[Industry Canada letterhead]
TECHNOLOGY PARTNERSHIPS CANADA
TPC PROJECT NO: 720-462728
PROJECT TITLE:
Development
of
Very High Speed Digital Signal Processing(DSP) Based
Software Radio Systems
This Agreeent made this 31 day of March, 1999
Between: HER MAJESTY THE QUEEN IN RIGHT OF CANADA as represented by
the Minister of Industry (hereinafter referred to as "the Minister")
And: Spectrum Signal Processing Inc., a corporation duly incorporated under
the laws of British Columbia, (hereinafter referred to as "Spectrum"
or "the Recipient")
[GRAPHIC]-----------------------------------------------------------------------
Technology Partnerships Partenariat technologique
Canada Canada
10th floor, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇ ▇▇▇▇▇▇ (▇▇▇▇▇▇▇) K1A 0C8 [LOGO]
-2-
TABLE OF CONTENTS
INTRODUCTION
1.0 The Agreement
1.1 Deadline for Signature
1.2 Entire Agreement
1.3 Definitions
2.0 The Project
2.1 Conduct of Project
2.2 Time-frame of Project
2.3 Material Changes
2.4 Disposal of Material Assets
2.5 Disposal of Special-Purpose Equipment
2.6 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 Cost Period
3.4 Project Financing and Progress
3.5 Environmental Protection Measures
3.6 Annual Environmental Compliance Certification
3.7 Set-off Rights of Minister
4.0 Claims for Payment
4.1 Claim Procedures
4.2 Hold-Back Rights
4.3 Final Claim
4.4 Certification of Claims
4.5 Overpayment by Minister
5.0 Royalty Payments
5.1 Royalty Rate
5.2 Royalty Base
5.3 Royalty Statements and Payments
5.4 Late Payments
5.5 Dividend Restriction
5.6 No Accelerated Repayment
5.7 Payment Date
6.0 Intellectual Property
6.1 Ownership of Technology
6.2 Commitment to Exploitation in Canada
6.3 Limitation on Transfer of Technology
6.4 Patent Protection
7.0 Monitoring and Reporting
7.1 Annual Financial Statements
7.2 Minister's Right to Audit 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 Changes to Spectrum's Structure
9.0 Representations, Warranties and Undertakings
9.1 Power and Authority of Recipient
9.2 Authorized Signatories
9.3 Binding Obligations
9.4 No Pending Suits or Actions
9.5 No Gifts or Inducements
9.6 Compliance with Environmental Protection Requirements
10.0 Other Government Assistance
10.1 Disclosure
10.2 Continuing Disclosure Obligation
11.0 Dispute Resolution
11.1 Optional Mediation or Arbitration
12.0 Default and Recovery
12.1 Events of Default
12.2 Remedies on Default
12.3 Remedies Cumulative
12.4 No Waiver
12.5 Remedies Fair and Reasonable
13.0 Force Majeure
13.1 Event of Force Majeure
13.2 Definition of Force Majeure
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 Term of Agreement
16.1 Agreement termination date
17.0 General Conditions
17.1 Compliance with Laws
17.2 Members of the House of Commons or the Senate
17.3 Annual Appropriations
17.4 Confidentiality
17.5 No Assignment of Agreement
17.6 Compliance with Post-Employment Provisions
17.7 No Partnership Created
17.8 Binding Agreement
17.9 Severability
17.10 Signature in Counterparts
17.11 Language of Agreement
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
-3-
INTRODUCTION
(i) 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;
(ii) 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 focussing its funding in
results-oriented, near-market projects that involve activities that
▇▇▇▇▇▇ innovation, rapid commercialization and value-added production;
and
(iii) Spectrum Signal Processing Inc. has requested a financial contribution
from the Minister under the Technology Partnerships Canada Program to
develop Very High Speed Digital Signal Processing (DSP) Based Software
Radio Systems for Wireless Infrastructure Base Stations and SIGnals
INTelligence (SIGINT) applications, which can be named "SoftRadio"
elsewhere in this document, with the specific intent of commercially
exploiting the Project results.
