Model Indemnity Agreement - Canada Travelling Exhibitions Indemnification Program

Model indemnity agreement

Between:

Her Majesty The Queen in right of Canada as represented by the Minister of Canadian Heritage (the “Minister” and including any person duly authorized to represent her)

And:

Name of Owner ________________________________(the “Owner”) [indicate the legal status of the Owner]

(or if the Crown is dealing with the Owner’s legal agent):

Name of Legal Agent acting on behalf of [insert name of owner] (the “Owner”)

(collectively referred to herein as the “Parties”).

Introduction

  1. The Minister, on the basis of Legislation, created the Canada Travelling Exhibition Indemnification Program (the “Program”); a program for travelling exhibitions aimed at reducing the insurance costs associated with major travelling exhibitions of art and cultural heritage collections for Canadian institutions, such as museums, art galleries, archives and libraries.
  2. The Owner has entered into a loan agreement to loan Property to [insert name of the “Participating Institution(s)”] for a travelling exhibition entitled XXXX (the “Travelling Exhibition”) that will take place from XXX to XXX.
  3. [Insert name of the Participating Institution] that is organizing or hosting the Travelling Exhibition has submitted an Application for Indemnification to the Minister through the Program.
  4. In reliance upon the accuracy of the information provided, including all the provisions of the loan agreement, the Minister has approved the Application, subject to the execution of this Agreement by the Parties.
  5. Pursuant to and in accordance with the Legislation, the Minister and the Owner now wish to enter into this Agreement.

Now therefore, the Parties agree as follows:

Indemnification coverage

Subject to the execution of this Agreement by the Parties no later than [insert specific date](which is no more than 45 days from date of Ministerial approval – the Program to advise the Owner by way of letter to a Participating Institution of the date before which they have to return the signed Agreement to the Minister) indemnification coverage will:

  1. commence following the production of condition reports upon Crating of the Property at Owner’s designated premises [indicate location if known] for Transit to [Insert Name of a Participating Institution] no earlier than [insert date]; and
  2. indemnity coverage will cease upon completion of condition reports of the Property after Transit to a non-participating Institution [insert name of owner designated premises] no later than [insert date].

Obligations of the Minister

Subject to, and in accordance with the Legislation, the terms of the Program and the terms of this Agreement, the Minister agrees to indemnify the claims of the Owner for loss or damage to the Property, based on the fair market value set out in Schedule 2, less any deductible specified in the Regulations for which the Participating Institution is responsible, including:

  1. damage resulting from approved Transit to, from or between [insert location, i.e. lender’s designated premises or non-participating institution)] and [name of Participating Institution or non-participating institution]; and
  2. damage resulting from installation, display, storage or dismantling that occurs at [indicate name of Participating Institution].

The Minister shall not indemnify the Owner for any damage that is due to or results from:

  1. loss or damage from normal wear and tear, gradual deterioration, vermin, inherent vice, pre-existing flaw or condition, radioactive contamination, wars, strikes, riots, civil commotion, or repair, restoration or retouching processes other than those repair, restoration or retouching processes undertaken at the request of the Minister pursuant to subparagraph 12(b)(ii) of the Regulations;
  2. loss or damage to the Property due to the wilful misconduct or gross negligence of the Owner or the Participating Institution, including their employees; and
  3. loss or damage that occurs at a Non-Participating Institution that is unrelated to the Transit of the Property to or from a Participating Institution.

The Minister shall have no obligation to indemnify the Owner in respect of any loss or damage to Ineligible Property.

The Minister shall have no obligation to indemnify the owner unless provided, in the event of a claim, with all the Condition Reports completed during the period of indemnification.

The Minister shall have no obligation to indemnify the Owner in respect of any period during which a Travelling Exhibition is shown outside Canada.

Obligations of the Owner

The Owner must comply with the indemnity claims procedure set out in the Legislation in the event of loss or damage to the Property that is the subject of this Agreement, including, but not limited to, the following requirements:

  1. the Minister’s receipt of a duly signed loan agreement prior to the execution of this Agreement (the issuance of this Agreement to the Owner constituting acknowledgment that this condition has been met);
  2. written notification to the Minister within forty eight (48) hours of loss, or damage to the Property for which indemnification may be sought.

During the term of this Agreement, the Owner shall,

  1. upon the written request of the Minister, provide any information as the Minister may require concerning this Agreement;
  2. ensure, either directly or through a Participating Institution, that the Minister is informed of any changes affecting the time, period, venues, list of indemnified objects or appurtenances or the packing, shipping, security, storage and environmental conditions as stated in the Application, so that consideration may be given to amending this Agreement; and
  3. remain eligible for indemnification under the provisions of the Legislation.

