EXHIBIT 4.6
[LOGO] Industry Canada Industrie Canada
DEVELOPMENT OF AN ELECTRONIC CHART DISPLAY AND
INFORMATION SYSTEM - PARAMILITARY\MILITARY (ECDIS-PM)
TPC PROJECT N0.710-465430
Technology Partnerships Canada
This Agreement made this 15/TH/ day of November, 1999
Between:
HER MAJESTY THE QUEEN IN RIGHT OF CANADA
as represented by the Minister of Industry (hereinafter referred
to as "the Minister")
And:
Offshore Systems Ltd., a corporation duly incorporated
under the laws of British Columbia (hereinafter referred
to as "OSL" or "the Recipient")
And:
Offshore Systems International Ltd., a corporation duly incorporated
under the laws of British Columbia (hereinafter referred to as
"OSI" or "the Intervenor")
[LOGO] Technology Partnerships Partenariat technologique
Canada
10th floor, 000 Xxxxxx Xxxxxx 10/e/ etage 300. rue Xxxxxx
OTTAWA, Ontario K1A C08 OTTAWA (Ontario) X0X 0X0 Xxxxxx
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TECHNOLOGY PARTNERSHIPS CANADA
AGREEMENT TABLE OF CONTENTS
1.0 The Agreement
1.1 Entire Agreement
1.2 Definitions
2.0 The Project
2.1 Conduct of the Project
2.2 Project Completion Date
2.3 Material Changes
2.4 Disposal of Special Purpose Equipment
2.5 Transfer of Special Purpose Equipment to Production
3.0 The Contribution
3.1 Sharing Ratio and Contribution Ceiling
3.2 Annual Contribution Disbursement Limits
3.3 Eligible Costs Period
3.4 Environmental Protection Measures
3.5 Set-Off Rights of Minister
4.0 Other Government Assistance
4.1 Disclosure
4.2 Continuing Disclosure Obligation
5.0 Claims for Payment
5.1 Claim Procedures
5.2 Hold-Back Rights
5.3 Final Claim
5.4 Certification of Claims
5.5 Overpayment by Minister
6.0 Royalty Payments
6.1 Date of Commencement of Gross Revenues
6.2 Royalty Rate
6.3 Royalty Due Date
6.4 Royalty Statements and Payment
6.5 Dividend Payment Restriction
6.6 Payment Date
7.0 Monitoring and Reporting
7.1 Annual Financial Statements
7.2 Access to Accounts and Records
7.3 Access to Project
7.4 Access to Third-Party Information
7.5 Project Progress Reports
7.6 Commercial Exploitation Reports
8.0 Special Conditions
8.1 Other Agreements
8.2 Background Technology
8.3 OSI Benefit
8.4 Financial Support
8.5 Articles Applicable to OSI
9.0 Intellectual Property
9.0 Ownership of Technology
9.2 Commitment to Exploitation in Canada
9.3 Limitation on Transfer of Technology
10.0 Default and Recovery
10.1 Events of Default
10.2 Remedies on Default
10.3 Remedies Fair and Reasonable
10.4 No Waiver
11.0 Force Majeure
11.1 No Default for Force Majeure
11.2 Definition of Force Majeure
12.0 Representations, Warrants and Undertakings
12.1 Power and Authority of the Recipient
12.2 Authorised Signatories
12.3 Binding Obligations
12.4 No pending Suit or Action
12.5 No Gifts or Inducements
12.6 Compliance with Environmental Protection Requirements
13.0 General Conditions
13.1 Members of the House of Commons or the Senate
13.2 Annual Appropriations
13.3 Confidentiality
13.4 No Assignment of Agreement
13.5 Compliance with Post-Employed Provisions
14.0 Announcements
14.1 Consent to Public Announcement
14.2 Confidentiality Obligation
15.0 Notice
15.1 Form and Timing of Notice
15.2 Change of Address
15.3 Addresses
16.0 Other Provisions
16.1 No Partnership Created
16.2 Binding Agreement
16.3 Signature in Counterparts
16.4 Governing Laws
16.5 Term of Agreement
16.6 Deadline for Signature
SCHEDULES
Schedule "A" - Statement of Work,
Schedule "A1" - Special Purpose Equipment List
Schedule "B" - Report on Estimated & Actual Project Benefits and Results
Schedule "C" - Report on Estimated & Actual Sales and Royalties
Schedule "D" - TPC Project Cost Principles
Schedule "E" - Project Fact Sheet for News Release
TPC Project Number: 710-465430
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INTRODUCTION
The Minister and OSL recognize that, in order to enhance productivity and
competitiveness in the aerospace, defence and related high-technology industry
sectors in Canada, it is necessary to conduct applied research in
commercializing innovative technology;
The Minister is charged with certain duties and functions which the Minister is
required to carry out, with the public policy objectives of strengthening the
national economy, promoting sustainable development, increasing the
international competitiveness of Canadian industry, goods and services, and
encouraging the fullest and most efficient development and use of science and
technology;
The Minister is responsible for the Technology Partnerships Canada Program, a
discretionary source of funding, designed to promote economic growth and create
jobs in Canada, in knowledge-intensive sectors of the economy, by strategically
investing its funding in results-oriented, near-market projects that involve
activities that xxxxxx innovation, rapid commercialization and value-added
production;
OSL has requested a financial contribution from the Minister to develop an
electronic chart display and information system - paramilitary\military
(ECDIS-PM), with the specific intent of commercially exploiting the project
results and developing advanced production capabilities;
In consideration of their respective obligations which are set out below, the
parties agree as follows:
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1.0 The Agreement
1.1 Entire Agreement
This Agreement, including
Schedule "A" - Statement of Work
Schedule "A1" - Special Purpose Equipment List
Schedule "B" - Report on Estimated & Actual Project Benefits and
Results
Schedule "C" - Report on Estimated & Actual Sales and Royalties
Schedule "D" - TPC Project Cost Principles, and
Schedule "E" - Project Fact Sheet for News Release,
(this "Agreement"), is made pursuant to the Technology Partnerships Canada
Program and constitutes the entire Agreement between the parties and
supersedes all previous documents, negotiations and undertakings related to
its subject matter.
1.2 Definitions
For the purposes of this Agreement,
"Effective Date" means 23 December 1998, which is the earliest date on
which Eligible Costs may be incurred.
"Eligible Costs" means the cost elements specified in the Statement of Work
necessary for the performance of the Project and incurred and paid for by
the Recipient in accordance with the TPC Project Cost Principles (Schedule
"D");
"Gross Revenues" means all revenues, receipts, monies and other
considerations of whatever nature earned or received by OSL, whether in
cash, or by way of benefit, advantage, or concession, and without
deductions of any nature, net of any returns or discounts actually credited
and any sales, excise, ad valorem or similar taxes paid but without
deduction for bad debts or doubtful accounts, as determined in accordance
with generally accepted accounting principles, applied on a consistent
basis. Transactions with related persons (as that term is defined in the
Income Tax Act) will be deemed made in an amount equal to the highest price
obtained for a similar product in the preceding calendar year.
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"Intellectual Property" means all technical data, including, without
limitation, all designs, specifications, software, data, drawings, plans,
reports, patterns, models, prototypes, demonstration units, practices,
inventions, methods, applicable special purpose equipment and related
technology, processes or other information conceived, produced, developed
or reduced to practice in carrying out the Project, and all rights therein
including, without limitation, patents, copyrights, industrial designs,
trade-marks, and any registrations or applications for the same and all
other rights of intellectual property therein, including any rights which
arise from the above items being treated by OSL as trade secrets or
confidential information;
"Long Term Lease" means any lease of any system in accordance with the
definition of "finance lease" in the Canadian Institute of Chartered
Accountants Generally Accepted Accounting Procedures of December 1978; and
"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, and prototypes or pilot plants that are
designed and built by OSL to demonstrate the product or system to be
commercialized but excluding jigs, tools, dies and fixtures.
