Contribution Agreement, dated as of July 10, 2018, between Canada Foundation for Sustainable Development Technology and D-Wave Systems Inc

1.0

INTERPRETATION

2.0

TERM

3.0

CONTRIBUTION PAYMENTS

4.0

ELIGIBLE PROJECT COSTS

5.0

REPORTING

6.0

ACCOUNTS, AUDITS AND INSPECTIONS

7.0

COVENANTS OF THE ELIGIBLE RECIPIENT

8.0

REPRESENTATIONS AND WARRANTIES

9.0

INTELLECTUAL PROPERTY

10.0

CONFIDENTIAL INFORMATION

11.0

INDEMNITY

12.0

LIMITATION OF LIABILITY

13.0

TERMINATION OF AGREEMENT

14.0

ASSIGNMENT

15.0

DISPUTE RESOLUTION

16.0

PUBLICITY AND ACKNOWLEDGEMENTS

17.0

NOTICES

18.0

GENERAL CONTRACT PROVISIONS

19.0

INTERPRETATION

In this Agreement the following terms shall have the following meanings respectively and other terms may be defined elsewhere in this Agreement

technologies related to energy end-use technologies, such as transportation and building technologies, and technologies to reduce ground level ozone;

technologies related to the hydrogen economy, such as mobile and stationary fuel cells, the production, distribution and storage of hydrogen as well as transition fuels and related technologies;

technologies related to the sustainable production of fossil fuels (“clean fossil fuel technologies”), such as the efficient combustion or conversion of fossil fuels (including advanced coal gasification), C02 capture and storage, more efficient technologies for surface and in-situ oil sands production, and access to frontier and unconventional natural gas resources;

renewable energy technologies, including biomass, solar, wind, wave and tidal technologies;

greenhouse gas emissions reduction technologies related to areas other than energy production and use, including technologies to reduce C02 in cement manufacturing;

air quality improvement technologies, including toxic substance recovery systems, particulate control technologies and acid rain technologies;

enabling or cross-cutting technologies, including sensors and controls, closed loop process waste or air, water and soil treatment technologies, and process technologies for the purpose of increasing energy efficiency;

water quality and quantity improvement technologies, including, the conservation of water and the disinfection and the mitigation or abatement of contaminants in water, sewage or

waste management technologies, including those designed to prevent, reduce, or eliminate solid waste generation or discharge, as well as materials recovery processes, composting, thermal treatment, and biotechnology-based systems, and associated equipment for detection, quantification, analysis, and calibration; or

soil quality improvement technologies, including the Remediation of Contaminants in Soil and Sediments, through containment, removal, recovery, reduced bio-availability, and destruction methods applied either in-situ or ex-situ using physical, chemical, thermal or biological processes, and associated equipment for detection, quantification, analysis, and calibration.

salaries and benefits, including administrative labour related to the Eligible Project;

professional, scientific, technical and contractual services costs (e.g. trades, contracts for Project and financial audits, third party verification);

field testing services;

feasibility studies related to the Eligible Project;

license fees and permits;

supplies and equipment, including the costs to purchase, rent, fabricate and install supplies and equipment;

purchase, installation, repair, up-grade, testing and commissioning of equipment, materials and products, including diagnostic and testing tools and instruments;

furniture (pro-rated amount as applicable);

laboratory and field supplies and materials;

reasonable travel and conference expenses related to the Eligible Project;

printing and production services;

shipping costs, including customs costs;

utilities, waste removal, consumables (i.e. items used up completely during the Project such as motor oil, lubricants, transmission fluids);

data collection services, including processing, analysis and management;

communication and distribution costs;

translation costs;

capital items specifically required for the delivery of the Eligible Project, including the lease of land or license to use land, data collection equipment, prototypes, pilot plants or

the depreciation expense of capital items during the Period of Funding (i.e. cost of utilization) that have residual value as determined by IFRS or ASPE.

a for-profit corporation, a partnership, a limited partnership or a business trust and has entered into a contract relating to the carrying out of an Eligible Project with one or more of the following legal entities:

another corporation;

a partnership, a limited partnership or a business trust which has expertise in Sustainable Development Technologies;

a university, a college or another provincially accredited post-secondary educational institution;

a research institute;

an individual who has expertise in Sustainable Development Technologies;

a not-for-profit corporation, one of its purposes being to undertake, fund or otherwise support the Development or Demonstration of Sustainable Development Technologies; or

a for-profit corporation, a partnership, a limited partnership or a business trust, and one or more of the following legal entities:

another corporation;

a partnership, a limited partnership or a business trust which has expertise in Sustainable Development Technologies;

a university, a college or another provincially accredited post-secondary educational institution;

a research institute;

an individual who has expertise in Sustainable Development Technologies; or

a not-for-profit corporation, one of its purposes being to undertake, fund or otherwise support the Development or Demonstration of Sustainable Development Technologies;

a not-for-profit corporation, one of its purposes being to undertake, fund or otherwise support the Development or Demonstration of Sustainable Development Technologies;

general overhead costs of the Eligible Recipient, including operating costs related to general maintenance and repairs;

costs to decommission the Project;

capital costs associated with ongoing scientific or technical activities of the Eligible Recipient;

costs associated with the subsequent diffusion of the technology;

fees and expenses incurred in relation to lobbying or government relation activities;

contingency fees; and

legal, financing fees and costs.

