All references to monetary amounts in this Guide and all funds paid pursuant to the Program are in Canadian currency.

Transcription

1 INTRODUCTION The Alberta Small Business Innovation and Research Initiative (the Program ) is designed to match the ability of Alberta SMEs to provide technology solutions to Challenges presented by End-Users. End- Users have direct access to the market needs, have significant resources available to take new products to market, but may be risk averse or lack in-house innovation capacity. The purpose of the Program is to stimulate the development and commercialization of novel technological solutions, while generating material risk-weighted returns on investment to the Province of Alberta based on economic, social and/or environmental metrics. The Program is managed and administered by Alberta Innovates Technology Futures ( AITF ).In the case of health-related Challenges, Alberta Innovates Health Solutions (AIHS) will provide contributions to the Program in one of two ways: AIHS will contribute funding to the Investment (to be administered by AITF); and Where the End-User is Alberta Health Services through a Strategic Clinical Network ( SCN ), the SCN may apply for funding to AIHS Accelerating Innovations into Care ( AICE ) program, which can be applied to the Contribution. This Alberta Small Business Innovation and Research Initiative Guide (the Guide ) provides the general framework of the Program, including an overview of the funding structure, minimum requirements and eligibility criteria to apply, the application process, the review process and administrative matters. This Guide also sets out the material terms and conditions of the Program which govern approved Projects and provide the rights and obligations of all parties involved. Accordingly, potential Applicants and End- Users should thoroughly review and understand this Guide prior to submitting the Applications. Key definitions are set out in Appendix 1 at the back of this Guide. All references to monetary amounts in this Guide and all funds paid pursuant to the Program are in Canadian currency. 1 DESIRED OUTCOMES (c) (d) (e) (f) (g) (h) Provide traditional sectors of the economy access to innovative technology solutions to lower costs, improve competitiveness and environmental stewardship, by providing feasible technological solutions to defined Challenges; Promote the entry and growth of competitive Alberta technology-oriented SMEs into the global market; Generate measurable, timely and material economic, social and/or environmental benefits for Alberta; Serve as a catalyst for the development and implementation of competitive Alberta technology-oriented SMEs with innovative technology products that generate increased revenues; Generate opportunities for economic diversification within the Province of Alberta; Encourage the employment and retention of highly qualified personnel; Establish new collaborations between MNEs and Alberta technology-based SMEs; and Increase investment into Alberta s technology industries. 2 FUNDING STRUCTURE 2.1 Purpose of Funding For Alberta SMEs, the Program provides funding support, mentorship, and potential first-client opportunities to develop new technology solutions with real market potential, building the SME s supply chain and market access, as well as adding innovation capacity. For End-Users, the Program offers a low risk opportunity to support the development of a solution to a Challenge, and have the opportunity to try and, ideally, purchase the resulting solution. Alberta Innovates Technology Future Industry Investment Programs April 2016 Page 1

2 The Program is designed to support technologies or innovation solutions in the mid-to-late developmental stages. Some early developmental stages may be considered on a case by case basis. Appendix 1, Technology Readiness Levels (TRLs) are provided for reference. The Investment is intended to support the Applicant working in collaboration with the End-User to advance the technology or innovation to market. Technology or innovation solutions to the Challenges may also be found using a technology from a Research Institution. In such cases, the Research Institution must be able to provide a capable team to advance the Project, and a new SME must be established by the Research Institution prior to submitting any Applications. Examples of such teams may be a group of entrepreneurial researchers, researchers with support from private investors or researchers with support from a technology commercialization organization. The funding structure of the Program promotes the Investment having a maximum effect on advancing the technology or innovation solution. 2.2 Use of Sub-Contractors The Applicant may require the services and/or products of another SME, MNE, a government department or agency, and/ or an academic institution (collectively, ( Sub-Contractor(s) ). Where Sub-Contractor(s) are utilized, a collaboration letter, contract or agreement between the Applicant and the Sub-Contractor(s) must be in place prior to executing an Agreement. Applicant shall be responsible for all work, acts and defaults of any of the Sub-Contractor(s). 2.3 Investment AITF s Investment under this Program will be specific to each Project, over a term of no more than five (5) years. The Applicant and the End-User are each required to provide cash and/or In-kind resources, (the Contribution ) and the ratio or percentage of the Contribution to the Project Costs is to be determined before an Agreement can be executed. Applicants with significant cash contributions to the Project are strongly preferred. The Investment is provided to cover Eligible Expenses incurred by the Applicant for any one (1) or more of the following activities: (c) (d) (e) (f) (g) (h) New product research and development; Leading-edge design, engineering and prototype development; Advanced product testing and refinement; Patent development; Manufacturing of a prototype for demonstration; Testing of prototype in an End-user environment; Results assessment and/or verification of technical data; and Other technology development activities may be considered on a case by case basis. 2.4 Eligible Expenses and Contributions Eligible Expenses collectively form the Project Costs. AITF s Investment must only be used to pay Eligible Expenses of the approved Project. The funds must be used efficiently and only for costs essential to the success of the Project. Guidance regarding what constitutes an Eligible Expense and Ineligible Expense is outlined in Appendix 1. Applicants should review those terms carefully and understand the scope of Eligible Expenses before preparing the Applications to ensure that only acceptable Eligible Expenses are provided as Project Costs. Any expense not listed as an Eligible Expense constitutes an Ineligible Expense and must be preapproved in writing by AITF prior to including the expense as a Project Cost. Likewise, costs incurred Alberta Innovates Technology Future Industry Investment Programs April 2016 Page 2

