Document:

Exhibit

Exhibit 10.42
AMENDMENT NO. 12 TO LOAN AND SECURITY AGREEMENT, WAIVER AND CONSENT
THIS AMENDMENT NO. 12 TO LOAN AND SECURITY AGREEMENT, WAIVER AND CONSENT (this “Agreement”) is made as of May 12, 2020 by and among KEMET ELECTRONICS CORPORATION, a Delaware corporation (“KEC”), KEMET BLUE POWDER CORPORATION, a Nevada corporation  (“KEMET Blue”), THE FOREST ELECTRIC COMPANY ̧ an Illinois corporation (“FELCO” and, together with KEC and KEMET Blue, each individually, a “U.S. Borrower” and, collectively, “U.S. Borrowers”), KEMET ELECTRONICS MARKETING (S) PTE LTD., a Singapore corporation (“Singapore Borrower” and, together with U.S. Borrowers, each individually, a “Borrower” and, collectively, “Borrowers”), the financial institutions party hereto as lenders (collectively, “Lenders”) and BANK OF AMERICA, N.A., a national banking association, as agent for the Lenders (“Agent”).
W I T N E S S E T H:
WHEREAS, Borrowers, Lenders and Agent have entered into that certain Loan and Security Agreement dated as of September 30, 2010 (as amended, restated, renewed, extended, substituted, modified and otherwise supplemented from time to time, the “Loan Agreement”), and certain other Loan Documents (as defined in the Loan Agreement); 
WHEREAS, Borrowers have advised Agent and Lenders that Yageo Corporation, a corporation organized under the laws of the Republic of China (“Yageo Corporation”), intends to purchase all of the Equity Interests of Parent (the “Subject Transaction”); 
WHEREAS, Borrowers have requested that Agent and Lenders consent to and waive any provisions of the Loan Agreement that may prohibit or be violated by the Subject Transaction; and
WHEREAS, Borrowers have requested that Agent and Lenders agree to amend certain provisions of the Loan Agreement, and Agent and Lenders are willing to do so, subject to the terms and conditions set forth herein; 
NOW, THEREFORE, in consideration of the foregoing, and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto hereby agree as follows:
SECTION 1.    DEFINITIONS. 
Capitalized terms used and not defined in this Agreement shall have the respective meanings given them in the Loan Agreement.
SECTION 2.    ACKNOWLEDGMENTS.
2.1    Acknowledgment of Obligations.  Each Borrower hereby acknowledges, confirms and agrees that as of May 12, 2020, U.S. Borrowers are jointly and severally indebted to Agent and Lenders in respect of the Revolver Loans in the principal amount of $0 and in respect of LC Obligations in the amount of $0, and Singapore Borrower is indebted to Agent and Lenders in respect of the Revolver Loans in the principal amount of US$0.  All such amounts, together with interest accrued and accruing thereon, and fees, costs, expenses and other charges now or hereafter payable by each Borrower to Agent and Lenders, are unconditionally owing by such Borrower to Agent and Lenders in accordance with the terms of the Loan Documents, without offset, defense or counterclaim of any kind, nature or description whatsoever.
2.2    Acknowledgment of Security Interests.  Each Borrower hereby acknowledges, confirms and agrees that Agent, for the benefit of Secured Parties, has and shall continue to have valid, enforceable

and perfected first priority Liens, subject to Permitted Liens, upon and security interests in the Collateral of such Borrower granted prior to the date hereof to Agent, for the benefit of Secured Parties, pursuant to the Loan Documents or otherwise granted prior to the date hereof to or held by Agent, for the benefit of Secured Parties, and upon and in which Agent, for the benefit of Secured Parties, prior to the date hereof had perfected first priority Liens and security interests.

2.3     Binding Effect of Documents. Each Borrower hereby acknowledges, confirms and agrees that: (a) each of the Loan Documents to which it is a party has been duly executed and delivered, and each is in full force and effect as of the date hereof, (b) the agreements and obligations of such Borrower contained in the Loan Documents and in this Agreement constitute the legal, valid and binding obligations of such Borrower, enforceable against it in accordance with their respective terms, and such Borrower has no valid defense to the enforcement of such obligations, except as limited by applicable bankruptcy, insolvency, reorganization, moratorium, or similar laws affecting the rights of creditors generally and to the effect of general principles of equity whether applied by a court of law or equity, and (c) Agent and Lenders are and shall be entitled to the rights, remedies and benefits provided for in the Loan Documents and applicable law.
SECTION 3. WAIVER AND CONSENT IN RESPECT OF THE SUBJECT TRANSACTION.
3.1    Borrowers and the other Obligors have requested that Agent and the Lenders waive the application of any provision of the Loan Agreement, each other Loan Document and each Hedging Agreement that may prohibit or be violated by the Subject Transaction and consent to the Subject Transaction.
3.2    Subject to the terms and conditions set forth herein, Agent and the Required Lenders hereby (i) waive the application of each provision of the Loan Agreement, each other Loan Document and each Hedging Agreement that may prohibit or be violated by any of the Subject Transaction or that would result in any termination right or event as a result of the Subject Transaction, (ii) consent to the Subject Transaction, and (iii) waive any Default or Event of Default or Termination Event (as defined in each Hedging Agreement) that may have occurred or may otherwise occur as a result of the Subject Transaction.
SECTION 4.    AMENDMENTS. 
4.1    Section 1.1 of the Loan Agreement is hereby amended to insert the following new defined terms in the appropriate alphabetical order:
“Amendment No. 12 Effective Date: May 8, 2020.”
“IFRS” means the International Financial Reporting Standards in effect in the Republic of China from time to time.”
“LIBOR Screen Rate: as defined in Section 3.1.4.”
“LIBOR Successor Rate: as defined in Section 3.1.4.”
“LIBOR Successor Rate Conforming Changes: means, with respect to any proposed LIBOR Successor Rate, any conforming changes to the definition of Base Rate, Interest Period, timing and frequency of determining rates and making payments of interest and other technical, administrative or operational matters as may be appropriate, in the discretion of the Agent, to reflect the adoption and implementation of such LIBOR Successor Rate and to permit the administration thereof by the Agent in a manner substantially consistent with market practice (or, if the Agent determines that adoption of any portion of such market practice is not administratively feasible or

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that no market practice for the administration of such LIBOR Successor Rate exists, in such other manner of administration as the Agent determines is reasonably necessary in connection with the administration of this Agreement).”
“Relevant Governmental Body: means the Federal Reserve Board and/or the Federal Reserve Bank of New York, or a committee officially endorsed or convened by the Federal Reserve Board and/or the Federal Reserve Bank of New York for the purpose of recommending a benchmark rate to replace LIBOR in loan agreements similar to this Agreement.”
“Scheduled Unavailability Date: as defined in Section 3.1.4.”
“SOFR: means with respect to any day means the secured overnight financing rate published for such day by the Federal Reserve Bank of New York, as the administrator of the benchmark (or a successor administrator) on the Federal Reserve Bank of New York’s website (or any successor source) and, in each case, that has been selected or recommended by the Relevant Governmental Body.”
“SOFR-Based Rate: means SOFR or Term SOFR.”
“Term SOFR: means the forward-looking term rate for any period that is approximately (as determined by the Agent) as long as any of the Interest Period options set forth in the definition of “Interest Period” and that is based on SOFR and that has been selected or recommended by the Relevant Governmental Body, in each case as published on an information service as selected by the Agent from time to time in its reasonable discretion.”
“Yageo” means, collectively, Yageo Corporation and Sky Merger Sub, Inc., a Delaware corporation.”
“Yageo Acquisition: means the acquisition of Parent contemplated by the Agreement and Plan of Merger by and among Yageo Corporation, Sky Merger Sub Inc., and Parent dated as of November 11, 2019.”
“Yageo Change of Control:  means a Change of Control arising from the consummation of Yageo Acquisition.”
4.2    The definition of “Capital Lease” set forth in Section 1.1 of the Loan Agreement is hereby amended and restated in its entirety to read as follows:
“Capital Lease: any lease that is required to be capitalized for financial reporting purposes in accordance with GAAP (or after the Yageo Change in Control, in accordance with IFRS).” 
4.3    The definition of “Change of Control” set forth in Section 1.1 of the Loan Agreement is hereby amended and restated in its entirety to read as follows:
“Change of Control: (a) Parent ceases to own and control, beneficially and of record, directly or indirectly, all Equity Interests in all Borrowers; (b) any Person or “group” (within the meaning of Section 13(d) or 14(d) of the Securities Exchange Act of 1934, as amended), other than the Permitted Holders, is or becomes the “beneficial owner” (as defined in Rule 13d-3 under the Securities Exchange Act of 1934, as amended), directly or indirectly, of 35% or more of the outstanding voting power of the Equity Interests of the Borrowers or their direct or indirect parents; 

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or (c) all or substantially all of a Borrower’s assets are sold or transferred, other than sale or transfer to another Borrower.” 
4.4    The definition of “EBITDA” as set forth in Section 1.1 of the Loan Agreement is hereby amended and restated in its entirety to read as follows:
“EBITDA: for any period, for Parent and its Subsidiaries on a consolidated basis, an amount equal to net income for such period plus (a) the following to the extent deducted in calculating such net income, without duplication: (i) Interest Expense for such period; (ii) the provision for federal, state, local and foreign income taxes payable by Parent and its Subsidiaries for such period; (iii) the amount of depreciation and amortization expense for such period; (iv) all non-cash impairment charges (to the extent not captured in amortization) for such period; (v) non-cash expenses resulting from the grant of stock and stock options and other compensation to management personnel of Parent and its Subsidiaries; (vi) all non-cash expenses attributable to minority interests in Subsidiaries; (vii) all other non-cash charges (which, for the avoidance of doubt, shall not include write downs of Inventory); (viii) non-cash losses from foreign currency translations; (ix) fees, expenses or charges relating to the preparation, negotiation and delivery of, and the closing of the financing transactions contemplated by, the Loan Documents, the Term Documents and the TOKIN-SMTB Loan Documents; (x) Net Restructuring Charges (if the result of the calculation of Net Restructuring Charges is positive); (xi) losses in respect of any Asset Disposition by Parent and its Subsidiaries (net of fees and expenses relating to the transaction giving rise thereto), on an after-tax basis; (xii) any net losses attributable to the early extinguishment of Debt; (xiii) any expenses or charges related to any equity offering, any Investment permitted hereunder, any recapitalization or Debt permitted hereunder (whether or not successful), the incurrence of the Term Loans, the incurrence of the TOKIN-SMTB Loans, or the entering into of this Agreement and the issuance of Revolver Loans; and (xiv) fees, expenses, charges or transaction costs relating to the Yageo Acquisition, including the preparation, negotiation and delivery of, Amendment No. 12 to Loan and Security Agreement, Waiver and Consent; and minus (b) the following to the extent included in calculating such net income, without duplication: (i) non-cash gains from foreign currency translations to the extent included in calculating such net income for such period; (ii) all non-cash items increasing net income for such period; (iii) Net Restructuring Charges (if the result of the calculation of Net Restructuring Charges is negative); (iv) gains in respect of any Asset Disposition by Parent and its Subsidiaries (net of fees and expenses relating to the transaction giving rise thereto), on an after-tax basis; and (v) any net gains attributable to the early extinguishment of Debt.”
4.5    The definition of “Interest Expense” set forth in Section 1.1 of the Loan Agreement is hereby amended and restated in its entirety to read as follows:
“Interest Expense: the aggregate consolidated interest expense (net of interest income) of Parent and its Subsidiaries in respect of indebtedness determined on a consolidated basis in accordance with GAAP (or after the Yageo Change in Control, in accordance with IFRS), including amortization or original issue discount on any indebtedness and amortization of all fees payable in connection with the incurrence of such indebtedness, including, without limitation, the interest portion of any deferred payment obligation and the interest component of any Capital Leases, and, to the extent not included in such interest expense, any losses on hedging obligations or other derivative instruments entered into for the purpose of hedging interest rate risk, net of interest income and gains on such hedging obligations, and costs of surety bonds in connection with financing activities.” 