Representations by the Owner

The Owner represents that:

  1. it has the capacity and authority to enter into this Agreement; and
  2. any information communicated to the Minister and the Participating Institution in relation to the Application and this Agreement is accurate and that all relevant information has been disclosed.

Claims for property comprising part of a set

A determination made under section 14 of the Regulations of a consequent reduction in fair market value in the event of loss or damage to the Property, where that Property is part of a set, shall be a reasonable and fair proportion of the total value of the set, giving consideration to the importance of the Property to the set, but in no event shall such loss or damage be construed to mean total loss of or damage to a set.

Dispute resolution process

If a dispute arises the Parties will attempt to resolve it following the dispute resolution process set out in Schedule 1 of this Agreement.

Subrogation

If the Minister compensates the Owner for loss or damage, the Minister shall be subrogated in accordance with section 16 of the Regulations under which the Minister’s right to subrogation cannot be waived.

Buy-back

If the Owner is compensated for Property that is lost and subsequently the Property is recovered, the Owner may buy back the Property from the Minister in accordance with section 17 of the Regulations.

Benefit to Bailee

This Agreement shall in no way inure directly or indirectly to the benefit of any carrier or other Bailee.

Governing law

This Agreement shall be governed by, interpreted and construed exclusively in accordance with the laws of the Province of [indicate province] and the laws of Canada as applicable and any claim or dispute arising hereunder or in connection herewith shall be determined exclusively by the Courts in Canada.

Hyperlinks

The Minister has incorporated hyperlinks to the Government of Canada Justice Laws solely for ease of reference (the “Hyperlinks”). The Minister cannot assure the Owner that the Hyperlinks will remain accessible or the same during the term of this Agreement or thereafter. The Owner has sole responsibility for obtaining access to the most current Legislation.

Privacy and access to information

The information submitted to and in the possession of the Minister in relation to this Agreement is subject to applicable Canadian laws, including the Privacy Act, R.S.C., 1985, c. P-21 and Access to Information Act, R.S.C., 1985, c. A-1.

Binding agreement

This Agreement is binding on the Parties and their successors and assigns.

No assignment of agreement

This Agreement, including any part thereof, may not be assigned by the Owner without the prior written consent of the Minister.

Invalid provisions

If any provision of this Agreement is held to be illegal, invalid, or unenforceable under present or future laws effective during the term of this Agreement, the legality, validity, or enforceability of the remaining provisions of the Agreement will not be affected thereby.

Official languages

This Agreement and all documents relating thereto, shall be written in one of the official languages of Canada (English or French), the choice of which official language being that of the Owner.

Entire agreement

This Agreement constitutes the entire agreement and only agreement between the Parties and supersedes all previous documents, negotiations, communications, arrangements, undertakings and understandings whether written or oral, unless they are expressly incorporated by reference into this Agreement. There are no terms, covenants, representations, statements or conditions binding on the Parties other than those contained in this Agreement. The Owner acknowledges having read the Agreement and agrees with its contents.

Amendments

To be effective, the Parties must agree in advance in writing to any amendment to this Agreement.

Termination

  • In the event of default to any term, condition, representation or obligation provided for in this Agreement or if the Minister is of the view that there has occurred any change in the risk relating to the Application or this Agreement, the Minister may suspend and terminate this Agreement.
  • In the event that the Property is seized under a valid order, including final order, of a competent civil or criminal authority, the Minister may suspend and terminate this Agreement as it pertains to the seized Property.
  • Notwithstanding anything provided for in this section, the Minister may not terminate this Agreement unless he has served written notice to the Owner of the event of default and that the Owner has failed to remedy the default within a period of thirty (30) days (the suspension period) from the date that the written notice was served.

No benefit

No current or former public servant or public office holder who is not in compliance with the provisions of the Conflict of Interest Act, S.C. 2006,c.9, the Values and Ethics Code for the Public Sector and the Policy on Conflict of Interest and Post-Employment, member of the House of Commons or senator who is not in compliance with the Conflict of Interest Code for Members of the House of Commons or the Conflict of Interest Code for Senators, or anyone else bound by other values and ethics codes applicable to government or specific recipients, shall derive a direct benefit from this Agreement, unless the provision or receipt of the benefit is in compliance with the legislation or codes.

Time is of the essence

Time is of the essence of this Agreement and no extension or variation of the Agreement operates as a waiver of this provision.