3 after the Project has been formally approved for funding by AITF, but before the Agreement has been signed by all required parties are Eligible Expenses only with written approval from AITF. The monetary value placed on the In-kind resources will only be recognized as an Eligible Expense where the costs incurred by the Applicant or End-User are incremental to its ordinary course of business, directly attributable to the Project and easily auditable. AITF s Proposal form permits the Applicant to identify any Ineligible Expense the Applicant seeks to have pre-approved as an Eligible Expense. AITF will approve or deny such requests during its evaluation process. It is a condition of the Investment that AITF has the right, in addition to any other rights under this Guide or the Agreement, to require the Applicant to repay all amounts of the Investment which were used to cover Ineligible Expenses, and such amount is an immediate debt owed and repayable by the Applicant to AITF. 2.5 Stacking Limit AITF encourages co-funding of Projects with other funding agencies. The maximum level of total government assistance (whether from federal, provincial/territorial, and/or municipal departments, Crown agencies or Crown corporations) in respect of the same Eligible Expenses cannot exceed 75% of the Project Costs (the Stacking Limit ). For example, a Project having $1,000,000 in Project Costs would have a Stacking Limit of $750,000. If, in this example, the Applicant received $500,000 financial support from AITF under the Program, the Applicant could seek additional funding from other government sources up to a maximum amount of $250,000. At times where the total government assistance to the Applicant exceeds the Stacking Limit, AITF reserves the right to unilaterally and without notice reduce its Investment so that the applicable Stacking Limit is not exceeded. 3 MINIMUM REQUIREMENTS TO APPLY Upon review by AITF, as outlined in Section 5, AITF must determine whether the following minimum requirements have been met. 3.1 The Applicant The Applicant must meet the following minimum requirements: (c) (d) (e) (f) (g) (h) Be a SME; Demonstrate why AITF s support for the Project is necessary for success; Exist as a provincially, extra-provincially or federally registered corporation which has legal status to operate on a for-profit basis in Alberta, and which retains a significant physical presence in Alberta; Show evidence of adequate operational capital and sound financial resources to develop and commercialize the innovation or technology; Be able to provide evidence of the viability of the technology or innovation and its value to the End-User; Be an advanced technology-oriented business developing innovative new products or services for growing markets; Have a plan for applying the research results, and marketing or exploiting products or processes in the best interest of the Applicant, the End-user and the Alberta economy; and Not have an outstanding balance or otherwise owe money to any Alberta Innovates Corporation organization, or any of their organization subsidiaries, or partners. Alberta Innovates Technology Future Industry Investment Programs April 2016 Page 3

4 3.2 End-Users AITF intends to be flexible and will work with an End-User to define a Challenge. An End-User must meet the following minimum requirements: (c) (d) (e) (f) (g) Demonstrate why AITF s support for the Project is necessary for success; Must be Arm s Length from the Applicant (cannot have any legal relationship with the Applicant); Must provide the Contribution at reasonable market rates; Does not have an outstanding balance or otherwise owe money to any Alberta Innovates Corporation organization, or any of their organization subsidiaries, or partners; Must have demonstrated qualifications, capabilities and capacity to test the developed solution in the End-User environment; Must provide solution development support including initial requirements outline, ongoing mentorship and feedback to the Applicant, and evaluation of the progress for the duration of the Project; and Participate in the Project with the intent to acquire the technology solution upon successful development and trial, subject to applicable laws (terms will vary and depend on the Project). 3.3 The Project The Project must meet the following criteria: (c) (d) (e) (f) If Sub-Contractors are used, in accordance with Section 2.2, this must be indicated in the Application; The Project activities must be stepped with critical go/no go Milestones; The Project must be a logical fit within the Applicant and End-User s business strategy; The Project must have a Project Start Date, as further described in Section 4.1, and the Project cannot commence prior to a fully executed Agreement as outlined in Section 6.2; The Project must be completed within five (5) years of the Project Start Date unless an extension is specifically approved in writing by AITF as outlined in Section 6.18; and The technology or innovation solution must address the identified Challenge; 4 APPLICATION PROCESS The Program is delivered as a three step process managed and administered by AITF. In Step 1, the Challenge is identified and Applicants are invited to apply with a solution in the form of the EOI. Applicants whose EOIs pass through this first review process are invited to submit a Proposal, which is written by the Applicant in collaboration with the End-User, and the decision to invest is determined. The activities of the Project happen in Step 2, with go/no go Milestones established for the determination of continued funding. Step 3 is the commercialization of the product and possible purchase by the End-User. The application process for the Program consists of an initial call for EOIs, launched and made public on AITF s website at EOIs are reviewed as indicated in Section 5, and Applicants with approved EOIs will be notified and invited to submit a Proposal. Applications must be submitted online through the AITF web portal at and timelines for calls and submission deadlines will allow sufficient time for the Applicants to prepare their Applications (See Appendix 3). The review process for the Applications will begin only after all required information is received by AITF. Please note that incomplete Applications will not be considered or reviewed by the Investment Committee. The following documents must be submitted with the EOI: Alberta Innovates Technology Future Industry Investment Programs April 2016 Page 4

5 Source of Support (template supplied); and Previous fiscal year end statements that must include income statement, balance sheet, cash flow statement, and statement of retained earnings. The following documents may be submitted with the EOI if available: Current business plan; Letters of Support from Sub-Contractors if applicable; (c) Graphs or Images; and (d) Patent and/or License Details. The following documents must be submitted with the Proposal: Challenge Analysis (template supplied); Current business plan; (c) Letters of Support from Sub-Contractors (if applicable); and (d) Milestone, Reporting and Payment Schedule (template supplied). The following documents may be submitted with the Proposal: Graphs or Images; Patent and/or License Details; (c) Relevant intellectual property licensing agreements if applicable; and/or (d) Third Party Quote(s). 4.1 Project Start Date The Applicant will identify a proposed Project Start Date in the Proposal. The actual Project Start Date may differ from the proposed Project Start Date in the Proposal depending on the time required to process and execute an Agreement. To avoid this, the Project Start Date in the Proposal must be no sooner than five (5) months from the date of the submission of the Proposal. See Appendix 3 for Process Flow diagram. If the proposed Project Start Date needs to be changed, the Applicant will need to amend the Milestone, Reporting and Payment Schedules to reflect the revised dates. A request to delay the Project Start Date must be made to AITF in writing, and AITF has the right, as determined in its sole and absolute discretion, to extend the Project Start Date or rescind the Investment. 4.2 Mandatory Disclosure The Applicant must meet the following disclosure obligations: (c) (d) All information contained in the Applications, including all particulars of the Project and Project Costs, together with any other documentation provided to AITF in relation to the Program is accurate; For purposes of monitoring the Stacking Limit (see Section 2.5), Applicants have an obligation to disclose in the Applications all sources of government financial assistance (whether from federal, provincial/territorial, and/or municipal departments, Crown agencies or Crown corporations) which has been received or requested for the Project; For purposes of continued monitoring of the Stacking Limit, Applicants have a continuing obligation (for the duration of the term under the Agreement) to disclose any other government assistance received subsequent to making its disclosure in the Application; and If the Applicant has received assistance with assessing potential funding by an authorized AITF representative (for example, such as a TDA), then the Applicant must identify that representative in the Application. Alberta Innovates Technology Future Industry Investment Programs April 2016 Page 5