2.0 The Project
2.1 Conduct of the Project
OSL will carry out the Project ("the Project") in Canada, involving
development of the electronic chart display and information system -
paramilitary\military, as described in Schedule "A", in a diligent,
professional manner using qualified personnel.
2.2 Project Completion Date
OSL shall ensure that the Project is completed on or before 31 March 2003,
unless otherwise agreed to in writing by the Minister.
2.3 Material Changes
OSL will not, without the prior written consent of the Minister alter in
any material aspect the Project assisted by the Minister. An alteration in
a material aspect will have occurred only if
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(a) a Project performance milestone described in the Statement of
Work is not expected to be achieved within 6 months of the
projected completion date for that element;
(b) the estimated Eligible Costs for the Project described in the
Statement of Work are expected to be exceeded by 20% or more;
(c) the Project will be carried out at locations other than the
following: North Vancouver B.C.
Such consent of the Minister will not be unreasonably withheld.
2.4 Disposal of Special Purpose Equipment
Except in the situation described in section 2.5, if OSL transfers to
commercial production, transfers outside of Canada, sells, leases, or
otherwise disposes of any Special Purpose Equipment, the Minister will
require OSL to repay the greater of an amount equal to that of
(a) 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 OSL for Eligible
Costs, and
(b) 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 disposal by the
ratio of the total amount of the contribution paid by the
Minister to the total amount paid by OSL for Eligible Costs;
but in no event shall the amount payable exceed the amount paid by the
Minister to OSL under this Agreement.
OSL will 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.
2.5 Transfer of Special Purpose Equipment to Production
If the estimated cost as set out in the Statement of Work of all of the
items of Special Purpose Equipment, other than prototypes and pilot
plants, is 30% or less of the total estimated Eligible Costs of the
Project, OSL will not be obligated to repay the Minister for those
items of Special Purpose Equipment which are transferred to commercial
production in Canada by OSL.
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3.0 The Contribution
3.1 Sharing Ratio and Contribution Ceiling
Subject to the terms and conditions of this Agreement, the Minister
will make a repayable contribution to OSL towards the Eligible Costs of
the Project, of the lesser of:
(a) 33% of the Eligible Costs, and
(b) $4,000,177
3.2 Annual Contribution Disbursement Limits
Unless the Minister agrees otherwise, the amount of the contribution
will not exceed the following amounts in those respective government
fiscal years ending on March 31st:
99/00 $1,196,110
00/01 $1,275,764
01/02 $1,151,609
02/03 $ 376,694
The Minister will consider any request to reprofile these funds, but
the Minister will have no obligation to pay any greater amount in any
government fiscal year.
3.3 Eligible Costs Period
Under this Agreement, the Minister will not contribute to any cost
incurred by OSL prior to 23 December 1998 nor to any cost incurred by
OSL after 31 March 2003, unless otherwise agreed to by the Minister,
in writing.
3.4 Environmental Protection Measures
The Minister, being satisfied that any potentially adverse
environmental effects that may be caused by each element of the Project
is insignificant, will make the contribution to OSL only if OSL has
incorporated and utilized environmental protection measures in relation
to the Project that satisfy the requirements of all regulatory bodies
having jurisdiction over OSL or the Project or both and certifies to
the Minister that it has done so, which certification will be provided
with the first claim for payment under this Agreement.
3.5 Set-Off Rights of Minister
The Minister will have the right to set-off against amounts payable
under this Agreement any amounts owed by OSL under other agreements for
which the Minister is responsible or under the Defence Industry
Productivity Program.
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4.0 Other Government Assistance
4.1 Disclosure
OSL hereby acknowledges that for the purposes of this Agreement, except
for scientific research and experimental development tax credits, no other
federal, provincial or municipal government assistance other than that
described below has been requested or received by OSL for the Eligible
Costs of this Project.
Federal $00
Provincial $00
Municipal $00
Total $00
4.2 Continuing Disclosure Obligation
OSL will inform the Minister promptly in writing of any other federal,
provincial or municipal government assistance to be received for costs
covered by the Minister under this Project and the Minister will have the
right to reduce the contribution under this Agreement to the extent of any
such assistance except for scientific research and experimental
development tax credits,
5.0 Claims for Payment
5.1 Claim Procedures
The Minister will pay the contribution to OSL, in respect of Eligible
Costs incurred, on the basis of claims which claims will be:
(a) submitted in writing not more frequently than monthly;
(b) accompanied by 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;
(c) certified by an officer of OSL or other person satisfactory to the
Minister; and
(d) accompanied by a report of the work completed indicating which
milestones, if any, were achieved during the period of the claim.
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5.2 Hold-Back Rights
(a) Subject to 5.2(b), the Minister will pay 100% of the claims until
such time as 90% of the contribution has been disbursed. Following
disbursement of the 90% of the contribution, the Minister will have
the right to audit the claims before making any further payments. The
Minister will pay the remaining 10% of the contribution by paying
100% of each claim until 90% of that 10% has been disbursed. The
balance of the contribution will be released upon completion of the
final audit if required by the Minister. The final audit will take
place no later than eighteen months after receipt of the final claim.
(b) The Minister and OSL will, during the term of this Agreement, conduct
periodic audits or cost reviews in conjunction with the semi-annual
progress report described in section 7.5, and if during the periodic
audits or cost reviews no significant difficulty is identified (or if
identified, is remedied to the satisfaction of the Minister) with
respect to the claims that have been paid, then the Minister agrees
that the remaining claims will be paid, without any holdback. However
the Minister reserves the right following the final payment to audit
all claims.
5.3 Final Claim
Within one year of completion of the Project or of 31 March 2003,
whichever is earlier, the final claim for payment will be submitted by OSL
and will be accompanied by an itemized statement, certified by OSL's
senior financial officer or an auditor approved by the Minister, attesting
to the Eligible Costs having been incurred in the Project.
5.4 Certification of Claims
The Minister may require that any claim submitted for payment of the
contribution be certified by OSL's senior financial officer or by an
auditor approved by the Minister.
5.5 Overpayment by Minister
If the Minister, acting reasonably, determines that the amount paid to OSL
exceeds the amount to which OSL is entitled pursuant to this Agreement,
the amount of the excess, together with interest thereon from the date of
the notice of the excess to OSL, a copy of which will also be faxed to
OSL, to the day of repayment by OSL to the Minister in full, is a debt due
and payable forthwith to the Minister. Interest will be calculated at the
Bank Rate, as defined in the Interest And Administrative Charges
Regulations in effect as of the date of the notice of the excess to OSL
plus 3% per annum, compounded monthly.
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6.0 Royalty Payments
6.1 Date of Commencement of Gross Revenues
OSL will notify the Minister of the date of commencement of Gross Revenues
by OSL.
6.2 Royalty Rate
OSL will pay a 3% royalty on all Gross Revenues from 1 December 1999 to 30
November 2008. If the total cumulative royalties paid and payable as of 30
November 2008 does not equal or exceed $7,810,230 then OSL will continue to
pay royalties on Gross Revenues generated after 30 November 2008 until
total cumulative royalties paid or payable reach $7,810,230 or until 30
November 2014, whichever comes first.
