraction:		Actual/360

Fixed Amounts II:		On each Fixed Rate II Payer Payment Date, the Fixed Amounts II shall be determined in accordance with the following formula:

		Fixed Amounts II = (Fixed Rate II Payer Currency Amount x Fixed Rate II x Fixed Rate II Day Count Fraction)

		Fixed Amounts in BRL shall be converted into USD in accordance with the Settlement Provisions below.

Settlement Provisions:

Settlement:		Non-Deliverable, with the effect that any Reference Currency amounts payable hereunder on a Payment Date shall be converted into Settlement Currency amounts by reference to the Settlement Rate Option on each Valuation Date. The obligations of the parties to pay the Fixed Amounts I or the Fixed Amounts II, as the case may be, shall be replaced by an obligation of one party to pay the Settlement Amount in accordance with the provisions of this Confirmation. The Settlement Amount shall be determined on the Valuation Date by the Calculation Agent as follows:



		If the Settlement Amount is a positive number, the Fixed Rate I Payer shall pay the Settlement Amount to the Fixed Rate II Payer on the respective Payment Date.

		If the Settlement Amount is a negative number, the Fixed Rate II Payer shall pay the absolute value of the Settlement Amount to the Fixed Rate I Payer on the respective Payment Date.

Reference Currency:		BRL

Settlement Currency:		USD

Settlement Rate Option:		BRL PTAX (BRL09)

Valuation Date:		Two Business Days prior to each Fixed Rate II Payment Date (each a “Scheduled Valuation Date”), subject to adjustment in


		accordance with the Preceding Business Day Convention; provided, however, that the adjustment shall be made in accordance with the Following Business Day Convention in the event of an Unscheduled Holiday. Notwithstanding the foregoing, if the parties have specified a Scheduled Valuation Date that falls on a date that, as at the Trade Date, is not a scheduled Business Day in New York, no adjustment shall be made on account of the fact that such date is not a Business Day in New York.

Disruption Events and Fallbacks:

Disruption Events:

Price Source Disruption:		Applicable

Price Materiality:		Applicable

Primary Rate:		BRL PTAX (BRL09)

Secondary Rate:		EMTA BRL Industry Survey Rate (BRLI2), or EMTA BRL Indicative Survey Rate (BRL 13), as the case may be.

Price Materiality Percentage:		3%, provided, however, that if there are insufficient responses on the Valuation Date to the EMTA BRL Industry Survey or the EMTA BRL Indicative Survey, as the case may be, the Price Materiality Percentage will also be deemed to have been met.

Disruption Fallbacks:

First Fallback Reference Price:		EMTA BRL Industry Survey Rate (BRL 12)

Valuation Postponement

Second Fallback Reference Price:		EMTA BRL Indicative Survey Rate (BRL13)

Calculation Agent Determination of Settlement Rate

Other Terms:

Unscheduled Holiday:		“Unscheduled Holiday” means that a day is not a Business Day and the market was not aware of such fact (by means of a public announcement or by reference to other publicly available information) until a time later than 9:00 am local time in the Principal Financial Center(s) of the Reference Currency two Business Days prior to the Scheduled Valuation Date.

Deferral Period for Unscheduled Holiday:		In the event the Scheduled Valuation Date becomes subject to the Following Business Day Convention, and if the Valuation Date has not occurred on or before the 30th consecutive day after the Scheduled Valuation Date (any such period being a “Deferral Period”), then the next day after the Deferral Period that would have been a Business Day but for the Unscheduled Holiday, shall be deemed to be the Valuation Date.

Valuation Postponement for Price Source Disruption:		“Valuation Postponement” means, for purposes of obtaining a Settlement Rate, that the Spot Rate will be determined on the Business Day first succeeding the day on which the Price Source Disruption ceases to exist, unless the Price Source Disruption continues to exist (measured from the date, that, but for the occurrence of the Price Source Disruption, would have been the Valuation Date) for a consecutive number of calendar days equal to the Maximum Days of Postponement.


		In such event, the Spot Rate will be determined on the next Business Day after the Maximum Days of Postponement in accordance with the next applicable Disruption Fallback.

Cumulative Events:		Notwithstanding anything herein to the contrary, in no event shall the total number of consecutive calendar days during which either (i) valuation is deferred due to an Unscheduled Holiday, or (ii) a Valuation Postponement shall occur (or any combination of (i) and (ii)), exceed 30 consecutive calendar days in the aggregate. Accordingly, (x) if, upon the lapse of any such 30 day period, an Unscheduled Holiday shall have occurred or be continuing on the day following such period, then such days shall be deemed to be a Valuation Date, and (y) if, upon the lapse of any such 30 day period, a Price Source Disruption shall have occurred or be continuing on the day following such period, then Valuation Postponement shall not apply and the Spot Rate shall be determined in accordance with the next Disruption Fallback.

