Canada-Israel collaboration Presentation to The Israel-Canada Chamber of Commerce & Industry Tuesday 26th July, 200

1. Canada-Israel collaboration Presentation to The Israel-Canada Chamber of Commerce & Industry Tuesday 26th July, 2005

2. Overview • Established 1994 • To promote collaborative R&D between firms in both countries • For Canada, CIIRDF is itself an innovation • For Israel, CIIRDF is one of a number of similar bilateral initiatives – based on the success of BIRD • Operated by a President and a small staff located in Ottawa, Canada and an office in Israel. • The President reports to a Board of Directors, comprising three members from each country.

3. CIIRDF Activities • Promoting and marketing the benefits of joint Canadian-Israeli R&D collaboration • Matching companies in one country seeking a research partner in the other • Supporting projects by contributing up to 50% of the joint R&D costs • Promoting consortium to consortium cooperation in areas of strategic importance to both countries

4. Partnership Objectives: • CIIRDF seeks to promote partnerships where a joint R&D project builds on the capabilities of both partners • CIIRDF partnerships are to develop new products, processes or significant enhancements enabling wider product marketing. • Partnerships are not intended to be primarily supplier-distributor relationships.

5. Matchmaking: • Core Function to facilitates the identification of potential technology partners for Canadian and Israeli companies • Utilization of the extensive networks and databases in Canada and Israel to locate these partners. CIIRDF and IRAP (Industrial Research Assistance Program) partnership • providing IRAP with experience in international partnerships • giving Israel access to the Canada-wide network of 260 Industrial technology advisors

6. CIIRDF Awards Model CIIRDF’s major role is that of sharing in R&D risk by • investing up to $20,000 for feasibility studies • and up to $800,000 for full-scale R&D projects undertaken as a joint project by Canadian and Israeli partners CIIRDF awards are provided on a cost-share basis for up to 50% of the project R&D costs CIIRDF retains neither equity nor intellectual property rights as a result of its contribution CIIRDF requires that the award be repaid by the project partners should the project result in commercialization and revenue generation

7. Eligibility for CIIRDF R&D Grants • Canadian and Israeli firms which operate and are headquartered in Canada and Israel respectively are eligible for the program. • Firms may be cooperating on either an ad hoc basis, through a joint venture, or may share common ownership • The companies should be able to conduct R&D to advance commercially products or processes that have a reasonable potential for commercial success • Track records should show past sales and ability to deliver

8. The Agreement • Typically a three-party agreement (i.e. between the Canadian and Israeli companies and CIIRDF • Company-Company agreement is not subject to review by CIIRDF. • However it is expected that the partners both stand to gain from the Project • Partners have agreed on issues relating to manufacturing rights, marketing, intellectual property rights, etc

9. Grant Payments Full-scale Projects funding in three installments: • Upon signing the Cooperation and Project Funding Agreement, • Upon submission and acceptance of the interim Technical and Fiscal Reports • Upon submission and acceptance of the Final technical and commercialization reports. Feasibility Studies funding in two payments: • 50% upon signing of the Agreement, • and the balance upon submission and acceptance of the Final Report

10. Award Repayments • The Proposer is required to make payments to CIIRDF based on gross sales derived from the sale, leasing or other marketing or commercial exploitation of the product or process innovation resulting from the Project. • The repayment rate is 2.5% of gross sales revenue semiannually, beginning with the semiannual period during which the first sale was made following receipt of the Award, and ending when at least 90% of the Award value has been repaid to CIIRDF

11. Process Feasibility Studies - approved by the President Full-Scale Projects - Board approval. After the initial expression of intent by the Proposer to apply for Full-Scale Project funding, CIIRDF may invite an outline of the proposal and then a detailed proposal

12. Timing Feasibility Study proposals may be submitted at any time - typically a two-week turnaround for decision. Full-scale proposals require : • 10-14 days for outline review • 6-8 weeks for full evaluation • final decision by the CIIRDF Board. • Board meets are twice a year – April & November

13. Funded Projects • Bioxel Pharma, Quebec City and Polygene, Jerusalem • Gallium Software Inc., Nepean and Tiltan System Engineering Ltd., Bnai B’rak • GEMs Systems, Toronto and Isorad, Soreq • Mirador DNA Design, Montreal and Sensis Ltd., Kiryat Shmona • Mitel Networks Corporation. Ottawa and VCON Ltd. of Herzliya • Elbit Systems of Petach Tikva and MDA of Richmond, B.C. • Digiscreen of Montreal, Quebec and Moonlight Software of Tel Aviv • Oceans Nutrition Canada, Halifax Nova Scotia and NoriTech, Haifa • Omega Recyling Technologies, Montreal and Pervasiv Ltd., Ashkelon • OZ Optics of Carp, Ontario and Nanonics Imaging Ltd., Jerusalem • TELEstraining, Vancouver and Shoham, Haifa • Tesma Engine Technologies, Toronto and Dead Sea Magnesium (DSM), Beersheva • Unity Wireless System Corp of Burnaby, B.C. and Dekolink Wireless Ltd., Petach Tikva • Wavesat Wireless, Montreal and Celerica Ltd., Petach Tikva

14. Lessons learned • ENCRYPTION • FIREWALL • WIRELESS • CHIP DESIGN • APPLIED PHOTONICS • COMPUTATIONAL BIOLOGY • DRUG DESIGN AND DELIVERY • MEDICAL ELECTRONICS AND DEVICES • GENE THERAPY • AG BIOTECH

15. Canadian Audit Summary Sales forecasts are estimated to surpass $700M for Canadian firms alone; Projects have led firms in new directions: to create new technologies, to pursue new markets, to spin-off companies; • CIIRDF has strengthened overall economic, trade, and political relations between Canada and Israel; • Matchmaking services are being conducted effectively. In the past 3-4 years, CIIRDF has provided matchmaking services to approximately 240 firms. • CIIRDF output surpasses all other tech programs evaluated in the past 20 years

16. Israel as a strategic partner: • Gives a comparative advantage in multi-disciplinary approaches to innovation and commercialization • In the past decade, recognized world leadership in the key enablers ( cryptology, firewall, systems biology, drug delivery, non-intrusive diagnostics, wireless )

17. The Real Upside of …...Canada-Israel collaboration!!!