Exhibit 4.36
"TPC" AGREEMENT NO. 720-481443
TECHNOLOGY PARTNERSHIPS CANADA
THE INTEGRATED COMMUNICATIONS SOLUTIONS R&D PROJECT
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: MARCH NETWORKS CORPORATION, a corporation duly incorporated under the
laws of Canada, having its head office located at Ottawa, Ontario
(hereinafter referred to as "a Proponent" or "March Networks")
And: MITEL NETWORKS CORPORATION, a corporation duly incorporated under the
laws of Canada, having its head office located at Ottawa, Ontario
(hereinafter referred to as "a Proponent" or "Mitel Networks")
And: MITEL KNOWLEDGE CORPORATION, a corporation duly incorporated under the
laws of Canada, having its head office located at Ottawa, Ontario
(hereinafter referred to as "a Proponent" or "Mitel Knowledge")
Collectively referred to as the Proponents.
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 Proponents' Project
described in this Agreement, considering that:
(a) the Project contributes to the attainment of TPC's objectives of
increasing economic growth, creating jobs and wealth, and supporting
sustainable development;
(b) the technology developed under this project will provide broadband
communication access to Canadians by building the devices and the
compelling broadband applications that will take advantage of the existing
under utilized broadband networks; and
(c) the technology will contribute to the development of applications that
will enable Internet Service Providers (ISP) to host web based
applications, which their commercial enterprise clients could access as
required, allowing new sources of revenues for the ISPs
while saving commercial enterprises the cost of purchasing and supporting
these applications.
(d) by combining their resources and eliminating duplications and
inefficiencies, March Networks and Mitel Networks will maximize synergy
and create an environment that is highly conducive to accelerate Canada's
transition to converged, broadband networks.
AND WHEREAS the entering into this Agreement is not contingent upon any export
performance on the part of the Proponents.
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 Proponents and received by the
Minister on or before October 15th, 2002, failing which it will be null
and void.
Article 2 - Documents forming a part of this Agreement
2.1 The following documents form an integral part of this Agreement:
These Articles of the 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
Schedule 7 - Special Purpose Equipment
Schedule 8 - Specimen Warrant Certificate
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 the Agreement
Schedule 1 - General Conditions
Schedule 2 - The Project
Other Schedules
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Article 3 - The Proponents' Obligations
3.1 The Proponents will carry out the Integrated Communications Solutions R&D
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
fulfill all of its other obligations hereunder, in a diligent and
professional mariner using qualified personnel.
3.2 The Proponents shall ensure that the Project is completed on or before
September 30th, 2004 ("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 Proponents in respect of the Project, of the
lesser of
(a) 25% of the Eligible Costs; and
(b) $60,000,000.
4.2 The Minister will not contribute to any Eligible Costs incurred by the
Proponents prior to October 1st, 2001 nor after the Project Completion
Date, unless otherwise agreed to in writing by the Minister.
4.3 Unless the Minister agrees otherwise in writing, and subject to the
overall limit stipulated in section 4.1 above, the amount of the
Contribution will not exceed the following amounts in the relevant Fiscal
Years of the Project as follows:
2002/2003: $28,000,000
2003/2004: $20,000,000
2004/2005: $12,000,000
The Minister will consider any request to reprofile these funds, but the
Minister will have no obligation to pay any greater amount in any of the
said Fiscal Years except to the extent that such reprofiling will have
been agreed to by the Minister.
Article 5 - Environmental Assessment
5.1 The Minister has assessed the Project under the 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 Proponents hereby acknowledge that, except for scientific research and
experimental development tax credit deductions or allowances, no other
federal, provincial or
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municipal government financial assistance other than that described below
has been requested or received by the Proponents for the Eligible Costs of
the Project.
Federal $0
Provincial $0
Municipal $0
Total $0
6.2 The Proponents will inform the Minister promptly in writing of any other
federal, provincial or municipal government assistance (except for
scientific research and experimental development tax credit deductions or
allowances) to be received for the Eligible Costs of the Project by the
Proponents 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, Enabling Technologies
Technology Partnerships Canada
10th Floor
300 Xxxxxx Street
Ottawa, Ontario KIA OC8
Fax No: (000) 000-0000
7.2 Any notice to the Proponents during the project performance will be
addressed to:
Dr. Xxxxxx Xxxxx
Chief Operating Officer
March Networks Corporation
000 Xxxxxx Xxxxx
Xxxxxx, Xxxxxxx X0X 0X0
Fax No: (000) 000-0000
Xxx Xxxxx
Chief Executive Officer
Mitel Networks Corporation
000 Xxxxxx Xxxxx
Xxxxxx, Xxxxxxx X0X 0X0
Fax: (000) 0000000
Xxxx Xxxxxxxx
Chief Financial Officer
Mitel Knowledge Corporation
000 Xxxxxx Xxxxx - Xxxxx X
Xxxxx 000
Xxxxxx, Xxxxxxx X0X 0X0
Fax: (000) 000-0000
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Article 8 - Special Conditions
8.1 Statements of Work
The Proponents shall submit to the Minister's satisfaction an annual detailed
Statement of Work (nature of work, milestones, timing, cost breakdown) at the
time of execution of this Agreement covering the period from October 1st, 2001
to April 30th, 2003, and thereafter by each following March 31st to cover each
subsequent 12 month period extending from May 1st to April 30th. The last
Statement of Work must be submitted on March 31st 2004 and will cover the period
from May 1st, 2004 to September 30th, 2004. It is a condition precedent to any
payment in any given Fiscal Year that said detailed Statement of Work be
submitted and approved by the Minister; tiling an acceptable detailed Statement
of Work in a timely fashion shall constitute a material condition.
8.2 Reporting
8.2.1 If the cumulative R&D spending by the Proponents is lower than $80 million
during any of the Proponents' fiscal years ending on or about April 30th,
the Proponents, separately or together, shall submit to the Minister
within 90 days following April 30th of that year a report indicating where
and why spending has been lower than $80 million during the fiscal year.
8.2.2 The above report shall also include an action plan and a revised budget,
acceptable to the Minister, that will put the Project on course to
achieving the objectives of the Proponents' three year R&D strategy; aside
from all other remedies the Minister may have pursuant to this Agreement,
failure or delays in providing the analysis and corrective action plan may
result in the Minister withholding disbursement of funds until mutually
satisfactory resolution.
8.2.3 The Proponents shall also disclose in the report any other governmental
financial assistance they applied for, or will receive or have received in
connection with the Project.
8.3 Intellectual Property
8.3.1 For greater clarity, the definition of Intellectual Property pursuant to
Section 1 of Schedule 1 - TPC General Conditions does not include
background intellectual property.
8.3.2 Title to the Intellectual Property is to be vested, and unless otherwise
agreed to in advance and in writing by the Minister, to remain,
exclusively with the Proponents.
8.3.3 Should any of the Intellectual Property be licensed or sub-licensed by a
Proponent, that Proponent shall ensure that all licence and sub-licence
agreements are subordinated to the Minister's rights regarding the
Intellectual Property in case of default and that should the
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Minister exercise the remedies provided in Schedule 1, the Intellectual
Property shall be clear of any contractual obligations resulting from the
licences or sub-licences other than licences granted in the normal course
of business to enable customers to use the Intellectual Property.
8.4 Third-Party Collaborations
8.4.1 The Minister hereby grants the Proponents the right to enter into
third-party collaboration agreements (CA) for Work described in Schedule 2
provided that:
a) the total number of CAs does not exceed 10;
b) no CA shall exceed $2,000,000 in typical TPC Eligible Cost as
indicated in Schedule 3 - Claims and TPC Project Cost Principles;
c) the aggregate value in Eligible Costs for all CAs remains lower than
$10 million;
d) the Proponent complies with Subsection 6.8 of Schedule 1 - TPC
General Conditions;
e) the other terms and conditions of this subsection are met.