6 5 REVIEW PROCESS The Applications submitted under the Program will be reviewed by experts from any or all of AITF, EDT, the applicable End-User, AIHS, and/or experts who are Arm s Length from those organizations. These experts will provide their recommendations to the Investment Committee, and may also voluntarily provide constructive feedback meant for the Applicant. In the case of the EOIs, the recommendation will be to either invite the Applicant to submit a Proposal, or to decline the EOI. In the case of the Proposal, the recommendation of the Investment Committee will be whether or not to make the Investment. The Investment Committee will make the final determination regarding approval of the EOI and any subsequent Proposal, and may request an interview with the Applicant. The Investment Committee may also, in its sole and absolute discretion, forward to the Applicant the constructive feedback, but will not provide any information regarding an expert s personal information. Applicants are not entitled to access any information regarding the experts, including personal information, nor are they entitled to access or review the expert s recommendation. The decision to make the Investment is based on the evaluation of the response to the Challenge, the capabilities of the Applicant, the Project, the technology or innovation solution, the market, and the impact of the Project to the Province of Alberta. The Project s clarity, structure, compliance with Program requirements, and the funding history between AITF and the Applicant are also considered. 5.1 Due Diligence Searches In assessing the eligibility of the Applicant and the End-User, the review process shall include due diligence searches of various public registries including bankruptcy and insolvency records, corporate and litigation searches. AITF may also request a copy of a business license, if applicable, at any time during the review process, and may request and contact business references without further notice to the Applicant. AITF may also complete such due diligence at any time after approval of an Investment or during the Project. Results of such searches may result in a determination of ineligibility of the Applicant at any time during the Project. 5.2 Investment Determinations Regardless of whether the Applicant and the Project meet the minimum requirements or eligibility criteria, the Investment Committee retains complete discretion regarding Investment determinations, including whether to invest, the amount of the Investment (if any), and the terms and conditions of such Investment notwithstanding the results of any expert s evaluation or recommendation or the involvement of an agent of AITF, including but not limited to a TDA at any time. Further, the Investment Committee, in its sole and absolute discretion, has the right to decline Applications at any stage of the review process for any reason and does not owe a duty of reasonableness to any Applicant in making its Investment determination. The Applicant acknowledges that AITF has no obligation to the Applicant and End-User during the course of receiving and reviewing the EOI or Application or in making its Investment determination. AITF will use its reasonable commercial efforts to inform the Applicant of the determination made in respect of an EOI within eight (8) weeks after the complete EOI is received by AITF, and within eight (8) weeks after the complete Proposal is received by AITF. Any failure to inform the Applicant of the determination regarding the Applications will not result in any obligation or liability of AITF to the Applicant or any other interested party. All Investment determinations made by the Investment Committee (including declining an Investment) are final, non-appealable and binding on the Applicant and End-user. Alberta Innovates Technology Future Industry Investment Programs April 2016 Page 6

7 AITF has the right, as determined in its sole and absolute discretion, to impose a life-time limit on the number of Applications an Applicant may submit. 6 LEGAL DETAILS 6.1 Discretion of AITF Any decision to be made at the discretion of AITF may be made by any AITF authorized representative for and on behalf of AITF. 6.2 Agreement Each Applicant, whose Proposal is approved for an Investment, is required to enter into an Agreement with AITF and the End-User, in the form provided by AITF, prior to commencing the Project. The Agreement will contain terms and conditions which govern the relationship of the parties involved in the Project. AITF must receive the fully executed Agreement within sixty (60) days of the Applicant receiving notice from AITF of its successful Proposal and before the Project Start Date. 6.3 Terms and Conditions In order to properly manage its operations, AITF has the right to amend the terms and conditions or any other aspect of the Program at any time as determined in the sole and absolute discretion of AITF. The Investment is governed by this Guide, the approved Proposal and the terms and conditions in the Agreement. In the event of a conflict among this Guide, the approved Proposal or a term of the Agreement, the term in the Agreement governs, and the term in this Guide or approved Proposal is not binding on the parties to the extent of such conflict. For clarity, this Guide may be amended by AITF in its sole and absolute discretion from time to time, with notice of the amendment together with the amended Guide provided on AITF s website at: No additional notice is required to any party regarding any amendment to this Guide. The Applicant understands its obligation to review AITF s website periodically and ensure the parties involved in the Project understand the current terms governing AITF s Investment. This Guide as amended governs the Investment from the date the amended Guide is published on AITF s website regardless of the stage of any particular Investment or Project. Notwithstanding the foregoing, AITF may determine in its sole and absolute discretion that this Guide in effect at the time the Applicant submits its Applications to AITF will govern the Investment. 6.4 Representations and Warranties Where a Proposal is approved and an Agreement entered into, the Applicant Representative (referred to as you below) represents and warrants to AITF that as set out in this section: (c) (d) You have disclosed all information in the Applications which is required under this Guide and that information remains true and accurate and you will promptly notify AITF of any change to the information provided in the Applications; You have read and understand this Guide and the Agreement prior to executing it; You have the power to own, lease, use and operate your assets and carry out the Project and to enter the Agreement; The Applicant is not insolvent and no proceedings have been taken or authorized by you or by any other Person with respect to the Applicant s bankruptcy, insolvency, liquidation, dissolution or winding up. No creditor has taken possession of any of the Applicant s Alberta Innovates Technology Future Industry Investment Programs April 2016 Page 7