6.3 Royalty Due Date
OSL will pay the Minister a royalty on or before 1 February of each year
following the calendar year in which the amount of the royalty was
calculated. The first royalty payment is due 1 February 2001.
6.4 Royalty Statements and Payment
OSL will, with each royalty payment specified in section 6.3, provide to
the Minister a statement certified by its senior financial officer of Gross
Revenues for the calendar year preceding the payment. The statement will
include the calculation of the royalty due.
6.5 Dividend Payment Restriction
OSL will not make any dividend payment that would prevent it from
implementing the Project or that would prevent it from making the royalty
payments called for in this Agreement.
6.6 Payment Date
Whenever any payment date under this section 6.0 occurs on a Saturday,
Sunday or statutory holiday, such payment shall be made on the next day
following which is not a Saturday, Sunday or holiday.
7.0 Monitoring and Reporting
7.1 Annual Financial Statements
OSL will provide the Minister with a copy of its annual unaudited financial
statements within one hundred and twenty (120) days of the end of each of
OSL's fiscal years.
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7.2 Access to Accounts and Records
OSL will at its own expense preserve and make available for audit and
examination by the Minister or his representatives the books, accounts and
records of the Project and of the information necessary to calculate any
amount owing to the Minister under this Agreement. The Minister will have
the right to conduct such additional audits, at his expense, as he may
consider necessary using the audit staff of the Minister, the Audit
Services Group of Consulting and Audit Canada, an independent auditing firm
or OSL's external auditors. Any licence agreement for the production of
the electronic chart display and information system - paramilitary\military
between OSL and a third party will contain similar provisions to permit the
Minister to audit the calculation of the royalty.
7.3 Access to Project
OSL will provide the representatives of the Minister reasonable access to
OSL's premises to inspect and assess the progress of the Project or any
element thereof and supply promptly on request such data as the Minister
may reasonably require for statistical or project evaluation purposes.
7.4 Access to Third-Party Information
OSL will, to the extent practicable, assist the Minister with the
implementation of this Agreement and facilitate access by the Minister to
information from third parties engaged in the performance of the Statement
of Work.
7.5 Project Progress Reports
OSL will provide the Minister with semi-annual progress reports commencing
on 30 January 2000. The reports will include:
(a) a description of the progress in performance of the Statement of Work
in comparison with the milestones contained in the Statement of Work;
(b) an update of the Project cost estimates;
(c) an indication of any delay in completing the Project;
(d) a cumulative list summarizing any acquisition and current holdings of
Special Purpose Equipment, as per Schedule "A1";
(e) an indication of any planned transfer to commercial production,
transfer outside of Canada, sale, lease or other disposition of
Special Purpose Equipment.
(f) sufficient information to enable the Minister to assess the Project's
contribution to jobs and economic growth, as per Schedule "B", and
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(g) an update of the projected market, as per Schedule "C".
7.6 Commercial Exploitation Reports
OSL will continue to provide reports to the Minister on an annual basis
from 31 March 2003 until the end of the Term of the Agreement which
will indicate whether the Project is achieving its projected commercial
and economic objectives, including job creation, as per Schedules "B"
and "C".
8.0 Special Conditions
8.1 Other Agreements
Neither OSL nor OSI have entered into contracts that would prevent the
full implementation of this Agreement and undertake not to enter into
any contracts that would prevent the full implementation of this
Agreement without the prior written consent of the Minister.
8.2 Background Technology
OSI represents that it holds all the requisite intellectual property
rights to fully implement the Project and undertakes to maintain all
such rights.
8.3 OSI Benefit
OSI hereby declares that it benefits from this Agreement through OSL, a
wholly owned subsidiary, and through the value added to the electronic
chart display and information system technology, as further described in
Schedule A, Statement of Work.
8.4 Financial Support
OSI hereby undertakes, for the duration of this Agreement, to provide
OSL with all the necessary financial support in order to fully implement
the Project in a timely fashion, including the marketing and
commercialisation of the Project results.
8.5 Articles Applicable to OSI
The following sections and articles apply to the Intervenor, and any
reference to the Recipient or OSL also applies to OSI: sections
6.5, 7.1, 7.2, 7.3, 7.4 and articles 10, 11, 13, 14, and 16.
8.6 OSL support
When providing the financial statements provided under section "7.1," to
the Minister, OSL will at the same time provide annually to the Minister
a report of financial arrangements in place to support their share of
the Project.
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8.7 Annual Financial Statements
OSI will provide the Minister with a copy of its annual audited financial
statements within one hundred and twenty (120) days of the end of each of
OSI's fiscal years.
9.0 Intellectual Property
9.1 Ownership of Technology
Legal title to any Intellectual Property which may be created, generated or
produced during or as a result of the performance of the Project by OSL is
to be vested with OSL.
9.2 Commitment to Exploitation in Canada
OSL will exploit the Intellectual Property developed under this Project
through the manufacture of the electronic chart display and information
system - paramilitary\military in Canada. OSL will ensure that follow-on
production of the electronic chart display and information system -
paramilitary\military and its variants and derivatives occurs within Canada
unless the Minister agrees in advance in writing to the contrary.
9.3 Limitation on Transfer of Technology
OSL will not, without the prior written consent of the Minister, grant any
right to the manufacture of the electronic chart display and information
system - paramilitary\military or transfer title to any of the Intellectual
Property outside of Canada, except the licence or sublicence for use in
conjunction with the sale of products developed as a result of the Project,
and will impose the same restriction on all transferees.
10.0 Default and Recovery
10.1 Events of Default
The Minister may declare an event of default has occurred if:
(a) OSL 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 for dissolution of OSL is made which is not being contested or
appealed by OSL or a resolution is passed for the winding-up of OSL or
it is dissolved;
(c) OSL has intentionally submitted false or misleading information to the
Minister or intentionally made a false or misleading representation;
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(d) any material term, condition or undertaking required under this
Agreement is not complied with, in any material respect; or
(e) OSL neglects or fails to pay the Minister, 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 OSL of the condition or event which, in his opinion,
constitutes an event of default and OSL has failed, within 30 days of
receipt of such 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
notify the Minister of rectification.
10.2 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 costs of the Project including any obligation to
pay any amount owing prior to the date of such suspension;
(b) terminate any obligation by the Minister to contribute or continue to
contribute to the costs of the Project, including any obligation to
pay any amount owing prior to the date of such termination;
(c) require OSL to repay to the Minister all or part of the contribution
disbursed and pay the Minister any amounts due under this Agreement,
together with interest from the date of demand compounded monthly at
the interest rate, as set out in section 5.5.
If an event of default has occurred in relation to paragraph 10.1(a) or
(b), or as a result of the failure of OSL to comply with the provisions of
section 2.4, 6.0 or 9.0, the Minister may direct OSL to transfer and
deliver to the Minister title to, possession of and all rights of OSL in
the Intellectual Property, and OSL will immediately comply.
If, in the opinion of the Minister, acting reasonably, that an event of
default is likely to occur, the Minister may suspend any obligation to
contribute upon giving notice of the likely event of default or alteration
and if OSL fails to cure or demonstrate to the satisfaction of the
Minister that it has taken such steps as are necessary to correct the
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condition within ten days of receipt of such notice, the Minister may
utilise any other remedy set out in this section 10.2.
