EXHIBIT 4.6
Redacted
[LOGO]
Technology Partnerships Partenariat Technologique
Canada Canada
An Agency of Un organisme
Industry Canada d'Industrie Canada
"TPC" AGREEMENT NO. 710-488685
TECHNOLOGY PARTNERSHIPS CANADA
OPERATIONAL SITUATIONAL AWARENESS TECHNOLOGIES
THIS AGREEMENT MADE
BETWEEN: HER MAJESTY THE QUEEN IN RIGHT OF CANADA
as represented by the Minister of Industry
(hereinafter referred to as "the MINISTER")
AND: OFFSHORE SYSTEMS LTD., a corporation duly incorporated under the laws
of British Colombia, having its head office located at 107 - 000 Xxxx
0xx Xxxxxx, Xxxxx Xxxxxxxxx, X. X., X0X 0X0
(hereinafter referred to as "the PROPONENT")
AND: OFFSHORE SYSTEMS INTERNATIONAL LTD., a corporation duly incorporated
under the laws of British Colombia, having its head office located at
107 - 000 Xxxx 0xx Xxxxxx, Xxxxx Xxxxxxxxx, X. X., X0X 0X0
(hereinafter referred to as "the INTERVENER")
WHEREAS in a context in which innovation is essential in an increasingly
knowledge-based economy, the Minister is charged with the achievement of
Canada's objectives of increasing economic growth, creating jobs and wealth, and
supporting sustainable development; and
WHEREAS the Technology Partnerships Canada ("TPC") Program is specifically
designed to promote the above objectives by means of strategically investing in
research, development and innovation in order to encourage private sector
investment, and so maintain and grow the technology base and technological
capabilities of Canadian industry throughout the country, and
WHEREAS the Minister agrees to make a TPC investment in the Proponent's project
described in this Agreement, considering that:
a) the project will enhance Canadian technological capability in electronic
marine navigational displays and information systems;
b) the new technologies and resulting products are expected to offer
significant performance advantages over existing software, hardware,
display, integration and processing technologies;
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c) the resulting products are expected to contribute to meeting a growing
demand for high performance displays, software, hardware, electronic
controls and processing products; and
d) the project is expected to generate significant jobs and leverage
additional R&D activity in Canada;
AND WHEREAS the entering into this Agreement is not contingent upon any export
performance on the part of the Proponent.
NOW, THEREFORE, in consideration of their respective obligations set out below,
the parties hereto agree as follows.
ARTICLE 1 - DEADLINE FOR RECEIPT OF SIGNED AGREEMENT
1.1 This Agreement must be signed by the Proponent and received by the
Minister within thirty (30) days of its signature on behalf of the
Minister, failing which it will be null and void.
ARTICLE 2 - DOCUMENTS FORMING PART OF THIS AGREEMENT
2.1 The following documents form an integral part of this Agreement:
These Articles of Agreement
Schedule 1 - TPC General Conditions
Schedule 2 - The Project
Schedule 3 - Claims and TPC Project Cost Principles
Schedule 4 - Contractual Benefits
Schedule 5 - Reporting Requirements
Schedule 6 - Project Fact Sheet for News release
2.2 In the event of conflict or inconsistency, the order of precedence amongst
the documents forming part of this Agreement shall be:
These Articles of Agreement,
Schedule 1 - General Conditions
Schedule 2 - The Project
Other Schedules
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ARTICLE 3 - THE PROPONENT'S OBLIGATIONS
3.1 The Proponent will carry out the OPERATIONAL SITUATIONAL AWARENESS
TECHNOLOGIES Project ("the PROJECT") as described in Schedule 2, will make
claims in accordance with Schedule 3, will provide the benefits mentioned
in Schedule 4, will issue the reports required under Schedule 5 and will
fulfil all of its other obligations hereunder, in a diligent and
professional manner using qualified personnel.
3.2 The Proponent shall ensure that the Project is completed on or before
March 31, 2007 ("PROJECT COMPLETION DATE"), unless otherwise agreed to in
writing by the Minister.
ARTICLE 4 - THE CONTRIBUTION
4.1 Subject to all the other provisions of this Agreement, the Minister will
make a Contribution to the Proponent in respect of the Project, of the
lesser of:
(a) * % of the Eligible Costs; and
(b) $ 3,768,391.
4.2 The Minister will not contribute to any Eligible Costs incurred by the
Proponent prior to * nor after the Project Completion Date, unless
otherwise agreed to in writing by the Minister.
ARTICLE 5 - ENVIRONMENTAL ASSESSMENT
5.1 The Minister has assessed the Project under Canadian Environmental
Assessment Act and is satisfied that any potentially adverse environmental
effects that may be caused by the Project are insignificant.
ARTICLE 6- OTHER GOVERNMENT ASSISTANCE
6.1 The Proponent hereby acknowledges that, except for scientific research and
experimental development tax credits, deductions or allowances, no other
federal, provincial or municipal government financial assistance other
than that described below has been requested or received by the Proponent
for the Eligible Costs of the Project.
Federal *
Provincial *
Municipal *
Total *
* Material has been omitted and filed separately with the commission
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6.2 The Proponent will inform the Minister promptly in writing of any other
federal, provincial or municipal government assistance (except for
scientific research and experimental development tax credits, deductions
or allowances) to be received for the Eligible Costs of the Project and
the Minister will have the right to reduce the Contribution under this
Agreement to the extent of any such assistance.
ARTICLE 7 - ADDRESSES
7.1 Any notice to the Minister will be addressed to:
Director, Aerospace & Defence
Technology Partnerships Canada
10th Floor
000 Xxxxxx Xxxxxx
Xxxxxx, Xxxxxxx X0X 0X0
Fax No: (000) 000-0000
7.2 Any notice to the Proponent will be addressed to:
Xx. Xxxxx Xxxxxxxxx
Director of Operations
Offshore Systems Ltd.
000-000 Xxxx 0xx Xxxxxx
Xxxxx Xxxxxxxxx, X. X.
X0X 0X0
Fax No: 000-000-0000
7.3 Any notice to the Intervener will be addressed to:
Mr. John Sentjens
Controller
Offshore Systems International Ltd.
000-000 Xxxx 0xx Xxxxxx
Xxxxx Xxxxxxxxx, X. X.
X0X 0X0
Fax No: 000-000-0000
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ARTICLE 8 - SPECIAL CONDITIONS
8.1 ALTERNATE DISPUTE RESOLUTION
If a dispute arises concerning the application or interpretation of this
Agreement, the parties will attempt to resolve the matter through good
faith negotiation, and may, if necessary and the parties consent in
writing, resolve the matter through mediation by a mutually acceptable
mediator or arbitration in accordance with the Commercial Arbitration Code
set out in the schedule to the Commercial Arbitration Act (Canada), and
all regulations made pursuant to that Act.
8.2 REQUIRED GOVERNMENT APPROVALS
All payments to be made by the Minister to the Proponent, pursuant to this
Agreement, on or after December 31, 2005 are subject to the required
Governmental approvals, including Treasury Board. In the event that the
Minister is prevented from disbursing the full amount of the Contribution,
the Parties agree to review the effects of such a shortfall in the
Contribution on the implementation of the Agreement and to adjust, as
appropriate, the Contractual Benefits specified therein.
8.3 VISIBILITY PROTOCOL
(a) The following sub-articles concerning public announcements by the
Proponent as well as the obligations set-out in Article 10 of the General
Terms and Conditions are Material Undertakings under this Agreement:
(i) The Proponent shall obtain the prior consent of the Minister
prior to mentioning TPC in any of its public statements. The
Proponent shall mention TPC (name and logo) in its promotional
activities, in its publicities and in its public relations
when it mentions the Project. A qualifying statement shall be
added to underscore the importance of the TPC contribution.
(ii) The Proponent shall invite representatives of TPC to be
present at public activities involving the Project and shall
inform the public of TPC's collaboration in the Project.
(b) For information purposes, the following Government of Canada URL
provides protocol guidelines for use when planning public ceremonies
related to the Project:
(xxxx://xxx.xxx.xx.xx/xxxxx/xxxx-xxxx/xx/xxxxx_x.xxx)
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8.4 INTERVENER'S OBLIGATIONS
The Intervener shall at all times ensure that Offshore Systems Ltd. has
sufficient financial resources to fund its share of the project.
