SADI Overview

1. SADI Overview

2. Strategic Aerospace and Defence Initiative • SADI is a program managed by the Industrial Technologies Office, a Special Operating Agency of Industry Canada. • Launched in April 2007 as a replacement for the Technology Partnerships Canada (TPC) program. • Higher standards for transparency and accountability. • More predictable repayment structure. • Open to companies of all sizes.

3. A Repayable Contribution Program • 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. • SADI contributions will equal approximately 30 percent of a project's total eligible costs.

4. 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.

5. Collaboration • SADI is placing increased emphasis on fostering collaboration between companies and academic institutions • Benefits for companies: • Find a solution to a problem  innovation • Develop new technology  competitive advantage • Develop a new process  higher productivity, lower costs • Improve performance and features  competitiveness • Access to world-recognized experts  innovation • Increase R&D  faster time to market

6. SADI Funding • Originally authorized to invest up to $225 Million per year. • Additional $200 million in SADI funding announced in September 2009. • To date, SADI has invested more than $824 million in 24 projects across Canada, leveraging an additional $1.7 billion in R&D investments. • $2.08 in R&D investments leveraged for each SADI dollar. • Typically, SADI contributes 30 % of a project`s eligible costs. • 40% for JSF and DDSA projects

7. Eligibility • Companies must be incorporated under Canadian law. • Proposal must show that the company's project will consist of eligible activities: industrial research and/or pre-competitive development resulting in either new or improved products, processes or services. • Project must include strategic R&D activities. • Applicant must demonstrate that government support is required to meet the scope and timing of the proposed project. • Strategic R&D and benefits must occur in Canada.

8. Assessment Criteria • Company capability to achieve the stated objectives • Financial resources • Management and technical expertise and experience • Business plan • Technological Benefits • Degree of strategic technology innovation and/or excellence • Feasibility of R&D leading to product/service applications • Social and Economic Benefits • Feasibility of achieving stated economic benefits • Technology diffusion to other companies or sectors; and • Collaborative partnerships developed during the course of the project

9. SADI Project Lifecycle • First contact • Proposal developed • Determine project eligibility • Perform due diligence • Approvals • Contribution Agreement signed • Undertake R&D (Work Phase) • SADI funding disbursed via project claims • Project complete (Benefits Phase) • Project monitoring & audits • Repayments

10. Repayments • Conditional or Unconditional Repayment Terms • Conditional Repayments: based on Gross Business Revenue (GBR) - amounts due are easily verifiable with annual financial statements. • Unconditional Repayments: based on fixed yearly repayments over the length of the repayment period. • Begin one year after completion of R&D phase • Generally do not extend beyond 15 years • Transparent: disclosed on ITO website

11. SADI Portfolio (August 2011) • AeroMechanical Services Ltd.Next-generation data communication systems for commercial and military aircraft • ASCO Aerospace Canada Ltd.Innovative manufacturing for aircraft bulkheads and specialized metal components • Axys Technologies Inc.Real-time maritime monitoring and surveillance data unification technology • BelAir Networks Inc.Wireless networking technologies to improve defence industry communications • CAE Inc.Innovative aircraft simulator systems • CMC Electronics Inc.Cost-effective cockpit technologies for next-generation aircraft • D-Ta Systems Inc.High-end sensor interfacing and processing systems to meet defence communications needs

12. SADI Portfolio (continued) • Diamond D-Jet CorporationAn all-composite, single-engine, five-passenger jet aircraft • GMA Cover, ULC • Héroux Devtek Inc.More reliable and environmentally-friendly landing gear systems • Integran Technologies Inc. (3 projects)Nanotechnology-based coatings for aerospace applications • Kongsberg Mesotech Ltd.Next-generation sonar technologies for underwater surveillance and maritime security • Magellan Aerospace Limited (Bristol Aerospace)New processes for composite manufacturing and complex assemblies • Mechtronix Systems Inc. Build in-house capabilities to develop flight simulator training products • Norsat International Inc.Next-generation portable ground satellite telecommunications technologies

13. SADI Portfolio (continued) • PCI Geomatics Enterprises IncorporatedNext-generation earth observation technologies • Pratt & Whitney Canada Corp.Lighter aircraft engines with more power, better fuel consumption and improved durability • SkyWave Mobile Communications Inc.Technologies for satellite-based goods tracking and monitoring • Sputtek Inc.Advanced protective coating technology • Thales Canada Inc.Innovative flight control systems • Ultra Electronics TCS Inc.Next-generation tactical radio systems for military and government security

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