In consideration of their respective obligations which are set out below, the
parties agree as follows:
1.0 The Agreement
1.1 Deadline for Signature
This Agreement must be signed by Spectrum Signal Processing, Inc. and
received by the Minister on or before 31 March 1999 failing which it
will be null and void.
1.2 Entire Agreement
This Agreement is made pursuant to the Technology Partnerships Canada
Program, constitutes the entire agreement between the parties and
supersedes all previous documents, negotiations, arrangements,
undertakings and understandings related to its subject matter. In the
event of conflict, the order or precedence amongst the Agreement and
the schedules attached hereto shall be: this Agreement, the Statement
of Work, the TPC Project Cost Principles and any other document
specified in this Agreement.
-4-
1.3 Definitions
For the purposes of this Agreement,
(a) "Agreement" means 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
Schedule E - Project Fact Sheet for News Release
Schedule F - Environmental Mitigation Measures
(b) "Contribution" means the funding, in Canadian dollars, provided by
the Minister under this Agreement.
(c) "Completion Date" means 30 April 2001, which is the date by which
the Project must be completed.
(d) "Effective Date" means 28 September 1998, which is the earliest
date on which Eligible Costs may be incurred.
(e) "Eligible Costs" means those costs incurred by the Recipient with
respect to the activities set out in Schedule A (Statement of
Work) in accordance with Schedule D (TPC Project Cost Principles).
(f) "Fiscal Year" means the federal government fiscal year beginning on
April 1 and ending on the following March 31.
(g) "Gross Project Revenues" means all sales, revenues, receipts,
monies and considerations made, earned or received by any person,
including Spectrum Signal Processing Inc., directly or indirectly
attributable to the sale, lease or other transfer of the
Resulting Products, whether received in cash, or by way of
benefit, advantage, or concession, 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. A Resulting Product will be deemed sold, leased
or transferred at the time the transaction is recorded in the
books, in accordance with generally accepted accounting
principles, applied on a consistent basis.
-5-
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.
(h) "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.
(i) "Intellectual Property" means all intellectual property rights in the
Project Technology, including, without limitation, all patents, copyrights,
industrial designs, design patents, trade-marks, and any registrations or
applications for registration of the same.
(j) "Project" means the Development of Very High Speed Digital Signal Processing
(DSP) Based Software Radio platforms for Wireless Infrastructure Base
Stations and SIGnals INTelligence(SIGINT) applications(SoftRadios), as
more fully described in the Statement of Work (Schedule A).
(k) "Project Technology" means all technology and technical data conceived,
produced, developed or reduced to practice in carrying out the Project,
including, without limitation, all designs, specifications, software, data,
drawings, plans, reports, patterns, models, prototypes, pilot plants,
practices, inventions, methods, processes or other information.
(l) "Resulting Products" means
(i) The Very High Speed Digital Signal Processing (DSP) Based Software
Radio platforms for Wireless Infrastructure Base Stations and SIGnals
INTelligence(SIGINT) applications("SoftRadios"), variants,
derivatives and any improved versions thereof developed using Project
Technology;
(ii) all applications using Project Technology, including applications for
commercial narrow band and wideband cellular wireless infrastructure
base stations and military SIGnals INTelligence(SIGINT) and also all
other commercial applications which incorporate results of the
Project; and
(iii) all other commercial applications which are made using Project
Technology, Intellectual Property, Special-Purpose Equipment,
equipment, machinery and any item of Project tooling.
-6-
(m) "Sharing Ratio" means the percentage set out in paragraph 3.1(a).
(n) "Special-Purpose Equipment" means equipment, including ancillary
systems, instrumentation, special test equipment, prototypes and pilot
plants to develop and demonstrate the product, service, process or
system to be commercialized, that is purchased, leased, manufactured
or otherwise acquired for the purposes of the Project, the item cost
of which exceeds $250,000 (except for prototypes and pilot plants
where no minimum cost applies).
(o) "Start Date" means 1 November 1998, which is the date by which the
Project must be commenced.