8.5 SECURITY LAWS AND STOCK EXCHANGE RULES
The Minister acknowledges the Proponent's responsibilities under both the
security laws and stock exchange rules that may require it to divulge the
nature of an Agreement with the Crown relating to this project.
8.6 SALES TO NON-ARMS LENGTH COMPANIES
The proponent must report to TPC any sales to non-arms length companies
and provide fair market value certificates. The royalty based repayment
will be based on the fair market value.
ARTICLE 9 - ENTIRE AGREEMENT
This Agreement constitutes the entire agreement between the parties and
supersedes all previous documents, negotiations, arrangements, undertakings and
understandings related to its subject matter.
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IN WITNESS WHEREOF the parties hereto have executed this Agreement through duly
authorized representatives.
HER MAJESTY THE QUEEN IN RIGHT OF CANADA,
as represented by the Minister of Industry
Per: /s/ Xxxx Xxxxxx 26/04/04
--------------------------------------- ---------------
Technology Partnerships Canada (TPC) Date
Xxxx Xxxxxx - Executive Director
OFFSHORE SYSTEMS LTD.
Per: /s/ Xxx Xxxxxxxxxxx 26/04/04
----------------------- ---------------
Xxx Xxxxxxxxxxx, COO Date
-----------------------
Name & Title
OFFSHORE SYSTEMS INTERNATIONAL INC.
Per: /s/ Xxxx Xxxxxxxx 26/04/04
--------------------------------------- ---------------
Xxxx Xxxxxxxx, CEO Date Date
-----------------------
Name & Title
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SCHEDULE 1 - TPC GENERAL CONDITIONS
TABLE OF CONTENTS
1. DEFINITIONS 8. DEFAULT AND RECOVERY
"Agreement" 8.1 Events of Default
"Background Intellectual Property" 8.2 Remedies on Default
"Contribution" 8.3 Remedies Fair and Reasonable
"Eligible Costs" 8.4 No Waiver
"Fiscal Year"
"Intellectual Property" 9. FORCE MAJEURE
"Interest Rate"
"Project" 9.1 Event of Force Majeure
"Project Completion Date" 9.2 Definition of Force Majeure
"Schedule"
"Statement of Work" 10. ANNOUNCEMENTS
2. MATERIAL CHANGES 10.1 Consent to Public Announcement
10.2 Confidentiality Obligation
3. DISPOSAL OF ASSETS 10.3 Reporting under Security Laws
4. CLAIMS FOR PAYMENT 11. NOTICE
4.1 Payment of Claims 11.1 Form and Timing of Notice
4.2 Hold-back Rights 11.2 Change of Address
4.3 Overpayment by Minister
4.4 Set-off Rights of Minister 12. COMPLIANCE WITH LAWS
5. MONITORING 13. MEMBERS OF PARLIAMENT
5.1 Minister's Right to Audit Accounts and Records 14. ANNUAL APPROPRIATIONS
5.2 Access to Premises
5.3 Access to Third-party Information 14.1 Parliamentary Allocation
14.2 Lack of Appropriation
6. REPRESENTATIONS, WARRANTIES AND UNDERTAKINGS
15. CONFIDENTIALITY
6.1 Power and Authority of Proponent
15.1 Consent Required
6.2 Authorized Signatories 15.2 International Dispute
6.3 Binding Obligations 15.3 Financing and Licensing
6.4 No Pending Suits or Actions
6.5 No Gifts or Inducements 16. CONSENT OF THE MINISTER
6.6 Intellectual Property
6.7 Compliance with Environmental 17. NO ASSIGNMENT OF AGREEMENT
Protection Requirements
6.8 Other Agreements 18. COMPLIANCE WITH POST-EMPLOYMENT PROVISIONS
6.9 Dividend Restriction
6.10 Other Financing 19. CONTRIBUTION AGREEMENT ONLY
6.11 Lobbyist Act
20. BINDING AGREEMENT
7. TERM OF AGREEMENT
21. SEVERABILITY
7.1 Contractual Benefits
7.2 Advance Payment 22. APPLICABLE LAW
7.3 Audit
23. SIGNATURE IN COUNTERPARTS
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TPC GENERAL CONDITIONS
1. DEFINITIONS
For the purposes of this Agreement,
"AGREEMENT" means the agreement to which these General Conditions relate,
consisting of Articles of agreement and the Schedules referred to in these
Articles.
"BACKGROUND INTELLECTUAL PROPERTY" means the intellectual property rights in the
technology developed prior to the beginning of the Project and required for the
carrying out of the Project or the exploitation of the Intellectual Property.
"CONTRIBUTION" means the funding, in Canadian dollars, payable by the Minister
under the Agreement.
"ELIGIBLE COSTS" means the project cost elements specified in the statement of
work in schedule 2 and incurred by the proponent in accordance with the TPC
Project Cost Principles, excluding those Project cost elements that may be
specifically mentioned in the Statement of Work as not being supported by the
Minister.
"FISCAL YEAR" means the federal government fiscal year beginning on April 1 and
ending on the following March 31.
"INTELLECTUAL PROPERTY" means all technical data, including, without limitation,
all designs, specifications, software, data, drawings, plans, reports, patterns,
models, prototypes, demonstration units, practices, inventions, methods,
applicable special purpose equipment and related technology, processes or other
information conceived, produced, developed or reduced to practice in carrying
out the Project, and all rights therein including, without limitation, patents,
copyrights, industrial designs, trade-marks, and any registrations or
applications (or the same and all other rights of intellectual property
therein, including any rights which arise from the above items being created by
the Proponent as trade secrets or confidential information.
"INTEREST RATE" means the Bank Rate, as defined in the Interest And
Administrative Charges Regulations, in effect on the due date, plus 300 basis
points, compounded monthly. The Interest Rate for a given month can be found at:
http:/xxx.xxxxx.xx.xx/xxxxxx/xxxx/xxxx-x.xxxx
"PROJECT" means the project described in Schedule 2.
"PROJECT COMPLETION DATE" means the date set in the articles of agreement for
the completion of the project.
"SCHEDULE" means a schedule to the Agreement.
"STATEMENT OF WORK" refers to the document in Schedule 2 containing the
description of the Project.
2. MATERIAL CHANGES
No material changes will be made to the estimated total scope or nature of any
element of the Project without the prior written consent of the Minister.
Without limiting the generality of the foregoing, a material change will have
occurred if:
(a) a Project performance milestone is not expected to be achieved
within six (6) months of the projected completion date mentioned in
the Statement of Work for that element;
(b) the estimated Eligible Costs mentioned in the Statement of Work are
expected to be exceeded by 20% or more;
(c) the Project is carried out at locations other than those mentioned
in the Statement of Work;
(d) a change in respect of any other aspect of the Project (including
but not limited to a change to key Project personnel, Project
financing, or ownership of the Proponent) which has been
specifically identified in another part of the Agreement as a
"material change" for the purpose of this provision, has occurred.
3. DISPOSAL OF ASSETS
The Proponent shall retain possession and control of the Project assets, the
cost of which has been contributed to by the Minister under the Agreement, and
shall not dispose of the same until they are no longer required to complete the
Project.
4. CLAIMS FOR PAYMENT
4.1 PAYMENT OF CLAIMS
The Minister will pay the Contribution to the Proponent in respect of Eligible
Costs incurred on the basis of itemized claims submitted in accordance with the
procedures set out in Schedule 3.
4.2 HOLD-BACK RIGHTS
The Minister may withhold up to ten percent (10%) of the Contribution prior to
the completion of the Project or until such audit as he/she may require has been
performed, in the event that no audit has been performed eighteen months after
receipt of the final claim, any amount so withheld shall be released to the
Proponent.
4.3 OVERPAYMENT BY MINISTER
Where for any reason:
(a) the Proponent is not entitled to the Contribution; or
(b) the Minister determines that the amount of the Contribution
disbursed exceeds the amount to which the Proponent is entitled,
the Proponent will repay to the Minister, promptly and no later than 30 days
from notice from the Minister, the amount of the Contribution disbursed or the
amount of the overpayment, as the case may be, together with interest at the
Interest Rate from the date of the notice to the day of repayment to the
Minister in full. Any such amount is a debt due to Her Majesty in Right of
Canada and is recoverable as such.