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4.6    The definition of “LIBOR” set forth in Section 1.1 of the Loan Agreement is hereby amended and restated in its entirety to read as follows:
“LIBOR: for any Interest Period with respect to a LIBOR Revolver Loan, the per annum rate of interest (rounded up to the nearest 1/8th of 1%) determined by Agent at or about 11:00 a.m. (London time) two (2) Business Days prior to commencement of such Interest Period, for a term equivalent to such Interest Period, equal to the London Interbank Offered Rate, or comparable or successor rate approved by Agent, as published on the applicable Reuters screen page (or other commercially available source designated by Agent from time to time); provided, that any comparable successor rate shall be applied by Agent, if administratively feasible, in a manner consistent with market practice; provided, further, that in no event shall LIBOR be less than one percent (1.0%).”
4.7    The definition of “Permitted Holders” set forth in Section 1.1 of the Loan Agreement is hereby amended and restated in its entirety to read as follows:
“Permitted Holders: Yageo.”
4.8    The definition of “Properly Contested” set forth in Section 1.1 of the Loan Agreement is hereby amended and restated in its entirety to read as follows:
“Properly Contested: with respect to any obligation of an Obligor, (a) the obligation is subject to a bona fide dispute regarding amount or the Obligor’s liability to pay; (b) the obligation is being properly contested in good faith by appropriate proceedings promptly instituted and diligently pursued; (c) appropriate reserves have been established in accordance with GAAP (or after the Yageo Change in Control, in accordance with IFRS); (d) non-payment could not reasonably be expected to have a Material Adverse Effect, nor result in forfeiture or sale of any assets of the Obligor; (e) no Lien is imposed on assets of the Obligor, unless bonded and stayed to the reasonable satisfaction of Agent; and (f) if the obligation results from entry of a judgment or other order, such judgment or order is stayed pending appeal or other judicial review.” 
4.9    Section 1.2 of the Loan Agreement is hereby amended and restated in its entirety to read as follows:
“1.2 Accounting Terms.  Under the Loan Documents (except as otherwise specified herein), all accounting terms shall be interpreted, all accounting determinations shall be made, and all financial statements shall be prepared, in accordance with GAAP (or after the Yageo Change in Control, in accordance with IFRS) applied on a basis consistent with the most recent audited financial statements of Parent delivered to Agent before the Closing Date and using the same inventory valuation method as used in such financial statements, except for any change required by GAAP (or after the Yageo Change in Control, in accordance with IFRS) if Borrowers’ certified public accountants concur in such change, the change is disclosed to Agent, and Section 10.3 is amended in a manner satisfactory to Borrowers and Required Lenders to take into account the effects of the change.”
4.10    Section 1.4 of the Loan Agreement is hereby amended and restated in its entirety to read as follows:
 “1.4 Certain Matters of Construction.  The terms “herein,” “hereof,” “hereunder” and other words of similar import refer to this Agreement as a whole and not to any particular section, paragraph or subdivision.  Any pronoun used shall be deemed to cover all genders.  In the 

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computation of periods of time from a specified date to a later specified date, “from” means “from and including,” and “to” and “until” each mean “to but excluding.”  The terms “including” and “include” shall mean “including, without limitation” and, for purposes of each Loan Document, the parties agree that the rule of ejusdem generis shall not be applicable to limit any provision.  Section titles appear as a matter of convenience only and shall not affect the interpretation of any Loan Document.  All references to (a) laws or statutes include all related rules, regulations, interpretations, amendments and successor provisions; (b) any document, instrument or agreement include any amendments, waivers and other modifications, extensions or renewals (to the extent permitted by the Loan Documents); (c) any section mean, unless the context otherwise requires, a section of this Agreement; (d) any exhibits or schedules mean, unless the context otherwise requires, exhibits and schedules attached hereto, which are hereby incorporated by reference; (e) any Person include successors and assigns; (f) time of day mean time of day at Agent’s notice address under Section 14.3.1, unless otherwise specified; or (g) discretion of Agent, Issuing Bank or any Lender mean the sole and absolute discretion of such Person.  All calculations of Value, fundings of Revolver Loans, and payments of Obligations shall be in Dollars and, unless the context otherwise requires, all determinations (including calculations of Borrowing Base and financial covenants) made from time to time under the Loan Documents shall be made in light of the circumstances existing at such time.  Borrowing Base calculations shall be consistent with historical methods of valuation and calculation, and otherwise satisfactory to Agent (and not necessarily calculated in accordance with GAAP (or after the Yageo Change in Control, in accordance with IFRS)).  Borrowers shall have the burden of establishing any alleged negligence, misconduct or lack of good faith by Agent, Issuing Bank or any Lender under any Loan Documents.  No provision of any Loan Documents shall be construed against any party by reason of such party having, or being deemed to have, drafted the provision.  Whenever the phrase “to the best of Borrowers’ knowledge” or words of similar import are used in any Loan Documents, it means actual knowledge of a Senior Officer, or knowledge that a Senior Officer would have obtained if he or she had engaged in good faith and diligent performance of his or her duties, including reasonably specific inquiries of employees or agents and a good faith attempt to ascertain the matter to which such phrase relates.”
4.11    Section 3.1.4 of the Loan Agreement is hereby amended and restated in its entirety to read as follows:
“3.1.4.    Inability to Determine Rates.  Notwithstanding anything to the contrary in this Agreement or any other Loan Documents, if the Agent determines (which determination shall be conclusive absent manifest error), or the Borrower or Required Lenders notify the Agent (with, in the case of the Required Lenders, a copy to the Borrower) that the Borrower or Required Lenders (as applicable) have determined, that:
(i)    adequate and reasonable means do not exist for ascertaining LIBOR for any requested Interest Period, including, without limitation, because the LIBOR quote on the applicable screen page (or other source) used by Agent to determine LIBOR (“LIBOR Screen Rate”) is not available or published on a current basis and such circumstances are unlikely to be temporary; or
(ii)    the administrator of the LIBOR Screen Rate or a Governmental Authority having jurisdiction over the Agent has made a public statement identifying a specific date after which LIBOR or the LIBOR Screen Rate shall no longer be made available, or used for determining the interest rate of loans, provided that, at the time of such statement, there is no successor administrator that is satisfactory to the Agent, that will continue to provide LIBOR after such specific date (such specific date, the “Scheduled Unavailability Date”); or

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(iii)    syndicated loans currently being executed, or that include language similar to that contained in this Section 3.1.4, are being executed or amended (as applicable) to incorporate or adopt a new benchmark interest rate to replace LIBOR,
then, reasonably promptly after such determination by the Agent or receipt by the Agent of such notice, as applicable, the Agent and the Borrower may amend this Agreement solely for the purpose of replacing LIBOR in accordance with this Section 3.1.4 (x) one or more SOFR-Based Rates or (y) another alternate benchmark rate giving due consideration to any evolving or then existing convention for similar U.S. dollar denominated syndicated credit facilities for such alternative benchmarks and, in each case, including any mathematical or other adjustments to such benchmark giving due consideration to any evolving or then existing convention for similar U.S. dollar denominated syndicated credit facilities for such benchmarks, which adjustment or method for calculating such adjustment shall be published on an information service as selected by the Agent from time to time in its reasonable discretion and may be periodically updated  (the “Adjustment;” and any such proposed rate, a “LIBOR Successor Rate”), and any such amendment shall become effective at 5:00 p.m. on the fifth Business Day after the Agent shall have posted such proposed amendment to all Lenders and the Borrower unless, prior to such time, Lenders comprising the Required Lenders have delivered to the Agent written notice that such Required Lenders (A) in the case of an amendment to replace LIBOR with a rate described in clause (x), object to the Adjustment; or (B) in the case of an amendment to replace LIBOR with a rate described in clause (y), object to such amendment; provided that for the avoidance of doubt, in the case of clause (A), the Required Lenders shall not be entitled to object to any SOFR-Based Rate contained in any such amendment.  Such LIBOR Successor Rate shall be applied in a manner consistent with market practice; provided that to the extent such market practice is not administratively feasible for the Agent, such LIBOR Successor Rate shall be applied in a manner as otherwise reasonably determined by the Agent.
If no LIBOR Successor Rate has been determined and the circumstances under clause (i) above exist or the Scheduled Unavailability Date has occurred (as applicable), the Agent will promptly so notify the Borrower and each Lender. Thereafter, (x) the obligation of the Lenders to make or maintain Eurodollar Rate Loans shall be suspended, (to the extent of the affected Eurodollar Rate Loans or Interest Periods), and (y) the Eurodollar Rate component shall no longer be utilized in determining the Base Rate. Upon receipt of such notice, the Borrower may revoke any pending request for a Borrowing of, conversion to or continuation of Eurodollar Rate Loans (to the extent of the affected Eurodollar Rate Loans or Interest Periods) or, failing that, will be deemed to have converted such request into a request for a Borrowing of Base Rate Loans (subject to the foregoing clause (y)) in the amount specified therein.

Notwithstanding anything else herein, any definition of LIBOR Successor Rate shall provide that in no event shall such LIBOR Successor Rate be less than one percent (1.0%) per annum for purposes of this Agreement.
In connection with the implementation of a LIBOR Successor Rate, the Agent will have the right to make LIBOR Successor Rate Conforming Changes from time to time and, notwithstanding anything to the contrary herein or in any other Loan Document, any amendments implementing such LIBOR Successor Rate Conforming Changes will become effective without any further action or consent of any other party to this Agreement, provided that, with respect to any such amendment effected, the Agent shall post each such amendment implementing such LIBOR Successor Conforming Changes to the Lenders reasonably promptly after such amendment becomes effective.”

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4.12    Section 9.1.7 of the Loan Agreement is hereby amended and restated in its entirety to read as follows:
“Financial Statements.  The consolidated and consolidating balance sheets, and related statements of income, cash flow and shareholder’s equity, of Parent and its subsidiaries that have been and are hereafter delivered to Agent and Lenders, are prepared in accordance with GAAP (or after the Yageo Change in Control, in accordance with IFRS) (subject, in the case of interim financial statements, to year-end adjustments and the absence of footnotes), and fairly present in accordance with GAAP (or after the Yageo Change in Control, in accordance with IFRS) the financial positions and results of operations of Borrowers and Subsidiaries at the dates and for the periods indicated.  All projections delivered from time to time to Agent and Lenders have been prepared in good faith, based on reasonable assumptions in light of the circumstances at such time.  Since March 31, 2010, there has been no change in the condition, financial or otherwise, of any Borrower or Subsidiary that could reasonably be expected to have a Material Adverse Effect.  No financial statement delivered to Agent or Lenders at any time contains any untrue statement of a material fact, nor fails to disclose any material fact necessary to make such statement not materially misleading.  Each Borrower is and Borrowers and Subsidiaries, taken as a whole, are Solvent.”
4.13    The lead in paragraph and clauses (a), (b) and (c) of Section 10.1.2 of the Loan Agreement are hereby amended and restated in their entirety to read as follows:
“10.1.2 Financial and Other Information.  Keep adequate records and books of account with respect to its business activities, in which proper entries are made in accordance with GAAP (or after the Yageo Change in Control, in accordance with IFRS) reflecting all financial transactions; and furnish to Agent and Lenders:
(a)    as soon as available, and in any event within ninety (90) days after the close of each Fiscal Year, balance sheets as of the end of such Fiscal Year and the related statements of income, cash flow and shareholders’ equity for such Fiscal Year, on consolidated and consolidating bases for Parent and its Subsidiaries, which consolidated statements shall be audited and certified (without qualification as to scope or going concern) by Ernst & Young LLP or another firm of independent certified public accountants of recognized standing selected by Parent and reasonably acceptable to Agent (it being understood that after the Yageo Change in Control, Deloitte & Touche LLP shall be so acceptable), and shall set forth in comparative form corresponding figures for the preceding Fiscal Year (as long as such consolidated statements for such preceding Fiscal Year are prepared using a comparable accounting standard) (it being understood and agreed that the timely filing with the SEC of Parent’s Form 10-K for such Fiscal Year shall satisfy such delivery requirement in this clause (a));
(b)    as soon as available, and in any event within forty-five (45) days after the end of each of the first three (3) Fiscal Quarters, unaudited balance sheets as of the end of such Fiscal Quarter and the related statements of income and cash flow for such Fiscal Quarter and for the portion of the Fiscal Year then elapsed, on consolidated and consolidating bases for Parent and its Subsidiaries, setting forth in comparative form corresponding figures for the preceding Fiscal Year (as long as such consolidated statements for such preceding Fiscal Year are prepared using a comparable accounting standard) and certified by the chief financial officer of Borrower Agent as prepared in accordance with GAAP (or after the Yageo Change in Control, in accordance with IFRS) and fairly presenting in all material respects the financial position and results of operations for such Fiscal Quarter and period, subject to normal year-end adjustments and the absence of footnotes (it being understood and agreed that the timely filing with the SEC of Parent’s Form 10-Q for such Fiscal Quarter shall satisfy such delivery requirement in this clause (b));