8 (e) assets and no execution or distress has become enforceable upon any of the Applicant s assets; and The Agreement including each of the Schedules, when signed by you, will be validly executed and delivered by you. The Agreement will be legal and valid, with binding legal obligations enforceable against you in accordance with their respective terms. Such terms are subject only to bankruptcy, insolvency and other laws affecting the rights of creditors generally, and equitable remedies may be granted only in the discretion of a court of competent jurisdiction. You acknowledge that AITF is relying on the above representations and warranties in entering into the Agreement and completing the transactions contemplated by it. 6.5 Reporting Obligations The Applicant has the following reporting obligations, which may be amended by AITF in its sole and absolute discretion: Under the Program, the Applicant and End-User must: (i) in respect of a Milestone Payment in the Project (except for the last Milestone): i. complete the particular Milestone as set out in the Milestone, Reporting and Payment Schedule attached to the Agreement and in accordance with the terms of this Guide, the approved Proposal and the Agreement; and ii. deliver to AITF within fourteen (14) days of completing the particular Milestone a completed Progress Report (using AITF s standard form) signed by the Applicant and the End-User, together with all supporting documentation. An incomplete Progress Report (including a Progress Report which is not signed by the Applicant and the End-User) or a Progress Report which does not use AITF s standard form will not be accepted by AITF; and (ii) in respect of a Milestone Payment for the last Milestone in the Project: i. complete the particular Milestone as set out in the Milestone, Reporting and Payment Schedule and in accordance with the terms of this Guide, the approved Proposal and the Agreement; and ii. deliver to AITF within fourteen (14) days of completing the Project a completed Final Report (using AITF s standard form) signed by the Applicant and the End-User, together with all supporting documentation. An incomplete Final Report (including a Final Report which is not signed by the Applicant and the End-User) or a Final Report which does not use AITF s standard form will not be accepted by AITF. Under the Program, a Post-Investment Metrics Report (using AITF s standard form), must be submitted to AITF by the Applicant within fourteen (14) days of receiving the request by AITF, for each of the three (3) following years. The information or the aggregate data contained in the Progress Report, Final Report and Post- Investment Metrics Report may be published in the public domain, without further notice to the Applicant. During the five (5) years following the completion of the Project, AITF, the Government of Alberta and our funding partners such as AIHS may collect information on impacts and outcomes resulting from its Investment in the Project, including, but not limited to new or enhanced products and processes, intellectual property generated, new customers, new employees or new hires, new or increased sales, market capture, any other economic growth of the Applicant and other significant outcomes arising directly or indirectly from the Project or the Investment. All such information is deemed to be non- Alberta Innovates Technology Future Industry Investment Programs April 2016 Page 8

9 confidential for all of AITF s purposes. The Applicant and the End-User each agree to comply with such request of disclosure to the Government of Alberta. 6.6 Timing of Payment AITF will only pay a Milestone Payment after the applicable Progress Report or Final Report has been approved. Such approval is determined by the Investment Committee in its sole and absolute discretion, and if approved, the Investment is paid directly to the Applicant. A declined Progress Report may result in the cancellation of the Project. The Milestone Payments will be structured in accordance with the Project Milestones identified in the Milestone, Reporting and Payment Schedule. AITF will pay the Investment within forty-five (45) days after the applicable Progress Report or Final Report is approved. Under the Program, goods and sales tax (GST) is an Ineligible Expense. For auditing purposes, under the Program, any goods and sales tax forming part of the Project Costs will be considered paid with the Contribution made by the Applicant. 6.7 Milestone, Reporting and Payment Schedule The Applicant must complete a Milestone, Reporting and Payment Schedule as part of the Proposal. Milestones must be at least 30 days apart, and Proposals that have Milestones shorter than 30 days, or alter AITF s form, will not be considered. If the Proposal is approved by the Investment Committee, the Milestone, Reporting and Payment Schedule becomes part of the Agreement governing the Investment. Applicants are encouraged to carefully complete the Milestone, Reporting and Payment Schedule as it contains fundamental terms governing the Project and AITF s corresponding funding. AITF has the right to unilaterally change the terms and information set out in the Milestone, Reporting and Payments, upon written notice from AITF to the Applicant. 6.8 Forms The Applicant agrees to use AITF s standard form documents during the course of completing and reporting on the Project. All forms can be found on AITF s website at: AITF may amend its standard forms from time to time without notice to the Applicant. Accordingly, all parties are encouraged to access the particular form from AITF s website (at the web address set out above) at the time it is required in order to ensure the most current version of the form is used. 6.9 FOIP and Collection and Retention of Information During the duration of the Project, and thereafter, AITF must keep accurate and complete records of Applications, the Project, the Agreement and all the forms and supporting documentation, in accordance with the Alberta Records Management Committee approved retention schedule, as amended from time to time. Such records may be subject to the Freedom of Information and Protection of Privacy Act (Alberta) ( FOIP ), as outlined in greater detail in the Application. A copy of FOIP can be found on the AITF website Program Audit and Requirement to Maintain Auditable Records As part of an ongoing effort to improve and enhance the Program, AITF reserves the right to audit any account of the Applicant or the End-User pertaining to the Program, from time to time and at any time Alberta Innovates Technology Future Industry Investment Programs April 2016 Page 9