2.0 The Project
2.1 Conduct of Project
Spectrum Signal Processing Inc. will carry out the Project in a diligent
and professional manner using qualified personnel.
2.2 Time-frame of Project
Spectrum Signal Processing Inc. will:
(a) commence the Project on or before 1 November 1998; and
(b) complete the Project in accordance with the Statement of Work
(Schedule A) on or before the Completion Date.
2.3 Material Changes
No material changes will be made to the estimated total scope, nature,
or financing of any element of the Project or ownership or the key
personnel of Spectrum Signal Processing Inc., without the prior written
consent of the Minister. Without limiting the generality of the
foregoing provision, a material change will have occurred if:
(a) a Project performance milestone described in the Statement of Work is
not expected to be achieved within three 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; or
-7-
(c) the Project is carried out at locations other than: Burnaby:
2.4 Disposal of Material Assets
Spectrum Signal Processing Inc. will not, without the prior written consent
of the Minister, sell, transfer or otherwise dispose of, nor cease to use
for the purposes of the Project, nor remove nor relocate nor transfer to a
use other than the Project, any material asset acquired for the Project
including any equipment, machinery and tooling, the cost of which has been
contributed to by the Minister, under this Agreement.
2.5 Disposal of Special-Purpose Equipment
Except in the situation described in subsection 2.6, if Spectrum Signal
Processing Inc. transfers to commercial production, transfers outside of
Canada, sells, leases, ceases to use or otherwise disposes of any
Special-Purpose Equipment, Spectrum Signal Processing Inc. will pay to the
Minister the greater of an amount equal to that of:
(a) multiplying the proceeds of disposal of the Special-Purpose
Equipment by the Sharing Ratio; 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, cessation of use or other disposal by the Sharing
Ratio,
but in no event will the amount payable exceed the amount of the
Contribution paid by the Minister under this Agreement. Spectrum Signal
Processing Inc. will make such payment within 30 days of the transfer to
commercial production, transfer outside of Canada, sale, lease, or other
disposal of the Special-Purpose Equipment.
2.6 Transfer of Special Purpose Equipment to Production
If the estimated cost as set out in Schedule A (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, Spectrum Signal Processing Inc. will not be obligated to pay the
Minister for those items of Special-Purpose Equipment which are transferred
to commercial production in Canada by Spectrum Signal Processing Inc.
-8-
3.0 The Contribution
3.1 Sharing Ratio and Contribution Ceiling
Subject to all the other provisions of this Agreement, the Minister will
make a repayable Contribution to Spectrum Signal Processing Inc., with
respect to the Project, of the lesser of:
(a) 31.04% of the Eligible Costs; and
(b) $6,300,000.
Irrespective of the limitation on the Minister's Contribution under this
Agreement, Spectrum Signal Processing Inc. shall remain obligated to
perform the whole of the Project, as described in the Statement of Work.
3.2 Annual Contribution Disbursement Limits
The disbursement of the Contribution will not exceed the following amounts,
in each of the following Fiscal Years:
1998 - 1999 $ Unlimited subject to the Sharing ratio and the Contribution
ceiling shown in 3.1 above
1999 - 2000 $2,805,000
2000 - 2001 $2,891,000
2001 - 2002 $ 205,000
and the Minister will have no obligation to pay any amount in any other
Fiscal Year. No portion of these maximum annual amounts will be rolled
over to previous or subsequent Fiscal Years, without the consent of the
Minister, who will consider any such requests on a case-by-case basis.
3.3 Eligible Cost Period
The Minister will not contribute to any Eligible Costs incurred by Spectrum
Signal Processing Inc. prior to the Effective Date nor after the Completion
Date.
3.4 Project Financing and Progress
The Minister will have no obligation to make all or part of the Contribution
unless the Minister remains satisfied with the overall financing of the
Project and the progress of the Project.
-9-
3.5 Environmental Protection Measures
The Minister, being satisfied that any potentially adverse
environmental effects that may be caused by the Project are
insignificant, will have no obligation to make all or part of the
Contribution unless Spectrum Signal Processing Inc. has incorporated
and utilized environmental protection measures in relation to the
Project that satisfy the requirements of all regulatory bodies
having jurisdiction over Spectrum Signal Processing Inc. or the
Project, or both, and certifies to the Minister that it has done so.