Computation of time

Time periods provided for under this agreement expressed in days mean calendar days. Where a time limit falls on a Saturday, Sunday or a federal statutory holiday recognized in Canada, the time limit is extended to the next day that is not a Saturday, Sunday or a federal statutory holiday recognized in Canada.

Signed in counterparts

This Agreement, and any amendment, supplement, restatement or termination of any provision of this Agreement, may be executed and delivered in counterparts, each of which when executed and delivered is an original but all of which taken together constitute one and the same instrument.

Notice

Any other notice to be made under this Agreement shall be in writing and may be made by personal delivery, post, courier or electronic means such as email or facsimile, addressed to the respective Parties as follows:

Any notice to the Minister shall be addressed to:
Canada Travelling Exhibitions Indemnification Program
Department of Canadian Heritage
25 Eddy Street, 9th Floor (25-9-N)
Gatineau, Quebec, K1A 0M5
CANADA

FAX (819) 997-8392
Email: PCH.dgpindemnisation-dghbindemnification.PCH@canada.ca

Any notice to the Owner shall be addressed to:
Name of Owner (including corporations)
or the Owner’s duly authorized representative
Address
(Phone Number)
(Email address)

Date

The date of the agreement will be the date this agreement is signed by the last party to sign it, such party will be the representative of Her Majesty the Queen in Right of Canada.

Interpretation

For greater certainty in the interpretation of this Agreement, the parties will refer to the text of the Legislation.

Her Majesty The Queen in right of Canada, represented by the Minister of Canadian Heritage

_____________________________________
Deputy Director General
Heritage Group
Department of Canadian Heritage

_____________________________________
Date

[Name of the Owner in upper case]

_____________________________________
Owner

_____________________________________
Date

Or where the Owner is represented:
[Name of Agent printed]

_____________________________________
Owner’s Duly Authorized Agent

_____________________________________
Date

Or where the Owner is a corporation
[Corporate name printed]

By:__________________________________

Name:

Title:

I have authority to bind the Corporation

_____________________________________
Date

Definitions

“Act” means The Canada Travelling Exhibitions Indemnification Act, S.C. 1999, c. 29 http://laws-lois.justice.gc.ca/PDF/C-10.5.pdf, as amended from time to time.

“Agreement” means this indemnity agreement and includes all schedules and any amendments to the foregoing.

“Application” means the information provided to the Minister pursuant to the Regulations by a Participating Institution, and in reliance upon which the Minister has based the decision to indemnify the Owner.

“Condition Report” means a detailed report made in accordance with applicable museum standards and describing the physical condition of the Property; performed by professionals; as approved by the Minister for the Travelling Exhibition, that is completed each time an object is crated or uncrated for the purposes of transit and display during the period of indemnification, and which is required to establish any loss or damage to an object or appurtenance that is subject to this Agreement.

“Crating” means the process of packaging the Property in accordance with applicable professional museum standards as approved by the Minister for the Travelling Exhibition.

“Dispute” means:

a) A dispute by the Owner of the Minister’s written determination under subsection 13(1) of the Regulations as to the validity of a claim; or b) one or both of the Parties disagree with the written determination of the appraiser(s) with respect to the extent of the partial loss or damage under subsection 14(1) of the Regulations; or c) any other dispute arising under the terms of this Agreement.

“Ineligible Property” means Property that:

a) was the subject of a civil or criminal claim regarding ownership when the application for indemnification was approved by the Minister; b) becomes the subject of a civil or criminal claim regarding ownership at any time during the indemnity coverage period provided by this Agreement; or c) is seized under a valid order, including final order, of a competent civil or criminal authority after the date this Agreement becomes effective.

“Legislation” means collectively the Act and the Regulations.

“Participating Institution” means an institution as defined in the Act that:

a) is situated in Canada and organizes or hosts a Travelling Exhibition; and b) for the purposes of this agreement is identified as follows [indicate name of Participating Institution(s)].

“Property” means the object(s) or appurtenance(s) described in Schedule 2 of this Agreement.

“Regulations” means the Canadian Travelling Exhibitions Indemnification Regulations, SOR/99-467 http://laws-lois.justice.gc.ca/PDF/SOR-99-467.pdf, as amended from time to time.

“Transit” means the conveying and short-term storage of the Property by a qualified transportation company as approved by the Minister for the Travelling Exhibition.

