PROFARMA AMENDED AND RESTATED SHAREHOLDERS AGREEMENT
This AMENDED AND RESTATED SHAREHOLDERS AGREEMENT (this “Agreement”) is entered into as of January 18th, 2018 by and among BPL Brazil Holding Company, a Luxembourg société à responsabilité limitée, having its registered office at 2-4, rue Eugène Ruppert, L-2453 Luxembourg, Grand-Duchy of Luxembourg, registered with the Registre de Commerce et des Sociétés, Luxembourg (“BPL“), BMK Participações S.A., a sociedade anônima organized under the laws of Brazil, headquartered at Avenida Ayrton Senna, No. 2150, BIoco P, Sala 301, in the city of Rio de Janeiro, State of Rio de Janeiro, enrolled with the National Registry of Legal Entities (“CNPJ/MF”) under No. 03.283.980/0001-75, herein represented in accordance with its by-laws (“BMK”; BPL and BMK jointly referred to as the “PF Shareholders” and, individually and generally referred to as a “PF Shareholder”); and, as intervening consenting parties, Profarma Distribuidora de Produtos Farmacêuticos S.A., a sociedade anônima de capital aberto organized under the laws of Brazil, headquartered at Avenida Ayrton Senna, No. 2150, BIoco P, Sala 301, in the city of Rio de Janeiro, State of Rio de Janeiro, enrolled with CNPJ/MF under No. 45.453.214/0001-51, herein represented in accordance with its by-laws (“Profarma”), AmerisourceBergen Corporation, a Delaware corporation (“ABC”), and Sammy Birmarcker, Brazilian citizen, married, entrepreneur, bearer of the Identity Card RG No. 07.023.989-2 - IFP/RJ, enrolled with the CPF/MF under No. 810.719.737-20, resident and domiciled in the city of Rio de Janeiro, state of Rio de Janeiro and with commercial address at Avenida Ayrton Senna, No. 2150, BIoco N, Sala 305 - parte, in the city of Rio de Janeiro, State of Rio de Janeiro (“Sammy”), Manoel Birmarcker, Brazilian citizen, married, entrepreneur, bearer of the Identity Card RG No. 1.031.127 - IFP/RJ, enrolled with the CPF/MF under No. 027.990.227-15, resident and domiciled in the city of Rio de Janeiro, state of Rio de Janeiro and with commercial address at Avenida Ayrton Senna, No. 2150, BIoco N, Sala 305 - parte, in the city of Rio de Janeiro, State of Rio de Janeiro (“Manoel”), Cacilda Delegave Birmarcker, Brazilian citizen, married, entrepreneur, bearer of the Identity Card RG No. 2543586- IFP/RJ, enrolled with the CPF/MF under No. 308.783.067-49, resident and domiciled in the city of Rio de Janeiro, state of Rio de Janeiro and with commercial address at Avenida Ayrton Senna, No. 2150, BIoco N, Sala 305 - parte, in the city of Rio de Janeiro, State of Rio de Janeiro (“Cacilda”), and Deborah Uderman, Brazilian citizen, married, entrepreneur, bearer of the Identity Card RG No. 048.351.35-7 – SSP/RJ, enrolled with the CPF/MF under No. 628.654.127-68, resident and domiciled in the city of Rio de Janeiro, state of Rio de Janeiro and with commercial address at Avenida Ayrton Senna, No. 2150, BIoco N, Sala 305 - parte, in the city of Rio de Janeiro, State of Rio de Janeiro (“Deborah” and, jointly with Sammy, Manoel and Cacilda, the “BMK Shareholders”); provided that ABC is an intervening and consenting party to this Agreement for the sole purpose of complying with certain obligations as expressly indicated in the relevant Sections of this Agreement.
BPL, BMK, Profarma and ABC (as an intervening and consenting party) have entered into a certain Share Subscription Agreement dated March 24, 2014 (the “Share Subscription Agreement”) pursuant to which, upon the closing of the transactions contemplated thereunder (the “Closing”), BPL agreed to subscribe for and pay the number of newly-issued, freely-tradable, book-entry common shares of Profarma representing up to 19.99% of the total outstanding shares of Profarma calculated as of the Closing by receiving as assignee (for no consideration), BMK’s rights to subscribe for such shares.
On June 26, 2014, the Closing of the transactions contemplated by the Share Subscription Agreement occurred and, in connection therewith, the PF Shareholders agreed to enter into a certain Shareholders Agreement dated June 26, 2014 (the “Original Shareholders Agreement”) to govern certain of their rights and obligations as PF Shareholders.
On November 20, 2017, the PF Shareholders, Profarma, the BMK Shareholders and ABC have entered into a certain binding term sheet containing the necessary provisions to consummate, among other transactions, a private capital increase of Profarma in which (i) BPL has committed to a minimum contribution of R$200,000,003, (ii) BMK has agreed to assign, for no consideration, its preemptive rights to BPL to the extent necessary to allow BPL to achieve the R$200,000,003 minimum contribution (“PF Capital Increase”), and (iii) BMK has agreed not to participate (except that BMK will be free to assign any remaining portion of its preemptive rights related to PF Capital Increase to other existing shareholders or non-shareholder investors), and;
On January 5th, 2018, the Board (as defined below) approved the PF Capital Increase and, on the date hereof, BPL subscribed for and paid-in 28.571.429 common shares of Profarma. In connection therewith, the PF Shareholders, Profarma, the BMK Shareholders and ABC (as an intervening and consenting party) agreed to enter into this Agreement, effectively as of the date hereof, which will amend and supersede the Original Shareholders Agreement;
Profarma and the BMK Shareholders executed this Agreement to acknowledge and accept its terms, agreeing to comply with the rights and obligations contained herein.
NOW, THEREFORE, in consideration of the premises and the mutual promises set herein, the parties hereof, intending to be legally bound, enter into this Agreement, which will be governed by the following terms and conditions:
ARTICLE SHARES BOUND BY THIS AGREEMENT
(a)This Agreement is binding on the totality of the outstanding shares issued by Profarma and owned by the PF Shareholders and their respective Affiliates, as well as on the shares or any other securities or rights convertible into shares issued by Profarma that may be subscribed for or purchased or in any other way acquired by the PF Shareholders, their Affiliates, successors or authorized assignees on any account, during the term of this Agreement, including any shares deriving from stock splits, reverse stock splits, conversions, dividend distributions, capital reductions and increases, mergers, amalgamations, spin offs, the exercise of any option and any rights attributed thereto, including preemptive rights (“PF Shares”). Therefore, the PF Shareholders acknowledge and accept that all PF Shares existing on the date of this Agreement or any new PF Shares that may exist in the future, shall be bound by and subject to the terms and conditions of this Agreement. The PF Shareholders undertake to cause their Affiliates to fully observe all the terms and conditions of this Agreement. An “Affiliate” means in relation to any Person, any other Person directly or indirectly Controlling, Controlled by or under common Control with, such first Person and with respect to any Person who is an individual, also his/her spouse, stable union or equivalent companion, ancestors or descendants in straight line, as well as any legal entity wholly-owned by any of them. For the purposes of this Agreement, “Control” means (A) the powers of the shareholder (whether an individual or a legal entity), or (B) a group of individuals or legal entities bound by a voting agreement or under common control, to: (1) permanently assure the majority of votes in resolutions of general shareholders’ meetings and to elect the majority of the management of the company (Board members and officers); and (2) direct the corporate activities and to guide the operations of a company.
(b)So long as the provisions contained in ARTICLE 3 and Section 4.2 herein are duly observed, in case a PF Shareholder wishes to sell any of its PF Shares in the stock exchange or in the over-the-counter market, the PF Shareholders hereby agree that, upon receipt by a PF Shareholder of a notice from another PF Shareholder indicating the number of PF Shares it intends to sell, the notifying PF Shareholder or Profarma will be duly entitled to (x) communicate to Profarma’s custodian bank that such number of PF Shares will be automatically excluded and no longer be bound by this Agreement and (y) freely pursue their sale in the stock exchange or in the over-the-counter market; provided that any such sale of PF Shares under this clause (b) shall be consummated within 10 Business Days of the notice to Profarma’s custodian Bank, or the PF Shares shall be automatically bound by this Agreement again and registered accordingly by Profarma’s custodian bank. The notifying PF Shareholder shall be required to restate the prior notice for a renewal of the 10 Business Days exclusion period for consummation of the sale of PF Shares in the stock exchange or in the over-the-counter market.