3.6 Annual Environmental Compliance Certification
Any certification required pursuant to subsection 3.5 must be
provided together with the first claim for payment under this
Agreement, and subsequent certifications must be provided annually.
3.7 Set-off Rights of Minister
The Minister may set off against the Contribution, any amounts owed
by Spectrum Signal Processing Inc. to Her Majesty in Right of Canada,
including amounts pursuant to any other agreement for which the
Minister is responsible, including agreements under the Defence
Industry Productivity Program.
4.0 Claims for Payment
4.1 Claim Procedures
The Minister will pay the Contribution to Spectrum Signal Processing
Inc. in respect of Eligible Costs incurred on the basis of itemized
claims which will:
(a) be submitted in writing, preferably quarterly, but not more
frequently than once per month;
(b) be certified by a senior officer of Spectrum Signal Processing
Inc.;
(c) be accompanied by details of all costs being claimed,
substantiated by such documents as may be required by the
Minister, and presented in accordance with the major elements
identified in Schedule A (Statement of Work);
(d) be accompanied by a brief technical report on work completed
and confirmation of any Statement of Work milestones attained
during the claim period; and
-10-
(e) include a deduction for any Eligible Costs included in previous claims
which have not been paid.
4.2 Hold-Back Rights
The Minister will have no obligation to pay more than 90% of the
Contribution prior to the date on which the Minister has approved the final
claim referred to in subsection 4.3.
4.3 Final Claim
Within 90 days of the Completion Date, the final claim for payment will be
submitted by Spectrum Signal Processing Inc., accompanied by:
(a) an itemized statement of all Eligible Costs incurred and paid in
performance of the Project;
(b) certification by a senior officer of Spectrum Signal Processing Inc.
that the Eligible Costs referred to in the itemized statement:
(i) have been incurred and paid;
(ii) are related to the activities described in the Statement of Work
(Schedule A); and
(iii) are in compliance with the requirements set out in the TPC Project
Cost Principles and its Addendum (Schedule D); and
(c) a final report of the Project in accordance with subsection 7.5.
Upon approval by the Minister of the final claim, the Minister will pay any
outstanding amount of the Contribution.
4.4 Certification of Claims
The Minister may require that any claim submitted for payment be certified
by Spectrum Signal Processing Inc.'s auditor or chief financial officer or
by an auditor approved by the Minister, at the Recipient's expense.
4.5 Overpayment by Minister
Where for any reason:
(a) Spectrum Signal Processing Inc. is not entitled to the Contribution; or
-11-
(b) the Minister determines that the amount of the Contribution disbursed
exceeds the amount to which Spectrum Signal Processing Inc. is
entitled,
Spectrum Signal Processing Inc. 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.
5.0 Royalty Payments
5.1 Royalty Rate
Spectrum Signal Processing Inc. will pay to the Minister a royalty of 2.5%
of Gross Project Revenues.
5.2 Royalty Base
The royalty in subsection 5.1 is pyable on Gross Project Revenues generated
commencing on 1 January 2001. If, by 31 December 2006, the total
cumulative royalty payments paid or due equal or exceed $11,428,000, no
further royalty payments will be exigible. If, by 31 December 2006, the
total cumulative royalty payments paid or due do not equal or exceed
$11,428,000, royalty payments will continue to be exigible until the total
cumulative royalty payments paid or due equal $11,428,000.
5.3 Royalty Statements and Payments
Spectrum Signal Processing Inc. will provide to the Minister a statement,
certified by Spectrum's external auditor or senior financial officer of the
Gross Project Revenues generated during the period beginning on 1 Jan 2001,
and ending on 31 December 2001. The statement and royalty payment will be
provided to the Minister no later than 1 February 2002, and annually
thereafter.