Schedule 1

Dispute resolution process

  • 1.0 Dispute Resolution and Legal Proceedings:For the purpose of this Schedule, “dispute resolution” means negotiation or mediation and “legal proceedings” means, but is not limited to, arbitration proceedings as provided for below in Section 8 of this schedule.
  • 2.0 Negotiation Mandatory- The Parties will attempt to resolve any Dispute within 60 days of the day that it arises through good faith negotiation prior to commencing legal proceedings and bear their own costs of participating to the negotiation.
  • 3.0 Specific Procedure – Where a Dispute arises out of subsection 14(1) of the Regulations, each party shall select a competent appraiser who shall independently consider the extent of the partial loss or damage to or any consequent reduction in the fair market value of the object or appurtenance.
  • 4.0 Confidentiality – All information exchanged by the Parties during dispute resolution will be regarded as “without prejudice” communications for the purpose of settlement discussions and will be treated as confidential by the Parties and their representatives, unless otherwise required by law. However, evidence that is independently admissible or discoverable will not be rendered inadmissible or non-discoverable by virtue of its use during dispute resolution.
  • 5.0 Authority - Any representatives of the Parties that participate in dispute resolution must have the authority to settle the Dispute or have a rapid means of obtaining the requisite authorization.
  • 6.0 No commencement of legal proceedings - During dispute resolution, the Parties shall not commence legal proceedings or take any new steps in any legal proceeding between them which concerns the same matter that is the subject of dispute resolution except where it is necessary to take action to preserve rights while the dispute resolution process is ongoing.
  • 7.0 Mediation - If the Parties are unable to settle any Dispute within 30 days of the commencement of negotiations, the Parties may attempt to resolve the Dispute through mediation prior to commencing legal proceedings. Each party will be responsible for its own costs of participating in a mediation.
  • 8.0 Arbitration – Use of the Commercial Arbitration Act - If the Parties are unable to settle any Dispute through dispute resolution within 90 days of the initial dispute arising, the Parties shall be finally settled pursuant to the Commercial Arbitration Act and the Commercial Arbitration Code annexed thereto (RSC 1985, c. 17 (2nd Supp.) as am.), conducted in accordance of the following terms:
    • 8.1 Notice - The Party requesting arbitration (the “claimant”) will do so by written notice to the other Party.
    • 8.2 Commencement of Proceedings - The arbitration commences on the date of receipt by the responding Party (the “respondent”) of the notice to arbitrate the dispute.
    • 8.3 Selection of Arbitrators - The Parties will jointly select a competent and disinterested arbitrator. If the Parties cannot agree on the choice of an arbitrator within 30 days from the date of the commencement of the proceedings, then an arbitrator will be chosen, upon application by the Parties, to a superior court of competent jurisdiction in Canada.
    • 8.4 Written submission of the claimant - Within 30 days of the selection of the arbitrator, the claimant will submit in writing to the arbitrator and the respondent a claim containing a statement of facts, issues in dispute and remedies sought, as well as all supporting documentation.
    • 8.5 Written submission of the respondent - Within 30 days following the receipt of the claim, the respondent will submit in writing to the arbitrator and the claimant a reply in response, as well as all supporting documentation.
    • 8.6 No oral hearing - The arbitration will proceed solely by written submissions.
    • 8.7 Arbitral Award - The arbitrator will make every reasonable effort to issue a written decision within 60 days of the completion of filing documentation by the Parties.
    • 8.8 Judgment - Judgment upon any arbitral award rendered may be entered in any court in Canada which has jurisdiction.
    • 8.9 Prohibition against further assistance – The arbitrator will neither represent nor testify on behalf of any of the Parties in any subsequent legal proceeding between the Parties or where they are opposed in interest.
    • 8.10 Confidentiality - The Parties and the arbitrator will treat all meetings and communications, the proceedings, the documents disclosed during the proceedings and the award as confidential, except (i) to the extent that disclosure may be required of a Party to fulfil a legal obligation, protect or pursue a legal right, or enforce or challenge an award in bona fide legal proceedings before a court or other judicial authority; (ii) with the consent of all Parties; (iii) where needed for the preparation or presentation of a claim or defence in this arbitration; or (iv) where such information is already in the public domain other than as a result of a breach of this clause; or (v) by order of the arbitrator upon application of a Party.
    • 8.11 Costs – In accordance with subsection. 15(2) of the Regulations the costs of the arbitration, including the fees and expenses of the arbitrator, will be shared equally by the Parties. Each Party will be responsible for its own legal fees and disbursements associated with the arbitration.

Schedule 2

List of indemnified objects and fair market value

Identification
a) title
b) artist
c) type of object/appurtenance
d) accession #/catalogue #
Creation date or ageMaterial or medium of object and supportDimensions (cm)Fair Market Value in Foreign CurrencyExchange rateFair Market Value in CDN $Owner’s name and address
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