10.3 Remedies Fair and Reasonable
OSL acknowledges that the policy objectives served by the Minister's
agreement to make the contribution, that the contribution comes from
public monies, that the amount of damages sustained by the Minister in an
event of default is difficult to ascertain, and therefore that it is fair
and reasonable that the Minister be entitled to exercise any or all of
the remedies provided for in section 10.0 and to do so in the manner
provided for in that section if an event of default occurs; provided that
in exercising any remedy in accordance with paragraph 10.2(c) other than
for a breach of paragraph 10.1(e), the Minister will credit OSL for any
royalties paid to the Minister under this Agreement.
20.4 No Waiver
The fact that the Minister refrains from exercising a remedy he is
entitled to exercise under this 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
this Agreement or other applicable law.
11.0 Force Majeure
1l.2 No Default for Force Majeure
OSL will not be in default by reason only of any failure in performance
of the Project in accordance with the Statement of Work if such failure
arises without the fault or negligence of OSL and is caused by any other
event of force majeure.
11.2 Definition of Force Majeure
Force majeure means any cause which is unavoidable or beyond the
reasonable control of OSL, including war, riot, insurrection, orders of
government, strikes or any Act of God or other similar circumstance which
is beyond OSL's control, and which could not have been reasonably
circumvented by OSL without incurring unreasonable cost.
12.0 Representations, Warranties and Undertakings
12.1 Power and Authority of the Recipient
OSL is duly incorporated and validly existing and in good standing under
the laws of British Columbia 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.
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12.2 Authorised Signatories
OSL represents and warrants that the signatories to this Agreement have
been duly authorized to execute and deliver this Agreement on its
behalf.
12.3 Binding Obligations
OSL represents and warrants that the execution, delivery and performance
of this Agreement have been duly and validly authorized and when
executed and delivered will constitute a legal, valid and binding
obligation of OSL enforceable in accordance with its terms.
12.4 No Pending Suit or Action
OSL 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.
12.5 No Gifts or Inducements
OSL represents and warrants that it has not, nor has any person offered
or promised to any official or employee of the Minister for or with a
view to obtaining this Agreement any bribe, gift or other inducement,
and it has not nor has any person on its behalf employed any person to
solicit this Agreement for a commission, contingency fee or any other
consideration dependant upon the execution of this Agreement.
12.6 Compliance with Environmental Protection Requirements
OSL warrants and undertakes that it will maintain environmental
protection measures in relation to the Project that satisfy the
requirements of all regulatory bodies having jurisdiction over OSL or
the Project and certify to the Minister annually its compliance with
such requirements.
13.0 General Conditions
13.1 Members of the House of Commons or the Senate
No member of the House of Commons or the Senate, either directly nor
indirectly, shall be admitted to any share or part of this Agreement or
to any benefit to arise therefrom.
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13.2 Annual Appropriations
Any payment by the Minister under this Agreement is subject to there
being an appropriation in accordance with section 40 of the Financial
Administration Act for the fiscal year in which the payment is to be
made.
13.3 Confidentiality
Subject to Section 12 and the Access to Information Act the parties will
keep confidential and will not disclose the contents of this Agreement
nor the transactions contemplated hereby without the consent of all
parties.
13.4 No Assignment of Agreement
Neither this Agreement, nor any part thereof nor any amount thereunder
will be assigned by OSL without the prior written consent of the
Minister.
13.5 Compliance with Post-Employment Provisions
OSL confirms that no individual for whom the post-employment provisions
of the Conflict of Interest and Post-Employment Code for Public Office
Holders or the Conflict of Interest and Post-Employment Code for the
Public Service apply, will derive a direct benefit from this Agreement
unless that individual is in compliance with the applicable
post-employment provisions.
14.0 Announcements
i4.1 Consent to Public Announcements
OSL hereby consents to public announcements by or on behalf of the
Minister containing any of the information in the documents attached
hereto as Schedule "E".
14.2 Confidentiality Obligation
The Minister will inform OSL of the date on which the public
announcement is to be made and OSL will not disclose the existence of
this Agreement until such date.
15.0 Notice
15.1 Form and Timing of Notice
Any notice, information or document provided for under this Agreement
will be effectively given if delivered or sent by letter or facsimile,
postage or other charges
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prepaid. Any notice that is delivered will have been received on
delivery; any notice sent by facsimile will be deemed to have been
received one working day after having been sent, and any notice mailed
will be deemed to have been received eight (8) calendar days after being
mailed.
15.2 Change of Address
OSL or the Minister may change the address which they have stipulated in
this Agreement by notifying the other of the new address.
15.3 Addresses
Any notice to the Minister will be addressed to:
Director, Aerospace and Defence
Technology Partnerships Canada
10th Floor
000 Xxxxxx Xxxxxx
Xxxxxx, Xxxxxxx X0X OC8
Fax No: (000) 000-0000
Any notice to OSL will be addressed to:
Director of Operations
Offshore Systems Ltd.
000-000 Xxxx 0xx Xxxxxx
Xxxxx Xxxxxxxxx, X.X.
X0X 0X0
Fax No: (000) 000-0000
Any notice to OS1 will be addressed to:
President and Chief Executive Officer
Offshore Systems International Ltd.
000-000 Xxxx 0xx Xxxxxx
Xxxxx Xxxxxxxxx, X.X.
X0X 0X0
Fax No: (000) 000-0000
-19-
16.0 Other Provisions
16.1 No Partnership Created
The parties declare that nothing in this Agreement will be construed as
creating a partnership, joint venture or agency relationship between the
Minister and OSL.
16.2 Binding Agreement
This Agreement is binding on the parties and their successors and
permitted assigns.
16.3 Signature in Counterparts
This Agreement may be signed in counterparts, each of which when taken
together, will constitute an original Agreement.
16.4 Governing Laws
This Agreement will be governed by the laws in force in the province of
British Columbia.
-20-
16.5 Term of Agreement
This Agreement will terminate on the earlier date of the following:
(a) payment to the Minister by OSL of all amounts due pursuant to this
Agreement; and
(b) 31 March 2015.
16.6 Deadline for Signature
This Agreement must be signed by Offshore and received by the Minister
on or before 17 November 1999 failing which it will be null and void.
IN WITNESS WHEREOF the parties hereto have executed this Agreement as of
the date first above written.
HER MAJESTY THE QUEEN IN RIGHT
OF CANADA, as represented by the
Minister of Industry
By: /s/[ILLEGIBLE]
-----------------------------------------
Technology Partnerships Canada 15/11/99
Offshore Systems Ltd.
By: /s/ Xxxx Xxxxxxx
-----------------------------------------
By: Xxxx Xxxxxxx, President & CEO
Offshore Systems International Ltd.
By: Xxxx Xxxxxxx
-----------------------------------------
By: Xxxx Xxxxxxx, President & CEO.
A-l
SCHEDULE A
STATEMENT OF WORK
for
ELECTRONIC CHART DISPLAY AND INFORMATION SYSTEM -
PARAMILITARY\MILITARY
A-2
Statement Of Work
1. General
The project will build upon OSL's 22 years of experience in the design and
development of ship navigation systems and position the firm for the next
generation of electronic chart technology. The project upgrades key elements of
software and hardware technology that increase the functionality of electronic
chart systems.
2. Project Description
The purpose of this project is to design and develop an integrated ship
navigation system which combines Offshore's existing technology, Electronic
Chart Precise Integrated Navigation System, (ECPINS) with new technology that
meets the standards of the International Maritime Organization (IMO) and
additional requirements of paramilitary and military customers. The resulting
product will be a qualified Electronic Chart Display and Information System
(ECDIS) with additional functionality for paramilitary and military markets. The
project will complete the early stages of a full Warship ECDIS (WECDIS)
specification.