4.4 SET-OFF RIGHTS OF MINISTER
Without limiting the scope of the set-off rights provided for under the
Financial Administration Act, it is understood that the Minister may set off
against the Contribution, any amounts owed by the Proponent to Her Majesty in
Right of Canada under legislation or contribution agreements and the Proponent
shall declare to the Minister all amounts outstanding in that regard when making
a claim under Schedule 3.
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5. MONITORING
5.1 MINISTER'S RIGHT TO AUDIT ACCOUNTS AND RECORDS
The Proponent will, at its own expense, preserve and make available for audit
and examination by the Minister or the Minister's representatives the books,
accounts and records of the Project and of the information necessary to ensure
compliance with the terms and conditions of this Agreement, including payment of
amounts to the Minister. The Minister will have the right to conduct such
additional audits at the Minister's expense as may be considered necessary using
the audit staff of the Minister, the Audit Services Group of Consulting and
Audit Canada, an independent auditing firm or the Proponent's external auditors.
The Proponent will ensure that any licence agreement it enters into for the
exploitation of the Intellectual Property will contain similar provisions to
permit the Minister to audit licensees' accounts and records in respect to the
calculation of amounts that may be payable by the Proponent to the Minister
under this Agreement.
5.2 ACCESS TO PREMISES
The Proponent will provide the representatives of the Minister reasonable access
to the Proponent's premises to inspect and assess the progress of the Agreement
or any element thereof and supply promptly on request such data as the Minister
may reasonably require for statistical or project evaluation purposes.
5.3 ACCESS TO THIRD-PARTY INFORMATION
The Proponent will, to the extent practicable, assist the Minister with the
implementation of the Agreement and facilitate access by the Minister to
information from third parties, relating to the Agreement.
6. REPRESENTATIONS WARRANTIES AND UNDERTAKINGS
6.1 POWER AND AUTHORITY OF PROPONENT
The Proponent represents and warrants that it is duly incorporated and validly
existing and in good standing and has the power and authority to carry on its
business, to hold property and to enter into this Agreement and undertakes to
take all necessary action to maintain itself in good standing and to preserve
its legal capacity.
6.2 AUTHORIZED SIGNATORIES
Each party represents and warrants that the signatories to the Agreement have
been duly authorized to execute and deliver the Agreement.
6.3 BINDING OBLIGATIONS
Each party represents and warrants that the execution, delivery and performance
of the Agreement have been duly and validly authorized and that when executed
and delivered, the Agreement will constitute a legal, valid and binding
obligation enforceable in accordance with its terms.
6.4 NO PENDING SUITS OR ACTIONS
The Proponent warrants that it is under no obligation or prohibition, nor is it
subject to or threatened by any actions, suits or proceedings which could or
would prevent compliance with the Agreement. The Proponent will advise the
Minister forthwith of any such occurrence during the term of the Agreement.
6.5 NO GIFTS OR INDUCEMENTS
The Proponent represents and warrants that it has not, nor has any person
offered or promised to any official or employee of Her Majesty the Queen in
Right of Canada, for or with a view to obtaining the Agreement, any bribe, gift
or other inducement, and it has not nor has any person on its behalf employed
any person to solicit the Agreement for a commission, contingency fee or any
other consideration dependant upon the execution of the Agreement.
6.6 INTELLECTUAL PROPERTY
(a) The Proponent represents and warrants that it either owns the Background
Intellectual Property or holds sufficient rights in the same to permit the
Project to be carried out and the Intellectual Property to be exploited by
the Proponent.
(b) The Proponent will ensure that title to the Intellectual Property is to be
vested, and unless otherwise agreed to in writing by the Minister, to
remain, exclusively with the Proponent.
(c) The Proponent shall take appropriate steps to protect the Intellectual
Property and shall, upon request, provide information to the Minister in
that regard.
6.7 COMPLIANCE WITH ENVIRONMENTAL PROTECTION REQUIREMENTS
The Proponent shall apply, in relation to the Project, in all material respects,
the requirements of all applicable environmental laws, regulations, orders and
decrees and of regulatory bodies having jurisdiction over the Proponent or the
Project.
6.8 OTHER AGREEMENTS
The Proponent represents and warrants that it has not entered, and undertakes
not to enter, without the Minister's written consent, into any agreement that
would prevent the full implementation of the Agreement by the Proponent.
6.9 DIVIDEND RESTRICTION
The Proponent will not make any dividend payments or other shareholder
distributions that would prevent it from implementing the Project and other
Proponent's obligations under the Agreement including the making of payments to
the Minister as required under the Agreement.
6.10 OTHER FINANCING
The Proponent remains solely responsible for providing or obtaining the funding,
in addition to the Contribution, required for the carrying out of the Project
and the fulfilment of the Proponent's other obligations under the Agreement.
6.11 LOBBYIST ACT
The Proponent represents and warrants that any person who lobbys on its behalf
to obtain the Agreement, or any benefit thereunder, and who is required to be
registered pursuant to the Lobbyists Registration Act R.S. 1985c. 44 (4th
Supplement), is registered pursuant to that Act.
7. TERM OF AGREEMENT
7.1 CONTRACTUAL BENEFITS
The Agreement will terminate when all of the Proponent's undertakings in regard
to the contractual benefits mentioned in Schedule 4 have been fulfilled.
7.2 ADVANCE PAYMENT
Any advance or accelerated payment by the Proponent of the amounts due to the
Minister under Schedule 4 shall not have the effect of shortening the period set
in Schedule 4 for the fulfilment of contractual benefits to Canada.
7.3 AUDIT
The audit rights of the Minister under section 5 above will survive for one year
the termination date established under subsection 7.1 above.
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8. DEFAULT AND RECOVERY
8.1 EVENTS OF DEFAULT
The Minister may declare that an event of default has occurred if:
(a) The Proponent is adjudged or declared bankrupt or if it goes into
receivership or takes the benefit of any statute from time to time
in force relating to bankrupt or insolvent debtors;
(b) an order is made which is not being contested or appealed by the
Proponent or a resolution is passed for the winding-up of the
Proponent or it is dissolved;
(c) the Proponent has intentionally submitted false or misleading
information to the Minister or intentionally made a false or
misleading representation;
(d) any material term, condition or undertaking in the Agreement is not
complied with in any material respect; or
(e) the Proponent neglects or fails to pay to the Minister any amount
due in accordance with this Agreement.
provided that the Minister will not declare an event of default has occurred by
reason of paragraphs (c), (d) or (e) unless the Minister has given notice to the
Proponent of the condition or event which in the Minister's opinion constitutes
an event of default and the Proponent has failed, within 30 days of receipt of
the notice, either to correct the condition or event complained of or to
demonstrate, to the satisfaction of the Minister, that it has taken such steps
as are necessary to correct the condition, and has notified the Minister of the
rectification.
8.2 REMEDIES ON DEFAULT
If the Minister declares that an event of default has occurred, the Minister may
exercise one or more of the following remedies:
(a) suspend any obligation by the Minister to contribute or continue to
contribute to the Eligible costs including any obligation to pay any
amount owing prior to the date of such suspension;
(b) terminate any obligation of the Minister to contribute or continue
to contribute to the Eligible costs, including any obligation to pay
any amount owing prior to the date of such termination;
(c) require the Proponent to repay to the Minister all or part of the
Contribution paid by the Minister to the Proponent, and pay the
Minister any amounts due under the Agreement, together with interest
from the date of demand at the Interest Rate;
If an event of default has occurred in relation to paragraph 8.1(a) or (b), or
as a result of the failure of the Proponent to comply with subsection 6.6 of
these General Conditions (Intellectual Property), section A (Payments to
Minister) or subsection B.1 (Work in Canada) of Schedule 4 or the provisions
that may be part of the Agreement regarding the disposal of special purpose
equipment, the Minister may direct the Proponent to transfer and deliver to the
Minister title to, possession of, and all rights of the Proponent in the
intellectual Property, and the Proponent will immediately comply.
8.3 REMEDIES FAIR AND REASONABLE
The Proponent acknowledges that in view of the policy objectives served by the
Minister's agreement to make the contribution, the fact that the contribution
comes from public monies, and that the amount of damages sustained by the Crown
in the event of default is difficult to ascertain, that it is fair and
reasonable that the Minister be entitled to exercise any or all of the remedies
provided for in this section 8 and to do so in the manner provided for in that
section if an event of default occurs; provided that in exercising any remedy in
accordance with paragraph 8.2(c) other than for a breach of paragraph 8.1(e),
the Minister will credit the Proponent for any amounts paid to the Minister
under schedule 4 of this Agreement.