10 during the Project and for a period of five (5) years thereafter. This right to audit includes due diligence searches of various public registries as outlined at Section 5.1. The cost of any audit, examination or report is payable by AITF, unless the audit, examination or report reveals a material breach of any term governing the Investment or indicates that the records and books of account were inadequate to permit a determination of how the Investment was used by the Applicant, or what results were achieved through the conduct of the Project, in which case the cost will be borne by the Applicant. During the Project and for a period of five (5) years thereafter, the Applicant and the End-User must maintain and have available for audit or review by AITF full, accurate and complete records of the Project activities, the results achieved, and financial accounting evidencing proper Expense of the Investment together with all supporting receipts. Such records may be subject to the FOIP, as outlined in greater detail in the Application Site Inspection AITF and/or its authorized agents are entitled, at reasonable times and upon reasonable notice to the Applicant or End-User, to attend, or have its authorized agents attend at the premises of the Applicants or End-User, or at the place where the Project is being carried out, for the purpose of examining premises and files, documents and records, and any other assets relevant to the Project in order to assess whether the Applicant and End-User is in compliance with the terms of the Investment. The Applicant and End- User must provide AITF and its authorized agents with such assistance as may be reasonably required during such an inspection. This right of inspection is limited to the purpose of ascertaining whether the terms of the Investment have been complied with, and AITF does not have any general right to obtain custody or copies of records in the custody of the Applicant or End-User Program Evaluations By signing the Agreement, the Applicant and End-User agrees to participate in Program evaluations that may be undertaken by AITF from time to time at the Applicant and End-User s cost, both during the Project and after the Project Completion Date Contact Information of the Parties In order to ensure compliance with FOIP, AITF will only disclose information or documentation to the End- User Representative(s) or Applicant Representative(s). AITF relies on the contact information provided in the EOI. If the EOI is approved, any further communication will be determined based on the information provided on the particular document i.e. Proposal or Agreement. If the Proposal is approved, the Applicant and End-User will have the opportunity to identify different or additional contact person(s) to receive documentation related to the Investment. In the case where the Applicant or End-User indicates a different End-User Representative(s) or Applicant Representative(s) than in the Proposal, the person(s) named in the Agreement supersedes that of the person named in the Proposal. In this case, please note that the provision of documentation will only be directed to those person(s) identified in the Agreement as the End-User Representative(s) or Applicant Representative(s). At any time, if the End-User Representative or Applicant Representative wishes to authorize another person to receive information or documentation from AITF, the End-User Representative or Applicant Representative, as the case may be, must provide written notice of such authorization to AITF. AITF must be notified immediately of any change to the contact information of any party Purchased Material Each party retains ownership of their purchased material directly related to the Project. Alberta Innovates Technology Future Industry Investment Programs April 2016 Page 10

11 6.15 Intellectual Property AITF makes no claim to Intellectual Property Rights arising from any Investment in a Project. Ownership of Intellectual Property developed during the course of the Project is not governed by this Guide or the Agreement. A written Intellectual Property ownership agreement between the Applicant and the End-User governing all Intellectual Property Rights must be in place prior to execution of the Agreement. A copy of such agreement must be provided to AITF as proof of compliance with this requirement Acknowledging the Funding Agencies All publications, presentations and public messages arising from the Investment must acknowledge the support of AITF, EDT, and AIHS where applicable. Please use the full corporate names, Alberta Innovates Technology Futures, Government of Alberta, Ministry of Economic Development and Trade, and Alberta Innovates Health Solutions, rather than any acronym. AITF's financial support of a Project in no way constitutes an endorsement of the Project, Applicant or End-User. Any suggestion or statement that AITF endorses a Project or any party involved in the Project is strictly prohibited as a term of the Investment and can result in the repayment of the Investment to AITF Non-Confidential Information and Publication of Non-Confidential Information by AITF The Applicant and End-User agree that AITF may (1) publish and/or disseminate in the public domain certain information contained within the Applications, Progress Report(s), Final Report, and/or Post- Investment Metrics Report as a way to promote success stories about and report on innovation in the Province of Alberta and/or (2) may use certain information within the Applications to verify information in the Applications. On that basis, the Parties acknowledge the information expressly set out as nonconfidential information in Part 3 of the Applications and the final results with respect to those components as described in any Progress Report, Final Report and Post-Investment Report is nonconfidential and subject to disclosure, as indicated in Part 3 of the Applications, by AITF in its sole and absolute discretion at any time without notice to the Applicant and End- Users Changes to the Project Submitting a Scope Change Request Form Applicants are expected to achieve the Project as set out in the Agreement. Wherever the Applicant wishes to amend the Agreement, it is the responsibility of the Applicant to submit a Scope Change Request Form (SCRF) to AITF, signed by the Applicant and the End-User, for consideration by the Investment Committee. Upon review of the SCRF, the Investment Committee may approve, request specific changes, or decline approval of the SCRF, as determined in its sole discretion and the decision of the Investment Committee is binding on all parties. If an SCRF is declined, the Applicant may choose to proceed with the Project as previously approved, or may elect to terminate the Agreement with no further payments of the Investment being provided. If the proposed scope change will change any Project Costs, clear and detailed quotations in support of such changes must be included with the completed SCRF. Any Project work which is part of the proposed scope change cannot be commenced prior to the date that the Investment Committee approves this SCRF, and any costs incurred for such unauthorized work will constitute Ineligible Expenses. An incomplete SCRF, including a SCRF that is not signed by the Applicant and the End-User, or a SCRF that is not in the current standard form provided on AITF s website will not be accepted. Alberta Innovates Technology Future Industry Investment Programs April 2016 Page 11

12 Situations for using a Scope Change Request Form An SCRF must be submitted for the following reasons: (c) (d) (e) An increase in funding where such increase cannot exceed the maximum dollar value of the Program, the purpose for such increase remains consistent with the overall intention of the Investment, and the parties have arranged for the provision of the Top-Up Contribution; A substantial change in the nature of the Project which changes the overall intention of the Investment, and which may or may not impact the Project Completion Date; A change in the Project Completion Date whether due to delay or suspension; A Change of Control or name change of the Applicant or the End-User; or Where AITF determines an SCRF is required. In addition to the above, an SCRF and a revised Milestone, Reporting and Payment Schedule must be submitted for the following reasons: (c) A delay of any Expected Milestone Completion Date that exceeds 90 days; The parties wish to change the timing or portion of disbursement related to any Expected Milestone Completion Date, without changing the total Investment; or Where the accumulation of the changes to the Expected Milestone Completion Dates change the Project Completion Date. If the SCRF is approved by the Investment Committee, the Milestone, Reporting and Payment Schedule submitted will replace the original Milestone, Reporting and Payment Schedule as Schedule B to the Agreement. The following may be reported using a Progress Report, Final Report, or SCRF, depending on the circumstances: A decrease in the Project Costs, where the parties have made provisions for the adjustment and proportional return, where applicable, of the decreased Contribution, to the party who provided it; A minor change to the work plan which does not change the end goal of the Project; (c) Any one or more of the Expected Milestone Completion Dates is changed by less than 90 days; (d) The Project Completion Date is delayed by less than 90 days; or (e) A change to the contact person(s) in the Notices section of the Agreement Frustration of the Project for Suspension or Delay Prior to the Start Date If the Applicant or the End-User suspends or delays the Project for any reason whatsoever for a period greater than one (1) year or for periods which in aggregate exceed twelve (12) months, then AITF in its sole and absolute discretion may terminate the Agreement effective immediately upon notice to the Applicant. Upon such notice, AITF will have no further payment obligations to the Applicant Termination of the Project If any one of the Applicant or End-User terminates their part of the Project for any reason after execution of the Agreement and prior to the Project Completion Date, AITF must be notified immediately. Failure to notify AITF may result in AITF terminating the Project and rescinding the Investment. In the event of termination of the Project for whatever reason, the Applicant must submit a Final Report within three (3) weeks of effective date of termination. Alberta Innovates Technology Future Industry Investment Programs April 2016 Page 12

