Strategic Aerospace and Defence Initiative (SADI) Contribution Agreement Template

Schedule 1 - SADI General Conditions

1. Definitions

For the purposes of this Agreement, unless the context indicates otherwise:

"A&D"
means aerospace, defence, space and security.
"Acquisition or Divestiture"
means an acquisition of a business, the sale of a business or a merger or amalgamation, that affects Gross Business Revenue.
"Act"
means the Lobbying Act R.S.C. 1985 c. 44 (4th Supp.), as amended from time to time and its regulations.
"Activity"
means a major task that must take place in order to complete the Project. It has duration, during which time the work of that activity is performed, and may have resources and costs associated with that work as reflected in Form C-1 of Schedule 2.
"Agreement"
consists exclusively of the documents listed in section 2.1 of the Articles of Agreement.
"Affiliated Person"
means an affiliated person as defined in the Income Tax Act R.S.C. 1985 c. 1 (5th Supp), as amended.
"Background Intellectual Property"
means the intellectual property rights developed prior to the beginning of the Project and required for the carrying out of the Project or the exploitation of the Project Intellectual Property.
"Change in Control"
means,
  1. if the Recipient is a public company, a proposed change in the identity of the individual or company that owns 20 per cent or more of the voting rights attached to all outstanding voting securities of the Recipient,
  2. if the Recipient is a private company, a proposed change in the identity of the individuals or companies that owns 50 per cent or more of the outstanding voting securities of the Recipient, and
  3. if the Recipient enters into a binding obligation to sell, sells or otherwise disposes of all or substantially all of its assets;
"Collaboration"
means the Recipient's association with one or more Collaboration Partners for the purpose of research and development related to the Project.
"Collaboration Partner"
means, other than the Recipient, any licensed or accredited academic, post-secondary institution in Canada that is involved in the Collaboration.
"Contractual Benefits to Canada"
means any obligations of the Recipient intended to provide economic or social benefits to the population of Canada, set out in Articles 3 or 8 of the Articles of Agreement;
"Contribution"
means the funding, in Canadian dollars, payable by the Minister under this Agreement.
"Default"
means any of the events specified in Section 8.1 of Schedule 1, the occurrence or failure to occur of which constitutes an Event of Default, or becomes an Event of Default with the passage of time.
"Dispose"
means transferring outside of Canada, using an asset for a purpose other than the Project, selling, leasing or otherwise disposing including, in the case of a prototype or pilot plant, the transfer to commercial production, of any asset, if the costs of the manufacture, purchase or creation of the asset formed part of Eligible Costs, but, in any event shall not include abandoning the asset for legitimate business reasons.
"Eligible Costs"
means the costs incurred and paid by the Recipient in respect of the Project as identified in Schedule 2 and in accordance with Schedule 5, excluding those costs that are specifically mentioned in the Statement of Work as not being supported, if any, or other costs prohibited elsewhere in this Agreement.
"Event of Default"
has the meaning assigned to it in section 8.1.
"Fair Market Value"
means the price that would be agreed to in an open and unrestricted market between knowledgeable and willing parties dealing at arm's length, who are fully informed and not under any compulsion to transact.
"Force Majeure"
means any cause which is unavoidable or beyond the reasonable control of the Recipient, including only war, riot, insurrection, strikes or any act of God or other similar circumstance which is beyond the Recipient's control, and which could not have been reasonably circumvented by the Recipient without incurring unreasonable cost.
"Government Fiscal Year"
means the period from April 1 of one year to March 31 of the following year.
"Industrial Research"
means planned research or critical investigation aimed at discovery of new knowledge, with the objective that such knowledge may be useful in developing new products, processes or services or in bringing about a significant improvement to existing products, processes or services.