8.4 NO WAIVER
The fact that the Minister refrains from exercising a remedy he or she is
entitled to exercise under the Agreement will not constitute a waiver of such
right and any partial exercise of a right will not prevent the Minister in any
way from later exercising any other right or remedy under the Agreement or other
applicable law.
9. FORCE MAJEURE
9.1 EVENT OF FORCE MAJEURE
The Proponent will not be in default by reason only of any failure in
performance of the Project in accordance with Schedule 2 if such failure arises
without the fault or negligence of the Proponent and is caused by any event of
force majeure.
9.2 DEFINITION OF FORCE MAJEURE
Force majeure means any cause which is unavoidable or beyond the reasonable
control of the Proponent, including war, riot, insurrection, orders of
government, strikes or any Act of God or other similar circumstance which is
beyond the Proponent's control, and which could not have been reasonably
circumvented by the Proponent without incurring unreasonable cost.
10. ANNOUNCEMENTS
10.1 CONSENT TO PUBLIC ANNOUNCEMENTS
The Proponent hereby consents to public announcements by or on behalf of the
Minister containing any of the information contained in Schedule 6 entitled
"Project Fact Sheet for News Release".
10.2 CONFIDENTIALITY OBLIGATION
The Minister will inform the Proponent of the date on which the first public
announcement is to be made and the Proponent will not disclose the existence of
this Agreement until such date.
10.3 REPORTING UNDER SECURITY LAWS
Nothing in this Agreement shall be interpreted as preventing the fulfilment by
the Proponent of its reporting obligations under applicable security laws.
11.0 NOTICE
11.1 FORM AND TIMING OF NOTICE
Any notice, information or document provided for under the Agreement shall be
effectively given if delivered or sent by letter or facsimile, postage or other
charges prepaid. Any notice that is delivered shall have been received on
delivery; any notice sent by facsimile shall be deemed to have been received one
working day after having been sent, and any notice mailed shall be deemed to
have been received eight(8) calendar days after being mailed.
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11.2 CHANGE OF ADDRESS
A party may change the address which that party has stipulated in the Agreement
by notifying in writing the other party of the new address.
12. COMPLIANCE WITH LAWS
In implementing the Agreement, the Proponent will comply with all applicable
federal, provincial and municipal laws, including but not limited to statutes,
regulations, by-laws, ordinances and decrees.
13. MEMBERS OF PARLIAMENT
No member of the House of Commons will be admitted to any share or part of this
Agreement or to any benefit to arise therefrom. No person who is a member of the
Senate will, directly or indirectly, be a party to or be concerned in the
Agreement.
14. ANNUAL APPROPRIATIONS
14.1 PARLIAMENTARY ALLOCATION
Any payment by the Minister under this Agreement is subject to there being an
appropriation for the Fiscal Year in which the payment is to be made; and to
cancellation or reduction in the event that departmental funding levels are
changed by Parliament.
14.2 LACK OF APPROPRIATION
In the event that the minister is prevented from disbursing the full amount of
the Contribution due to a lack or reduction of appropriation or departmental
funding levels, the parties agree to review the effects of such a shortfall in
the Contribution on the implementation of the Agreement and to adjust, as
appropriate, the Contractual benefits specified in Schedule 4.
15. CONFIDENTIALITY
15.1 CONSENT REQUIRED
Subject to section 10 and the Access to Information Act, each party shall keep
confidential and shall not without the consent of all parties disclose the
contents of the Agreement and the documents pertaining thereto, whether provided
before or after the Agreement was entered into, or of the transactions
contemplated herein.
15.2 INTERNATIONAL DISPUTE
The Minister is hereby authorized to disclose any of the information referred to
in paragraph 15.1 above where, in the opinion of the Minister, such disclosure
is required to an international trade panel for the purposes of the conduct of a
dispute in which Canada is a party or a third party intervener. The Minister
shall give prior notice to the Proponent of such disclosure.
15.3 FINANCING AND LICENSING
The Minister hereby consents to the Proponent disclosing the Agreement or any
portion thereof for the purposes of securing additional financing or of
licensing for commercial exploitation, subject to the Proponent having the
person to whom the information is disclosed execute a non-disclosure agreement
prior to disclosure
16. CONSENT OF THE MINISTER
Whenever the Agreement provides for the proponent obtaining the consent or
agreement of the Minister, it is understood that such consent or agreement shall
not be unreasonably withheld and that the Minister may make the issuance of such
consent or agreement subject to reasonable conditions.
17. NO ASSIGNMENT OF AGREEMENT
The Proponent shall not assign the Agreement nor any part thereof without the
prior written consent of the Minister.
18. COMPLIANCE WITH POST-EMPLOYMENT PROVISIONS
The Proponent confirms that no individual for whom the post-employment
provisions of the CONFLICT OF INTERNET AND POST-EMPLOYMENT CODE FOR PUBLIC
OFFICE HOLDERS or the CONFLICT OF INTEREST AND POST-EMPLOYMENT CODE FOR THE
PUBLIC SERVICE apply, will derive a direct benefit from this Agreement unless
that individual is in compliance with the applicable post-employment provisions.
19. CONTRIBUTION AGREEMENT ONLY
The Agreement is a contribution agreement only, not a contract for services or
a contract of service or employment, and nothing in the agreement, the parties
relationship or actions is intended to create, nor shall be construed as
creating, a partnership, employment or agency relationship between them. The
Proponent is not in any way authorized to make a promise, agreement or contract
and to incur any liability on behalf of Canada, nor shall Canada make a
promise, agreement or contract and incur any liability on behalf of the
Proponent, and the Proponent shall be solely responsible for any and all
payments and deductions required by the applicable laws.
20. BINDING AGREEMENT
This Agreement is binding on the parties and their successors and permitted
assigns.
21. SEVERABILITY
Any provision of this Agreement prohibited by law or otherwise ineffective will
be ineffective only to the extent of such prohibition or ineffectiveness and
will be severable without invalidating or otherwise affecting the remaining
provisions of the Agreement.
22. APPLICABLE LAW
The Agreement shall be interpreted in accordance with the laws in force in the
province where the Proponent's head office is located.
23. SIGNATURE IN COUNTERPARTS
This Agreement may be signed in counterparts, each of which when taken together,
will constitute an original Agreement.
Page 13
SCHEDULE 2 - THE PROJECT
The Project is described in the attached Statement of Work
Page 14
STATEMENT OF WORK
OVERVIEW
Offshore Systems Ltd(OSL) with the support of Technologies Partnership Canada
will develop under this SOW (Statement of Work) Operational Situational
Awareness Technologies areas including the following products:
- Warship Electronic Charting Display and Information System (WECDIS)
- Common Operational Picture-Image Display Server (COP-IDS(TM))
- Networked radar image overlay for ECDIS.
WECDIS PRODUCT
*
* Material has been omitted and filed separately with the Commission
Page 15
*
COP-IDS PRODUCT
*
* Material has been omitted and filed separately with the Commission
Page 16
*
NETWORKED RADAR IMAGE OVERLAY
*
* Material has been omitted and filed separately with the Commission
OFFSHORE SYSTEMS LTD PRODUCT ENGINEERING SCHEDULE
2003 2004 2005 2006 2007
TASK ID TASK NAME
XXX0 XXX0 XXX0 XXX0 XXX0 XXX0 XXX0 QTR4 QTR1 QTR2 QTR3 QTR4 QTR1 XXX0 XXX0 XXX0 XXX0 XXX0 XXX0
PROJECT NAME: WECDIS PRODUCT
A1
A2
A3 * * * * * * * * * * * * * * * * * * *
A4
A5
A6
A7
A8
A9
PROJECT NAME: COP-IDS 2.0 PRODUCT
B1
B2
B3 * * * * * * * * * * * * * * * * * * *
B4
B5
B6
B7
B8
PROJECT NAME: NETWORKED RADAR IMAGE OVERLAY
C1
C2 * * * * * * * * * * * * * * * * * * *
C3
C4
C5
C6
C7
C8
C9
CA
CB
* Material has been omitted and filed separately with the commission
Page 18
ANNEX A
FORM B - MILESTONES
PROPONENT NAME: OFFSHORE SYSTEMS LTD. PROJECT NUMBER: 710-488685
KEY PROJECT MILESTONE DATE
-------------------------------------------------------- ----
1 WECDIS certification under STANAG 4564 *
2 Network radar image overlay (RIO) board completion *
3 ARPA RIO functionality *
4 COP-IDS 2.0 product completion *
* Material has been omitted and filed separately with the Commission
Page 19
ANNEX A
FORM C - CURRENT FISCAL YEAR COST BREAKDOWN BY MAJOR ACTIVITIES
PROPONENT NAME: OFFSHORE SYSTEMS LTD. PROJECT NUMBER: 710-488685
FOR FISCAL YEAR ENDING MARCH 31, 2005
DESCRIPTION OF ACTIVITY(1) ESTIMATED ELIGIBLE COSTS ($000)
-------------------------- -----------------------------------------------------------------
DIRECT SUBCONTRACTS OTHER
LABOUR DIRECT AND DIRECT
COSTS MATERIALS CONSULTANTS COSTS EQUIPMENT OVERHEAD TOTAL
------ --------- ------------ ------ --------- -------- -----
1. WECDIS * * * * * * *
2. COP-IDS * * * * * * *
3. NETWORK RIO * * * * * * *
TOTAL * * * * * * *
Notes:
