Offset Purchase Agreements: Key Issues

Offset Purchase Agreements:Key Issues RON EZEKIEL Fasken Martineau 604 631 4708 rezekiel@van.fasken.com 6394266

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

Offset Purchase Agreements: Key Issues