EXHIBIT 4.33
CONFIDENTIAL TREATMENT REQUESTED PURSUANT TO RULE 24B-2
CERTAIN PORTIONS, INDICATED BY [*****], OF THIS EXHIBIT HAVE BEEN OMITTED
PURSUANT TO RULE 24b-2 OF THE SECURITIES ACT OF 1934. THE OMITTED MATERIALS
HAVE BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
TECHNOLOGY PARTNERSHIPS CANADA
SOFTWARE DEFINED RADIO FOR DEFENCE PURPOSES
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: SPECTRUM SIGNAL PROCESSING INC., a corporation duly
incorporated under the laws of British Columbia, having
its head office located at 200-2700 Production Way,
Burnaby, British Columbia, (hereinafter referred to as "the
PROPONENT")
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 increase 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 software
defined radio;
b) The new technologies and resulting products are expected to offer
significant performance advantages over existing communications
technologies;
c) The resulting products are expected to contribute to meeting a growing
demand for high performance military communications products; and
FILE NO. 710-487968
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
ARTICLE 3 - THE PROPONENT'S OBLIGATIONS
3.1 The Proponent will carry out the Software Defined Radio for
Defense Purposes 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 December 31, 2006 ("PROJECT COMPLETION DATE"), unless otherwise
agreed to in writing by the Minister.
FILE NO. 710-487968
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) 25% of the Eligible Costs; and
(b) $8,299,616
4.2 The Minister will not contribute to any Eligible Costs
incurred by the Proponent prior to June 19, 2003 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 $ 0.0
Provincial $ 0.0
Municipal $ 0.0
-----
Total $ 0.0
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 Directorate
Technology Partnerships Canada
FILE NO. 710-487968
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:
Spectrum Signal Processing Inc.
000-0000 Xxxxxxxxxx Xxx
Xxxxxxx, Xxxxxxx Xxxxxxxx
X0X 0X0
Fax No: (000) 000-0000
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 CONDITIONS PRECEDENT - EVIDENCE OF FINANCING
Spectrum shall demonstrate, by 31 March 2004, that the company has
maintained the financial means and intent to complete this project.
Proof of access to a minimum of $5 million working capital or in the
event of a change in control of the company an equivalent financial
guarantee by the parent company, combined with a reaffirmation in
writing of the intent to complete the project in accordance with the
terms of the agreement shall constitute a satisfactory demonstration.
In the event that satisfactory demonstration is not achieved, TPC will
make payment on claims submitted by Spectrum for eligible costs
incurred up to and including 31 March 2004 after which TPC's funding
obligation will cease until such time as the company provides
satisfactory evidence of financing. In the event that the company is
unable to provide satisfactory evidence of financing before 30
September 2004, the agreement will terminate on September 30, 2004 or
earlier, upon the issuance of a letter, from the Minister, informing
that in his or her sole opinion, Spectrum has not provided satisfactory
evidence of financing.
8.3 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
FILE NO. 710-487968
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.
8.4 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:
ARTICLE 9 - ENTIRE AGREEMENT
FILE NO. 710-487968
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 16/03/04
------------------------------------------ Date
Technology Partnerships Canada (TPC)
Xxxx Xxxxxx - Executive Director, TPC
SPECTRUM SIGNAL PROCESSING INC.
Per: /s/ Xxxxx Xxxxxxx March 16, 2004
------------------------------------------ Date
XXXXX XXXXXXX
Chief Financial Officer
Name & Title
FILE NO. 710-487968
SCHEDULE 1 - TPC GENERAL CONDITIONS
TABLE OF CONTENTS
1. DEFINITIONS
Agreement
Background Intellectual Property
Contribution
Eligible Costs
Fiscal Year
Intellectual Property
Interest Rate
Project
Project Completion Date
Schedule
Statement of work
2. MATERIAL CHANGES
3. DISPOSAL OF ASSETS
4. CLAIMS FOR PAYMENT
4.1 Payment of Claims
4.2 Hold-back Rights
4.3 Overpayment by Minister
4.4 Set-off Rights of Minister
5. MONITORING
5.1 Ministers Right to Audit Accounts and Records
5.2 Access to Premises
5.3 Access to Third-party Information
6. REPRESENTATIONS, WARRANTIES AND UNDERTAKINGS
6.1 Power and Authority of Proponent
6.2 Authorized Signatories
6.3 Binding Obligations
6.4 No Pending Suits or Actions
6.5 No Gifts or Inducements
6.6 Intellectual Property
6.7 Compliance with Environmental Protection Requirements
6.8 Other Agreements
6.9 Dividend Restriction
6.10 Other Financing
6.11 Lobbyist Act
7. TERM OF AGREEMENT
7.1 Contractual Benefits
7.2 Advance Payment
7.3 Audit
8. DEFAULT AND RECOVERY
8.1 Events of Default
8.2 Remedies on Default
8.3 Remedies Fair and Reasonable
8.4 No Waiver
9. FORCE MAJEURE
9.1 Event of Force Majeure
9.2 Definition of Force Majeure
10. ANNOUNCEMENTS
10.1 Consent to Public Announcement
10.2 Confidentiality Obligation
10.3 Reporting under Security Laws
11. NOTICE
11.1 Form and Timing of Notice
11.2 Change of Address
12. COMPLIANCE WITH LAWS
13. MEMBERS OF PARLIAMENT
14. ANNUAL APPROPRIATIONS
14.1 Parliamentary Allocation
14.2 Lack of Appropriation
15. CONFIDENTIALITY
15.1 Consent Required
15.2 International Dispute
15.3 Financing and Licensing
16. CONSENT OF THE MINISTER
17. NO ASSIGNMENT OF AGREEMENT
18. COMPLIANCE WITH POST-EMPLOYMENT PROVISIONS
19. CONTRIBUTION AGREEMENT ONLY
20. BINDING AGREEMENT
21. SEVERABILITY
22. APPLICABLE LAW
23. SIGNATURE IN COUNTERPARTS
FILE NO. 710-487968
SCHEDULE 2 - THE PROJECT
STATEMENT OF WORK (SOW)
1.01 DESCRIPTION OF THE WORK
This project, Software Defined Radio for Defence Purposes, is focused on
developing new technologies to enable the implementation of software
definable reconfigurable RF signal processing platforms for use in
aerospace and defence applications.
