On August 24, the 5th Board of Coordination and Review of the Federal Prosecutor’s Office approved the leniency agreement (“Agreement”) executed between J&F Investimentos S.A (holding company of the JBS Group) and the Federal Prosecutor's Office in connection with Operations Greenfield, Sépsis, Cui Bono, Car Wash and Weak Flesh. Following the approval, the Agreement becomes effective after almost three months since its signing.

The Agreement covers: unlawful conduct demonstrated by or on behalf of any of the Group’s companies; facts related to events under investigation in administrative or criminal proceedings and/or civil or police inquiries, within the scope of the aforementioned operations that may violate the Administrative Improbity Act or the Anti-Corruption Law, and acts that constitute money laundering, as well as illicit acts of any other nature.

With the signing of the Agreement, the Company undertakes to: cooperate with the investigations and identify unlawful acts and individuals who took part in them; conduct internal investigations; cease its participation in the facts covered by the agreement; improve its Compliance Program; hire independent auditors; remove Mr. Joesley Batista (head of JBS) from all management and board positions of the companies for 5 years; and, finally, pay a fine of BRL 10.3 billion.

The Agreement establishes that the Federal Prosecutor’s Office will refrain from filing complaints or initiate any civil or sanctioning proceedings against the signatory parties with regard to the facts disclosed by the Company, and also undertakes to request the suspension of civil and administrative improbity lawsuits already in progress until the termination of the Agreement and, provided that all obligations are properly fulfilled, to extinguish those lawsuits definitively or to seek solely the recognition the declaratory effects of any rulings.

The fine is to be disbursed within twenty-five years and will be shared in the following proportions: (i) BRL 1.75 billion to BNDES; (ii) BRL 1.75 billion to the Federal Government; (iii) BRL 1.75 billion to FUNCEF; (iv) BRL 1.75 billion to PETROS; (v) BRL 500 million to Caixa Econômica Federal; (vi) BRL 500 million to FGTS and (vii) BRL 2.3 billion to promote the social projects.

As for public contracts, the Federal Prosecutor’s Office agrees to refrain from requesting the annulment of contracts concluded between the Company and any entity of the Government. It also pledges that, in order to maintain the Company's economic capacity and allow the payment of the settlement, it will not restrain renewals, addendums and other contractual instruments pertaining to contracts and legal transactions between the signatory parties and the Government.

This is the highest fine ever established as a result of corrupt practices, surpassing, for example, the fines set forth in leniency agreements signed by companies such as Odebrecht (BRL 3.828 billion), Braskem (BRL 3.1 billion), Andrade Gutierrez (BRL 1 billion) and Camargo Correa (BRL 700 million) in connection with Operation Car Wash.