ARTICLE CORPORATE GOVERNANCE
2.1 Board of Directors Representation
During the term of this Agreement, the PF Shareholders agree to vote all of their PF Shares at any annual or extraordinary meeting called for the purpose of electing directors, and take all other necessary or desirable actions within his, her or its control (whether in his, her or its capacity as a shareholder, director or officer of Profarma or otherwise), such that (i) BPL shall be able to appoint at least two designees (the “BPL Designees”) to the board of directors of Profarma (the “Board”); and (ii) subject to the prior satisfaction of the requirement in (i) above regarding the appointment of BPL Designees, BPL shall agree to vote its PF Shares to appoint not less than (a) two BMK designees to the Profarma Board, as long as BMK owns at least 20% of Profarma’s outstanding common shares, or (b) one BMK designee to the Profarma Board, as long as BMK owns at least 10% of Profarma’s outstanding common shares (the “BMK Designees”) to the Board, provided, however, (x) in either instance BPL’s interest in Profarma, together with BMK’s ownership interest, permits such appointment in accordance with Profarma’s bylaws after satisfaction of the requirement in (i) above regarding the appointment of BPL Designees; and (y) that in the event of the death, disability, retirement, resignation, or removal of any Board member appointed by any PF Shareholder, the same PF Shareholder that has appointed the dead, resigning, absent or removed Board member shall have the sole and exclusive right to appoint an individual to fill the Board seat formerly occupied by such Board member, except where such resignation is caused by BPL under Section 5.3(b). Any Board member may be removed from the Board either (a) without cause, solely by the PF Shareholder who appointed him or her, and (b) by any of the PF Shareholders in the event of a knowing breach by the Board member of a legal duty required under Brazilian Law No. 6,404, of December 15, 1976, as amended (“Brazilian Corporations Law”) or by any rule issued by the Brazilian Securities and Exchange Commission (“CVM”), provided that such Board member has received notice from such PF Shareholder of such breach and had an opportunity to cure (to the extent possible to cure) such breach within 15 Business Days after his or her receipt of such notice. In the event any PF Shareholder wishes to replace its designee, such PF Shareholder shall forward a written notice to that effect to the chairman or chairwoman of the Board and, upon receipt of such notice, the Board shall, as soon as practically possible, but in any event no later than 5 Business Days thereafter, call a shareholders’ meeting in which the PF Shareholders shall attend and approve the replacement of the relevant Board member in accordance with the terms of the written notice.
2.2Election of Recommended Director
The PF Shareholders may freely appoint the Persons they believe are capable to comply with the duties of a Profarma Board member, provided the following requirements are fulfilled: (a) the Board member must hold the industry knowledge necessary to exercise such position and must have an unblemished reputation (reputação ilibada); and (b) the Board member must fulfill all legal and regulatory requirements imposed for the exercise of such position. For the avoidance of doubt, any individual holding the office or title set forth in Schedule 2.2 attached hereto shall be deemed to satisfy the qualification requirements of a Profarma Board member set forth in this Section.
2.2.1 Sharing Information
Notwithstanding anything in this Agreement and to the extent permitted under applicable law, the BPL Designees may share with ABC and its Affiliates any information gained in such designee's capacity as a Board member. Any ABC employee with whom such information will be shared shall be subject to the confidentiality obligation under Section 5.14 and ABC will be responsible for any breach of this Section
2.2 by the BPL Designees
2.3 Specific Enforcement
Each party hereto agrees that irreparable damage would occur in the event any provision of this Agreement was not performed in accordance with the terms herein and that the parties shall be entitled to specific performance of the terms hereof, in addition to any other remedy at law or set forth herein. Each party hereto further agrees that Brazilian Corporations Law article 118 (as such is amended or replaced from time to time) as well as Brazilian Law No. 13,105/15, of March 16, 2015, as amended (“Civil Procedure Code”) articles 497 and 814 through 823 (as such are amended or replaced from time to time) shall apply to this Agreement in full and each party shall be entitled to the specific enforcement provisions set out therein.
2.4.1 Covenants of Profarma.
Profarma agrees to use commercially reasonable efforts to ensure that the rights given to the applicable PF Shareholders hereunder are effective and that such PF Shareholders enjoy the benefits thereof, including causing the nomination and election of Board members in accordance with ARTICLE 1. Profarma will not, by any voluntary action, avoid or seek to avoid the observance or performance of any of the terms to be performed hereunder by Profarma, but will at all times in good faith assist in the carrying out of all of the provisions of this Agreement and in the taking of all such actions as may be necessary or appropriate in order to protect the rights of the PF Shareholders hereunder against impairment.
2.4.1 Covenants of PF Shareholders.
From and after the execution of this Agreement, in any written consent or at any annual or extraordinary meeting of shareholders, (a) each of the PF Shareholders shall vote its PF Shares, and ABC shall cause BPL to vote its PF Shares, and each of the PF Shareholders and Profarma shall take all other actions necessary, to give effect to the provisions of this Agreement and to ensure that Profarma’s by-laws do not, at any time hereafter, conflict in any respect with the provisions of this Agreement; (b) each of the PF Shareholders shall vote its PF Shares, upon any matter submitted for action by the PF Shareholders, in conformity with the specific terms and provisions of this Agreement; and (c) none of the PF Shareholders shall vote its PF Shares in favor of any amendment of Profarma’s by-laws that would conflict with, or purport to amend or supersede, any of the provisions of this Agreement. In order to effectuate the provisions of this Agreement each of the PF Shareholders (i) hereby agrees that when any action or vote is required to be taken pursuant to this Agreement, such PF Shareholder, as the case may be, shall use its commercially reasonable efforts to call, or cause the appropriate officers and directors of Profarma to call, a meeting of the PF Shareholders, (ii) shall use its commercially reasonable efforts to cause the Board to adopt, either at a meeting of the Board, all the resolutions necessary to effectuate the provisions of this Agreement, and (iii) shall use its commercially reasonable efforts to cause the Board members or any other person acting as chairman or secretary of any given shareholders’ or Board meeting not to record any vote or action contrary to the terms of this Agreement. The PF Shareholders shall duly observe any applicable duties as PF Shareholders under applicable Brazilian laws, including obligations under Section 115 of the Brazilian Corporations Law.
2.5 Preliminary Meetings
Prior to any shareholders’ meeting or meeting of the Board in which a Reserved Matter will be resolved, the PF Shareholders shall hold a preliminary meeting (“Preliminary Meeting”) to agree on how their votes or those of their representatives shall be directed, in accordance with the terms of this Agreement. The members of the Board nominated by the PF Shareholders shall be responsible for convening the Preliminary Meetings and shall cause such meetings to be held within at least 5 days from the call notice of the relevant shareholders’ meeting or Board meeting, as the case may be.
(a) A Preliminary Meeting shall be considered validly installed upon the presence of both PF Shareholders and all decisions taken in the Preliminary Meeting shall be taken unanimously for so long as each of BPL and BMK owns at least 12.5% of Profarma’s outstanding common shares.
(b) The PF Shareholders agree and covenant that they shall exercise the voting rights attaching to their PF Shares at each shareholders’ meeting or cause their representatives in the Board to exercise their voting rights at each Board meeting in accordance with the resolution(s) adopted at the relevant Preliminary Meeting, as a single, unified block. If any Person proposes a resolution that has not been approved at a Preliminary Meeting and/or submitted to a vote at a shareholders’ meeting or a Board meeting, each PF Shareholder shall vote or shall cause its representative to the Board to vote against such proposed resolution at the relevant shareholders’ meeting or Board meeting, as the case may be.