The key enabler of 'software define-ability' in a Software Defined Radio
(SDR) rests in the signal processing heart of the radio and it is the
creative implementation of this processing heart that is the focus of this
project. Making SDR a reality involves significant advances in
communications signal processing, software algorithms, software tools,
Field Programmable Gate Array (FPGA) software, communications fabrics and
Digital Signal Processor (DSP) system design. Spectrum's R&D program
pursues next generation advances in all of these disciplines which,
combined, will allow us to produce the sophisticated technology necessary
to implement SDR.
THE OBJECTIVES OF THE PROJECT ARE TO DEVELOP:
- SDR hardware with enhanced scalability, modularity and
heterogeneity (supporting additional processor types);
- Broad analog and digital input/output capability for SDR
- Application support, including signal processing algorithms
and tools, libraries, tools, operating systems, the Software
Communications Architecture (SCA), communications fabrics,
development of front/back-end interfaces; and,
- [*****]
THE ULTIMATE GOAL OF THIS PROJECT IS TO DEVELOP A PORTFOLIO OF HARDWARE
AND SOFTWARE BUILDING BLOCKS FOR SOFTWARE DEFINED RADIO, WHICH IS OPTIMAL
FOR THE DEFENCE MARKET AND CAN BE LEVERAGED INTO COMMERCIAL APPLICATIONS
AS THAT MARKET MATURES.
2.0 DESCRIPTION OF MAJOR ACTIVITIES AND MILESTONES
The major activities, which constitute this project, are research and
development of:
- PERFORMANCE. This includes:
- New and more powerful processors including FPGAs;
- Adding further configurability such as more choice of
processor types;
- Reduced electrical power needs; and,
- Reduced cost for a given performance.
FILE NO. 710-487968
- I/O. This includes:
- Faster analog I/O;
- Adding digital I/O interfaces such as Fibrechannel;
and,
- Enabling our customers to create their own I/O.
- APPLICATION SUPPORT. This includes:
- Signal processing algorithms and tools;
- Hardware abstraction tools (quicComm);
- Real-time operating system (RTOS) independence;
- Application abstraction tools (e.g., SCA); and,
- Demonstrating and benchmarking the SDR design for
defence applications.
- [*****]
Spectrum subscribes to a diligent R&D approval process that is aimed at
prioritizing and committing to R&D activities in a timeframe that
minimizes market risk. In order to consider an R&D activity, there must
be strategic fit, economic opportunity and validation of market demand.
[*****]
[*****]
All R&D activities will be conducted at the company's facility in
Burnaby, British Columbia, with the exception that some subcontracting
work may be done at the subcontractor's premises. All subcontracting
work will be performed by Canadian companies unless suitable domestic
capability does not exist.
1.1 MAJOR ACTIVITY 1: PERFORMANCE
[*****]
- Channelization
Synchronizing multiple channels of data within one
physical stream, and multiple streams across multiple
boards is a very difficult task. This must be solved
by using common clock sources, time-stamping data,
the provision of packet numbering, and using error
checking.
There are generally no standardized requirements
across our customer base. [*****]
- Higher speed processors on cPCI
The defence community has asked for an upgrade in the
FPGA type, from Xilinx Virtex E to Virtex II, and to
support the Texas Instruments C6416 processor.
Carrier boards always implement multiple processors,
or the same type or a heterogeneous mix. An example
is our Mosport board that implements 8 C6203
processors. Mezzanine module cards may have one or
more processors. Two projects in progress are a
module with one Xilinx Virtex II, and a module with
two C6416 processors.
1.01 Research Rapid I/O to a mezzanine
FILE NO. 710-487968
Spectrum wishes to increase the data throughput between a carrier card
and a mezzanine module, and to further drive this as an industry
standard. Much of this involves simulation and then empirical testing
to prove the throughputs can be achieved and a design can be
manufactured.
[*****]
- First VxS bus boards
The VME bus backplane standard, which we currently
use, is evolving to support Serial Rapid I/O fabric
over the backplane, supporting considerably faster
data rate necessary for supporting the new DOD
wideband protocols. This new technology standard is
called VxS, recently ratified by the VITA standards
body. In designing new boards to support this, the
latest processors will be incorporated. The Xilinx
Virtex II Pro supports PowerPC processors on the same
chip as the FPGA. The latest PowerPC processor (7457)
provides a performance upgrade from the current
7410s.