1. Title of key project tasks enumerated and described in the SOW.
* Material has been omitted and filed separately with the Commission
Page 20
ANNEX A
FORM D - COST BREAKDOWN BY FISCAL YEAR
PROPONENT NAME: OFFSHORE SYSTEMS LTD. PROJECT NUMBER: 710-488685
FISCAL YEAR
(ENDING
MARCH 31) ESTIMATED ELIGIBLE COSTS ($000)
----------- -------------------------------------------------------------------------
SUBCONTRACTS
DIRECT DIRECT AND OTHER DIRECT
LABOUR MATERIALS CONSULTANTS COSTS EQUIPMENT OVERHEAD TOTAL
------ --------- ------------ ------------ --------- -------- -----
2005 * * * * * * *
2006 * * * * * * *
2007 * * * * * * *
TOTAL * * * * * * *
The above cost breakdown includes all estimated direct costs and associated
overhead costs for the Project. For claims purposes, these costs will be
determined using the applicable Public Works and Government Services Canada
(PWGSC) costing rates negotiated with the Proponent in accordance with the PWGSC
1031-2 Contract Cost Principles. For any period where the PWGSC rate
negotiations have not been completed at the time of claim preparation for the
period, the previous year's negotiated PWGSC costing rates will be used in the
interim.
* Material has been omitted and filed separately with the Commission
Page 21
ANNEX A
FORM E-1 - PROJECT LOCATION AND COSTS
PROPONENT NAME: OFFSHORE SYSTEMS LTD. PROJECT NUMBER: 710-488685
START PERIOD
(FISCAL YEAR AND COSTS
PROJECT LOCATION QUARTER) WORK PERFORMED ($000)
---------------- ---------------- -------------- ------
* * * *
TOTAL * * *
Note: Government fiscal year runs April 1 - March 31.
* Material has been omitted and filed separately with the Commission
Page 22
ANNEX A
FORM E-2 - EQUIPMENT COST BREAKDOWN
PROPONENT NAME: OFFSHORE SYSTEMS LTD. PROJECT NUMBER: 710-488685
PLANNED ACQUISITION
PERIOD ESTIMATED
(FISCAL YEAR AND COSTS
EQUIPMENT DESCRIPTION QUARTER) ($000)
--------------------- ------------------- ---------
* * *
TOTAL * *
Notes:
1) For the purposes of this table, equipment includes all equipment with a unit
cost of more than $250K, or specific equipment essential to the project's
success, whose aggregate cost is significant, but whose unit cost is below
$250K.
2) Government fiscal year runs April 1 - March 31.
* Material has been omitted and filed separately with the Commission
Page 23
ANNEX A
FORM E-3 - MATERIALS COST BREAKDOWN
PROPONENT NAME: OFFSHORE SYSTEMS LTD. PROJECT NUMBER: 710-488685
PLANNED ACQUISITION ESTIMATED
PERIOD (FISCAL COSTS
MATERIALS DESCRIPTION YEAR AND QUARTER) ($000)
--------------------- ------------------- -----------
* * *
TOTAL *
Notes:
Government fiscal year runs April 1 - March 31.
Material costs include the development of prototype displays, test boards,
license fees for engineering and development tools, test equipment, jigs,
software and hardware.
* Material has been omitted and filed separately with the Commission
Page 24
ANNEX A
FORM E-4 - SUB-CONTRACT COST BREAKDOWN
PROPONENT NAME: OFFSHORE SYSTEMS LTD. PROJECT NUMBER: 710-488685
ESTIMATED
ANTICIPATED START PERIOD COSTS
SUB-CONTRACTS CONTRACTOR(S) (FISCAL YEAR AND QUARTER) ($000)
------------- ------------- ------------------------- ---------
* * *
TOTAL *
Notes:
1) Government fiscal year runs April 1 - March 31.
* Material has been omitted and filed separately with the Commission
Page 25
ANNEX A
FORM E-5 - OTHER COSTS BREAKDOWN
PROPONENT NAME: OFFSHORE SYSTEMS LTD. PROJECT NUMBER: 710-488685
START PERIOD ESTIMATED
(FISCAL YEAR AND COSTS
OTHER COST QUARTER) ($000)
---------- ---------------- ---------
* * *
TOTAL *
Notes:
Government fiscal year runs April 1 - March 31.
* Material has been omitted and filed separately with the Commission
Page 26
SCHEDULE 3 - CLAIMS AND TPC PROJECT COSTS PRINCIPLES
A-CLAIMS
1. The Minister will pay the Contribution to the Proponent, in respect of
Eligible Costs incurred, on the basis of claims which will:
(a) be submitted on a monthly basis ("CLAIM PERIOD"), except for the
first claim which will cover a longer period going back to *
(b) be submitted on TPC claim forms, within forty-five (45) days of the
end of each Claim Period;
(c) be accompanied with details of all costs being claimed, which will
be substantiated by such documents as may be required by the
Minister and presented in accordance with the structure and the
milestones contained in the Statement of Work in Schedule 2.
(d) be certified by the chief financial officer of the Proponent or
other person satisfactory to the Minister;
(e) be accompanied by a report on the progress made in carrying out the
Project during the Claim Period, containing such information as
mentioned in the section of Schedule 5 (Reporting Requirements)
entitled Claim Reports;
(f) include a deduction for Eligible Costs included in a previous claim
but which have not been paid by the Proponent within ninety (90)
days of such claim.
2. In regard to paragraph 1 (f) above, the Minister may request at any time
that the Proponent provide satisfactory evidence to demonstrate that
Eligible Costs have been paid.
3. Within one hundred and twenty (120) days of the submission of the final
claim, the Proponent shall submit an itemized statement certified by the
Proponent's chief financial officer attesting to the Eligible Costs for
the entire Project having been incurred and paid.
* Material has been omitted and filed separately with the Commission
Page 27
B - TPC PROJECT COST PRINCIPLES
1. GENERAL PRINCIPLE
The total Eligible Costs of the Project shall be the sum of the applicable
direct and indirect costs which are, or are to be reasonably and property
incurred and/or allocated, in the performance of the Project, less any
applicable credits. These costs shall be determined in accordance with the
Proponent's cost accounting system as accepted by the Minister and applied
consistently over time.
2. DEFINITION OF REASONABLE COST
(1) A cost is reasonable if, in nature and amount, it does not exceed that
which would be incurred by an ordinary prudent person in the conduct of a
competitive business.
(2) In determining the reasonableness of a particular cost, consideration
shall be given to
(a) whether the cost is of a type generally recognized as normal and
necessary for the conduct of the Proponent's business or performance
of the Project;
(b) the restraints and requirements by such factors as generally
accepted sound business practices, arm's length bargaining, federal,
provincial and local laws and regulations, and Agreement terms;
(c) the action that prudent business persons would take in the
circumstances, considering their responsibilities to the owners of
the business, their employees, customers, the Government and public
at large;
(d) significant deviations from the established practices of the
Proponent which may unjustifiably increase the Eligible Costs; and
(e) the specifications, delivery schedule and quality requirements of
the particular Project as they affect costs.
3. DIRECT COSTS
There are three categories of direct costs:
(a) Direct Material Cost meaning the cost of materials which can be
specifically identified and measured as having been used or to be
used for the performance of the Project and which are so identified
and measured consistently by the Proponent's cost accounting system
as accepted by the Minister.