Maximum Days of Postponement:		Thirty (30) calendar days

Business Days Applicable to the Valuation Date (as defined in the FX Definitions):		Any of Rio de Janeiro, São Paulo or Brasilia and New York City

Business Days Applicable to the Fixed Amounts I & Fixed Amounts II (as defined in the 2006 Definitions):		Rio de Janeiro, São Paulo or Brasilia

Business Days applicable to the Payment Date (as defined in the 2006 Definitions):		Any of Rio de Janeiro, São Paulo or Brasilia, and New York City, provided however, that in the event of an Unscheduled Holiday following the Trade Date, then New York only.

Calculation Agent:		Party A

3. Offices:


a) The Office of Party A for the Transaction is:		New York

b) The Office of Party B for the Transaction is:		Please advise

4. Each party will be deemed to represent to the other party that (absent a written agreement between the parties that expressly imposes affirmative obligations to the contrary for this Transaction):

Non-Reliance. It is acting for its own account, and has made its own independent decisions to enter into this Transaction and as to whether this Transaction is appropriate or proper for it based upon its own judgment and upon advice from such advisers as it has deemed necessary. It is not relying on any communication (written or oral) of the other party as investment advice or as a recommendation to enter into this Transaction; it being understood that information and explanations related to the terms and conditions of this Transaction shall not be considered investment advice or a recommendation to enter into this Transaction. No communication (written or oral) received from the other party shall be deemed to be an assurance or guarantee as to the expected results of this Transaction.

c)	Status of Parties. The other party is not acting as a fiduciary for or an advisor to it in respect of this Transaction.

5. Account Details


Payments to Party A:		To be provided


Payments to Party B:		Please Provide

Documentation Contacts:		Interbank Clients: Hotline: +1 410-534-1593 Facsimile: +1 212-404-4762 Email: Derivative.Confirms.Americas@morganstanley.com

Operations Contact:		Telephone: 212 761-4662 Facsimile: 212 404-4726

Please confirm that the foregoing correctly sets forth the terms of our agreement MSCS Ref. YRZQA by executing this Confirmation and returning it to us.

Best regards,


MORGAN STANLEY & CO. INTERNATIONAL PLC.

By:	/s/ Iwona Szmidt
	Name:	Iwona Szmidt
	Title:	Vice President

Acknowledged and agreed as of the date first written above:


ARCOS DORADOS B.V.

By:		/s/ Diego Pace
		Name: Diego Pace
		Title: Corporate Finance Director

MORGAN STANLEY & CO. INTERNATIONAL PLC is authorised and regulated by the Financial Services Authority

Our charges may comprise commission as notified to you from time to time and/or mark-up or mark-down. We may share charges with our Associated Firms or other third parties or receive remuneration from them in respect of transactions carried out with or for you or we may be acting on both sides of the transaction. We or our Associate may pass on part of our or their charges to a third party as a reward for introducing your business to us or them. Details of any such arrangements will be made available to you upon written request. Time of execution is available on request.

Exhibit 10.19

Execution Copy

SCHEDULE

to the

2002 MASTER AGREEMENT

dated as of December 14, 2009

between

JPMORGAN CHASE BANK,

NATIONAL ASSOCIATION

(“Party A”)

and

ARCOS DORADOS B.V.

(“Party B”)

PART 1

Termination Provisions

(1)	“ Specified Entity ” means, in relation to Party A, for the purpose of:

Section 5(a)(v) , any Affiliate of Party A;

Section 5(a)(vi) , none;

Section 5(a)(vii) , none; and

Section 5(b)(v) , none;

and, in relation to Party B, for the purpose of:

Section 5(a)(v) , none;

Section 5(a)(vi) , none;

Section 5(a)(vii) , none; and

Section 5(b)(v) , none.

(2)	“ Specified Transaction ” will have the meaning specified in Section 14 of this Agreement.

(3)	The “ Cross-Default ” provisions of Section 5(a)(vi) will apply to Party A and Party B, and for such purpose:

(a)

“ Specified Indebtedness ” will have the meaning specified in Section 14 of this Agreement, except that such term shall not include obligations in respect of deposits received in the ordinary course of a party’s banking business.