- Higher speed processors on cPCI
- Continuing development with the latest FPGAs and processors.
Research SoC semiconductors.
Semiconductor vendors are attempting to place more
communications functions on one chip. FPGA vendors
are putting processors such as PowerPCs on their
chips (for example, the Xilinx Virtex-II Pro series
support embedded PowerPCs). DSP vendors such as Texas
Instruments are putting special function blocks on
their DSP chips such as Turbo Decoders. Yet other
companies are designing massively parallel computing
engines for wireless communications.
We are attempting to determine the direction of
semiconductor development in our area of expertise:
high-performance, software-reconfigurable,
heterogeneous processing platforms. There are
representations made regularly that SoC architectures
will come to market that will supercede more generic
processors such as DSPs and FPGAs. Spectrum must
continue to validate these claims and be prepared to
utilize them in a timely manner to maintain its
technological lead over competitors.
- Design in SoC technology
This project involves implementing the SOC technology
or technologies chosen in the earlier research phase.
Although Spectrum has designed its own custom ASICs
in the past, it has no desire to create custom
semiconductors going forward. Our direction will be
to utilize SoC semiconductors that others have
developed within our boards and with additional
intellectual property added through software and
application development.
1.06 Research next-gen backplane standards
Standards bodies are considering the next leap in
backplane standards, such as PICMG AdvancedTCA, and
VITA 34. Spectrum believes that it must research and
select the appropriate standards that SDR must
migrate to,
FILE NO. 710-487968
including performing any prototyping to verify
performance and operability.
Whereas the VxS standard, mentioned above, is stable
enough to develop product on, this task and the next
involve research and development in backplanes that
are not fully specified and are months to years away
from becoming ratified. The companies defining these
specifications, including ours, must still prove the
technical feasibility. For example, today we can
achieve 1.25 gigabits-per-second from chips across
boards and backplanes to other chips. The new
possible standards mentioned are attempting to
achieve 10 Gbps over a single differential line.
- Design in next-generation backplane
This project involves implementing the backplane
technology or technologies chosen in the earlier
research phase.
2.2 MAJOR ACTIVITY 2: I/O
[*****]
- High-speed mass storage
The Signals Intelligence (SIGINT) community must deal
with an ever-increasing number of RF channels. An
upcoming requirement is to buffer a wide swath of RF
data onto extremely high-speed disk arrays, and then
after deciding what signals are of interest, to
retrieve the buffered data and process only the
channels of interest. [*****]
1.09 Transition Module reference design kit
Our experience with previous products and again with
our first implementation of SDR shows that a signal
processing solution can be developed that meets the
needs of many customers. However, the input/output
section, whether analog or digital, may need to be
different for each customer. We have partially
ameliorated the need to change our products for each
customer by separating the processing function from
the I/O, with a novel communications bus that
functions at very high-speed and supports packetizing
and time-stamping of the data (to enable
channelization).
[*****]
[*****]
- [*****]I/O module
Spectrum's current SDR-3000 subsystem supports I/O
streams from the RF transceiver of 80 mega-samples
per second (MSPS). [*****]This technology is
important to the SIGINT community, but is of special
interest to Military Satellite Communications
programs wishing to implement new very high-speed
waveforms. There is both research and development in
achieving this module. Other public companies have
recently proven 1 gigabit receive technology, but not
transceive. It is unknown today if we can
sufficiently reduce clock jitter
FILE NO. 710-487968
and break the data into parallel, slower data-rate,
streams that can be supported by today's FPGAs. We
will need to propose solutions, prototype and test
them before proceeding with the development of the
module.
- [*****]
- Fibrechannel connectivity
Spectrum expects to use the Fibrechannel
communications standard to allow connectivity to
external high-speed RF transceivers, and for
connecting to back-end processing systems.
1.3 MAJOR ACTIVITY 3: APPLICATION SUPPORT
[*****]
- FPGA core support
Developing VHDL code for FPGAs is still in very early
stages, much like software a few decades ago.
Currently what we offer are the "copper" connections
between an FPGA and the outside world, and the
beginnings of coding support. Our customers must then
spend a great deal of time learning our architecture,
writing and debugging the FPGA code.
Our goal, exactly as we have done with traditional
processors, is to abstract the hardware details and
greatly reduce the development time for our
customers, allowing them to concentrate on their
application instead of being forced to become experts
on Spectrum's hardware design.
Some interesting points: FPGAs today must interface
to other FPGAs, communications fabrics, processors,
high-speed memory, etc. These interfaces can be
parallel, serial, and/or packetized. FPGAs now have
over 1000 pin connections. If the designer
accidentally drives both ends of a circuit board
connection through incorrect programming, he can
destroy a $40,000 board.
[*****]
- SCA Beta test
The SCA standard driven by the defence community is
still being modified and discussed. Spectrum expects
to be the first company to offer a COTS SDR
supporting SCA. Customers want to begin testing our
SDR platform for compliance as soon as possible.
Spectrum must develop a board support package
necessary to install an SCA core framework on our SDR
products. This is several man-years of work,
involving the definition of our hardware resources
and providing device drivers that represent them.