5.4 Late Payments
Spectrum Signal Processing Inc. will pay interest calculated and compounded
monthly on overdue royalty payments, at the Interest Rate from the date on
which the royalty payment is due, until payment in full is received by the
Minister. Such interest is payable without notice to Spectrum Signal
Processing Inc., and in addition to any remedies of the Minister for
default by Spectrum Signal Processing Inc., as set out in section 12.0 of
this Agreement.
-12-
5.5 Dividend Restriction
Spectrum Signal Processing Inc. will not make any dividend payments or
other shareholder distributions that would prevent it from implementing the
Project or that would prevent it from making the royalty payments required
in this Agreement.
5.6 No Accelerated Repayment
The repayment of the Contribution will take place in accordance with the
timetable and method specified in this section 5.0 and Spectrum Signal
Processing Inc. shall not accelerate the rate of repayment, in any way.
5.7 Payment Date
Whenever any payment date under this section 5.0 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.
6.0 Intellectual Property
6.1 Ownership of Technology
Spectrum Signal Processing Inc. will obtain and retain title to all
Intellectual Property and Project Technology.
6.2 Commitment to Exploitation in Canada
Spectrum Signal Processing Inc. will exploit the Intellectual Property
developed under this Project through the production of the Very High Speed
Digital Signal Processing (DSP) Based Software Radio Systems for Wireless
Infrastructure Base Stations and SIGnals INTelligence (SIGINT) applications
in Canada and through the promotion, distribution and sale of the Very High
Speed Digital Signal Processing (DSP) Based Software Radio Systems for
Wireless Infrastructure Base Stations and SIGnals INTelligence (SIGINT)
applications in Canada and elsewhere.
Spectrum Signal Processing Inc. will ensure that follow-on production of
the Very High Speed Digital Signal Processing (DSP) Based Software Radio
Systems for Wireless Infrastructure Base Stations and SIGnals INTelligence
(SIGINT) applications and of its variants and derivatives occurs within
Canada, unless the Minister agrees, in advance, in writing, to the
contrary.
-13-
6.3 Limitation on Transfer of Technology
(a) General
Spectrum Signal Processing Inc. will not, without the prior written
consent of the Minister,
(i) grant any right in or transfer title to the Project Technology,
Intellectual Property, or in any applicable technology
incorporated in Special-Purpose Equipment, including the
assignment, sale, licence and lease to any person; or
(ii) transfer electronically any software developed during the course
of the Project; or
(iii) make use of the Project Technology, Intellectual Property,
Special-Purpose Equipment, and other Project machinery and
equipment, of any kind, or any part thereof,
for the purpose of producing or manufacturing outside Canada any of the
Resulting Products or any product that is substantially the same as any
of the Resulting Products and is made using Project Technology or
Intellectual Property;
(b) Patent Disclosures
Notwithstanding paragraph (a), Spectrum Signal Processing Inc. does not
require the consent of the Minister to make any disclosure of
information required by law for the purpose of obtaining a patent;
(c) Licence for Use Only
Notwithstanding paragraph (a), Spectrum Signal Processing Inc. does not
require the consent of the Minister to licence or sub-licence for use
only any of the Project Technology or Intellectual Property in
conjunction with the sale of any of the Resulting Products;
(d) Compliance by Licensees
Spectrum Signal Processing Inc. will impose the restriction on transfer
outlined in paragraph (a) on all licensees, and other transferees of
title to or any right to use any of the Project Technology or
Intellectual Property; and
-14-
(e) Sub-Contractors and Consultants
Spectrum Signal Processing Inc. will ensure that no sub-contractor
or consultant acquires any rights to the Project Technology,
Intellectual Property and Special-Purpose Equipment without the
proper written consent of the Minister.
6.4 Patent Protection
(a) Spectrum Signal Processing Inc. will apply for appropriate patent
protection for any inventions resulting from the Project.
(b) If Spectrum Signal Processing Inc. elects not to apply for
appropriate patent protection in respect of inventions resulting
from the Project, Spectrum Signal Processing Inc. will
(i) so advise the Minister forthwith; and
(ii) if so requested by the Minister, assign the invention to Her
Majesty the Queen in Right of Canada, together with all
patents, patent applications and rights to obtain patents
therefor.