In this Agreement:

unless the context otherwise requires, the singular shall include the plural and vice versa, and in particular the definitions of words and expressions set forth in Section 1.1 hereof shall be applied to such words and expressions when used in either the singular or the plural form;

references to, or to any particular provision of, a document shall be construed as references to that document as amended to the extent permitted by this Agreement and in force at any time;

any reference to a statutory provision shall include that provision as from time-to-time modified or re-enacted providing that in the case of modifications or re-enactments made after the date of this agreement the same shall not have effective substantive change to that provision;

unless otherwise indicated, references to Articles, Sections, Subsections or Schedules should be construed as references to the applicable Articles, Sections, Subsections or Schedules;

the division of this Agreement into Sections, the insertion of headings and the provision of a table of contents are for convenience of reference only and are not to affect the construction or interpretation of this Agreement;

unless otherwise indicated all dollar amounts referred to in this Agreement, including the symbol“$”, refer to lawful money of Canada; and

unless the context otherwise requires, words importing a particular gender shall include the other gender.

In the event of any inconsistency between a provision in the body of this Agreement and a provision in a Schedule or the Proposal, then:

a specific provision takes precedence over a general provision; and

otherwise, the following order of precedence shall apply:

this Agreement;

the applicable Schedule;

the Proposal.

Where any representation, warranty or other statement in this Agreement is expressed to be made by any party to its knowledge or is otherwise expressed to be limited in scope to matters known to a party, or of which a party is aware, it shall mean such knowledge as is actually known to, or which would have or should have come to the attention of, such party, or if such party is a corporation the officers or employees of such party who have overall responsibility for or knowledge of the matters relevant to such statement and such party hereby confirms that it has made appropriate inquiries of all such officers and employees. Any reference to an Eligible Recipient’s knowledge in respect to a Consortium Member refers to knowledge based on such Eligible Recipient’s due inquiry of employees of such Consortium Member.

The following are the Schedules attached to and incorporated in this Agreement by reference and deemed to be a part hereof:

Schedule A Work Plan and Statement of Project Objectives

Schedule B Project Milestones, Deliverables, Metrics and Risks

Schedule C Project Financials

Schedule D Consortium Members, Participants and Key Suppliers/Subcontractors

Schedule E Project Reporting Requirements

Schedule F Environmental and Economic Benefits

Schedule G Accepted Practices

TERM

The term of this Agreement shall commence on the Effective Date and, unless terminated earlier in accordance with Section 13.0 hereof, shall continue in full force and effect until the Acceptance by SDTC of the third annual SDIRS Reports on the Project as provided in Sections 5.0 and 8.0 in Schedule E.

CONTRIBUTION PAYMENTS

Subject to the terms and conditions contained herein, SDTC shall pay to the Eligible Recipient up to the lesser of: (a) 23.1 %of the Eligible Project Costs, or (b) $12,000,000 (the

Notwithstanding any other provision of this Agreement:

the Contribution shall not exceed fifty percent (50%) of the Eligible Project Costs for the Project;

the Eligible Recipient shall contribute a minimum of twenty-five percent (25%) of the Eligible Project Costs for the Project in cash, in-kind goods or services, or a combination thereof;

SDTC shall not have any obligation to pay the Contribution, or any installment thereof, unless SDTC has received sufficient allocated funds from the Government of Canada and the Funding Partner to enable it to make such Contribution;

SDTC shall not have any obligation to pay the Contribution, or any installment thereof, unless the Eligible Recipient(s), on or before each Payment Date, has established, to the satisfaction of SDTC, that the Eligible Recipient through enforceable commitments or otherwise, has the financial capacity to finance the Project; and

the Eligible Recipient shall declare and certify to SDTC in writing all direct sources of funding for the Project, whether in place, requested or anticipated to be requested, including Government Funding identified by specific government programs.

Installments of the Contribution shall be paid to the Eligible Recipient upon the achievement of various Project Milestones and upon receipt by SDTC and SDTC Acceptance of all required reports. A written claim (“Claim”) requesting an installment payment for a Milestone and all associated required reports shall be submitted by the Eligible Recipient upon the achievement of each Milestone in accordance with the schedule of payments set out in Schedule C attached hereto. Early delivery is permitted, provided that SDTC shall not be required to release payment until the dates specified in Schedule C. Each Claim shall include a statement of Eligible Project Costs incurred in connection with the Milestone and shall be certified by an officer of the Eligible Recipient and accompanied by such supporting documentation as SDTC may require. Where the amount of any item of a Claim exceeds $1000.00, invoices, receipts or other supporting documentation shall be available for review by SDTC to support the Claim with respect to such items. Upon Acceptance by SDTC of a Claim for payment of an installment of the Contribution, SDTC shall pay to the Eligible Recipient such installment of the Contribution. SDTC shall have 45 days from the receipt of all required reports to provide notice of Acceptance or rejection of a Claim. If a Claim is rejected by SDTC then SDTC will give notice of such rejection to the Eligible Recipient, together with its reasons therefore, and the Eligible Recipient shall have 20 days to provide revised reports in support of such Claim. SDTC shall have 10 days to provide notice of Acceptance or rejection of revised reports. If the Claim is again rejected by SDTC then the aforementioned process and time periods for the submission of reports will continue until such