(b)

“ Threshold Amount ” means, with respect to Party A, an amount equal to three percent of the shareholders’ equity of Party A; and with respect to Party B, USD 25,000,000, or the equivalent thereof in any other currency or currencies. For purposes of this definition, any Specified Indebtedness denominated in a currency other than the currency in which the Threshold Amount is expressed shall be converted into the currency in which the Threshold Amount is expressed at the exchange rate therefor reasonably chosen by the other party.

(4)

The “ Credit Event Upon Merger ” provisions of Section 5(b)(v) will apply to Party A and Party B; provided, however, that if the applicable party has long term, unsecured and unsubordinated indebtedness or deposits which is or are publicly rated (such rating, a “Credit Rating”) by Moody’s Investor Services. Inc. (“Moody’s”), Standard and Poors Ratings Group (“S&P”) or any other internationally recognized rating agency (a “Rating Agency”), then the words “materially weaker” in line 6 of Section 5(b)(v) shall mean that the Credit Rating of such party (or, if applicable, the Credit Support Provider of such party) shall be rated lower than Baa3 by Moody’s, or lower than BBB- by S&P or, in the event that there is no Credit Rating by either Moody’s or S&P applicable to such party (or, if applicable, the Credit Support Provider of such party) but such party’s long-term indebtedness or deposits is or are rated by a Rating Agency, lower than a rating equivalent to the foregoing by such Rating Agency.

(5)	The “ Automatic Early Termination ” provision of Section 6(a) will not apply to Party A or Party B.

(6)	“ Termination Currency ” will have the meaning set forth in Section 14 of this Agreement.

(7)	Additional Termination Event will not apply.

PART 2

Tax Representations

(1)	Payer Tax Representations . For the purpose of Section 3(e) of this Agreement, Party A and Party B each hereby make the following representation:

It is not required by any applicable law, as modified by the practice of any relevant governmental revenue authority, of any Relevant Jurisdiction to make any deduction or withholding for or on account of any Tax from any payment (other than interest under Section 9(h) of this Agreement or amounts payable hereunder that may be considered to be interest for United States federal income tax purposes) to be made by it to the other party under this Agreement. In making this representation, it may rely on (i) the accuracy of any representations made by the other party pursuant to Section 3(f) of this Agreement, (ii) the satisfaction of the agreement contained in Section 4(a)(i) or 4(a)(iii) of this Agreement and the accuracy and effectiveness of any document provided by the other party pursuant to Section 4(a)(i) or 4(a)(iii) of this Agreement and (iii) the satisfaction of the agreement of the other party contained in Section 4(d) of this Agreement, except that it will not be a breach of this representation where reliance is placed on clause (ii) above and the other party does not deliver a form or document under Section 4(a)(iii) by reason of material prejudice to its legal or commercial position.

(2)	Payee Tax Representations . For the purpose of Section 3(f) of this Agreement, Party A and Party B each hereby make the following representations:

(i)

Party A represents that it is a U.S. person for U.S. federal income tax purposes.

(ii)

Party B represents that:

PART 3

Agreement to Deliver Documents

For the purpose of Sections 4(a)(i) and 4(a)(ii) of this Agreement, each party agrees to deliver the following documents:

(a)

Tax forms, documents or certificates to be delivered are:


Party required to deliver document	Form/Document/Certificate	Date by which to Be delivered
Party A	A complete and accurate U.S. Internal Revenue Service Form W-9 or any successor form, in a manner reasonably satisfactory to Party B.	(i) Upon becoming a party to this Agreement, (ii) thereafter promptly upon reasonable demand by the other party, and (iii) if such form or document was previously delivered and has become obsolete or incorrect, promptly upon learning that such form or document previously delivered by Party A has become obsolete or incorrect.
Party B	A complete and accurate U.S. Internal Revenue Service Form W-8BEN or any successor form, in a manner reasonably satisfactory to Party A.	(i) Upon becoming a party to this Agreement, (ii) thereafter promptly upon reasonable demand by the other party, and (iii) if such form or document was previously delivered and has become obsolete or incorrect, promptly upon learning that such form or document previously delivered by Party A has become obsolete or incorrect.