7.0 Monitoring and Reporting
7.1 Annual Financial Statements
Spectrum Signal Processing Inc. will provide the Minister with a copy
of its audited annual financial statements within one hundred and
twenty (120) days of the end of each of Spectrum Signal Processing
Inc.'s fiscal years.
7.2 Minister's Right to Audit Accounts and Records
Spectrum Signal Processing Inc. 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 royalties. 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 Spectrum Signal Processing
Inc.'s external auditors. Any licence agreement for the production of
the Resulting Products between Spectrum Signal Processing Inc. and a
third party will
-15-
contain similar provisions to permit the Minister to audit the
calculation of royalties payable under this Agreement.
7.3 Access to Project
Spectrum Signal Processing Inc. will provide the representatives of
the Minister reasonable access to Spectrum Signal Processing Inc.'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
Spectrum Signal Processing Inc. 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, relating to
this project.
7.5 Project Progress Reports:
Spectrum Signal Processing Inc. will provide the Minister with
semi-annual progress reports for 6 month periods ending 31 December and
30 June (or as otherwise specified in the Statement of Work)
commencing on 30 June 1999 and ending with the final report within 60
days following the Completion Date. The reports will include:
(a) a description of the progress in completion of the Project, in
comparison with the milestones contained in the Statement of Work
and the related Project expenditures for that segment of Project
activities;
(b) sufficient information to enable the Minister to assess the
Project's contribution to jobs and economic growth, as set out in
Schedule B;
(c) an update of the Project cost estimates;
(d) an indication of any delay in completing the Project and the
reasons for such delay;
(e) an update of the projected market and any changes in the projected
sales and royalties, as set out in Schedule C;
(f) a cumulative list summarizing any acquisition and current holdings
of Special-Purpose Equipment as set out in Schedule A1; and
(g) an indication of any planned transfer to commercial production,
transfer outside of Canada, sale, lease or other disposal of
Special-Purpose Equipment.
-16-
7.6 Commercial Exploitation Reports
From 30 April 2001 until the termination of the Agreement, Spectrum
Signal Processing Inc. will continue to provide annual reports to the
Minister, within one hundred and twenty (120) days of the end of each
of Spectrum Signal Processing Inc.'s fiscal years, which will indicate:
(a) whether the Project is achieving its projected commmercial and
economic objectives including job creation, as set out in Schedule
B;
(b) an update of the projected market and any changes in the projected
sales and royalties, as set out in Schedule C; and
(c) an indication of any completed or planned transfer to commercial
production, transfer outside of Canada, sale, lease or other
disposal of Special-Purpose Equipment.
8.0 Special Conditions
8.1 Changes to Spectrum's Structure
Notwithstanding the provision of section 2.3 concerning ownership, the
Minister recognizes that market conditions may not allow Spectrum to
seek the Minister's consent before a change in ownership. Accordingly,
Spectrum undertakes to promptly inform and seek the consent of the
Minister of any significant change in the composition of Spectrum's
majority shareholders.
9.0 Representations, Warranties and Undertakings
9.1 Power and Authority of Recipient
Spectrum Signal Processing Inc. represents and warrants that it is duly
incorporated and validly existing and in good standing under the laws
of Canada 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.
-17-
9.2 Authorized Signatories
Spectrum Signal Processing Inc. represents and warrants that the
signatories to this Agreement have been duly authorized to execute and
deliver this Agreement on its behalf.
9.3 Binding Obligations
Spectrum Signal Processing Inc. represents and warrants that the
execution, delivery and performance of this Agreement have been duly
and validly authorized and that when executed and delivered, this
Agreement will constitute a legal, valid and binding obligation of
Spectrum Signal Processing Inc. enforceable in accordance with its
terms.
9.4 No Pending Suits or Actions
Spectrum Signal Processing Inc. 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, and will advise the Minister forthwith of any such
occurrence during the term of this Agreement.
9.5 No Gifts or Inducements
Spectrum Signal Processing Inc. 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 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.