(i.) These materials may include, in addition to materials
purchased solely for the Project and processed by the
Proponent, or obtained from subcontractors, any other
materials issued from the Proponent's general stocks.
(ii.) Materials purchased solely for the Project or subcontracts
shall be charged to the Project at the net laid down cost to
the Proponent before cash discounts for prompt payment.
(iii.)Materials issued from the Proponent's general stocks shall be
charged to the Project in accordance with the method as used
consistently by the Proponent in pricing material inventories.
Page 28
(b) Direct Labour Cost meaning that portion of gross wages or salaries
incurred for activities which can be specifically identified and
measured as having been performed or to be performed on the Project
and which is so identified and measured consistently by the
Proponent's cost accounting system as accepted by the Minister.
(c) Other Direct Costs meaning those applicable costs, not falling
within the categories of direct material or direct labour, but
which can be specifically identified and measured as having been
incurred or to be incurred in performance of Project activities and
which are so identified and measured consistently by the Proponent's
costing system as accepted by the Minister.
4. INDIRECT COSTS
(1) Indirect Costs (overhead) meaning those costs which, though necessarily
having been incurred during the period of the performance of the Project
activities for the conduct of the Proponent's business in general, cannot
be identified and measured as directly applicable to the Project.
(2) These Indirect Costs may include, but are not necessarily restricted to,
such items as:
(a) indirect materials and supplies (*);
(b) indirect labour;
(c) fringe benefits (the Proponent's contribution only);
(d) service expenses: expenses of a general nature such as power, heat,
light, operation and maintenance of general assets and facilities;
(e) fixed/period charges: recurring charges such as property taxes,
rentals and reasonable provision for depreciation;
(f) general and administrative expenses: including remuneration of
executive and corporate officers, office wages and salaries and
expenses such as stationery, office supplies, postage and other
necessary administration and management expenses;
(g) selling and marketing expenses associated with the products or
services being acquired under the Agreement;
(h) general research and development expenses as considered applicable
by the Minister.
* For supplies of similar low-value, high-usage items the costs of which
meet the above definition of Direct Material Costs but for which it is
economically expensive to account for these costs in the manner prescribed
for direct costs, then they may be deemed to be indirect costs for the
purposes of the Project.
Page 29
5. ALLOCATION OF INDIRECT COSTS
Indirect costs shall be accumulated in appropriate indirect cost pools,
reflecting the Proponent's organizational or operational lines and these pools
subsequently allocated to the Project or contracts, in accordance with the
following two principles:
(a) the costs included in a particular indirect cost pool should have a
similarity of relationship with the Project or contracts, as
applicable, to which that indirect cost pool is subsequently
distributed; further, the costs included in an indirect cost pool
should be similar enough in their relationship to each other that
the allocation of the total costs in the pool provides a result
which would be similar to that achieved if each cost within that
pool were separately distributed;
(b) the allocation basis for each indirect cost pool should reflect, as
far as possible, the causal relationship of the pooled costs to the
Project to which these costs are distributed.
6.CREDITS
The applicable portion of any income, rebate, allowance, or any other credit
relating to any applicable direct or indirect costs, received by or accruing to
the Proponent, shall be credited to the Eligible Costs.
7.NON-APPLICABLE COSTS
Notwithstanding that the following costs may have been or may be reasonably and
properly incurred by the Proponent during the performance of Project activities,
they are considered non-applicable costs to the Project:
(a) allowance for interest on invested capital, bonds, debentures, bank
or other loans together with related bond discounts and finance
charges;
(b) legal, accounting and consulting fees in connection with financial
reorganization, security issues, capital stock issues, obtaining of
patents and licenses and prosecution of claims against the Minister;
(c) losses on investments, bad debts and expenses for the collection
thereof;
(d) losses on other projects or contracts;
(e) federal and provincial income taxes, excess profit taxes or surtaxes
and/or special expenses in connection therewith;
(f) provisions for contingencies;
(g) premiums for life insurance on the lives of officers and/or
directors where proceeds accrue to the Proponent;
(h) amortization of unrealized appreciation of assets;
(i) depreciation of assets paid for by the Minister;
(j) fines and penalties;
(k) expenses and depreciation of excess facilities;
Page 30
(l) unreasonable compensation for officers and employees;
(m) product development or improvement expenses not associated with the
product being acquired under the Project;
(n) advertising, except reasonable advertising of an industrial or
institutional character placed in trade, technical or professional
journals for the dissemination of information for the industry or
institution;
(o) entertainment expenses;
(p) donations except those to charities registered under the Income Tax
Act;
(q) dues and other memberships other than regular trade and professional
associations;
(r) fees, extraordinary or abnormal for professional advice in regard to
technical, administrative or accounting matters, unless approval
from the Minister is obtained.
ADDENDUM TO TPC PROJECT COST PRINCIPLES
A INTELLECTUAL PROPERTY PROTECTION
Notwithstanding section 7(b) above, legal, accounting and consulting fees
in connection with the obtaining of patents and statutory protection of
other elements of the Intellectual Property are Eligible Costs.
Page 31
SCHEDULE 4 - CONTRACTUAL BENEFITS
A - PAYMENTS TO MINISTER
1. DEFINITIONS
"GROSS BUSINESS REVENUES" means all revenues, receipts, monies and other
considerations of whatever nature received by the Proponent, whether in
cash, or by way of benefit, advantage, or concession, and without
deductions of any nature, but net of any returns or discounts actually
credited and any sales, excise, ad valorem or similar taxes paid but
without deduction for bad debts or doubtful accounts, as determined in
accordance with generally accepted accounting principles, applied on a
consistent basis.
"ROYALTY PERIOD" means the period during which royalties will accrue, as
specified in paragraph 2.2 below
2. ROYALTY PAYMENTS
2.1 ROYALTY RATES AND ROYALTY BASIS
The Proponent will pay to the Minister a royalty of 1.4 % of annual
Gross Business Revenues during the First Royalty Period of January
01, 2006 to December 31, 2008 and a royalty of 2.5 % of annual Gross
Business Revenues during the Second Royalty Period of January
01, 2009 to December 31, 2013
2.2 ROYALTY PERIODS
The first Royalty Period will begin on January 01, 2006 and will end
on December 31, 2008 and the second Royalty Period will begin on
January 01, 2009 and end on December 31, 2013. If, however,
cumulative royalties are less than $6,079,176 by December 31, 2013,
then the Second Royalty Period will continue until the earlier of
December 31, 2017 or until a cumulative royalty ceiling of
$6,079,176 is reached.
2.3 ROYALTY STATEMENTS AND PAYMENTS
The Proponent will provide to the Minister an annual statement of
the Gross Business Revenues, certified by the Proponent's Chief
Financial Officer, within four (4) months of the end of each
calendar year, together with the related royalty payment. The first
statement and related royalty payment must be provided to the
Minister by April 30, 2007 in respect of the calendar year ending
December 31, 2006 and by April 30 each year thereafter in regard to
the previous calendar year. Payments shall be made by cheque to the
order of the Receiver General and sent
Page 32
to the Minister.
2.4 LATE PAYMENTS
The Proponent will pay interest on overdue royalty payments, at the
Interest Rate, from the date on which the royalty payment is due,
until payment in full is received by the Minister. Such interest is
payable without notice to the Proponent, and in addition to any
remedies of the Minister for default by the Proponent.
3. CHANGES IN REGARD TO COMPANY'S BUSINESS
3.1 The Proponent shall notify the Minister should the business carried
out by the Proponent be split so as to be carried out in part by
other persons.
3.2 In the event that part of the Proponent's business is carried out by
related persons (subsidiaries or otherwise affiliated), the same
royalty base shall continue to apply and the Proponent shall have
the related persons involved report their gross revenues to the
Minister and the Proponent shall make, or continue to make, as the
case may be, payments to the Minister as if the Proponent's business
had not been split. The audit rights of the Minister as mentioned in
Section 5 of the General Conditions shall extend to these related
persons and the Proponent shall ensure that such audit rights may be
exercised by the Minister.