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(c)    as soon as available, and in any event within thirty (30) days after the end of each month (but within sixty (60) days after the last month in a Fiscal Year), unaudited balance sheets as of the end of such month and the related statements of income and cash flow for such month and for the portion of the Fiscal Year then elapsed, on consolidated and consolidating bases for Parent and its Subsidiaries, setting forth in comparative form corresponding figures for the preceding Fiscal Year (as long as such preceding Fiscal Year is prepared using a comparable accounting standard) and certified by the chief financial officer of Borrower Agent as prepared in accordance with GAAP (or after the Yageo Change in Control, in accordance with IFRS) and fairly presenting the financial position and results of operations for such month and period, subject to normal year-end adjustments and the absence of footnotes; provided, that the financial statements furnished to Agent and Lenders pursuant to this Section 10.1.2(c) for the last month in a Fiscal Year shall have appended to them supplemental schedules setting forth the same information for the last Fiscal Quarter of such Fiscal Year;”
4.14    Clauses (7) and (8) of Section 10.2.4 of the Loan Agreement are hereby amended and restated in their entirety to read as follows:
“(7) solely prior to the consummation of the Yageo Change of Control, Distributions to allow Parent to make repurchases and redemptions of Equity Interests in an aggregate amount not exceeding $15,000,000 in any fiscal year for fiscal years ending March 31, 2019, 2020 and 2021, so long as (a) on a pro forma basis for the thirty (30) consecutive day period immediately prior to and upon giving effect thereto, Aggregate Availability is greater than or equal to 15% of the Revolver Commitments at such time, and (b) immediately prior to and upon giving effect thereto, no Default or Event of Default exists; and 
(8) solely prior to the consummation of the Yageo Change of Control, other Distributions in an aggregate amount not exceeding $15,000,000 with respect to any Fiscal Year, so long as immediately prior to and upon giving effect thereto, no Default or Event of Default exists.”
4.15    Section 10.2.13 of the Loan Agreement is hereby amended and restated in its entirety to read as follows:
“10.2.13. Accounting Changes.  Make any material change in accounting treatment or reporting practices, except as required by GAAP or, after the Yageo Change of Control, as required by IFRS, and in accordance with Section 1.2; or change its Fiscal Year.”
4.16    Section 10 of the Loan Agreement is hereby amended to add the following new Section 10.2.22 at the end of such Section:
“10.2.22. Yageo Payments and Transactions. Without limiting any other covenant set forth in this Section 10.2, (i) make any payments or Distributions to or on behalf of Yageo or any of Yageo’s Subsidiaries or Affiliates (other than the Obligors), (ii) incur or pay any Debt for or on behalf of Yageo or any of Yageo’s Subsidiaries or Affiliates (other than the Obligors), (iii) make any investments in or on behalf of Yageo or any of Yageo’s Subsidiaries or Affiliates (other than the Obligors), (iv) enter into any transactions with Yageo or any of Yageo’s Subsidiaries or Affiliates (other than the Obligors), other than transactions in the ordinary course of business, upon fair and reasonable terms fully disclosed to Agent and no less favorable than would be obtained in a comparable arm’s-length transaction with a non-Affiliate, or (v) make any payments or Distributions to Parent for the purpose of Parent doing any of the foregoing.”

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SECTION 5.    REPRESENTATIONS, WARRANTIES AND COVENANTS.
Each Borrower hereby represents, warrants and covenants with and to Agent and Lenders as follows: 
5.1    Authorization.  
(a)Each Obligor has the corporate or limited liability company power and authority to execute, deliver and perform this Agreement and, in the case of the Borrowers, to obtain the extensions and increases of credit under the Loan Agreement as amended by this Agreement (the “Amended Loan Agreement”).
(b)No consent or authorization of, filing with, notice to or other act by, or in respect of, any Governmental Authority or any other Person is required to be obtained by the Loan Parties in connection with this Agreement, except (i) consents, authorizations, filings, acts and notices which have been obtained, taken or made and are in full force and effect and (ii) consents, authorizations, filings, acts and notices in respect of Liens created pursuant to the Loan Documents (including Liens to be created under foreign pledge agreements after the date hereof) and to the release of existing Liens.
(c)This Agreement has been duly executed and delivered on behalf of each Obligor that is a party hereto. This Agreement and the Loan Agreement constitute the legal, valid and binding obligations of the Borrowers and the other Obligors that are party thereto and are enforceable against the Borrowers and the other Obligors that are party thereto in accordance with their terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium or other laws affecting creditors’ rights generally and subject to general principles of equity, regardless of whether considered in a proceeding in equity or at law.
5.2    Representations in Loan Documents. Each of the representations and warranties made by or on behalf of such Borrower to Agent and Lenders in any of the Loan Documents was true and correct in all material respects when made (except for those representations and warranties that were already qualified by concepts of materiality or by express thresholds, which representations and warranties shall be true and correct in all respects) and is true and correct in all material respects on and as of the date of this Agreement with the same full force and effect as if each of such representations and warranties had been made by or on behalf of such Borrower on the date hereof and in this Agreement (other than such representations and warranties that relate solely to a specific prior date). 
5.3    Binding Effect of Documents. This Agreement and the other Loan Documents have been duly executed and delivered to the Lender by such Borrower and are in full force and effect, as modified hereby.
5.4    No Conflict, Etc. The execution, delivery and performance of this Agreement by such Borrower will not violate or cause a default under any Applicable Law or Material Contract of such Borrower and will not result in, or require, the creation or imposition of any Lien on any of its properties or revenues, other than Permitted Liens.
5.5    No Default or Event of Default. No Default or Event of Default exists immediately prior to the execution of this Agreement and no Default or Event of Default will exist immediately after the execution of this Agreement and the other documents, instruments and agreements executed and delivered in connection herewith.
5.6    Additional Events of Default. Any misrepresentation by such Borrower, or any failure of such Borrower to comply with the covenants, conditions and agreements contained in any Loan Document, herein or in any other document, instrument or agreement at any time executed and/or delivered by such Borrower with, to or in favor of Agent and/or Lenders shall, subject to the terms and provisions of the Loan 

10

Agreement and the other Loan Documents, constitute an Event of Default hereunder, under the Loan Agreement and the other Loan Documents.  
SECTION 6.    CONDITIONS PRECEDENT.
The effectiveness of the terms and provisions of this Agreement shall be subject to the receipt by Agent of this Agreement, duly authorized, executed and delivered by each Borrower, Lenders and Agent.
SECTION 7.    PROVISIONS OF GENERAL APPLICATION.
7.1    Effect of this Agreement. Except as modified pursuant hereto, and pursuant to the other documents, instruments and agreements executed and delivered in connection herewith, no other changes or modifications to the Loan Documents are intended or implied and in all other respects the Loan Documents are hereby specifically ratified, restated and confirmed by all parties hereto as of the effective date hereof. To the extent of conflict between the terms of this Agreement and the other Loan Documents, the terms of this Agreement shall control. Any Loan Document amended hereby shall be read and construed with this Agreement as one agreement.
7.2    Costs and Expenses. Borrowers absolutely and unconditionally agree to pay to Agent, on demand by Agent at any time and as often as the occasion therefor may require, whether or not all or any of the transactions contemplated by this Agreement are consummated: all reasonable fees and disbursements of any counsel to Agent in connection with the preparation, negotiation, execution, or delivery of this Agreement and any agreements delivered in connection with the transactions contemplated hereby and all reasonable out-of-pocket expenses which shall at any time be incurred or sustained by Agent or its directors, officers, employees or agents as a consequence of or in any way in connection with the preparation, negotiation, execution, or delivery of this Agreement and any agreements prepared, negotiated, executed or delivered in connection with the transactions contemplated hereby.
7.3    No Third Party Beneficiaries. The terms and provisions of this Agreement shall be for the benefit of the parties hereto and their respective successors and assigns; no other person, firm, entity or corporation shall have any right, benefit or interest under this Agreement.
7.4    Further Assurances. The parties hereto shall execute and deliver such additional documents and take such additional action as may be reasonably necessary or desirable to effectuate the provisions and purposes of this Agreement.
7.5    Binding Effect. This Agreement shall be binding upon and inure to the benefit of each of the parties hereto and their respective successors and assigns.
7.6    Merger. This Agreement sets forth the entire agreement and understanding of the parties with respect to the matters set forth herein. This Agreement cannot be changed, modified, amended or terminated except in a writing executed by the party to be charged.
7.7    Survival of Representations and Warranties. All representations and warranties made in this Agreement or any other document furnished in connection with this Agreement shall survive the execution and delivery of this Agreement and the other documents, and no investigation by Agent or any closing shall affect the representations and warranties or the right of Agent to rely upon them.
7.8    Severability. Any provision of this Agreement held by a court of competent jurisdiction to be invalid or unenforceable shall not impair or invalidate the remainder of this Agreement.

11

7.9    Reviewed by Attorneys. Each Borrower represents and warrants to Agent and Lenders that it (a) understands fully the terms of this Agreement and the consequences of the execution and delivery of this Agreement, (b) has been afforded an opportunity to have this Agreement reviewed by, and to discuss this Agreement and each document executed in connection herewith with, such attorneys and other persons as such Borrower may wish, and (c) has entered into this Agreement and executed and delivered all documents in connection herewith of its own free will and accord and without threat, duress or other coercion of any kind by any Person. The parties hereto acknowledge and agree that neither this Agreement nor the other documents executed pursuant hereto shall be construed more favorably in favor of one than the other based upon which party drafted the same, it being acknowledged that all parties hereto contributed substantially to the negotiation and preparation of this Agreement and the other documents executed pursuant hereto or in connection herewith.
7.10    Governing Law; Consent to Jurisdiction and Venue. 
(a)THIS AGREEMENT, UNLESS OTHERWISE SPECIFIED, SHALL BE GOVERNED BY THE LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO ANY CONFLICT OF LAW PRINCIPLES (BUT GIVING EFFECT TO FEDERAL LAWS RELATING TO NATIONAL BANKS).
(b)EACH BORROWER HEREBY CONSENTS TO THE NON-EXCLUSIVE JURISDICTION OF ANY FEDERAL OR STATE COURT SITTING IN OR WITH JURISDICTION OVER THE STATE OF NEW YORK, IN ANY PROCEEDING OR DISPUTE RELATING IN ANY WAY HERETO, AND AGREES THAT ANY SUCH PROCEEDING SHALL BE BROUGHT BY IT SOLELY IN ANY SUCH COURT. EACH BORROWER IRREVOCABLY WAIVES ALL CLAIMS, OBJECTIONS AND DEFENSES THAT IT MAY HAVE REGARDING SUCH COURT’S PERSONAL OR SUBJECT MATTER JURISDICTION, VENUE OR INCONVENIENT FORUM. EACH PARTY HERETO IRREVOCABLY CONSENTS TO SERVICE OF PROCESS IN THE MANNER PROVIDED FOR NOTICES IN SECTION 14.3.1 OF THE LOAN AGREEMENT. Nothing herein shall limit the right of Agent or any Lender to bring proceedings against any Obligor in any other court, nor limit the right of any party to serve process in any other manner permitted by Applicable Law. Nothing in this Agreement shall be deemed to preclude enforcement by Agent of any judgment or order obtained in any forum or jurisdiction.
7.11    Waivers. TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, EACH BORROWER WAIVES (A) THE RIGHT TO TRIAL BY JURY (WHICH AGENT AND EACH LENDER HEREBY ALSO WAIVES) IN ANY PROCEEDING OR DISPUTE OF ANY KIND RELATING IN ANY WAY HERETO; (B) PRESENTMENT, DEMAND, PROTEST, NOTICE OF PRESENTMENT, DEFAULT, NON-PAYMENT, MATURITY, RELEASE, COMPROMISE, SETTLEMENT, EXTENSION OR RENEWAL OF ANY COMMERCIAL PAPER, ACCOUNTS, DOCUMENTS, INSTRUMENTS, CHATTEL PAPER AND GUARANTIES AT ANY TIME HELD BY AGENT ON WHICH A BORROWER MAY IN ANY WAY BE LIABLE, AND HEREBY RATIFIES ANYTHING AGENT MAY DO IN THIS REGARD; (C) NOTICE PRIOR TO TAKING POSSESSION OR CONTROL OF ANY COLLATERAL; (D) ANY BOND OR SECURITY THAT MIGHT BE REQUIRED BY A COURT PRIOR TO ALLOWING AGENT TO EXERCISE ANY RIGHTS OR REMEDIES; (E) THE BENEFIT OF ALL VALUATION, APPRAISEMENT AND EXEMPTION LAWS; (F) ANY CLAIM AGAINST AGENT OR ANY LENDER, ON ANY THEORY OF LIABILITY, FOR SPECIAL, INDIRECT, CONSEQUENTIAL, EXEMPLARY OR PUNITIVE DAMAGES (AS OPPOSED TO DIRECT OR ACTUAL DAMAGES) IN ANY WAY RELATING TO ANY ENFORCEMENT ACTION, OBLIGATIONS, LOAN DOCUMENTS OR TRANSACTIONS RELATING THERETO; AND (G) NOTICE OF ACCEPTANCE HEREOF. Each Borrower acknowledges that the foregoing waivers are a 

12

material inducement to Agent and Lenders entering into this Agreement and that Agent and Lenders are relying upon the foregoing in their dealings with Borrowers. Each Borrower has reviewed the foregoing waivers with its legal counsel and has knowingly and voluntarily waived its jury trial and other rights following consultation with legal counsel. In the event of litigation, this Agreement may be filed as a written consent to a trial by the court.
7.12    Counterparts. This Agreement may be executed in one or more counterparts, each of which shall constitute but one and the same Amendment. In making proof of this Agreement, it shall not be necessary to produce or account for more than one counterpart thereof signed by each of the parties hereto. Delivery of an executed counterpart of this Agreement electronically or by facsimile shall be effective as delivery of an original executed counterpart of this Agreement.