SDTC shall withhold ten percent (10%) (the “Holdback”) from each installment of the Contribution payable hereunder until:

the Project has been completed to the satisfaction of SDTC;

all required reports have been received and approved by SDTC; and

SDTC has accepted the Audited Project Report;

The obligation of SDTC to make a payment to the Eligible Recipient of each installment of the Contribution is subject to the fulfillment, or the waiver by SDTC, in its sole discretion, of each of the following conditions on or before the time of each such payment:

Accuracy of Representations and Warranties. Each representation and warranty contained in Section 8.0 hereof shall be true on and as of the Payment Date with the same force and effect as though such representation and warranty had been made on and as of that date; and

Performance. The Eligible Recipient shall have performed and complied with all agreements and conditions contained in this Agreement required to be performed or complied with by the Eligible Recipient prior to or on the Payment Date; and

Disbursement. Notwithstanding any other provision of this Agreement, including for greater certainty any Schedule hereto, SDTC shall not, and shall have no obligation to, pay any part of a Claim subsequent to March 31, 2023 unless SDTC shall have first obtained in form satisfactory to SDTC authorization from the Government of Canada in accordance with the Funding Agreement to disburse funds subsequent to such date.

It is expressly understood that this Agreement has been authorized and delivered by SDTC in reliance on environmental assurances and disclosures set forth in the Proposal, and that

where the Project requires an Environmental Assessment the Eligible Recipient has provided a summary of the results;

where the Project does not require an Environmental Assessment, the Eligible Recipient has provided written confirmation that a self-assessment of environmental impacts associated with the Project was conducted and that any necessary mitigating measures will be implemented; and

in the event part of the Project is a “Project” as defined in the Canadian Environmental Assessment Act and is to be carried out or conducted outside of Canada, the Eligible Recipient has conducted an Environmental Assessment of the Project in accordance with the Canadian Environmental Assessment Act or in accordance with a process that is in effect in the foreign state where the Project will take place and consistent with the Canadian Environmental Assessment Act.

The Eligible Recipient acknowledges and agrees that upon the occurrence of any one or more of the following events:

SDTC has paid a Claim and later determines that the Claim contained a cost which was a Non-Eligible Project Cost;

The Eligible Recipient is not in compliance with Section 3.2b) hereof or provides less funding for the Project than specified in the Budget;

SDTC’s Contribution to the Project exceeds 50% of the Project’s Eligible Project Costs; or

The Eligible Recipient(s) receives revenue from the sale or commercial use of Project assets during the Period of Funding;

The Eligible Recipient may propose reasonable amendments to any or all of the Work Plan, Milestones or Budget, and shall provide SDTC with written notice of the proposed amendment, including its scope, anticipated cost and anticipated results. SDTC shall have the right to review the proposed amendment and to consult with the Eligible Recipient and with any external consultants as deemed appropriate by SDTC in respect thereof. Within sixty (60) days of SDTC’s receipt of the aforementioned amendment notice: (i) if SDTC at SDTC’s own discretion, after consultation with the Eligible Recipient and with any external consultants as deemed appropriate by SDTC, does not agree with the proposed amendment, it shall not be Accepted; or (ii) if SDTC agrees with the proposed amendment, it shall so advise the Eligible Recipient in writing and this Agreement shall be amended in accordance with Section 18.3 hereof. Lack of consent by SDTC to a proposed amendment shall not preclude the Eligible Recipient from submitting any other reasonable proposed amendment in respect of any or all of the Work Plan, Milestones or Budget at any other time.

The Eligible Recipient acknowledges that SDTC and the Funding Partner shall establish a project oversight committee (the “Project Oversight Committee”) for the Project, consisting of representatives appointed by the Funding Partner and SDTC. The Funding Partner will be entitled to appoint representatives to the Project Oversight Committee, and SDTC will be entitled to appoint representatives to the Project Oversight Committee. The objectives of the Project Oversight Committee are to:

meet with such frequency as may be required for the effective operation of the Project;

monitor the progress of the Project;

review the Eligible Recipient’s Claims;

provide guidance to the Eligible Recipient about the Project regarding technical and financial matters as needed;

provide strategic direction to the Eligible Recipient; and

make recommendations to the Eligible Recipient on the Budget, as requested.