8.4.2 The Minister hereby agrees to subordinate his rights relating to the
Intellectual Property developed in the context of the third-party
collaboration agreement with respect to Subsection 8.4.1, and the specific
technology developed under that agreement.
8.4.3 The Proponents shall obtain the Minister's written prior consent when
entering into third-party collaboration agreements not contemplated by
Subsection 8.4.1 above.
8.4.4 Any default under para. 8.4.3 constitutes an event of default under this
Agreement.
8.4.5 The Parties agree to exclude from this section 8.4 the intellectual
property resulting from work aimed at modifying an arm's length third
Parties' intellectual property when the work is essential for the Project
and solely to achieve the interoperability with or the incorporation into
the Proponent's resulting products; such occurrences shall be reported to
the Minister on an annual basis.
8.5 Alliance Agreement
A copy of the agreement entered into by March Networks and Mitel Networks,
entitled "Alliance Agreement between March Networks and Mitel Networks", dated
September 21st, 2001;
i) was shared with the Minister and constitutes a complete, up-to-date
and true copy of the said document;
ii) is hereby incorporated by reference to this Agreement;
iii) shall not be amended or terminated without the Minister's prior
written consent; and
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iv) any misrepresentation under paragraph i) or any default under
paragraph iii) above constitutes an event of default under this
Agreement pursuant to subsection 8.1 (d) of Schedule I - TPC General
Conditions.
8.6 Contractual Benefits to Canada
In the context of Schedule 4, Section B, Subparagraph lb), the Minister hereby
consents that the Proponents may contract all of their manufacturing
requirements at arm's length outside of the Proponents companies. Furthermore,
the Minister hereby acknowledges that BreconRidge Manufacturing Solutions
Corporation may manufacture the resulting products outside Canada; any other
contract related to manufacturing to be carried on out of Canada shall require
the prior written consent of the Minister.
8.7 Parties Joint But Not Several
8.7.1 Notwithstanding any other provision of this Agreement, it is understood
and agreed that each Proponent shall:
a) be exclusively responsible for the implementation of its portion of
the Statement of Work;
b) be exclusively responsible for its compliance with the terms and
conditions of this Agreement for its portion of the Project; and
c) have the right to receive payment of the contribution from the
Minister for its portion of its Eligible Costs,
being understood that the Proponents may choose to channel all
correspondence through a coordinator of their choice.
8.7.2 Should any portion of the Statement of Work not be clearly identified as
the exclusive responsibility of a Proponent, the Minister may notify the
Proponents accordingly and require a clear identification of the relevant
Proponent within the following 30 calendar days; failing to reply or give
a satisfactory identification shall be resolved in accordance with section
8.8 below.
8.8 Joint And Several
For greater clarity, any portion of the Project not clearly and specifically
attributable to one of the Proponents shall be the joint and several
responsibility of the Proponents and:
a) any payment regarding such joint and several portion of the work may be
validly paid by the Minister to any of the Proponents; and
b) except as provided in section 8.15, the word Proponent used in singular
form throughout this Agreement applies to each of the Proponents
individually as contemplated in section 8.7 above.
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8.9 Early Termination
If the Minister declares that an event of default by one of the Proponents has
occurred and decides to terminate this Agreement, the Minister and the
non-defaulting Proponent shall be governed by the following provisions: the
a) Minister shall notify the Proponent;
b) Minister shall terminate any payment towards the Project;
c) amount owed to the Minister shall be the total contribution received to
date by that Proponent less the value set initially at the time of
issuance of any warrants received previously;
d) non-defaulting Proponent shall repay to the Minister within 30 days of
notification of the amount owed;
e) amount owed by the non-defaulting Proponent may the paid through the
issuance of Warrants in favour of the Minister, to be issued in accordance
with the provisions of this Article 8; and
f) Intellectual Property of the defaulting Proponent seined by the Minister
in accordance with subsection 8.2 of the General Conditions (if the
Minister has so elected) may be transferred to the non-defaulting
Proponent.
8.10 Project Reassessment
In the event the Minister declares a default pursuant to section 8.9 above, the
Minister and the non-defaulting Proponent:
a) shall reassess and conclude on the feasibility of pursuing the Project
with the non-defaulting Proponent within 30 days of the notice of default;
b) should the Project still be feasible and parties wish to pursue the
Project, the non defaulting Proponent shall submit a complete revised
Statement of Work, acceptable to the Minister, within 60 days;
c) should either the Minister or the non-defaulting Proponent decide to
terminate the Project or should the Project no longer be feasible,
i) the Minister shall terminate any payment towards the Project;
ii) the non-defaulting Proponent shall repay to the Minister within 30
days of notification by the Minister of the amount owed.
8.11 Warrant Benefits
8.11.1 In exchange for the Contribution, March Networks and Mitel Networks
agree to provide financial benefits to the Minister as hereinafter
described.
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8.11.2 For the purposes of this Agreement, "Warrants" means the Warrants issued
in accordance with Schedule 8 and further governed by the provisions of
this section.
8.11.3 Each of March Networks and Mitel Networks hereby:
(A) represents and warrants that:
i) as of the date of this Agreement, the authorized share capital
of March Networks and Mitel Networks consists only of an
unlimited number of common shares;
ii) there are no provisions of the articles and by-laws, or any
resolutions of the directors and shareholders, of March
Networks or Mitel Networks or any agreement to which March
Networks or Mitel Networks is a party that will be contravened
by the issuance of the Warrants as hereinafter described.
iii) as of the date of this Agreement, there are no shareholders'
agreements in place except for those disclosed to the Minister
and listed hereafter:
a) August 31st, 2001 Agreement:
- Mitel Networks Corporation,
- Mitel Systems Corporation (100% owned By X. Xxxxxxxx)
81.15%,
- Zarlink Semiconductor Inc. 9.02%
- Power Technology Investment Corporation 3.61 %.
(B) undertakes to:
i) take all corporate action required to authorize the issuance
of the Warrants in a timely fashion by the dates specified in
subsection 8.11.4 below;
ii) approve within 60 days any proposed transfer of the Minister's
Warrants; and
iii) take no actions and enter into no agreements which will
prevent or impair the Proponents ability to carry out the
provisions of this Agreement.
8.11.4 As at September 30th, 2002 and as at each September 30th thereafter for
every 12 month period beginning October 1 where the Minister makes a
contribution payment to a Proponent up to and including September 30th,
2005, March Networks and Mitel Networks shall issue non-expiring, deemed
fully-paid Warrants exchangeable on a one Warrant for one common share
basis of the said Proponent with no consideration being payable for the
issuance of such Warrants to the Proponent by the Minister.
8.11.5 The number of warrants to be issued by March Networks and Mitel Networks
shall be equal to the amount of contributions paid by the Minister in
the immediately proceeding twelve (12) months before each such September
30th divided by the fair market value of the common shares of that
Proponent as at the September 30th in question.
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8.11.6 In the event that Mitel Networks closes an equity round within three (3)
months of September 30th, 2002, at an equivalent common share price
which is lower than the price at which the common shares of Mitel
Networks were valued on September 30th, 2002 in accordance with
paragraph 8.11.5, then the Minister shall have the right to require that
the number of Mitel Networks warrants issued as of September 30th, 2002
be recalculated to reflect the lower equivalent common share price.