(c) If a Preliminary Meeting is not installed due to the absence of one or both PF Shareholders at such Preliminary Meeting, a new Preliminary Meeting shall be held within 2 days after the date scheduled for the original Preliminary Meeting (“Second Preliminary Meeting”). For the avoidance of doubt the quorum requirements set out in Section 2.5(a) shall also apply to such Second Preliminary Meeting. If once again, the Second Preliminary Meeting is not installed due to the absence of one or both PF Shareholders at such Second Preliminary Meeting, a third Preliminary Meeting shall be held within 1 day after the date scheduled for the Second Preliminary Meeting (“Third Preliminary Meeting” and together with the Preliminary Meeting and the Second Preliminary Meeting, the “Preliminary Meetings”) and shall be installed with the presence of at least one PF Shareholder. If one of the PF Shareholders is not present at this Third Preliminary Meeting, the affirmative vote of the PF Shareholder present at the Third Preliminary Meeting shall bind the vote of the absent PF Shareholder and its respective representative to the Board in the relevant general shareholders’ meeting or meeting of the Board, as applicable.
(d) Minutes of the Preliminary Meetings shall be drafted and signed by all representatives present and shall serve as evidence of the decisions taken therein. Unless otherwise agreed by the representatives of BMK and BPL, the Preliminary Meetings shall be held at Profarma’s headquarters.
(e) Attendance at the Preliminary Meetings by conference call, video conference or any other type of communication, permitted by law, that allows the identification of the member and the simultaneous communication with all the other people attending the meeting will be permitted, provided that a copy of the minutes of the Preliminary Meetings be signed via facsimile transmission on the same date of the meeting, and the respective original be subsequently signed by all the Board members that attended such Preliminary Meetings.
(f) The chairman or chairwoman of any shareholders’ meeting or Board meeting shall disregard any vote cast in violation of the vote of the PF Shareholders in the relevant Preliminary Meeting(s) provided that (i) this Agreement is filed with Profarma’s headquarters; and (ii) a copy of the minutes of the Preliminary Meeting(s) (except if the requirement to hold Preliminary Meetings is waived in writing by both PF Shareholders) is either made available to the chairman or chairwoman of the shareholders’ meeting or the Board meeting, as the case may be, or filed at Profarma’s headquarters.
2.6 Reserved and Specified Matters
(a) Reserved Matters. So long as BPL owns at least 12.5% of Profarma’s outstanding common shares, BMK shall not, whether by amendment, merger, consolidation, or otherwise, vote (or cause any of BMK’s Affiliates or Board designees to vote) in order to cause Profarma, any of its direct and indirect subsidiaries (“Subsidiaries”), or Profarma’s directors or officers to take any of the following actions without prior written approval by BPL (the “Reserved Matters”):
(i) acquire or make investments in any drug manufacturing business or hospitals, health maintenance organizations and pharmacy benefit managers;
(ii) enter into commercial agreements or arrangements with Cardinal Health Inc., McKesson Corporation, Celesio AG or any of their Affiliates;
(iii) transfer any Profarma assets with an aggregate book value in excess of R$50,000,000;
(iv) amend Profarma’s By-Laws in any manner that would result in a conflict with the provisions of this Agreement or otherwise result, or reasonably be expected to result, in a disproportionate effect to BPL’s shareholder rights as compared to the rights of Profarma’s other shareholders;
(v) enter into transactions with BMK or any of its Affiliates (other than Profarma or its Subsidiaries that, individually or combined with the amounts of other transactions or series of transactions with such related parties in such fiscal year, exceeds, in the aggregate, the amount of R$3,000,000 in such fiscal year; or
(vi) approve the dissolution or liquidation of Profarma or commence any bankruptcy, judicial or out of court reorganization proceedings.
(b) Specified Matters. In addition to the Reserved Matters provided in Section 2.6(a) above, as long as BPL owns at least 12.5% of Profarma’s outstanding common shares, BMK shall not, whether by amendment, merger, consolidation, or otherwise, vote (or cause any of BMK’s Affiliates or Board designees to vote) in order to cause Profarma, the Subsidiaries, or Profarma’s directors or officers to take any of the following actions (the “Specified Matters”) if a BPL Designee abstains from voting on, or votes against, the Specified Matter, unless and until the Board chairman or chairwoman and a representative of BPL selected by the BPL Designees meet and discuss in good faith the applicable Specified Matter and the other requirements of this Section are satisfied:
(i) annual consolidated operating and capital budgets of Profarma;
(ii) any expenditure or series of capital expenditures not reflected in a previously approved Profarma annual budget exceeding R$5,000,000.00, within a twelve-month period;
(iii) any Indebtedness not reflected in a previously approved Profarma budget exceeding R$10,000,000.00 in each instance, other than amounts drawn on any Profarma line of credit outstanding as of the effective date of this Agreement to the extent of the maximum amount thereof on such date. For the purpose of this Agreement, “Indebtedness” shall mean (i) all indebtedness for borrowed money, (ii) all deferred purchase price of property or services (other than current trade liabilities incurred in the ordinary course of business and payable in accordance with customary practices), (iii) any other indebtedness that is evidenced by a note, bond, debenture, draft or similar documents, (iv) all obligations under financing or capital leases, (v) any other banking or capital market debt, (vi) letters of credit and any other contracts relating to the borrowing of money or extension of credit, and (vii) any guarantee of any of the foregoing obligations;
(iv) the removal and replacement of each Profarma Senior Financial/Commercial Team. For the purpose of this Agreement, “Profarma Senior Financial/Commercial Team” shall include, without limitation, the Profarma CFO, Profarma COO, the Retail Division Lead Executive and the Retail Division Lead Financial Executive and shall not include Profarma CEO.
The good faith discussions required by the foregoing shall be undertaken promptly and, in any case, concluded within thirty (30) days of the adjournment of the Board for such purpose. Following the completion of these good faith discussions, the Board chairman or chairwoman shall reconvene the Board to act on the Specified Matter in accordance with applicable requirements. If, at that time, the Board duly approves the Specified Matter and one or more of the BPL Designees abstains from voting on, or votes against, the Specified Matter, the action taken by the Board on the Specified Matter shall be deemed duly adopted (provided all other applicable legal requirements are met) but BPL shall have the option, to be exercised within 30 days of the date of the Board vote by written notice to BMK, to require Section 2.6(a) of this Agreement to be amended, without the need for further action, to include, at BPL’s sole discretion as set forth in such notice, any (or all) of the Specified Matters as Reserved Matters from and after the date of such notice.
(c) Removal and Replacement of Each Profarma Senior Financial/Commercial Team. In addition to the Reserved Matters and Specified Matters above, so long as BPL owns at least 12.5% of Profarma’s outstanding common shares, a BPL Designee will be entitled to propose to the Board by written notice given to the Board chairman or chairwoman the removal and replacement of each Profarma Senior Financial/Commercial Team. Upon receipt of such notice, the Board shall be convened for this purpose and, in the event such proposal is not approved by the Board, the Board meeting convened for this purpose shall be suspended and the Board chairman or chairwoman and a representative of BPL selected by the BPL Designees shall meet and discuss in good faith such proposal. The good faith discussions required by the foregoing shall be undertaken promptly and, in any case, concluded within thirty (30) days of the adjournment of the Board for such purpose. Following the completion of these good faith discussions, the Board chairman or chairwoman shall reconvene the Board to reconsider the removal and replacement of the applicable Profarma Senior Financial/Commercial Team member, in accordance with applicable requirements. If, at that time, the Board does not approve the removal and replacement of the applicable Profarma Senior Financial/Commercial Team member and one or more of the BPL Designees votes in favor of the removal and replacement of the applicable Profarma Senior Financial/Commercial Team member, the applicable Profarma Senior Financial/Commercial Team member shall remain in office but BPL shall have the option, to be exercised within 30 days of the date of the Board vote by written notice to BMK, to require, from and after the date of such notice (i) that the members of the Board appointed by BMK vote in accordance with the instructions of the BPL Designees on future elections to appoint or to remove and replace each Profarma Senior Financial/Commercial Team; and/or (ii) Section 2.6(a) of this Agreement to be amended, without the need for further action, to include, at BPL’s sole discretion as set forth in such notice, any (or all) of the Specified Matters as Reserved Matters from and after the date of such notice.
(d) Manner of Voting. The voting of PF Shares pursuant to this Agreement may be effected in person, by proxy, by written consent or in any other manner permitted by applicable law.
