Offset Purchase Agreements: Key Issues RON EZEKIEL Fasken Martineau

Outline Transaction Structure Purchase and Sale Representations Audit / Further Assurances Security / Credit Default / Remedies

Transaction Structure Who is the Vendor? Project Proponent Aggregator Other? Who is the Purchaser? Financial Position

Transaction Structure What is Being Bought / Sold? Offsets (risk on vendor) Rights capable of becoming offsets (risk on purchaser) When Will the Transaction Occur? One-time trade Long term supply Status of the Offset Project

Purchase and Sale Delivery Delivery schedule that sets out quantity and delivery date Delivery by deposit to Purchaser’s account Payment Timing Means

Representations Can provide comfort on project status Project milestones Option to “refresh” representations

Representations Confirmation that obvious issues have been addressed, like: project start date project approvals reductions or removals during registration period no climate change incentives title

Audit / Further Assurances Important until system is operational and we all understand exactly what is required

Security / Credit Critical to mitigate long term supply Some parties may not have credit ratings, or options for a credit support provider Providing security is a cost (GSA / Letter of Credit)

Default / Remedies Force Majeure Change in Law Surplus risk Limitations of Liability No consequential loss Replacement offsets Caps Dispute Resolution

Questions? Ron Ezekiel