Spectrum must then port an SCA core framework on the
SDR platform. This work is under way. We are
currently working with Xxxxxx Corporation to use
their dmTK product, the only publicly available
supported framework. All of our work is completely
applicable to other frameworks developed, such as the
SCARI product developed in Canada by DRDC.
The SCA standard is still very new and there has been
no certification
FILE NO. 710-487968
process established. We anticipate that it will take
many man-months of work to test, debug and certify
our platform.
[*****]
- RTOS Independence
Customers demand different RTOS', often dictated
within a defence program. Spectrum expects that it
must support a second operating system, with two
possible choices being Linux or Greenhills Integrity
OS. The selection criteria is primarily business
based. We must verify an OS technically meets
real-time performance requirements and supports all
the features needed, but after that our customer or
the end program may dictate the OS.
An important direction we see is the use of Linux
within the military and government community. Linux
was not developed initially to support real-time
systems and there are tentative solutions that we
must evaluate. We are planning a research project on
this.
- System examples for target applications
There are several defence applications that require
unique data flows between the different processing
elements within a SDR. These include: RADAR,
Direction Finding, and Beamforming. Spectrum must
demonstrate, and benchmark, these data flows to its
customers.
Our platform supports a number of heterogeneous
processors (DSPs, PowerPCs, FPGAs) that are
interconnected by multiple data paths. Some
applications require a serialized approach, such as
I/O to FPGA to PowerPC to back-end processing. Some
require a parallel approach, such as a
direction-finding system having four antennas, each
going to an FPGA, with a certain amount of data
needing to be transferred between the FPGAs, and then
processed data from the FPGAs proceeding to DSP
processors. Each application specifies the processing
power at each step and the amount of data that must
flow continuously through each path.
An example of performance characteristics are:
multi-channel direction finding, RF being monitored
is 70 MHz wide with a sampling rate of 93
megasamples/second, the data rate for each channel
(antenna) is 186 megabytes/second, the mass storage
required is 5 terabytes, the FPGAs must do 16,000
point FFTs, the FPGA to processor bandwidth is 151
megabytes/second, and the data out of the processor
is 1 megabyte/second. Spectrum must empirically
determine, and often prove to customers, that these
data rates are achievable.
1.4 [*****]
[*****]
- [*****]
[*****]
FILE NO. 710-487968
[*****]
- [*****]
[*****]
[*****]
- [*****]
- [*****]
FILE NO. 710-487968
ANNEX A
FORM B: MILESTONES
PROPONENT NAME: SPECTRUM SIGNAL PROCESSING INC. PROJECT NUMBER: 710-487968
[*****]
FILE NO. 710-487968
FORM C - CURRENT FISCAL YEAR COST BREAKDOWN BY MAJOR ACTIVITIES
PROPONENT NAME: SPECTRUM SIGNAL PROCESSING INC. PROJECT NUMBER: 710-487968
FOR FISCAL YEAR ENDING MARCH 31, 2004
[*****]
1. TITLE OF KEY PROJECT TASKS ENUMERATED AND DESCRIBED IN THE SOW.
FILE NO. 710-487968
ANNEX A
FORM D - COST BREAKDOWN BY FISCAL YEAR
PROPONENT NAME: SPECTRUM SIGNAL PROCESSING INC. PROJECT NUMBER: 710-487968
[*****]
FILE NO. 710-487968
ANNEX A
FORM E-1 - PROJECT LOCATION AND COSTS
PROPONENT NAME: SPECTRUM SIGNAL PROCESSING INC. PROJECT NUMBER: 710-487968
START PERIOD
(FISCAL YEAR AND COSTS
PROJECT LOCATION QUARTER) WORK PERFORMED ($)
-------------------------------------------------------------------------------------------------------------
BURNABY, BRITISH COLUMBIA 2002/2003 Q1 ALL OF THE WORK IN THIS [*****]
INVESTMENT PROPOSAL WILL BE
PERFORMED BY SPECTRUM
SIGNAL PROCESSING INC. AND
ITS SUBCONTRACTORS
-------------------------------------------------------------------------------------------------------------
TOTAL [*****]
-------------------------------------------------------------------------------------------------------------
NOTE: GOVERNMENT FISCAL YEAR RUNS APRIL 1 - MARCH 31.
FILE NO. 710-487968
ANNEX A
FORM E-2 - EQUIPMENT COST BREAKDOWN
PROPONENT NAME: SPECTRUM SIGNAL PROCESSING INC. PROJECT NUMBER: 710-487968
PLANNED
ACQUISITION
PERIOD ESTIMATED
(FISCAL YEAR AND COSTS
EQUIPMENT DESCRIPTION QUARTER) ($)
-----------------------------------------------------------------------------------------------------------------
1. NO INDIVIDUAL EQUIPMENT COSTING MORE THAN $250K WILL BE PURCHASED.
2.
3.
4.
5.
6.
-----------------------------------------------------------------------------------------------------------------
TOTAL
-----------------------------------------------------------------------------------------------------------------
Notes:
1) [*****]
2) Government fiscal year rues April 1 - March 31.