8.11.7 The fair market value of the common shares of March Networks and Mitel
Networks shall be determined by the Minister using one of the following
methods:
a) the most recent arms length (as that term is defined and applied in
the Income Tax Act, R.S.C. 1985, C.1 (5th supplement), as amended)
equity transaction involving the issuance or transfer of the
Proponent's common shares (including, without limiting the
generality of the foregoing, in the event that the Proponent's
common shares are traded on a recognized North American stock
exchange in such case using the closing sale prices for the common
shares for the most recent 20 consecutive trading days on such stock
exchange before the September 30th in question); or
b) if requested by either March Networks or Mitel Networks or the
Minister, by an independent third-party assessment in accordance
with the following mandatory guidelines:
i) the independent third-party assessment shall be conducted by a
chartered business valuator (the Assessor) specializing in
valuing internet related information and communications
technology businesses;
ii) the Assessor shall practice at a nationally recognized
auditing, consulting or valuation firm with offices in more
than three provinces including at least one office in either
the Province of Ontario or the Province of Quebec;
iii) the Assessor shall not be at a firm providing services to any
of the Proponents or related persons ("related persons" as
defined in Canada's Income Tax Act, sec. 251);
iv) the Assessor shall be selected by the mutual agreement of the
Proponent and the Minister, failing which the independent
third-party assessor shall be determined in accordance with
paragraph 8.14 of this Agreement;
v) the Assessor shall not take into account any issues of
minority discount or any Proponent internal agreements or
arrangements such as the fact that the intellectual property
used by the Proponent may be owned by another Proponent; and
vi) all costs related to the independent assessment shall be borne
by the Proponents.
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8.11.8 The Minister hereby agrees that he will hold all the issued Warrants up
to and including September 30, 2004, and, thereafter, may only sell the
issued Warrants at an accumulative rate of up to 6.25% of the number of
originally issued warrants, from time to time for each three (3) month
period commencing October 1st, 2004.
8.12 Undertaking
8.12.1 If either of March Networks and Mitel Networks confers any rights
attaching to all of its common shares as a class or the common shares
held directly, indirectly or beneficially by Xxxxxxx H, Xxxxxxxx or any
other majority shareholder, either of March Networks or Mitel Networks
undertakes to take such action ass may be required to ensure that the
monetary value of the common shares underlying the Warrants while held
by the Minister shall be equal to those common shares on an "as
converted" basis, at no additional cost to the Minister. It shall be
incumbent upon either of March Networks and Mitel Networks to
demonstrate to the satisfaction of the Minister that the above condition
is met, and failure to do so will constitute an event of default.
8.12.2 Each of March Networks and Mitel Networks represents that it has not
entered into and undertakes not to enter into any agreement with a
related person (as defined in section 251 of Canada's Income Tax Act,)
that would negatively affect in any significant way either its revenues
or its book value; the undertaking shall last as long as the Minister
has not exercised or otherwise disposed of the Warrants.
8.13 Interpretation
8.13.1 Where a Proponent carries no activities described in the Statement of
Work, it is dispensed from reporting to the Minister as contemplated
under sections 8.1 and 8.2 above, except for paragraph 8.2.3.
8.13.2 For the purpose of the Schedules to this Agreement "Proponent" shall
mean all Proponents unless otherwise stated.
8.14 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.
8.15 Single Proponent
For the purposes of sections 8.7, 8.8, 8.9, 8.10, Schedule 3 and Schedule 5
excepting section 6 thereof, Mitel Networks and Mitel Knowledge shall form a
single Proponent.
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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.
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 9 Oct. 02
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Technology, Partnerships Canada Date
Xxxx Xxxxxx, Executive Director
----------------------------------------
MARCH NETWORKS CORPORATION
Per: /s/ Xxx Xxxxx 10 Oct 02
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March Networks Corporation Date
Xxx Xxxxx, COO
----------------------------------------
Name and Title
MITEL NETWORKS CORPORATION
Per: /s/ Xxxxxxxx Xxxxxxxx 10 Oct 02
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Mitel Networks Corporation Date
Xxxxxxxx Xxxxxxxx, VP, General Counsel
----------------------------------------
Name and Title
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MITEL KNOWLEDGE CORPORATION
Per: /s/ Xxxx Xxxxxxxx 10 Oct 02
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Mitel Knowledge Corporation Date
Xxxx Xxxxxxxx, Chief Financial Officer
----------------------------------------
Name and Title
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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 Minister's 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
6.3 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
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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, trademarks, and any registrations or
applications for the same and all other rights of intellectual property therein,
including any rights which arise from the above items being treated 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
xxxx://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.
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2. Material Changes
No material changes will be trade 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 by 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 of 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 Claim
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 per cent (10%) of the Contribution prior to
the completion of the Project or until such audit as he/she tray 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.
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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.
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.
-17-
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 this 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 Agent.
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.
-18-
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 fulfillment 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. 1985 c. 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 Advisee 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 fulfillment 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.
-19-
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 much 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
-20-
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
Ministers 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 exorcising any remedy in
accordance with paragraph 8.2(e) 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".
-21-
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 fulfillment by
the Proponent of its reporting obligations under applicable security laws.
11. 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 bean received eight (8) calendar days after being mailed.
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
same 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 time bring an
appropriation for the Fiscal Year in which the payment is to be made; and to
cancellation or reduction in the event that department 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, are parties agree to
-22-
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 intervenor. 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 e nondisclosure 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 Interest and Post-Employment Code for Public
Officer 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.
-23-
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 considered 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.
-24-
SCHEDULE 2 - THE PROJECT
A - THE PROJECT
[Subject to a request for confidential treatment; Separately filed with
the Commission]
B - STATEMENT OF WORK (SOW) - OCTOBER 1st, 2001 TO APRIL 30th, 2002
Summary
During this period, the R&D program will contain three main sections:
[Subject to a request for confidential treatment; Separately filed with the
Commission]
The four major tasks are:
[Subject to a request for confidential treatment; Separately filed with the
Commission]
While each product development project will result in a distinct product, during
this first year designers will architect systems that are compatible with the
future goal of [Subject to a request for confidential treatment; Separately
filed with the Commission] solutions. The product families are all designed to
operate in the IP environment.
Detailed Tasks
1.
[Subject to a request for confidential treatment; Separately filed with
the Commission]
The products emerging during this phase of the work will include:
[Subject to a request for confidential treatment; Separately filed with
the Commission]
Product Goals:
[Subject to a request for confidential treatment; Separately filed with
the Commission]
Major Technical Activities:
[Subject to a request for confidential treatment; Separately filed with
the Commission]
Major Technical Problems/Achievements:
[Subject to a request for confidential treatment; Separately filed with
the Commission]
Innovations and Milestones:
[Subject to a request for confidential treatment; Separately filed with
the Commission]
2)
[Subject to a request for confidential treatment; Separately filed with
the Commission]
The products emerging during this phase of the work will include:
[Subject to a request for confidential treatment; Separately filed with
the Commission]
Product Goals:
[Subject to a request for confidential treatment; Separately filed with
the Commission]
Major Technical Activities:
[Subject to a request for confidential treatment; Separately filed with
the Commission]
Major Technical Problems and Achievements:
[Subject to a request for confidential treatment; Separately filed with
the Commission]
Innovations and Milestones:
[Subject to a request for confidential treatment; Separately filed with
the Commission]
3)
[Subject to a request for confidential treatment; Separately filed with
the Commission]
The products emerging during this phase of the work will include:
[Subject to a request for confidential treatment; Separately filed with
the Commission]
Product Goals:
[Subject to a request for confidential treatment; Separately filed with
the Commission]
Major Technical Activities:
[Subject to a request for confidential treatment; Separately filed with
the Commission]
Major Technical Problems and Achievements:
[Subject to a request for confidential treatment; Separately filed with
the Commission]
Innovations and Milestones:
[Subject to a request for confidential treatment; Separately filed with
the Commission]
4)
[Subject to a request for confidential treatment; Separately filed with
the Commission]
The products emerging during this phase of the work will include:
[Subject to a request for confidential treatment; Separately filed with
the Commission]
Product Goals:
[Subject to a request for confidential treatment; Separately filed with
the Commission]
Major Technical Activities:
[Subject to a request for confidential treatment; Separately filed with
the Commission]
Major Technical Problems/Achievements:
[Subject to a request for confidential treatment; Separately filed with
the Commission]
Innovations and Milestones:
[Subject to a request for confidential treatment; Separately filed with
the Commission]
-25-
FORM B
FORM B - MILESTONES (1)
PROPONENT NAME: March Networks Corp., Mitel Networks Corp.
