Document:

bioc-ex101_6.htm

EXHIBIT 10.1

WARRANT EXERCISE AGREEMENT

 

This Warrant Exercise Agreement (this “Agreement”), dated as of May 28, 2019, is by and between Biocept, Inc., a Delaware corporation (the “Company”), and the undersigned holder (the “Holder”) of warrants to purchase shares of the Company’s common stock, par value $0.0001 per share (the “Common Stock”).

 

WHEREAS, the Holder beneficially owns in the aggregate (i) the number of warrants to purchase Common Stock with an exercise price of $1.20 per share that are exercisable until January 30, 2023, as set forth on the Holder's signature page hereto (the “January 2018 Warrants”), (ii) the number of warrants to purchase Common Stock with an exercise price of $1.20 per share that are exercisable until February 12, 2024, as set forth on the Holder's signature page hereto (the “February 2019 Warrants”) and (iii) the number of warrants to purchase Common Stock with an exercise price of $1.25 per share that are exercisable until March 19, 2024, as set forth on the Holder's signature page hereto (the “March 2019 Warrants” and collectively with the February 2019 Warrants and the January 2018 Warrants, the "Original Warrants"). 

 

WHEREAS, the Holder desires to exercise certain of such Original Warrants in the amounts set forth on the applicable signature pages hereto and, immediately prior to such exercise and in consideration of the Holder’s exercise of such Original Warrants, the Company has agreed to issue the Holder, in addition to the shares of Common Stock to which such exercising Holder is entitled pursuant to the exercise of such Original Warrants, a number of new warrants equal to seventy-five (75%) of the number of Original Warrants being exercised in the form attached hereto as Exhibit A (the “New Warrants”).  The shares of Common Stock underlying the Original Warrants are referred to herein as the “Warrant Shares”.  The shares of Common Stock underlying the New Warrants are referred to herein as the “New Warrant Shares” and collectively with the New Warrants and Warrant Shares, the “Securities”.

 

NOW, THEREFORE, IN CONSIDERATION of the mutual covenants contained in this Agreement, and for good and valuable consideration the receipt and adequacy of which are hereby acknowledged, the Holder and the Company agree as follows:

 

ARTICLE I

DEFINITIONS

 

Section 1.1Definitions.   Capitalized terms not defined in this Agreement shall have the meanings ascribed to such terms in the New Warrants.  

 

ARTICLE II

EXERCISE OF ORIGINAL WARRANTS

 

Section 2.1Exercise of Warrants.   

 

(a)By executing this Agreement, the Company and the Holder hereby agree that the Holder shall be deemed to have exercised the number1 of Original Warrants set forth on the signature page hereto for aggregate cash proceeds to the Company in the amount set forth on the Holder’s signature page hereto, pursuant to the terms of the applicable Original Warrants.  The Holder shall deliver the aggregate cash exercise price for such Original Warrants to the bank account set forth on the Company’s signature page hereto within one Trading Day after the date hereof and promptly after receipt of such funds (but in no event later than one Trading Day after the receipt of such funds) , the Company shall deliver the Warrant 

	
	 

	
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 Equivalent to 20%, in the aggregate, of all Original Warrants currently held by the investor.

 

Shares to the Holder via the Depository Trust Company Deposit or Withdrawal at Custodian system pursuant to the terms of the Original Warrants, but pursuant to DWAC instructions set forth on the Holder’s signature page hereto. The date of the closing of the initial exercise of the Original Warrants shall be referred to as the “Closing Date.”

 

(b)For a period of forty-five (45) days after the Closing Date (as such date may be extended pursuant to the last sentence of this paragraph, the "Option Period"), while any of the Original Warrants are outstanding, the Holder may elect to exercise for cash any such number of the remaining Original Warrants then held by it by delivery of a Notice of Exercise pursuant to the terms and conditions of the applicable Original Warrants.  Notwithstanding anything to the contrary set forth herein, if at any time after the date hereof and prior to the end of the Option Period, any resale registration statement with respect to the Common Stock underlying any of the Original Warrants is not available for the resale of any such Common Stock, for each calendar day of such unavailability, the Option Period shall be extended by one calendar day.

 

Section 2.2Issuance of New Warrants. Within two Trading Days of the Closing Date, the Company shall deliver to the Holder the New Warrants to which the Holder is entitled.   The Holder shall be entitled to receive a New Warrant issuable for seventy-five percent (75%) of the number of shares of Common Stock as the Holder exercises for cash pursuant to Section 2.1(a) above.  Within two Trading Days of the exercise of any remaining Original Warrants for cash prior to end of the Option Period (the “Termination Date”) pursuant to Section 2.1(b) above, the Company shall deliver to the Holder one New Warrant issuable for seventy-five percent (75%) of the number of remaining Original Warrants exercised. The obligations under this Section 2.2 shall terminate on the Termination Date.

 

Section 2.3Legends; Restricted Securities.    

 

(a)The Holder understands that the New Warrants and the shares of Common Stock underlying New Warrants are not, and may never be, registered under the Securities Act of 1933, as amended (the “Securities Act”), or the securities laws of any state and, accordingly, each certificate, if any, representing such securities shall bear a legend substantially similar to the following:

 

“NEITHER THIS SECURITY NOR THE SECURITIES FOR WHICH THIS SECURITY IS EXERCISABLE HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS. THIS SECURITY AND THE SECURITIES ISSUABLE UPON EXERCISE OF THIS SECURITY MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT WITH A REGISTERED BROKER-DEALER OR OTHER LOAN WITH A FINANCIAL INSTITUTION THAT IS AN “ACCREDITED INVESTOR” AS DEFINED IN RULE 501(a) UNDER THE SECURITIES ACT OR OTHER LOAN SECURED BY SUCH SECURITIES.”

 

(b)Certificates evidencing shares of Common Stock underlying the New Warrants shall not contain any legend (including the legend set forth in Section 2.3(a) hereof), (i) while a registration statement covering the resale of such Common Stock is effective under the Securities Act, (ii) following any sale of such Common Stock pursuant to Rule 144, (iii) if such Common Stock is eligible for sale under 

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Rule 144 (assuming cashless exercise of the New Warrants), without the requirement for the Company to be in compliance with the current public information required under Rule 144 as to such Common Stock and without volume or manner-of-sale restrictions, (iv) if such Common Stock may be sold under Rule 144 (assuming cashless exercise of the New Warrants) and the Company is then in compliance with the current public information required under Rule 144 as to such Common Stock, or (v) if such legend is not required under applicable requirements of the Securities Act (including judicial interpretations and pronouncements issued by the staff of the Securities and Exchange Commission (the “Commission”)). The Company shall cause its counsel to issue a legal opinion to the transfer agent promptly after the Delegend Date (as defined below) if required by the Company and/or the transfer agent to effect the removal of the legend hereunder, which opinion shall be in form and substance reasonably acceptable to the Holder. If such Common Stock may be sold under Rule 144 (assuming cashless exercise of the New Warrants) without the requirement for the Company to be in compliance with the current public information required under Rule 144 or if such legend is not otherwise required under applicable requirements of the Securities Act (including judicial interpretations and pronouncements issued by the staff of the Commission), then such Common Stock shall be issued free of all legends. The Company agrees that following the Delegend Date or at such time as such legend is no longer required under this Section 2.3(b), it will, no later than two (2) Trading Days following the delivery by the Holder to the Company or the transfer agent of a certificate representing the Common Stock underlying the New Warrants issued with a restrictive legend (such second Trading Day, the “Legend Removal Date”), deliver or cause to be delivered to the Holder a certificate representing such shares that is free from all restrictive and other legends or, at the request of the Holder shall credit the account of the Holder’s prime broker with the Depository Trust Company System as directed by the Holder. The Company may not make any notation on its records or give instructions to the transfer agent that enlarge the restrictions on transfer set forth in this Section 2.3(b).   “Delegend Date” means the earliest of the date that (a) a registration statement with respect to the Common Stock has been declared effective by the Commission or (b) all of the Common Stock has been sold pursuant to Rule 144 or may be sold pursuant to Rule 144 without the requirement for the Company to be in compliance with the current public information required under Rule 144 and without volume or manner-of-sale restrictions or (c) following the six (6) month anniversary of (I) the Closing Date, if a New Warrant is exercised pursuant to a cashless exercise, or (II) the date of the related cash exercise of the New Warrants provided, in each case, that the applicable holder of the New Warrants or the Common Stock, as the case may be, is not an Affiliate of the Company, the Company is in compliance with the current public information required under Rule 144 (“Current Public Information Requirement”) and all such Common Stock may be sold pursuant to Rule 144 or an exemption from registration under Section 4(a)(1) of the Securities Act without volume or manner-of-sale restrictions; provided, further, however, that if the Company fails to comply with the Current Public Information Requirement at any time following the applicable six (6) month anniversary set forth above and the one (1) year anniversary of the Closing Date, the Company shall promptly provide notice to the Holder and the Holder undertakes not to sell such Common Stock pursuant to Rule 144 until the Company notifies the Holder that it has regained compliance with the Current Public Information Requirement; and provided further, that if a delegending is in effect solely as the result of the effectiveness of a registration statement covering the resale of any Common Stock, the Holder undertakes not to sell any such Common Stock if the Holder is notified or otherwise becomes aware that such registration statement has been withdrawn or suspended, contains a material misstatement or omission or has become stale.  The Holder agrees with the Company that the Holder will only sell or transfer any New Warrants or shares of Common Stock underlying New Warrants pursuant to either the registration requirements of the Securities Act, including any applicable prospectus delivery requirements, or an exemption therefrom, and that if such securities are sold pursuant to a registration statement, they will be sold in compliance with the plan of distribution set forth therein, and the Holder acknowledges that the removal of the restrictive legend from certificates representing any such securities as set forth in this Section 2.3 or otherwise is predicated upon the Company’s reliance upon this understanding. 

 

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Section 2.4Filing of Form 8-K. Prior to 9:00 am ET on May 29, 2019, the Company shall issue a Current Report on Form 8-K, reasonably acceptable to the Holder disclosing the material terms of the transactions contemplated hereby, which shall include this form of Agreement (the “8-K Filing”). From and after the issuance of the 8-K Filing, the Company represents to the Holder that the Holder shall not be in possession of any material, nonpublic information received from the Company, any of its Subsidiaries (as defined below) or any of their respective officers, directors, employees or agents, that is not disclosed in the 8-K Filing. In addition, effective upon the filing of the 8-K Filing, the Company acknowledges and agrees that any and all confidentiality or similar obligations under any agreement, whether written or oral, between the Company, any of its Subsidiaries or any of their respective officers, directors, employees or agents, on the one hand, and the Holder or any of its Affiliates, on the other hand, shall terminate.  The Company shall not, and shall cause each of its Subsidiaries and its and each of their respective officers, directors, employees and agents, not to, provide the Holder with any material, nonpublic information regarding the Company or any of its Subsidiaries from and after the date hereof without the express prior written consent of the Holder. To the extent that the Company, any of its Subsidiaries or any of their respective officers, directors, employees or agents, delivers any material, non-public information to the Holder without the Holder’s consent, the Company hereby covenants and agrees that the Holder shall not have any duty of confidentiality with respect to, or a duty not to trade on the basis of, such material, non-public information.  As used herein, “Subsidiary” means any subsidiary of the Company, and shall, where applicable, also include any direct or indirect subsidiary of the Company formed or acquired after the date hereof.

 

ARTICLE III

REPRESENTATIONS AND WARRANTIES

 

Section 3.1Representations and Warranties of the Company. The Company hereby makes the representations and warranties set forth below to the Holder that as of the date of its execution of this Agreement:

 

(a)Authorization; Enforcement. The Company has the requisite corporate power and authority to enter into and to consummate the transactions contemplated by this Agreement and otherwise to carry out its obligations hereunder and thereunder. The execution and delivery of this Agreement by the Company and the consummation by it of the transactions contemplated hereby have been duly authorized by all necessary action on the part of such Company and no further action is required by such Company, its board of directors or its stockholders in connection therewith other than in connection with (i) the filings required pursuant to Section 2.4 of this Agreement, (ii) such applications for listing of the New Warrant Shares that are required to be filed with the Nasdaq Stock Market in the time and manner required thereby, and (iii) such filings as are required to be made under applicable state securities laws (the “Required Approvals”). This Agreement has been duly executed by the Company and, when delivered in accordance with the terms hereof will constitute the valid and binding obligation of the Company enforceable against the Company in accordance with its terms except (i) as limited by general equitable principles and applicable bankruptcy, insolvency, reorganization, moratorium and other laws of general application affecting enforcement of creditors’ rights generally, (ii) as limited by laws relating to the availability of specific performance, injunctive relief or other equitable remedies and (iii) insofar as indemnification and contribution provisions may be limited by applicable law.

 

(b)Organization. The Company is a duly organized and validly existing corporation in good standing under the laws of the State of Delaware.

 

(c)Registration Statement. The Warrant Shares are registered for issuance on certain Form S-1 Registration Statements (as applicable, File No. 333-221648, File No. 333-222706, File No. 333-228566, and File No. 333-230797 ) (collectively, the “Registration Statements”) and the Company knows 

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of no reasons why such Registration Statements shall not remain available for the issuance of such Warrant Shares for the foreseeable future. The Company shall use commercially reasonable efforts to keep the Registration Statements effective and available for the issuance of the Warrant Shares underlying the Original Warrants until all Original Warrants are exercised.