[Signature page follows]

13

IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of the date first written above.

	
			
	KEMET ELECTRONICS CORPORATION

	 

	 
	 
	 

	By:
	/s/ GREGORY C. THOMPSON
	 

	Name:
	Gregory C. Thompson
	 

	Title:
	Executive Vice President and Chief Financial Officer
	 

	 
	 
	 

	KEMET ELECTRONICS MARKETING (S) PTE LTD.
	 

	 
	 
	 

	By:
	/s/ R. JAMES ASSAF
	 

	Name:
	R. James Assaf
	 

	Title:
	Director
	 

	 
	 
	 

	KEMET BLUE POWDER CORPORATION
	 

	 
	 
	 

	By:
	/s/ CHARLES C. MEEKS, JR.
	 

	Name:
	Charles C. Meeks, Jr.
	 

	Title:
	President
	 

	 
	 
	 

	THE FOREST ELECTRIC COMPANY
	 

	 
	 
	 

	By:
	/s/ CHARLES C. MEEKS, JR.
	 

	Name:
	Charles C. Meeks, Jr.
	 

	Title:
	President
	 

	 
	 
	 

	 
	 
	 

Signature Page to Amendment No. 12, Waiver and Consent

Acknowledged:
	
			
	KEMET CORPORATION
	 

	 
	 
	 

	By:
	/s/ GREGORY C. THOMPSON
	 

	Name:
	Gregory C. Thompson
	 

	Title:
	Executive Vice President and Chief Financial Officer

	 

	 
	 
	 

	KEMET SERVICES CORPORATION

	 

	 
	 
	 

	By:
	/s/ CONNIE W. FISCHER
	 

	Name:
	Connie W. Fischer
	 

	Title:
	President
	 

	 
	 
	 

	KRC TRADE CORPORATION

	 

	 
	 
	 

	By:
	/s/ RICHARD J. VATINELLE
	 

	Name:
	Richard J. Vatinelle
	 

	Title:
	Vice President – Treasurer
	 

	 
	 
	 

Signature Page to Amendment No. 12, Waiver and Consent

	
			
	BANK OF AMERICA, N.A.,
	 

	as Agent and sole Lender
	 

	 
	 
	 

	By:
	/s/ ANDREW A. DOHERTY
	 

	Name:
	Andrew A. Doherty
	 

	Title:
	Senior Vice President
	 

	 
	 
	 

Signature Page to Amendment No. 12, Waiver and Consenturov-ex101_6.htm

 

Exhibit 10.1

 

Execution Version

INFORMATION SHARING AND COOPERATION AGREEMENT

by and among

UROVANT SCIENCES LTD.,

AND

SUMITOVANT BIOPHARMA LTD.

Dated as of May 21, 2020

 

 

 

TABLE OF CONTENTS

 

	
 
	
 
	
 
	
 
	
Page

	
Article 1

	
Definitions And Interpretation

	
 
	
 
	
 
	
 
	
 

	
Section 1.01.
	
 
	
Definitions
	
 
	
1

	
Section 1.02.
	
 
	
Additional Defined Terms
	
 
	
6

	
Section 1.03.
	
 
	
Other Definitional and Interpretive Matters
	
 
	
6

	
 
	
 
	
 
	
 
	
 

	
Article 2

	
Financial Reporting And Disclosure Covenants

	
 
	
 
	
 
	
 
	
 

	
Section 2.01.
	
 
	
Financial Reporting and Controls
	
 
	
7

	
 
	
 
	
 
	
 
	
 

	
Article 3

	
Compliance Covenants

	
 
	
 
	
 
	
 
	
 

	
Section 3.01.
	
 
	
Compliance
	
 
	
12

	
 
	
 
	
 
	
 
	
 

	
Article 4

	
Exchange Of Information; Confidentiality

	
 
	
 
	
 
	
 
	
 

	
Section 4.01.
	
 
	
Privilege
	
 
	
14

	
Section 4.02.
	
 
	
Ownership of Information
	
 
	
14

	
Section 4.03.
	
 
	
Record Retention
	
 
	
15

	
Section 4.04.
	
 
	
Limitation of Liability
	
 
	
15

	
Section 4.05.
	
 
	
Confidentiality
	
 
	
15

	
Section 4.06.
	
 
	
Protective Arrangements
	
 
	
16

	
Section 4.07.
	
 
	
Preservation of Legal Privileges
	
 
	
17

	
 
	
 
	
 
	
 
	
 

	
Article 5

	
Tax Matters

	
 
	
 
	
 
	
 
	
 

	
Section 5.01.
	
 
	
PFIC
	
 
	
17

	
Section 5.02.
	
 
	
QEF Information
	
 
	
17

	
 
	
 
	
 
	
 
	
 

	
Article 6

	
Dispute Resolution

	
 
	
 
	
 
	
 
	
 

	
Section 6.01.
	
 
	
Limitation on Monetary Damages Equitable Remedies
	
 
	
18

	
Section 6.02.
	
 
	
Disputes
	
 
	
18

	
Section 6.03.
	
 
	
Escalation; Mediation
	
 
	
18

	
Section 6.04.
	
 
	
Binding Arbitration
	
 
	
19

i

 

 

 

	
Article 7

	
Further Assurances

	
 
	
 
	
 
	
 
	
 

	
Section 7.01.
	
 
	
Further Assurances
	
 
	
20

	
 
	
 
	
 
	
 
	
 

	
Article 8

	
Miscellaneous

	
 
	
 
	
 
	
 
	
 

	
Section 8.01.
	
 
	
Counterparts; Entire Agreement; Conflicting Agreements
	
 
	
21

	
Section 8.02.
	
 
	
No Construction Against Drafter
	
 
	
21

	
Section 8.03.
	
 
	
Governing Law
	
 
	
21

	
Section 8.04.
	
 
	
Assignability
	
 
	
21

	
Section 8.05.
	
 
	
Notices
	
 
	
21

	
Section 8.06.
	
 
	
Severability
	
 
	
22

	
Section 8.07.
	
 
	
Force Majeure
	
 
	
23

	
Section 8.08.
	
 
	
Headings
	
 
	
23

	
Section 8.09.
	
 
	
Termination; Survival
	
 
	
23

	
Section 8.10.
	
 
	
Waivers of Default
	
 
	
23

	
Section 8.11.
	
 
	
Specific Performance
	
 
	
23

	
Section 8.12.
	
 
	
Amendments
	
 
	
24

	
Section 8.13.
	
 
	
Waiver of Jury Trial
	
 
	
24

	
Section 8.14.
	
 
	
Limitation on Monetary Damages
	
 
	
24

	
Section 8.15.
	
 
	
Indemnity and Expenses
	
 
	
24

	
Section 8.16.
	
 
	
Maintenance of Insurance
	
 
	
24

	
Section 8.17.
	
 
	
No Third-Party Beneficiaries
	
 
	
24

	
Section 8.18.
	
 
	
Expenses
	
 
	
24

 

 

 

ii

 

 

INFORMATION SHARING AND COOPERATION AGREEMENT

This INFORMATION SHARING AND COOPERATION AGREEMENT (this “Agreement”), dated as of May 21, 2020 (the “Effective Date”), is entered into between Urovant Sciences Ltd., a Bermuda exempted limited company (the “Company”), and Sumitovant Biopharma Ltd., a Bermuda exempted limited company (“Sumitovant”) (with each of the Company and Sumitovant, a “Party” and, together, the “Parties”).

RECITALS

WHEREAS, Sumitovant is the majority shareholder of the Company;

WHEREAS, the Parties hereto desire to enter into an agreement to provide for certain rights and obligations associated with Sumitovant’s ownership of Common Shares, which rights and obligations are intended to be incremental to the rights and obligations set forth in the Investor Rights Agreement (as defined below);

WHEREAS, the Parties intend that this Agreement shall set forth the principal arrangements between Sumitovant and the Company regarding the sharing of information and cooperation of the Parties in connection with the preparation of each Party’s financial statements and, to the extent applicable, their respective reporting obligations under other circumstances;

NOW, THEREFORE, in consideration of the covenants and agreements contained herein, the Parties hereto agree as follows:

Article 1
Definitions and Interpretation

Section 1.01.Definitions.  The following terms, as used herein, have the following meanings:

“Affiliate” means, with respect to any Person, any other Person that, directly or indirectly through one or more intermediaries, controls, is controlled by or is under common control with such Person, including any general partner, managing member, officer or director of such Person or any venture capital, private equity or other investment fund or account now or hereafter existing that is controlled by one or more general partners or managing members of, or shares the same management company or investment advisor with, such Person.

“Applicable Money Laundering Laws” means Laws applying to the Company and, in the case of each Subsidiary of the Company, the Laws applying to such Subsidiary, prohibiting money laundering.

“Beneficially own” has the meaning specified in Rule 13d-3 promulgated under the Exchange Act.

“Audit Committee” means the Audit Committee of the Board.

 

 

 

 “Board” means the Board of Directors of the Company.

“Business Day” means any day other than a Saturday or Sunday on which banks are open for business in New York, New York, London, United Kingdom, and Bermuda.

“Bye-laws” means the Second Amended and Restated Bye-laws of the Company, as the same may be amended from time to time.

“Common Shares” means the common shares of the Company.

“Compensation Committee” means the Compensation Committee of the Board.

“Compliance Officer” means, with respect to any Person, the individual on the senior management of such Person who has been delegated the responsibility for ensuring compliance with all Specified Laws.

“Compliance Oversight Committee” means the Nominating, Corporate Governance and Compliance Oversight Committee of the Board.

“Compliance Program” means a quality and regulatory compliance program, overseen by the Compliance Oversight Committee, for ensuring compliance by the Company and its Subsidiaries with the Specified Laws.

“Control” means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a person, whether through the ownership of voting securities, by contract or otherwise, with “Controlled” having a correlative meaning.

“Data Privacy and Cybersecurity Rules and Regulations” means, collectively, all of the following to the extent relating to data privacy, data protection or cybersecurity (including the collection, storage, use, maintenance, access, disclosure, processing, security, transfer, aggregation, confidentiality, integrity and availability) of Personal Information, and confidential, proprietary and/or business information: (i) all Laws, encompassing U.S. state and federal, regional and international data privacy and cybersecurity laws, regulations and guidance including but not limited to the Health Insurance Portability and Accountability Act, the Gramm-Leach-Bliley Act, the Federal Information Security Management Act, the Fair Credit Reporting Act, the Fair and Accurate Credit Transaction Act, the Federal Trade Commission Act, the Privacy Act of 1974, the CAN-SPAM Act, the Telephone Consumer Protection Act, the Telemarketing and Consumer Fraud and Abuse Prevention Act, Children’s Online Privacy Protection Act, the EU Data Protection Directive, the EU General Data Protection Regulation, the Canadian Personal Information Protection and Electronic Documents Act, the Swiss Federal Act on Data Protections, and U.S. state data privacy, cybersecurity and data breach notification laws, (ii) the Company’s own rules, policies, procedures and public statements (including all data protection and privacy policies and related notices, (iii) industry-recognized privacy and cybersecurity standards (such as NAI, ISO 27001, COBIT, NIST, HIPAA, PCI-DSS, ITAR, etc.), and (iv) contracts into which the Company has entered or by which it is otherwise bound.

2

 

 

“Equity Securities” means, without duplication, (a) the Common Shares, (b) any other class of equity security or equity-linked security issued by the Company or any corporate successor thereto and (c) any other securities convertible into or exchangeable or exercisable for, or options, warrants or other rights to acquire, Common Shares, or any other equity or equity-linked securities issued by the Company or any corporate successor thereto.

“Exchange Act” means the U.S. Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated from time to time thereunder.

“FCPA” means the U.S. Foreign Corrupt Practices Act of 1977, as amended.

“FDA” means the U.S. Food and Drug Administration.

“GAAP” means either (a) United States generally accepted accounting principles, or (b) international financial reporting standards as issued by the International Accounting Standards Board, in each case if Sumitovant’s or the Company’s respective financial statements are at such time prepared in accordance therewith.

“Government Official” means (a) an officer or employee of any national, regional, local or other component of government; (b) a director, officer or employee of any entity in which a government or any component of a government possesses a majority or controlling interest; (c) a candidate for public office; (d) a political party or political party official; (e) an officer or employee of a public international organization (e.g., the European Commission or World Bank); and (f) any individual who is acting in an official capacity for any government, component of a government, political party or public international organization, even if such individual is acting in that capacity temporarily and without compensation.