(b)


Party required to deliver document	Form/Document/Certificate	Date by which to be delivered	Covered by Section 3(d) Representation

Party B	Annual Report of Party B and of its Credit Support Provider (as applicable) containing consolidated financial statements certified by independent certified public accountants and	as soon as available and in any event within 120 days after the end of each fiscal year of	Yes


	prepared in accordance with accounting principles that are generally accepted in the country or countries in which Party B and its Credit Support Provider (as applicable) is organized. For the avoidance of doubt, such statement shall only be required of the Credit Support Provider to the extent the Credit Support Provider prepares such statements.	Party B

Party B	Unaudited consolidated financial statements of Party B and of its Credit Support Provider (as applicable) for a fiscal quarter prepared in accordance with accounting principles that are generally accepted in the country or countries in which Party B and its Credit Support Provider (as applicable) is organized. For the avoidance of doubt, such statements shall only be required of the Credit Support Provider to the extent the Credit Support Provider prepares such statements.	as soon as available and in any event within 90 days after the end of each fiscal quarter of Party B	Yes

Party A	A copy of Party A’s call report filed with the Federal Deposit Insurance Corporation (“FDIC”)	Within 30 days following the end of the relevant quarter if not otherwise available on the FDIC’s website	Yes



Party B	Certified copies of all corporate authorizations and any other documents with respect to the execution, delivery and performance of this Agreement	Upon execution and delivery of this Agreement	Yes

Party A and Party B	Certificate of authority and specimen signatures of individuals executing this Agreement, Confirmations and each Credit Support Document (as applicable)	Upon execution and delivery of this Agreement and thereafter upon request of the other party	Yes


JPMORGAN CHASE BANK, NATIONAL ASSOCIATION			ARCOS DORADOS B.V.

By:	/s/ Patricia Marckesano		By:	/s/ Diego Pace
	Name:	Patricia Marckesano		Name:	Diego Pace
	Title:	Vice President and Assistant General Counsel		Title:	Corporate Finance Manager


JPMORGAN CHASE BANK, N.A. (“Party A”)		and		ARCOS DORADOS B.V. (“Party B”)


ATTN:		Diego Pace ARCOS DORA DOS BV

FAX NO:		0054 1147 112094

FROM:		Carmine Pilla JPMorgan Chase Bank, N.A.

RE:		Interest Rate Swap Confirmation

YOUR REF: OUR REF:		0500095503957

DATE SENT:		21 December 2009

NO OF PAGES:		10 (including Cover)


Our Ref: 0500095503957 – pa		Sent: 21 December 2009 12:54		Page 1 of 9



JPMorgan Deal Number(s):		0500095503957

Trade Date:		15 December 2009

Effective Date:		10 November 2009

Termination Date:		10 November 2013, subject to adjustment in accordance with the Modified Following Business Day Convention

Calculation Agent:		JPMorgan, unless otherwise stated in the Agreement.
Fixed Amounts:
Fixed Rate Payer:		JPMorgan

BRL Notional Amount		As set forth in the Notional Amount Schedule hereto

Fixed Rate:		2.01000 percent

Fixed Rate Day Count Fraction:		Actual/360

Fixed Rate Payer Period End Dates:		The 10 February, 10 May, 10 August and 10 November in each year, from and including 10 February 2010 to and including the Termination Date, subject to adjustment in accordance with the Modified Following Business Day Convention

Fixed Rate Payer Payment Dates:		The 10 February, 10 May, 10 August and 10 November in each year, from and including 10 February 2010 to and including the Termination Date, subject to adjustment in accordance with the Modified Following Business Day Convention and there will be no adjustment to the Calculation Period and subject to adjustment as provided in the section entitled “Adjustment to Payment Date(s),” below.
Floating Amounts:
Floating Rate Payer:		Counterparty

USD Notional Amount:		As set forth in the Notional Amount Schedule hereto

Floating Rate Payer Period End Dates:		The 10 February, 10 May, 10 August and 10 November in each year, from and including 10 February 2010 to and including the Termination Date, subject to adjustment in accordance with the Modified Following Business Day Convention


Our Ref: 0500095503957 – pa		Sent: 21 December 2009 12:54		Page 2 of 9



Notional Amount:				As set forth in the Notional Amount Schedule hereto

Floating Rate Payer Payment Dates:				The 10 February, 10 May, 10 August and 10 November in each year, from and including 10 February 2010 to and including the Termination Date, subject to adjustment in accordance with the Modified Following Business Day Convention and there will be no adjustment to the Calculation Period and subject to adjustment as provided in the section entitled “Adjustment to Payment Date(s),” below.

