Acceptance Letter, dated March 4, 2020, between Arcturus Therapeutics Holdings Inc. and the Economic Development Board of Singapore

Claims must be submitted using the prescribed Forms la and lb and be certified by a duly authorised signatory of the Grantee. Each claim should cover a period of at least 6 months. The amount of grant monies disbursed shall be based on the actual qualifying cost items incurred by the Grantee on the Project during the Qualifying Period.

All claims must be externally audited by a Public Accountant/audit firm registered with the Accounting and Corporate Regulatory Authority. The External Auditor's Statement, in accordance with the prescribed format in Annex 2, shall be submitted at least once every 12 months from the start of the claim period, and shall be accompanied by Forms la and lb as stamped by the external auditor (or stamped copies of Forms la and lb that were previously submitted) for the claims covered in the Statement. The Grantee shall make available to its auditor this Letter of Award and its accompanying annexes, including the Terms of Reference for External Auditors at Annex 2. In the event that the external auditor cannot issue an unqualified statement, EDB shall have direct access to the external auditor to obtain details with regard to the audit findings. For the avoidance of doubt, nothing in this paragraph prevents the Grantee from submitting unaudited claims in the interim.

The final audited claim shall be submitted to EDB with complete documentation (including the External Auditor's Statement on such part of the Qualifying Period as was not covered in the previous audit, if any) within 183 calendar days from the end of the Qualifying Period, or from completion or termination of the Project, whichever is earlier, unless otherwise approved by EDB.

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Disbursements for any qualifying equipment shall only be made after the equipment has been commissioned for the Project. In cases where the commissioning of equipment is not applicable, disbursements shall only be made after the qualifying equipment has been delivered.

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The Grantee shall submit the following:

An Annual Progress Update, in accordance with the prescribed format in Annex 3. This is to be submitted as and when notified by EDB.

A Final Progress Update, in accordance with the prescribed format in Annex 4. This is to be submitted within 183 calendar days from completion or termination of the Project, unless otherwise approved by EDB.

The submission by the Grantee and EDB’s acceptance of the above progress updates shall not, in and of itself, constitute a waiver or variation of any of the terms and conditions of this Incentive, or a waiver of any breach thereof.  If required by EDB, the Grantee must undertake to submit additional information and supporting documents to substantiate the information provided.

The Grantee shall implement the Project as stated in the Application throughout the qualifying period.

Where the term appears in this Letter of Award, cumulative fixed asset investment (FAI) refers to fixed assets (at cost), excluding land, as at the milestone date specified.  Additional fixed asset investment (FAI) refers to additional fixed assets (at cost), excluding land, invested over the specified period. In each case, the calculation of FAI shall be net of disposal of assets.  Where there is a requirement to “maintain” FAI, this means that any sale of the assets constituting the requisite FAI shall be compensated for by the incurring of replacement FAI.

Where the term appears in this Letter of Award, Total Business Expenditure (TBE) shall be ascribed the meaning attributed to it under Item D in Part II of the EDB Core Form. Unless otherwise specified in the Letter of Award, TBE refers to the expenditure incurred during the relevant twelve-month period immediately preceding the due date of the condition in question.

Where the terms appear in this Letter of Award, the terms: -

“Skilled Employees” shall refer to “Professionals”, “Managers”, “Associate Professionals and Technicians” and “Skilled Production Craftsmen”, each as identified as the same in the EDB Supplementary Form;

“Research Scientists and Engineers (RSEs)” shall refer to scientists and engineers who are principally employed in a research capacity;

A person is “based in Singapore” if he/she is a tax resident of Singapore; and

“Singapore publicly-funded IHLs” refer to National University of Singapore (NUS), Nanyang Technological University (NTU), Singapore Management University (SMU), Singapore University of Technology and Design (SUTD), Singapore Institute of Technology (SIT), Singapore University of Social Sciences (SUSS), Institute of Technical Education (ITE), and all Polytechnics in Singapore.

Virement from one qualifying cost category to another is not permitted unless first approved in writing by EDB.

Grant monies are not to be applied towards the payment of any form of taxes, including but not limited to GST and withholding taxes.

All Grant monies received shall be used solely for the implementation of the Project.

EDB reserves the right to –

require the provision of any document or information for the purposes of verifying a claim; and

reject any claim not submitted in accordance with the prescribed procedures or in respect of which the Grantee is unable to provide justification to EDB’s satisfaction.

The Grantee is to carry out all related party transactions at arm’s length. A related party, for the purposes of this clause, is determined with reference to Financial Reporting Standards 24.