“Health-Related Requirements” means (a) the federal Laws applicable to the activities of a pharmaceutical or biological product manufacturer, including but not limited to federal health care program and FDA requirements relating to research; development; interactions with health care professionals, patient advocacy or assistance organizations, charitable organizations, and professional societies; data integrity and security; labeling; marketing; sale; distribution; import; export; product pricing and reimbursement; Quality Management Systems; price, safety, and other reporting obligations; safety monitoring; or exclusion and debarment (collectively, “manufacturer activities”); (b) the U.S. anti-corruption Laws (e.g., the FCPA) applicable to manufacturer activities occurring outside the United States; and (c) non-U.S. laws that are equivalent to the requirements set forth in clauses (a) and (b) of this definition (e.g., the UKBA and any other applicable Laws prohibiting bribery and corruption).

“Investor Rights Agreement” means that certain investor rights agreement dated as of December 27, 2019 by and among the Company, Sumitovant and Sumitomo, as such agreement may be amended, replaced or otherwise modified from time to time.

3

 

 

“Law” means any national, federal, state, provincial, local or foreign law, statute, code, ordinance, rule, regulation, order, judgment, writ, stipulation, award, injunction, decree or arbitration award or finding.

“Local ABAC Laws” means local Laws applying to the Company and, in the case of each Subsidiary of the Company, the Laws applying to such Subsidiary, prohibiting bribery and corruption.

“Person” means an individual, company, corporation, limited liability company, partnership, association, joint stock company, trust, joint venture, unincorporated organization or other entity or organization, including a governmental authority.

“Quality Management Systems” means those systems supporting the development and manufacture of pharmaceutical drug substances (i.e., active pharmaceutical ingredients (APIs)) and drug products, including biotechnology and biological products, throughout the product lifecycle.

“Regulatory and Governance Requirements” means all (a) ethics, conduct, conflict, insider trading and other internal policies and guidelines applicable generally to Sumitovant or any of its Representatives and (b) applicable regulatory, internal controls (including internal controls with respect to financial reporting and remediation of any deficiencies), audit, compliance, record keeping, document retention, financial reporting, tax and legal requirements applicable to Sumitovant or any of its Representatives, in each case, as amended or updated from time to time.

“Reportable Event” means any event that may (a) represent a substantial deviation from applicable policies, procedures, systems or controls regarding Specified Laws; or (b) represent a violation of any Specified Law that could have a material compliance, regulatory, legal financial, reputational or safety impact on the Company, its Affiliates, and its or their stakeholders or patients, in each case, as reasonably determined by the Company.

“Representatives” means, with respect to a Person, such Person’s directors, officers, employees, agents, legal counsel, financial advisors and other representatives, including any appointed representative of such Person serving on the Board. In addition and without limiting the foregoing, with respect to Sumitovant, “Representatives” shall (a) include Sumitovant Biopharma, Inc. and Sumitomo, together with the respective directors, officers, employees, agents, legal counsel, financial advisors and other representatives of Sumitovant Biopharma, Inc. and Sumitomo Dainippon Pharma Co. and (b) exclude any Subsidiaries or Affiliates of Sumitovant Biopharma, Inc., Sumitomo, and Sumitovant, other than Sumitomo and Sumitovant.

“Sanctions” means economic or financial sanctions or trade embargoes, including (a) United Nations sanctions imposed pursuant to any United Nations Security Council Resolution; (b) U.S. sanctions administered by the Office of Foreign Assets Control of the U.S. Department of the Treasury, the U.S. Department of State, the U.S. Department of Commerce or any other U.S. government authority or department; (c) EU restrictive 

4

 

 

measures implemented pursuant to any EU Council or Commission Regulation or Decision adopted pursuant to a Common Position in furtherance of the EU’s Common Foreign and Security Policy; (d) UK sanctions adopted by the Terrorist Asset-Freezing etc. Act 2010 or other legislation and statutory instruments enacted pursuant to the United Nations Act 1946 or the European Communities Act 1972 or enacted by or pursuant to other Laws; and (e) any other trade, economic or financial sanctions Laws, embargoes or restrictive measures administered, enacted or enforced by any authority, government or official institution as applicable to Company and each of its Subsidiaries or any transaction in which Company or each Subsidiary of the Company is engaged.

“Sarbanes-Oxley Act” means the Sarbanes-Oxley Act of 2002, as amended, and the rules and regulations promulgated from time to time thereunder.

“SEC” means the U.S. Securities and Exchange Commission.

“Securities Act” means the U.S. Securities Act of 1933, as amended, and the rules and regulations promulgated from time to time thereunder.

“Specified Laws” means (a) the UKBA or FCPA; (b) applicable trade, economic or financial sanctions Laws, embargoes or other restrictive measures, including (i) Local ABAC Laws, (ii) Applicable Money Laundering Laws, (iii) Sanctions and (iv) applicable Laws prohibiting fraud, tax evasion, insider dealing and market manipulation; (c) applicable Health-Related Requirements; (d) applicable securities Laws, including the Exchange Act, the Sarbanes-Oxley Act and the Securities Act; (e) applicable Data Privacy and Cybersecurity Rules and Regulations; and (f) all other Laws of any jurisdiction that are similar to the Laws described in the foregoing clauses (a)–(e).

“Subsidiary” means, with respect to any specified Person, any other Person (a) Controlled by such first Person or (b) of which at least a majority of the securities or ownership interests having by their terms ordinary voting power to elect a majority of the board of directors or other persons performing similar functions is directly or indirectly owned or controlled by such first Person and/or by one or more of its Subsidiaries.

“Sumitomo” means Sumitomo Dainippon Pharma Co., Ltd., a company organized under the laws of Japan.

“Trigger Date” has the meaning set forth in the Bye-laws.

“Sumitomo Group” means Sumitomo and any entity that is a controlled Affiliate of Sumitomo (but in all events excluding the Company and its Subsidiaries).

“UKBA” means the UK Bribery Act 2010, as amended.

5

 

 

Section 1.02.Additional Defined Terms.  Each of the following terms is defined in the Section set forth opposite such term:

		
	
Term
	
Section

	
Agreement
	
Preamble

	
Annual Financial Statements
	
‎‎2.01(c)(ii)

	
Company
	
Preamble

	
Effective Date
	
Recitals

	
Expert Councils
	
‎‎3.01(e)

	
Indemnified Liabilities
	
‎8.15(a)(i)

	
Indemnitees
	
‎8.15(a)(i)

	
Policies
	
‎3.01(a)

	
Privilege
	
‎‎4.01

	
Quarterly Financial Statements
	
‎2.01(b)(i)

	
Sumitovant
	
Preamble

 

Section 1.03.Other Definitional and Interpretive Matters.  Unless otherwise expressly provided herein, for purposes of this Agreement, the following rules of interpretation shall apply:

(a)Calculation of Time. When calculating the period before which, within which or after which any act is to be done or step taken pursuant to this Agreement, the date that is the reference date in calculating such period shall be excluded. If the last day of such period is not a Business Day, the period in question shall end on the next succeeding Business Day.

(b)Dollars. Any reference in this Agreement to “$” means U.S. dollars.

(c)Gender and Number. Any reference in this Agreement to gender shall include all genders, and words imparting the singular number only shall include the plural and vice versa.

(d)Herein. The words “herein,” “hereof” and “hereunder” refer to this Agreement as a whole and not merely to a subdivision in which such words appear unless the context otherwise requires.

(e)Other. The words “include,” “includes” and “including” when used herein shall be deemed in each case to be followed by the words “without limitation.” The word “extent” in the phrase “to the extent” means the degree to which a subject or other thing extends, and such phrase does not mean simply “if.”

6

 

 

Article 2
Financial Reporting and Disclosure Covenants

Section 2.01.Financial Reporting and Controls.  The Parties agree that they will comply with the requirements set forth in this ‎Section 2.01, (A) with respect to Sections ‎2.01(d), ‎2.01(f) and ‎2.01(h)–‎(n) from and after the Effective Date, and (B) with respect to Sections ‎2.01(a)–‎(c), ‎2.01(e) and ‎2.01(g), from and after such time that Sumitovant (i) notifies the Company that it is actively engaging in the preparation of a registration statement to be filed under the Securities Act for an initial public offering of its securities or (ii) has a class of securities registered under Section 13(a) or 15(d) of the Exchange Act and Sumitovant is required (x) by GAAP to consolidate the results of operations and financial position of the Company, (y) to account for its investment in the Company under the equity method of accounting (determined in accordance with GAAP and consistent with SEC reporting requirements) or (z) to otherwise include separate financial statements of the Company in its filings with the SEC pursuant to any rule of the SEC.

(a)Disclosure of Financial Controls. In connection with the filing of Sumitovant’s annual and quarterly reports under the Exchange Act or any investigations of prior periods, the Company shall cause its principal executive officer and principal financial officer to provide to Sumitovant and its Representatives (A) on a timely basis, if this provision is applicable by virtue of ‎Section 2.01(B)(ii)(x) and (B) on a timely basis and if reasonably requested by Sumitovant, if this provision is applicable by virtue of Sections ‎2.01(B)(i) or (ii)(y) or (z), (1) certifications to Sumitovant corresponding to those required under Sections 302 and 906 of the Sarbanes-Oxley Act, (2) any certificate that may be reasonably necessary for Sumitovant to satisfy the requirements applicable to it under Section 404 of the Sarbanes-Oxley Act, (3) any certificates or other written information that the Company’s principal executive officer or principal financial officer received as support for the certificates provided to Sumitovant and (4) a reasonable opportunity to discuss with the Company’s principal financial officer and other appropriate officers and employees of the Company any issues reasonably related to the foregoing.

(b)Quarterly Financial Statements.

(i)As soon as reasonably practicable and no later than 15 days before the date by which Sumitovant is required to file a quarterly report on Form 10-Q if this provision is applicable by virtue of ‎Section 2.01(B)(ii)(x) above or 10 days before the date by which Sumitovant is required to file a quarterly report on Form 10-Q if this provision is applicable by virtue of ‎Section 2.01(B)(i) or (ii)(y) or (z) above, the Company will deliver to Sumitovant and its Representatives reasonably complete drafts of (A) the consolidated financial statements of the Company (and notes thereto) for the quarterly periods and for the period from the beginning of the current fiscal year to the end of such quarter, setting forth in each case in comparative form for each such fiscal quarter of the Company the consolidated figures (and notes thereto) for the corresponding quarter and periods of the previous fiscal year prepared in accordance with Article 10 of Regulation 

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S-X and GAAP and (B) a discussion and analysis by management of the Company’s financial condition and results of operations for such fiscal period, including, without limitation, an explanation of any material period-to-period change and any off-balance sheet transactions, prepared in accordance with Item 303(b) of Regulation S-K. The information set forth in (A) and (B) above is referred to in this Agreement as the “Quarterly Financial Statements.” As soon as reasonably possible and no later than 5 days before the date by which Sumitovant is required to file a quarterly report on Form 10-Q, the Company will deliver to Sumitovant and its Representatives the final form of the Quarterly Financial Statements; provided, however, that the Company may continue to revise such Quarterly Financial Statements prior to its filing thereof in order to make corrections, updates and changes, which corrections, updates and changes, if substantive, will be delivered by the Company to Sumitovant as soon as reasonably possible. At Sumitovant’s request, the Company’s Representatives will consult and discuss with Sumitovant’s Representatives any such corrections, updates and changes. To the extent that the fiscal year of Sumitovant is not the same as the fiscal year of the Company or Sumitovant is not subject to reporting obligations under Section 13(a) or 15(d) of the Exchange Act, the obligation to deliver Quarterly Financial Statements before the date by which Sumitovant is required to file its quarterly report on Form 10-Q shall be determined based on the date by which the Company is required to file its quarterly report on Form 10-Q.

(ii)As soon as reasonably practicable and no later than 45 days after the end of its fiscal year, the Company will deliver to Sumitovant and its Representatives a preliminary draft of its consolidated financial statements (excluding notes) for the last quarter of its fiscal year, setting forth in each case in comparative form for such fiscal quarter of the Company the consolidated figures (and notes thereto) for the corresponding quarter of the previous fiscal year prepared in accordance with Article 10 of Regulation S-X and GAAP; provided, however, that the Company may continue to revise such preliminary draft of its consolidated financial statements in order to make corrections, updates and changes in connection with the preparation of its audited annual financial statements, which corrections, updates and changes, if substantive, will be delivered by the Company to Sumitovant as soon as reasonably possible.