"Interest Rate"
means the Bank Rate, as defined in the Interest and Administrative Charges Regulations, in effect on the due date, plus 300 basis points, compounded monthly. The Interest Rate for a given month can be found at:
http://www.tpsgc-pwgsc.gc.ca/recgen/txt/71-eng.html
"ITO"
means the Innovation, Science and Economic Development Canada special operating agency known as the Industrial Technologies Office.
"Master Schedule"
means a summary-level Project schedule that identifies the major Activities and work breakdown structure components and Milestones as reflected in Form A of Schedule 2.
"Material Change"
is a change of any aspect of the Project that the Minister determines to be material, including without limitation, the following:
  1. The Project is not expected to be completed by the Project Completion Date;
  2. the total estimated Eligible Costs mentioned in the Statement of Work are expected to be exceeded by 20% or more;
  3. the Project is carried out at locations other than those mentioned in the Statement of Work;
  4. a Change in Control of the Recipient;
  5. a change in the business of the Recipient resulting in a change to the royalty base which would significantly lower the royalty payments to the Minister, other than a change as a result of an event of Force Majeure; or
  6. the loss of, or changes to, any key personnel identified in Article 8 of the Articles of Agreement.
"Maximum Amount to be Repaid"
has the meaning as set forth in Schedule 3 of the Agreement.
"Milestone"
means a significant point or event in the Project as set forth in Form B of Schedule 2.
"Party" or "Parties"
in the singular form mean the Minister or the Recipient, and both of them in the plural form.
"Pre-Competitive Development"
means the translation of industrial research findings into a plan, blueprint or design for new, modified or improved products, processes or services whether intended for sale or use, including the creation of a first prototype which would not be capable of commercial use, and may further include the conceptual formulation and design of products, processes or services and of initial demonstration or pilot projects, but does not include:
  1. initial demonstration or pilot projects if these could be converted or used for industrial application or commercial exploitation; or
  2. routine or periodic alterations to existing products, production lines, manufacturing processes, services, and other on-going operations even though these alterations may represent improvements.
"Project"
means the project as described in the Statement of Work.
"Project 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 by the Recipient and/or any of its Collaboration Partners, their employees, agents or assigns, 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 the Recipient as trade secrets or confidential information. This does not include Background Intellectual Property as defined in this Agreement.
"Public Office Holder"
means a public office holder as defined in the Act.
"Resulting Products"
means all products, services or processes produced using the Project Intellectual Property or that incorporate any of the Project Intellectual Property.
"Recipient Fiscal Year"
means the period for which the Recipient's accounts in respect of its business or property are made up for purposes of assessment under the Income Tax Act, R.S.C. 1985, c. 1 (5th Supp.), as amended.
"Repayment Phase"
means the period of time from the Project Completion Date to the expiry of this Agreement in accordance with Subsection 7.1.
"Schedule"
means a schedule to the Agreement.
"Similar Goods"
means goods or services that closely resemble the goods being transferred, in respect of their component materials and characteristics, and are capable of performing the same functions as, and of being commercially interchangeable with, the goods being transferred.
"Statement of Work"
refers to the description of the Project contained in Schedule 2 and includes all forms and tables attached thereto.
"Third Parties"
means an individual, an institution, corporation, or other legal entity, which is organized for the profit or benefit of its shareholders or other owners.
"Work Phase"
means the period of time from the Eligibility Date to the Project Completion Date.