3. Key Activities
The project is divided into three Key Activities.
1. ECDIS Functionality
The design and development of core ECDIS and enhanced ECDIS features, including:
1.1. Development of IMO compliant ECPINS and standard back-up systems.
1.l.l. Project Management
1.1.2. Requirements Analysis and Design
1.1.3. Coding
1.1.4. Testing
1.1.5. User Documentation
1.1.6. IMO Type Approval Certification
1.1.7. In-Field Beta Testing
1.1.8. Product Release
A-3
1.2. Addition of DNC/VPF Functionality
1.2.1. Project Management
1.2.2. Engineering Analysis and liaison with NIMA/DND
1.2.3. System Hardware Design
1.2.4. Coding
1.2.5. Fabrication and Assembly
1.2.6. Testing
1.2.7. User Documentation
1.2.8. In-Field Beta Testing
1.2.9. Product Release
1.3. Addition of Enhanced ECDIS Functionality
1.3.1. Project Management
1.3.2. Requirements Analysis and Design
1.3.3. System Hardware Design
1.3.4. Coding
1.3.5. Fabrication and Assembly
1.3.6. Testing
1.3.7. User Documentation
1.3.8. In-Field Beta Testing
1.3.9. Product Release
2. Military Enhancements
The design and development of Military and Paramilitary specific additions,
including:
2.1. Harbour Defence Functionality
2.1.1. Project Management and Reporting
2.1.2. Requirements Analysis and Design
2.1.3. System Hardware Design
2.1.4. Coding
2.1.5. Fabrication and Assembly
2.1.6. Testing
2.1.7. User Documentation
2.1.8. In-Field Beta Testing
2.1.9. Product Release
A-4
2.2. Sonar and Surface Search Radar Integration
2.2.1. Project Management and Reporting
2.2.2. Requirements Analysis and Design
2.2.3. System Hardware Design
2.2.4. Coding
2.2.5. Fabrication and Assembly
2.2.6. Testing
2.2.7. User Documentation
2.2.8. In-Field Beta Testing
2.2.9. Product Release
2.3. Military Hardware Platform Standardization
2.3.1. Project Management and Reporting
2.3.2. Requirements Analysis and Design
2.3.3. System Hardware Design
2.3.4. Coding
2.3.5. Fabrication and Assembly
2.3.6. Testing
2.3.7. User Documentation
2.3.8. In-Field Beta Testing
2.3.9. Product Release
2.4. Search and Rescue Functionality
2.4.1. Project Management and Reporting
2.4.2. Requirements Analysis and Design
2.4.3. System Hardware Design
2.4.4. Coding
2.4.5. Fabrication and Assembly
2.4.6. Testing
2.4.7. User Documentation
2.4.8. In-Field Beta Testing
2.4.9. Product Release
A-5
2.5. Partial Additional Military Layer (AML) Functionality
2.5.1. Project Management and Reporting
2.5.2. Requirements Analysis and Design
2.5.3. System Hardware Design
2.5.4. Coding
2.5.5. Fabrication and Assembly
2.5.6. Testing
2.5.7. User Documentation
2.5.8. In-Field Beta Testing
2.5.9. Product Release
3. Black Box Radar
The design and development of a multi-platform, fully integrated radar interface
unit for use in military, paramilitary and commercial markets.
3.1. Phase 1 - Black Box Preliminary Release
3.1.1. Project Management and Reporting
3.1.2. Requirements Analysis and Design
3.1.3. System Hardware Design
3.1.4. Coding
3.1.5. Fabrication and Assembly
3.1.6. Integration and Testing
3.1.7. User Documentation
3.1.8. In-Field Beta Testing
3.1.9. Product Release
3.2. Phase 2 - Radar Image Enhancement
3.2.1. Project Management and Reporting
3.2.2. Requirements Analysis and Design
3.2.3. System Hardware Design
3.2.4. Coding
3.2.5. Fabrication and Assembly
3.2.6. Integration and Testing
3.2.7. User Documentation
3.2.8. In-Field Beta Testing
3.2.9. Product Release
A-6
3.3. Phase 3 - Black Box Feature Enhancement
3.3.1. Project Management and Reporting
3.3.2. Requirements Analysis and Design
3.3.3. System Hardware Design
3.3.4. Coding
3.3.5. Fabrication and Assembly
3.3.6. Integration and Testing
3.3.7. User Documentation
3.3.8. In-Field Beta Testing
3.3.9. Product Release
Each Key Activity is broken down into a number of defined milestones. Section 6
outlines the milestones for each Key Activity.
A-7
4. Cost Breakdown
Cost Breakdown by key tasks
----------------------------------------------------------------------------------------------------------
Tasks Project Schedule Project Costs
-------------------------------------------------------------------------------
Start End Labour (note 1)
---------------------------------------------------
Engineering Technical Management Total
----------------------------------------------------------------------------------------------------------
ECDIS Functionality Dec 1996 Dec 2000 3,350,133 781,216 966,083 5,177,432
----------------------------------------------------------------------------------------------------------
Military Functionality Jan 1999 June 2002 2,588,802 1,248,172 693,429 4,530,403
----------------------------------------------------------------------------------------------------------
Black Box(TM) Radar Jan 2000 June 2002 640,348 308,739 171,522 + 1,120,609
----------------------------------------------------------------------------------------------------------
Total 6,579,283 2,338,127 1,851,034 -10,768,444
----------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------
Tasks Project Costs
---------------------------------------------------
Material Other Direct Total
(note 2) Sub-contract (travel, etc.)
-----------------------------------------------------------------------------
ECDIS Functionality 380,000 245,000 131,478 5,873,910
-----------------------------------------------------------------------------
Military Functionality 200,000 100,000 92,457 4,922,860
-----------------------------------------------------------------------------
Black Box(TM) Radar 81,500 100,000 22,870 1,324,979
-----------------------------------------------------------------------------
Total 661,500 445,000 246,805 12,121,749
-----------------------------------------------------------------------------
Cost Breakdown By Fiscal Year (ending March 31):
-------------------------------------------------------------------------------------------
Year Project Costs Total
----------------------------------------------------------------
Labour Material
(note 1) (note 2) Sub-contract Other Direct
-------------------------------------------------------------------------------------------
99-00 3,207,025 199,352 144,983 73,216 3,624,576
-------------------------------------------------------------------------------------------
00-01 3,443,788 212,627 131,442 78,092 3,865,950
-------------------------------------------------------------------------------------------
01-02 3,103,063 188,445 126,677 71,539 3,489,724
-------------------------------------------------------------------------------------------
02-03 1,015,020 61,070 41,436 23,971 1,141,498
-------------------------------------------------------------------------------------------
Total 10,768,896 661,494 444,538 246,819 12,121,748
-------------------------------------------------------------------------------------------
Note 1: Includes overhead and G&A (ref. PWGSC neg. rate)
Note 2: Includes material and handling (ref. PWGSC neg. rate)
A-8
5. List of Special Equipment
This is not applicable to the ECDIS-PM project.
6. Milestones
Each Key Activity is broken down into defined milestones, which are based on
scheduled software and/or hardware release dates. Each release will be followed
by several months of Beta Testing and Sea Trials. The folIowing table summarizes
the milestones for each Key Activity.