(c)Annual Financial Statements. As soon as reasonably practicable and no later than 60 days after the end of its fiscal year, the Company will deliver to Sumitovant and its Representatives reasonably complete drafts of  (i) the consolidated financial statements of the Company (and notes thereto) for such year, setting forth in each case in comparative form the consolidated figures (and notes thereto) for the previous fiscal years, prepared in accordance with Article 10 of Regulation S-X and GAAP and (ii) a discussion and analysis by management of the Company’s financial condition and results of operations for such year, including, without limitation, an explanation of any material period-to-period changes and any off-balance sheet transactions, prepared in accordance with Item 303(a) and 305 of Regulation S-K. The information set forth in ‎(i) and ‎(ii) above is referred to in this Agreement as the “Annual Financial Statements.” As soon as reasonably possible and in any event at least 5 business days before the date by which Sumitovant or its Representative is required to file its annual report on Form 10-K, the 

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Company will deliver to Sumitovant and its Representatives the final form of the Annual Financial Statements and an opinion on the Annual Financial Statements by the Company’s independent registered public accountants (the “Company Auditors”); provided, however, that the Company may, if necessary, continue to revise such Annual Financial Statements prior to the filing thereof in order to make corrections, updates and changes, which corrections, updates and changes, if substantive, will be delivered by the Company to Sumitovant as soon as reasonably possible. At Sumitovant’s request, the Company’s Representatives will consult and discuss with Sumitovant’s Representatives any such corrections, updates and changes. To the extent that the fiscal year of Sumitovant is not the same as the fiscal year of the Company or Sumitovant is not subject to reporting obligations under Section 13(a) or 15(d) of the Exchange Act, the obligation to deliver Annual Financial Statements before the date by which Sumitovant is required to file its annual report on Form 10-K shall be determined based on the date by which the Company is required to file its quarterly report on Form 10-K.

(d)Conformance of Financial Statements. Subject to the other terms in this Agreement, the Company shall not make or adopt any significant changes to its accounting estimates or accounting policies and principles from those in effect on the Effective Date to the extent that such changes would significantly impact Sumitovant’s financial statements. Notwithstanding the previous sentence, nothing in this Agreement shall prevent the Company from making those changes to its accounting estimates or accounting policies and principles if such changes are required by GAAP or which the Audit Committee determines are necessary or appropriate for the proper presentation of the Company’s financial statements; provided, however, that the Company shall first consult with Sumitovant.

(e)Earnings Releases and Similar Financial Information. The Company and Sumitovant will consult with each other as to the timing of their annual and quarterly earnings releases and any interim financial guidance for a current or future period, to the extent reasonably possible. If the Company and Sumitovant are unable to agree as to such timing, then Sumitovant and the Company shall each make reasonable efforts to issue their respective annual and quarterly earnings releases at approximately the same time on the same date, which will include for these purposes during the same period of time beginning after the close of market on one day and ending just prior to the opening of market on the next day. Sumitovant and the Company agree to consult with each other as to the timing of their respective earnings release conference calls.

(f)Other Press Releases. The Company shall provide Sumitovant advance notice of any material press release (aside from an earnings release and similar financial information to which subsection ‎(e) above applies); it being understood for the avoidance of doubt that this subsection (f) shall apply to any press release that communicates updates or other information with respect to filings with regulatory authorities, regulatory data, changes in commitment to investment timelines, new executive hires, executive terminations and/or resignations, financial results to the extent subsection (e) above does not apply, clinical/chemical and manufacturing controls/commercial disclosures, any other information related to the pipeline that is required to be disclosed pursuant to applicable law and any transactions and/or partnerships that are required to be disclosed pursuant to applicable law, to be issued by the Company and to take into consideration in good faith any timely comments from Sumitovant related to such press release.

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(g)Cooperation on Filings. The Company agrees to provide to Sumitovant and its Representatives, and to instruct the Company Auditors to provide to Sumitovant and its Representatives, all material information with respect to the Company that Sumitovant reasonably requires in connection with the preparation by Sumitovant of its Quarterly Reports on Form 10-Q, Annual Reports to Shareholders, Annual Reports on Form 10-K, any Current Reports on Form 8-K and any registration statements, or other filings made by Sumitovant with the SEC, any national securities exchange or otherwise made publicly available with respect to the disclosures pertaining to the Company (collectively, the “Sumitovant Public Filings”). The Company and Sumitovant agree to reasonably cooperate with each other with respect to the requesting and furnishing of such required information in order to enable Sumitovant to file all Sumitovant Public Filings within the deadlines as required by applicable law. The Company will cause the Company Auditors (as defined below) to consent to any reference to them as experts in any Sumitovant Public Filings required under any law, rule or regulation. In addition, Sumitovant shall provide to the Company necessary and appropriate information that the Company reasonably requires, to the extent Sumitovant has such information and the Company does not, in connection with required filings made by the Company to a reasonably applicable governmental authority.

(h)Access to the Company Auditors. The Company will authorize the Company Auditors to make reasonably available to Sumitovant’s auditors both the personnel who performed, or are performing, the annual audit and quarterly reviews of the Company and work papers related to the annual audit and quarterly reviews of the Company, in all cases within a reasonable time prior to Sumitovant’s auditors opinion date, so that Sumitovant’s auditors are able to perform the procedures they consider necessary to take responsibility for the work of the Company Auditors as it relates to Sumitovant’s auditors report on Sumitovant’s statements.

(i)Access to Records. If Sumitovant determines in good faith that there may be a material inaccuracy in the Company’s financial statements or deficiency or inadequacy in the Company’s internal accounting controls or operations that could reasonably be expected to materially impact Sumitovant’s financial statements, and at Sumitovant’s request, the Company will provide Sumitovant’s internal auditors with reasonable access to the Company’s books and records so that Sumitovant may conduct reasonable audits relating to the financial statements provided by the Company under this Agreement, as well as to the internal accounting controls and operations of the Company.

(j)Tax Information. Each Party shall make available to the other and its Representatives all information relating to such Party or any of its Subsidiaries necessary or appropriate to enable the other Party to prepare its federal, state, local and foreign income tax returns; provided that Sumitovant and its Representatives shall have no obligation to provide information about (A) its directors or investors or (B) its Subsidiaries other than the Company and the Company’s subsidiaries. Such information shall be prepared by the Party making it available at its sole cost and expense, and each Party shall make such information available to the other Party and its Representatives with reasonable promptness in light of the timing applicable to the purpose for which such information is to be used.

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(k)Compliance Inspection Rights. Without limiting the generality of the requirements of subsection ‎(m) of this ‎Section 2.01 or the information and inspection rights in Article III of the Investor Rights Agreement, the Company shall provide Sumitovant and its Representatives with the right to visit and inspect any of the offices and properties of the Company and its Subsidiaries and inspect the books and records of the Company and its Subsidiaries and controlled Affiliates as they relate to Specified Laws, as well as to review and make copies of correspondence and other documents, however sent or received, possessed by the Company and/or the Company’s Subsidiaries and controlled Affiliates pertaining to compliance with the Policies and Specified Laws, at such times as a Reportable Event has been communicated to the Company’s Board of Directors for the purpose of verifying and evaluating the Company’s and its Subsidiaries’ compliance with the Company’s Compliance Program, and to make appropriate officers and directors of the Company and its Subsidiaries available at such times as reasonably requested by Sumitovant for consultation with Sumitovant and its Representatives with respect to matters relating to the Compliance Program.

(l)Shareholder Information Rights. Without limiting the generality of the information and inspection rights of Article III of the Investor Rights Agreement, the Company shall, and shall cause each of its Subsidiaries to, promptly, upon reasonable request, (A) make available to Sumitovant and its Representatives such information, documents and other materials, whether current, historical or prospective, relating to the business of the Company or any of its Subsidiaries and in its possession and control (and subject to any Third Party confidentiality and use obligations or limitations) as Sumitovant may from time to time reasonably request, including, for the avoidance of doubt, clinical data and other regulatory information pertaining to the Company or any of its Subsidiaries, subject at all times to applicable law regarding the disclosure of such information; and (B) give Sumitovant and its Subsidiaries the reasonable opportunity to discuss any matters with the Company’s and its Subsidiaries’ senior management, in the case of each of clauses (A) and (B) in connection with any proper purpose. For the avoidance of doubt, proper purpose includes disclosure to Sumitovant of any such information, data, documents or other materials for its own internal research purposes, including but not limited to, for purposes of analyzing, and/or deriving learnings from, clinical data provided by the Company to Sumitovant hereunder; provided that, in no event does the provision of information hereunder grant Sumitovant any right (i) to disclose any such information to any Affiliate except that Sumitovant may disclose such information to Sumitomo on an as-needed basis subject to its obligations and any restrictions hereunder, (ii) to use any such information in any manner deemed in good faith by Sumitovant to be detrimental to the Company or its minority shareholders, or (iii) or to grant any other rights or licenses under or to any of the Company’s intellectual property, compounds, products or programs.  

(m)Provision of Information. The Company shall provide, or cause to be provided, to Sumitovant, as soon as reasonably practicable after request therefor, confirmation as to whether the Company is in possession of information that would reasonably be considered to be material nonpublic information with respect to the Company under applicable U.S. securities laws, and sufficient additional information as is necessary, in the reasonable judgment of Sumitovant and its counsel, to determine whether such information is material with respect to Sumitovant under applicable U.S. securities laws.

(n)Fiscal Year. The Company shall not change its fiscal year without the prior written consent of Sumitovant.

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Article 3
Compliance Covenants

Section 3.01.Compliance.  The Company shall observe the following requirements:

(a)Adoption of Policies. The Company shall adopt, implement and maintain at all times policies with respect to the Specified Laws, including with respect to regulatory, Quality Management Systems standards, internal controls (including with respect to financial reporting and remediation of deficiencies), audit, compliance, record keeping, document retention, financial reporting, tax and legal requirements (collectively, the “Policies”), in accordance with Section 4.1 of the Investor Rights Agreement and the respective charters of the Audit Committee, the Compliance Oversight Committee and the Compensation Committee.

(b)Compliance Committee. Absent a waiver by Sumitovant, the Board shall at all times have a Compliance Oversight Committee whose composition, meetings and proceedings shall be subject to the requirements for any other committee of the Board pursuant to the Bye-laws, to oversee the Company’s and its Subsidiaries’ Compliance Program. In administering the Compliance Program, the Compliance Oversight Committee shall:

(i)appoint an individual on the senior management team of the Company (the “Compliance Officer”) who will be responsible for the management and administration of the Compliance Program; provided that, until the Compliance Oversight Committee shall have appointed a Compliance Officer, the principal executive officer of the Company shall perform the duties of the Compliance Officer;

(ii)cause the Company and its Subsidiaries to implement a training and education plan to ensure that the Company’s employees receive adequate training regarding the Compliance Program; and

(iii)cause the Company to establish an internal reporting procedure that includes a confidential hot line mechanism to enable directors, officers, employees and agents of the Company and its Subsidiaries to report to the Compliance Officer (and/or such other person who is not in the reporting individual’s chain of command as the Compliance Oversight Committee may from time to time designate) any identified issues or questions associated with the Company’s policies, conduct, practices or procedures related to the Specified Laws.

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(c)Compliance Officer. In administering the Compliance Program, the Compliance Officer shall:

(i)make periodic reports (but in any event at least quarterly) regarding the status of the Compliance Program directly to the Compliance Oversight Committee;

(ii)make reports regarding compliance matters directly to the Board at any time he or she considers appropriate;

(iii)annually certify to the Compliance Oversight Committee (together with the principal executive officer of the Company, if the principal executive officer is not acting as Compliance Officer) that to the best of his or her knowledge and after reasonable due diligence, except as otherwise described in the report, the Company and its Subsidiaries and their respective directors, officers, employees and agents are each in compliance with all Specified Laws applicable to the Company and its Affiliates; and any other related compliance policies or requirements as may be reasonably requested and provided in writing in advance to the Compliance Officer (together with the principal executive officer of the Company, if the principal executive officer is not acting as Compliance Officer); provided that, if either the Compliance Officer or the principal executive officer of the Company is unable to provide such a certification, he or she shall provide an explanation directly to the Compliance Oversight Committee of the reasons why he or she is unable to provide such certification; and

(iv)notify the Compliance Oversight Committee of (1) any actual or threatened investigation, regulatory or legal proceeding involving the Specified Laws or (2) any Reportable Event, in each case within 48 hours after discovery of the underlying facts or as soon thereafter as practicable.

(d)Compliance with Law.

(i)The Company shall not, and shall cause its Subsidiaries and its and their respective directors, officers, employees and agents not to, directly or indirectly, make, offer, promise or authorize any payment or transfer of any money or anything of value to or for the benefit of a Government Official or individual employed by another entity in the private sector that would violate either the UKBA or the FCPA or engage in any conduct that would reasonably be expected to be deemed to violate the UKBA or the FCPA in any material respect.

