Swindon Common Farm Solar CIC1 – a solar project offering ... · Swindon Common Farm Solar CIC1...

1 | 46Issuer: Swindon Common Farm Solar CIC. Document approved by Abundance Investment Ltd, which is authorised and regulated by the Financial Conduct Authority.

Swindon Common Farm Solar CIC1 – a solar project offering a fixed return of capital and interest payable twice-yearly with an effective rate of return over the life of the investment of 6.0%2 before taxThis document is an offer to subscribe for tradeable Debentures issued by Swindon Common Farm Solar CIC1 to raise £1,783,000 to co-fund with Swindon Borough Council (SBC) a ground-mounted community solar installation at Common Farm in Wiltshire.

23 February 2016

1 CIC is a Community Interest Company. The CIC will convert to a CIC plc within 6 months of this offer (see page 13 for more detail).2 See notes on next page for detail on returns calculation.

Issuer: Swindon Common Farm Solar CIC. Document approved by Abundance Investment Ltd, which is authorised and regulated by the Financial Conduct Authority.


Swindon Common Farm Solar CIC1 lets you invest money in an installed ground-mounted solar farm and receive a regular income return amounting to an effective rate of return of 6.0%2 before tax.

This Offer Document has been prepared by Swindon Common Farm Solar CIC, the issuer of the Debentures (“Issuer”, “we” or “us”). It has been approved as a financial promotion for the purpose of the Financial Services and Markets Act 2000 (“FSMA”) and FCA Rules by Abundance Investment Ltd (“Abundance”) who is authorised and regulated by the Financial Conduct Authority (“FCA”) under number 525432 and whose full details are given on page 45 under ‘Our Service Providers’.

The role of Abundance is to facilitate the issue of the Debentures and to provide a platform for investing in them. It is not advising you as to the merits of, or making a personal recommendation to you in relation to, investing in the Debentures.

You should consider carefully whether an investment in the Debentures is suitable for you in the light of your own personal, financial and tax circumstances. You should consider carefully all the information set out in this Offer Document including the information set out in ‘The risks’ on pages 22-25. The value of investments can go down as well as up and you may not get back the money you originally invested or make any return on your investment. Forecasts, estimates and projections as to future business or returns are not a reliable indicator of these matters and may be impacted by various factors – see ‘The risks’ on pages 22-25.

If you are in any doubt as to any aspect of investing in the Debentures, including any accounting or tax issues, you should seek independent advice from an FCA-authorised person who has experience in advising on investments such as these. Nothing in this Offer Document should be read or understood to be financial, investment, tax or accounting advice.

This Offer Document is not a prospectus for the purposes of Part VI of FSMA. It has not been approved by the FCA or any other regulator. The Debentures have not been admitted to listing on any regulated market and will not be dealt on any stock exchange or other such market.

Investment in the Debentures is available only to members of Abundance and in accordance with its Terms and Conditions at www.abundanceinvestment.com. It is not available to those who are US Persons as defined in the Abundance Terms and Conditions and this includes citizens of the USA wherever resident. We may redeem any Debenture held by Restricted Persons as defined in the Debenture Deed which includes any persons ineligible to hold the Debentures because of relevant legal, regulatory or tax restrictions. This Offer Document is intended to be circulated only in the United Kingdom and any other countries in the European Economic Area where Abundance considers it may be circulated. It does not constitute an offer to sell or the solicitation of an offer to buy any securities in any country or jurisdiction where such offer or solicitation would be unlawful.

1 CIC is a Community Interest Company. The CIC will convert to a CIC plc within 6 months of this offer (see page 13 for more detail).2 See pages 16-20 for a more detailed explanation of assumptions and sensitivities. The return is calculated from 1 July 2016 and assumes your Cash Returns are paid 10 weeks after the end of each Cash Return Period.


Swindon Common Farm Solar CIC1 lets you invest money in an installed ground-mounted solar farm and receive a regular income return amounting to an effective rate of return of 6.0%2 before tax.

Swindon Common Farm Solar CIC (Swindon Common Farm) is a company set up to own and manage a 4.8 MW solar PV system at Common Farm in the Borough of Swindon in Wiltshire. Swindon Common Farm is owned and managed by Swindon Borough Council. Funds raised by this offer of Debentures, alongside a £3 million loan provided by Swindon Borough Council, will pay for the solar PV installation once it is installed and generating electricity, which is expected to happen by the end of June 2016, see page 15, ‘The story so far’.

This offer is an opportunity to invest in the first solar Debentures in the UK issued by a council-owned project and to receive a twice-yearly income. The Debentures which are tradeable using the Abundance Bulletin Board (see page 30 for details) give an effective rate of return of 6.0%2 before tax and after fees over 20 years.

Each year from 1 July 2016 we will pay you a fixed amount of interest alongside the repayment of your capital. Interest and capital will be paid semi-annually until maturity. The amount of cash interest you receive remains the same each year whilst the amount of capital you have remaining in the project decreases; see pages 16-20 for more detail on your returns.

Photo-montage of Swindon Common Farm

1 CIC is a Community Interest Company. The CIC will convert to a CIC plc within 6 months of this offer (see page 13 for more detail).2 See pages 16-20 for a more detailed explanation of assumptions and sensitivities. The return is calculated from 1 July 2016 and assumes your Cash Returns are paid 10 weeks after the end of each Cash Return Period.


Samantha Mowbray, Paul Smith and Patrick WeirDirectors of Swindon Common Farm Solar CIC

As well as being the 3 directors of Swindon Common Farm Solar CIC, our roles in the Council cover people, community, localities, engagement and finance – Swindon Common Farm Solar CIC brings together each of these priorities to deliver mutual benefit to the Council, investors and the community in its many guises and we’re very excited to be part of such an innovative project. We very much hope you will share our enthusiasm for what we hope becomes a template for future projects in our Borough by becoming an investor and furthering the goals set out in the Vision for Swindon which aims to make Swindon a place where people choose to live, visit and invest.

As directors of this newly established Community Interest Company, the first of its kind for the Borough Council, we’re delighted to introduce this opportunity to you.

Back in September Swindon Borough Council set out its Vision for Swindon to 2030. A key part of that vision is about developing a low-carbon economy and encouraging sustainable methods of producing energy. The Common Farm project is very significant as it is the first project that has been developed to achieve this.

It is also significant because it gives our residents the chance to invest in renewable energy schemes and offers a new model for how the Council can fund important projects for the town, given the reduction in funding that it receives. The Council has agreed to co-fund a 4.8MW solar farm with its residents and other members of the general public, delivering valuable revenues and returns to help the Council’s finances, and provide bank-beating returns to small investors. By working with Abundance who can accommodate investments from as little as £5, we hope we will allow as many of our residents to get involved as want to.

And there’s a benefit to local communities too. Because the company has been set up as a Community Interest Company, each year a small financial dividend will be made available to support those local community projects that matter to local residents. We’re just thinking about how that can best be made available to communities but please be assured that we’ll be transparent about how its spent each year.

Introduction

Letter from the directors & Swindon’s Vision


Introduction

Contents

Legal

Why buy a Swindon Common Farm Debenture 6A glossary of useful terms 8

Who is involved 10Meet the directors 12What is a CIC 13Swindon Common Farm – the story so far and here on 14A brief introduction to ground-mounted solar photovoltaics 15

How your money will be used 16Explaining the numbers 17What you get back 19What are the risks 22Terms and how to subscribe 26Role of the agent 28Anticipated timetable 29Your questions answered 30

The legal agreement 31Our service providers 45

The offer

Our project


Your estimated cash returnsAssuming you hold a Debenture for its full term, the graph to the right and the table on the following page show how the equivalent interest rate on your outstanding capital increases (i) as the interest income remains the same and (ii) as your capital is repaid over time. Page 21 explains what happens in the event there is insufficient generation to cover your Cash Returns.

The Debentures are transferable to anyone with an Abundance account and in accordance with the Abundance Terms and Conditions, which means you can sell them (or transfer them to a relative for example). Abundance provides a Bulletin Board on its website to help you find potential buyers – details of how to use it are on the site.

Know exactly where your money has gone and how it’s being used; get regular updates on the amount of energy that Swindon Common Farm is generating and regular updates on how much revenue the project is earning.

Know exactly what you are entitled to receive in income payments over the life of the project.

Receive a 6.0%* gross effective rate of return or 1.7x* your original investment – whether you start with £5, £10,000 or £50,000 (note, returns and repayments of the amount you lend are not guaranteed – see ‘The risks’ on pages 22-25.

Get access to an investment that becomes increasingly productive the longer you hold it – since your capital is repaid in equal instalments each year and your interest payments remain fixed the longer you hold the Debentures, the higher the rate of return is on the amount of original capital you still have invested, see the diagram on this page. Pages 16-20 gives more detail on your Cash Returns.

Receive regular twice-yearly repayments of your capital.

Receive regular twice-yearly fixed interest income payments.

Use the Bulletin Board provided by Abundance if you need to sell, for which there are no charges.

Help generate clean, green electricity for the UK and be part of Swindon Borough Council’s Vision for 2030 and its ambitions to develop a low-carbon economy

Why buy a Swindon Common Farm Debenture

Earn an effective rate of return of 6.0%* before tax over the life of the Debenture, with regular fixed income payments and repayments of capital.

Note: Annual interest rate calcualed on capital outstanding at start of each year

Average 1-7

100

80

60

40

20

0

85.0%

50.0% 30.4%

17.5%7.8%4.4%

Average 8-14 Average 15-20

Amount outstanding from original investment – average for period Annual rate of return on amount outstanding – average for the period

(and excluding capital repayment)

* See pages 16-20 for a more detailed explanation of assumptions and sensitivities. The return is calculated from 1 July 2016 and assumes your Cash Returns are paid 10 weeks after the end of each Cash Return Period.


Debentures are a type of loan – they are the evidence of an IOU made by us, the Issuer, to you (or of a loan made by you to us). They are transferable which means you can sell them (Abundance provides a free-to-use Bulletin Board where you can find buyers).

We commit to pay you twice a year for 20 years a fixed amount of interest income along with repayments of your capital (together these make up your Cash Return) from the revenues received through the generation of electricity from the solar panels.

The table on this page sets out exactly what you are entitled to receive each year if you invest £1,000 on the first day of this offer.Your Cash Return is comprised of 2 elements:

i The capital you invest in the project, which is repayable in equal semi-annual instalments over the life of the investment from 1 July 2016 to 30 June 2036

ii Payments of interest income that you earn for lending money to our project. The interest income you receive for lending us money is a fixed amount (see table on this page and graph on page 19) and is paid in equal semi-annual instalments.

The breakdown of your returns over time: capital, interest income & the equivalent interest rate on outstanding capital

Why buy a Swindon Common Farm Debenture


How the Debentures work

Year

1234567891011121314151617181920Total

Outstanding capital at start of year(£)

1,000.00

950.00

900.00

850.00

800.00

750.00

700.00

650.00

600.00

550.00

500.00

450.00

400.00

350.00

300.00

250.00

200.00

150.00

100.00

50.00

CapitalRepayment(£)

50.00

50.00

50.00

50.00

50.00

50.00

50.00

50.00

50.00

50.00

50.00

50.00

50.00

50.00

50.00

50.00

50.00

50.00

50.00

50.00

1,000.00

Interest income(£)

37.18

37.18

37.18

37.18

37.18

37.18

37.18

37.18

37.18

37.18

37.18

37.18

37.18

37.18

37.18

37.18

37.18

37.18

37.18

37.18 743.69

Equivalent interest rate on outstanding capital at start of year(%)

3.72%

3.91%

4.13%

4.37%

4.65%

4.96%

5.31%

5.72%

6.20%

6.76%

7.44%

8.26%

9.30%

10.62%

12.39%

14.87%

18.59%

24.79%

37.18%

74.37%

Total return(£)

87.18

87.18

87.18

87.18

87.18

87.18

87.18

87.18

87.18

87.18

87.18

87.18

87.18

87.18

87.18

87.18

87.18

87.18

87.18

87.18

1,743.69


Explaining some of the terms that appear in this document

AbundanceAbundance is the arranger and distributor of the Debentures and is authorised and regulated by the Financial Conduct Authority under number 525432, see page 45 for full details. Abundance also provides ongoing services in relation to the Debentures, including acting as Registrar, arranging payment of Cash Returns to Debenture holders and providing regular information on us, the Issuer, and how much electricity we are producing.

Agent Abundance acts as the agent on behalf of the holders of Debentures in a largely administrative capacity to help co-ordinate holder meetings, enforce holders’ rights after taking instructions from holders and for instructing payments. For more detail, see page 28.

Bulletin BoardA service provided by Abundance on its website to allow potential buyers and sellers of Debentures to find each other. There is no charge for using the Bulletin Board or for completing a transfer of your Debentures.

Cash ReturnThe amount paid twice yearly to each Debenture holder over the term of the Debenture, which is comprised of 2 parts: (i) repayment of your capital (or principal) invested; and (ii) payments of interest income that you earn for lending money to our project.

Your Cash Returns are payable within 10 weeks of the end of each Cash Return Period.

Your first Cash Return is expected to be paid on or before 10 March 2017 in relation to the 6 month Cash Return Period starting 1 July 2016 and ending 31 December 2016.

Cash Return PeriodThe 6 month period between each Cash Return. Your Cash Return is payable within 10 weeks of the end of each of these periods. In certain circumstances this can be deferred for up to 12 months (see page 21 under Paying you your Cash Returns – providing additional cover).