13 6.21 Rescission of Investment caused by Default and Effect Applicants are cautioned that AITF has the right to unilaterally terminate and rescind its Investment for any Project that incurs a Default. All Applicants and End-Users are strongly encouraged to review and understand the definition of Default in Appendix 1. The Applicant and End-Users are to be aware of its post-rescission obligations Rescission of Investment caused by Change of Control of Applicant and Effect Applicants are cautioned that AITF has the right to unilaterally terminate and rescind its Investment for any Applicant that incurs a Change of Control. All Applicants are strongly encouraged to review and understand the definition of Change of Control in Appendix 1. AITF will not rescind the Investment as a result of Change of Control where: (c) The Applicant continues to satisfy the eligibility requirements of the Program; The Applicant, AITF and the new entity execute an assignment and novation agreement whereby the Applicant assigns the rights to the new entity, the new entity assumes all obligations, and AITF consents to the assignment and assumption; and Applicant Representative and entity information requirement of the Application is provided to and approved by AITF. Where the Investment is rescinded by AITF due to a Change of Control any amount of the Investment advanced by AITF to the Applicant constitutes a debt owed by the Applicant to AITF. The debt owed is on a dollar for dollar basis together with interest, which accrues from and after the date of notice of rescission from AITF at the prime rate for commercial loans fixed by the Alberta Treasury Branches as at such date, plus 3%. Such debt plus accrued interest is due and re-payable upon notice of rescission delivered by AITF to the Applicant. The Applicant has forty-five (45) days from the date of the notice of rescission to repay the debt and accrued interest. Alberta Innovates Technology Future Industry Investment Programs April 2016 Page 13

14 6.23 Repayment of Investment It is a condition of the Investment that AITF has the right to require the Applicant to repay to AITF any amounts of the Investment paid to the Applicant. This is the case where (i) the Applicant fails to comply with all required reporting obligations under Agreement including but not limited to Section 6.5; (ii) Scope Change Request is not approved under Section 6.18; (iii) the Project is terminated by the Applicant under Section 6.20; (iv) the Investment is rescinded by AITF due to a Default or Change of Control under Section 6.22; or (v) and pursuant to Section In any of these causes, any amount of the Investment advanced by AITF to the Applicant constitutes a debt owed by the Applicant to AITF. The debt owed is on a dollar for dollar basis together with interest, which accrues from and after the date of notice of rescission from AITF at the prime rate for commercial loans fixed by the Alberta Treasury Branches as at such date, plus 3%. Such debt plus accrued interest is due and re-payable upon notice of rescission delivered by AITF to the Applicant. The Applicant has fortyfive (45) days from the date of the notice of rescission to repay the debt and accrued interest Extent of Liability AITF is not liable in any way whatsoever to the Applicant or the End-User, or any of their respective directors, officers, employees, agents, personal legal representatives and/or heirs for any direct damages, or any indirect, incidental, consequential, or special damages or any loss of profits, loss of business opportunity, loss of revenue, or any other loss or injury suffered or arising in any way, whether arising before or after submitting Applications or entering the Agreement with AITF Indemnity The Applicant and End-User each indemnify and hold harmless AITF, its directors, officers, employees and agents against and from any and all third party claims, demands, actions, and costs whatsoever (including legal costs on a solicitor-client basis) that may arise directly or indirectly out of any act or omission of the Applicant and End-User, or any of their directors, officers, employees, contractors, agents or legal representatives or the negligence or tortious act or willful misconduct of the Applicant or the End- User or any of their directors, officers, employees, contractors, agents or legal representatives in relation to their obligations under the Program Dispute Settlement In the case of a dispute between the Applicant and/or End-User and any other party involved in the Project, it is the responsibility of the disputing parties to reach a resolution. AITF will not act as a mediator or adjudicator. In the event of a dispute, in all instances AITF is not liable to pay any arbitration, court or any other dispute resolution related costs General Liability Insurance The Applicant and End-User shall, at its own expense and without limiting its liabilities herein, insure its operations under a contract of General Liability Insurance, in accordance with the Insurance Act (Alberta), in an amount not less than $2,000,000 inclusive per occurrence, insuring against bodily injury, personal injury and property damage including loss of use thereof. Such insurance must be in place before the Project is commenced and continue through until the Project is completed. The Applicant and End-user acknowledge that no protection from AITF is available for any third party claims pursuant to the Programs. AITF can request a certificate of Insurance as evidence of insurance coverage from the Applicant at any time as determined in the sole and absolute discretion of AITF. Alberta Innovates Technology Future Industry Investment Programs April 2016 Page 14