2. Material Changes

2.1 Other than a Change of Control where the Recipient is a public company, no Material Change will be made without the prior written consent of the Minister. Notice of such a Material Change must be delivered promptly to the Minister and in no event later than 30 days prior to the proposed Material Change.

2.2 In the case where the Recipient is a public company, the Recipient shall notify the Minister in writing of any Change of Control no later than thirty (30) days following any Change of Control, and as a result of such Change of Control, the Minister may, at his discretion, terminate the Agreement and may require that the Recipient pay the Minister up to the Maximum Amount to be Repaid.

3. Disposal of Assets

Subject to subsection 2.2, the Recipient shall retain possession and control of all assets, the cost of which has been contributed to by the Minister under the Agreement, and shall not Dispose of the same, without the prior written consent of the Minister, other than in the ordinary course of business where the aggregate book value of such assets for each occurrence is no greater than $25,000.

4. Claims for Payment

4.1 Payment of Claims

The Minister will pay the Contribution to the Recipient in respect of Eligible Costs incurred on the basis of itemized claims submitted in accordance with the procedures set out in Schedule 5.

4.2 Hold-Back Rights

The Minister may withhold ten per cent (10%) of the Contribution.

4.3 Overpayment by Minister

Where for any reason the Minister determines that the amount of the Contribution disbursed exceeds the amount to which the Recipient is entitled, the Recipient shall repay to the Minister, promptly and no later than 30 days from notice from the Minister, the amount of the overpayment together with interest at the Interest Rate from the date of the notice to the day of payment to the Minister in full. Any such amount is a debt due to Her Majesty the Queen in Right of Canada and is recoverable as such.

4.4 Set-off Rights of Minister

Without limiting the scope of the set-off rights provided for under the Financial Administration Act, it is understood that the Minister may set off against the Contribution, any amounts owed by the Recipient to Her Majesty the Queen in Right of Canada under legislation or contribution agreements and the Recipient shall declare to the Minister all amounts outstanding in that regard when making a claim under Schedule 5.

5. Monitoring and Evaluation

5.1 Minister's Right to Audit Accounts and Records

The Recipient shall, at its own expense, maintain and preserve in Canada and make available for audit and examination by the Minister or the Minister's representatives all books, accounts and records held by the recipient, or by agents or contractors of the recipient, relating to this Agreement and of the information necessary to ensure compliance with the terms and conditions of this Agreement, including repayment to the Minister. The Minister will have the right to conduct such additional audits at the Minister's expense as may be considered necessary. Unless otherwise agreed to in writing by the Minister, the Recipient shall maintain and preserve all books, accounts, invoices, receipts and records and all other documentation related to this Agreement for a period of three (3) years from the expiry or termination of this Agreement.

5.2 Auditor General Right's

The Recipient recognizes, acknowledges and accepts that the Auditor General of Canada may, at the Auditor General's cost, after consultation with the Recipient, conduct an inquiry under the authority of subsection 7.1 (1) of the Auditor General Act in relation to any funding agreement (as defined in subsection 42 (4) of the Financial Administration Act) with respect to the use of funds received.

For the purposes of any such inquiry undertaken by the Auditor General, the Recipient shall provide, upon request and in a timely manner, to the Auditor General or anyone acting on behalf of the Auditor General,

  1. all records held by the Recipient, or by agents or contractors of the Recipient, relating to this Agreement and the use of the funds provided under this Agreement; and
  2. such further information and explanations as the Auditor General, or anyone acting on behalf of the Auditor General, may request relating to this Agreement or the use of the funds provided under this Agreement.

5.3 Access to Third Party Records

The Recipient shall, at all times, ensure that its agents, employees, assigns and contractors are obligated to provide to the Minister or the Auditor General or their authorized representatives records and other information that are in possession of those agents, employees, assigns and contractors and that relate to this Agreement or to the use of the Contribution.

The Recipient shall ensure that any licence agreement it enters into for the exploitation of the Project Intellectual Property will contain similar provisions to permit the Minister to audit licensees' accounts and records in respect to the calculation of amounts that may be payable by the Recipient to the Minister under this Agreement.

5.4 Access to Premises

The Recipient shall provide the representatives of the Minister reasonable access to 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.

5.5 Evaluation

The Recipient shall, at its own expense, participate in the preparation of case studies reporting on the outcomes of the Project, to be completed by the Minister or his agents, in order to assist in the Minister's preparation of an overall evaluation of the value and effectiveness of SADI.

5.6 Extension of Obligations and Rights

The obligations and rights set out above in subsections 5.1, 5.2, 5.3, 5.4 and 5.5. of this Schedule 1 will survive for three years following the expiry or termination of this Agreement.

6. Representations, Warranties and Undertakings

6.1 Power and Authority of Recipient

The Recipient represents and warrants that it is duly incorporated under Canadian law and validly existing and in good standing and has the power and authority to carry on its business, to hold property and to enter into this Agreement and undertakes to take all necessary action to maintain itself in good standing, to preserve its legal capacity and to remain incorporated in a Canadian jurisdiction.