PROJECT NUMBER: 720-481443
[Subject to a request for confidential treatment; Separately filed with
the Commission]
File No.: 720-481443
-26-
FORM B
FORM B - MILESTONES (2)
PROPONENT NAME: March Networks Corp., Mitel Networks Corp.
PROJECT NUMBER: 720-481443
[Subject to a request for confidential treatment; Separately filed with
the Commission]
File No.: 720-481443
-27-
FORM C
C - CURRENT FISCAL YEAR COST BREAKDOWN BY MAJOR ACTIVITIES
PROPONENT NAME: March Networks Corp., Mitel Networks Corp.
PROJECT NUMBER: 720-481443
FOR FISCAL YEAR ENDING MARCH 31, 2002
================================================================================
DESCRIPTION OF
ACTIVITY(1) ESTIMATED ELIGIBLE COSTS ($)
================================================================================
* * * * * * Total
--------------------------------------------------------------------------------
* * * * * * *
--------------------------------------------------------------------------------
* * * * * * *
--------------------------------------------------------------------------------
* * * * * * *
--------------------------------------------------------------------------------
* * * * * * *
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
================================================================================
Total * * * * * * 45,389,777
================================================================================
* - [Subject to a request for confidential treatment; Separately filed with the
Commission]
Notes:
1. Title of key Project tasks enumerated and described in the SOW.
-28-
FORM D
D - COST BREAKDOWN BY FISCAL YEAR
PROPONENT NAME: March Networks Corp., Mitel Networks Corp.
PROJECT NUMBER: 720-481443
================================================================================
FISCAL YEAR ESTIMATED ELIGIBLE COSTS ($)
================================================================================
** ** ** ** ** ** Total
--------------------------------------------------------------------------------
2002 (6m) ** ** ** ** ** ** **
--------------------------------------------------------------------------------
2003 ** ** ** ** ** ** **
--------------------------------------------------------------------------------
2004 ** ** ** ** ** ** **
--------------------------------------------------------------------------------
2005 (6m) ** ** ** ** ** ** **
--------------------------------------------------------------------------------
20XX
================================================================================
Total ** ** ** ** ** ** 240,000,000
================================================================================
*The above cost breakdown includes all estimated direct costs and associated
overhead costs for the Project. For claim purposes, these costs will be
determined in accordance with the TPC Cost Principles (Schedule 3) with overhead
being calculated at 65% of the salaries and wages of employees directly engaged
in the Project, as defined in the Canada Customs and Revenue Agency policy on
Scientific Research and Development.
** - [Subject to a request for confidential treatment; Separately filed with the
Commission]
-29-
SCHEDULE 3 - CLAIMS AND TPC PROJECT COST PRINCIPLES
A. - CLAIMS
1. The Minister will pay the Contribution to the Proponents, in respect of
Eligible Costs incurred, on the basis of claims which will:
a) be submitted on a monthly basis ("Claim Period") by each Proponent,
except for the first claim of each Proponent which may cover a
longer period going back to October 1st, 2001;
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 each Proponent
for their respective claim or other persons 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 Proponents 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 Proponents shall individually submit an itemized statement
certified by their respective chief financial officer attesting to the
Eligible Costs for the entire Project having been incurred and paid.
-30-
B - TPC PROJECT COST PRINCIPLES
1. GENERAL PRINCIPLE
The total Eligible Costs of the Project shall be the sum of the applicable
directed 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 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.
-31-
(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
(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;
-32-
(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 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 o claims against the Minister;
(c) losses on investments, bad debts and expenses for the collection
thereof;
(d) losses on other projects or contracts;
-33-
(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.
ADDENDUM TO TPC PROJECT COST PRINCIPLES
A - Intellectual Property Protection
Notwithstanding subsection 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 - Specific Purpose Equipment
For Eligible Costs in respect to Special Purpose Equipment, see the
Schedule entitled Special Purpose Equipment.
-34-
C - SR&ED Method of Calculating Labour and Overhead Allowance
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.
-35-
TPC Overhead Proxy
Calculating the Prescribed Proxy Amount for Eligible Overhead Expenditures, A
Summary of CCRA T4088 Rev. 99 Guide to Form T661 - Claiming Scientific Research
and Experimental Development Expenditures
xxxx://xxx.xxxx-xxxx.xx.xx/X/xxx/xx/x0000xx/XXXXXX.xxxx. 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:
o the related benefits (employer's share) of the approved
wages/salaries
o office supplies
o general purpose office equipment
o heat, water, electricity and telephones
o support staff salaries or wages
o travel and training
o property taxes
o maintenance and upkeep of Project premises, facilities or equipment
o 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 2000, the maximum amount is
$94,000 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.
-36-
Calculating the Prescribed Proxy Amount Base
--------------------------------------------------------------------------------
Include the Portion of Wages for Time spent on the Project of:
--------------------------------------------------------------------------------
Employees directly engaged in the Project, based on such tasks as:
o preparing equipment and materials for experiments, tests and analysis (but
not for maintaining equipment);
o experimenting, testing and analysing;
o collecting data for experimentation and analysis; and,
o directing the course of the ongoing Project activities being claimed for
the year.
Other employees' time is also considered to be directly engaged in the project
to the extent the following tasks are required as part of the SOW:
o recording measurements, making calculations and preparing charts and
graphs;
o conducting statistical surveys and interviews,
o preparing computer programs, and,
o working in areas of engineering or design, operations research,
mathematical analysis and psychological research.
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.
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Do Not Include
--------------------------------------------------------------------------------
Employees providing a service to Project staff including clerks, secretaries and
receptionists engaged in activities in such areas as accounting, payroll,
finance, legal, shipping, inventory control, maintenance and word processing.
Time managers and supervisors spend on the non technical management aspects of
activities such as long-term decision making, contract administration and other
decision-making functions that do not directly influence the Project activities.
Usually, do not include work performed beyond the first-line supervision level.
For a specified employee, the maximum amount of salary that can be included in
the base is limited to 75% of salary/wage costs, regardless of the share of time
working on the Project exceeds this amount. This amount is further restricted,
to be the lessor of the prior calculation or the following formula:
2.5 times the Maximum Pensionable Earnings (for CPP purposes, $37,600 for year
2000) times the number of days in the taxation year that the person is employed
by the client divided by 365.
--------------------------------------------------------------------------------
-37-
SCHEDULE 4 - CONTRACTUAL BENEFITS
A - PAYMENTS TO THE MINISTER
1. Definitions
"Warrant" means a certificate issued individually by March Networks and
Mitel Networks giving to the Minister the right to purchase common
shares issued respectively by March Networks and Mitel Networks at a
stated price and stipulated date.
"Fair market value" means the value of the shares on the Toronto Stock
Exchange or other public exchange at the close of business on the day
before receipt.
2. Warrants
2.1 March Networks and Mitel Networks shall in accordance with
section 8.11 of the Agreement individually issue to the
Minister a Warrant Certificate on September 30th, 2002 and on
every September 30th up to and including September 30th, 2005
evidencing a number of warrants based on the Contribution
disbursed in the preceding twelve months divided by the Fair
market value of the shares on the relevant September 30th.
These Warrant Certificates shall be delivered to the Minister
no later than 30 days after the issuance.
2.2 The terms and conditions of the warrants will be as set forth
in the respective specimen Warrant Certificate contained in
Schedule 8 to this Agreement.
2.3 The Warrant Certificate shall be accompanied by a legal
opinion addressed to the Minister confirming the due and valid
execution and delivery of the Warrant Certificate.
2.4 March Networks and Mitel Networks will use their best efforts
to effect the issuance of the warrants. In the event the
Toronto Stock Exchange or other applicable public exchange
does not approve the issuance of these warrants, the
Proponents shall be obligated to repay the related portion of
the Contribution with interest at the Interest Rate from the
date the related warrant Certificate was required to be
issued.