15 6.28 Funding to AITF Notwithstanding anything in this Guide or the Agreement, if the Government of Alberta suspends, revokes, reduces or terminates funding to AITF at any time, AITF may immediately and unilaterally alter or terminate its obligations under the Program, including all obligations under an Agreement. In such an instance, AITF will notify the Applicant and End-user of such alteration or termination of ATIF s obligations as soon as practicably possible, and the Applicant will be entitled to reimbursement for the direct costs of winding down the Project, including incurred Eligible Expenses and non-cancellable legal commitments made by other parties seeking reimbursement, supported by applicable receipts or invoices and as confirmed and approved by AITF and up to a maximum amount of the approved Investment in each case Assignment or Encumbrance Neither the Applicant nor the End-User may assign or transfer any of its rights or obligations under the Program without AITF s written consent, which consent may not be unreasonably withheld No Partnership, Joint Venture, or Agency The rights, duties, obligations and liabilities of AITF and any other party are individual and not joint or collective. There is no intention of AITF to create a partnership, an incorporated joint venture, an unincorporated association or a trust with either the Applicant or the End-User under the Program. Nothing under this Guide, or any subsequent Applications, Agreement or other document pertaining to the Program authorizes any party to act as an agent or an employee of the other party for any purpose whatsoever, except as expressly set out in this Guide, Agreement or other document Governing Law All matters contemplated in this Guide are governed by the laws of Alberta and the federal laws of Canada applicable therein Compliance with Applicable Laws The parties must comply with all applicable laws, ordinances, codes and regulations of government agencies having jurisdiction over the matters contemplated in this Guide, the approved Applications, the Agreement and/or any required reporting Time Time is of the essence, and no extension or variation of this Guide, the approved Applications, the Agreement, any required reporting or any other matter relating to the Project will operate as a waiver of this provision. Alberta Innovates Technology Future Industry Investment Programs April 2016 Page 15

16 APPENDIX 1 Definitions For the purposes of this Guide, the following terms are defined to have the corresponding meaning: (c) (d) (e) (f) (g) (h) (i) AITF means Alberta Innovates Technology Futures; Agreement means an Alberta Small Business Innovation and Research Initiative Investment Agreement between AITF, the End-User and the Applicant; AIHS means Alberta Innovates Health Solutions; Applicant means the SME who completes and submits the EOI and/or the Proposal, and may in future include the new entity assigned with a Change of Control in accordance with Section 6.22; Applicant Representative means the individual who is authorized to act on behalf of the Applicant; Applications means collectively the EOI and the Proposal; Arm s Length means any present or former officer, director, shareholder or employee of a party or its subsidiary, or any Person with which the party does not deal at arm's length within the meaning of the Income Tax Act (Canada); Challenge means the technology problem or issue presented by the End-User, requiring a solution; Change of Control means any change in Control of a Person, directly or indirectly, by any means whatsoever (whether by merger, plan of arrangement, sale of shares or other equity interest through a single transaction or a series of related transactions), but all provided that the appointment of one additional co-trustee of any trust (for a total of two co-trustees in respect of such trust) is not a change in Control for purposes of this Agreement; (j) Contribution has the meaning set forth in Section 2.4; (k) Control means one or more of the following: (i) (ii) (iii) (iv) a body corporate is controlled by a Person if: (A) securities of the body corporate to which are attached more than 50% of the votes that may be cast to elect directors of the body corporate are beneficially owned by the Person; and (B) the votes attached to those securities are sufficient to elect a majority of the directors of the body corporate; a trust is controlled by a Person if that Person is a trustee of such trust; an association, partnership, or other organization is controlled by a Person if: (A) more than 50% of the ownership interests, however designated, into which the association, partnership or other organization is divided are beneficially owned by the Person; and (B) the Person is able to direct the business and affairs of the association, partnership, or other organization; and a Person that controls another Person is deemed to control any Person that is controlled or deemed to be controlled by the other Person. (l) Default means any one (1) or more of the following: Alberta Innovates Technology Future Industry Investment Programs April 2016 Page 16

17 (i) (ii) (iii) the bankruptcy or insolvency of the Applicant, (including becoming the subject matter of any proceeding relating to its bankruptcy, insolvency, receivership, liquidation, dissolution or winding up);or any breach of an obligation or failure to perform or observe any provision on its part under the Agreement or this Guide, made by the Applicant and any such breach or default continues for a period of five (5) days after receipt of written notice from AITF specifying such breach; or but provided that where AITF gives notice of the occurrence of a Default and the Default is cured within five (5) days, notice that the Default is no longer continuing will be given to AITF by the Applicant immediately after the Applicant becomes aware that the Default has been cured, and AITF will not rescind its Investment on the basis of that Default. (m) (n) EDT means Ministry of Economic Development and Trade; Eligible Expense means: (i) (ii) (iii) (iv) (v) (vi) (vii) (viii) labour costs (gross wages or salaries incurred at reasonable market rates) for those individuals who are specifically identified as performing the service which is directly attributable to the Project and thereby quantifiable or measurable. Accordingly, general overhead is not considered an Eligible Expense; costs of materials, made at the lower of cost or fair market value, which can be specifically identified and quantified as having been incurred in the performance of the Project activities, and which are so identified and quantified consistently in the cost accounting practices of either the Applicant or the End-User, as the case may be; acquisitions of property including capital improvements to facility premises and capital equipment (but excluding land and buildings), made at the lower of cost or fair market value, that are critical to the performance of the Project will be considered on a case by case basis upon submission to the Investment Committee by the Applicant. The contribution will be pro-rated to the Project time frame based on asset s expected economic life, if purchased, at industry standard depreciation rates with any residual undepreciated value attributed to the economic life of the asset remaining after Project completion being an Ineligible Expense; acquisitions of software or information databases, made at the lower of cost or fair market value, that are critical to the performance of the Project will be considered. The cost of such technology will be pro-rated over the duration of the Project; additional direct operating costs (incurred at reasonable market rates), not falling within the categories of labour and materials, but which can be specifically identified and quantified as having been incurred, or to be incurred, in the performance of the Project activities and which are so identified and quantified consistently by the Applicant s cost accounting practices; technology transfer to the Applicant from an Alberta public sector research organization; costs related to travel (including mileage, airfare and accommodation) by the Applicant to the End-User s location, where the End-User place of business is located in a different city than the Applicant; and any other cost which AITF pre-approves in writing as an Eligible Expense. (o) End User means one of the following: (i) (ii) (iii) a provincially, extra-provincially or federally registered corporation which has legal status to operate on a for-profit basis in Alberta, has more than 500 Full Time employees (as defined in accordance with the Employment Labour Code (Alberta)), and more than $50,000,000 annual gross revenue; a group of private sector corporations as defined above; Alberta public sector organizations, such as government departments, agencies and municipalities; or Alberta Innovates Technology Future Industry Investment Programs April 2016 Page 17