(e) Director’s and Officer’s Insurance. On an uninterrupted basis throughout the term of this Agreement, Profarma shall use commercially reasonable efforts to obtain or renew (as applicable) adequate insurance covering its officers and directors and their related persons from claims arising from actions taken in good faith on behalf of Profarma, provided that such insurance is available on commercially reasonable terms as determined by the Board.
2.7 Language of Board Meetings.
All meetings of the Board shall be conducted in English and their minutes shall be prepared both in English and Portuguese.
ARTICLE TRANSFER OF PF SHARES
3.1 Transfer of PF Shares
Each PF Shareholder hereby agrees that it, he or she shall be free to transfer any of its PF Shares or rights to subscribe additional PF Shares, except as provided otherwise in this Agreement in ARTICLE 3 and Section 4.2. Any transfers performed in disagreement with this ARTICLE 3 and Section 4.2 herein shall be null and void ab initio, and shall not be recognized or registered by Profarma in its corporate books. For purposes of this ARTICLE 3, “transfer” and its derivatives include all forms of direct or indirect voluntary transfer or disposition, by operation of law or otherwise, as well as the creation of any liens, pledges, voting agreements, voting trusts, proxy agreements, security interests, mortgages, and other possessory interests, conditional sale or other title retention agreements, assessments, easements, rights-of-way, covenants, restrictions, rights of first refusal, encroachments, and other options, or encumbrances of any kind (“Encumbrances”) on all or any part of any PF Shares. For clarity, the PF Shareholders hereby agree that any indirect transfer of PF Shares, including, but not limited to, the transfer of shares issued by BMK and owned by the BMK Shareholders and their respective Affiliates (“BMK Shares”) and transfers performed through merger, spin-off or consolidation of BMK, shall be considered transfers subject to the provisions of this ARTICLE 3. As a result, BMK and each of the BMK Shareholders covenant and agree that the BMK Shares are also bound by this Agreement and that any transfer (as defined above) of BMK Shares performed in disagreement with this ARTICLE 3 and Section 4.2 herein shall be null and void ab initio, and shall not be recognized or registered by BMK in its corporate books.
3.2 Tag-Along Right
(a) In addition and without prejudice to the ROFR, as defined and set forth in Section 3.3 below, if any PF Shareholder (and/or its Permitted Transferees) proposes to transfer Control or 10% or more, within any twelve-month period, of the then outstanding PF Shares (the "Proposed PF Transferor"), to a bona fide third party purchaser who is not a Permitted Transferee (the "Proposed Transferee"), the other PF Shareholder (“Beneficiary PF Shareholder”) shall be permitted to participate in such transfer (a "Tag-along Sale") on the terms and conditions set forth in this Section 3.2. For purposes of this Section 3.2, neither of the following shall be considered as a Tag-along Sale: (x) sales of PF Shares by the PF Shareholders or its Affiliates conducted on the Brazilian stock exchange, nor (y) assignment (without consideration) of preemptive rights for subscription of newly issued shares of Profarma. For purposes of this Agreement, “Permitted Transferee” shall mean, in respect of any PF Shareholder, any BMK Shareholder, (i) any Affiliate of such PF Shareholder, any Affiliate of BMK Shareholder to the extent such Affiliate is (a) directly or indirectly, wholly-owned by the transferring shareholder (the transferring Affiliate shall provide to BPL such information as may be reasonably requested to ascertain that such Affiliate has not ceased to be an Affiliate of the transferring shareholder) or (b) with respect to any Person who is an individual, also his/her spouse, stable union or equivalent companion, ancestors or descendants in straight line, as well as any legal entity wholly-owned by any of them; (ii) the transferring shareholder guarantees all of the obligations of such Affiliate under this Agreement; (iii) the Affiliate mentioned in item (i) above unconditionally adheres to this Agreement, on the same terms as applicable to the transferring shareholder in relation to those PF Shares or BMK Shares immediately before the transfer, and the corresponding instrument of adhesion is filed with Profarma or BMK, together with this Agreement; and (iv) such Affiliate shall transfer back to the transferring shareholder its Shares before the Affiliate ceases to be an Affiliate of the transferring shareholder.
(b) the Proposed PF Transferor must deliver to Profarma and to the Beneficiary PF Shareholder a written notice (a "Sale Notice") of any proposed Tag-along Sale no later than 10 Business Days before the closing date of the proposed Tag-along Sale. The Sale Notice shall reference BPL’s rights hereunder and shall describe:
(i)the aggregate number of PF Shares the Proposed Transferee has offered to purchase (which, in the event of a transfer of Control, shall include all the PF Shares owned by the Beneficiary PF Shareholder and in the event of a transfer of 10% or more of the outstanding PF Shares of Profarma, but less than the Control, shall include Beneficiary PF Shareholder 's pro-rata portion);
(ii)the identity of the Proposed Transferee;
(iii)the proposed date, time and location of the closing of the Tag-along Sale;
(iv)the per share purchase price and other material terms and conditions, including a description of any non-cash consideration in sufficient detail to permit the valuation thereof; and
(v)a copy of any form of agreement proposed to be executed in connection therewith.
(c)The Beneficiary PF Shareholder shall exercise its right to participate in the proposed Tag-along Sale by delivering to the Proposed PF Transferor a written notice (a "Tag-along Notice") stating its election to do so and specifying the number of PF Shares to be transferred by the Beneficiary PF Shareholder no later than 5 Business Days after receipt of the Sale Notice (the "Tag-along Period"). The offer of the Beneficiary PF Shareholder set forth in a Tag-along Notice shall be irrevocable, and, to the extent such offer is accepted, Beneficiary PF Shareholder shall be bound and obligated to transfer such PF Shares in the proposed Tag-along Sale on the terms and conditions set forth in this Section 3.2, provided the terms of such transfer are no less favorable to the Beneficiary PF Shareholder than as described in the Sale Notice, and subject to Section 3.2(f) below. The Proposed PF Transferor and the Beneficiary PF Shareholder shall have the right to transfer in such Tag-along Sale the number of PF Shares equal to the product of (x) the aggregate number of PF Shares the Proposed Transferee proposes to buy as stated in the Sale Notice and (y) a fraction (A) the numerator of which is equal to the number of PF Shares then held by Beneficiary PF Shareholder or the Proposed PF Transferor, as the case may be, and (B) the denominator of which is equal to the number of PF Shares then held by the PF Shareholders; provided that in the event of a transfer of Control, the Beneficiary PF Shareholder shall have the right to transfer all PF Shares owned by the Beneficiary PF Shareholder.
(d) If the Beneficiary PF Shareholder does not deliver a Tag-along Notice, it shall be deemed to have waived its rights to participate in such Tag-along Sale, and the Proposed PF Transferor shall thereafter be free to transfer to the Proposed Transferee its PF Shares at a per share price that is no greater than the per share price set forth in the Sale Notice and on other terms and conditions that are not materially more favorable to the Proposed PF Transferor than those set forth in the Sale Notice without any further obligation to Beneficiary PF Shareholder with respect to such Tag-along Sale.
(e) If Beneficiary PF Shareholder participates in a Tag-along Sale it shall receive the same consideration per share as the Proposed PF Transferor after deduction of Beneficiary PF Shareholder's proportionate share of the related expenses under Section 3.2(g) below.
(f) The Beneficiary PF Shareholder shall not assume any indemnity liability jointly with Proposed PF Transferor (or any of its Permitted Transferee) with regard to the Proposed Transferee and shall exclusively make or provide representations and warranties with respect to its (i) organization and good standing, (ii) authorization to execute the agreements necessary to consummate the Tag-along Sale, and (iii) ownership and absence of Encumbrances over its PF Shares.
(g) The fees and expenses of Beneficiary PF Shareholder and Proposed PF Transferor incurred in connection with a Tag-along Sale and for the benefit of all PF Shareholders (it being understood that costs incurred by or on behalf of Beneficiary PF Shareholder or Proposed PF Transferor, as the case may be, for its sole benefit will not be considered to be for the benefit of all PF Shareholders), to the extent not paid or reimbursed by Profarma or the Proposed Transferee, shall be shared by Proposed PF Transferor and Beneficiary PF Shareholder if Beneficiary PF Shareholder participates in such sale on a pro rata basis, based on the aggregate consideration received by Proposed PF Transferor (and/or any Permitted Transferee of Proposed PF Transferor) and Beneficiary PF Shareholder.