The Grantee shall –

upon receipt of at least two weeks’ notice in writing from EDB, and for the purpose of allowing EDB to determine whether the Grantee is complying with the terms and conditions of the Incentive, permit EDB officers or such other persons as EDB may nominate to inspect the premises where the Project is carried out, the Grantee's accounts on expenditures related to the Project and the Grantee’s records on the progress of the Project, and such other information or documents as EDB may consider necessary.  Any inspections shall be carried out at reasonable intervals.  The Grantee shall, upon notification from EDB, reimburse EDB for reasonable costs incurred by EDB or its nominee in connection with any inspection carried out pursuant to this sub-clause;

if required by EDB, submit a report comparing its projections in the Application with the actual realised figures. The template for this report and the timeline for submission will be provided by EDB;

if required by EDB, submit an external auditor’s report setting out its progress in meeting the terms and conditions of the Incentive. Where an external auditor’s report is required, EDB may specify that this be submitted by a stipulated deadline and follows the Agreed-Upon Procedures Report Template (“AUP Template”) as published on the website of the Institute of Singapore Chartered Accountants.  In the event that the external auditor cannot issue an unqualified statement, EDB may elect to have direct access to the external auditor to gather details with regard to the external auditor’s findings and the Grantee shall facilitate EDB’s access in this regard, including but not limited to providing all necessary consents to enable the external auditor to resolve EDB’s queries and/or concerns to EDB’s satisfaction;

if required by EDB, submit a copy of its statutory filings (e.g. annual financial statements and audited accounts), together with the detailed profit and loss statement; and  

provide information reasonably related to the Grant as well as other information required by EDB including responses to surveys or any other studies that may be carried out by EDB from time to time.

The Grantee shall comply with the terms and conditions set out in the Letter of Award until the end of the Qualifying Period or the due date of the final condition(s) imposed under Section 2 of the Letter of Award, whichever is later. The Grantee shall notify EDB as soon as possible should it fail to fulfill or maintain any said term or condition.  

Under no circumstances shall a failure to comply with the terms and conditions of the Grant permit the Grantee to unilaterally treat the Grant as having been terminated or revoked.

Should the Grantee seek the withdrawal, termination, or revocation of the Grant, it shall make a request in writing to EDB and the Grant shall continue to have effect until such time as the request is approved and EDB notifies the Grantee of the revocation of the Grant.  

In the event of any breach of any term or condition of the Grant, EDB shall give due consideration to a reassessment of the same. Notwithstanding the foregoing, EDB reserves the right to stop all disbursements, recover from the Grantee the total amount of Grant monies paid to the Grantee, and require payment by the Grantee of all costs and interest incurred by EDB in connection with such recovery.

In the event –

the Project is terminated or aborted;

the Grantee is likely to cease to exist as a distinct legal entity during the qualifying period; or

where the Grantee is a foreign company with a branch registered in Singapore with the Accounting and Corporate Regulatory Authority, the Grantee’s business operations or registration with the Accounting and Corporate Regulatory Authority is likely to cease during the Qualifying Period

the Grantee shall be obliged to inform EDB in writing of the same immediately, and in the case of sub-clauses (b) and (c), where the cessation of existence, cessation of business operations or cessation of registration is initiated by the Grantee, EDB shall be informed at least 183 calendar days before the intended date of cessation of existence, cessation of business operations or cessation of registration, as the case may be; and

such termination, abortion, cessation of existence, cessation of business operations or cessation of registration, as the case may be, shall constitute a breach of the terms and conditions of the Grant.

The terms and conditions of the Grant shall be kept confidential by the Grantee and shall be disclosed to a director, officer or employee of the Grantee only to the extent that the disclosure is necessary for the said director’s, officer’s or employee’s as the case may be, performance of his duties. Said information shall not be disclosed to any third parties, including but not limited to the general public and the press, except with the prior written approval of EDB. Notwithstanding the generality of the foregoing, the Grantee may release said information, on a strictly confidential and need to know basis, to auditors, tax consultants and legal advisors as may be necessary for the purposes of obtaining professional advice PROVIDED the Grantee ensures that such third parties are first informed of, and acknowledge in writing, the confidential nature of the disclosed information. The Grantee may also release

the said information to the Inland Revenue Authority of Singapore (IRAS) where the release is made pursuant to a statutory obligation owed to IRAS.  

The failure by EDB to insist upon strict performance of the terms and conditions of the Grant shall not constitute a waiver of any of EDB's rights therein, at law or in equity, or a waiver of EDB’s right subsisting or future, to require the Grantee to comply  with any other term or condition of the Grant.

Neither EDB nor the Grantee shall, by virtue of the Letter of Award, be deemed to be in a relationship of partnership, agency or employment with the other.

No person, save EDB and the Grantee, shall have any right under any statutory provisions or applicable law to the extent their operation may be excluded, to enforce against EDB or the Grantee any of the terms or conditions of the Grant.

Save with the prior written approval of EDB, the Grantee may not seek or receive monies from any other incentives by the Government of Singapore or any of its agencies for funding of the Project.

EDB reserves the right to amend the terms and conditions of the Grant in the event of any errors on the part of EDB, including but not limited to typographical errors and accidental omissions. All other amendments to the terms and conditions in the Letter of Award shall be subject to mutual written consent.

The Letter of Award embodies the entire agreement between EDB and the Grantee in respect of the Grant and any prior or contemporaneous representations, either oral or written, are hereby superseded.

Headings or titles in this Letter of Award are for reference and convenience only and do not form part of this Letter of Award and shall not affect its interpretation.

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