FILE NO. 710-487968
FORM E-3 - MATERIALS COST BREAKDOWN
PROPONENT NAME: SPECTRUM SIGNAL PROCESSING INC. PROJECT NUMBER: 710-487968
PLANNED ACQUISITION
PERIOD ESTIMATED
(FISCAL YEAR AND COSTS
MATERIALS DESCRIPTION QUARTER) ($)
-----------------------------------------------------------------------------------------------------------
1. COMPONENTS 2004 [*****]
2. COMPONENTS 2005 [*****]
3. COMPONENTS 2006 [*****]
4. COMPONENTS 2007 [*****]
-----------------------------------------------------------------------------------------------------------
TOTAL: [*****]
-----------------------------------------------------------------------------------------------------------
NOTES:
GOVERNMENT FISCAL YEAR RUNS APRIL 1 - MARCH 31
FILE NO. 710-487968
ANNEX A
FORM E-4 - SUB-CONTRACT COST BREAKDOWN
PROPONENT NAME; SPECTRUM SIGNAL PROCESSING INC. PROJECT NUMBER: 710-487968
[*****]
FILE NO. 710-487968
ANNEX A
FORM E-5 - OTHER COSTS BREAKDOWN
PROPONENT NAME: SPECTRUM SIGNAL PROCESSING INC. PROJECT NUMBER: 710-487968
[*****]
NOTES:
GOVERNMENT FISCAL YEAR RUNS APRIL 1 - MARCH 31.
FILE NO. 710-487968
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 quarterly basis ("CLAIM PERIOD"),
except for the first claim which will cover a longer period
going back to June 19, 2003;
(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
(d) 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.
(e) be certified by the chief financial officer of the
Proponent or other person satisfactory to the Minister;
(f) 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.
(g) 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.
FILE NO. 710-487968
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 properly
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
FILE NO. 710-487968
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.
(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
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.
(1) The 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
FILE NO. 710-487968
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.
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 casual 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 the 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;
FILE NO. 710-487968
(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;
(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.
FILE NO. 710-487968
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.
B. SR&ED METHOD OF CALCULATING LABOUR AND OVERHEAD ALLOWANCE (IF
APPLICABLE)
Notwithstanding the provisions on Direct Labour Costs and Indirect
Costs contained above, in the event that it is mentioned in the
Statement of Work that the Canada Customs and Revenue Agency policy on
Scientific Research and Experimental Development has been chosen by the
Proponent as a proxy for Overhead calculations for this Project, please
see the attached guide, TPC Overhead Proxy.
FILE NO. 710-487968
TPC OVERHEAD PROXY
Calculating the Prescribed Proxy Amount for Eligible Overhead
Expenditures, A Summary of CCRA T4088(E) Rev.03 Guide to Form T661 - Claiming
Scientific Research and Experimental Development Expenditures
xxxx://xxx.xxxx-xxxx.xx.xx/X/xxx/xx/x0000xx/ README.html. This summary has been
prepared to outline the major elements of calculating the prescribed proxy
amount (PPA). In case of disagreement between this summary and the SR&ED rules,
SR&ED will apply.
In lieu of standard PWGSC direct labour and overhead negotiations, TPC
clients may choose to follow the SR&ED rules. Under this method, rather than
specifically identifying and allocating incremental overhead expenditures to the
Project, a PPA for eligible overhead costs may be calculated based on a fixed
percentage of the salaries or wages, or portion thereof, of the employees
directly engaged in the Project. The base will include wages/salaries as well as
normal sick and vacation leave and statutory holidays. It will not include
expenditures for taxable benefits, as well as remuneration based on profits and
bonuses, or related benefits (the employer's share of EI, CPP or QPP, WCB or
CSST, employee pension and medical plans).
The current SR&ED PPA rate is 65% of the base.
The PPA will cover overhead expenditures such as:
- the related benefits (employer's share) of the approved wages/salaries
- office supplies
- general purpose office equipment
- heat, water, electricity and telephones
- support staff salaries or wages
- travel and training
- property taxes
- maintenance and upkeep of Project premises, facilities or equipment
- any other eligible expenditures, not specifically identified in the
Statement of Work, that are incremental costs as a result of the
approved Project activity.
Note, there are rules that limit the amount of wage/salary costs of
specified employees that can be included in the base. For year 2002, the maximum
amount is $97,750 per specified employee. Specified employees are those
employees who do not deal at arm's length with the employer or who own directly
or indirectly, at any time during the year, 10% or more of the issued shares of
any capital stock of the employer or of any corporation related to the employer.
The following table highlights the types of activity that should be
included in calculating the base as well as applicable limits.
CALCULATING THE PRESCRIBED PROXY AMOUNT BASE
FILE NO. 710-487968
INCLUDE THE PORTION OF WAGES/SALARIES FOR TIME SPENT ON
THE PROJECT OF: DO NOT INCLUDE:
------------------------------------------------------------------------------------------------------------------------
Employees directly engaged in the Project, based on such Employees providing a service to the Project staff
tasks as: including clerks, secretaries and receptionists
are engaged in activities in such areas as
- preparing equipment and materials for experiments, accounting, payroll, finance, legal, shipping,
tests and analyses (but not for maintaining inventory control, maintenance and word
equipment); processing.
- experimenting, testing and analyzing; Time managers and supervisors spend on the
non-technical management aspects of activities
- collecting data for experimentation and analysis; such as long-term decision-making, contract
and, administration and other decision-making functions
that do not directly influence the Project
- directing the course of the ongoing Project activities.
activities being claimed for the year.