9.6 Compliance with Environmental Protection Requirements
Spectrum Signal Processing Inc. warrants and undertakes that it will
maintain environmental protection measures in relation to the Project
that satisfy the requirements of all regulatory bodies having
jursidiction over Spectrum Signal Processing Inc. or the Project and
certify to the Minister annually its compliance with such requirements.
10.0 Other Government Assistance
10.1 Disclosure
Spectrum Signal Processing Inc. hereby acknowledges that for the
purposes of this Agreeement, except for scientific research and
experimental development tax credits, no other federal, provincial or
municipal government financial assistance other than that
-18-
described below has been requested or received by Spectrum Signal
Processing Inc. for the costs of this Project.
Federal $00
Provincial $00
Municipal $00
Total $00
10.2 Continuing Disclosure Obligation
Spectrum Signal Processing Inc. will inform the Minister promptly in
writing of any other federal, provincial or municipal goverment
assistance (except for scientific research and experimental development
tax credits) to be received for Eligible Costs of the Project and the
Minister will have the right to reduce the Contribution under this
Agreement to the extent of any such assistance.
11.0 Dispute Resolution
11.1 Optional Mediation or Arbitration
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.
12.0 Default and Recovery
12.1 Events of Default
The Minister may declare an event of default has occured if:
(a) Spectrum Signal Processing Inc. becomes insolvent or 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
Spectrum Signal Processing Inc. or a resolution is passed for the
winding-up of Spectrum Signal Processing inc. or it is dissolved;
-19-
(c) Spectrum Signal Processing Inc. has intentionally submitted false or
misleading information to the Minister or made a false or misleading
representation;
(d) in the opinion of the Minister, acting reasonably, a material adverse
change in risk affecting the performance of the terms and conditions
of this Agreement has occurred;
(e) any term, condition or undertaking in this Agreement is not complied
with in any material respect; or
(f) Spectrum Signal Processing Inc. 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), (e) or (f) unless the Minister has
given notice to Spectrum Signal Processing Inc. of the condition or event
which in the Minister's opinion constitutes an event of default and
Spectrum Signal Processing Inc. has failed, within 30 days of receipt of
the notice, to demonstrate to the satisfaction of the Minister that it has
either corrected the condition or event complained of or demonstrated that
it has taken such steps as are necessary to correct the condition or event
and so notified the Minister.
12.2 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 of the Minister to contribute or continue to
contribute to the Eligible Costs of the Project including any
obligation to pay any amount owing prior to the date of such
suspension;
(b) terminate any obligation of the Minister to contribute or continue to
contribute to the Eligible Costs of the Project, including any
obligation to pay any amount owing prior to the date of such
termination;
(c) require Spectrum Signal Processing Inc. to repay to the Minister all
or part of the Contribution which has been paid by the Minister to
Spectrum Signal Processing Inc., together with interest from the
date of demand at the Interest Rate;
(d) require Spectrum Signal Processing Inc. to pay to the Minister all or
part of the royalties and other amounts due under this Agreement;
-20-
(e) if an event of default has occurred in relation to paragraph 12.1(a) or
(b), or as a result of the failure of Spectrum Signal Processing Inc.
to comply with the provisions of article 5.0 or subsections 6.1, 6.2 or
6.3, direct Spectrum Signal Processing Inc., and Spectrum Signal
Processing Inc. will immediately comply, to transfer and deliver to the
Minister, at no cost to the Minister, title to, possession of, and all
rights of Spectrum Signal Processing Inc. in the Intellectual Property;
and
(f) direct Spectrum Signal Processing Inc. and Spectrum Signal Processing
Inc. will immediately comply, to transfer and deliver to the Minister,
at no cost to the Minister, title to, possession of, and all rights of
Spectrum Signal Processing Inc. in the Special-Purpose Equipment.
12.3 Remedies Cumulative
The Minister may exercise any or all of the remedies set out in subsection
12.2, provided that in exercising any remedy in accordance with paragraph
12.2 (c) or (d), in respect of any default other than a breach of paragraph
12.1(f), the Minister will credit Spectrum Signal Processing Inc. for any
royalties paid to the Minister under this Agreement.