The Eligible Recipient shall forward all invoices and applicable reports quoting this Agreement number 2017-A-3278 to:

ELIGIBLE PROJECT COSTS

The Eligible Recipient hereby certifies that (a) all costs described as Eligible Project Costs in Schedule C and submitted to SDTC for payment of an installment of the Contribution are accurate and are Eligible Project Costs of the Project, (b) all labour rates submitted in the budget as Eligible Project Costs are equal to the salary of the actual employee performing the work or if paid to a consultant and not an employee are the lowest labour rates charged by any consultant to a third party, and (c) the cost claimed for any services or equipment submitted as an Eligible Project Cost shall not include profit to the Eligible Recipient or any Consortium Member or any party related to or otherwise not at arm’s length to any of them and must be supported by invoice, and (d) all costs for labour rates claimed will be directly related to the person undertaking the work.

SDTC will determine whether a cost is an Eligible Project Cost or a Non-Eligible Project Cost and such determination shall be final and binding upon the Eligible Recipient.

REPORTING

The Eligible Recipient shall submit to SDTC, at least annually, in such form and containing such information as SDTC may require from time to time the reports and information set forth in Schedule E, together with such other information and reports as may from time to time reasonably be requested by SDTC.

Upon request from SDTC the Eligible Recipient will furnish to SDTC (i) the unaudited balance sheet of the Eligible Recipient (the “Balance Sheet”) as at such interim period as may be reasonably requested by SDTC and the related unaudited statements of operations and cash flows for the requested period, and (ii) the audited balance sheet of the Eligible Recipient and the related audited statements of operations and cash flows for the fiscal year then ended, (collectively, the “Financial Statements”). The Financial Statements shall be complete and correct, shall be in accordance with the books and records of the Eligible Recipient and present fairly the financial condition and results of operations of the Eligible Recipient, as at the dates and for the periods indicated, and shall be prepared in accordance with IFRS or ASPE, consistently applied.

Subject to Section 10.0 hereof, the Eligible Recipient hereby grants to SDTC a limited license (with a right to sublicense to the Funding Partner) to copy and distribute all information and/or reports submitted to it pursuant to this Section 5.0 hereof for the purposes of SDTC (or the Funding Partner) fulfilling its obligations hereunder and its obligations to the Government of Canada or other governmental authorities.

Upon completion of the Project, the Eligible Recipient shall provide SDTC with a certificate of an officer of the Eligible Recipient setting out any contributions or payments received by the Eligible Recipient in respect of the Project in addition to, or from sources other than, those named in its Proposal, and shall further certify as to any amounts owing to SDTC resulting from such over-funding and/or over-payment either as a result of changes in Project costs or accounting errors, or both.

ACCOUNTS, AUDITS AND INSPECTIONS

During the term of this Agreement, and for a further period of not less than four (4) years subsequent to termination the Eligible Recipient(s) shall:

maintain and preserve proper books, accounts and records of its financial contributions both, cash and in-kind, all its costs and expenses incurred and paid in connection with the Project and shall keep invoices, receipts and vouchers relating thereto;

maintain and preserve proper and accurate records relating to the environmental impact, sales revenues, employment impacts, technology developments (including patents and patent applications) and other impacts of the Project; and

on demand, make available to SDTC such books, accounts, records, invoices, receipts and vouchers referred to above and permit SDTC to examine, audit and take copies and extracts from such documents.

The Project shall be audited at the expense of the Eligible Recipient, by an auditor acceptable to SDTC at the end of the Project and such auditor shall prepare a final financial project audit report (the “Audited Project Report”) based upon such audit. The Project may also be audited by SDTC’s auditors or another auditor acceptable to SDTC, at SDTC’s cost, at such other time or times as SDTC may require.

The Eligible Recipient shall ensure that SDTC or its designate or the Funding Partner has access during normal working hours to any premise, or place where the Project is being carried out for the purpose of inspecting and assessing the progress of the Project and all matters relating thereto.

The Eligible Recipient shall permit the Minister and the Auditor General of Canada or their representatives to audit, or cause to have audited, the accounts and records of the Eligible Recipient as those accounts and records relate to the Project and shall cooperate with and allow access to the Minister and the Auditor General of Canada to the books and records of the Eligible Recipient and to the business premises and the Project site of the Eligible Recipient in order for the Minister and the Auditor General of Canada to conduct any such audit.

COVENANTS OF THE ELIGIBLE RECIPIENT

The Eligible Recipient shall complete the Project by the Completion Date unless the Completion Date is extended by SDTC in consultation with the Funding Partner.

The Eligible Recipient shall carry out the Project promptly, diligently and in a professional manner and in accordance with the terms and conditions of this Agreement, including all

The Eligible Recipient shall comply with all federal, provincial and municipal laws in relation to the Project.

The Eligible Recipient shall use commercially reasonable efforts to ensure that within three (3) years of the Completion Date the Project Intellectual Property and technology developed in connection with the Project, including any products, processes or services relating thereto, is made commercially available for the benefit of Canadians.

The Eligible Recipient shall comply in carrying out the Project, in all material respects, with all applicable environmental laws as such laws relate to the Project, and, to the extent that the Project was the subject of a self-assessment of environmental impacts to cause all mitigation measures identified to be fully undertaken and performed.