Usually, do not include work performed beyond the
Other employees' time is also considered to be directly first-line supervision level.
engaged in the Project to the extent the following tasks are
required as part of the SOW: For a specified employee, the maximum amount of
salary that can be included in the base is limited
- recording measurements, making calculations and to 75% of salary/wage costs, regardless of the
preparing charts and graphs; share of time working on the Project exceeds this
amount. This amount is further restricted, to be
- conducting statistical surveys and interviews; the lessor of the prior calculation or the
following formula:
- preparing computer programs; and,
2.5 times the Maximum Pensionable Earnings (for
- working in areas of engineering or design, CPP purposes, $39,100 for year 2002) times the
operations research, mathematical analysis and number of days in the taxation year that the
psychological research. person is employed by the client divided by 365.
Supervisors' or managers' time spent directly involved in
the technical aspects of the Project.
Note: employees who spend all or substantially all of their
time (90%) on SOW activities are considered to spend all of
their time on the Project.
------------------------------------------------------------------------------------------------------------------------
FILE NO. 710-487968
SCHEDULE 4 - CONTRACTUAL BENEFITS
A - PAYMENTS TO MINISTER
1. DEFINITIONS
"GROSS BUSINESS REVENUES" means all revenues, receipts, monies and
other considerations of whatever nature in excess of $22,368,421 per
annum received by the Wireless Systems Group of 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 RATE AND ROYALTY BASIS
The Proponent will pay the Minister a royalty of 1.75% of the
annual Gross Business Revenues during the Royalty Period.
2.2 ROYALTY PERIOD
The Royalty Period will begin on January 1, 2004 and will on
December 31, 2010. If, however, cumulative royalties are less
than $10,500,484 by December 31, 2010, then the royalty period
will continue until the earlier of December 31, 2013 or until
a cumulative royalty ceiling of 10,500,484 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 company fiscal year December, together with the related
royalty payment. The first statement and related royalty
payment must be provided to the Minister by May 1, 2005 in
respect of the fiscal year ending December 31, 2004 and by
each year thereafter in regard to the previous fiscal year.
Payments shall be made by cheque to the order of the Receiver
General and sent 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
31
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 Corporations shall extend to these related persons
and 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 any right to the production of resulting
products or transfer title to any of the Intellectual Property
outside of Canada, except the license or sublicense in
conjunction with the sale of resulting products, and will
impose the same restriction on all licensees and transferees.
(c) The expression "resulting products" as used in paragraph (a)
and (b) above means products, including services, resulting
from use of the Intellectual Property.
32
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) a 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 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 delay, together with the Proponents revised
schedule and any proposed revisions to the Statement of Work.
33
4. ANNUAL INFORMATION UPDATES
By February 15, 2004, 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 (Reports 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 on 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 fulfillment of specific
commitments in regard to contractual benefits to Canada
identified in Schedule 4.
5. 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.
34
FORM TPC - 1
REPORT ON ESTIMATED & ACTUAL REPAYMENTS TO THE MINISTER
PROPONENT: SPECTRUM SIGNAL PROCESSING INC. PROJECT NUMBER: 710-487968
1 2 3 4
--------------------------------------------------------------------------------
YEAR DUE
ENDING ESTIMATED PAYMENT ACTUAL PAYMENT DATE
(MM/DD/YY) (IN $) (IN $) (MM/DD/YY)
--------------------------------------------------------------------------------
12/31/04 [*****] 5/1/05
--------------------------------------------------------------------------------
12/31/05 [*****] 5/1/06
--------------------------------------------------------------------------------
12/31/06 [*****] 5/1/07
--------------------------------------------------------------------------------
12/31/07 [*****] 5/1/08
--------------------------------------------------------------------------------
12/31/08 [*****] 5/1/09
--------------------------------------------------------------------------------
12/31/09 [*****] 5/1/10
--------------------------------------------------------------------------------
12/31/10 [*****] 5/1/11
--------------------------------------------------------------------------------
12/31/11 5/1/12
--------------------------------------------------------------------------------
12/31/12 5/1/13
--------------------------------------------------------------------------------
12/31/13 5/1/14
--------------------------------------------------------------------------------
TOTAL 10,500,484
--------------------------------------------------------------------------------
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 repayments
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.
35
FORM TPC - 2
REPORT ON JOB CREATION AND MAINTENANCE
PROPONENT: SPECTRUM SIGNAL PROCESSING INC. PROJECT NUMBER: 710-487968
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 types represents a Protect 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 32 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-contracted 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.