 

(d)No Conflicts. The execution, delivery and performance of this Agreement by the Company and the consummation by the Company of the transactions contemplated hereby do not and will not: (i) conflict with or violate any provision of the Company’s certificate or articles of incorporation, bylaws or other organizational or charter documents, or (ii) conflict with, or constitute a default (or an event that with notice or lapse of time or both would become a default) under, result in the creation of any lien upon any of the properties or assets of the Company, or give to others any rights of termination, amendment, acceleration or cancellation (with or without notice, lapse of time or both) of, any material agreement, credit facility, debt or other material instrument (evidencing Company debt or otherwise) or other material understanding to which the Company is a party or by which any property or asset of the Company is bound or affected, or (iii) subject to the Required Approvals, conflict with or result in a violation of any law, rule, regulation, order, judgment, injunction, decree or other restriction of any court or governmental authority to which the Company is subject (including federal and state securities laws and regulations), or by which any property or asset of the Company is bound or affected, except in the case of each of clauses (ii) and (iii), such as would not have or reasonably be expected to result in (i) a material adverse effect on the legality, validity or enforceability of this Agreement, (ii) a material adverse effect on the results of operations, assets, business or condition (financial or otherwise) of the Company and its subsidiaries, taken as a whole, or (iii) a material adverse effect on the Company's ability to perform in any material respect on a timely basis its obligations under this Agreement (any of (i), (ii) or (iii), a “Material Adverse Effect”).

 

(e)Disclosure. Except with respect to the material terms and conditions of the transactions contemplated by this Agreement, the Company confirms that neither it nor any other Person acting on its behalf has provided any of Holder or their agents or counsel with any information that it believes constitutes or might constitute material, non-public information. The Company understands and confirms that the Holder will rely on the foregoing representation in effecting transactions in securities of the Company. As of the date of this Agreement, all of the disclosure when furnished by or on behalf of the Company to the Holder regarding the Company and its Subsidiaries, their respective businesses and the transactions contemplated hereby, including but not limited to the disclosure set forth in the SEC Reports, is true and correct in all material respects and does not contain any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements made therein, in light of the circumstances under which they were made, not misleading. As used herein, “SEC Reports” means all reports, schedules, forms, statements and other documents required to be filed by the Company as of the date of this Agreement with the Commission pursuant to the reporting requirements of the 1934 Act, including all exhibits included therein and financial statements, notes and schedules thereto and documents incorporated by reference therein.

 

(f)Issuance of Securities.  The issuance of the New Warrants are duly authorized and, upon issuance in accordance with the terms of this Agreement, the New Warrants shall be validly issued and free from all preemptive or similar rights (except for those which have been validly waived prior to the date hereof), taxes, liens and charges and other encumbrances with respect to the issue thereof, other than restrictions on transfer under applicable state and federal securities laws and liens or encumbrances created by or imposed by the Holder.  As of the Closing Date, a number of shares of Common Stock shall have been duly authorized and reserved for issuance which equals or exceeds the maximum number of Warrant Shares issuable upon exercise of the New Warrants (without taking into account any limitations on the exercise of the New Warrants set forth therein).  Upon exercise of the New Warrants in accordance with the New Warrants, the New Warrant Shares when issued will be validly issued, fully paid and nonassessable and free from all preemptive or similar rights, taxes, liens, charges and other encumbrances with respect to 

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the issue thereof, other than restrictions on transfer under applicable state and federal securities laws and liens or encumbrances created by or imposed by the Holder, with the holders being entitled to all rights accorded to a holder of Common Stock.  Assuming the accuracy of each of the representations and warranties set forth in Section 3.2 of this Agreement, the offer and issuance by the Company of the New Warrants is exempt from registration under the 1933 Act.

 

(g)No General Solicitation.  Neither the Company, nor any of its Subsidiaries or Affiliates, nor any Person acting on its or their behalf, has engaged in any form of general solicitation or general advertising (within the meaning of Regulation D) in connection with the offer or sale of the New Warrants.

 

(h)No Integrated Offering.  None of the Company, its Subsidiaries or any of their Affiliates, nor any Person acting on their behalf has, directly or indirectly, made any offers or sales of any security or solicited any offers to buy any security, under circumstances that would require registration of the issuance of any of the New Warrants or the New Warrant Shares (collectively, the “New Securities”) under the Securities Act, whether through integration with prior offerings or otherwise, or cause this offering of the New Securities to require approval of shareholders of the Company for purposes of the Securities Act or any applicable shareholder approval provisions, including, without limitation, under the rules and regulations of the Nasdaq Stock Market.  None of the Company, its Subsidiaries, their Affiliates nor any Person acting on their behalf will take any action or steps that would require registration of the issuance of any of the New Securities under the Securities Act or cause the offering of any of the New Securities to be integrated with other offerings for purposes of any such applicable shareholder approval provisions.

 

(i)No Disqualification Events.  With respect to Securities to be offered and sold hereunder in reliance on Rule 506(b) under the Securities Act  (“Regulation D Securities”), none of the Company, any of its predecessors, any affiliated issuer, any director, executive officer, other officer of the Company participating in the offering hereunder, any beneficial owner of 20% or more of the Company's outstanding voting equity securities, calculated on the basis of voting power, nor any promoter (as that term is defined in Rule 405 under the Securities Act) connected with the Company in any capacity at the time of sale (each, an “Issuer Covered Person” and, together, “Issuer Covered Persons”) is subject to any of the “Bad Actor” disqualifications described in Rule 506(d)(1)(i) to (viii) under the Securities Act (a “Disqualification Event”), except for a Disqualification Event covered by Rule 506(d)(2) or (d)(3). The Company has exercised reasonable care to determine whether any Issuer Covered Person is subject to a Disqualification Event.  The Company has complied, to the extent applicable, with its disclosure obligations under Rule 506(e), and has furnished to the Holder a copy of any disclosures provided thereunder.

 

Section 3.2Representations and Warranties of the Holder. The Holder hereby makes the representations and warranties set forth below to the Company that as of the date of its execution of this Agreement. 

 

(a)Organization; Due Authorization.  The Holder is either an individual or an entity duly incorporated or formed, validly existing and in good standing under the laws of the jurisdiction of its incorporation or formation with full right, corporate, partnership, limited liability company or similar power and authority to enter into and to consummate the transactions contemplated by this Agreement and otherwise to carry out its obligations hereunder. The Holder represents and warrants that (i) the execution and delivery of this Agreement by it and the consummation by it of the transactions contemplated hereby have been duly authorized by all necessary action on its behalf and (ii) this Agreement has been duly executed and delivered by the Holder and constitutes the valid and binding obligation of the Holder, enforceable against it in accordance with its terms.

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(b)Understandings or Arrangements. The Holder is acquiring the Securities as principal for its own account and has no direct or indirect arrangement or understandings with any other persons to distribute or regarding the distribution of such Securities (this representation and warranty not limiting the Holder’s right to sell the Securities pursuant to a registration statement or otherwise in compliance with applicable federal and state securities laws). The Holder is acquiring the Securities hereunder in the ordinary course of its business.

 

(c)No Conflicts.  The Holder represents and warrants that the execution, delivery and performance of this Agreement by the Holder and the consummation by the Holder of the transactions contemplated hereby do not and will not: (i) conflict with or violate any provision of the Holder’s organizational or charter documents, or (ii) conflict with or result in a violation of any agreement, law, rule, regulation, order, judgment, injunction, decree or other restriction of any court or governmental authority which would interfere with the ability of the Holder to perform its obligations under this Agreement.

 

(d)Access to Information.  The Holder acknowledges that it has had the opportunity to review this Agreement and the SEC Reports and has been afforded (i) the opportunity to ask such questions as it has deemed necessary of, and to receive answers from, representatives of the Company concerning the terms and conditions of the exercise of the Original Warrants and the merits and risks of investing in the Warrant Shares, the terms and conditions of the offering of the Securities and the merits and risks of investing in the Securities; (ii) access to information about the Company and its financial condition, results of operations, business, properties, management and prospects sufficient to enable it to evaluate its investment; and (iii) the opportunity to obtain such additional information that the Company possesses or can acquire without unreasonable effort or expense that is necessary to make an informed investment decision with respect to the investment. The Holder acknowledges and agrees that neither Maxim Group LLC (the “Advisor”) nor any Affiliate of the Advisor has provided the Holder with any information or advice with respect to the Securities nor is such information or advice necessary or desired. Neither the Advisor nor any Affiliate has made or makes any representation as to the Company or the quality of the securities issued and issuable hereunder and the Advisor and any Affiliate may have acquired non-public information with respect to the Company which the Holder agrees need not be provided to it. In connection with the issuance of the securities hereunder to the Holder, neither the Advisor nor any of its Affiliates has acted as a financial advisor or fiduciary to the Holder.

 

(e)Holder Status.  The Holder represents and warrants that at the time the Holder was offered the Securities, it was, and as of the date hereof it is, and on each date on which it exercises any New Warrants, it was or will be an “accredited investor” as defined in Rule 501 under the Securities Act.

 

(f)Knowledge.  The Holder, either alone or together with its representatives, has such knowledge, sophistication and experience in business and financial matters so as to be capable of evaluating the merits and risks of the prospective investment in the Warrant Shares, and has so evaluated the merits and risks of such investment. The Holder is able to bear the economic risk of an investment in the Warrant Shares and, at the present time, is able to afford a complete loss of such investment.

 

ARTICLE IV

MISCELLANEOUS

 

Section 4.1Subsequent Equity Sales.

 

(a)From the date hereof until the tenth calendar day following the end of the Option Period (the “Restricted Period”), neither the Company nor any Subsidiary shall issue, enter into any agreement to issue or announce the issuance or proposed issuance of any shares of Common Stock or 

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Common Stock Equivalents.  As used herein, “Common Stock Equivalents” means any securities of the Company or the Subsidiaries which would entitle the holder thereof to acquire at any time Common Stock, including, without limitation, any debt, preferred stock, right, option, warrant or other instrument that is at any time convertible into or exercisable or exchangeable for, or otherwise entitles the holder thereof to receive, Common Stock.  In addition, from the date hereof until the end of the Restricted Period, the Company shall not, directly or indirectly, file any registration statement with the Securities and Exchange Commission (“SEC”), or file any amendment or supplement thereto or cause any registration statement or amendment thereto to be declared effective by the SEC, or grant any registration rights to any Person that can be exercised prior to such time as set forth above; provided however, that the foregoing shall not prevent the Company from filing during the Restricted Period a registration statement on Form S-8.

 

(b)Notwithstanding the foregoing, this Section 4.1 shall not apply in respect of an Exempt Issuance.  “Exempt Issuance” means the issuance of (a) shares of Common Stock or options to employees, officers or directors of the Company pursuant to any stock or option plan duly adopted for such purpose, by a majority of the non-employee members of the Board of Directors or a majority of the members of a committee of non-employee directors established for such purpose for services rendered to the Company, (b) securities upon the exercise or exchange of or conversion of any Securities issued hereunder and/or other securities exercisable or exchangeable for or convertible into shares of Common Stock issued and outstanding on the date of this Agreement, provided that such securities have not been amended since the date of this Agreement to increase the number of such securities or to decrease the exercise price, exchange price or conversion price of such securities (other than in connection with stock splits or combinations) or to extend the term of such securities, and (c) securities issued pursuant to acquisitions or strategic transactions approved by a majority of the disinterested directors of the Company, provided that any such issuance shall only be to a Person (or to the equity holders of a Person) which is, itself or through its subsidiaries, an operating company or an owner of an asset in a business synergistic with the business of the Company and shall provide to the Company additional benefits in addition to the investment of funds, but shall not include a transaction in which the Company is issuing securities primarily for the purpose of raising capital or to an entity whose primary business is investing in securities; provided, that such securities are issued as “restricted securities” (as defined in Rule 144) and the recipients of such securities are not granted registration rights that enable or require the filing of a resale registration statement until after the time period specified in the first sentence of Section 4.1(a) above.

 

Section 4.2Public Information.  At any time commencing on the six (6) month anniversary of the date hereof and ending when no New Warrants remain outstanding, if there is no effective registration statement covering the resale of the New Warrant Shares and the Company (i) shall fail for any reason to satisfy the current public information requirement under Rule 144(c) or (ii) the Company shall fail to satisfy any condition set forth in Rule 144(i)(2) (a “Public Information Failure”), then, in addition to such Holder’s other available remedies, the Company shall pay to a Holder, in cash, as partial liquidated damages and not as a penalty, by reason of any such delay in or reduction of its ability to sell the New Warrant Shares, an amount in cash equal to two percent (2.0%) of the product of (i) the maximum number of New Warrant Shares issuable upon a cash exercise of the New Warrants and (ii) the last Closing Sale Price less the Exercise Price of the New Warrants immediately prior to the time of the initial Public Information Failure and on every thirtieth (30th) day (pro-rated for periods totaling less than thirty (30) days) thereafter until the earlier of (a) the date such Public Information Failure is cured and (b) such time that such public information is no longer required for the Holders to transfer the New Warrant Shares pursuant to Rule 144.  The payments to which a Purchaser shall be entitled pursuant to this Section 4.2 are referred to herein as “Public Information Failure Payments.”  Public Information Failure Payments shall be paid on the earlier of (i) the last day of the calendar month during which such Public Information Failure Payments are incurred and (ii) the third (3rd) Trading Day after the event or failure giving rise to the Public Information Failure Payments is cured.  In the event the Company fails to make Public Information Failure Payments in a timely manner, such Public Information Failure Payments shall bear interest at the rate of 1.5% per month (pro-

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rated for partial months) until paid in full. Nothing herein shall limit such Holder’s right to pursue actual damages for the Public Information Failure, and such Holder shall have the right to pursue all remedies available to it at law or in equity including, without limitation, a decree of specific performance and/or injunctive relief.