3.3 In the event that part of the Proponent's business is carried out by
an unrelated person, the royalty rate shall be increased so that the
Minister is receiving comparable royalties as if that part of the
Proponent's business had remained with the Proponent. After due
consultation with the Proponent, the Minister shall make a
determination as to the increased royalty rate. In the event that
the Proponent disagrees with such increased rate, the Proponent may
refer the matter to arbitration under the federal Commercial
Arbitration Act, within 45 days of being notified of the new rate by
the Minister.
B - CONTRACTUAL BENEFITS TO CANADA
1. WORK IN CANADA
(a) Unless otherwise agreed to in writing by the Minister, the Proponent
will ensure that the Intellectual Property is exploited through the
production in Canada of resulting products until the end of the
Royalty Period as set out in section 2.2 of this schedule.
(b) The Proponent will not, without the prior written consent of the
Minister, grant
Page 33
any right to the production of resulting products or transfer title
to any of the Intellectual Property outside of Canada, except the
licence or sublicence in conjunction with the sale of resulting
products, and will impose the same restriction on all licensees or
transferees.
(c) The expression "resulting products" as used in paragraph (a) and (b)
above means products, including services, resulting from the use of
the Intellectual Property.
Page 34
SCHEDULE 5 - REPORTING REQUIREMENTS
1. CLAIM REPORTS
Whenever the Proponent submits a claim, it shall attach to the claim a
progress report containing:
(a) a description of the progress made in the fulfilment of the
Statement of Work during the Claim Period, detailed by Activity as
defined in the Statement of Work;
(b) a statement of milestones achieved, if any, during the Claim Period;
(c) an assessment of any significant delay in completing the project or
the attainment of any milestone identified in the Statement of Work,
the reasons for such delay, and mitigation measures being taken;
(d) the Proponent's revised projections of Project cash flows for the
current Fiscal Year, except that in cases where the Claim Period is
monthly, this information is to be provided on March 31st, July 31st
and November 30th of each year.
No claim for the Contribution will be processed unless and until such
report is provided to the Minister.
2. ANNUAL REVIEW
Unless otherwise agreed to, the parties shall meet at least once annually
during the Project period, at a mutually agreeable time, to review the
progress of the Project.
3. PROJECT PROGRESS REPORTS
At least one (1) month prior to the date set for the Annual Review meeting
mentioned in section 2 above, the Proponent shall provide the Minister
with a written progress report containing:
(a) a description of the progress in completion of the Project
activities, in comparison with the schedule and milestones contained
in the Statement of Work and the related Project expenditures for
that segment of Project activities;
(b) the Proponent's revised cost breakdown for the Project, including an
estimated cost breakdown by major activity and by Fiscal Year; and
(c) an indication of any delay in completing the Project and the reasons
for such
Page 35
delay, together with the Proponent's revised schedule and any
proposed revisions to the Statement of Work;
4. ANNUAL INFORMATION UPDATES
By February 15, 2005 and by the same date each year thereafter until this
agreement ends in accordance with section 7 of the General Conditions, the
Proponent shall provide the following information updates to the Minister.
(a) an update of the projected and actual repayments to the Minister, as
set out in Form TPC-1 (Report on Estimated & Actual Repayments to
the Minister) attached hereto, together with an explanation of any
significant changes from the last update.
(Note: Once the repayment period starts, this update shall be
provided annually at the time of making repayment, in accordance
with the provisions entitled "Payments to Minister" in Schedule 4)
(b) an update of projected and actual person years (PYs), as set out in
Form TPC-2 (Report on Job Creation and Maintenance) attached hereto,
together with an explanation of any significant changes from
the last update;
(c) an update of other representations and expected results as set out
in Form TPC-3 (Report on Other Representations & Expected Results)
attached hereto, together with an explanation of any significant
changes from the last update;
(d) an update of investment leverage, as set out in Form TPC - 4 (Report
on Investment Leverage) attached hereto, together with an
explanation of any significant changes from the last update;
(e) an update on sustainable development impacts, as set out in Form TPC
- 5 (Report on Sustainable Development Impacts) attached hereto,
together with an explanation of any significant changes from the
last update;
(f) a summary of the progress made in the fulfilment of specific
commitments in regard to contractual benefits to Canada identified
in Schedule 4.
ANNUAL FINANCIAL STATEMENTS
The Proponent shall provide the Minister with a copy of its annual audited
financial statements within four (4) months of the end of each of the
Proponent's fiscal years.
Page 36
FORM TPC-1
REPORT ON ESTIMATED & ACTUAL REPAYMENTS TO THE MINISTER
PROPONENT: OFFSHORE SYSTEMS LTD.
PROJECT NO.: 710-488685
1 2 3 4
--------- ----------------- -------------- ----------
YEAR
ENDING ESTIMATED PAYMENT ACTUAL PAYMENT DUE DATE
(12/31/YY) (in $000) (in $000) (04/30/YY)
---------- ----------------- -------------- ----------
* * * *
Total
Run-on
* * * *
SIGNATURE OF AUTHORIZED OFFICER:_________________________________________
REPORT DATE: ___________
The Proponent certifies that the initial repayment projections provided at the
time of the Agreement, and as may be revised from time to time per the
requirements of Schedule 5, represent reasonable estimates of the repayment that
the Minister can expect from this Project, as they could be determined at any
particular time. The Minister recognizes that those estimates may vary through
time, due to factors over which the Proponent has little or no control.
* Material has been omitted and filed separately with the Commission
Page 37
FORM TPC-2
REPORT ON JOB CREATION AND MAINTENANCE
PROPONENT: OFFSHORE SYSTEMS LTD.
PROJECT NO.: 710-488685
GENERAL INSTRUCTIONS
THE INTENT OF THIS SCHEDULE IS TO IDENTIFY THE NUMBER OF PYs EXPENDED ON PROJECT
RELATED ACTIVITIES DURING ANY ONE YEAR OF THE DURATION OF THE AGREEMENT,
ACCORDING TO CATEGORY OF EMPLOYMENT. BOTH PART-TIME AND FULL-TIME EMPLOYEES
SHOULD BE CLAIMED, AS EMPLOYMENT OF ALL EMPLOYMENT TYPES REPRESENT A PROJECT
BENEFIT. PART-TIME WORK SHOULD BE CONVERTED INTO PY UNITS ON THE BASIS NORMALLY
USED BY THE PROPONENT PROVIDED IT IS BETWEEN 1800 AND 2000 HOURS OF WORK PAID IN
A GIVEN YEAR.
1. DATA IS TO BE PROVIDED BASED ON A 52 WEEK CALENDAR YEAR AND SHOULD BE
EXPRESSED IN PY UNITS.
2. DIRECT PYS ARE TO BE COUNTED. THE TERM "DIRECT PY" RELATES TO THE WORK
PERFORMED IN CANADA BY EMPLOYEES OF THE PROPONENT. ONLY THOSE DIRECT PYS
WHICH RESULT FROM THE PROJECT ARE TO BE COUNTED. WORK PERFORMED OUTSIDE OF
CANADA BY CANADIAN EMPLOYEES IS NOT TO BE INCLUDED EXCEPT FOR ELIGIBLE
ACTIVITIES PERFORMED AS PART OF THE STATEMENT OF WORK DURING THE WORK
PHASE. REPORTED PYS MAY BE PERFORMED BY EXISTING STAFF OR BY NEW HIRES.
THESE PYS ARE NORMALLY LOCATED IN THE PROPONENT'S FACILITY AND INVOLVE AN
ELIGIBLE OPERATION OR ACTIVITY SUPPORTED BY THE INDUSTRIAL ASSISTANCE
PROGRAM. DURING THE BENEFITS PHASE, THESE PYs NORMALLY PERTAIN TO
PRODUCTION/DISTRIBUTION ACTIVITIES ASSOCIATED WITH THE SUPPORTED FACILITY,
PRODUCT OR PROCESSES OF THE PROPONENT.
3. INDIRECT PYs REFER TO WORK PERFORMED IN CANADA AS A RESULT OF THE PROJECT
BY EMPLOYEES WHO ARE NOT EMPLOYED BY THE PROPONENT, AND NORMALLY AT A
LOCATION OTHER THAN THE PROPONENT'S FACILITY. APART FROM THE FOLLOWING TWO
EXCEPTIONS, INDIRECT PYS ARE NEVER TO BE INCLUDED IN THE PY COUNT.
1) SUB-CONTRATCTED PYS IN THE WORK PHASE OF R&D/INNOVATION PROJECTS ARE
INCLUDED IN THE PY COUNT, PROVIDED THAT THE RELATED ACTIVITY IS
EXPLICITLY SET OUT IN THE STATEMENT OF WORK IN THE CONTRIBUTION
AGREEMENT.