6.2 Authorized Signatories

Each Party represents and warrants that the signatories to the Agreement have been duly authorized to execute and deliver the Agreement.

6.3 Binding Obligations

Each Party represents and warrants that the execution, delivery and performance of this Agreement have been duly and validly authorized and that when executed and delivered, the Agreement will constitute a legal, valid and binding obligation enforceable in accordance with its terms.

6.4 No Pending Suits or Actions

The Recipient represents and warrants that it is under no obligation or prohibition, nor is it subject to or threatened by any actions, suits or proceedings that could or would prevent compliance with the Agreement. The Recipient shall inform the Minister forthwith of any such occurrence during the term of the Agreement.

6.5 Project Intellectual Property

6.5.1 Background Intellectual Property

The Recipient represents and warrants that it owns the Background Intellectual Property or holds sufficient rights, licenses and permissions in the same to permit the Project to be carried out and the Project Intellectual Property to be exploited by the Recipient.

6.5.2 Project Intellectual Property

Subject to subsection 6.5.4 the Recipient shall ensure that title to the Project Intellectual Property is to be vested, and unless otherwise agreed to in writing by the Minister, to remain, exclusively with the Recipient.

6.5.3 License of Project Intellectual Property

Subject to subsection 6.5.4, the Recipient agrees not to grant any right or license to, any of the Project Intellectual Property without the prior written consent of the Minister, except:

  1. in respect of an end-user licensee in conjunction with the sale of Resulting Products; and
  2. to a Collaboration Partner for the purposes of Collaboration, provided that, the Recipient shall ensure that the Recipient holds or will hold sufficient rights, licenses and permissions in such Project Intellectual Property to permit the Project to be carried out and the Project Intellectual Property to be exploited by the Recipient.

6.5.4 Collaboration Partner Development

The Recipient may enter into any ownership, rights sharing, and/or licensing arrangements with a Collaboration Partner in respect of any Project Intellectual Property developed by or with the Collaboration Partner, provided that, the Recipient holds or will hold sufficient rights, licenses and permissions in such Project Intellectual Property to permit the Project to be carried out and the Project Intellectual Property to be exploited by the Recipient.

6.5.5 Protection of Project Intellectual Property

The Recipient shall take appropriate steps to protect the Project Intellectual Property, and shall seek normal contractual assurances that any Collaboration Partner take appropriate steps to protect the Project Intellectual Property. The Recipient shall provide information to the Minister in that regard, upon request.

6.6 Compliance with Environmental Protection Requirements

The Recipient shall apply, in relation to the Project, in all material respects, the requirements of all applicable environmental laws, regulations, orders and decrees and of regulatory bodies having jurisdiction over the Recipient or the Project.

6.7 Other Agreements

The Recipient represents and warrants that it has not entered, and undertakes not to enter, without the Minister's written consent, into any agreement that would prevent the full implementation of the Agreement by the Recipient.

6.8 Dividend Restriction

The Recipient shall not make any dividend payments or other shareholder distributions that would prevent it from implementing the Project or satisfying any other of the Recipient's obligations under this Agreement, including, without limitation, the making of repayments to the Minister hereunder.

6.9 Other Financing

The Recipient remains solely responsible for providing or obtaining the funding, in addition to the Contribution, required for the carrying out of the Project and the fulfilment of the Recipient's other obligations under the Agreement.