 

Section 4.3Resale Registration Statement. The Company reserves the right at any time to file and cause to become effective a registration statement covering the resale of the New Warrant Shares.  Holder hereby covenants and agrees to promptly provide the Company with any material information that is reasonably required to be provided in such registration statement with respect to such Holder, including the completion, execution, acknowledgement and delivery of customary selling stockholder questionnaires and other documents, certificates, instruments, representations and warranties and indemnities as may be reasonably requested by the Company in connection with the filing of such registration statement, including, without limitation, representations and warranties (or indemnities with respect thereto) in connection with (i) Holder’s ownership of New Warrant Shares to be transferred free and clear of all liens, claims and encumbrances, (ii) Holder’s power and authority to effect such transfer, and (iii) such matters pertaining to compliance with applicable law by Holder. The Company may require Holder, by written notice given to Holder not less than seven (7) Trading Days prior to the filing date of a registration statement, to promptly, and in any event within five (5) Trading Days after receipt of such notice, furnish in writing to the Company such information regarding the distribution of the New Warrant Shares as the Company may from time to time reasonably request and such other information as may be legally required in connection with such registration.  Notwithstanding anything to the contrary contained herein, (i) the provisions of this Section 4.3 shall not be applicable to the extent that the Holder is required to be named as an underwriter in any resale registration statement, and (ii) any indemnities required to be provided in this Section 4.3 by the Holder shall apply solely with respect to written information provided by the Holder specifically for use in such registration statement, and such indemnities shall be limited to net proceeds received by such Holder with respect to sales of New Warrant Shares.

 

Section 4.4Notices. Any and all notices or other communications or deliveries required or permitted to be provided hereunder shall be made by email to (i) the email address of the Holder set forth on Holders’ signature page or (ii) the email address of the Company set forth on the Company's signature page, as applicable.

 

Section 4.5Survival. All warranties and representations (as of the date such warranties and representations were made) made herein or in any certificate or other instrument delivered by it or on its behalf under this Agreement shall be considered to have been relied upon by the parties hereto and shall survive the issuance of the New Warrants. This Agreement shall inure to the benefit of and be binding upon the successors and permitted assigns of each of the parties; provided however that no party may assign this Agreement or the obligations and rights of such party hereunder without the prior written consent of the other parties hereto.

 

Section 4.6Execution. This Agreement may be executed in two or more counterparts, all of which when taken together shall be considered one and the same agreement and shall become effective when counterparts have been signed by each party and delivered to the other party, it being understood that both parties need not sign the same counterpart. In the event that any signature is delivered by facsimile transmission, such signature shall create a valid and binding obligation of the party executing (or on whose behalf such signature is executed) with the same force and effect as if such facsimile signature page were an original thereof.

 

Section 4.7 Severability. If any provision of this Agreement is held to be invalid or unenforceable in any respect, the validity and enforceability of the remaining terms and provisions of this Agreement shall not in any way be affected or impaired thereby and the parties will attempt to agree upon a valid and 

9

enforceable provision that is a reasonable substitute therefor, and upon so agreeing, shall incorporate such substitute provision in this Agreement.

 

Section 4.8Governing Law. All questions concerning the construction, validity, enforcement and interpretation of this Agreement shall be determined pursuant to the Governing Law provision of the New Warrants.  

 

Section 4.9Entire Agreement. The Agreement, together with the exhibits and schedules thereto, contain the entire understanding of the parties with respect to the subject matter hereof and supersede all prior agreements and understandings, oral or written, with respect to such matters, which the parties acknowledge have been merged into such documents, exhibits and schedules.

 

Section 4.10Construction. The headings herein are for convenience only, do not constitute a part of this Agreement and shall not be deemed to limit or affect any of the provisions hereof. The language used in this Agreement will be deemed to be the language chosen by the parties to express their mutual intent, and no rules of strict construction will be applied against any party.

 

Section 4.11Fees and Expenses. Except as expressly set forth herein, each party shall pay the fees and expenses of its advisers, counsel, accountants and other experts, if any, and all other expenses incurred by such party incident to the negotiation, preparation, execution, delivery and performance of this Agreement. The Company shall pay all transfer agent fees, stamp taxes and other taxes and duties levied in connection with the delivery of any Warrant Shares.

 

Section 4.12Equal Treatment of New Warrant Holders. No consideration (including any modification of this Agreement or the New Warrants) shall be offered or paid to any holder of New Warrants to amend or consent to a waiver or modification of any provision of this Agreement or the New Warrants unless the same consideration is also offered to all of the holders of the New Warrants. For clarification purposes, this provision constitutes a separate right granted to each holder of New Warrants by the Company and negotiated separately by each holder of the New Warrants, and is intended for the Company to treat the holders of New Warrants as a class and shall not in any way be construed as the holders of New Warrants acting in concert or as a group with respect to the purchase, disposition or voting of Securities or otherwise.

 

 

 

[Signature page follows]

10

IN WITNESS WHEREOF, the undersigned have executed this Warrant Exercise Agreement as of the date first written above.

 

COMPANY:

 

BIOCEPT, INC.

 

 

By:  _______________________________

Name:   ____________________________

Title:  ______________________________

 

Address:

 

[                             ]

[                             ]

Attention: [                           ]

Email: [                               ]

 

 

Bank Account and Wire Instructions

 

 

 

 

 

 

 

 

 

[HOLDER SIGNATURE PAGES TO BIOCEPT, INC. 

WARRANT EXERCISE AGREEMENT]

 

IN WITNESS WHEREOF, the undersigned have caused this Agreement to be duly executed by their respective authorized signatories as of the date first indicated above.

 

 

		
	
Name of Holder:
	
_________________________________________

	
 

 

Signature of Authorized Signatory of Holder:
	
_________________________________________

	
 

 

Name of Authorized Signatory:
	
_________________________________________

	
 

 

Title of Authorized Signatory:
	
_________________________________________

	
 

 

Email Address of Holder:
	
_________________________________________

	
 

Number of January 2018 Warrants held:
	
_________________________________________

	
 

Number of February 2019 Warrants held:
	
_________________________________________

	
 

Number of March 2019 Warrants held:
	
_________________________________________

	
 

Number of January 2018 Warrants deemed Exercised:
	
_________________________________________

	
 

Number of February 2019 Warrants deemed Exercised:
	
_________________________________________

	
 

Number of March 2019 Warrants deemed Exercised:
	
_________________________________________

	
 

Number of New Warrants to be issued to Holder upon deemed exercise:
	
_________________________________________

	
 

 

Address for Delivery of New Warrants for Holder:
	
_________________________________________Exhibit 10.1

 

SHAREHOLDERS AGREEMENT OF LINX S.A.

 

AMONG

 

NÉRCIO JOSÉ MONTEIRO FERNANDES,

 

ALBERTO MENACHE,

 

ALON DAYAN,

 

DANIEL MAYO,

 

AND

 

DENNIS HERSZKOWICZ,

 

AS PARTIES

 

AND

 

LINX S.A.

 

AS INTERVENING CONSENTING PARTY

 

 

JULY 30, 2014

 

 

 

SHAREHOLDERS AGREEMENT OF LINX S.A

 

This Shareholders Agreement (the “Agreement”) is entered into on July 30, 2014 by and among:

 

(a)                                 NÉRCIO JOSÉ MONTEIRO FERNANDES, Brazilian citizen, married, holder of [identity card] RG No. 7.760.014 SSP/SP, enrolled with the Individual Taxpayers Register of the Ministry of Finance (CPF/MF) under No. 022.256.918-27, with business address in the City of São Paulo, State of São Paulo, Brazil, at Rua Cenno Sbrighi No. 170, 9th floor, District of Água Branca, postal code (CEP) 05036-010 (“Nércio”);

 

(b)                                 ALBERTO MENACHE, Brazilian citizen, married, holder of RG No. 24.257.036-7 SSP/SP, enrolled with the CPF/MF under No. 172.636.238-89, with business address in the City of São Paulo, State of São Paulo, Brazil, at Rua Cenno Sbrighi, No. 170, 9th floor, District of Água Branca, CEP 05036-010 (“Alberto”);

 

(c)                                  ALON DAYAN, Brazilian citizen, married, holder of RG No. 8.894.140-1 SSP/SP, enrolled with the CPF/MF under No. 014.642.468-90, with business address in the City of São Paulo, State of São Paulo, Brazil, at Rua Cenno Sbrighi No. 170, 9th floor, District of Água Branca, CEP 05036-010 (“Alon”);

 

(d)                                 DANIEL MAYO, Brazilian citizen, married, holder of RG No. 19.201.330-0 SSP/SP, enrolled with the CPF/MF under No. 157.679.338-98, with business address in the City of São Paulo, State of São Paulo, Brazil, at Rua Cenno Sbrighi No. 170, 9th floor, District of Água Branca, CEP 05036-010 (“Daniel”); e

 

(e)                                  DENNIS HERSZKOWICZ, Brazilian citizen, married, holder of RG No. 20.310.061, enrolled with the CPF/MF under No. 165.783.068-38, with business address in the City of São Paulo, State of São Paulo, Brazil, at Rua Cenno Sbrighi No. 170, 9th floor, District of Água Branca, CEP 05036-010 (“Dennis”);

 

(Nércio, Alberto, Alon, Daniel and Dennis are hereinafter collectively referred to as the “Shareholders”, and each, individually, as a “Shareholder”),

 

And, further, as Intervening Consenting Party:

 

(f)                                   LINX S.A., a corporation organized and existing under the laws of Brazil, having its principal place of business at Rua Cenno Sbrighi No. 170, 9th floor, District of Água Branca, CEP 05036-010, in the City of São Paulo, State of São Paulo, Brazil, enrolled with the National Corporate Taxpayers Register (CNPJ) under No. 06.948.969/0001-75, represented herein by its undersigned legal representatives (“Linx” or the “Company”);

 

WHEREAS:

 

(1)                                 on December 3, 2012, the Shareholders, among other agreements signed with third parties, entered into a Company shareholders agreement to govern their relationships as shareholders holding common shares issued by the Company following the consummation of the Company’s process of going

 

 

public (the “2012 Shareholders Agreement”, a copy of which is attached hereto as Exhibit I);

 

(2)                                 in view of the Company’s current corporate structure, the Shareholders wish to have this Agreement govern certain aspects of their relationships as shareholders holding common shares issued by the Company, setting forth mutual rights and obligations with respect to certain matters, as provided for in article 118 of Law No. 6.404, of December 15, 1976 (the “Corporation Law”, as amended); and

 

(3)                                 by signing this instrument, the Shareholders expressly wish to terminate, without any formalities, the 2012 Shareholders Agreement and replace it with this Agreement for all legal purposes;

 

NOW, THEREFORE, they resolved to enter into this Agreement, which shall be governed by the following provisions:

 

SECTION I

PURPOSE, EQUITY INTEREST, AND BOUND SHARES

 

1.1.                            The purpose of this Agreement is to govern certain aspects of the Shareholders’ relationships in their capacity as holders of common shares issued by the Company, setting forth mutual rights and obligations with respect to certain matters, as provided for in article 118 of the Corporation Law.

 

1.2.                            The Company’s capital stock, as subscribed for and paid in, amounts to three hundred and forty-six million eight hundred and sixty-three thousand six hundred and eighty-eight Reais and thirty-three cents (R$346,863,688.33), fully subscribed for and paid in, divided into forty-six million five hundred and seventy-six thousand four hundred and ninety-four (46,576,494) registered book-entry common shares, with no par value. The Shareholders collectively hold fourteen million seven hundred and twenty-seven thousand five hundred (14,727,500) common shares issued by the Company, and the number of shares in the Company held by each of the Shareholders is as follows:

 

	
Shareholder
    	
 
    	
No. of Common
   Shares
    	
 
    	
% of the Company’s
   Total Capital Stock
    	
 
    	
% of the Relating
   Capital Stock
    	
 
    
	
Nércio
    	
 
    	
5,504,048
    	
 
    	
11.82
    	
%
    	
37.37
    	
%
    
	
Alberto
    	
 
    	
4,558,208
    	
 
    	
9.80
    	
%
    	
30.95
    	
%
    
	
Alon
    	
 
    	
4,004,976
    	
 
    	
8.60
    	
%
    	
27.19
    	
%
    
	
Daniel
    	
 
    	
388,156
    	
 
    	
0.83
    	
 
    	
2.64
    	
%
    
	
Dennis
    	
 
    	
272,112
    	
 
    	
0.58
    	
 
    	
1.85
    	
%
    
	
TOTAL
    	
 
    	
14,727,500
    	
 
    	
31.63
    	
%
    	
100
    	
%
    

 

1.2.1.                  For the purposes of this Agreement, “Relating Capital Stock” means the total shares held by each Shareholder relating to the total shares only collectively held by the Shareholders, taken as a whole (excluding all other shareholders in the Company).

 

1.3.                            All shares issued by the Company and owned by the Shareholders are bound by this Agreement, as will any such shares as may be added thereto in the future for any reasons (“Shares”), such as purchase, subscription, conversion of debentures, split or bonus distributions, donation, inheritance, loan, beneficial ownership or right to subscribe for said Shares, and any securities ensuring such right or convertible into Shares, which are deemed to rank pari passu with the Shares for the purposes of this Agreement, shall

 

 

compulsorily form an integral part of, and shall automatically and unrestrainedly be covered by and subject to the terms and conditions of this Agreement.