B - CONTRACTUAL BENEFITS TO CANADA
1. Work in Canada
a) Unless otherwise agreed to in writing by the Minister, the Proponents will
ensure that the Intellectual Property is exploited through the production,
exclusively in Canada, of resulting products until live years after the
completion of the Project as described in Schedule 2 - The Project.
b) The Proponents 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
-38-
outside of Canada, except the licence or sub-licence 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.
2. Commercial Exploitation Work outside of Canada
The Proponents will have the right to insert the Intellectual Property produced
in Canada into existing products currently manufactured outside of Canada.
3. R&D after Project Completion Date
The Proponents undertake to conduct an average of $80,000,000, with a minimum of
$50,000,000, worth of R&D per year during the next five years following the
Project Completion Date.
-39-
SCHEDULE 5 - REPORTING REQUIREMENTS
1. Claim Reports
Whenever the Proponents individually submit a claim, they 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, June 30th, September 30th and
December 31st of each year;
(e) an update to the list of current holdings of Special Purpose Equipment
(Special Purpose Equipment Form in Schedule 7) if any modifications have been
made since the last claim;
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 Proponents 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 Proponents' 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 mid any proposed
revisions to the Statement of Work.
-40-
4. Annual Information Updates
By February 15th, 2003, and by the same date each year thereafter until this
Agreement ends in accordance with section 7 of the General Conditions, the
Proponents shall individually 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, a s 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;
(g) an update to the list of current holdings of Special Purpose Equipment as
set out in the Special Purpose Equipment Form forming part of Schedule 7;
(h) an identification of any planned or completed transfer to commercial
production, transfer outside of Canada, sale, lease or other disposal of Special
Purpose Equipment,
5. Changes in Annual Ceilings for Contribution
The revised forecasts on Project costs contained in the Claim Reports, the
Project Progress Reports and the Annual Information Updates, do not constitute
requests for reprofiling of annual ceilings for the Contribution as mentioned in
Article 4.3. Any reprofiling request shall be specifically and separately made
by the Proponents.
-41-
6. Annual Financial Statements
The Proponents shall individually provide the Minister with a copy of their
annual audited financial statements within four (4) months of the end of each of
the Proponents' fiscal years.
SCHEDULE 5 - REPORTING REQUIREMENTS FORM TPC -1
REPORT ON ESTIMATED AND ACTUAL REPAYMENTS TO THE MINISTER
PROPONENTS: March Networks Corporation PROJECT NO.: 720-481443
Mites Networks Corporation
Mitel Knowledge Corporation
----------------------------------------------------------------------------------------------------------------------
1 2 3 4 5 6 7 8
----------------------------------------------------------------------------------------------------------------------
YEAR ENDING ESTIMATED ESTIMATED ESTIMATED ACTUAL VALUE ACTUAL ACTUAL DUE DATE
VALUE OF A NUMBER OF POTENTIAL OF A WARRANT NUMBER OF POTENTIAL
(MM/DD/YY) WARRANT WARRANTS RETURN AT AT ITS WARRANTS RETURN AT (MM/DD/YY)
6.25% DELIVERANCE 6.25%
($) EXECUTION EXECUTION
($)
($) ($)
----------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------
9/30/02 10/30/02
----------------------------------------------------------------------------------------------------------------------
9/30/03 10/30/03
----------------------------------------------------------------------------------------------------------------------
9/30/04 10/30/04
----------------------------------------------------------------------------------------------------------------------
10/1/04 10/30/04
----------------------------------------------------------------------------------------------------------------------
9/30/05 10/30/05
----------------------------------------------------------------------------------------------------------------------
10/1/05 10/30/05
----------------------------------------------------------------------------------------------------------------------
10/1/06 10/30/06
----------------------------------------------------------------------------------------------------------------------
10/1/07 10/30/07
----------------------------------------------------------------------------------------------------------------------
10/1/08 10/30/08
----------------------------------------------------------------------------------------------------------------------
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 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.
-42-
SCHEDULE 5 - REPORTING REQUIREMENTS FORM TPC - 2
REPORT ON JOB CREATION AND MAINTENANCE
PROPONENTS- Mitel Network Corporation PROJECT NO. 720-481443
Mitel Network Corporation
Mitel Knowledge Corporation
--------------------------------------------------------------------------------
GENERAL INSTRUCTIONS
The intent of this schedule is to identify the number of PY's 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 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) Subcontracted 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.
--------------------------------------------------------------------------------
-43-
--------------------------------------------------------------------------------
FORM TPC - 2 (Cont'd)
--------------------------------------------------------------------------------
PART 1 : WORK PHASE - Data compiled as of: December 31, 2001
--------------------------------------------------------------------------------
CATEGORY OF EMPLOYMENT TOTAL NUMBER OF PERSON YEARS
--------------------------------
ESTIMATE ACTUAL
--------------------------------------------------------------------------------
A) KNOWLEDGE-BASED Yr. 1 ending 12/31/2002 *
(SCIENCE, ENGINEERING & Yr. 2 ending 12/31/2003 *
TECHNICAL) Yr. 3 ending 12/31/2004 *
Yr. 4 ending 12/31/2005 *
Yr. 5 ending 12/31/2006
--------------------------------------------------------------------------------
B) MANAGEMENT & ADMINISTRATION Yr. 1 ending 12/31/2002 *
Yr. 2 ending 12/31/2003 *
Yr. 3 ending 12/31/2004 *
Yr. 4 ending 12/31/2005 *
Yr. 5 ending 12/31/2006 *
--------------------------------------------------------------------------------
C) SUB-CONTRACTED WORK Yr. 1 ending 12/31/2002
Yr. 2 ending 12/31/2003 *
Yr. 3 ending 12/31/2004 *
Yr. 4 ending 12/31/2005 *
Yr. 5 ending 12/31/2006 *
--------------------------------------------------------------------------------
TOTAL Yr. 1 ending 12/31/2002 *
Yr. 2 ending 12/31/2003 *
Yr. 3 ending 12/31/2004 *
Yr. 4 ending 12/31/2005 *
Yr. 5 ending 12/31/2006 *
--------------------------------------------------------------------------------
PART 2 - BENEFIT PHASE - Data compiled as of: December 31, 2001
--------------------------------------------------------------------------------
CATEGORY OF EMPLOYMENT NUMBER OF PERSON YEARS
---------------------------------------
ESTIMATED AVERAGE ACTUAL
NUMBER OF PERSON PERSON YEARS
YEARS FOR DURATION FOR REPORTING
OF BENEFIT PHASE PERIOD
--------------------------------------------------------------------------------
A) KNOWLEDGE-BASED *
(SCIENCE, ENGINEERING & TECHNICAL)
--------------------------------------------------------------------------------
B) GENERAL PRODUCTION *
--------------------------------------------------------------------------------
C) MANAGEMENT, ADMINISTRATION, *
MARKETING, SALES & SUPPORT
--------------------------------------------------------------------------------
TOTAL *
--------------------------------------------------------------------------------
* [Subject to a request for confidential treatment; Separately filed with the
Commission]
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.
-44-
SCHEDULE 5 - REPORTING REQUIREMENTS FORM TPC - 3
REPORT ON OTHER REPRESENTATIONS & EXPECTED RESULTS
PROPONENTS: March Networks Corporation PROJECT NO.: 720-481443
Mitel Networks Corporation
Mitel Knowledge Corporation
--------------------------------------------------------------------------------
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 PLANNED/REVISED DATE STATUS/ACTUAL DATE
RESULT/REPRESENTATION
--------------------------------------------------------------------------------
1. N/A
2. N/A
3. N/A
4. N/A
--------------------------------------------------------------------------------
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.