6.10 Compliance with Lobbying Act

The Recipient warrants and represents:

  1. that it has filed all Lobbying Act returns required to be filed in respect of persons employed by the Recipient who communicate and/or arrange meetings with public office holders as part of their employment duties, and that it will continue to do so;
  2. that it has not contracted with any person to communicate and/or arrange meetings with public office holders for remuneration that is or would be contingent in any way upon the success of such person arranging meetings with public office holders, or upon the approval of the Recipient's application for SADI funding, or upon the amount of SADI funding paid or payable to the Recipient under this Agreement;
  3. that it will not contract with any person to communicate and/or arrange meetings with public office holders for remuneration that is or would be contingent upon the success of such person arranging meetings with public office holders, or upon the amount of SADI funding paid or payable to the Recipient under this Agreement;
  4. all persons who are or have been contracted by the Recipient to communicate and/or arrange meetings with public office holders in respect of the Project or this Agreement are in full compliance with the registration and other requirements of the Lobbying Act; and
  5. it shall at all times ensure that any persons contracted to communicate and/or arrange meetings with public office holders in respect of the Project or this Agreement are in full compliance with the requirements of the Lobbying Act.

6.11 Renewal of Representations

When submitting a claim for payment, as well as when submitting any report in accordance with Schedule 5, the Recipient must provide SADI with an update, in a form satisfactory to the Minister, on all representations, warranties and undertakings made herein.

7. Term of Agreement

7.1 Repayments to the Minister and Contractual Benefits

The Agreement will expire once all Contractual Benefits to Canada have been fulfilled and the total amount to be repaid to the Minister pursuant to Schedule 3 has been repaid, or the Repayment Period set out in Schedule 3 has elapsed, whichever shall first occur.

7.2 Advance Payment

Any advance or accelerated payment by the Recipient of the amounts due to the Minister under Schedule 3 shall not have the effect of shortening the period set in the Articles of Agreement for the fulfilment of the contractual obligations forming part of the Contractual Benefits to Canada, if any.

8. Default and Recovery

8.1 Events of Default

The Minister may declare that an Event of Default has occurred if:

  1. a receiver, trustee or custodian for all or part of the assets of the Recipient is appointed;
  2. the Recipient makes an assignment for the benefit of creditors;
  3. the Recipient becomes insolvent;
  4. the Recipient files a voluntary petition for bankruptcy;
  5. the Recipient acquiesces to an involuntary petition for bankruptcy petition;
  6. the Recipient is adjudicated as a bankrupt;
  7. an order is made which is not being contested or appealed by the Recipient or a resolution is passed for the winding-up of the Recipient or it is dissolved;
  8. the Recipient ceases to carry on business;
  9. a representation, warranty or material statement contained herein or in any certificate delivered to the Minister hereunder or in connection therewith is at any time incorrect, false or misleading;
  10. the Recipient neglects or fails to pay to the Minister any amount due in accordance with this Agreement or fulfill any of the contractual obligations forming part of the Contractual Benefits to Canada;
  11. the Recipient fails to comply with the obligations regarding audit and evaluation, as set out in Article 5 of this Schedule 1;
  12. the Recipient defaults in the performance or fulfilment or does not comply with any other obligation, condition or covenant hereunder;
  13. the Recipient ceases to carry on the operations it carries on the date of the Agreement or enters into any unrelated operations which may materially adversely affect the Recipient's repayment capacity; or
  14. the Recipient enters into a letter of intent or binding obligation to sell, sells or otherwise disposes of all or substantially all of its assets without prior consent of the Minister;

Except in the case of a default under 8.1 (a) to (h), the Minister will not declare that an event of default has occurred unless he or she has given written notice to the Recipient of the occurrence which, in the Minister's opinion, constitutes an event of default and the Recipient fails, within 30 days of receipt of the notice, either to correct the condition or event or demonstrates, to the satisfaction of the Minister that it has taken such steps as are necessary to correct the condition.