 

1.3.1.                  Any other shares issued by the Company as are not owned by the Shareholders are not bound by this Agreement, which shares, however, together with the Shares, are the subject of the Company’s shareholders agreement entered into by the Shareholders with Messrs. Aparecido Elias Raposo, Marcos Akira Takata, Flávio Mambreu Menezes, Dario de Sena Gouvêa and Jean Carlo Klaumann on December 3, 2012 with a view to governing their relationship as the Company’s controlling block of shareholders (the “Controlling Block Shareholders Agreement”).

 

1.4.                            Subject to the provisions of this Agreement, none of the Shareholders may, directly or indirectly, through an intermediary or otherwise, hold any Shares as owned thereby, including through any legal entities controlling them or controlled thereby, without the other Shareholders being previously notified in writing and without such persons compulsorily becoming parties to this Agreement.

 

1.5.                            Each Shareholder hereby expressly represents that: (i) he is the current lawful holder of his/her respective Shares, in the proportion set out in Section 1.2 above; (ii) the Shares held thereby have been fully subscribed for and paid in; (iii) he has powers to enter into and comply with the provisions of this Agreement; (iv) the conclusion of this Agreement does not breach any commitments, agreements or obligations to which he is a party; and (v) all of his/her respective Shares are fully free and clear of any charges, debts, encumbrances, liens, pledges, collaterals, fiduciary assignment, guarantees, limitations on full and free use, enjoyment or fruition of any right (or any attributes inherent in or related to any right), as a result of any law, contract or claims of any nature, including by any grant of beneficial ownership, options, rents or rights of first refusal (“Encumbrances”, including any variations of the term), except as provided in the Controlling Block Shareholders Agreement.

 

SECTION II

PRIVATE SALE OF COMPANY SHARES

 

(A)                      Private Transfer of Shares

 

2.1.                  Subject to the provisions of Sections 2.2 through 2.13 below, any private transfer of Shares owned by any of the Shareholders shall require previous notice to be sent to the other Shareholders, who shall have a right of first refusal, in equal conditions to those offered by any third parties, to purchase such Shares.

 

2.1.1.                            For the sake of clarification, any transfers made in a stock exchange environment are free, subject to the terms of Section V of this Agreement.

 

2.2.                  Any Shareholder willing to assign, transfer, allocate to the capital of another company or promise to sell any or all of his/her Shares privately (i.e., outside a stock exchange), or any of the rights therein (a “Selling Shareholder”), to third parties shall give written notice of his/her intent to the other Shareholders (“Sale Proposal”), together with a copy of the proposal offered by the interested third party, which shall be irrevocable and irreversible and shall compulsorily stipulate:

 

(a)             the number of Shares, or his/her respective rights therein, to be sold (“Offered Shares”);

 

 

(b)             the price and payment terms; and

 

(c)              the purchasing third party’s irrevocable and irreversible commitment to, at the request of any of the Shareholders, be fully bound by the rules and conditions set forth in this Agreement kept on file at the Company’s principal place of business, irrespective of the number and type of Shares subject to the offer.

 

2.3.                  Any transfer of Shares owned by the Shareholders to third parties in a private transaction (i.e. out of a stock exchange environment) shall at all times be made in conjunction with the assignment of the same percentage of their credit rights and any other rights and/or obligations to the Company, and no Shares are allowed to be sold without the corresponding transfer of said rights and/or obligations, and vice versa. Therefore, any purchase and/or sale of Shares, as referred to in this Section, shall also cover the purchase and/or sale of the relevant credit rights and any other rights and/or obligations, but the Selling Shareholder will remain jointly liable with the purchasing third party for the obligations incurred and still pending before the Company and/or the other Shareholders.

 

2.4.                  The other Shareholders having received the Sale Proposal shall have a period of up to ten (10) days of their receipt of such Sale Proposal to reply, on an irrevocable and irreversible basis, by written notice sent to the Selling Shareholder (“Notice of Reply”), that they will either:

 

(a)             exercise their right of first refusal and purchase all of the Offered Shares for the price and on the terms set forth in the Sale Proposal; or

 

(b)             waive their right of first refusal to purchase the Offered Shares and tacitly agree that the Selling Shareholder may sell the Offered Shares to the interested third party, it being understood that the failure to send the Notice of Reply with the aforementioned period of up to ten (10) days will be deemed a tacit, irrevocable and irreversible waiver by the relevant Shareholder of his right of first refusal.

 

2.5.                  Upon exercise of the right of first refusal set forth in item (a) of Section 2.4 above:

 

(a)             the sale of the Offered Shares shall be made in favor of the Shareholder(s) having signified his/their willingness to purchase them within ten (10) days of the Selling Shareholder’s receipt of the Notice(s) of Reply or within such shorter period as may be set forth in the proposal submitted by the interested third party, upon payment by the purchasing Shareholder(s) of the price stipulated in the Sale Proposal; or

 

(b)             the transfer of the relevant subscription and payment rights in favor of the Shareholder(s) having signified willingness shall be made within the relevant period set forth in the Bylaws or by the Company’s shareholders’ meeting, as the case may be, and notified in writing to the Company through the person of the Chairman of the Executive Board.

 

2.6.                  If the right of first refusal set forth in Section 2.4 above is waived or not exercised within the periods set forth in Section II, then, subject to the provisions of the Shareholders Agreement, the Selling Shareholder shall be released to proceed with the private sale:

 

 

(a)             of the Offered Shares to the willing third party, on the exact terms and conditions of the Sale Proposal, within the thirty (30) days next following: (i) the receipt of the Notice of Reply; or (ii) the expiration of the relevant timetable for sending the Notice of Reply;

 

(b)             the relevant subscription or payment rights, on the exact terms and conditions of the Sale Proposal, within the relevant period set forth in the Bylaws or by the Company’s shareholders’ meeting, as the case may be, and notified in writing to the Company through the person of the Chairman of the Executive Board.

 

2.7.                  The provisions of Sections 2.1 through 2.6 above shall not apply to the shareholders Daniel and Dennis. For the sake of clarification, Daniel and Dennis shall not have a right of first refusal to purchase Shares subject to any private transfers by the other Shareholders, nor shall the other Shareholders have a right of first refusal to purchase Shares subject to any private transfers by Daniel and/or Dennis.

 

2.8.                  The Shareholders hereby agree that no private assignment or transfer of Shares may be made if any of the terms and conditions of Sections 2.1 through 2.7 above are not met.

 

(B)                      Encumbrance of Shares

 

2.14.           Any Shares owned by the Shareholders may be freely encumbered, requiring no previous, express consent from the other Shareholders, provided that all (and no less than all) of the following requirements are met:

 

(a)    As a condition on the placing of any such Encumbrance, any Shareholder willing to encumber his/her Shares shall notify the other Shareholders of his/her intent at least two (2) days prior to the closing date of the transaction, which notice shall contain: (i) a reasonable description of the relevant transaction; and (ii) the name(s) and address(es) of the willing third party(ies) involved in the transaction.

 

(b)    Irrespective of any Encumbrance, on the date of any of the Company’s shareholders’ meetings, the Shareholders shall directly hold one hundred percent (100%) of the political rights corresponding to the Shares in their entirety, and shall exercise said political right by casting their free votes, in strict compliance with the provisions of Section III below.

 

(c)     For the duration of this Agreement, no Shareholder shall have Encumbrances on more than 50% of his/her Relating Capital Stock, under penalty of nullity before the Company, the Shareholders and any third parties.

 

SECTION III

EXERCISE OF VOTING RIGHTS AT COMPANY SHAREHOLDERS’ MEETINGS

 

3.1.                            The Shareholders shall exercise their voting right at the Company’s shareholders’ meetings (proportionally to their interests in the Company’s voting capital) and cause their representatives on the board of directors or any other governing body of the Company to exercise the voting rights exclusively in the Company’s best interests, subject to the provisions of this Agreement and the Controlling Block

 

 

Shareholders Agreement.

 

3.2.                            The Shareholders shall resolve, at prior meetings among themselves, on the matters to be on the agenda for any shareholders’ meeting or otherwise any meeting of any of the Company’s governing bodies. Such prior meetings shall be held at least thirty (30) minutes before they state their will at the relevant shareholders’ meeting or meeting of any of the Company’s governing bodies. The decisions of a majority of the Shareholders at the prior meetings shall be binding upon all Shareholders, who shall exercise their respective voting rights at the Company’s shareholders’ meetings according to the decision of such majority of the Shareholders at the relevant prior meetings.

 

3.3.                            For all purposes of the Shareholders’ Agreements, the Shareholders shall, in any event, state their will in unison and through no more than two representatives, namely, Nércio and Alberto (“Representatives”). Accordingly, all decisions made by the Shareholders under this Agreement shall be stated by the Representatives to any third parties and shareholders and the Company.

 

SECTION IV

ADMISSION OF SPOUSES AND/OR HEIRS-DESCENDANTS

 

4.1.                           It is hereby agreed that in the event of death, disability or legal incapacity of any individual Shareholder, his/her spouse, as well as his/her respective heirs-descendants, successors and trustees (“Successors”) shall fully submit to the terms and conditions of this Agreement concerning the exercise of any rights attaching to the Shares, as well as all other Shareholders Agreements if, on a cumulative basis, (a) a majority of the remaining Shareholders state their willingness to agree to the adherence of Successors to this Agreement and (b) each Successor wishes to have his/her Shares bound by this Agreement.

 

4.1.1.                   If a majority of the remaining Shareholders should not agree to the admission of Successors and/or any such Successors should not accept to have their Shares bound hereby, then such Shares will not be bound by this Agreement.

 

SECTION V

DISCHARGE OF SHARES

 

5.1.                           Each Shareholder may freely dispose of his/her Shares on a stock exchange without observing the procedures set forth in Section II of this Agreement, in which case the Shares to be disposed of shall be discharged from this Agreement, subject, in every event, to the applicable laws and regulations.

 

5.2.                            Any Shareholder willing to sell Shares on a stock exchange shall send written notice of his/her intent to the other Shareholders at least twenty-four (24) hours prior to the time of opening for trading of the “São Paulo Securities, Commodities and Futures Exchange” (Bolsa de Valores, Mercadorias e Futuros de São Paulo, or BM&FBovespa S.A.).

 

5.2.1.                  The Shareholders hereby agree to use their best efforts to have the notice set forth in Section 5.2 above delivered as soon as possible to the other Shareholders, subject, in any event, to the aforementioned minimum notice period.

 

 

5.2.2.                            Should the foregoing notice period not be observed, then the Shareholder willing to sell Shares on the stock exchange will be forbidden to sell such Shares on the scheduled date, unless previous consent thereto is given by all other Shareholders, under penalty of nullity before the Company, the Shareholders and any third parties.

 

5.3.                            Any Shares transferred to third parties by transactions on a stock exchange will not be bound by this Agreement upon such transfer.

 

SECTION VI

ENTRIES IN THE SHARE REGISTER

 

6.1                               One counterpart of this Agreement shall be filed with the Company’s records, as set forth in Article 118, paragraph one, of the Corporation Law, so that it may become legally binding, and particularly in Article 118, paragraph three, of the Corporation Law, as well as articles 632 et seq. of the Code of Civil Procedure.

 

6.2.                            The owners of Shares in the Company, all of which are registered, will be the individuals named in the records of the bookrunner for the Shares responsible for the relevant annotations.

 

SECTION VII

EFFECTIVENESS OF THE AGREEMENT

 

7.1.                            This Agreement comes into effect on the date hereof and shall remain effective hereafter.

 

7.2.                            The Shareholders hereby agree that if any of the Shareholders should in any way assign or transfer his/her interest in the Company’s capital, then the Shares that used to be held thereby shall cease to be bound by this Agreement.

 

SECTION VIII

GENERAL PROVISIONS

 

8.1.                            This Agreement may only be amended by decision of Shareholders holding at least seventy-five percent (75%) of the Relating Capital Stock and by the execution of a specific instrument.

 

8.1.1.                  Any Shareholder who disagrees with the decision to amend this Agreement made by Shareholders holding at least seventy-five percent (75%) of the Relating Capital Stock may have his/her Shares discharged from this Agreement by sending written notice to this effect to the other Shareholders, provided that such Shareholder (a) shall have his/her rights set forth in Section II of this Agreement removed or unfavorably modified or (b), in view of the proposed change, shall be affected by any other material, unfavorable change in his/her contractual rights hereunder or set forth in the applicable laws.

 

8.2.                           Starting on the date hereof, no Shareholder may execute any other shareholders’ agreement or similar instrument concerning the Company or the Shares without the previous written consent of those holding at least seventy-five percent (75%) of the Relating Capital Stock. Each of the Shareholders hereby consents to the other Shareholders executing the Shareholders Agreement.

 

 

8.3.                            The Shareholders may grant powers of attorney to third parties for the same to represent them before the Company at shareholders’ meetings and any corporate actions, on condition that such third parties shall vote and/or proceed as set forth in this Agreement, which condition shall be set forth in any such powers of attorney.

 

8.4.                            Each Shareholder agrees to take any and all such steps as may be needed for a proper and full performance of the obligations assumed under this Agreement.