-45-
SCHEDULE 5 - REPORTING REQUIREMENTS FORM TPC - 4
REPORT ON INVESTMENT LEVERAGE
PROPONENT: March Networks Corporation PROJECT NO,: 720-481443
Mitel Networks Corporation
Mitel Knowledge Corporation
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)
----------------------------------------------------------------------------------------------------------------------
(1) (2) (3) (4) (1) (2) (3)
Year (Ending Eligible Other Project Other Eligible Other Project Other
Mar. 31) Supported Costs Related Costs Investment Support Costs Related Costs Investment
----------------------------------------------------------------------------------------------------------------------
2002 *
----------------------------------------------------------------------------------------------------------------------
2003 *
----------------------------------------------------------------------------------------------------------------------
2004 *
----------------------------------------------------------------------------------------------------------------------
2005 *
----------------------------------------------------------------------------------------------------------------------
TOTAL 240,000
----------------------------------------------------------------------------------------------------------------------
* [Subject to a request for confidential treatment; Separately filed with the
Commission]
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 bane 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.
-46-
SCHEDULE 5 - REPORTING REQUIREMENTS FORM TPC - 5
REPORT ON SUSTAINABLE DEVELOPMENT BENEFIT'S
PROPONENT: March Networks Corporation PROJECT NO,: 720-481443
Mitel Networks Corporation
Mitel Knowledge Corporation
--------------------------------------------------------------------------------
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 X
increased energy production through sustainable means
(i.e. efficiency of generation)
----------------------------------------------------------------------------------------------------------------------
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 X
materials (reduced material Intensity)
----------------------------------------------------------------------------------------------------------------------
Reduced production and/or release of pollutant species X
of any kind to the atmosphere
----------------------------------------------------------------------------------------------------------------------
Reduced production and/or release of pollutant species X
of any kind to receiving waters
----------------------------------------------------------------------------------------------------------------------
Reduced production and/or disposal of solid wastes to X
the land
----------------------------------------------------------------------------------------------------------------------
Reduced usage and/or production and/or disposal of X
hazardous/toxic substances
----------------------------------------------------------------------------------------------------------------------
Remediation or rehabilitation of contaminated land or X
water
----------------------------------------------------------------------------------------------------------------------
-47-
SCHEDULE 6 - PROJECT FACT SHEET FOR NEWS RELEASE
--------------------------------------------------------------------------------
Program: Technology Partnerships Canada Project No.: 720-481443
--------------------------------------------------------------------------------
Name & Address of March Networks: March Networks Contact:
Name: Dr. Xxxxxx Xxxxx, Chief Operating
March Networks Corporation Officer
000 Xxxxxx Xxxxx Xxxxxxxxx:
Xxxxxx Xxxxxxx X0X 0X0 Fax:
--------------------------------------------------------------------------------
Name & Address of Mitel Networks: Mitel Networks Contact:
Name: Xxx Xxxxx, thief Executive
Mitel Networks Corporation Officer
000 Xxxxxx Xxxxx Xxxxxxxxx:
Xxxxxx, Xxxxxxx X0X 0X0 Fax:
--------------------------------------------------------------------------------
Name & Address of Mitel Networks: Mitel Knowledge Contact:
Mitel Knowledge Corporation Name: Xxxx Xxxxxxxx, Chief Financial
000 Xxxxxx Xxxxx - Tower B Officer
Suite 534 Telephone:
Ottawa, Ontario K2K 2X3 Fax:
--------------------------------------------------------------------------------
Project Location: Project Type:
Ottawa, Ontario Enabling Technologies
--------------------------------------------------------------------------------
Industrial Sector: Project Purpose:
Information and Communication Upgrade of legacy products and
Technologies Industry development of a Suite of Interactive
Applications and Smart Broadband
Appliances
--------------------------------------------------------------------------------
Authorized Assistance: $60.000.000.
--------------------------------------------------------------------------------
Project Description and Anticipated Results:
The R&D program will contain three main sections:
a) Upgrade of capabilities of legacy TDM products;
b) Development of new IP bated appliances, platforms and applications;
c) Designing the next generation of converged multimedia appliances and
applications.
The four major tasks are:
1. Applications
2. Interactive Broadband Appliances
3. Integrated Communications Platform
4. Video Services
While each product development project will result in a distinct product, during
this first year designers will architect systems that are compatible with the
future goal of converged voice, data and video solutions. The product families
are all designed to operate in the IP environment.
--------------------------------------------------------------------------------
-48-
SCHEDULE 7 - SPECIAL PURPOSE EQUIPMENT
1. Definition
"Special Purpose Equipment" means
-equipment, including ancillary systems, instrumentation, or special test
equipment that is purchased, leased, manufactured or otherwise acquired for the
purposes of the Project, the item cost of which exceeds $250,000, excluding
jigs, tools, dies and fixtures, and
-prototypes or pilot plants that are designed and built by the Proponents to
demonstrate the technology to be commercialized.
2. Treatment of Special Purpose Equipment
(a) Disposal
Except in the situation described in section (b) below, if the Proponents
transfer to commercial production, transfers outside of Canada, sells, leases or
otherwise disposes of any Special Purpose Equipment, the Minister will require
the Proponents to repay the greater of an amount equal to that of
(i) multiplying the proceeds of disposition of the Special Purpose Equipment
by the ratio of the total amount of the contribution paid by the Minister
to the total amount paid by the Proponents for Eligible Costs, and
(ii) multiplying the fair market value of the Special Purpose Equipment on the
date of the transfer to commercial production, transfer outside of Canada,
sale, lease or other disposition by the ratio of the total amount of the
contribution paid by the Minister to the total amount paid by the
Proponents for Eligible Costs;
but in no event shall the amount payable exceed the amount paid by the Minister
to the Proponents under this Agreement.
The Proponents shall make such repayment within 30 days of the transfer to
commercial production, transfer outside of Canada, sale, lease, or other
disposition of the Special Purpose Equipment.
(b) Repayment on Special Purpose Equipment
If the estimated cost as set out in the Statement of Work of ail of the items of
Special Purpose Equipment, other than prototypes and pilot plants, is 30% or
less of the total estimated Eligible Costs, the Proponents will not be obligated
to pay the Minister for those items which are transferred by the Proponents to
commercial production in Canada.
-49-
3. Costing Principles
(a) To be an Eligible Cost, the Special Purpose Equipment must be necessary
for the performance of the Project, be described in sufficient detail
heroin so as to be readily identifiable, and the relevant cost be
specified in the Special Purpose Equipment Form attached.
(b) If the Special Purpose Equipment is to be modified or integrated by the
Proponents during the Project, the costs related thereto will be eligible
only if specifically identified in the Statement of Work in Schedule 2.
(c) Eligible Costs for Special Purpose Equipment will be the net laid down
cost to the Proponents, after deducting trade discounts and cash discounts
for prompt payment.
(d) Where applicable, periodic payments under a capital lease are Eligible
Costs, to a maximum equal to the price of the Special Purpose Equipment,
if it were purchased at the commencement of the lease period; all interest
and carrying charges are to be excluded. For operating leases, the
Eligible Cost is the actual lease payments incurred during the performance
of the Project,
(e) Labor and material costs required in the modification or adaptation of the
Special Purpose Equipment, for the purposes of the Project, are eligible
costs.
(f) Unless such is otherwise allowed in the Statement of Work, costs of
construction or alteration of plant facilities to accommodate the Special
Purpose Equipment or any other item of machinery and equipment, and any
profit, fees, general and administrative overhead expenses related
thereto, are not eligible.
4. Reporting
As mentioned in sections 1 (Claim Reports) and 4 (Annual Information Updates) of
Schedule 5, the Proponents will report to the Minister, using the Special
Purpose Equipment Form attached, on all activities associated with Special
Purpose Equipment.
The Proponents also agree to monitor the location and use of all the items of
equipment that will eventually appear on the list.