8.2 Remedies on Default

If the Minister declares that an Event of Default has occurred, the Minister may exercise one or more of the following remedies:

  1. suspend any obligation by the Minister to contribute or continue to contribute to the Eligible Costs including any obligation to pay any amount owing prior to the date of such suspension;
  2. terminate any obligation of the Minister to contribute or continue to contribute to the Eligible Costs, including any obligation to pay any amount owing prior to the date of such termination;
  3. require the Recipient to repay to the Minister all or part of the Contribution paid by the Minister to the Recipient, together with interest from the day of demand at the Interest Rate;
  4. pay the Minister the total of all amounts required to be repaid pursuant to the Agreement or the Maximum Amount to be Repaid, whichever shall be the greater, less the total of all Annual Repayments paid to the Minister together with interest from the day of demand at the Interest Rate;
  5. pay the Minister an amount equal to the Maximum Amount to be Repaid, less the total of all Annual Repayments paid to the Minister by the Recipient, together with interest from the day of demand at the Interest Rate;
  6. terminate the Agreement; or
  7. post a notice on the Innovation, Science and Economic Development Canada website disclosing that the Recipient is in Default under the provisions of this Agreement and describing generally the remedies, if any, that the Minister has accordingly exercised.

In any event, the above remedies will only be used to obtain, in the aggregate, no more than the Maximum Amount to be Repaid.

8.3 No Waiver

The rights and remedies of the Minister under this Agreement shall be cumulative and not exclusive of any right or remedy that he would otherwise have.

The fact that the Minister refrains from exercising a remedy he or she is entitled to exercise under the Agreement will not constitute a waiver of such right and any partial exercise of a right will not prevent the Minister in any way from later exercising any other right or remedy under the Agreement or other applicable law.

9. Event of Force Majeure

The Recipient will not be in Default by reason only of any failure in the performance of the Project in accordance with Schedule 2 if such failure arises without the fault or negligence of the Recipient and is caused by any event of Force Majeure.

10. Notice

10.1 Form and Timing of Notice

The Minister or the Recipient may send any written notice by any pre-paid method, including regular or registered mail, courier or facsimile. Notice will be considered as received upon delivery by the courier, or one day after being sent by facsimile or five (5) calendar days after being mailed.

10.2 Change of Address

A Party may change the address which that Party has stipulated in the Agreement by notifying in writing the other Party of the new address.

10.3 Changes in Regard to Recipient's Business

The Recipient shall, in advance and in writing, and subject to Sections 2 and 3 of this Schedule 1, notify the Minister in the event of Acquisition or Divestiture. In the case where the Recipient is a public company, the Recipient shall notify the Minister in writing of any Acquisition or Divestiture contemporaneously with any press release, or filing of a public regulatory notice in respect of such Acquisition or Divestiture.

11. Compliance with Laws

In implementing the Agreement, the Recipient shall comply with all applicable federal, provincial and municipal laws, including but not limited to statutes, regulations, by-laws, ordinances and decrees.

12. Members of Parliament

The Recipient represents and warrants that no member of the House of Commons will be admitted to any share or part of this Agreement or to any benefit to arise therefrom. No person who is a member of the Senate will, directly or indirectly, be a party to or be concerned in this Agreement.

13. Annual Appropriations

13.1 Parliamentary Allocation

Any payment by the Minister under this Agreement is subject to there being an appropriation for the Government Fiscal Year in which the payment is to be made; and to cancellation or reduction in the event that departmental funding levels are changed by Parliament.

13.2 Lack of Appropriation

If the Minister is prevented from disbursing the full amount of the Contribution due to a lack or reduction of appropriation or departmental funding levels, the Parties agree to review the effects of such a shortfall in the Contribution on the implementation of the Agreement and to adjust, as appropriate, the Payments to the Minister identified in Schedule 3 and the contractual obligations forming part of the Contractual Benefits to Canada.

14. Confidentiality

14.1 Consent Required

Subject to Schedule 4 and the Access to Information Act, each party shall keep confidential and shall not without the consent of all Parties disclose the contents of the Agreement and the documents pertaining thereto, whether provided before or after the Agreement was entered into, or of the transactions contemplated herein.

14.2 International Dispute

The Minister is hereby authorized to disclose any of the information referred to in paragraph 14.1 above where, in the opinion of the Minister, such disclosure is required to an international trade panel for the purposes of the conduct of a dispute in which Canada is a party or a third party intervener. The Minister shall give prior notice to the Recipient of such disclosure.