(ii)The Company shall not, and shall cause its Subsidiaries and its and their respective directors, officers and employees not to, directly or indirectly, make, offer, promise or authorize any payment or transfer of any money or anything of value to or for the benefit of a Government Official or individual employed by another entity in the private sector that would violate Local ABAC Laws or engage in any conduct that would reasonably be expected to be deemed 

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to violate Local ABAC Laws, Applicable Money Laundering Laws, Sanctions or applicable Laws prohibiting fraud, tax evasion, insider dealing and market manipulation in any material respect.

(iii)The Company shall, and shall cause each of its direct and indirect Subsidiaries to, keep and maintain books and records reflecting accurately and in reasonable detail transactions involving the Company and its direct and indirect Subsidiaries and to implement financial controls giving reasonable assurance that payments will be made by or on behalf of the Company and its direct and indirect Subsidiaries only in accordance with management instructions.

(iv)The Company shall, and shall cause its Subsidiaries and its and their respective directors, officers and employees to, otherwise comply in all material respects with all Specified Laws.

(e)Participation on Expert Councils. To facilitate collaboration and best practices among Sumitovant, the Company and other Affiliates of Sumitovant and the Company, Sumitovant may from time to time sponsor expert councils (the “Expert Councils”). The Company shall participate in such Expert Councils by appointing an individual with relevant expertise to each such Expert Council. No such Expert Council shall be convened on more than a semi-annual basis, unless urgent circumstances dictate otherwise. The objectives of the Expert Councils shall include facilitating discussion on changes in the applicable field of expertise, trends in the field and experiences, best practices and issues of a general nature. All proceedings of an Expert Council shall be subject to the terms of confidentiality set forth in ‎Article 4.

Article 4
Exchange of Information; Confidentiality

Section 4.01.Privilege.  In the event that a Party reasonably determines that the provision of information pursuant to this Agreement would violate any law or bona fide contractual restriction, or result in the waiver of any Privilege, the Parties shall take all commercially reasonable measures to permit the compliance with the provision of information obligations in a manner that avoids any such harm or consequence, which shall include, but not be limited to, compliance with Sections ‎4.05, ‎4.06 and ‎4.07 hereof. For purposes of this Agreement, the term “Privilege” shall mean information and advice that has been previously developed but is legally protected from disclosure under legal privileges, such as the attorney-client privilege, work product exemption or similar concept of legal protection

Section 4.02.Ownership of Information.  Any information owned by a Party that is provided to the other Party pursuant to the terms of this Agreement shall be deemed to remain the property of such Party. Unless expressly set forth in this Agreement, nothing contained in this Agreement shall be construed as granting or conferring any right, title or interest (whether by license or otherwise) in, to, or under any such information.

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Section 4.03.Record Retention.  To facilitate the provision of information pursuant to this Agreement, the Company agrees to retain all information in its possession or control in accordance with its document retention policies, as such policies may be reasonably amended or revised after the Effective Date. The Company shall provide Sumitovant with reasonable notice of any material amendment or revision to its retention policies after the Effective Date.

Section 4.04.Limitation of Liability.  Each Party shall have no liability to the other Party in the event that any information exchanged or provided pursuant to this Agreement is found to be inaccurate or the requested information is not provided, in the absence of willful misconduct by, or gross negligence of, such Party. Each Party shall not have any liability to the other Party if any information is destroyed in compliance with its document retention policies.

Section 4.05.Confidentiality.  

(a)Subject to ‎Section 4.07, each Party (the “Receiving Party”) agrees to hold, and to cause its Representatives, including for the avoidance of doubt underwriters or other parties providing financing to such Party, to hold in strict confidence, with at least the same degree of care that applies to its confidential and proprietary information pursuant to its policies in effect as of the Effective Date, all information with respect to the other Party (the “Providing Party”) that is accessible to it, in its possession (including information in its possession prior to the Effective Date) or furnished by the Providing Party or its Representatives, or accessible to, in the possession of, or furnished to the Receiving Party or its Representatives pursuant to this Agreement or otherwise, including as a result of the Receiving Party’s Representatives serving on the Board, except, in each case, to the extent that such information  is or becomes part of the public domain through no breach of this Agreement by the Receiving Party or its Representatives,  was independently developed following the Effective Date by the Receiving Party or its Representatives who have not accessed or otherwise received the applicable information; provided that such independent development can be demonstrated by competent, contemporaneous written records of the Receiving Party, or  became or becomes available to the Receiving Party following the Effective Date on a non-confidential basis from a third Party who is not bound directly or indirectly by a duty of confidentiality to the Providing Party. The Parties acknowledge that they may have in their possession confidential or proprietary information of third Parties that was received under confidentiality or non-disclosure agreements with such third Party. The Parties will hold in strict confidence the confidential and proprietary information of third Parties to which they have access in accordance with the terms of any such agreements.

(b)Notwithstanding anything herein to the contrary, Sumitovant and its Representatives shall be permitted to:

(i)use the Company’s trademark in its written materials when referencing the Company;

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(ii)disclose confidential information (x) to Sumitovant’s attorneys, accountants, consultants and other outside professionals or advisors who are subject to a duty or undertaking of confidentiality to the extent necessary to obtain their services in connection with monitoring its investment in the Company or enforcing any of its rights under this Agreement or any other agreements with the Company; (y) to any Affiliate, if such Affiliate agrees to be bound by confidentiality provisions at least as restrictive as this Section 4.05, to the extent necessary to allow such Affiliate to support Sumitovant’s operations only and not for the benefit of such Affiliate; and (z) to any investor or potential investor of Sumitovant, if such prospective purchaser agrees to be bound by confidentiality provisions at least as restrictive as this ‎Section 4.05 and also agrees to customary standstill agreement with respect to the Company’s securities until such time as such confidential information is publicly disclosed;

(iii)provide confidential information regarding the Company (including but not limited to historical financial and other information) to persons who have a legitimate reason to know such information and who are under an obligation to keep such information confidential and to use such information in a manner consistent with the proper purpose for which the information has been shared with Sumitovant or its Representatives; and

(iv)publish non-confidential information of the Company (including but not limited to historical financial and other information).

(c)Notwithstanding anything to the contrary in this ‎Article 4, the Receiving Party shall have no right to use any information disclosed by the Providing Party unless otherwise provided for in this Agreement or specifically provided for in any other agreement between the Parties.

Section 4.06.Protective Arrangements.  In the event that the Receiving Party either determines on the reasonable advice of its counsel that it is required to disclose any information pursuant to applicable Law (including the rules and regulations of the SEC in connection with any proposed registration of the Receiving Party’s securities under the Securities Act or the Exchange Act, or pursuant to the requirements of any national securities exchange) or receives any request or demand from any governmental or regulatory authority to disclose or provide information of the Providing Party that is subject to the confidentiality provisions hereof, the Receiving Party shall, to the extent permitted by Law and except in connection with a general regulatory examination unrelated to the Providing Party, notify the Providing Party prior to disclosing or providing such information and shall reasonably cooperate at the expense of the Receiving Party in seeking any reasonable protective arrangements (including by seeking confidential treatment of such information) requested by the Providing Party. Subject to the foregoing, the Receiving Party may thereafter disclose or provide information solely to the extent required by such Law or requested or required by such governmental authority; provided, however, that the Receiving Party provides the Providing Party, to the extent legally permissible and except in connection with a general regulatory examination unrelated to the Providing Party, upon request with a copy of the information so disclosed.

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Section 4.07.Preservation of Legal Privileges.  

(a)The Parties recognize that they possess and will possess Privileged information. Each Party recognizes that they shall be jointly entitled to the Privilege with respect to such Privileged information and that each shall be entitled to maintain, preserve and assert for its own benefit all such information and advice, but the Parties shall ensure that such information is maintained so as to protect the Privileges with respect to the other Party’s interest. To that end, no Party will knowingly waive or compromise any Privilege associated with such information and advice without the prior written consent of the other Party, which shall not be unreasonably withheld. In the event that Privileged information is required to be disclosed to any arbitrator or mediator in connection with a dispute between the Parties, such disclosure shall not be deemed a waiver of Privilege with respect to such information, and any Party receiving it in connection with a proceeding shall be informed of its nature and shall be required to safeguard and protect it.

(b)Upon receipt by either Party of any subpoena, discovery or other request that may call for the production or disclosure of information that is the subject of a Privilege, or if a Party obtains knowledge that any current or former employee of a Party has received any subpoena, discovery or other request that may call for the production or disclosure of such information, such Party shall provide the other Party a reasonable opportunity to review the information and to assert any rights it may have under this ‎Section 4.07 or otherwise to prevent the production or disclosure of such information. Absent receipt of written consent from the other Party to the production or disclosure of information that may be covered by a Privilege, each Party agrees that it will not produce or disclose any information that may be covered by a Privilege unless a court of competent jurisdiction has entered a final, nonappealable order finding that the information is not entitled to protection under any applicable Privilege.

Article 5
Tax Matters

Section 5.01.PFIC.  For so long as Sumitovant owns Equity Securities, the Company will use reasonable best efforts to avoid, in respect of any taxable year, being treated as a passive foreign investment company (“PFIC”) within the meaning of Section 1297 of the Code, including, but not limited to, causing any of its subsidiaries to file an election pursuant to Treasury Regulation Section 301.7701-3. No later than 75 days after the end of each taxable year, the Company shall deliver to Sumitovant an analysis as to whether the Company believes that it will be treated as a PFIC in respect of such taxable year. Such analysis may be prepared by the Company, but in preparing such analysis the Company shall consult with its internationally recognized tax advisors.

Section 5.02.QEF Information.  For so long as Sumitovant owns Equity Securities, the Company shall use reasonable best efforts to provide, and shall cause each of its subsidiaries to use reasonable best efforts to provide, to Sumitovant all information that may be necessary to allow Sumitovant, and any direct or indirect owners of Sumitovant, to evaluate the analysis referenced in ‎Section 5.01 and to fulfill their U.S. tax 

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filing and reporting obligations. The Company shall provide, and shall cause each of its subsidiaries to provide, such information to Sumitovant, and any direct or indirect owners of Sumitovant, as may reasonably be required to timely file and maintain a “qualified electing fund” election (as defined in Section 1295(a) of the Code) with respect to any such entity.

Article 6
Dispute Resolution

Section 6.01.Limitation on Monetary Damages Equitable Remedies.  Subject to ‎Section 8.15, the Company and Sumitovant hereby agree that neither Party shall have any liability for monetary damages for any breach of this Agreement so long as such Party used commercially reasonable efforts to comply with the obligation such Party breached and continues thereafter to use commercially reasonable efforts to remedy such breach. In addition to other remedies provided by applicable law, the Company and Sumitovant may each enforce the provisions of this Agreement through such legal or equitable remedies as a court of competent jurisdiction shall allow without the necessity of proving actual damages or bad faith, and the Party subject to a claim under this Agreement hereby waives any claim or defense that such Party has an adequate remedy at law, and waives any requirement for the securing or posting of any bond in connection with such equitable remedy.

Section 6.02.Disputes.  The procedures for discussion, negotiation and mediation set forth in this ‎Article 6 shall apply to all disputes, controversies or claims (whether arising in contract, tort or otherwise) that may arise out of or relate to, or arise under or in connection with, this Agreement or the transactions contemplated hereby or thereby (including all actions taken in furtherance of the transactions contemplated hereby on the Effective Date). The Company hereby agrees that its members of the board of directors or senior management that are not affiliated with Sumitovant shall lead all discussions, negotiations and mediations that occur pursuant to this ‎Article 6.

Section 6.03.Escalation; Mediation.  

(a)It is the intent of the Parties to use their respective commercially reasonable efforts to resolve expeditiously any dispute, controversy or claim between or among them with respect to the matters covered by this Agreement. In furtherance of the foregoing, any Party involved in a dispute, controversy or claim with respect to such matters may deliver a notice (an “Escalation Notice”) demanding an in person meeting involving representatives of the Parties at a senior level of management of the Parties (or if the Parties agree, of the appropriate strategic business unit or division within such entity). A copy of any such Escalation Notice shall be given to the general counsel, or like officer or official, of each Party involved in the dispute, controversy or claim (which copy shall state that it is an Escalation Notice pursuant to this Agreement). Any agenda, location or procedures for such discussions or negotiations between the Parties may be established by the Parties from time to time; provided, however, that the Parties shall use their commercially reasonable efforts to meet within 30 days of the Escalation Notice.

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(b)If the Parties are not able to resolve the dispute, controversy or claim through the escalation process referred to in subsection ‎(a) above within 90 days of delivery of the Escalation Notice, then the matter shall be referred to mediation; provided that such period of time may be extended upon mutual written consent of the Parties. The Parties shall retain a mediator to aid the Parties in their discussions and negotiations by informally providing advice to the Parties. Any opinion expressed by the mediator shall be strictly advisory and shall not be binding on the Parties, nor shall any opinion expressed by the mediator be admissible in any other proceeding. The mediator may be chosen from a list of mediators previously selected by the Parties or by other agreement of the Parties. Costs of the mediation shall be borne equally by the Parties involved in the matter, except that each Party shall be responsible for its own expenses. Mediation shall be a prerequisite to the commencement of any action by either Party.