Key Activity Milestone Description- Release
Date
----------------------------------------------------------------------------------------
ECDIS Functionality 1 PC Baseline Release 3.11 July `99
2 PC Baseline Release 3.2A Nov. `99
3 PC Baseline Release 3.2 May `00
4 PC Baseline Release 3.5 Dec. `00
5 Enhanced Functionality Ongoing
Military Functionality 1 VME Baseline Release 2.03 July `99
2 VME Baseline Release 1.7x Nov. `99
3 VME Baseline Release 2.1 Feb. `00
4 Hardware Baseline Dec. `00
Standardization
5 Enhanced Military Functionality Dec. `01
6 Partial AML Mar. `02
"Black Box" Xxxxx 0 Xxxxx "Xxxxx Xxx" Xxxxx 0 May `01
2 Radar "Black Box" Phase 2 Dec. `01
3 Radar "Black Box" Part Phase 3 Mar. `02
A-9
Project Grantt Chart
A-10
COST ESTIMATES
The values in the Statement of Work/cost breakdown as previously presented are
estimates only.
The cost breakdown includes all estimated direct costs and associated overhead
costs for the Project. For claim purposes, these costs will be determined using
the applicable Public Works and Government Services Canada (PWGSC) costing rates
negotiated with the Recipient in accordance with the PWGSC 103l-2 Contract Cost
Principles. For any period where the PWGSC rate negotiations have not been
completed at the time of claim submission for this period, the previous year's
negotiated PWGSC rates will be used in the interim.
The allowable amount which may be claimed is shown in the main body of the
Contract under Article 3.1 titled "Sharing Ratio and Contribution Ceiling".
A1 - 1
RECIPIENT NAME:OSL
PROJECT TITLE: Development of An Electronic Chart Display and Information System
- Paramilitary\Military
SPECIAL PURPOSE EQUIPMENT LIST - EXCLUSIVE OF PROTOTYPES AND PILOT PLANTS
[THIS LIST IS FOR PAYMENT OF CLAIMS AND FOR PROJECT MONITORING PURPOSES]
GENERAL: This list will include all items of Special Purpose Equipment(SPE)
purchased by the Recipient, at a cost exceeding $250,OOO or any other limit
specified in the Agreement.
MECHANISM: In accordance with the requirements of paragraph 7.5(d) of this
Agreement, the Recipient agrees to provide an up-to-date copy of this list,
with every claim that modifies its content, specifying and describing the
new items for which payment of the TPC contribution is being claimed. The
Recipient also agrees to monitor the location and use of all the items of
Equipment that will eventually appear on the list.
LIST OF EQUIPMENT
----------------------------------------------------------------------------
1 2 3 4 5 6
----------------------------------------------------------------------------
ITEM DESCRIPTION & QTY COST OF THE "TPC" "TPC"
NO SERIAL NUMBER ITEM TO FIRM SHARING CONTRIBUTION
(Cdn Funds) RATIO (%) (Cdn Funds)
----------------------------------------------------------------------------
1.
----------------------------------------------------------------------------
2.
----------------------------------------------------------------------------
3.
----------------------------------------------------------------------------
4.
----------------------------------------------------------------------------
5.
----------------------------------------------------------------------------
At the time of signing of the Agreement the above list was not applicable.
B - 1
RECIPIENT NAME: OSL SCHEDULE - B
PROJECT TITLE: Development of An Electronic Chart Display and Information System
- Paramilitary\Military
REPORT ON ESTIMATED & ACTUAL PROJECT BENEFITS AND RESULTS
PART A - JOB CREATION
DEFINITIONS-one Person-Year (P-Y) is equal to 1950 hours of work paid.
-----------
1. Data to be provided based on a 52-week year and should be expressed in P-Y
units, with one decimal only.
2. Personnel changes-entry or exit from a cell within a year -should follow
the same fundamental principle whereby the clock is stopped for the
outgoing element and started for the incoming one.
3. Very simply, the intent of this schedule is to identify the number of P-Ys
expended on the Project activities during any one year of the Project
duration, according to one characteristic: category of employment. Both
part-time and full-time employees working on the Project should be
claimed, as employment of all types represents a Project benefit.
Part-time work on the Project should be transposed into P-Y units on the
basis of one P-Y equals 1950 hours of work paid in a given year.
PART A-1 PROJECT WORK PHASE
[REPORTING FREQUENCY: ANNUAL WITH ALL DATA COMPILED AS OF 31 DECEMBER OF
APPLICABLE YEAR]
year 1=1999, year 2=2000, year 3=2001, year 4=2002, year 5=2003
================================================================================
TOTAL NUMBER OF PERSON-YEARS
---------------------------------
CATEGORY OF EMPLOYMENT PROJECT PROJECT
ESTIMATE ACTUAL
--------------------------------------------------------------------------------
A] SCIENCE & ENGINEERING
- year 1 3
- year 2 5
- year 3 5
- year 4 6
- year 5 3
--------------------------------------------------------------------------------
B] TECHNICAL & SKILLED LABOUR
- year 1 4
- year 2 12
- year 3 18
- year 4 12
- year 5 3
--------------------------------------------------------------------------------
C] MANAGEMENT & ADMINISTRATION
- year 1 1
- year 2 2
- year 3 2
- year 4 1
- year 5 1
--------------------------------------------------------------------------------
D] SUB-CONTRACTED WORK
- year 1 2
- year 2 3
- year 3 3
- year 4 3
- year 5 1
--------------------------------------------------------------------------------
TOTAL
- year 1 10
- year 2 22
- year 3 28
- year 4 22
- year 5 8
--------------------------------------------------------------------------------
B - 2
RECIPIENT NAME: OSL
PROJECT TITLE: Development of An Electronic Chart Display and Information System
- Paramilitary\Military
PART A-2 COMMERCIAL EXPLOITATION PHASE
[REPORTING FREQUENCY: ANNUAL WITH ALL DATA COMPILED AS OF 31 DECEMBER OF
APPLICABLE YEAR]
year 1=2000, year 2=2001, year 3=2002, year 4=2003, year 5=2004, year 6=2005,
year 7=2006, year 8=2007, year 9=2008
--------------------------------------------------------------------------------
TOTAL NUMBER OF PERSON-YEARS
--------------------------------
CATEGORY OF EMPLOYMENT PROJECT PROJECT
ESTIMATE ACTUAL
--------------------------------------------------------------------------------
A] SCIENCE & ENGINEERING
- year 1 6
- year 2 6
- year 3 7
- year 4 10
- year 5 10
year 6 10
year 7 10
year 8 10
year 9 10
--------------------------------------------------------------------------------
B] TECHNICAL & SKILLED LABOUR
- year 1 10
- year 2 12
- year 3 22
- year 4 27
- year 5 27
year 6 30
year 7 30
year 8 30
year 9 30
--------------------------------------------------------------------------------
B-3
RECIPIENT NAME: QSL
PROJECT TITLE: Development of An Electronic Chart Display and Information
System - Paramilitary\Military
PART A-2 COMMERCIAL EXPLOITATION PHASE
[REPORTING FREQUENCY: ANNUAL WITH ALL DATA COMPILED AS OF 31 DECEMBER OF
APPLICABLE YEAR]
year 1=2000, year 2=2001, year 3=2002, year 4=2003, year 5=1004, year 6=2005,
year 7=2006, year 8=2007, year 9=2008
--------------------------------------------------------------------------------
TOTAL NUMBER OF PERSON-YEARS
CATEGORY OF EMPLOYMENT ------------------------------
PROJECT PROJECT
ESTIMATE ACTUAL
--------------------------------------------------------------------------------
C] GENERAL PRODUCTION
-year 1(2000) 10
-year 2 12
-year 3 22
-year 4 50
-Year 5 53
year 6 59
year 7 59
year 8 59
year 9 59
--------------------------------------------------------------------------------
MARKETING, SALES & SUPPORT
-year 1 1
-year 2 2
-year 3 3
-year 4 3
-year 5 3
year 6 2
year 7 2
year 8 2
year 9 2
--------------------------------------------------------------------------------
D] MANAGEMENT & ADMINISTRATION
-year 1 3
-year 2 4
-year 3 5
-year 4 5
-year 5 5
year 6 5
year 7 4
year 8 4
year 9 4
--------------------------------------------------------------------------------
TOTAL
-year 1 30
-year 2 36
-year 3 59
-year 4 95
-year 5 98
year 6 105
year 7 105
year 8 105
year 9 105
--------------------------------------------------------------------------------
B-4
RECIPIENT NAME: OSL
PROJECT TITLE: Development of An Electronic Chart Display and Information
System - Paramilitary\Military
PART B - REPRESENTATIONS & EXPECTED RESULTS [other than Job Creation and Sales]
--------------------------------------------------------------------------------
[REPORTING FREQUENCY: ANNUAL WITH ALL DATA COMPILED AS OF 31 DECEMBER OF
APPLICABLE YEAR]
1. PATENTS: [are there any patents that are expected to result from the
development work of the Project]
2. ACQUISITION OF TECHNOLOGY: [is the Recipient planning to obtain
technology/know-how essential to the success of the Project and/or the
commercialisation of its results]
3. WORLD PRODUCT MANDATE: [specify any representation to that effect and
indicate clearly to which defined system that mandate applies.)