Closing DateOn the earlier of receipt of valid subscriptions totalling the Target Amount or 30 June 2016. The Closing Date can be extended at our discretion for up to 3 months. Subscriptions are made on the basis of “first come, first served”.

Common FarmThe 24 acre site in the Borough of Swindon where our solar farm is located and which is owned by Swindon Borough Council and will be leased to us.

Community Interest Company (CIC)A community interest company is a type of company introduced by the UK government in 2005, designed for social enterprises that wantto use their profits and assets for the public good.

Feed-in Tariff Scheme (FiT)Introduced by the government in April 2010, the Feed-in Tariff (FiT) Scheme was designed to encourage small-scale renewable and low carbon electricity generation technologies by providing tariffs that would give a degree of financial certainty to eligible generators.

The tariffs are comprised of the following 2 elements:

• a “Generation Tariff” payable for every kilowatt hour of electricity generated. The level of the tariff is dependent on the type of technology, the size of the system and the date the system is deemed eligible for FiT support (the “Eligibility Date”). This Eligibility Date is, in turn, dependent on the date the system is commissioned and the date that FiT support is applied for; and

• an “Export Tariff” payable for every kilowatt hour of electricity exported to the National Grid, unless this tariff is waived in favour of selling the electricity generated at a higher price to another entity. For systems smaller than 30kWp without export meters, the export element will be deemed to be 50% of the electricity generated by the system. Systems larger than 30kW (such as Swindon Common Farm) will have export meters fitted to read the amount of energy exported to the grid and the export tariff will be claimed on the full amount.

Each of the tariffs are available for 20 years and are adjusted every year with effect from 1 April to take account of any changes in the RPI over the 12 month period ending on 31 December of the previous year. In the case of solar PV, the tariffs are adjusted as follows:

• Installations with an Eligibility Date between 1 April and 31 December receive the RPI adjustment from 1 April of the next FiT year;

• Installations with an Eligibility Date between 1 January and 31 March receive the RPI adjustment from 1 April in the following FiT year.

A glossary of useful terms


More information is available on the Department of Energy and Climate Change’s website: www.decc.gov.uk/fits/.

Our solar PV system at Common Farm has been pre-accredited (see Pre-accreditation below) and will receive a Generation Tariff of 6.16p for every kilowatt hour of electricity it generates as long as it is commissioned and generating electricity by 29 June 2016, (see pages 22-25, ‘The risks’).

Ground-mounted solar PVRefers to projects where PV systems are mounted on a frame and stand at ground level, as opposed to a rooftop project where the solar panels are attached to the roof of a residential, public or commercial building. Our project is a ground-mounted solar PV system and covers about 24 acres of low-grade agricultural land.

Kilowatt hour (kWh)A kilowatt hour, kWh, is a unit of electrical energy and is equivalent to one kilowatt (1 kW) of electricity for one hour (1 h) of time. A megawatt hour, MWh, is one thousand kilowatt hours. A gigawatt hour, GWh is one thousand megawatt hours.

Kilowatt peak (kWp)Kilowatt peak is used in the solar photovoltaic industry to measure the maximum potential output, the peak output, of a photovoltaic module under Standard Test Conditions (STC). By setting the STC, the industry can compare the potential output of one module with another.

Pre-accreditation or preliminary accreditation for the Feed-in TariffSince the level of Feed-in Tariff a project qualifies for reduces depending on overall amount installed as well as the later in time it is commissioned (called contingent degression), pre-accreditation was introduced to give some protection from an unknown variable as long as the project is commissioned within a set time from the date of application for pre-accreditation.

Project The Swindon Common Farm solar project which, under this Debenture offer, consists of part funding the installation of a 4.8 MW solar PV installation and the ongoing operation of the installation and associated equipment. The remainder of the funding for the PV installation (£3 million) will come from a shareholder loan from Swindon Borough Council.

PVPhotovoltaic – when used in the context of this document, it refers to a system that converts sunlight into electricity.

PVsystPVsyst® is a dynamic simulation programme for photovoltaic systems used widely by the solar industry including our installation contractor, Lark Energy, to estimate the expected electricity generation from PV systems like ours at Common Farm. The software takes into account the specific types of equipment used at the site as well as the local climate and weather data and the orientation of the solar modules. After working out the theoretical maximum capacity at the site, PVsyst deducts the various elements which will reduce the maximum into a combined loss factor, to give us our estimated annual generation.

PV system / systemIncludes all the generating (solar panels or modules, inverters, cables, grid connection and so on, plus any mounting racks), metering and data monitoring equipment that makes up a solar PV installation, plus the lease that accompanies the ground-mounted solar installation giving the landowner’s consent for the installation to remain on the land for the duration of the Project.

RPI The Retail Price Index is the main domestic measure of inflation in the UK and is calculated by the Office for National Statistics. We have assumed the RPI to be 1.0% a year for the first 5 years and thereafter 2.8% a year for the remaining life of the investment. 2.8% is in line with the Bank of England’s Consumer Price Index (CPI) inflation target of 2% and the conclusions of the Office for Budget Responsibility in their November 2011 Working Paper, ‘the long-run difference between RPI and CPI inflation’ which shows that the RPI on average runs 0.8% above the CPI, see page 23 for more detail on how fluctuating inflation can affect us.

Target AmountUp to £1,783,000 for the ground-mounted solar installation at Common Farm. Pages 14 and 15 gives more detail on the site characteristics and page 26 gives details on the terms of the offer.

A glossary of useful terms

http://www.decc.gov.uk/fits/


Who is involved

Swindon Borough Council SBC is the local authority of the Borough of Swindon in Wiltshire, England, an area covering 89 square miles and home to about 209,000 people. Swindon, the Borough’s main town, was the original home of Isambard Brunel’s railway works which for some time dominated its industry, but has now transformed itself into one with a mix of modern industries. The remainder of the Borough is characterised by small market towns, villages and high quality landscape, including parts of the North Wessex Downs Area of Outstanding Natural Beauty and the Thames Vale.

Last September, the Council set out its Vision for Swindon, which is shared by many other organisations across the Borough. One of the priorities within that Vision is for Swindon to “improve infrastructure and housing to support a growing, low-carbon economy” by 2030. This scheme will play a key part in the achievement of that ambition.

Furthermore, one of the key development priorities of the Council’s Local Plan 2026 which outlines development objectives for Swindon is the recognition that green infrastructure has an important role in enhancing the quality of life for existing and future residents.

Alongside this, the Council has sought ways to allow collective switching of energy provider for its residents and “to allow residents to invest in renewable schemes” (Council Motion, 3 April 2014 – Minute 110 2013/14). Swindon Common Farm is helping to deliver on both of these strategic objectives.

As shareholder and landowner of Swindon Common Farm, SBC will also receive rent, rates, interest and dividend income to put to use in the delivery of its objectives.

PPSPublic Power Solutions Ltd (PPS) is a wholly-owned company of Swindon Borough Council and provides innovative waste and renewables solutions to SBC. It performed all the development work for our project to get it to the point it is ready to build, including setting up the CIC and applying for pre-accreditation on the CIC’s behalf.

Lark Energy or LarkLark Energy is a provider of commercial and utility scale energy schemes encompassing a wide range of renewables – particularly solar PV and biomass as well as conventional energy sources. Part of the Larkfleet Group of companies based in the East Midlands, a construction and development group, Lark Energy was set up in 2010 to assist in all aspects of a renewable project from feasibility and planning through installation and operations.

Swindon Common Farm Solar CICSwindon Common Farm Solar CIC is the company set up to own and manage the solar PV installation at Common Farm. Swindon Common Farm is 100% owned by Swindon Borough Council. Swindon Borough Council has appointed Samantha Mowbray, Paul Smith and Patrick Weir to be the directors of Swindon Common Farm.

Our project


Who is involved

Our project

Lark EnergyPublic Power Solutions

Provides innovative waste and renewables solutions to SBC and others.

Originally performed all the development work to get the solar project ‘shovel ready’.

100% shareholder of PPS

Contracted to build and provide O&M services to Swindon Common Farm. Covers the costs of all parts and labour and therefore retains ownership of them until the agreed payment terms are met.

Being offered the opportunity to share in the financial benefits of Swindon Common Farm by investing alongside SBC. Will receive regular payments of capital and income for 20 years.

100% shareholder of Swindon Common Farm and will provide £3m loan to fund the solar project alongside members of the general public and its own residents.

Swindon Borough Council

Swindon Common FarmSolar CIC

Investors including residents of Swindon Borough


Meet the directors

Our project

Patrick Weir, Head of Localities, Community Involvement and Volunteering for SBCPatrick has been a public servant for 26 years and has worked for Swindon Borough Council for the last 17. With a first career in HR, and a Chartered Member of the CIPD, he has fulfilled a range of corporate and service management roles, all of which have involved leading organisational change, development and innovation.

Patrick now leads the Council’s work to support and enable community action, working alongside the Borough’s communities to deliver new approaches to issues affecting residents and public services alike, such as loneliness in older age, looking after public space, increasing self-reliance and confidence of people managing long-term health conditions, promoting physical activity and community sport, sustaining local community facilities and developing new approaches to neighbourhood volunteering.

Patrick is pleased to be appointed as a director of Swindon’s Common Farm Solar CIC, which is another example of innovation in the way public services and residents can work together for mutual benefit, this time inviting public investment in securing new sources of sustainable energy.

Paul Smith, Head of Technical Finance for SBCPaul has been at Swindon Borough Council for 8 years and has been heavily involved in structuring the Common Farm project, leading the Council’s involvement from a financial viability perspective from initial proposal through to completion. Prior to joining SBC, Paul had over 25 years’ public sector experience at a senior level, with a specific focus on technical accounting and large projects. He is also responsible for managing the Councils Treasury Management function with responsibility for debt of c.£250m and investments of c.£90m.

Previous roles include working at Deloitte as a Public Sector Consultant, the Ministry of Defence as Financial Controller and Bristol City Council for 15 years as Principal Accountant. Paul is a qualified accountant (both AAT and ACCA qualified) and has been a Fellow of Chartered Certified Accountants since 2001.

Samantha Mowbray, Head of Performance, People and Engagement for SBCSamantha, or Sam as she is usually known, has been at Swindon Borough Council for a year now and manages the People, Performance and Engagement team which looks to support the Council in delivering the ambitions set out in the Vision for Swindon. This includes making sure SBC can measure what is being achieved and where it is not doing so well, equipping staff to do their jobs as well as they can to deliver what is required for residents and making sure residents are involved as much as possible in the decisions the Council makes.

Prior to joining SBC, Sam has worked at a couple of other large councils in policy and communications roles and has also held management roles in large voluntary and private sector organisations.


How does a CIC work?

When possible, we will look to pay more than the minimum 0.85% – £7,200, the amount we intend to pay in the first year is closer to 1.5%. By making the offer to local residents and the wider general public and arranging it through Abundance which allows investments of £5 or more, we are also seeking to maximise the potential to share the financial benefits of the project directly with the whole Borough.

The asset lock also requires that at least 65% of profits go towards the community purpose. Whilst Debenture investors and the Council’s loan are being repaid, this may not amount to very much although it will be significant for the last 5 years – based on current assumptions we estimate this will be around £725,000 during the life of the project. Profits and therefore the amount that can go to the community purpose may increase if either of inflation or wholesale energy prices rise from current levels.

In most other respects, a CIC operates as a limited company and a CIC plc as a public limited company. We have undertaken to convert to a plc within 6 months of this offer and will shortly appoint auditors to assist with the conversion.

A CIC is a type of limited company designed to provide a bridge between traditional corporate legal structures and not-for-profit organisations. The primary purpose of a CIC is to advance the community purpose whilst its legal structure is designed to give it some of the benefits of a limited company. As with any other commercial company, a CIC must comply with company law and it must remain solvent. As well as applying to Companies House, a CIC needs to be approved by the CIC regulator which will look to ensure it has a valid community interest and that it has a satisfactory asset lock.

Our purpose, as set out in our Articles, is “to carry out activities which benefit the community and in particular, without limitation, to promote renewable energy and community development”. Our stated community interests as set out in our declarations to the CIC regulator are 2-fold: that the company’s activities will provide benefit (i) to members of the general public by providing an opportunity for local residents to invest in local renewable energy generation and (ii) to members of the local community by supporting community projects (including a commitment of at least 0.85% of annual revenues). This is deliberately wide in remit to allow us time to engage with key stakeholders and work with them to define its eventual practical application. Our director Patrick, in his role as SBC’s Head of Localities, Community Involvement and Volunteering, will lead our efforts in this regard.

Our project

Photo from Solstice Renewables


Swindon Common Farm – the story so far and here on

Our project

Our shareholder, Swindon Borough Council, began discussing the benefits of solar back in 2013 at the same time it set some ambitious targets to roll out 200 MW of renewable generation in the Borough by 2020 of which 140 MW is already in construction or in planning. In addition to the generation target, the Council wanted to find a model which could focus on local benefit – an objective which set the tone for both our and other future projects. Common Farm was identified as a possible site in April 2014 and a model which would blend community, Council and private investment was endorsed.

This saw the beginning of work on the project with PPS mandated to secure the relevant consents (planning, grid connection and an intention to lease) and to design the model which would satisfy the Council’s local benefit objectives. As well as the priority to deliver local benefit, our Common Farm site was selected as an excellent example to show solar can blend and add to the countryside – Common Farm is low grade agricultural land with low biodiversity (solar can improve this) and the development will have low visual and landscape impact without disrupting the operations of the existing farm business.

With planning permission granted in June 2015, and a grid connection from SSE, the CIC was set up and pre-accreditation applied for to give us until end of June this year to build the solar farm. Lark Energy was appointed after a tender to build it and Abundance to help us make the project open for investment by our residents and other members of the general public.

Lark is already very familiar with the site and some work has already started. Before long, they will swing fully into action, preparing the site for the actual installation work to begin.

The panels will be mounted on racks that are pile-driven into the ground using no concrete and arranged in rows to minimise shading but which also encourages biodiversity and allows for grazing to keep growth under control. The actual installation work takes only a matter of weeks with ample time before the pre-accreditation deadline of 29 June (this offer will not proceed if the deadline is missed, see the risks section on pages 22-25).

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OH

LEGEND

LV OVERHEAD

11kV OVERHEAD

11kV UNDERGROUND

33kV OVERHEAD

BT UNDERGROUND

BT OVERHEAD

FOUL WATER

GAS MP 250mmØ PE

SECURITY FENCE

OH OH OH

OH OH OH

OH OH OH

BT BT BT

BT OH BT OH BT OH

MP MP MP

400

PLASTIC MARKER TILES1000mm x 244mm x 12mm

1100

300mm² AL XLPE IN TREFOILINSTALLED IN 188mm ID

EMTELLE DUCTS

BACKFILLMATERIAL

SECTION A-A

BACKFILL WITH SAND WITH ATHERMAL RESISTIVITY OF 1.2COMPLYING WITH ENA TS 97-1

TO A MINIMUM DEPTH OF 75mmSURROUNDING THE DUCT

G.L

150

75

Unit 5.2.2The Leathermarket

11-13 Weston StreetLondon

SE1 3ER

Client SCS LTD Client Ref COMMONFARM

Site AddressCOMMON FARM PV GENERATION,

SWINDON, SN4 9QJ

Title SITE PLAN AND CABLE ROUTE

Drawn By DS Date 22/09/2015

Checked By KWY Date 22/09/2015

Approved By PL Date 22/09/2015

Scale 1:250 @ A1

Revision 2

Drawing No 469-CR-01

2 CABLE ROUTE AMENDED 09/11/2015 DS

1 CABLE ROUTE AMENDED 28/10/2015 AC

- ORIGINAL 22/09/2015 DS

REV REVISION NOTES DATE ENG.

Issued forApprovalStatus

APPROX. 163m PLUS 10mFOR POC TERMINATIONS

AND 5m FOR SUBSTATIONSTERMINATIONS

TOTAL 178m

SSEPD TO INSTALL H-POLEAT THE POC

A

A

Map of site, Swindon Common Farm


Various technologies are used in the manufacture of solar PV panels – however, they all operate to convert sunlight directly into electricity (rather than using the heat from the sun to generate electricity). The amount of electricity that can be generated in a year at any given site will depend on a number of factors, including among other:

• The annual amount of solar irradiation the site receives which will depend on where in the country the site is located and the amount of cloud cover and/or pollution it experiences during daylight hours at different times of the year. Being in the south of the UK, Swindon is in an excellent location to benefit from solar energy.

• The orientation and tilt of the solar panels – south-facing panels receive more direct sunlight which is more effective than sunlight arriving at an angle due to reflection and refraction off the glass surface of the panels. In our project, the solar panels are mounted on a rack and raised off the ground so they can be positioned and angled to most effectively catch the available sunlight.

• The energy conversion efficiency from sunlight into direct current electricity of the solar panels used, taking account of the fact that the solar panels can be expected to be very slightly less effective as time goes by – the manufacturer’s warranties for the panels in our system (which will likely be made by Q Cells or an equivalent product of equal or better type and quality) estimate performance to be at least 80% after 25 years, see page 25 for more detail.

• The energy conversion efficiency from direct current electricity into alternating current electricity of the inverters used (which are expected to be made by Power Electronics or Gamesa and selected in each case to maximise the system efficiency).

To estimate the amount of electricity we expect to generate Lark Energy used a software system called PVsyst, which is widely used in the industry for simulating photovoltaic system performance. They import the irradiation data through the PVGIS database and adjust the installation parameters such as inclination, orientation and equipment configuration to match the PV system. The software performs complete calculations and produces an estimate of the “yield” which can be expected from that system after expected losses are taken into account. The yield is the number of kWh per kWp that can be expected over a year taking into account the variables outlined above.

The solar panels are installed on to a metal mounting rack that is pile-driven into the ground. We will install a 24-hour CCTV system and remote monitoring at Common Farm to ensure the safety and security of the equipment. We aim to have a very light ecological touch on the land, and with the exception of the mini-substation foundation, the PV system will not use concrete.

The site will also be managed to promote biodiversity, with the land around the panels remaining in agricultural use, and sheep grazing for part of the year. The solar farm will generate enough electricity to supply the equivalent of 1,200 typical homes and save around 2,000 tonnes of carbon dioxide a year.

The land will be leased from Swindon Borough Council, our shareholder, who will be paid rent for the use of the land.

Our project

A brief introduction to ground-mounted solar photovoltaics

Photo from Solstice Renewables


How your money will be used

Lark Energy has been contracted by us to install the solar PV system on our behalf and connect it to the grid, and will cover all the costs of the labour and equipment in the first instance. It is expected to be installed and generating electricity no later than 29 June 2016, when pre-accreditation for the 6.16p Generation Tariff expires. The money raised by this offer, along with the loan provided by Swindon Borough Council, will then be used to pay Lark for the work it has done and the equipment it has provided. Proceeds from the offer will also go towards the costs of the public offering of our Debentures, including Abundance’s set-up fee of 5% of the amount raised.

Once commissioned, we can begin to receive the Feed-in Tariffs for the electricity generated and the revenues made from selling it. These revenues, once all costs have been paid, will be used to fund the Debentures’ Cash Returns (as well as the annual payment to the community purpose and the interest and repayment of the loan from the Council, our shareholder).

The loan provided by SBC will be a 20-year loan with regular repayments of capital and 3.5% interest charged on outstanding capital. Interest payments and capital repayments will be made 6-monthly at the same time as Cash Returns to Debenture holders. In the event of a shortfall in working capital to cover the required payments in any period to both Debenture holders and SBC, Cash Returns to Debenture investors will take priority.

The offer


Our revenuesMost of our revenues will come from the Generation Tariff and we have received pre-accreditation at a tariff of 6.16p per kWh. The amount we generate is metered onsite and communicated to our FiT licensee, (this will be an Ofgem-licensed entity that is authorised to pay the FiTs). We estimate the PV system will generate approximately 4,763 MWh in its first year. The efficiency of panels can be expected to degrade over time and therefore we have conservatively estimated that the amount of electricity they will generate will decrease by 0.4% a year.

In addition to the Generation Tariff, we are entitled to receive revenues from the Export Tariff of 4.85p per kWh generated. We may be able to enter into a PPA (Power Purchase Agreement) with an electricity supplier to receive more than the Export Tariff, but will be able to earn at least 4.85p per kWh. Both tariffs will change each year in line with the RPI.

The offer

Explaining the numbers – understanding our revenues and costs

Note: see pages 16-20 for a more detailed explanation of assumptions and sensitivities. The return is calculated from 1 July 2016 and assumes your Cash Returns are paid 10 weeks after the end of each Cash Return Period.

Tax

Returns to the community – annual payments and dividends

Debentureinterest income

ExternalOperating costs24%

5%

7%

9%Debentureprincipal13%

Returns to Swindon – rates, rent, interest, dividends21%

Swindon loan principal21%


Our costsThe table sets out our principal costs, including the annual fee payable to Abundance for the ongoing administration of the Debentures, but does not include Corporation Tax. Abundance’s annual fee is equivalent to 1.5% of the amount raised in this offer for the first 5 years and 1% thereafter.

The offer

Explaining the numbers – understanding our revenues and costs

Note: see pages 16-20 for a more detailed explanation of assumptions and sensitivities. The return is calculated from 1 July 2016 and assumes your Cash Returns are paid 10 weeks after the end of each Cash Return Period.

Note: The table sets out our principal costs but does not include Corporation Tax.

Item

Operating and maintenance expenses

Rates

Rent

Community benefit payment

Other

Inverter sinking fund

Administrative expenses

Includes

Payment to Lark Energy for operation and maintenance of solar panels

Payment of business rates to Swindon Borough Council for operating the solar site

Payment to Swindon Borough Council as the freeholder of the site

Payment to the local community each year

Insurance

An annual provision for inverters and other replacement equipment not covered by the O&M

– Legal– Accounting and administration– Abundance’s annual account fee

Estimated cost

Approximately £9,500 / MWp (in 2016 prices) in the first year and after estimated to grow in line with inflation. This level of O&M charge guarantees 99% availability – if the solar farm is available to operate for less than 99% of the time (excluding grid-related issues), Lark Energy has to pay us compensation

Approximately £19,000 in the first year and after estimated to grow in line with inflation

4.5% of revenue

At least 0.85% of annual revenue, although we aim to pay more whenever possible. £7,200, the starting amount, is closer to 1.5% of revenue

Approximately £34,000 for insurance in the first year and £1,000for electricity and after estimated to grow in line with inflation (Note: our monitoring and CCTV system incurs a small electricity charge)

£10,000 a year

Estimated at approximately £34,000 a year. The majority, the Abundance fee of approximately £27,000 a year for the first 5 years and £18,000 thereafter is fixed and the balance rises with inflation


Your estimated Cash Returns over time

Worked example – ‘what you get back’

Over the life of the Debentures you are expected to receive Cash Returns totalling 1.7x* your initial investment and an effective rate of return of 6.0%* before tax. This figure is after the Abundance annual fee.

Your Cash Return is paid twice yearly and is comprised of:

1 a repayment of 1/40th of your original capital. You will receive the same amount of capital back in respect of each 6-month Cash Return Period. For example, if you invested £1,000, since the investment is 20 years long, £25 of each Cash Return is repaying your investment.

2 a fixed interest income payment. As with your capital repayments, your annual interest income will be paid semi-annually and split 50/50. You will receive the same amount of interest income for each 6-month Cash Return Period. For tax purposes, the interest income is treated as an interest payment (see page 7 for a table of the amounts and the graph on this page).

The offer


What you get back – Your Cash Returns

Note: all returns are shown gross, ie before the deduction of any tax

200

150

100

50

01 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20

Interest Income

Principal repayment

Capital

Interest income (gross of tax)

Total

Total

£ 1,000.00

£ 743.69

£1,743.69

Each year

£50.00 (= 1,000 / 20)

£37.18(= 743.69 / 20)

£87.18

Jul – Dec

£25.00 (= 50 * 50%)

£18.59(= 37.18 * 50%)

£43.59

Jan – Jun

£25.00 (= 50 * 50%)

£18.59(= 37.18 * 50%)

£43.59


What you get back – further detail

Other things to consider:• Your return is equivalent to an effective rate of return of 6.0%* (after fees) from 1 July 2016 for the rest of the life of the investment, assuming that you hold it for the full term. Effective rate of return is your average annual return based on your Cash Returns and factoring in the ‘time value of money’ (the fact that money you receive earlier is more valuable to you than money you receive later). This is also known as the Internal Rate of Return (IRR).

• This Debenture offer provides a fixed income return, and as a result, you will know from the outset what you will receive every year. The income you receive is split 50/50 between the two Cash Return Periods in each year.

• Since your initial capital is repaid through the life of the Debentures, each year reduces the risk that you might not get it all back (and increases that year’s rate of return on your outstanding capital – see the graph on page 6).

• Your returns may be subject to tax – depending on your individual circumstances – see page 21 for further detail.

Note: we believe that any predictions or forecasts we give as to future performance or revenues are reasonable and are based on reasonable assumptions including those in this document and, where possible, supported by objective data. However, performance may be affected by risks and other factors set out in this document including under ‘The risks’ on pages 22-25 and therefore they are not reliable indicators of future performance or revenues. Payment of Cash Returns (including repayment of your capital, the amount you have lent) depends on there being sufficient Operating Profit.

The offer

Yield4,763 MWh/anet energy yield

Costs• O & M• Insurance• Tax

Price• Generation FiT• Export price

A brief introductionto roof mounted solar PVsee page 15

The Project –How your moneywill be usedsee page 16

The Project –Explaining the numberssee pages 17-18

The Project –What you get back– in your pocketsee page 19

Capitalrepayment

Investmentincome

Electricity

RevenueFiTc. 56%

Exportc. 44%



TaxThe portion of your Cash Return that goes towards repaying your original investment is not subject to tax in the UK. The portion that is interest income will be treated as interest income for tax purposes. You can find the details of how your Cash Return will be taxed on the Abundance website, www.abundanceinvestment.com, in the FAQs.

Paying you your Cash Returns – providing additional coverOne of the key advantages of solar PV as a technology is that the amount of output a system will generate in any given year can be predicted with a good degree of accuracy. The FiT scheme adds further predictability by setting out a framework of payment that covers all our expected revenues. Therefore, although we are not guaranteeing that we can pay the full amount of Cash Return each time it is due, we are very confident that we will.

In addition, to ensure there is sufficient working capital to cover both our operating expenses and the Cash Returns owing to our Debenture investors, we will leave a cash ‘buffer’ equivalent to one Cash Return (in other words one capital repayment and one amount of interest) to cover any short-term fall in operating profit (revenues after operating expenses) that might impact our ability to pay Cash Returns. This is called the Reserve in the Debenture Deed and will be funded by the Debenture raise.

In the event we are unable to make one of your Cash Returns in full even after using this cash buffer, the amount outstanding will roll up to the next Cash Return Period and accrue interest equivalent to the Barclays Bank’s overnight base rate at the time plus 3%. If we continue to be unable to make the subsequent Cash Return, capital and interest income will again roll up (plus accrued interest for late payment) although we cannot roll up for more than one year without being in default. All outstanding capital and interest becomes due and payable at the end of the Debenture term.

The offer

What you get back – additional information


The risks – the investment

We cannot set out all the risks that may be involved in an investment in the Debentures. You should consider whether the Debentures are a suitable investment for you in the light of your own personal circumstances and take advice as necessary. These are some of the risks that may be involved – remember there is no guarantee that you will receive any Cash Return or that your capital (i.e. the money you have lent under the Debentures) will be returned.

Things you need to know about the investment:

Debentures are unsecured obligations of Swindon Common Farm Solar CIC. Although we are obliged under the terms of the Debentures to repay holders of Debentures the Cash Return owing to them and notwithstanding that we will do what we can to ensure this does happen, there is no certainty that you will receive the whole or any part of the expected Cash Return if, for any reason outside of our reasonable control, there is insufficient cash to make those payments.

Debentures are designed to be long-term investments and it may not be easy to sell them quickly or sell them at their original value. Therefore, you should consider what is the right amount for you given your own circumstances. There is no regulated marketplace for the Debentures and, therefore, the options to sell Debentures are limited. Abundance provides a Bulletin Board where you can find potential buyers. However, if you need to sell your Debentures in a hurry or, for whatever reason, you are unable to find an investor to purchase your Debentures for the original amount that you paid, you may not get all of your original investment back.

Debentures are not covered by the Financial Services Compensation Scheme (FSCS) or the Financial Ombudsman Service (FOS) – this means if we do not fulfil the terms of the Debentures there is no right to complain to FOS or to get compensation from FSCS. Abundance is authorised and regulated by the FCA for the services it provides and any rights to complain to FOS and/or FSCS are detailed in its Terms and Conditions which are available at www.abundanceinvestment.com.

Estimates and ProjectionsWhere we have made estimates or projections of our anticipated revenues, costs, or inflation these are based on our current beliefs and assumptions at the date of this Offer Document – we won’t necessarily update them. These statements may involve known or unknown risks, uncertainties and other important factors which could cause our actual results, performance or achievements to differ from those we expect.

In particular, while we believe that any predictions or forecasts we give are reasonable and based on reasonable assumptions supported by objective data, they may be affected by risks and other factors not set out in this document and therefore are not reliable indicators of future performance.

There can be no guarantee:

• that we have correctly measured or identified all of the factors affecting the Project and its revenues or their likely impact

• that publicly available information relating to the factors on which our analysis is based is complete or accurate

• that our analysis is correct; or

• that our business (and the Project) which is based on this analysis, will be successful.

The offer


The risks – things we have little or no control over

Government policyThere may be changes in laws, regulation or government policy which might impact an investment in the Debentures or the rights of holders to them. These may include, for example:

– Changes to the level of the Generation and/or Export Tariffs under the Feed-in Tariff regime, our entitlement to them and how they are calculated.

– Changes to tax law which might affect us or make it less advantageous for you to hold the Debentures.

– Regulatory issues which might entail expenditure, costs or operational restrictions which we have not foreseen.

– Changes to the basis on which the RPI is calculated.

Also, an investment in the Debentures may be affected by general economic circumstances which may lead to increases in costs or unforeseen expenditure.

Solar irradiationWe have based the estimated output on the irradiation data provided by the Solar PVGIS database imported into the PVsyst software. However, should solar irradiation be lower than our estimates, our ability to repay the Debenture capital and interest might be affected.

The level of inflation We have assumed an RPI of 1.0% for the first 5 years, and thereafter 2.8% for the remainder of the Debentures in line with the Bank of England’s Consumer Price Index inflation target of 2% and the conclusions of the Office for Budget Responsibility in their November 2011 Working Paper, ‘The long-run difference between RPI and CPI inflation’.

Most of our revenues come from the FiTs, which rise each year in line with the RPI and we expect our costs also to rise in line with RPI. We have run a number of scenarios involving lower levels of inflation to check the impact on our expected revenues and operating profit, and therefore on our ability to repay Debenture capital and interest. Should the inflation rate be lower than expected for extended periods with no other changes to our operating model, our ability to repay Debenture capital and interest may be reduced.

It should be noted that the RPI is a measure of the level of inflation in the UK and is likely to differ from the level of inflation outside the UK.

General contractual risksWe are reliant for some services on third party providers. Whilst we are thorough in checking who we work with and in ensuring proper contractual arrangements are in place, we cannot guarantee that those providers will perform their contractual obligations adequately. Pursuing providers for breach of contract can result in delays and legal expenses. Any supplier or partner can undergo insolvency or restructuring procedures which may affect whether or not they can perform their obligations.

Insolvency or restructuring riskThe Issuer together with any supplier, partner or contractor on the Project can be the subject of insolvency or restructuring procedures which may affect whether or not we or they can perform their obligations. This may also mean that, in relation to suppliers or contractors, we are unable to secure the same level of service at the same price resulting in greater costs.

The offer


The risks – things we have little or no control over

Force MajeureThere is always the possibility that an event could occur that is completely out of our control and completely unexpected. This includes events such as natural disasters or acts of terrorism.

Currency RiskAll investors will be receiving Cash Returns from the Debentures in GBP Sterling so any non-UK investor may be exposed to currency risk if they need to exchange GBP Sterling for another currency.

Insurance RiskWe, or a contractor, may, where economically practicable and available, endeavour to mitigate some of the project risks by procuring relevant insurance cover. However, such cover may not always be available or economically justifiable, or the policy provisions and exclusions may render a particular claim outside the scope of the insurance cover. There will also remain the risk that an insurer defaults on a legitimate claim.

The offer


The risks – Specific to our project

Risk: Delays to commissioning mean the pre-accreditation deadline is missed

Impact: Significant loss of revenue since the new FiT level for a system of this size is 0.87p / kWh

Mitigant: This offer will not proceed if the pre-accreditation deadline is missed. Lark Energy, our EPC contractor, is very experienced and has built several hundred megawatts of similar projects in much shorter timeframes.

Risk: Other pre- and post-operational issues relating to the quality of installations

Impact: Loss of electricity production

Mitigant: The EPC contract between Swindon Common Farm and Lark Energy entitles us, at any time, to carry out a quality audit that checks that all aspects of the installation have been completed properly and that the PV system is performing as expected. The EPC contract with Lark Energy includes a 2-year Defect Warranty period from the date of installation and provides for damages if performance is below certain limits (which amount to approximately £64,000 for every percentage point below a defined performance ratio). Under the O&M contract, Lark is also contracted to achieve a defined guaranteed performance ratio and guarantee availability of 99% (in other words should operate for 99% of the time it is able to barring issues outside Lark’s control) and must pay circa £50,000 for every percentage point below this level. The O&M contract also includes ongoing web-based monitoring of performance to check regularly that the installation is performing as expected.

Risk: Operational issues as a result of underperforming or faulty equipment

Impact: Loss of electricity production

Mitigant: Since our portfolio is made up of approximately 20,000 solar panels, faulty equipment should not impact the generation of the entire installation. In addition, we will only use the solar panels that come with a manufacturer’s warranty guaranteeing certain levels of performance over 25 years. Similarly, we will have warranties in place for 5 years for the inverters and 20 years for the mounting structures.

Risk: Operational costs are not fixed for the duration of the project and may increase more than we have estimated

Impact: Higher costs and therefore reduced operating profit

Mitigant: The initial term of the O&M contract with Lark is 5 years after the completion of Lark’s obligations under the EPC contract, subject to appropriate termination clauses to ensure the serviceis of high quality at a competitive price. At the end of this time, we will run a competitive procurement exercise for the services. Historically O&M costs in the UK market have reduced rather increased.

Risk: Lark Energy becomes insolvent leading to termination of the O&M contract with Swindon Common Farm

Impact: We are unable to secure the same level of service at the same price resulting in greater costs

Mitigant: There are a significant number of O&M providers in what is becoming a well-established market, reducing the likelihood of not finding a competitive and qualified replacement.

The offer


How to subscribe – key elements of the offer

Issuer of the Debentures: Swindon Common Farm Solar CIC

Instrument: Debenture – an unsecured debt obligation

Target Amount: £1,783,000

Minimum subscription: £5

Opening Date for subscriptions: 23 February 2016

Closing Date for subscriptions: On the earlier of 30 June 2016 or the date that valid subscriptions totalling the Target Amount have been received. Subscriptions are made on the basis of “first come, first served”.

Option to extend Closing Date: The directors of Swindon Common Farm reserve the right to extend the offer period for a period of no more than 3 months.

Subscriptions: Subscriptions are made electronically at www.abundanceinvestment.com, see page 27 for details.

Cash Return: Payable twice yearly, comprising repayment of capital (principal) and a payment of interest income, see page [xx] for details.

Repayment of original investment: Regular instalments throughout the life of the investment as part of your Cash Return, and rolled up from one Cash Return Period to the next if there are insufficient revenues after expenses and insufficient cash in the cash reserve.

Maturity: 30 September 2036

Transferability: Transferable on your instructions to anyone with an account at Abundance.

Abundance fees: The annual fee payable to Abundance for the on-going administration of the Debentures and paid by us. The fee is 1.5% of the original amount invested. There is also a one-off set up fee of 5% of the amount raised by the Debentures. Your rate of return is quoted after the deduction of all costs including the Abundance fees.

Default events: Failure to pay amounts payable within 14 days, breach of other terms of the deed (not remedied within 14 days), insolvency or analogous event, and cessation of business.

The offer

http://www.abundanceinvestment.com


How to subscribe

You subscribe for Debentures through your Abundance account. You will need to deposit cash first if you haven’t already (Abundance will perform additional identity checks at this point). Details of how to deposit cash are provided on the Abundance website. Money should arrive in your Abundance account within one working day.

Abundance will email you once the cash has arrived in your account. You can then complete your subscription to buy Debentures. If you subscribe, you acknowledge that:

– you have read and understood this Offer Document;

– all the relevant details of the Offer are set out in this Offer Document and the Debenture deed and that no one else is authorised to make any other statements about the terms of the Offer or the Debentures;

– you are not relying on any statements other than those in this Offer Document or as approved by Abundance; and

– that your holding of Debentures is subject to the Abundance Terms and Conditions found at www.abundanceinvestment.com. The offer will be closed on the Closing Date once valid subscriptions have been confirmed totalling the Target Amount or on 30 June 2016, whichever comes soonest, unless the option to extend the Closing Date is used.

Subscriptions will be taken on a first come, first served basis. Valid subscriptions will be confirmed as they are received.

Note: your returns may be subject to tax, see page 21for further detail.

The offer


Role of Abundance as the Agent

Under the Debentures, Abundance will act as Agent for the Holders which is largely an administrative role where Abundance acts as an intermediary between the Issuer and the Holders and carries out functions such as instructing payments under the Debentures, calling Holder meetings and taking instructions from Holders to carry out certain actions under the Debenture Deed.

This agency role is set out in the Agency Agreement (between us and the Agent) which includes, among other things, provisions for: (a) how the Agent may support the Holders to enforce their rights under the Debenture Deed and other finance documents on the Holders’ instructions; (b) determining what important decisions (“Reserved Matters”) need a Special Resolution of Holders and what less important decisions (“Non-Reserved Rights”) need an Ordinary Resolution of Holders; (c) how consents, waivers or changes to the Debenture Deed and other finance documents can be made; and (d) the requirements for meetings of the Holders to make the necessary decisions.

See table to the right for what is meant by Special Resolution and Ordinary Resolution and for a summary of the relevant instruction thresholds or majorities for certain actions by Holders:

The offer

Action

Calling a meeting of Holders

Calling an Event of Default

Withdrawing an “Acceleration Notice” after an Event of Default

Quorum for Special Resolution

Quorum for Ordinary Resolution

Voting on Special Resolution

Voting on Ordinary Resolution

Appointing a Holder Representative e.g. after an Event of Default

Relevant instruction or resolution threshold

Holders with 10% of Principal (of the Debentures) or Agent

Holders with 25% of Principal (of the Debentures) or by an Ordinary Resolution or Special Resolution of the Holders

Special Resolution of the Holders

Holders representing at least 75% of Principal of the Debentures

Holders representing more than 50% of Principal of the Debentures

Holders representing at least 75% of Holders represented at meeting and entitled to vote

Holders representing more than 50% of Holders represented at meeting and entitled to vote

Holders with 25% of Principal (of the Debentures) or by Ordinary Resolution or Special Resolution

Relevant document & clause reference

Agency Agreement, Schedule 3, Para 1.3

Debenture Deed, Clause 15.3

Agency Agreement, Clause 10.6

Agency Agreement, Schedule 3, Para 4






What happens when – anticipated timetable

23 February 2016 Offer Document published, offer opens for subscriptions

30 June 2016 Closing Date unless extended

1 July – 31 December 2016 First Cash Return Period

On or before 10 March 2017 First Cash Return Payment Date

1 January – 30 June 2017 Second Cash Return Period

On or before 9 September 2017 Second Cash Return Payment Date

On or before 10 March and 9 September each year Expected Cash Return Payment Dates

1 January – 30 June 2036 Last Cash Return Period

30 June 2036 Debentures mature

On or before 9 September 2036 Last Cash Return Payment Date

30 June Swindon Common Farm financial year end

The offer


Your questions, answered

How do I receive my Cash Returns?We will make a single payment to Abundance’s client money service provider twice a year representing the principal repayment and interest payments due. Abundance will then instruct its client money service provider to distribute each Debenture holder’s Cash Return proportionally to their holding of our Debentures.

How are the Debentures treated for tax purposes?The portion of your Cash Return which goes towards repaying your original investment is not subject to tax. The remaining portion of your Cash Return is interest income and is treated as interest income for tax purposes. You can find the details of how your Cash Return will be taxed on the Abundance website, www.abundanceinvestment.com, in the FAQs. You should seek independent advice if you are not clear or have any questions.

How do I keep track of my Debentures?Your Abundance account page is where you will find all the informationthat you would expect in respect of your holding of Debentures plus a lot more. Once the Debenture offer closes you can find the following documents in the Admin section of your account: a copy of this Offer Document and, in time, a history of our annual reports and accounts as well as any tax statement relating to your holding of our Debentures. The statement of your Debenture (under the Money section of your account) represents your electronic confirmation and certificate of ownership. You can also download a statement of your Debenture holdings under the Admin section. On the Abundance website you can also get updates on how much electricity is being produced as well as any important updates on the Project.

Can I hold the Debentures in a Self Invested Personal Pension (SIPP)?Debentures are eligible to be held in a SIPP at the discretion of the provider. You can set up an Abundance Pension to hold Debentures within a SIPP, or there are a number of other SIPP providers that allow you to invest through your Abundance account. Please contact Abundance if you would like the current list of providers that will accept Debentures in a SIPP.

Can I hold the Debentures in an ISA?You cannot currently hold Debentures in an ISA. The Treasury announced that Debentures such as those arranged by Abundance will be eligible in the form of an Innovative Finance ISA (IF ISA) from autumn 2016. While details of the precise workings of the IF ISA are still being confirmed, it is not yet possible to confirm if Debentures in Swindon Common Farm Solar CIC will be transferable to the IF ISA. More information about the upcoming IF ISA can be found on the Abundance website here.

What charges are there?Abundance is paid a one-off set up fee of 5% of the amount raised for arranging the issue of this Debenture offer. Abundance is then paid an annual fee of 1.5% a year of the amount raised for the first 5 years, and 1% thereafter. This is for the ongoing administration of the Debenture including paying your Cash Returns, providing information about performance, and fielding the first instance questions you may have about your investment. Otherwise, there are no charges for opening an account or for depositing or withdrawing cash or on cash that is sitting in your account rather than invested in a Debenture. There is also no charge for buying or selling an existing Debenture.

The estimated effective rate of return quoted in this document is after the Abundance annual account fee.

How do I sell?Debentures are transferable in accordance with the Abundance Terms and Conditions and can be sold to anyone with an Abundance account. Sellers can find potential buyers by posting an expression of interest to sell on Abundance’s Bulletin Board, which can be viewed by anyone. Since Abundance acts as the registrar of all holders of Debentures, the buyer will need to open an account at Abundance if they don’t already have one to register the change in ownership. There are no charges for posting an expression of interest, for opening an account or for transferring ownership.

What happens if Swindon Common Farm defaults?The capital (and any accrued additional interest in the case of deferred capital or principal amounts owing) forming part of the Cash Return that has not yet been repaid becomes immediately due in the event of a default. In the event that we are unable to pay any sums due when demanded, a Debenture holder will have the right to take action against us for breach of the terms of the Debenture deed.

The offer

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The legal agreement

This Deed is made on 23 February 2016

Between

Swindon Common Farm Solar CIC, a company incorporated in England and Wales with registered number 9663536 and having its registered office at Waterside Park, Darby Close, Cheney Manor Industrial Estate, Swindon, SN2 2PN (the Issuer); and

Abundance Investment Limited, a company incorporated in England and Wales with registered number 07049166 and having its registered office at Threshold & Union House, 65-69 Shepherds Bush Green, London W12 8TX (the Agent).

Background

(A) The Issuer has resolved, pursuant to a resolution of its board of directors dated 23 February 2016, to create and issue the Debentures in relation to its investment in the Project.

(B) The Issuer has determined to constitute the Debentures in the manner set out in this Deed.

Now this deed witnesses as follows:

1 Definitions and Interpretation1.1 In this Deed, unless the subject or context requires otherwise,the following expressions shall have the meanings set out opposite them below:

Abundance means Abundance Investment Limited a private limited company incorporated in England and Wales with company number 07049166 and its registered address at Threshold & Union House, 65-69 Shepherds Bush Green, London W12 8TX; and which is authorised and regulated by the Financial Conduct Authority (“FCA”) with FCA registration number 525432.

Abundance Service means the website, services and the Bulletin Board operated by Abundance at www.abundanceinvestment.com.

Abundance Terms and Conditions means the terms and conditions governing the operation of the Abundance Service, from time to time, the latest copy of which can be found at www.abundanceinvestment.com.

Additional Interest has the meaning given in clause 10.

Affected Person means any person which Abundance or the Issuer, in its discretion (acting reasonably and in good faith and after consulting with the other), determines, as a result of a Tax or Regulatory Requirement is ineligible to acquire or hold Debentures or that it would be unlawful or inappropriate for them to so due to the additional costs or restrictions of that Tax or Regulatory Requirement.

Agency Agreement means the agency agreement between the Agent and the Issuer entered into on or around the date of this Deed.

Annual Interest Amount means £66,300.07 for each year during the term of the Debentures on the assumption that the Issue Amount is £1,783,000. In the event that the Issue Amount is less than £1,783,000, the Annual Interest Amount shall be adjusted but shall bear the same pro rata proportion to the Issue Amount.

Annual Principal Repayment means an amount equal to one twentieth (1/20th) of the Issue Amount.

Assets means the ground-mounted solar photovoltaic installations (and associated infrastructure) forming part of the Project.

Authorisation means any consent, authorisation, registration, filing, lodgement, agreement, notarisation, certificate, permission, licence, approval, authority or exemption from, by or with any governmental, semi-governmental or judicial entity or authority (including any self-regulatory organisation established under statute or by a governmental or semi-governmental body).

Business Day means a day other than a Saturday, Sunday or English public holiday when banks in London are open for business.

Cash Return Period means the First Cash Return Period, the Final Cash Return Period and each six month period between those two periods in respect of which repayments of Principal and payments of Interest and Additional Interest are calculated and payable in accordance with this Deed.

Change of Control means a change whereby either the beneficial ownership of more than 50% of the issued or allotted share capital of the Issuer ceases to be held by the same shareholder(s) of the Issuer as at the date of this Deed or the legal power to direct or cause the direction of the general management of the Issuer ceases to be held by the person or persons holding such power as at the date of this Deed and Controlled shall be construed accordingly.

Costs has the meaning set out in Schedule 1 (Calculations).

Debenture means each Debenture constituted by this Deed.

Deed means this Deed and the Schedules to this Deed as amended from time to time.

Deferred Amount means a payment of Principal and/or Interest that is deferred (in whole or part) in accordance with clauses 8 and 9 (respectively).

Eligible EEA Country has the meaning given to it in the Abundance Terms and Conditions.

Dated 23 February 2016 Debenture Deed constituting unsecured debenturesSwindon Common Farm Solar CIC


The legal agreement

Enforcement Action has the meaning given to it in the Agency Agreement.

Environment means humans, animals, plants and all other living organisms including the ecological systems of which they form part and the following media:

(a) air (including, without limitation, air within natural or man-made structures, whether above or below ground);

(b) water (including, without limitation, territorial, coastal and inland waters, water under or within land and water in drains and sewers); and

(c) land (including, without limitation, land under water).

Environmental Law means any applicable law or regulation which relates to:

(a) the pollution or protection of the Environment;

(b) the conditions of the workplace; or

(c) the generation, handling, storage, use, release or spillage of any substance which, alone or in combination with any other, is capable of causing harm to the Environment, including, without limitation, any waste.

EPC Agreement means the EPC agreement between the Issuer and Lark Energy Limited dated on or about the date of this Deed.

Feed-in Tariff Scheme means the feed-in tariff scheme established and operated pursuant to the terms of The Feed-in Tariffs Order 2012 (as amended from time to time).

Final Cash Return Period means the Cash Return Period beginning 1 January 2036 and ending on the Maturity Date.

Final Repayment Date means the date falling 10 weeks after the Maturity Date and is the date by which all outstanding Principal and all other sums due but unpaid under this Deed must be repaid.

Finance Documents means this Deed, the Agency Agreement, the Subordination Agreement, or any document designated as such by the Agent and the Issuer.

Financial Indebtedness means any obligation (whether incurred as principal or surety and whether present, future, actual or contingent) for the payment or repayment of any money including, without limitation, any indebtedness in respect of money borrowed or debt balances at any financial institution or under any bond, note, debenture, loan stock or similar instrument, loan, share, receivable, finance or capital lease, acceptance credit or bill discounting facility.

First Cash Return Period means the Cash Return Period beginning on 1 July 2016 and ending on 31 December 2016.

Grid Connection Agreement means the grid connection agreement between the Issuer and Southern Electric Power Distribution Plc dated 12 November 2015.

Holder means the person entered in the Register as the holder of each Debenture from time to time.

Holder Representative means the Holders appointed as a committee to represent the interests of Holders in accordance with paragraph 16 of the Provisions.

Insolvency Event means each of the events and circumstances listed in clauses 15.1.5-15.1.8 (inclusive).

Interest means any amount of interest payable to a Holder in accordance with clause 9 of this Deed.

Issue Amount means the principal or face amount of the Debentures issued under this Deed, from time to time, before and excluding any repayments of Principal made under the Deed but less any amount the Issuer has redeemed early in accordance with clause 12 or clause 13.

Lease Agreement means the lease agreement in relation to the Project between Swindon Borough Council and the Issuer dated on or about the date of this Deed.

Maturity Date means 30 June 2036.

Members has the meaning given in the Abundance Terms and Conditions.

O&M Agreement means the operation and maintenance agreement between Lark Energy Services Limited and the Issuer dated on or about the date of this Deed.

Offer Document means the document produced by the Issuer relating to the Debentures dated on or about the date of this Deed, as amended or updated from time to time.

Operational Reserve has the meaning given in paragraph 6 of Schedule 4 (Positive Undertakings).

Ordinary Resolution has the meaning given to in the Agency Agreement.

Permitted Disposal means any disposal (i) of cash as contemplated by the Transaction Documents; (ii) of any trading stock made on arm’s length terms and in the ordinary course of trading of the Issuer (including any worn out, excess to requirements or obsolete assets); or (iii) arising as a result of any Permitted Security.


The legal agreement

Permitted Indebtedness means any Financial Indebtedness incurred by the Issuer as follows:

(a) under the Finance Documents;

(b) any Subordinated Debt; or

(c) trade credit in the ordinary course of carrying on the business of the Project.

Permitted Security means any lien arising by operation of law and in the ordinary course of trading of the Issuer in relation to the Project.

Principal means, as the context requires, the principal amount of the Debentures for the time being outstanding or the principal amount of the Debentures held by any Holder.

Project means the project of the Issuer to purchase, operate and maintain a portfolio of 4.7685MW ground-mounted solar photovoltaic installations (as more fully described in the offer document dated on or about the date of this Deed) and as contemplated under the Project Documents.

Project Document means each of:

(a) EPC Agreement;

(b) O&M Agreement;

(c) The Lease Agreement;

(d) Grid Connection Agreement; and

(e) any other agreement designated as such in writing by the Issuer and the Agent.

Provisions mean the provisions for meetings of Holders, amendments and waivers and for a Holders’ Representative as set out in Schedule 3 of the Agency Agreement.

Register means the register of Holders of Debentures.

Relevant Surplus has the meaning given in Schedule 1 (Calculations).

Reserve has the meaning given in paragraph 6 of Schedule 4 (Positive Undertakings).

Reserved Matters means the matters or provisions specified in paragraph 16 of the Provisions.

Restricted Person means any person who does not fulfil any criteria of eligibility to invest and/or to hold Debentures set out in the Abundance Terms and Conditions from time to time including (without limitation): (i) any US Person; or (ii) any person who is resident in, whose permanent place of business or whose jurisdiction of incorporation or establishment is in any of the Channel Islands or the Isle of Man; or (iii) any Affected Person.

Revenues has the meaning given in Schedule 1 (Calculations).

RPI means the domestic measure of inflation in the UK complied by the UK Office of National Statistics.

Schedule means a Schedule to this Deed.

Shareholder means Swindon Borough Council, a UK government local authority with offices at Civic Offices, Euclid Street, Swindon, SN1 2JH.

Shareholder Loan Agreement means the £2,987,500 loan agreement entered into between the Shareholder and the Issuer dated on or about the date of this Deed.

Special Resolution has the meaning given to in the Agency Agreement.

Sterling or £ means the lawful currency of the United Kingdom.

Subordinated Debt means any Financial Indebtedness owing under the Shareholder Loan Agreement as subordinated under the Subordination Agreement.

Subordination Agreement means the subordination agreement entered into between the Shareholder, the Borrower and the Agent dated on or about the date of this Deed.

Subsequent Cash Return Period means, in relation to any Cash Return Period, the Cash Return Period immediately following that Cash Return Period (and Subsequent Cash Return Periods means, in relation to any Cash Return Period, each of the Cash Return Periods following that Cash Return Period).

Tax means any tax, levy, impost, duty or other charge or withholding of a similar nature (including any related penalty or interest).

Tax or Regulatory Requirement means any Tax or law, regulation, rule, order, official directive or guideline of any governmental, inter-governmental or supranational body, agency, department or regulatory authority or organisation or any decision of a court (having the force of law) in any country or territory.

Transaction Documents means the Finance Documents and the Project Documents.

UK means the United Kingdom.

US means the United States of America.


The legal agreement

1.2.7 A reference to this Deed or to any other deed, instrument, agreement or document shall, unless the context otherwise requires, be construed as reference to this Deed or such other deed, instrument, agreement or document as the same may from time to time be amended, varied, supplemented or novated, in each case, in accordance with its terms;

1.2.8 A reference to an “encumbrance” shall be construed as a reference to a mortgage, charge, assignment, pledge, lien (save as arising in the ordinary course of business), hypothecation, right of set-off (save as arising under the general law for the protection of certain classes of creditors) or trust arrangement for the purpose of and having a similar effect to the granting of security, or other security interest of any kind;

1.2.9 Indebtedness shall be construed as a reference to any obligation for payment or repayment of money, whether as principal or as surety and whether present or future, actual or contingent;

1.2.10 A reference to a statute or statutory provision or other law is a reference to it as amended, or replaced and includes all legislation and regulations made under it;

1.2.11 A month shall be construed as a reference to a period starting on one day in a calendar month and ending on the numerically corresponding day in the next calendar month save that, where any such period would otherwise end on a day that is not a Business Day, it shall end on the next Business Day, unless that day falls in the calendar month succeeding that in which it would otherwise have ended, in which case it shall end on the preceding Business Day provided that, if a period starts on the last Business Day in a calendar month or if there is no numerically corresponding day in the month in which that period ends, that period shall end of the last Business Day in that later month;

1.2.12 The winding-up, dissolution or administration of a person shall be construed so as to include any equivalent or analogous proceedings under the law of the jurisdiction in which such person is incorporated or of any jurisdiction in which such person carries on business;

1.2.13 All the provisions of this instrument are severable and distinct from one another and the illegality, invalidity or unenforceability of any provision of this instrument under the law of any jurisdiction shall not affect its validity or enforceability under the law of any other jurisdiction nor the legality, validity or enforceability of any other provision;

1.2.14 References to the Debentures include references to all and/or any of the Debentures;

1.2.15 The terms including, include and in particular or any similar expression shall be construed as illustrative and shall not limit the sense of words preceding those words;

1.2.16 Headings are inserted for convenience and do not affect the interpretation of this Deed;

1.2.17 A reference in this Deed to the exercise of any rights of a Holder Representative shall mean the exercise of such rights by a Holder Representative appointed pursuant to the Provisions; and

1.2.18 A reference to an Event of Default continuing means that it has not been remedied or expressly waived.

1.3 Where indicated in this Deed, terms will have the meaning given to them by the Abundance Terms and Conditions.

1.4 Other terms will have the specific meaning given to them in the relevant provisions of this Deed or the Schedules forming part of it.

US Person means any persons who are or deemed to be US Persons for the purposes of US tax laws or US securities laws (including (without limitation) the US Securities Act of 1933). The Issuer may determine (acting reasonably) whether a person acquiring or holding Debentures (or proposing to do so) is a US person in accordance with applicable law at the time it makes such determination. Further summaries of what constitutes a US Person are provided in the Abundance Terms and Conditions.

Written Resolution has the meaning given to it in the Agency Agreement.

1.2 In this Deed unless the contrary intention appears:

1.2.1 terms defined in the Agency Agreement have the same meaning in this Deed;

1.2.2 Clause, Schedule and paragraph headings shall not affect the interpretation of this Deed;

1.2.3 Words denoting the singular include the plural and vice versa and a reference to one gender includes the other gender;

1.2.4 A reference to a “person” means any individual, company, corporation, partnership, joint venture, association, unincorporated organisation, trust or other judicial entity;

1.2.5 A reference to a party or any other person includes its successors in title, permitted assigns and permitted transferees;

1.2.6 References to clauses, paragraphs and Schedules (including, for the avoidance of doubt, the Abundance Terms and Conditions) are to the clauses, paragraphs and Schedules of this Deed which form part of this Deed and shall have the same force and effect as if set out in the body of this Deed and any reference to this Deed shall include the Schedules;


The legal agreement

2.9 The Issuer may retain any payments paid upon any such Debentures which any person referred to in clause 2.8 is entitled to, until such person is registered as the holder of such Debentures or he has duly transferred the Debentures.

2.10 The Holders appoint the Agent to act on their behalf in accordance with the terms of the Agency Agreement.

2.11 The provisions of the Agency Agreement (as the same may be amended, varied or modified from time to time) are expressly and specifically incorporated into and shall apply to this Deed.

3 Denomination, Issue and Status3.1 The Debentures are issued in amounts and multiples of one pound Sterling (£1.00) in nominal amount.

3.2 The aggregate principal amount of the Debentures is limited to a maximum of £1,783,000.

3.3 As and when issued, the Debentures shall constitute direct, unconditional and unsecured obligations of the Issuer and rank and will rank pari passu, equally and rateably without discrimination or preference with all other outstanding unsecured and unsubordinated obligations of the Issuer, without any preference among themselves.

3.4 The Debentures are issued to, and can only be held by, Members in accordance with the Abundance Terms and Conditions.

4 TransferThe Debentures may only be transferred in accordance with the Abundance Terms and Conditions or, if applicable, in accordance with clauses 2.7 and 2.8.

5 Representations of the IssuerSo long as the Debentures are outstanding, the Issuer makes each of the representations and warranties set out in Schedule 3.

6 Undertakings of the IssuerSo long as the Debentures are outstanding, the Issuer agrees to comply with each of the undertakings given by it that are set out in Schedules 4 and 5.

7 Use of Proceeds7.1 Subject to this Deed (including, without limitation, clause 7.2 below), the Issuer may only use the proceeds raised from the Debentures issued under this Deed:

7.1.1 to part fund the Assets; and

7.1.2 to fund the Reserve under paragraph 6 of Schedule 4.

7.2 The Agent will only be obliged to instruct the Client Money Services Provider to transfer proceeds raised from the Debenture to the Issuer if, under the terms of the EPC Agreement, Lark Energy Construction Ltd has met its obligations to the Issuer under that agreement to ensure the Assets are “Commissioned and Accredited” (as defined in the EPC Agreement) on or before the “Commissioning Longstop Date” (as defined in the EPC Agreement).

7.3 No Holder is bound to monitor or verify the application of any net proceeds of a Debenture issued pursuant to this Deed.

8 Repayment of Principal8.1 Subject to this Deed, the Issuer shall repay Principal by making the Annual Principal Repayment in semi-annual instalments following the end of each Cash Return Period, each instalment amount being equal to fifty per cent (50%) of the Annual Principal Repayment.

2 Form, Title, Register and Agent2.1 Debentures will be held in electronic form, represented by book entries in the Register.

2.2 Holders will be issued with an electronic confirmation of their holding of Debentures via the Abundance Service in accordance with the Abundance Terms and Conditions.

2.3 The Issuer and the Agent will only recognise and treat each registered Holder as the absolute owner of his Debentures for all purposes and shall not bound to take notice of any trust to which any Debenture may be subject and shall not be required to obtain any proof thereof or as to the identity of such Holder.

2.4 No notice of any trust, except as required by applicable law, will be entered on the Register in respect of any Debentures.

2.5 The Debentures will be registered only in accordance with the Abundance Terms and Conditions.

2.6 The Issuer shall maintain arrangements so that any changes to the Register required under this clause shall be made by Abundance in accordance with the Abundance Terms and Conditions.

2.7 Subject to clause 2.8, the personal representatives of a deceased Holder shall be the only persons recognised by the Issuer as having any title to, or interest in, that Debenture on the death of such Holder but will only be so recognised subject to their becoming Members in accordance with the Abundance Terms and Conditions.

2.8 Any person becoming entitled to a Debenture in consequence of the death or bankruptcy of any Holder or otherwise by operation of law, may, upon producing such evidence that he is so entitled as the Issuer may reasonably require, be registered himself as the Holder subject to his becoming a Member of Abundance in accordance with the Abundance Terms and Conditions.


The legal agreement

8.5 Any Deferred Amount shall bear Additional Interest in accordance with clause 10.

8.6 All outstanding Principal (including any Deferred Amounts) must be repaid by the Issuer no later than the Final Repayment Date.

9 Interest 9.1 Subject to this Deed, the Issuer shall pay Interest following the end of each Cash Return Period in accordance with this clause.

9.2 The Debentures bear and accrue Interest on and from the date the Debentures are issued to and including the date that they are repaid or redeemed in full.

9.3 The Issuer shall pay Interest equal to the Annual Interest Amount to the Holders in semi-annual instalments following the end of each Cash Return Period, each instalment amount being equal to fifty per cent (50%) of the Annual Interest Amount.

9.4 The making of any payment of Interest (including any Deferred Amounts) or its deferral following the end of any Cash Return Period (other than the Final Repayment Date) depends on the amount of Relevant Surplus of the Project and the Reserve in the relevant Cash Return Period. As soon as is reasonably practicable following the end of each Cash Return Period, the Issuer shall perform the calculation of its Relevant Surplus in Schedule 1 (Calculations) and the Reserve, to determine what (if any) payment of Interest is required to be made in respect of that Cash Return Period at that time.

9.5 If because there is sufficient Relevant Surplus or Reserve in a Cash Return Period (on the basis of the calculations referred to in clause 9.4), the Issuer determines that it is required to make a payment of Interest in respect of that Cash Return Period, the Issuer shall make that payment within ten weeks of the end of that Cash Return Period.

9.6 If due to both insufficient Relevant Surplus or Reserve in a Cash Return Period (on the basis of calculations referred to in clause 9.4), the Issuer determines that no payment of Interest is required to be made in respect of that Cash Return Period or the amount of Relevant Surplus and Reserve available for such payment is less than the amount required under clause 9.3, the Issuer’s liability to paysuch shortfall of Interest (a “Deferred Amount”) will be treated as not having fallen due and shall be deferred and become due and payable by the Issuer on the earlier of: (i) the date falling 10 weeks after the end of the next Subsequent Cash Return Period in which the Issuer has determined (on the basis of the calculations referred to in clause 9.4) that there is sufficient Relevant Surplus or Reserve to make that payment; (ii) the date falling twelve months from the date on which it would have been due and payable if not first deferred under this clause; (iii) the date that all payments under this Deed are accelerated under clause 15.3.1 after an Event of Default; or (iv) the Final Repayment Date.

9.7 Any Deferred Amount shall bear Additional Interest in accordance with clause 10.

9.8 All due but unpaid Interest shall be payable on the Final Repayment Date.

9.9 Interest shall be calculated and accrue on the basis of the actual number of days elapsed in the relevant period and a 365 day year.

8.2 The making of any repayment of Principal (including any Deferred Amounts) or its deferral following the end of any Cash Return Period (other than the Final Repayment Date) depends on the amount of Relevant Surplus of the Project and the Reserve in that Cash Return Period. As soon as is reasonably practicable following the end of each Cash Return Period, the Issuer shall perform the calculation of its Relevant Surplus in accordance with Schedule 1 (Calculations) and the Reserve, to determine what (if any) repayment of Principal is required to be made in respect of that Cash Return Period at that time.

8.3 If because there is sufficient Relevant Surplus or Reserve in a Cash Return Period (on the basis of the calculation referred to in clause 8.2), the Issuer determines that it is required to make a repayment of Principal in respect of that Cash Return Period, the Issuer shall make that payment within ten weeks of the end of that Cash Return Period.

8.4 If because there is both insufficient Relevant Surplus or Reserve in a Cash Return Period (on the basis of the calculation referred to in clause 8.2), the Issuer determines that no repayment of Principal may be made in respect of that Cash Return Period or the amount of Relevant Surplus and Reserve available for such repayment of Principal is less than the amount required to be paid under clause 8.1, the Issuer’s liability to pay such shortfall of Principal (a “Deferred Amount”) will be treated as not having fallen due shall be deferred and become due and payable by the Issuer on the earlier of: (i) the date falling 10 weeks after the end of the next Subsequent Cash Return Period in which the Issuer has determined that there is sufficient Relevant Surplus or Reserve (on the basis of calculations referred to in clause 8.2) to make that payment; (ii) the date falling twelve (12) months from the date on which it would have been due and payable if not first deferred under this clause; (iii) the date all payments under this Deed are accelerated under clause 15.4.1 after an Event of Default; or (iv) the Final Repayment Date.


The legal agreement

11.2 Subject to the Agency Agreement, the Issuer may, at any time, make any payment of any Deferred Amount(s) or Additional Interest in advance of its due date, provided that there is sufficient Relevant Surplus to do so (with the effect that it may make such payments in priority to any Costs other than amounts due to the Agent (as described in paragraph 1.5 (c) of Schedule 1 (Calculations)).

11.3 Subject to clause 1.7 of Schedule 1 (Calculations), if there is either:

11.3.1 a shortfall in Relevant Surplus for the Issuer to make any required payment to Holders under clauses 8 to 10 (inclusive) of this Deed; or

11.3.2 at the time of making any required payment to Holders under clauses 8 to 10 (inclusive) of this Deed, there is less cash freely available to the Issuer than the amount of Relevant Surplus available to make that payment,

(each such shortfall in Relevant Surplus or cash in the sub-clauses above, being a “Relevant Shortfall”), the Issuer shall make that required payment out of the Reserve in an amount no greater than the Relevant Shortfall.

12 Redemption and Early Redemption at the Issuer’s option12.1 The Issuer shall be entitled at any time following (i) a Change of Control; and/or (ii) a Tax or Regulatory Requirement by issue of an irrevocable notice (“Notice of Redemption”) to the Holders (or, in the case of a Tax or Regulatory Requirement, to any Affected Person) giving not less than 20 Business Days’ and no more than 40 Business Day’s notice (which shall be given via the Abundance Service) of its intention to redeem the Debentures or, in the case of the Debentures held by an Affected Person, redeem the affected Debentures. Each Notice of Redemption will specify the date for the proposed redemption.

12.2 Following the Notice of Redemption, on the date specified for redemption, the Issuer will redeem the affected Debentures and repay the Principal of those affected Debentures together with any accrued Interest and/or Additional Interest then owing in relation to those affected Debentures.

12.3 Where the Issuer has issued a Notice of Redemption in respect of a Change of Control, the Issuer will pay a further percentage amount of such Principal amount calculated and verified by the Independent Valuer, being a percentage of premium payable in addition to the Principal amount having regard to all reasonable circumstances including the period of time remaining until the Final Repayment Date and amount of Interest that would have been payable but for early redemption, discounted to present value in a commercially reasonable manner.

12.4 By no later than the end of the notice period specified in the Notice of Redemption, the Issuer (acting reasonably) shall have appointed the Independent Valuer which shall be a firm of Chartered Accountants who have not been engaged by the Issuer to provide professional services to it within a period of 5 years prior to the Issue of the Notice of Redemption. Following the appointment of the Independent Valuer the Issuer shall inform the relevant Holders of the identity of the Independent Valuer as soon as reasonably practicable.

12.5 Save in the case of manifest error, the verification of the calculation by the Independent Valuer shall be final and binding on the Issuer and the relevant Holders and any applicable premium shall be paid by the Issuer within 28 days of the date the Issuer is notified of the Independent Valuer’s confirmation.

12.6 The costs of the Independent Valuer shall be payable by the Issuer.

10 Additional Interest10.1 The Issuer shall pay Additional Interest on any Deferred Amounts in respect of Principal or Interest at a rate of 3% over the published Base Rate of Barclays Bank PLC (or, if that rate is unavailable from Barclays Bank PLC, the equivalent base rate of another major UK retail bank of comparable size chosen by the Issuer) from the date when payment of such amount of Principal or Interest would have been made in accordance with clauses 8 or 9 (as applicable) until actual payment, after as well as before judgment.

10.2 In respect of each Cash Return Period, the Issuer shall pay Additional Interest on Deferred Amounts outstanding during that Cash Return Period, within 10 weeks of the end of such Cash Return Period except that, if there is insufficient Relevant Surplus or Reserve (in accordance with the Issuer’s calculations in Schedule 1) for that Cash Return Period to make such payment in full, such shortfall may be deferred on the same basis as applicable to payments of Principal and Interest in accordance with clauses 8 and 9 save that any deferred Additional Interest will not itself bear Additional Interest.

10.3 Additional Interest shall accrue on a daily basis and on the basis of a 365 day year.

10.4 All due but unpaid Additional Interest (including any Deferred Amounts) shall be payable in accordance with 10.2 and by no later than the Final Repayment Date.

11 Payments 11.1 All payments owing to Holders under this Deed are subject to clause 7 of the Agency Agreement including, without limitation, provisions detailing the priority of payments under this Deed.


The legal agreement

For the purpose of this clause the following capitalised term will have the meanings as set out below:

Relevant Event means any event or circumstance (including, without limitation, any event contemplated by the Lease Agreement) as a result of which the Issuer losing or no longer having the rights to the Feed-in-Tariffs in relation to the Assets that have been funded under this Deed for the purposes of the Project.

14 Purchase and Cancellation14.1 Subject to paragraph 14 of the Provisions, the Issuer or any party associated with the Issuer may at any time by agreement with the relevant Holder purchase any Debentures at any price by tender, private treaty or otherwise.

14.2 Any Debentures which are repaid, redeemed or purchased by the Issuer shall forthwith be cancelled and shall not be available for re-issue.

15 Events of Default15.1 Each of the following events or circumstances set out in this clause 15.1 is an Event of Default:

15.1.1 any failure by the Issuer to pay in full any amount payable to such Holder in respect of the Debentures within 10 Business Days after the due date for its payment; or

15.1.2 the Issuer fails to perform or comply with any of its other obligations under the Finance Documents (other than the obligations specified in clause 15.1.1) or any of its material obligations under the Project Documents and, except where such failure is incapable of remedy, such failure continues for 10 Business Days after the earlier of (a) written notice has been given by the Agent requiring remedy of such failure; or (b) the date that the Issuer has become aware of such failure; or

15.1.3 any representation, warranty or statement made or deemed to be made by the Issuer in the Finance Documents or any other document delivered by or on behalf of the Issuer under or in connection with any Finance Document is or proves to have been incorrect or misleading in any material respect when made or deemed to be made; or

15.1.4 any Financial Indebtedness in respect of Permitted Indebtedness exceeding £5,000 of the Issuer is not paid when due or otherwise becomes due and payable prior to its specified maturity or any creditor of the Issuer becomes entitled to declare any such Financial Indebtedness due and payable prior to its specified maturity including, without limitation, due to an event of default (howsoever described) occurring; or

15.1.5 the Issuer is deemed insolvent or unable to pay its debts for the purposes of section 123(1) or section 123(2) of the Insolvency Act 1986; or

15.1.6 in relation to the Issuer, any corporate action, legal proceedings or other procedure or step is taken in relation to the suspension of payments, a moratorium of any indebtedness, winding-up, dissolution, administration or a reorganisation, composition, compromise, assignment or arrangement with any creditor of the Issuer (other than for the purposes of a bona fide, solvent scheme of reconstruction or amalgamation previously approved by a Special Resolution) or the appointment of a liquidator, receiver, administrative receiver, administrator, compulsory manager or other similar officer in respect of the Issuer or any of its assets and such person not being paid out or discharged within 10 Business Days; or

12.7 Subject to clause 14.1, the Issuer shall not be entitled to redeem the Debentures otherwise than in accordance with this Clause 12.

13 Mandatory Redemption on the Relevant Events 13.1 Where a Relevant Event has occurred in relation to any Asset that has been funded under this Deed as part of the Project (the “Affected Assets”), the Issuer shall promptly issue a Notice of Redemption (via the Abundance Service) informing the Holders of the same and stating the Principal amount of the Debentures which will be redeemed and the date upon which redemption will take place (which shall be a date within 20 Business Days of the Notice of Redemption being issued). The amount of Principal which will be redeemed shall be calculated as follows:-

P x (S/T)

Where,

P = the amount of Principal outstanding at the date of redemption:

T = the total output (in kWp) of the Assets in the Project; and

S = the output (in kWp) of the Affected Assets in relation to which a Relevant Event has occurred.

13.2 Any redemption made pursuant to clause 13.1 above shall be made repaying a pro-rata amount of Principal held by each Holder and any sum so redeemed shall be paid together with any Interest and/or Additional Interest accrued or owing on such sums up until the date of redemption.


The legal agreement

15.3 If any Event of Default occurs and is continuing, the Agent if so directed in writing by Holders of at least twenty five per cent. (25%) of the Principal (or by an Ordinary Resolution or Special Resolution of the Holders), shall:

15.3.1 by notice in writing (an “Acceleration Notice”) declare all the Debentures to be due and payable to take effect on the first Business Day following the end of a period of twenty (20) Business Days following the date the Acceleration Notice is given (the “Standstill Period”), whereupon the Debentures shall become immediately due and payable by the Issuer at their principal amount together with all unpaid and/or accrued Interest, all Deferred Amounts and any other sum then payable on the Debentures without further action or formality unless, prior to the end of that Standstill Period, the Acceleration Notice has been withdrawn in accordance with clause 10.6 of the Agency Agreement provided that, in the case of any Insolvency Event, the Standstill Period (or any days remaining within that period) may be waived with immediate effect at any time by the Agent giving notice to that effect to the Issuer and the Holders (a “No Standstill Notice”) if the Agentdetermines, in its absolute discretion, that immediate acceleration is necessary to protect the interests of the Holders and upon the service of such a No Standstill Notice, all the Debentures will be due and payable (and become immediately due and payable by the Issuer) on the first Business Day following the date of the No Standstill Notice at their principal amount together with all unpaid and/or accrued Interest, all Deferred Amounts and any other sum then payable on the Debentures without further action or formality; or

15.3.2 allow the Agent, at the cost and expense of the Issuer (such costs to be proper and reasonable and as far as practicable agreed in advance of appointment), to appoint accountants, lawyers or technical advisers as agreed by the Agent and the Issuer to protect the Holders’ interests under the Finance Documents and to investigate the Event of Default affecting the Project; or

15.3.3 permit the appointment of a Holder Representative in accordance with the terms of the Agency Agreement.

15.4 No Holder shall be entitled to take any Enforcement Action in relation to the Debentures or enforce any provision of this Deed or waive, cure or consent to any Event of Default or proposed breach of the terms of this Deed except where such action is permitted by and in accordance with the terms of the Agency Agreement

16 Notices16.1 The Issuer will give each notice, and will send any other document, to a Holder using the Abundance Service (which, for the avoidance of doubt, includes the use of e-mail). Each Holder agrees that the Issuer may rely on Abundance to deliver any such notice in accordance with the Abundance Terms and Conditions.

16.2 Any notice from the Holders to the Issuer contemplated by this Deed may be given by e-mail to the Issuer at the following address [email protected] as otherwise directed by the Issuer or Abundance (acting on behalf of the Issuer) at the relevant time.

16.3 A notice, document or information sent or supplied by electronic means to an address specified for the purpose is deemed to be given to or received by the intended recipient on the same day it was sent, and in providing service it is sufficient to prove that the communication was properly addressed and sent.

15.1.7 any expropriation, attachment, sequestration, distress or execution or any analogous process in any jurisdiction affects any asset or assets of the Issuer and is not discharged or stayed within 10 Business Days; or

15.1.8 anything analogous to or having a substantially similar effect to any of the events specified in clauses 15.1.5 to 15.17 inclusive shall occur under the laws of any applicable jurisdiction; or

15.1.9 it is or becomes unlawful for the Issuer to perform any of its obligations under the Finance Documents or any such obligation ceases to be legally, valid and binding or any subordination created under a Subordination Agreement is or becomes unlawful; or

15.1.10 it rescinds or purports to rescind or repudiates or purports to repudiate a Finance Document or evidences an intention to do so; or

15.1.11 the Issuer ceases to carry on the business or a substantial part of the business that it carries on at the date of this Deed or abandons or ceases to carry on the management or ownership of a material part of the Assets for a continuous period of 15 Business Days or more.

15.2 The Issuer shall promptly and as soon as practicable notify the Holders and the Agent of the happening of any Event of Default upon becoming aware of its occurrence (and the steps, if any, being taken to remedy it) and, to the extent that the Agent is aware of an Event of Default, the Agent shall provide such notification.

mailto:kawojobi%40swindon.gov.uk?subject=


The legal agreement

19.2 Except as expressly provided in clause 19.1, no rights are conferred on any person under the Contracts (Rights of Third Parties) Act 1999 to enforce any term of this Deed, but this does not affect any right or remedy of any person which exists or is available apart from that Act.

19.3 Subject to Clause 15.4 and the provisions of the Agency Agreement, each Holder shall be entitled to sue for the performance and observance of the provisions of this Deed as far as his holding of Debentures is concerned.

19.4 For the avoidance of doubt this Deed and the Debentures are enforceable under the Contracts (Rights of Third Parties) Act 1999 by each Holder.

19.5 Abundance provides services in accordance with arrangements it has with the Issuer and operates the Abundance Service in accordance with the Abundance Terms and Conditions as agreed by Members.

20 InspectionA copy of this Deed shall be kept at the registered office of the Issuer and any Holder and any person duly authorised in writing by a Holder may at all reasonable times during office hours inspect it.

21 EndorsementA memorandum of execution of any deed supplemental to this Deed shall be endorsed by the Issuer on this Deed.

22 Governing Law and Jurisdiction22.1 This Deed and the Debentures and any dispute or claim arising out of or in connection with any of them or their subject matter or formation (including non-contractual disputes or claims) shall be governed by, and construed in accordance with, the law of England and Wales.

22.2 The courts of England and Wales shall have exclusive jurisdiction to settle any dispute or claim, whether contractual or non-contractual, arising out of or in connection with this Deed or the Debentures.This document is executed as a deed and is delivered and takes effect on the date written at the beginning of it.

Executed as a deed by )Swindon Common Farm Solar CIC )acting by a director )

________________________________________________________Director

Witness Signature:Witness Name:Witness Occupation:Witness Address:

Executed as a deed by )Abundance Investment Limited )acting by a director )

________________________________________________________Director

Witness Signature:Witness Name:Witness Occupation:Witness Address:

17 Meetings of Holders, Voting and Modifications to the Deed17.1 The Provisions as defined and set out in Schedule 3 of the Agency Agreement include provisions for:

17.1.1 convening meetings of Holders;

17.1.2 voting and quorum requirements and powers exercisable in respect of an Ordinary Resolution, Special Resolution or a Written Resolution;

17.1.3 the ability to appoint (and powers of) a Holders Representative; and

17.1.4 waivers, modifications or consents in respect of certain material matters that affect the Finance Documents (defined in the Agency Agreement as “Reserved Matters”) that are only exercisable by Special Resolution and in respect of other matters that affect the Finance Documents (defined in the Agency Agreement as “Non-Reserved Matters”) that are exercisable by Ordinary Resolution and in respect of matters deemed by the Agent to be of a formal, minor or technical nature that are exercisable by the Issuer and/or Agent without Holder consent in accordance with the Agency Agreement.

18 No DealingsThe Debentures are not capable of being dealt or listed on any stock exchange or other public market in the United Kingdom or elsewhereand no application has been, or is intended to be made, for the Debentures to be listed or otherwise traded on any such stock exchange or other public market.

19 Rights and Obligations 19.1 This Deed does not confer rights on any persons other than the Holders, the Agent and the Issuer.


The legal agreement

1.4 The Issuer’s Revenues for the purpose of the calculation in paragraph 1.2 shall be any sums receivable by the Issuer in respect of the generation or sale of any electricity produced by the Project including (i) any proceeds receivable by the Issuer in relation to any power purchase agreement or similar agreement relating to electricity generated by the installations, under the Feed-in Tariff Scheme, any Renewable Energy Guarantee of Obligation, Levy Exemption Certificate or other relevant government subsidy or embedded benefit; and (ii) any other sums receivable by the Issuer in connection with the Project under performance bonds, letters of credit, bank interest, claims under any insurance policy, liquidated damages or other sums receivable by the Issuer under any contract relating to the Project.

1.5 The Issuer’s Costs for the purposes of the calculation in paragraph 1.2 shall be the costs and expenses of the Issuer (excluding capital expenditure) incurred in respect of any given Cash Return Period, including (without double counting):

a) operating costs and expenses (including administrative, legal, management and accounting);

b) tax liabilities (including any tax liability arising as a result of the receipt by the Issuer of any Revenues) where such liabilities fall due for payment in that Cash Return Period (but excluding where such liabilities have been incurred by the Company but are not due for payment during that Cash Return Period);

c) fees and expenses payable to Abundance or any other third party incurred by the Issuer in the establishment of the Debentures;

d) maintenance costs and expenses incurred in respect of the Project;

e) insurance premium incurred relating to the Project; plus

f) any contribution into the Reserve.

Schedule 2

Holder Restrictions1.1 The Debentures may only be acquired or held by Members who are eligible to invest in accordance with the Abundance Terms and Conditions, which, as at the date of this Deed, includes:

1.1.1 individuals aged 18 years or over who have their permanent residence in an Eligible EEA Country (but excluding any Restricted Person);

1.1.2 those who are not individuals, being persons who have a permanent place of business in an Eligible EEA Country and are duly incorporated, authorised, established or formed in accordance with the relevant European laws and regulations; or

1.1.2 other Members who fulfil all the applicable criteria of eligibility to acquire and to hold Debentures in accordance with the Abundance Terms and Conditions from time to time.

1.2 The Debentures may not be acquired or held by any Restricted Person.

1.3 The Debentures have not been and will not be registered under the United States Securities Act of 1933 or qualified for sale under the laws of the US or under the laws of any country, jurisdiction, state or territory outside the UK.

1.4 The Issuer, or Abundance on its behalf, may require reasonable evidence that a proposed transfer is exempt from or not subject to a registration or similar requirement in the US or any other jurisdiction outside the United Kingdom and is not to, or for the benefit of, a Restricted Person.

1.5 The Issuer may require redemption of any Debenture that reasonably appears to it to be held by, or for the benefit of, a Restricted Person.

Schedule 1

Calculations

Words and expressions defined in the Deed shall bear the same meanings when used in this Schedule.

1 The Issuer shall calculate any amounts payable to the Holders under this Deed in the manner set out in the following sub-clauses:

1.1 The First Cash Return Period ends on 31 December 2016. Subsequent Cash Return Periods following the First Cash Return Period will be periods of six months following the First Cash Return Period, as set out in the Deed. The Final Cash Return Period ends on the Maturity Date.

1.2 Within 10 weeks of the last day of the each Cash Return Period, the Issuer will calculate its Relevant Surplus, Revenues and Costs in such Cash Return Period.

1.3 The Issuer’s Relevant Surplus for the purposes of the calculation in paragraph 1.2 is the total of:

(a) the sums receivable by the Issuer as Revenues during that Cash Return Period; plus

(b) any sum actually receivable by the Issuer during that Cash Return Period in relation to rebate or repayment of any Costs incurred during any previous Cash Return Period; less

(c) the Costs incurred by the Issuer in respect of that Cash Return Period.


The legal agreement

5 No default: No Event of Default in relation to it is subsisting and no Event of Default is reasonably likely to occur as a result of the issue of the Debentures.

6 Project Documents: It has complied with the material terms of the Project Documents and no person has disputed, repudiated or disclaimed liability under any Project Document or evidenced an intention to do so.

7 Arm’s Length: The Transaction Documents to which it is expressed to be a party have been, are being or will be entered into in good faith for the benefit of the Issuer and on arm’s length terms.

8 Information:

8.1 All information that it has given in connection with the Offering Document and the Transaction Documents was true and accurate as at the date it was provided or as at any date at which it was stated to be given.

8.2 Any financial projections contained in the information referred to in paragraph 8.1 have been prepared as at the date they were provided or stated to be given on the basis of both recent historical information and reasonable assumptions or, where there was no recent historical information available, on the basis of reasonable assumptions and, in each case, having been arrived at after careful consideration by the Issuer.

9 No litigation: No litigation, arbitration or administrative proceedings or investigations (whether or not in relation to any Environmental Law or any other matter) of, or before, any court, arbitral body or agency have been started or threatened against it which have or, if adversely determined, would materially adversely affect the Issuer’s ability to perform its obligations under the Transaction Documents to which it is expressed to be a party or result in a liability against the Issuer in an amount which exceeds £25,000.

10 Trustee: It is not entering into any Finance Document as a trustee.

11 Centre of main interests and establishments: For the purposes of The Council of the European Union Regulation No. 1346/2000 on Insolvency Proceedings, its “centre of main interest” is situated in England and Wales.

12 Business purpose: The Issuer is a single purpose vehicle whose sole business is managing and operating the Project as contemplated by the Transaction Documents and has no debt other than Permitted Indebtedness.

Schedule 4

Positive Undertakings

1 Authorisations: The Issuer must promptly obtain, comply with and do all that is necessary to maintain in full force and effect any Authorisation required under any law or regulation of England and Wales that enable it to perform its obligations under the Transaction Documents and to ensure the legality, validity, enforceability or admissibility in evidence of any Transaction Document or that enable it to own its assets and carry on its business as it is being conducted.

2 Compliance with laws: The Issuer must comply with any law or regulation (including any Environmental Law) where such breach would materially adversely affect the Issuer’s ability to perform its obligations under the Transaction Documents to which it is expressed to be a party or result in a liability against the Issuer in an amount of which exceeds £25,000.

3 Taxes: The Issuer must pay all Taxes due and payable by it prior to the accrual of any fine or penalty for late payment and must promptly pay to HM Revenue & Customs all VAT and related interest and penalties payable by it in respect of the Project.

Schedule 3

Representations and Warranties

Words and expressions defined in the Deed shall bear the same meanings when used in this Schedule.

The Issuer represents and warrants to the Holders that:

1 Status: it is a private limited company, duly incorporated and validly existing under the laws of England and Wales and it has full power and authority to carry on its business and activities as presently conducted or as contemplated under the Transaction Documents.

2 Power and Authority: it has the power and authority to enter into, exercise its rights under and perform its obligations under the Transaction Documents to which it is a party and it has taken all necessary action to authorise the entry into and performance of the Transaction Documents to which it is a party.

3 Authorisation: All Authorisations required to enable it to lawfully issue the Debentures and perform the terms of the Transaction Documents and ensure the obligations expressed to be assumed by it in the Debentures and Transaction Documents are legal, valid, binding and enforceable against it have been obtained or effected and are in full force and effect (subject to any necessary registrations being completed).

4 Non-conflict with other obligations: The entry into and performance by it of, and the transactions contemplated by, the Transaction Documents do not and will not conflict with any law or regulation applicable to it, its constitutional or any agreement or instrument binding upon it or any of its assets.


The legal agreement

7 Shareholder Loan Agreement: The Issuer agrees that it will comply with the terms of the Shareholder Loan Agreement and the Subordination Agreement and that any Financial Indebtedness created under the Shareholder Loan Agreement is and continues to be subordinated to the Debentures under the terms of the Subordination Agreement.

8 Information: The Issuer must promptly supply to the Agent or a Holder Representative any other information in relation to the costs of the Project, the progress of the Project or any other matters in relation to the Project which the Agent or Holder Representative may reasonably request.

9 Access: The Issuer shall allow the Agent or any person or persons appointed on the Agent’s or Holders’ behalf in accordance with clauses 15.3.2 or 15.3.3 (respectively) or paragraph 16 of the Provisions (each a “holder appointee”) and any of their officers, employees and agents to attend, all meetings concerning relevant milestones in the Project (other than site meetings) and ensure that the Agent and/or the holder appointee (as applicable) are given access to the records of the Project on reasonable notice.

Schedule 5

Negative Undertakings

Subject to the terms of this Deed, the Issuer shall not:

1 Financial Indebtedness: incur or permit to subsist or be outstanding any Financial Indebtedness other than Permitted Indebtedness;

2 Lending and guarantees: make any loan or enter into, increase or extend any liability, form of credit or any guarantee or indemnity (other than under a Transaction Document) or an indemnity under a contract for goods or services entered into in the ordinary course of carrying on the business of the Project;

3 Negative Pledge: create or permit to subsist any encumbrance over any of its assets other than Permitted Security;

4 Acquisition: make any acquisition or investment other than as permitted under the Transaction Documents;

5. Disposal: transfer, sell, lend, part with or otherwise dispose of any (or any part of) any asset or undertakings other than a Permitted Disposal;

6 Dividend: whilst an Event of Default has occurred and is continuing, apply, pay, make or declare any dividend, return on capital, repayment of capital contributions or other distribution or make any distribution of assets or other payment whatsoever in respect of share capital whether directly or indirectly;

7 Joint Venture: form, enter into, invest in or transfer any asset to any partnership, consortium or joint venture entity or any other incorporated or unincorporated association for the purposes of any business or form or acquire any subsidiary undertaking (as defined in section 1162 of the Companies Act 2006);

4 Insurances: The Issuer must ensure that at all times from the date hereof insurances are maintained in full force and effect, which are in accordance with sound commercial practice normally maintained by companies carrying on similar businesses to the Issuer and are in an amount, and in a form, and with a reputable insurance company and underwriters.

5 Project Document: The Issuer must exercise its rights under and comply with its material obligations under each Project Document in a proper and timely manner.

6 Reserve: The Issuer will at all times any amount is outstanding under this Deed and until the Final Repayment Date:

6.1 maintain an amount in free cash in a segregated bank account in its name (the “Reserve”) consisting of an amount equal to the sum of fifty per cent (50%) of the Annual Interest Amount and 1/40th of the total amount of the Issue Amount (to be used solely for repayment of Principal and payment of Interest, Additional Interest or Deferred Amounts) provided that, if the Issuer makes any payment out of the Reserve in accordance with clause 11.3, the amount of Reserve shall temporarily reduce and the Issuer shall fund the resulting shortfall out of any Relevant Surplus; and

6.2 set aside and maintain an amount in free cash in a segregated bank account in its name) equal to £10,000 per annum each year during the term of the Debentures as an operational contingency reserve (the “Operational Reserve”) to be used solely in the ordinary course of running the Project and for meeting any decommissioning liabilities over the life of the Project.


The legal agreement

8 Merger: enter into any amalgamation, demerger or merger or corporate reconstruction;

9 Change in business: undertake any business or activity which is not incidental to the Project or any of the activities contemplated by the Transaction Documents;

10 Other agreements: enter into any material agreement other than the Transaction Documents or as expressly permitted by a Transaction Document or otherwise if such agreement is entered into on arm’s length terms and in the ordinary course of carrying on the Project;

11 Scheme: establish any pension or life insurance scheme, or any bonus, profit sharing, share option or other incentive scheme for its directors or employees;

12 Directors’ payments: make any payment, whether by way of emoluments for services or otherwise (but not including reimbursement of expenses reasonably and properly incurred) to, or on behalf of, any director of the Issuer; or

13 Conversion: convert the Debentures or any principal or interest payments in relation to the same into shares or any other securities of the Issuer without the sanction of a Special Resolution in accordance with the terms of the Agency Agreement.


The legal agreement

Our service providers

Issuer, we or us:Swindon Common Farm Solar CICCompany registration number: 9663536Registered address:Civic OfficesEuclid StreetSwindonSN1 2JH

Our service providers:

Legal counsel to IssuerOsborne Clarke LLP2 Temple Back EastTemple QuayBristol BS1 6EG

Arranger and distributorAbundance Investment LtdThreshold House, 65-69 Shepherds Bush Green London W12 8TX

Legal counsel to AbundanceKeystone Law LLPSecond Floor, Audley House, 13 Palace Street London SW1E 5HX

The following documents are available on request at our registered address:

• Lease• The Operations and Maintenance Contract • The EPC Contract• The Agency Agreement

Terms and conditions for the use of the Abundance service available at www.abundanceinvestment.com

We would like to thank you for taking the time to read our offer document. We the directors accept responsibility for the information it contains, which is true to the best of our knowledge and belief (having taken all reasonable care to ensure this is so) and reflects the facts without omitting anything which could affect its importance.

Samantha Mowbray, Paul Smith and Patrick WeirDirectors of Swindon Common Farm Solar CIC

http://www.abundancegeneration.com

46 | 46Issuer: Swindon Common Farm Solar CIC. Document approved by Abundance Investment Ltd, which is authorised and regulated by the Financial Conduct Authority.Issuer: Swindon Common Farm Solar CIC. Document approved by Abundance Investment Ltd, which is authorised and regulated by the Financial Conduct Authority.

Design: Kristina LangheinIllustration: Jim Le Fevre

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