Section 6.04.Binding Arbitration.  

(a)If, after complying with the provisions set forth in ‎Section 6.03 above the Parties are unable to reach resolution to any dispute, controversy or claim between the Parties, any such dispute, controversy or claim between the Parties, including any claim arising out of, in connection with, or in relation to the interpretation, performance, breach, or termination of this Agreement, shall be resolved exclusively and finally by confidential binding arbitration. The seat, or legal place, of arbitration shall be New York, New York. The language of the arbitration shall be English. The arbitration shall be administered by the International Centre for Dispute Resolution in accordance with its International Arbitration Rules in force when the Notice of Arbitration is submitted in accordance with such Rules. Each Party shall select one person to act as arbitrator and the two selected shall select a third arbitrator, who shall act as president of the panel. Where there are multiple claimants or multiple respondents, the multiple claimants, jointly, and the multiple respondents, jointly, shall select the party-appointed arbitrators. Except as may be required by law, to comply with a legal duty, or to pursue a legal right, neither a party nor an arbitrator may disclose the existence, content, or results of any arbitration hereunder without the prior written consent of both parties. Nothing herein shall prevent either Party from seeking provisional measures from any court of competent jurisdiction, and any such request shall not be deemed incompatible with the agreement to arbitrate or a waiver of the right to arbitrate. Each Party shall consent, for purposes of provisional measures or the enforcement of any arbitral award, to the non-exclusive jurisdiction of the state and federal courts located in New York, New York, and each Party shall not assert that such courts constitute forum non-conveniens. The award shall be final and binding on the parties. Judgment on the award may be entered in any court of competent jurisdiction.

(b)Unless otherwise agreed in writing, the Parties will continue to provide service and honor all other commitments under this Agreement during the course of dispute resolution pursuant to the provisions of this ‎Article 6, except to the extent such commitments are the subject of such dispute, controversy or claim.

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Article 7
Further Assurances

Section 7.01.Further Assurances.  

(a)In addition to the actions specifically provided for elsewhere in this Agreement, each of the Parties hereto will cooperate with each other and shall use their commercially reasonable efforts to take, or cause to be taken, all actions, and to do, or cause to be done, all things, reasonably necessary, proper or advisable under applicable laws, regulations and agreements to consummate and make effective the transactions contemplated by this Agreement.

(b)Without limiting the foregoing each Party hereto shall cooperate with the other Party, and without any further consideration, but at the expense of the requesting Party, to execute and deliver, or use its commercially reasonable efforts to cause to be executed and delivered, all instruments, including instruments of conveyance, assignment and transfer and to make all filings with, and to obtain all consents, approvals or authorizations of, any governmental authority or any other person or entity under any permit, license, agreement, indenture, order, decree, financial assurance (including letter of credit) or other instrument, and to take all such other actions as such Party may reasonably be requested to take by such other Party hereto from time to time, consistent with the terms of this Agreement.

(c)Nothing in this Agreement shall be construed to restrict or limit any right, responsibility or authority of either of Parties hereto or their respective, independent registered public accountants, audit committee or board of directors in violation of any law, legal requirement or listing standard applicable to such Party, whether existing today or hereafter. In the event either Party hereto reasonably determines that any provision in this Agreement does or will so limit any right, responsibility or authority of such Party or such Party’s independent registered public accountants, audit committee or board of directors, then the Parties hereto agree to attempt to negotiate in good faith any changes necessary or advisable to this Agreement to avoid or prevent such violation.

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Article 8
Miscellaneous

Section 8.01.Counterparts; Entire Agreement; Conflicting Agreements.

(a)This Agreement may be executed in one or more counterparts all of which shall be considered one and the same agreement, and shall become effective when one or more counterparts have been signed by each of the Parties and delivered to the other Party. Execution of this Agreement or any other documents pursuant to this Agreement by facsimile or other electronic transmission (including in PDF form) shall be deemed to be, and shall have the same effect as, executed by an original signature.

(b)This Agreement contains the entire agreement of the Parties with respect to the subject matter hereof, supersede all previous agreements, negotiations, discussions, writings, understandings, commitments and conversations with respect to such subject matter and there are no agreements or understandings between the Parties with respect to such subject matter other than those set forth or referred to herein or therein.

(c)In the event and to the extent that there shall be a conflict between the provisions of this Agreement and the provisions of any other agreement between the Parties, the other agreement shall control with respect to the subject matter thereof, and this Agreement shall control with respect to all other matters.

Section 8.02.No Construction Against Drafter.  The Parties acknowledge that this Agreement and all the terms and conditions herein have been fully reviewed and negotiated by the Parties and their respective attorneys. Having acknowledged the foregoing, the Parties agree that any principle of construction or rule of law that provides that, in the event of any inconsistency or ambiguity, an agreement shall be construed against the drafter of the agreement shall have no application to the terms and conditions of this Agreement.

Section 8.03.Governing Law.  This Agreement shall be governed by and construed and interpreted in accordance with the laws of the State of New York, without regard to the conflict of laws principles thereof that would result in the application of any law other than the laws of the State of New York.

Section 8.04.Assignability.  This Agreement shall be binding upon and inure to the benefit of the Parties and their respective heirs, successors, legal representatives and permitted assigns; provided, however, that no Party may assign its respective rights or delegate its respective obligations under this Agreement without the express prior written consent of the other Party.

Section 8.05.Notices.  All notices, requests, claims, demands and other communications required or permitted hereunder to be given to a party to this Agreement shall be in person or in writing transmitted via email or mailed by registered or certified mail, postage prepaid, or otherwise delivered by hand or by messenger, addressed to such party’s address as set forth below or at such other address as the party shall have furnished to each other party in writing in accordance with this provision.

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If to Sumitovant, to:

Sumitovant Biopharma Ltd.
Suite 1, 3rd Floor
11-12 St. James’s Square
London SW1Y 4LB, United Kingdom

Attention: Corporate Secretary

 

with a copy sent concurrently to:

Sumitovant Biopharma, Inc.
320 W 37th Street, 6th Floor,

New York NY 10018

Attention: Head of Legal
Email: tara.soni@sumitovant.com

 

If to the Company to:

Urovant Sciences Ltd.
Suite 1, 3rd Floor
11-12 St. James’s Square
London SW1Y 4LB, United Kingdom
Attention: Corporate Secretary

with a copy sent concurrently to:

Urovant Sciences, Inc.
5281 California Avenue, Suite 100
Irvine, CA 92617
Attention: Bryan Smith, General Counsel
Email: bryan.smith@urovant.com

Any notice sent in accordance with this ‎Section 8.05 shall be effective (i) if mailed, 7 Business Days after mailing, (ii) if sent by messenger, upon delivery, and (iii) if sent via facsimile or email, upon transmission and electronic confirmation of receipt or (if transmitted and received on a non-Business Day) on the first Business Day following transmission and electronic confirmation of receipt (provided, however, that any notice of change of address shall only be valid upon receipt).

Section 8.06.Severability.  If any provision of this Agreement or the application thereof to any person or circumstance is determined by a court of competent jurisdiction to be invalid, void or unenforceable, the remaining provisions hereof or the application of such provision to persons or circumstances or in jurisdictions other than those as to which it has been held invalid or unenforceable, shall remain in full force and effect and shall in no way be affected, impaired or invalidated thereby, so long as the economic or legal substance of the transactions contemplated hereby is not affected in any manner adverse to any Party. Upon such determination, the Parties shall negotiate in good faith in an effort to agree upon such a suitable and equitable provision to effect the original intent of the Parties.

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Section 8.07.Force Majeure.  No Party shall be deemed in default of this Agreement to the extent that any delay or failure in the performance of its obligations under this Agreement results from any cause beyond its reasonable control and without its fault or negligence, such as acts of God, acts of civil or military authority, embargoes, epidemics, war, riots, insurrections, fires, explosions, earthquakes, floods, unusually severe weather conditions or labor problems. In the event of any such excused delay, the time for performance shall be extended for a period equal to the time lost by reason of the delay.

Section 8.08.Headings.  The article, section and paragraph headings contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement.

Section 8.09.Termination; Survival.  This Agreement and all covenants and obligations herein shall terminate upon the later of  the Trigger Date and such time as Sumitovant is no longer required by GAAP reporting requirements to consolidate the results of operations and financial position of the Company, account for its investment in the Company under the equity method of accounting (determined in accordance with GAAP and consistent with SEC reporting requirements) or otherwise include separate financial statements of the Company in its filings with the SEC pursuant to any rule of the SEC; provided that  the Parties may terminate this Agreement at any time upon mutual written consent and  Sumitovant may terminate this Agreement upon written notice to the Company in the event of a bankruptcy, liquidation, dissolution or winding-up of the Company. Notwithstanding any termination of this Agreement pursuant to this ‎Section 8.09, the obligations of the Parties hereto pursuant to Sections ‎4.01, ‎4.02, ‎4.04, ‎4.05, ‎4.06, ‎4.07, ‎Article 6, ‎Article 7 and ‎Article 8 (other than ‎Section 8.16 (Maintenance of Insurance)) shall survive until the expiration of the applicable statute of limitations.

Section 8.10.Waivers of Default.  Waiver by any Party of any default by the other Party of any provision of this Agreement shall not be deemed a waiver by the waiving Party of any subsequent or other default, nor shall it prejudice the rights of the other Party.

Section 8.11.Specific Performance.  The Parties acknowledge that money damages may not be an adequate remedy for violations of this Agreement .In the event of any actual or threatened default in, or breach of, any of the terms, conditions and provisions of this Agreement, the Party or Parties who are or are to be thereby aggrieved shall have the right to specific performance and injunctive or other equitable relief of its rights under this Agreement, in addition to any and all other rights and remedies at law or in equity, and all such rights and remedies shall be cumulative.

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Section 8.12.Amendments.  No provisions of this Agreement shall be deemed waived, amended, supplemented or modified by any Party, unless such waiver, amendment, supplement or modification is in writing and signed by an authorized representative of the Party against whom it is sought to enforce such waiver, amendment, supplement or modification.

Section 8.13.Waiver of Jury Trial.  SUBJECT TO ‎ARTICLE 6 AND SECTIONS ‎8.10 AND ‎8.11 HEREIN, EACH OF THE PARTIES HEREBY WAIVES TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY WITH RESPECT TO ANY COURT PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF AND PERMITTED UNDER OR IN CONNECTION WITH THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT. EACH OF THE PARTIES HEREBY (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF THE OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT, AS APPLICABLE, BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 8.13.

Section 8.14.Limitation on Monetary Damages.  The Parties hereto hereby agree that no Party shall have any liability for monetary damages for any breach of this Agreement so long as such Party used commercially reasonable efforts to comply with the obligation such Party breached and continues thereafter to use commercially reasonable efforts to remedy such breach.

Section 8.15.Indemnity and Expenses.  

(a)Indemnification.  Each Party shall indemnify and hold harmless the other Party and its Indemnitees for any breach of ‎Section 4.05 hereof due to the gross negligence or willful misconduct of such Party or its Representatives.

(b)Maintenance of Insurance.  The Company shall, and shall cause its Subsidiaries to,  maintain Sumitovant as additional named insured on each of its and its Subsidiaries’ insurance policies and arrangements during the term of this Agreement and  maintain insurance coverage reasonably sufficient to meet its indemnification obligations under this Agreement.

(c)No Third-Party Beneficiaries.  This Agreement is not intended, nor shall it be deemed, to confer any rights or remedies on any person other than the Parties hereto and their respective successors and assigns. This Agreement does not create any third-party beneficiary hereto and the Company and Sumitovant are the only parties entitled to commence any action, proceeding or claim under this Agreement.

24

 

 

(d)Expenses.  Each Party is responsible for its own fees, costs and expenses incurred in connection with this Agreement and the activities contemplated hereby; provided, that to the extent that the observation of the covenants and performance of the obligations set forth in this Agreement will result in additional significant financial expenses to the Company, the Company will use reasonable efforts to notify Sumitovant in advance of the incurrence of such expense, then Sumitovant will promptly reimburse the Company upon the Company’s reasonable request for reimbursement of such additional financial expenses incurred by the Company.

 

 

25

 

 

IN WITNESS WHEREOF, the parties hereto, intending to be legally bound, have caused this Agreement to be executed as of the date first written above.

		
	
UROVANT SCIENCES LTD.

	
By:
	
/s/ James A. Robinson

	
 
	
Name:James A. Robinson

	
 
	
Title:Principal Executive Officer

 

		
	
SUMITOVANT BIOPHARMA LTD.

	
By:
	
/s/ Marianne L. Romeo

	
 
	
Name: Marianne L. Romeo

	
 
	
Title: Head, Global Transactions &

Risk Management

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