(h) Subject to Section 3.2(f), Beneficiary PF Shareholder shall take all actions as may be reasonably necessary to consummate the Tag-along Sale, including entering into agreements and delivering certificates and instruments, in each case consistent with the agreements being entered into and the certificates being delivered by Proposed PF Transferor.
(i) The Proposed PF Transferor shall have 90 days following the expiration of the Tag-along Period in which to transfer the PF Shares described in the Sale Notice, on the terms set forth in the Sale Notice (which such 90-day period may be extended for a reasonable time not to exceed 120 days to the extent reasonably necessary to obtain the approval of any governmental department, commission, board, bureau, agency, administrative body, accreditation body, court, or other instrumentality, or contractor thereof, whether foreign or domestic, of any country, nation, republic, federation or similar entity or any state, county, parish or municipality, jurisdiction or other political subdivision thereof (collectively, the “Governmental Authorities”). If at the end of such 90-day period (or 120-day period, as applicable), the Proposed PF Transferor has not completed such transfer, neither the Proposed PF Transferor nor any Permitted Transferee of the Proposed PF Transferor may then effect a transfer of PF Shares subject to this Section 3.2 without again fully complying with the provisions of this Section 3.2. If the Proposed PF Transferor (or any Permitted Transferee of Proposed PF Transferor) transfers to the Proposed Transferee any of its PF Shares in breach of this Section 3.2, then Beneficiary PF Shareholder shall have the right to transfer to Proposed PF Transferor, and Proposed PF Transferor undertakes to purchase from Beneficiary PF Shareholder, the number of PF Shares that Beneficiary PF Shareholder would have had the right to transfer to the Proposed Transferee under this Section 3.2, for a per share amount and form of consideration and upon the terms and conditions on which the Proposed Transferee bought such PF Shares from Proposed PF Transferor (or any Permitted Transferee of Proposed PF Transferor, as the case may be), but without indemnity being granted by Beneficiary PF Shareholder to Proposed PF Transferor; provided that nothing contained in this Section 3.2 shall preclude a PF Shareholder from seeking alternative remedies against Proposed PF Transferor as a result of its breach of this Section 3.2. Proposed PF Transferor shall also reimburse Beneficiary PF Shareholder for any and all reasonable and documented out-of-pocket fees and expenses, including reasonable legal fees and expenses, incurred pursuant to the exercise or the attempted exercise of Beneficiary PF Shareholder's rights.
(j) As a condition precedent for any acquisition of PF Shares by a Proposed Transferee, such Proposed Transferee shall adhere to this Agreement in writing, agreeing to be bound by all of the terms of this Agreement upon consummation of such acquisition.
3.3 Right of First Refusal
(a). Without prejudice to Section 3.2 or Section 4.2, should BMK, any BMK Shareholder, and/or any of their Permitted Transferees (the “Transferring Shareholder”) wish to undertake a “Restricted Transfer” (as defined below) to a bona fide third party purchaser which is not a Permitted Transferee (“Proposed Transferee”), the Transferring Shareholder shall give prior notice in writing (“Offer Notice”) to BPL, which will have a right of first refusal (“ROFR”) over the proposed transfer of PF Shares or BMK Shares, as applicable, that are encompassed by the Offer Notice. “Restricted Transfer” means any transfer, in one or a series of related transactions, of (i) BMK Shares that would result in a change of Control of BMK (including in case of a public offering of shares registered with the CVM (“Public Offering”)), or (ii) PF Shares that would result in a change of Control of Profarma (including in case of a Public Offering), or (iii) PF Shares that would not result in a change of Control of Profarma other than a transfer on the Brazilian stock exchange or made pursuant to a Public Offering.
(b)The Offer Notice must include all the following information in reasonable detail: (i) the number of PF Shares or BMK Shares (as the case may be) covered by the proposed transfer (“Offered Shares”), (ii) the price per share offered by the Proposed Transferee for the Offered Shares (“Offered Price”), (iii) the identity of the Proposed Transferee, and (iv) any other terms and conditions relevant to the proposed transfer. The Offer Notice will constitute an offer for sale of the Offered Shares by the Transferring Shareholder to BPL at the Offered Price, subject to the other terms and conditions established in the Offer Notice and to the provisions set forth herein. BPL may accept the offer substantiated in the Offer Notice by giving written notice (“Acceptance Notice”) to the Transferring Shareholder concerned at any time during the period of 20 Business Days following receipt of the Offer Notice by the Offered Shareholder (“Offer Period”). Failure to deliver the Acceptance Notice before expiration of the Offer Period shall be deemed a waiver by the Offered Shareholder to exercise the ROFR.
(c)The Acceptance Notice must state the irrevocable commitment to acquire all (but not less than all) of the Offered Shares on the terms and conditions set forth herein. Such acquisition must comply with all applicable law and on the absence of any injunction or other conservatory measure that prevents performance of said transaction.
(d) If BPL gives the Acceptance Notice before expiration of the Offer Period, agreeing to acquire all of the Offered Shares, the Offering Shareholder must transfer the Offered Shares to BPL and BPL must pay the Offered Price within 45 days after expiration of the Offer Period, provided, however, that if the transfer of the Offered Shares to the Offered Shareholder and the payment thereof require the prior approval from any Governmental Authority, including, without limitation Brazilian antitrust authorities, such 45-day period must be extended until such approval is granted.
(e) If no Acceptance Notice is given during the Offer Period stating the intention of BPL of acquiring all of the Offered Shares or if BPL waives its ROFR, then the Offering Shareholder, subject to the other provisions of this Agreement, will have 30 days (subject to extension for applicable anti-trust approval processes) after the lapse of the Offer Period (or such extended term as set forth above), to transfer the Offered Shares to the Proposed Transferee, at a price (“Transfer Price”) (converted, if necessary, upon the transfer, into the original currency of the Offered Price) at least equal to the Offered Price and on terms and conditions not more favorable to the Proposed Transferee than those specified in the Offer Notice. As a condition for the Proposed Transferee to acquire the Transfer Shares, such Proposed Transferee shall accede to this Agreement in writing, agreeing to be bound by all of the terms hereof and shall have all rights and obligations of the Transferring Shareholder under this Agreement. If said transfer is not consummated within such period of 30 days (subject to extension for applicable anti-trust approval processes), the Transferring Shareholder, unless otherwise permitted pursuant to the relevant provisions of this Agreement, must not transfer the Offered Shares to any third party without first observing each one of the requirements set forth in this Section 3.3.
(f) For the avoidance of doubt, for purposes of this Section 3.3, each of the PF Shareholders and BMK Shareholders agrees that a transfer of PF Shares by BMK or its Affiliates in a Public Offering that would constitute a change of Control of Profarma shall be subject to the ROFR and may not be made in any manner without first observing each one of the requirements set forth above in this Section 3.3.
ARTICLE ADDITIONAL COVENANTS
4.1 Notice of Events
(a) In addition and without prejudice to BPL’s Tag-Along Right and ROFR under Sections 3.2 and 3.3, BMK and the BMK Shareholders shall provide written notice to BPL at least 5 Business Days before any transfer or sale of BMK Shares, except if to a Permitted Transferee (provided in the case of each such exception that notice of such transfer or sale is promptly provided to BPL).
(b) Upon having given prior notice to BPL, if BMK fails to complete the notified actions under Section 4.1(a) within a period of 30 days (or 60 days, if needed for regulatory approval) from the date of BPL’s receipt of the notice delivered pursuant to Section 4.1(a), BMK would be required to deliver another written notice to BPL in order to extend the prior 90-day period for one month.