4. OTHER SIGNIFICANT EXPECTED RESULTS/REPRESENTATIONS:
NOTE: any representation or expected result appearing above should be
transposed into the table hereunder and should be reported on, once a year.
--------------------------------------------------------------------------------
DESCRIPTION OF EXPECTED RESULT/ PLANNED / REVISED STATUS / ACTUAL
REPRESENTATION IMPLEMENTATION IMPLEMENTATION
DATE DATE
--------------------------------------------------------------------------------
1.
2.
3.
4.
5.
--------------------------------------------------------------------------------
At the time of signing of the Agreement the above list was not applicable.
CERTIFICATION OF SCHEDULE "B" CONTENTS:
*AUTHORIZED SIGNATORY:__________________________ REPORT DATE:____________
The Recipient certifies that the data - representations/expected results -
summarized at the time of Project definition and as amended from time to time -
represents a valid estimate of the benefits, that the Minister could expect from
this Project and the exploitation of its results, as they could be determined at
any particular time. The Minister recognizes that those estimates will
inevitably vary through time, according to market requirements and other
factors, on which the Recipient has little or no control.
REPORTING: In order to allow the Minister to fulfill his mandate in the
monitoring of the Project's contribution to the Jobs and Growth Objective of the
Government, the Recipient hereby agrees to report, annually, on actual results
in comparison to the estimates that will appear in the report at any one time.
This process shall be in accordance with and in response to the requirements of
paragraphs 7.5 (f) and of sub-article 7.6 of the Agreement and no other report
mentioned therein shall be requested from the Recipient, by the Minister, in
support of the determination and monitoring of the contribution of the Project
to the Jobs and Growth Objective of the Government of Canada, except as per
Schedule C, next.
C - 1
RECIPIENT NAME: OSL SCHEDULE C
PROJECT TITLE: Development of An Electronic Chart Display and Information
System - Paramilitary\Military
REPORT ON ESTIMATED & ACTUAL SALES AND ROYALTIES [REPORTING FREQUENCY:
ANNUAL]
-----------------------------------------------------------------------------------------
1 2 3 4 5 6 7
-----------------------------------------------------------------------------------------
ROYALTY YEAR OR ROYALTY TOTAL ESTIMATED TOTAL ACTUAL ROYALTY
YEAR PERIOD RATE ESTIMATED ROYALTY ACTUAL SALES (in $,000)
NUMBER ending (in %) SALES (in $,000) (in $,000)
30 Nov (in $,000)
-----------------------------------------------------------------------------------------
1 2000 3.0 8,080 242.4
-----------------------------------------------------------------------------------------
2 2001 3.0 10,574 317.22
-----------------------------------------------------------------------------------------
3 2002 3.0 19,585 587.55
-----------------------------------------------------------------------------------------
4 2003 3.0 22,706 681.18
-----------------------------------------------------------------------------------------
5 2004 3.0 26,269 788.07
-----------------------------------------------------------------------------------------
6 2005 3.0 31,112 933.36
-----------------------------------------------------------------------------------------
7 2006 3.0 37,821 1134.63
-----------------------------------------------------------------------------------------
8 2007 3.0 43,467 1394.01
-----------------------------------------------------------------------------------------
9 2008 3.0 57,727 1731.81
-----------------------------------------------------------------------------------------
10
-----------------------------------------------------------------------------------------
11
-----------------------------------------------------------------------------------------
12
-----------------------------------------------------------------------------------------
13
-----------------------------------------------------------------------------------------
SIGNATURE OF CHIEF FINANCIAL OFFICER:_____________________________
REPORT DATE:_________________
The Recipient certifies that the initial data summarized at the time of
Project definition, and as amended from time to time, represents a valid
estimate of the benefits, that the Minister can expect from this Project and
the exploitation of its results, as they could be determined at any particular
time. The Minister recognizes that those estimates will inevitably vary
through time, according to market requirements and other factors, on which the
Recipient has little or no control.
REPORTING: In order to allow the Minister to fullfil his mandate in the
monitoring of the Project's contribution to the Jobs and Growth objective
of the Government, the Recipient hereby agrees to report, annually, on actual
results in comparison to the estimates mentioned in this Schedule C. This
process shall be in accordance with and in response to the requirements
of sub-sections 6.4,7.5 (f) and 7.6 of the Agreement and, no other report
mentioned therein shall be requested from the Recipient, by the Minister, in
support of the determination and monitoring of the contribution of the Project
to the Jobs and Growth Objective of the Government of Canada, except as per
Schedule B, previous.
SCHEDULE D
D-1
TPC PROJECT COST PRINCIPLES
1. GENERAL PRINCIPLE
The total Eligible Costs of the Project shall be the sum of the applicable
direct and indirect costs which are, or are to be reasonably and properly
incurred and/or allocated, in the performance of the Project, less any
applicable credits. These costs shall be determined in accordance with the
Recipient's cost accounting system as accepted by the Minister and applied
consistently over time.
2. DEFINITION OF REASONABLE COST
(1) A cost is reasonable if, in nature and amount, it does not exceed that
which would be incurred by an ordinary prudent person in the conduct of
a competitive business.
(2) In determining the reasonableness of a particular cost, consideration
shall be given to:
(a) whether the cost is of a type generally recognized as normal and
necessary for the conduct of the Recipient'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
Recipient which may unjustifiably increase the Eligible
Costs of the Project; 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 Recipient's cost accounting system
as accepted by the Crown.
(i) These materials may include, in addition to materials
purchased solely for the Project and processed by the
Recipient, or obtained from subcontractors, any other
materials issued from the Recipient's general stocks.
(ii) Materials purchased solely for the Project or subcontracts
shall be charged to the Project at the net laid-down cost to
the Recipient before cash discounts for prompt payment.
(iii) Materials issued from the Recipient's general stocks shall be
charged to the Project in accordance with the method as used
consistently by the Recipient 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
Recipient's cost accounting system as accepted by the Minister.