Except as provided in the Proposal, the Eligible Recipient shall not subcontract all or any part of the Project unless the Eligible Recipient has obtained the prior written consent of SDTC. Every subcontract made by the Eligible Recipient shall provide that the subcontractor shall comply with the terms and conditions of this Agreement that are applicable to the subcontract.

The Eligible Recipient will not knowingly permit any member of the Legislative Assembly of British Columbia to be admitted, directly or indirectly to any share or part of any contract, agent or commission made pursuant to this Agreement or in relation to the Project or to obtain any benefits arising therefrom.

The Eligible Recipient shall maintain valid policies of employer’s liability insurance and of insurance with respect to its properties and business (the “Insurance Policies”) of the kinds and in the amounts which are customary for the nature and scope of the business carried on by the Eligible Recipient and for the Project.

The Eligible Recipient shall give written notice to SDTC of any (i) change in control of the Eligible Recipient, and (ii) any change in the composition of the Consortium Members or other entities listed in Schedule D attached hereto.

Subject to any confidentiality obligations of the Eligible Recipient to third parties, the Eligible Recipient will provide access to any individual conducting an evaluation of SDTC that is in the employ of, or engaged by, Her Majesty the Queen in Right of Canada, as represented by the Minister (the “Evaluator”) to the appropriate records and information sources relating to the Project to enable the Evaluator to conduct such evaluation and the Eligible Recipient shall cooperate with the Evaluator in respect of the Evaluator carrying out such evaluation of SDTC.

REPRESENTATIONS AND WARRANTIES

The Eligible Recipient hereby represents and warrants on its own behalf and on behalf of the Consortium and each Consortium Member, and the Eligible Recipient hereby acknowledges that SDTC is relying on such representations and warranties for the purpose of entering into this Agreement and making payment of any installment of the Contribution:

Corporate Power and Due Authorization

Incorporation and Status

Contribution Eligibility

Sources of Funding

No Conflicts

Governmental Consents

Accuracy of Proposal

Litigation

Insurance

Absence of Changes

Permits

Environmental Matters

Disclosures

International Agreements

Contingency Fees

SDTC hereby represents and warrants to the Eligible Recipient and hereby acknowledges that the Eligible Recipient is relying on such representations and warranties for the purpose of entering into this Agreement:

Corporate Power and Due Authorization

Incorporation and Status

INTELLECTUAL PROPERTY

Subject to Section 13.2d) hereof, title to all Intellectual Property Rights in Project Intellectual Property shall vest in the Eligible Recipient and/or Consortium Members, in the manner agreed

The Eligible Recipient shall ensure that all employees or contractors working on the Project assign any and all Intellectual Property Rights in and to any Project Intellectual Property to the Eligible Recipient or a Consortium Member and that each such employee or contractor or any other person working on or contributing to the development of Project Intellectual Property executes a written permanent waiver of moral rights (as that term is defined in the Copyright Act, R.S.C., c. C-42} in any copyright arising in connection with the Project Intellectual Property.

The Eligible Recipient shall disclose to SDTC all arrangements and agreements among the Consortium Members with respect to the ownership of all Project Intellectual Property.

The Eligible Recipient shall disclose to SDTC, concurrent with the execution of this Agreement, all security interests, liens, encumbrances or other restrictions (each, a “Security Interest”) on or against all Project Intellectual Property. In addition, throughout the term of this Agreement, the Eligible Recipient shall disclose to SDTC in writing in advance its intention to grant over all or any part of the Project Intellectual Property a Security Interest in favour of a third party, including any Consortium Member. The Eligible Recipient will update such information promptly to SDTC in writing should any such Security Interest, or the details thereof change, terminate or be amended in any way throughout the term of this Agreement.

The Eligible Recipient agrees to do and execute or cause to be made, done or executed all such further and other things, acts, deeds, documents, applications, specifications, oaths, assignments and assurances as may be necessary or reasonably required to give full effect to the assignment to Canada pursuant to Section 13.2d) hereof of the Eligible Recipient’s rights in the Project Intellectual Property, including all Intellectual Property Rights therein or relating thereto. The Eligible Recipient hereby irrevocably designates and appoints SDTC and its duly authorized officers and agents as the Eligible Recipient’s agent and attorney in fact, to act for and on behalf of the Eligible Recipient to execute and file any such applications and to do all other lawfully permitted acts to further the prosecution and issuance of letters patent or copyright registrations thereon with the same legal force and effect as if executed by the Eligible Recipient.

CONFIDENTIAL INFORMATION

Any Confidential Information received by either party hereto (a “receiving party”) pursuant to this Agreement shall be used, disclosed, or copied, only for the purposes of, and only in accordance with, this Agreement. The receiving party shall use, as a minimum, the same degree of care as it uses to protect its own Confidential Information of a similar nature, but no less than reasonable care, to prevent the unauthorized use, disclosure or publication of Confidential Information. Without limiting the generality of the foregoing:

the receiving party shall only disclose Confidential Information to its bona fide employees, contractors or suppliers who need to obtain access thereto for purposes consistent with this Agreement;

the receiving party shall not make or have made any copies of Confidential Information except those copies which are necessary for the purposes of this Agreement; and

the receiving party shall affix to any copies it makes of the Confidential Information, all proprietary notices or legends affixed to the Confidential Information as they appear on the copies of the Confidential Information originally received from the disclosing party.