4.2 Right of First Negotiation
(a) Right of First Negotiation to Sell
In case of a proposed transfer of PF Shares by BMK or its Affiliates conducted in one or more Public Offerings that are not part of a change of Control of Profarma (“Potential Sale Transaction”), BMK will, as soon as practicable, notify BPL in writing that it may pursue a Potential Sale Transaction, and BPL shall have 15 Business Days from its receipt of such notice to provide BMK (“First Negotiation Sale Period”) with a written proposal to acquire a corresponding number of BMK’s PF Shares to those being made available in the Potential Sale Transaction (“Right of First Negotiation to Sell”); provided that if BMK does not comply with its obligation to give written notice of the Potential Transaction, such notice shall be deemed to have been given on the date BPL gains knowledge of the Potential Sale Transaction and the First Negotiation Sale Period shall be extended to 20 Business Days. During such 15 Business Day period (or 20 Business Day period, as applicable), BMK shall not take any steps, and shall cause Profarma not to take any steps, including steps to seek a recommendation from the Board, towards the Potential Sale Transaction. Upon expiration of the First Negotiation Sale Period, independently of having received or not a proposal from BPL, BMK shall have no further obligation with respect to the Right of First Negotiation to Sell and shall be free to enter into any such noticed Potential Sale Transaction. ABC shall cause BPL to comply with its obligation under this Section
(b) Right of First Negotiation to Purchase
In case of any proposed purchase of PF Shares by BPL or its Affiliates (“Potential Purchase Transaction”), BPL will, as soon as practicable, notify BMK in writing that it may pursue a Potential Purchase Transaction, and BMK shall have 15 Business Days from its receipt of such notice to provide BPL (“First Negotiation Purchase Period”) with a written proposal to sell a corresponding number of BMK’s PF Shares to those being sought in the Potential Purchases Transaction (“Right of First Negotiation to Purchase”). For the avoidance of doubt, the sale of a corresponding number of BMK’s PF Shares shall only occur if BMK’s written proposal contains, in all circumstances, information regarding the financial terms of the transaction, which shall not be, in aggregate, less favorable than those offered by a third party. If BPL does not comply with its obligation to give written notice of the Potential Purchase Transaction, such notice shall be deemed to have been given on the date BMK gains knowledge of the Potential Purchase Transaction and the First Negotiation Purchase Period shall be extended to 20 Business Days. During such 15 Business Day period (or 20 Business Day period, as applicable), BPL or its Affiliate, as applicable, shall not take any steps, towards the Potential Purchase Transaction. Upon expiration of the First Negotiation Purchase Period, independently of having received or not a proposal from BMK, BPL shall have no further obligation with respect to the Right of First Negotiation to Purchase and shall be free to enter into any such noticed Potential Purchase Transaction, provided that BPL must accept the proposal made by BMK or its Affiliates if the financial terms of such proposal, when considered in aggregate, are not less favorable to BPL than those available to BPL from a third party for the Potential Purchase Transaction. BMK Shareholders shall cause BMK to comply with its obligation under this Section 4.2(b).
4.3 Go to Market Assistance
At BPL’s request, Profarma will cooperate, and BMK shall cause Profarma to cooperate, in good faith with and provide customary go-to-market assistance to BPL, including road show presentations prepared by Profarma’s management, investor presentations, and accompanying site visits, to facilitate an expeditious and orderly sale by BPL of all or any portion of its PF Shares, to the extent permitted under applicable Brazilian law. All reasonable costs and expenses incurred by BMK or Profarma in connection with this assistance will be borne by BPL.
4.4 Non-Competition; Non-Solicitation
So long as this Agreement remains in full force and effect and a BPL Designees remains on the Board, without prior written consent of Profarma, BPL or its Affiliates shall not:
pursue or engage in, directly or indirectly, any business in the wholesale and retail distribution of drugs that competes with Profarma’s business of wholesale and retail distribution of drugs in Brazil as such business is conducted at the time such opportunity is presented to BPL or its Affiliates (“Competing Business”); except that BPL and its Affiliates are permitted to, directly or indirectly: (x) distribute products and offer services that are not offered by Profarma, and to sell data and other information it may acquire (other than data that it may acquire as a result of its investment in Profarma) and (y) own, manage, operate, control, or participate in the ownership, management, operation or control of less than 5% of the equity of any Competing Business; or
solicit to employ any officer or key employee of Profarma or any of its Subsidiaries with whom BPL came in contact with during the process of completing the Transaction (each such person, a “Covered Person”); provided, however, the obligations under this Section 4.4(b) shall not prevent BPL or its Affiliates from hiring a Covered Person if such Covered Person: (x) was previously an employee of BPL or its Affiliates, (y) responds to a general solicitation of employment not specifically directed towards Profarma or the employees of Profarma, or (z) has already terminated its employment relationship with Profarma prior to commencement of any employment discussions between BPL or any of its Affiliates and the Covered Person.
4.5 Provisions of Section
4.4 Notwithstanding the foregoing, none of the provisions in Section 4.4 shall apply to any services, activities or acts (w) currently, or in the prior five years, carried out by World Courier Group, Inc. or its Subsidiaries anywhere in the world, (x) currently, or in the prior five years, carried out by AmerisourceBergen Consulting Services, Inc. or its Subsidiaries anywhere in the world, (y) by MWI Veterinary Supply, Inc. or its Subsidiaries anywhere in the world, or (z) by Walgreens Boots Alliance, Inc., Walgreen Co., Alliance Boots, or their respective Affiliates.
ARTICLE 5INFORMATION RIGHTS
5.1 Information Right
During the term of this Agreement, to the extent legally permitted, BPL will have the right to receive, upon the presentation of a written request to Profarma’s management, the following information, as the case may be, and BMK shall cooperate and take all reasonable actions necessary to ensure that BPL receives any such information:
(a) historical audited financial statements for Profarma, prepared in accordance with applicable law or the International Financial Reporting Standards, issued by the International Accounting Standards Board, and the accounting practices adopted in Brazil under applicable law, which follow the pronouncements by Comitê de Pronunciamentos Contábeis (“BR IFRS”);
(b) quarterly unaudited consolidated financial information for Profarma no more than 45 days after the end of each quarter, which Profarma shall (x) prepare in accordance with BR IFRS and (y) provide all necessary or appropriate information and assistance to BPL, including access, data and other reasonably requested information to prepare such financial information in accordance with the generally accepted accounting principles in the United States (“U.S. GAAP”);
(c) annual consolidated audited financial statements for Profarma within 90 days after each year end, which Profarma shall (x) prepare in accordance with BR IFRS and (y) provide all necessary or appropriate information and assistance to BPL, including access, data and other reasonably requested information to prepare such financial information in accordance with U.S. GAAP;
(d) any information reasonably required for tax purposes;
(e) any information reasonably required for the review and assessment of Profarma’s anti-corruption and related compliance practices or policies by BPL’s internal compliance team, audit team or a third party engaged by BPL;
(f) any other information requested by BPL that is reasonable and necessary for BPL to fulfill its legal or statutory reporting and disclosure requirements and all internal review and audit matters, including a review of Profarma’s corporate, financial, legal, tax, environmental, intellectual property, anti-corruption practices, and labor records and agreements, and any other matter as deemed relevant by BPL’s accountants, legal counsel, tax advisors, and other relevant advisors. In addition, Profarma shall provide all necessary or appropriate information and assistances to BPL, including access, data and all other reasonably requested information in order to assist BPL with preparing financial information on a U.S. GAAP basis. The reasonable and documented out-of-the-pocket expenses incurred by Profarma to produce and deliver such information under this subsection shall be reimbursed by BPL;
(g) Profarma shall provide BPL with access to the relevant Profarma management personnel to conduct discussions and reviews of the matters described in this Section 5.1 above and any areas of concern identified by Profarma’s auditors and potential responses thereto. Such discussion and reviews will generally take place on an annual basis, except in unusual or extraordinary circumstances; and
(h)All references to BPL in this Section 5.1 are deemed to include ABC.
5.2 Amendments; Waivers
Any term hereof may be amended or waived with the written consent of Profarma, BMK and BPL. No waiver, termination or discharge of this Agreement, or any terms or provisions hereof, shall be binding upon any PF Shareholder hereto unless confirmed in writing. No waiver by any PF Shareholder hereto of any term or provision of this Agreement or of any default hereunder shall affect such PF Shareholder’s rights thereafter to enforce such term or provision or to exercise any right or remedy in the event of any other default, whether or not similar.