36
PART 1 : WORK PHASE - DATA COMPILED AS OF DECEMBER 31,
TOTAL NUMBER OF PERSON YEARS
----------------------------
CATEGORY OF EMPLOYMENT ESTIMATE ACTUAL
---------------------------------------------------------------------------------------------
A) KNOWLEDGE-BASED YR 1 ENDING 12/31/03 [*****]
(SCIENCE, ENGINEERING & YR 2 ENDING 12/31/04
TECHNICAL) YR 3 ENDING 12/31/05
YR 4 ENDING 12/31/06
---------------------------------------------------------------------------------------------
B) MANAGEMENT & ADMINISTRATION YR 1 ENDING 12/31/03 [*****]
YR 2 ENDING 12/31/04
YR 3 ENDING 12/31/05
YR 4 ENDING 12/31/06
---------------------------------------------------------------------------------------------
C) SUB-CONTRACTED WORK YR 1 ENDING 12/31/03 [*****]
YR 2 ENDING 12/31/04
YR 3 ENDING 12/31/05
YR 4 ENDING 12/31/06
---------------------------------------------------------------------------------------------
TOTAL YR 1 ENDING 12/31/03 [*****]
YR 2 ENDING 12/31/04
YR 3 ENDING 12/31/05
YR 4 ENDING 12/31/06
---------------------------------------------------------------------------------------------
PART 2 - BENEFIT PHASE - DATA COMPILED AS OF DECEMBER 31,
TOTAL NUMBER OF PERSON YEARS
---------------------------------------
ESTIMATED AVERAGE
NUMBER OF PERSON ACTUAL PERSON
YEARS FOR DURATION YEARS FOR
CATEGORY OF EMPLOYMENT OF BENEFIT PHASE REPORTING PERIOD
------------------------------------------------------------------------------------------------
A) KNOWLEDGE-BASED
(SCIENCE, ENGINEERING &TECHNICAL) [*****]
------------------------------------------------------------------------------------------------
B) GENERAL PRODUCTION [*****]
------------------------------------------------------------------------------------------------
C) MANAGEMENT. ADMINISTRATION, MARKETING, SALES &
SUPPORT [*****]
------------------------------------------------------------------------------------------------
[*****]
TOTAL
------------------------------------------------------------------------------------------------
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 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.
37
FORM TPC - 3
REPORT ON OTHER REPRESENTATIONS & EXPECTED RESULTS
PROPONENT: SPECTRUM SIGNAL PROCESSING INC. PROJECT NUMBER: 710-487968
OTHER REPRESENTATIONS AND EXPECTED RESULTS INCLUDE:
1. PATENTS: [are there any patents that arc 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.]
PLANNED/REVISED STATUS/ACTUAL
DESCRIPTION OF EXPECTED RESULT/ REPRESENTATION DATE DATE
------------------------------------------------------------------------------------------------------------
1. Patent applications to be filed in each of calendar December 31, 2004 -2
years Apps
December 31, 2005 -2
Apps
December 31, 2006 -2
Apps
------------------------------------------------------------------------------------------------------------
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 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.
38
FORM TPC - 4
REPORT ON INVESTMENT LEVERAGE
PROPONENT: SPECTRUM SIGNAL PROCESSING INC. PROJECT NUMBER: 710-487968
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 coats 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) OTHER OTHER
YEAR (2) PROJECT (4) (1) PROJECT (3)
(ENDING ELIGIBLE RELATED OTHER ELIGIBLE RELATED OTHER
DEC. 31) SUPPORTED COSTS COSTS INVESTMENT SUPPORTED COSTS COSTS INVESTMENT
--------------------------------------------------------------------------------------------------------
2003 [*****]
--------------------------------------------------------------------------------------------------------
2004 [*****]
--------------------------------------------------------------------------------------------------------
2005 [*****]
--------------------------------------------------------------------------------------------------------
2006 [*****]
--------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------
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 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.
39
FORM TPC - 5
REPORT ON SUSTAINABLE DEVELOPMENT BENEFITS
PROPONENT: SPECTRUM SIGNAL PROCESSING INC. PROJECT NUMBER: 710-487968
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 of use) or
increased energy production through sustainable means
(i.e. efficiency of generation) x
---------------------------------------------------------------------------------------------------------------
Increased supply of energy from renewable sources x
---------------------------------------------------------------------------------------------------------------
Reduced water consumption or increased supply of clean x
water
---------------------------------------------------------------------------------------------------------------
Reduced consumption of raw materials or manufactured
materials (reduced material intensity) x
---------------------------------------------------------------------------------------------------------------
Reduced production and/or release of pollutant species of x
any kind to the atmosphere
---------------------------------------------------------------------------------------------------------------
Reduced production and/or release of pollutant species of x
any kind to receiving waters
---------------------------------------------------------------------------------------------------------------
Reduced production and/or disposal of solid wastes to the x
land
---------------------------------------------------------------------------------------------------------------
Reduced usage and/or production and/or disposal of x
hazardous/toxic substances
---------------------------------------------------------------------------------------------------------------
Remediation or rehabilitation of contaminated land or water x
---------------------------------------------------------------------------------------------------------------
40
SCHEDULE 6 - PROJECT FACT SHEET FOR NEWS RELEASE
PROGRAM: TECHNOLOGY PARTNERSHIPS CANADA PROJECT NO.: 710-487968
NAME & ADDRESS OF PROPONENT: PROPONENT CONTACT:
SPECTRUM SIGNAL PROCESSING INC. NAME: NAME: XXX XXXXXX
200-2700 PRODUCTION WAY TELEPHONE: (000) 000-0000
BURNABY, BRITISH COLUMBIA FAX: (000) 000-0000
V5A 4X1
PROJECT LOCATION: BURNABY, BRITISH COLUMBIA PROJECT TYPE: PRE-COMPETITIVE
DEVELOPMENT
INDUSTRIAL SECTOR: DEFENCE ELECTRONICS PROJECT PURPOSE: SOFTWARE
DEFINED RADIO FOR DEFENCE
PURPOSES
AUTHORIZED ASSISTANCE: $8,299,616
PROJECT DESCRIPTION AND ANTICIPATED RESULTS: TO COME
SPECTRUM WILL USE TPC'S INVESTMENT TO BROADEN ITS EXISTING SOFTWARE
RECONFIGURABLE PROCESSING PLATFORM PORTFOLIO. SPECTRUM'S SOFTWARE RECONFIGURABLE
PLATFORMS ENABLE SOFTWARE DEFINED RADIOS (SDRS). SDRS ARC
SOFTWARE-RECONFIGURABLE, WHICH MEANS THAT THEY CAN CHANGE MODE OF OPERATION AND
BE UPGRADED VIA SOFTWARE WITHOUT ANY HARDWARE CHANGES. THIS FLEXIBILITY PERMITS
SDRS TO BE REPROGRAMMED 'ON THE FLY' TO INTEROPERATE WITH OTHER RADIOS.