2) BENEFIT PHASE PRODUCTION PYS OF RELATED ENTITIES TO THE PROPONENT
ARE INCLUDED IN THE PY COUNT, PROVIDED THAT THE CONTRIBUTION
AGREEMENT EXPLICITLY INCLUDES PY REPORTING REQUIREMENTS ON THE
PARTIES CONCERNED AND PROVIDES THE MINISTER ACCESS TO THE RELATED
FACILITIES FOR MONITORING PURPOSES.
4. REPORTING DURING THE WORK PHASE REQUIRES A YEARLY BREAKDOWN BY CATEGORY OF
EMPLOYMENT. REPORTING DURING THE BENEFITS PHASE REQUIRES THE AVERAGE
NUMBER OF PYs DURING THIS PHASE BY CATEGORY OF EMPLOYMENT.
Page 38
PART 1: WORK PHASE - DATA COMPILED AS OF : DECEMBER 31,
TOTAL NUMBER OF PERSON YEARS
----------------------------
CATEGORY OF EMPLOYMENT ESTIMATE ACTUAL
--------------------- -------- ------
A] * *
B] * *
C] * *
TOTAL * *
PART 2 - BENEFIT PHASE - DATA COMPILED AS OF : DECEMBER 31,
NUMBER OF PERSON YEARS
--------------------------------
ESTIMATED
AVERAGE NUMBER OF ACTUAL PERSON
PERSON YEARS FOR YEARS FOR
DURATION OF REPORTING
CATEGORY OF EMPLOYMENT BENEFIT PHASE PERIOD
---------------------- ----------------- -------------
A] * *
B] * *
C] * *
TOTAL *
SIGNATURE OF AUTHORIZED OFFICER: _______________________________
REPORT DATE:__________________
The Proponent certifies that the initial employment projections presented at the
time of the Agreement, and as may be revised from time to time per the
requirements of Schedule 5, represent reasonable estimates of the employment
benefits that the Minister can expect from this Project, as they could be
determined at any particular time. The Minister recognizes that those estimates
may vary through time, due to factors over which the Proponent has little or no
control.
* Material has been omitted and filed separately with the Commission
Page 39
FORM TPC-3
REPORT ON OTHER REPRESENTATIONS & EXPECTED RESULTS
PROPONENT: OFFSHORE SYSTEMS LTD.
PROJECT NO.: 710-488685
OTHER REPRESENTATIONS AND EXPECTED RESULTS INCLUDE:
1. PATENTS: [are there any patents that are expected to result from the
development work of the project]
2. ACQUISITION OF TECHNOLOGY: [is the Proponent planning to acquire
intellectual property rights, technology, or know-how essential to the
success of the Project]
3. CORPORATE MANDATES: [specify any new or enhanced mandates expected]
4. OTHER SIGNIFICANT REPRESENTATIONS/EXPECTED RESULTS: [strategic alliances
or partnerships, new applications of technology, technology diffusion,
etc.]
DESCRIPTION OF EXPECTED RESULT PLANNED / REVISED STATUS / ACTUAL
/REPRESENTATION DATE DATE
------------------------------ ----------------- ---------------
* *
SIGNATURE OF AUTHORIZED OFFICER:_________________________________________
REPORT DATE:_________________
The Proponent certifies that the initial projections presented at the time of
the Agreement, and as may be revised from time to time per the requirements of
Schedule 5, represent reasonable estimates of the benefits that the Minister can
expect from this Project as they could be determined at any particular time. The
Minister recognizes that those estimates may vary through time, due to factors
over which the Proponent has little or no control.
* Material has been omitted and filed separately with the Commission
Page 40
FORM TPC-4
REPORT ON INVESTMENT LEVERAGE
PROPONENT: OFFSHORE SYSTEMS LTD.
PROJECT NO.:710-488685
This form estimates all costs incurred in Canada and investment that may be
leveraged by TPC funds. These include:
- ELIGIBLE SUPPORTED COSTS: Those costs incurred by the Proponent and
towards which TPC provides financial support.
- OTHER PROJECT RELATED COSTS (INCLUDING POST WORK PHASE INVESTMENT): Other
non-recurring costs incurred in Canada that are directly related to the
project. This would include items such as cost overruns but would not
include costs prior to the date indicated in Article 4.2. For example, a
project may include capital costs (for land and building) that are not
eligible for TPC support, but which the company will incur directly
related to the project.
Post work phase investment refers to any additional non-recurring, post
work phase, project related investment in Canada by the Proponent (e.g.
non-recurring related to production facilities, marketing and distribution
activities, etc...). For example, a company may have to build new
production lines, or create a new marketing team, or establish a new
distribution line/network for the resulting product/technology.
- OTHER INVESTMENT: Other investment unrelated to the specific project but
included in the contractual commitments made by the Proponent. For
example, a company may commit to construction of a building as a condition
of receiving a TPC investment although the building is not directly part
of the project.
ESTIMATES ($000) ACTUAL ($000)
------------------------------------------------- --------------------------------------
(3) (2)
(1) (2) Other (1) Other
YEAR Eligible project (4) Eligible Project (3)
(Ending Supported Related Other Supported Related Other
Nov.31) Costs Costs Investment Costs Costs Investment
------- --------- -------- ---------- --------- --------- ----------
* * *
*
SIGNATURE OF AUTHORIZED OFFICER: ___________________________________
REPORT DATE:_________________
The Proponent certifies that the initial projections presented at the time of
the Agreement, and as may be revised from time to time per the requirements of
Schedule 5, represent reasonable estimates of the benefits that the Minister can
expect from this Project, as they could be determined at any particular time.
The Minister recognizes that those estimates may vary through time, due to
factors over which the Proponent has little or no control.
* Material has been omitted and filed separately with the Commission
Page 41
FORM TPC-5
REPORT ON SUSTAINABLE DEVELOPMENT BENEFITS
PROPONENT: OFFSHORE SYSTEMS LTD.
PROJECT NO.: 710-488685
On a full life cycle basis (from design through manufacture/operation and
decommissioning or disposal/recycling), the technologies that are to be
developed during the course of this R&D project are expected to provide the
following downstream Sustainable Development benefits (over existing industrial
practices) as they are incorporated into the commercial activities of the firm.
BENEFITS SIGNIFICANT MODERATE MINOR/NONE
-------- ----------- -------- ----------
Reduced energy consumption (i.e. efficiency x
of use) or increased energy production
through sustainable means (i.e. efficiency
of generation)
Increased supply of energy from renewable x
sources
Reduced water consumption or increased x
supply of clean water
Reduced consumption of raw materials or x
manufactured materials (reduced material
intensity)
Reduced production and/or release of x
pollutant species of any kind to the
atmosphere
Reduced production and/or release of x
pollutant species of any kind to receiving
waters
Reduced production and/or disposal of x
solid wastes to the land
Reduced usage and/or production and/or x
disposal of hazardous/toxic substances
Remediation or rehabilitation of x
contaminated land or water
Page 42
SCHEDULE 6 - PROJECT FACT SHEET FOR NEWS RELEASE
PROGRAM: TECHNOLOGY PARTNERSHIPS CANADA PROJECT NO.: 710-488685
--------------------------------------- ---------------------------------------
NAME & ADDRESS OF PROPONENT: PROPONENT CONTACT:
OFFSHORE SYSTEMS LTD. Name: Xxxxx Xxxxxxxxx
000-00- Xxxx 0xx Xxxxxx Xxxxx Xxxxxxxx of Operations
Vancouver, B.C. Telephone: 000-000-0000
V7P Fax: 000-000-0000
3N4
Project Location: Project Type: Defence
North Vancouver, B.C.
Industrial Sector: Marine Defence Project Purpose: To advance the
-navigation and control communications company's capabilities and products for
image display technology
Authorized Assistance: $3,768,391
Project Description and Anticipated Results:
The project will enable the company to provide high performance products for the
integration and display of geographical data and images. The technology permits
the faster and more efficient exchange and display of data and information.
Military users will benefit from a common picture of the operational
environment. The project will enhance the company's current products, services
and capabilities and will allow them to continue to work with customers to meet
very high technical and operational requirements. The project will position the
company to meet emerging maritime performance specifications.