(a)This Agreement shall be valid and effective until the 20th anniversary of the execution date of this Agreement, provided that it shall be renewed for equal and sequential periods in case no communication to the contrary by any of the parties is delivered to the other party within six months before its expiration date, and may not be terminated by any of the parties, except in any of the following events:
(i)The parties mutually agree in writing to terminate this Agreement.
(ii)Upon a shareholders’ decision to delist Profarma.
(iii)If a PF Shareholder has (A) been declared insolvent by a competent court and such order has not been reverted with respect to its merits within the applicable legal terms; (B) applied for or consent to the appointment of, or the taking of possession by, a receiver, custodian, trustee, examiner, síndico, administrador judicial, liquidator or similar person of itself or of all or any substantial part of its property; (C) made a general assignment for the benefit of its creditors; or (D) filed a petition seeking relief under any applicable law relating to bankruptcy, insolvency, reorganization, recuperação judicial or recuperação extrajudicial, liquidation, falência, dissolution, arrangement or winding up or composition or readjustment of debts.
(iv)In relation to BPL, (a) if BPL’s PF Shares fall below 10.0% of Profarma’s then outstanding common shares (the “Threshold”) solely because of BPL’s action to sell PF Shares, or (b) if BPL’s PF Shares fall below the Threshold for any other reason and BPL’s PF Shares do not reach or exceed the Threshold as of the 6 month anniversary of the date BPL’s PF Shares fell below the Threshold.
(b) If this Agreement is terminated under Section 5.3(a)(iv), BPL will cause the BPL Designees to resign from the Board.
All notices and other communications provided for or permitted hereunder shall be deemed duly given upon receipt when sent by one of the following methods, and such notice will be deemed to have been received as follows: (a) if delivered by an internationally recognized overnight delivery providing receipt of delivery, at the time of signature of the courier’s delivery receipt; (b) if delivered by hand, at the time of delivery; or (c) if delivered by electronic mail or similar means, on the date sent if notice is also provided by one of the other means set forth in this Section 5.4 as promptly as practicable thereafter, in each case of (a) through (c) to the applicable addresses (including electronic mail addresses) set forth below or such other address that each party may from time to time specify by notice under this Section 5.4. If the deemed time of receipt of a notice under this Section 5.4 is not within business hours, the next Business Day shall be in place of the date of deemed receipt
If to BPL, to:
BPL Brazil Holding Company
2-4 rue Eugène Ruppert
L-2453 Luxembourg, Grand-Duchy of Luxembourg
Attention: Board of Managers
with a copy (which shall not constitute notice) to ABC and BPLs legal counsel at:
1300 Morris Drive
Chesterbrook, PA, USA 19087
Attention: John G. Chou, Executive Vice President and Chief Legal & Business Officer
Mattos Filho Advogados
Alameda Joaquim Eugenio de Lima, 447
São Paulo, SP, Brasil 01303-001
Attention: João Ricardo de Azevedo Ribeiro / Maria Fernanda de Almeida Prado
E-mail: firstname.lastname@example.org / email@example.com
If to Profarma, to:
Profarma Distribuidora de Produtos Farmacêuticos S.A.
Avenida Ayrton Senna, nº 2.150, Bloco P, Sala 301
Rio de Janeiro, Brasil, CEP 22775-003
Attention: Maximiliano Guimarães Fischer
If to BMK and BMK Shareholders, to:
BMK Participações S.A.
Avenida Ayrton Senna, nº 2.150, Bloco N, Sala 305 - parte
Rio de Janeiro, Brasil, CEP 22775-003
Attention: Sammy Birmarcker
with a copy (which shall not constitute notice) to Profarma’s or BMK’s legal counsel at:
Souza, Cescon, Barrieu & Flesch Advogados
Rua Funchal 418, 11º andar
São Paulo, Brasil, CEP 04551-060
Attention: Daniel de Miranda Facó
If one or more provisions of this Agreement are held to be unenforceable under applicable law, the parties agree to renegotiate such provision in good faith. If the parties cannot reach a mutually agreeable and enforceable replacement for such provision, then (a) such provision shall be excluded from this Agreement, (b) the balance of the Agreement shall be interpreted as if such provision were so excluded and (c) the balance of the Agreement shall be enforceable in accordance with its terms.
5.6 Governing Law; Exceptional Submission to Jurisdiction
This Agreement shall be governed by and construed in accordance with the laws of the Federative Republic of Brazil, without regard to the laws of any other jurisdiction. Without prejudice to the validity of the arbitration clause set forth in Section 5.7 herein, the PF Shareholders elect, to the exclusion of any others, the courts of the Judicial District of São Paulo, State of São Paulo, if and when necessary, for the sole purposes of: (a) enforcing obligations subject to judicial enforcement; (b) obtaining injunctive relief or precautionary measures as guarantee for the efficacy of the arbitration proceedings; and (c) obtaining mandatory and specific enforcement measures. After the constitution of the arbitral tribunal, arbitrators may uphold, overturn or modify any measures previously granted by the competent court. The filing of any measures under the terms set out in this clause shall not imply any waiver of the arbitration clause set forth in Section 5.7 herein or of the scope of jurisdiction of the arbitral panel. The PF Shareholders agree that service of any process, summons, notice or document to the respective addresses of the PF Shareholders set forth in Section 5.4 of this Agreement shall be effective service of process for any action, suit or proceeding brought under this Agreement
All disputes arising out of or in connection with this Agreement, involving any of the parties or the intervening and consenting parties, shall be finally settled by arbitration administrated by the International Court of Arbitration of the International Chamber of Commerce (“ICC”), in accordance with its rules of arbitration in effect on the date of the request for arbitration (the “ICC Rules”) and pursuant to the following conditions:
The seat of the arbitration shall be São Paulo, State of São Paulo, Brazil.
The language of the arbitration shall be English.
The law governing the validity of this arbitration agreement shall be the Brazilian Federal Law No. 9.307/96, as amended. The same law shall apply to any procedural issues arising during the arbitration.
The arbitral tribunal shall consist of three arbitrators selected in accordance with the ICC Rules and in the following manner: (i) claimant(s) shall be entitled to appoint one arbitrator, (ii) respondent(s) shall be entitled to appoint one arbitrator and (iii) the two arbitrators nominated by the them shall seek to agree upon a joint nominee to serve as chair of the arbitral tribunal within 30 days from the confirmation of appointment of the party-appointed arbitrators by the International Chamber of Commerce Court or any such later time as may be agreed in writing by the PF Shareholders.
In the arbitration, the International Bar Association Rules on the Taking of Evidence in International Arbitration effective on the date of the request for arbitration (the “IBA Rules”) will operate as guidance on evidence and procedure but not as strict rules.
Any award shall be final and binding upon the parties and their successors on any account.
5.8 Successors and Assigns
The terms and conditions of this Agreement shall inure to the benefit of and be binding upon the respective successors and assigns of the parties. Nothing in this Agreement, express or implied, is intended to confer upon any party other than the parties hereto or their respective successors and assigns any rights, remedies, obligations, or liabilities under or by reason of this Agreement, except as expressly provided in this Agreement
5.9 Compliance with the Agreement
Profarma, BMK, BPL and the BMK Shareholders undertake to comply with all provisions of this Agreement (as applicable) and Profarma and BMK shall keep this Agreement filed at Profarma’s and BMK’s registered office, according to the Brazilian Corporations Law. Profarma and each PF Shareholder undertake to promptly notify the PF Shareholders of any act, fact or omission that may imply a breach of this Agreement. Furthermore, Profarma shall not register, consent or ratify any vote or approval by the PF Shareholders, directors or officers in violation of this Agreement.
5.10 Entire Agreement
This Agreement contains the entire understanding of the parties and intervening and consenting parties hereto with respect to the subject matter hereof and supersedes all other agreements between or among them with respect to the subject matter hereof, including the Original Shareholders Agreement. In the event of any conflict between this Agreement and Profarma’s by-laws, the terms of this PF Agreement shall to the extent legally possible prevail with respect to the PF Shareholders, and the PF Shareholders shall, at the first general Shareholders’ Meeting held after such conflict is identified, use commercially reasonable efforts to procure that a resolution on an amendment to Profarma’s by-laws is taken by the general Shareholders’ Meeting so as to eliminate said conflict.
