1. September 22, 2010 Strategic Aerospace and Defence Initiative (SADI) Program Overview

2. Industrial Technology Office - Overview 2 Strategic Aerospace and Defence Initiative  Launched in April 2007 as a replacement for the Technology Partnerships Canada (TPC) program.  SADI has funded 16 projects for a total of 440 millions.  SADI funding helps support companies that are investing in R&D, allowing projects to proceed successfully and generating benefits for Canadians.  SADI provides Canadian companies performing work in the aerospace, defence, space and security (A&D) industries with repayable contributions for strategic R&D projects.

3. Industrial Technology Office - Overview 3 SADI Objectives  Encourage strategic R&D that will result in innovation and excellence in new products and services;  Enhance the competitiveness of Canadian aerospace, defence, space and security companies; and,  Foster collaboration between research institutes, universities, colleges, and the private sector.

4. Industrial Technology Office - Overview 4 Eligibility Requirements  Companies must be incorporated under Canadian law.  The proposal must show that the company's project will consist of eligible activities: industrial research and/or pre-competitive development.  The project must include strategic R&D activities.  The applicant must demonstrate that government support is required to meet the scope and timing of the proposed project.  Strategic R&D and follow on benefits must occur in Canada.

5. Industrial Technology Office - Overview 5 SADI Process - A Quick Rundown  Application Develop Proposal with assistance of SADI Officer Evaluate eligibility and conduct initial assessment Perform due diligence Approvals Contribution Agreement  Benefits Monitoring Manages those projects that are in their work (R&D) phase. Process requests for reimbursement of R&D expenditures Negotiate and execute amendments when required Monitor project benefits.  Repayments

6. Industrial Technology Office - Overview 6 Proposal Assessment Criteria  Company capability to achieve the stated objectives (company must demonstrate that it has, or will have, all of the following:) Financial resources Management expertise A business plan (outlining how results/benefits in the proposal will be achieved), and Technical team’s experience and expertise  Technology Benefits (project must meet at least one of the criteria) Degree of strategic technology innovation and/or excellence Feasibility of R&D leading to product/service applications  Social and Economic Benefits (project must meet at least two of the criteria) Feasibility of achieving stated economic benefits or Technology diffusion to other companies or sectors; and Collaborative partnerships developed during the course of the project between research institutes, universities, colleges and the private sector

7. Industrial Technology Office - Overview 7 Benefits Monitoring  Develop and maintain relationship with Recipients  Perform claims verification;  Undertake site visits;  Assess Annual Information Updates;  Perform Annual Risk Assessments;  Review Project Progress Reports and Annual Financial Statements;  Transition project to the benefits phase;

8. Industrial Technology Office - Overview 8 Repayment  Based on Gross Business Revenue (GBR) - amounts due are easily verifiable with annual financial statements  Two repayment plans: Conditional or Unconditional  Repayment periods will generally not exceed 15 years  All projects treated using common methodology

9. Industrial Technology Office - Overview 9 Conclusion  SADI program has established itself as a strong supporter of Canada’s A&D industries, recognizing the strategic importance of these industries to our national economy.  SADI projects are also laying the groundwork for future innovation by expanding Canada's expertise in key fields, transferring new technologies and knowledge through collaborations with partners and supply chains, and helping develop and maintain a highly skilled Canadian workforce.  SADI is building its success to continue helping even more Canadian aerospace and defence companies take on strategic industrial and pre-competitive R&D projects that allow them to innovate, collaborate and compete, both at home and abroad.

10. Industrial Technology Office - Overview 10 Contact Information Website: ito.ic.gc.caito.ic.gc.ca Email: info@ito.ic.gc.cainfo@ito.ic.gc.ca Toll free (Canada): 1-800-266-7531 Toll free TTY (hearing impaired only): 1-866-468-1669 Industrial Technologies Office Industry Canada 235 Queen Street, 7th Floor Ottawa, ON K1A 0H5 Fax: 613-954-5649