-50-
SPECIAL PURPOSE EQUIPMENT FORM
PROPONENTS: March Networks Corporation, Mitel Networks Corporation,
Mitel Knowledge Corporation
PROJECT NO.: 720-481443
--------------------------------------------------------------------------------
This list is to include all items of Special Purpose Equipment (SPE), as defined
in Schedule 7, purchased by the Proponents for the purposes of carrying out the
Project.
The Proponents agree to provide an up-to-date copy of this list with any claim
that modifies its content as well as with each annual report,. as specified in
Schedule 5.
--------------------------------------------------------------------------------
LIST OF EQUIPMENT
--------------------------------------------------------------------------------
1 2 3 4
--------------------------------------------------------------------------------
ITEM NO. DESCRIPTION & QTY COST OF THE ITEM(s)
SERIAL NUMBER TO FIRM (Cdn $)
--------------------------------------------------------------------------------
1 Plastic Moulding Not Known 3624000
Tools and Telecom
Testing Systems
--------------------------------------------------------------------------------
2
--------------------------------------------------------------------------------
3
--------------------------------------------------------------------------------
4
--------------------------------------------------------------------------------
5
--------------------------------------------------------------------------------
-51-
SCHEDULE 8 - SPECIMEN WARRANT CERTIFICATES
Al - WARRANT TO PURCHASE COMMON SHARES OF
March Networks Corporation
Certificate No. 1 _____Warrants
THIS IS TO CERTIFY THAT, for value received,
Her Majesty the Queen in Right of Canada, as represented by the Minister of
Industry through Technology Partnerships Canada (TPC)
(the "Holder") is entitled to receive from March Networks Corporation (the
"Corporation"), a company incorporated under the laws of Canada at the offices
of the Corporation, [address], [x] common shares (the "Shares") in the share
capital of the Corporation all upon and in accordance with the Terms and
Conditions attached hereto.
IN WITNESS WHEREOF the Corporation has caused this Warrant to be executed
by its duly authorized officer as of the ____ day of _________, 200_.
March Networks Corporation
Per:_______________________________
-52-
A2 - WARRANT TO PURCHASE COMMON SHARES OF
Mitel Networks Corporation
Certificate No. 1 ___ Warrants
THIS IS TO CERTIFY THAT, for value received,
Her Majesty the Queen in Right of Canada, as represented by the Minister of
Industry through Technology Partnerships Canada (TPC)
(the "Holder") is entitled to receive from Mitel Networks Corporation (the
"Corporation"), a company incorporated under the laws of Canada at the offices
of the Corporation, [address], [x] common shares (the "Shares") in the share
capital of the Corporation all upon and in accordance with the Terms and
Conditions attached hereto.
IN WITNESS WHEREOF the Corporation has caused this Warrant to be executed by its
duly authorized officer as of the ____ day of _________, 200_.
Mitel Networks Corporation
Per:_______________________________
-53-
Article 1
TERMS AND CONDITIONS
1.1 Exercise of Warrant
To exercise this warrant ("Warrant") in whole or in part, the Holder shall
deliver to the Corporation at its aforementioned office a written notice, in
substantially the form of the subscription notice attached as an exhibit hereto
(the "Subscription Notice") of the Holder's election to exercise this Warrant in
whole or in part, which Subscription Notice shall specify the number of Shares
to be received.
The Corporation shall, as soon as practicable and in any event within 14 days
thereafter, execute and deliver or cause to be delivered certificates
representing the aggregate number of Shares specified in the Subscription
Notice. The share certificates so delivered shall be issued in the name of the
Holder or such other name or names as shall be designated in the Subscription
Notice. Such certificates shall be deemed to have been issued and the Holder, or
other person designated, shall be deemed for all purposes to have become the
shareholder of record of the Shares as of the date of receipt by the Corporation
of the Subscription Notice.
If this Warrant shall have been exercised only in part, the Corporation shall,
at the time of delivery of the certificates, deliver to the Holder a new Warrant
Certificate evidencing the right to receive the remaining Shares purchasable
under this Warrant Certificate, which new Warrant Certificate shall, in all
other respects, be identical with this Warrant Certificate.
1.2 Shares
All Shares issued upon the exercise of this Warrant shall be deemed fully paid
and non-assessable, validly issued, and free from all taxes, liens and charges
with respect to the issue thereof. During the period within which the rights
represented by the Warrant may be exercised, the Corporation will at all times
have authorized and reserved for the purpose of issuance upon exercise of the
receipt rights evidenced by this Warrant, a sufficient number of common shares
to provide for the exercise of the right represented by this Warrant.
1.3 Stock Splits
In the event of any subdivision, split or change of the common shares of the
Corporation into a greater number of common shares at anytime while this Warrant
is outstanding the Corporation shall thereafter deliver, and the subscribers
under Warrants shall accept, at the time of receipt of common shares pursuant to
the terms of the Warrants, in lieu of the number of common shares in respect of
which the right to receive is being exercised, such greater number of common
shares of the Corporation as would result from said subdivision, split or
change.
1.4 Stock Consolidations
In the event of any consolidation of the common shares of the Corporation into a
lesser number of common shares at any time while this Warrant is outstanding,
the Corporation shall thereafter
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deliver, and the subscribers under Warrants shall accept, at the time of receipt
of common shares pursuant to the terms of the Warrants, in lieu of the number of
common shares in respect of which the right to receive is then being exercised,
such lesser number of common shares of the Corporation as would result from such
consolidation.
1.5 Reclassifications
(a) in the event of any reclassification of the common shares of the
Corporation, resulting from, but not being limited to, the payment of a
stock dividend other than dividends in the ordinary course, capital
reorganization, or amalgamation of the Corporation with another
corporation or the sale or conveyance of the undertakings or assets of the
Corporation, as an entirety or substantially as an entirety to another
entity, including pursuant to a take-over bid, at any time while this
Warrant is outstanding, the Corporation shall thereafter deliver at the
time of receipt of common shares pursuant to the terms of the Warrants the
number of common shares of the Corporation or of the appropriate class or
classes resulting from such reclassification as the subscriber would have
been entitled to receive in respect of the number of common shares in
respect of which the right of receipt is then being exercised had the
right of receipt been exercised before such reclassification; and
(b) in the case of the amalgamation, merger or transfer of the undertaking or
assets of the Corporation as an entirety or substantially as an entirety
to another corporation (a "Successor Corporation"), the Successor
Corporation resulting from such amalgamation, merger or transfer (if not
the Corporation) shall be deemed to assume the due and punctual
performance and observance of each and every covenant and condition
contained herein to be performed and observed by the Corporation.
1.6 Certificate of Adjustment
The Corporation shall, from time to time immediately after the occurrence of any
event which requires an adjustment or readjustment as provided in sections 1.3
to 1.5, deliver a certificate of the Corporation to the Holder specifying the
nature of the event requiring the same and the amount of the adjustment
necessitated thereby and setting forth in reasonable detail the method of
calculation and the facts upon which such calculation is based, which
certificate shall be supported by a certificate of the Corporation's auditors
verifying such calculation.
1.7 Notice of Special Meetings
The Corporation covenants with the Holder that, so long as this Warrant remains
outstanding, it will give notice to the Holder of its intention to fix the
record date for the issuance of rights, options or warrants (other than the
Warrants) to all or substantially of all the holders of its outstanding common
shares. Such notice shall specify the particulars of such event and the record
date for such event, provided that the Corporation shall only be required to
specify in the notices such particulars of the event as shall have been fixed
and determined on the date on which the notice is given. The notice shall be
given in each case not less than 14 days prior to such applicable record date.
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1.8 No Action after Notice
The Corporation covenants with the Holder that it will not close its transfer
books or take any other corporate action which might deprive the Holder of the
opportunity to exercise its rights of receipt pursuant thereto during the period
of 14 days after the giving of the certificate or notices set forth in sections
1.6 and 1.7.