 

8.5.                            If any provisions contained in this Agreement is held null or ineffective, then such fact will not compromise the validity and effectiveness of any other provisions, which shall be fully observed, and the Shareholders agree to use their best efforts to agree on a valid alternative to achieve the same effects as intended by the provision having been held null or ineffective.

 

8.6.                            Subject to the provisions of this Agreement specifically in this respect, this Agreement is binding upon the Shareholders and their respective heirs, successors and assigns in any capacity. The Shareholders agree, on behalf of themselves and their successors, to abide by the rules set forth in this Agreement, as well as the rules set forth in the Company’s other shareholders agreements.

 

8.7.                            All notices and/or communications under and/or related to this Agreement shall be in writing and delivered in person, by mail or by e-mail, with return notice (or proof of delivery, for e-mail) requested in any event, and shall be addressed to the Shareholders as shown below:

 

(a)                                 If to Nércio:

 

Name: Nércio José Monteiro Fernandes

Address: Rua Cenno Sbrighi, no 170, 9o andar, Bairro Água Branca,

CEP 05036-010, São Paulo/SP

Tel.: (+55 11) 2103-2425

e-mail: nercio@linx.com.br

 

(b)                                 If to Alberto:

 

Name: Alberto Menache

Address: Rua Cenno Sbrighi, no 170, 9o andar, Bairro Água Branca,

CEP 05036-010, São Paulo/SP

Tel.: (+55 11) 2103-2421

e-mail: menache@linx.com.br

 

(c)                                  If to Alon:

 

Name: Alon Dayan

Address: Rua Cenno Sbrighi, no 170, 9o andar, Bairro Água Branca,

CEP 05036-010, São Paulo/SP

Tel.: (+55 11) 2103-2493

e-mail: alon.dayan@linx.com.br

 

 

(d)                                 If to Daniel:

 

Name: Daniel Mayo

Address: Rua Cenno Sbrighi, no 170, 9o andar, Bairro Água Branca,

CEP 05036-010, São Paulo/SP

Tel.: (+55 11) 2103-2456

e-mail: daniel@linx.com.br

 

(e)                                  If to Dennis:

 

Name: Dennis Herszkowicz

Address: Rua Cenno Sbrighi, no 170, 9o andar, Bairro Água Branca,

CEP 05036-010, São Paulo/SP

Tel.: (+55 11) 2103-1501

e-mail: dennis@linx.com.br

 

(f)                                   If to the Company:

 

Name: Linx S.A., care of Chief Executive Officer Alberto Menache

Address: Rua Cenno Sbrighi, no 170, 9o andar, Bairro Água Branca,

CEP 05036-010, São Paulo/SP

Tel.: (+55 11) 2103-2421

e-mail: menache@linx.com.br

 

8.7.1.                  Any notices given under this Section shall be deemed delivered: (a) at the time of delivery if delivered in person; (b) at the time of receipt if sent by mail or courier; (c) at the time when proof of delivery is received by the sender, if sent by e-mail.

 

8.7.2.                  Any of the parties to this Agreement may change the address to which notices are to be sent by giving written notice thereof to the other parties according to Section 8.7 above.

 

8.7.3.                  For the purposes of article 118, § 10, of the Corporation Law, each Shareholder appoints the individuals named in Section 8.7 above as their respective representatives for the purposes of any communications with the Company in terms of providing or receiving information whenever necessary, in accordance with the provisions of this Agreement.

 

8.8.                            The Shareholders acknowledge that a mere payment of damages would not be an appropriate compensation for any default of obligations undertaken under this Agreement, which permits specific performance in accordance with the law.

 

8.9.                            This Agreement, as signed and initialed on the date hereof, together with the exhibit hereto, is the entire understanding among the Shareholders, by said date, on the transaction carried out hereunder. The Shareholders agree that this Agreement accurately reflects the negotiations previously held and their respective intents and fully supersedes any other documents or memoranda of any nature whatsoever previously exchanged among or signed by the parties, including the 2012 Shareholders Agreement, which is hereby terminated with no further formalities by the Shareholders for all legal purposes. It is hereby

 

 

agreed that, for all intents and purposes, only this Agreement shall govern the relationships among Shareholders concerning the provisions hereof.

 

8.10.                     The Shareholders shall use their best efforts to try and amicably resolve all disputes arising out of this Agreement. If there should be any dispute, the Shareholder interested in resolving it shall send written notice to the other party with a view to holding amicable, good-faith negotiations in order to resolve the dispute within a period of thirty (30) days of the receipt of such notice.

 

8.11.                     Should the Shareholders fail to reach an amicable agreement on the dispute within the period set forth in Section 8.10 above, then the legal representative of one of the interested Shareholders shall give written notice to the legal representatives of the other interested Shareholder calling for them to jointly and amicably seek, within a period of thirty (30) days of such new notice, the best possible solution for the Shareholder involved.

 

8.12.                                                 If, upon expiration of the period set forth in Section 8.11 above, the legal representatives should fail to reach an amicable consensus on the dispute, then all matters, questions and disputes generally related to this Agreement, including, but not limited to, any question concerning its existence, effectiveness and termination, shall be referred to arbitration according to the following provisions:

 

(i)                                    The arbitration shall be submitted to the Arbitration and Mediation Center of the Brazil-Canada Chamber of Commerce (“CCBC”), in accordance with the CCBC’s Arbitration Rules (hereinafter referred to as the “Rules”).

 

(ii)                                 The dispute shall be resolved by an Arbitral Tribunal (the “Arbitral Tribunal”) consisting of three (3) arbitrators. Each party shall designate one arbitrator, and the two (2) arbitrators so designated shall, by mutual agreement within a period of ten (10) days of the receipt of notice to be sent by the CCBC, appoint the third arbitrator, who shall act as president of the Arbitral Tribunal. Upon lapse of such period of ten (10) days, if the arbitrators appointed by the parties should fail to reach an agreement on the appointment of the third arbitrators, who shall serve as president, such third arbitrator shall be appointed by the President of the CCBC. Where there are multiple parties, whether as plaintiffs or respondents, such multiple plaintiffs or multiple respondents shall jointly designate one arbitrator.

 

(iii)                              The arbitration shall be held in the City of São Paulo, Brazil, where the arbitration award will be issued. The arbitration procedure shall be held in Portuguese and in accordance with Law No. 9.307/96.

 

(iv)                             Without prejudice to the effectiveness of this arbitration clause, the parties hereby elect, to the exclusion of any others, the courts in the Judicial District of São Paulo, State of São Paulo, if and when necessary, exclusively for the purposes of: (i) enforcing any obligations that are promptly capable of being enforced by court order; (ii) securing restraining orders or injunctive relief to assure the effectiveness of the arbitration procedure; and (iii) obtaining any specific performance order, it being understood that once such restraining order or specific performance order is obtained, then full and exclusive powers to resolve any and all such matters, whether procedural or on the merits, as may have given rise to the filing for relief or specific performance order shall be restored to the Arbitral Tribunal to be appointed or having already been appointed, and the

 

 

relevant legal proceedings shall be suspended until a partial or final decision in the matter is rendered by the Arbitral Tribunal. Any filings provided for in this section shall not operate as a waiver of this arbitration clause or the full jurisdiction of the Arbitral Tribunal.

 

(v)                                The Arbitral Tribunal shall render its award within a period of twelve (12) months as of the execution of the Arbitration Agreement. This period may be extended for up to six (6) months by the Arbitral Tribunal, to the extent justification is given.

 

(vi)                             The arbitration award shall fix the arbitration fees and decide which of the parties shall bear them in what proportions they shall be shared by the parties. In any event, each party shall pay its own attorney’s fees.

 

(vii)                          The Shareholders and the arbitrators shall keep any and all information concerning the arbitration in secrecy.

 

(viii)                       The Shareholders and the Company agree that any order, decision or determination by the Arbitral Tribunal shall be final and binding upon the parties to the relevant dispute.

 

(ix)                             The Company represents that it is bound by this arbitration clause for all legal purposes.

 

(x)                                The arbitration shall be subject to the law, and the arbitrators shall compulsorily apply the provisions of this Agreement and the laws of the Federative Republic of Brazil.

 

8.13.                     This Agreement shall be governed by and interpreted in accordance with the laws of the Federative Republic of Brazil, which shall also be the governing law for any arbitration hereunder.

 

IN WITNESS WHEREOF, the parties hereto, together with the Company, have caused this Agreement to be executed in seven (7) counterparts, each to be deemed an original, but all together forming one and the same agreement binding upon the parties, the Company and their respective heirs and successors, as the case may be, in the presence of the two (2) witnesses named below.

 

São Paulo, July 30, 2014.

 

Signatures in the following pages

 

 

Execution Page 1/6 of the Shareholders’ Agreement dated July 30, 2014 by and among Nércio, Alberto, Alon, Daniel and Dennis

 

	
 
    	
/s/ Nércio José Monteiro   Fernandes
    	
 
    
	
 
    	
NÉRCIO   JOSÉ MONTEIRO FERNANDES
    	
 
    

 

 

Execution Page 2/6 of the Shareholders’ Agreement dated July 30, 2014 by and among Nércio, Alberto, Alon, Daniel and Dennis

 

	
 
    	
/s/ Alberto Menache
    	
 
    
	
 
    	
ALBERTO MENACHE
    	
 
    

 

 

Execution Page 3/6 of the Shareholders’ Agreement dated July 30, 2014 by and among Nércio, Alberto, Alon, Daniel and Dennis

 

	
 
    	
/s/ Alon Dayan
    	
 
    
	
 
    	
ALON DAYAN
    	
 
    

 

 

Execution Page 4/6 of the Shareholders’ Agreement dated July 30, 2014 by and among Nércio, Alberto, Alon, Daniel and Dennis

 

	
 
    	
/s/ Daniel Mayo
    	
 
    
	
 
    	
DANIEL MAYO
    	
 
    

 

 

Execution Page 5/6 of the Shareholders’ Agreement dated July 30, 2014 by and among Nércio, Alberto, Alon, Daniel and Dennis

 

	
 
    	
/s/ Dennis Herszkowicz
    	
 
    
	
 
    	
DENNIS HERSZKOWICZ
    	
 
    

 

 

Execution Page 6/6 of the Shareholders’ Agreement dated July 30, 2014 by and among Nércio, Alberto, Alon, Daniel and Dennis

 

CONSENTING PARTY:

 

LINX S.A.

 

	
/s/ Alberto Menache
    	
 
    	
/s/ Alon Dayan
    
	
Name Alberto Menache 
    	
 
    	
Name Alon Dayan 
    
	
Title
    	
 
    	
Title
    

 

Witnesses:

 

	
/s/ Rosana Coz Fidalg
    	
 
    	
/s/ Alexandre Kelemen
    
	
Name: Rosana Coz Fidalg RG 30.746.503-2 
    	
 
    	
Name: Alexandre Kelemen 
    
	
CPF No.: 312.743.988-19
    	
 
    	
CPF No.: 340.736.038-09
    

 

 

1ST AMENDMENT TO THE SHAREHOLDERS AGREEMENT OF LINX S.A., EXECUTED ON

 

JULY 30, 2014

 

BETWEEN

 

NÉRCIO JOSÉ MONTEIRO FERNANDES,

 

ALBERTO MENACHE,

 

ALON DAYAN,

 

DANIEL MAYO,

 

AND

 

DENNIS HERSZKOWICZ,

 

AS PARTIES

 

AND

 

LINX S.A.

 

AS INTERVENING CONSENTING PARTY

 

SEPTEMBER 17, 2018

 

1ST AMENDMENT TO THE SHAREHOLDERS AGREEMENT OF LINX S.A.

 

This 1st Amendment to the Shareholders Agreement of Linx S.A. (“1st Amendment to the Shareholders Agreement”) is executed on September 17, 2018 among:

 

(g)           NÉRCIO JOSÉ MONTEIRO FERNANDES, Brazilian citizen, married, holder of Identity Card (RG) No. 7.760.014 SSP/SP, enrolled with the Individual Taxpayers Register of the Ministry of Finance (CPF/MF) under No. 022.256.918-27, with business address in the City of São Paulo, State of São Paulo, Brazil, at Rua Cenno Sbrighi No. 170, 9th floor, District of Água Branca, Postal Code (CEP) 05036-010 (“Nércio”);

 

(h)           ALBERTO MENACHE, Brazilian citizen, married, holder of RG No. 24.257.036-7 SSP/SP, enrolled with the CPF/MF under No. 172.636.238-89, with business address in the City of São Paulo, State of São Paulo, Brazil, at Rua Cenno Sbrighi, No. 170, 9th floor, District of Água Branca, CEP 05036-010 (“Alberto”);

 

(i)            ALON DAYAN, Brazilian citizen, married, holder of RG No. 8.894.140-1 SSP/SP, enrolled with the CPF/MF under No. 014.642.468-90, with business address in the City of São Paulo, State of São Paulo, Brazil, at Rua Cenno Sbrighi No. 170, 9th floor, District of Água Branca, CEP 05036-010 (“Alon”); and

 

(j)            DANIEL MAYO, Brazilian citizen, married, holder of RG No. 19.201.330-0 SSP/SP, enrolled with the CPF/MF under No. 157.679.338-98, with business address in the City of São Paulo, State of São Paulo, Brazil, at Rua Cenno Sbrighi No. 170, 9th floor, District of Água Branca, CEP 05036-010 (“Daniel”);

 

(Nércio, Alberto, Alon and Daniel are hereinafter jointly referred to as “Remaining Shareholders”),

 

In the capacity as Dissenting Shareholder:

 

(k)           DENNIS HERSZKOWICZ, Brazilian citizen, married, holder of RG No. 20.310.061, enrolled with the CPF/MF under No. 165.783.068-38, with business address in the City of São Paulo, State of São Paulo, Brazil, at Rua Cenno Sbrighi No. 170, 9th floor, District of Água Branca, CEP 05036-010 (“Dennis” or “Dissenting Shareholder”); and

 

Furthermore, in the capacity as Intervening Consenting party:

 

(l)            LINX S.A., a corporation organized and existing under the laws of Brazil, having its principal place of business at Rua Cenno Sbrighi No. 170, 9th floor, District of Água Branca, CEP 05036-010, in the City of São Paulo, State of São Paulo, Brazil, enrolled with the National Corporate Taxpayers

 

 

Register (CNPJ) under No. 06.948.969/0001-75, represented herein by its undersigned legal representatives (“Linx” or the “Company”);

 

WHEREAS:

 

(1)           on July 30, 2014, the Shareholders entered into a shareholders agreement of the Company to replace the shareholders agreement entered into among them on December 3, 2012, to govern aspects of their relationships as shareholders holding common shares issued by the Company (the “2014 Shareholders Agreement”), a copy of which is attached hereto as Exhibit I; and

 

(2)           in view of the exercise of the right of Shareholder Dennis Herszkowicz (“Dissenting Shareholder”) to withdraw from the 2014 Shareholders Agreement, in accordance with the “Instrument of Withdrawal from the 2014 Shareholders Agreement of Linx S.A.”, presented on the date hereof, a copy of which is attached hereto as (Exhibit II), and of the current corporate structure of the Company, the Shareholders, upon execution hereof, expressly wish to execute the 1st Amendment to the Shareholders Agreement of the Company, executed on July 30, 2013, to ratify the exercise of the right to withdrawal presented by Mr. Denis and to amend Section 1 of the 2014 Shareholders Agreement.