5.11 Titles and Subtitles
The titles and subtitles used in this Agreement are used for convenience only and are not to be considered in construing or interpreting this Agreement.
5.12 Aggregation of Shares
All PF Shares held or acquired by any PF Shareholder and its Affiliates shall be aggregated together for the purpose of determining the availability of any rights under this Agreement.
5.13 Delays or Omissions
It is agreed that no delay or omission to exercise any right, power or remedy accruing to any party, upon any breach, default or noncompliance by another party under this Agreement shall impair any such right, power or remedy, nor shall it be construed to be a waiver of any such breach, default or noncompliance, or any acquiescence therein, or of or in any similar breach, default or noncompliance thereafter occurring. It is further agreed that any waiver, permit, consent or approval of any kind or character on any party’s part of any breach, default or noncompliance under this Agreement or any waiver on such party’s part of any provisions or conditions of the Agreement must be in writing and shall be effective only to the extent specifically set forth in such writing. All remedies, either under this Agreement by law, or otherwise afforded to any party, shall be cumulative and not alternative.
Each of BPL and Profarma shall maintain and use their commercially reasonable efforts to cause their respective directors, officers, employees, accountants, lawyers, consultants, advisors, and agents (all such persons being collectively referred to as “Representatives”) to maintain, the confidentiality of any non-public information received from the other PF Shareholder and/or Profarma ("Confidential Information") and use such Confidential Information solely in connection with BPL’s investment in Profarma, including all non-public data and information obtained by any of them pursuant to this Agreement. Except as may be required from time to time by the rules of any national stock exchange, if any PF Shareholder is requested or required (whether by applicable law, court order, by the rules or regulations of any regulatory authority having jurisdiction over the PF Shareholder or a national stock exchange on which a PF Shareholder’s securities are traded, or otherwise) to disclose any Confidential Information, such PF Shareholder shall, to the extent practicable, (a) promptly notify Profarma and the other PF Shareholder of the existence, terms and circumstances in connection therewith, (b) cooperate with the other PF Shareholder in the event that any PF Shareholder seeks a protective order or other appropriate remedy, (c) furnish only that portion of the Confidential Information which is legally required, and (d) exercise its reasonable efforts to obtain reliable assurances that confidential treatment will be accorded to the Confidential Information. The PF Shareholders hereby acknowledge that each of them may disclose any Confidential Information, to the extent necessary and permitted by applicable law, to any of their respective direct or indirect shareholder, employee, officer, attorney, consultant, financial advisor, accountant or other representative thereof, in compliance with the provisions of this Section 5.14. Notwithstanding the foregoing, Confidential Information does not include information that: (i) is or becomes generally available to the public other than as a result of a disclosure by a PF Shareholder or its Representatives in violation of this Agreement; (ii) was available to such PF Shareholder on a non-confidential basis before its disclosure to such PF Shareholder or its Representatives by the other PF Shareholder; or (iii) becomes available to such PF Shareholder on a non-confidential basis from a source other than Profarma after the disclosure of such information to such PF Shareholder or its Representatives by the other PF Shareholder, which source is (at the time of receipt of the relevant information) not, to the best of such PF Shareholder’s knowledge, bound by a confidentiality agreement with (or other confidentiality obligation to) Profarma or another Person. BPL may share Confidential Information with ABC and its Subsidiaries, Profarma may share Confidential Information with BMK, ABC and BMK shall be subject to the confidentiality obligations under this Section 5.14, and ABC shall cause its Subsidiaries with whom it shares Confidential Information to comply with the confidentiality obligations under this Section 5.14.
The headings in this Agreement shall have no effect on its interpretation. In the case of conflict or ambiguity between any provision contained in the body of this Agreement and any provision contained in any appendix, the provision in the body of this Agreement shall take precedence. Unless the context otherwise requires: (a) references to sub-sections, sections, and annexes are to sub-sections, sections, and annexes of this Agreement and the words “hereof”, “herein”, and “hereunder” and words of similar import, when used in this Agreement, shall refer to this Agreement as a whole and not to any particular provision of this Agreement; (b) references to any of the parties hereto include their permitted successors and assigns and vice versa; (c) references to statutory provisions include those statutory provisions as amended or re-enacted and vice versa; (d) references to any document or agreement, including this Agreement, include references to such document or agreement as amended, supplemented, replaced, or restated from time to time in accordance with its terms and subject to compliance with any requirements set forth therein; (e) references to any gender include all genders and use of the singular includes the plural and vice versa; (f) wherever the word “include,” “includes,” or “including” is used in this Agreement, it shall be deemed to be followed by the words “without limitation”; (g) references to “Brazilian Reais”, “Reais” or “R$” mean the lawful currency of Brazil; (h) “Business Day” means any day other than a Saturday, Sunday, or a day on which banking institutions in Rio de Janeiro, Brazil are permitted or obligated by law to be closed for regular banking business; (i) references to any time periods shall be either to Business Days if so specified or, if not specified as Business Days, to calendar days; and any time period that would otherwise expire on a non-Business Day shall be deemed to expire on the next Business Day; and (j) “Person” means any individual, firm, corporation, partnership, trust, incorporated or unincorporated association, joint venture, joint stock company, limited liability company, Governmental Authority or other entity of any kind, and shall include any successor (by merger or otherwise) of such entity. For all purposes of this Agreement, any and all time periods shall be counted under Brazilian Law No. 10,406, of January 10, 2002, as amended (Brazilian Civil Code) article 132.
This Agreement is being executed in English and may, for filing purposes only, be translated into Portuguese. In the event of any conflict, the English version of this Agreement shall prevail.
5. 17 Filing and Registration
This Agreement shall be filed on the date hereof at Profarma’s, the Subsidiaries’ and BMK registered offices under and for the purposes of Brazilian Corporations Law Article 118. Profarma signs this Agreement as evidence of acknowledgement and confirmation of its filing in Profarma’s headquarters, and hereby declares to have knowledge of all its terms. Profarma further agrees to take any action on its part required to be taken under this Agreement, as well as to request Itaú Corretora de Valores S.A. as the custodian bank of Profarma’s shares to register this Agreement in its appropriate registries. BMK also agrees to register this Agreement with BMK’s share registry book. BMK Shareholders shall cause BMK to comply with its obligation under this Section 5.17.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement in three original copies, as of the day and year first above written, in the presence of the two undersigned witnesses.
Signature page 01/06 of the Amended and Restated Shareholders Agreement of Profarma Distribuidora de Produtos Farmacêuticos S.A. dated January 18th, 2018.
BPL Brazil Holding Company,
a Luxembourg société à responsabilité limitée
Signature page 02/06 of Amended and Restated Shareholders Agreement of Profarma Distribuidora de Produtos Farmacêuticos S.A. dated January 18th, 2018.
BMK PARTICIPAÇÕES S.A.
a sociedade anônima organized under the laws of Brazil
Signature page 03/06 of the Amended and Restated Shareholders Agreement of Profarma Distribuidora de Produtos Farmacêuticos S.A. dated January 18th, 2018.
PROFARMA DISTRIBUIDORA DE PRODUTOS FARMACÊUTICOS S.A.,
a sociedade anônima organized under the laws of Brazil
Signature page 04/06 of Amended and Restated Shareholders Agreement of Profarma Distribuidora de Produtos Farmacêuticos S.A. dated January 18th, 2018.
a Delaware corporation, as INTERVENING AND CONSENTING PARTY for the sole purpose of complying with certain obligations as expressly indicated in the relevant Sections of this Agreement
Signature page 05/06 of the Amended and Restated Shareholders Agreement of Profarma Distribuidora de Produtos Farmacêuticos S.A. dated January 18th, 2018.
Cacilda Delegave Birmarcker
Signature page 06/06 of the Amended and Restated Shareholders Agreement of Profarma Distribuidora de Produtos Farmacêuticos S.A. dated January 18th, 2018.