14.3 Financing, Licensing and Subcontracting

The Minister hereby consents to the Recipient disclosing this Agreement, and any portion or summary thereof, for any of the following purposes:

  1. securing additional financing;
  2. licensing for commercial exploitation; or
  3. confirming to agents, contractors and subcontractors of the Recipient that all agents, contractors and subcontractors must agree to provide the Minister and the Auditor-General with access to their records and premises.

Provided that any person to whom this Agreement, or any portion or summary thereof is disclosed shall execute a non-disclosure agreement prior to such disclosure.

15. Consent of the Minister

Whenever the Agreement provides for the Recipient obtaining the consent or agreement of the Minister, it is understood that such consent or agreement will not be unreasonably withheld and that the Minister may make the issuance of such consent or agreement subject to reasonable conditions.

16. No Assignment of Agreement

The Recipient shall not assign the Agreement or any part thereof without the prior written consent of the Minister. Any attempt by the Recipient to assign this Agreement or any part thereof, without the express written consent of the Minister, is void.

17. Compliance with Post-Employment Provisions

The Recipient confirms that no current or former public servant or Public Office Holder to whom the Values and Ethics Code for the Public Service, the Values and Ethics Code for the Public Sector, the Policy on Conflict of Interest and Post-Employment or the Conflict of Interest Act apply, will derive a direct benefit from this Agreement unless the provision or receipt of such benefits is in compliance with such legislation and codes.

18. Contribution Agreement Only; Indemnification; Limitation of Liability

18.1 Contribution Agreement Only

The Agreement is a contribution agreement only, not a contract for services or a contract of service or employment, and nothing in the Agreement, the Parties relationship or actions is intended to create, or be construed as creating, a partnership, employment or agency relationship between them. The Recipient is not in any way authorized to make a promise, agreement or contract and to incur any liability on behalf of Canada or to represent itself as an agent, employee or partner of the Crown, including in any agreement with a third party, nor shall Canada make a promise, agreement or contract and incur any liability on behalf of the Recipient, and the Recipient shall be solely responsible for any and all payments and deductions required by the applicable laws.

18.2 Indemnification

Except for any claims arising from the gross negligence or gross fault of Canada's employees, officers, agents or servants, the Recipient agrees, at all times, to indemnify and save harmless, Canada and any of its officers, servants, employees or agents from all and against all claims and demands, loss, costs, damages, actions, suits or other proceedings by whomsoever made, brought or prosecuted, in any manner based upon, occasioned by or attributable to the execution of this Agreement or any action taken or things done or maintained by virtue hereof, or the exercise in any manner of rights arising hereunder.

18.3 Limitation of Liability

Notwithstanding anything to the contrary contained herein, Canada shall not be liable for any direct, indirect, special or consequential damages of the Recipient nor for the loss of revenues or profits arising based upon, occasioned by or attributable to the execution of this Agreement, regardless of whether such a liability arises in tort (including negligence), contract, fundamental breach or breach of a fundamental term, misrepresentation, breach or warranty, breach of fiduciary duty, indemnification or otherwise.

19. Binding Agreement

This Agreement is binding on the Parties and their successors and permitted assigns.

20. Severability

Any provision of this Agreement which is prohibited by law or otherwise deemed 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.

21. Applicable Law

This Agreement will be interpreted in accordance with the laws and regulations of Canada and of the province in which the Recipient's head office is located. The word "law" used herein has the same meaning as in the Interpretation Act, R.S.C., 1985, c. I-21.

22. Signature in Counterparts

This Agreement may be signed in counterparts and such counterparts may be delivered by facsimile or by other acceptable electronic transmission, each of which when taken together, will constitute an original Agreement.

23. Alternate Dispute Resolution

If a dispute arises concerning the application or interpretation of this Agreement, the Parties will attempt to resolve the matter through good faith negotiation, and may, if necessary and the Parties consent in writing, resolve the matter through mediation by a mutually acceptable mediator or arbitration in accordance with the Commercial Arbitration Code set out in the schedule to the Commercial Arbitration Act (Canada), and all regulations made pursuant to that Act.

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