The Eligible Recipient recognizes the necessity for SDTC to provide verification pursuant to the Funding Agreement to Her Majesty the Queen (the “Crown”) in Right of Canada as represented by the Minister of Industry that the purpose and objectives of SDTC are being achieved. The Eligible Recipient shall cooperate with SDTC to enable SDTC to effectively report to the Crown, provided however that SDTC shall not disclose Confidential Information received from the Eligible Recipient to the Crown unless such Information is aggregated with similar information from other projects and is not attributed to the Eligible Recipient or other Consortium Members, in which case the information will be deemed not to be Confidential Information. Such aggregated information may include Greenhouse Gas emissions reduction and clean air impacts reporting, both estimated and actual, and all other information reported under Section 5.0 hereof after it has been compiled by sector, sub-sector, technology segment and/or region.

The receiving party shall not be bound by obligations restricting disclosure and use set forth in this Agreement with respect to any Confidential Information which:

was known by the receiving party prior to disclosure, as evidenced by its business records;

was lawfully in the public domain prior to its disclosure, or lawfully becomes publicly available other than through a breach of this Agreement or any other confidentiality obligation on behalf of any third party;

was disclosed to the receiving party by a third party provided such third party, or any other party from whom such third party receives such information, is not in breach of any confidentiality obligation in respect of such information;

is independently developed by the receiving party, as evidenced by its business records; or

is disclosed when such disclosure is compelled pursuant to legal, judicial, or administrative proceedings, or otherwise required by law, provided that the receiving party advises the disclosing party of any such disclosure in a timely manner prior to making any such disclosure (so that either party can apply for such legal protection as may be available with respect to the confidentiality of the information which is to be disclosed), and provided that the receiving party shall apply for such legal protection as may be available with respect to the confidentiality of the Confidential Information which is required to be disclosed.

Except for disclosures authorized under the terms of this Agreement, the receiving party shall notify the disclosing party immediately upon learning of any disclosure of the disclosing party’s Confidential Information.

Notwithstanding any other provision of this Agreement, SDTC may provide any reports, financial statements, certificates or other documents, and any Confidential Information or other information, received from the Eligible Recipient under terms of this Agreement to the Funding Partner, so long as the Funding Partner is subject to the obligations of confidentiality with respect thereto that are substantially the same (with appropriate adjustments to address the different governance structures of SDTC and the Funding Partner) as SDTC’s obligations of confidentiality under this Agreement.

INDEMNITY

The Eligible Recipient shall indemnify and save harmless SDTC and its board of directors, members, employees and agents and the Government of Canada from and against any and all

any injury to persons (including injuries resulting in death) or loss of or damage to property which may be or be alleged to be caused by or suffered as a result of the carrying out of the Project or any part thereof, except to the extent caused by the negligence of SDTC, its board members, employees or agents;

any claim, demand or action for the infringement or alleged infringement of any Intellectual Property Right of a third party based upon the use thereof by the Eligible Recipient or upon the use of the Project Intellectual Property by SDTC or the Government of Canada in accordance with the terms hereof; and

any claim, demand or action made by a third party against them or any of them based upon SDTC’s capacity as a provider of financial assistance under this Agreement, including without limitation, any claim in respect of materials or services provided by a third party to the Eligible Recipient or to a subcontractor or supplier of the Eligible Recipient.

LIMITATION OF LIABILITY

IN NO EVENT SHALL EITHER PARTY HAVE ANY LIABILITY FOR ANY INDIRECT, INCIDENTAL, SPECIAL OR CONSEQUENTIAL DAMAGES, HOWEVER CAUSED AND ON ANY THEORY OF LIABILITY (INCLUDING NEGLIGENCE), ARISING OUT OF THIS AGREEMENT, INCLUDING BUT NOT LIMITED TO LOSS OF ANTICIPATED PROFITS, EVEN IF SUCH PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES. THESE LIMITATIONS SHALL APPLY NOTWITHSTANDING ANY FAILURE OF ESSENTIAL PURPOSE OF ANY LIMITED REMEDY.

Except for claims under Section 11.1b) hereof, neither party shall be liable to the other for damages in excess of the amount of the Contribution actually paid to the Eligible Recipient by SDTC pursuant to this Agreement.

The Eligible Recipient hereby acknowledges that SDTC may provide funding to numerous companies, entities and consortia, some of which may be competitive with the Eligible Recipient or Consortium Members or which may be competitive with the technology developed in connection with the Project (“Competitive Entities”). SDTC shall not be liable to the Eligible Recipient for any claim arising out of, or based on: (i) the provision of funding by SDTC to any Competitive Entity; or (ii) actions taken by any partner, officer or other representative of SDTC to assist a Competitive Entity (in the capacity as a director of such company or otherwise), whether or not such action has a detrimental effect on the Eligible Recipient or the Project, provided that SDTC will in all circumstances maintain the confidentiality of all information provided to it by the Eligible Recipient in accordance with the terms and conditions hereof.