 

NOW, THEREFORE, THE PARTIES RESOLVE to enter into this 1st Amendment to the Shareholders Agreement, which shall be governed by the following provisions:

 

SECTION I

 

EXERCISE OF THE RIGHT TO WITHDRAWAL OF SHAREHOLDER

 

1.1.         The Remaining Shareholders irrevocably and irreversibly agree and ratify, for all legal purposes and effects, the withdrawal of Mr. Dennis from the 2014 Shareholders Agreement, according to the document Instrument of Withdrawal from the 2014 Shareholders Agreement of Linx S.A., signed by the Dissenting Shareholder on the date hereof, by means of which Mr. Dennis granted the Company, its controlled companies and/or subsidiaries, as well as the Shareholders, the broadest, fullest, most complete, general, irrevocable and irreversible release in relation to this Agreement, representing to have nothing else to claim and/or to seek, in or out of court, at any time and on any account or pretext, with respect to any and all rights and obligations under said Agreement, especially, but not limited to, to the exercise of the voting right, approval of the management accounts, financial statements and balance sheets of the Company, ratifying all other resolutions passed by the Company, especially the resolutions of the Board of Directors, for the time during which he remained a party to this agreement and, furthermore, with respect to compliance with his respective obligations set forth by law, in the Company’s By-Laws or in any shareholders agreements.

 

1.2. The Remaining Shareholders grant the Dissenting Shareholder the broadest, fullest, most complete, general, irrevocable and irreversible release with respect to this Agreement, representing to have nothing else to claim and/or to seek, in or out of court, at any time and on any account or pretext, with respect to any and all rights and obligations under said Agreement.

 

SECTION II

 

AMENDMENT TO ITEM 1.2 OF SECTION I OF THE 2014 SHAREHOLDERS AGREEMENT

 

2.1.         In view of the exercise of Mr. Dennis to withdraw from the 2014 Shareholders Agreement, item 1.2 of said Agreement is amended and shall now read with the following new wording:

 

The Company’s capital stock, as subscribed for and paid in, amounts to four hundred and eighty-eight million four hundred and sixty-six thousand nine hundred and seventy-nine Reais and sixty-four cents (R$488,466,979.64), fully subscribed for and paid in, divided into one hundred and sixty-six million two hundred and eighty-three thousand three hundred and eighty-two (166,283,382) registered book-entry common shares, with no par value. The Shareholders collectively hold twenty-eight million three hundred and thirty-six thousand seven hundred and ninety-nine (28,336,799) common shares issued by the Company, and the number of shares in the Company held by each of the Shareholders is as follows:

 

 

	
Shareholder
    	
 
    	
No. of Common
   Shares
    	
 
    	
% of the Company’s
   Total Capital Stock
    	
 
    	
% of the Relating
   Capital Stock
    	
 
    
	
Nércio
    	
 
    	
11,903,430
    	
 
    	
7.16
    	
%
    	
42.01
    	
%
    
	
Alberto
    	
 
    	
8,566,413
    	
 
    	
5.15
    	
%
    	
30.23
    	
%
    
	
Alon
    	
 
    	
6,933,988
    	
 
    	
4.17
    	
%
    	
24.47
    	
%
    
	
Daniel
    	
 
    	
932,968
    	
 
    	
0.56
    	
%
    	
3.29
    	
%
    
	
TOTAL
    	
 
    	
28,336,799
    	
 
    	
17.04
    	
%
    	
100
    	
%
    

 

SECTION III

 

RATIFICATIONS AND ENTRIES IN THE SHARE REGISTER

 

3.1.         All other clauses and conditions of the 2014 Shareholders Agreement that do not conflict with this amendment, especially, but not limited to, sections 8.11 and 8.12 of said Agreement are ratified.

 

3.2.         One counterpart of this 1st Amendment to the Shareholders Agreement shall be filed in the Company’s records, pursuant to the provisions of paragraph one of Article 118 of the Corporation Law, for it to produce its legal effects and, especially, the effect set forth in paragraph three of Article 118 of the Corporation Law.

 

3.2.(sic)  The owners of the Company’s Shares, all of which are registered shares, shall be the individuals mentioned in the records of the bookkeeping agent of the Shares, responsible for the relevant annotations.

 

IN WITNESS WHEREOF, the parties hereto, together with the Company, have caused this 1st Amendment to the Shareholders Agreement to be executed in seven (7) counterparts, each to be deemed an original, but all together forming one and the same agreement binding upon the parties, the Company and their respective heirs and successors, as the case may be, in the presence of the two (2) witnesses below.

 

São Paulo, July 30, 2014.

 

 

(Signature page of the 1st Amendment to the Shareholders Agreement of Linx S.A., executed by and among Nércio, Alberto, Alon, Daniel, Dennis and Linx S.A. on September 17, 2018)

 

REMAINING SHAREHOLDERS:

 

	
/s/ NÉRCIO JOSÉ MONTEIRO FERNANDES
    	
 
    	
/s/ ALBERTO MENACHE
    
	
 
    	
 
    	
 
    
	
/s/ ALON DAYAN
    	
 
    	
/s/ DANIEL MAYO
    

 

	
DISSENTING SHAREHOLDER:
    	
 
    
	
 
    	
 
    
	
/s/ DENNIS HERSZKOWICZ
    	
 
    
	
 
    	
 
    
	
CONSENTING PARTY:
    	
 
    

 

LINX S.A.

 

	
/s/ Alberto Menache
    	
 
    	
/s/ Flávio Mambreu Menezes
    
	
Name:
    	
 
    	
Name:
    
	
Title:
    	
 
    	
Title:
    
	
 
    	
 
    	
 
    
	
Witnesses:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
/s/ Ana Paula Frigo
    	
 
    	
/s/ Caroline Souza Santos
    
	
Name: Ana Paula Frigo
    	
 
    	
Name: Caroline Souza Santos
    
	
Identity Card (RG): 28.733.692-X
   Taxpayer Card (CPF):291.772.648-00
    	
 
    	
Taxpayer Card (CPF): 432.112.208-28 39.575.753-8
    

 

 

EXHIBIT I TO THE 1ST AMENDMENT TO THE SHAREHOLDERS AGREEMENT OF LINX S.A., ENTERED INTO ON JULY 30, 2014

 

SHAREHOLDERS AGREEMENT OF LINX S.A., ENTERED INTO ON JULY 30, 2014

 

SHAREHOLDERS AGREEMENT OF LINX S.A.

 

BETWEEN

 

NÉRCIO JOSÉ MONTEIRO FERNANDES,

 

ALBERTO MENACHE,

 

ALON DAYAN,

 

DANIEL MAYO,

 

AND

 

DENNIS HERSZKOWICZ,

 

AS PARTIES

 

LINX S.A.

 

AS INTERVENING CONSENTING PARTY

 

JULY 30, 2014

 

SHAREHOLDERS AGREEMENT OF LINX S.A.

 

This Shareholders Agreement (the “Agreement”) is entered into on July 30, 2014 by and among:

 

(a)           NÉRCIO JOSÉ MONTEIRO FERNANDES, Brazilian citizen, married, holder of [identity card] RG No. 7.760.014 SSP/SP, enrolled with the Individual Taxpayers Register of the Ministry of Finance (CPF/MF) under No. 022.256.918-27, with business address in the City of São Paulo, State of São Paulo, Brazil, at Rua Cenno Sbrighi No. 170, 9th floor, District of Água Branca, postal code (CEP) 05036-010 (“Nércio”);

 

(b)           ALBERTO MENACHE, Brazilian citizen, married, holder of RG No. 24.257.036-7 SSP/SP, enrolled with the CPF/MF under No. 172.636.238-89, with business address in the City of São Paulo, State of São Paulo, Brazil, at Rua Cenno Sbrighi, No. 170, 9th floor, District of Água Branca, CEP 05036-010 (“Alberto”);

 

(c)           ALON DAYAN, Brazilian citizen, married, holder of RG No. 8.894.140-1 SSP/SP, enrolled with the CPF/MF under No. 014.642.468-90, with business address in the City of São Paulo, State of São Paulo, Brazil, at Rua Cenno Sbrighi No. 170, 9th floor, District of Água Branca, CEP 05036-010 (“Alon”);

 

(d)           DANIEL MAYO, Brazilian citizen, married, holder of RG No. 19.201.330-0 SSP/SP, enrolled with the CPF/MF under No. 157.679.338-98, with business address in the City of São Paulo, State of São Paulo, Brazil, at Rua Cenno Sbrighi No. 170, 9th floor, District of Água Branca, CEP 05036-010 (“Daniel”); e

 

(e)           DENNIS HERSZKOWICZ, Brazilian citizen, married, holder of RG No. 20.310.061, enrolled with the CPF/MF under No. 165.783.068-38, with business address in the City of São Paulo, State of São Paulo, Brazil, at Rua Cenno Sbrighi No. 170, 9th floor, District of Água Branca, CEP 05036-010 (“Dennis”);

 

(Nércio, Alberto, Alon, Daniel and Dennis are hereinafter collectively referred to as the “Shareholders”, and each, individually, as a “Shareholder”),

 

And, further, as Intervening Consenting Party:

 

(f)            LINX S.A., a corporation organized and existing under the laws of Brazil, having its principal place of business at Rua Cenno Sbrighi No. 170, 9th floor, District of Água Branca, CEP 05036-010, in the City of São Paulo, State of São Paulo, Brazil, enrolled with the National Corporate Taxpayers

 

 

Register (CNPJ) under No. 06.948.969/0001-75, represented herein by its undersigned legal representatives (“Linx” or the “Company”);

 

WHEREAS:

 

(1)           on December 3, 2012, the Shareholders, among other agreements signed with third parties, entered into a Company shareholders agreement to govern their relationships as shareholders holding common shares issued by the Company following the consummation of the Company’s process of going public (the “2012 Shareholders Agreement”, a copy of which is attached hereto as Exhibit I);

 

(2)           in view of the Company’s current corporate structure, the Shareholders wish to have this Agreement govern certain aspects of their relationships as shareholders holding common shares issued by the Company, setting forth mutual rights and obligations with respect to certain matters, as provided for in article 118 of Law No. 6.404, of December 15, 1976 (the “Corporation Law”, as amended); and

 

(3)           by signing this instrument, the Shareholders expressly wish to terminate, without any formalities, the 2012 Shareholders Agreement and replace it with this Agreement for all legal purposes;

 

NOW, THEREFORE, they resolved to enter into this Agreement, which shall be governed by the following provisions:

 

SECTION I

 

PURPOSE, EQUITY INTEREST, AND BOUND SHARES

 

1.1.         The purpose of this Agreement is to govern certain aspects of the Shareholders’ relationships in their capacity as holders of common shares issued by the Company, setting forth mutual rights and obligations with respect to certain matters, as provided for in article 118 of the Corporation Law.