SPECTRUM'S PRIMARY TARGET MARKETS FOR SDR ARE MILITARY COMMUNICATIONS, SIGNALS
INTELLIGENCE AND RADAR AND SONAR.
SDR IS THE TERM USED TO DESCRIBE A RADIO THAT PROVIDES SOFTWARE CONTROL OF A
VARIETY OF MODULATION TECHNIQUES AND WAVEFORM REQUIREMENTS, OF CURRENT AND
EVOLVING STANDARDS, OVER A BROAD FREQUENCY RANGE. THIS TECHNOLOGY USES A COMMON
HARDWARE PLATFORM TO ACCOMMODATE DIFFERENT COMMUNICATIONS STANDARDS AND
TECHNOLOGIES, VIA SOFTWARE MODULES AND FIRMWARE. SPECTRUM'S SDR RESEARCH AND
DEVELOPMENT IS AT THE FOREFRONT OF EFFORTS TO IMPROVE CANADIAN AND WORLDWIDE
MILITARY COMMUNICATIONS INTEROPERABILITY.
SPECTRUM'S CURRENT SOFTWARE RECONFIGURABLE PROCESSING PLATFORM, THE SDR-3000,
HAS BEEN ADOPTED AS ONE OF THE PLATFORMS USED BY JOINT TACTICAL RADIO SYSTEM
TECHNOLOGY LABORATORY (JTEL) TO SUPPORT THE TEST AND ACCEPTANCE OF PROGRAM
DELIVERABLES. THE JOINT TACTICAL RADIO SYSTEM (JTRS) IS A MULTI BILLION DOLLAR
US PROGRAM THAT WILL PROVIDE A FAMILY OF SOFTWARE PROGRAMMABLE RADIOS, TO ENSURE
INTEROPERABILITY AND PORTABILITY ACROSS DISPARATE RADIO NETWORKS. JOINT TACTICAL
RADIOS WILL BE MULTI-MODE AND MULTI-BAND ALLOWING ONE RADIO TO COMMUNICATE WITH
ALL OTHER RADIOS. JTRS WILL CARRY INFORMATION IN REAL-TIME TO THE WARFIGHTER IN
THE FIELD, WHETHER IT BE GROUND-BASED, SHIPBORNE, OR AIRBORNE. ONCE IMPLEMENTED,
JTRS WILL ENABLE THE INFORMATION SUPERIORITY NECESSARY FOR EFFICIENT MILITARY
ENGAGEMENTS. OTHER COUNTRIES WORLDWIDE HAVE THEIR OWN MILITARY SDR PROGRAMS THAT
ARE EXPECTED TO INTEROPERATE WITH JTRS RADIOS.
SPECTRUM SIGNAL PROCESSING DESIGNS, DEVELOPS, AND MARKETS HIGH PERFORMANCE
SIGNAL PROCESSING AND PACKET VOICE PROCESSING PLATFORMS FOR USE IN DEFENCE AND
COMMUNICATIONS INFRASTRUCTURE EQUIPMENT. SPECTRUM'S OPTIMIZED HARDWARE, SOFTWARE
AND CHIP TECHNOLOGY WORK TOGETHER TO COLLECT, COMPRESS AND CONVERT VOICE AND
DATA SIGNALS. LEVERAGING ITS 17 YEARS OF DESIGN EXPERTISE, SPECTRUM PROVIDES ITS
CUSTOMERS WITH FASTER TIME TO MARKET AND LOWER COSTS BY DELIVERING HIGHLY
FLEXIBLE, RELIABLE AND HIGH- DENSITY SOLUTIONS. SPECTRUM SUBSYSTEMS ARE TARGETED
FOR USE IN GOVERNMENT INTELLIGENCE, SURVEILLANCE AND COMMUNICATIONS SYSTEMS,
SATELLITE HUBS, CELLULAR BASE STATIONS, MEDIA GATEWAYS AND NEXT-GENERATION VOICE
AND DATA SWITCHES. MORE INFORMATION ON SPECTRUM AND ITS FLEXCOMM(TM) AND AXS(TM)
PRODUCT LINES IS AVAILABLE AT XXX.XXXXXXXXXXXXXX.XXX.
41