Floating Rate for initial Calculation Period:				0.27406 percent

Floating Rate Option:				USD-LIBOR-BBA

Designated Maturity:				3 Month

Spread:				None

Floating Rate Day Count Fraction:				Actual/360

Compounding:				Inapplicable


Notional Amount Schedule
Effective From:	Notional Amount: (USD)		Notional Amount: (BRL)
10-Nov-09		100,000,000.00		176,000,000.00
10-Feb-10		100,000,000.00		176,000,000.00
10-May-10		100,000,000.00		176,000,000.00
10-Aug-10		100,000,000.00		176,000,000.00
10-Nov-10		90,000,000.00		158,400,000.00
10-Feb-11		90,000,000.00		158,400,000.00
10-May-11		80,000,000.00		140,800,000.00
10-Aug-11		80,000,000.00		140,800,000.00
10-Nov-11		70,000,000.00		123,200,000.00
10-Feb-12		70,000,000.00		123,200,000.00
10-May-12		60,000,000.00		105,600,000.00
10-Aug-12		60,000,000.00		105,600,000.00
10-Nov-12		50,000,000.00		88,000,000.00
10-Feb-13		50,000,000.00		88,000,000.00
10-May-13		25,000,000.00		44,000,000.00
10-Aug-13		25,000,000.00		44,000,000.00


Our Ref: 0500095503957 – pa		Sent: 21 December 2009 12:54		Page 3 of 9



1. First Fallback Reference Price:		EMTA BRL Industry Survey Rate (BRL 12)

2. Valuation Postponement:

3. Second Fallback Reference Price:		EMTA BRL Indicative Survey Rate (BRL 13)

4. Calculation Agent Determination of Settlement Rate:


Our Ref: 0500095503957 – pa		Sent: 21 December 2009 12:54		Page 4 of 9


Our Ref: 0500095503957 – pa		Sent: 21 December 2009 12:54		Page 5 of 9


		Date or Exchange Date shall be adjusted in respect of both parties’ payments. For the avoidance of doubt, such adjustments shall not apply in respect of Period End Dates (including the Termination Date) for the purpose of determining the Calculation Periods.

Local Business Days:		Each day that is a Business Day in Rio de Janeiro, Sao Paulo or Brasilia.

Maximum Days of Postponement:		Thirty (30) calendar days

Relevant Cities for Business Day(s) for Valuation Date(s):		Local Business Days and New York

Relevant Cities for Business Day(s) for Payment Date(s):		New York and Rio de Janeiro, Sao Paulo or Brasilia, provided, however, that in the event of an Unscheduled Holiday following the Trade Date, then New York only

Quoting Dealer Disclaimer:		Each party acknowledges that the other party, acting directly or though a branch or an affiliate, may be requested to provide a quotation or quotations from time to time for the purpose of determining the Fallback Reference Price and such quotation may affect, materially or otherwise, the settlement of this Transaction.


Payments to JPMorgan in USD:		JPMORGAN CHASE BANK, N.A. JPMORGAN CHASE BANK NATIONAL ASSOCIATION BIC: CHASUS33XXX AC No: 099997979

Payments to Counterparty in USD:		As per your standard settlement instructions.


Our Ref: 0500095503957 – pa		Sent: 21 December 2009 12:54		Page 6 of 9


Our Ref: 0500095503957 – pa		Sent: 21 December 2009 12:54		Page 7 of 9


JPMorgan Chase Bank. N.A.

/s/ Carmine Pilla
Name:		Carmine Pilla
Title:		Executive Director


Our Ref: 0500095503957 – pa		Sent: 21 December 2009 12:54		Page 8 of 9


Contacts
JPMorgan Contact		Telephone Number

Client Service Group		(001) 302 634 4960

Group E-mail address:
Facsimile:		(001) 888 803 3606
Telex:
Cable:


Our Ref: 0500095503957 – pa		Sent: 21 December 2009 12:54		Page 9 of 9


Our Ref: 0500095503957 – pa		Sent: 21 December 2009 12:54		Page 1 of 10


JPMorgan Deal Number(s):		0500095503956

Trade Date:		15 December 2009

Effective Date:		01 October 2009

Termination Date:		01 October 2014, subject to adjustment in accordance with the Modified Following Business Day Convention

Calculation Agent:		JPMorgan, unless otherwise stated in the Agreement.


Fixed Rate Payer:		JPMorgan

Notional Amount ( Present Value On Effective Date ):		USD 100,000,000.00

Fixed Rate:		7.50000 percent

Fixed Rate Day Count Fraction:		30/360

Fixed Rate Payer Period End Dates:		The 01 April and 01 October in each year, from and including 01 April 2010 to and including the Termination Date, subject to no adjustment.

Fixed Rate Payer Payment Dates:		The 01 April and 01 October in each year, from and including 01 April 2010 to and including the Termination Date, subject to adjustment in accordance with the Modified Following Business Day Convention and subject to adjustment as provided in the section entitled “Adjustment to Payment Date(s),” below.


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		that falls on a date that, as at the Trade Date, is not a scheduled Business Day in New York, no adjustment shall be made on account of the fact that such date is not a Business Day in New York.


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