TERMINATION OF AGREEMENT

The following shall constitute events of default (each an “Event of Default”) under this Agreement:

the Eligible Recipient becomes bankrupt or insolvent, goes into receivership, or takes the benefit of any statute from time to time in force relating to bankrupt or insolvent debtors;

an order is made or resolution passed for the winding up of the Eligible Recipient, or the Eligible Recipient is dissolved;

the Eligible Recipient has knowingly made any misrepresentations to SDTC in respect of the Proposal or this Agreement;

the Eligible Recipient Is in material breach of this Agreement and such material breach has not been remedied by the Eligible Recipient within sixty (60) days of receiving notice of such material breach from SDTC; or

the rejection by SDTC of the third consecutive submission of any one report in support of a Claim under Section 3.3 hereof.

Upon the occurrence of an Event of Default, SDTC may, in its sole discretion exercise one or more of the following options:

terminate the whole or any part of this Agreement;

suspend or terminate SDTC’s obligation to pay any further installments of the Contribution in respect of the Project, including monies due or accruing due which have not yet been paid;

in the event of a breach by the Eligible Recipient of Section 3.2 hereof, exercise the remedies described in Section 3.7 hereof;

upon fifty (50) days written notice to the Eligible Recipient and provided that the Eligible Recipient has not repaid the disbursed Contribution prior to the expiry of such fifty (50) day period, cause the Eligible Recipient to convey directly to Canada any and all Project Intellectual Property and obtain from the Eligible Recipient any required license to exercise the Intellectual Property Rights in the Background Intellectual Property;

upon fifty (50) days written notice to the Eligible Recipient and provided that the Eligible Recipient has not repaid the disbursed Contribution prior to the expiry of such fifty (50) day period, have the Eligible Recipient transfer and assign to SDTC all of the Eligible Recipient’s right, title and interest in and to equipment, capital assets and supplies purchased by the Eligible Recipient to carry out the Project (to the extent such were acquired and reimbursed by SDTC); and/or

direct the Eligible Recipient to repay forthwith all or any part of the Contribution paid by SDTC pursuant to this Agreement.

In the event that SDTC exercises its rights under Section 13.2d) hereof, the Eligible Recipient shall:

obtain a written permanent waiver of moral rights (as that term is defined in the Copyright Act, R.S.C., c. C-42), in a form acceptable to SDTC, from every author that contributed to any Intellectual Property Rights which arose from the Project and which are subject to copyright protection; and

at the expense of SDTC, afford Canada all reasonable assistance in the preparation of applications and in the prosecution of any applications for registration of any Intellectual Property Right which arose from the Project.

In the event that the Eligible Recipient determines in good faith that (i) the Project should be terminated prior to completion or (ii) at any time after completion of the Project commercialization is not reasonably commercially feasible, the Eligible Recipient shall provide SDTC with detailed written reasons for the termination of the Project or termination of commercialization as the case may be. SDTC shall have a period of sixty (60) days to assess

this Agreement shall be terminated; and

SDTC shall have no obligation to pay any further installments of the Contribution in respect of the Project, other than amounts due or accruing due as of the date of termination which have not yet been paid.

In the event that SDTC does not agree that the Project should be terminated, then SDTC shall give notice to the Eligible Recipient that as of the date of such notice from SDTC:

this Agreement shall be terminated in accordance with Section 13.2 hereof;

SDTC shall have no obligation to pay any further installments of the Contribution in respect of the Project, including amounts due or accruing due as of the date of termination which have not yet been paid; and

upon fifty (50) days written notice to the Eligible Recipient and provided that the Eligible Recipient has not repaid the disbursed Contribution prior to the expiry of such fifty (50) day period, the Eligible Recipient shall transfer and assign to Canada all of the Eligible Recipient’s right, title and interest in and to the Project Intellectual Property.

SDTC may terminate this Agreement, terminate its obligations to make Contributions or reduce the amount of Contributions otherwise required to be made pursuant to this Agreement upon thirty (30) days written notice to the Eligible Recipient (“Notice of Termination”), without penalty in the event that:

the Funding Agreement is materially amended, expired or terminated for any reason;

SDTC has not received sufficient allocated funds from the Government of Canada to enable SDTC to pay the Contribution; or

an order is made or resolution passed for the winding up of SDTC or the dissolution of SDTC.

If this Agreement is terminated in accordance with section 13.6:

any Claims submitted by the Eligible Recipient prior to the effective date of the Notice of Termination shall be processed by SDTC in accordance with the terms hereof;

SDTC shall have no obligation to pay any further installments of the Contribution, including amounts due or accruing as of the effective date of the Notice of Termination; and

the Eligible Recipient releases SDTC from any and all claims relating to such termination (other than the payment of any part of the Contribution properly payable by SDTC to the Eligible Recipient in accordance with the terms and conditions hereof).