 

1.2.         The Company’s capital stock, as subscribed for and paid in, amounts to three hundred and forty-six million eight hundred and sixty-three thousand six hundred and eighty-eight Reais and thirty-three cents (R$346,863,688.33), fully subscribed for and paid in, divided into forty-six million five hundred and seventy-six thousand four hundred and ninety-four (46,576,494) registered book-entry common shares, with no par value. The Shareholders collectively hold fourteen million seven hundred and twenty-seven thousand five hundred (14,727,500) common shares issued by the Company, and the number of shares in the Company held by each of the Shareholders is as follows:

 

	
Shareholder
    	
 
    	
No. of Common
   Shares
    	
 
    	
% of the Company’s
   Total Capital Stock
    	
 
    	
% of the Relating
   Capital Stock
    	
 
    
	
Nércio
    	
 
    	
5,504,048
    	
 
    	
11.82
    	
%
    	
37.37
    	
%
    
	
Alberto
    	
 
    	
4,558,208
    	
 
    	
9.80
    	
%
    	
30.95
    	
%
    
	
Alon
    	
 
    	
4,004,976
    	
 
    	
8.60
    	
%
    	
27.19
    	
%
    
	
Daniel
    	
 
    	
388,156
    	
 
    	
0.83
    	
 
    	
2.64
    	
%
    
	
Dennis
    	
 
    	
272,112
    	
 
    	
0.58
    	
 
    	
1.85
    	
%
    
	
TOTAL
    	
 
    	
14,727,500
    	
 
    	
31.63
    	
%
    	
100
    	
%
    

 

1.2.1.      For the purposes of this Agreement, “Relating Capital Stock” means the total shares held by each Shareholder relating to the total shares only collectively held by the Shareholders, taken as a whole (excluding all other shareholders in the Company).

 

1.3.         All shares issued by the Company and owned by the Shareholders are bound by this Agreement, as will any such shares as may be added thereto in the future for any reasons (“Shares”), such as purchase, subscription, conversion of debentures, split or bonus distributions, donation, inheritance, loan, beneficial ownership or right to subscribe for said Shares, and any securities ensuring such right or convertible into Shares, which are deemed to rank pari passu with the Shares for the purposes of this Agreement, shall compulsorily form an integral part of, and shall automatically and unrestrainedly be covered by and subject to the terms and conditions of this Agreement.

 

1.3.1.      Any other shares issued by the Company as are not owned by the Shareholders are not bound by

 

 

this Agreement, which shares, however, together with the Shares, are the subject of the Company’s shareholders agreement entered into by the Shareholders with Messrs. Aparecido Elias Raposo, Marcos Akira Takata, Flávio Mambreu Menezes, Dario de Sena Gouvêa and Jean Carlo Klaumann on December 3, 2012 with a view to governing their relationship as the Company’s controlling block of shareholders (the “Controlling Block Shareholders Agreement”).

 

1.4.         Subject to the provisions of this Agreement, none of the Shareholders may, directly or indirectly, through an intermediary or otherwise, hold any Shares as owned thereby, including through any legal entities controlling them or controlled thereby, without the other Shareholders being previously notified in writing and without such persons compulsorily becoming parties to this Agreement.

 

1.5.         Each Shareholder hereby expressly represents that: (i) he is the current lawful holder of his/her respective Shares, in the proportion set out in Section 1.2 above; (ii) the Shares held thereby have been fully subscribed for and paid in; (iii) he has powers to enter into and comply with the provisions of this Agreement; (iv) the conclusion of this Agreement does not breach any commitments, agreements or obligations to which he is a party; and (v) all of his/her respective Shares are fully free and clear of any charges, debts, encumbrances, liens, pledges, collaterals, fiduciary assignment, guarantees, limitations on full and free use, enjoyment or fruition of any right (or any attributes inherent in or related to any right), as a result of any law, contract or claims of any nature, including by any grant of beneficial ownership, options, rents or rights of first refusal (“Encumbrances”, including any variations of the term), except as provided in the Controlling Block Shareholders Agreement.

 

SECTION II

 

PRIVATE SALE OF COMPANY SHARES

 

(A)       Private Transfer of Shares

 

2.1.      Subject to the provisions of Sections 2.2 through 2.13 below, any private transfer of Shares owned by any of the Shareholders shall require previous notice to be sent to the other Shareholders, who shall have a right of first refusal, in equal conditions to those offered by any third parties, to purchase such Shares.

 

2.1.1.         For the sake of clarification, any transfers made in a stock exchange environment are free, subject to the terms of Section V of this Agreement.

 

2.2.      Any Shareholder willing to assign, transfer, allocate to the capital of another company or promise to sell any or all of his/her Shares privately (i.e., outside a stock exchange), or any of the rights therein (a “Selling Shareholder”), to third parties shall give written notice of his/her intent to the other Shareholders (“Sale Proposal”), together with a copy of the proposal offered by the interested third party, which shall be irrevocable and irreversible and shall compulsorily stipulate:

 

(d)              the number of Shares, or his/her respective rights therein, to be sold (“Offered Shares”);

 

(e)              the price and payment terms; and

 

(f)               the purchasing third party’s irrevocable and irreversible commitment to, at the request of any of the Shareholders, be fully bound by the rules and conditions set forth in this Agreement kept on file at the Company’s principal place of business, irrespective of the number and type of Shares subject to the offer.

 

2.3.      Any transfer of Shares owned by the Shareholders to third parties in a private transaction (i.e. out of a stock exchange environment) shall at all times be made in conjunction with the assignment of the same percentage of their credit rights and any other rights and/or obligations to the Company, and no Shares are allowed to be sold without the corresponding transfer of said rights and/or obligations, and vice versa. Therefore, any purchase and/or sale of Shares, as referred to in this Section, shall also cover the purchase and/or sale of the relevant credit rights and any other rights and/or obligations, but the Selling Shareholder will remain jointly liable with the purchasing third party for the obligations incurred and still pending before the Company and/or the other Shareholders.

 

2.4.      The other Shareholders having received the Sale Proposal shall have a period of up to ten (10) days of their receipt of such Sale Proposal to reply, on an irrevocable and irreversible basis, by written

 

 

notice sent to the Selling Shareholder (“Notice of Reply”), that they will either:

 

(c)              exercise their right of first refusal and purchase all of the Offered Shares for the price and on the terms set forth in the Sale Proposal; or

 

(d)              waive their right of first refusal to purchase the Offered Shares and tacitly agree that the Selling Shareholder may sell the Offered Shares to the interested third party, it being understood that the failure to send the Notice of Reply with the aforementioned period of up to ten (10) days will be deemed a tacit, irrevocable and irreversible waiver by the relevant Shareholder of his right of first refusal.

 

2.5.      Upon exercise of the right of first refusal set forth in item (a) of Section 2.4 above:

 

(c)              the sale of the Offered Shares shall be made in favor of the Shareholder(s) having signified his/their willingness to purchase them within ten (10) days of the Selling Shareholder’s receipt of the Notice(s) of Reply or within such shorter period as may be set forth in the proposal submitted by the interested third party, upon payment by the purchasing Shareholder(s) of the price stipulated in the Sale Proposal; or

 

(d)              the transfer of the relevant subscription and payment rights in favor of the Shareholder(s) having signified willingness shall be made within the relevant period set forth in the Bylaws or by the Company’s shareholders’ meeting, as the case may be, and notified in writing to the Company through the person of the Chairman of the Executive Board.

 

2.6.      If the right of first refusal set forth in Section 2.4 above is waived or not exercised within the periods set forth in Section II, then, subject to the provisions of the Shareholders Agreement, the Selling Shareholder shall be released to proceed with the private sale:

 

(c)              of the Offered Shares to the willing third party, on the exact terms and conditions of the Sale Proposal, within the thirty (30) days next following: (i) the receipt of the Notice of Reply; or (ii) the expiration of the relevant timetable for sending the Notice of Reply;

 

(d)              the relevant subscription or payment rights, on the exact terms and conditions of the Sale Proposal, within the relevant period set forth in the Bylaws or by the Company’s shareholders’ meeting, as the case may be, and notified in writing to the Company through the person of the Chairman of the Executive Board.

 

2.7.      The provisions of Sections 2.1 through 2.6 above shall not apply to the shareholders Daniel and Dennis. For the sake of clarification, Daniel and Dennis shall not have a right of first refusal to purchase Shares subject to any private transfers by the other Shareholders, nor shall the other Shareholders have a right of first refusal to purchase Shares subject to any private transfers by Daniel and/or Dennis.

 

2.8.      The Shareholders hereby agree that no private assignment or transfer of Shares may be made if any of the terms and conditions of Sections 2.1 through 2.7 above are not met.

 

(B)       Encumbrance of Shares

 

2.14.    Any Shares owned by the Shareholders may be freely encumbered, requiring no previous, express consent from the other Shareholders, provided that all (and no less than all) of the following requirements are met:

 

(d)              As a condition on the placing of any such Encumbrance, any Shareholder willing to encumber his/her Shares shall notify the other Shareholders of his/her intent at least two (2) days prior to the closing date of the transaction, which notice shall contain: (i) a reasonable description of the relevant transaction; and (ii) the name(s) and address(es) of the willing third party(ies) involved in the transaction.

 

(e)              Irrespective of any Encumbrance, on the date of any of the Company’s shareholders’ meetings, the Shareholders shall directly hold one hundred percent (100%) of the political rights corresponding to the Shares in their entirety, and shall exercise said political right by casting their free votes, in strict compliance with the provisions of Section III below.

 

(f)               For the duration of this Agreement, no Shareholder shall have Encumbrances on more than 50% of his/her Relating Capital Stock, under penalty of nullity before the Company, the Shareholders and any third parties.

 

 

SECTION III

 

EXERCISE OF VOTING RIGHTS AT COMPANY SHAREHOLDERS’ MEETINGS

 

3.1.         The Shareholders shall exercise their voting right at the Company’s shareholders’ meetings (proportionally to their interests in the Company’s voting capital) and cause their representatives on the board of directors or any other governing body of the Company to exercise the voting rights exclusively in the Company’s best interests, subject to the provisions of this Agreement and the Controlling Block Shareholders Agreement.

 

3.2.         The Shareholders shall resolve, at prior meetings among themselves, on the matters to be on the agenda for any shareholders’ meeting or otherwise any meeting of any of the Company’s governing bodies. Such prior meetings shall be held at least thirty (30) minutes before they state their will at the relevant shareholders’ meeting or meeting of any of the Company’s governing bodies. The decisions of a majority of the Shareholders at the prior meetings shall be binding upon all Shareholders, who shall exercise their respective voting rights at the Company’s shareholders’ meetings according to the decision of such majority of the Shareholders at the relevant prior meetings.

 

3.3.         For all purposes of the Shareholders’ Agreements, the Shareholders shall, in any event, state their will in unison and through no more than two representatives, namely, Nércio and Alberto (“Representatives”). Accordingly, all decisions made by the Shareholders under this Agreement shall be stated by the Representatives to any third parties and shareholders and the Company.

 

SECTION IV

 

ADMISSION OF SPOUSES AND/OR HEIRS-DESCENDANTS

 

4.1.         It is hereby agreed that in the event of death, disability or legal incapacity of any individual Shareholder, his/her spouse, as well as his/her respective heirs-descendants, successors and trustees (“Successors”) shall fully submit to the terms and conditions of this Agreement concerning the exercise of any rights attaching to the Shares, as well as all other Shareholders Agreements if, on a cumulative basis, (a) a majority of the remaining Shareholders state their willingness to agree to the adherence of Successors to this Agreement and (b) each Successor wishes to have his/her Shares bound by this Agreement.

 

4.1.1.      If a majority of the remaining Shareholders should not agree to the admission of Successors and/or any such Successors should not accept to have their Shares bound hereby, then such Shares will not be bound by this Agreement.

 

SECTION V

 

DISCHARGE OF SHARES

 

5.1.         Each Shareholder may freely dispose of his/her Shares on a stock exchange without observing the procedures set forth in Section II of this Agreement, in which case the Shares to be disposed of shall be discharged from this Agreement, subject, in every event, to the applicable laws and regulations.

 

5.2.         Any Shareholder willing to sell Shares on a stock exchange shall send written notice of his/her intent to the other Shareholders at least twenty-four (24) hours prior to the time of opening for trading of the “São Paulo Securities, Commodities and Futures Exchange” (Bolsa de Valores, Mercadorias e Futuros de São Paulo, or BM&FBovespa S.A.).

 

5.2.1.      The Shareholders hereby agree to use their best efforts to have the notice set forth in Section 5.2 above delivered as soon as possible to the other Shareholders, subject, in any event, to the aforementioned minimum notice period.

 

5.2.2.   Should the foregoing notice period not be observed, then the Shareholder willing to sell Shares on the stock exchange will be forbidden to sell such Shares on the scheduled date, unless previous consent thereto is given by all other Shareholders, under penalty of nullity before the Company, the Shareholders and any third parties.

 

5.3.         Any Shares transferred to third parties by transactions on a stock exchange will not be bound by this Agreement upon such transfer.

 

 

SECTION VI

 

ENTRIES IN THE SHARE REGISTER

 

6.1          One counterpart of this Agreement shall be filed with the Company’s records, as set forth in Article 118, paragraph one, of the Corporation Law, so that it may become legally binding, and particularly in Article 118, paragraph three, of the Corporation Law, as well as articles 632 et seq. of the Code of Civil Procedure.

 

6.2.         The owners of Shares in the Company, all of which are registered, will be the individuals named in the records of the bookrunner for the Shares responsible for the relevant annotations.

 

SECTION VII

 

EFFECTIVENESS OF THE AGREEMENT

 

7.1.         This Agreement comes into effect on the date hereof and shall remain effective hereafter.

 

7.2.         The Shareholders hereby agree that if any of the Shareholders should in any way assign or transfer his/her interest in the Company’s capital, then the Shares that used to be held thereby shall cease to be bound by this Agreement.

 

SECTION VIII

 

GENERAL PROVISIONS

 

8.1.         This Agreement may only be amended by decision of Shareholders holding at least seventy-five percent (75%) of the Relating Capital Stock and by the execution of a specific instrument.