18 (iv) an industry consortium (an association of two or more sole proprietors, partnerships, or corporations with the objective of participating in a common activity or pooling their resources for achieving a common goal); (p) (q) (r) (s) (t) End-User Representative means the individual who is authorized to act on behalf of the End- User; Expected Milestone Start Date means the date on which each Milestone is expected to begin, as outlined in the Milestone, Reporting and Payment Schedule; Expected Milestone Completion Date means the date on which each Milestone is expected to end, as outlined in the Milestone, Reporting and Payment Schedule; EOI means the initial expression of interest submitted by the Applicant for consideration by AITF under the Program, prior to being invited to submit a Proposal; Final Report means AITF s standard form entitled the Final Report under the Program; (u) FOIP has the meaning set out in Section 6.9; (v) Ineligible Expense means any one (1) of the following: (i) (ii) (iii) (iv) (v) (vi) (vii) (viii) (ix) (x) (xi) (xii) (xiii) (xiv) (xv) (xvi) (xvii) (xviii) (xix) any cost that does not qualify as an Eligible Expense; any cost incurred prior to formal approval of an Investment by AITF, except where AITF has provided written approval to include the cost as an Eligible Expense; transactions between related parties; provisions for contingencies; allowance for interest on debt; losses on investments, bad debts and expenses for collection charges; losses on other projects or activities outside the approved Project; fines and penalties; unreasonable compensation for Project labour; costs for professional training & development; Federal and Provincial income taxes, goods and services taxes; costs related to land and buildings (for example, acquisitions, leases and/or leasehold improvements); advertising costs, 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; costs associated with applying for government grants and programs; costs of internships or support for students of knowledge institutions; basic professional services, fees and disbursements, such as ongoing routine accounting, tax and legal business requirements and financing fees unless directly related to the Project; routine testing and maintenance; costs relating to meals, entertainment, hospitality and gifts; and any other costs deemed ineligible by the Investment Committee. (w) (x) In-Kind means a contribution in goods or services to the Project, as opposed to cash; "Intellectual Property" means tangible or intangible property in which Intellectual Property Rights subsist and/or that is subject to Intellectual Property Rights including, without limitation, ideas, formulae, algorithms, concepts, techniques, processes, procedures, approaches, methodologies, plans, systems, research, information, documentation, data, data compilations, specifications, Alberta Innovates Technology Future Industry Investment Programs April 2016 Page 18

19 requirements, designs, diagrams, inventions, technology, computer programs (including all related code), tools, products, knowledge, know-how and trade secrets; (y) "Intellectual Property Rights" means: (i) (ii) any and all proprietary rights anywhere in the world provided under: patent law, copyright law, trademark law, design patent or industrial design law, semiconductor chip or mask work law, trade secret law, or any other statutory provision or common law principle that provides a right in either intellectual property or the expression or use of intellectual property; and any and all applications, registrations, licenses, sub-licenses, franchises, agreements or any other evidence of a right in any of the foregoing; (z) (aa) (bb) (cc) (dd) (ee) (ff) (gg) (hh) (ii) (jj) (kk) Investment Committee means a committee comprising representatives from each of AITF, EDT, the End-User, and in the case of health-related Challenges, AIHS; Investment means the amount of funding granted by AITF to an Applicant under the Program and governed by the Agreement; Milestone means a major segment of the Project activities for the purpose of monitoring and measuring the progress of the Project, concluding in every case, with a critical go/no go decision and Milestones mean all major segments of the Project activities which comprise the entire Project; Milestone Payment means the portion of the Investment allocated to a Milestone as described in the Milestone, Reporting and Payment Schedule; Milestone, Reporting and Payment Schedule sets out the scope of each Milestone, the time in which to complete each Milestone and the corresponding Milestone Payment from AITF for each Milestone that has been completed and satisfactorily reported on; MNE means multi-national enterprise; Person which definition is only applicable in Section 6.4 and Appendix 1, (j), (i) and (k) and means any individual, body corporate, partnership, sole proprietorship, joint venture, trust, unincorporated association, unincorporated organization, and any other entity or organization of any nature whatsoever. Unless the context otherwise requires, any reference to a Person includes its heirs, administrators, executors and other legal representatives, successors and permitted assigns; Post-Investment Metrics Report means a report completed by the Applicant upon request by AITF for the three (3) years following the Project Completion Date; Program means the Alberta Small Business Innovation and Research Initiative; Progress Report means AITF s standard form entitled Progress Report under the Program; Project means the scope of work to be performed by the Applicant and the End-user, as set out in the Milestone, Reporting and Payment Schedule and the work product arising from the collaboration between the Applicant and the End-User, which forms the basis of seeking funding under an Application; Project Completion Date means the date on which the last Milestone is completed, as set out in the Milestone, Reporting and Payment Schedule; Alberta Innovates Technology Future Industry Investment Programs April 2016 Page 19

20 (ll) (mm) (nn) (oo) (pp) Project Costs means all Eligible Expenses incurred during the course of the Project as expressly set out in the Application; Project Start Date means the date on which the first Milestone starts, as set out in the Milestone, Reporting and Payment Schedule; Proposal means the written plan put forward by the Applicant for consideration by AITF under the Program; Research Institution means a public sector academic organization or government agency providing research that is based in Alberta, such as post-secondary institutions or Alberta Innovates corporations; SME For the purpose of the Program, an SME is defined as being a company that is incorporated in Alberta or extra provincially registered in Alberta, with fewer than 500 Full Time employees (as defined in accordance with the Employment Labour Code (Alberta)), and less than $50,000,000 annual gross revenue; (qq) Stacking Limit has the meaning set out in Section 2.5; (rr) (ss) (tt) Sub-Contractor means an SME, MNE, government department or agency, and/ or an academic institution which provides services and/or products to the Applicant that are required to perform the Project; Top Up Contribution means an increase of the Contribution, resulting from an increase in the Project Costs; and TDA means Technical Development Advisor from AITF. Alberta Innovates Technology Future Industry Investment Programs April 2016 Page 20

21 APPENDIX 2 Technology Readiness Levels (TRL) Alberta Innovates Technology Future Industry Investment Programs April 2016 Page 21