If upon expiration or termination of this Agreement for any reason whatsoever, there are, at the date of such termination, any amounts paid by SDTC to the Eligible Recipient as part of the Contribution which have not been expended by the Eligible Recipient on such date on Eligible

Fees and Expenses

ASSIGNMENT

This Agreement shall not be assigned in whole or in part by the Eligible Recipient without the prior written consent of SDTC and any assignment made without that consent is void and of no force or effect.

DISPUTE RESOLUTION

Best Endeavours to Settle Disputes

Mediation

Arbitration

Except as is expressly provided in this Agreement, if the parties do not reach a solution pursuant to Sections 15.1 or 15.2 hereof within a period of thirty {30) Business Days, then upon written notice by any party to the other, the dispute, claim, question or difference shall be finally settled by arbitration in accordance with the provisions of the Arbitrations Act (British Columbia) and any amendments thereto, based upon the following:

the arbitration tribunal shall consist of one arbitrator appointed by mutual agreement of the parties, or in the event of failure to agree within ten (10) Business Days, any party may apply to a court of competent jurisdiction to appoint an arbitrator. The arbitrator shall be qualified by education and training to pass upon the particular matter to be decided;

the arbitrator shall be instructed that time is of the essence in proceeding with his determination of any dispute, claim, question or difference and, in any event, the arbitration award must be rendered within thirty (30) Business Days of the submission of such dispute to arbitration;

the arbitration shall take place in Vancouver, British Columbia and shall, unless otherwise mutually agreed among the parties, be conducted in English;

the arbitration award shall be given in writing and shall be final and binding on the parties, not subject to any appeal, and shall deal with the question of costs of arbitration and all matters related thereto;

each party shall bear the cost of preparing its own case. The arbitrator shall have the right to include in the award the prevailing party’s costs of arbitration and reasonable fees of attorneys, accountants, engineers and other professionals incurred by it in connection with the arbitration; and

judgment upon the award rendered may be entered in any Court having jurisdiction, or, application may be made to such Court for a judicial recognition of the award or an order of enforcement thereof, as the case may be. In addition, if it appears to either party that the arbitrator lacks the power to give effective interim relief, such party may apply to a court of competent jurisdiction for such relief.

PUBLICITY AND ACKNOWLEDGEMENTS

The Eligible Recipient will acknowledge the financial support of SDTC and the Funding Partner in all publicly disseminated information relating to the Project unless otherwise directed by SDTC.

The Eligible Recipient hereby consents and agrees to the participation by SDTC or a representative of the Government of Canada and the Funding Partner at any public event relating to the Project organized by the Eligible Recipient, the Consortium or a Third Party and to have the event take place on a date mutually agreed upon by the Eligible Recipient and SDTC. If directed by SDTC, the Eligible Recipient shall use the corporate name and logo of SDTC and the name and logo of the Funding Partner and the Government of Canada’s wordmark provided that such use is strictly in accordance with the policies of SDTC and the Government of Canada and the Funding Partner, as applicable relating thereto and only as it relates to the Project and for no other use without the prior written consent of SDTC.

No press releases, public announcements or other material prepared by the Eligible Recipient, the Consortium or a Third Party for promotional and general information purposes relating to the Project, SDTC, the Funding Partner or the Contribution shall be issued or distributed to the public without the prior written approval of SDTC and the Eligible Recipient shall use the framework for press releases provided by SDTC which recognizes the contribution to the Project of SDTC, the Government of Canada and the Funding Partner. At the request of SDTC, press releases, public announcements and other material prepared by the Eligible Recipient, the Consortium or a Third Party relating to the Project shall be in both English and French. Any such press releases, public announcements or other material shall be submitted to SDTC for review and approval at least ten Business Days prior to scheduled release to the public.

Each of SDTC and the Funding Partner may issue press releases and other materials it has prepared for promotional and general information purposes which refer to the Eligible Recipient, the Consortium, the Project and the Contribution without the approval or consent of the Eligible Recipient.

NOTICES

Notices under this Agreement shall be issued to the following individuals. Notification may be via fax or mail/courier to the following address:

GENERAL CONTRACT PROVISIONS

Time is of the Essence

Excusable Delays

Amendments

Legal Relationship

Severability

No Implied Waivers; Rights Cumulative.

Further Assurances

Governing Law

Entire Agreement

Successors and Assigns

Language of Agreement

LIMITS ON FUNDING

The preparation of this Agreement by SDTC and the completion of any blanks herein shall not be construed as an offer by SDTC to the Eligible Recipient. This Agreement shall not be binding on SDTC until it has been executed by SDTC and the Eligible Recipient and a fully executed copy is delivered to the head office of SDTC in Ottawa. Unless fully executed, this document shall expire on July 31, 2018 and any potential funding described herein may be unilaterally withdrawn by SDTC.

/s/ Kevin Lindsey

/s/ Vern Brownell

Kevin Lindsey

Acting Vice President, Performance

/s/ Ziyad Rahme

Ziyad Rahme

VP Investments, for Leah Lawrence, President and CEO