Strategic Aerospace and Defence Initiative (SADI) Contribution Agreement Template (00756)

1. Definition

"Special Purpose Equipment" means

1. equipment, including ancillary systems, instrumentation, or special test equipment that is purchased, leased, manufactured or otherwise acquired for the purposes of the Project, the item cost of which exceeds $250,000, excluding jigs, tools, dies and fixtures; and
2. prototypes that are designed and built by the Recipient to demonstrate the technology to be commercialized.

2. Disposal and Repayment of Special Purpose Equipment

1. Disposal

   Except in the situation described in section (c) below, if the Recipient disposes any Special Purpose Equipment, the Minister will require the Recipient to repay the greater of an amount equal to that of

   1. multiplying the proceeds of disposition of the Special Purpose Equipment by the ratio of the total amount of the Contribution paid by the Minister to the total amount paid by the Recipient for supported Eligible Costs; and
   2. multiplying the Fair Market Value of the Special Purpose Equipment on the date of the transfer to commercial production, transfer outside of Canada, sale, lease or other disposition by the ratio of the total amount of the Contribution paid by the Minister to the total amount paid by the Recipient for Eligible Costs.

   The Recipient shall make such repayment within 30 days of the transfer to commercial production, transfer outside of Canada, sale, lease, or other disposition of the Special Purpose Equipment.

2. Reduction in Amounts Repayable

   Any repayments made in respect of Special Purpose Equipment pursuant to subsection 2(a) shall be credited to and applied against the total amount which the Recipient is required to repay to the Minister pursuant to Schedule 3 hereof.

3. Exception to Repayment on Special Purpose Equipment

   If the estimated cost as set out in the Statement of Work of all of the items of Special Purpose Equipment, other than prototypes, is 30% or less of the total estimated Eligible Costs, the Recipient will not be obligated to pay the Minister for those items which are transferred by the Recipient to commercial production in Canada.

This exception shall not reduce the Maximum Amount to be Repaid pursuant to Schedule 3 of this Agreement.

3. Costing Principles

1. To be an Eligible Cost, the Special Purpose Equipment must be necessary for the performance of the Project, be described in sufficient detail herein so as to be readily identifiable, and the relevant cost be specified in the Special Purpose Equipment form attached.
2. If the Special Purpose Equipment is to be modified or integrated by the Recipient during the Project, the costs related thereto will be eligible only if specifically identified in the Statement of Work in Schedule 2.
3. Eligible Costs for Special Purpose Equipment will be 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 are Eligible Costs, to a maximum equal to the price of the Special Purpose Equipment, if it were purchased at the commencement of the lease period; all interest and carrying charges are to be excluded. For operating leases, the Eligible Cost is the actual lease payments incurred during the performance of the Project.
5. Labour and material costs required in the modification or adaptation of the Special Purpose Equipment, for the purposes of the Project, are Eligible costs.
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.

4. Reporting

In accordance with Schedule 5 (Claim Reports), the Recipient shall report to the Minister, using the Special Purpose Equipment form attached, on all activities associated with Special Purpose Equipment.

The Recipient also agrees to monitor the location and use of all the Special Purpose Equipment that will eventually appear on the list.

Special Purpose Equipment Form

Recipient: