Braeside Solar Energy Co-operative Offering Statement October 2015

Transcription

1 Braeside Solar Energy Co-operative Offering Statement October 2015 Ontario Incorporation No OFFERING STATEMENT of Braeside Solar Energy Co-operative Inc. (the Co-operative ) October 1, 2015 Offering Statement Please be advises that the co-operative has never conducted operations and is in the development stage. Purchases of preference shares in such start-up ventures involve a high degree of risk and subscribers should view this subscription as speculative. Investors may lose their investment. The Co-operative is offering to sell Membership Shares and Class A PREFERENCE SHARES. This document contains important information about Membership Shares and Class A PREFERENCE SHARES offered for sale by the Braeside Solar Energy Co-operative Inc. (BSEC) You should read the entire Offering Statement before deciding whether or not to buy these Shares. All prospective purchasers of these Shares must receive this Offering Statement before completing their purchase. The Co-operative is offering to sell MEMBERSHIP SHARES AND Class A PREFERENCE SHARES. A prospective member of the Co-operative must be admitted into membership by the Board of the Co-operative and purchase one (1) Membership Share. Par Value of Membership Share = $100 Par Value of Class A PREFERENCE SHARES = $100. Table 1 Number of Membership Shares Offered Proceeds from the sale of Membership Shares Number of Class A Preference Shares Offered Proceeds from the sale of Class A Preference Shares Minimum Offering 3000 $300,000 Maximum Offering 500 $50,000 10,000 $1,000,000 Minimum Individual Share Purchase with any part held in RRSP* Minimum Individual Share Purchase no part held in RRSP Aggregate Maximum Holding of Class A Preference Shares 1 $ $5,000 1 $ $2,500 1 $ $100,000 i

2 Braeside Solar Energy Co-operative Offering Statement October 2015 *If eligible RRSPs will be administered by the Canadian Worker Co-op Federation and registered through Concentra Trust. Amount to be raised by this offering not to exceed $1,000,000 The Board of BSEC may cap the offering at less than that amount depending on final cost of the renewable energy projects available for investment. The minimum amount to be raised in this offering is $300,000 If the threshold of $300,000 minimum offering contemplated is not raised through the sale of Class A PREFERENCE SHARES, then the Co-operative will return the funds to the members as per the Escrow Agreement. One (1) Membership Share must be purchased as a condition of membership. A person who subscribes for Membership Shares does not have to subscribe for Class A Preference Shares. However, if a Member does want to subscribe for Class A PREFERENCE SHARES, the minimum number of Class A PREFERENCE SHARES set forth above must be subscribed for. Both Membership Shares and Class A PREFERENCE SHARES are being offered (the Offering ). This Co-operative was incorporated in 2013, and recently commenced active business operations. The purchase of Shares in such start-up ventures involves a high degree of risk and investors should view this investment as speculative. There is no established market through which these securities may be sold. Due to the characteristics of the Shares offered by this Offering Statement, restrictions on their transfer, and the fact that significant resale restrictions may apply, no such market is likely to develop. The Board of the Co-operative has determined the price of these Shares. No official of the Government of the Province of Ontario has considered the merits of the matters addressed in this Offering Statement. Neither the Ministry of Finance nor any other ministry or agency of the Government of Ontario assumes any liability or obligation to anyone who purchases the Membership or Class A PREFERENCE SHARES offered under this Offering Statement. Investors should not rely on any information other than what is contained in this Offering Statement. Potential buyers should pay careful attention to all the Risk Factors noted in the Offering Statement. The information in any projections or pro forma statements contained in this Offering Statement may vary materially from actual results. This Offering Statement expires on October No further Class A PREFERENCE SHARES of the Co-operative may be issued after this date other than any exempt issues prescribed by the Co-operative Corporations Act (Ontario), unless a new Offering Statement is filed and receipted. ii

3 Table of Contents GLOSSARY CORPORATE INFORMATION DIRECTORS AND OFFICERS DESCRIPTION OF THE BUSINESS OF THE CO-OPERATIVE... 9 Overview and History... 9 Vision and Goals... 9 Operations Co-operative Management Membership Requirements and Treatment of Surplus Membership in Other Organizations Authorizations, Licenses, Compliance & Permits Real Estate FIT Contracts Insurance The Memorandum of Understanding Agreement BUSINESS PLAN RISK FACTORS USE OF PROCEEDS OF THE OFFERING Escrow Agreement Use of Proceeds CAPITAL STRUCTURE Authorized Capital Material Attributes of Authorized Capital DESCRIPTION OF SECURITIES OFFERED METHOD OF SALE OF SHARES DESCRIPTION OF THE MARKET ON WHICH THE SHARES MAY BE SOLD STATEMENT OF MINIMUM AND MAXIMUM AMOUNT OF THE OFFERING AND MINIMUM AND MAXIMUM AMOUNT OF ANY INDIVIDUAL SUBSCRIPTION AMOUNT AND PARTICULARS OF ANY SECURITIES, MORTGAGES, BONDS, DEBENTURES OR OTHER DEBT OBLIGATIONS MATERIAL LEGAL PROCEEDINGS TO WHICH THE CO-OPERATIVE IS A PARTY MATERIAL INTERESTS OF DIRECTORS, OFFICERS AND EMPLOYEES OF THE CO-OPERATIVE MATERIAL CONTRACTS ENTERED INTO IN THE TWO (2) YEARS PRECEDING THIS OFFERING STATEMENT DIVIDENDS OR OTHER DISTRIBUTIONS PAID, DECLARED, OR ACCUMULATED BUT UNPAID DURING THE FIVE (5) YEARS PRECEDING THIS OFFERING STATEMENT ANY OTHER MATERIAL FACTS CERTIFICATE OF DISCLOSURE

4 19. Appendix A- Business Plan Appendix 1: Memorandum of Understanding Agreement Appendix 2: BSEC Pro Forma Financial Statements Appendix 3 Renfrew Solar Enterprises pro forma Appendix 4: BSEC Current Project Portfolio Appendix 5: Bouris Wilson Release Letter Appendix 6: Financial Statements-2014 Audited Appendix 7: Financial Statements-2015 Interim Appendix 8: Subscription Agreement Appendix 9: Escrow Agreement Appendix 10: Membership Subscription Agreement Appendix 11: BSEC and Nelligan O Brien Payne Agreement

5 GLOSSARY The following terms and phrases used in this Offering Statement have the meanings set out below: Articles means the Co-operative s Articles of Incorporation, as amended by any Articles of Amendment; Board means the Board of Directors of the Co-operative; Business Plan means the Co-operative s business plan appended to this Offering Statement as Appendix A; Class A Preference Shares means the Class A Preference Shares of the Co-operative, and Class A Preference Share shall mean one of them; Class A Redemption Amount or Redemption Amount has the meaning ascribed thereto in Section 7 hereof; "Co-operative" means: Braeside Solar Energy Co-operative Inc. Debt Financing means any loans advanced to the Co-operative which are secured by the assets of the Co-operative; EPC means Engineering, Procurement, Construction Co. Feasibility Study means the solar resource & shading assessment, electrical and structural designs for a Project, and financial analysis of the Project, and Feasibility Studies means more than one of them; Financial Statements means the Co-operative s annual or interim financial statements, a copy of which is attached hereto as Appendix 6 and 7; FIT means Feed-In Tariff, which is the name of the Ontario Power Authority s program for the purchase of power and connectivity to the Grid for renewable power generators; the FIT program guarantees a fixed-price for power generated for forty (40) years for microhydro generators and twenty (20) years for all other renewable power generators by means of a FIT Contract; refer also to Micro-FIT ; FIT Contract means the contract offered by the Ontario Power Authority for the purchase of power and grid connectivity of a particular renewable power generation Project, and FIT Contracts means more than one of them; FIT Rules & Regulations means the current process that must be followed to apply for and receive a FIT Contract; GAAP means generally accepted accounting principles as determined by the Canadian Institute of Chartered Accountants; Grid means the electricity transmission or distribution networks power lines, controlled by Hydro One or a Local Distribution Utility (LDC); Installation means a solar PV or other renewable power Project owned by the Cooperative and installed on a leased building or land, and Installations means more than one installation. IESO means Independent Electricity System Operator (formerly OPA) 5

6 kv means kilovolts (thousands of volts); kw means kilowatts (thousands of watts); kwh means kilowatt hours; LDC means the Local Distribution Company, being Hydro Ottawa, Hydro One, or a local municipality that owns and operates its own electrical distribution network, or an independent utility that owns and operates its own electrical distribution network; Lease Agreement means the binding agreement between the Co-operative and an owner of property where the Solar Panels or other renewable power generation equipment are installed, as more particularly described in Section 3 herein, and Lease Agreements shall mean more one of them; Lease Option Agreement means the provisional Lease Agreement between the Cooperative and an owner of property where the Solar Panels or renewable power equipment are installed, as more particularly described in Section 3 herein and Lease Option Agreements shall mean more one of them; Member means a holder of issued and outstanding Membership Shares of the Cooperative and Members shall mean more than one Member; Membership means the Members of the Co-operative; Membership Shares means the Membership Shares of the Co-operative; Memo of Understanding means the agreement between three parties as to their responsibility in regard to the two projects being developed in the McNab Braeside Community as included in Appendix 1 Micro-FIT means an Installation of 10kW or less that is subject to a simplified version of a FIT Contract; Micro-hydro project means an Installation in which power is generated from a run-ofriver hydro-electric power system MW means megawatts (millions of watts); Net Shareholder s Equity has the meaning ascribed thereto in Section 7 hereof; Offering means the offering of Membership and Class A PREFERENCE SHARES contemplated by this Offering Statement; Offering Statement means this Offering Statement; Ontario Domestic Content means the proportion of the PV and ancillary equipment that is manufactured in Ontario or Ontario labour that is used, as defined in the OPA s FIT Rules & Regulations; OPA means the Ontario Power Authority ; "OSEA means the Ontario Sustainable Energy Association ; person is to be broadly interpreted and includes an individual, a couple, a partnership, a trust, an unincorporated organization, a government of a country or political subdivision thereof, or any agency or department of any such government and the legal personal representative or representatives of an individual; 6

7 Portfolio means all of the Co-operative s renewable power Installations; "Project" means the activities and tasks comprising individual installation of renewable power systems at a particular location by the Co-operative, and "Projects" means more than one of them; PV means photo-voltaic, a technology for converting sunlight directly into electricity; PV Installation means the individual Solar Panels and equipment installed on an individual property covered under a Lease Option Agreement or a Lease Agreement, and PV Installations shall mean more than one of them; Redemption Amount has the meaning ascribed thereto in Section 7 hereof; Renewable Energy means energy from natural resources such as sunlight, wind, water flow, tidal action and geothermal heat which are naturally replenished, often continuously or in a matter of hours; also known as sustainable energy; Renfrew Solar Enterprises Inc. Renfrew Solar Power Enterprises Inc. (RSPE) was founded by two enterprises. BSEC and Creativity Plus Inc. (CPLUS) in order to participate in the renewable energy sector. RSPE is responsible for the FIT contract, operating renewable energy projects and generates revenue on behalf of its shareholders. RSPE qualifies under the parameters of the Independent Electricity Systems Operator IESO (formerly Ontario Power Authority) Feed-in Tariff (FIT) program. RSPE produces electricity as a generator and sells this electricity to IESO under the FIT Rules & Regulations for a term of twenty (20) years, at a set price. RSPE is responsible for acquiring long term take out financing for the projects. Risk Factor means one of the circumstances or events identified as a risk factor in Section 5 hereof and Risk Factors shall mean more than one of them; Shares means the Co-operative s Membership Shares or Class A Preference Shares, and Share shall mean one of them; Shareholder means a holder of Membership or Class A Preference Shares, and Shareholders shall mean more than one of them; Solar Cell means the smallest component of a Solar Panel and Solar Cells means more than one of them; Solar Panel means the assembly of Solar Cells into a module which becomes the base unit for a PV Installation and Solar Panels shall mean more than one of them. Take-Out Financing means that a financial institution will pay off all construction loans and establish a long term debt instrument with the RSPE. 7

8 1. CORPORATE INFORMATION Name of Co-operative: Braeside Solar Energy Co-operative Inc. (BSEC) Date of Incorporation: Articles of Incorporation dated January 10, 2013 Ontario Incorporation No Head Office Address: Third Avenue, Arnprior, Ont K7S 1Y9 Banking: TD Canada Trust 375 Daniel Street South, Arnprior Ontario K7S 3K6 Insurance: Smith Petrie Carr & Scott Insurance Brokers Ltd- Suite 600, 359 Kent St, Ottawa, ON, K2P 0R6 Legal Counsel: Mr. D Stout Trustee: Nelligan O Brien Payne- 50 O'Connor Street #1500, Ottawa, ON K1P 5E1 Transfer/Registrar Agent: Nelligan O Brien Payne- 50 O'Connor Street #1500, Ottawa, ON K1P 5E1 Accountants: Bouris Wilson LLP-1701 Woodward Dr, Ottawa, ON K2C 0R4 External Auditor: Bouris Wilson LLP-1701 Woodward Dr, Ottawa, ON K2C 0R4 Fiscal Year End: September DIRECTORS AND OFFICERS The Articles of the Co-operative provide that the Co-operative may have a Board of a minimum of three (3) and a maximum of eleven (11) Board members. There are presently five (5) Board members. The directors and officers of the Co-operative are as follows: Name Title Residence Address Occupation Mathew Edward Thomas MacAdam President 186 Third Avenue, Arnprior, Ont K7S 1Y9 Production tech Royal Canadian Mint Donald William Carney Treasurer 1 Brodeur Cres. Kanata Ont. K2L1Z2 IT Security Consultant Dawn Margaret Secretary 186 Third Avenue, Arnprior, Business Owner MacAdam Ont K7S 1Y9 Dale Alvenia Carney Director 1 Brodeur Cres. Kanata Ont. Business Owner K2L1Z2 Colin Malcom Keddy Director 2 Lewiston Ave Nepean Ont K2G 6G8 Registered Financial Planner 8

9 3. DESCRIPTION OF THE BUSINESS OF THE CO-OPERATIVE Overview and History The Braeside Solar Energy Co-operative Inc. (BSEC) (the Co-operative) was incorporated on January 10 th, 2013 as a renewable energy co-operative under the Co- Operative Corporations Act (Ontario). BSEC is a for-profit co-operative created to participate in renewable energy projects. Renfrew Solar Power Enterprises Inc. (RSPE) was founded by two enterprises. BSEC and Creativity Plus Inc. (CPLUS) in order to participate in the renewable energy sector RSPE is responsible for the FIT contract, operating renewable energy projects and generates revenue on behalf of its shareholders. The renewable energy projects are located in the McNab Braeside area where electricity is produced to sell to the Ontario grid, and enabling individual residents of the town of McNab Braeside to have the opportunity to invest in the projects developed by RSPE. BSEC has the opportunity as a shareholder to invest in projects to earn a reasonable rate of return from renewable energy projects. RSPE qualifies under the parameters of the Independent Electricity Systems Operator IESO (formerly Ontario Power Authority) Feed-in Tariff (FIT) program. RSPE produces electricity as a generator and sells this electricity to IESO under the FIT Rules & Regulations for a term of twenty (20) years, at a set price. Membership allows individual residents of the town of McNab Braeside who are unable to invest in their own renewable power systems, to invest in a co-operative which has an interest in community power projects larger than they could own individually. Currently BSEC does not do any business with members and all board members are volunteers and the (President) is reimbursed his expenses. In 2016, the Cooperative is proposing to participate in the capitalization of a renewable energy project being developed by RSPE. 1 The first of two 500kW AC FIT project is currently under construction by our Engineering, Procurement, Construction Company (EPC). Construction financing has been provided by our EPC. Funds raised under this offering statement will be used as equity investment for takeout financing 2 required by the projects. (See Memorandum of Understanding MOU Appendix 1) Vision and Goals The Co-operative s vision is to promote renewable energy technologies that are environmentally, socially and financially sustainable in order to improve the quality of life for all residents of the McNab Braeside area. 1 BSEC is a 51% shareholder of Renfrew Solar Power Enterprises Inc. 2 Financial obligations are outlined in Appendix 1 Memorandum of Understanding (MOU) 9

10 The Co-operative s goals are: 1. Generate decentralized renewable electricity in the town of McNab Braeside 2. Create a democratic, self-reliant, environmentally, socially and financially sustainable business model for community power in the town of McNab Braeside area; 3. Increase the accessibility and awareness of sustainable energy technologies by providing leadership and advocacy and building social capital; 4. Through social financing improve the market for renewable energy and other forms of sustainable technology in the town of McNab Braeside 5. Provide a fair return for co-operative members who wish to invest in local renewable energy production; and 6. Partner with other organizations, companies and government agencies to develop a variety of projects that achieve our vision. Operations The Ontario Green Energy Act (2009), and the Feed in Tariff (FIT) program offered under this Act, allows the Co-operative to participate in business of the generation of electricity from solar and other renewable energy sources in Ontario. The use of the Cooperative model for producing energy from renewable resources has been very successfully adopted in Europe over the past fifteen (15) years. The Co-operative restricts its business to investing in the generating and sale of electricity produced from one or more renewable energy sources. The Co-operative operates on co-operative basis by: (a) Providing each Member with only one vote and allowing voting by proxy, (b) Selling Preference Shares to members and investing the proceeds in portfolios of renewable energy electricity generating projects (c) Annually distributing the surplus from the sale of electricity generated by the Cooperative s investments, after paying expenses and making proper allowance for depreciation, in any or all of the following ways: i- By setting aside reserves to cover future commitments deemed to be conducive to the interests of the Co-operative or its Members; ii- By payment of dividends on the Preference Shares of the Co-operative used to finance its investments and returning the capital invested over a 20-year period after share issuance; Figure 1 illustrates the ownership and investment relationships and arrangements involved in the Co-operative s ventures for its Class A Preference Shares. 10

11 Figure 1- BSEC and RSPE Relationship 11

12 The renewable power installations will be located in the township of McNab/Braeside on property that is leased to RSPE for twenty (20) years, which will coincide with the term of the twenty (20) year Feed-in Tariff (FIT) Contract. The Cooperative interests are initially focusing on solar photovoltaic (PV) power systems, but may also consider other renewable power systems in the future if the opportunity arises. The Co-operative intends to keep the size of its solar PV investments in the small FIT application requirement. RSPE monitors the projects to maximize the efficiency of the Installations. RSPE will make site adjustments where appropriate to ensure BSEC s investment is maximized. The cost of the solar panels and other renewable energy equipment purchased by RSPE will vary depending on the manufacturer. Equipment costs can fluctuate depending on the manufacturer and care was taken to ensure fair pricing was achieved. The electricity generated by such equipment is dependent on a number of factors such as the efficiency of the solar panel or other equipment, their size, orientation, and weather factors, such as the amount of sunlight or lack thereof. The solar panels or other equipment installed at a given Project is site specific, the objective being to maximize the generation of electricity at a given site in the most cost-effective manner. The revenue from the electricity generated on each project is divided in proportion to percent ownership after all operational costs have been paid. The electricity sold from each project is sold into the grid. It is not intended that any of the Projects installed will be for Off-Grid use. Currently there are a number of companies that sell, install and service solar PV or other renewable power systems in Ontario. The Co-operative through investments with partners undertakes feasibility or due diligence study for each prospective project, installing the most efficient equipment to match the power producing capacity of individual sites and then monitoring production to ensure the electrical yield is maximized for each site. As of September 30, 2014, 59 members had been admitted to the Co-operative by Board decision. As of the said date no Class A Preference Shares have been sold. The Cooperative believes that many current members, as well as many other residents of McNab/Braeside are interested in purchasing the Class A Preference Shares described in this Offering Statement. A Member who participates as an investor in the Co-operative has the dual benefit of supporting development of a portfolio of renewable energy production facilities and of generating revenue from the production facilities through dividends on their ownership of Preference Shares. The Co-operative intends to raise a maximum of $1,000,000 through the sale of Class A Preference Shares to invest in a new renewable power project. Marketing The Co-operative has a marketing strategy to attract Members and Member investment. More information on this plan is provided in Section 4 of this Offering Statement and in Section 5 of the Business plan included in Appendix A. 12

13 Co-operative Management The Co-operative is currently managed by its Board of Directors all of whom have extensive business experience: Mathew MacAdam - President Donald Carney- Treasurer Dawn MacAdam Secretary Dale Carney Director Colin Keddy Director Directors are elected for a term between two to five years. All current directors are eligible to stand for another term. Current staff of the Co-operative includes: - Operations Manager Matthew MacAdam In addition to our staff, BSEC is assisted by a number of skilled professionals. These include legal counsel from Nelligan, O Brien, Powers Law, and the accounting firm of Bouris Wilson LLP. The Board and staff are also assisted by Board/Member volunteer teams on business planning, communications, and technical assessment. Membership Requirements and Treatment of Surplus Membership Requirements: To become a Member, an individual must submit an application for membership to the Board. A Member is not required to purchase preference shares from the Co-operative. a) Membership is open to individuals, who are a minimum of eighteen (18) years of age and whose membership application has been approved by the Board of Directors and who have purchased the single Membership share for $100. b) Each Member is entitled to only one vote and to hold only one elected position. c) A Member in good standing is entitled to all the rights, benefits and privileges of Membership and to stand for any elected office in the Co-op. To remain in good standing, a Member must abide by the By-Laws of the Co-op and any other policies the Co-op may establish from time to time pursuant to these By-Laws. d) A Member may withdraw from the Co-op by giving the Secretary 30 day s written notice. The Board may vote to accept any application to withdraw upon shorter notice. Members who subsequently move away from McNab/Braeside remain members unless they withdraw from the Cooperative. Admission: Membership in the Co-operative shall consist of all persons who are accepted as Members in the manner prescribed below and whose membership has not been terminated pursuant to the provisions of the Act. 13

14 Acceptance: No individual shall become a Member until an individual s application for membership has been approved by the Board. If the application is not approved by the Board, any payment forwarded with the application shall be refunded without interest to the applicant. Purchase of Preference Shares: Once an individual is a member of the Co-operative, they will be notified about potential investment opportunities through this or other Preference Share Offering Statements. The purchase of Preference Shares is not mandatory as a requirement of membership. However, if a Member does purchase Preference Shares, then a minimum number, set in the offering statement, must be purchased. Only Members, as individuals, are eligible to purchase Preference Shares. Transfer of Membership: Membership in the Co-operative shall not be transferable unless authorized by the Board. Termination of Membership: Membership in the Co-operative shall terminate upon the resignation of the Member from the Co-operative, on the death of the Member, or on the expulsion of the Member from the Co-operative by a resolution passed by the Board pursuant to the Act or as may also be prescribed from time to time by the Act. Treatment of Surplus: The Board, after paying expenses and administration shall apportion the surplus arising from the net revenue from the Co-operative s interest in the project(s) in the following ways: 1. By setting aside reserves in such amount as the Board deems advisable for such purpose or purposes that are deemed to be conducive to the interests of the Cooperative or its Members, which sum may be invested, dealt with and disposed of for the benefit of the Co-operative as the Board determines from time to time; 2. Payment of dividends on the Preference Shares of the Co-operative used to finance its project and payments for return of the capital invested by these Preference Shareholders in whole or in part. Membership in Other Organizations The Co-operative is a member of the Federation of Community Power Co-operatives, which is a resource and common voice for Ontario renewable energy co-operatives in the area of co-operative development, government relations and co-operative education. Authorizations, Licenses, Compliance & Permits For Renewable Energy generation projects, the Board of the Co-operative will ensure that all licenses, compliances and permits required by the Co-operative to develop these projects and to operate as a Renewable Energy Co-operative and to supply services to its Members are in good standing. Real Estate The Co-operative does not own any real property. FIT Contracts The FIT Program is described in Section 2 of the Business Plan Executive Summary. 14

15 The two projects and FIT contracts that the Co-operative is investing in with the proceeds of this and subsequent offerings are described in more detail in section 3 of the Cooperative s Business Plan attached as Appendix A to this Offering. See section 3 of the Business Plan for more details. In future, the Co-operative may pursue larger projects if those become available under the FIT program and meet the Co-operative s business and financial goals. Insurance RSPE will arrange for comprehensive general liability insurance during construction of its Projects. Once a Project commences commercial operation, the RSPE takes out property, general liability, and casualty insurance with reputable insurers who are experienced with insuring commercial renewable power Projects in amounts which are customary in the industry. The Co-operative has also purchased general liability and comprehensive directors and officer s insurance designed specifically for co-operatives with share capital. The Memorandum of Understanding Agreement The Co-operative is investing in two FIT projects. The Memorandum of Understanding (MOU) (Appendix 1) parties include; Renfrew Solar Power Enterprises Inc. hereinafter referred to as RSPE, Creativity + Inc. hereinafter referred to as CPLUS. Under this agreement each parties roles, responsibilities, obligations and costs are described. The Co-operative has majority shares of RSPE. All project expenses are paid by RSPE which includes (insurance, maintenance, management, financing etc.) and the resulting net revenue is paid to BSEC as a dividend. On dissolution all assets are shared according to the ownership percentage. The FIT contract application is in the name of the Renfrew Solar Power Enterprises Inc. CPLUS will act with the BSEC and RSPE to design, coordinate and consult with the construction and development. RSPE is responsible for the legal and accounting responsibilities. RSPE and CPLUS have negotiated an agreement with an Engineering, Procurement and Construction (EPC) Company to build and finance the project. The first project on Scheel Drive is currently being built out and is targeted for completion and in the spring of Once the project is on line and generating revenue RSPE will arrange long term financing from a tier 1 lender. BSEC will provide equity along with the other parties to acquire this long term financing. The second project is on Mill Ridge Road and will begin construction in the summer of 2016 and follow the same sequence of activities. 15

16 4. BUSINESS PLAN The Co-operative s Business Plan is attached as Appendix A. 5. RISK FACTORS Investment in Class A PREFERENCE SHARES involves certain risks. As described below, a number of factors (the Risk Factors ) could adversely affect the value of the Class A PREFERENCE SHARES and could jeopardize investors investments in the Co-operative and/or financial returns. While the Co-operative s management will make every effort to prevent or mitigate the factors, before investing, prospective purchasers should carefully consider, in light of their own financial circumstances, the Risk Factors set forth below as well as the other information contained in this Offering Statement. (a) (b) (c) (d) Long Term Investment: Purchases of the Class A PREFERENCE SHARES offered herein should be considered long term investments which may not be suitable for investors who may need to sell their Class A PREFERENCE SHARES quickly in order to raise money. While the intent is to return all capital invested in Class A PREFERENCE SHARES over a twenty (20) year period, Members are not entitled to demand the redemption of these Shares as explained in Material Attributes of Authorized Capital at the end of Section 7, Capital Structure. Any redemption of these Class A Preference Shares will occur at the sole discretion of the Board. It is recommended that investors who are looking for short-term returns from their investments should not purchase the Class A PREFERENCE SHARES offered herein. Speculative Investment: The Class A PREFERENCE SHARES being offered under this Offering Statement are speculative, and involve a high degree of risk. Investors may lose their investment. Start-up Venture: The Co-operative is a start-up venture. The Co-operative currently does not have significant assets or other financial resources. The commencement of construction of renewable power installations is not dependent upon the Co-operative raising sufficient equity under this Offering Statement. However, the Cooperative requires to raise equity to contribute to the long term take out financing. The long term financing will replace the short term construction financing and RSPE will arrange this financing. Financial Projections: The Co-operative and RSPE have prepared income projections for Portfolio operations up to They are included as part of the Business Plan attached as Appendix 2 and Appendix 3 hereto. These projections are based upon assumptions and hypotheses, which the Board of the Cooperative believes to be reasonable. There can be no assurance that these forecasts and projections will actually be achieved. Actual results will vary, perhaps in a materially negative way, from these forecasts and projections. The assumptions upon which these forecasts and projections are based may change, 16

17 (e) (f) (g) (h) (i) (j) whether due to circumstances beyond the control of the Co-operative or otherwise. Failure to Raise Sufficient Equity and Impact on Financing: In the event that the net proceeds received under this Offering Statement, together with the other resources of the Co-operative are insufficient to meet the equity requirements of the portfolio, RSPE will raise sufficient equity. Projections and Forward-Looking Information: This Offering Statement and the Business Plan contain forward-looking statements and projections which involve numerous assumptions, hypotheses, risks and uncertainties including, among others, those set out herein as Risk Factors. Actual results of operations will vary, perhaps materially and adversely, from the projections contained in this Offering Statement and the Business Plan. No representations or warranties are given that these projections will actually be achieved. The assumptions and hypotheses upon which these projections are based may change on account of circumstances beyond the control of the Co-operative. Cash Flow: The Co-operative anticipates receiving positive cash flow over the life of the Portfolio. However, these projections are based on a number of assumptions which are outlined in this Offering Statement and the Business Plan. If any one or more of these assumptions are incorrect, then the Cooperative may not receive cash flow requirements to meet the target dividend. Availability of Debt Financing: No assurances can be given that any of the loan facilities referred to under the heading Business Plan will be obtained or will be obtained on acceptable terms. If the loans or bridge financing obtained by RSPE are at higher rates than noted in the Business Plan, then the revenue flow to the Co-operative may be reduced from the projections in the Business Plan. Priority of Lenders: The net proceeds from the Shares offered herein will be utilized as the Co-operative s equity investment in RSPE projects. These proceeds will be subordinate to any funds received from term and/or working capital lenders and all other creditors of the RSPE, who will rank in priority to all Shareholders. Any such lenders and creditors will have priority with respect to the payment of interest and principal and secured creditors will hold a secured position over all of the assets of RSPE in priority to its Shareholders. It is anticipated these lenders will place certain conditions and restrictions upon RSPE s ability to make distributions to its Shareholders. These conditions could require RSPE to allocate all or part of any excess cash flow generated by the RSPE s operations to the pre-payment of its indebtedness, thereby eliminating or reducing the amount of cash, which could otherwise be available for distribution to Shareholders. The ability of the RSPE to pay dividends will depend both on the success of its Projects and on the terms and conditions imposed by the lenders. Insufficient Capital: While the Co-operative presently believes that it will raise sufficient equity for the long term take out financing any amount under that amount of capital, could ultimately result in the Co-operative members receiving less revenue to distribute. Nonetheless, a combination of factors, such as price increases for the purchase of Renewable Energy equipment, inability to 17

18 (k) (l) obtain the equipment when contemplated due to short supply, and the cost to comply with regulatory issues, could result in an insufficient amount of capital raised, which could ultimately result in the number of additional Installations being reduced and/or the Cooperative not being profitable Failure of Some Equipment: The solar PV and other Renewable Energy equipment the project(s) intends to install is expected to be low maintenance and trouble free, with the exception of the power inverters, which are planned to be replaced in the Business Plan. Solar Panels are covered by warranty for twenty-five (25) years and the inverters are covered by warranty for seven (7) to twenty-five (25) years. However, should issues with the Solar Panels and/or inverters develop, there would be a loss of energy production and associated revenues for the period of time that a failure occurs. This loss is not covered by warranty or insurance. Availability and Operation of Solar Panels: Because of the tremendous growth expected in Solar Panel installation world-wide and the limited number of manufacturers of Solar Panels, there could be a potential delay in being able to have the panels of choice delivered for installation according to the RSPE construction schedule. If the Solar Panel delivery time is delayed from the schedule set forth in the Business Plan, the revenue stream to the Co-operative will be delayed. (m) Non-completion: Should the Co-operative not be successful in raising the required capital from the sales of Class A PREFERENCE SHARES, and RSPE is unable to raise the difference in equity, funds will be released back to investors from Escrow. (n) Regulatory Approval and Permits: RSPE has obtained FIT Contracts and a Connection Agreement to proceed under the present FIT Rules & Regulations. If the FIT Rules & Regulations change this may impose additional costs to the RSPE not contemplated in its current Business Plan. (o) Feed-In Tariff Program: The Government of Ontario can suspend the FIT Program at any time. It is assumed, but cannot be guaranteed, that any contract for a Project under the FIT program signed prior to a suspension will be honored and RSPE will complete the installation and connection under the terms of the FIT program prior to suspension. The IESO is required under the Green Energy Act to review and amend FIT program rates every two years to reflect changes in renewable energy equipment costs. (p) Environmental Conditions: RSPE is not aware of any environmental concerns that could halt proceeding with the installation of the Portfolio at this time. However, there can be no assurances given that the OPA will not review or change this aspect of the FIT program. This could have a negative impact of Cooperative s Business Plan and its profitability. (q) Market for Shares: There is presently no market for the Shares being offered nor is a market expected to develop. Purchasers may not be able to resell Shares purchased pursuant to this Offering Statement. Transfers of Membership 18

19 (r) (s) (t) (u) Shares and Class A Preference Shares require Board approval. Management will use its best efforts to match buyers and sellers, but no guarantee is offered that Shareholders of the Shares will be able to sell them. Unknown Risk Factors: RSPE may also be subject to other unknown Risk Factors that could potentially affect its profitability and solvency. Some of these Risk Factors could include, but not be limited to, failure to comply with governing statutes and increased competition. Potential adverse changes in these areas may limit RSPE solvency and/or its ability to pay dividends and redeem Shares. Sinking Fund or Reserve: No sinking fund or reserve has been established to redeem Class A PREFERENCE SHARES. It is the intention of the Cooperative to begin redemption of outstanding Class A PREFERENCE SHARES annually starting in year two (2) after the purchase of these Shares. However, there can be no guarantee this will occur. Members are not entitled to demand the redemption of these Shares. Any redemption of these Shares will occur at the sole discretion of the Board of the Co-operative. Dividends are Non-Cumulative: It is the sole discretion of the Cooperative s board whether to declare a dividend on Class A PREFERENCE SHARES in a year. If an annual dividend is not declared, the board may declare bonus dividends in future years, but holders of Class A PREFERENCE SHARES do not have a right to any make-up payment in years subsequent to the year for which dividends were not declared. Taxation: Financial projections assume that renewable energy generation assets owned by the RSPE are eligible for accelerated capital cost allowance under Canada Revenue Agency Class 43.2 provisions. These provisions would limit the tax paid by the RSPE for the first 10 years of operation. These provisions may be changed in the future and result in higher taxation for the RSPE and limit dividends. 6. USE OF PROCEEDS OF THE OFFERING The Co-operative plans to raise up to $1,000,000 through the sale of Class A PREFERENCE SHARES to Members to invest in the projects. In case subscriptions are more than the maximum or the target, subscriptions will be considered in the order in which they were received by the Trustee. Escrow Agreement Pending completion of the offering, monies raised through the sale of Class A Preference Shares will be held in trust. An Escrow Agreement will be prepared between the Cooperative and a Trustee prescribing the terms and conditions whereby the subscription price for Class A Preference Shares and the share certificates issued to each investor will be held, invested and ultimately released to the Co-operative upon completion of certain conditions described below (the Escrow Property ). In no circumstances will the offering be completed and shares released prior to October 01,

20 The Co-operative will appoint the Trustee to hold the Escrow Property in connection with the Co-operative s Offering Statement. Until all of the terms and conditions for the release of the Escrow Property set out below have been met, all Escrow Property will be held in a trust account set up by the Trustee until the conditions described below are met. Release of Funds from Trust for Project Scheel Drive: Conditions of Escrow Property released from Trust: 1 The minimum amount of Class A Preference Shares have been sold which is: a. $300,000 for Scheel Drive 2 FIT contract has been awarded to Renfrew Solar Power Enterprise Inc. (RSPE); 3 Notice to Proceed has been received by RSPE; 4 Confirmation that an Engineering Procurement Contract has been executed by RSPE and a third party contractor; 5 The necessary construction financing has been provided to RSPE; 6 Written approval and direction from the Co-operative to the Trustee for the delivery of Escrow Property from the Trustee to the Co-operative has been provided to the Trustee, and 7 Confirmation that RSPE has received take-out financing approval. Release of Funds from Trust for Project Mill Ridge Road: Conditions of Escrow Property released from Trust: 1 The minimum amount of Class A Preference Shares have been sold which is: a. $250,000 for Mill Ridge Road 2 FIT contract has been awarded to Renfrew Solar Power Enterprise Inc. (RSPE) ; 3 Notice to Proceed has been received by RSPE; 4 Confirmation that an Engineering Procurement Contract has been executed by RSPE and a third party contractor; 5 The necessary construction financing has been provided to RSPE; 6 Written approval and direction from the Co-operative to the Trustee for the delivery of Escrow Property from the Trustee to the Co-operative has been provided to the Trustee, and 7 Confirmation that RSPE has received take-out financing approval. Funds will be released from Escrow on the date of closing for take-out financing of each respective project. If all the conditions above are not met and take out financing is not achieved investor funds will be returned to preferred shareholders on a per project basis. When the Escrow Property is released from Trust, the subscription funds will be delivered to the Co-operative, and the share certificate related to such subscription funds will be released to the investor. 20

21 The Trustee shall not at any time deliver any of the Escrow Property until the above conditions are met. Among other things the agreement with the Trustee will provide as follows. Account: Subscription funds received by the Trustee are to be deposited in a daily interestbearing savings account maintained by the Trustee. Reporting: The Trustee shall report to the Co-operative on a weekly basis, giving full particulars of all Escrow Property delivered to it during the previous week. Fee Payable to Trustee: The Trustee shall be entitled to be compensated by the Cooperative for its services rendered pursuant to the Escrow Agreement in the amount of $1,000 upfront payment and $450 per month plus disbursements until termination of escrow pursuant to the terms of the Escrow Agreement. Invoices will be provided by the Trustee to the Co-operative on a monthly basis. Termination of Escrow Agreement: Time shall be of the essence of this Escrow Agreement. The term of this Agreement shall commence on the date hereof and shall continue until the date that the Escrow Agent has released all of the Escrow Fund in accordance with the terms and conditions hereof. Accrued interest will be transferred to the Co-operative to be used towards project development expenses. If the project(s) do not proceed, investors funds will be returned. Use of Proceeds The Co-operative intends to allocate the proceeds from the sale of Class A Preference Shares as follows: Investment in Capital Projects 95% Project Development and Capital Raising Expenses* 5% * Development and capital raising expenses include, without limitation, costs associated with this Offering Statement, securing financing, costs associated with acquiring the FIT Contracts and other authorizations, licenses, and the marketing program to raise member equity through the sale of Class A Preference Shares. The 5% represents the expected maximum that will be used for these purposes. Proceeds from the sale of the Preference Shares will not be used to cover on-going operating expenses of the Co-operative. If the threshold of $300,000 minimum offering contemplated is not raised through the sale of Class A PREFERENCE SHARES, then the Co-operative will return the funds to the members as per the Escrow Agreement. Any balance of capital required will be raised through RSPE debt financing as described in section 4 of this Offering Statement. The more capital that is raised through the sale of Preference Shares, the lower the amount of debt financing that will be acquired. Proceeds from sales of membership shares will be used for general operations of the Cooperative. 21

22 To the extent that additional capital is raised by this Offering Statement, the Co-operative will be able to increase its investment in the proposed projects and/or reduce the level of debt financing, thus meeting the targets set in the Business Plan. Potential subscribers should carefully review the Business Plan in Appendix A to determine to their satisfaction that if the net amount to be raised by this offering is sufficient to meet the objectives of the plans as expressed by the Co-operative. 7. CAPITAL STRUCTURE Authorized Capital The Co-operative is incorporated as a for-profit co-operative with share capital. In accordance with its Articles of Incorporation, its authorized capital is $3,000,000, divided as follows: Membership Shares: $1,000,000 comprised of 10,000 Membership Shares with a par value of $100 each. Class A Preference Shares: $1,000,000 comprised of 10,000 Class A Preference Shares with a par value of $100 each. Class B Preference Shares: $1,000,000 comprised of 20,000 Class B Preference Shares with a par value of $50 each. As of September 30, 2014 the Co-operative had sold 59 Membership Shares. The Co-operative s capital structure as of December 31, 2014 was as follows: Issued Shares 59 Membership Shares $5,900 0 Class A PREFERENCE SHARES Total Members Equity and Share Investment $5,900 Material Attributes of Authorized Capital Membership Shares Holders of Membership Shares are entitled to attend and vote at all meetings of Members of the Co-operative and to receive such dividends (subject always to the prior rights of holders of Preference Shares) on Membership Shares as may be declared from time to time at the sole discretion of the Board of the Co-operative. Holders of Membership Shares have equal ownership of all assets of the Co-operative and each has one (1) vote at all meetings of Members of the Co-operative. Class A and B Preference Shares Class A and B Preference Shares, all of which rank equally, may be issued in one or more series. The Board of Directors determines by resolution the designation, rights, privileges, restrictions, and conditions attaching to each series of Preference shares as well as the number to be issued. The terms determined by the Board of Directors include dividend payments, conversion features, redemption features, return of capital, and transfer 22

23 restrictions. Different series of preference shares shall not be construed to constitute different classes of shares. (a) Redemption Amount for Class A, B Preference Shares If at any time the Co-operative purchases for cancellation or redeems Preference Shares of the Co-operative, the redemption amount or purchase for cancellation amount for each Class A, B Preference Share (herein collectively called the "Redemption Amount") shall be an amount equal to: (i) their par value PLUS any dividends declared thereon but unpaid LESS any return of capital paid out in full or in part by the Co-operative to the Class A, B Preference Shareholder, or (ii) in the event that the value of all issued and outstanding Class A, B Preference Shares is greater than the Net Shareholders' Equity of the Co-operative ("Net Shareholders' Equity" being defined as the amount arrived at when subtracting the retained earnings deficit of the Co-operative, if any, from value of all the Class A, B Preference Shares of the Co-operative), and the Board determines it is necessary for the long term financial wellbeing of the Co-operative, the Board of the Cooperative may by resolution resolve that the Redemption Amount shall be an amount equal to the Redemption Amount calculated as per clause (i) multiplied by a fraction that has as its numerator the Net Shareholders' Equity of the Cooperative and has as its denominator the total value of all Class A, B Preference Shares in the capital of the Co-operative, both determined as at the date of the last completed financial year end of the Co-operative immediately prior to the date that the redemption or purchase for cancellation of Class A, B Preference Shares is completed. (b) Dividends on Class A, B Preference Shares Holders of Class A, B Preference Shares are entitled to receive an annual dividend in priority to any dividend being paid on Membership shares. Cheques of the Cooperative payable at par at any branch of the Co-operative s bankers in Canada shall be issued in respect of such dividends and the payment thereof shall satisfy such dividends. The Board shall be entitled from time to time to declare part of the said dividends payable for any financial year notwithstanding that such dividends for such financial year shall not be declared in full. If within four months after the expiration of any financial year of the Co-operative the Board in its discretion shall not declare the said dividends or any part thereof in the Class A, B Preference Shares for such financial year, then the rights of the holders of these Preference Shares to such dividends or to any undeclared part thereof for such financial year shall be forever extinguished. The holders of the Class A and B Preference Shares shall not be entitled to any dividends other than or in excess of the dividends herein provided for. (c) Priority of Class A, B Preference Shares The Class A, B Preference Shares shall rank, both in regards to payment of dividends and re-payment of capital, in priority to Membership Shares of the Co-operative, and shall not confer any further right to participate in profits or assets. Under the Act, all series within any Class of Preference shares rank equally with other series in that Class with respect to payment of dividends. 23

24 (d) Redemption of Class A, B Preference Shares by the Co-operative The Co-operative may upon giving six (6) months written notice to the holders of the Class A, B Preference Shares, redeem at any time or from time to time the whole or any part of their then outstanding Preference Shares. Upon redemption, the Cooperative shall pay to the holders of the Class A, B Preference Shares to be redeemed, in respect of each Class A, B Preference Share to be redeemed, an amount equal to the Redemption Amount. If notices of any redemption are given by the Co-operative and if amounts sufficient to redeem the Class A, B Preference Shares are deposited with any chartered bank or trust company in Canada, as specified in the notice, in trust for the holders of the Class A, B Preference Shares to be redeemed on or before the date fixed for redemption, dividends on the Class A, B Preference Shares to be redeemed shall cease after the date so fixed for redemption and the holders thereof shall thereafter have no rights against the Co-operative in respect thereof except, upon surrender to the Co-operative of certificates representing such Class A, B Preference Shares, to receive payment therefore out of the monies so deposited. In case only part of the then-outstanding Class A, B Preference Shares are at any time to be redeemed, the Class A, B Preference Shares so to be redeemed shall be in proportion to the number of Class A, B Preference Shares registered in the name of each holder of Class A, B Preference Shares (e) Participation of Class A, B Preference Shares on Dissolution In the event of the liquidation, dissolution or winding up of the Co-operative or other distribution of assets of the Co-operative among its Members for the purpose of winding up its affairs, the holders of the Class A, B Preference Shares shall be entitled to receive, before any distribution of any part of the assets of the Co-operative, the Redemption Amount including all dividends declared thereon and unpaid. After payment to the holders of the Class A, B Preference Shares of the amount so payable to them as above provided, they shall not be entitled to share in any further distribution of the property or assets of the Co-operative. (f) Voting Rights of Class A, B Preference Shares Holders of Class A, B Preference Shares have the right under the Act to vote at all meetings of holders of Class A, B Preference Shares called for the purpose of amending any of the terms of the said Preference Shares. 24

25 8. DESCRIPTION OF SECURITIES OFFERED The Co-operative is offering to sell Membership Shares and Class A Preference Shares The following is an outline of the minimum and maximum number of Membership and Class A Preference Shares offered pursuant to this Offering Statement and the attributes of each such class of Shares: Membership Shares Minimum offering none Maximum Offering $50,000 Minimum Individual Subscription $100 Maximum Individual Subscription $100 Prospective Members of the Co-operative are required to purchase one (1) Membership Share with a par value of $ each. Holders of Membership Shares are entitled to attend and vote at all meetings of Members of the Co-operative in accordance with the terms and provisions of the Act. Par Value $ Issue Dividends Rank Transfer Membership Shares shall be issued to anyone eligible for membership in the Co-operative, and who has been admitted into membership by the Board. At the discretion of the Board, to the maximum amount permitted under the Act. Junior, with respect to the payment of dividends, to Preference Shares. Junior, upon dissolution, to Preference Shares. Upon dissolution and after the payment of all debts and liabilities, the Co-op's remaining property will be distributed or disposed of to one or more co-operatives or charitable organizations in or near the Ottawa area, either of which are involved in the promotion of renewable energy. Subject to the consent of the Board and to the provisions of the Act regarding the transfer of Shares. Class A PREFERENCE SHARES Minimum Offering: $300,000 Maximum Offering: $1,000,000 Minimum Individual Subscription with any part held in an RRSP: $5,000 Minimum Individual Subscription without any part held in an RRSP: $2,500 Maximum Individual Subscription: $100,000 less the amount of any Class A PREFERENCE SHARES already held. Par Value $100 Term: Issue Twenty (20) years Class A PREFERENCE SHARES shall not be allotted or issued without the prior consent of the Board. Only holders of Membership Shares of the Co-operative can subscribe for Class A PREFERENCE SHARES, and these shares must be owned by individuals. 25

26 Dividends Voting Rights The Co-operative intends to pay a non-cumulative dividend on the current value of each Class A Preference Share (par value less return of capital) at a rate of 5% per annum. Under the Act, the holders of Class A Preference Shares have a right to vote at all meetings of holders of Class A PREFERENCE SHARES called for the purpose of amending any of the terms of the said Class A Preference Shares. Self-Directed RRSP Option Class A PREFERENCE SHARES can be purchased inside of an RRSP Plan, at a minimum value of $5,000. This plan is administered through the Canadian Workers Co-operative Federation (CWCF) self-directed RRSP plan, which is registered through Concentra Trust. It is possible to use this option only where the individual planholder and their immediate family holds less than 10% of the value of each class of shares in the co-operative. Contributions in-kind are allowed, which means currently-owned shares of the Co-operative can be rolled into the self-directed RRSP. Class A Preference Shares may also be purchased through a Transfer In from an existing RRSP account. Dividends on shares are paid in cash and remain in the account. Only Class A Preference Shares from the Co-operative are eligible investments in this account. The same limits that apply to RRSP contributions generally apply to this self-directed RRSP. The individual plan-holder pays an annual fee to the CWCF. Although the minimum purchase has been set at $5,000, prospective purchasers should be aware that an amount of $10,000 or more is recommended because of these fees. RRSP s will not be offered under this Offering Statement if the shares of the Cooperative are not deemed to be RRSP eligible. Class A PREFERENCE SHARES are not currently able to be held in a Tax Free Savings Account (TFSA), nor in a Registered Retirement Income Fund (RRIF). Return of Capital In addition to paying an annual dividend, it is the intention of the Cooperative to return the full capital value of a Member s Class A PREFERENCE SHARES over twenty (20) year at a rate of 1/20 the per annum, commencing in the second year after issuance of their preference shares at a rate of one twentieth (1/20th) of the initial issue value, and will continue over the period from year two (2) to year twenty (21) following their issuance. Redemption The Co-operative may redeem Class A PREFERENCE SHARES in accordance with the provisions of its Articles. Members may request to redeem Class A PREFERENCE SHARES with the approval of the Board and by giving six (6) months written notice. The Co-operative is also under no obligation to redeem any of the Class A PREFERENCE SHARES offered under this Offering Statement upon the withdrawal of a Member. No reserve or sinking fund is being established for the 26

27 Transfer Dissolution redemption of the Class A Preference Shares being issued. This is identified as a Risk Factor in Section 5. Class A Preference Shares may only be transferred with the consent of the Board of the Co-operative. In the event of the dissolution or liquidation of the Co-operative, the holders of Class A PREFERENCE SHARES shall be entitled to receive, before any distribution of any part of the assets of the Co-operative, the Class A Redemption Amount (as defined in Section 7 hereof), including any dividends declared but unpaid. Upon payment of the above amount, the holders of Class A Preference Shares shall not be entitled to any further share in the distribution of the assets of the Co-operative. Please see Section 7 entitled Material Attributes of Authorized Capital for further details on the Shares offered pursuant to this Offering. 9. METHOD OF SALE OF SHARES All securities sold pursuant to this Offering Statement will be sold exclusively by Board members, officers, senior employees of the Co-operative, and designated Members of the Co-operative. There are no commissions payable or discounts allowed. Class A PREFERENCE SHARES may be issued only to Members of the Co-operative. All prospective purchasers of Class A PREFERENCE SHARES sold pursuant to this Offering Statement will have received a copy of this Offering Statement prior to subscribing for such Shares. 10. DESCRIPTION OF THE MARKET ON WHICH THE SHARES MAY BE SOLD There is no market through which the Membership Shares or the Class A Preference Shares may be sold and none is expected to develop. Purchasers may not be able to resell Shares purchased pursuant to this Offering Statement. No Shares of the Co-operative may be transferred without the express consent of the Board. In addition to paying an annual dividend, it is the intention of the Co-operative to return the full capital value of a Member s Class A PREFERENCE SHARES over twenty (20) years as described above. Members may only redeem Class A PREFERENCE SHARES with the approval of the Board. The Co-operative is under no obligation to redeem any of the Class A PREFERENCE SHARES offered under this Offering Statement upon the withdrawal of a Member. No reserve or sinking fund is being established for the redemption of the Class A PREFERENCE SHARES being issued. The Act prohibits the redemption of Class A PREFERENCE SHARES if the Co-operative is or would be, as a result of such redemption, insolvent or if such repurchase would, in the opinion of the Board, be detrimental to the financial stability of the Co-operative. There can be no assurance given as to when or whether the Co-operative may be profitable. Subject always to the Act, as set out in the Co-operative s Articles, upon the approval of the Board, Class A PREFERENCE SHARES may be transferred to other Members or 27

28 prospective Members of the Co-operative. Furthermore, there can be no assurance that Members interested in the purchase of such Class A PREFERENCE SHARES will be available if and when a Member wishes to transfer their Class A PREFERENCE SHARES. 11. STATEMENT OF MINIMUM AND MAXIMUM AMOUNT OF THE OFFERING AND MINIMUM AND MAXIMUM AMOUNT OF ANY INDIVIDUAL SUBSCRIPTION Minimum Aggregate Offering: $300,000 Membership shares: Nil Class A PREFERENCE SHARES: $300,000 Maximum Aggregate Offering: $1,000,000 Membership shares: $50, 000 Class A PREFERENCE SHARES: $1,000,000 The Board of the Co-operative has set a target amount of $1,000,000 to be raised under this offering statement. If the Board of the Cooperative decides to cap the offering at the target amount, and demand exceeds that target, or if subscriptions exceed the maximum aggregate offering, the shares will be allocated to purchasers based on date on which subscription orders were received by the Trustee. Minimum and Maximum Amount by Individual Member All Members must purchase one (1) Membership Share. Only one (1) Membership Share may be held by each Member. Class A Preference Shares may only be purchased by persons who are admitted as Members into the Co-operative. The purchase of Preference Shares is optional and is not a requirement of membership. However, if a Member does purchase Class A Preference Shares with any part held in an eligible RRSP, then a minimum of $5,000 of Class A Preference Shares must be purchased. If a Member does purchase Class A Preference Shares with no part held in an eligible RRSP, then a minimum of $2,500 of Class A Preference Shares must be purchased. A maximum of $100,000 of Class A Preference Shares per Member is permitted. 12. AMOUNT AND PARTICULARS OF ANY SECURITIES, MORTGAGES, BONDS, DEBENTURES OR OTHER DEBT OBLIGATIONS The Co-operative currently has no debt of security obligations outstanding. 13. MATERIAL LEGAL PROCEEDINGS TO WHICH THE CO-OPERATIVE IS A PARTY The Co-operative is not party to any legal proceedings. 28

29 14. MATERIAL INTERESTS OF DIRECTORS, OFFICERS AND EMPLOYEES OF THE CO-OPERATIVE In the Co-operative Each of the Directors of the Board of the Co-operative is a Member of the Co-operative and owns the required one (1) Membership Share. No individual Board member, officer or employee has a material interest in the business or operations of the Co-operative other than disclosed herein. In the Projects Described Herein No Director has a material interest in any of the projects to be financed with through this offering. In the Shares Offered Herein The Board members, officers and employees will be offered the Class A PREFERENCE SHARES to be issued under this Offering Statement on the same terms as are available to all other persons. 15. MATERIAL CONTRACTS ENTERED INTO IN THE TWO (2) YEARS PRECEDING THIS OFFERING STATEMENT The current contracts that the Cooperative has an interest in are: A FIT 2.0 Ground Mount 500Kwh project on Scheel Drive and a FIT 3.0 Ground Mount 500Kwh on Mill Ridge Road. The Cooperative through RSPE has replacement cost insurance contracts and business revenue replacement contracts for each renewable energy installation. It also has a general liability and Directors and Officers insurance coverage contract. The Cooperative has not signed any bank agreement with any financial institution. The long term debt financing is being arranged through RSPE. RSPE has an agreement for construction financing for the Scheel Drive project through it Engineering, Procurement and Construction (EPC) Company. The Cooperative will maintain staffing contracts as defined in section 4 of the Business Plan (see Appendix A). 16. DIVIDENDS OR OTHER DISTRIBUTIONS PAID, DECLARED, OR ACCUMULATED BUT UNPAID DURING THE FIVE (5) YEARS PRECEDING THIS OFFERING STATEMENT The Co-operative has not paid or declared any dividends since its incorporation. 17. ANY OTHER MATERIAL FACTS A copy of this Offering Statement must be given to each investor before any payment is legally accepted by the Co-operative. 29

30 None of the Shares issued by the Co-operative pursuant to this Offering Statement will be in bearer form. This Offering Statement will expire on October 01, 2016 after which date no further sale of the Shares offered hereunder shall occur, unless a new Offering Statement has been filed and receipted. 30

31 18. CERTIFICATE OF DISCLOSURE THE FOREGOING CONSTITUTES FULL, TRUE AND PLAIN DISCLOSURE OF ALL MATERIAL FACTS RELATING TO THE SECURITIES OFFERED BY THIS OFFERING STATEMENT AS REQUIRED BY SECTION 35 OF THE CO- OPERATIVE CORPORATIONS ACT. DATED this 01 day of February,

32 19. Appendix A 2015/2016 BUSINESS PLAN FOR Braeside Solar Energy Co-operative. (BSEC) Executive Summary: Company Profile (Introduction): Description of Business Undertaking of the Co-operative Vision and Goals Membership in the Co-operative and Purchase of Preference Shares Renewable Energy Co-operative Operation BSEC s Current Investments Project Ownership Project Financing Product or Service Description The Regulatory and FIT Environment Management Staff and Support The Board Marketing Plan: Key Messages Promotional Strategy Pricing Strategy Financial Plan: Assumptions Taxation Operational, Project Development and Capital Raising Expenses Cash Flow Forecast Capital Structure and Financing Requirements: Financial Statements (Unaudited) Financial Management and Legal Services Risk Analysis Appendices

33 Executive Summary: Braeside Solar Energy Cooperative Inc. (BSEC) was created as a renewable energy Cooperative under the Co-operative Corporations Act (Ontario) to enable individuals to invest and have an interest in renewable energy generation projects in the McNab/Braeside area, and earn a reasonable return while doing so. BSEC s vision is to promote renewable energy technologies that are environmentally, socially and financially sustainable in order to improve the quality of life for all residents of the McNab/Braeside area. The management team of BSEC is pleased to present the 2015/2016 Business Plan. 33

34 BSEC membership is open to McNab/Braeside residents over the age of 18 who have completed the required application form and paid the single non-refundable Membership fee of $100. BSEC raises investment from individual members, enabling them to invest in projects that are larger than they could invest in individually. BSEC is a majority shareholder in Renfrew Solar Power Enterprises Inc. (RSPE). RSPE has been awarded two 500KwH solar projects, approved and qualified under the Independent Electricity System Operator (IESO) Feed-in Tariff (FIT) programs. BSEC has signed a Memorandum of Understanding (Appendix 1) with Renfrew Solar Power Enterprises Inc. (RSPE) and Creativity + Inc. (CPLUS) that outlines responsibilities of the parties for the successful development of the projects. As of December 31, 2014, BSEC had 59 members. BSEC has set the following targets for : To have the Scheel Drive FIT project constructed and on line by June To have 100 members by the end of To reach Notice to Proceed (NTP) on the Mill Ridge Road FIT contract by March To have all funds raised by Coop members of BSEC to provide equity for the two projects. In 2015/2016, BSEC will raise up to $ 1.0 million of capital for investment in two solar projects. The Co-op will raise this capital through an offering of preference shares to members of the Co-operative. 34

35 1. Company Profile (Introduction): Name: Braeside Solar Energy Co-operative Incorporation Date: January 10, 2013 Launch Date: August 12, 2013 Address: 186 Third Avenue, Arnprior, Website: to be announced Board Members: President: Mathew MacAdam Secretary: Dawn MacAdam Treasurer: Donald Carney Director: Colin Keddy Director: Dale Carney Communications Associate: Elizabeth Carruthers Legal Counsel: Nelligan O Brien Payne Accounting: Bouris Wilson LLP Auditor: Bouris Wilson LLP Description of Business Undertaking of the Co-operative Braeside Solar Energy Cooperative Inc. BSEC was created as a renewable energy cooperative under the Co-operative Corporations Act. (Ontario) BSEC currently is investing in renewable energy generation projects in the McNab/Braeside area. In the future BSEC may own its own renewable generation projects but for now the vision is to promote renewable energy technologies that are environmentally, socially and financially sustainable in order to improve the quality of life for all residents of the McNab/Braeside area. Membership in BSEC is open to individuals over the age of 18 who reside in the township of McNab/Braeside and have completed the required application form and paid the single non-refundable Membership fee of $100. The Co-operative restricts its business to the generation of electricity produced from one or more renewable energy sources and selling, electricity produced from renewable energy sources into the grid. The Ontario Green Energy and Economy Act (2009) and the Feed in Tariff (FIT) Program offered under the Act presented an opportunity for the Co-operative to become a producer of solar Photovoltaic (PV) and other renewable energy in Ontario. The use of the Co-operative model for producing energy from renewable resources has been very successfully adopted in Europe over the past 30 years. The Independent Electrical System Operator (IESO) formerly Ontario Power Authority (OPA) currently operates three Feed in Tariff Programs - the FIT Program for projects over 10kW and the Micro FIT Program for small projects 10kW and under. The first rounds of these three programs FIT 1.0 and Micro FIT 1.0 started accepting applications in 2010 and ran until the end of A second round of Micro FIT projects Micro FIT was opened in August A FIT 2.1 program for small projects between 10 kw and 500 kw accepted project applications from December until 35

36 January 18, A FIT 3.0 program for small projects between 10 kw and 500kW and accepted project applications from June to October The Government of Ontario recently announced that in future the FIT program will focus on these small projects under 500 kw. An additional round for small projects is expected later in 2015, followed by annual rounds for the following four years. BSEC expects to continue to participate in any future FIT rounds. BSEC raises capital from individual members, which is then invested in Green Energy projects. BSEC Member funds will be combined in a portfolio of renewable energy projects technologies that meet the requirements of the Independent Electrical System Operator (IESO) Feed-in Tariff (FIT) programs. These projects earn revenue from the sale of power to the grid through the IESO FIT programs. BSEC s intention is to provide members who invest in these projects with a reasonable return on their investment. BSEC currently focuses its ownership interests on two 500 kw solar photovoltaic (PV) power projects. Vision and Goals BSEC s vision is to promote renewable energy technologies that are environmentally, socially and financially sustainable in order to improve the quality of life for all residents of the McNab/Braeside area. The Cooperative's goals are to: Invest in renewable electricity in McNab/Braeside; Create a democratic, self-reliant, environmentally, socially and financially sustainable business model for community power in the McNab/Braeside area; Increase the accessibility and awareness of sustainable and efficient energy technologies by providing leadership and advocacy and building social capital; Through social financing, improve the market for renewable energy and other forms of sustainable technology in McNab/Braeside; Provide a fair fiscal return for co-operative members who wish to invest in local renewable energy production, and Partner with other organizations, companies and government agencies to develop a variety of projects that achieve our vision. Membership in the Cooperative and Purchase of Preference Shares Membership is open to individuals over the age of 18 who, have completed the required application form and paid the single non-refundable Membership fee of $100. Each Member is entitled to only one vote and to hold only one elected position. A Member in good standing is entitled to all the rights, benefits and privileges of Membership and to stand for any elected office in the Co-operative. To remain in good standing, a Member must abide by the By-Laws of the Co-operative and any other policies the Co-op may establish from time to time pursuant to these By-Laws. 36

37 A Member may withdraw from the Co-op by giving the Secretary 30 day s written notice. The Board may vote to accept any application to withdraw upon shorter notice. Membership in the Cooperative is not transferable unless authorized by the Board. Membership in the Cooperative shall terminate upon the resignation of the Member from the Cooperative, on the death of the Member, or on the expulsion of the Member from the Cooperative by a resolution passed by the Board. Once an individual is a BSEC member, they are notified about potential investment opportunities through the issuing of a Preference Share offering statement. Members are not required to purchase Preference Shares from the Cooperative. Preference Shares are offered at a purchase price of one hundred dollars ($100) per share, with a prescribed minimum purchase amount for each offering. Only Members are eligible to purchase Preference Shares. BSEC will only offer preference shares in a self-directed RRSP if they are eligible. The purchase of BSEC Preference Shares should be considered a long term investment. There is currently no market for these types of Preference Shares and to protect cash flow, BSEC places some restrictions on the transfer and redemption of Preference Shares. BSEC s Preference Share Offering Statements provide full details on the benefits and risks of investment. The Board, after paying expenses apportions the net revenue of their ownership share arising from the yearly business of the Cooperative in the following ways: 1) By setting aside reserves in such amount as the Board deems advisable for such purpose or purposes that are deemed to be conducive to the interests of the Cooperative or its Members, including maintaining a positive cash flow and meeting future obligations, which sum may be invested, dealt with and disposed of for the benefit of the Cooperative as the Board determines from time to time; 2) After allocation to the reserves outlined in (1) above, by payment of dividends on the Preference Shares of the Cooperative and returning the capital invested through the purchase of these Preference Shares. Renewable Energy Co-operative Operation The renewable power installations are normally located on 20 year leased property which coincides with the twenty (20) year term of Feed-in Tariff (FIT) Contracts. The solar panels or renewable power equipment installed at a given project is site specific, the objective being to maximize the generation of electricity at a given site in the most cost effective manner. The cost of the solar panels and other renewable power equipment purchased for the project(s) varies depending on the manufacturer of this equipment. The electricity generated by such equipment is dependent on a number of factors such as the efficiency of the solar panels or other renewable power equipment, their size, orientation, and weather factors, such as the amount of sunlight or wind or water flow or lack thereof. BSEC has chosen to invest into two 500kW ground mount FIT projects. In the future where BSEC is the sole owner of the Project, all of the revenue from the electricity 37

38 generated accrues to the Cooperative. In cases where ownership is shared revenue is divided in proportion to percent investment after all project costs have been paid. The following is a summary of how BSEC intends to operate. Developing the two project portfolio BSEC or its partner(s) will identify land owners in McNab/Braeside area who were interested in hosting renewable energy projects. BSEC or its partner(s) will enter into option agreements with these property owners to lease their land for a term of 20 years. BSEC or its partner(s) will secure a FIT contract for the proposed projects. Investment from Members BSEC issues a preference share investment offering to its members. BSEC invests member capital in renewable energy projects. Selling Power to the Grid BSEC or its partner(s) are connected to the Hydro One grid. BSEC or its partner(s) will sign a 20-year Feed-in Tariff contract with the Independent Electrical System Operator (IESO) Feed-in Tariff (FIT) programs to sell power generated by each system. The contract provides guaranteed tariff rates for every kwh generated for the full 20 years. BSEC or its partner(s) operates and maintains the projects for at least 20 years At the end of the contract term, BSEC or its partner(s) have the option of entering into a new contract with OPA, a utility or the property owner; removing the project; or selling the project. Distributing the Revenue BSEC distributes its surplus revenue generated from projects among Preference Shareholders in proportion to number of Preference Shares that they hold. The 20 year guaranteed tariff rates will enable BSEC to: o pay a reasonable rate of return (dividend) competitive with other investment options, and o Return invested capital according to schedules that best meet the needs of investors and the co-operative. BSEC s Current Investments BSEC s launched a membership and Preference Share sales drive in January 2013 with a series of workshops in Arnprior. As of December , BSEC has 59 members. BSEC will participate in two 500kW ground solar projects approved under the Small FIT 2.1 and 3.1 Programs, Details of BSEC s current project portfolio are provided in Appendix 4. 38

39 Indications are that revenue from the two projects will put the Co-operative on track to pay its first dividend in 2016 to all Preference Shareholders of record as of the end of BSEC s fiscal year (September 30) BSEC has built an organizational structure and accounting system to manage the Co-op s assets and its preference share capital, and to participate in new rounds of the FIT Program. In January 2013, BSEC created its board and Matt McAdam will take the volunteer role of President and Operations for the Coop. The Co-op has retained Nelligan O Brien Payne Law as its legal counsel Bouris Wilson LLP for strategic accounting advice. Targets and Plans for 2015/2016 The Board of Directors of the Co-operative has set the following targets for : To work towards these targets, BSEC s plans for 2015/16 consist of the following: To participate in completing the Scheel Drive project constructed and on line by June ; To have 100 members by the end of 2016; To ensure the Mill Ridge Road project reaches Notice to Proceed (NTP) by March 31, 2016; To have all funds raised by Coop members of BSEC to provide equity for the two projects and 1.2 Megawatts (DC) of Solar production, and Implement a comprehensive communications and share marketing plan. Project Ownership BSEC invests in and has an interest in two projects with Renfrew Solar Power Enterprises Inc. All project expenses (insurance, maintenance, management, etc.) and revenue are shared according to the ownership percentage. On dissolution all assets are shared according to the ownership percentage. The FIT contract application is in the name of the Renfrew Solar Power Enterprises Inc. Project Financing The Co-op does is not required to seek project financing. The Co-op has been asked to participate in raising equity of up to 20% of the capital required for its projects. Product or Service Description BSEC participates and has an interest in generating community-owned renewable energy within the boundaries of the McNab/Braeside. It provides an opportunity for residents of McNab/Braeside to cooperatively own and operate renewable energy facilities. BSEC members build a sense of community by raising community capital together to finance these projects. BSEC works towards providing members with a reasonable return on their investment. 39

40 BSEC s activities help to stimulate the local economy by providing jobs to solar installers, rental income for landowners, and income for workers who provide maintenance on the systems. This community investment also brings locally-produced energy to McNab/Braeside thereby reducing our reliance on outside energy sources. 2.The Regulatory and FIT Environment In 2003, Ontario s electricity production was derived from the following sources: 32% from nuclear, 22% from large hydro, 18% from coal, 24% from natural gas and 4% from renewable and other sources. In the same year, the electrical production market was opened up to allow companies to bid to supply new energy producing facilities to reduce the Ontario Grid s reliance on coal fired generating plants, while at the same time to distribute the production of electricity more locally. The Ontario s Green Energy Act, 2009 and its subsequent Feed in Tariff regulations, rules and contract requirements, changed the structure of energy production in the province to encourage individuals, companies and co-operatives to produce renewable power and sell it at a guaranteed price for a term of twenty (20) years. The first two The Independent Electrical System Operator (IESO) feed-in tariff (FIT) programs were launched in The FIT program is for generated output greater than 10kW (to a maximum of 10MW in the case of solar PV). The Micro FIT program is for generation output of 10kW or less and has simplified requirements compared to the main FIT program. The Micro FIT program is limited to renewable power generators that own the property on which the generation equipment is located. The FIT (1 and 2.1) regulations require sixty per cent (60%) of a solar power system s equipment to be manufactured in Ontario. FIT program tariffs are set to provide a reasonable return (5-7%) for investors in a renewable power system given the current cost of these systems in Ontario. As economies of scale drive the price of systems down, FIT program tariffs for new contracts are adjusted downward to provide the same return. This approach has been very successful in Germany where after 15 years, the cost of solar PV systems has been cut in half and is still falling. The objective of most FIT programs is to achieve parity between renewable power and conventional power sources within a decade, while at same time building a strong renewable power manufacturing and installation economy. The first rounds of FIT and Micro FIT programs were closed in 2011, but approved projects continue to be built into In general, the Ottawa area saw significant progress under the initial FIT Programs with over 40 large scale solar FIT contracts in various stages of completion and over 350 small scale Micro FIT projects. A second round of the Micro FIT Program opened in August 2012 with a target of 50 MW. A second round of the FIT program (FIT 2.1) opened for small projects greater than 10 kw and less than 500 kw in December The application window was open only until January 18, 2013, but the new program included a set aside for projects with at least 51% community owned projects, and priority points system that gave priority to projects with greater than 15% community ownership. The Government of Ontario has committed to use this approach in future rounds of the FIT program which will continue 40

41 to focus on small projects for the next five years. This has made it very advantageous for solar developers and building owners to partner with community partners like BSEC, and provided a stable long term investment environment The costs of solar systems have decreased due to an expanding market; the FIT 2.1 program generates Tariffs that are up to 30% lower than FIT 1.0. A large number of experienced solar developers and installers have been established to support the FIT programs. As a result of the 60% domestic content rule, several new manufacturers of solar PV modules, inverters and wind power components began operation over the past two years. Because these are start-up operations, the cost of solar PV panels in Ontario is expected to remain above international levels in the short term, but the Ontario FIT program tariffs will be sufficient to provide a reasonable return during this period. The 60% domestic content rules were recently challenged internationally before the World Trade Organization and will not apply for future rounds of the FIT program. This should result in lower costs for some solar system components while still maintaining a viable solar industry in Ontario. The Green Energy Act also required a strengthening and expansion of the grid to allow higher levels of renewable power to be connected. The success of the first round FIT programs as well as the simultaneous development of other power production facilities has meant that in some areas of the Province, demand for connecting additional renewable power projects is running ahead of these grid upgrades. Any new FIT 2.1 project will have to undergo economic and technical connection tests which determine the place in the connection queue. 3. Management The Cooperative is currently managed by its 5-member volunteer Board of Directors, which reflects a diverse array of experience in renewable energy, project management, finance, and community development. Staff and Support Board member Mathew MacAdam volunteers as Operations Manager. His responsibilities include setting up and managing the Co-op s overall operational systems on behalf of the Board, coordination of new project applications, and the oversight of the activities of volunteer teams. In addition to an Operations Manager, BSEC is assisted by a number of skilled professionals. These include legal counsel from Nelligan O Brien Payne, and the accounting firm of Bouris Wilson LLP. The Board BSEC s Board remains highly active in project assessment and development as well as member recruitment. Summary bios of each Board member are below: 41

42 Mathew MacAdam- President Matthew has spent over 10 years focusing his skill set to helping people achieve their personal and financial goals. While being dedicated to producing renewable green energy projects, Matthew also holds a University education background in Psychology and Sales and 7-year career in Public Relations. Matthew is the President and CEO of the Braeside Solar Energy Co-op. Don Carney Treasurer - Carney is an IT Senior Consultant and Strategist with over 22 years experience in management consulting, IT security and project management. He has resided in Kanata since 1986 and has been married to Dale for 31 years with four children. Dawn MacAdam- Secretary - Dawn is an established and successful local business owner in Arnprior for 15 years now. While marketing and running her business, Dawn is well known for being actively involved in the community by coordinating, promoting and creating innovative ways to bring forth awareness and fundraising for charitable causes, such as Free the Children, Children s Hospital of Eastern Ontario, and St. Joseph s Catholic School. Dale Carney- Director Dale Carney is a health and wellness consultant and founder of Guided Learning Solutions, a home-based health and wellness business in Kanata. Married to Don for 31 years and the mother of 4 wonderful children. She was trained as a Registered Nurse and worked in a hospital prior to the birth of her children. Colin Keddy - Director- Mr. Colin M. Keddy is a Co-Founder of Synergy Family Office & Private Wealth Management Inc. and serves as its Managing Partner. With over 14 years in the financial sector, Mr. Keddy is coordinating the efforts of third-party tax and legal services with a customized and comprehensive wealth management strategy. He is an expertise in insurance and financial planning services. He collaborates with the clients and the advisors to maximize all areas of their financial objectives by focusing on support in the integration of the overall financial picture. Technical Team EPC Contractor Business Development Team In addition to Board members Patrick Caicco acts as a consultant to BSEC for Business Development. Communications Team In addition to Board Members Ms.Elizabeth Carruthers volunteers as the Coop Communication and Marketing director. Transition to a Staffed Organization Over the next three years, as revenues from project investments increase, BSEC plans to transition to retain part time staff. The strong volunteer member base will assist in keeping staffing costs to a minimum. The operations manager and supporting contractors will take over all administrative aspects of the Cooperative s operations, reporting the Board of Directors on all major issues. 42

43 4. Marketing Plan: By the end of 2016 BSEC intends to have 100 members and have raised sufficient new equity from members to invest in the new projects described in this Business Plan. BSEC s Marketing Plan focuses on two target markets: 1) Current members 2) Potential new members and investors Therefore, for the remainder of 2015 and 2016, the focus of BSEC is to first increase membership as quickly as possible, with a target of 10 new members per month, and to raise capital through the sale of preference shares. Key Messages McNabb/Braeside residents do not need to wait for a government or big company to bring renewable energy to town; they can join forces with other interested investors in the community and take matters into their own hands. Know where your long-term savings are being invested, and see the impact in your own community. Collaborate with your fellow community members and be part of the change that you want to see. Promotional Strategy Member communications Monthly (or regular mail for those who have requested) newsletter with updates. Facebook Host open houses at project sites, and invite members, media, town council, and the Mayor Take photos and videos of members and project hosts, then post testimonials on website. Recognize members for volunteer involvement. Pricing Strategy The $100 non-refundable membership fee was chosen as it would attract only those who are seriously considering investment through BSEC and those who want to help community-owned power to succeed. BSEC plans to set the minimum investment in all new Preference Share Offerings at $2,500 ($5,000 if any portion of the investment is for an RRSP) (if preferred shares are eligible.) This amount was chosen to keep administrative costs to reasonable levels while at the same time providing opportunities for a wide range of members. A maximum of $100,000 was chosen to ensure that no individual member has a majority interest in any project portfolio. 43

44 5. Financial Plan: Assumptions A financial forecast for the Co-operative has been prepared using standard accounting principles and policies, based on the operating plans described above. Net Revenue Net revenue from all operating projects is defined as the revenue from the sale of power to the grid from the project minus annual project related costs including maintenance, site insurance, land lease rent, and project management. Net revenue from all operating projects invested in by the Co-operative will be used to cover annual administrative expenses, service and retire debt, pay dividends, and return Member capital. Capital Raising and Project Development Costs Project development expenses, costs associated with the preparation of offering statements, and the cost of raising additional capital are covered by a small (<5%) allocation from raised capital. If the opportunity arises, applications will be made to the CEPP for contributions towards technical assessment, due diligence, legal, community engagement, marketing, and other costs associated with developing each new Project. We have assumed that if these applications are successful we will receive 50% of other eligible costs. Financing Member purchases of Preference Shares will provide an opportunity to supply up to twenty percent (20%) of the capital costs of the projects. RSPE may supply the balance of the capital costs of the project(s). Required Capital and Estimated Revenue The total cost of acquiring or installing the projects and FIT contracts determines the capital required. Multiplying the estimated energy production for a project by the FIT Contract price for the project is equal to the production revenue. Contract prices for FIT 2.1 and 3.1 projects are as follows. Solar PV System FIT 2.1 FIT 3.1 Cents/kWh Cents/kWh FIT systems kw

45 Dividends and Return of Capital Dividends and return of capital will be as follows: 1) It is the intention of the Board of the Co-operative (but not guaranteed) to pay noncumulative cash dividends at a rate of approximately 5% per annum (or fraction thereof depending on the date issued) based on current value of a member s preference share holdings (par value less capital returned); 2) The Board will return a member s invested capital over a twenty (20) year period, commencing in the second year after issuance of their preference shares on a straight line basis the initial issue value, and will continue over the period from year two (2) to year twenty (20) following their issuance, and 3) Any loans taken out by the Co-operative s for the financing of a project will be fully repaid within the twenty (20) years of the FIT contract for that project. Other Assumptions Other assumptions related to these forecasts are as follows: Interest rate long term financing 5.5% Interest rate bridge financing 9.8% Portion of debt financing Up to 80% Term debt in years Income tax rate 15.5% Annual Inflation rate 1.3% Taxation The purchase of renewable power production equipment will qualify for an up to 50% per annum accelerated capital cost allowance under Class 43.2 of Schedule II to the Income Tax Regulations for specified energy generation equipment. With these accelerated capital cost allowance rates, it is not anticipated the contract holders will be liable for tax on the new projects purchased in 2013/14 for a period of ten (10) years. Future tax provisions have been based on a future rate (federal and Ontario) of 15.5 percent assuming that BSEC qualifies under tax concessions for small businesses. Operational, Project Development and Capital Raising Expenses BSEC s annual operational budget includes two types of expenses: 1. Day to day administrative costs of running the Co-operative that will be incurred every year. These costs will be paid out of net revenue from operating projects and any grants that can be secured to cover these costs. 2. Project development, offering statement, and capital raising costs that will be incurred only in years when new projects are being developed and/or acquired. 45

46 Net revenue is defined as the revenue from the sale of power to the grid from all of the Co-op s projects minus annual project related costs including maintenance, site insurance, land lease rent, and project management. Day to day administrative costs covered from the net revenue include liability and directors and officer s insurance; legal, accounting and bookkeeping costs; and administrative staffing costs. Project development and capital raising costs include the preliminary assessment of project opportunities, offering statement preparation, technical assessment, due diligence, legal, community engagement, marketing, and other costs associated with developing each Project and raising capital. BSEC Annual Operational Budget-2016 Staffing $ 10,000 Legal $ 9,500 Accounting Services $ 6,000 Office rental and expenses $ 500 Insurance $ 1,000 Total $27,000 BSEC 2015/16 Project Development and Capital Raising Budget Legal $ 1,875 Staffing $ 1,250 Project Development $ 250 Community Engagement $ 250 Total $3,625 Total 2015 Operational Expenses $8,875 Cash Flow Forecast Cash flow is determined by a detailed budgeting process that estimates investments in new projects, net revenue from all operational projects that BSEC invests in and has an interest. They will participate in these projects over a 20-year period, annual administrative and operation expenses, project development and capital raising costs, the cost of borrowing, annual payment of dividends and capital repayment. BSEC s 20-year cash flow forecast is provided in Appendix 2 and Appendix 3 provides a 20-year pro forma statement from Renfrew Solar Enterprises Inc. (RSPE). The cash flow forecast includes investment in the two projects that BSEC invests and participates in. It notes combined Co-op administrative and project development costs; proceeds from the sale of shares; and payment of dividends and return of capital. 46

47 This cash flow forecast is for the two projects that BSEC participates in. Administrative costs are expected to increase in the next few years due to increased administration costs. After that point it is assumed to remain constant (corrected for inflation) over the balance of the 20-year period. Capital raising expenses occur only in 2015 and New business plans will be prepared when the Co-op develops new business opportunities. The cash flow forecast shows that the Cooperative will be able to maintain a positive cash position for the full 20 years of the FIT projects while paying a reasonable dividend to Preference Shareholders and returning invested capital. Capital Structure and Financing Requirements: BSEC may raise up to twenty percent (20%) of the capital required for each project with the purchase of the preferred share offering. Financial Statements BSEC s audited financial statements for the financial year ending September 30, 2014 are provided in Appendix 6. Internally generated interim financial statements up to August are also provided in Appendix 7. Financial Management and Legal Services BSEC has set up a secure accounting system and database for the administration of the Co-op s finances, project assets, and preference share registration. BSEC has retained as legal counsel and Bouris Wilson LLP for expert accounting advice. Risk Analysis The BSEC cash flow forecast set out in this business plan is subject to several risks which may change some of the assumptions made. Actual results will vary, perhaps in a materially negative way, from these forecasts and projections. Some key risk events that may be expected to impact the Business Plan are shown in Table 2, along with the assessment of impact (high/ medium/ low), the probability (high/ medium/ low), and the risk response (what to do if the risk event happens, or what to do to reduce the likelihood or impact of it happening.). A more detailed list of risk factors is included in each of the Co-op s Share Offering Statement. 47

48 Table 2: Risk Management Risk Event Type of Risk Impact (H/M/L) The net proceeds from sale of preference shares may be insufficient to meet the equity requirements of the Co-operative and its project portfolio. A combination of factors such as, for example, price increases for the purchase of PV panels, inability to obtain the Solar Panels when contemplated due to short supply and cost to comply with regulatory issues, could affect the profitability of BSEC projects. The solar PV equipment the Co-operative intends to install is expected to be low maintenance and trouble free. However, should issues with the Solar Panels and/or inverters develop, there would be a loss of energy production and associated revenues for the period of time that a failure occurs. This loss is not covered by warranty or insurance. Because of the tremendous growth expected in Solar Panel installation world-wide and the limited number of manufacturers of Solar Panels, there could be a potential delay in being able to have the panels of choice delivered for installation according to the Cooperative s construction schedule. The viability of the renewable power industry in Ontario and Canada is dependent upon tax policies, government programs, and environmental and other rules and regulations which provide an incentive to generate electricity from renewable energy sources. FIT Rules & Regulations may change and impose additional costs to the Co-operative. FIT pricing for future projects will come down more quickly than expected as the program is increasingly successful. Probabilit y (H/M/L) Response Financial M M Aggressive marketing of preference shares. Exploit the community network and hold information sessions. Financial H M Research alternate suppliers. Innovative approach and quick response to events effecting competitiveness and profitability Technical, Financial H L Thorough research during design, prior to ordering. Check references with existing customers. Use alternate suppliers. Hold backup equipment in storage where necessary. Save money for planned replacement of inverters. Schedule M M Identify long-lead items. Order as early as possible. Alternate suppliers. Legal M L Advocacy plan with other co-ops and groups such as the Canadian Renewable Energy Alliance, Ecology Ottawa, and other networks. Financial L-M M Careful project and supplier selection Thorough research during design, prior to ordering 48

49 Appendices Appendix 1: Memorandum of Understanding Agreement Appendix 2: Braeside Cash Flow Forecast Appendix 3 Renfrew Solar Enterprises pro forma Appendix 4: BSEC Current Project Portfolio Appendix 5: Bouris Wilson Release Letter Appendix 6: Financial Statements-2014 Audited Appendix 7: Financial Statements-2015 Interim Appendix 8: Subscription Agreement Appendix 9: Escrow Agreement Appendix 10: Membership Subscription Agreement Appendix 11: BSEC and Nelligan O Brien Payne Agreement 49

50 20. Appendix 1: Memorandum of Understanding 50

51 51

52 52

53 21. Appendix 2: BSEC Pro Forma Financial Statements Braeside Solar Energy Co-operative Inc. (BSEC) Pro forma - Statement of Income For the years ended September 31, Revenue Dividend Income (Pref. Shares) $ - $ - $ - $ - $ 50,000 $ 47,500 $ 45,000 $ 42,500 $ 40,000 $ 37,500 $ 35,000 $ 32,500 $ 30,000 $ 27,500 $ 25,000 $ 22,500 $ 20,000 $ 17,500 $ 15,000 $ 12,500 $ 10,000 $ 7,500 $ 5,000 $ 2,500 Dividend Income (Common Shares) $ 20,276 95,856 95,703 95,550 95,396 95,241 95,086 94,929 94,772 94,614 94,454 88,800 72,858 64,450 59,783 56,959 59,114 61,317 63,364 65,168 4, , , , , , , , , , , , ,800 95,358 84,450 77,283 71,959 71,614 71,317 70,864 70,168 7,275 Operating Expenses Expenses (office, bank, supplies, rent, phone, travel,salary) 13,590 11,702 5,860 35,875 50,000 50,000 68,200 68,907 69,621 70,342 71,071 71, ,300 74,058 74,824 75,597 78,378 79,167 79,463 79,268 69,078 69,078 55, ,590 11,702 5,860 35,875 50,000 50,000 68,200 68,907 69,621 70,342 71,071 71,806 72,549 73,300 74,058 74,824 75,597 78,378 79,167 79,463 79,268 69,078 69,078 55, Income (Loss) before taxes (13,590) (11,702) (5,860) (15,599) 95,856 93,203 72,350 68,989 65,620 62,244 58,859 55,466 52,065 48,654 39,742 20,534 8,853 (1,095) (7,208) (7,849) (7,951) 1,786 1,090 (47,987) Provision for income taxes (@15.5%) - (2,489) (981) 3,143 22,608 22,197 4,227 4,084 3,939 3,794 3,647 3,498 3,349 3,198 2, Net Income (Loss) (13,590) (9,213) (4,879) (18,742) 73,248 71,007 68,123 64,905 61,681 58,450 55,212 51,967 48,716 45,457 37,548 20,534 8,853 (1,095) (7,208) (7,849) (7,951) 1,786 1,090 (47,987) Preferred Share (dividend) (@5%) (50,000) (47,625) (45,250) (42,875) (40,500) (38,125) (35,750) (33,375) (31,000) (28,625) (26,250) (23,875) (21,500) (19,125) (16,750) (14,375) (12,000) (9,625) (7,250) (4,875) Profit/Loss (13,590) (9,213) (4,879) (18,742) 23,248 23,382 22,873 22,030 21,181 20,325 19,462 18,592 17,716 16,832 11,298 (3,341) (12,647) (20,220) (23,958) (22,224) (19,951) (7,839) (6,160) (52,862) Retained Earnings Balance Beginning of year/period $ - $ (13,590) $ (22,803) $ (27,682) $ (46,424) $ (23,176) $ 206 $ 23,079 $ 45,109 $ 66,290 $ 86,615 $ 106,077 $ 124,670 $ 142,386 $ 159,217 $ 170,515 $ 167,174 $ 154,527 $ 134,307 $ 110,350 $ 88,125 $ 68,174 $ 60,336 $ 54,176 Net Income (Loss) for year/period (13,590) (9,213) (4,879) (18,742) 23,248 23,382 22,873 22,030 21,181 20,325 19,462 18,592 17,716 16,832 11,298 (3,341) (12,647) (20,220) (23,958) (22,224) (19,951) (7,839) (6,160) (52,862) Balance (deficit) end of year $ (13,590) $ (22,803) $ (27,682) $ (46,424) $ (23,176) $ 206 $ 23,079 $ 45,109 $ 66,290 $ 86,615 $ 106,077 $ 124,670 $ 142,386 $ 159,217 $ 170,515 $ 167,174 $ 154,527 $ 134,307 $ 110,350 $ 88,125 $ 68,174 $ 60,336 $ 54,176 $ 1,314 53

54 Braeside Solar Energy Co-operative Inc. (BSEC) Consolidated Balance Sheet Assets Current Assets Cash and cash equivalents $ 5,568 $ 1,233 $ 469 $ 15,806 $ 34,273 $ 55,155 $ 75,528 $ 95,058 $ 113,739 $ 131,564 $ 148,526 $ 164,619 $ 179,835 $ 194,166 $ 202,964 $ 197,123 $ 181,976 $ 159,256 $ 132,799 $ 108,074 $ 85,623 $ 75,285 $ 66,625 $ 11,263 Future income taxes - 2,489 3, Harmonized Sales Tax recoverable Total current assets 5,568 3,942 4,458 15,806 34,273 55,155 75,528 95, , , , , , , , , , , , ,074 85,623 75,285 66,625 11,263 Investment in Renfrew Solar at cost , , , , , , , , , , , , , , , , , ,551 95,051 47, Total assets $ 5,619 $ 3,993 $ 4,509 $ 965,857 $ 936,824 $ 910,206 $ 883,079 $ 855,109 $ 826,290 $ 796,615 $ 766,077 $ 734,670 $ 702,386 $ 669,217 $ 630,515 $ 577,174 $ 514,527 $ 444,307 $ 370,350 $ 298,125 $ 228,174 $ 170,336 $ 114,176 $ 11,314 Liabilities and Shareholders' Equity Current Liabilities Notes and loans payable $ - $ 10,000 $ 10,000 $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - Accounts payable $ 3,381 8,129 10, $ 3,381 $ 18,129 $ 20,010 $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - Loan non interest - not repaid within one year related (Creativity) $ 10,128 1,527 1, Loan non interest - not repaid within one year related (Renfrew) 1,240 4,754 2, Total current liabilities 13,509 20,896 26,291 2, Shareholders' Equity Preferred Shares - - 1,000, , , , , , , , , , , , , , , , , , ,000 50,000 - Membership Shares (Common) 5,700 5,900 5,900 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 Retained Earnings (13,590) (22,803) (27,682) (46,424) (23,176) ,079 45,109 66,290 86, , , , , , , , , ,350 88,125 68,174 60,336 54,176 1,314 (7,890) (16,903) (21,782) 963, , , , , , , , , , , , , , , , , , , ,176 11,314 $ 5,619 $ 3,993 $ 4,509 $ 965,857 $ 936,824 $ 910,206 $ 883,079 $ 855,109 $ 826,290 $ 796,615 $ 766,077 $ 734,670 $ 702,386 $ 669,217 $ 630,515 $ 577,174 $ 514,527 $ 444,307 $ 370,350 $ 298,125 $ 228,174 $ 170,336 $ 114,176 $ 11,314 54

55 Braeside Solar Energy Co-operative Inc. (BSEC) Statement of Cash Flow For the years ended September 31, Operating Activities Net income $ (13,590) $ (9,213) $ (4,879) $ (18,742) $ 73,248 $ 71,007 $ 68,123 $ 64,905 $ 61,681 $ 58,450 $ 55,212 $ 51,967 $ 48,716 $ 45,457 $ 37,548 $ 20,534 $ 8,853 $ (1,095) $ (7,208) $ (7,849) $ (7,951) $ 1,786 $ 1,090 $ (47,987) Items not invovling cash (future income taxes) - (2,489) (981) 3, (13,590) (11,702) (5,860) (15,272) 73,248 71,007 68,123 64,905 61,681 58,450 55,212 51,967 48,716 45,457 37,548 20,534 8,853 (1,095) (7,208) (7,849) (7,951) 1,786 1,090 (47,987) Accounts payables and accrualed liabilities 3,381 4,748 3,261 (10,010) Harmonized Sales tax (recoverable) - (220) Net cash provided by operations (10,209) (7,174) (2,080) (24,763) 73,248 71,007 68,123 64,905 61,681 58,450 55,212 51,967 48,716 45,457 37,548 20,534 8,853 (1,095) (7,208) (7,849) (7,951) 1,786 1,090 (47,987) Investing Activities shares (common Renfrew) (51) Shares (preferred Renfrew) (950,000) 47,500 47,500 47,500 47,500 47,500 47,500 47,500 47,500 47,500 47,500 47,500 47,500 47,500 47,500 47,500 47,500 47,500 47,500 47,500 47,500 Net cash used in investing activities (51) - - (950,000) 47,500 47,500 47,500 47,500 47,500 47,500 47,500 47,500 47,500 47,500 47,500 47,500 47,500 47,500 47,500 47,500 47,500 47,500 47,500 47,500 Financing Activities increase (decrease) loan to related companies 10,128 (7,361) 1,316 (4,000) (2,281) Proceeds loans payable - 10,000 - (10,000) Proceeds on issuance of membership shares 5, , Proceeds (RoC) on issuance of Preferred Shares 1,000,000 (50,000) (50,000) (50,000) (50,000) (50,000) (50,000) (50,000) (50,000) (50,000) (50,000) (50,000) (50,000) (50,000) (50,000) (50,000) (50,000) (50,000) (50,000) (50,000) (50,000) Dividends paid (50,000) (47,625) (45,250) (42,875) (40,500) (38,125) (35,750) (33,375) (31,000) (28,625) (26,250) (23,875) (21,500) (19,125) (16,750) (14,375) (12,000) (9,625) (7,250) (4,875) Net cash used in financing activities 15,828 2,839 1, ,100 (102,281) (97,625) (95,250) (92,875) (90,500) (88,125) (85,750) (83,375) (81,000) (78,625) (76,250) (73,875) (71,500) (69,125) (66,750) (64,375) (62,000) (59,625) (57,250) (54,875) Net increase (decrease) in Cash and cash equivalents 5,568 (4,335) (764) 15,337 18,467 20,882 20,373 19,530 18,681 17,825 16,962 16,092 15,216 14,332 8,798 (5,841) (15,147) (22,720) (26,458) (24,724) (22,451) (10,339) (8,660) (55,362) Cash and cash equivalents at beginning of year - 5,568 1, ,806 34,273 55,155 75,528 95, , , , , , , , , , , , ,074 85,623 75,285 66,625 Cash and cash equivalents at end of year $ 5,568 $ 1,233 $ 469 $ 15,806 $ 34,273 $ 55,155 $ 75,528 $ 95,058 $ 113,739 $ 131,564 $ 148,526 $ 164,619 $ 179,835 $ 194,166 $ 202,964 $ 197,123 $ 181,976 $ 159,256 $ 132,799 $ 108,074 $ 85,623 $ 75,285 $ 66,625 $ 11,263 Notes: Return of Capital starts in 2nd year at a rate of 1/20 per year 55

56 22. Appendix 3- Renfrew Solar Enterprises-pro forma T o tal Book Inco me Revenue 200, , , , , , , , , , , , , , , , , , , , ,665 13,289,249 Operating Expenses (18,000) (75,000) (75,750) (76,508) (77,273) (78,045) (78,826) (79,614) (80,410) (81,214) (82,026) (82,847) (83,675) (84,512) (85,357) (86,211) (77,590) (69,831) (62,848) (56,563) (50,906) (1,543,004) Interest Expense (59,813) (206,944) (200,722) (194,158) (187,232) (179,926) (172,218) (164,086) (155,507) (146,456) (136,907) (126,832) (116,204) (104,991) (93,162) (80,682) (67,515) (53,624) (38,970) (23,509) (12,295) (2,521,753) Amortization (1/20th) (72,500) (255,000) (255,000) (255,000) (255,000) (255,000) (255,000) (255,000) (255,000) (255,000) (255,000) (255,000) (255,000) (255,000) (255,000) (255,000) (255,000) (255,000) (255,000) (255,000) (182,500) 5,100,000 Net Income (loss) 50, , , , , , , , , , , , , , , , , , , , ,964 4,124,491 Taxable Income Book net income (loss) 50, , , , , , , , , , , , , , , , , , , , ,964 4,124,491 Add back amortization 72, , , , , , , , , , , , , , , , , , , , ,500 5,100,000 Allowable capital cost allowance 122, , , , , , , , , , , , , , , , , , , , ,464 9,224,491 (122,780) (401,082) (404,505) (408,269) (412,392) (416,895) (421,798) (427,124) (432,894) (439,135) (445,871) (383,628) (191,814) (95,907) (47,953) (23,977) (11,988) (5,994) (2,997) (1,499) (749) (5,099,251) Taxable Income , , , , , , , , , ,715 4,125,241 M aximum capital cost allowance (50%CCA rate which can not create 1,275,000 2,611,390 2,288,069 2,085,817 1,881,682 1,675,486 1,467,039 1,256,139 1,042, , , , ,814 95,907 47,953 23,977 11,988 5,994 2,997 1, or increase a loss) Cash Flow Revenue 200, , , , , , , , , , , , , , , , , , , , ,665 13,289,249 Operating Expenses (18,000) (75,000) (75,750) (76,508) (77,273) (78,045) (78,826) (79,614) (80,410) (81,214) (82,026) (82,847) (83,675) (84,512) (85,357) (86,211) (77,590) (69,831) (62,848) (56,563) (50,906) (1,543,004) Loan Interest (59,813) (206,944) (200,722) (194,158) (187,232) (179,926) (172,218) (164,086) (155,507) (146,456) (136,907) (126,832) (116,204) (104,991) (93,162) (80,682) (67,515) (53,624) (38,970) (23,509) (12,295) (2,521,753) Loan Principal (83,024) (113,129) (119,351) (125,916) (132,841) (140,147) (147,855) (155,987) (164,567) (173,618) (183,167) (193,241) (203,869) (215,082) (226,912) (239,392) (252,558) (266,449) (281,104) (296,564) (269,886) (3,984,659) Taxes (@15.5%) (10,773) (41,715) (57,881) (66,710) (71,924) (76,854) (80,835) (84,351) (87,652) (60,716) (639,412) 39, , , , , , , , , , , , , , , , , , , ,780 61,862 4,600,420 BSEC class A Pref.dividends (47,500) (45,125) (42,750) (40,375) (38,000) (35,625) (33,250) (30,875) (28,500) (26,125) (23,750) (21,375) (19,000) (16,625) (14,250) (11,875) (9,500) (7,125) (4,750) (2,375) (498,750) BSEC class A Pref. redemptions (1/20th) (47,500) (47,500) (47,500) (47,500) (47,500) (47,500) (47,500) (47,500) (47,500) (47,500) (47,500) (47,500) (47,500) (47,500) (47,500) (47,500) (47,500) (47,500) (47,500) (47,500) (950,000) BSEC Common dividends (20,276) (98,406) (98,190) (97,973) (97,755) (97,536) (97,317) (97,097) (96,876) (96,654) (96,431) (90,712) (74,706) (66,235) (61,504) (58,616) (60,708) (62,847) (64,830) (66,570) (6,113) (1,607,352) Profit/Loss 19,480 94,547 94,339 94,131 93,921 93,711 93,501 93,289 93,077 92,863 92,649 87,155 71,777 63,637 59,092 56,318 58,327 60,382 62,288 63,960 5,874 1,544,318 Notes Scheel Dr Project total $2.9M MillRidge Dr. Project Total $2.2M Bank Finance - 5.5% at 75% debt to equity Scheel Dr Project CoD June 2016 Millridge Dr Project CoD January 2017 Return of Capital starts in 2nd year at a rate of 1/20 per year 56

57 23. Appendix 4: Current BSEC Project Portfolio Name: Scheel Drive Size kw AC 500 Size kw DC 600 Commercial Operation Date (COD): Est August System owner (BSEC, JV, etc.): Braeside Solar Energy Cooperative, Renfrew Solar Power Enterprises Inc. BSEC share 51% Total Cost $2,900,000 Name: Mill Ridge Road Size kw AC 500 Size kw DC 600 Commercial Operation Date (COD): Est November System owner (BSECC, JV, etc.): BSEC share 51% Total Cost $2,200,000 Braeside Solar Energy Cooperative, Renfrew Solar Power Enterprises Inc. 57

58 24. Appendix 5: Bouris Wilson Release Letter 58

59 25. Appendix 6: Financial Statements-2014 Audited 59

60 60

61 61

62 62

63 63

64 64

65 65

66 66

67 67

68 68

69 26. Appendix 7: Financial Statements 2015 Interim 69

70 70

71 71

72 72

73 73

74 74

75 27. Appendix 8: Subscription Form Braeside Solar Energy Co-op Subscription Form To: Braeside Solar Energy Co-operative (the Co-operative ) The undersigned subscribes for a total of (minimum of 25) Class A Preference Shares ( Shares ) of the Co-operative, at a price of $ per Share or (minimum of 50) class A preference shares at a price of $ for registered funds. Enclosed herewith is a cheque or money order in the amount of $ payable to Braeside Solar Energy Co-operative, representing payment in full for the Shares. This Offering Statement will expire on October 01, 2016 after which date no further sale of the Shares offered hereunder shall occur, unless a new Offering Statement has been filed and receipted 1. The undersigned acknowledges that the undersigned: (a) is aware that the Shares are being sold under an Offering Statement and acknowledges that the undersigned is not acquiring the Shares as a result of any information about the affairs of the Co-operative that is not generally known to the public; (b) has received a copy of the Co-operative's Offering Statement as prepared in accordance with the provisions of the Co-operative Corporations Act, R.S.O. 1990, CHAPTER C.35 with regard to the sale of the Shares and further acknowledges that the undersigned is aware of and understands its contents including the "Risk Factors" section contained therein; (c) has received and obtained all of the information regarding the Co-operative that the undersigned requires prior to making this subscription and that the undersigned s subscription has not been solicited in any way contrary to the provisions of the Cooperative Corporations Act and the regulations thereto; (d) understands that this subscription is given for valuable consideration and shall not be withdrawn or revoked by the undersigned after midnight of the second day after acceptance. The acceptance of this subscription shall be effective upon delivery to the Co-operative and the tender of the full subscription price by cheque or money order. 2. The undersigned hereby declares, represents and warrants that: (a) (b) the undersigned is purchasing the Shares as principal; the undersigned has attained the age of 18 years; 75

76 (c) the undersigned is a member of the Co-operative; (d) by virtue of the undersigned s investment experience or by virtue of the undersigned s consultation with or advice from professional advisors, the undersigned is in a position to evaluate the prospective investment on the basis of the Offering Statement and has determined that the investment in the Shares is compatible with the undersigned s investment objectives; and (e) the undersigned is not a resident of the United States of America or any place subject to the jurisdiction thereof and is not acting directly or indirectly for any person who is resident of the United States of America or any place subject to the jurisdiction thereof. (f) the undersigned is given notice that if all the conditions noted in the Escrow Agreement are not met and take-out financing is not achieved investor funds will be returned to preferred shareholders on a per project basis. The said Shares are to be registered as follows: Full Name (please print): Social Insurance Number: Street Address: City and Province: Postal Code: - - Dated this day of, 201. Signature of Subscriber Witness Note: The accepted subscription, share certificate and other documentation will be mailed to the subscriber at the address noted above. The Shares will be registered in the manner in which the subscriber s name appears above. Any change in the subscriber s address will only be effective on receipt of written notice thereof by the Co-operative. Receipt and acceptance of the foregoing subscription and payment of the subscription price is acknowledged. 76

77 Per: 77

78 About Investing in BSEC through a Self-Directed RRSP There are two ways to invest in BSEC shares under a self-directed RRSP; a) as new contributions or b) as a transfer in from an existing RRSP. RRSP s will not be offered under this Offering Statement if the shares of the Cooperative are not deemed to be RRSP eligible. The Canadian Worker Co-operative Federation (CWCF) manages self-directed RRSP accounts for BSEC members. CWCF is registered with the Canadian Revenue Agency. Their website is The CWCF charges an annual fee of $50 and a withdrawal fee of $75. To make a withdrawal or for any other questions, contact: Pamela Farrow, RRSP Program Manager P.O. Box 89, Grand Pre, NS, B0P 1M0 tel fax pamela@canadianworker.coop When a withdrawal is made, CWCF will mail you a cheque for the amount requested less the $75 withdrawal fee. The annual fee, which is due in early December, is charged to BSEC. BSEC will pay the CWCF fee and then deduct the cost from investors annual dividend. BSEC will pay dividends into the investor s RRSP account. BSEC members may be able to request dividend payouts as new BSEC shares. Note that the CWCF does not have a RRIF program. At the age of 71, investors will have to withdraw their BSEC investment from their self-directed RRSP and declare it as income. Steps to Investing Through and RRSP Fill out forms 1-7 to open an RRSP account for BSEC shares. Add form 8 if you are transferring funds. If you have an existing RRSP account with BSEC, skip forms 1-4. When filling out the forms, note that you are the annuitant. We apologize for the administrative burden. Please mail the completed forms to: BSEC 186 Third Avenue, Arnprior, Ont K7S 1Y9 1. Declaration of Trust. No signature is required. You must read the document. 2. RRSP Application Form. Leave the Contract # in the top right blank. Make sure to enter your birth date. 78

79 3. Designation of Beneficiary Form. Leave the Client Contract # blank. Put a check mark beside First Designation (add). Ensure a witness signs. 4. Fee Schedule. Put your name on the top line. Leave the Contract # blank. Sign and Date. 5. Payment Authorization Form. Put your name on the top line. Enter Braeside Solar Energy Cooperative Inc. on the second line. Sign and Date. 6. Deposit Form. Leave the Contract # blank. If this is a new contribution to an RRSP, put a check mark beside Contribution In-Kind. If it is a Transfer from an existing RRSP, check the appropriate transfer option. In the Security Deposits box enter BSEC preference shares and the value. Sign and Date. 7. Shares Annuitant Declaration. This form is to declare that you own less than 10% of the issued shares. No investor at BSEC falls into this category. Put your name on the top line. Leave the Plan # blank. Enter the number of shares purchased (the shares cost $100 each) and the value of the purchase. Sign and date. Get a witness to sign. To Transfer In RRSPs 8. Direct Transfer-In Form. Contact your institution to generate the cash or make it very clear on the form which holdings are to be sold to generate the cash. Fill in your name, SIN, phone number, and address. Include the address and phone number of the institution the investment is transferring from. Fill in the Contract or Plan # with the information from the account you are transferring from. Leave the Deposit #, and the Maturity Date blank. Lease Part II blank. Please note that it takes approximately 3-4 weeks for the cash to arrive. Braeside Solar Energy Co-operative (BSEC) 186 Third Avenue, Arnprior ON K7S 1Y9 CANADIAN WORKER CO- OPERATIVE FEDERATION SELF-DIRECTED RETIREMENT SAVINGS PLAN DECLARATION OF TRUST We, Concentra Trust, declare that we accept the trust created between us and the Annuitant when the application was signed. The following are the terms of this trust: Contributor The individual, either you or your 1. Definitions spouse, who made a contribution to The The following definitions apply: Plan. 79

80 Contribution Any amount paid or qualified investment deposited in your Plan. Income Tax Act Income Tax Act (Canada), and regulations thereto, as amended from time to time. Plan The Canadian Worker Co-operative Federation Self-Directed Retirement Savings Plan consisting of the Application and this Declaration of Trust and the addendum or addenda thereto, where applicable. Plan Maturity The date you eventually select for commencement of retirement income from the Plan. (This date must not be later than the maturity date provided in the Income Tax Act.) Spouse As recognized in the Income Tax Act for the purposes of registered retirement savings plans and, where applicable, incorporates the meaning of the term common-law partner as set out in Subsection 248(1) of the Income Tax Act. Trustee Concentra Trust 2. Registration We will apply for registration of your Plan as required by the Income Tax Act. 3. Contributions We will hold all contributions made to your Plan, and any income earned on these contributions, as outlined in this Declaration and as required by the Income Tax Act. No contributions may be made after the Plan Maturity. 4. Record Keeping We will record the details of all contributions and transactions relating to your Plan. We will supply you with a statement of these details at least annually. 5. Income Tax Receipts We will provide the contributor with a receipt or receipts, suitable for income tax filing purposes, for all eligible contributions. 6. Refund of Contributions Upon receipt of your written application, and the written application of your spouse if your spouse was the contributor to your Plan, we will refund to the taxpayer the amount determined in accordance with Paragraph 146(2)(c.1) of the Income Tax Act. 7. Investment All contributions and other assets or amounts properly transferred into your Plan will be deposited and invested as directed by the Annuitant. The Annuitant shall be permitted to hold investments in Cooperative Corporation Shares as defined in subsection 4900(12) of the Income Tax Act, CEDIF shares issued under the Nova Scotia Securities Act, and other assets and investments, which are: a. authorized under the Income Tax Act; and b. acceptable to the Trustee. We reserve the right to refuse, hold or accept certain investments even though they may be qualified investments under the Income Tax Act. 8. Retirement Income You must advise us in writing, at least 90 days prior to your Plan Maturity, of the type of retirement income you elect to receive from the proceeds of your Plan. You may choose to receive income from any one of, or any combination of, a life annuity, a fixed term annuity providing benefits for a term of years equal to 90 minus the age in whole years of the annuitant at the maturity of the plan (or the annuitant s spouse if the spouse is younger and the annuitant so elects to use the spouse s age), a registered retirement income fund or other retirement income option that may be provided for in the Income Tax Act. If the retirement income you choose to receive is an annuity, it must meet the following conditions: 80

81 a. It must be paid out in a single lump sum if it becomes payable to someone other than your spouse upon or after your death. b. It must be paid in equal annual or more frequent periodic payments until such time as you fully or partially commute this retirement income and, where such commutation is partial, equal annual or more frequent periodic payments thereafter. c. It must not provide for any increase in the amount of the periodic payments as a result of your death where payments are to continue to your spouse following your death. d. It may not be assigned in whole or in part. If you have not advised us in writing, prior to the maturity date provided in the Income Tax Act, of your selection of a retirement income the proceeds of your Plan will be transferred to a Registered Retirement Income Fund trusteed by us. If the funds held in your Plan at the Plan Maturity are not sufficient to produce a retirement income of greater than $ per annum the funds in your Plan will be paid to you as a single lump sum in the year following Plan Maturity. 9. Beneficiary Designation You may designate a beneficiary, in those provinces where the law so permits, to receive the proceeds of your Plan in the event of your death prior to your Plan Maturity. Details of our requirements for making, changing or revoking such a designation are available from the office of the Agent. 10. Death In the event of your death prior to the Plan Maturity, we will, once we have received the documentation we require, pay or transfer the Plan proceeds, less required income Cdn. Worker Co-op Fed (RSP Bilingual) (11/07) tax deductions, to your designated beneficiary and notify your estate representative of any resulting tax liability. When we have made the payment to your designated beneficiary, we will be considered as fully discharged from any further liability with respect to your Plan. In instances where you have not designated a beneficiary, as explained in Clause 9 of this Declaration, the proceeds of your Plan will be paid or transferred, less required income tax deductions, to your estate. 11. Your Responsibilities It is your responsibility to ensure, that: a. the contributions to the Plan do not exceed the allowable maximum under the Income Tax Act; b. all assets acquired by the Plan are qualified investments for a Registered Retirement Savings Plan; c. we are advised, in writing, of any changes in your address; d. your birthdate as recorded on your application is accurate; e. you will eventually elect, as spelled out by Clause 8 of this Declaration, the type of Retirement income you choose to receive. 12. Restriction on Trustee We cannot give you or any person related to you any benefit or advantage if the benefit or advantage is conditional upon the existence of your Plan. 13. Amendments We may from time to time amend your Plan by giving you notice in writing on such change. Any amendment cannot, however, be contrary to the provisions of the Income Tax Act. In the event of changes to the Income Tax Act or any pension legislation governing your plan, your Plan will be considered to have been amended to conform to such changes effective the date such changes come into force. 14. Notices Any notices given to us by you under this Plan shall be sufficiently given if mailed, postage prepaid by you, to any of our offices and shall be deemed to have been given on the day that such notice is received by us. Any notices given by us to you shall be sufficiently given if mailed, postage prepaid by us, to you at your last address supplied by you and shall be deemed to have been given on the day of mailing. 81

82 15. Limits of Our Liability We will not provide any investment advice regarding any of the assets held or acquired by the Plan and shall act solely on your written instructions or those of your authorized agent. We shall not be responsible for any loss or damage suffered or incurred by your Plan, by you or by any beneficiary designated by you, unless caused by or resulting from our dishonesty, negligence, wilful misconduct or lack of good faith. 16. Withdrawals You may make withdrawals from your Plan, subject to the following conditions: a. we will withhold taxes from any withdrawals in such amounts as required by the Income Tax Act from time to time; b. withdrawals must be declared by you as income for the taxation year of receipt. 17. Transfers The Plan may be amended to permit the payment or transfer, on behalf of the Annuitant, of any funds as allowed by the Income Tax Act. We may, at our discretion, charge a fee for each transfer out of the plan. 18. Trustees Financial Conditions We shall be entitled to: a. pay all costs, charges, and/or overdrafts incurred in connection with the Plan out of the plan; b. pay all brokerage fees, commissions and other relevant costs, if any, from the assets of this Plan as they are incurred; c. receive remuneration for our services as Trustee in each year and reimbursement of proper disbursements made in accord with the current fee schedule in effect between us; d. sell investments of the Plan in order to realize sufficient monies therefrom to pay the above costs and expenses, if the said costs and/ or expenses are not paid by the Annuitant within sixty (60) days of the billing thereof, and after having given the Annuitant fifteen (15) days written notice in this regard. You shall be liable to us for all such costs, charges, remuneration and/or overdrafts to the extent that the Plan assets are not sufficient to cover the same. We shall not be required to consult with you when determining which of the plan assets are to be sold and shall not be liable for any loss resulting therefrom. 19. Other Conditions While this Plan continues to be a Retirement Savings Plan under the provisions of the Income Tax Act, it shall constitute an inter vivos trust. Neither the Plan nor the assets of the Plan can be used as security for a loan. 20. Resignation of Trustee We may resign at any time by delivering sixty (60) days notice of its resignation to the Annuitant. In the event of our resignation, you shall appoint a successor trustee or trustees who shall be acceptable to us. We shall deliver the property comprised of the investments within the Plan and the records relating thereto, and shall execute such deeds and assurances and do such things as may be requisite in order to ensure the continued and uninterrupted operation of the Plan. Should you neglect or refuse to appoint a successor trustee or trustees who shall be acceptable to us, we reserve the right to transfer assets in specie to you as a withdrawal from the Plan. 21. Ultimate Responsibility We have entered into an Agency Agreement with Canadian Worker Co-operative Federation named in the Plan, which provides that Canadian Worker Cooperative Federation (or any of its duly authorized representatives) acts as our Agent for the purpose of administration of this Plan. However, we are ultimately responsible for the administration of the Plan. 82

83 Nous, La Société de Fiducie Concentra, acceptons la déclaration de fiducie (dont les dispositions sont énoncées ci-après) conclue entre nous et le rentier au moment de la signature de la Demande de régime d épargne-retraite. 2 Enregistrement Nous nous chargerons de faire la demande d enregistrement de votre Régime conformément aux dispositions de la Loi de l impôt sur le revenu. 1 Définitions Les définitions qui suivent s appliquent à la présente Déclaration de fiducie. Conjoint Tel que reconnu comme époux dans la Loi de l impôt sur le revenu (Canada) aux fins des régimes enregistrés d épargne-retraite. Le cas échéant, ce terme incorpore la signification de conjoint de fait tel que mentionné dans au paragraphe 248 (1) de la Loi de l impôt sur le revenu (Canada). Cotisant Personne qui cotise au régime, il peut s agir de vous ou de votre conjoint. Cotisation Somme d argent ou investissements admissibles versés dans votre régime. Échéance du Date à laquelle débute le versement d e la rente e retraite en vertu du régime régime. Vous déterminez vous-même cette date (qui ne doit toutefois pas survenir après la date d échéance stipulée dans la Loi de l impôt sur le revenu (Canada). Fiduciaire La Société de Fiducie Concentra Loi de l impôt La Loi de l impôt sur le revenu (Canada) et ses règlements d application, sur le revenu ainsi que les modifications qui leur sont apportées. Régime Le Régime d épargne-retraite du autogéré Canadian Worker Co-operative Federation regroupant la demande et la Déclaration de fiducie ainsi que les addenda, le cas échéant. RÉGIME D ÉPARGNE-RETRAITE AUTOGÉRÉ CANADIAN WORKER CO- OPERATIVE FEDERATION DECLARATION DE FIDUCIE 3 Cotisations Conformément aux dispositions de la présente Déclaration et de la Loi de l impôt sur le revenu, nous conserverons, toutes les cotisations versées dans votre Régime ainsi que le revenu gagné. Il est interdit de verser des cotisations au Régime après son échéance. 4 Tenue des registres Nous consignerons par écrit tous les détails concernant les transactions et les cotisations versées dans votre Régime. Nous vous ferons parvenir un relevé faisant état de ces détails au moins une fois par année. 5 Reçus d impôt Nous remettrons au cotisant le ou les reçus aux fins de l impôt relativement à l toutes les cotisations admissibles. 6 Remboursement des cotisations Dès réception de votre demande écrite, et de celle de votre conjoint s il était le cotisant à votre Régime, nous rembourserons au contribuable le montant calculé conformément à l alinéa 146(2)(c.1) de la Loi de l impôt sur le revenu. 7 Placement Toutes les cotisations et les autres actifs ou montants dûment transférés dans votre Régime seront déposés ou investis selon les directives du cotisant. Le cotisant est autorisé à conserver les placements en actions dans une coopérative telles que définies par paragraphe 4900(12) de la Loi de l impôt sur le revenu, des actions dans un CEDIF émies par la Loi sur les valeurs mobilières de la Nouvelle-écosse, et les autres biens et placements, qui : 83

84 a. sont conformes à la Loi de l impôt sur le revenu; et b. sont acceptés par les Fiduciaires. Nous nous réservons le droit de refuser de conserver ou d accepter certains placements même s il s agit de placements admissibles au titre de la Loi de l impôt sur le revenu. 8 Revenu de retraite Vous devez nous informer par écrit, au moins 90 jours avant l échéance du Régime, du type de revenu de retraite que vous choisissez de vous constituer avec la valeur du Régime. Le revenu peut provenir d un des éléments suivants ou d une combinaison de ceux-ci: une rente viagère; une rente à échéance fixe payable pour un nombre d années égal à 90 moins l âge du rentier, en années accomplies, à l échéance du Régime (ou l âge du conjoint, si le conjoint est plus jeune que le rentier et que celui-ci en décide ainsi); un fonds enregistré de revenu de retraite ou tout autre revenu de retraite prévu par la Loi de l impôt sur le revenu. Si le revenu de retraite que vous choisissez de recevoir est une rente, elle doit remplir les conditions suivantes: a. Elle doit être versée en une somme unique si elle devient payable à une autre personne que votre conjoint après votre décès. b. Elle doit pouvoir être payable en versements périodiques égaux, annuellement ou plus fréquemment, jusqu à la conversion totale ou partielle du revenu de retraite et en cas de conversion partielle, la rente sera payable en paiements périodiques égaux, annuellement ou plus fréquemment par la suite. c. S il s agit d une rente réversible, les paiements périodiques faits à votre conjoint ne doivent pas augmenter par suite de votre décès. d. Elle ne peut être cédé en totalité ou en partie. Si vous omettez de nous informer par écrit, avant la date d échéance stipulée dans la Loi de l impôt sur le revenu, de votre choix de revenu de retraite, nous virerons la valeur de votre Régime à un fonds enregistré de revenu de retraite dont nous serons les fiduciaires. Si les fonds détenus dans votre Régime à son échéance sont insuffisants pour constituer un revenu de retraite supérieur à 250 $ par année, ces fonds vous seront versés en une somme unique au cours de l année suivant l échéance du Régime. 9 Désignation du bénéficiaire Dans les provinces ou la loi le permet, vous pouvez, désigner un bénéficiaire pour recevoir la valeur de votre Régime advenant votre décès avant son échéance. Vous pouvez obtenir tous les renseignements voulus sur l établissement, la modification ou la révocation d une telle désignation à nos bureaux. 10 Décès Advenant votre décès avant l échéance du Régime, nous verserons ou transférerons, dès réception des documents nécessaires, la valeur du Régime à votre bénéficiaire désigné. Nous retiendrons toutefois sur cette valeur l impôt exigible sur le revenu et aviserons votre représentant successoral des obligations fiscales en découlant Régime Dès le versement de cette valeur à votre bénéficiaire désigné, nous serons considérés comme ayant acquitté toutes nos obligations en vertu de votre Cdn. Worker Co-op Fed (RSP Bilingual) (11/07) Advenant votre décès avant l échéance du Régime, nous verserons ou transférerons, dès réception des documents nécessaires, la valeur du Régime à votre bénéficiaire désigné. Nous retiendrons toutefois sur cette valeur l impôt exigible sur le revenu et aviserons votre représentant successoral des obligations fiscales en découlant. Dès le versement de cette valeur à votre bénéficiaire désigné, nous serons considérés comme ayant acquitté toutes nos obligations en vertu de votre Régime. Si aucun bénéficiaire n a été désigné, aux termes de l article 9 de la présente Déclaration, la valeur de votre Régime, moins l impôt exigible sur le revenu, sera versée ou transférée sous forme de somme unique à votre succession. 11 Vos responsabilités Vous êtes tenu de vous assurer que: a. les cotisations versées à votre Régime ne dépassent pas la limite permise par la Loi de l impôt sur le revenu; 84

85 b. tous les placements acquis par le Régime sont des placements admissibles au titre d un Régime d épargne-retraite; c. vous nous avez avisé, par écrit, de tout changement d adresse; d. la date de naissance indiquuée dans votre Demande est exacte; e. vous choisirez éventuellement, tel qu il est énoncé à l article 8 de la présente Déclaration de fiducie, le type de revenu de retraite que vous souhaitez recevoir. 12 Restriction s appliquant au fiduciaire Il nous est interdit de vous accorder ou d accorder à une personnne avec laquelle vous avez un lien de dépendance un avantage ou un bénéfice qui dépende de l existence de votre Régime. 13 Modifications Nous nous réservons le droit de modifier votre Régime, de temps à autre, en vous donnant par écrit un préavis à l égard de cette modification. Toute modification apportée au Régime ne saurait toutefois être non conforme aux dispositions de la Loi de l impôt sur le revenu. En cas de modifications à la Loi de l impôt sur le revenu ou à n importe qu elle loi régissant votre Régime, votre Régime sera censé avoir été modifié en conséquence à compter de la date d entrée en vigueur des modifications. 14 Avis Les avis que vous nous donnerez en vertu du Régime seront réputés nous avoir été donnés en bonne et due forme s ils sont transmis par courrier, dûment affranchis, à l un de nos bureaux. Ces avis seront considérés comme ayant été donnés le jour de leur réception à nos bureaux. Les avis que nous vous donnerons seront réputés vous avoir été donnés en bonne et due forme s ils sont transmis par courrier, dûment affranchis, à la dernière adresse que vous nous aurez indiquée. Ces avis seront censés vous avoir été donnés le jour de leur mise à la poste. 15 Limite de responsabilité Nous ne fournirons aucun conseil en placement à l égard des actifs détenus dans le Régime ou qui ont été acquis par celui-ci. Nous agirons uniquement conformément à vos instructions écrites ou à celles de votre mandataire. Nous ne sommes pas responsables de toute perte ou de tout dommage subi ou encouru par votre Régime, vous même ou le bénéficiaire que vous avez désigné, à moins qu une telle perte ou un tel dommage ne soit le résultat de notre malhonnêteté, négligence, faute intentionnelle ou mauvaise foi. 16 Retraits Vous pouvez retirer des fonds de votre Régime, sous réserve des conditions suivantes : a. les retraits feront l objet de retenues d impôt à la source selon le montant exigé par la Loi de l impôt sur le revenu,de temps à autre; b. vous devrez déclarer les sommes que vous retirez du Régime à titre de revenu pour l année d imposition en cours 17 Transferts Il est possible de modifier le Régime pour permettre le paiement ou le transfert des fonds selon ce qui est permis par la Loi de l impôt sur le revenu. Nous nous réservons le droit d imputer des frais pour chaque transfert hors du Régime. 18 Situation financière du fiduciaire Nous pouvons: a. payer tous les frais, payments ou découverts necessaire de votre Régime b. payer tous les frais d agents, les commissions et les autre charges rélévants à les placements dans votre Régime. c. recevoir rémunération chaque année pour notre obligations comme Fiduciaire et pour les remboursements versée dans la liste officielle des taux. d. si vous ne payez pas les frais ou remboursements susmentionné dans 60 jours de notre 85

86 avis, nous pouvous vendre les placements dans votre Régime, aprex vous donnez une avis par ecrit il y a quinze (15) jours. Vous devez nous rembourses tous les frais, rémunérations et/ou découverts si les placements dans votre Régime ne suffire pour le payer. Nous ne servons pas tenus responsibles de vous consulter pour déterminer quelles biens de vendre et si les placements sont vendre à perte. 19 Autres modalités Bien que ce Régime demeure un régime d epargne-retraite au titre de la Loi de l impôt sur le revenu, il représente une fiducie entre vifs. Il est interdit d utiliser le Régime ou les éléments d actif du Régime à titre de garantie pour un prêt. 20 Démission du fiduciaire Nous nous réservons le droit de démissionner en tout temps en donnant au rentier un avis écrit de soixante (60) jours. Advenant notre démission, vous devrez nommer un fiduciaire suppléant ou des fiduciaires suppléants que nous accepterons. Nous remettrons les biens du Régime (incluant les placements) et tous les registres y afférents et nous signerons les actes et prendrons les mesures nécessaires afin d assurer l exploitation continue et ininterrompue du Régime. Si vous omettez de désigner un fiduciaire suppléant ou des fiduciaires suppléants qui nous semblent acceptables ou si vous refusez de le faire, nous nous réservons le droit de faire un transfert en nature des actifs à votre intention en tant que retrait du Régime. 21 Responsabilité ultime Nous avons conclu une entente de représentation avec Canadian Worker Co-operative Federation désigné dans le Régime. Cette entente stipule que Canadian Worker Co-operative Federation (ou un de ses mandataires dûment autorisés) agira comme notre représentant aux fins de l administration du Régime. Toutefois, la responsabilité ultime de l administration du Régime nous incombe 86

87 87