D-2
(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
Recipient'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 Recipient'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 Recipient's contribution only);
(d) service expenses: expenses of a general nature such as power, heat,
light, operation and maintenance of general assets and facilities;
(e) fixed/period charges: recurring charges such as property taxes,
rentals and reasonable provision for depreciation;
(f) general and administrative expenses: including remuneration of
executive and corporate officers, office wages and salaries and
expenses such as stationery, office supplies, postage and other
necessary administration and management expenses;
(g) selling and marketing expenses associated with the products or
services being acquired under the Agreement;
(h) general research and development expenses as considered applicable
by the Minister.
* For supplies of similar low-value, high-usage items the costs of which meet
the above definition of Direct Material Costs but for which it is
economically expensive to account for these costs in the manner prescribed
for direct costs, then they may be deemed to be indirect costs for the
purposes of the Project.
5. ALLOCATION OF INDIRECT COSTS
Indirect costs shall be accumulated in appropriate indirect cost pools,
reflecting the Recipient's organizational or operational lines and these
pools subsequently allocated to the Project or contracts, in accordance with
the following two principles:
(a) the costs included in a particular indirect cost pool should have a
similarity of relationship with the Project or contracts, as
applicable, to which that indirect cost pool is subsequently
distributed; further, the costs included in an indirect cost pool
should be similar enough in their relationship to each other that
the allocation of the total costs in the pool provides a result
which would be similar to that achieved if each cost within that
pool were separately distributed;
(b) the allocation basis for each indirect cost pool should reflect, as
far as possible, the casual relationship of the pooled costs to the
Project to which these costs are distributed.
D-3
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 Recipient, shall be credited to the Eligible Costs of the Project.
7. NON-APPLICABLE COSTS
Notwithstanding that the following costs may have been or may be reasonably
and properly incurred by the Recipient during the performance of Project
activities, they are considered non-applicable costs to the Project:
(a) allowance for interest on invested capital, bonds, debentures, bank
or other loans together with related bond discounts and finance
charges;
(b) legal, accounting and consulting fees in connection with financial
reorganization, security issues, capital stock issues, obtaining of
patents and licenses and prosecution of claims against the Minister;
(c) losses on investments, bad debts and expenses for the collection
thereof;
(d) losses on other projects or contracts;
(e) federal and provincial income taxes, excess profit taxes or surtaxes
and/or special expenses in connection therewith;
(f) provisions for contingencies;
(g) premiums for life insurance on the lives of officers and/or
directors where proceeds accrue to the Recipient;
(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) due 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.
D-4
ADDENDUM TO THE "TPC" PROJECT COST PRINCIPLES
A] SPECIAL PURPOSE EQUIPMENT AND OTHER ITEMS OF MACHINERY & EQUIPMENT
(1) To be an Eligible Cost, the Special Purpose Equipment and any item of
machinery and equipment must be necessary for the performance of the
Project, be described in sufficient detail in the Statement of Work, so
as to be readily identifiable, along with the cost related thereto.
(2) If a Pilot Plant is developed, constructed or integrated, by the
Recipient or by approved subcontractors for the purposes of the Project,
the costs related thereto will be eligible, only if those costs are
specifically identified in the Statement of Work, in accordance with the
provisions of sub-section (5) of this section.
(3) Eligible Costs related to Special Purpose Equipment and to any item of
machinery and equipment shall reflect the net laid-down cost to the
Recipient, after deducting trade discounts and cash discounts for prompt
payment.
(4) Where applicable, periodic payments under a capital lease for Special
Purpose Equipment or for any other significant items of machinery and
equipment represent Eligible Costs, up to a maximum not exceeding the
price of the item involved, 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 activities.
(5) Where applicable, labour and material costs required in the modification
or adaptation of the Special Purpose Equipment, machinery and other
items of equipment, for the purposes of the Project, are eligible
provided such cost elements are specifically identified in the Statement
of Work.
(6) 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.
B] SUBCONTRACTS
(1) For subcontracting costs that are not specifically mentioned in the
Statement of Work, the Recipient shall obtain the consent of the
Minister, in writing, prior to subcontracting or permitting the
subcontracting of any portion of the Project work at any tier. The
Minister shall not unreasonably withhold consent.
(2) Notwithstanding subsection (1), and provided labour-intensive R&D and
engineering services subcontracts are performed in Canada, the Recipient
may without the prior written consent of the Minister:
(a) purchase off-the-self items and software and such standard articles
and materials as are ordinarily produced by manufacturers in the
normal course of business and subcontract for the provision of such
incidental services as might ordinarily be subcontracted in
performing the Project activities;
(b) subcontract any of the Project activity to one or more
Subcontractors, up to a total value of:
(i) for Agreements valued up to $1.0 M[one million] in total
Project Eligible Costs *25% of the Project Eligible Costs,
(ii) for Agreements valued over $1.0M[one million] in total
Project Eligible Costs, *$250,000 plus 10% of the total
Project Eligible Costs in excess of $1.0M, up to a total
value of $1.0M.
(c) authorise its subcontractors at any tier to make purchases or
subcontract as permitted in subparagraph (a) and (b).
D-5
A subcontract at any tier may not be let without consent under paragraphs (b)
or (c) where the Subcontractor would obtain title to any Intellectual
Property developed as part of the Project activities.
(3) In any subcontract other than a subcontract referred to in paragraph
2(a), the Recipient shall, unless the Minister otherwise consents in
writing, ensure that the Subcontractor is bound by terms and conditions
compatible with and, in the opinion of the Minister, not less favourable
to Canada than the terms and conditions of the Agreement. Deviations
from the terms of the Agreement shall be entirely at the risk of the
Recipient.
(4) The Recipient is not obliged to seek consent to subcontracts
specifically authorised in the Statement of Work or in any Cost
Breakdown matrix appended thereto.
(5) Any consent to a subcontract shall not relieve the Recipient from its
obligations under the agreement or be construed as authorising any
liability on the part of the Minister to a Subcontractor.
C] PATENTS AND LICENSES
Eligible patent and copyright costs include relevant searches and filing
fees related to obtaining North American rights. World rights may be
considered only if such costs were specifically identified in the Statement
of Work. Maintenance fees and all expenses incurred protecting a patent or
copyright are not eligible.
D] LICENCE PURCHASE
Costs associated with the purchase of a single-use license for special
software, networking other specialised computer boards, and/or equipment, as
well as the one-time purchase of a licence, registered industrial design,
trademark, copyright work, trade secret, other intellectual property right,
as well as any other related data right, that is fundamental to the conduct
of the Project activities and/or the commercial exploitation of its results,
will be eligible, provided such costs are specifically identified in the
Statement of Work, or otherwise approved by the Minister, in writing, prior
to being incurred.
E-l SCHEDULE E
PROJECT FACT SHEET FOR NEWS RELEASE
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Program: Technology Partnerships Canada Project No.: 710-465430
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Name & Address of Recipient: Recipient Contact:
Offshore Systems Ltd. Name: Xxxxxx Xxxxxxx, Director, Operations
000-000 Xxxx 0xx Xxxxxx
Xxxxx Xxxxxxxxx Telephone: (000) 000-0000
British Columbia Fax: (000) 000-0000
V7P 3N4
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Project Location: Project Type:
North Vancouver, B.C. Development
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Industrial Sector: Product/Service:
Aerospace and Defence\Navigation Electronic Chart Display and Information System -
Paramilitary\Military
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Project Description and Anticipated Results:
The project will develop an advanced electronic chart display and information
system with additional layers of military information.
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Authorized Assistance: $4,000,177
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Project Start Date: 1 July 1999. Project Completion Date: 31 March 2003.
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