12.4 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.
12.5 Remedies Fair and Reasonable
Spectrum Signal Processing Inc. acknowledges that in view of the public
policy objectives served by the Minister's agreement to make the
Contribution, the fact that the Contribution comes from public monies, and
that the amount of damages or loss 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 Agreement and to do so in the manner provided for in this Agreement if
an event of default occurs.
-21-
13.0 Force Majeure
13.1 Event of Force Majeure
Spectrum Signal Processing Inc. 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 Spectrum Signal Processing Inc. and is caused by any event of force
majeure.
13.2 Definition of Force Majeure
Force majeure means any cause which is unavoidable or beyond the
reasonable control of Spectrum Signal Processing Inc., including war,
riot, insurrection, orders of government, strikes or any Act of God or
other similar circumstance which is beyond Spectrum Signal Processing
Inc.'s control, and which could not have been reasonably circumvented by
Spectrum Signal Processing Inc. without incurring unreasonable cost.
14.0 Announcements
14.1 Consent to Public Announcements
Spectrum Signal Processing Inc. 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 (Project Fact Sheet for News
Release).
14.2 Confidentiality Obligation
The Minister will inform Spectrum Signal Processing Inc. of the date on
which the first public announcement is to be made and Spectrum Signal
Processing Inc. 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 shall
be effectively given if delivered or sent by letter or facsimile, postage
or charges prepaid. Any notice that is delivered shall have been received
on delivery; any notice sent by facsimile shall be deemed to have been
received one working day after having been sent, and any notice mailed
shall be deemed to have been received eight (8) calendar days after being
mailed.
-22-
15.2 Change of Address
Spectrum Signal Processing Inc. 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, Enabling Technologies
Technology Partnerships Canada Fax No: (▇▇▇) ▇▇▇-▇▇▇▇
10th Floor
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇
Any notice to Spectrum Signal Processing Inc. will be addressed to:
Spectrum Signal Processing Inc.
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇.▇.
V5A 4V7
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇, President
Fax No: (▇▇▇) ▇▇▇-▇▇▇▇
16.0 Term of Agreement
16.1 Agreement Termination Date.
This Agreement will terminate on the earlier date of the following:
(a) payment to the Minister by Spectrum Signal Processing Inc. of all
amounts due pursuant to this Agreement; and
(b) 30 April 2015.
-23-
17.0 General Conditions
17.1 Compliance with Laws
Spectrum Signal Processing Inc. will comply with all federal, provincial
and municipal laws governing Spectrum Signal Processing Inc. or the
Project, including but not limited to statutes, regulations, by-laws and
ordinances.
17.2 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.
17.3 Annual Appropriations
Any payment by the Minister under this Agreement is subject to there being
an appropriation for the Fiscal Year in which payment is to be made.
17.4 Confidentiality
Subject to Section 14.0 and to applicable laws, including the Access to
Information Act, the parties shall keep confidential and shall not
disclose the contents of this Agreement nor the transactions contemplated
hereby without the consent of all parties.
17.5 No Assignment of Agreement
Neither this Agreement, nor any part thereof nor any amount thereunder
shall be assigned by Spectrum Signal Processing Inc. without the prior
written consent of the Minister.
17.6 Compliance with Post-Employment Provisions
Spectrum Signal Processing Inc. 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.
17.7 No Partnership Created
The parties declare that nothing in this Agreement shall be construed as
creating a partnership, joint venture or agency relationship between the
Minister and Spectrum Signal Processing Inc.
-24-
17.8 Binding Agreement
This Agreement is binding on the parties and their successors and
permitted assigns.
17.9 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.
17.10 Signature in Counterparts
This Agreement may be signed in counterparts, each of which when taken
together, will constitute an original Agreement.
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
Per: /s/ Illegible
------------------------------------
Technology Partnerships Canada
Spectrum Signal Processing Inc.
Per: /s/ ▇▇▇▇▇ ▇▇▇▇▇
------------------------------------
Title: President & CEO
---------------------------------
Per:
-----------------------------------
Title:
---------------------------------