1.9 No Fractional Common Shares
Notwithstanding anything contained herein, including without limitation, any
adjustment provided for herein, the Corporation shall not be required, upon the
exercise of this Warrant, to issue fractions of Shares or to distribute
certificates which evidence such fractions of Shares. In lieu of fractional
Shares, the Corporation shall pay to the Holder who would otherwise be entitled
to receive fractional Shares upon an exercise of Warrants, within 10 business
days after the date upon which the fractional Shares would otherwise have been
deemed to be issued, an amount equal to the Current Market Price of the Shares
multiplied by an amount equal to the fractional interest of Shares such Holder
would otherwise be entitled to receive upon such exercise, provided that the
Corporation shall not be required to make any payment, calculated as aforesaid,
that is less than $1.00. In this subsection, "Current Market Price" of the
Shares at any date, means the closing price per Share for such Shares on the
last trading day prior to such date on such exchange upon which such shares are
listed, or, if such shares are not listed on any stock exchange, then on such
over-the-counter market as may be selected for such purpose by the directors of
the Corporation, or, if them is no over-the-counter market then at the price per
Share of the last private placement prior to the date of the adjustment.
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Article 2
TRANSFER
2.1 Expenses of Delivery
The Corporation shall pay all expenses, taxes and other charges payable in
connection with the preparation, issuance and delivery of the Warrant
Certificate, and share certificate issuable upon the exercise of the Warrant and
any new Warrant Certificate issued under section 1.1 hereof.
2.2 Closing of Transfer Books
The Corporation shall not be required to deliver share certificates while the
transfer books of the Corporation are closed prior to any meeting of
shareholders or for the payment of dividends or for any other purpose, and in
the event of the exercise of the right to subscribe during any such period,
delivery of the certificates may be postponed for a period not exceeding five
days after the date of reopening of the share transfer books provided that the
period for which the share transfer books may be closed shall not be
unreasonable; and provided, however, that any such postponement of delivery of
the certificates shall not be without prejudice to the right of the Holder of
the Warrant to receive such certificates after the share transfer books shall
have been reopened.
2.3 Assignment or Transfer
When requesting consent to any proposed transfer or assignment, the Holder shall
provide the Corporation with all information required by the Corporation
concerning the proposed transfer or assignment.
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Article 3
REPRESENTATIONS
3.1 Representations of the Corporation
The Corporation represents to the Holder that:
(a) this Warrant has been duly authorized and executed by the Corporation and
when delivered will be the valid and binding obligation of the Corporation
enforceable in accordance with its terms;
(b) the common shares to be received upon the exercise hereof have been duly
authorized and reserved for issuance by the Corporation and when issued in
accordance with the terms hereof, will be validly issued, fully paid and
non-assessable;
(c) the execution and delivery of this Warrant (i) are not, and the issuance
of the Common shares upon exercise of this Warrant in accordance with the
terms hereof will not be, inconsistent with the Corporation's articles or
by-laws, (ii) do not and will not contravene any law, governmental rule or
regulation, judgment or order applicable to the Corporation, (iii) do not
and will not contravene any provision of, or constitute a default under,
any indenture, mortgage, contract or other instrument of which the
Corporation is a party or by which it is bound and (iv) do not and will
not require the consent or approval of, the giving of notice to, the
registration with or the taking of any action in respect of or by, any
federal, provincial or local government authority or agency or other
person.
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Article 4
MISCELLANEOUS
4.1 No Impairment
The Corporation will not, by amendment of its articles or through any
reorganization, recapitalization, transfer of assets consolidation, merger,
dissolution, issue or sale of securities or any other voluntary action, avoid or
seek to avoid the observance or performance of any of the terms to be observed
or performed hereunder by the Corporation, but will at all times in good faith
assist in the carrying out of all the provisions of this Section 4.1 and in
taking of all such action as may be necessary or appropriate in order to protect
the rights of the Holder against impairment.
4.2 Entire Agreement
This Warrant and TPC Agreement no. 720-481443 contain the entire agreement
between the Holder and the Corporation with respect to the subject matter hereof
and the related transactions and supersedes all prior arrangements or
understandings with respect thereto.
4.3 Governing Law
This Warrant shall be governed by and construed in accordance with the laws of
the Province of Ontario and the laws of Canada applicable therein.
4.4 Waiver and Amendment
Any term or provision of this Warrant may be waived at any time by the party
entitled to the benefits thereof and any term or provision of this Warrant may
be amended or supplemented at any time by agreement of the Holder and the
Corporation, except that any waiver of any term or condition, or any amendment
or supplementation of this Warrant, must be in writing. A waiver of any breach
of failure to enforce any of the terms or conditions of this Warrant shall not,
in any way, affect or limit or act as a waiver of the parties' rights hereunder
at any time to enforce strict compliance thereafter with any term or condition
of this Warrant.
4.5 Filing of Warrant Certificate
A copy of this Warrant Certificate shall be filed in the minute book of the
Corporation.
4.6 Loss, Destruction, Etc. of Warrant Certificate
Upon receipt of evidence satisfactory to the Corporation of loss, theft,
mutilation or destruction of this Warrant Certificate and, in the case of any
such loss, theft or destruction, upon delivery of a bond of indemnity in such
form and amount as shall be reasonably satisfactory to the Corporation or, in
the event of such mutilation, upon surrender and cancellation of the Warrant
Certificate, the Corporation will make and deliver a new Warrant Certificate of
like tenor in lieu of such lost, stolen, mutilated or destroyed Warrant
Certificate.
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4.7 Rights as Shareholders
The Holder shall not be entitled to vote or receive dividends and shall not be
deemed the holder of common shares, nor shall anything contained herein be
construed to confer upon the Holder, any of the rights of a shareholder of the
Corporation or any right to vote for the election of directors or upon any
matter submitted to shareholders at any meeting thereof, or to receive notice of
meetings, or to receive dividends or subscription rights or otherwise until this
Warrant shall have been exercised and the common shares receivable upon the
exercise hereof shall have become deliverable, as provided herein.
4.8 Notices
Any notice, request or other document required or permitted to be given or
delivered to the Holder or the Corporation shall be delivered, or shall be sent
by certified or registered mail, postage prepaid or shall be sent by facsimile
transmission to such Holder or the Corporation at the address or facsimile
number as set forth below.
Director, Enabling Technologies
Technology Partnerships Canada
10th Floor, 300 Xxxxxx Street
Ottawa, Ontario KIA OC8
Fax No: (000) 000-0000
Dr. Xxxxxx Xxxxx
Chief Operating Officer
March Networks Corporation
000 Xxxxxx Xxxxx
Xxxxxx, Xxxxxxx X0X 0X0
Fax No: (000) 000-0000
Xxx Xxxxx
Chief Executive Officer
Mitel Networks Corporation
000 Xxxxxx Xxxxx
Xxxxxx, Xxxxxxx X0X 0X0
Fax.: (000) 000-0000
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EXHIBIT
SUBSCRIPTION NOTICE
SHARE PURCHASE WARRANT
March Networks Corporation
The undersigned, holder of a Warrant issued by March Networks Corporation. (the
Corporation), dated as of ______________, 200_ (the Warrant), hereby elects to
receive common shares (Shares) of the Corporation and hereby instructs the
Corporation to issue the certificate representing the Shares in the name of the
undersigned at the address below.
DATED the ____ day of _________, 200_
Signature of Holder
Name of Holder - please print
Street Address
City, Province, Postal Code
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EXHIBIT
SUBSCRIPTION NOTICE
SHARE PURCHASE WARRANT
Mitel Networks Corporation
The undersigned, holder of a Warrant issued by Mitel Networks Corporation (the
Corporation), dated as of _________, 200_ (the Warrant), hereby elects to
receive common shares (Shares) of the Corporation and hereby instructs the
Corporation to issue the certificate representing the Shares in the name of the
undersigned at the address below.
DATED the ____ day of _________, 200_
Signature of Holder
Name of Holder - please print
Street Address
City, Province, Postal Code
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