 

8.1.1.      Any Shareholder who disagrees with the decision to amend this Agreement made by Shareholders holding at least seventy-five percent (75%) of the Relating Capital Stock may have his/her Shares discharged from this Agreement by sending written notice to this effect to the other Shareholders, provided that such Shareholder (a) shall have his/her rights set forth in Section II of this Agreement removed or unfavorably modified or (b), in view of the proposed change, shall be affected by any other material, unfavorable change in his/her contractual rights hereunder or set forth in the applicable laws.

 

8.2.         Starting on the date hereof, no Shareholder may execute any other shareholders’ agreement or similar instrument concerning the Company or the Shares without the previous written consent of those holding at least seventy-five percent (75%) of the Relating Capital Stock. Each of the Shareholders hereby consents to the other Shareholders executing the Shareholders Agreement.

 

8.3.         The Shareholders may grant powers of attorney to third parties for the same to represent them before the Company at shareholders’ meetings and any corporate actions, on condition that such third parties shall vote and/or proceed as set forth in this Agreement, which condition shall be set forth in any such powers of attorney.

 

8.4.         Each Shareholder agrees to take any and all such steps as may be needed for a proper and full performance of the obligations assumed under this Agreement.

 

8.5.         If any provisions contained in this Agreement is held null or ineffective, then such fact will not compromise the validity and effectiveness of any other provisions, which shall be fully observed, and the Shareholders agree to use their best efforts to agree on a valid alternative to achieve the same effects as intended by the provision having been held null or ineffective.

 

8.6.         Subject to the provisions of this Agreement specifically in this respect, this Agreement is binding upon the Shareholders and their respective heirs, successors and assigns in any capacity. The Shareholders agree, on behalf of themselves and their successors, to abide by the rules set forth in this Agreement, as well as the rules set forth in the Company’s other shareholders agreements.

 

8.7.         All notices and/or communications under and/or related to this Agreement shall be in writing and delivered in person, by mail or by e-mail, with return notice (or proof of delivery, for e-mail) requested in any event, and shall be addressed to the Shareholders as shown below:

 

(a)           If to Nércio:

 

 

Name: Nércio José Monteiro Fernandes

 

Address: Rua Cenno Sbrighi, no 170, 9o andar, Bairro Água Branca,

 

CEP 05036-010, São Paulo/SP

 

Tel.: (+55 11) 2103-2425

 

e-mail: nercio@linx.com.br

 

(b)           If to Alberto:

 

Name: Alberto Menache

 

Address: Rua Cenno Sbrighi, no 170, 9o andar, Bairro Água Branca,

 

CEP 05036-010, São Paulo/SP

 

Tel.: (+55 11) 2103-2421

 

e-mail: menache@linx.com.br

 

(c)           If to Alon:

 

Name: Alon Dayan

 

Address: Rua Cenno Sbrighi, no 170, 9o andar, Bairro Água Branca,

 

CEP 05036-010, São Paulo/SP

 

Tel.: (+55 11) 2103-2493

 

e-mail: alon.dayan@linx.com.br

 

(d)           If to Daniel:

 

Name: Daniel Mayo

 

Address: Rua Cenno Sbrighi, no 170, 9o andar, Bairro Água Branca,

 

CEP 05036-010, São Paulo/SP

 

Tel.: (+55 11) 2103-2456

 

e-mail: daniel@linx.com.br

 

(e)           If to Dennis:

 

Name: Dennis Herszkowicz

 

Address: Rua Cenno Sbrighi, no 170, 9o andar, Bairro Água Branca,

 

CEP 05036-010, São Paulo/SP

 

Tel.: (+55 11) 2103-1501

 

e-mail: dennis@linx.com.br

 

(f)            If to the Company:

 

Name: Linx S.A., care of Chief Executive Officer Alberto Menache

 

Address: Rua Cenno Sbrighi, no 170, 9o andar, Bairro Água Branca,

 

CEP 05036-010, São Paulo/SP

 

Tel.: (+55 11) 2103-2421

 

e-mail: menache@linx.com.br

 

8.7.1.      Any notices given under this Section shall be deemed delivered: (a) at the time of delivery if delivered in person; (b) at the time of receipt if sent by mail or courier; (c) at the time when proof of delivery is received by the sender, if sent by e-mail.

 

 

8.7.2.      Any of the parties to this Agreement may change the address to which notices are to be sent by giving written notice thereof to the other parties according to Section 8.7 above.

 

8.7.3.      For the purposes of article 118, § 10, of the Corporation Law, each Shareholder appoints the individuals named in Section 8.7 above as their respective representatives for the purposes of any communications with the Company in terms of providing or receiving information whenever necessary, in accordance with the provisions of this Agreement.

 

8.8.         The Shareholders acknowledge that a mere payment of damages would not be an appropriate compensation for any default of obligations undertaken under this Agreement, which permits specific performance in accordance with the law.

 

8.9.         This Agreement, as signed and initialed on the date hereof, together with the exhibit hereto, is the entire understanding among the Shareholders, by said date, on the transaction carried out hereunder. The Shareholders agree that this Agreement accurately reflects the negotiations previously held and their respective intents and fully supersedes any other documents or memoranda of any nature whatsoever previously exchanged among or signed by the parties, including the 2012 Shareholders Agreement, which is hereby terminated with no further formalities by the Shareholders for all legal purposes. It is hereby agreed that, for all intents and purposes, only this Agreement shall govern the relationships among Shareholders concerning the provisions hereof.

 

8.10.       The Shareholders shall use their best efforts to try and amicably resolve all disputes arising out of this Agreement. If there should be any dispute, the Shareholder interested in resolving it shall send written notice to the other party with a view to holding amicable, good-faith negotiations in order to resolve the dispute within a period of thirty (30) days of the receipt of such notice.

 

8.11.       Should the Shareholders fail to reach an amicable agreement on the dispute within the period set forth in Section 8.10 above, then the legal representative of one of the interested Shareholders shall give written notice to the legal representatives of the other interested Shareholder calling for them to jointly and amicably seek, within a period of thirty (30) days of such new notice, the best possible solution for the Shareholder involved.

 

8.12.                If, upon expiration of the period set forth in Section 8.11 above, the legal representatives should fail to reach an amicable consensus on the dispute, then all matters, questions and disputes generally related to this Agreement, including, but not limited to, any question concerning its existence, effectiveness and termination, shall be referred to arbitration according to the following provisions:

 

(xi)          The arbitration shall be submitted to the Arbitration and Mediation Center of the Brazil-Canada Chamber of Commerce (“CCBC”), in accordance with the CCBC’s Arbitration Rules (hereinafter referred to as the “Rules”).

 

(xii)         The dispute shall be resolved by an Arbitral Tribunal (the “Arbitral Tribunal”) consisting of three (3) arbitrators. Each party shall designate one arbitrator, and the two (2) arbitrators so designated shall, by mutual agreement within a period of ten (10) days of the receipt of notice to be sent by the CCBC, appoint the third arbitrator, who shall act as president of the Arbitral Tribunal. Upon lapse of such period of ten (10) days, if the arbitrators appointed by the parties should fail to reach an agreement on the appointment of the third arbitrators, who shall serve as president, such third arbitrator shall be appointed by the President of the CCBC. Where there are multiple parties, whether as plaintiffs or respondents, such multiple plaintiffs or multiple respondents shall jointly designate one arbitrator.

 

(xiii)        The arbitration shall be held in the City of São Paulo, Brazil, where the arbitration award will be issued. The arbitration procedure shall be held in Portuguese and in accordance with Law No. 9.307/96.

 

(xiv)        Without prejudice to the effectiveness of this arbitration clause, the parties hereby elect, to the exclusion of any others, the courts in the Judicial District of São Paulo, State of São Paulo, if and when necessary, exclusively for the purposes of: (i) enforcing any obligations that are promptly capable of being enforced by court order; (ii) securing restraining orders or injunctive relief to assure the effectiveness of the arbitration procedure; and (iii) obtaining any specific performance order, it being understood that once such restraining order or specific performance order is obtained, then full and exclusive powers to resolve any and all such matters, whether procedural or on the merits, as may have given rise to the filing for relief or specific performance order shall be restored to the Arbitral Tribunal to

 

 

be appointed or having already been appointed, and the relevant legal proceedings shall be suspended until a partial or final decision in the matter is rendered by the Arbitral Tribunal. Any filings provided for in this section shall not operate as a waiver of this arbitration clause or the full jurisdiction of the Arbitral Tribunal.

 

(xv)         The Arbitral Tribunal shall render its award within a period of twelve (12) months as of the execution of the Arbitration Agreement. This period may be extended for up to six (6) months by the Arbitral Tribunal, to the extent justification is given.

 

(xvi)        The arbitration award shall fix the arbitration fees and decide which of the parties shall bear them in what proportions they shall be shared by the parties. In any event, each party shall pay its own attorney’s fees.

 

(xvii)       The Shareholders and the arbitrators shall keep any and all information concerning the arbitration in secrecy.

 

(xviii)      The Shareholders and the Company agree that any order, decision or determination by the Arbitral Tribunal shall be final and binding upon the parties to the relevant dispute.

 

(xix)        The Company represents that it is bound by this arbitration clause for all legal purposes.

 

(xx)         The arbitration shall be subject to the law, and the arbitrators shall compulsorily apply the provisions of this Agreement and the laws of the Federative Republic of Brazil.

 

8.13.       This Agreement shall be governed by and interpreted in accordance with the laws of the Federative Republic of Brazil, which shall also be the governing law for any arbitration hereunder.

 

IN WITNESS WHEREOF, the parties hereto, together with the Company, have caused this Agreement to be executed in seven (7) counterparts, each to be deemed an original, but all together forming one and the same agreement binding upon the parties, the Company and their respective heirs and successors, as the case may be, in the presence of the two (2) witnesses named below.

 

São Paulo, July 30, 2014.

 

Signatures in the following pages

 

Execution Page  /6 of the Shareholders’ Agreement dated July 30, 2014 by and among Nércio, Alberto, Alon, Daniel and Dennis

 

	
 
    	
/s/ Nércio   José Monteiro Fernandes
    	
 
    
	
 
    	
NÉRCIO   JOSÉ MONTEIRO FERNANDES
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
/s/ Alberto Menache
    	
 
    
	
 
    	
ALBERTO MENACHE
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
/s/ Alon Dayan
    	
 
    
	
 
    	
ALON DAYAN
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
/s/ Daniel Mayo
    	
 
    
	
 
    	
DANIEL MAYO
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
/s/ Dennis   Herszkowicz
    	
 
    
	
 
    	
DENNIS HERSZKOWICZ
    	
 
    

 

CONSENTING PARTY:

 

LINX S.A.

 

	
/s/ Alberto Menache
    	
 
    	
/s/ Dennis Herszkowicz
    
	
Alberto Menache
    	
 
    	
Name: Dennis Herszkowicz
    
	
Title: CEO
    	
 
    	
Title: CFO 
    

 

 

	
 
    	
 
    	
Taxpayer Card (CPF): 165.783.068-38
    
	
 
    	
 
    	
Identity Card (RG): 20.310.061
    

 

Witnesses:

 

	
/s/ Alexandre R.S. Kelemen
    	
 
    	
/s/ Ana Paula Frigo
    
	
Name: Alexandre R.S. Kelemen
    	
 
    	
Name: Ana Paula Frigo
    
	
Identity Card (RG): 23.055.340-0
    	
 
    	
Identity Card (RG): 28.733.692-X
    
	
Taxpayer Card (CPF): 340.736.038-09
    	
 
    	
Taxpayer Card (CPF): 281.772.648-00
    

 

EXHIBIT II TO THE 1ST AMENDMENT TO THE SHAREHOLDERS AGREEMENT OF LINX S.A., EXECUTED ON JULY 30, 2014

 

INSTRUMENT OF WITHDRAWAL FROM SHAREHOLDERS AGREEMENT

 

INSTRUMENT OF WITHDRAWAL FROM SHAREHOLDERS AGREEMENTS OF LINX S.A.

 

By this Instrument of Withdrawal from the Shareholders Agreement of Linx S.A. (“Withdrawal from the 2014 Shareholders Agreement of Linx S.A.”), I, DENNIS HERSZKOWICZ, Brazilian citizen, married, holder of RG No. 20.310.061, enrolled with the CPF/MF under No. 165.783.068-38, submit my request for withdrawal from the Shareholders Agreements of LINX S.A., a corporation organized and existing under the laws of Brazil, enrolled with the National Corporate Taxpayers Register (CNPJ) under No. 06.948.969/0001-75, executed on December 3, 2012 and July 30, 2114 (“Shareholders Agreement of the Controlling Block” and “2014 Shareholders Agreement”), acknowledging that I will have nothing else to claim against the other parties to said agreements, at any time and/or on any account, in or out of court, as well as against the Company and its managers and respective successors, either in the capacity as shareholders, managers of the companies or on any other account, granting the broadest, fullest, complete, general, irrevocable and irreversible release, in my name and in the name of my respective successors, with respect to any rights and obligations based on said Agreements, especially, but not limited to, to the exercise of the voting right, approval of the management accounts, financial statements and balance sheets of the Company, ratifying all other resolutions passed by the Company, especially the resolutions of the Board of Directors, for the time during which I remained a party to this agreement and, furthermore, with respect to compliance with the respective obligations set forth by law, in the Company’s By-Laws or in shareholders agreements relating to the period during which I was a signatory to those Agreements.

 

São Paulo, September 17, 2018.

 

	
 
    	
/s/ DENNIS HERSZKOWICZ

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